As the turkey and poultry section in the grocery store begins to fill back up again, toys appear back on shelves, and all those expensive Christmas decorations start finding themselves packed up again, it’s apparent that the holiday season is over. This can be a sad time for many, but the birth of a new month and new year can also bring wonderful possibilities – including that of finally getting your first home!

Scared by this, excited, guarded, all of the above? All are understandable reactions. The entire home buying experience can be anxiety-producing. After all, where do you even start with such a monumental task? Well, we know and are here to send some of that wisdom in your direction. Continue below for our comprehensive step-by-step guide that’ll take you through the entire process – from getting a mortgage to identifying your ideal house to making an offer and beyond.

1. Take a Look at Your Financial Situation

Nobody likes being limited by the amount of cash in their wallets (or, more accurately, within the digital confines of their bank account), but it’s a reality, nonetheless. Unless you’re remarkably wealthy, you’re going to have to carefully consider your financial position before you even think about seeing houses, much less preparing yourself to put in an offer.

So, take this seriously. Do a thorough financial audit, taking into account not just upfront expenses of the initial purchase but also regular upkeep and repair costs. This means looking at your savings, reviewing your average spending habits, and checking to see if your credit is good, bad, or practically non-existent. After this (and after seeking out any other financial help, if you’re wont to do so), set a budget and don’t let yourself budge.

2. Examine Your Housing Needs

Nearly everyone loves a big 3000 square-foot house with a million bathrooms, a pool, and a dedicated mudroom. But first-time buyers especially need to look beyond the pretty image on the surface and really consider what they need to be happy in a house. What do you genuinely need for it to work with your lifestyle?

Do you really need to be in a condo with a great view that’ll cost you most of your salary, or would a lovely single-family home be a better use of your money? Is that outdoor garden space a legitimate must-have, or is having enough rooms so that each child can have their own higher on the priority list? Are you really sure that you’re willing to take a long commute to work for an updated kitchen? These are just a few examples of questions that could crop up – be prepared. Define your priorities and needs early, and stick with them regardless of how un-fun it might be. Trust us. You’ll be happier in the long run if your home works for you rather than the other way around.

3. Reach Out to Mortgage Lenders

First-time homebuyers are put in a difficult position. Having no experience and probably little formally-taught knowledge, mortgages can be an incredibly confusing topic. And when you don’t understand them, you can make poor choices. Fight against this by getting educated. Need a little help with the basics?

Mortgages essentially have six steps: pre-approval, house shopping, mortgage application, loan processing, underwriting, and closing. The former pulls on basic information about your credit score and history to show what kind of loan amount you qualify for, and this saves you time and signals to everyone that you’re a serious buyer.

After you’re pre-approved and have a house you want to put an offer on, you’ll need to apply for a mortgage by gathering up some documents like employment info, W-2s, asset docs, etc., to get a loan file through underwriting. A loan officer will guide you through, and loan processors will review the info to draft up a package for the underwriter to approve. If all looks good with your credit and documentation, you should be approved, and you’ll officially close with a bunch of paperwork, sealing the deal and securing your mortgage. 

4. Hire a Real Estate Agent

Underwriters, loan docs, budgets – none of that sounds like a good time. Fair enough, but with them now out of the way, it’s time to focus on what actually is: looking at some houses. The best way to do this is by hiring a good real estate agent since they’ll help you locate homes that make sense for you and your situation, arrange times to walk through, and possibly give you some constructive feedback if you’d like a little more support.

These individuals also assist in the price negotiation and loan processes, making them insanely valuable members of your first-time homebuying team. In other words, find one you click with and never take them for granted. They’re essential should you want things to go as smoothly as possible.

5. Make a Housing Offer

Buying a home for the first time is exhausting but ultimately worth it when you find the perfect fit that just feels right. Experienced this magical “click” moment for yourself already? You’re likely ready to take that next step and actually put in an offer. When you decide to go for it, talk to your real estate agent. They’ll assist you in deciding how much to offer, what conditions need to be fulfilled (if any) before a deal can be reached, and what counteroffers you’ll make should the seller not accept right off the bat.

Just be warned, these last stages of the home buying experience can be brutal and draining – emotionally and financially. Be honest with yourself about budget and cut your losses if that counteroffer is looming a little too ominously for comfort. There will be other costs to consider and money already starting off tight is a recipe for disaster.

6. Get a Home Inspection and Close

An initial walkthrough of a home is great. It gets you a feel for the space and helps you envision what your life could look like in it. However, what it doesn’t do is tell you if there are any real issues you should be worried about. Don’t take a quick look at face value. Get a home inspection. Let a trained professional do their job, checking to make sure electrical, plumbing, roofing, foundation, and other important safety and quality stuff are looking good. If it’s not, you should be able to rescind your offer or negotiate for lower costs/more extensive conditions before moving forward with buying.

And in the event that everything looks good during inspection or the seller agrees to lower the price or take care of all necessary repairs for you? You’re now in a position where you can close on your home. This just involves a lot of paperwork, so break out your good pen and patience. Once this is done, you’re officially a first-time homeowner!