Step 6: Dealing With the House's Physical Condition

Whether new or old, no house is in perfect condition. An important part of the homebuying process is finding out about the house's condition from the seller, investigating its condition on your own, and protecting yourself against problems that will arise in the future.

Many states' laws require sellers to tell you about many or most problems that they know about concerning the house -- issues like leaks, termites, a faulty foundation, past water or fire damage, location in a flood or earthquake zone, and more. See Required Disclosures When Selling Real Estate for advice to sellers on this topic.

The seller's disclosures provide a good starting point, but you'll still probably want to have your own inspections done by at least one experienced professional -- and for the sale to be contingent upon your approving the results. See Get a House Inspection Before Buying for details on the hows and whys of this step.

Neither the seller nor the inspector can know everything about the house, however. Problems could be lurking that they can't see. For this reason, it's worth buying homeowners' insurance. In fact, if you take out a home loan, your lender will probably insist that you purchase insurance in order to protect its interest in the property. For more detailed advice, check out Homeowners' Insurance: What You Need to Know.

Step 7: Closing the Deal

Events start moving very quickly toward the end of a house-buying process. Your purchase contract will normally contain a "closing date," and all your activities will be geared toward wrapping things up by that date. You'll need to finalize your financing, review the home inspection and other reports, probably have the house appraised (most lenders require this), get title insurance (also required by most lenders, in case someone other than the seller has the right to own or use the property), and advise the seller when you're satisfied that a certain contingency has been met. (For example, if your offer was contingent on your selling your own house, and the house has been sold, the seller needs to know that.)

Try to stay focused on the big picture. Little issues will come up that need negotiating -- for example, the inspection report may show a minor needed repair, which you'd like the seller to pay for. If the seller refuses, he or she risks your calling off the deal. But if you play hardball, you may lose the house over a few hundred dollars.

On the closing day, you probably won't meet with the seller in person. More likely you'll go to the office of your escrow agent or attorney to sign the final documents. Then the house is yours!