Here’s a step-by-step guide for buying a house:

1. Understand why you want to buy a house
2. Check your credit score
3. Create a housing budget
4. Save for a down payment
5. Shop for a mortgage
6. Hire a real estate agent
7. See multiple homes
8. Make an offer
9. Get a home inspection
10. Negotiate repairs and credits
11. Secure your financing
12. Do a final walk-through
13. Close to your house

1. Understand why you want to buy a house

Purchasing a home is a significant decision that shouldn’t be taken lightly. You could regret your decision if you’re unclear about why you want to buy a house.

How to get started: Define your personal and financial goals. “Buyers should think about things like when they intend on moving and what they want in a home — amenities, ideal location, and how long it could take them to save for a down payment,” says Edwence Georges, a sales associate with RE/MAX in Westfield, New Jersey. “These are all important to help define the goals they would like to meet.”

Key takeaways:

• Make a list of what’s important to you in a home. Are you craving stability? Is location the top priority? Any must-have amenities?
• Does it make sense for you financially? Would renting for another year or two improve your financial standing?
• Are you prepared for the responsibility of maintaining a home?

2. Check your credit score

Checking your credit score will help you determine your financing options; lenders use it to set your loan pricing and see if you can repay your mortgage. The better your credit history, the better your chances of securing financing with the best terms and rates.

How to get started: You can get your credit report and score from each of the three major credit reporting agencies, Equifax, Experian, and TransUnion, for free once a year. Your bank or credit card company might offer free access to your score or credit report.

Key takeaways:

• Consider how different credit score ranges impact your interest rate, monthly payments, and total interest. Generally, the lower your credit score, the more expensive your mortgage will be.
• Pull your credit reports from each credit bureau for free every 12 months at AnnualCreditReport.com. If you discover any discrepancies, contact each agency and report the error.

3. Create a housing budget

Setting a realistic budget for your new home will help inform what you can afford and how much your all-in costs will be.

How to get started: The purchase price isn’t the whole picture. Carefully factor in other expenses to determine what you can afford.

“Buyers tend to forget to factor in other costs like (homeowners association) fees and setting money aside for maintenance costs. Just because you can afford a mortgage and a down payment doesn’t mean you can afford those long-term costs after you move.”

Key takeaways:

• Determine the maximum loan you qualify for.
• Decide how much you can set aside for a down payment, plus a buffer fund for ongoing or unexpected maintenance costs.
• See if your monthly budget can handle the mortgage payment and other bills such as daycare, tuition, utilities, groceries, etc.

4. Save for a down payment

To avoid private mortgage insurance or PMI, you’ll need to save at least 20 percent of the home’s purchase price for a down payment. Some lenders offer mortgages without PMI with lower down payments but expect to pay a higher interest rate.

How to get started: Research the down payment requirements for the loan you want so you know exactly how much you’ll need. If a friend, relative, or employer has offered to provide a down payment gift, initiate a conversation early on to learn how much they plan to contribute and if there’s any shortfall you’ll need to cover — and secure a gift letter from them well in advance, too.

Key takeaways:

• If you don’t have much saved for a down payment, consider options backed by the federal government. FHA loans, insured by the Federal Housing Administration, require just 3.5 percent down, while VA and USDA loans have no down payment requirement.
• Conventional loans backed by Fannie Mae and Freddie Mac require just 3 percent down.
• Look into a local or state first-time homebuyer assistance program to help with closing costs or your down payment.

5. Shop for a mortgage

Getting pre-approved for a mortgage is helpful when you make an offer on the house, giving you a firmer handle on how much you can afford.

How to get started: Shop around with at least three lenders or a mortgage broker to increase your chances of getting a low-interest rate.

Key takeaways:

• Work with an experienced mortgage lender who can walk you through all options and overall costs.
• Ask what first-time homebuyer programs or other incentives are available to you.

6. Hire a real estate agent

An experienced real estate agent can save you time and money by helping you find your dream home and by negotiating with the seller on your behalf.

How to get started: Contact several real estate agents and ask to meet with them for a conversation about your needs before choosing one. “Someone with knowledge of an area can also tell if your budget is realistic or not, depending on the features you desire in a home,” Kruger says. “They can also point you to adjacent areas in your desired neighborhood or other types of considerations to help you find a house.”

Key takeaways:

• Before hiring a real estate agent, please find out about their track record, knowledge of your desired neighborhood, and workload. You don’t want someone who is over-scheduled.
• Agents can refer you to other professionals like home inspectors, contractors, appraisers, and title companies; however, you should still shop around and compare fees from other professionals.

7. See multiple homes

Simply viewing listing photos isn’t a substitute for visiting homes in person — with appropriate precautions in the pandemic — and getting to know the neighborhood and its amenities.

How to get started: Let your real estate agent know what specific kinds of homes you want to see or search for homes online yourself. Your agent can create your profile in the local multiple listing service (MLS), a database of homes for sale, and set up automatic searches for those that meet your criteria. You may not be able to check off everything on your home amenity wish list, so you’ll want to prioritize what’s most important to you aside from location.

Key takeaways:

• Drive through neighborhoods you like to see what’s for sale and attend open houses for homes that pique your interest. Remember to keep notes on each property you visit. After a few showings, you quickly forget which homes you liked and why.
• Keep your schedule open so you can pounce when a great home is listed, especially in a competitive seller’s market. You could gain an edge over other buyers the sooner you see it and put your offer in.

8. Make an offer

Understanding how to make an attractive offer on a home can help increase your chances the seller will accept it, putting you one step closer to getting those coveted house keys.

How to get started: Once you find “the one,” your real estate agent will help you prepare a complete offer package, including your offer price, preapproval letter, and proof of funds for a down payment (this helps in competitive markets) and terms or contingencies.

Key takeaways:

• Sellers might counteroffer on your price, terms, or contingencies. You can respond to the counteroffer or reject it and move on.
• Once an offer is accepted, you’ll sign a purchase agreement that includes the price of the home and the estimated closing date. You’ll need to pay an earnest money deposit, typically 1 percent to 2 percent of the purchase price. The seller may have a right to keep the money if you back out.
• Contingency clauses protect the buyer and typically include an appraisal, financing, and home inspection. If a home inspection report shows significant problems, you can often back out of the contract and get a refund.

9. Get a home inspection

A home inspection helps you get an overall picture of the property’s mechanical and structural issues. The home inspection will help determine how to proceed with the closing process. You might need to ask the seller for repairs or decide to back out of the deal if you have a contingency in the contract.

How to get started: You can get recommendations for home inspectors from your real estate agent, but also, be sure to do your homework before choosing one. Depending on your contract and state of residence, you’ll generally need to complete a home inspection 10 to 14 days after you sign a purchase agreement. As a buyer, you’re usually responsible for paying the home inspector, and while the fees can vary, you’ll pay an average of $270 to $400, according to HomeAdvisor by Angi.

Key takeaways:

• To ensure the home inspector has enough experience, read online reviews, ask for past client references and look at their credentials.
• Look at the home inspection checklist to understand what is and isn’t covered.

10. Negotiate repairs and credits

Your home inspection report may reveal major or minor issues. Major problems will likely need to be dealt with before your mortgage lender finalizes your loan, while minor issues can often wait till you take possession of the home.

How to get started: Enlist your agent’s help to negotiate with the seller. Ask the seller to do the repairs or give you credit at closing.

Key takeaways:

• If there are hazards like structural damage or improper electrical wiring, your lender might not approve your loan. Likewise, you might not have the budget or desire to handle such repairs after buying the home.
• Some sellers won’t agree to extensive repairs, and that’s why a home inspection contingency is a good idea — to give you a way out of the purchase if the home isn’t in ideal shape.

11. Secure your financing

Getting final loan approval means keeping your finances and credit in line during underwriting. Once you’re ready to close, you won’t want to open new credit lines or make other major purchases until the paperwork is signed.

How to get started: Respond promptly to requests for more documentation and double-check your loan estimate to ensure all the details are correct, so there are no hiccups later. You may need to submit additional paperwork as your lender completes the underwriting process, such as:

• Bank statements
• Tax returns
• Additional proof of income
• Gift letter or written statements explaining significant deposits into your bank account

Key takeaways:

• Preapproval doesn’t mean you’re in the clear until a lender has given the final stamp of approval. Keep your finances and credit in good shape from preapproval until closing day. If you can, avoid changing jobs before closing on your new home, too.

Also, avoid running up credit cards, taking out new loans, or closing credit accounts. Doing any of these things can hurt your credit score or impact your debt-to-income ratio, imperil your final loan approval.

12. Do a final walk-through

A final walk-through is an opportunity to view the property before it becomes yours. This is your last chance to view the home, ask questions and address any outstanding issues before the house becomes your responsibility.

How to get started: Come with your home inspection checklist and other documents, like repair invoices and receipts for any work the owner conducted, to ensure everything was done as agreed upon and that the home is in ready condition.

Key takeaways:

• Ask your real estate agent to be there so they can act as witnesses and help answer any questions you may have.
• If repairs or issues haven’t been addressed, have your agent communicate immediately with the seller and your lender. Your closing date might be delayed to ensure those issues are remedied first.

13. Close on your house

Once all contingencies have been met, you’re happy with the final walk-through, and the closing agent has given the green light to close, it’s time to make it official and close on your home. In this final step, your lender will issue you a “clear to close” status on your loan.

How to get started: Three business days before your closing date, the lender will provide you with a closing disclosure that outlines all of your loan details, such as the monthly payment, loan type, and term, interest rate, annual percentage rate (APR), loan fees and how much money you must bring to closing. At the conclusion, you (the buyer) will attend, along with your real estate agent, possibly the seller’s agent, the seller, in some cases, and the closing agent, who may be a representative from the escrow or title company or a real estate attorney. This is also the time where you’ll wire your closing costs and down payment, depending on the escrow company’s procedures.

Key takeaways:

• Before closing, review the closing disclosure carefully and compare it to the loan estimate to ensure closing fees and loan terms are the same. Ask questions about your loan and correct any errors (like your name or personal details) before you sign closing paperwork.
• On closing day, review all the documents you sign carefully, and ask for clarification on anything you don’t understand.
• Ensure you’ve been provided all house keys, entry codes, and garage door openers before closing.
• You’ll leave closing with copies of the paperwork (or a digital file) and your new house keys. Be sure to store your paperwork in a safe place for future reference.

Once all the paperwork has been signed, the home is yours, and you’ll get those house keys. Congratulations! The fun part comes: moving in and making the house your home.

Bottom line

Buying a home involves many moving parts and complex steps. Still, this guide — along with the professional expertise of your real estate agent and mortgage lender — can help you navigate the process smoothly. By doing your homework ahead of time, you’ll have more confidence in your decision and relish getting those coveted house keys on closing day.