Buying a house can feel stressful — it’s a big financial decision. In fact, 48% of home buyers reported that buying a house was more expensive than they expected, according to a recent home buyer study.
While that number may seem bleak, 34% of those same home buyers reported paying under asking price in 2024, which is slightly up from 27% in 2022.
To help you during your home-buying journey, we created this comprehensive guide on how to buy a house. This guide will help you simplify the process, save time and money, and find your next home with the expertise of a local agent.
⚡ Get started: Match with top buyer’s agents near you and get cash back at closing.
Select your state from the list below to learn how to buy a house in your local market.
1. Assess your financial readiness
Before you start house hunting, it’s crucial to understand the state of your finances and what you can afford in a home.
Save for a down payment
Saving for a substantial down payment can take time. In fact, 55% of home buyers reported saving over two years for a down payment, according to a recent study.
While some loans allow down payments as low as 3.5% (FHA) or even 0% (VA), a larger down payment can reduce your monthly costs and help you avoid private mortgage insurance (PMI). 20% is the recommended down payment for home buyers. For a median value US home, that would be around $88,000.
While 20% is the recommended amount, the majority of home buyers often don’t put 20% down. According to a recent home buyer study:
- The average home buyer puts 15% down.
- The average first-time home buyer puts 8% down.
- The average repeat buyer puts 19% down.
If you can’t afford a 20% down payment, you have options! Consider opting for an FHA or VA loan, or research down payment assistance programs available in your state.
Check your credit score
Your credit score plays a vital role in determining your mortgage interest rate and loan options. Most lenders consider scores above 740 to be excellent, while scores below 620 may make obtaining a conventional mortgage challenging.
| Loan | Down payment | Credit score requirement |
| Conventional loan | 20% or <20% with PMI | 620 |
| FHA loan (Higher down payment option) | 10% | 500 |
| FHA loan (Lower down payment option) | 3.5% | 580 |
| VA loan | 0% | Varies by lender, but usually 620 |
- Make all payments on time: Payment history accounts for 35% of your FICO score. Set up automatic payments to avoid missing due dates.
- Keep credit utilization low: Aim to use less than 30% of your available credit. For example, if you have a $10,000 limit, keep your balance below $3,000. Consider requesting credit limit increases or paying your balance multiple times per month.
- Maintain older credit accounts: The length of your credit history makes up 15% of your score. Keep your oldest accounts open and active with occasional small purchases.
- Limit new credit applications: Each hard inquiry can temporarily lower your score. Only apply for new credit when necessary and avoid multiple applications within a short period.
- Mix your credit types: Having both revolving credit (like credit cards) and installment loans (like car loans) can improve your score. However, don't take on debt solely for this purpose.
2. Compare US down payment assistance programs
If you’re struggling to afford a down payment, there are several state-wide and national programs to help homebuyers with this cost.
| DPA program | Max household income | Max purchase price | Credit score |
| Chenoa Fund FHA Down Payment Assistance Repayable | Varies | $766,550 | 600 |
| Chenoa Fund FHA Down Payment Assistance Forgivable | Varies | $766,550 | 600 |
Details
- Down payment amount: Varies
- Max household income: Varies
- Max house price: $766,550
- Credit score: 600
- Provider: CBC Mortgage Agency
- Homeowner education required? Yes
- Only available to first-time home buyers? No
Overview
This program offers a 10-year term with an interest rate matching the interest rate on the FHA first mortgage. This loan has the 3.5% or 5% DPA option and does require a monthly payment on the second mortgage.
Details
- Down payment amount: N/A
- Max household income: Varies
- Max house price: $766,550
- Credit score: 600
- Provider: CBC Mortgage Agency
- Homeowner education required? Yes
- Only available to first-time home buyers? No
Overview
This program has a 30-year term with an interest rate of 0% (0% APR). This loan does not require a monthly payment on the second mortgage. Forgiveness is determined by the DPA amount. Both the 3.5% and 5.0% forgivable loan options may be forgiven at the end of the 30-year term if the previous forgiveness conditions have not been met, even if the borrower made late payments on the FHA first mortgage.
3. Find an experienced local real estate agent
Finding the right real estate agent can make a significant difference in your home-buying journey. An experienced buyer’s agent can help you navigate the local real estate market, find homes that fit your criteria, and negotiate offers with sellers.
Look for agents who:
- Have at least 3 years of experience in your specific target area
- Can discuss recent sales and market trends in your desired neighborhoods
- Understand local zoning laws and development plans
- Have experience with your property type
- Are familiar with local flood zones and environmental considerations
- Have positive reviews online from other buyers
Some agents may have unique certifications, which verify their expertise in key areas. These certifications require agents to complete specialized coursework and maintain ongoing education. Certifications to look for include:
- ABR (Accredited Buyer's Representative): Agents complete training specifically focused on helping buyers navigate the purchase process.
- SRES (Seniors Real Estate Specialist): These agents focus on helping senior buyers and have extensive training in explaining the buying process and coordinating with lenders and attorneys.
- PSA (Pricing Strategy Advisor): These agents are experts at helping buyers understand home valuations and make competitive offers.
Once you’ve found 2-3 agents you like, interview them thoroughly to confirm which one is the right fit for you.
4. Get pre-approved for a mortgage loan
Getting pre-approved for a mortgage is a crucial step that should be completed before you start viewing homes with your agent. A pre-approval letter shows sellers you're a serious buyer and helps you understand exactly how much house you can afford.
You’ll have the option to choose a local lender or a nationwide lender. Local lenders often have a more in-depth understanding of your area’s real estate market and provide more personalized service, while national lenders may offer more competitive rates and faster processing times. Compare rates from 3-4 lenders and try to get quotes within 14 days to minimize the effect on your credit score.
To get pre-approved, you’ll likely submit the following information:
- Last two years of W-2s and tax returns
- Recent pay stubs (last 30 days)
- Bank statements (last two months)
- Investment account statements
- Photo ID and Social Security number
- Proof of United States residence
- Employment verification
- Explanation of any credit issues
- Information about current debts
Your pre-approval letter will typically be valid for 60-90 days and show your maximum loan amount. Now you can start the fun part: house hunting!
5. Begin your home search
It’s time to begin actively searching for houses!
Depending on the market and what you’re looking for in a home, the house-hunting process can take around 1-3 months, sometimes longer. In a recent home buyer study, 61% of home buyers said it took longer than expected to find the right home. 76% of these buyers reported that they searched for at least one month, but 47% reported it took at least three months.
Start your search by focusing on a location, weighing factors like affordability and quality of life.
Consider housing affordability
To comfortably afford the median home in the United States, a first-time buyer needs a household income of around $119,769.
However, depending on where you want to live, this number varies based on housing affordability. According to a recent homeownership study, here are states with the best housing affordability:
- Median sale price: $175,432
- Income needed to afford median home: $47,405
- Median household income: $54,329
- Median sale price: $200,959
- Income needed to afford median home: $62,029
- Median household income: $65,720
- Median sale price: $217,833
- Income needed to afford median home: $67,875
- Median household income: $69,588
- Median sale price: $229,424
- Income needed to afford median home: $65,374
- Median household income: $66,785
- Median sale price: $328,639
- Income needed to afford median home: $95,415
- Median household income: $94,991
Consider quality of life
When you’re looking for your next home location, don’t forget to factor in quality of life in your decision. Quality of life can look different for everyone, but here are some of the top things to consider when looking for a home, according to a recent survey of American home buyers.
- 🥇 Low crime rates (68% of surveyed Americans)
- 🥈 Low living and housing costs (66%)
- 🥉 Good weather (62%)
- Low taxes (52%)
- Lots of things to do (50%)
Attend house showings with your agent
Once you’ve chosen a desired location, set a budget, and have a list of preferred house features, your real estate agent will find homes on your local Multiple Listing Service that best meet your needs. You can also do some research yourself by using one of the many house-buying real estate websites that let you search for homes.
After you’ve selected the homes you’re interested in, you should tour them in person with your agent.
⭐ House showing tips for buyers
- Prepare questions for your agent beforehand.
- Take notes, photos, and video during the showing to reference later.
- Ask about the age of major systems (HVAC, roof, water heater).
- Listen for neighborhood noise.
- Check ceilings, floors, and basement (if applicable) for water damage.
- Discuss your opinions with your agent after you’ve left the property.
Once you’ve found a house that meets your criteria, it’s time to make an offer!
6. Make offers and negotiate
Making an offer on a home requires strategy, preparation, and creative thinking. You want your offer to be attractive to the seller but also keep your costs down. Striking this balance can be tricky, but your real estate agent can help you navigate the process.
Keep in mind that you’ll likely make more than one offer during your home-buying journey. According to a recent home buyer study, 95% of buyers reported making more than one offer during the home buying process.
What makes a strong offer from a buyer?
- Purchase price: Include the amount you're willing to pay, supported by comparable sales data. Your agent will help you analyze recent sales of similar properties in the area to determine a competitive offer price.
- Earnest money deposit: In the United States, earnest money typically ranges from 1–3% of the purchase price. For the median home value in the US, that would be $3,553–$10,660. This shows the seller you're serious about the purchase.
- Pre-approval letter: Many sellers won’t consider your offer if you don’t have a pre-approval letter from a lender.
- Contingencies: Contingencies can protect you in case things don’t go as planned. Consider including an inspection contingency and appraisal contingency to protect you in case these reports reveal issues.
- Closing date: Include a realistic closing timeline that works for both parties. In the United States, 35 days are typical, though this can vary based on financing type.
How to negotiate your offer effectively
If the seller accepts your offer, you can move forward to the due diligence process. If the seller comes back with a counteroffer, you’ll have a chance to negotiate the offer terms. In a recent home buyer study, 52% of home buyers tried to negotiate their home purchase. 94% of those buyers succeeded in negotiating!
Keep in mind that the home price isn’t always the most important factor. There are several other factors you can negotiate with the seller, including:
- Closing costs: Instead of negotiating the price down, ask the seller to cover some closing costs. This reduces your out-of-pocket expenses while keeping the sale price (and the seller's net proceeds) higher.
- Buyer’s agent commission: According to the 2024 NAR lawsuit, buyers are now responsible for paying the buyer’s agent commission to their agent. However, most sellers will consider paying this cost to incentivize buyers. (93% of recent home buyers succeeded in negotiating this.)
- Repairs: Rather than requesting repairs, negotiate a credit at closing. This gives you control over the work and often simplifies the transaction. (83% of recent home buyers succeeded in negotiating this.)
- Cosmetic credit: If the house doesn’t need significant repairs, consider asking the seller for a credit at closing to pay for cosmetic updates. (89% of recent home buyers succeeded in negotiating this.)
- Closing timeline: If the seller seems eager to sell quickly, consider offering an expedited closing date to sweeten the deal.
- Mortgage points: Rather than asking for a lower price, consider asking the seller to help pay points to lower your mortgage rate. (77% of recent home buyers succeeded in negotiating this.)
- Included appliances or furniture: While some houses are sold completely empty, others may have appliances (like a fridge) that appeared in the listing. Consider including these items in your offer if it makes sense for your situation. (91% of recent home buyers succeeded in negotiating this.)
Remember that successful negotiation often requires give and take from both parties. Stay focused on your primary goals while remaining flexible on less important details. Your agent's experience in your local market will be invaluable throughout this process.
7. Complete due diligence
After your offer has been accepted, you’ll enter into the due diligence period, which helps you understand exactly what you’re purchasing and identifies any issues before closing.
Order the home inspection
We highly recommend getting the home inspected, unless you intentionally waived the inspection contingency in your offer. A home inspection helps identify any issues with the home and examines key areas, including:
- Foundation
- Electrical system
- Plumbing
- HVAC
- Roof and home exterior
- Insulation/ventilation
In the United States, a home inspection costs around $249-$347.[5] The buyer is responsible for paying for the home inspection.
It would also be a good idea to order termite and radon inspections for your potential home. A termite inspection costs around $139 in the United States.[6] You can usually order a free or discounted radon test from your state government, or your inspector will perform one during the home inspection.
Get a home appraisal
Your mortgage lender will order a home appraisal to make sure the property’s value matches the amount that they’re lending you. A professional appraiser will visit your potential home, evaluate its condition compared to similar, recent sales in the area, and provide a detailed value report. A home appraisal costs around $233-$361 in the United States.[7]
If the appraisal comes in low, you have a few options:
- Renegotiate the purchase price with the seller.
- Make up the difference in cash.
- Challenge the appraisal with additional data and request a new one.
- Cancel the contract (if you have an appraisal contingency).
Start the underwriting process
While inspections are ongoing, your lender will begin the underwriting process to officially verify that you can afford your mortgage. They'll typically require:
- Updated bank statements
- Recent pay stubs
- Tax returns
- Source of down payment funds
- Insurance quotes
During this time, avoid making large purchases, changing jobs, or opening new credit accounts, as these events could delay the underwriting process and postpone closing. Stay in regular contact with your loan officer, and don't hesitate to ask questions about anything you don't understand.
8. Close on your new home
You’re almost at the finish line! Before closing, perform a final walk-through of the home with your agent to make sure everything is in the expected condition. You’ll want to verify that all agreed-upon repairs are completed, no new damage has occurred, all included items remain in the home, and all systems and appliances are working properly.
If you come across any issues, your buyer’s agent will communicate with the seller’s agent to resolve the issue.
Attend the closing
As the buyer, be prepared to sign a ton of documents during closing! You’ll typically meet at the office of a title company, real estate attorney, or lender to sign the documents. The seller may not be present during closing, as they can do their part electronically.
The closing package typically includes:
- Deed
- Mortgage/Deed of Trust
- Settlement statement
- Affidavits
- Tax documents
- Insurance documents
As you sign each document, don’t be afraid to ask questions to your agent, lender, or attorney if anything is unclear. Make sure that all names and property details are correct, and keep copies of all your signed documents.
These states require a real estate attorney to conduct your closing:
- Connecticut
- Delaware
- Georgia
- Kentucky
- Massachusetts
- New Hampshire
- New York
- North Carolina
- South Carolina
- West Virginia
Even if your state doesn't require that a real estate attorney conduct your closing, it's not a bad idea to hire one, especially if the sale involves complicated legal issues such as liens or property disputes.
Pay buyer closing costs
Once you’ve signed the documents, you’ll pay your portion of the closing costs. Buyer closing costs include:
- Buyer’s agent commission: Unless the seller agreed to pay the buyer’s agent commission, you’ll be responsible for this cost at closing. In the United States, the average buyer’s agent commission rate is 2.58%.
- Lender-related fees: Be prepared to pay some costs associated with the underwriting of your mortgage loan, processing fees, and rate-lock fees.
- Property-related fees: As the buyer, you’re responsible for covering the cost of the home inspection, appraisal fee, and other property inspection costs.
- Title-related fees: You’ll be charged for the title search, recording fees, and any title insurance (if applicable).
- Prepaid costs: You’ll typically pay upfront for homeownership insurance, property taxes, and HOA dues (if applicable).
In total, buyer closing costs are typically between 3% and 5% of the purchase price. That would be $13,204-$22,006 on the median value home in the United States.
Keep in mind that buyer closing costs can vary by buyer and property, so be sure to speak with your agent, escrow agent, or real estate attorney to understand your financial responsibility.
After closing, your agent will give you the keys to your new home!
✅ Post home-purchase tasks
- Collect physical and digital copies of your closing documents.
- Set up utilities (water, electrical, gas, etc.).
- Change locks and access codes for security.
- Update your address with the USPS.
- Be prepared for your first monthly mortgage payment (usually due at the beginning of the next month).
Should I buy a house?
With the real estate market constantly shifting, it’s difficult to know when it’s smart to buy a house in your local market. A real estate agent can help you understand current market conditions, assess your financial readiness, and get you started on your journey to purchasing a home.
In the United States, the median home sale price is $440,126.[1] That’s 6.83% higher than the median listing price of $412,000.[2]
The median home value in the United States is $355,328, which is projected to rise by 1.10% in the next year.[3]
Currently in the United States, houses stay on the market for an average of 66 days.[2]
A fast market indicates that houses are selling quickly and demand is high. When the market moves slower, you could have more time to make an offer.
Currently in the United States, there are 847,825 housing units on the market. This is 5,641 units fewer than the yearly average inventory count in the United States.[2]
A low housing inventory indicates that there are fewer homes than interested buyers, which can lead to buyer competition, while a higher inventory indicates that there are plenty of homes available to choose from.
The national mortgage rate is 6.65%.[4]
Frequently asked questions about buying a house
- Assess your financial readiness.
- Compare DPA programs.
- Find a local real estate agent.
- Get pre-approved for a mortgage.
- Begin your home search.
- Make offers and negotiate.
- Complete due diligence.
- Close on your home.
According to a recent home buyer study, a buyer needs an average household income of $119,769 to afford a median value home in the United States.
Most conventional lenders require a minimum 620 credit score.
Federal Housing Administration (FHA) loans require a minimum credit score of 500 for the 10% down payment option, and a minimum credit score of 580 for the 3.5% down payment option.
20% is what lenders typically recommend as a down payment in the United States. On a typical United States home, that's about $88,000.
You can put down less than 20%, but you'll need to pay private mortgage insurance (PMI) if you do. If you opt for an FHA loan, you might qualify for a down payment as low as 3.5% or 10%.
Methodology
Our mission is to provide accurate, actionable, and practical information that will help you make better decisions about your real estate journey.
To help create this home-buying guide, we pulled current and historical market data from vetted sources, such as Zillow, Realtor.com, Redfin, Freddie Mac, and Thumbtack. As these sources update, we refresh our pages accordingly to ensure everything is current.
We also used survey data from our homeownership studies, including:
- How Much House Can I Afford (2024)
- The Best Places to Live in the U.S. (2024) — surveyed 1,000 Americans
- The True Cost of Buying a Home (2024) — surveyed 1,000 Americans who have bought a home since 2022
- Home Buyer and Seller Report (2023) — surveyed 2,000 American home buyers who purchased a home in 2021-2073
