Why You Need a First-Time Home Buyer Checklist

Buying a home is the biggest financial decision most people ever make. There are 50+ steps, and missing one can cost you thousands. This checklist ensures you do everything right, in the right order.

Phase 1: Preparation (Months 1-3 Before Buying)

Step 1: Check Your Credit Score

• Get free credit reports at AnnualCreditReport.com
• Minimum score for FHA: 580
• Minimum score for conventional: 620
• Best rates: 740+
• Dispute any errors (takes 30-90 days to fix)

Step 2: Improve Your Credit Score

• Pay down credit cards to under 30% utilization
• Don't open new credit accounts
• Don't close old accounts (lengthens history)
• Pay all bills on time (35% of score)
• Consider a credit-builder loan if score is low

Step 3: Save for Down Payment

• Conventional: 5-20% down
• FHA: 3.5% down
• VA: 0% down (veterans only)
• USDA: 0% down (rural areas only)
• Plus closing costs: 2-5% of purchase price

Step 4: Save for Closing Costs

• Title insurance: $1,000-3,000
• Appraisal: $400-600
• Inspection: $400-600
• Origination fee: 0.5-1% of loan
• Recording fees: $100-500
• Total: $5,000-15,000 on a $300K home

Step 5: Save for Reserves

• Lenders want 2-6 months of mortgage payments in savings
• Plus 1-3% of home value for repairs annually
• Plus moving costs: $1,000-5,000

Step 6: Calculate Your Budget

• Use the 28/36 rule:

- Max 28% of gross monthly income on housing (PITI) - Max 36% on all debts (housing + cars + student loans + credit cards)

• Example: $80K income = $1,867 max housing payment

Step 7: Get Pre-Approved (Not Pre-Qualified)

• Pre-qualification = casual estimate
• Pre-approval = verified by lender, binding for 90 days
• Get quotes from 3+ lenders
• Compare: rate, points, fees, APR
• Get pre-approval letter (required for offers)

Phase 2: House Hunting (Months 4-6)

Step 8: Find a Buyer's Agent

• Interview 3+ agents
• Look for: 5+ years experience, 25+ transactions/year, local expert
• Get referrals from friends/family
• Check Zillow reviews (50+ reviews ideal)

Step 9: Define Your Must-Haves

• Location (cities, neighborhoods, school districts)
• Price range (max budget)
• Beds/baths minimum
• Square footage
• Must-have features (garage, yard, etc.)
• Deal-breakers (HOA, busy street, etc.)

Step 10: Set Up MLS Alerts

• Your agent sets up auto-alerts
• Get notified within 15 minutes of new listings
• Average home in hot markets sells in 5-7 days
• See homes within 24-48 hours of listing

Step 11: Research Neighborhoods

• Visit at different times of day/week
• Check school ratings (GreatSchools.org)
• Check crime rates (CrimeReports.com)
• Check commute times (Google Maps)
• Walk score (WalkScore.com)
• Local amenities (parks, restaurants, grocery)

Step 12: Tour Homes (Average: 10-20 homes)

• Take photos + videos
• Bring a tape measure + checklist
• Note pros/cons of each home
• Ask about: age of roof, HVAC, water heater, foundation
• Look for: water stains, cracks, uneven floors

Step 13: Find "The One"

• Most buyers know within 30 seconds
• Visit it 2-3 times at different times of day
• Bring family/friends for second opinion
• Don't settle — there will always be another house

Phase 3: Making an Offer (Days 1-7)

Step 14: Make a Competitive Offer

• Ask your agent for "comparable sales" (comps)
• Offer 95-100% of asking in normal markets
• Offer 100-110% in hot seller's markets
• Include: price, earnest money, closing date, contingencies

Step 15: Write the Offer Letter

• Use your state's standard purchase agreement
• Include: property address, price, earnest money amount
• Specify: inspection period (7-14 days), financing type
• Add: contingencies (financing, inspection, appraisal)
• Sign + date

Step 16: Provide Earnest Money

• 1-3% of purchase price (held in escrow)
• Refundable if inspection fails
• Forfeit if you back out without cause
• Applied to down payment at closing

Step 17: Negotiate Counter-Offer

• Seller may counter price, terms, or both
• Be ready to walk away (sets boundaries)
• Consider: seller concessions (closing cost help), repairs, possession date
• Get everything in writing

Step 18: Accept Offer + Open Escrow

• Both parties sign final offer
• Earnest money deposited into escrow
• Escrow company handles closing
• Set target closing date (30-45 days out)

Phase 4: Due Diligence (Days 7-21)

Step 19: Schedule Home Inspection

• Hire ASHI-certified inspector
• Cost: $400-600 (well spent)
• Attend the inspection (2-4 hours)
• Get written report with photos

Step 20: Review Inspection Report

• Major issues: foundation, roof, HVAC, plumbing, electrical
• Minor issues: cosmetic, easily fixed
• Negotiate: ask seller to fix major issues OR credit you

Step 21: Get Appraisal

• Lender orders appraisal ($400-600)
• Appraiser visits property (1-2 hours)
• Report confirms property is worth purchase price
• If appraisal comes in low: renegotiate or pay difference

Step 22: Get Final Loan Approval

• Lender reviews appraisal + final docs
• Update income/employment verification
• Lock interest rate (if not already locked)
• Receive "Clear to Close" (3-7 days before closing)

Step 23: Shop for Homeowners Insurance

• Get quotes from 3+ insurers
• Bundle with auto for 10-15% discount
• Coverage: dwelling, personal property, liability
• Cost: $1,000-3,000/year (varies by location)

Step 24: Order Title Search + Insurance

• Title company searches for liens, encumbrances
• Title insurance protects against future claims
• Cost: $1,000-2,000 (one-time)
• Required by lender

Step 25: Final Walk-Through

• 24-48 hours before closing
• Verify repairs were completed
• Check no new damage
• Confirm appliances included are still there
• Take final photos

Phase 5: Closing (Day 30-45)

Step 26: Receive Closing Disclosure

• Lender sends 3+ business days before closing
• Shows: final loan terms, monthly payment, closing costs
• Compare to Loan Estimate (received at pre-approval)
• Question any large discrepancies

Step 27: Get Certified Funds

• Wire transfer or cashier's check
• Amount = closing costs + down payment - earnest money
• Get exact amount from escrow company
• Wire fraud is common — verify wire instructions by phone

Step 28: Sign Documents at Closing

• 1-2 hours of signing
• Bring: government ID, social security number
• Sign: deed of trust, promissory note, closing disclosure
• Notary public witnesses signatures

Step 29: Pay Closing Costs

• Total: 2-5% of purchase price
• Includes: lender fees, title, escrow, insurance, taxes
• Paid via wire transfer or cashier's check

Step 30: Get Your Keys!

• Once funds clear + deed records
• Typically same day or next day
• Change locks immediately
• Get extra keys made

Phase 6: Move-In + First Year

Step 31: Set Up Utilities

• Electric, gas, water, trash, internet
• Schedule: 1 week before move-in
• Cost: $200-500 setup fees + deposits

Step 32: Change Your Address

• USPS mail forwarding ($1.05 online)
• Update: driver's license, banks, credit cards, employer
• Update: subscriptions, insurance, voter registration

Step 33: Update Insurance

• Confirm homeowners policy active
• Update address on auto insurance
• Consider umbrella policy ($1M+ coverage, $200-400/year)

Step 34: Hire a Handyman for Repairs

• Get referrals from your agent
• Pre-fix: leaky faucets, squeaky doors, cabinet alignment
• Cost: $75-150/hour

Step 35: Paint + Make It Yours

• Paint before moving furniture in
• Choose neutral colors for resale
• Cost: $2-5/sqft professionally, $0.50-1 DIY

Step 36: Deep Clean

• Hire cleaners ($200-500)
• Or DIY with rental carpet cleaner ($50/day)
• Focus on: carpets, appliances, bathrooms

Step 37: Change Locks + Smart Lock

• Re-key or replace all exterior doors
• Consider smart lock (August, Schlage Encode)
• Cost: $200-500

Step 38: Set Up Security System

• Options: Ring, SimpliSafe, ADT
• Cost: $200-600 equipment + $20-50/mo monitoring
• Insurance discount: 5-15%

Step 39: Test Smoke + Carbon Monoxide Detectors

• Replace batteries
• Add detectors if missing (one per floor + bedrooms)
• Cost: $20-50 each

Step 40: Locate Main Shut-Offs

• Water shut-off valve
• Gas shut-off valve
• Electrical panel
• Test them — know how to use them

Step 41: Save for Property Taxes

• Set aside 1/12 of annual taxes each month
• Or use escrow account (lender handles)
• Property taxes average 1.1% of home value

Step 42: Save for Home Maintenance

• 1-3% of home value annually
• $300K home = $3,000-9,000/year
• Major repairs: roof ($8K), HVAC ($5K), water heater ($1.5K)

Step 43: Build Emergency Fund

• 3-6 months of expenses
• Separate from home maintenance fund
• High-yield savings account (4-5% APY)

Step 44: Track Home Value

• Check Zillow/Redfin quarterly (rough estimate)
• Get professional appraisal every 5 years
• Track for refinance / sale timing

Step 45: Document Home Improvements

• Keep receipts + photos of all improvements
• Reduces capital gains tax when you sell
• Adds to cost basis (lowers profit on paper)

Step 46: File for Homestead Exemption

• Reduces property taxes 10-30%
• File in first year of ownership
• Free — just paperwork

Step 47: Review Mortgage Annually

• Check interest rates
• Consider refinance if rates drop 1%+
• Run break-even analysis

Step 48: Build Relationship with Neighbors

• Introduce yourself within first month
• Join Nextdoor app
• Attend HOA meetings (if applicable)

Step 49: Plan First-Year Maintenance

• Spring: HVAC tune-up, gutter cleaning
• Summer: A/C service, exterior paint touch-up
• Fall: Furnace tune-up, weatherstripping
• Winter: Pipe insulation, chimney inspection

Step 50: Celebrate + Enjoy Your New Home!

• Host a housewarming party
• Take photos for memories
• Start building equity
• You did it!

Key Takeaways

• Preparation (credit + savings) takes 3-6 months — start early
• Get pre-approved BEFORE looking at homes
• Tour 10-20 homes before deciding
• Inspection is non-negotiable ($400-600 saves $10K+ in surprises)
• Closing takes 30-45 days after offer acceptance
• Closing costs: 2-5% of purchase price
• First year: maintenance fund, emergency fund, document improvements
• File homestead exemption in year 1 (10-30% tax savings)
• Plan seasonal maintenance (HVAC tune-ups = 2x lifespan)
• Celebrate — you're now a homeowner!