Learn · Buying
First-Time Buyer's Complete Guide
From getting pre-approved to handing you the keys — a practical walkthrough of every step in the home buying process.
Buying your first home is the largest financial transaction most people ever make. The good news: without an agent collecting a 2.5–3% commission, you keep that money — and with the right information, you don't need one. Here's the full process, step by step.
Step 1 — Get Your Finances in Order
Before you look at a single listing, know your numbers:
- Credit score: 620 minimum for conventional loans, 580 for FHA. Above 740 gets you the best rates.
- Down payment: 20% avoids PMI (private mortgage insurance), but 3–10% is common for first-time buyers.
- Debt-to-income ratio (DTI): most lenders want total monthly debts under 43% of gross income.
- Emergency fund: keep 3–6 months of expenses in cash after closing — don't drain savings to buy.
- Closing costs: budget 2–5% of the purchase price on top of your down payment.
Step 2 — Get Pre-Approved (Not Just Pre-Qualified)
Pre-qualification is a quick estimate based on self-reported info. Pre-approval is a lender's verified commitment based on your actual documents. Sellers take pre-approval seriously — pre-qualification is often ignored.
Documents you'll need for pre-approval:
- Last 2 years of W-2s or tax returns (self-employed: 2 years of returns + P&L)
- Last 2 months of pay stubs
- Last 2–3 months of bank statements
- Government-issued ID
- List of all debts (car loans, student loans, credit cards)
Step 3 — Search Smartly
Define your non-negotiables vs. nice-to-haves before you start touring. It's easy to get swept up emotionally.
Non-negotiables (be strict)
- Commute time / location
- School district if you have children
- Minimum bedrooms / bathrooms
- Budget ceiling — not your pre-approval max
Nice-to-haves (be flexible)
- Cosmetic finishes (paint, fixtures)
- Garage size
- Yard size
- Extra bedroom or office space
Step 4 — Make a Strong Offer
Your offer is a legal contract. It should include:
- Purchase price — supported by recent comps, not just what you want to pay
- Earnest money deposit — typically 1–3% of purchase price, shows you're serious
- Financing contingency — protects you if your loan falls through
- Inspection contingency — gives you the right to negotiate or walk after inspection
- Appraisal contingency — protects you if the home appraises below purchase price
- Closing date — typically 30–45 days from accepted offer; flexible dates can win deals
Step 5 — The Inspection Period
Once your offer is accepted, you typically have 10–15 days to complete inspections. Never waive inspection on a resale home.
General home inspection ($350–$600)
Covers structure, roof, electrical, plumbing, HVAC, and more. This is non-negotiable.
Specialist inspections (as needed)
Depending on findings: roof inspector, HVAC specialist, foundation engineer, mold or radon testing.
What to do with findings
Request repairs, a price reduction, or a seller credit at closing. You can also walk away and recover your earnest money if the contingency is in place.
Step 6 — Closing
Closing is the final step where ownership transfers. You'll sign a stack of documents, pay closing costs, and receive the keys.
- Review the Closing Disclosure at least 3 business days before closing — it lists every fee
- Do a final walkthrough 24 hours before closing to confirm the home is in agreed-upon condition
- Bring a government-issued ID and a cashier's check or wire transfer for closing costs
- Closing costs include lender fees, title insurance, prepaid property taxes and homeowner's insurance, and escrow fees
You still need a real estate attorney
Even without an agent, always use a real estate attorney to review the purchase contract and handle closing. Attorney fees ($500–$1,500) are a fraction of agent commissions and the protection is real. Friedum™ connects you with licensed attorneys at flat fees.