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How to Actually Buy a Home

How to ACTUALLY Buy a Home



I’m a Realtor® in one of the most competitive real estate markets in America right now—South Florida. It’s a tough market for homebuyers, and it’s gotten even tougher in the past two years.

As with markets nationwide, the demographic of who is buying has shifted, as younger generations start to value homeownership. There’s also been a shift to remote work in our labor force, freeing people from needing to live in the same city, or state, as their employer.

This has increased the demand for homeownership across the country. States with lower tax rates like Texas, and relaxed COVID mandates, like Florida, have seen a wave of buyers that they’ve never seen before.

It’s created an extreme seller’s market, where the supply of homes available can’t keep up with the demand for homes. As a result, you have cash buyers paying over market value for homes in many places.

What does that mean for you, the regular homebuyer, looking for your primary residence? It means that if you want to buy a home in 2022, you need the right plan. This guide is a good place to start. You’ll learn what it takes to be a successful homebuyer in this seller’s market.

Step 1: Make sure you’re ready to buy

The idea of owning a home is constantly drilled into us from an early age. Heck, most kids grew up playing “House”. As a society, we’re conditioned to judge the success of an individual by the size of the house and the neighborhood they live in. And while everyone wants to live in the biggest and nicest house around, having a clear idea of what you want, and what you can afford, is THE MOST crucial factor in buying a home.

First-time homebuyers, I’m talking to you.

The first thing you need to do is speak with a HUD-certified housing counselor. This is the most important and most overlooked step in the homebuying process. It’s a free service offered by nonprofit services under the direction of the U.S. Department of Housing and Urban Development (HUD). But like most good government programs, most homebuyers don’t even know this exists.

A housing counselor will give you a good understanding of how the home buying process works from the financial side. Counselors will also help you get organized on three key aspects:

  1. Setting up a budget.
  2. Checking your debt ratios to understand how much home you can afford to purchase.
  3. Understanding what you need to do to become mortgage ready.

You’ll want to find a HUD-approved housing counseling agency in the area where you want to buy that offers a first-time homebuyer program. The CFPB has a Find a Housing Counselor tool that you can search by zip code.

Since the counselor is local, they will be able to tell you about down payment and closing assistance programs available where you want to buy. Those programs mean you get money to cover the upfront costs of buying a home.  So, it’s worth it to do the 30–60-minute consultation.

The program will also teach you what to expect as you go through the homebuying process. You will receive a Certificate of Completion, which is necessary to qualify for those down payment and closing cost assistance programs.

Understand the cost of ownership vs renting

Although owning a home is better financially over the long term, there’s nothing wrong with renting until you’re ready to buy. Rushing into a big purchase because you feel behind the curve will only lead to financial hardships. If you‘re dealing with debt or aren’t financially stable, renting could be the best option.

There are several differences that you need to consider before you make such a big financial decision.

When you rent, you know precisely what your monthly housing costs will be. The cost may be higher than that of a mortgage, however, things like utilities, lawn care, and general maintenance are typically included.

Homeownership works differently. When you take on a mortgage, you are paying back the loan given to you by your lender. The monthly payment you make goes towards OWNING the home. However, should anything arise such as a broken water pipe or an aging roof, that’s going to be something you’ll have to pay.

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Step 2: Get ready to shop for a home

Even after you confirm you’re ready to buy, you are still not ready to start house hunting.

Shopping for a home can be an exhilarating process, but there is some groundwork that needs completing first. Always remember that “Proper Preparation Prevents Poor Performance.”

1. Get mortgage preapproval

I am asked, “What is the first thing I should do to buy a home?” on an almost daily basis. Most people think that finding the right house is the place to start. While that might have been the case in years past, the fact that we are currently amid a seller’s market erases all notion of hesitancy. Realtors are forgoing even collaborating with a client if they do not have their financials in order. So, what should you do?

Most people buying their first home need a mortgage to reach that goal.

The good news, there is a multitude of options when it comes to securing a mortgage loan—online lenders, banks, credit unions, private lenders, and mortgage brokers. They will all give you a preapproval letter, or proof of finances. This provides context to the seller that you have the funds required to purchase their home.

2. The Right “Type” of Home

You don’t want to buy a home and then realize you hate it after a year because it doesn’t meet your need. So, it’s important to set a realistic expectation of what you are looking for.

Single Family Home

The most common type of home, where 70% of Americans live. These are typically bigger than other types of houses, freestanding, with a yard or land around the house.

Pros: Cons:
*American Dream* You’re responsible for repairs and maintenance
Often greater square footage HOA rules can be bothersome if you have a homeowner’s association
Usually “freehold/fee simple” meaning you can do with the property as you please HOAs can get you in financial trouble with fees


These are units within a larger building that share at least one wall with a neighboring condo unit.

Pros: Cons:
Have a maintenance team for repairs, cleaning, etc. Pay a fee for maintenance
Often in “premium” locations (sea view, downtown) Can be harder to finance than other types of homes (makes selling them more difficult as well)
Typically, lower priced than Single-Family Homes If the building’s management is not funded properly, you could be hit with massive bills


An attached single-family home that shares a wall with one or two other townhouses

Pros: Cons:
Like condos, often built where land is at a premium Must be comfortable with HOA/Condo fees, if part of one
Spared direct responsibility for maintenance if part of an HOA Sharing a wall with at least one neighbor
Usually includes a backyard, though smaller than a Single-Family Not always the cheapest option


A home delivered in pieces and then constructed by a home builder. Each piece or module is custom-made to match the specifications set forth by the architect.

Pros: Cons:
10-20% cheaper than traditionally built homes Transportation of the home can be an issue
More energy-efficient than others The site work needs proper planning and access for a large crane
Improved quality of build and finish due to being built in a factory Fees during the “construction stage”

Planned Unit Development (PUD)

Homes built as part of planned development. Can include single-family homes, apartment-style condos, and townhomes within the same PUD.

Pros: Cons:
Assortment of home types High HOA/Condo fees
Access to amenities Mortgage lender will want to know you are buying a PUD
Large PUDs have entertainment facilities (bars,shopping,restaurants) Rules and communal costs can be harsh


Detached building made up of multiple units. Multi-family homes differ from apartment buildings because they can only have four or fewer units before being considered a commercial building.

Pros: Cons:
Can live in one unit and rent others if you own more than one unit High fees if financing more than one unit
Allowed to finance a higher amount with multi-unit properties Qualifying for a loan can be more difficult
Can finance as a primary home if you live in one unit Don’t appreciate value as fast as Single-Family Homes, so equity is slower to build


Part of a larger group which can include mobile homes and trailers; different because they count as real estate and are mortgageable.

Pros: Cons:
Least expensive way to own a home Stigma associated with this type (“Trailer Park”)
Manufactured homes can be spacious and comfortable Manufactured homes depreciate over time
Great option if you’re downsizing in retirement Be wary of the location where you buy. Park owners can be manipulative

3. Find the Best real estate Agent Around

Chances are, you know someone with a real estate license.

How good of an agent they are, however, may be up for debate.

While it’s nice your cousin just got certified and is trying to launch a career, you need someone with experience. Speak with friends or family who live in the area and may know someone reputable. Failing that, call around locally to get a feel for agents. Don’t pick the first agent you speak to – “shop” around and interview a few. The right agent will check all these boxes:

  • They work full-time
  • Offer helpful suggestions for your search
  • Are an area expert
  • You have a comfortable rapport
  • Can demonstrate experience with recent sales

Also check online reviews—not just the agent’s own site.

If you’re still uncertain, schedule a meeting with a local broker. They can answer any questions you may still have.

Brokers have the distinction of knowing more than the average agent. They guide agents around mishaps and mediate relationships between used title companies, lenders, inspectors, lawyers, and their offices. Some, known as “broker agents”, also continue the day-to-day transactional activities.

I recommend hiring a broker because that extra knowledge and training may give you an edge. If you’re in a busy market and can’t find a broker to work with directly, work with one of their agents. That way, you still get that benefit of experience when needed.

I say this from experience. I was helping a client purchase a million-dollar home and had it not been for my broker, it would’ve been dead in the water. When negotiations were falling through, he found a clause in the mortgage agreement from the client’s lender that gave us the negotiating room we needed.

Without his knowledge, we wouldn’t have closed.

Step 3: Shop for a home the right way

Now that you have your list of wants and needs, your preapproval letter, and the services of a dependable agent, you are finally ready to start shopping for a home. Your agent should have an overview of what you are looking for, but make sure to bring up anything specific (i.e., architectural design, backyard, etc.). Having an accurate idea of what EXACTLY to look for will help your agent find homes on the Multiple Listing Service.

The Multiple Listing Service, or MLS, is a database established by cooperating real estate brokers to provide data about properties for sale. The MLS is a service only available to those with a real estate license, unlike housing sites like Zillow or Redfin. This ensures that only the most up-to-date information shows regarding a certain property; it also protects sensitive information a seller may not want out in the public.

Your agent should send you at least 8-10 different properties at a minimum. This will give you a chance to take stock of what you need, what you like, and what you hate. Then you can communicate that to your agent and refine your search.

Looking at properties

You have a few options for seeing properties.

The most common and best way to do it is to get a private showing. Your agent will set a time and date to see the property exclusively without any other potential buyers there. This is your best chance to get an intimate feel for the house and see if you can truly make it a home. Private showings can be difficult in the current market, but they’re worth it if you can get them.

The listing agent may be present at the showing.  They are there to answer questions about the neighborhood, the foundation of the house (roof, flooring, plumbing, etc.), or anything not readily available to your agent through the MLS.

Open houses are another option.

Open houses are like garage sales for homebuying. They’re hosted by the listing agent, usually the first weekend the house is up for sale, to drive interest in the property. It’s easier to get in on an open house—anyone can show up. I recommend going with your agent because they can answer MOST of the questions that you would ask the listing agent if you’re on your own.

Remember, the listing agent represents the SELLER, not YOU. So, the questions you ask could hurt negotiations down the line. Always try and contain your excitement and curiosity around a listing agent and leave questions (number of offers on the house, what would the seller be willing to accept, etc.) to your agent.

You can do a virtual tour, where the listing agent goes to the and takes videos. It’s convenient if you are buying a house out of state, but I recommend going to see the house in person before make a decision.

Step 4: Make an offer and get it accepted

Once you found a new place to call home, your agent will prepare an offer for the seller. This will include several things:

  1. Your mortgage preapproval letter or/proof of finances if you’re paying cash
  2. The purchase price you are offering
  3. Your escrow or “good faith” deposit (deposited with a title company within 11 days of contract acceptance)

If something on the seller’s end falls through, you receive the escrow deposit back. If it’s your fault, you could forfeit that money. There are certain exceptions, such as something coming up during the appraisal or inspection process, or a contingency in your offer getting triggered.

To determine a price to offer that is both fair and sensible, your agent will perform a Comparative Market Analysis or CMA. Then, they will look to see what features in the comparable homes have made them cheaper or more expensive. Negotiations and counteroffers are quite common, as well as outright rejection.

Should you see something yourself before you make the initial offer, you can add a clause in the contract to have the seller pay for the repairs or take the cost of the repairs from the purchase price of the home.

Your agent will handle the back-and-forth during the negotiation, bringing you counteroffers from the seller and helping you respond. Once everyone agrees, you will be officially under contract.

Step 5: Property appraisal

Once you’re under contract, an appraisal will be the first step you take to get to closing.

Appraisals ensure that the purchase price of the home is appropriate given the home’s condition, location, and features. Think of this as a teacher (the appraiser) checking the math homework of a student (your agent).

Licensed appraisers take account of the interior and exterior of the property, the neighborhood and area, and recent comparable sales. They provide an appraisal report that will include:

  • Photos of the front, back, and street of the property
  • A map showing the property
  • Information on the comparable houses used for the appraisal
  • Sketch of the exterior of the property
  • Market sales data, public land records, and tax records used to determine the market value of the property

Appraisals protect the interest of the lender, so they order it but you pay for it. It will run several hundred dollars, but it’s beneficial for you as well. If the appraisal comes back at the contract price or above it, everything is good to move forward. Should it come back lower, it can scupper the deal because you are paying above the “correct” price of the home. Lenders will not finance a home over market value.

It is not necessary for you to be at the property for the appraisal, but your agent should be in attendance. They can review the report and speak with the appraiser if anything comes up.

If the appraisal comes back lower than the purchase price of the home, this is a standard contingency that means you can get out of the contract without penalties. In other words, you won’t lose your earnest money deposit.

Step 6: Home inspections

While you do have the option to forgo this step entirely, I wouldn’t recommend it. You can use not having an inspection as a contingency to entice a seller into selecting your offer, but it could be a costly error. There are no lemon laws to protect you if you buy a bad home.

A standard home inspection will find any major defects in the house that may not be visible to the untrained eye. The inspector will note:

  1. any problem that’s a major defect, minor defect, or safety issue
  2. any items that need replacing, repairs, or service
  3. items that are OK but may need special attention once you own the property

Inspections can vary in price, but a good rule of thumb is, “you get what you pay for.” In most cases, you pay around $400-$600.

For inspections, both you and your agent should be present. Being there in real-time with the inspector to ask questions is incredibly important.

Note that a standard inspection may not cover everything. You may want to pay for specialized inspections to check for:

  • Termite damage
  • Inside pipes and sewer lines
  • Foundation of the house
  • Asbestos

To make sure that the sale of the home is legal, your lender will order a title search on the property. A title search is an examination of public records to affirm a property’s legal ownership. This will check if any deeds, land records, tax liens, bankruptcy records or lawsuits are pending against the home or homeowner.

A title company, attorney, or even a lender can conduct a title search. They will check public records and legal documentation and provide a report that includes information on any issues with the title.

Costs for title searches vary depending on the purchase and loan price.

Remember: For a legal transaction to take place, the title on the house MUST be clean. While not inadvertently important to buyers, it can delay your purchase and cost you more money.

Step 8: Closing day

Once all the challenging work is done, you will be on your way to closing day. Getting to closing usually takes 30-45 days after the contract acceptance unless unforeseen circumstances arise. This is I preach preparedness to my buyers. Promptly handling issues while under contract and getting everything in order with your mortgage will get you to closing faster.

Expect to sign a TON of paperwork on closing day.  Closings take place at either the listing or buyer’s agent office, title company office, or lender’s office. Though not everyone may be present, those that may attend are:

  • Buyer(s)
  • Seller(s)
  • Listing agent
  • Buyer’s agent
  • Escrow officer
  • Lawyer (from either side of the transaction)
  • Transaction coordinator

While you’re not required to have an attorney present, it can be beneficial in case you have any legal questions. In any case, a good agent will read each document you sign for correctness, and you should do the same. If you don’t understand something, don’t be afraid to ask.

What you need for closing day

  1. The biggest thing you need for closing is your final payment. Closing costs usually run to be about 3-5% of the purchase price of the home, though it can vary from contract to contract. You will also need: Two forms of ID
  2. Homeowners insurance (if applicable)
  3. Lender distribution of funds covering the loan amount to the closing agent
  4. Loan terms, an impound account to cover taxes and insurance, in addition to the monthly payment

Once you sign everything you are ready to get your keys!

Now that you’re informed, make sure to get mortgage-ready

Make no mistake, buying a home can be one of the most taxing and emotional periods of your life. Blood (hopefully not), sweat, and tears will go into finding your home.

You also need to be prepared for the other side of the homebuying process, which is getting your mortgage. Just as the homebuying process is complex and involved, the process of getting approved for a mortgage is more complicated than other loan applications. You need to have your financials and your credit in order to make the underwriting process and smooth and stress-free as possible.

Good luck out there and happy house hunting.

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