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Step 1: Determine Your Budget

Before looking at homes, it is important to understand what you can realistically afford.

Factors that affect affordability include:

• Income and monthly expenses

• Credit score

• Down payment amount

• Mortgage interest rates

• Property taxes and insurance

 

Most lenders as a general budget guideline, look at housing costs stay within 28 to 30 percent of your monthly income, which is not a universal lender requirement or a guarantee of affordability. The appropriate budget for housing costs depends on income, debts, taxes, insurance, other expenses, and the lender's underwriting criteria. 

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You should also account for additional expenses such as maintenance, utilities, and repairs.

 

Step 2: Get Mortgage Pre-Approval

Mortgage pre-approval letters have expiration dates set by the lender. The validity period varies, so confirm the date on your letter and ask your lender what information must be updated if you continue searching after it expires. Changes in income, debt, credit, or interest rates may affect your financing options.

During pre-approval the lender reviews:

• credit history

• income and employment

• debt levels

• assets and savings

 

Pre-approval letters typically remain valid for 60 to 90 days.

 

Step 3: Understand the Home Buying Process

A typical home purchase includes several stages:

1. Home search

2. Making an offer

3. Negotiating the purchase agreement

4. Home inspection

5. Appraisal

6. Mortgage approval

7. Closing

 

Each stage involves professionals who help verify the value and condition of the property.

 

Step 4: Search for the Right Home

When searching for a home, buyers should consider:

• location and commute

• school districts

• neighborhood growth

• property taxes

• future resale value

 

Online platforms can help identify listings, but buyers should also evaluate market conditions and comparable sales before making an offer.

 

Step 5: Make an Offer

Once you find a property, the next step is submitting an offer.

Offers typically include:

• purchase price

• financing terms

• contingencies

• closing timeline

• earnest money deposit

 

Negotiations may occur if the seller counters the offer.

 

Step 6: Home Inspection

A professional inspection evaluates the physical condition of the home.

Inspectors typically review:

• roof and structure

• electrical systems

• plumbing

• HVAC systems

• foundation issues

 

The inspection report can help buyers decide whether to move forward, negotiate repairs, or withdraw from the purchase.

 

Step 7: Home Appraisal

Lenders require an appraisal to confirm the property’s value.

Appraisers evaluate:

• comparable home sales

• property condition

• size and features

• neighborhood trends

 

If an appraisal comes in lower than the purchase price, buyers may need to renegotiate with the seller or increase their down payment.

 

Step 8: Closing Costs

Closing costs vary by property, location, loan program, and transaction terms. Any percentage-based estimate is only a starting point. Ask your lender for a Loan Estimate when applicable and review the expected cash needed to close, including applicable lender fees, title and settlement charges, prepaid taxes and insurance, and other transaction-specific expenses.

Typical closing costs include:

• loan origination fees

• appraisal fees

• title insurance

• escrow fees

• recording fees

• property taxes and insurance

 

In many cases, closing costs range from 2 to 5 percent of the purchase price.

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Step 9: Final Walkthrough

Before closing, buyers usually conduct a final walkthrough to confirm:

• agreed repairs were completed

• the home is in the expected condition

• appliances and fixtures remain in place

 

This step helps ensure there are no surprises before the transaction is finalized.

 

Step 10: Closing on the Home

At closing, all final documents are signed and ownership transfers from the seller to the buyer.

Closing typically includes:

• signing mortgage documents

• transferring funds

• recording the deed

• receiving the keys

 

After closing, the buyer officially becomes the new homeowner.

 

Common Questions from Home Buyers

 

Do I need a buyer’s agent to purchase a home

Buyers can choose to work with a buyer’s agent, consult independent advisors, or research the process themselves. Understanding the transaction and negotiation process is important regardless of representation.

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How much down payment is required

Many loan programs allow down payments as low as 3 to 5 percent, although larger down payments may reduce monthly payments and mortgage insurance.

 

How long does it take to buy a home

The timeline varies, but most transactions take 30 to 60 days from accepted offer to closing.

 

How BuyersShare Helps Home Buyers

BuyersShare helps buyers understand the home buying process and connect with professionals involved in a real estate transaction.

Through guidance and resources, buyers can better understand:

• financing options

• inspections and appraisals

• negotiation strategies

• closing costs

• the overall home buying process

 

Our goal is to help buyers make confident decisions when purchasing property. Follow us on Facebook.

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