Now that you have your list of needs and wants and you know how much you can afford to spend, it's time to look at some houses! Not just yet. Step back for a moment and consider the larger picture. People don't just buy a house; they buy the neighborhood the house is in. Think about that...if you found the perfect house but it was in a neighborhood that wasn't to your liking, would you make an offer on it? Most likely the answer would be, "No."

So, you will need to make another list of what type of neighborhood you want to live in. You will most likely want to consider things like how living in the neighborhood will affect your drive time to and from work, what amenities are offered (swimming pool, tennis courts, park, etc.), and, if you have children who are attending school or soon will be, what school district you will be in and how close the schools are. You may even want to make two lists just as you did with your home criteria.

Your real estate agent can help you consolidate the information from your list of needs and wants for your home, your preapproval, and your list of needs and wants for the neighborhood. From this, you can incorporate this information into a broad search profile, which will then be narrowed down to specific areas dictated by the market in which you will be looking. Your agent's experience in local markets will be an invaluable resource during this step.