Buyers Guide

1. Determine how much you can afford.

Your debt-to-income (or DTI) ratio can help you determine how affordable your monthly mortgage payments are. Talk to your Real Estate agent or look online for a DTI ratio calculators online where you enter your monthly income, long term debt and interest rate to get an estimate of how much you can borrow.  

2. Save for a down payment.

Unless you have enough cash to afford the entire cost of a home, you’ll need to secure a mortgage loan. Your home loan covers most of the purchase price, and you’ll pay it back (with interest) over a set period of time—but you’ll need to pay the down payment upfront using cash on hand. The larger the down payment, the more you’ll save over the course of your loan. 

3. Find a buyer’s agent.

Real estate agents can work exclusively as buyer’s agents—also called selling agents—where they represent a client who is looking to buy property. You want someone experienced, knowledgeable, and trustworthy with whom you can establish a great rapport. 

4. Get mortgage pre-approval and choose a lender.

The type of mortgage you get depends on a few financial factors. Sellers want to know you’re actually able to pay, and you show them by getting a pre-approval letter. Before you start home shopping in earnest, shop for mortgage lenders and provide the necessary financial documents like pay stubs, credit report and job history, debts, and assets to get pre-qualified for a loan amount that you’re capable of paying back. 

5. Find the right home for you.

Research and visit neighborhoods. Look at current and previous listings in those areas. Work with your agent to narrow down your list of properties, prioritizing features that matter most to you.

6. Make a smart offer.

Lean on your agent for the initial offer amount and contingencies, taking into consideration the current housing market, how long the home has been for sale, and any outstanding offers from other buyers that you might be competing against. 

7. Negotiate.

If a seller makes a counteroffer (or tries to initiate a bidding war among potential buyers), rely on your agent’s expertise. They’ll know when to increase the offer amount (and by how much), if you should remove contingencies, or when to call the seller’s bluff and pull your bid. 

8. Schedule a home inspection.

The inspector will closely examine the property and write a report detailing the condition, noting any issues. Use these findings to ask the seller to make fixes, reduce the purchase price, or make concessions for closing. 

9. Assemble cash to pay closing costs.

Your finances will need to be liquid at closing so that you can cover various costs to finalize the deal, such as property taxes, loan origination fees, appraisal fees, and attorney’s fees. 

10. Complete a home appraisal.

If you have a mortgage lender, they’ll arrange for a professional appraiser to determine the property value, ensuring that they (and you) aren’t paying more than the home is actually worth. 

11. Get homeowner’s insurance.

If you have a mortgage lender, they’ll require you to provide proof of insurance at closing. Shop around to find the best policy for you. 

12. Scout a contractor.

Unless the home is 100 percent turnkey, there’s likely to be some work you want (or need) done after closing. Start looking around for a contractor who can complete that work. Search online and ask your agent—or, even better, other homeowners you know—if they can make introductions to a contractor they trust. 

13. Do a final walk-through.

In most cases, you get one final chance to look at the property 24 hours before closing. At that point, the home should be completely empty (aside from any appliances you agreed to keep) and reflect the condition stated in your contract. Test everything—faucets, light fixtures, appliances, toilets, doors, windows, the HVAC system, and anything else. If there are issues, report them to your agent immediately. 

14. Bring everything necessary to closing.

Closing costs can include the expenses and fees associated with the purchase and sale of a home, such as taxes, title insurance, appraisal, lender fees, and other services carried out during closing. On closing day, you’ll need to provide ID, proof of home insurance, checks or cashier’s checks to cover the closing costs, and other documentation that your agent will bring to your attention. 

15. Close on your home.

After signing the paperwork, the home will transfer to you. You’ll shake hands with the agent and get the keys to your new home.