The process of buying a home for the first time can seem a little too difficult. There are a lot of seemingly complicated things happening at any given time in the process, with so many individuals involved. It's a jungle out there, it seems: all too easy to get lost in figuring out where the dangers are and which way to go next. This article will explain how the process works.

1. Getting Yourself Pre-Approved

Get pre-approved for a home loan. This will involve completing paperwork about your assets and income. Once you are pre-approved, you will know how much you can plan to budget for your home purchase.

2. Getting Your Ideas Together

Start looking. It is good to begin the search already knowing what you want. You can define your ideas systematically, by making a comprehensive list.

3. Identify Home

Bingo! You've found it. The right home could be the first one you find or the umpteenth.

4. Offer

Before making an offer, put some serious thought behind it. Find out what price properties in the neighborhood are selling for. Make an equitable offer -- too low and you could insult them, or too much and you might end up paying a higher price than you should. Usually, when you make an offer, you will probably need to put up anywhere from 1% to 5% of the asking price as a good faith deposit. Your offer will cover contingencies and terms in addition to price, such as being subject to inspection, necessary repairs, and your preferred date of closing.

5. Agreement

After a little negotiation back and forth, the seller and you will come to an agreement on all the terms of the sale.

6. Review of Title

A title review, in most states, is normally done by a real estate attorney who examines the title, or ownership records of the property, and gives a written opinion as to whether the seller's title satisfies the requirements of the contract of purchase. In some parts of the U.S. this is done without the services of an attorney but almost without exception there is a requirement for some kind of title search.

7. Home Inspection and Negotiation of Repairs

Never buy property without having it inspected by a third party inspector. A thorough inspection can reveal problems large and small, from mold to a sinking chimney. If the inspection does uncover problems, you will agree on the cost or completion of repairs.

8. Getting an Appraisal

An appraisal offers a professional estimate on the matter of the property's value. No lender will write a loan for more than the appraised value of the property. For that reason, if the appraised value comes back lower than the sale price, the deal is jeopardized. Actions or workarounds you could possibly take include your making up the difference in cash, the seller agreeing to lower the price to match the appraisal, or requesting a different appraisal.

9. Commitment

You will feel a big sense of relief when the lender completes a review of the documentation and commits your loan.

10. Walk Through Inspection

Your final walk through takes place just prior to closing. During the walk through inspection, you have your opportunity to assure yourself that the property is in the condition in which you agreed to take it -- that all repairs that the seller has agreed to make have been made satisfactorily, and that the property has not sustained any damage since you agreed to buy it.

11. Closing

Closing is the transfer of title to the buyer. You will have to hand over the down payment on the property and your share of the closing costs. Before the day of the closing ask your Realtor exactly how much you'll need to have on hand.

Done! Once you've completed those easy steps, you'll have your home.


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