Buying a house is a weighty decision that involves several key steps. Whether you are a first-time buyer, downsizing, changing locations, upgrading, investing, or looking to add a second home to fit your lifestyle, here's a quick breakdown of the 10 most critical steps when buying a home:

1. Assess Your Financial Readiness

Before you even glance at listings, take a quiet moment and look inward. What can you truly afford? Your income, your savings, your comfort level—all of it matters when it comes to how good you will feel and how much future enjoyment you will experience. This first step of analysis is where dreams meet dollars and where clarity gives you confidence in your choices and decisions. A strong and honest foundation sets the tone for everything that follows. So, let's begin with a few baby steps:

A. Check Your Credit Score

· What is a Credit Score

A credit score is a three-digit number that indicates how likely you are to repay debt responsibly. Lenders use it to decide whether to approve you for loans, credit cards, or mortgages—and what interest rate to offer.

· What Does a Credit Score Measure

It reflects your creditworthiness, based on your past financial behavior. It looks at such things as:

Do you pay bills on time?
How much debt are you carrying?
How long have you had credit accounts?
Do you open new credit often?
What types of credit do you use?

· Key Factors in a FICO Credit Score

35% – Payment history
30% – Amounts owed
15% – Length of credit history
10% – Credit mix (types of accounts)
10% – New credit inquiries

· Score Grading (Most common: 300-850)

300–579: Poor
580–669: Fair
670–739: Good
740–799: Very Good
800–850: Excellent

· Why Does the Score Matter

Lenders use your score to decide:

If they’ll loan to you
How much interest you’ll pay.
How much you can borrow.

Seems simple enough, right? But you might be asking yourself:

· Who Does the Scoring

Two leading companies handle the calculations:

FICO - Fair Isaac Corporation
VantageScore is a model developed in 2006.

We don’t need to go into tremendous detail here about the companies. However, it is safe to say that a great deal of information is available about all of us.

The minimum credit scores a lender will accept depend on the type of loan you're applying for and the lender's internal guidelines. Here's a quick guide for the most common mortgage types:

Simply put, a higher credit score results in better loan terms and, as a result, a lower overall cost.

· Where to Find Your Score

There are several places one can go to get their score.

Here are a few of them.

Credit Card Companies & Banks

Many major banks and card issuers (e.g., Discover, Capital One, Chase, Bank of America) offer free credit scores to their customers.

Credit Monitoring Services

These are free but may include ads and offers.
Credit Karma (VantageScore)
Credit Sesame (VantageScore)
WalletHub (VantageScore)

Lenders During Pre-Approval

When you apply for mortgage pre-approval, the lender will pull your credit. Ask for the score they see—this is often your FICO Mortgage Score, which is what matters for home buying.

Experian Free Credit Score

B. Determine Your Budget

As a guideline, use the 28/36 rule: spend no more than 28% of your gross monthly income on housing and 36% on total debt. This means that your housing costs, including mortgage, property taxes, and insurance, should not exceed 28% of your gross monthly income, and your total debt, including housing costs, should not exceed 36% of your gross monthly income.

C. Save for a Down Payment

Typically, 3–20%, depending on loan type. For instance, conventional loans usually require a down payment of 20%, while FHA loans may only require a down payment of 3.5% (See Chart). Always keep in mind that regardless of your credit score, the larger the down payment, the lower your monthly payments will be. And remember, there are ways to speed up the amortization and save thousands on interest. (More on this at another time.).

D. Budget for Closing Costs

Usually, 2–5% of the purchase price.

Now that we have a basic understanding of the importance of credit scores and how to calculate them, let's examine the next steps in the process.

2. Find a Real Estate Agent

If you haven’t already, it’s time to find an agent. So, where do you start looking for an agent? They rely on advertisements they've seen, referrals they've received, and personal contacts. That’s all fine and good. But you’ll still need to do some research. That means you might have to interview a few to get "a feeling" about the individual. I caution everyone to trust their gut, trust their instincts, and take the time to find the right agent for you. Because a good agent, and there are many of them out there, will put your interests first and help you every step of the way.

So essentially, choose a local agent who:

· You Trust

· Communicates Well

· Has your Best Interests in Mind

· Answers the Phone

They'll help with:

· Market Knowledge

· Negotiations

· Paperwork

· Homeowners Association (If applicable)

And then, once you've made your choice on who is going to represent you, you'll need to sign a Buyer's Broker Agreementthat spells out certain things to one degree or another, such as the duration of the representation, exclusivity, potential properties covered, and the amount of compensation the broker is to receive and how that is structured, etc. (More on this at another time).

3. Get Preapproved for a Mortgage

So why do you want to get pre-approved?

· It shows sellers that you're serious and capable.

· It helps you know precisely what you can afford.

· It speeds up the buying process.

· It eliminates several potential problems that can arise.

So now that you are preapproved, something to be aware of, and I cannot stress it enough:

DO NOT MAKE ANY CHANGES TO YOUR FINANCIAL SITUATION

UNTIL YOU HAVE THE KEYS IN HAND TO YOUR NEW HOME

AND ARE WALKING THROUGH THE FRONT DOOR!

Simply put, do not apply for another credit card, buy a new vehicle, take out a loan, or make any changes to your financial picture. The reason is that any financial actions can impact your credit rating and affect your debt-to-income ratio, potentially jeopardizing your previously approved status. The long and the short of it is that once you have your pre-approval, sit tight for the time being. It's a time to be cautious and responsible, not adventurous.

OK. What’s next?

4. House Hunting

The "Hunt" might be the most thrilling aspect of the entire process. This is the step where dreams move towards reality, and the original catalyst that sparked all those thoughts and emotions about making a move begins to take a discernible shape. You've laid the groundwork and developed a roadmap that should hopefully lead you to your goal: a new home! Not to mention you now have a realtor to help guide you.

And that guidance looks something like this:

A. Make a Three-Column List:

· Must-Haves,

· Nice-to-Haves and

· No Way-No How Have Nots

This helps organize your actual needs and separates them from your emotions. Always keep in mind that the more items you have on the “Must Have and “No Way” columns, the more it will affect the number of homes that fit into your search and availability.

Once you've found a home or homes in your budget that at least contain your must-haves and hopefully a sprinkling or two of the nice-to-haves, you move on to the next part.

B. Tour Homes In Person or Virtually.

Touring the home is about getting a proper feel for the actual house. With all the lenses, lighting, and AI, the pictures you’ve looked at can be a little deceiving. That's why touring the house is so important. You need to get into the space and imagine yourself living there.

Alright, now that we've viewed one or a few homes. Having made an honest evaluation of each property and chosen the one that resonates with you the most, we'll move on to the next step.

5. Make an Offer

At this point, your agent will conduct a more in-depth analysis of the market to determine the Fair Market Value.

From there, your agent will:

· Craft a competitive offer tailored to current market conditions.

· Be prepared to negotiate on price, contingencies, closing costs, and warranties, etc.

Assuming all goes well with the offer and counteroffers, we will have a Residential Purchase Agreement. Your agent will send these documents to a Title Company, where the Title Officer will open escrow.

6. Escrow

(Side note: Nevada is a Title Theory State. I'll elaborate on that in another writing. I mention it because you might be coming from a state that uses Lien Theory or Intermediate Theory. For this paper, we will utilize Title Theory processes. OK. Moving on)

Being in escrow means that a neutral third party temporarily holds money, documents, or other assets on behalf of the buyer and seller in a real estate transaction while certain conditions of the sale are being met by all parties, as stated in the RPA.

Here is how it works:

· Agreement Reached:
The buyer and seller agree on the terms of the sale and sign a purchase agreement.

· Escrow Opens:
A third party—usually an escrow company or agent will handle the transaction. The buyer deposits earnest money (a good-faith deposit), and the seller is required, by statute, to provide certain disclosures.

· Neutral Holding Zone:
The escrow agent holds all funds and documents safely, including the buyer’s deposit, loan documents, and the property deed, until all conditions in the contract are fulfilled.

· Conditions Met:
These might include:

Home inspection (Step 8)
Title search
Final loan approval (Step 7)
Appraisal (Step 7)
Repairs (if needed)

· Closing of Escrow:
Once everything is in order, the buyer pays the remaining funds, the seller signs over the deed, and the escrow company records the sale with the county.

· Escrow Closes:
The buyer gets the keys, the seller receives the money, and the escrow is officially closed.

Being “in escrow” is like being in the safe middle zone between “offer accepted” and “keys in hand.” It protects both parties and ensures everything is done correctly before ownership changes hands.

7. Secure Financing

Even if you were pre-approved, remember there has been a time lapse between that moment and where you are now. At this point, it’s a matter of updating any information that needs to be adjusted by the lender for final approval.

The lender will:

· Ask you to provide the necessary documents to ensure the funding.

· Choose the correct type of mortgage (conventional, FHA, VA, etc.).

· Lock in your interest rate.

· Have the home appraised.

Home appraisal is a vital aspect of most home-buying transactions because:

· It's required by lenders to ensure the home's value justifies the loan.

· If the appraisal is low, you may need to renegotiate the terms, cancel the transaction, or pay the difference between the appraised value and the sales price.

Now that Title and Lender are handling their respective tasks, let's proceed to the investigative part of the transaction.

8. Get a Home Inspection

This is standard practice for most residential home purchases. Your agent should have inspectors they’ve used in the past that are reliable. So, no worries about where to find one.

So why do you need a home inspection?

· A home inspection thoroughly examines the home's condition, helping to protect you from problems.

· It will reveal issues with the home's structure, systems, or safety. Items such as attic trusses, electrical wiring, plumbing, the roof, etc.

· Once the property has been inspected and the report has been submitted, you can:

Accept the home in its current condition.
Request repairs,
Renegotiate the price, or if all else fails...
Walk away if significant problems are found or you are unable to agree on what repairs are to be done.

Now that all of that is out of the way, as the saying goes, we didn't come this far, just come this far. It's time to push towards the finish line.

9. The Close

A day or so before the signing of final documents, you, along with your agent, should perform:

· A final walkthrough of the property.

This is to ensure that no damage has occurred to or on the property.
Once that’s done, you will go back to the escrow office and…

· Review ALL documents as they are being explained.

· Sign the final documents.

· Pay closing costs, including any down payment.

Next, the escrow office will record the transaction with the county to officially recognize the purchase.

What time is it? It’s time to:

10.Take Possession

Here it is. The day you have been striving for has finally come. After all the searching, chit-chat, decisions, paperwork, and the potential stress of a long, emotional ride, you finally are the owner of your new home.

At this point, you will:

· Coordinate with your agent to transfer the keys.

· Cross the threshold for the first time as the new owner of the home.

· Feel relieved that the process is over.

· Pat yourself on the back.

AND

· Enjoy!

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