Homebuying Process: 8 Steps to Buying a House

Buying a home can be an overwhelming and daunting process. With continued rising housing costs, it’s crucial to understand every step of buying a house before you begin to ensure you’re fully prepared.

Buying a house can be more straightforward if you know what to expect beforehand. 

Here’s how to buy a house in 2025:

1. Decide if you are ready to buy a house.
2. Make sure you can afford to buy a house.
3. Find a lender and a good real estate agent.
4. Sell your current home (if you have one).
5. Find a home and make an offer.
6. Order a home inspection and a home appraisal.
7. Complete a final walkthrough of your new home.
8. Close on your new home.

This article will discuss everything you need to do to buy a home in 2025. You should know what to expect in the process, and this article will explore all of the fine details, including understanding things like how your credit score might affect your ability to buy a home, what to keep in mind before moving, and other costs to start saving for now.

1. Decide if You Are Ready To Buy a House

Buying a home is a huge commitment and should be done when you’re truly ready for the emotional and financial costs of the process. Often, there are costs that you might not initially expect, so it’s crucial to save for these beforehand to keep your finances stable and predictable.

Factors to Consider Before Deciding to Buy a Home

The various aspects of your individual life will often work to determine what your home buying process looks like. 

Here are a few things to consider before deciding to buy a home:

• Your familial/relationship status. If you’re single, you can move where you want to. However, having a partner or family with particular needs can affect where and when you move. You might have to consider things like moving away from extended family, waiting to move until the school year ends, and more.
• Pets that need certain living conditions. If you have a large dog or several, you might want to find a home with a large yard, or near a local dog park. Similarly, some cities have rules on how much livestock you can own if you have chickens or horses. Finding this out beforehand can help narrow down a potential home.
• Staying somewhere new long term. You’ll likely stay in the new home for a while if you move. It’s essential to consider things like making sure your commute to work isn’t too long, how safe the area you’re moving to is, and if you’d feel comfortable living there long term. 

Credit Score

Your credit score can affect the kind of home you can buy. Mortgage lenders will look at your credit score to determine whether or not you qualify for a loan, which can make or break your home buying process. 

In 2025, it’s best to have a credit score of around 580+ to ensure mortgage lenders will approve you for most loans. 

If you have a low credit score, you can start building credit now by doing the following: 

• Paying your credit card balance on time.
• Not opening any new lines of credit.
• Being on time with any other loan payments.

2. Make Sure You Can Afford to Buy a House

Home prices can vary depending on where you’re looking. You can get a better idea of the current house price trends by searching for houses in your desired area to see what they’re currently selling for. 

You can also use a mortgage calculator to calculate an estimated monthly payment. This monthly payment can change depending on how you buy your home. 

For example, if you can place a down payment of 20% on your home, you can remove PMI or Private Mortgage Insurance. Getting rid of PMI can lower your monthly payment significantly. 

It’s also essential to plan for emergencies or unexpected problems by having at least three months of extra rent set aside in savings. If you don’t have the equivalent of three months’ rent saved up, it might be best to wait until you do before buying a new home.

Additional Costs

Often, there are additional costs that we don’t consider when moving. You’ll likely have to pay to rent a moving van or hire movers to transport all of your furniture and belongings. 

If you don’t have any furnishings or appliances, you may have to spend a significant amount upfront to buy things like a bed, a refrigerator, a washing and dryer, and more.

Small purchases, like everyday household items, cleaning supplies, and tools, can add up. Depending on where you move, there may also be additional costs, like Homeowner Association costs, property taxes, interest rates, homeowner’s insurance, and more. 

When you budget for a future house, keeping these in mind can ensure you can afford what you buy.

Debt-to-Income Ratio

Your debt-to-income ratio tells you exactly how much of your income is going towards paying off debts. Before buying a home, it’s best to work on paying down your debts.

Ensuring a low debt-to-income ratio will help you qualify for a mortgage.

3. Find a Lender and a Good Real Estate Agent

When you’re shopping for a new home, you’ll also need a good real estate agent, as they help you negotiate the selling price of your desired home. You’ll also need a good lender that can help you find the best interest rates.

Let’s talk more about these things.

Shop for a Lender

You can get prequalified for a mortgage to move the process along more quickly. 

Different lenders offer varying interest rates, closing costs, and other benefits. Because there are so many lenders out there, take the time to find one that offers benefits that you like. 

Once you find your lender, you can get prequalified for a loan. After the lender completes your prequalification, they can pre-approve you for a loan, guaranteeing that you’ll get the loan based on your financial state.

Find a Real Estate Agent

An excellent real estate agent can help you find the best listings in your desired area.

Real estate agents will work closely with you during the home buying process, negotiating pricing, handling paperwork, helping you make an offer that isn’t too low or too high, and offering their expertise in home buying. 

Once you find a capable, efficient real estate agent, you can send them your budget and they’ll begin showing you listings. The seller will pay your real estate agent from the closing costs, so you won’t have to pay them out-of-pocket.

4. Sell Your Current Home (if You Have One)

Selling your current home to buy a new home can be tricky and require good timing to pull off smoothly. 

One of the most significant benefits of selling your current home before purchasing a new one is that you can use the equity you’ve gained from your old home to help pay down the costs of your new home. 

However, the timing of this can be difficult to predict or plan. 

If you sell your current home and can’t find a new one, you might find yourself having to live with family or in an apartment for a while. To avoid straining finances or family relationships, you can look into options like a Bridge Loan, a loan designed especially for this kind of transition.

You may also be able to negotiate with your potential buyers to impose a 30-day period before you hand over your keys. 

This contingent period will give you time to find and put an offer down on a home.

5. Find a Home and Make an Offer

You can find potential homes for sale by either looking at the listings your real estate agent gives you or browsing real estate listing sites. You can give your real estate agent certain desirable qualities you’re hoping for in a potential home, and they can narrow down the search for you based on these factors. 

Here are a couple of things to consider when looking for a new home:

• Neighborhood safety: Is the neighborhood in a safe area? Look into the crime statistics for your potential new neighborhood. 
• Proximity to work: If your home is far from where you work, you may have to endure a long commute, resulting in lost time and money from travel time and gas costs. 
• Convenience: It’s essential to look into nearby grocery stores, shopping centers, gas stations, and hospitals. If your home is too close or too far from any of these, it could cause unwanted issues. 
• Schools and workplaces: Consider what schools are nearby for any school-aged children you may have. Similarly, if you plan to get a job near your new home, look into career prospects in the new area. 
• Community restrictions: If you move into an area with a Homeowners Association, there may be restrictions on what you can do with your future home, if you can have pets, what parking is like, and more.
• The state of the home: Purchasing a home with several problems or inadequate spacing for your needs can cause problems in the future. Look for homes that fit your needs and that are in good condition. Attend open houses or schedule to see the home in person if possible. 

Once you find a home you like, you can work with your real estate agent to make a reasonable offer.

6. Order a Home Inspection and a Home Appraisal

After your offer has been accepted, you’ll need to order both a home inspection and a home appraisal. Your real estate agent can help you arrange both of these. 

A home inspection will help you look at the current state of your new home, determining whether it may need major repairs, if it has been constructed correctly and if it’s safe to live in.

If the home inspector realizes that this home requires significant repairs, you may further negotiate with the seller. The seller may offer to do the repairs themselves or not. 

You can back out of your offer if you’re unsatisfied with the home inspection results.

You’ll also order a home appraisal to give you an estimate of how much the desired house is actually worth based on various external factors. An appraisal is critical because your mortgage lender will only provide a loan covering the appraised cost, not the actual selling cost. 

If your desired home is appraised at far lower than what the seller is selling it for, you may not be able to afford it.

7. Complete a Final Walkthrough of Your New Home

Once you’ve completed both the home inspection and home appraisal and are satisfied with the outcomes, you can begin a final walkthrough of the home. 

A final walkthrough is a much more in-depth process than simply going to see a potential home. You’ll want to take your time during your final walkthrough, making notes of every potential problem the home might have. 

Here are the things to look at during a final inspection: 

• Does hot water come out of faucets quickly?
• Are there any leaks?
• Do all of the windows and doors close securely? 
• Is there any water damage?
• Do all of the outlets and lights work properly?
• Can you see any mold, pests, or invasive animals?
• Has the seller left the yard items they promised with the sale?
• Does the garage opener work? 
• Does the thermostat work? 
• Does the plumbing work? 

You want to ensure that the house is in working order. If you’re unsure what to look for, bring your realtor to help you with the final walkthrough. If you find anything amiss, you can discuss this with your realtor and the seller and decide whether to stay or back out.

8. Close on Your New Home

Once you have completed every preparatory step, you can work with your real estate agent, the seller, and the lender to close on your new home. They’ll handle all of the paperwork, and you’ll sign the appropriate documents. 

Once the closing is completed, you’ll gain the keys and ownership to your new home.

Final Thoughts

Buying a home in 2025 can be a simple, straightforward process if you understand all of the steps to purchase a new house. By ensuring you are ready to move, your budget capabilities, your new home’s potential, and more, you can move into a house that fits all of your needs.