The specific way you progress through a real estate transaction varies depending on the real estate laws and customs where you live, but there are many steps that are standard, even though they might not be accomplished in the same order in every location.

You'll feel more confident about your home buying journey when you understand what is required of you and every other person who is involved in the transaction. Use this guide to get started.

Step 1: Get Your Finances in Order

Your credit reports are an ongoing look at how you manage your finances. You must know exactly what your credit reports say about your financial history before you apply for a home loan. Why? Because they play an important role in the mortgage approval process and in determining the interest rate and other loan terms that a lender offers you.

If you haven't looked at your credit reports, you might be surprised at their contents, because errors are common.

Step 2: Get Familiar with the Mortgage Industry

Finding the right loan and lender is crucial to your home buying success.

Step 3: Get Pre-Approved for a Mortgage

Do you know how much house you can afford? Probably not, unless you've talked with a lender.

Consider this scenario. A home seller gets two similar offers. One is accompanied by a letter from the buyer's bank that states she is pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think will be considered first?

Step 4: Determine Your Wants and Needs

Buying a house isn't as difficult as you might think, even if you're short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at homes.

Step 5: Learn to Work with Real Estate Agents

Real estate agents represent buyers, sellers or both—and in some states they can work as neutral facilitators for either party. It's essential to understand agent duties and loyalties before you make the first phone call.

Step 6: Start Searching for a Home

Your agent will give you listing sheets to study. You will probably also pick up House for Sale magazines and read classified ads in your local newspapers. You'll probably spend time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what's available.

Step 7: Handle Pre-Offer Tasks

Deciding whether or not you want to buy a house involves a look at its structure and its features, bit there are many other topics that are every bit as important to your purchase.

Step 8: Make an Offer

There's no one set of instructions that can cover all the differences in real estate laws and customs that exist throughout the United States, so the mechanics of making an offer and its specific contingencies depend greatly on your location. However, there are some tips that can help you fine-tune your offer, no matter where you live.

Step 9: Home Inspections and Other Tests

In some states, home inspections are accomplished before the final offer to purchase; in other states, inspections take place after an offer is finalized. No matter when you do them, it's critical to decide which inspections and tests you want to perform.

Talk with your real estate agent or other advisor to find out when inspections should be handled and if additional types of testing are important for your specific area.

Step 10: Avoiding and Correcting Last Minute Problems

As your closing date nears, everyone involved in your real estate transaction should check its progress on a daily basis, because staying on top of things means you'll know immediately if there's a problem that must be dealt with. Here's a bit of information that focuses on a few common problems that home buyers must deal with before they close on a house.

Step 11: You're on the Way to Closing

Most of the problems are behind you now and you're on your way to closing, also called settlement, the event that transfers ownership of the property to you. Just a few more things to learn, a few more things to do, and you're there!

Closing Thoughts

The steps outlined in this article are a general guide. You will encounter issues specific to your location and your transaction, issues that can best be explained and handled by your real estate agent, your lender, your attorney, your closing agent, or others who are helping you complete the deal.

Don't hesitate to ask questions! Ask as many questions as necessary to help you understand the entire home buying process. You are making a long term commitment and spending a major amount of money—you'll feel much better about the transaction if you stay informed and understand what's happening every step along the way.