A young family moving into their new house. A young child carrying a box into their new house.

The Home Buying Process Step by Step


Are you ready to buy your first home but confused by the home buying process? It can be daunting, whether you’re buying your first or tenth home! If you’ve never purchased a home before, you may not have a clue where to start. Perhaps you’ve fallen in love with a house but don’t know how to get a loan.

Wherever you are in your home buying journey, keep reading for a straightforward guide through the home buying process step by step.

The Home Buying Process in Ten Steps

  1. Calculate how much house you can afford.
    Start by spending some time deciding what you want and need from a house. Do some research and see what’s available in the area you want to buy into. 
  2. Choose a mortgage lender and get your mortgage pre-approval.
    Working with a local mortgage lender is a great idea. At the appropriate time, you may need to share some financial documents with them to obtain your mortgage pre-approval. Going into the buying process with a loan pre-approval shows sellers that you are a serious buyer and improves the odds that your offer will be accepted. Honor Bank’s Home Buyer’s Edge & Upfront Underwriting review can help streamline the pre-approval and purchase processes.
  3. Partner with a real estate agent.
    Choose an agent that truly has your best interests in mind. They’ll help you find the right house that perfectly meets your needs and financial budget. You may have to work with your agent for weeks or months before you find the perfect home in your targeted area. Therefore, it is very important to select a real estate agent you like and trust.
  4. Make a detailed comparison of your top choice houses.
    Ask yourself important questions when you find houses you like. Is the house the right size for your family? Will you need to do work on the house to make it habitable? Is the neighborhood pleasant and well-kept? Are you comfortable with the amount of traffic going by? Would you be comfortable sending your children to the local schools? If you resell this home in the future, will it draw new buyers to the neighborhood?
  5. Make an offer.
    When you have chosen a house to pursue, you and your real estate agent will work together to draft an offer. Your agent will submit the offer to the seller’s agent on your behalf. You may go back and forth with the seller to negotiate and reach an agreed upon price
  6. Go into escrow.
    Once you and the seller agree on the terms of sale, your funds will go into escrow. During the escrow period, a third party holds any funds in an escrow account until the sale is completed. Escrow is designed to secure the transaction and provide peace of mind for the buyer and seller until the sale is completed. The deal will remain in escrow until you complete the remaining home buying steps. You will also want to contact your mortgage lender and let them know you have an accepted offer.
  7. Get the house inspected.
    A professional home inspection can pinpoint structural or systemic problems with the home. An inspection protects you from unknowingly buying a house that needs major work, such as electrical rewiring or a new roof. If issues arise through the inspection (it’s normal that some do) but you still want to buy the house, you can use the inspection findings to negotiate a lower purchase price. But if the inspection reveals extensive problems with the property, now is your opportunity to back out of the purchase and keep looking for a more suitable home.
  8. Secure your home loan.
    When the inspection is complete and you are ready to execute the purchase of your new home, it’s time for your lender to process and underwrite your loan. You will need to gather any remaining financial documents and paperwork. Honor Bank’s Mortgage Checklist will help you gather what you need and stay organized. Based on your personal situation, your lender may also ask you to provide additional materials.
  9. Get an appraisal.
    Before you can sign your loan closing documents, your lender will schedule an appraisal of the property to determine an estimated value of the house. Appraisers are third-party service providers who are not associated with any bank or lender. The appraisal is intended to assure you that you are paying a fair price for the property. It also assures the bank that they are lending you an appropriate amount of money for the property you are purchasing.
  10. Closing time.
    With your loan approved, it’s time to officially buy your new house. Your title company will make an appointment for you to go to their office and sign all the documents necessary to transfer the property and the home loan to you. Once all funds have been transferred and the paperwork has been processed, it’s time to move into your new home! Congratulations!

For first-time homebuyers, not knowing what to expect throughout the home buying process can be a major stressor. Honor Bank has been helping our Northern Michigan clients through the home buying process for over a hundred years, and we can help you too. Experience the difference with us!

Call Honor Bank at 877-325-8031 to partner with an experienced local mortgage lender you can trust.

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