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New to buying · Reviewed August 2026

The first-time home buyer's guide

Everything that actually happens when you buy a home — the full process, the real costs, the taxes your state won't advertise, and how agents get paid now. Start with the overview of any step, then dive as deep as you want.

On this page
Your estimateTimelineEvery stepYour state's taxesWhat it costsAgents & commissionsCommon practicesFAQ

Make it specific to you

Costs and taxes change a lot by location. Pick your state to unlock local details, and add a price for personalized estimates.

The timeline at a glance

House hunting is open-ended; once your offer is accepted, closing typically takes ~30–45 days (about 37 on average). A federal rule requires your Closing Disclosure at least 3 business days before closing.

Financial readiness & credit prepMonths before, ongoing
Mortgage pre-approvalA few days to ~2 weeks
House hunting & touringWeeks to several months (variable)
Offer & negotiation~1–3 days
InspectionScheduled in first ~10 days
Appraisal~1–2 weeks
Title search (parallel)~1–2 weeks
Underwriting → clear-to-close~2–4 weeks
Closing Disclosure review≥3 business days before closing
Final walkthrough~24 hours before closing
Closing / settlement~1–2 hour signing

Every step, explained

Start with the one-line overview; open any step for the full deep dive — what happens, who's involved, your to-dos, the pitfalls, and where costs land.

STEP 1
Financial readiness & credit prep

Before you shop, get your credit, savings, and debt load into loan-ready shape — this sets your interest rate, the biggest long-term cost of all.

Lenders weigh three levers: credit score, debt-to-income ratio (DTI), and cash on hand. Conventional loans typically want a 620+ FICO; FHA allows 580+ (3.5% down) or 500–579 (10% down). The classic DTI rule of thumb is 28/36 (housing ≤28% of gross, total debt ≤36%), though conventional loans routinely approve to 43–45% and sometimes ~50% with strong compensating factors.

Who's involved: You, and optionally a loan officer or nonprofit housing counselor.
Typical duration: Months before you shop, and ongoing.
Your to-dos
  • Pull your credit and fix errors; avoid opening new accounts.
  • Pay down revolving balances to lower your DTI and boost your score.
  • Save a down payment (20% is NOT required — median first-timer is ~8–9%) plus closing costs and a few months of reserves.
  • Gather 30 days of pay stubs, 2 years of W-2s/returns, and 2 months of bank statements.
Common pitfalls
  • Opening new credit lines or financing a car right before applying.
  • Large, unexplained ('unsourced') deposits into your accounts.
  • Assuming you need 20% down and delaying for years unnecessarily.
Where costs land
  • None directly — but your credit and DTI here determine your rate, which dwarfs any single closing fee over the life of the loan.
STEP 2
Pre-qualification vs. pre-approval

Pre-qualification is an informal estimate; pre-approval is a documented, verified commitment that sellers actually take seriously.

Pre-qualification uses self-reported, unverified info (soft or no credit pull) — fast but weak. Pre-approval is a formal review where the lender verifies income, assets, and credit with a hard pull. Neither guarantees the loan (underwriting, appraisal, and the property still matter). A pre-approval letter is usually valid 60–90 days.

Who's involved: You and a mortgage lender/broker.
Typical duration: Pre-qual: minutes. Pre-approval: 24–48 hours with documents ready.
Your to-dos
  • Get pre-approved (not just pre-qualified) before touring in any competitive market.
  • Compare offers from at least 3 lenders — rate and fees vary.
  • Ask each lender whether they actually verified income and assets.
Common pitfalls
  • Touring homes with only a pre-qual and losing to pre-approved buyers.
  • Letting your letter expire mid-search.
  • Treating 'pre-approval' as standardized — rigor varies by lender.
Where costs land
  • Usually free; involves a small, temporary credit-score dip from the hard inquiry.
STEP 3
Choosing & engaging a buyer's agent

As of August 2024 you generally must sign a written buyer agreement before touring homes — and how your agent gets paid is now negotiated up front.

The buyer agreement defines the agent's services, term, geographic/property scope, exclusivity, and — mandatorily — how they're paid. Post-NAR-settlement, the seller contributing to that fee is negotiated deal-by-deal rather than assumed. (See the 'Agents & commissions' section below for the full mechanics.)

Who's involved: You and a licensed buyer's agent/brokerage.
Typical duration: A day or two to interview and sign.
Your to-dos
  • Interview a few agents; ask how they're paid and whether the fee is negotiable (it is).
  • Read the term length, scope, exclusivity, and cancellation terms before signing.
  • Prefer a short 'touring agreement' before committing to a long exclusive term.
Common pitfalls
  • Signing a long exclusive agreement without understanding the commission cap.
  • Assuming the seller will automatically cover your agent's fee.
Where costs land
  • Commission is contracted here (typically ~2.4–2.8% buyer side) — may be seller-paid, but you're on the hook if not.
STEP 4
House hunting & touring

Tour homes with your agent against your verified budget — the least predictable phase of the whole process.

You visit homes, compare against your priorities, and narrow the field. Touring an open house on your own doesn't require a written agreement; a represented tour does. This phase runs anywhere from a few weeks to many months depending on inventory and competition.

Who's involved: You and your buyer's agent (plus listing agents at showings).
Typical duration: Weeks to several months — highly variable.
Your to-dos
  • Shop within your pre-approval, not above it.
  • Revisit finalists at different times of day; check commute, noise, and cell coverage.
  • Keep your pre-approval current if the search runs long.
Common pitfalls
  • Falling in love with a home above budget and overpaying.
  • Emotional attachment that weakens your later negotiation.
Where costs land
  • None yet — but travel/time, and don't let a letter expire.
STEP 5
Making an offer

A written offer becomes a binding contract the moment the seller signs — your contingencies are the escape hatches that protect you.

Your offer sets price, earnest money, closing date, financing terms, contingencies, requested concessions, included fixtures, and a response deadline. Key contingencies: inspection/due-diligence, appraisal, financing, and (sometimes) sale-of-home. If a contingency isn't met you can typically renegotiate or walk away with earnest money refunded. Earnest money (commonly 1–3% of price, up to 10% in hot markets) is due 1–3 business days after acceptance and held by a NEUTRAL third party in escrow — never the seller.

Who's involved: You, your agent, the listing agent, the seller, and an escrow holder.
Typical duration: Writing an offer: hours. Negotiation: ~1–3 days.
Your to-dos
  • Decide your true ceiling and which contingencies you'll keep.
  • Fund earnest money to the escrow holder on time (it's credited toward your down payment/closing).
  • Consider concessions (seller-paid closing costs / agent fee) as offer terms.
Common pitfalls
  • Waiving inspection/appraisal/financing contingencies to win — this transfers major risk to you.
  • Wiring earnest money based on an emailed change of instructions (a common fraud — verify by phone).
Where costs land
  • Earnest money deposit (at risk only if you breach for an unprotected reason).
STEP 6
Under contract & counteroffers

Once both parties sign, you have a binding purchase agreement — but a counteroffer restarts the clock.

The purchase and sale contract binds both sides to the price, terms, contingencies, and timeline. A seller counteroffer extinguishes your original offer and becomes a new offer that's binding only when accepted in writing. Multiple rounds (price, closing date, credits, contingency deadlines) are common.

Who's involved: You, the seller, both agents, and (in attorney states) attorneys.
Typical duration: Immediate once fully signed; counteroffer rounds take days.
Your to-dos
  • Track every contingency deadline — missing one can waive a protection.
  • Keep written records of all agreed changes.
Common pitfalls
  • Assuming a counteroffer keeps your original terms — it doesn't until re-signed.
  • Verbal agreements — only written, signed terms are enforceable.
Where costs land
  • None new at signing; downstream costs (inspection) follow immediately.
STEP 7
Home inspection & repair negotiation

An independent inspection surfaces defects and gives you leverage to negotiate repairs, credits, or a price cut.

A standard inspection (~$400–$600, 2–4 hours, usually in the first ~10 days under contract) covers foundation, roof, exterior, electrical, plumbing, HVAC, water heater, appliances, and safety devices. Specialty inspections (termite, radon, sewer scope, mold) cost extra. Afterward you can ask the seller to (1) make repairs, (2) give a credit at closing, or (3) cut the price. With an inspection contingency, severe issues let you walk with earnest money protected.

Who's involved: You, a licensed home inspector, your agent, the seller.
Typical duration: Scheduled within ~10 days of going under contract.
Your to-dos
  • Attend the inspection and read the full report.
  • Prioritize safety/structural/system issues over cosmetics in negotiation.
  • Prefer a closing credit (you control the work) over seller-managed repairs when practical.
Common pitfalls
  • Skipping the inspection to strengthen an offer.
  • In due-diligence states (e.g., NC, GA), the due-diligence fee is often non-refundable — know your state's rules.
Where costs land
  • Inspection ~$400–$600 + specialty add-ons ($75–$650 each), paid out of pocket, non-refundable.
STEP 8
Appraisal & the appraisal gap

The lender confirms the home is worth what you're borrowing — a low appraisal ('appraisal gap') forces a decision.

The lender orders an independent appraisal (~$300–$450 typical; VA higher). Because lenders lend against appraised value, not contract price, a low appraisal means you must cover the difference in cash, renegotiate, request a reconsideration of value, or walk (with an appraisal contingency). In hot markets buyers pre-empt this with capped appraisal-gap coverage.

Who's involved: Lender (orders it), an independent appraiser, you.
Typical duration: ~1–2 weeks.
Your to-dos
  • Budget a cash cushion in case the appraisal comes in low.
  • If it's low and you think it's wrong, ask for a reconsideration of value with comps.
Common pitfalls
  • Waiving the appraisal contingency without the cash to cover a gap.
Where costs land
  • Appraisal fee ~$300–$450 (often paid upfront or on the Closing Disclosure).
STEP 9
Underwriting & loan types

The lender's deep verification before final approval — and your loan type shapes down payment, insurance, and limits.

Underwriters review the 'C's: Credit, Capacity (income/DTI), Assets/reserves, and Collateral (the appraisal). 'Conditional approval' means you're on track pending items; 'clear to close' (CTC) is final sign-off. Loan choices: Conventional (as little as 3% down; 2026 conforming limit $832,750 baseline / $1,249,125 high-cost; PMI under 20% down that CANCELS at 78–80% LTV), FHA (3.5% down at 580+, but MIP usually lasts the life of the loan under 10% down), VA (0% down, no PMI, one-time funding fee), USDA (0% down for eligible rural areas, income-limited).

Who's involved: Lender, underwriter, you; your agent coordinates.
Typical duration: ~21–45 days; CTC often lands around days 25–45.
Your to-dos
  • From application to closing: don't take on new debt, change jobs, or make large unsourced deposits.
  • Respond to underwriter document requests fast — they gate your timeline.
  • Compare conventional (cancellable PMI) vs FHA (life-of-loan MIP) carefully.
Common pitfalls
  • New credit inquiries or a car loan mid-process can sink the approval.
  • A single deposit over ~50% of monthly income needs documentation (Fannie Mae rule).
Where costs land
  • Origination ~0.5–1% of the loan, optional discount points (1 pt = 1% for ~0.25% lower rate), underwriting/processing fees.
LoanMin. downMortgage insuranceNote
Conventional3% (first-time programs); 20% to avoid PMIPMI if <20% down — cancels at 78–80% LTV2026 conforming limit $832,750 (baseline) / $1,249,125 (high-cost). Above = jumbo.
FHA3.5% (FICO 580+); 10% (500–579)1.75% upfront + 0.15–0.75%/yr — usually life-of-loan under 10% downEasier credit, but MIP rarely cancels without refinancing out of FHA.
VA0% (eligible veterans/service members)None — one-time funding fee (1.25%–3.3%), waived for 10%+ disabilityNo county loan limit for full-entitlement borrowers.
USDA0% (eligible rural/suburban addresses)1% upfront guarantee fee + 0.35%/yrHousehold income generally ≤115% of area median; check the USDA eligibility map.
STEP 10
Title search & title insurance

Confirms the seller can convey clean ownership and insures you and the lender against hidden title defects.

A title search examines public records for liens, unpaid taxes, easements, judgments, and deed errors. Lender's title insurance (required, buyer-paid) protects the lender's lien; owner's title insurance (optional but strongly recommended) protects YOUR equity against pre-existing defects that surface later. Both are one-time premiums at closing — no recurring payments.

Who's involved: Title/escrow company or attorney, you, the lender.
Typical duration: Runs in parallel, ~1–2 weeks.
Your to-dos
  • Buy the owner's policy — it's cheap insurance against forgery, undisclosed heirs, and old liens.
  • Confirm who customarily pays the owner's policy in your area (it varies).
Common pitfalls
  • Skipping owner's title insurance to save a few hundred dollars.
Where costs land
  • Combined lender + owner title insurance commonly 0.5%–1.0% of price; title search $75–$300; settlement/escrow fee $300–$800.
STEP 11
Final walkthrough

A last check — usually within 24 hours before closing — that the home is in agreed condition and repairs are done.

Ideally with the home empty, you verify negotiated repairs are complete, systems and appliances work, no new damage or leaks, included fixtures remain, and the seller has moved out.

Who's involved: You and your agent.
Typical duration: ~30–60 minutes, ~24 hours before closing.
Your to-dos
  • Bring the purchase agreement, inspection report, a phone charger (to test outlets), and a camera.
  • Test HVAC, plumbing, major appliances, windows, doors, and locks.
Common pitfalls
  • Skipping it, or doing it while the seller's belongings still hide problems.
Where costs land
  • None — but catching issues here avoids post-close surprises.
STEP 12
Closing / settlement

You sign, funds move through escrow, the loan funds, and the deed is recorded — you own the home.

You review the Closing Disclosure (delivered by law at least 3 business days before closing — compare it to your Loan Estimate), then sign the promissory note, the deed of trust/mortgage, and the deed, which is recorded with the county. Who runs closing is state-dependent: an escrow/title agent in ~28 states, a licensed attorney in ~16 (mostly Northeast/Southeast).

Who's involved: Escrow/title agent or attorney, lender, you, the seller.
Typical duration: ~1–2 hour signing; recording same day or shortly after.
Your to-dos
  • Compare the Closing Disclosure line-by-line against your Loan Estimate.
  • Verify wire instructions BY PHONE with a known number — wire fraud peaks at closing.
  • Bring a government ID and a cashier's check or pre-arranged wire for funds due.
Common pitfalls
  • Any last-minute loan-term change can restart the 3-business-day disclosure clock.
  • Trusting emailed wiring changes — a leading cause of six-figure losses.
Where costs land
  • Total buyer closing costs typically 2–5% of price, on top of the down payment (transfer taxes swing this a lot by locale).
STEP 13
After closing

First payment, your escrow account, and filing for a homestead exemption where it's offered.

Your first mortgage payment is generally due the first of the month after one full calendar month passes (close Jan 15 → first payment March 1). If you have an escrow/impound account, the servicer collects ~1/12 of annual taxes and insurance monthly and pays those bills, adjusting yearly. Many states let owner-occupants file for a homestead exemption to reduce taxable value.

Who's involved: You, your loan servicer, the county assessor/tax office.
Typical duration: First payment ~30–60 days out; homestead deadlines vary by state.
Your to-dos
  • File for the homestead exemption if your state/county offers one (deadlines vary — e.g., FL Mar 1, GA Apr 1, TX Apr 30).
  • Set aside a maintenance reserve (rule of thumb: 1%–4% of home value per year).
  • Watch for the CA supplemental tax bill (or your state's equivalent) that arrives outside escrow.
Common pitfalls
  • Missing the homestead filing deadline and overpaying for a year.
  • Being surprised by a supplemental/reassessment bill that escrow didn't cover.
Where costs land
  • Ongoing: mortgage, escrowed taxes + insurance, HOA, maintenance, utilities (~$21k–$24k/yr in non-mortgage costs on average).

Taxes & costs where you're buying

Pick your state above to see local property-tax rates, transfer taxes, and the supplemental or special-district taxes first-timers often miss.

See how any home actually fits your priorities — build your Bayted profile.

What it all costs

Typically 2%–5% of the purchase price (on top of the down payment).

Before closing (out of pocket)

Earnest money deposit1%–3% of price (up to 10% in hot markets)

A good-faith deposit held in escrow, credited toward your down payment/closing at closing.

Who pays: Buyer

Refundable if a valid contingency fails; at risk if you breach for an unprotected reason.

Home inspection~$400–$600 (national avg ~$343)

Independent condition inspection of the home's structure and systems.

Who pays: Buyer

Specialty inspections+$75–$650 each

Add-ons beyond the general inspection: radon, sewer scope, termite/pest, roof, mold.

Who pays: Buyer

Appraisal fee$300–$450 (up to $1,000; VA higher)

Lender-required independent opinion of the home's value.

Who pays: Buyer

Credit report fee$25–$75

The lender's pull of your credit.

Who pays: Buyer

At closing

Loan origination fee0.5%–1.2% of the loan

The lender's charge to process and originate your loan.

Who pays: Buyer

Discount points (optional)1 point = 1% of loan → ~0.25% lower rate

Prepaid interest to permanently buy down your rate.

Who pays: Buyer (or seller/builder)

Underwriting / processing fees$300–$800

Lender fees for verifying and packaging your file.

Who pays: Buyer

Lender's title insurance~0.1% of the loan

Protects the lender's lien against title defects (required).

Who pays: Buyer

Owner's title insurance~0.4% of price (combined lender+owner 0.5%–1.0%)

Protects YOUR equity against pre-existing title defects (optional but recommended).

Who pays: Buyer or seller (varies by region)

Settlement / escrow fee$300–$800 (more in some markets)

The title/escrow company's fee to conduct the closing.

Who pays: Often split

Recording fees~$125 (varies by county)

County fee to record the deed and mortgage.

Who pays: Buyer

Transfer / documentary taxes0% (13 states) to 4%+ (DE, Philadelphia)

Government tax on transferring the property — varies enormously by state/city.

Who pays: Buyer, seller, or split (by local custom)

See your state's detail above — this is the biggest locale-driven swing in closing costs.

Prepaids & escrow reservesVaries by rate, closing date, and local taxes

Prepaid interest, first-year homeowners insurance, and a tax/insurance escrow cushion.

Who pays: Buyer

HOA transfer / capital contribution$100–$500 transfer + often 2–3 months' dues

One-time HOA/condo charges due at closing (if applicable).

Who pays: Usually buyer

Ongoing after purchase

Property taxes~0.4%–2.2%+ of value/yr (see your state)

Annual tax on the home's value, usually paid monthly via escrow.

Who pays: Owner

Homeowners insurance~$2,100–$2,900/yr (rising fast in high-risk areas)

Required coverage, usually paid via escrow.

Who pays: Owner

Mortgage insurance (PMI/MIP)~0.15%–1.5% of loan/yr

Required with a low down payment until removed.

Who pays: Owner

Conventional PMI cancels at 78–80% LTV; FHA MIP usually lasts the life of the loan under 10% down.

Flood insurance (if in a flood zone)~$900/yr (coastal/high-risk $1,600+)

Often lender-required in FEMA flood zones.

Who pays: Owner

HOA / condo duesVaries widely

Ongoing association dues, where applicable.

Who pays: Owner

Maintenance & repairs1%–4% of home value/yr

Budget rule of thumb for upkeep.

Who pays: Owner

Newer homes near 1%; 30+ year-old homes closer to 4%.

Agents, contracts & commissions

The rules changed with the 2024 NAR settlement. Here's what a first-timer needs to know.

You sign a written buyer agreement before touring

As of Aug 2024, an agent working with you must have a written buyer agreement before touring a home (in person or virtual). It's a compensation agreement — it does NOT force an exclusive relationship. Touring an open house on your own is exempt.

Buyer-agent pay is off the MLS — and negotiated up front

Offers of buyer-agent compensation can no longer be published on the MLS. They can still be made and negotiated off-MLS, and sellers can still pay your agent (commonly as a concession) — but it's now an explicit negotiation, not an assumption.

Your agent can't collect more than your agreement states

The buyer agreement must conspicuously state the agent's pay as a definite, ascertainable figure, and disclose that fees are fully negotiable and not set by law. Per NAR's rules, the agent can't receive more than that amount from all sources combined — if the seller offers more, the excess is credited back or renegotiated.

Who pays, and how much (commissions)

Typical total: ~5%–6% total (roughly 2.4%–2.8% on the buyer side), each side then split with its brokerage.

Old way: Before Aug 2024: the seller signed a ~5–6% listing and the listing broker advertised a co-op split to the buyer's agent on the MLS. Buyers rarely negotiated or paid directly.

New way: After Aug 2024: your agent's fee is negotiated with you in writing up front, is not on the MLS, and is capped by your agreement. The seller can still pay it (off-MLS offer or concession) and frequently does — but you now negotiate at two points: hiring the agent, and structuring your offer.

Have commissions dropped? Largely no — a year-plus out, data shows them roughly flat to slightly higher. Treat all figures as ranges.

Your agent's fee covers:
  • Curating listings and arranging tours
  • Comparable-sales pricing analysis and offer strategy
  • Drafting and submitting the offer and disclosures
  • Negotiating price, contingencies, repairs, and concessions
  • Coordinating inspections, appraisal, title, and escrow
  • Managing deadlines through to closing
Contract types to recognize
Your buyer agreement

Exclusive buyer agency: You commit to one brokerage; the agreed commission is owed on a qualifying purchase regardless of who finds the home — even one you find yourself.

Non-exclusive: You may work with multiple agents; only the brokerage whose agent actually procures the home you buy earns the fee.

The seller's listing agreement

Exclusive Right to Sell: One brokerage earns commission if the home sells during the term, no matter who finds the buyer — even the owner. The most common type. (Most listings you'll see.)

Exclusive Agency Listing: One brokerage is authorized, but the seller can sell it themselves and owe no commission. (A seller-found (FSBO-style) buyer is possible even with an agent involved.)

Open Listing: Non-exclusive; multiple brokers, only the one who procures the buyer is paid; the seller can also sell commission-free. (Common with some for-sale-by-owner listings.)

Net Listing: The agent keeps everything above a seller-set net price — an inherent conflict of interest. (Banned in ~47 states + DC; be wary if you encounter one.)

How to negotiate as a first-timer
  • Say it out loud — the rate is negotiable, and the forms must say fees aren't set by law.
  • Read the buyer agreement before signing: rate, term length, scope, exclusivity, cancellation.
  • Ask the seller to cover your agent's fee as a concession in your offer — common, but now an explicit ask.
  • Remember the cap protects you: the agent can't collect more than your agreement states.
  • Budget to pay directly if the seller won't — financing the fee into the loan is generally restricted.
  • Match the fee structure to the deal — a flat or hourly fee can beat a percentage on a higher-priced home.

Common — but not required — practices

These are widespread, optional, and negotiable. Knowing they exist is half the battle.

Seller pays/credits the buyer-agent commission

The seller agrees to cover your agent's fee, usually as a concession earmarked for the buyer's agent.

When it's used: Negotiated as an offer term; sellers often agree because it widens their buyer pool.

Why it matters: If the seller won't, you're contractually on the hook to pay your own agent — possibly out of pocket at closing.

Seller concessions toward closing costs

A seller credit toward your closing costs and prepaids (never cash back), capped by your actual costs.

When it's used: Common in buyer's markets or to offset inspection findings.

Why it matters: Caps by loan type: Conventional 3%–9% (by LTV), FHA 6%, VA 4% (on certain items), USDA 6%. Can't fund your down payment.

Rate buydowns

Paying upfront to lower your rate — permanently (discount points) or temporarily (e.g., a 2-1 buydown).

When it's used: Sellers/builders often fund a temporary buydown instead of cutting the price.

Why it matters: Temporary buydowns front-load savings (good if income will rise or you'll refinance); you must still qualify at the full note rate.

Escalation clause

Automatically raises your offer by a set increment above any competing bona-fide offer, up to a cap.

When it's used: Multiple-offer situations.

Why it matters: Reveals your ceiling, relies on the listing agent to verify the competing offer, and can push you above appraised value (an appraisal gap).

Appraisal gap coverage

You promise to cover a shortfall between appraised value and contract price, up to a capped amount.

When it's used: Competitive markets, often paired with an escalation clause.

Why it matters: Strengthens your offer but you need that cash liquid at closing — a capped clause is far safer than fully waiving the appraisal contingency.

Leaseback / rent-back

The seller stays in the home for a short period after closing, paying rent (often your daily carrying cost).

When it's used: When the seller needs time to move; a cheap rent-back can sweeten your offer.

Why it matters: Usually capped at ~60 days (owner-occupancy loan rules); you bear damage/holdover/insurance risk — confirm your lender allows it.

As-is sale

The seller won't make or pay for repairs.

When it's used: Estate sales, distressed properties, or sellers avoiding repair haggling.

Why it matters: 'As-is' does NOT remove your right to inspect, and in most states does NOT waive the seller's duty to disclose known material defects. Keep the inspection contingency for information and leverage.

Watch out: wire fraud at closing

Scammers email fake last-minute wiring instructions to steal your closing funds.

When it's used: Around closing, when large wires move.

Why it matters: Always confirm wiring details by phone or in person using a known number; never trust emailed changes. If defrauded, call your bank immediately and file with the FBI's IC3.

Down payment assistance (DPA)

Grants, forgivable/zero-interest second loans, or tax credits from state/local programs.

When it's used: For income-qualified and often first-time buyers (usually means no ownership in the past 3 years).

Why it matters: Highly location-specific and frequently changing — check your state Housing Finance Agency; it can cover much of your down payment or closing costs.

Ready to put this into practice?

Build your Bayted profile and we'll score real homes against your priorities — budget, commute, schools, space to grow — and explain exactly how each one fits.

Frequently asked questions

How much do I really need for a down payment on a first home?

Not 20%. Conventional loans go as low as 3% down, FHA 3.5%, and VA/USDA 0% for eligible buyers. The median first-time buyer puts down about 8–9%. Twenty percent simply lets you avoid PMI on a conventional loan.

What are typical closing costs for a buyer?

Plan on roughly 2%–5% of the purchase price, on top of your down payment. That covers loan origination, appraisal, title insurance, escrow/settlement, recording, prepaids, and transfer taxes — which vary widely by state and city.

Who pays the buyer's agent after the 2024 NAR settlement?

It's now negotiated up front, in writing, and is no longer advertised on the MLS. The seller can still pay it — commonly as a concession — and often does, but it's an explicit ask in your offer rather than an automatic arrangement.

What is California's supplemental property tax?

When you buy in California, the home is reassessed to your purchase price, and a one-time supplemental bill charges the difference from the prior owner's assessed value for the rest of the fiscal year. It arrives months after closing, comes directly to you, and is not paid through your escrow account — budget for it separately.

How long does it take to buy a home?

House hunting is open-ended, but once your offer is accepted, closing typically takes about 30–45 days (around 37 on average). A federal rule requires your Closing Disclosure at least 3 business days before closing.

Should I get pre-qualified or pre-approved?

Get pre-approved. Pre-qualification is an informal, unverified estimate; pre-approval is a documented, verified commitment that sellers take seriously — essential in any competitive market. A pre-approval letter is usually valid 60–90 days.

Can I remove PMI later?

On a conventional loan, yes — you can request cancellation at 80% loan-to-value and the servicer must automatically terminate it at 78%. FHA mortgage insurance usually lasts the life of the loan if you put down less than 10%, so many borrowers refinance out of FHA to drop it.

Sources & further reading

This guide is educational and reflects typical practices and figures as of August 2026. It is not legal, tax, or financial advice. Rules, rates, and who-pays-what customs vary by state, county, city, and lender — confirm the specifics for your purchase with a licensed professional.

Reviewed as of August 2026.