This ten-step checklist will help you understand what to expect during your first home purchase.
When you're thinking about buying your first home, it's entirely normal for the process to seem overwhelming. After all, this is likely the largest purchase that you've ever made. And while a great real estate agent can guide you along every step of the way, it's essential to have an idea of what to expect in advance.
That's why I've put together this first-time home-buying checklist, which includes ten steps to help prepare you for your real estate purchase.
1. Get Your Finances in Order and Obtain Mortgage Pre-Approval
Before you even begin scrolling through listings, step back and take an honest look at your finances. Thoroughly review your savings, income, credit score, and any existing debt. Then, speak with a mortgage professional to go through the process of getting pre-approved for a loan.
Once you're pre-approved, your lender will provide you with a pre-approval letter outlining the price range you can realistically afford. Most agents will want you to be pre-approved before scheduling showings, as this shows sellers that you're a serious buyer capable of purchasing their home.
Note: I always remind my clients to avoid opening new credit cards or making large purchases – such as a vehicle or other items that require financing – between pre-approval and closing on their home. Lenders will recheck your credit, and any significant changes may put your loan at risk.
Getting Pre-Approved for a Mortgage
First-time homebuyers often lack a comprehensive understanding of the mortgage pre-approval process. Many simply look at their budget, decide how much they feel they can afford to pay per month, and assume that a lender will issue them a loan based on that theoretical monthly payment.
But while understanding how much of your monthly income you feel comfortable putting toward a home is important, the pre-approval process is far more in-depth than that.
In reality, you'll need to meet the lender's eligibility requirements, which include a minimum credit score, a maximum debt-to-income ratio, and a specific down payment amount. These requirements will vary depending on the lender you choose and the loan type you're applying for.
For a conventional mortgage – the most popular type of home loan – you should plan to need:
Credit Score: 620 or higher
Debt-to-Income Ratio: 43% or lower (potentially up to 50% in certain scenarios)
Down Payment: 3% (for first-time and lower-income homebuyers)
Other types of mortgages, such as those backed by the FHA, VA, and USDA, will have different requirements. Be sure to speak with your lender to determine the right kind of loan for you.
2. Define Your Needs vs. Wants
Once you've been pre-approved and have a realistic budget to work with, the next step is to make a list of what matters the most to you in your future home. Is the proximity or ease of accessibility to work, local shopping, and amenities non-negotiable? Do you need a garage or a sizeable outdoor space? Perhaps you're thinking ahead and want an additional bedroom for future plans?
Separating your "must-haves" from the "nice-to-haves" helps to keep you focused once you actually start touring homes and emotions come into play. Many first-time buyers fall for the aesthetics of a space before thinking about its long-term functionality. In my experience, clarity upfront prevents costly compromises later.
3. Assemble Your Real Estate Team
Working with a capable real estate professional can make all the difference in your search for a home. However, real estate is a team sport. Beyond your agent, you're also going to need a trusted mortgage lender, a real estate attorney, a competent inspector, and possibly even a general contractor.
I always tell my clients: Your agent should act as your project manager. They can utilize their experience and industry knowledge to help you connect with the right professionals who specialize in your type of purchase, whether it's a single-family home, condo, co-op, or townhouse.
4. Start Your Home Search
With your team in place, you’re ready to begin your home search. This is the fun part – but also where emotions can run high. Ground yourself by attending open houses, scheduling private showings, and exploring different areas to understand value and the options available to you within your price range.
When searching for a home, remain open-minded. Don't forgo your "must-haves," but keep in mind that sometimes the "perfect" home looks different than what you originally imagined. I’ve had buyers fall in love with a layout or neighborhood that they initially hadn’t even considered.
5. Make an Offer
When you find the right place that you can see calling home, your agent will help you determine a strategic offer based on recent comparable sales, the condition of the property, and local market demand.
Keep in mind that your offer will be comprised of more than just the price that you're willing to pay. Some other factors that you and your agent will discuss include:
Contingency clauses
The timeline for closing
Any seller concessions you’re requesting
At this point, be prepared for negotiation – the seller may not accept your initial offer and instead respond with a counteroffer. Don’t let this discourage you. Similarly, don’t let your feelings for the property push you to accept a counteroffer that isn’t in your best interest. The goal is to create a win-win situation that feels fair and competitive to both parties.
Once you have an offer accepted and a purchase agreement in place, you will then send all of the information over to your mortgage provider, who will help you begin the formal lending process and move your application into the underwriting stage.
6. Conduct the Inspection and Due Diligence
Now that you have a property under contract, it's time to dig into the details. For houses, you'll want to schedule a home inspection to identify any potential problems, such as structural issues or necessary repairs.
If your purchase agreement includes an inspection contingency – which I highly recommend in most cases – you may be able to use the findings from your inspection to negotiate a lower purchase price or to have the seller cover certain repairs.
Suppose the issues are substantial and you can't come to a new agreement with the current homeowner. In that case, your inspection contingency gives you the right to back out of the deal.
For condos or co-ops, you'll still want to get a home inspection. However, your attorney and agent will also review building financials, board minutes, and offering plans to ensure that there are no hidden red flags.
7. Finalize Your Mortgage and Secure a Loan Commitment
After completing your due diligence, your lender will order an appraisal and move your file toward full loan approval. Some people may encourage you to schedule the appraisal immediately after getting a property under contract. However, if problems arise during due diligence and you end up canceling your offer, you may still be liable for paying the appraisal fee.
During this period of finalizing your mortgage, be sure to respond promptly to document requests to avoid any unnecessary delays. Once the underwriting department says that your loan is "clear to close," you'll receive a commitment letter confirming that your financing is locked in.
8. Schedule the Closing
With your financing commitment in place, it's time for your agent or attorney to coordinate with the seller's team to schedule a closing date. This is when you'll sign the final paperwork, transfer funds for your down payment and closing costs, and officially become a homeowner.
Pro Tip: Conduct a final walkthrough of the home just before closing to ensure the property's condition aligns with the agreed-upon terms. This can include verifying that conveying appliances are still there and that any required repairs have been completed.
9. Move In and Settle Into Homeownership
Your search is over – you're officially a homeowner. Now is the time to celebrate! But first, don't forget to tackle a few critical post-closing tasks.
Turn on Utilities in Your Name: Most sellers will have utilities disconnected the day of – or just before – closing. You can typically contact the utility provider in advance to schedule the service to be turned on in your name as soon as you close. Utilities to consider include electric, water, gas, and internet.
Change the Locks: You never know who may have keys to the home's existing locks. For your safety, make sure to change or rekey the locks as soon as you take possession of the property. For homes with a keypad-entry garage, be sure to change the code for that as well.
Deep Clean the Home: In most cases, the previous homeowner will have left the property in "broom clean" condition. However, you'll probably want to give the home a deep cleaning – especially the kitchen and bathrooms – before moving in. Better yet, work into your purchase agreement for the seller to have the house professionally cleaned prior to closing.
Make Any Desired Changes: Do you have plans to make any immediate changes to the home, such as painting the walls or replacing the flooring? It's a lot simpler to tackle these tasks while the property is still empty than it is after you've moved your belongings in.
Check or Replace Smoke and CO2 Detectors: Another vital safety practice is to double-check that all smoke and CO2 detectors are functioning correctly and replace those that are not working or have expired. Check the manufactured date, because alarms should be replaced every five to ten years, depending on the model.
Update Your Address With the Post Office: Ensure you're not missing out on mail being delivered to your previous residence by submitting a Change of Address with the post office as early as possible. Please note that it may take up to two weeks to process an address change request, so it is advisable to plan ahead.
Planning For the Future
At this point, I also recommend that my buyers create an ongoing maintenance checklist that identifies tasks to be completed on a monthly, seasonal, and annual basis. Your home inspection report is a great place to start, as it will cover nearly every aspect of your new home.
Another important thing that many first-time homeowners often overlook is establishing a budget for annual repairs and improvements. While the home may be new to you, most of its components are likely not, and eventually, things will need to be fixed or replaced.
10. Keep in Touch With Your Real Estate Team
Even though the home-buying process is complete, make sure to stay in touch with your real estate team. Your agent can continue to be a valuable resource long after closing, whether it's recommending local contractors, offering advice on renovations, or helping you plan for your next move.
People commonly think that real estate professionals are only there to assist you in buying or selling a home, but that’s not true. The best relationships in real estate are built to last well beyond the transaction.
Don't Be Intimidated by the Home-buying Process
Sure, buying a home – especially for the first time – can seem intimidating. However, don't let that deter you from pursuing your home-buying goals. This first-time home-buying checklist has outlined the most crucial aspects of the process. Still, more importantly, you won't be doing it alone. You'll have a team of professionals on your side the entire time, working their hardest to set you up for success.
