Home Buying Guide
A comprehensive resource to help you navigate the home buying process with confidence.
Table of Contents
Getting Started
Buying a home is one of the most significant investments you'll make in your lifetime. Before diving into the market, it's essential to understand the process and prepare accordingly.
Assess Your Readiness
Consider your current life situation, including job stability, how long you plan to stay in the area, and your willingness to take on the responsibilities of homeownership.
Understand the Market
Research the real estate market in your desired location. Look at trends in home prices, average time on market, and the overall health of the local economy.
Build Your Team
Assemble a team of professionals to help you through the process, including:
- A trusted real estate agent who understands your needs
- A mortgage lender or broker to help with financing
- A real estate attorney (required in some states)
- A home inspector to evaluate potential properties
Pro Tip
Interview multiple real estate agents before choosing one. Ask about their experience, knowledge of your desired neighborhoods, and communication style to ensure they're a good fit for your needs.
Financial Preparation
Before you start looking at homes, it's crucial to get your finances in order and understand what you can afford.
Check Your Credit Score
Your credit score plays a significant role in determining your mortgage interest rate. Review your credit report for errors and take steps to improve your score if needed.
Determine Your Budget
Consider not just the purchase price, but also:
- Down payment (typically 3-20% of the purchase price)
- Closing costs (2-5% of the loan amount)
- Moving expenses
- Ongoing costs like property taxes, insurance, maintenance, and utilities
Get Pre-Approved for a Mortgage
A mortgage pre-approval gives you a clear idea of how much you can borrow and shows sellers you're a serious buyer. To get pre-approved, you'll need to provide:
- Proof of income (pay stubs, tax returns)
- Employment verification
- Asset information (bank statements)
- Identification documents
Understand Mortgage Options
There are several types of mortgages available, including:
- Conventional loans: Not backed by the government, typically require higher credit scores
- FHA loans: Backed by the Federal Housing Administration, allow for lower down payments and credit scores
- VA loans: For veterans and active military, often require no down payment
- USDA loans: For rural homebuyers, may offer no down payment options
Pro Tip
Don't forget to factor in additional costs beyond your mortgage payment. A good rule of thumb is to budget 1-3% of your home's value annually for maintenance and repairs.
House Hunting
With your finances in order and a pre-approval in hand, you're ready to start looking for your dream home.
Define Your Must-Haves
Create a list of features your new home must have, those you'd like it to have, and those that would be deal-breakers. Consider:
- Location and neighborhood
- Home size and layout
- Number of bedrooms and bathrooms
- Outdoor space
- School district
- Commute time
- Property age and condition
Start Your Search
Use multiple resources to find potential homes:
- Online listings (like NexiHomes)
- Your real estate agent's MLS access
- Open houses
- For sale signs in neighborhoods you like
- Word of mouth
Evaluate Properties Thoroughly
When viewing homes, look beyond the surface and consider:
- The overall condition of the property
- Signs of potential problems (water damage, cracks in walls, etc.)
- The age and condition of major systems (HVAC, roof, plumbing, electrical)
- The layout and flow of the home
- Storage space
- Natural light
- Noise levels from neighbors or nearby roads
Pro Tip
Take photos and notes during home viewings to help you remember details later. Consider visiting properties at different times of day to get a feel for the neighborhood at various times.
Making an Offer
Once you've found a home you love, it's time to make an offer. This is a critical step that can determine whether you secure the property at a fair price.
Determine Your Offer Price
Work with your real estate agent to determine a competitive offer based on:
- Comparable sales in the area
- The property's condition
- How long it's been on the market
- Current market conditions (buyer's vs. seller's market)
- Your budget and financing
Include Contingencies
Contingencies protect you by allowing you to back out of the deal under certain circumstances. Common contingencies include:
- Home inspection: Allows you to negotiate repairs or back out if significant issues are found
- Financing: Makes the offer contingent on securing a mortgage
- Appraisal: Ensures the home is worth at least the purchase price
- Title: Requires a clear title with no ownership disputes
- Home sale: Makes your offer contingent on selling your current home
Negotiate the Offer
Be prepared for the seller to counter your offer. Work with your agent to negotiate:
- Purchase price
- Closing date
- Repairs or credits
- Included appliances or fixtures
- Contingencies
Pro Tip
Consider including a personal letter with your offer explaining why you love the home. This emotional connection can sometimes make a difference, especially in competitive situations with similar offers.
The Closing Process
Once your offer is accepted, you'll enter the closing process, which typically takes 30-45 days. This period involves several important steps.
Home Inspection
Hire a professional home inspector to thoroughly evaluate the property. They'll check:
- Structural components
- Roof and attic
- Plumbing and electrical systems
- HVAC system
- Appliances
- Foundation and basement
- Signs of water damage or pests
Based on the inspection results, you may negotiate repairs or credits with the seller.
Secure Your Financing
Work with your lender to finalize your mortgage. This process includes:
- Submitting additional financial documentation
- Getting a home appraisal
- Locking in your interest rate
- Obtaining loan approval
Title Search and Insurance
A title company will search public records to ensure the property has a clear title with no liens or disputes. You'll also purchase title insurance to protect against any future claims.
Final Walk-Through
Shortly before closing, you'll do a final walk-through of the property to ensure it's in the agreed-upon condition and any negotiated repairs have been completed.
Closing Day
On closing day, you'll:
- Sign numerous legal documents
- Pay closing costs
- Provide proof of homeowners insurance
- Receive the keys to your new home
Pro Tip
Review your Closing Disclosure, which you'll receive at least three days before closing, carefully. Compare it to your Loan Estimate to ensure there are no unexpected fees or changes.
After Purchase
Congratulations on your new home! Here are some important steps to take after closing.
Change the Locks
For security, replace or rekey all exterior locks as soon as possible after closing.
Set Up Utilities
Transfer utilities into your name, including:
- Electricity
- Gas
- Water and sewer
- Internet and cable
- Trash and recycling
Create a Home Maintenance Schedule
Develop a maintenance calendar for regular tasks like:
- Changing HVAC filters
- Cleaning gutters
- Testing smoke and carbon monoxide detectors
- Servicing major appliances
- Seasonal maintenance tasks
File for Homestead Exemption
In many states, homeowners can file for a homestead exemption, which can reduce property taxes on your primary residence.
Keep Important Documents
Store these important documents in a safe place:
- Closing documents
- Deed
- Home inspection report
- Homeowners insurance policy
- Warranty information
- Property survey
Pro Tip
Create a digital and physical inventory of your belongings for insurance purposes. Take photos or videos of each room and keep receipts for major purchases.
Common Mistakes to Avoid
Even experienced homebuyers can make mistakes. Here are some common pitfalls to avoid:
Skipping Pre-Approval
Getting pre-approved gives you a realistic budget and makes your offer more competitive. Without it, you might waste time looking at homes you can't afford.
Emptying Your Savings
Don't spend every penny on your down payment and closing costs. Maintain an emergency fund for unexpected home repairs and other expenses.
Skipping the Home Inspection
Even if the home looks perfect, a professional inspector might find hidden issues that could be costly to repair.
Making Large Purchases Before Closing
Buying furniture or a new car before closing can affect your debt-to-income ratio and jeopardize your mortgage approval.
Not Researching the Neighborhood
Visit the neighborhood at different times to check for noise, traffic, and overall vibe. Research schools, crime rates, and future development plans.
Waiving Too Many Contingencies
In competitive markets, buyers sometimes waive contingencies to make their offers more attractive. This can be risky and leave you unprotected.
Pro Tip
Trust your instincts. If something feels off about a property or the process, don't ignore that feeling. It's better to walk away than to make a decision you'll regret.
Ready to Start Your Home Buying Journey?
Buying a home is a complex process, but with the right preparation and team, it can be a rewarding experience. Use this guide as a reference throughout your home buying journey, and don't hesitate to seek professional advice when needed.
Additional Resources
First-Time Homebuyer Programs
Learn about special programs and incentives available to first-time homebuyers, including down payment assistance and tax benefits.
Learn MoreMortgage Calculator
Estimate your monthly mortgage payments based on home price, down payment, interest rate, and loan term.
Try Our CalculatorHome Inspection Checklist
A comprehensive checklist to help you evaluate properties during viewings and prepare for professional inspections.
Download ChecklistMoving Guide
Tips and timelines to help you plan and execute a smooth move to your new home.
Read the Guide