first-time-home-buyers-guide

 

When you begin thinking about buying your first home it can be an exciting and inspired time, but that doesn’t necessarily make it any easier to get started. Whether you are ready to start a new chapter in your life or are just tired of renting, it’s important to know where to begin. Questions like ‘What does a REALTOR® do?’, ‘What is the first step?’, and ‘What does this process look like?’  are important starting points. 

So, what does my selling agent do for me?

As a home buyer you will work closely with a selling agent, also known as a buyer’s agent. Your agent’s job is to be your advocate in the home buying process. They ensure that every part of the transaction is taken care of efficiently and accurately. Ultimately, your REALTOR® should function with your best interests in mind throughout every step – the home search, writing offers, replying to counteroffers, giving you insights after inspection, and helping you through the closing. But more than just function as your agent, your REALTOR® should be easy to talk to, easy to reach, and provide a personal experience. 

Now that you have a better idea the basic functions of your REALTOR®, it’s important to understand the steps that will best lead you to homeownership! 

1. Get pre-approved for your mortgage loan.

Getting pre-approved for your mortgage will be a key step early in the process. You can do this prior to having a REALTOR® to work with or your agent can recommend a lender to you, whichever works for you. There are a few important steps to this part of the process. 

Evaluate your financial starting point. 

Before beginning the home buying process, you will want to consider several important factors that affect the home buying process. Understand your financials by looking at your debt-to-income ratio, current income situation, credit score, and long-term living plans. 

Calculate how much house you can afford. 

Click here to use our favorite affordability calculator. This resource is also available in our Buyer Resources section on our Buy webpage.

Factor in your down payment and closing costs. 

Outside of what is listed above, you will also want to think about payments that come later down the line when purchasing a house. A down payment is a small percentage of the total cost of your potential home. The amount you put down initially can help determine the home loan and interest rates you qualify for. Closing costs are fees associated with the home loan you receive and will incur at the end of the transaction.  

Prepare for your meeting with your lender. 

Once you have selected a lender to work with, prepare for your meeting by collecting all the necessary documentation. You will have to provide several financial documents like W-2’s, pay stubs, and bank statements. Your finances will help determine which kind of loan you will receive. The amount you qualify for will guide your home search. Getting pre-approved will not only help guide your search, but it also puts you in a place of negotiating power, saves you time when you find a home you want to buy, and deters any future surprises or roadblocks.  

2. Pick an agent to work with. 

Selecting an agent can be based on your sphere of influence as you or someone you know knows at least one REALTOR®. However, a REALTOR® is a not only a professional resource, but a personal resource as well. It is important to converse with a handful of agents before making your decision. Having similar interests, going through similar life events, or being in similar life phases can be great connections to share with your REALTOR®. After all, a connection will be especially important between you and your agent as you work closely together to achieve a personal goal. Ultimately, having someone you feel comfortable with will be helpful. After you have selected an agent to work with, they will put you in contact with a lender. Lenders will give you the pre-qualifications necessary to guide your home search. If you are already pre-approved, that works too! 

3. You will now begin your home search.

Your agent will sit down with you to define the key features you are looking for in a new home. They take a wide range of wants and needs into account to help refine your search for specific and attainable results. Things like location, square footage, acreage, and the amount you qualified for, are all taken into consideration to produce the best results for you.  

4. Schedule showings for homes that catch your eye.

Once you have selected homes that you want to see in person, your agent will set up showing appointments so that you can tour the homes with them. Our agents provide their professional opinion and guidance when viewing homes so you can make informed decisions.

5. You found the ONE… It’s time to make an offer.

Once you are ready to make a bid on a home, your agent will help you write an offer. The offer is an important piece of their responsibilities, as they can piece together different means to give you the best opportunity of winning the bid. When your offer is accepted, you will finalize the details of your loan with your lender. If your offer is not accepted, you will continue to look for a home that better fits you. 

6. An accepted offer means it’s time for an inspection and appraisal. 

Now the home will go through the inspection and appraisal processes. Inspections evaluate the overall health of the home. During an inspection, a licensed professional will review and test all the home’s systems to ensure everything is compliant with health and safety codes. Your agents role in this step is to help you digest and respond to the results of the inspection. The appraisal will happen after your inspection and will ensure you are getting the home at fair market value.  

7. Now you are on the way to closing.

Once you are ready to close, your agent will finalize all the necessary paperwork. At closing, you will sign the final documents that transfer funds and home ownership. Congratulations on your new home!

For a downloadable pdf of the Home Buying Process, click here.