How to Buy a House with No Regrets in 10 Steps

Knowing how to buy a house is one thing but buying a house you won't regret later is a lot more difficult. According to a study by Clever Real Estate, 82% of American homebuyers have regrets about their purchase, whether that's buying a home that's not a good fit, spending too much money, or accepting a high interest rate.

And, according to a recent NAR (National Association of Realtors) report, the median first-time homebuyer age has risen to 40, with only 21% of homebuyers being first-time buyers. So, if you've waited this long to buy a house and you're one of the lucky few who can, let's do what we can to make it the right decision for you.

Here's how to buy a house in 10 simple steps—along with our advice on how to avoid common pitfalls.

1. Make sure you’re financially ready. Seriously, don't rush it.

Buying a home is a long-term commitment. That’s why the first step is making sure you’re financially prepared. Homeownership is more than monthly mortgage paymentsーthink maintenance, repairs, and property taxes. If the answer isn't "yes" to this list of questions, you're probably not ready to buy a house yet—and that's for the best. 

• Do you have at least three to six months of expenses saved up in an emergency fund (aside from your down payment)? 
• Is your debt-to-income ratio below 36%? 
• Do you have a stable job and reliable income? 
• Is your credit score at least 620?

Also, consider where you want to be 5, 10, or 15 years from now. It doesn’t make sense to buy a house if you don’t plan to live in it for at least five years. Buying and selling a home is an expensive process, and relocating too quickly could mean you won’t recoup the costs when you resell.

2. Figure out how much house you can afford.

If you’re ready to buy a home, the next step is determining how much of your income you can allocate to housing. You can use the 28/36 rule, which suggests that you should spend no more than 28% of your gross monthly income on housing and no more than 36% on debts. 

The 28% limit includes the principal, interest, homeowners insurance, property taxes, private mortgage insurance (PMI), and homeowners association (HOA) fees.

Once you have a budget to work with, stick to it. And if you’re buying a house with your partner, make sure you’re on the same page to avoid surprises or disagreements over which homes fit in your price range.

3. Save plenty for a down payment and closing costs. 

The down payment will be your biggest upfront expense, so how much should you save? It depends on what kind of loan you get. Generally a good rule of thumb is to put 20% down to avoid PMI if you're using a conventional loan, but the average down payment is only 10%. And if you qualify for certain programs, you may need to put down as little as 3%. Some government-backed loans, like VA and USDA loans, require zero down payments.

You should also save 2–5% of the home’s purchase price for closing costs, expenses you must pay when finalizing a home sale. This covers costs like loan origination fees, taxes, insurance, inspection and appraisal costs, and title fees. 

4. Find a solid real estate agent with a good track record. 

Although it's possible to buy a home without a real estate agent, 90% of people who buy a house use one for a reason. The right real estate agent can make a huge difference in your home-buying process. They'll also help you set up showing, construct an offer, negotiate concessions, and ask the right questions when buying a house.

You should interview at least three real estate agents before you hire one. Consider their housing market knowledge, local expertise, communication skills, and whether they specialize in helping people like you buy homes. Trust and reliability are also paramount. Read online reviews and ask for referrals from friends and family. Make sure you understand how buyer's agent commission works, too, before you sign the agreement with your agent.

😅 Interviewing agents takes forever—let Clever do it for you. Clever Real Estate vets thousands of agents nationwide so they're ready to go. When you go through Clever, you'll get matched for free with the best agents in your area that specialize in what kind of house you want to buy. Plus, you could qualify for cash back at closing. Get matched with the best agents in your area.

5. Get prequalified and then preapproved for a mortgage. 

A mortgage lender can prequalify you and give you an estimate of how much you might be able to borrow with a simple conversation. This is a good starting point when you're researching how to buy a house. However, a prequalification isn’t the same as getting preapproved. With a preapproval, the lender reviews your pay stubs, tax returns, bank statements, debts, and credit history. A preapproval is a more serious status and is what you'll use when you make an offer on a house.

When getting preapproved, lenders will perform a hard inquiry on your credit, which will show up in your report. Most mortgage preapprovals last between 60 and 90 days. But if you get several preapprovals around the same period, it will count as only one hard inquiry. So it's a good idea to not start getting prepapprovals until you're very close to buying a house.

6. Shop for your dream home—but with a practical list. 

This is the most exciting step, but it can also be overwhelming. To get started, create a list of must-have home features, nice-to-haves, and bonus features. If you have a partner, you should each create your own wish lists and then compare. It's easy to get swept up by certain houses when you walk through them once, so keeping your eye on what you really need and want will help you separate emotions from facts.

• Must-haves: Which essential home features can you not compromise on? For instance, the location, number of bedrooms, bathrooms, school districts, and home values in that area (are they rising or falling?).
• Nice-to-haves: These are things that would be nice to have, but you can live without. Think about large walk-in closets, a two-car garage, a kitchen island, and a finished basement. While they add comfort, they shouldn’t be deal breakers.
• Bonus features: These are dream items that would be amazing to have. For example, a backyard pool, a home gym, and smart home technology. Such features shouldn’t make or break your decision if the house meets your budget and has your must-haves.

And if you’re already a homeowner looking for a new home, you may want to consider buying a house before you sell. This way, you won’t miss out on your dream home before your old one sells. Also, don’t overlook government-owned properties, like HUD homes that often sell below their fair-market value.

7. Make an offer and prepare for inspections and appraisals.

Found a home that’s right for you? Now is the time to make an offer. Your real estate agent will help you submit a competitive offer. As you and your agent work on your offer, consider these strategies to make it more likely to be accepted:

• Make a substantial earnest money deposit. 
• Adjust the closing date to finalize the deal at the seller’s preferred date.
• Waive contingencies to make your offer more attractive.
• Add an escalation clause, which says you’ll increase your offer if the seller receives a higher one.

If the seller rejects your offer, you can make a counteroffer or walk away from the deal. Once the seller accepts your offer, prepare to launch into inspections and appraisals. This can be an emotional roller coaster if the inspection turns up a dealbreaker in the house or if the appraisal comes in lower than your offer. Through it all, a good agent can help you stay emotionally calibrated and decide on the best next step.

8. Get approved for your mortgage.

Although you're likely already prequalified for a mortgage when you make an offer on a house, actually getting approved to close requires additional layers of financial scrutiny. Your lender will thoroughly review your finances and ask for more documentation before providing the loan. This process is called mortgage underwriting, and it usually takes several weeks to complete.

Get ready to submit a lot of paperwork, which may include the following:

• ID and Social Security number
• Paycheck stubs for the past 30 to 60 days
• Tax returns for the past two years
• Recent bank statements
• Information regarding your debts
• Gift letters explaining any gift funds used for a down payment

9. Schedule a home inspection and appraisal. 

Once your offer is accepted, you need to schedule a home inspection to evaluate the home’s condition. A licensed home inspector will check for safety hazards, necessary repairs, plumbing, electrical, and HVAC systems. 

“The best thing I did was getting multiple thorough inspections, along with quotes from contractors to fix the issues that came up!” said Sain Rhodes, customer service manager at Clever Real Estate and a recent homebuyer. “At the time I was purchasing, many people were waiving inspections. Though I may have missed out on multiple homes due to being unwilling to waive my inspection, I don’t regret this move!”

You’ll also need a home appraiser to determine the market value of the house by comparing it with recent sales of similar properties in the region. Your lender will choose the appraiser, but you’re responsible for the fees.

10. Close the deal and do a happy dance.

You’ve made it! This is the last step of the home-buying process, where your lender will send the final closing statement at least three days before your closing date. Make sure you review everything again to avoid surprises on closing day.

“If I could go back and change anything, I would have asked my agent to ask the seller’s agent to please make sure the seller has removed their personal property from the home before closing,” Rhodes said. “They left behind some items in the garage and cabinets that I had to dispose of after closing, and that was a minor inconvenience I think I could have avoided.”

On closing day, you can do a final review with your real estate agent, pay your closing costs, and sign the paperwork. 

Overwhelmed? Most people are. Get a solid agent to guide you through it.

As long as you've done the prep work, we promise all the stress and tumult of buying a home will be worth it once you get to settle into a place you can truly call your own. Working with a real estate agent makes it much easier—and they can shoulder a lot of the logistics and stress for you. Fill out a quick form to get matched with the best Clever agents near you—all matches are free.