First-Time Home Buyer Checklist: Everything Before You Make an Offer

First-time home buyers in Los Angeles often skip steps. They see a home they love, fall in love with the neighborhood, and make an offer before they're actually ready.

Then they panic.

Here's the checklist you should work through before you're anywhere near an offer.

Financial Readiness (Do These First)

**[ ] Know your actual credit score.** Not the estimate you saw online. Your actual score from all three bureaus (Equifax, Experian, TransUnion). Lenders pull all three. Scores in the 620-680 range mean you'll pay a premium interest rate. 720+ means you're in normal pricing.

**[ ] Get pre-approved (not pre-qualified).** This is real. It takes 3-7 days. Do it before you start seriously looking. Pre-qualification is worthless to sellers.

**[ ] Know your down payment.** How much can you actually put down? 3%? 5%? 10%? 20%? This determines your maximum purchase price. Don't guess.

**[ ] Understand your debt-to-income ratio.** Your lender can explain this. It's roughly: (all monthly debts) / (gross monthly income). Most lenders want this under 43%. High ratio? You can't borrow as much as you think.

**[ ] Clean up your credit.** If you have delinquencies, late payments, or errors, now is the time to address them. Don't do this the week before you're ready to close.

**[ ] Save 2-3% extra beyond down payment for closing costs.** You'll need inspections ($400-$800), appraisal ($500-$700), title insurance, homeowners insurance, property taxes, HOA fees, and loan origination costs. These add up to 2-5% of your purchase price.

Neighborhood Homework

**[ ] Visit neighborhoods at different times of day.** 10 AM on Saturday looks different than 11 PM on Friday. Walk the area. Sit at the coffee shop. Eat at the restaurants. Do you actually want to live here?

**[ ] Research schools (even if you don't have kids).** School quality drives long-term neighborhood appreciation. Check California's school rating websites.

**[ ] Check commute times realistically.** Don't assume Google Maps' "optimistic" time. Add 20%. Does it still work?

**[ ] Research neighborhood trends.** Are prices going up or down? Are restaurants opening or closing? Is this neighborhood in appreciation or decline? Blogs and news articles help. So does talking to local agents.

The Home Itself

**[ ] Get a professional inspection.** This is non-negotiable. A $400 inspection can save you $50K in surprise repairs. Always hire your own inspector, not the seller's.

**[ ] Understand what needs repair.** Your inspector will tell you. Some things are deal-killers (foundation issues, serious roof damage, termites). Some things are cosmetic. Know the difference.

**[ ] Get a foundation specialist if there are any red flags.** Foundation repair is expensive ($10K-$50K+). If there's any question, get a specialist's opinion.

**[ ] Check flood maps and fire zones.** California has tools that show flood and fire risk. If the home is in a high-risk zone, understand the insurance and long-term risk.

**[ ] Request utilities cost history.** Ask the seller for the last 12 months of utility bills. High bills = poor insulation or expensive to heat/cool. This matters for long-term affordability.

Offer Strategy

**[ ] Don't waive contingencies.** Especially inspection and appraisal. They exist to protect you.

**[ ] Understand appraisal contingency.** If the home appraises for less than your offer, you need a plan. Do you cover the gap? Renegotiate? Walk?

**[ ] Know your financing contingency.** Usually 21 days. If you can't get financing in 21 days, you lose earnest money.

**[ ] Budget for PMI (if down payment < 20%).** Private mortgage insurance costs 0.5-1.5% of your loan annually. On a $500K loan, that's $2,500-$7,500/year. Budget for it.

**[ ] Have an earnest money contingency plan.** You lose earnest money if you walk for non-contingency reasons. How much can you afford to lose?

Emotional Readiness

**[ ] Are you actually ready to stop renting?** Homeownership is different. Repairs are your responsibility. HOA fees (if applicable) are mandatory. You can't just move next year.

**[ ] Can you afford to stay 5+ years?** Buying and selling costs 8-10% of the home value (realtor commissions, title insurance, closing costs). You need appreciation or 5+ years of equity building to break even.

**[ ] Do you have an emergency fund?** Beyond your down payment, you should have 3-6 months of expenses saved. Homeownership has surprises.

**[ ] Are you comfortable with this neighborhood long-term?** Even if prices go up, you have to live there. Make sure you actually want to.

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Work through this checklist before you make an offer. It'll save you from panic, from walking away after investing earnest money, and from buying the wrong home at the wrong time.

**Johnny Leou (DRE#02064780)** helps first-time buyers navigate every step of this checklist. If you're new to LA real estate and want a partner who actually explains these things (instead of just pushing you to sign), let's connect.