If I could do it all over again, I would've hired a structural engineer, a plumber, and an electrician to come out to the house instead of just a "Certified Home Inspector". Also, since it was and still is a fixer, a contractor to give me an estimate

Spend less than the lenders say you can afford.

Invest in a legit home inspector (they have to be engineers and have to have a license - at least in NYC) they will tell you all the problems of the house you are hoping to buy and if there are major issues, you can insist that the current homeowner fix the problem, or you get a discount for the problem. Also lets say the problem of the current house is the roof. You need to get, 2-3 contractors to give you a quote and you tell the current owner that is selling - it will cost $20K to fix, either you discount the price or you fix it properly... This is the $20K lesson we learnt from buying our first home. Good luck with yours.

get your financing in place BEFORE you start looking. nothing is worse than falling in love with something that you can't afford and on the flip side, having your financing in place gives you exceptional leveraging power.

true story; we had everything in order (pre-approval, 20% down etc.), we found something we liked bid well below asking price with the note that we could close in 14 days. they recieved other offers (one at full price) but went with ours because we had everything in order and closed within 2 weeks of our offer.

Think about how much yard work you want to do. Mowing, gardening, snow shoveling, gutter cleaning are all big time sucks that can eat your free time. And yes, spend way less than the bank wants to lend you.

Make sure the fundamentals are sound. Roof, heating, cooling systems , electrical,insulation etc. Those are necessary must haves. They are expensive and aren't fun to spend money on. More fun to spend money on paint, new flooring, landscaping, furniture, general decorating!
Be practical, don't fall in love, love will come when you put your own special stamp on the house.

The whole buying process was very stressful, I wish someone had told me that was normal. Every step of the way I felt like I didn't know what the heck I was doing. Get informed, information is power!

Those are things I wish I had known when I went "shopping" for my first house. In the end it is a rewarding process!

Know the process and your role in it, get your financing in place before you start to look; always get inspections and heed their findings, be flexible about wants and needs, and remember, there is NO such thing as a perfect house. There are lots of houses out there that will work for you; don't get your heart set on "the one"--things happen, you may not get it, or you make may bad decisions due to that judgment.

Start paying your mortgage now! Estimate your monthly payment and subtract whatever you're currently paying -- the difference goes into savings. That way you're setting aside money for your downpayment AND you'll already be used to the amount.

Great points so far, but if I was doing it over again I would have spent more time looking at my neighbors and the properties around me. I bought my house in the winter and didn't spend a lot of time looking around outside. My neighbors are nice enough, but the snow was covering one of the neighbors 'piles o-crap' in their backyard adjacent to my property. I also didn't realize that the charming two story across the street was split into three apartments. Even though it's not a done deal go back after a day or so in the evening and ring some doorbells and at least meet the people you are going to be living next to, behind, etc....

The offer process is an emotional roller coaster. You feel like you are stepping off a cliff when you sign the offer papers and then having to wait while you hear back is excruciating. Then there's the exhilarating moment of finding out that you have the house, followed by the immediate feeling that you've made a terrible mistake. Of course, the day that you get the keys is the day that you shout "This is mine!" while rolling around like a starfish on the floor.

I thought that I was just an emotional wreck, but found out that all my friends had the same upheavals.

The most important thing is to spend less than they say you can afford. You benefit by knowing enough to negotiate aggressively and your realtor benefits from getting you to settle for a less aggressive negotiation. Don't think too much, your brain is wired to do its best thinking in the subconscious rather than listing everything out in front of you so trust your emotions after you've researched. Expect problems, learn to navigate them. Ask yourself what benefits you gain from owning--some are better off renting. That question changed what I purchased entirely and I am extremely grateful I came to it before finalizing any deal. Walk away from any high pressure meeting--if it is a reasonable deal, it will be available after you've had time to clear your head. It is stressful, but in my experience so worth the stress.

Be realistic with yourself about how much time and money you can devote to fixing things up. Owning a home, especially one that you want to change, can be time-consuming and expensive. If you don't enjoy spending your time on projects, buy something finished. Or at least finished enough that renovations won't start to drive you crazy.

I echo the others--borrow less than the bank says you can afford. You do want to enjoy that house, right?!

Also, bargain for closing costs, appliances, and remodels when you can. Right now, unless you live somewhere unusual, the market is pretty bad and you can bargain for most of what you want (within reason).

We bought our house 2 years ago and were able to bargain for some external repairs, all appliances, including a huge deep freezer, that year's termite-bond fee, and $1500 for additional repairs to be spent however we wanted (we converted the fuse box to a breaker box and saved the rest for a kitchen repair we'll do when we redo that room). A few years ago that wouldn't have been possible, but in a bad market, buyers can get a lot for their money!

buy in a buyers market instead of a sellers market

:P

When my husband and I bought our first house, we only factored in the cost of the monthly mortgage payment into our budget, which was actually cheaper than what we were paying in rent at the time. The important thing we forgot, however, was to include taxes and insurance that were being socked away in escrow every month. That increased our monthly payment total by a third. Ouch, definitely.

Follow the home inspector around during the inspection. Ask tons of questions and don't be afraid of looking stupid. If you don't know much about home maintenance or how to spot problems, bring someone with you like an experienced friend or family member. Ask the seller for a home warranty. Most will include it.

I want to second (or fourth) hiring professionals (including engineers, etc) to inspect the house, even, and especially if, it's a new property. Just because the building is new doesn't mean it's without structural issues.

Be willing to live with your house in the condition it currently is. We planned many upgrades, especially to our kitchen, but surprise, I got pregnant, quit my job, and have lost one income long-term. We still could afford the house, but 5 years later, that kitchen and its burned and scratched formica countertop still glaer at me every day.

Do a budge mtg where your insurance and taxes are with your mtg amount and you don't have to stash on your own for those hurtful expenses.

Pay attention to the bones - HVAC, Roof, Foundation and Plumbing - not paint color.

Consider who the seller is - is it an investor who flips houses, original home owner etc - someone who lovingly takes care of the house will be able to give you warranties and info on things they had done and will really work with you to make sure repairs are done etc - a flipper doesn't know doesn't care - in most instances.

And regarding Anusha73 comment about having the seller fix issues or knock off the sales price - well in a perfect world maybe. But the sales price may already reflect that or they could just say no, also if you have the seller fix big stuff then who knows if its going to get done well and by who - so beware.

If you are coupled and are both working, buy a home that's affordable on one income, even if it means having to purchase a smaller home and having to sacrifice on ideal location.

I have friends who found themselves in huge financial holes after their other halves lost their jobs and they were unable to cover their mortgages and expenses as a result.

i second the comment about knowing how much time and resources you have to do upgrades...it's good to see the potential...but it's also good to be realistic about what you can live with until you have the time and funds to devote to a project.

I'll be the zillionth poster to say you should borrow less than what the bank offers. Their number is based on a formula that says 'yes, you can afford this mortgage and be able to buy food,' but will you be able to have a life outside your house? New clothes? Go on vacation?

If the person helping you with your mortgage is really good, the numbers they discuss with you will also include mortgage insurance (at least, here in Canada they use that), house insurance, life insurance... property taxes, etc. Look at the number that includes ALL monthly payments, and see how it stacks up with what you currently pay for rent. That'll give you a good idea of how much you can afford. On our first house we set our limit at $35,000 less that what the bank would give us, and we were still feeling the pinch.

If those numbers are looking good, be sure and ask about utility bills before putting an offer on a house. And don't forget about closing costs. Lawyers are expensive.

We're currently looking at selling our house and moving on. I expect the stress of selling to far outweigh the stress of buying...

Seriously above all, if you get a pre-approval (and you should) DO NOT accept a 60 day interest lock from the lender. Get a 90 day, even if they make you pay the $100 or whatever. Trust me, you don't want to get hosed for $2000 a week before closing because the financing company dragged things out and rates suddenly go up at day 70. Unfortunately in this post bubble world the mortgage process takes A LOT longer than it used to. Especially if you are not doing a traditional 80/20 mortgage (FHA, VA, etc) it will take longer than 6 weeks.

1. Don't let anyone convince you to spend outside of your comfort zone. You are the one on the hook every month, not them.

2. Don't be afraid to ask questions, ask until you are blue in the face and get the answer in writing. Don't accept anything but a straight answer and if can't get that get a second opinion. This goes double for both your and the seller's realtor.

3. Get an inspection. I had 5 seperate inspections done on my first home, bought 8 months ago. Septic, general, solar hot water, structural (crack in basement) and repair estimate (for crack), ask the inspectors questions. Don't let realtors bully you into skipping anything.

4. Find a lender you like and get a pre-approval. When you get that ask the lender to send you a list of all the things they will need to process your application, get all that stuff together in a folder and update every month with your newer pay stubs, etc. That way if you get under contract all you'll have to do is drop off that folder, it'll speed things up.

5. Don't settle. Yes of course the "perfect" house isn't out there, but you can and should get damn close. Don't let your realtor convince you that a house you don't really want will be fine for the "5-7 years" you live there before you sell. Seriously, they think everyone is house jumping every 5-7 years, I heard it so much I wanted to puke.

6. If you can avoid it, don't let the seller "fix" stuff unless an inspection is riding on it. Get a repair allowance built in to your contract so you get a check from the seller at closing to fix it yourself, or cut the price. If you let them fix it you won't know how they did it, it might look ok but could be very shoddy work.

The most I can tell you is to just stick to your guns, if something feels wrong it probably is. That and you are your own best advocate. Always check up on things that are important, don't assume they are getting done, and keep on top of your dates! Good luck out there.

Expect problems! We bought a home in pretty good condition--it was old (50+ years) but we were the second owners and while the baths and kitchen were outdated, it was in really good shape. But then our area had two years of historic flooding, which meant our basement, which had been dry for decades (not just according to the seller--neighbors, too) got over two feet of water. TWO summers in a row! We had insurance, but insurance didn't really cover our losses, not by any stretch.

Also, we have had a few minor leaks around windows, etc. And a couple of small electrical problems. AND an extremely drafty room that needed repairs. And on and on. So while the house is not a money pit, we have had two huge unforseen expenses and have otherwise been nickeled and dimed to death.

Next time, I'm not buying unless I have a big (say, $20k) savings fund that is only for house repairs. And I'm not going to bother with any place that needs a new kitchen or bath... little house fixes keep us busy enough.

Think carefully about location. Not just about proximity to shopping or work, although that is important, but about what you really DO with your spare time, not what the imaginary, aspirational version of yourself does. We used to rent in a cute, small town with a downtown with shops and restaurants in walking distance. Sounds charming, right? Well, we are total homebodies and prefer staying in with a home cooked meal and a book. So, a suburban house in a not-fancy, 50's era development made a lot more sense for us. And, it was far more affordable than living in a cute downtown.

This also applies to DIY projects and home/yard maintenance: think carefully about yourself and your inclinations before buying a fixer.

Test out your commute during rush hour.

RELAX. I don't know if it's possible to relax, because I definitely did not relax until we moved in, but at least try.

At the end of the day, you need to live somewhere. Your house is not an investment, it's a place to live.

Pick a place that is structurally sound (maybe is ugly/dated) but doesn't "need" anything immediately and then don't try to do everything at once! Stick to one or two projects at a time and don't let it turn into a huge time suck or spend too much right out of the gate. Feel it out and figure out what you dislike the most or what needs attention the soonest. I made a lot of progress since March, but missed a lot of my summer slaving in the yard and realized too late that I have 30 years to make this thing right! What's the rush!?

Where I live, you can rent for half the price of owning, but people still for some mysterious think you should never rent because you're "paying someone else's mortgage." But they don't factor in the lifetime costs of interest, insurance, taxes and maintenance that can really add up over time.

Look very closely at the costs of renting vs buying. If renting is significantly cheaper, ask yourself if the premium on owning is really worth it to you.

"Your house is not an investment, it's a place to live."

AMEN!

Thanks for the contributions everyone. Lots of valuable info here.

Not a homeowner yet but my wife and I plan to buy in two years. I'd appreciate if anyone can speak to their experience with private mortgage insurance, realtors commissions, 15/yr vs. 30/yr mortgages, or what they consider to be the *ideal* percentage of down payment. I must say, the idea of paying $275k over 30 years for a $150k mortgage (@ 4.5%) is hard to stomach.

Don't buy into the "STARTER HOME" talk.

Especially in today's economy where homes may be hard to sell and jobs/career opportunities may require you to move. Make sure that buying a property fits with your long-term plans.

Once the house is yours, the structure comes first, decorating second.

@patternseverywhere: shop around for a lender now if you want, they can tell you what their policy is for PMI. Typically for traditional financing you only have to pay it if you put less than 20% down. However, if you are financing through FHA you have to pay the PMI for the first few years (this has changed recently, so check) no matter how much you put down. FHA is a big fat ripoff by the way, avoid it if you can.

As far as realtor's commissions you as the buyer should not be responsible for it, that is typically a seller's burden.

Of course a 15 yr mortgage is cheaper in the long run, you pay less interest overall. If you can afford that, great! If not, talk to your lender about 30 year payoff strategies. I make one extra payment a year and it will take 5 years off my mortgage and save me 30k in interest. You can pay as much extra toward principle as you want, just make sure your lender applies it correctly.

1. Paint, ugly or stained carpet, cabbage flower wallpaper, brass fixtures and that etched swan shower door CAN ALL BE CHANGED!

2. The size of your lot, load-bearing walls, on-street parking, the fact that you have no basement, your crazy neighbors, and proximity to transit/location CAN NOT BE CHANGED! (well, not without a whole lotta dough or a weapon)

3. Live in your house for a while before renovating - it will give you time to really understand how you use your house & what you need vs. want.

4. Visit your target house/neighborhood several times a day and talk to neighbors if you can (I had no idea a train would blow its whistle at 4:30am near my house). Ugh.

5. Like many have already mentioned: spend less than your "max" - I agree w/calculating only one person's salary in the DTI ratio; and hire an excellent home inspector (you might even have a plumbing company come and send a camera down the main line... never know where those tree branches have gone). Won't cost more than a few hundred to get it checked & well worth the $$.

Definitely want to second checking out the neighbors--even if it means just hanging around for a few days to watch the goings on. Our block looks adorable and most of the neighbors are friendly, but it turned out we moved in next to a house that rents to section eight tenants amidst an upper middle class very residential and family friendly area. The tenants have included drug dealers and there was previously a stripper who was stripping in the house. Both tenants have been evicted (not without drama). The house has been foreclosed on and abandoned for about a year and is now starting to fall apart. All of the neighbors, at one point or another, have told us they couldn't believe we moved in next store. Well, of course, we moved in because we didn't know. We're praying for the next set of neighbors to be cool. . .or at least not felons. I wish I had known what was going on, so at least I could have purchased my house as an informed decision.

If you encounter something that you are unfamiliar with, look it up and see whether it's a good thing or not. Ex: we were unfamiliar with conventional foundations and of our top 2 houses one was conventiional, the other was slab. We went with the slab house. Now we have foundation problems that will be expensive to fix, same problems in a conventional foundation would be cheaper to fix.

Related: get someone to check the property around the house, especially if there are elevation changes around the house. Most of our problems stem from having a few atypical winters in a row that caused the land around and under our home to stay frozen and sodden more than usual. I wish we had had someone come and talk to us about the grade of our property and what it means to have a 3-foot high "step" of bare earth between our house and the thisclose neighbor (we are at the bottom of the step). Our home inspector and structural engineer did not examine these types of things. YMMV depending on where you live, but if your local inspectors and engineers don't cover it, call a landscape architect to come out or give you a name of someone who will.

Consider not doing it. Owning your own home is not for everyone. Think long and carefully about whether it's for you!

When you are viewing the property for the first or second time and the neighbors seem nosey/loud/unkempt/sketchy/have a yippy dog, etc....it means they are and it will only be worse when you own the adjacent property. If you get a bad feeling about the neighbors...move on and keep looking!

TAKE YOUR TIME. It's exciting to buy a house and easy to rush into things. Drive around through neighborhoods and look at tons of houses, in your price range and out. When we were looking, we had settled on the price we wanted to pay, but realized early on that for $10-15k more, we could get an additional bedroom and some extra square footage. We decided to target houses in that range, and see what happened.

We ended up finding an amazing house for only slightly more than our target range that had everything we wanted and was still well within our comfort zone. Our first time, we found something below our maximum, so it paid to broaden our search both times.

And as a number of people have already said, look at the neighbors. Drive past a house a zillion times, WALK through the neighborhood and around the block. The wrong neighbors can make your life a living hell--guess how I know!

1) Hire someone to do a sewer scope in addition to a regular inspection. We did and discovered a $15,000 problem in the side sewer which the seller had to pay for before the sale went through. Whew!
2) If you're buying a fixer (like we did) think about whether you LOVE to work. I really do and fixing up our 100-year-old house has been a joy but is HARD. Think about how you will feel if all you want to do is curl up with a book/tv/movie but you have to finish a sanding project before it starts raining - does it still sound like fun? This sounds silly but it will consume a LOT of your time, so choose carefully.

Watch out for "loan fees" from the big banks and lenders. Get the name of a good loan broker from friends or your real estate agent. These guys work with short term loan institutions that eventually sell your mortgage to the big banks. A mortgage loan fee can cost between $500 to several thousand and gets wrapped into your closing costs. A good loan broker will negotiate with several short term lenders and get those fees shifted to the lender. It's all transparent to you.

Plus a good loan broker can usually get you a slightly cheaper interest rate because they're negotiating with many institutions. It may not sound like much but a half point can mean an extra $300 on your payment.

Get some rates and good faith estimates from a couple of loan brokers. You're not obligated to sign with any of them.

Your real estate agent should have several loan brokers that s/he can refer you to.

Aside from what a lot of other people have said about spending below what the lender thinks you can afford, I think the biggest thing I wish I'd known at the beginning was to look not for physical characteristics (1 level vs 2, dining room vs open floorplan, etc) but at lifestyle utility (do you value separation of public and private space? do you do formal or informal entertaining?). It'll give you a lot more options to choose from and make it easier to evaluate very different floor plans and styles side-by-side.

mdorothy has a great point. We live in a neighborhood where lots of people bought during the crazy boom, but then didn't have the spare time, skills or money to maintain the property. The gov't is big on that be-a-homeowner propaganda, but there are lots of reasons (including good financial ones) to rent.

Aside from that (and assuming you go ahead), one thing I don't think I've seen yet is that you should budget for STUFF. You need enough cash to cover buying a mower, tools, bins, laundry baskets, light bulbs, etc., etc., as well as the inevitable sudden repair that will be required within a month of moving in. I had to borrow a lawnmower for the first summer I owned my home because I was skint after paying to fix some leaking gas lines (which the seller should have done -- long story, but the upside is the house didn't blow up).

In addition to the advice above I'd:
* only buy a house in this market if you can find a bargain OR will hold the house long-term, it's just not a jumper's house market and real estate prices won't go up for many years in most markets in the U.S. (different story abroad).
* buy a multi-dwelling (duplex, triplex), if you can make it work for you and this is your 1st buy, so you have some help with the mortgage - then later on - when you can buy a single family house you can keep the first as your first investment property. When you look at the downpayment + payments + maintenance, and look at the gain, essentially someone else will be paying for 80% of that investment property for you. Know yourself, don't imagine you're a landlord if you're not the type, if you're not the type then pass up acquiring investment properties.
* I'd honestly go with a 30 year mortgage, and aim to pay it off in 15 or less, the payments are so much lower on a 30 year that if your job becomes iffy or you have a major life change that wiggle room is really welcome relief. And if you're a homeowner, always, always, have a year's worth of expenses in reserve in case you lose your job or have a major house headache (after a major event, in some instances, it can take 6 months just to catch your breath again).
* when you're choosing people to work with on home buying, whether it's a real estate agent or home inspector or contractor, remember that they're motivated to do something that may not be in Your favor (make a buck) so question their advice - get a second opinion - make sure you've looked at the advice skeptically and reasonably before you commit. They likely aren't out to take you but their motivation will likely rank above your interests when it comes to their advice - so - be safe rather than sorry.
* it's OK to rent, you know, that old 'must buy a house' isn't always the best financial investment or financial risk these days. If you don't know how to crunch the numbers down to a dime - get someone who does - it could save you a bundle (in some cases investing the difference between renting & owning can make you more than real estate will over time).

Good luck!

don't get all wrapped up in finding THE PERFECT HOUSE!

the term starter home exists for a reason. so many ppl overextend themselves and purchase a home that meets their long list of wants. there is no shame in shortening that list and being somewhat practical so that you don't end up being housepoor.

think of it this way... DO NOT do the same thing that ended up triggering the whole US economic meltdown

We had an inspection, and now I realize that we paid some people lots of money to come in and tell us which light switches and faucets work. Poke around by yourself. Look for rot/mold inside and out. Search for termite damage. Take registers out and shine a flashlight through the ducts. If you suspect something's up, something probably is.

Buy for the long term, think of it as the house you will leave in your will to your kids or grandkids. Not the house you'll flip in 5 years to upgrade to something with more bedrooms.

Two-time buyer here... and I can only echo what others have said. Especially this:

If I could do it all over again, I would've hired a structural engineer, a plumber, and an electrician to come out to the house instead of just a "Certified Home Inspector". (We have a young house in GREAT shape, but our contractor let us know when we were renovating that our garage is structurally unsound and could collapse at any time.)

Add as many contingencies as possible to your offer. Ask for repairs, and money off if repairs aren't done.

Don't fall in love with a house until you have the keys. We had a nightmare scenario where we had an accepted offer and had to threaten legal action as the sellers wanted to back out days before closing.

Take your time! You may miss a couple, but there is a house out there for you!

Budget for a mortgage but also budget for expenses! You are responsible for EVERYTHING, so you may need to buy a water heater a month after you move in.

Don't buy in a floodplain. Research floodplains before you offer, and if you do, pay for flood insurance! We had to look through lots of properties with creeks before we found a flat, dry piece of land.

Take an experienced homeowner (parent, friend) with you. Not to tell you what you should want (beds, etc) but to point out all the things that can/should be done and average costs. A realtor will tell you anything can be changed, and it can, for a cost.

definitely visit the neighborhood on different days and at different times. our first neighborhood seemed nice by day but if we had only come back at night we would have seen it was actually overrun with drug dealers and prostitutes. we finally moved after someone was stabbed in front of our place during a drug dispute, but it took us 6 months to find a buyer because everyone else was smarter than we are and researched the neighborhood first. tough lesson learned.

All good points. More advice:

1) Do not use a home inspector(s) recommended by your realtor. (I don’t know if it is legal for a realtor to do this, but some do.)You need to hire your own. This may sound obvious, but buying a house is a nerve-wracking process and it is easy to get overwhelmed. Do this research before you start the process.

2) Don’t buy from a flipper. Flippers are more interested in making properties look great than in addressing foundation problems and wiring. And when flippers do address the latter, they do so in the cheapest, most minimal manner. I know many people who bought from flippers in the height of the market. All of them, without exception, ended up dumping a lot of money into the house to fix issues that were supposedly already addressed by the flipper.

3) Don’t get emotional. Or at least try not to let your emotions run the show. Buying a house that you will live in is an emotional experience. Try to keep your emotions in check and be smart about it. Try to look beyond the staging (or lack of), and the smell of cookies baking. Evaluate the property with a rational eye.

Consider a foreclosure especially if you find a really nice one in a good neighborhood. I lucked into a great foreclosure and was able to get a much nicer house than I thought I could get with my budget. But remember that it's going to take more time for the process.

Also, if buying a foreclosure house, don't be afraid to ask for the bank to fix stuff that comes up in the inspection even if they say beforehand they won't. If it's a major issue they may have to fix it before they can sell. My house needed a new roof due to two major hail storms prior to me going under contract. The bank grumbled a bit but eventually agreed to replace the roof. Saved me a ton of money and I was able to move into the house with equity.

Get a home inspection from someone you know is worth your money. You wouldn't buy a pair of pants without trying them on so why spend thousands and not know what you're getting? A quick few calls to various realtors recommending home inspectors will point you in the right direction.

If possible find out who built the house. In my city some builders are known crooks and houses are built cheaply and poorly. So you should know what you are buying.

Do not look at people's decor. You are buying the house and not their furniture. You can always paint and take down wallpaper. A nice house can be entirely pepto bismol pink and if you can't look past it you could miss out on a great property.

From my personal experience look at the landscaping and the outside of a home. If someone cannot mow a lawn, keep down the weeds and maintain the exterior of the home they are most likely not looking after the interior.

Lastly, look at the mechanical room of the house. Is the furnace serviced regularly? Does the water heater and/or softener look like it is well maintained? This is the most important room of the home. If it looks like no one ever goes in there then run.

1. Location is most important. Almost everything else can be changed.
2. List your true must-haves.
3. Only work with a realtor that you love.

Stay on top of your credit score / report if you can. I had beautiful credit until a last minute blemish came up after I made the offer. I had been pre-approved and all of that other stuff you need now, 6 months prior to the offer. But a blemish showed up within that 6 month time frame.

Note, I pay ALL of my bills on time and in full, but this blemish was caused by an ex-boyfriend who I lived with in an apartment and he defaulted on some bills to them. It took 4 years after the fact for this blemish to show up on my credit report and at the most in opportune time. In order to get the loan on the house, despite having 20% down and family (with excellent credit) willing to co-sign on anything, I still couldn't get approved due to potential lean's against the house. The only way to resolve this blemish was to pay off my ex-boyfriend's debt. Ugh. It totally sucked.

But just be prepared for any last minute and unexpected costs that may occur.

We just purchased our second home.
#1- get pre-approved with a lender in the new area where you are moving. Why: local lenders can get a better deal and face your agent and others daily- motivated. They could turn our financing in as little time as 9 days(8 days is state required + 1 day for their own comfort.) national, "phone a loan officer" with our bank was 48 days we learned later. Make sure to have income tax records, work forms, id's and so on ready before the officer asks. Asking for one document daily or weekly is not good customer service and adds delays.
#2- Have a very experienced agent in your new area. Our selling agent found us our buyer's agent. Buyer's agent reported back to selling agent weekly or sooner.
#3- Have an idea on square footage, number of bedrooms, and some must-haves. Agent will ask, and it narrows down your choices. Sunken room and skylight were ok in the case of the house we chose. Layout and other features overrode my pet peeves. Know your deal-breakers.
#4- dated flooring, walls and decor are changeable and can get you very modest price breaks. HVAC, roof, chimney, electrical, foundation, and bugs, are big expensive issues. So are moisture problems in bathrooms.
#5- Get qualified inspector(s). First home took 30 minutes, this home took 3 hours and checked structure, electrical, roof, systems, sprinklers, and termites. Ask questions. It will be your money well-spent.
#6- Your offer should be reasonable, as should your requests for repairs. Safety first! unreasonable offers- too low below market value will alienate the seller.
#7- expect things to break. Blowout on a sprinkler, etc. You are the owner, your problem to fix. Our first home had us replacing every possible appliance in 9 years. Might explain the dated decor and worn out floors. Roof, HVAC and so on *really* eat the budget.
#8- save some money to apply to gutter covers, gutters, tree trimming, yard equipment, furniture, and repairs the first year. Hidden expenses as owners abound. House numbers too, for front and back of house for emergency personnel and family.
#9- plan for your body to age or fail in this house. Some of those features you love now are not so good with arthritis or worse.
#10 transfer those warranties- termites, hvac, foundation, etc. many have a deadline after a sale closes.
#11- LOCATION is still king. No matter what you do to fix up a home, the location can still chase your future buyers away.
#12- wait at least 12 months before doing any landscaping. you can study the neighborhood, nurseries and local gardens for good things that will survive in that climate. Watch how the light changes and how the yard drains. Amazing how much money you can save that way.
#13- Have the locks re-keyed by a locksmith after you get the keys to the home. No telling how many spare keys were given to family, friends, repair people. If the locks can't be re-keyed, replace them.
#14- If you can't picture your stuff replacing the seller's stuff, only look at empty houses instead of occupied houses.

As others have said, there is no perfect home for you. Just a home that fits mosts of your needs at any given time.

hint: Any homeowner that has appliance manuals and other home info ready to give you at the sale is worth your notice. House plans, landscaping plans, etc are even better. Sign of a good homeowner.

Like a number of folks have said: Get a GOOD inspector. Preferably an engineer, and familiar with the type of construction you're considering (in my case, a 150-yr-old row house). Go through the property with them, give it a couple of hours, ASK QUESTIONS and TAKE NOTES. My guy basically explained the structure and systems to me, told me what to look out for and what not to worry about, and gave me a list of improvements to make in my first 5 years there. He was spot on.

Also, get a Gatorcam company to inspect pipes going out to the sewer (very expensive to fix). And get a termite inspection - always!

This is probably one of the best threads I've read on AT...really good advice. For the younger generation, I'd add, don't jump into buying with your boyfriend/girlfriend too quickly. When the market shifts and your place goes down in value, getting out of a mortgage can be more difficult than getting out of a marriage.

I am so glad that we purchased a home warranty. We recently bought a short sale (as-is) which is a minor fixer. The warranty paid for itself when the dishwasher and AC both broke within 6 months. if you are buying an older home (ours is from the 20's). I highly recommend it. Just keep in mind it won't cover any issues that you knew about before you bought the house (anything in the inspection reports, etc).

I am about to close on the purchase of my first house. I would say beware of costs that could come up later in the inspection & negotating process. For example I thought we were set on a final price, then the inspection was done & it turned out that the roof had some serious problems - which costs money to fix. Our seller was less than willing to negotiate with us, so we ended up having to pay about $2000 more than we had originally budgeted for. That was probably our only issue with the whole thing... other than that it's been such a fun learing process! :)

Don't buy something you can't afford, don't buy something you can't afford, don't buy something you can't afford.

Get a buyer's agent who knows the area in which your interested. Ask each agent who shows you a house if they can act as your buyer's agent---a bunch of them will hem and haw, and those are the ones you should not use. The one who says yes right away, and starts asking you a bunch of questions about what you're looking for---that's the one to use. Mine ended up saving me a bundle, and gave me lots of tips about things that needed fixing in the houses we saw. I feel like I got the best possible deal thanks to him.

California folks: hire a real estate attorney. The expense is worth it.

discuss what your ultimate top bid will be and stick to it! seriously. we live in a rural community and bought a decently sized fix'er up'er with a huge yard for fairly cheap. we did not budge on our final offer and i think that was really important. our house is perfect for us- but i wasn't going to let that distract us from our financial reality. in the end we got the best deal on the block in a buyers market and all we have to worry about is minor improvements. it's all gravy now.

A 1-yr home warranty came with the 20 y.o. house we bought 10 years ago. Within 6 months, the AC needed replacement but we were out only the $45.00 service fee. We've renewed annually and while it doesn't cover everything, it gives peace of mind. To echo others, spend less that you are told you can afford. Yet more peace of mind. Finally, you are buying not only a house, but a neighborhood. The beauty of historic streets, large old oaks and compatible neighbors gives me a feeling of contentment every day.

After waiting many years to be settled enough to buy a home, we finally bought our first home two years ago. Our wish list was long and our budget was low. A surprise stress for me was that my husband loved one house and I loved another. We ended up settling on a house that we both liked quite a bit but didn't love. I was hoping it would be a magical experience but instead it was an emotional roller coaster. Home ownership still is for me some days, and here's why:

Even though I had read many books about buying a home, in the heat of the moment we weren't as careful as we should have been. Once you start working with a realtor, things seem to snowball, so it's better to get your ducks in a row first (mortgage preapproval, line up inspectors, etc.)

Things we did right: Picked a home in a quaint town that we were familiar with, that had low crime rates, good schools, and a high proportion of homeowners. Got good neighbors (partly luck but more likely in a good neighborhood). Got a home with off-street parking, which was a priority. Got preapproved for an affordable mortgage (incl taxes and insurance) with a low, fixed interest rate. Worked with a professional and helpful mortgage broker, (even though he was connected to the realty company.)

Things we did wrong: Didn't have enough money saved for electrical and plumbing inspections or a structural engineer. Used an inspector selected by the realtor--he was competent but he pointed out the small things not the big picture--he was, in effect, working for the realtor, since she contacted him. Didn't ask the inspector to come back to check that the fixes were done correctly, since we can't tell. Bought an older home that looked nice on the surface but turns out it needs tons of work to the major things. Bought a home that had been remodeled structurally by amateur homeowners rather than by professionals. Settled on some things thinking we would sell in a few years, but now we are worried that all the problems we've discovered could make it unsellable unless we fix them, but don't know if we can afford to do it. Have to put our plans to finish the attic (a big part of why we bought the house) on hold to fix structural issues first, whenever we can afford that.

Advice: Take your time! Have lots of money saved for inspections of all types. Don't underestimate the cost of fixer uppers. If you think you'll sell in a few years, then buy a house that is in great shape, because those are more likely to sell. (Unless you have relatives living nearby who are good at construction and willing to help you.) There is a type of government loan called a 203K to pay for some of the cost of fixing up a property, but realtors and mortgage brokers often balk at that so you should get it all preapproved on your own beforehand from one of the few lenders who provide it if you want one. Pay attention to property lines on the survey--turns out part of our back yard belongs to the neighbors. Pay attention to drainage issues on the property.

This is a long post, but I hope our experiences will be helpful to someone!

Know your resources. I was able to score a 10,000 first time home buyer grant from my county! Also check out the neighborhood at different times of the day to get a feel for safety and any noise concerns at a specific home you like.

Kimberlydeane.etsy.com

Location, location, location. It's all that matters. If I had paid more attention to that, my 190K investment 20 years ago, is in a house that's now worth 500K, when I should have purchased 5 minutes away and be in a home that now goes for 800K.

I'm going to pass on reading 64 comments, so pardon me if this is already here. Don't buy a house unless it has at least one feature that truly makes you want it. When everything seems overwhelming or difficult, that is the part that makes it worthwhile.
My history:
condo was made worthwhile by location alone (across the street from water, even if I did not have the view.)
tiny house - excellent location, but it was the dining room that made me love the house.
current house - light. Location is acceptable. Missing the dining room. But the quality of the light is great.

If you're considering buying a fixer-upper, as mine is, be HONEST with yourself: do you like fixing things? doing projects? going to the hardware store at least once each weekend? dreaming about the next project immediately after finishing the last? (Or, are you willing to live in the house with several broken/imperfect elements?)

Keep in mind that every project and repair will take longer and be much more complicated than you thought it would be.

Do not close on your home until all requests, conditions, etc. in the sales contract are meant. If the seller agrees to fix a leak or complete some other repair, do not close on the home until the promise is met. Even if it's in writing, the seller can find some way to lie about something and get out of the promise, especially after the deal is done.

All of the above, particularly the things you can't change: lot size, location and neighbors.

But I have another very specific, learned the hard way tip: If you are buying an older house, run your fingernail across the wood work. So many owners, trying to slap a fresh look on dirty wood, put latex over oil or varnish and it will be coming off in chips in a few months. Its super important for older homes, as some of the oil paint coats on woodwork will contain lead paint, and remediation costs in the 10s of thousands of dollars. I hand scraped every single inch of crown moulding, doors, wainscot, chairrails, fireplaces and an entire staircase. It took 2 years. And it all could have been uncovered with a light scrape of the fingernail....

If any wood trim is really sloppy and you think you'll want to strip it down 'someday,' do it FIRST. I've remodeled down to the studs, but left one crappy doorway as-was. Now I can't bear the thought of using paint stripper around my new wood floors, kitchen cabinets. But it irks me every single day. Oh, if only I could turn back time!

Thanx everyone for these truly priceless tips! This is a fantastic list that will help so many :)

If you are buying a condo or home that has an HOA, check it out very carefully. Are the grounds and buildings well maintained?

Since you will most likely be living in close quarters to your neighbors, check them out very carefully. Knock on their doors, meet them and ask questions about their experience living there.

Get a copy of the CC&Rs (Convenants, Conditions and Restrictions) and read it carefully. It's dry as heck, but worth the time it takes to read it. Get a real estate attorney to look over the CC&Rs. Know what you're getting yourself into!

Try to attend one of the HOA meetings if you can and read the meeting minutes for the past few months. It's a great way see what is going on the community. Check to make sure the HOA has adequate reserves. Also, find out if a special assessment is planned in the future.

Check out the manager or management company. What kind of reputation do they have?

Does the complex have a lot of vacancies due to foreclosure? That could spell trouble and a struggling HOA.

HOAs have a lot of power so do your research carefully before buying into one.

I had this question myself so I had to start blogging about our process thinking it may help other people. There are no real answers out there because everyone's experience is so unique. I didnt have friends and family in the new city we moved to so we had to go at it carefully but we did it. Yes spend WAY LESS than you are qualified for to save for costs of repairs later. DO inspections. Dont buy a fixer upper if its your first home and especially if you dont have many people to help you. I can go on and on ;)

If possible, find a realtor who has contractor experience, because they'll be able to pre-inspect a home (for free) before you make an offer. Then hire a "real" inspector that comes from a trusted source, preferably NOT your realtor, since a strong relationship between the two can present a conflict of interest.

Don't fall in love with your first house - the odds are very high that it won't be your last house and getting emotionally attached can lead to poor decisions in the purchasing process. Be willing to walk away from the negotiations at any time if your needs aren't met and you won't be held hostage by the other party.

Its tempting to think that you're going to find the perfect house, but there are SO many examples of the perfect house slipping away (negotiation problems, outbidding, etc) and people always seem to find another or better perfect house later on.

Its also helpful to think about your ability to sell the house down the road - you might be willing to accept some quirks, but would a potential buyer 5 or 10 years from now? Don't even think about buying if you can't imagine staying there for at least that period of time, if not longer - the market simply doesn't offer the same flexibility and mobility that it used to.

1.) Pay down your principle as quickly as possible by making extra payments or rounding up.
2.) Whenever you get a windfall, eg money from the PUs, bonus, tax return, spend it one home maintenance. Fix the broken stuff, replace the roof, upgrade the flooring, get new appliances. You want to be ready if you have to sell in a hurry.
3.) Get a back up battery and generator for your sump pump. Make sure your homeowners policy includes a rider for sump backwash during heavy tropical storm rains.

If you have a garden, don't make any major changes for the first year or so. Spend the time observing how the sun and shade change through the year. It may be that that big ugly tree shades the house from the summer sun, or that weird shrub will be a mass of beautiful blossom and perfume in 6 months' time. You may also discover that the shady spot perfect for a fernery right now gets blasted by the sun when it's high in the sky in summer.

Get all your money in your bank accounts before you get pre-qualified. You don't want to be depositing large sums of money into your bank account when you're in escrow or doing anything that dramatically effects your bank account balances or credit score. Money that mysteriously "appears" often will not be considered by the bank.

My husband and I had about $15k worth of collectibles we were planning to sell for our down payment. We sold them and deposited the cash when we were in escrow and the bank wouldn't even consider it money. We ended up having to scrape together funds from a few other accounts to come up with a legitimate down payment.

1. First watch "Inside Job," then absolutely do not make yourself house-poor. Go for the old-fashioned lender ratios, even though the lenders don't use them anymore.
2. Don't hire the housing inspector recommended by your realtor: use service magic or something like that for your area.
3. The closer your neighbors are, the more important it is to be comfortable with them regardless of whether it's the perfect house.
4. Don't be in a rush to buy just because of low interest rates: you're going to be in that house for awhile, so make sure it is good for you.
5. Don't buy a house that says, in its selling literature, "Conventional financing only." This means the house wouldn't stand up to an FHA inspection. If you ever sell, not being able to sell to people who can only get FHA loans seriously shrinks your market of potential buyers.
6. While it's great to earn equity, there's a Jane Bryant Quinn book that has a chart that compares the cost-effectiveness of renting vs. owning: if you don't keep up on maintenance, you're not earning equity, you're draining it. That's not even counting what the housing market can do regardless of how many granite-topped upgrades you put in.
7. Whether the house is new or old, buy tools and one of those Reader Digest books on how to fix everything.

1) Find a mortgage broker that will do it for free and eat the costs. I paid a buttload in closing costs with broker #1. With broker #2 I have refinanced over four times and never paid a dime.

2) Pay attention to age and architecture and the dark sides to such "charm." I bought a 1928 house with a turret roof which is notorious for water problems. Some of the electric circuits is knob and tube, and some insurance companies will not cover a house with that type of wiring.

3) Be an eagle eye for water problems (mold, paint peeling or discoloration, dry rot, efflorescence), because you may never be able to completely fix water problems, esp if your house is on a high water table or have a turret roof.

I recommend that you ask the homeowner for copies of their monthly utilities. Moving from a small two bedroom apartment we were not prepared for the huge shift in electricity and gas bills. We went from paying about $150 a month for both g&e to $670 our first December! We also found out that our old house was not insulated and extremely cold. I would spend $200 and get an energy audit done before purchase. It is an annoying and costly expense to have insulation done but nothing is worse than freezing in your new old house with a newborn.
Ask the neighbors about flooding and water issues. Even if your house does not have any issues, if your area/direct neighborhood has issues they will eventually become your issues as well as water and equipment becomes eroded over time.
Start taking care of your lawn the minute you get there. Just simple things like weed control would have helped us tremendously. We were very ignorant and so overwhelmed with the house issues that we let the lawncare get away from us. It is not simply cutting the grass and pulling a weed here and there. Now, three years later we have weeds that are a bit out of control and perhaps another expense!

But, we do love our house and bought something that we found unique - we always come back to that when we are complaining about all of our $ going out the (drafty) door!

1. Inspections. I know it's been said before, but get an actual engineer with a good reputation to do the inspection, not a "certified home inspector." We didn't know better and used a home inspector and it has been an expensive mistake.

2. Don't Overspend. The good thing about our whole situation is that the house is otherwise comfortable and in a good neighborhood with sidewalks and bike trails and good schools and meets our needs although it's not luxurious. We were sure not to spend what the bank said we could spend, so we can afford the repairs and have slowly been able to afford upgrades to the dated styles.

3. Lead. The other thing we did was purchase a house that was built after the lead regulations went into effect. (1978?) Doing this or making sure lead remediation has been done is especially important if you currently have or may have small children.

4. Take Your Time. And then, as other people said, if things are structurally okay, think about waiting a year to do big upgrades, especially to the yard. You will find out which shrubs and trees need to go, and which ones the neighbors would weep and call you names if you removed.

Research contractors who have done any reno's to your potential new home. I cannot stress this enough. My bf and I bought a condo conversion. It was lovely, new Ikea kitchen, tile floors, new windows and Berber carpets. We fell in love right away and it was within our price range. That was two years ago and we were forced to move out because all of the renovations were done WRONG. All nicely hidden away under all of the new finishes. Electrical done wrong, roof replaced by a general contractor who didn't know a thing about flat roofs. On my birthday, it rained on the inside of our house, it ran down the inside of the walls and was going to cause black mold. The costs of repairing all of these things that went wrong would have been well over 75,000 to fix. Not something that we could afford. We ended up giving it to the bank and swallowing the 25,000 we had already put into our mortgage and attempting repairs. Be extra careful when looking into condo conversions, look into the history of the contractors doing the work, don't have your hearts broken like we did.

Do not think of your home as a starter home. If I had all of the money we have spent over the years "upgrading" and moving into bigger homes I would be a wealthy person. Learn from my lessons. Bigger isn't better. Buy a home you love and STAY there.

As has already been stated--spend way less than you are approved for, since you can expect to spend WAY more on various fixes and repairs than you can ever imagine.

The idea of hiring a fantastic inspector (ha! As if this is a simple and straightforward task) in addition to electricians, roofers and structural engineers to look at a house PRE-SALE is lovely but also totally ridiculous. Just a look-see from each of these folks will run you a minimum of $500 and probably more. I know, I know.... "it could save you $$$ in the long run," but I personally just can't imagine ponying up a few thousand to evaluate a property that I may end up walking away from. Just make sure the major systems aren't ancient and the roof isn't at the end of its life. There will always be surprises--that's just part of homeownership.

Shoot--I just paid nearly $2K to have a TREE REMOVED. I agonized over that one for weeks, but in the end... what a GREAT DECISION--because then Hurricane Irene came through, and if my 85 foot DEAD oak had still been standing, it probably would have landed in my living room. Just keep telling yourself, "It's only money." :)

I'm not a homeowner, but I am a law student. Real Estate law aside (b/c I hate it), the U.S. look favorably on home ownership, so I'm just going to point out a couple tax considerations that first home owners may not be familiar with.

Look out for helpful tax legislation geared specifically at buying a home. I believe the first-time home owner credit has sunsetted, but tax law is ever evolving so make sure you check with the IRS's website (which is fantastic!).

Secondly, you may deduct the interest from your mortgage. There is a point where the amount you can deduct phases out if you home is worth too much. But if you are that rich, you probably are not doing your own taxes, so it is irrelevant.

Good luck!

I'm with a lot of the other posters:

INSPECTION: Have a thorough inspection done by a trustworthy professional. Be there for the inspection and ask questions. If your gut tells you that something is wrong with the house, push the issue. I have purchased my first and second homes in the past two years, but I've had four home inspections done (two on houses that didn't work out due to problems with the house). Nearly every time, I caught something the inspectors did not--in our first house, a roof issue that turned out to be the bane of my existence. Many times, inspectors will make really big issues (including structural issues) sound really minor. While certain problems can technically be fixed, there may be hidden related problems that an inspector cannot see but which you will find out as soon as you start working to fix the problem. Also, while I do recommend having a home inspection, I realized that a lot of the paperwork has disclaimers: "I am not evaluating the plumbing, structure, appliances, carpentry, roof, basement, etc." so that they are not liable if they miss something. In the end, the agreement basically says they are not actually evaluating anything about the house, which makes you wonder, "Why am I paying this person?" You still need an inspection, just try to find someone known to be good, honest, and realistic.

FINANCING: Do not get a house at the upper end of what your lender says you can borrow. That kind of debt can take away your financial flexibility and feel like a huge weight. I recommend getting something you can afford with a 15-year loan. If you can get a better rate at 15 years, do that loan. If you can't, stick with a 30-year, but pay it off like it's a 15-year. DO get approval before looking at houses. If you find one you love and want to snatch up, not having pre-approval may prevent you from moving forward. DO compare loan rates and the overall expectations. We saw a great variety of rates and in what would be expected in terms of PMI if we did not put 20 percent down. So shop around, or you could be paying a lot more than you have to pay. Big lenders tend to offer the best rates, but smaller banks can be MUCH easier to work with. I've used both.

HOME SEARCH: Search online first to see what's out there and get an idea of pricing, location, etc. When you start seeing places in person, start out with the home you think is the best value (or least expensive, or most comfortable price) and work your way up. You'll have to weigh size, price, and condition.

I recommend avoiding fixer-uppers if your goal is to save money (but go for it if you've got plenty of cash and want to restore something that has good bones). If a home is in poor condition cosmetically, it likely experienced a lot of neglect in other areas. My husband and I got a fixer-upper for our first home to save money. We put a lot of money and effort into the home, but only got back our purchase price. We also spent A LOT of time dealing with failed systems and surprise issues, as well as a few longstanding problems. A smaller home in better condition would have been preferable.

Also, be aware of the kind of work the home and yard will require (and how much you really want to devote to upkeep). My husband thought he wanted a lot of land, but the two acres that came with our first house required a ton of mowing and upkeep, which either kept us really busy or didn't get done. The fruit trees were never trimmed in our one-year tenure, and most of the landscaping wasn't done until it was time to sell it.

Also, be realistic about how long you plan to stay in the house (and give yourself room to change your mind). If you won't be there long, look for something that will be easy to sell and won't require a ton of work. Make it yours, but don't be surprised if your investment isn't returned when you sell. And don't be afraid to go for something small--you can reduce energy and upkeep costs that way. If you don't know how long you'll be there, try to find something moderate--you want to be happy and have enough space if you stay long-term and your family grows, but you also want to be able to sell if you need to. If you're looking to stay in a house long-term, consider getting a home that can grow and change as your life does. You'll want a neighborhood that will be good for the long haul, a house that can grow and change as your family does, and a home that will be appropriate for your family as you progress in your career and life pursuits. You can allow yourself to splurge a bit if you know you'll be there long-term.

I hope some of this helps!

In San Francisco, where even "first time" homes are incredibly expensive, buyers that understand what they can afford and what trade-offs they are willing to make are usually less frustrated.

As others have also said, set your budget at the beginning and don't let yourself get distracted by pretty things you might see along the way during your home search.

Be sure you absolutely understand what you are buying. Have it inspected to your satisfaction, and be sure to attend those inspections. Nothing is quite as valuable as face time with an inspector.

Plan for surprises. No matter how thoroughly you inspect a home or think you understand it, rare is the home in SF that doesn't eventually throw its owners a curveball.

Have a contingency fund and be prepared!

http://www.jacksonfuller.com/about/first-time-buyers/

I agree with everyone who has said to borrow less than the lenders say you can afford. Have a year of mortgage payments and taxes socked away for the worst case scenario. Above all, make sure that the house doesn't end up owning you. Try your best to separate the emotion from the buying process.

We fell prey to the thinking that in a worst case scenario we could just sell the house and get ourselves out of a jam. This is not a good back-up plan. It's not a plan at all.

Apartment Therapy is a wonderful testament to the beauty of small spaces. Don't buy a house that's bigger than you can afford or take care of. The bigger the house, the bigger the problems. The bigger the house, the more you accumulate.

Sigh. Hindsight is always 20/20.

Find a buyer's real estate agent that you trust and like, but don't let them talk you into anything. Their job is to help you locate what you tell them you want and work out the details. Not decide for you.

Don't buy something that needs a lot of changes for you to be happy the day you move in. (We looked at a place that had hockey wallpaper in their kid's room -- yes, we could have scraped it off, but that takes lots of time and effort we were not prepared to invest. We found a similar place that only needed paint. Cheaper, too, as it turned out.)

Look for the features you consider critical. My partner is big on home theater. Back when we bought our first house, finding a suitable wall for a big screen tv (rear projection, at that time) meant a lot of nice homes wouldn't work for us. AFTER reassuring ourselves that the system would fit, then we looked for features we could at least live with long term, even if we would prefer nicer ones. (We eventually ripped out the vanilla formica cabinets and counters and got maple and granite, for example, but since we used our initial resources for down payments and closing costs, etc., we didn't have the funds to do that for years -- living with what we had was necessary.) (And we never did add the greenhouse addition that we discussed when we viewed the place!)

Especially if you like vintage architecture and features like old hardwood floors, and you can't bring yourself to look at new construction, be VERY careful to look for problems that time creates. Warpage, worn out appliances, inefficient heating plants, roofing problems, foundation cracks, etc. We now have a NEW house and still find ice damming problems and other issues that are only magnified the older the place is. You want to be as sure as possible that problems have been solved before you buy, since new ones are inevitable! Home maintanance is expensive and ongoing -- budget for it!! (We paid $275 this week for gutter cleaning. It never ends!)

Buy the worst house on the best street you can possibly afford.

Foolproof way to get into a neighborhood you couldn't otherwise afford and you can do a little reno here and there while your investment appreciates.

Great thread everyone! Lots of amazing tips.

Here are some that we've learned with our first house:

1) Do not underestimate cosmetic change costs. That gold door knob from the 80's that you hate on all the doors? Bottom of the line modern ones can start at $20 per knob. Multiply that by all your doors. It adds up fast. And that's just a door knob. Wait til you get into water faucets and crown moulding and light fixtures.

2) Do not underestimate major renovation costs. That deck in the backyard? The one your realtor said would run $3k to re-do, will wind up running you $10k after tear down, disposable bin, footings, unexpected weeping tile/gravel and oh yes the cost of lumber and labour. Always add money to what you think you will spend. IKEA can't always save you (even though God knows we try to prove otherwise).

3) Bills. Heating. Hydro. Water heater. A/C. Electric. Our house is 1300 sq foot and newer build and it still blows my mind how much it costs to heat in the winter (Welcome to Canada!).

4) Outdoor supplies that you never realize you needed. Salt for the driveway. Lawnmowers. Shovels. BBQ. Rakes. That gorgeous tree in the yard may become your nightmare come Oct. The outdoors and gardening not only cost a lot more, but it's a lot of maintenance work. Figure out if you have time to do that vs a condo with pre-paid maintenance fees and someone to do it for you. And yes leave your garden alone for the first year (within reason) to see unexpected plants that you didn't know you had start growing late in the season, rather than trying to dig out the roots of what you thought were weeds only to realize the replacement cost of the really gorgeous plant you just killed is a week's worth of groceries.

5) Strongly agree on the following ones already mentioned - Meet. Your. Neighbours. Before. You. Buy. The one crazy guy may wind up being the nice guy in disguise that you saw and thought was harmless. Talking to more than one neighbour before you bought would have helped you learn that before you got into a huge fight with him. Try if you can, to buy a house on ONE income only. And be prepared to live with your house "as it is" for a longer time than you anticipated. I.E. The kitchen that you swore you'd reno that you're still looking at 5 years later. Renovations take a lot longer than HGTV would like you to believe and you may run out of the money you wanted to spend on it because the previous project you did stole it all.

6) Paint can fix almost anything. The difference in our home before and after thanks to a fresh coat through the entire house is staggering. The light changed. It was like sunshine and rainbows and unicorns.

7) Buy a house that you can live with/in for longer than you believe you initially will. Our last place we had planned to be out in 2 years. 7 years later we finally moved. Life got in the way.

8) That being said also (and this is a tad contradictory) buy for the time and place of your life that you are in. I.E. You're young and dating and a sweet brick wall loft downtown where you can walk to work and entertainment is great when you're 25, but may not work well when you're 35, married and have 2 kids. There is nothing wrong about buying a home that fits in with your family's needs at a given point/age (*cough* the suburbs). We can't all afford the gorgeous city row houses or stunning farm homes in the country. There's a time and a place for everything. If you can, great. If not, don't beat yourself up about it. Home decor isn't a multi-billion dollar industry for no reason. A nice couch can change your mood and help with that.

9) Location. Always important. Research your neighbourhood. Know what's being built behind you, near you, around you, down the street from you. Ask yourself if you can live with it.

10) Bigger house. Not always better. Just find a way to make use of the space you have with better storage. There we go again, back to IKEA. Catalogue 2011. Our grandparents raised 4-6 kid families in small war time bungalows and they seemed to have survived. On the + side, lower heating costs.

Good luck!

HUD has a lot of good background on the home buying process.
http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home

Sometimes nonprofits have free home buyer counseling and workshops.

I'm late to the game here but thought I'd jump in anyway:
--Don't buy a "starter" home. Buy a house you can live in for the rest of your life. Old-fashioned? Yes. But if you keep getting raises and making extra payments, you will pay it off sooner. Then it's on to your second home on a lake. :)
--Move out to the suburbs. You get way more bang for your buck!
--Follow your home inspector around when he does his thang. We basically walked away with an "owner's manual" by doing this.

No one seems to point out the most important thing: know the prices in the area you want to buy in. And specifically know the prices on the street you want to buy in comparison to other streets (different streets can be more desirable and sell faster). House inspections and mortgage help are important but getting the buying price right is the most important. Do not get into a bidding war unless you live in a place like SF or NYC or Vancouver where you should look at houses 10-25% lower than what you can personally because bidding wars are the norm. And don't get overemotional over the "perfect" house. You will overpay and it will no longer be the perfect house when you can't afford it or you never recoup what you paid.