It seems obvious, but it's good to note that the first step to buying a house is making the decision to buy. Consider the reasons you want a new house and write them down. Determine how long you want to live in the new house - does buying still make good financial sense? Can you afford a house that will meet your list of requirements? A good rule of thumb is your mortgage payment should not exceed 1/3 of your net monthly income.
Step 2 - Seek Professional Guidance
Once you've made the decision to buy a house, you should contact a realtor who can further discuss your decision to buy a house and lead you through the home buying process. They'll be able to tell you about neighborhoods, schools, economic factors liable to affect the market today and tomorrow, mortgage financing and many other aspect of buying a house.
At this time it's important to get pre-qualified for a mortgage loan. Pre-qualification is a written statement from a loan officer indicating his or her opinion that you will be approved for a mortgage loan up to a certain amount. The fact that you are pre-qualified will help when negotiating the deal. Your realtor can help you find the best mortgage plan and lowest costs.
Step 3 - Begin the Hunt
After meeting with your realtor, they can create a search on the MLS (Multiple Listing Service) for houses on the market that fit your criteria and schedule to show you any of them at times convenient to you.
As you tour houses, your realtor should point out the positive features and negative features. You'll probably amend your "wish list" as you tour houses, some things will become more important and others less important. With this new information, your search criteria can be refined to narrow in on the house of your dreams.
Step 4 - Know the Market
Your realtors knowledge of the local market is an essential factor in the house search. They'll let you know when the market in a particular neighborhood is "hot" and requires immediate action or when the market is "cool" and allows for thoughtful consideration.
As you tour houses, they'll let you know when the asking price has negotiating room and when the house is "priced to sell". Unique market knowledge will keep you a step ahead of the "house hunting competition".
In a "seller's market". It is not unusual to see multiple offers on a property, full-price offers and even above-price offers. On the flip side, during a "buyer's market" there are more houses for sale than buyers. This gives you more negotiating room as houses are taking longer to sell.
Step 5 - Find Your Dream House
When you find your dream house, the purchase will be tailored for your needs including appropriate contingencies (such as obtaining financing, favorable home inspection, clear title, etc.).
The offer is normally presented with "earnest money". This is a cash deposit made to a home seller to secure an offer to buy the property. The amount is applied to closing costs. If the seller accepts the offer, generally closing is held 30 to 45 days from the offer date (generally dependent on the turn around time of your mortgage financing).
Step 6 - Negotiate the Deal
It is not uncommon to receive a counter offer when the initial purchase offer is submitted. Don't let this discourage you. Your realtor will discuss the counter offer with you and help you decide whether or not to accept the counter offer, submit our own counter offer, or reject the counter offer and move on.
Market conditions will play a role in how aggressively the deal is negotiated. Emotions can lead to buyer's remorse. It is better to set limits prior to negotiating an offer and stick to these limits.
Step 7 - Get a Loan
Back in Step 2 you should have applied for a mortgage. During the closing period, you will be working with your mortgage lender to close the loan. Since you began the loan approval process before starting your home search, you will be that much closer to the end.
Step 8 - Close the Deal
You should have received a "Good Faith Estimate" of closing costs at the time your loan application was submitted to the lender. The estimate is based on the loan officer's past experience and may not include all the closing costs. Your lender (or realtor) will be glad to review the "Good Faith Estimate," answering questions and highlighting missing costs and estimates.
Step 9 - Move In
Congratulations! It's time to move into your new house and make it your home. Enjoy this exciting time.