Nine Steps to Buying a Home

1. Your Finances Need to be OrganizedCredit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a mortgage, because the reports play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.

2. Get Pre-Approved for a MortgageDo you know how much house you can afford? Probably not, unless you've talked with a lender. Pre-approval helps you in other ways. Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer's bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?

3. Determine What Type of Home You Are Looking ForBuying a home isn't as difficult as you might think, even if you're short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.

4. Work with a Real Estate Agent who is Experienced in the Market of your ChoiceReal estate agents represent buyers, sellers, or both--and in some states they can work as neutral facilitators for either party. It's essential to understand agent duties and loyalties before you make that first phone call.

5. Start Your Search for a HomeYour agent will give you multiple listing sheets to study. I'm sure you'll also pick up House for Sale magazines and read classified ads in your local newspapers. You'll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what's available. Deciding whether or not you want to buy a house involves a look at its structure and its features, but there are many other topics that are every bit as important to your purchase.

6. Write an OfferThere's no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout the United States, so the mechanics of making an offer and its specific contingencies depend greatly on your location. However, there are some home buying tips that can help you fine-tune your offer, no matter where you live.

7. Begin the Inspection ProcessIn some states, home inspections are accomplished before the final purchase contract is signed. In other states, inspections take place after an offer is finalized. No matter when you do them, it's critical to decide which inspections and tests you want to perform. Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.

8. Be Pro-active not Re-activeAs your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you'll know immediately if there's a problem that must be dealt with. Communication between all parties is the key.

9. Congratulations You are Headed to ClosingMost of your homes buying problems are behind you now and you're on your way to closing, also called settlement, the event that transfers ownership of the property to you.