Buying your first home feels like 100 things at once. It’s not. I walk my buyers through it as 15 steps. Here’s the whole thing, in the order it actually happens.
Step 1: Find a lender
This is step one, before you tour a single house, before you fall in love with a listing. You need to know your real number first — what you can borrow, and what the payment looks like. Everything after this step depends on it.
Best way to find one: go through your realtor, if you already have one you trust — have them refer someone they’ve done a lot of business with, because that pre-existing relationship makes the process go smoother. If you don’t have a realtor, ask someone in your life who recently bought a house, or try home-buying groups on Facebook. You can Google, but most of those results are paid ads, so you won’t get a real feel for the person you’d be working with. I go deep on this in How to Find a Lender — and What Questions Should I Ask Them?.
Step 2: Get pre-approved
You usually can’t even go look at a home — unless it’s an open house — without a pre-approval. I can do a pre-approval in 5 to 20 minutes with 2 pay stubs and 2 bank statements. That’s the whole list to start. And here is the number that pre-approval actually gives you: what a full monthly payment looks like. Not just principal and interest — the whole thing. Example: a $700,000 house on FHA, 3.5% down, at the 6.94% example rate I use across this site, is $5,881 a month — principal and interest $4,545, property tax $729, homeowners insurance $292, and mortgage insurance $315. Every step after this one is about carrying a payment like that, so learn to read the full number now, not the stripped-down one most calculators show you. What it gets you: your real number, so you shop inside your budget instead of guessing — and when you find the house, you can offer fast.
To pull your credit, your lender will ask for the basics: your Social Security number, your two-year employment history, your income, your assets, and your debts. The information should be available on your application and credit report — but they’ll want to verify it, and the paperwork backs them up. Make sure you tell the truth: your file could get denied as soon as any false information is right there in black and white.
Be honest with me upfront. It saves you later. If something in your file is messy, I’d rather know now than find out in underwriting when there’s a deadline and a seller waiting.
Step 3: Find a full-time local realtor
Once you have your pre-approval, it’s time to find a realtor — and your lender’s referral is the best way, because they’ll have the best working relationship with that realtor and your best interests at heart. You can also go through a trusted friend who recently bought, or who has a good friend who’s an agent.
Make sure they’re working full-time as a real estate agent, and local to your area. From city to city, even zip code to zip code, the market can be really different — you want someone who understands home-buying where you’re buying. Ask what types of homes they’ve helped people buy, and whether those are the same types you’re in the market for. I say more about how to choose one in Choosing a Real Estate Agent.
Step 4: Go shopping
This is the fun part. Keep two things in mind: stay within your budget — that’s why the pre-approval matters — and keep your lender in the loop. When you find a property you’re serious about, tell your lender: here’s the HOA (the homeowners association, and its monthly dues), here’s the property taxes, here are the special assessments (extra charges the HOA or the city bills on top of regular dues and taxes). That way they can get you a payment that is accurate, fits within your pre-approval, and is one you’re comfortable with. And stay mindful of interest rates: if you were pre-approved three or four months ago, your rate has likely changed by the time you’re ready to offer. A good agent will have that conversation with the lender before the offer goes in, to make sure it still fits.
Step 5: Make an offer
You found the house. Your lender says yes, you’re good for it. So you make an offer — and your agent will talk through price and terms with you: earnest money, potential closing-cost requests and the seller’s closing responsibilities, whether you’ll pay for a home warranty or certain inspections.
Earnest money goes into an escrow account, a holding account. It’s like a deposit: it shows the seller you’re serious, and it reserves the property while you go through the process. In some cases it’s refundable, depending on the circumstances; in others, it’s not. On closing costs: sellers can pay for some or all of them, depending on the market — or as little as 1%, or just a home warranty. In a seller’s market you’re less likely to get help; in a buyer’s market you have more leverage. Make sure you and your lender are on the same page about how much money you have for closing costs versus your down payment before you offer.
Step 6: Offer accepted
Congratulations — your offer was accepted. Escrow, a non-biased third party, notifies everyone involved: title, your lender, your buyer’s agent, the listing agent, anyone coordinating the transaction. They manage the holding escrow account for any money that moves.
Your contract will typically say you need to get your earnest money into escrow within 24 hours. You’ll usually go to your bank and wire the funds to escrow — and before you send a cent, call escrow to verify the wire instructions. Wire fraud is real, and it targets first-time buyers who are moving fast and trusting every email they get. One phone call. Do it every time. Then your lender gets the contract, puts it in their system, sends out initial disclosures, and orders the appraisal.
Step 7: Initial disclosures
Now the lender sends out initial disclosures — essentially a breakdown of the loan and its costs, and your acknowledgment of them. You’ll get a Loan Estimate: estimated fees (they’ll change, but this is the estimate), your loan amount, your down payment, your estimated interest rate, and estimated title fees. The bottom line tells you how much money you’ll need to bring to close. You’ll also sign an intent to proceed — a form that says “yes, go ahead with this loan” — so your file can go into processing, plus the housing disclosures the law requires upfront.
This initial disclosure has to be signed before the lender’s behind-the-scenes processing can start. Waiting here can delay your entire loan — it’s the very first thing that has to be signed for everything else to get going.
Step 8: Inspections
Time to look at the house a lot closer. Get a home inspector — ask your real estate agent for their recommendation for a licensed inspector or contractor.
They’ll check the roof, the heater and air conditioning, the water heater, and water damage — existing and potential. Basically every little thing that could be wrong with the house. You’ll get a 50-page document that lists every issue, whether it’s a new house or an old house. They find something in every house, because that’s what they’re paid for. Take your time, understand the report, and talk to the inspector while they’re there — have them walk you through anything major that could be a deal breaker. In the end, it’s your call.
The inspector will also flag what needs to be fixed to satisfy your loan. On a water heater, for example, you’re required to have two earthquake straps — that’s the law for FHA and VA, and sometimes conventional appraisers require it too, because it’s a safety issue. Other items: broken windows, broken glass, a working refrigerator and stove, missing roof tiles, faulty outlets, working smoke alarms and carbon monoxide detectors, leaky faucets. Some more restrictive loans even require peeling paint to be fixed.
Step 9: Appraisal
Next is the appraisal. The appraiser doesn’t sweat the small stuff the way the inspector does — they check the overall value of the home. Your lender orders it through a third party. The appraiser walks through, observes the condition, features, and size, and compares the home to others in the area that recently sold.
The appraisal is the one that surprises people. Say you offer $300,000 and it appraises at $290,000. That $10,000 gap is real money. You renegotiate, you pay the difference, or you walk. The bank won’t lend on a house that isn’t worth it — and no website overrides that. Not Zillow, not anyone.
If it comes in low, sometimes — in a buyer’s market — you can ask the seller to lower the price, and a good full-time agent is your best resource for that negotiation. Sometimes that works. Sometimes the seller won’t come down, especially in a seller’s market, and you end up walking away. Tip: when you interview your agent, ask whether they’ve handled a low appraisal before and what the outcome was. That’s a good way to gauge their negotiating skills before you actually need them.
Step 10: Underwriting
The appraisal is ordered right away, but it can take a couple of weeks to come back. During that time, your file goes into underwriting: an underwriter reviews all of your documentation and confirms you can pay the loan and meet all of its requirements. A processor submits your file to the underwriter, who is the third look at all your documents — dotting the i’s, crossing the t’s, making sure you check every box. They may ask for additional documents or information. Don’t let it scare you. It’s stressful, but your lender is there to support you every step of the way.
Who’s involved: your loan officer, their processor — basically your assistant and second set of eyes — and the underwriter. This is why it’s so important to be honest with your lender upfront. If you’re hiding anything, the underwriter is going to find it. They run different reports, and they will find all of your secrets. They’ll look at your income, ask you to explain credit issues like charge-offs (debts a lender gave up on collecting), inquiries (times someone pulled your credit), or old addresses, and they’ll question large deposits and cash deposits into your bank. There’s always something they request, so don’t worry too much if they do — but get the documentation back as fast as you can, because the longer it takes you, the longer the process takes.
One thing to know: an underwriter will not talk to a buyer, and an underwriter will not talk to a real estate agent, no matter how much they insist. That’s why the relationship with your loan officer is so important.
Underwriting may seem like it’s taking weeks, but it’s usually just a few days. Once everything is cleared and approved, you get a conditional approval — “approved, if you send us these last items”: title items, the appraisal if it hasn’t come back yet, additional documentation, or letters of explanation. When all of those items are in, you get clear to close — the lender’s final yes.
Step 11: Closing
You’ve got the conditional approval. Next, the closing disclosures go out — similar numbers to the Loan Estimate, matched with title and escrow and all of their numbers, so you have an even clearer picture of what you need to wire into title to close.
Sign the closing disclosure fast. Once you sign, the 3-day clock is running — that’s the period before you can sign your loan docs, so sign immediately to start it. And understand this: that three-day window is your chance — really your last chance — to say, “I don’t want this house.”
Step 12: Down payment and closing costs
You’ve got your closing disclosure. You’ve got your clear to close. Now you need to wire the rest of the money. Your earnest money goes toward your down payment and closing costs. Look at your closing disclosure, talk to your lender, and have them verify with title that the numbers balance before you wire the right amount.
This is the most mysterious part of the whole process for most buyers. The amount is determined on the disclosures, and your lender works with the title company and escrow to make sure everyone is 100% clear on the exact dollar amount. You wire the same way you wired your earnest money at the start. And different dates change how much money you need to bring to the table — so before you wire, ask your lender exactly how much you need to send.
Step 13: Funding
Finally, you get to sign your loan docs. Some lenders have a streamlined program where you only sign a few documents at closing and it takes maybe half an hour. Others send all of their documents to title for closing — everything you e-signed, plus a few additional things like your deed of trust and your note.
Your note is the most important item you’ll sign aside from the final closing disclosure. If you keep nothing else, keep your note. It shows your first payment date, your loan amount, your interest rate, and your last payment date. Keep that if you keep nothing else.
Step 14: Recording
You’ve signed your loan documents. Escrow packages them up and sends them back to the lender, who checks that you signed everything — and then tells escrow the purchase has been funded. The lender sends the wire for all of the funds. Once escrow receives it, you have permission to record. Recording means that, with the county, you are officially recorded as the homeowner. It typically happens online: the documents are scanned in to the county and the transaction is recorded.
At this point, you have finished the most stressful process. Congratulations.
Step 15: You are now a homeowner!
Now it’s time to meet your realtor in front of the house, get those keys, and take a picture with that big oversized “sold” sign. Lo and behold, it is now your home.
The two things I drill into every buyer
- Be honest with me upfront. It saves you later. Surprises in underwriting cost deals.
- Sign the closing disclosure fast. Once you sign, the 3-day clock is running. Don’t sit on it.
My Take
The bank won’t lend on a house that isn’t worth it.
What to do with this
- Run your numbers in the Home Affordability Calculator — put in your actual debts, not the ones you wish you had.
- Read First-Time Home Buyers: Where to Start in the Home Buying Process for the order of operations.
- If the cash is the problem, read Down Payment Assistance in California: Every Program Worth Knowing in 2026.
- Then start your pre-approval and I’ll run your exact numbers.
Hear me walk through this on the podcast: Episode 1 — The Basics of Buying a Home from Start to Finish. Start here: Start Here hub.
Rates move. Your actual payment depends on your rate, your credit, your county’s tax rate, and your insurance. This is education, not a rate quote or a loan approval.