Buying a first home is a sequence of about a dozen decisions, most of which can't be reversed easily. The order matters, the timing matters, and a few of the steps that feel optional aren't. Here's the honest version, with the parts most guides skip.
Phase 1: Before the search
Get a real read on what you can afford — twice
The first read is the lender's. A pre-approval (not a pre-qualification) gives you a documented number based on your income, debts, credit, and current rates. The second read is yours: the same household income against a comfortable housing-cost ratio (25–28% gross), not the lender's ceiling (43%).
The lender's number is what you'll be offered. The personal number is what you should target. The gap is often $100,000+ in home price. Run the affordability calculator to see all three tiers — comfortable, stretched, house-poor — alongside the lender's qualifying number.
Verify the cash position
Down payment is the headline. The full cash requirement is more:
- Down payment (3–20%+ of purchase price)
- Closing costs (2–3%)
- Pre-paid escrow (a few months of taxes and insurance)
- Inspection ($400–$700) and appraisal ($500–$800), some of which may be lender-paid
- Reserves (most lenders want 2–6 months of PITI verifiable in account)
- Moving costs ($1,500–$5,000 local; more for long-distance)
- Initial repairs / furniture / utilities setup
The cash-to-close calculator works through this end-to-end.
Choose the loan structure
Conventional, FHA, VA, USDA — the right choice depends on credit, down payment, military status, and rural eligibility. The most common matchups:
- Conventional if credit is 700+ and down payment is 5%+. Lower long-run cost than FHA above 700 credit.
- FHA if credit is 580–700 or down payment is 3.5%. Easier qualification, but mortgage insurance runs for the life of the loan in most cases.
- VA if eligible (active-duty, veteran, qualifying spouse). 0% down, no PMI, competitive rates. Often the best option for those who qualify.
- USDA if the property is in a rural-eligible area and household income is under 115% of area median. 0% down. Geographic restrictions are real.
Phase 2: The search
Hire a buyer's agent — carefully
Get referrals; interview at least two; pick someone who answers honestly when you ask "should I make this offer?" not someone who pushes any deal. After the 2024 NAR settlement, buyer-agent compensation is more transparent than before, and the agreement you sign with the agent should be specific about what's covered and how the commission is paid.
Define the non-negotiables before falling in love
Number of bedrooms, commute distance, school zone, lot size, garage. Three to five hard constraints. Anything not on the list is negotiable. The reason is to keep the search comparison disciplined when emotions arrive — and they will, around the third or fourth showing.
Phase 3: The offer
Read the listing's tax history with skepticism
The listing tax bill is the seller's, not yours. Project the post-purchase tax using the local effective rate × your offer price. In Frisco the all-in rate is roughly 2.0–2.3%. The difference can be $150–$300/month versus what the listing implies — and over a 30-year hold, that's $50,000+ of cost.
Use the Listing Reality Check tool
Paste the listing details and get an honest projection of the complete monthly cost — projected tax (not seller's), maintenance reserve, PMI if applicable, HOA. This is the number to compare against your comfortable housing budget, not the listing's PITI.
Make the offer with eyes open
Offer price, earnest money, option period (Texas), financing contingency, inspection contingency, closing date, seller concessions. Each is a lever. In a balanced market expect to negotiate; in a hot market expect to lose a few. The right move is to bid your real number — including a sense of where you'd walk — not the agent's number.
Phase 4: Under contract
Inspection
Hire a general inspector ($400–$700). For older homes or specific concerns, add specialty inspections — foundation, sewer scope, HVAC, roof. The inspection is the highest-leverage moment in the transaction; it's where structural issues, deferred maintenance, and seller misrepresentations surface. Walk the inspection if you can.
Appraisal and underwriting
The lender orders an appraisal. If it comes in below contract price, the lender will only finance to appraised value — meaning you cover the gap in cash, renegotiate, or walk. Underwriting reviews everything submitted at pre-approval, plus updated paystubs and bank statements. Don't open new credit, change jobs, or move money around in odd ways during this period.
Insurance
Get bound homeowners insurance before closing. Pull a CLUE report on the property if you haven't. In Texas, verify the wind/hail deductible structure is acceptable to you — separate, percentage-based deductibles are common.
Phase 5: Closing and after
Final walkthrough
The day before or morning of closing. Verify the home is in the condition agreed, all repairs requested have been completed, and personal property included in the contract is still there. Discrepancies discovered at this stage are still negotiable.
Closing
Bring ID. The wire instructions will be confirmed verbally — never by emailed instructions; wire fraud in real-estate closing is a multi-billion-dollar industry. Sign approximately fifty documents. Receive keys.
Week one
- File the homestead exemption (Texas: by April 30 of the year after closing). Don't skip this.
- Set up utility transfers if not already done.
- Change locks and rekey.
- Pull the breakers and figure out which is which. Label the panel.
- Locate the main water shutoff and gas shutoff.
First three months
- Open a separate maintenance reserve account — automatic transfer of 1% of home value annually. Treat it as untouchable for non-housing.
- Get the HVAC serviced if it hasn't been recently.
- Note your insurance renewal date and put a reminder 60 days before it to shop the market.
- Keep documentation of every improvement made — capital improvements raise your basis and reduce capital gains tax at sale.