Understanding all of the steps is a great way to begin
From finding the right agent to getting your keys, learn the basics of how to buy a home.
Step 1: Determine your budget
Even before you start searching, you should determine how much you can afford with our online Mortgage Payment Calculator.
Just enter some basic information to get an estimate of how much your monthly payments will be.
Saving for a down payment
A big part of your mortgage will be determined based on how much you have in the form of a downpayment. In order to get the best rates you will need at least a 20% downpayment of the home’s final sale price, but you can certainly buy a home with less.
Generally, the higher the down payment, the better the interest rate will be. If you decide to put down less than 20%, you’ll likely need to pay "Private Mortgage Insurance or PMI". Speak with your agent and lender to understand your options are and determine which down payment and loan type will be best for you.
Don’t forget to include closing costs
Closing costs are fees paid at closing and vary depending on what day of the month you close and the lender's origination fees. Broadly speaking work on 1-3% of the purchase price
Step 2: Get pre-approved for a mortgage
Sellers will only consider offers from pre-approved buyers, because it shows that the buyer has the financial resources available to get a loan and close on the home.
Get quotes from several lenders and go with someone reliable. Read reviews of each lender and consider their responsiveness, transparency, and estimated closing timeline.
If you need some recommendations of lenders who have performed well for past clients, just ask and we can send their contact details to you.
We have no financial ties to any of them and recommendations are made purely on how they have performed for multiple clients.
Apply for pre-approval
Once you select a lender, apply for your preapproval. Your lender will check your credit and ask for all of your financial documents—tax returns, pay stubs, bank statements, credit card statements, student and auto loans, etc.—to accurately assess your financial situation.
Keep in mind that just because you’re pre-approved for a certain amount doesn’t mean you can actually afford that amount.
Prepare your own monthly budget to figure out what you’ll be comfortable paying.
Once you’re pre-approved, don't make any big purchases or life changes, such as quitting your job or buying a car, that could negatively affect your credit score.
Step 3: Find an exclusive buyer’s agent
Real estate agents are licensed professionals who have access to information that isn’t open to the public. An exclusive buyer's agent is an expert on the home buying process, know your area inside and out, be familiar with local listing agents, and be a skilled negotiator.
The seller pays all real estate commissions in a home sale, so working with a great real estate agent won’t cost you a thing.
Avoid dual agency
Dual agency occurs when the listing agent selling a home also serves as the buyer’s agent. Would you go to court and elect to use the opposing client’s lawyer? Probably not, and it is the same in real estate. That’s why Redfin does not allow dual agency within our brokerage. To be clear, two Redfin Agents can and do represent buyers and sellers in the same transaction, but just not one individual agent. We recommend that buyers have their own representation to ensure their best interests are being met.
If you’re considering representing yourself without an agent, you may be at a disadvantage, especially in a competitive market. Most experienced listing agents strongly prefer buyers who have agent representation because it is the best protection for all parties involved: the agents, the buyer, and the seller.
Step 4: Start looking at homes
Once you’re pre-approved and have an agent, you’re ready to look for a home.
Narrow down your search
If you’re like most homebuyers, you’re browsing homes for sale day and night on Redfin.com. At this point, it’s a good idea to narrow down your search.
Determine your ideal neighborhoods, and make a list of must-haves vs. nice-to-haves. If you’re having a tough time narrowing down, speak with your real estate agent about what she or he thinks is realistic for your price range.
Tour, tour, tour!
How long does it take to buy a house? Take as much time and tour as many homes as you need to find the right one.
Contact your real estate agent to set up a tour. Also check for weekly open houses, which typically take place on Saturday and Sunday, between 10 am and 4 pm. When you work with First Exclusive, you can tour as many homes as you want, whenever you want.
If you’re already working with an agent, be sure to tell the listing agent at an open house but avoid sharing any additional information that could affect negotiations. Don’t give the impression that you want to make an offer or discuss any details about how much you can afford, how quickly you wish to buy, etc.
Follow common courtesy but don’t be shy when touring. Inspect each home carefully and note details like how strong the water pressure is, how much street noise you hear, etc. It’s easy to get homes mixed up so take photos and take notes for each home.
Some sellers will have an offer-review date, while others will be open to any offers that come in. Make sure you ask your agent about this for each home you’re interested in.
When you’re ready, your agent will help you determine how much to offer and which contingencies to include. We also provide a comparable market analysis (CMA).
A CMA will show the list and final sale prices for similar homes that recently sold in that area.
If a home has been on the market for 20 days or more, ask your agent about making an offer at list price or under.
Once you submit your offer, the seller will review it with their agent and accept, decline, or submit a counteroffer. If your offer is rejected, make sure your real estate agent explains why so you can learn from each offer.
Negotiate if needed
Counter-offers are common and should even be expected. If you end up in a counter-offer situation, your agent will help you negotiate the best deal possible.
When negotiating, don’t focus only on your final offer price. Instead, look at the whole picture and consider raising your earnest money, waiving contingencies, or proposing an earlier closing date.
Step 6: Close
Once you and the seller agree on the terms, you’ll enter the closing process, or escrow, which usually takes 30 to 45 days. You’ll likely be in very close communication with your agent, lender, and escrow agency during this time.
Closing costs for buyers
Closing costs are the lender and third-party fees paid at the close of a real estate transaction. The fees usually total 1%–3% of the final sale price.
Step 7: Get the keys and move
Welcome to your new home! You will typically get the keys after 5 pm on your close date.
If you’re moving into a home with a homeowner’s association (HOA), make sure you receive a copy of the rules and regulations—and read it carefully. Some HOAs have rules around what days and times you can move into your home, and whether or not you can repaint the exterior of your home.
Whether or not your home is turnkey ready, there might be some maintenance and remodeling you want to complete before moving in. You’ll also want to think about hiring movers, buying new furniture and appliances, setting up your utilities, etc.
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