by Attorney Ilona Bray

Interested in buying a house? Orient yourself to the steps ahead, from researching neighborhoods to closing the deal.

You've probably been thinking -- or at least dreaming -- about buying a house for a long time. (Some people start going to open houses way before they're able to buy, just for the fun of it.) But buying a first home can be intimidating. Are you're ready for the multiple tasks involved in the homebuying process? Most people aren't. The preview below will alert you to the steps you'll need to take, and link you to other key information.

Step 1: Decide Which Community or Neighborhood You're Interested In

If you're already committed to a certain geographical area, and know you can afford it, jump down to the next step. However, if you're moving to a different state, or you have an inkling that your ideal neighborhood might be out of your financial reach, it's time for a little research. Driving or walking around, talking to local residents, and noodling around online are all good approaches. For details, see How to Research New Communities or Neighborhoods.

Step 2: Begin Looking at Houses

Even if you've never made a hobby of going to open houses, now is a good time to start. Visit a wide range of houses, in any of the neighborhoods that might interest you. Pay attention to the numbers of bedrooms and bathrooms, special features, and overall charm. If the seller has made pest or other inspection reports available, read them carefully, paying particular attention to the estimated cost of repairs. Ask the agent how many offers he or she expects on the house (multiple bidders can drive up the list price).

After a few weeks of this, make a game of testing what you've learned. Go to open houses where you don't know the list price, and then see how closely you can guess it.

For an armchair approach to the same process, scan the classified ads of your local newspapers, and look online for websites that publish the Multiple Listing Service (MLS), such as http://www.realtor.com, by the National Association of Realtors (NAR).

If you might be interested in a newly constructed home, see Buying a Newly Built House.

You'll inevitably start narrowing in on what type of house will meet both your wishes and your budget. To get organized about this, create a profile of your ideal house, then carry it with you as you get more serious about your home search. For more details on these early phases of the process, see Beginning Your Home Search.

Step 3: Assemble Your Team of Professionals

Most people prefer to work with a real estate agent or a lawyer at some point in the process. (In fact, in a handful of U.S. states, a lawyer must be hired to help finalize the sale.) A mortgage broker can also be of great help in finding the right home loan.

Experienced, responsible professionals can save you time, money, and aggravation. By the same token, incompetent or unethical ones can mess matters up badly. Take the time to get referrals from friends, and meet with a few prospects before you hire anyone.

For more on whether and how to get outside help, see Should I Hire a Real Estate Agent or Lawyer to Buy a House?

Step 4: Figure Out How You'll Pay for the House

The price of a house relative to the average U.S. income is higher than at any time in recent memory. So unless you are a statistical outlier, you'll probably have to save, scrounge, and borrow in order to afford your house purchase.

There are two parts of the purchase that you'll need to prepare for: your down payment and your mortgage. It's worth trying to pull together a relatively high down payment (20% or more of the purchase price), because that will let you afford more house and avoid paying private mortgage insurance (PMI). For ideas on where to draw your down payment money from, see Finding Your Down Payment.

Mortgages now come in all flavors and varieties, not just the fixed rate and adjustable rate ones from the past. The better your credit rating, the more favorable a mortgage you'll be able to obtain. (For more on this topic, see Qualifying for a Mortgage.) It's best to get preapproved for a loan before you start bidding on houses.

The key to choosing an amount and type of mortgage is to not get in over your head. Start by creating a realistic budget of your monthly income and expenses. Then research what type of loan will allow you to make the payments easily and responsibly. Again, a mortgage broker can help you wade through the possibilities. Or, for help with your own research, see Shopping for a Mortgage Online.

Step 5: Bidding on the House You Want

Here's where you lay your cards on the table, and present the seller with a written offer to buy the house. (Most states have standard contract forms that you or your realtor can use for this purpose.) The standard offer form will usually require you to state your proposed purchase price, where you expect to obtain financing, what conditions or "contingencies" you're attaching to the offer, how quickly you're willing to close the deal, and more.

Realize, however, that some important aspects of making the offer may depend on where the house is located and how hot the market is there. For example, in super-hot markets, such as California during the early 2000s, the list price was considered a mere baseline, and bidders were expected to offer tens of thousands of dollars more. Likewise, many sellers were not accepting offers with contingencies -- which are otherwise very common -- since they had their pick of offers to choose from.

A seller may accept your offer as written, but is more likely to present you with a counteroffer suggesting changes to some of the terms. Of course, the seller can also reject your offer. Even if you present a full price offer, the seller is under no obligation to accept it.

For more on how to craft a tempting offer and handle counteroffers, see Making an Offer on a House.