5 Steps to Purchasing Your Very First Home

Finding the right agent, reviewing your finances, and identifying your target market are a few steps you’ll be taking when purchasing your first home.

Tom Monaghan
Tom Monaghan

Purchasing your first home is one of the most exciting things you’ll do in your entire life. It’s opening the doors to a new phase of your life as a homeowner, where you’ll reap the many benefits of building equity, having full control of your property, and being able to settle down in one secure place.

The 5 Big Steps When Purchasing Your First Home

Before you can start enjoying the perks of homeownership, you’ll have to move through the purchasing process. To help you prepare for what’s to come, here are the things you’ll need to do before purchasing your first home.

#1. Look at Your Finances

First off, you’ll want to take a look at your finances and credit history. Purchasing your first home requires a large financial investment and a lasting commitment, so you want to ensure your finances are in order before taking the next steps.

Be mindful of how all events affect your credit score, including submitting mortgage applications.

Things to Consider:

  • If you’ll be funding your home purchase with a mortgage loan, now is the time to start exploring possible lenders and loan options.
  • Spend some time building up your credit score to help you access beneficial loan terms like a reduced interest rate and waived fees.
  • You’ll need to set aside some cash for the down payment and any out-of-pocket transaction costs. This will ensure that you’re prepared to cover the expense that may arise before the closing meeting.
  • Think about your budget. Your mortgage lender will help you refine this budget in later steps once you’ve been pre-qualified and pre-approved, but it’s good to start thinking about how much you could afford up-front and month-to-month.

#2. Determine Your Wants and Needs

You likely have many goals wrapped up in the idea of purchasing your first home. To streamline the process, you’ll need to organize your wants and needs by differentiating and prioritizing the things that you’re looking for. Knowing your wants and needs will help you narrow down the home search process.

Things to Consider:

  • Think of your needs as absolute non-negotiables that you cannot move forward without.
  • On the other hand, your wants are like perks: they’re good, but they’re not necessities.

#3. Start Thinking About Location

Location is one of the main things you need to decide on when purchasing your first home. This will set the geographic area where you’re searching for available listings that check off the items on your list of needs and wants.

Your budget and list of wants/needs will help to narrow locations you're serious about.

Things to Consider:

  • If you have an idea of where you want to live, get specific. If you know the city, do research into the different neighborhoods to zoom in on your target market.
  • Communities are about more than just location. Each neighborhood has its own lifestyle and feel, so look into the experience different neighborhoods offer as you look for communities where you’d be interested in living.
  • Be flexible wherever possible. While it is good to be specific, your agent may offer other options that are better suited to your wants and needs. Maintain an open mind as you progress through the home search process alongside your agent.

#4. Find the Right Real Estate Agent for You

The most important step in the process of purchasing your first home is to find the right agent to serve as your trusted guide.

You want to work with a top-performing local agent who can leverage their expertise and experience to support your best interests throughout the deal.

Things to Consider:

  • The right agent for you should be well-versed in helping buyers with similar goals as you. For example, if you’re looking to buy an affordable home, you don’t necessarily want to hire an agent that specializes in the ultra-luxury market.
  • Following your gut can help you choose an agent that’s a good personality fit for you. Remember, you’ll be working alongside this agent for months. To make it a smooth experience, you’ll want to select someone who you naturally get along with.

#5. Make an Offer and Move into Escrow

Once you hire your agent, you’ll begin taking the steps to kick off your transaction. After finding a home you like, your agent will help you make a strong offer. If the seller accepts your offer, you’ll move into the escrow process — which ends with the closing meeting and turning the key on your new home.

Things to Consider:

  • Talk to your agent about customizing your offer to reflect best practices in your current market. For example, you may want to include earnest money or an escalation clause when the market is particularly competitive.
  • Do some research on the escrow process so you have an idea of what steps you’ll be taking when purchasing your first home.

For more real estate tips and advice for home buyers, explore more articles on the RealEstateAgent.com Blog.

Tom Monaghan

Tom Monaghan