Home sellers do not just pick up the phone and call you with a maintenance-free home with an excellent mortgage.

Reading available real estate information materials, talking to friends and experts, and investing your time wisely by viewing a variety of homes on the market and researching the schools & neighborhoods is the best way to realize the American dream.

Carefully examine each important decision and think it through. Develop a well organized plan for making your home purchase. Focus on the most important factors. Create file folders on house hunting, home financing, service providers, etc.

Get yourself pre-qualified for a loan so you can determine the type of home you can afford. Getting pre-qualified also increases your chances of closing a deal, the seller is more likely to accept an already funded offer than one from a home buyer who still needs to get a loan.

Lenders usually employ the 28% formula in approving your loan. Your monthly mortgage must not exceed 28% of your monthly income. Plan your actions and get pre-qualified, this reduces the chance of panic situation and allows you seize opportunity when it is presented.

A thorough plan will save both time and money!

The days of 10-30% annual appreciation still exist. Home buyers in the 1990's benefited tremendously from what seemed like ever appreciating home prices, now we are seeing growth along the same lines. Nowadays, you're looking at stable growth while guarding against the possibilities of falling prices, low interest rates and corporate layoffs that can dramatically affect your home values. The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price.

When shopping for a home, list the features that are most important to you in deciding on which home to purchase. Be sure to include items like a fireplace, fenced-in yard, new appliances, etc. Establishing "your criteria" early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim -- for example, because of a circular stairwell -- that doesn't meet your fundamental requirements. As detailed in Tip #3, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities could logically be sacrificed if an incredible value is available.

Which type of loan fits your particular needs? Are you a first home buyer or are you moving to a larger home? If you're planning to own for a short time, an ARM may be the best type of loan. If you're shopping for your dream home or you plan to raise a family, a fixed rate mortgage may be more suitable for you. If you choose an ARM, the index should be based on the Cost of Funds Index if rates are increasing, and Treasury Bills if they are decreasing. The COFIs are less volatile over time than T-Bills. Find out what the teaser rate is and what the real rate would be.

Whichever loan you choose, make sure that you scrutinize all the closing costs. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures. Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.

Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family and neighbors instead of with the sharks.

Take time to understand the reasons the seller bought the home, their reasons for selling, and the improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. You are about to make one of the most important decisions that will affect both your life and the life of the seller. In the end, the real estate process excludes the professionals and comes down to the individuals buying and selling the home. A closer look at the seller may help you in deciding whether to buy a particular home and for how much.

One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are thousands of lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today you can apply for a loan over the Internet or even use a mortgage broker to shop for your loan with various lenders.

When choosing a lender, you want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to ARM s. Create a chart that lists different types of loans, fees, and at least five mortgage providers (including a mortgage broker).

Paying for a qualified home inspection before you buy a home is not just spending "a little extra" for peace of mind. It is absolutely essential for anyone who does not want to spend thousands of dollars for repairs. Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives -- their homes.

To protect both yourself as a buyer, as well as the seller, it is a good idea to purchase a home protection plan.

What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement on their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace the homeowner's insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put the seller's fears to rest.

The warranty covers mechanical breakdowns, while insurance typically repairs the related damage. For example, if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.