How to Buy a Home in 7 Steps
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 an online tool like the Redfin Home Affordability Calculator. Just plug in some basic information to get an estimate of how much you can spend on a home.
Save up for a down payment
A big part of your mortgage will be determined based on how much you pay upfront in the form of a down payment, which is typically 20% 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 (PMI). Speak with your agent and lender to understand your options are determine the best down payment for you.
Don’t forget about closing costs
Closing costs are fees paid at closing and usually total 2%–5% of the final sale price. Read more about closing costs for buyers below, in Step 6.
Step 2: Get pre-approved for a mortgage
Sellers are typically more willing to accept offers from pre-approved buyers, because it shows that the buyer has the financial resources available to make good on their offer.
Get quotes from multiple lenders and go with someone reliable. Read online reviews of each lender and consider their responsiveness, transparency, and estimated closing timeline. To get started, see which lenders Redfin clients recommend here, or ask a Redfin Agent who she or he trusts in your area.
Apply for pre-approval
Once you select a lender, apply for pre-approval. 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.
Step 3: Find a buyer’s agent
Real estate agents are licensed professionals who have access to information that isn’t open to the public. A good buyer’s agent will be 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.
Working with a Redfin buyer’s agent
Redfin Agents are paid on your review of our service—not just commission—so we’re 100% on your side and will never push for an easy sale. Plus, you can save thousands with the Redfin Refund.* There’s also no obligation to buy with Redfin, so you can tour as many houses as you like and if you’re just not into it, you can stop any time.
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.
Learn how to enter your criteria and save searches on Redfin.com so you’ll never miss a home.
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.
Book a tour instantly online with a local Redfin Agent or 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 Redfin, you can tour as many homes as you want, whenever you want.
Step 5: Make an offer
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. To determine your initial offer price, check to see if the home has a Redfin Estimate, and ask your agent for a comparative market analysis (CMA). A CMA will show the list and final sale prices for similar homes that recently sold in that area.
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 2%–5% of the final sale price.
You can learn more about the costs that you’ll pay at closing, and ways to lower them, on our resources page.
In addition to closing costs, your lender may require that you have at least two to six monthly payments (including principal, interest, taxes, and insurance) in the bank after the closing.
Final steps in closing
Once your enter escrow, you’ll have deadlines to complete each of the following:
- Make your earnest money deposit
- Order your title
- If you have a contingency, get a home inspection and request repairs
- Work with your lender to finalize your loan
- Have your home professionally appraised
- Get homeowner’s insurance
- Coordinate all of your paperwork with an underwriter
- Do a final walk-through
- Submit a cashier’s check for your down payment and closing costs
- Close escrow and sign all required paperwork
If all goes well, your contingencies will be removed and your bank will get the money to the seller on time for a smooth closing.
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.
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.
You’ll pay for these after the home is yours but may want to factor them into your home-buying budget or create a separate post-move budget.