The Complete Home-Buying Guide: 15 Steps to Buying a House

Are you planning on buying a house? Whether you've purchased a home before or it's your first time, there are many steps between deciding to purchase and moving into a new residence. While it can be difficult to patiently and diligently work through the home-buying process, you’ll get those shiny new keys when you focus on completing the following steps. Taking your time and doing the work can make the steps less stressful. With our guide on how to buy a house, you can rest a little easier knowing that you're prepared and won't overlook any important stages in your home-buying journey.

Steps to Survive and Thrive During the Home-Buying Process

When buying a house, it’s helpful to set expectations. This is especially true if you're a first-time home buyer. You are embarking on an exciting new chapter in your life, and it can inevitably make it difficult to be patient during the first steps to buying a house. But here is the good news: knowing what to expect from each step can make you flexible should there be any bumps.

These are the 15 typical steps you'll experience when buying a home. To complete each step in this house-buying guide, you'll want to work closely with the professionals mentioned in it and take advantage of their knowledge and guidance.

1. Assess Your Financials

You may be ready for the responsibilities of homeownership. Still, ensuring you’re financially ready to buy a home is one of the first steps to buying a house. Spend six months improving your credit score (minimum 620), calculate your debt-to-income ratio, make sure you can pay between 3% and 20% of the total cost as a down payment, and ensure you have enough to pay closing costs. You can also use an online home affordability calculator to determine these costs and a home-buying budget. 

2. Do Your Research

Now that you have a better idea of how much money you must spend on a down payment and mortgage payments, you can start researching areas that fit your budget. Research the average home prices in given areas, but also consider whether they're close to shops, the quality of the school district, and how old homes are in specific neighborhoods. Not knowing what kind of home you want — or what kind you can reasonably afford — can slow you down later in the home-buying process.

3. Get Preapproved for a Loan

Mortgage preapproval doesn’t guarantee that you'll be lent an exact amount of money. It gives you and home sellers an idea of how much you can spend, pending further review by a mortgage lender. It also shows that you're serious about buying a home when you eventually make an offer on a home. During this process, it is an excellent time to shop around for mortgage lenders and consider what type of loan is right for you.

4. Find a Real Estate Professional

While using a real estate professional isn't required, they are experienced and knowledgeable professionals who can help guide you through the rest of the steps and show you how to buy a house. But don't choose just anyone — whether you work with a REALTOR or an agent, select one who is a good fit for your experience level and needs.

5. Go House Hunting

 House hunting can be the most fun step in our house-buying guide for many people. It's when your vision of your new home becomes reality, and expectations become more realistic. You may discover that features you previously wanted aren't important to you, or you may find a feature you hadn't considered and now sits at the top of your list of "want-to-haves." Like other steps in this guide, make sure you take your time — and make notes — during walkthroughs, as you may not get another chance to view a home before it sells.

Related: Buyers House Hunting Checklist

6. Make an Offer

When you find a home you can picture yourself enjoying for many years, it's time to make an offer. Your real estate professional can be a huge help during this step. They’ll help you determine how much you should offer and how to submit your offer.

If the seller accepts your offer, you can continue the steps of how to buy a house. If they reject your offer, you can send a counteroffer. The negotiation process can continue back and forth until the seller accepts an offer or you decide to move on.

Bear in mind that you and the seller will need to agree to a timeframe when you make the offer, though you can ask for an extension if needed to complete the remaining steps. Ask your agent for guidance on the best timeframe to set.

7. Make a Deposit

Your offer usually includes earnest money or a good-faith deposit. This deposit shows the seller that you are serious about buying their home. The deposit is set aside in an escrow account or trust and can be applied to your down payment or closing costs.

8. Finalize a Mortgage Loan

Most likely, your agent has discussed the documents you must provide to your lender, such as income and tax-related documents. Work with your lender to be sure you know everything they will need from you. Then, they'll complete the underwriting process, which involves a deep dive into your financials to ensure you qualify. You must gather these documents and provide them to your lender quickly. Moving fast here is important because getting final lender approval can sometimes take a week or more, and you want to finish the home-buying process on time, right?

9. Set the Closing Date

Suppose you are in a “sale pending” status. In that case, you, the seller, and your respective agents will negotiate an agreed-upon closing date. In choosing a closing date, you’ll want to make sure there's enough time to complete the lending process, consider the availability of your lawyer (if you need one in your state), and try to find a date close to your expected move-in date. Remember that negotiating the closing date may also mean considering the seller's contingencies, which must be met before the closing date. Setting the closing date is an exciting step, as it puts the home’s final sale within your grasp!

10. Inspection Time

The next big step is getting the home inspection scheduled. You will want to set these dates with your real estate agent or REALTOR. Schedule the appointment as soon as possible so that if the inspection uncovers any issues, you’ll have time to address them in negotiations with the seller. Be sure to set a date and time when you can be at the house with your home inspection checklist when the inspector is there. If you have concerns that you’d like the inspector to focus on, it’s a good idea to discuss those things ahead of the scheduled date.

11. Contractor References

Your real estate agent is a great resource for contractors. Now is a good time to get estimates on any changes you might want to make so you can factor those costs into your plans.

12. Appraisal Time

Ask your lender when the home’s appraisal will be complete — completing this step early, during the deposit timeframe, may allow you to negotiate a better price if the home doesn't appraise for as much as expected.

13. Negotiate Repairs

When you get the inspection report(s) back, you can negotiate repairs with the seller. You and the seller will determine whether the seller will make the repairs or provide you with credit at closing so that you can pay your contractor to perform the repairs.

14. Close on the Home

Even though it's one of the last steps in our house-buying guide, buyers have a lot to do during closing. This is when you'll review your final walk-through to ensure all agreed-upon repairs were made. You'll sign many documents, known as final paperwork, and pay all the money you owe, including closing costs. You may also receive the keys to your new home and any security codes for the property. Then, once you reach the closing date, you can move into your new home!

Related: What Can Homebuyers Expect in the Closing Process?

15. Get a Home Warranty

Now that you know how to buy a house, ask your agent about getting home warranty coverage. You can add a real estate home warranty plan for up to 60 days after closing. If you'd like to learn more, you can find all the details about the appliances and home systems you can protect and get a free home buyer’s warranty quote in minutes.

The contents of this article are provided for general guidance only. First American Home Warranty does not assume any responsibility for losses or damages as a result of using this information.