Step By Step Look at Home Buying
The specific way you progress through a home buying transaction varies depending on the real estate laws and customs where you live, but there are many home buying steps that are standard, even though they might not be accomplished in the same order in every location.
You'll feel more confident about your home buying journey when you understand what is required of you and every other person who is involved in the transaction. This guide takes you through it, and shows you that you're only 11 steps away from buying a home.

Step 1, Get Your Finances in Order
Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.

If you haven't looked at your credit reports, you might be surprised at their contents, because errors are common.

Step 2, Get Familiar with the Mortgage Industry
Finding the right loan and lender is crucial to your home buying success.
It's up to you to determine which lender is best for your needs, and it's always a good idea to have at least a bit of background about the loan process before you talk to a lender.

Step 3, Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you've talked with a lender.

Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer's bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?

Step 4, Determine Your Wants and Needs
Buying a home isn't as difficult as you might think, even if you're short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.

Step 5, Learn to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both--and in some states they can work as neutral facilitators for either party. It's essential to understand agent duties and loyalties before you make that first phone call.

Step 6, Start Searching for a Home
Your agent will give you multiple listing sheets to study. I'm sure you'll also pick up House For Sale magazines and read classified ads in your local newspapers. You'll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what's available. Here are some tools to help you narrow your home buying search.

Step 7, Handle Pre-Offer Tasks
Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase.

Step 8, Make an Offer
There's no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout the United States, so the mechanics of making an offer and its specific contingencies depend greatly on your location. However, there are some home buying tips that can help you fine-tune your offer, no matter where you live.  F

Step 9, Home Inspections and Other Tests
In some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them, it's critical to decide which inspections and tests you want to perform. Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.

Step 10, Avoiding and Correcting Last Minute Problems
As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you'll know immediately if there's a problem that must be dealt with. Here's a bit of information that focuses on a few common problems that home buyers must deal with before they close on a house.

Step 11, You're on the Way to Closing
Most of your home buying problems are behind you now and you're on your way to closing, also called settlement, the event that transfers ownership of the property to you. Just a few more things to learn, a few more things to do, and you're there!

Closing Thoughts
The steps outlined in this article are a general home buying guide. You will encounter issues specific to your location and your transaction, issues that can best be explained and handled by your local real estate agent, your lender, your attorney, your closing agent, or others who are helping you complete the home buying transaction. Never hesitate to ask questions. Ask as many questions as necessary to help you understand the entire home buying process. You are making a long term commitment and spending a major amount of money--you'll feel much better about the transaction if you stay informed and understand what's happening every step along the way.

How Do You Learn the Basics?
Talk to a real estate agent about the typical home buying scenario. This is not a meeting that should lead to an agreement for the agent to represent you.

It's simply a general discussion about the real estate customs in your area. An agent who won't take fifteen minutes to help you understand what to expect when you're buying a home isn't much of an agent, so if the first few calls don't produce someone who will help, keep looking.
If you don't want to talk with a real estate agent, how about a bank loan officer or mortgage broker? They look at home buying from a different perspective, but can usually give you a basic overview of the process.


Home Buying Questions to Ask

If you decide to work with an agent, will the agent help you compose your offer to purchase a home? If not, who does help?

1. If the agent uses fill-in-the-blank forms, ask for a blank sample copy to take home and study.


2. What types of disclosures are sellers in your area required to give to buyers? Can the agent give you a sample copy of typical disclosures?

3. What types of home inspections are standard in your area? Are there other inspections that the agent recommends?

How much do the inspections usually cost? Are they regarded as a buyer expense?

When are inspections done?

4. Is a survey required for most transactions? If so, who typically pays for it, the buyer or the seller?

5. Who does the title search to verify that the deed is problem free, attorneys or a title company? What's the average cost for that service?

6. Who acts as settlement agent, the person who puts together final paperwork for you to sign? (attorney, title company personnel, real estate broker, other)?

7. Other than loan costs, what's the average total cost for other closing fees?

Taxes, settlement agent fees, etc.

8. How long does it usually take to close on a home once an offer is accepted?

That's a good start. After you have the answers to those questions, you'll have a better feeling for the basic customs in your area.

Always Keep a Cool Head
Even simple problems can be a burden when you have so many details to take care of, so don't over-react if you hit a few snags on the way to closing. Keep a cool head and work with the people helping you through the transaction to resolve any issues that pop up.


Now Dig In to the Home Buying Process
At this point, your remaining steps are no different than the steps nearly every home buyer must take. It's time to start digging into the details you need to get through the home buying process.

A good place to start:

You're Just 11 Steps Away from Buying a Home

The tools in that document help you branch off into the specific topics you'll encounter during your home buying journey.

Take a few deep breaths and relax. The entire process can be a fun adventure if you let yourself have some fun with it!
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