A clear walkthrough of what actually happens between deciding to buy and getting the keys.
Buying a home looks different than it used to. The National Association of Realtors reports that the share of first-time buyers fell to a record low of 21% in 2025, and the median age of a first-time buyer has climbed to 40, up from 28 in 1992. Homeownership is taking longer to reach for a lot of people but the process itself, once you're ready, still follows the same basic steps whether you're buying your first home or your fourth.
Step 1: Get Pre-Qualified Before You Shop
Pre-qualification starts with a mortgage application, where you provide your income, employment history, debts, and assets. The lender pulls your credit report from the three major bureaus and runs your information through underwriting, which weighs your income against your debts and evaluates how much risk you represent as a borrower. If everything checks out, you receive a pre-qualification letter stating how much you're approved to borrow and at what estimated rate and terms. It's worth noting that pre-qualification is conditional, it's based on the financial picture you've provided at that point in time, and final approval still depends on the specific home you choose passing appraisal and underwriting.
Step 2: Budget for More Than the Down Payment
Two costs surprise a lot of first-time buyers. Earnest money is a deposit, typically 1 to 3% of the purchase price, that shows the seller you're serious; it's held in escrow and later applied toward your down payment or closing costs. Closing costs are separate and typically run 2 to 5% of the purchase price. On a $300,000 home, that's roughly $6,000 to $15,000 on top of your down payment, so budget for it early rather than being caught off guard near closing.
Step 3: House Hunting and Making an Offer
This is where your agent's knowledge of comparable sales matters most. A competitive offer isn't just about price, it also reflects your financing type, your timeline, and which contingencies you include. Your agent can help you understand what's typical for your local market and what terms will make your offer stand out without overextending you.
Step 4: The Inspection Contingency
Once your offer is accepted, you'll typically have around 7 to 10 days to schedule and complete a home inspection, though the exact window is set by your purchase agreement. Most inspectors deliver their report within 1 to 24 hours of the visit, and a standard single-family inspection runs $200 to $500 (specialized inspections for things like radon, mold, or a sewer scope can add $100 to $400 each). Based on the findings, you can request repairs, negotiate a price adjustment or credit, or walk away from the deal with your earnest money intact (minus the cost of the inspection if it’s not pre-paid) this is one of the most important protections you have as a buyer.
Step 5: Closing
After your loan clears underwriting and the appraisal supports the purchase price, you'll do a final walkthrough to confirm the home's condition. You will also have to review your Closing Disclosure, and sign your loan documents. Once funds are transferred and the deed is recorded, the home is yours.
Where Your Down Payment Can Come From
A down payment doesn't have to come entirely out of your own savings. Many loan programs allow gift funds from family members, provided the gift is properly documented with a letter for your lender. First-time buyers can also pull up to $10,000 from an IRA without the usual 10% early-withdrawal penalty specifically for a home purchase, a lifetime limit that applies per person, so a couple could potentially use up to $20,000 combined (note that a traditional IRA withdrawal is still taxed as income, while a Roth withdrawal can be fully tax- and penalty-free if the account is at least five years old). And as covered below, state and local down payment assistance programs and lender-specific grants can cover part or all of the down payment for buyers who qualify. It's worth asking your loan officer what you're eligible for before assuming you need the full amount saved on your own.
Working With a Buyer's Agent
Since the 2024 NAR settlement, buyer's agent compensation is no longer automatically built into a listing. Buyers now typically sign a written agreement with their agent up front that spells out how that agent is paid, whether that's a fee negotiated with the seller as part of the offer, a flat fee, or a direct payment from the buyer. It's a conversation worth having with any agent before you start touring homes, so you understand the arrangement clearly. A good buyer's agent still earns their fee many times over, through access to listings, skilled negotiation, and catching problems in a contract or inspection report that an untrained eye would miss.
Mistakes Buyers Make — First-Timers and Repeat Buyers Alike
House hunting before getting pre-qualified, which wastes time on homes you may not qualify for and weakens your offer against pre-qualified competitors.
Waiving the inspection contingency to win a bidding war. This can save you time in a competitive offer, but it also removes one of your biggest protections against costly, hidden problems.
Forgetting to budget for closing costs and moving expenses on top of the down payment.
Making a large purchase or opening a new credit card between pre-approval and closing. Lenders re-check credit before closing, and new debt can change your approval or your rate.
Changing jobs mid-transaction. Lenders want to see stable income, and a job change can complicate or delay underwriting.
Every Buyer Is Different
A first-time buyer often benefits most from an FHA loan, which allows a down payment as low as 3.5% with a credit score of 580 or higher, and from state or local down payment assistance programs that can significantly reduce upfront costs. A move-up buyer is usually managing the sale of a current home alongside a new purchase, which often means negotiating a contingent offer or bridge financing to cover the gap. A luxury buyer is typically working outside conforming loan limits, which means a jumbo loan with stricter reserve requirements, and often has more flexibility to make a stronger offer with a larger down payment or an all-cash purchase. None of these paths is more "correct" than another, the right approach depends on your finances and goals.
Ready to Talk Through Your Options?
Buying or selling always comes down to your specific goals, timeline, and finances, not just the headlines. If you'd like to talk through what any of this means for your situation, reach out to Black Tie Realty. We're happy to answer questions, walk you through the numbers, and help you build a plan, no pressure attached.
Black Tie Realty | blacktierealtyne.com
Sources
First-Time Home Buyer Share Falls to Historic Low of 21%, Median Age Rises to 40 — NAR — https://www.nar.realtor/press-releases/first-time-home-buyer-share-falls-to-historic-low-of-21-median-age-rises-to-40
Minimum Mortgage Requirements for 2026 — LendingTree — https://www.lendingtree.com/home/mortgage/minimum-mortgage-requirements/
The Complete Cost of Buying and Selling a Home in 2026 — Newsweek — https://www.newsweek.com/the-complete-cost-of-buying-and-selling-a-home-in-2026-11773404
A Guide to the Home Inspection Contingency — Rocket Mortgage — https://www.rocketmortgage.com/learn/inspection-contingency
What Happens if the Inspection Contingency Expires on a Home Offer? — HomeLight — https://www.homelight.com/blog/buyer-what-happens-if-inspection-contingency-expires/
Penalty-Free IRA Withdrawals for Home Purchase — Texas Real Estate Research Center — https://trerc.tamu.edu/article/penalty-free-ira-withdrawals-for-home-purchase/
