Steps in Buying a House

Ready for the joys of homeownership! Few people understand the steps in buying a house so we wanted to provide a general overview herein. It really is a time consuming, stressful and complex process but the more you know, the better the chances you will make smart decisions.

First make sure it really makes sense for you to buy. There are a few simple guidelines. If you do not plan to own it for at least five years, you will most likely be better off renting someone else’s property. Also, owning shouldn’t be significantly more expensive than renting. Ownership usually is somewhat more expensive, so just make sure that makes sense for you. Note: The fancier the house, the more owning will cost over renting. Lastly, don’t buy in an area unless you know it really well!

Next you should get qualified by a reputable loan officer to see what price property is affordable for you; and then interview a few and select one qualified sales professional to represent you and stick with them during the process.

Now the real fun gets started!

1. Determine Type, Location, Amenities – Hopefully you can find some areas that match what you can afford with what you desire to own. Think through the amenities you want, like good schools, parks, nearby retail, urban, suburban, near highways, etc. And house, townhome or condo?

2. Shop for Property – You should should expect to look for a few months as you drive areas, go to open houses, review online listings and have your sales professional give you property tours. Online websites like Zillow, Trulia and Redfin are a huge help and you should view at least 15 homes to get a feel for what the market has to offer.

3. Offering on a Property – When you find the “right” property, make an offer quickly. You typically have a study period and little money at risk for 7-17 days as you do more research of the property and area. It may be just the first of many offers you will be making as you fight others for the good properties!

4. In Escrow – If you strike a deal with the seller, you are in escrow! Now you work through the terms of your contract doing your home inspection and other due diligence to make sure it is the “right” property for you. Mind all the contract terms and timelines carefully as you may soon have money at risk.

5. Mortgage Loan – Once you are in escrow move forward with your Mortgage Financing immediately as loans take 30-45 days to complete. Get all the newly required and re-requested documents to the bank quickly. It’s a lot of paperwork, but that is the process.

Note: Do not buy any cars, furniture, run up credit card debts or forget to pay bills on time during this process. It could kill your financing and hence the deal!

6.  Moving Forward – As your lender works through their underwriting process and requirements, you should work through your due diligence of the area, property condition, HOA documents, title report, property insurance, etc. Lots of steps in buying a house…and you will learn that it takes a lot of time!

7.  Closing Escrow and Owning the Property – As the bank does it’s final loan approval escrow will prepare documents to transfer title to you. Escrow will prepare a preliminary HUD-1 showing how much money you need to close the purchase. Then get your funds over to the escrow company, you will sign loan and purchase documents, the bank will fund the loan, and record your title to the property at the courthouse.

 Congratulations, you just joined the world of real estate ownership. Those are the basic steps in buying a house. It is the largest purchase you will ever make and taking the time to really learn and understand the process should make your ownership a good long term wealth building experience.

For further help you can download and review a Due Diligence Buying a Home Checklist from Leonard Baron’s website at no charge and with no log in required, under Chapter 1 at

Don’t skimp on protecting yourself on your largest purchase. Take the time, energy and effort to consider the real and significant issues with real estate ownership, and significantly lower your risks by making prudent choices that will last for years.

Leonard P. Baron, MBA, CPA, is a real estate lecturer at San Diego State University and author of Real Estate Ownership, Investment and Due Diligence 101 – A Smarter Way to Buy Real Estate.

Leonard is a long term residential real estate owner. He buys investment properties now, he does commercial real estate investment consulting at – and he loves kicking the tires on a good piece of dirt!


About leonardbaron

Leonard P. Baron, MBA, CPA, is a Real Estate Lecturer at San Diego State University Who Taught the MBA Real Estate Investment Course. He is a Long Term Residential Investment Real Estate Owner, He is Buying Investment Properties Now, He Does Commercial Real Estate Investment Consulting – and Loves Kicking the Tires of a Good Piece of Dirt!
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