7. Find a real estate agent

Finding a real estate agent is usually the first thing people think of when they’re ready to buy a home. But agents only get paid when a real estate deal closes, and just like you, they can’t afford to work for free.

When you’ve already established a homebuying budget and been pre-approved, potential agents will know you’re serious and will want to work with you. Plus, you’ll be able to choose people who specialize in the areas you know you can afford.

Ask friends and coworkers for recommendations and check online profiles. Talk to a few agents and choose one you have a good rapport with.

8. Determine which neighborhoods you want to target

With a budget and an agent, you can narrow down the precise areas where you’d like to live. And even though you can do so much research yourself online, take advantage of your agent’s experience in choosing a location. They might have some insider knowledge, like how close that beautiful new development is to train tracks or how crowded certain streets become when school lets out.

9. Create a list of non-negotiables and nice-to-haves

Determining what you want versus what you need in a house is an important exercise to help you understand your priorities and set realistic goals.

Your non-negotiables might be things like these:

Low crime rate
Proximity to work
Quiet
Walkable
Easy freeway access
Good school district
At least two bathrooms
At least 1,400 square feet

Your nice-to-haves might include:

Close to protected bike paths
Not part of an HOA
New roof
Energy efficient
Backyard deck
2,000 square feet
At least three bathrooms
Low-maintenance yard

Both lists will consist of your personal preferences and will be influenced by factors like your budget, household size, and how long you plan to live in your home.

10. Shop for homes

You’ll be so well-prepared at this point that you can use your in-person shopping time efficiently. You won’t waste time visiting listings you can’t afford or that don’t meet all your non-negotiables. You might even fall in love with the first home you tour, but it’s a good idea to visit a handful of houses before making a decision, to ensure you find the perfect fit.

11. Make an offer on a home

When you do find a home that feels right, you’ll be well-equipped to make an offer. Acting quickly is essential when housing inventory is limited; when it’s more plentiful, you may have more time. Your agent can advise you on how much to offer based on local market conditions and what contingencies to include. Ultimately, these are your decisions. Your agent will complete the paperwork, ask you to sign it, then submit your offer to the seller’s agent.

12. Get a mortgage

Once a seller has accepted your offer, you can go back to your preferred lender with your purchase agreement. The lender can then begin the process of underwriting the property and making sure you’re still financially qualified for the loan you were pre-approved for.

See: How To Get a Mortgage

13. Get a home appraisal

Your lender will order an appraisal, and you should schedule it as soon as possible. If the home appraises for less than the purchase price, you will have to negotiate with the seller, dispute the appraisal, pay the difference in cash, or walk away from the deal.

14. Secure homeowners insurance

Affordable homeowners insurance is not a given. Some homes are shockingly expensive to insure because they have high-risk attributes related to their claims history, location, or age. Ideally, your agent would learn this information from the seller’s agent before you even made an offer. At any rate, you need to make sure the property is insurable and that you can afford the premiums well before your scheduled closing date.

The national average homeowners insurance premium in 2024 is $2,230 per year. However, prices vary considerably by state.

15. Schedule a home inspection

While your lender won’t require a home inspection, you shouldn’t skip this step. A general home inspection can identify problems that might cost you lots of money or cause you to second-guess the purchase. Expect to spend $300 to $1,000 for this service, according to the American Society of Home Inspectors.

You might decide to order specialized inspections, such as an electrical inspection, to get a more qualified opinion about issues of extra concern.

16. Discuss inspection findings with the seller and schedule repairs

Inspection findings might be grounds for negotiating a closing cost credit or price reduction from the seller. Some may be required as a condition of getting a mortgage or getting homeowners insurance. Your agent may be able to feel out the seller’s agent to get a sense of how receptive the seller is to working with you. Keep in mind that the seller may not want to negotiate or may not have room to negotiate because they need a certain sum to pay off their loan and move.

If you’re able to reach an agreement with the seller about who will pay for repairs, and if the repairs must be made before the deal can close, then it’s time to hire a reputable, licensed, and bonded contractor to do the work.

17. Close on the home

Once your lender says you’re clear to close, you’ll get all your mortgage paperwork to review and sign. Take your time to read it and have your real estate attorney review it, too. Make sure you understand everything and there aren’t any mistakes.

Don’t rely on a notary, real estate agent, or loan officer who tells you not to worry if you raise a concern. Everyone wants the loan to close on time, but if you’re signing a bunch of legal documents that will impact your finances for years to come, you deserve to understand what you’re agreeing to.

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Tips for first-time homebuyers

When you’ve never bought a home before, it’s smart to rely on the wisdom of people who have. Here are three tips that will help you remain financially stable and keep your stress levels down as a first-time homebuyer:

Work on your credit score: As soon as you start toying with the idea of buying your first home, you can request a free credit report online to find out where you stand. If your score is below 760, you may not be eligible for the most competitive mortgage rates. It may take at least a few months to improve your score, but you can do it yourself for free by learning what factors have the biggest impact on your score.
It can save you thousands of dollars. In August 2023, homebuyers with a FICO score above 740 and a loan-to-value ratio greater than 80 paid an average interest rate of 7.19% on a conventional 30-year mortgage, according to data from Optimal Blue. Those with a score below 680 paid 7.48%.
Don’t waive contingencies: Appraisal, financing, and inspection contingencies can protect you from losing your earnest money deposit if the appraisal is too low, you can’t secure a mortgage, or the inspection uncovers major problems. First-time homebuyers usually include clauses in the purchase agreement that allow them to walk away without penalty under certain conditions. You might be tempted to waive them to make your offer more competitive, but that’s a big risk.
Don’t use all your savings: Even if your mortgage lender doesn’t require you to have extra savings in the bank as a condition of closing, you should. Sooner or later, your water heater will fail or your air conditioner will stop working. When you have savings, these things are inconveniences, but they’re not catastrophes — and you’ll still be able to pay your mortgage.

First-time homebuyer FAQs

How much do I need for a down payment as a first-time homebuyer?

The minimum down payment you’ll need to buy a home depends on what type of loan you qualify for. Here is a look at different loan types:

VA: 0%
USDA: 0%
Conventional: 3% or 5%
FHA: 3.5% or 10%, depending on credit score

To avoid PMI on a conventional loan, you’ll need to put down 20%. First-time homebuyer down payment assistance may be an option if you qualify.

What are the advantages of using a real estate agent when buying a home?

Buyers rarely represent themselves when buying a home. First-time buyers in particular can benefit from an agent’s familiarity with the process, ability to negotiate on their behalf, and expertise in the local housing market.

Are there any government programs or grants available for first-time homebuyers?

Government-sponsored first-time homebuyer assistance typically comes from state housing agencies. Just do an online search for the name of your state and “first-time homebuyer program” to see what’s available and how to qualify. Your real estate agent or mortgage lender may also be able to help you find grants, low-interest loans, no-interest loans, and forgivable loans for your down payment and closing costs.

What should I look for during a home inspection?

Ideally, you won’t be looking for anything — your home inspector will. If you’ve never owned a home or worked as a contractor, you may not notice any problems that aren’t staring you in the face. But a few things to be aware of are missing shingles, stained ceilings, flickering lights, and drains that don’t flow freely. Try to accompany the inspector as they go through their checklist. Ask them to explain what they’re looking for and what they’re finding.

How can I estimate my monthly mortgage payments?

You can estimate your monthly mortgage payments using our mortgage calculator if you know the loan amount, interest rate, and loan term. You can get the loan amount by subtracting your down payment from the purchase price. Plug in a variety of interest rates to see how much changes in market rates or your credit score could affect your monthly payment. Play with different loan amounts and terms to see how much you can comfortably borrow.

Lauren Graves