How to Buy a House in 2025: 15 Steps Every Homebuyer Should Know

Buying a home is a huge life milestone.

This life-changing purchase is likely one of the most significant investments you’ll ever make, and for most, it is a proud moment. This process symbolizes stability, permanence, warmth, and accomplishment. It’s an exciting time, but there’s also much to consider.

Many steps are involved, each with its own considerations and best practices. Most people think of this process as finding a home, handing over a down payment, and signing the paperwork. However, navigating this journey is not always straightforward, especially with older homes.

For example, when making an offer, you must consider what may be lurking in a home before closing the deal. Imagine buying your dream house only to find it full of black mold or asbestos a month after closing. What if you have secured your home and moved in, but now your house is leaking, or a friend visits and expresses concerns about the foundation? Then what?

Just as you were proactive in saving money, finding the right neighborhood and working with a great agent, you must also get the necessary inspections. It’s part of your due diligence as a buyer. Identifying potential issues before you sign that dotted line could mean the difference between contingencies in your offer and an extensive (and costly) renovation bill. WIN Home Inspection supports home buyers during this crucial stage. However, there's plenty to consider before and after home inspections. Let's start at the beginning.

Here are 15 steps to consider when buying a house.

Step-by-Step Guide to Buying a House

If this is your first time investing in property, you may wonder, how long does it take to buy a house? Whether you're new to the real estate game, are upsizing, downsizing, or building your investment portfolio, the buying process remains relatively the same.

Step 1: Evaluate if You're Ready to Buy

For many, homeownership feels like a pipe dream. A recent poll found that 86% of current renters in the United States WANT to buy a home but can't afford one. Among these respondents, 54% believe they will never own a home. However, many are hopeful that this affordability crisis will one day change.

If you're someone who feels similarly, don't count yourself out. Take these steps to assess certain variables so that you can make changes to reach your financial and real estate goals:

• Check your financial health. Focus on your credit score and debt-to-income ratio. Start taking steps to improve your credit rating so you can obtain an affordable mortgage when you’re ready.
• Consider job stability and long-term location plans. Access to work matters, as do any long-term goals you have for your life.
• Your emotional readiness is another variable. Owning a home requires a lot of responsibility and ongoing maintenance. Make sure you’re ready for this commitment.

Step 2: Set a Budget and Use a Home Affordability Calculator

If you're confident about step one and your ability to navigate it, it's time to crunch some numbers. That’s especially true if you're looking into how to buy a second house. You want to ensure you have enough money to cover your homeowner expenses.

What is your budget based on current variables? Use a home affordability calculator to see what is attainable.

Ask yourself how much you could afford each month to secure home ownership. Total monthly costs should cover more than just your mortgage. Factor in insurance, taxes, and an ongoing reserve for utility bills and unexpected events. Having a rough figure in mind can help you set goals and create a realistic action plan.

Step 3: Start Saving Early

As soon as you decide you're working toward homeownership, start saving. How much money do you need to buy a house? You'll need enough to cover the following:

• Down payment: Most mortgage loans require you to put anywhere from 3% to 20% down. In 2024, the median down payment was 18% among all homebuyers and 9% among first-time homebuyers.
• Closing costs: Legal fees, land transfer tax, inspection fees, survey fees, and other closing costs must be factored into your initial budget. Budget for 3% to 5% of your loan’s amount. It helps to use a closing cost calculator.
• Emergency fund: A new homeowner should expect the unexpected, especially in the first year. Your water heater may go out, or your HVAC system may die. Life can also happen, and income is never 100% certain. Having six months of expenses saved is vital to ensure you don't fall behind on payments.

Step 4: Explore Mortgage Options

At this point, you'll have a pretty good idea of what you can afford and will be more aware of common financial and real estate terms within the homebuying process. Now, to secure funding for the purchase. Compare your options (conventional mortgages vs. FHA vs. VA vs. USDA loans). If you're buying a second property or a rental, a DSCR loan might be a good option. These loans are based on the property's income instead of your own, which is great for investors and the self-employed.

To select an ideal loan type, consider:

• Eligibility requirements
• Minimum down payments
• Minimum credit score
• Maximum income and loan limits
• Insurance requirements

FHA loans are popular for first-time homebuyers. However, VA options may interest you if you're a veteran or active service member (especially if you are working on rebuilding your credit).

This step is when you will seek pre-qualification. You can submit data to receive a preliminary estimate of the potential mortgage size for which you may qualify — you then move on to the pre-approval process.

Step 5: Get Pre-Approved

When you get pre-approved for a mortgage, a lender assesses your current financial situation. Based on that information, they determine the maximum you can borrow to purchase a home. By taking this step, you’ll better understand your borrowing power. Having a figure in mind can help you budget accordingly.

If you find a property you like, a pre-approval can also make your offer more appealing to sellers. In a competitive market, that may give you an edge over other bidders. Pre-approvals average 60-120 days and are subject to continued good credit.

Wondering how to buy a house with cash​? If this is an option for you, it can be advantageous in a competitive market, as sellers don't have to wait for loan approval. Gather your funds and get a letter from your bank showing that you have funds to fulfill your offer.

Step 6: Build Your Home Wishlist

Before you start house shopping, list the must-haves vs. nice-to-haves. While the actual home and property matter regarding the number of bedrooms or yard space, you must also consider lifestyle factors. If you have children, how far is the nearest school, and will the bus pick them up? What about the neighborhood vibe? How long is your work commute?

Step 7: Find a Real Estate Agent

Working with a real estate agent provides valuable expertise and local market knowledge. They will also help you get a more favorable deal via negotiation. So, how do you find one you trust?

When real estate agents build a positive reputation, word gets out. Ask friends and family who they have worked with in the past. You can also check online listings or visit open houses to see how agents interact with clients. It's best practice to contact three agents. Take note of their communication style, experience, and fees. Read online reviews and don't be shy to ask questions.

Step 8: Start House Hunting

It's time for the fun part — house hunting!

Start by searching online, using tools like those offered by realtor.com. Attend open houses and visit neighborhoods. As your preferences change, notify your agent so that they know what to look for. Acting quickly is key, so ensure your agent is on the ball!

Step 9: Make a Competitive Offer

Did you find "the one," and you’re ready to make an offer? Lean on your agent for support. They have experience in negotiating with sellers and other agents. Your agent can help you secure favorable terms, including price, closing dates, and contingencies. For example, you might offer slightly less than asking and ask for the seller to provide documentation that a home inspection was completed.

If you're unsure about what is fair to offer, ask your agent to provide a comparative market analysis (CMA) to determine the fair market value of a property. Once you do make an offer, you'll want to pay earnest money, showing the seller you're serious. If the seller accepts, that payment will be applied to your down payment. The closing date will depend on your terms.

Step 10: Schedule a Home Inspection

This step is critical, as you may uncover issues that must be addressed before closing. To be proactive, seek a home inspection company with experience and a strong reputation. These companies will have highly trained, certified inspectors who use the latest tools and technology to detect potential issues that could affect your safety, health, and investment. For example, you might want to find inspectors offering infrared (IR) scan technology or sewer scope inspections. These options can take this process to the next level, helping you gain the peace of mind you need to commit.

Here is a comprehensive home inspection checklist.

Step 11: Request Repairs or Negotiate

The above step will help you navigate your following actions. Based on the inspection report, choose to renegotiate, request repairs, or walk away. Discuss this process with your agent and the home inspection company. Assess the urgency of issues so you know what’s most pressing. Prioritize anything that’s a safety concern or a red flag that may cause significant long-term problems.

Collect photos and secure an inspection report for the negotiation process. Next, decide on your walk-away point. How much can you realistically afford to address repairs the seller won't? At what point will you walk away? Communicate with your agent throughout the negotiation process.

Step 12: Get the Home Appraised

If you're at this step, you're closing in on owning your first (or next) home. Now that you have selected a house, you must get an appraisal. Lenders typically order a home appraisal as part of the mortgage process, usually after the buyer and seller have agreed on a price. The appraisal determines fair market value, ensuring the mortgage is within a safe range for the lender.

If an appraisal comes in lower than expected, the lender could and likely will decrease the amount you can borrow. So, you'll need to pay more upfront to cover the difference.

Step 13: Secure Homeowners Insurance

If there are no issues and you secure funding, it's time to shop for home insurance. While home insurance is not required by law, most mortgage lenders will ask for your policy before they release funds for the home purchase. Insurance is often necessary to protect the lender's investment, even if you're not moving in immediately. Just as you compared agents, review several quotes and what they cover to choose the best option.

Step 14: Do a Final Walk Through

You're almost ready to hold those house keys! If you've reached the final walk-through, there are only a few more minor steps. Start with any repairs you requested as part of your offer. Make sure they are completed, and then continue your walk-through. Check appliances, fixtures, and the overall condition of the house.

Step 15: Close the Deal

It's time to finalize the real estate deal. You'll most often need a cashier's check or proof of wire transfer, two forms of identification, and evidence of property insurance.

Take your time reviewing the paperwork. If there is anything you don't understand about the fees, terms, or loan details, now is the time to clarify. Be prepared to sign and receive your keys. You've done it — you're officially a homeowner, again or for the first time!

Know What to Expect (and Enjoy the Journey)

The journey to becoming a homeowner can be stressful.

However, it's also exciting. Learning how to buy a house for the first time is a rewarding experience. Although the journey may seem complex, breaking it down into steps is key. You also don’t want to rush the process, especially when it comes to home inspections. Finding potential problems now can help you move into a home that encourages happy memories, not renovation headaches. Happy house hunting!