More than half of Americans plan to buy a home this year, with 38% of those looking to buy for the first time. However, the home-buying process involves many complex steps, from searching local listings to securing financing to reviewing long contracts. Whether you’re buying for the first time or if you’ve gone through this process before, it requires thorough preparation to navigate the home buying journey with confidence.

Especially as the market evolves and changes, anyone in the market can benefit from top real estate tips for buyers. That’s why we’ve compiled this list! Let’s walk through a few steps you can take to better prepare for your big purchase.

1. Work With an Experienced REALTOR®

Working with an experienced REALTOR® gives you access to a real estate professional’s expertise and market knowledge when trying to buy a home. To find a qualified REALTOR®, ask yourself the following questions about potential candidates:

• Is this a real estate agent or a licensed REALTOR®? While all REALTORS® are real estate agents, not all agents are REALTORS®. A REALTOR® is a member of the National Association of REALTORS® (NAR), which must adhere to a strict code of ethics and higher professional standards than state-licensed real estate agents.
• Does this REALTOR® have experience in my target market? A professional who lives and works in the area you’re looking to move to will be knowledgeable about local market trends, neighborhoods, and pricing.
• How well do they communicate? To best meet your needs, a REALTOR® should be responsive to your texts, calls, and emails. They should also be proactive in reaching out, keeping you informed throughout the process and answering any questions you might have.

Ultimately, a knowledgeable agent helps you avoid costly mistakes and ensures a smoother, more successful home-buying experience.

2. Determine What You Can Afford

Neighborhoods, floor plans, and even small details like accent walls may contribute to the price tag you think a house deserves. However, an often-overlooked real estate tip for home buyers is to look beyond the cost of the house and consider other bills you’ll be responsible for fronting.

Mortgage payments, taxes, insurance, and other costs directly impact the affordability of your move. These costs determine what you can truly afford beyond just the home’s purchase price, and understanding them helps you budget accurately.

Here are some tools home buyers can use to estimate a home’s affordability:

• Mortgage calculators, like the calculator on Cole Rodgers’s website
• Property tax estimators, such as local county tax assessor websites
• Mortgage prequalification and preapproval (more on this later)

For more tips on what costs you should consider with your home purchase, ask the REALTOR® you choose to work with. They’ll be able to help you think holistically about all potential expenses so you’re not blindsided after receiving the keys.

3. Plan For Your Down Payment

Saving early for a down payment is crucial for homebuyers because it impacts their loan options, monthly payments, and overall financial readiness. The more you put down, the less you need to borrow, which means lower monthly mortgage payments. Plus, a larger down payment reduces a lender’s risk, which can help you qualify for better mortgage rates.

A common rule of thumb is to spend 20% of the home’s price as a down payment. While many lenders use this threshold for requiring mortgage insurance on a conventional loan, the minimum down payment required actually depends on the type of mortgage you apply for:

• Conventional loan: 3% minimum down payment required
• FHA loan: Varies depending on credit score (3.5% with a credit score of at least 580, 10% with a credit score of 500-579)
• VA loan: 0% minimum down payment required
• USDA loan: 0% minimum down payment required

For more help saving a reasonable down payment, ask your REALTOR® about any down payment assistance programs for which you might be eligible.

4. Understand Prequalification and Preapproval

Confirming whether you’ll qualify for a loan before making an offer on a home demonstrates to sellers that you’re a serious and qualified buyer. In competitive markets, this can give you an edge over buyers who haven’t secured financing.

There are two steps in the mortgage process to help you establish credibility with sellers:

• Prequalification is a preliminary estimate based on self-reported financial details that provides a rough estimate of what you might qualify for but is not a guarantee of loan approval. This process does not require a hard credit pull.
• Preapproval is a stronger commitment from a lender that requires a full review of income, credit, and assets. Preapproval demonstrates that you’re a reliable shopper and truly capable of making the purchase. This process requires a hard credit pull.

To get preapproved for a mortgage loan, shop around for lenders to find one that offers competitive interest rates. Then, apply for preapproval, providing all necessary financial documents for their review.

5. Improve Your Credit Score

Your credit score is one of the most important factors lenders consider when determining your mortgage eligibility. It influences whether you qualify for a loan, the interest rate you receive, and your overall borrowing costs.

As such, it’s important that you work to improve your credit score well before putting in an offer on a home. A few ways you can get your credit in line include:

• Paying bills on time. Set up automatic payments to avoid late fees and pay the minimum on all credit cards and loans.
• Lowering your credit utilization. Keep your credit card balances below 30% of your credit limit and pay down existing debt to improve your debt-to-income (DTI) ratio.
• Dispute any errors on your credit report. Get a free credit report from Experian, Equifax, or TransUnion and dispute any errors, such as incorrect accounts or payments marked as late that were actually made on time.

While it can take time for your credit score to significantly improve, even a small boost could mean a lower interest rate and better loan terms.