Buying your first house is a big decision, and it comes with a lot of steps that not many people can prepare you for. I certainly figured that out while my fiancé and I were trying to find our first home in Houston, TX.

If you’re new to home buying and aren’t sure where to start, here are the steps we took when we were in the process of buying our house:  

Get Pre-Approved

The first thing we did—and this is what every realtor will tell you—is start the process of getting pre-approved for a home. This begins with applying with your choice of lender. By default, many people may opt to apply through their banking institution if they’ve been a customer for a long time, but there are actually plenty of other options out there, from credit unions to other third-party lenders.

When you apply, be prepared to have a LOT of financial information (ideally, records from the past two years) ready to submit to the lender during the application process. Some things they’ll ask for include:

  • W2s
  • Bank statements
  • Credit card statements
  • Tax returns
  • Pay stubs

They’ll also ask for information regarding where you’ve previously lived in the past two years and current and former places of employment. Of course, as with any credit-related application, you’ll need your social security number handy, too. 

If you’re applying with a spouse or “co-borrower,” you’ll need all this information from each of you.   

Receive the Pre-Approval Letter

The pre-approval letter you receive from the lender (congrats if you are pre-approved!) will tell you exactly how much home you can afford, as well as the type of loan you’re eligible for (15 years, 30 year-fixed, etc.). In other words, when you start the home search, your goal should be to keep your budget as close to that number as possible.

Of course, if you have more money put away to contribute towards the down payment or the final price of the home in general, you have more room to look at slightly higher price points—as long as you still have enough left for the down payment of the home your lender requires.

Start the Home Search

The actual home search process, for us, took about a week and a half, which is a little faster than usual. However, what helped make this step go smoothly is narrowing down the neighborhoods or areas of Houston we wanted to be in.

From there, we used the home searching app, Trulia, to send us notifications about new homes on the market that fit our “must-haves” list (neighborhood, number of bedrooms, square footage, price, etc.).

As soon as we came across a home we liked, we immediately contacted our realtor to see if she could schedule a tour as soon as possible.

What we learned about home searching is that every minute counts. If you wait too long to schedule a tour, the home could already be off the market or pending/in an executed contract by the time you’re available to see it.

We started searching for a home during the 2020 pandemic, so many people were also on the market to downsize to save money. For that reason, it was challenging to not only find a starter home that fit our budget but one that was available long enough to even tour. 

With that said, regardless of the current economic conditions, I would recommend clearing up your schedule so that you’re able to look at a home at a moment’s notice, if possible. It could make the difference between missing out on that dream home or being about to put an offer on a house that has everything you could ask for.

Put in an Offer

The home we eventually bought was put on the market the same day we went to go look at it, and it had everything we wanted. We decided to put in an offer right then and there.

The offer will consist of a contract that already has your signature that mentions the offer price, down payment, and type of loan you are using for the home. Generally speaking, the more of a down payment you can contribute, the better it looks to sellers, so aim for as high as you’re willing to go.

Depending on the listing price of the home, you may want to offer below, at-price, or above the asking price. If the home is just a little above your budget, offer something lower, but provide a higher down-payment to make up for it.

The only instances where you may want to offer more than the asking price is if there are similar homes in the area that were recently sold for more.

In our case, the home we were looking at was at the low-end of our budget, and other homes in the area were not sold for much more, so our realtor recommended offering at-price and a higher down payment.

Write a Personal Letter

Tip: If you want to improve your chances of getting your offer accepted, especially if it’s an occupied, pre-owned home, write a personal letter to the sellers.

Think about it. If you’re selling your home, chances are you are finally moving on after spending years of your life there. Passing it on to people you most likely don’t know or may never get to meet in person can be difficult.

A heartfelt, personal letter to the seller that tells them why you love the home, and that reminds them of how well you’ll take care of it will make them more inclined to give the house to you. They’ll know the home will be in good hands.

Trust me, it works. We were one of four other couples that put in an offer on our first home. Our offer was the only one that met the original asking price, while the other three put in an offer about $5,000 above it. If you wanted to accept the best offer, it wasn’t us; technically, we would’ve been out of the running automatically—but then the sellers read our letter.

Next thing you know, their agent reached out to ours and asked if we were willing to match the other offers in price. If so, the home was ours. So, we agreed—and here we are today.

Get the Home Inspected

Once you get a contract signed between you and the sellers that approves the offer, you enter what’s called an “option” period. This is when you pay out escrow funds (usually 1% of the home’s offer price) in addition to an option fee that basically reserves the home for you to have inspected to make sure it doesn’t require any repairs. In other words, while you get this done, the home is temporarily “off the market.”

Our option period was five days, although the standard is seven. This is because our realtor was confident we could get the inspections done and the reports from it back in enough time.

After signing, our realtor sent us a list of about four or five inspectors to contact and get quotes from. As buyers, we’re the ones responsible for paying for the inspection, so we wanted to make sure that whoever we went with was worth the cost.

To get a home in Houston inspected, the average price is usually around $305 – $425, but this can vary based on a few factors:

  • Age of the home
  • Square footage of the home
  • Whether or not the home was built on a slab or beams (If you’re not sure which option applies to the home: there’s a crawl space underneath if it was built on beams. In general, most homes in Houston are built on slabs.)

However, the general home inspection does not include termite inspection, which is a must-have no matter where you end up buying a home. We ended up paying an extra $75 for that, although while calling for estimates, we saw rates as high as $125.

Apply for the Mortgage

If all goes well during the inspection, the next step is applying for a mortgage. The process for this is like the pre-approval phase, but may require more documentation from your end, depending on your situation.

For example, since I work as an independent contractor, I needed to submit additional information about my work, such as P&L statements and 1040 tax transcripts.

Your loan officer will likely contact you with lists of things they’ll need from you as they continue to work on your file.

In total, the time it took between when we first applied for our mortgage to when we were finally “clear to close” was about a month and a half.   

Walkthrough & Closing

Once you get the notification from the mortgage company that you’re “clear to close,” you’ve reached the home stretch. All that’s left is the walkthrough and closing.

During the walkthrough, you literally “walk through” your home-to-be, inspecting the property for any repairs the previous owners performed following the home’s initial inspection. If all is up to your expectations here, then you move on to closing, which usually takes place the following day.

Closing is the last stage of the home buying process: the step where you meet at the title company, sign the final closing contracts, and receive the keys to your new home!

Final Thoughts

If you’re not prepared for it, the home buying process can be overwhelming. But with the right guidance—and hopefully, after reading this article about my own personal experience with it—you’ll be ready to take on the real estate market and buy your dream home in no time.