Steps To Buying A House

First, set a budget for buying a house. Second, you’ll work with a mortgage broker or direct lender like a bank to get preapproved for a mortgage.

By Douglas Wade, Attorney

Email | Call (800) 484-4610

Buying your first home can be difficult, there are many necessary steps that you may not be aware of, and mistakes are costly. However, as a first homebuyer, you also have access to some advantages to encourage people to get on the property ladder. In this article, we will demystify the home buying process and what you need to have in place before you buy.

Table of Contents

1. What Advantages Do First-Time Homebuyers Receive?

2. Things to Consider Before You Buy

3. Steps to Buying A House

4. You Are Now a Home Owner

5. In Conclusion

What Advantages Do First-Time Homebuyers Receive?

There are a number of advantages and programs for first-time homebuyers to encourage more people to take the step of homeownership. They can often secure tax breaks, federally-backed loans for the deposit, and a number of state programs. To be considered as a first-time homebuyer, you must meet any of the following requirements:

A single parent whose previous home was jointly owned while married to their former spouse.
Any individual who has not owned a principal residence for three years. If you owned a home previously and married your spouse who has not, you can buy together as first-time buyers.
A displaced homemaker whose previous property was owned jointly with their former spouse.
Someone who owned a property that was not compliant with local, state, or model building codes. The property must be impossible to bring into compliance for any less than the cost of constructing a new building.
Someone who previously owned a principal residence but it was not permanently affixed to permanent foundations as required by regulations.

Things to Consider Before You Buy

Before you buy your first home, you should consider how home ownership fits in with your short and long-term goals. What does home ownership mean to you, and what do you hope to achieve by owning your own home?

How Is Your Financial Help?

Audit your finances before you even start looking at properties. You need to know if you have the funds for the deposit, can get approved for a mortgage, and have the finances for furnishing the home and maintaining payments.

Look at your savings. Ensure you have an emergency fund that covers six months to a year of living expenses. This will help you ensure you can pay your mortgage if you lose your job or suffer an unexpected cost. Also, evaluate if you have put aside enough for the deposit, closing costs, and any renovations or furnishing.

The challenge is keeping your savings liquid enough to access when you find your home, but still receives a return that keeps pace with inflation. If you have one to three years before you will buy a home, then consider a CD (certificate of deposit.) These keep pace with inflation, but you may be penalized for withdrawing the money early. If you think it will be less than a year until you buy your home, then keep the money liquid in a high-interest savings account.

Create a budget and track spending. Know where your money goes and where you might be able to cut back. This will not only help you save more money, but have a realistic picture of the mortgage you can afford.

Do a credit check. Before you start viewing homes, you need to know your credit score. Your credit score will affect the mortgage rate you receive. If you check it in advance, then you have time to improve your credit score before you apply for loans or a mortgage.

What Type of Property Suits Your Needs?

There are numerous residential property options and the right one for you will depend on your needs, budget, and homeownership goals. If you choose a fixer-upper, you may save money initially, but you will have to spend time and money, turning it into your dream home.

What Features Are Important to You?

While it is important to be flexible in your dream home criteria, you should also purchase a house that you enjoy living in. Make a list of features you want in your home and divide them into priorities and bonuses.

How Much Mortgage Can You Borrow?

The amount of mortgage you can borrow is a key factor in determining your property budget. Before you even start looking for a property, visit a lender to get a quote on how much you can borrow. The mortgage provider will look at factors like current debt, length of service at your job, and monthly income to calculate a realistic mortgage figure.

You can also get preapproval for a loan, and many sellers will not accept an offer that doesn’t have mortgage preapproval. Shop around before you do this and find the best interest rates and terms.

What Can You Afford?

Regardless of the mortgage you qualify for; you should look realistically at what you can afford. You don’t want most of your income to go towards mortgage pages or buy a home that is expensive to maintain. Consider the property taxes, homeowner insurance, and mortgage repayments. Also, factor in renovation costs and moving costs.

Who Do You Trust to Assist You With the Purchase?

Finding a real estate agent can be tough; it is important to find someone you can trust and who has the expertise to guide you through the complex purchase process. Your realtor will also help you to find a property that meets your needs. If there are problems after buying a house, you can hire a real estate attorney for assistance.

Steps to Buying A House

You’ve done the planning, and you’re ready to start looking for a house. Here is the basic buying process and what you should expect.

1. Find Your Dream Home

There are a number of different ways you can find homes:

Seeking advice from a real estate agent
Searching property listings online
Exploring your desired neighborhoods and looking for For Sale signs.
Asking your contacts

Once you have found some properties you like, take them to a real estate agent. You should not deal directly with a selling agent and should always have a real estate agent before you visit a property.

When looking for a home, it is important to look at the potential a property has. Remember the important features and don’t be afraid to make minor changes to the property. You may hate the kitchen cabinets but can paint them and add new handles to make them more to your taste. Think about what you can easily change and what you can’t. Things like size, location, and outdoor space cannot be changed, but the décor can. As a first homebuyer, making small changes that add value to the property will increase the equity in the property that you can trade-in when you’re ready to buy a new home.

2. Secure Financing

As a first-time homebuyer, you have a range of financing options available, including federally-backed loans. Consider these options:

HUD’s resource list details government-backed loans available to first-time homebuyers and which organizations to contact for the grants.
A first-time homebuyer can withdraw money from traditional and Roth IRAs without penalty if it is going towards their first home. You can withdraw $10,000 without penalty, meaning a couple can access $20,000 to use towards their home. However, you do still have to pay income taxes and will have to repay the money within a timeframe.
Most states offer financial assistance for first-time homebuyers and will pay portions of closing costs, renovations, down payments, etc.
If you are a Native American, you are eligible for a Section 184 loan as a first-time homebuyer of a single-family home that will be a primary residence.

It is important to shop around rather than just getting a quote from your bank or financial institution. Interest rates, fees, and even loan conditions can vary significantly by financial institution.

Qualify for loans with two lenders just in case. Financial institutions will often change their policies, or the market will shift, and you will no longer qualify for a loan. By having a backup, you can keep the process on track.

3. Making an Offer

You have found a home you love and want to purchase it. Talk to your real estate agent about how much you want to offer for the property. They will present the offer to the seller’s agent who will talk to the seller. The seller will either accept the offer or present a counter offer. Offers are a negotiation that will end in one of two results: buying a house or one party ending negotiations.

Take another look at your budget before you submit an offer and factor in closing costs and initial expenses for the property such as moving, furnishing, and repairs. You can request utility bill amounts from the owner so you can factor in the costs of living in the property.

Once you and the seller agree on an offer, you will make a deposit and start escrow. During escrow, the seller takes the house off the market, and you have agreed to purchase the property subject to a successful inspection.

4. Home Inspection

You must have the home inspected before you close. This is the only way to find out about underlying issues to the home and foresee any issues that may arise in the first few years of homeownership. If the inspector uncovers serious issues with the property that the seller’s agent did not disclose, then you can rescind your offer and retrieve your deposit. It is possible to negotiate with the seller to discount the selling price or to make repairs to the property before you close.

5. Close

If there are no significant issues with the inspection, or you have worked out a satisfactory deal with the seller, then it is time to close. Closing involves a lot of paperwork which is completed as quickly as possible to ensure that nothing falls through. During this process, you need to:

Conduct a home appraisal for your mortgage
Do a title search to ensure the property is the seller’s to sell
Obtaining mortgage insurance if your down payment is below 20%
Complete mortgage paperwork

Closing fees include fees for the above as well as taxes, surveys, credit reports, title insurance, and loan origination fees.

You Are Now a Home Owner

Congratulations, you have successfully bought your first home! There will still be regular costs involved with owning a home.

Continue to Save

Owning a home means that you are the one responsible for fixing anything that breaks. Create an emergency fund specifically for your home. This will help to cover any unexpected costs such as fixing a hot water heater or the roof.

Conduct Regular Maintenance

By doing regular maintenance, you will prevent problems from becoming big issues. It also allows you to keep your property in the best possible condition.

Ignore the Housing Market

Many home buyers can become obsessive with their property value, but the property value doesn’t matter until you are ready to sell. When you are considering selling, check the market value of your property so you can put your property on the market at the most profitable time.

Do Not Rely on Your Home to Fund Your Retirement

You should still contribute regularly to your retirement fund. Many people consider their home their retirement fund, but the property market is volatile, and you cannot guarantee that your house price will be favorable when the time comes for retirement. By continuing to make contributions to your retirement fund, you can maximize your options at retirement.

In Conclusion

This article is intended as a guide for people preparing to purchase their first home. Consider it as a starting point and seek expert advice for up to date information. By preparing in advance, you will have a successful and less stressful homebuying experience. Good luck and happy house hunting!

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment

Most recent blogs:

How To Find Your Business EIN Number

Find your business EIN through IRS records, tax returns, bank documents, licensing agencies, or the IRS Business and Specialty Tax Line. Review when a new EIN is required, how applications work, and why this federal tax ID benefits business owners.

Business Acumen: Definition, Importance, and Ways to Develop It

Business acumen combines strategic thinking, financial awareness, leadership, and market insight to support sound decisions and stronger workplace performance. Build business acumen through education, mentoring, industry research, customer feedback, and practical experience across everyday professional situations.

How to Open a Bar: Starting a Bar Business

Start a California bar with practical guidance on business planning, funding, locations, licenses, permits, staffing, insurance, and opening costs. Review liquor license requirements, zoning rules, employee training, marketing strategies, and compliance steps for launching a successful bar.

What Do Corporate Lawyers Do?

Corporate lawyers handle contracts, governance, compliance, transactions, and legal risks affecting a company’s operations and long-term business decisions. They also review agreements, conduct due diligence, interpret laws, and advise executives on corporate responsibilities and strategic matters.

What is a Mechanic’s Lien? Key Facts and Legal Implications

A mechanic’s lien is a legal claim against property that helps contractors, subcontractors, and suppliers secure unpaid construction debts. This guide covers filing steps, enforcement, homeowner risks, and practical ways to prevent lien disputes during construction projects.

When are S-Corp Shareholders Entitled to Shareholder Distributions?

S Corp shareholders may receive proportional distributions after reasonable compensation is paid and ownership percentages are properly documented. Accurate tax reporting and basis tracking help prevent penalties, payroll tax issues, and unexpected capital gains.

How to Start a Taxi Business in 2026

Start a taxi business in 2026 with market research, licensing, financing, branding, insurance, vehicles, and staffing steps. Build a stronger taxi company by choosing the right model, planning costs, and targeting profitable local passengers.

What is a Business Partnership: Meaning and Types?

A business partnership lets two or more owners share resources, profits, losses, and responsibilities while running a company. This guide covers partnership types, advantages, drawbacks, agreements, registration steps, and tax considerations for US business owners.

What Is Gross Profit and How Is It Calculated in Financial Statements?

Gross profit shows how revenue compares with production costs and helps guide pricing, inventory, and cost-control decisions. Formulas, margins, and common mistakes can affect financial statements, profitability reviews, and long-term business planning.

What Is Indemnity and How Does It Apply to Insurance Contracts?

Insurance indemnity helps businesses cover insured losses, settlements, judgments, repairs, and legal defense costs. Indemnity coverage can protect companies from liability risks, vendor insurance gaps, and major out-of-pocket expenses.

52 Best Self-Employment Jobs and Business Ideas

Review self-employment jobs and low-cost business ideas for starting a flexible, independent career. Compare options from tutoring and freelancing to pet care, consulting, online courses, and home-based services.

8 Steps on How to Start a Small Restaurant

Start a small restaurant with steps covering concept, planning, location, menus, costs, funding, permits, and staffing. Build a stronger food business with practical guidance for launch, operations, marketing, and future growth.

How to Pay Yourself From An LLC?

LLC owners can pay themselves through draws, guaranteed payments, salaries, or dividends based on tax classification. This article covers payment options, IRS rules, tax mistakes, and reasonable compensation for LLC members.

Elements of Libel: Definitions, Proof, and Legal Standards

Libel claims require false published statements that damage reputation and satisfy specific legal standards of proof. This article covers definitions, defenses, damages, and how courts evaluate libel, slander, and defamatory meaning.

How to Pay Yourself as a Sole Proprietor?

See how to pay yourself as a sole proprietor through owner’s draws and separate business finances. Review tax basics, records, DBAs, and payment schedules before moving money from business profits.

How to Start an Import Export Business from Home?

Start an import export business from home with steps for product research, suppliers, licenses, customs bonds, costs, and marketing. Build a home-based trade company with practical tips on setup, compliance, distribution, and startup expenses.

How to Calculate Employee Turnover Rate?

Track employee turnover rate with a simple formula that helps measure departures across your workforce. See turnover types, causes, costs, and ways companies can improve retention.

What Does “Caveat Emptor” Mean? Definition and Buyer Beware Rule

Definition of caveat emptor, buyer beware rules, seller duties, warranties, as-is sales, and legal options after defective purchases. See how this rule affects real estate, used cars, retail sales, and consumer protection claims.

How to Prove a Verbal Agreement in Court?

Prove a verbal agreement in court using witnesses, emails, payment records, and conduct showing both sides accepted the terms. See when oral contracts hold up, when writing is required, and how documentation supports your claim.

How to Start a Gym Business in 2026

Start a gym business in 2026 with planning around costs, equipment, permits, insurance, pricing, and marketing. Build a fitness facility that attracts members, manages risk, and supports long-term growth from day one.

How to Buy Out a Business Partner?

Review how a business partner buyout works, from valuation and payment terms to legal protections and transition planning. See key steps for reducing disputes, protecting company assets, and structuring a smoother ownership change.

What Is a Notice and Acknowledgment of Receipt?

A Notice and Acknowledgment of Receipt lets California parties serve lawsuit documents by mail instead of personal service. This guide covers the process, deadlines, rights, obligations, and business uses of acknowledgment receipts.

Advantages and Disadvantages of a Corporation

Review corporation benefits and drawbacks, from liability protection and tax options to costs, paperwork, and formal rules. Compare C corps, S corps, B corps, nonprofits, and closed corporations before choosing a business structure.

Which Payroll Taxes Are Paid By Employers in California?

California employers pay payroll taxes such as UI, ETT, FICA, FUTA, and Medicare. This article covers employer tax rates, payment deadlines, filing options, and payroll duties for California businesses.

How to File a DBA in Los Angeles

File a DBA in Los Angeles County by choosing an available name, filing the FBN statement, and completing newspaper publication. Review fees, renewal terms, tax details, and filing steps for using a fictitious business name in Los Angeles.

Elements of a Breach of Contract in California

California breach of contract claims require proof of a valid agreement, performance, breach, and measurable damages. This article covers breach types, legal defenses, and the damages available in California contract disputes.

Steps on How to Build Business Credit

Build business credit with practical steps that can help your company secure financing, better vendor terms, and stronger growth opportunities. This article covers registration, reporting accounts, timely payments, and common mistakes that can hurt your business credit profile.