The next step is to figure out what you want and need in a house. This should include both the essentials, such as the number of rooms you need, and those nonessentials that you'd like to have. Then, narrow down where you want to live. If you have no idea, ask friends and colleagues at work if they're happy where they live. Ask the lender who prequalified you to recommend the best areas that have houses in your price range. Drive around neighborhoods. Start visiting open houses in the areas you're considering.

When you know where you want to buy, you're ready to choose a real estate agent to help you find the house. Ask colleagues for recommendations. Sellers usually interview several agents before they select one to work with. Buyers should do the same, unless they instantly hit if off with an experienced agent who specializes in the area they want. It's wise not to use an out-of-area agent. If you're looking in several different marketplaces, be sure your agent is knowledgeable about the areas.

The search itself may go quickly, or it could take months. This will depend on how aggressive you are. You should look at every house that comes on the market that your agent thinks might work. How long it takes to find a home will also depend on how much inventory there is on the market. Try to be flexible with your search criteria, particularly on the nonessential elements. Be firmer about the essentials on your wish list.

HERE'S A TIP: Finding the house is only part of the process. Once found, you must then negotiate the purchase contract with the sellers. Make sure your contract includes contract contingencies to protect you. Minimally, your contract should have an inspection contingency that allows you to complete any inspections of the property that you deem necessary. You'll also need a financing contingency, unless you're paying all cash. This contingency should provide a time period for you and the property to qualify with a lender. You may want this condition to stipulate that the property must appraise for the purchase price. The contract should also include a clause that specifies that the property title condition be acceptable.

When the buyers have satisfied their contingencies, the contingencies are removed from the contract. Then closing documents are prepared and signed by the buyers and sellers. Closing occurs when title to the property transfers from the sellers to the buyers. If a contingency can't be satisfied, the buyers' deposit money is usually returned to them and the contract is canceled.