The dream of homeownership is something many Americans hold dear. There are many reasons why: including investment and wealth-building purposes, a sense of control and flexibility, tax benefits, building generational wealth, and the pride of ownership. For a first-time home buyer, navigating the process can feel overwhelming without proper guidance. That’s why we created this step-by-step guide for first-time home buyers.
Step 1: Find an Agent
You don’t want to log in to a third-party site like Zillow or Realtor.com and reach out to the first agent you see, or call the number on a “for sale” sign to speak to the agent selling the home you’re interested in. It’s important to do some research on your future realtor- as they will be guiding you through one of the biggest purchases in your life. Set up a time to interview your agent and learn more about them and their experience!
Step 2: Find a Lender
Once you decide on an agent, it’s important to get a lender- unless you are paying cash. Your agent can provide you with a couple of recommendations on lenders that will get you prequalified and determine the price range you should be searching in. There are different loan types like conventional, FHA, and VA! Knowing what type of financing you can obtain is important- as some properties have limitations to the loan type they will accept.
After you get prequalified, your lender can go over the upfront costs that come with purchasing a home such as down payment, closing costs, earnest money, appraisal, and inspection fees. All of these costs should be discussed before submitting an offer on a home to avoid any surprises throughout the process.
If, for some reason, you’re unable to be approved for a home loan, your agent and lender can guide you on ways to be approved in the future. Don’t get your hopes down if it happens the first time around!
Step 3: Start the Home Search
Once you’re prequalified, your agent can begin searching for homes within the criteria you provide them. You should discuss items like price, location, number of bedrooms and garages, etc. Your agent will set you up on a search through the Multiple Listing Service (MLS) so you will see all the homes that pop up in your criteria with all the most accurate information. When you identify a home you’d like to view, you should coordinate a time with your agent to view the home as soon as possible- especially in a quick-moving market!
Step 4: Make an Offer
Once you decide to write an offer, you and your agent will review the terms of the contract and discuss items to add that will put you in the best position. Your agent may ask your lender for closing and monthly cost estimates before you submit your offer- to make sure you are within budget. Although the current market is competitive, price is not the only thing that sellers look at to choose an offer. Talk with your Lange Real Estate agent about other creative ways to be competitive in this market.
Step 5: Offer Accepted
You got your offer accepted! This is where the fun starts! From the time you get your offer accepted to closing usually takes around 30-35 days. Once under contract, your agent will send your lender the contract. They will begin working on your formal loan processing and order the appraisal. Your agent will also send your contract to the title company, so they can begin running title work and assure your property is free and clear of any liens or other surprises.
Step 6: Inspections and Appraisals
Your agent will work with you to get property inspections scheduled. You and your agent should attend inspections. This way, you can review any items that pop up with the inspector and ask questions. As long as you don’t agree to purchase a home “as-is”, there will be another negotiation phase to ask the seller to make some repairs. Your lender will notify you when the appraisal is complete and if it came back at or undervalue. If the appraisal came back undervalued, your agent will guide you on what to do next.
Once your inspections, repairs, loan processing, and appraisal are complete, you will be very close to closing! The next steps are getting utilities scheduled for your closing date, scheduling a final walk-through, and gathering funds for the closing!
Step 7: Closing Time
You made it! On closing day, you’ll need to bring your check and a valid ID and meet your agent at the title company. You will sit down and go through the paperwork, sign documents, and get the keys to your new home!
Helping first-time home buyers is one of the most rewarding and exciting parts of our job at Lange Real Estate. If you’re ready to start the process or have questions, contact us in the form below.
Written by: Heather Stevenson, Lange Real Estate