Everything you need to know – from credit scores to closing day
Buying a home is one of the biggest financial decisions you’ll ever make, and one of the most emotionally charged. Between sky-high prices in competitive markets and nerve-wracking paperwork, it can feel like navigating a maze with no exit. But don’t panic, if you know the path, you’ll get there.
Whether you’re a first-time buyer or a seasoned investor, the journey to homeownership follows a set of time-tested steps. Master these 10, and you’ll not only get the keys, you’ll keep your sanity.
Step 1: Know Your Credit Before Lenders Do
Before a lender peeks into your financial history, you need to take a hard look yourself.
Start with your credit report. These are pulled from the big three: TransUnion, Equifax, and Experian, and used to calculate your FICO and Vantage scores. You’re entitled to one free report annually from each agency. Find an error? Dispute it now, not after you’ve fallen in love with a house.
FICO scores range from 350 to 850 and are what lenders use to gauge your trustworthiness. Generally, a score of 720+ lands you better terms on conventional loans. FHA loans are more forgiving, many lenders approve buyers with a 580 score or above.
So what affects your score? Payment history, total debt, how long you’ve had credit, your new credit inquiries, and the types of credit in your name. Understand these and improve them, before step two.
Step 2: Understand What You Can Afford
Forget what the lender says for a moment, what can you realistically handle?
You don’t need a full pre-approval to get a ballpark. A lender can pre-qualify you with basic financial info and a soft credit pull. Even easier: try tools like Zillow’s BuyAbility℠ or Home Affordability Calculator to crunch the numbers using your income, debts, and market interest rates.
Then, adjust your expectations. Maybe you want four bedrooms, a garden, and a view. But if your budget says two bedrooms and a balcony, prioritize accordingly. Your list of must-haves should balance reality with dream.
Step 3: Get Pre-Approved – Or Get Ignored
In hot markets, sellers rarely entertain offers without pre-approval. In fact, according to Zillow’s 2022 survey, 86% of sellers prefer buyers who are pre-approved.
To get there, you’ll need to share:
- Income documents (W2s, 1099s, tax returns)
- Asset statements (retirement funds, savings)
- Details on debts (credit cards, student loans)
- Other obligations (child support, alimony)
- Records of any bankruptcies or foreclosures
Your lender will calculate your debt-to-income ratio, then issue a pre-approval letter, your golden ticket to making offers.
Pro tip: you don’t have to stick with the lender who pre-approved you. Compare offers. Zillow research shows even a 1% difference in interest rate could cost — or save — you around $182 a month, and nearly $75,000 over 30 years.
Step 4: Hire the Right Agent, Not Just Any Agent
Your real estate agent is more than a tour guide, they’re your advocate, strategist, and closer. In 2024, 85% of buyers used an agent, according to Zillow’s Consumer Housing Trends Report.
Why? Because a good agent can:
- Decode market trends and pricing strategy
- Spot red flags during home tours
- Negotiate like a shark on price, contingencies, and repairs
- Recommend vetted lenders, inspectors, attorneys, and more
- Keep you sane during paperwork hell
Sellers typically pay the agent’s commission, so you get this expertise for free. Find someone with local knowledge and a strong record. Zillow makes it easy to compare agents, read reviews, and schedule tours directly.
Step 5: Begin the House Hunt
The search begins online. 95% of buyers used digital tools in 2024. Use filters for price, features, and location on Zillow to narrow the field. Let your agent send listings and schedule private showings.
Stay flexible. You might sacrifice an extra half-bath for a better commute. You might realize you don’t need that walk-in closet. Compromise is part of the journey.
Touring Tips: Don’t Just Look, Inspect
When you visit a home, don’t be shy. Turn on faucets. Flip light switches. Look for cracks in the walls, aging roofs, or windows that don’t close right. Noise from the street or neighbors? That matters too. The formal inspection will cover it later, but early diligence can save you heartbreak.
Step 6: Make Your Offer Count
You found “the one.” Now comes the offer.
Your agent will prepare a Comparative Market Analysis (CMA), a data-driven price estimate based on similar recent sales nearby. But pricing is only part of it.
Key considerations:
- Disclosures: Review any red flags like past water damage, unpermitted work, or flood risk.
- Closing date: Expect 30–45 days with a mortgage, but you can negotiate for sooner or later.
- Contingencies: Most buyers include inspection and appraisal contingencies, and should. According to Zillow, 88% of successful buyers didn’t waive the inspection.
- Earnest money: Think of it as a deposit proving you’re serious. It becomes part of your down payment, unless you back out without a valid contingency.
Don’t be discouraged if your offer isn’t accepted. Zillow data shows 59% of buyers submit multiple offers before winning a bid.
Step 7: Inspection Day
Your offer was accepted… congrats, you’re in escrow!
Schedule a home inspection ASAP, typically within a week of signing. Your agent likely has trusted referrals. Attend the inspection if you can, it’s your chance to learn about your future home.
If the report uncovers major issues, you can renegotiate. Maybe the seller pays to fix it, or lowers the price. Maybe you walk away.
Zillow research says 66% of buyers made their final offer contingent on inspection. That’s your safety net.
Step 8: Finalize Your Financing
Even with pre-approval, you’re not done. Your loan isn’t official until you apply formally, pass underwriting, and get the “clear to close.”
What’s involved?
- Update financials with your lender
- Respond quickly to document requests
- Wait for the appraisal ordered by your lender, scheduled by your agent
If the appraisal value matches or exceeds your offer, smooth sailing. If it’s lower, you’ll have to renegotiate or bring extra cash to closing.
A bad appraisal isn’t always the end. If you believe it’s wrong, you can contest it or ask for a second one.
Step 9: Buy Homeowners Insurance
Before closing, you’ll need a homeowners insurance policy in place. This protects your investment and your lender’s. If you already own property, ask your provider about bundling. If not, shop around.
Many policies can be rolled into your monthly escrow payments. Your lender or agent can assist.
Step 10: Close the Deal and Move In
The finish line is in sight.
Schedule a final walkthrough within 24 hours of closing to ensure everything looks right, especially if repairs were negotiated. On closing day, expect to sign a mountain of paperwork with your escrow agent.
Bring your closing costs, usually 3-5% of the purchase price and proper ID. Once the sale is recorded, you’ll get the keys.
You’re now a homeowner. Set up utilities, forward your mail, and unpack. The house hunt is officially over.
