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Building a Homebuying Team and Choosing a Property

This guide presents selected U.S. government consumer education from CFPB. References to “we” or “us” in the source material refer to the issuing agency. Source dates and links appear below.

Find the right home

You can explore your loan choices and shop for homes at the same time.

Once you’ve learned about the available options, met with multiple lenders, received a preapproval letter, and selected the kind of loan that’s right for you, there’s not much more to do in the mortgage process – until you find a home you want to purchase.

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What to do now

Remember your budget and priorities

As you shop for homes, you’re likely to encounter homes that you like that stretch your budget. Be careful not to fall in love with a home that’s more than your budget can handle.

Consider working with a real estate agent

Many people work with a real estate agent to shop for homes.

  • Choose an agent who has strong experience with your preferred neighborhoods, price range, type of home, and other factors that are important to you.
  • Real estate websites can also help you find a home or connect you with an agent. Keep in mind many of these websites make money through advertisements from agents.
  • Ask the agent you’re considering for references. Also check your state’s licensing agency (sometimes called the Department of Real Estate) to see if there are disciplinary actions on the agent’s record.
  • Many homebuyers feel an obligation to work with a family member or friend who is a real estate agent. Remember that buying a home is one of the most important investments you’ll make. You need to work with an agent who has the experience to do the best job, which may or may not be your family member or friend.

Know who your real estate agent represents

Real estate agents can represent the buyer or the seller, and sometimes both. State laws can require your real estate agent to tell you who they are representing and under what terms. Ask questions. Find out, for example, whether your agent keeps your conversations confidential and how they are compensated. How would the agent or brokerage company handle the situation if you find a home you like, and the agent or brokerage company also represents the seller of that home?

Research and contact closing service providers

Closing on a home involves a lot of third-party services. You can usually choose the provider for some of these servicers, and borrowers who choose their own providers often save money. But when you find the right home, things start to move fast. Now is a good time to begin researching providers for closing services such as title insurance and settlement agents. Settlement agents, including attorneys, who are independent from the other real estate professionals involved might offer you lower costs as well as objective advice along the way. Look ahead to learn more about closing services and how to shop for them.

What to know

You can make a plan for contingencies

It’s a good idea to make your purchase offer and sales contract contingent on obtaining financing and contingent on a satisfactory inspection. That way, if you’re unable to get a loan, or if the inspection turns up serious flaws in the home, you’re not contractually required to buy the home.

Additional considerations for a new construction home

If you are considering purchasing a home that is not yet built, your builder could ask for an upfront builder deposit, also called earnest money. Before committing, ask the homebuilder under what conditions the builder deposit can be returned. Homebuilders often have an associated mortgage lender they work with. You don’t have to use that lender, and you have the right to shop around for a better deal.

How to avoid pitfalls

Consider getting an informal insurance estimate before committing to a house

For a house in a high-risk area, insurance could be difficult to find. Or, it might cost more than you expect. Many online tools help you get a quick sense of potential insurance costs.

Ask questions to find out if a property has previously flooded or been damaged

If a home has been hit by a natural disaster, it could happen again. Some states, but not all, require home sellers to disclose past damage, so pay attention and ask questions. When you look at the home, be alert for signs of improper repair—although some damage is invisible. Frequent damage from storms could increase insurance costs or decrease the home’s value.

Learn more about what questions you should ask about flood and disaster risk when buying a house.

Visit our sources page to learn more about the facts and numbers we reference.

The process and forms described on this page reflect mortgage regulations that apply to most mortgages.

Build a network of advisors

Buying a home and choosing a mortgage can be complicated. It helps to have people you can talk things over with. People tend to do best when they rely on a network of trusted advisors – not just one person – to help them through the process.

Your friends, relatives, and co-workers can all serve as advisors in this process – they don’t have to be professionals.

What to do now

Make a list of friends, family, co-workers, or other people you trust who have bought a home or refinanced a mortgage recently

Identify at least three people you feel comfortable talking to about the home buying and mortgage shopping process.

The people you choose should be knowledgeable and trustworthy, but they don’t all have to be the people you are closest to.

  • You should be able to talk frankly about money issues with at least two people. Also include people that you’d feel comfortable talking to about their own home buying experience, and people you can ask for recommendations on lenders or real estate agents.

Talk with the people on your list

Ask the people you choose if they will share their recent experiences and if you can come back to them from time to time as you move through the process. Here are a few questions you might ask to get the conversation started:

  • Were there things during the process of buying a home and finding a mortgage that surprised you or that you were not expecting?
  • What did you learn during the process that you wish you knew at the beginning?
  • If you were buying and financing a house again, what would you do differently?

Consider meeting with a housing counselor

Especially if this is your first time buying a home, a housing counselor can be a very helpful advisor throughout this process. You can find a HUD-certified housing counselor online or by calling 1-800-569-4287. Ask for the pre-purchase counseling services.

Start to gather names of recommended professionals

Throughout this process, you need to work with many professionals, including real estate agents and loan officers.

What to know

Real estate agents and mortgage loan officers are important sources of information in this process – but they are not the only people you should consult

These professionals make money based on your decisions. Their interests may not always be aligned with your interests. Always ask yourself, “does what I’m hearing make sense?” Having a network of advisors helps you evaluate what you’re hearing and help you think through major decisions.

Building a network of advisors is not just for first-time homebuyers

Everyone can benefit from an outside perspective when making big financial decisions. The market changes rapidly, so the experience may be very different from your last home purchase or refinance.

Active duty servicemembers may want to contact their installation’s personal financial manager (PFM)


How to avoid pitfalls

Don't rely on just one person for advice

Get a second – or a third – opinion throughout the process and before making key decisions. Then make the best choice for yourself.

Visit our sources page to learn more about the facts and numbers we reference.

The process and forms described on this page reflect mortgage regulations that apply to most mortgages.

Sources and publication details

The federal agency source text is U.S. government work in the public domain. Fynoptic selected, adapted, and formatted it for this guide. No agency endorsement is implied. Follow the linked sources for current program details and the rules applicable to your circumstances.

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