The First-Time
Home Buyer's Guide

Let's face it: buying a home requires a lot of work. Typically the process is long and laborious, but it doesn't need to be so tricky to navigate.
We compiled a guide of the home buying process to assist anyone unsure of how to go about finding their first home. We've organized our overview into the most commonly asked questions, giving you the option to read the entire guide or just the section that relates to your inquiries.

Don't know where to start?

If you're looking for a basic introduction to the buying process, skip down and read on for a better understanding of what's involved in buying a home.

Begin Your Journey Here

Before you start seriously searching for a new home, check out Movoto Real Estate's home buying guide for help with making your dream home become a stress-free reality.

Basecamp: An Introduction to the Home Buying Process

New to the home buying process? Here's a step-by-step breakdown of all the main elements to help prepare you for what buying a home will really be like.

Get Your Finances in Order

The first thing you want to do once you decide to buy a home is to organize your finances, check your credit score, and make sure you look like a good candidate for a mortgage.
This should be done prior to starting your search, because it's in your best interest to approach the process with a strong financial background--purchasing a house is a major expense that will affect your finances for many years to come. The more prepared you are for such an investment, the more smoothly it will go.

Shop Around for a Mortgage

We know it sounds backwards, but you want to figure out your price range before you start shopping around for a home, and you can't do that until you are able to accurately estimate your loan.
One way to figure out what type of mortgage will work best for you is by getting preapproved or prequalified for a loan. Preapproval or prequalification will:
  • Give you an estimate of what type of loan you qualify for
  • Help you determine what your monthly mortgage payments will be
  • Allow you to better calculate your home-buying budget
For a detailed breakdown of different kinds of mortgages, see Question 6, How do I know what loan to apply for?

Figure Out What You Can Afford

Once you've found a mortgage plan that fits--or at least have a better idea of what type of loan you can afford--you should calculate your budget.
Movoto's Buyer Tip: You should figure out your budget only after you have your finances organized and know that now is a good time for you to purchase. You also want to estimate your costs on the higher side to make sure you're fully prepared to buy a home.
The best way to figure out your budget is by adding up estimates of all the costs related to your new home (and it's generally better to estimate on the higher side). These costs typically include:
  • Down payment for mortgage
  • Closing costs
  • Property taxes
  • Insurance
  • Maintenance costs
  • Homeowners association fees
  • Inspection and application fees
  • Regular mortgage payments
Check out Question 3, How much house can I afford?, for a more detailed breakdown of how to calculate your budget.

Find an Agent

Theoretically you might be able to search for a home without the assistance of an agent, but having someone who knows your needs and also understands the real estate market will make your search easier.
Calculate your budget with Movoto’s Budget calculator.
Ideally you want an agent who:
  • Always acts with your interests in mind
  • Helps you understand current market conditions
  • Works with you to define your criteria and guides you to homes that fit it
  • Negotiates with the seller for you
  • Solves any problems that arise
You can look for an agent through an online brokerage or by contacting a local brokerage, among other ways.

Define Your Needs

Once you begin the search, you'll start to get an idea of what components you seek most in your home. Some of the details you want to figure out around this time are the location, size, type of home, and condition (whether you want a newly constructed home or an existing one).
Movoto's Buyer Tip: The location could easily be the most important aspect of home shopping. Location is important not only for your current needs, but for future selling opportunities as well. Make a list of the most important aspects you want in a neighborhood, such as being close to work or near a good school. This will help guide your home search.
You can find a more detailed overview of these options in Question 4, How do I know what I want?

Find Your Home

With assistance from your agent, searching for your dream home is easier than ever. Movoto and other comparable websites give you access to local listings and a variety of quality homes--and with time and effort, one of these options may turn out to be the best home for you.
Don't jump in and buy the first house you look at. Visit a number of homes in your price range to see what you can get on your budget, then pick your top homes and check them out again.

Hire a Good Lawyer (Optional)

As with your real estate agent, you want to hire an experienced lawyer familiar with the home-buying process. But you also want a professional who will negotiate on your behalf and with your best interests in mind.
Ask for recommendations from friends and colleagues. Then check out anyone you're considering online--there are so many sites nowadays to see reviews for people, from Googling them to searching on sites such as Yelp and Angie's List.

Make an Offer

When you find a house that could be The One, make a reasonable offer based on the comparable homes you've seen. Your offer can be below the asking price, but you should be prepared for seller to turn you down if you do so.
If the housing market is in one of its ruts, your chances of success with a lower offer are generally better. Likewise if the seller is eager to unload the property because he or she has already purchased another home. Yet if the seller happens to be someone willing to wait for years to get the asking price, chances are you won't make any progress unless you agree to that price.
Your offer should have three basic components, which your agent should help you to assemble:
Price: The amount you are offering to purchase the home for
Terms: These should cover any other financial or time factors relative to the offer
Contingencies: These are clauses that will release you from the deal if you come across a problem with the home, such as finding out the house has an issue you weren't made aware of

Negotiate a Deal

If your offer was below the seller's asking price, you should expect a counter offer in return that is between your number and the original. You can make your own counter offer if the seller's new price is still above what you're willing to pay, and you will continue to go back and forth until both parties are satisfied.
Be cautious about how much you haggle the price, though. Too many counter offers could annoy the seller and put an end to your chances of owning that particular home.

Inspect Your Home

Once you and the seller have reached a deal, it can feel like you're in the home stretch. However, it's important that you take the time to have the property professionally inspected to ensure your investment is exactly what you understand it to be.
An inspection is virtually your last chance to discover any condition relating to the home that you don't know about. You may believe everything the seller has told you about the property, but this is your opportunity to have an outsider give you feedback about the home's safety. Here's what you should be concerned about with an inspection:
  • If there's a possibility of structural damage, which could occur from poor construction, water damage, or shifting ground
  • How costly a big issue could be to correct, if a large-scale problem shows up in the inspection report
What you shouldn't be concerned about is something small that might appear in the report. Don't sweat over anything that can be easily fixed that gets pointed out, because it's the inspector's job to mark all issues no matter how small.

Submit Your Mortgage Application

If the inspection yields positive results, then it's time for you to submit the application--along with an application fee--for your mortgage. If possible, ask the lender to lock in your rate until you close on the house.
Movoto's Buyer Tip: About a week after you submit your application, check in with the lender to make sure there's no missing paperwork. You don't want a mistake on your part to hold up the application's evaluation.

Prepare to Close

In addition to gathering all the necessary paperwork, you should stay in touch with all parties involved in the sale to deal with any potential problems as they arise. Prior to closing you should also:
  • Conduct a final walkthrough with your agent
  • Confirm that you have all of the paperwork
  • Stay on top of your finances, and avoid making any large purchases without first talking to your lender
All that's left is for you to sign the paperwork for the mortgage and sign and verify all documents during the closing. Then you can finally call your new investment home sweet home!

Congratulations on making the decision to become a homeowner!

We hope our Home Buying Guide proves useful for whenever you need a conceptual breakdown or just can't quite grasp the real estate lingo.
Should you have a unique question and are looking for an experienced agent's insight, we offer only the best real estate professionals to assist you with your home purchase and answer all inquiries.