Resources Buying a home
How to buy a home, start to finish.
Eight steps that apply in every U.S. state. Open each one for what happens, what to do, and what to watch out for.
- 01
Check your credit & savings FREE REPORTS WEEKLY
Know what lenders will see before they see it.
Lenders look at your credit history, income, and debts. Months before you shop, pull your credit reports and fix anything that’s wrong. Errors are common and disputes take time.
- Get free reports from all three bureaus at AnnualCreditReport.com, weekly, at no cost.
- Dispute errors in writing; they can move your score meaningfully.
- Save for closing costs (2 to 5% of the price) on top of your down payment.
- Keep paying everything on time. Payment history is the biggest score factor.
Watch out for: Don’t open or close credit accounts while preparing to buy. New inquiries and changed balances can drop your score right when it matters most.
- 02
Set your real budget ≤28% OF INCOME
What you can borrow isn’t what you should spend.
A useful starting point: keep the full housing payment (principal, interest, taxes, insurance, HOA) under about 28% of gross monthly income, and all debts under 36%.
- Budget about 1% of the home’s value per year for maintenance and repairs.
- You don’t need 20% down. First-time buyers typically put down far less.
- Model the monthly payment at today’s rates before falling in love with a price point.
- Leave an emergency fund untouched after closing.
Watch out for: Being approved for more than you can comfortably pay. Lenders approve to their limits, not your lifestyle. “House poor” is a real outcome.
- 03
Get preapproved ~90-DAY VALIDITY
A letter that makes sellers take you seriously.
A preapproval is a lender’s written estimate of what they’ll lend you, based on verified income, assets, and credit. Most sellers expect one attached to any offer.
- Gather pay stubs, W-2s or tax returns, and bank statements before applying.
- Preapproval (verified) is stronger than prequalification (self-reported).
- It typically lasts about 90 days, so time it to your shopping window.
- You are not committed to the lender who preapproves you.
Watch out for: Hard credit pulls from many lenders spread over months. Cluster your applications within a short window so they count as one inquiry.
- 04
Hire your buyer’s agent INTERVIEW 2 to 3
Interview a few, then sign clearly.
A buyer’s agent tours homes with you, reads the local market, writes offers, and negotiates. Since 2024, you’ll sign a written buyer agreement before touring homes that spells out services and compensation.
- Interview 2 to 3 agents; ask about neighborhoods, recent deals, and communication style.
- Read the buyer agreement fully. Terms and compensation are negotiable.
- Ask how they’ll help you compete: pricing strategy, timing, contingencies.
- Local expertise matters more than brand names.
Watch out for: Signing a long exclusive agreement with the first agent you meet. Start with a short term until you know the fit is right.
- 05
Shop with a clear head 3 NON-NEGOTIABLES
Needs first, wants second, neighborhood always.
Write down your non-negotiables (commute, bedrooms, school zone) separately from nice-to-haves. Homes are compromises. Decide yours before emotions run the process.
- Visit the neighborhood at rush hour, at night, and on a weekend.
- Check property taxes, HOA rules and fees, and flood-zone status for every serious candidate.
- Photograph and take notes at each showing. They blur together fast.
- New listing alerts move fastest, so have your agent set them up day one.
Watch out for: Falling for staging. You’re buying the floor plan, systems, roof, and location, not the furniture.
- 06
Make a strong offer 1 to 3% EARNEST MONEY
Price is one lever; terms are the rest.
Your agent runs comparable sales to anchor the price, then structures terms: earnest money (usually 1 to 3%), contingencies, and timing that fits the seller.
- Inspection, financing, and appraisal contingencies exist to protect your deposit. Waive them only with clear eyes.
- A flexible closing date can beat a slightly higher price.
- Ask for seller concessions (help with closing costs) in slower markets.
- Set your walk-away number before negotiations start.
Watch out for: Bidding-war adrenaline. Decide the maximum you’d be happy with the morning after, then stop there.
- 07
Inspect, appraise & compare loans 3+ LOAN ESTIMATES
The week that protects your money.
Under contract, three things run in parallel: a professional inspection, the lender’s appraisal, and your final loan shopping using standardized Loan Estimate forms.
- Never skip the inspection. It’s a few hundred dollars against five-figure surprises.
- Use findings to negotiate repairs, credits, or price.
- Collect Loan Estimates from 3+ lenders within two weeks and compare line by line.
- If the appraisal comes in low, you can renegotiate, cover the gap, or walk per your contingency.
Watch out for: Making big purchases or job changes before closing. Lenders re-verify credit and employment days before you sign.
- 08
Close & get the keys 2 to 5% CLOSING COSTS
Three days to review, one hour to sign.
Your Closing Disclosure arrives at least three business days before closing. Compare it to your Loan Estimate (the forms match line for line) and question anything that moved.
- Do the final walkthrough within 24 hours of closing.
- Bring government ID and your cashier’s check or wire confirmation.
- Budget closing costs of roughly 2 to 5% of the loan.
- Keep every closing document. You’ll want them at tax time.
Watch out for: Wire fraud is rampant in real estate. Always confirm wiring instructions by calling the title company at a number you look up yourself, never one from an email.
Educational content adapted from the Consumer Financial Protection Bureau’s Buying a House resources and National Association of REALTORS® consumer guidance, reviewed July 2026. This is general information for every U.S. state, not financial, legal, or tax advice. Free, HUD-approved housing counselors are available at consumerfinance.gov .
Buying a home: your checklist
- Get free reports from all three bureaus at AnnualCreditReport.com, weekly, at no cost.
- Dispute errors in writing; they can move your score meaningfully.
- Save for closing costs (2 to 5% of the price) on top of your down payment.
- Keep paying everything on time. Payment history is the biggest score factor.
- Budget about 1% of the home’s value per year for maintenance and repairs.
- You don’t need 20% down. First-time buyers typically put down far less.
- Model the monthly payment at today’s rates before falling in love with a price point.
- Leave an emergency fund untouched after closing.
- Gather pay stubs, W-2s or tax returns, and bank statements before applying.
- Preapproval (verified) is stronger than prequalification (self-reported).
- It typically lasts about 90 days, so time it to your shopping window.
- You are not committed to the lender who preapproves you.
- Interview 2 to 3 agents; ask about neighborhoods, recent deals, and communication style.
- Read the buyer agreement fully. Terms and compensation are negotiable.
- Ask how they’ll help you compete: pricing strategy, timing, contingencies.
- Local expertise matters more than brand names.
- Visit the neighborhood at rush hour, at night, and on a weekend.
- Check property taxes, HOA rules and fees, and flood-zone status for every serious candidate.
- Photograph and take notes at each showing. They blur together fast.
- New listing alerts move fastest, so have your agent set them up day one.
- Inspection, financing, and appraisal contingencies exist to protect your deposit. Waive them only with clear eyes.
- A flexible closing date can beat a slightly higher price.
- Ask for seller concessions (help with closing costs) in slower markets.
- Set your walk-away number before negotiations start.
- Never skip the inspection. It’s a few hundred dollars against five-figure surprises.
- Use findings to negotiate repairs, credits, or price.
- Collect Loan Estimates from 3+ lenders within two weeks and compare line by line.
- If the appraisal comes in low, you can renegotiate, cover the gap, or walk per your contingency.
- Do the final walkthrough within 24 hours of closing.
- Bring government ID and your cashier’s check or wire confirmation.
- Budget closing costs of roughly 2 to 5% of the loan.
- Keep every closing document. You’ll want them at tax time.
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