How to Buy Your First Home
Buying a home is one of the biggest decisions you'll ever make. We've broken the process into clear, manageable steps so you know exactly what to expect — from saving for a down payment to getting the keys in your hand.
Check Your Finances
Before you start browsing listings, take an honest look at your financial picture. Review your credit score (aim for 620 or higher for conventional loans), calculate your debt-to-income ratio, and figure out how much you can comfortably afford each month. A good rule of thumb: keep your total housing costs at or below 28% of your gross monthly income.
Pro tip: Pull your free credit report at AnnualCreditReport.com and dispute any errors before applying for a mortgage.
Save for a Down Payment & Closing Costs
Most conventional loans require 5–20% down. FHA loans allow as little as 3.5% with a credit score of 580+. Don't forget closing costs — typically 2–5% of the loan amount — which cover appraisal fees, title insurance, and lender fees. The more you put down, the lower your monthly payment and the less you pay in interest over time.
Pro tip: First-time buyers may qualify for down payment assistance programs through Michigan State Housing Development Authority (MSHDA).
Get Pre-Approved for a Mortgage
A pre-approval letter from a lender tells sellers you're a serious buyer and shows exactly how much you can borrow. You'll submit documents like pay stubs, tax returns, bank statements, and W-2s. Pre-approval is different from pre-qualification — it involves a hard credit check and gives you a firm loan commitment.
Pro tip: Shop at least 3 lenders and compare APR, not just interest rate. Even a 0.25% difference can save thousands over the life of the loan.
Find a Real Estate Agent
A buyer's agent works exclusively for you — at no cost to you (the seller typically pays both agents' commissions). Your agent will help you find homes that match your criteria, schedule showings, advise on offer price, negotiate on your behalf, and guide you through every step of the transaction. Choose someone who knows your target neighborhoods well.
Pro tip: Ask potential agents how many buyers they've represented in the past year and what their average days-on-market looks like for their clients.
Start House Hunting
Make a list of your must-haves (number of bedrooms, school district, commute distance) versus nice-to-haves (finished basement, big backyard). Tour homes in person when possible — photos don't always tell the full story. Keep notes on each home you visit. In a competitive market, be ready to move quickly when you find the right one.
Pro tip: Don't fall in love with a home before the inspection. Focus on the bones — location, layout, and structure — not paint colors or furniture.
Make an Offer
When you find the right home, your agent will help you craft a competitive offer based on comparable sales (comps) in the area. Your offer will include the purchase price, earnest money deposit (typically 1–3% of the price), contingencies (inspection, financing, appraisal), and a proposed closing date. The seller can accept, reject, or counter your offer.
Pro tip: An escalation clause can automatically increase your offer up to a set maximum if competing offers come in — useful in a hot market.
Get a Home Inspection
Once your offer is accepted, hire a licensed home inspector to evaluate the property's condition — roof, foundation, electrical, plumbing, HVAC, and more. The inspection report gives you leverage to negotiate repairs or credits, or to walk away if serious issues are found. Never skip this step, even on new construction.
Pro tip: Attend the inspection in person. A good inspector will walk you through every finding and explain what's urgent versus routine maintenance.
Secure Your Financing & Appraisal
After the inspection, your lender will order an appraisal to confirm the home's value supports the loan amount. You'll also finalize your loan type, lock in your interest rate, and submit any remaining documents your lender requests. This period — called underwriting — typically takes 2–4 weeks. Avoid making large purchases or opening new credit accounts during this time.
Pro tip: Respond to your lender's document requests within 24 hours to keep the process on track and avoid delays.
Do a Final Walk-Through
A day or two before closing, do a final walk-through of the property to confirm it's in the agreed-upon condition, any negotiated repairs have been completed, and the seller has moved out. Check that all appliances and fixtures included in the sale are still present and working.
Pro tip: Bring your purchase agreement to the walk-through so you can verify every item that was supposed to stay with the home.
Close on Your New Home
At closing, you'll sign a stack of documents, pay your closing costs and down payment (bring a cashier's check or wire the funds in advance), and receive the keys. The title company or closing attorney will record the deed with the county. Congratulations — you're a homeowner!
Pro tip: Review your Closing Disclosure carefully at least 3 business days before closing. It lists every fee and should closely match your Loan Estimate.
Ready to Take the First Step?
Our team at Natod Realty has helped hundreds of first-time buyers navigate Oakland County's market with confidence. Reach out today and let's start your home buying journey together.
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