Steps to Buying a Home

When you're buying a home, sometimes it's hard to know where to begin (and where you'll end up!). This section gives you an overview of the entire home buying process.

First we'll discuss the steps and show you one possible "path" towards buying a home. Then we'll ask you to think about what steps you plan to take. Don't be concerned if your list doesn't look exactly the same as ours. The important thing is to think through the entire process, so you'll be prepared to buy your home.

The steps to buying a home

There's no one "right" way to buy a house. The exact steps may vary depending on where you live and your personal situation.

Step 1: Rent or buy?
Decide whether you would rather own a home than rent.

Step 2: How much can I afford?
Decide how much you can afford.

Step 3: What kind of home and where?
Given your price range, decide what kind of home you want/need: size, location, special features (such as fireplace or fence), etc. You will also want to consider school districts and other factors that are important to you and your family. Consider your home as an investment. What will make your home attractive to purchasers when you are ready to sell? A couple without children would not be interested in local schools for themselves, but the quality of local schools may be an important factor when they want to sell the house. There are good resources available at bookstores, your library and through real estate agents on what factors are especially important for buyers and for sellers.

Step 4: Find a real estate agent
Contact a real estate broker/agent to help you with your search. This is the selling broker/agent. Interview several brokers/agents to find one you are comfortable working with, who will answer your questions and help you find a property that meets your specifications.

A listing broker lists the property for sale and actively markets the property. The selling broker or agent shows the house to the buyer. Sometimes, the listing and selling brokers are the same agency. The fees for the listing and selling broker/agent are generally paid by the seller, usually as a percentage of the purchase price.

Step 5: Pre-qualification
If possible, get "pre-qualified" for a loan. This means the lender or real estate broker will informally qualify you for a loan by getting basic information on your income, debts and credit. By getting pre-qualified, you can usually estimate how much you could borrow for a home.

Step 6: Begin house hunting
Allow time (up to several months) to see a number of houses, so you have a good basis for making a final decision.

Step 7: Find a Real Estate Attorney
Contact an attorney who will help you with an Offer and the Purchase Contract. Your rights as a buyer are established when you make an offer. You want to have the right to get out of the agreement if you find the house has significant problems. A lawyer will help you with your Offer and a Purchase Contract.

Often new buyers believe they do not need an attorney until the Closing. While your attorney serves a very important function at Closing, your attorney also helps you with the Offer and Purchase Contract. That help can save your considerable grief and expense if problems develop between the offer and closing.

For many of us, a house is our largest single investment and our most valuable asset. Our mortgage is our largest debt. Just as a house inspector is a crucial member of your buying team, your attorney will protect your legal rights in this all important investment.

Step 8: Inspect the home, grounds and neighborhood
When you find a home you like, carefully give it your own personal inspection. If you are not familiar with houses, you may want to bring a friend. Even if the property boundaries seem to be clear, ask the real estate agent to get a copy of the land survey from the seller and "walk the boundaries" to avoid unpleasant surprises. You will also want to tour the neighborhood and perhaps see the house at different times of day or on weekends to check traffic patterns and other amenities that may affect your decision.

Step 9: Make an offer and sign a Purchase Contract
If you're comfortable with the home, make an Offer to Purchase, including a down payment. Your attorney will make sure the Offer allows you to get your money back if a professional inspection reveals problems with the house, or if you aren't able to get approved for a mortgage.

Step 10: Get professional inspections
Your Purchase Contract will permit you to have various professional inspections and will govern your rights if the inspections show problems. Before you make an offer and sign a purchase contract, ask your attorney which inspections are best for your area. For example, standard purchase contract forms often do not provide for radon inspections. Have them included as a contingency for your offer.

Step 11: Apply for a mortgage
Apply for a mortgage loan at a bank or other lending institution.

Step 12: Final Walk-Through
A day or two before closing, do a final walk-through of the property to make sure there are no new problems. This may be a good time to have the seller show you how to operate major systems and appliances.