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How to Get/Buy/Score a house step by step.

It seems like everybody is in the market for a house these days, especially where I live. But buying a home is a huge commitment and a potentially long term commitment at that. So I'm going to walk you through buying a house step by step and 11 easy steps.

11-Step Guide: How to Buy a House in 2026

Follow these 11 steps from readiness check to closing — your roadmap to homeownership.

Let's get right into it. Okay, so step number one is, are you even ready to own a home? So you have to really dig deep down inside, look at yourself in the mirror and ask yourself, am I in a position and am I ready and responsible enough to own a home? So the first step I would recommend is having steady income and employment. So if you have your regular paycheck coming in, you're able to kind of budget and understand what your money situation is going to be.

This is a good thing. If you know your job is stable, this is a good thing. If you're in sales or if you have a unreliable source of income, you know, your commissions could be up, they could be down. You could be a business owner and you don't know how much money you're going to make in a certain month. I recommend having at least six to 12 months of reserves to at least somewhat compensate for this first point.

The Step Two is understand your debt to income ratio. So the banks are going to base this on your gross monthly debt obligations divided by your gross income. I actually like to look at this on net income, but just for the gross income basis, this should at least be under 36%. In my opinion, if you're above 36% of your monthly debt divided by your gross income, that is too high of a debt to income ratio and it could actually cause some problems and underwriting when getting a mortgage.

And then finally, Number Three how is your credit? Have you looked at it lately? If you're a good credit score, that's only going to get you a better rate, meaning the cost of borrowing money is going to be cheaper over the length of the loan. Okay. Number four is knowing how much house you can afford. So this is probably the most important aspect of home ownership because this will either determine if you're living comfortably or if you're going to be house poor. So first and foremost, I highly recommend if you haven't already checking out my home Affordability calculator, this alone can prevent you from making a huge financial mistake by buying too much house.

That way you know exactly how much house you can afford. Okay. So step Number Five these are your down payment and closing costs. So if you don't know what a down payment is, that's simply a percentage of the home that you're paying for with cash and then you're taking a mortgage for the rest of the amount. You can put anywhere from zero to 100% down. 100% is paying cash, 0% is using something like a VA loan or a USDA loan, which doesn't apply to most people.

On a conventional mortgage, you can typically put anywhere from three to 99% down. However, most people typically put anywhere from three to 20% down. However, most banks, if you put less than 20% down, you're going to get PMI, which stands for private mortgage insurance. You want to avoid PMI because this doesn't go towards principal or interest. It is literally just a monthly fee, aka insurance for the bank or the lender giving you that mortgage. So I would recommend 20% down.

Obviously more people, more and more people are putting down less. But if you do put down 20% down, you do avoid the PMI. So if you want to use 20% as an example on $100,000 home, $100,000 times 0.2, that just gives you $20,000 as a down payment. So when you're going into a house purchase, you're going to have to have a down payment of some sort, and then you're also going to have closing costs right here. So what are closing costs? If you do opt to get a mortgage, you're going to have to get involved with a bank and they're going to require things like appraisal, title, closing fees, bank fees. These typically range anywhere from about one to 6% of the value of the home. If you're smart, you'll put away about 3% for closing costs just to make sure that you have that money ready and available.

Step Number Six is getting your mortgage pre-approval. This is simply just going down the street to the bank or credit union saying, Hey, Mr. Banker, my partner and I were looking to get this house. Can you at least tell us what we're pre-approved for when we are starting the mortgage process with you guys? And they'll take your information, they'll look at basically your income, your debt to income ratio, your credit score, your other obligations, so on and so forth. And they'll come back to you with a dollar amount that you're essentially pre-approved for, uh, for amount of loan, AKA mortgage. So this will actually help allow you to budget better and you'll know, Hey, this is the amount of money we have down. This is the amount of money we can borrow.

This is the amount of money or the amount of house we can afford. Okay. So what this helps to do is this helps you get under contract fast if you do find a home you like. So instead of trying to talk to the seller and have your real estate agent write an offer letter, you can actually show the seller, Hey, I'm interested in your house. This is my offer. Here's our pre-approval letter. Great. So as the seller, I actually have some confidence in you seeing the letter or the pre-approval letter from bank X saying that you're approved for amount Y of dollars. And this helps me know that once I get into contract with you, you're able to close quickly and you do have the funds available.

Step Number Seven is working with a real estate agent or a realtor. So this could be, you know, your father-in-law, this could be a friend that you work with doing it on the side. They can be a full-time agent. The skills and skill sets of agents vary. There's some that are really good, some that are really bad. So make sure you know who you're getting into bed with before you go on this house hunting journey. Okay. So this person is essentially representing you in the purchase. They are kind of like a lawyer representing you or your medical professional giving you advice or a financial advisor, for example. So their specialty is to write offers, negotiate, guide you through the entire process. They should be your trusted advisor when looking at these homes. You don't necessarily need one. However, if you are a first-time home buyer, I would recommend you work with a good one because they can kind of calm your nerves down.

They can walk you through the process and they can kind of be your guide throughout this whole sales process or this sales journey. Number three is that they are compensated typically in most cases by the seller. So the seller is selling their home.

They are working with a listing agent. This is your buying agent. You are purchasing the home. Typically they're compensated anywhere from I'd say 2 to 3 percent depending on the price of the house. So you are not actually paying them anything unless you have some other sort of negotiation in place. The seller is paying both the listing and the selling agent to sell their home.

Number Eight is starting the house hunt or starting your search. So the search begins. Number one, the most important thing is establishing your criteria. So at this point you've established your price, the square footage that you would need, the amount of bedrooms, bathrooms, depending on your family size or your living situation, and also most importantly your wants and your needs. If you're doing this with a spouse or a significant other, figure out what things you align with. Figure out things that are wants.

Figure out things that are needs. Okay. We both want a swimming pool.

We both want a gazebo. We both want, you know, four car garage, whatever.

I'm just making stuff up. Make sure that you're both on the same page because you'll see once you start to see more and more houses, this is going to be areas for contention and argument. So make sure you outline what you want in the beginning. this is a up arrow and a down arrow. It's basically just ranking your priorities. Okay. So if you have a list of wants and needs, make sure that you give your real estate agent who's going to be looking at the MLS for these houses for you and also you and your partner or spouse. Make sure that you're ranking these priorities highest to lowest. You know, what can you live with? What can you live without? And then finally, number three, this is kind of just a tip from my background.

I've worked in commercial real estate on the development side and also on the leasing side. I look at everything from a dollar per square foot perspective, price per square foot. So you may have two different houses, you know, and let's just say their amenities are similar. It's a comparable property. Look at the dollar per square foot. Is one coming in at $150 a square foot and the other one's coming at a $185? Well, what is that $35 per square foot difference? So that way it kind of gives you a baseline of understanding, this neighborhood, things seem to be going for $150 a square foot. This neighborhood, things seem to be going for $250 a square foot. You know, why is that? Am I getting a good deal or am I getting ripped off? So I look at everything on a price per square foot basis if all the amenities and upgrades are similar.

Step Number Nine is making the offer and negotiating. This we're going to talk about actually making the offer. So number one is submitting and writing an offer. You want to get everything in writing and remember everything is negotiable. So if you liked a certain statue or a piece of art or, you know, whatever, or a piece of gym equipment or fitness equipment, you can negotiate all that in writing. Most likely they'll actually let you do this outside or after the contract's been signed. However, it helps to get everything in writing first and foremost. So basically the offer is basically what you're willing to pay for it. Any contingencies on financing or inspection, things like that. And once all those things are checked off, you can then move on to finally completing the offer. However, that'll be discussed later in the video. So what you want to do is, Humans love stories.

So humans love stories. So when you're making your offer, say for example, you're a newlywed and you have a new baby on the way and your wife's pregnant and you know, it's lovey dovey. People love that. So if you have a house that's in a hot market and there's a bunch of offers coming in, it may actually behoove you to cover, to do a cover letter with,

hi, I'm sendra. This is my husband. we're pregnant.

We really love the neighborhood. Blah, blah, blah, blah, blah. Humans love stories....They may be more inclined to sell you the house or go with your offer. Even if it isn't the best one on the table, it doesn't happen all the time, but I have seen it.

Number Ten you'll put down earnest money. So earnest money is essentially a good faith deposit that goes towards the down payment or closing costs. However, if you walk away from the deal, you will lose that earnest money. If it is indeed on your fault or on you for walking away from the deal. So this is typically, you know, a couple grand, it could be less, could be more depending on the price of the house, but it's basically you putting a good faith forward or a good foot forward with the seller saying, Hey, I'm serious about this offer. So at this point, three things can happen.

The sellers can either 1. accept your offer, 2. decline your offer, or 3. they can come back with a counter offer and it can go both ways. And at that point you just continue the negotiation.

Step Number Eleven is once you get the contract accepted or you're under contract, depending on the length of the contract that will give you time to get an inspection and an appraisal. So these are two different things. Don't get them confused. So once the property is under contract, I recommend getting a home inspection. This is basically a gentleman or a woman who comes out, they inspect the roof, the inside of the house, you know, plumbing, radon, gas, mold, things like that. Anything that could be wrong or a foreseeable issue with the property. So they're looking for problems or issues. the appraisal is completely different. This is a certified professional that tells you or estimates the value of the home depending on comparables, depending on, you know, the build quality, the neighborhood, things like that.

I actually have ammo. So ammunition. So if the inspection or the appraisal comes back, say for example, the inspector comes back and says, this roof is shot, there's mold in the basement, there's radon, & more.

You can use that as bargaining or negotiation ammunition in the negotiation part. And you can actually get either a credit or some money off the house, depending on the amount of money it costs to remediate these issues that the inspector finds. Secondly, the appraisal, say you're looking at a house for easy numbers, it's 100 grand. The appraisal comes back at 90. You can then maybe use that 10 grand to get some money off the asking price as well. So inspection and appraisal, super important.

Number Twelve is just to piggyback off of what I just said with repairs and credits very quickly. As mentioned, when stuff does come back, you can ask for a discount off the purchase price of the home. You can ask for a credit at closing, for example, or you can have the seller fix it or remediate it. So by the time you do your final walkthrough, you can see that they fixed all the issues that you brought up in the contract. So very simply, just wanted to recap this. This is where you can save a lot of money.

Number Thirteen So I decided to give it its own section. Okay, so number 10 is completing your final walkthrough. So you want to go through the house after the seller is taking everything out, all their possessions that you didn't negotiate on or you didn't want or you didn't purchase from them.Basically, you want to see if everything is where they left it. You don't want any beautiful fixtures taken off the wall. You don't want any damage happening after the move out.So you may even want to take before and after pictures. That way, when you go to final walkthrough, you say, hey, what the heck happened here? There's a big gash on the wall. There's a big hole in the drywall. So do your final walkthrough, make sure everything is in order. Secondly, have the seller show you around, have them show you everything. So if there's a nice speaker system, for example, or there's an alarm system or there's automatic lights or there's a sub pump in the basement, for example, you want to make sure that they show you everything.

That way, you're not trying to reach out to these people after the fact, after you've already taken possession. So make sure that you get a final walkthrough through the seller and make sure that they show you all the quirks and features of the house. .

Congratulations you are almost a homeowner. So your lending institution is going to send you a closing disclosure. This is basically an outline of things that you need to bring to the closing table. This will happen roughly two, three, four days before the actual closing date. And it's basically just telling you what you need to bring to the closing. Number two is reviewing your numbers.

Make sure that the lender, the numbers that they gave you during your pre-approval and all the mortgage disclosure documents with the principal and the interest and the amortization schedule, make sure all that stuff adds up and you are indeed getting the mortgage that you are essentially promised to be getting from your lending institution. And then finally, this is your settlement statement. This is very important because this is basically showing you all the closing costs, the purchase of the purchase price of the home, the down payment amount, etc.

All that good stuff. Make sure all this stuff balances out to zero and you're not paying more than you should. So congratulations, you are now house poor and you're going to be in debt for the next 30 years of your life.

🥰I'm just kidding. The one thing I want to, the takeaway from here that I want to say, I'm just messing around, but in all seriousness, a house is a big responsibility. You got to set aside money every year for maintenance.

You know, if you're renting right now, your landlord is taking care of all that. Once you're a homeowner, the HVAC goes out, if the roof goes, you know, it gets crushed by a tree or whatever, that's all on you as the homeowner. So just be cognizant of that.

Owning a home is awesome. It's a great source of pride, but it does come with a lot of responsibility. So if you got value out of this Article, i'm Happy.

Buying vs Building A House (Pros & Cons)

we're actually going to be discussing whether you should build or buy a home and some of the pros and cons that come with doing both of those things so with real estate prices at all-time highs at the time and with interest rates that are extremely low right now people are actually starting to consider building versus buying used or buying an existing home so i mentioned we're going to talk about some of the pros and cons of building a home and i'll touch on the existing home portion as well let's get into it okay so the way i'm going to present this is with the pros and cons of building a home and i'm going to interject the pros and cons of buying an existing home so this will make more sense once i start so let's get into it

Buying an Existing Home vs. Building New: Pros & Cons

Weigh the benefits of quick move-in and known condition vs. full customization and energy efficiency.

number one is you get exactly what you want when you are building a home that is obviously the reason why you are building a custom-built home so you can get exactly what you want so you're in complete control when you build a home you can work with an architect a general contractor you can be the general contractor you can work with a builder but basically you have control over the floor plan the finishes the layout the colors the landscaping pretty much everything it's a blank canvas in most situations

if you are in a cookie cutter development which i'll talk about later in the video now to counteract that point with an existing home you can still finish an existing home the way you want however you lose a majority of the control when you're talking about layout and floor plan so with the layout and floor plan sometimes you have load bearing walls that you can't demo sometimes you have certain structural issues that you can't change so that's definitely a pro in favor of building a home.

now the second point that most of you may not think about is that there are no bidding wars when it comes to building a home so in my market right now houses are getting bit up thousands of dollars over asking price just because there's such low supply and so much demand in the market with a new home there is no competition unless you're literally you know trying to compete and buy a certain lot or buy the land that's typically when you have competition with newer homes however when it comes to building the home say you already own the lot there's no headache and no bidding wars when it comes to that .

There are no headaches with building a new home and for anybody that's built a new home you're probably like dislike, you're probably saying Pardeep you're an idiot what are you talking about that's why i have a huge asterisk right there so let me get into this right after the policy genius spot hey everybody so check this out policy genius is america's leading online insurance marketplace since 2014 they've helped over a hundred thousand families get insurance right and have placed 45 billion dollars in coverage by combining cutting-edge technology with expert human help so check this out we have life insurance homeowners insurance renters auto in case something happens to fido we got pet insurance disability, you name it they have it so what policy genius does is they compare the top life insurance companies to find you the right coverage at the best possible price with policy genius you can save up to 40 percent just by comparing quotes so they are the second largest term life insurance broker in the united states policy genius helps you shop over 40 insurers to find your best fit so if you remember my whole life and term life this is a huge benefit and because policy genius is an independent broker they fight for the customer not the insurance company so you can see here i'm basically going through a personalized quote.

it couldn't be any simpler you guys i'm going to go through this process very quickly i'm not going to show you my birth date because i'm getting older but you know if you want to check this out all you have to do is visit policygenius.com whiteboard finance to shop the market and start saving today so new homes have little to no maintenance because literally everything is new with existing homes you have to worry about the roof the mechanicals the finishes the windows the lighting all that stuff may be decades old depending on what part of the country you're buying in and how old the original house was built so if the original owners didn't do any of that stuff guess who has to foot that bill it's either going to be you or hopefully your insurance company but that's that's a topic for another time, so no headaches with a new home and yes trust me i'm going to get to this asterisk on on the flip side of the so newer homes or new homes are obviously more efficient.

they're typically more energy efficient because they're using better technology they have newer windows they have improved technology with the mechanicals and they're also using energy efficient materials so if you're somewhere that has four seasons this is very important because it'll get you need your house to stay hot in the winter and you need to be cool in the summer and all of these newer homes have energy efficient technology that lets them do is that.

this is common sense with a new home is that you are the only owner so think of this as a one owner vehicle or a one owner car you're the first and only owner of the house so far meaning that with existing homes you have to the previous owner may have had pets they may have had mold they may have been dirty people in general they may have been hoarders you don't know the worst thing is they may have been smokers actually where the walls are literally yellow but hopefully that gets remediated before the sale so my point is is that you know that everything in this house is fresh it's new if you're a clean person you can maintain it for years or decades without the house ever having any of those issues from an existing owner okay so let's talk about some of the cons of building a home and i'm going to interject some points of existing homes and that as well so number one is stress building a home is incredibly stressful especially if you aren't on the same page as your spouse or significant other.

so i continued the asterisks from the pros because i didn't mean to make it say that building a new house has no headaches whatsoever i meant once you're moved in and settled in and everything is working how it should then there's typically no headaches because everything is new however the process of building a home is extremely stressful so you have to buy the land you have to get the financing if you're not paying cash you have to deal with the general contractor or the project manager or the subcontractors if you are the general contractor or the builder sometimes i know couples that have gone through this process that have gotten a divorce during the home building process because it is so stressful so what i would recommend doing is getting a dedicated project manager especially if you're working one of the national builders like adries or orion homes or whoever they will help you get through this process and alleviate some of this stress the thing with existing homes is that you know exactly what you're getting so it alleviates some of that stress yes you can still disagree with your partner on fit and finish and colors and things like that however when it comes to floor plan and layout and all that you know big stuff and managing subcontractors an existing home doesn't have any of those headaches. so you have to wait to move in so depending on your builder and the type of home that's being built you have these national builders that build these cookie cutter homes that go up in 90 days.

then you have custom built homes that could take anywhere from you know a year to two years depending on the size and scope of the project it typically takes 90 days to about two years to build a custom built home so what are you going to do that whole time typically you have to either rent a space whether it's an apartment or an existing single family home i actually had a tenant in one of my properties he was a domino's franchisee owner this guy made like 20 30 grand a month he owned a bunch of these dominoes and he actually rented from me and he was the best tenant ever however he did leave about a year and a half later so existing homes you don't have to do this because it already exists so you don't have to wait to move in you pick a closing date you get the keys you change the locks boom you're moved into your new home so move-in weight is a big issue with new homes number three is that there's little negotiation little to no negotiation so you know me i'm old school i like to haggle on everything with existing homes you can haggle on the stuff that's inside the house you can hang on the price of the house you can say hey your roof is old knock off you know 15 grand off the price of the house you know otherwise get it fixed that kind of a thing with new homes there is little to no negotiation so other than materials you know say you're buying in bulk for example it's hard to negotiate the price on building a home especially with a national builder because typically they know their margins Their prices are set okay so with an existing home you have a lot more negotiation. room

we're going to talk about hidden costs so new homes are advertised as starting at however you don't really start racking up the bills until you start adding what you really want so as i mentioned earlier to fit and finish and things like that play a big role in what the price per square foot is ultimately going to be for the cost of the house so there's a big difference between you know custom cabinets and granite countertops than you know something that comes from like rooms to go or something and you get it done for super super cheap so if you have laminate countertops and you know not custom cabinets of course there's going to be a big difference there so with existing homes you don't typically have hidden costs unless you're talking about closing costs and things like that that you just simply weren't aware of but when it comes to you know fitting or outfitting.

An existing home the hidden costs aren't there and then finally we have construction and landscaping so this is my beautiful drawing of an evergreen tree that's that means landscaping in my hieroglyphics but that's why you watch this channel for my art abilities right so you typically if you're moving into a development for example and you're one of the earlier purchasers obviously your house is going to be built before everyone else is so you're dirt you're dealing with noise dirt mud you know debris potentially nails in the road things like that also no one's going to have landscaping for a year, year and a half to two years the other thing with that that no one really thinks about not only does your landscaping look like crap every nothing is mature okay so existing homes they may potentially be in a mature development so they're gonna have beautiful you know tall trees evergreens things like that depending on where you live with the cookie cutter developments where they just buy a big tract of land. just flatten everything you know that's not a mature development it's just going to be literally a cookie cutter development so obviously you can buy a buy a plot of land and build a new home somewhere super nice but i'm just talking about for a majority of the people.

Home Affordability Calculator: See What You Can Really Afford

Plug in your numbers (price, down payment, rate, taxes, insurance) to avoid buying too much house.

so finally my thoughts at the end and that's why you should stay until the end not because you want to hear my thoughts or because i'm a genius because i'm not, i'm just a regular person,it's because this is where you can apply logic to what i just presented and you're also helping, so anyway my thoughts on this are what can you afford okay so i know most of you came to this here wondering what my opinion is on whether you should build or buy or what.

The numbers work out to be that's impossible to answer real estate is hyper local it all depends on where you live you can literally be on a different side of the train tracks and it changes the numbers completely so i cannot possibly create encompassing openion for the entire country or the entire world to be exact because i have people all over the world so first and foremost what can you afford it doesn't matter if you want a brand new house if you can't afford it if you cannot afford to build a new home then you have to settle with an existing home and then you have to settle with an existing home that you can actually afford and it's just the house yes your house is your sanctuary it's where you relax it's where you raise a family it's where you're part of a community it's where you know you go to unplug i get all that trust me however once you get bombarded with all these videos on instagram and youtube and hgtv and oh you know i'm a teacher i'm a butterfly collector and i'm looking at houses in the neighborhood of 700 000 you know it's like what you know like are you even a real person uh so what my point to all this ramble is is that that allure goes away over time okay so yes when you're moving into a house you want to outfit it you want to finish it you want to do all your you know furniture you want to make it your home i get that but trust me that goes away and guess what it just turns into a money pit over time it's a liability.

yes on your balance sheet a house is an asset of course but at the end of the day it truly is a liability because you'll always have property taxes you'll always have maintenance you always have upkeep and and stuff breaks okay so remember these two things and you should be a-okay as always

About the Author

This article was written by the Me (Pardeep) and My Financial Guide Team, a group of researchers focused on mortgage education and home financing tools. Our goal is to help home buyers understand mortgage payments, interest rates, and loan options through simple guides and calculators. Last Updated: March 2026