How to Buy Your First Home - step by step process guide

How to Buy Your First Home

6 steps 24h 0min Advanced

First-time home buying is a 60-90 day process with high stakes. Most expensive purchase of your life. This walks through pre-approval, agent, offer, inspection, and close.

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Step-by-Step Instructions

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Step 1: Get pre-approved for mortgage

Before house hunting. Pre-approval tells you what you can afford and signals serious to sellers. Shop 3+ lenders for rates.

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Local credit union

Often best rates and personal service.

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Better.com (online lender)

Easy online application, competitive rates.

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Compare 3+ lenders within 14 days

All credit pulls in 14 days count as one inquiry. Comparison is mandatory.

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Step 2: Hire a buyer's agent (free for you)

Seller pays both agents' commission. Free for buyer. Get a buyer's agent who knows your target neighborhoods.

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Interview 3 agents

Ask about local experience, recent buyers, market knowledge.

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Ask about average days on market in your area

Tests their local knowledge.

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Step 3: Define what you actually want

Must-have vs nice-to-have list. Locations, bedrooms, schools, commute. Saves both you and your agent's time.

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Top 3 deal-breakers + 5 nice-to-haves

Be honest about which compromise is worse.

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Drive target neighborhoods at different times

Tuesday 6pm and Saturday 8am are different worlds.

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Step 4: Make the offer

Agent guides on price based on comps (comparable sales). In hot markets, escalation clauses help. In cold markets, low offers can succeed.

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Agent runs comps in target area

Last 6 months of similar sales. Sets baseline for offer.

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Earnest money deposit (1-3% of price)

Shows you're serious. Refundable if contingencies fail.

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Step 5: Get an inspection (NEVER skip)

Independent inspector identifies problems. Costs $400-600. Saves $10,000+ in unknown repairs.

Warning: Waiving inspection in competitive markets = playing roulette with the biggest purchase of your life. Find a home where you don't need to.

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Hire independent inspector (NOT agent's pick)

Avoid conflicts of interest. Search 'home inspector' on local Yelp or Angie's.

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Negotiate repairs from inspection report

Ask seller to fix or credit toward closing. Walk if major issues.

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Step 6: Close + budget for hidden costs

Closing costs are 2-5% of purchase price on TOP of down payment. Plus moving costs. Plus appliances. First-year ownership is expensive.

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Budget 2-5% for closing costs

$10-25k on a $500k home, in cash, at closing.

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Have 6 months of mortgage payments in reserve

On top of down payment. Home maintenance hits hard year one.

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