Last Updated on October 10, 2022 by growinghome.la

Feeling confused and have no idea how to buy a home? Learn 4 key steps you need to take in order to confidently buy your home.

In 2014, I fulfilled a goal to live on my own for the first time. After years of having roommates, I had finally moved into my own apartment in the Upper East Side of Manhattan. It may have only been 250 square feet, but it was my shoebox, and I was proud.  I felt one step closer to my ultimate goal – buying my own home. Little did I know, this choice would take me farther away from my homeownership goal than I would ever get. 

You may think that buying a home starts with making sure you have a large enough down payment and then saving a search in Zillow or Redfin. Or, you may feel confused and have no idea how to start your homeownership journey. Here, I share the 4 key steps you need to take in order to confidently buy a home.

How To Buy A Home Tip 1: Gaining Awareness of Your Spending Will Help Prepare You for Homeownership

I don’t like the word budget – it feels restrictive and inflexible. For my 20’s and into my 30’s, I preferred to ignore my spending and hope that everything worked out. As you may imagine, that approach did not end well. Luckily, I was able to turn my personal finances around by simply taking mindful action. You can read more about my personal finance journey in an upcoming post.

Buying a home comes with a lot of extra costs that you may not realize. If you don’t have a good sense of your monthly and annual spending, it will be hard to figure out how much you can afford and what reserves you should have in place.

Once I started taking stock of my monthly spending in key areas of my life, I felt much more empowered because I knew where my money was going. I realized I had a choice about whether I wanted to make any changes. My go-to method for doing this is to review my credit card bill manually at the end of the month, but there are countless apps that can help you with this such as Mint, Personal Capital or YNAB.

For me, I like the action of reviewing and compiling my monthly expenses, since it gives me a time each month to reflect on the experiences I’ve had and how much those experiences may have cost. I like to set aside time to review my credit card statement and group my expenses into categories like: Housing, Food, Bills (utilities), Transportation, Entertainment, Self-Care etc. I note the expense in an Excel spreadsheet and add them up. Sometimes I’m surprised by how much I may have spent on one category, and I decide whether that really made me happy or if I want to be more mindful of those expenses in the coming month.

However you prefer to review your expenses, it’s the first step towards taking control of your personal finances and to stop feeling intimidated by them. Use your happiness level as a guide – don’t judge yourself. Instead, ask yourself, how does this spending make me feel?

white documents on desk with small wooden bowl and pencil

How To Buy A Home Tip 2: To Become a Confident Homebuyer, Focus on What’s Most Important to You

Once I started tracking my spending, I was able to clearly see which expenses added joy and fulfillment to my life, and which didn’t. Similarly, think about what’s most important to you. What are you looking for in your next home? What would bring you joy? Do you need a certain number of bedrooms or bathrooms? Is outdoor space for your pets or kids to play in a non-negotiable? Do you need to have a few local restaurants and bars within walking distance? Think about what’s most important to you and define the ideal characteristics of your future home.

In my homebuyer workbook, this is what I call the Dream step. It’s critical to figuring out what kind of home you’re looking for, so you’ll know it when you see it. This will save you so much time spent scrolling through endless listings with a vague idea of what your dream home looks like. Note: Sometimes scrolling through listings is a great source of inspiration, just don’t let it overwhelm you. If you’re not into Pinterest, you can use Zillow or Redfin to help jump start your vision and what it will feel like to buy a home. But don’t get stuck endlessly scrolling! Use this as inspiration to keep moving.

How To Buy A Home Tip 3: Know Your Homeownership Goals

This is a step that most people don’t when they’re buying a home. They simply have a dream of homeownership and go after that dream. They don’t necessarily thinking about how their home can serve their personal wealth goals further down the road. My homebuyer workbook also takes you through this step, which is what I call Strategize. Think through how long you want to be in your home and what your exit strategy might be. Do you want to pick a home in an “up-and-coming” neighborhood that will appreciate in value more significantly? This could allow you to make real profit once you sell it. How long do you want to be in your home? Do you want to buy something that needs a little (or a lot!) of love, so that you can force appreciation to create equity?

pink goal setting notebook with gold desk accessories

Buying A Home Tip 4: Develop Your Homeownership Why

Do you want to buy a home that you can grow with you over time? Do you want to buy a home that your family can create memories in? Where you can become a part of your community in a meaningful way? Are you sick of paying someone else for your housing and want to start paying yourself? Do you want to become the first homeowner in your family and create a legacy of wealth that will live beyond your lifetime?

Identifying why you want to buy a home on a deeper level will help you through the ups and downs of the home buying journey. These might be: offers that you submit and aren’t accepted, the tedious process of gathering your financial information, or the long wait between getting your offer accepted and closing on your new home. Coming back to your why will help you move forward knowing that your home is out there, and it may be closer than you think.

Back in 2014 in my tiny apartment in New York, I mindlessly spent money to keep up my lifestyle and didn’t pay attention to any of these tips. It took me getting into thousands of dollars of credit card debt to really wake up and really understand my situation. But I also realized I had the power to get myself out of it. I knew I never wanted to feel helpless about my finances again. That I could still become a homeowner someday, despite my current situation. I want you to feel empowered to take steps towards your personal homeownership goals – no matter where you are today.

To get started, check out my Map Out Your Dream Home workbook. Just click on the banner below and you can start taking steps towards becoming a homeowner today. For more tips on how to buy a home, check out my post on 5 Critical Tips for First-Time Homebuyers.