What is the first step in the home buying process?

Obtaining pre-approval for a mortgage is the first step in the home buying process because it establishes a buyer's financing options and budget before actively searching for a home. Pre-approval involves submitting financial information to a lender, which then provides a letter indicating how much money the buyer can borrow. This not only gives the buyer a clear understanding of their price range but also strengthens their position when negotiating with sellers, as it shows that they are serious and financially capable of completing the purchase.

While finding a real estate agent can be an important early step in the process, it is often more effective once the buyer understands their financial situation. Viewing potential properties naturally follows financial preparation, as buyers need to know what they can afford before they begin looking. Making an offer on a home is dependent on finding the right property, which is informed by having a mortgage pre-approval letter. Hence, starting with pre-approval ensures that the subsequent steps in the home buying process are more focused and efficient.