One of the biggest decisions to be made in your life is the decision of buying a first home. Though it can be a labor-intensive process, it will ultimately be worth all of the effort, planning, hunting and negotiating that goes into it. Buying a first home can be broken down to follow several standard steps.

  • Get approved for a mortgage. This will help you determine what a financial institution will loan you to pay for the house based on your credit, income and future prospects. Essentially, this falls under “financing” for your new home.
  • Pick your house. This will be regulated by the amount of the mortgage loan that you have been approved for.
  • Finance the down payment. Most of the time, first time home buyers, or any home buyer, will have to pay 15-20% of the total cost of the house in a down payment. This means that if the house is $100,000, then the down payment will be $15,000 to $20,000.
  • Find an agent. This process does not need a real estate agent if you are very savvy about the real estate market, but since most people are not, make sure that you have someone to work through.
  • Place a bid for the house through the agent. The agent will facilitate the negotiation between you and the seller. The amount that the house is worth is not necessarily what you will be paying. For instance, if they are asking $100,000 for the house, you can place a bid at $89,000. If they are motivated to sell, then they might just give you that price. Otherwise, they might dance with you a little through the agent to try to come to terms. However, most of the time, you can knock the price down by several thousand.
  • Work with the lawyer and agent as well as your financial institution to finalize the paperwork. This will help move the house from the seller’s possession into yours, making the house irrevocably yours, provided you make your mortgage payments.

Though buying a house is a little more complex that these steps outline, this structure is the basic process that you can expect to experience when buying a first home.