5 Steps to Buying a Home

Buying a home can be quite a process. It’s important to know how much home you can afford, what type of down payment to budget for, monthly mortgage payment as well as what type of loan program you’ll use to finance the new property.

Step 1: Getting Pre-Approved

A personal consultation with a trusted mortgage professional should address all your initial loan approval questions, as well as uncover any potential challenges that can complicate the entire transaction. Certain mortgage loans have residence type, HOA, appraisal or insurance restrictions that your agent needs to be aware of before showing you listings.

Step 2: Assemble Your Home Buying Team

The home buying process has multiple steps, participating parties and potential challenges that can be overcome with the right team on your side. Your agent, appraiser, title company, home inspector, insurance agent and lender all have important roles to play. Buying a new home is literally a team sport since there are so many tasks, important timelines, documents and responsibilities that need attention.

Besides working with a professional team that you trust, it’s also important that the individual players have the ability to effectively communicate and execute on important decisions together.

Step 3: Go House Hunting!

Once you start visiting homes in person, be sure to consider the home’s “health” so you’ll have an idea of any major challenges that might be coming your way if you decide to make an offer. Ultimately, the inspection will give you an official report on the home’s quality and condition, but while you’re touring, keep an eye out for the following:

  • Structural defects and cracking

  • Water pressure (turn on faucets and shower heads)

  • Electrical issues (try the light switches)

  • Functionality and heat retention of doors and windows

  • Roof and exterior quality

  • Noise from neighbors or traffic


Step 4: Make an Offer

Once you’ve found the right home, you should make your offer based on a comparative market analysis (CMA) done by your agent. The CMA is a calculation of a home’s market value based on comparable recent sales in the same area.

When you're buying a home with a mortgage, it will take 30-45 days after the contract is signed to close on the home. Using the CMA as your baseline, your agent should help you determine a fair offer price and help you decide if you should leave some room for negotiation — this depends on the state of your real estate market.

Above and beyond the CMA, here are some other things to take into consideration when making an offer:

  • Disclosures: Disclosures are known problems related to structural issues, unpermitted work, natural hazards and flood risks. Most states require sellers to provide disclosure documents, so make sure your agent requests them.

  • Closing date: When you’re buying a home with a mortgage, it will take 30-45 days after the contract is executed to close on the home. When you submit an offer, you can request a later closing date to fit your moving timeline, but the seller may push back on this request.

  • Contingencies: A contingency is an agreement between the seller and the buyer or the lender and the buyer regarding conditions that need to occur for the sale to move forward. Some contingencies are necessary, like the appraisal contingency your lender will require to ensure they’re not overpaying on your loan. An inspection contingency is up to you, but it’s highly recommended.

  • Earnest money: An earnest money deposit is a sum of money you’re willing to put down when you make your offer to show that you’re serious about buying the home. If you close on the home, the earnest money simply becomes part of your down payment. If you back out of the purchase (outside of a contingency), you’ll lose the deposit.

It’s important to note that not every offer works out. It can be disappointing, but try not to feel discouraged if you don’t get the first home you put an offer on.

Step 5: Close the Sale

Many buyers choose to have a final walkthrough a day before or the morning of closing. Its purpose is to be sure that the property looks the same as when you made your offer and that the seller completed agreed-upon repairs (if applicable).

On closing day, expect to spend at least a few hours at the title company signing paperwork. You should also be prepared to bring funds to cover your closing costs, which typically range between 3-5% of the sale price.

Once the signing is complete and the sale is recorded, you’ll receive your keys. The house is yours!

You can now set up utilities for the new home — things like electric, cable and internet. If you’re buying a condo with an HOA that covers some utility costs, double check contract responsibilities with your real estate agent.

Finally, get ready to move and settle into your new home.