How Do You Buy a Home? 10 Steps to Success

Dreaming of becoming a homeowner? Maybe you’ve even started perusing online listings. Either way, you probably have lots of questions, from how much you need for a downpayment to how to make an offer.  If you’re wondering how to buy a home, we’ve outlined the process in 10 steps.

1. Set Up a Budget and Start Saving

How do you buy a home? You start well in advance by saving for a down payment.

The minimum down payment varies by loan type:

• Conventional loans: As low as 3%–20% down, depending on lender and credit score.
• FHA loans: 3.5% down for credit scores 580+ and 10% for credit scores below that.
• VA loans: 0% down for eligible veterans, active-duty military, and surviving spouses
• USDA loans: 0% down for eligible homebuyers purchasing a home in a rural area (as defined by the USDA).

Be sure to also budget for closing costs, property taxes, and ongoing expenses at your current address.

2. Explore Mortgage Options and Pre-Approval

A mortgage pre-approval tells you how big a mortgage you’ll be able to get. Pre-approvals typically last 60–90 days and lock in an interest rate for that period.

When you’re trying to figure out how to buy a house for the lowest overall cost, compare lenders to find the best interest rates and mortgage terms. Consider whether a fixed-rate or adjustable-rate mortgage (ARM) is best for your financial situation. This will require some planning, but don’t let that intimidate you!

3. Choose the Right Real Estate Agent

Buying a home is a major investment, so work with a knowledgeable real estate agent who understands the local market and trends in real estate. Ask about their experience, references, and expertise in your desired location. Look for an agent who knows how to buy a home from the home buyer’s point of view.

4. Start House Hunting

Now for the fun part! You are going from “How do you buy a home?” to “How do you choose a home?” It can be difficult but it’s always exciting!

Location is key when choosing a home. You may want to be in a particular neighborhood, near your work, or close to your children’s schools. Consider your daily routines and how they will be affected by living in a particular place.

Next, think about the type of house you want. A key part of how to buy a house is having a clear idea about the lifestyle you want to lead. Is it important to you to have a yard, or would you prefer a balcony on the upper floor of a condominium building? Do you need room to expand, or do you like to keep things under control in a smaller space? Try to picture your life in the future and imagine the space you will be in.

If you’re wondering how do you buy a home while selling yours, remember that you’re not the first person who’s gone through this process. Rely on your real estate agent to guide you through it all.

5. Make an Offer

Making an offer to purchase a home is where the rubber hits the road. This part of the process can go very quickly. Your agent and the seller’s agent will negotiate terms that are acceptable to both you and the seller. Market conditions influence how you should approach this:

• In a seller’s market demand for housing is high, and you may have to offer over asking.
• When it’s a buyer’s market, you have the upper hand, which gives you negotiating power.

When you’re thinking about how to buy a house, this part of the process can be intimidating. But rest easy, your real estate agent has done this many times before, and they handle most of the interaction and negotiation.

6. Get a Home Inspection

Home inspection isn’t always required, but it’s always recommended. In fact, many people ask, “How do you buy a home without an inspection?” Home inspectors are experts at spotting potential problems that you may not notice. They will examine key systems like heating, plumbing, electrical, roofing, and the foundation. Sometimes, problems can be used to negotiate a lower price. You can also request that the issue be repaired before the closing date.

A home inspection is an out-of-pocket expense that usually costs around $300–$600 depending on the home’s size and location.

7. Close the Deal

The closing process (escrow period) typically lasts 30–45 days. During this time, your lender will have the house appraised and finalize your mortgage approval, and the seller will complete any repairs or take care of any other contingencies in your offer. Your attorney or escrow company will handle the legal paperwork.

At closing, you’ll sign the final documents, pay closing costs (typically 2%–5% of the home’s purchase price), and receive the keys!

8. Update Utilities, Transfer Services, and Change Your Address

Once your closing date is set, you are almost ready to take possession. Be sure to update your service providers as soon as you can.

• Have your mail forwarded through USPS
• Update your address on your driver’s license with the DMV
• Change your address on file with the IRS
• Transfer or set up the utilities at your new home.

If you have an autofill setup on your devices to fill in your address when you order something, make sure you change this as soon as you move. You don’t want all the new things that you’re buying for your house to go to your old address.

9. Pack and Move

Moving takes planning, so start as soon as possible. If hiring a moving company, choose a reputable business licensed through the Federal Motor Carrier Safety Administration (FMCSA) for interstate moves.

10. Enjoy Your New Home!

Congratulations! Now you’re an expert on how to buy a house! It’s time to settle in, personalize your space, and explore your new neighborhood!

Think you’re ready to buy? Connect with a REMAX agent and start your home search today.