Steps to Buying a Home: A Complete Guide for First-Time Homebuyers in Minnesota

Key Points

• The home buying process in Minnesota typically involves 10 key steps, from financial preparation through closing and move-in.
  • Establish what you can afford and where
  • Get pre-approval on a mortgage
  • Define your ideal home
  • Choose a real estate agent
  • Search for homes
  • Make an offer 
  • Complete inspections
  • Secure financing
  • Complete final walkthrough
  • Close on your new home
• Working with a local real estate team who knows your target market is one of the most important decisions you will make in the process.

The Journey to Buying a Home in Minnesota

For most of us, buying a house is probably (definitely) one of the biggest financial and emotional decisions we’ll ever make. But before you sign for your forever home, you’ve got to go through a rigorous process that can be particularly overwhelming for first-time home buyers. 

At Excelsior Realty, we’ve guided hundreds of families through this process-driven journey. We’ve put together the steps to buy a home so first-time buyers never feel unsteady throughout the process.

What Are the Steps to Buying a Home?

Excelsior Realty has been operating as a boutique real estate agency since 2004. We’ve assisted with plenty of house closings. Here’s how the entire process of buying a home works:

Step 1: Establish What You Can Afford and Set a Budget Range

You have to start by determining your price range. We recommend the following in this stage:

• Subtract your non-housing monthly expenses from your take-home income. Consider how much of this can be put towards a down payment on a house, assuming you have to save some amount separately.
• Determine your debt-to-income ratio by summing your monthly debt payments and dividing by your gross monthly income. This is important for determining your eligibility for mortgage loans. If your debt-to-income ratio is more than 25%, lenders may not extend you a loan, require a larger down payment, or set a higher interest rate.
• Increase your credit score by making payments on time and avoiding opening too many credit cards.

According to Forbes, the typical down payment in Minnesota is about 16% of the purchase price, typically $38,000 (approx., subject to loan type).

Step 2: Choose a Lender & Get Pre-Approved for a Mortgage

Pre-approval is the financial foundation of the home buying process, and it is non-negotiable in a competitive market like the Twin Cities area.

Look for a lender with reasonable fees and favorable loan rates. When you apply for mortgage, the lender will review your income, assets, credit history, and debts to determine how much they are willing to lend you and at what rate. The result is a pre-approval letter that tells sellers you are a serious, financially qualified buyer.

Step 3: Define Your Needs and Wants

Before you kick off the routine of endless open houses and viewings, you must take the time to separate your priorities from your nice-to-haves. An actual checklist can make it easy to compare properties and find your dream home. 

Some questions to think about:

• How many bedrooms and bathrooms do you need versus want?
• Is school district quality a deciding factor?
• Are there lifestyle amenities, parks, lakes, walkability, or proximity to specific areas that matter significantly to your daily life?

The list is truly up to you!

Communities like Excelsior, Wayzata, Minnetonka, Orono, and Chanhassen each have distinct characters and price points. Being clear about what matters most to you helps your agent focus the search productively from the start.

Step 4: Find a Real Estate Agent

Finding the right real estate broker is one of the most important decisions you’ll make during the home buying process. A good broker gives you access to a wider range of properties, helps you determine whether a home is fairly priced, advises you on offer strategy based on current market conditions, negotiates on your behalf, coordinates inspections and due diligence, and guides you through every stage of the transaction until closing. 

What to look for in an agent:

• Knowledge of your target market and its specific dynamics
• Experience working with buyers at your price point and property type
• A track record of successful transactions
• An association with the National Association of Realtors® (NAR)

At Excelsior Realty, our owner, Cheryl Holds, and certified team have built our reputation specifically around the Lake Minnetonka area and western Twin Cities communities. Our boutique approach means clients receive personalized attention rather than being processed through a high-volume machine.

Step 5: Do Your Research and Begin Touring Homes

Go to open houses, ask around about neighborhoods and communities, and look up listings online. This is a major life commitment, and doing your due diligence has never mattered more. 

Our tips to search for your home:

• View properties in person whenever possible. Photos can be misleading, but some online listings also come with virtual tours.
• Take notes and photos during viewings so you can compare accurately later
• Pay attention to the neighborhood and surroundings
• Be responsive when your agent surfaces a strong match. In competitive markets, good properties move quickly.

Step 6: Make an Offer

When you find the right home, your agent will help you negotiate a good offer. Depending on the housing market, you may need to make an aggressive offer or bid lower in anticipation of a negotiation.

If a seller accepts an offer, you’ll officially be under contract. The seller usually does not accept other offers during this time while you complete the remaining formalities. You may be required to make a good faith deposit of about 1-2% of the sale price.

Step 7: Complete Inspections and Appraisal

Once your offer is accepted, your realtor can help arrange for a professional inspection. This will reveal any issues you may not have noticed. 

Standard inspections for Minnesota home buyers:

• Structure and foundations
• Electrical systems
• Sewage and plumbing systems
• Infestation damage
• Heating and cooling
• Roofing system and drainage

A professional appraiser will also provide you with an approximate value of the home. For waterfront or near-lake properties in the Lake Minnetonka area, additional inspections specific to shoreline conditions, moisture, and dock structures are also worth considering.

Step 8: Secure Your Financing

As the third-party inspection is being completed, keep following up with your lender about finalizing your mortgage. This stage is called underwriting, and it involves the lender verifying all the information from your pre-approval in detail and confirming that you can make the monthly mortgage payment. 

The loan approval process also includes verifying the home’s appraised value to ensure the amount you borrow does not exceed the property’s value.

Step 9: Negotiate & Complete the Final Walk-Through

After the appraisal and inspection, you can negotiate with the seller based on the findings. You may ask the seller to adjust the price or complete agreed repairs. Shortly before closing, typically within 24 hours, you will complete one last walk-through of the property. This is your chance to confirm that the home is in the expected condition and that any agreed repairs have been completed.

Step 10: Close on Your New Home!

If everything goes smoothly, you should be able to close on your home around 45 days after making your offer. On closing day, you’ll need to bring identification and any other required documents. You’ll also sign the necessary paperwork in the presence of your real estate agent, lender, the seller, and a legal representative. 

The keys will then be handed over. You can move into your new home!

Choose Excelsior Real Estate for Your First Home Purchase

Buying a home is both exciting and exhausting. To make it all the way to closing, you need a partner who can guide you through the process and help you spot red flags that may not be obvious at first.

Founded in 2004 and now led by Cheryl Holds and a collaborative team with deep local roots, Excelsior Realty is proud to be a boutique firm. When you choose us, you’re choosing experienced negotiators who go the extra mile to help you achieve the best possible outcome. We keep it honest, so you always have the information you need to make confident decisions. 

Call: (952) 474-2999

Email: hello@excelsiorrealty.com

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