The first step in home buying is to find out what you can afford to pay for a house or condo. This depends on the cash you have for a down payment, assets and overall financial situation.
Mortgage qualification is easier for buyers who work as employees whose income can easily be verified. Self-employed individuals or buyers with income from investments may find the qualification process more difficult.
In the past a preapproval letter was easy to obtain. After Jan. 1, 2010 the Department of Housing and Urban development (HUD) began requiring lenders and mortgage brokers to issue a binding Good Faith Estimate within 3 days of receiving a loan application. Without a loan application lenders will only provide a prequalification letter which is not as strong as a preapproval letter. This will suffice if you are looking in an area where there is a surplus of inventory of unsold homes (many markets today).
A mortgage person you trust is essential. A real estate agent that you have confidence in will also be a help, as knowledge of the market as where to buy and what to buy is helpful.
Today the wise choice is to buy a home with good resale potential. This does not eliminate houses with differed maintenance or outdated decor. These can be improved. Incurable defects such as a steep or shared driveway, location on a busy street, or near a freeway cannot be changed, and should consider much thought. It may be years before the housing market will improve, so don't be stuck with a house you will soon outgrow, or with a incurable defect that you cannot change.
It makes sense to buy a house with broad-based appeal that will sell well in any market.