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8 Important Steps for First-Time Home Buyers

Updated: Apr 20, 2023

Are you ready to buy a home? You’ve started your down payment savings and virtually shopped around to help get an idea of what you want.


Any purchase of this magnitude can be stressful, but with a bit of help, you can attain homeownership with the least amount of static as possible.

8 steps for first time home buyers

It’s an exciting time in your life, and you want to keep it that way by knowing what to expect.


Here are 8 simple steps to buying a home!

Close and Turn the Key



Plan for a Home and Your Budget

Before purchasing a home, you must plan and budget for your life with this new major purchase.


When you own a home, everything falls on you. Now, I'm sure you're used to paying your own utilities, so this may not shock your finances.


But.......These are not the only expenses homeowners have to think about.


In addition to your mortgage, which usually includes your property taxes and home insurance, you may have to add additional insurances to keep your property safe.


For example, some homeowners have to add flood insurance and/or mortgage insurance to qualify for a home loan, depending on the area they live in and the type of loan they have.

Calculate the cost of owning a home.

Other things, like landscape maintenance and repairs, all fall on the homebuyer.


If you're in a neighborhood with an HOA, failure to maintain your property will annoy them, and they will annoy you.


So, when budgeting for your home, consider all the additional expenses you're responsible for each month.


Create a monthly budget to determine what you're willing to spend each month on your new home.


This is called passive home-buying, and it helps.



Search for a Lender


Someone once said that all good things come in threes. That's the case when looking for lending for your new home.


Always check with at least 3 lenders before you choose. You might think, "I don't want 3 hard inquiries on my credit."


And you're right; you don't.


But the great thing about checking with three lenders back to back is that the credit bureaus will count this as one inquiry.



The credit bureaus realize that you are shopping around, and they consider this, so your credit is safe.


But why so many?


You want the best rate you can get, and this may not be with the first lender or the second. Never sell yourself short by going with the first lender that says "yes."


You also have to realize that not all lenders offer the same products. There are so many programs and products for first-time homebuyers.


To make sure you have the best offers compare lenders.



Attain a Pre-Approval Letter


You'll love yourself for this move, and your realtor will love you too.



You want to have this letter before you go shopping for homes. If not, you'll be disappointed when finding a home you love, only to learn you can't afford it.

Get pre-approved for a home loan.

Also, if you have a realtor and you find a home, you'll need this letter when you put in an offer for the home. Sellers won't accept your offer without it.


I have made this mistake before, which annoys my awesome realtor, and I also annoy myself because I ended up not being able to make an offer.


I learned the hard way and vowed never to do that again.



Find a Realtor


Here's a big myth about Realtors: they help you with your credit and finance of a home.


This is not true. In fact, your realtor is the last person you'll want to go to when you're looking for a home.


They can't help you improve your finances, and they can't help you get approved for a loan.


These things have to happen before you meet with the Realtor.


So, once you've attained a pre-approval letter, you can look for a Realtor you can trust. This may take a little research on your part.

A Realtor will help you find a home you love and a price you can live with.

Realtors help you find a home that will work for your family.


You want to tell them everything you'll need in your first home, and they search in their database to find the home you want.


Most importantly, in your price range.


  • Have in-depth knowledge of the area where you wish to live

  • Have extensive knowledge of the home buying process and be able to answer your questions

  • Complete the paper needed to submit your offer

  • Keep the lines of communication open to give you support on your journey

That sounds like a great deal to me!



Make a Choice and Make an Offer

Once your Realtor helps you choose the perfect home, you can put in an offer for the home.


You typically make an offer in what's called a "letter of intent" drafted by your agent.


The seller typically has 3 days to respond to your offer with a counteroffer, acceptance, or a decline of your offer.


Making an offer does not mean you're in a contract with the buyer; however, once the buyer has accepted your offer, you are now in what's called a "purchase agreement" with the seller.


In the purchase agreement, you'll find the identification of both parties, a detailed legal description of the property, and financial details regarding the purchase, such as:

  • property price,

  • closing cost,

  • buyer's financing

You will also be notified of any contingencies the seller may have, any appliances or fixtures you would like to include in the sale, and time frames such as:

  • contingency time frame,

  • offer expiration

  • projected closing date

If your offer is accepted, you're now ready to move into the next phase in the home-buying process.



Critical Hires for Due Diligence


Once your offer has been accepted, here are a few essential things you'll need to do.



  • Get a Home Inspection - While the home appraisal determines the value of the home, the home inspection determines the condition of the home. Here are a few things a home inspector will investigate:

    1. Foundation

    2. Basement

    3. Floors

    4. Windows

    5. Doors

    6. Heating System

    7. Attic

    8. Insulation

    9. Ceilings

    10. Central air system

    11. Interior plumbing and electrical

    12. Roof

    13. Rain Gutters

The home inspector will do a thorough investigation of all the areas they can access.

This important step can save you money in the end when purchasing a new home.


  • Get a Pest Inspection- Many states require that you get a pest inspection before purchasing a home. The cost of a pest inspection can range from $60 to $100, depending on the size of the home.

This inspection investigates any home-damaging animals and/or insects.


  • Get Home Owners Insurance- While there is no law requiring you to have home insurance, lenders require you to get it before they can agree to finance your new home.

You'll have to show proof of home insurance coverage at least 3 days before

closing.


  • Schedule your final walkthrough- Now, you're down to the final walkthrough. You and your realtor will inspect the home, checking for anything that was not addressed after the first home inspection.

I suggest you also take a friend with a knack for attention to detail. You

want to thoroughly check doors and windows to ensure they close and lock properly.


Check for any signs of mold, inspection repairs, and appliances you wanted with the

purchase. Also, run everything in the home, appliances, central air, heat, etc.


Leave no stone unturned. This is your last chance to make sure you're getting

the home of your dreams.

Final Loan Processing and Paperwork


Now that you've finished the long list of necessary inspections, it's time for the final processing and paperwork to make this home yours.


The lender, at this point, will check your finances one last time to ensure nothing has drastically changed in your life and that you can still afford the home.


They will then turn the paperwork over to the title company to verify the seller as the legal owner of the home. This protects you from any home-buying fraud or scams.



Close and Turn the Key


Last but most exciting is the closing. Here you will sign all of your paperwork, and do your hand warm-ups because it's a lot of signing.


You will also hand in your deposit and closing costs; most lenders prefer a cashier's check or certified check.


It takes about 3 to 5 business days for your loan to be funded after you turn in your paperwork. Once the check is cleared by the seller, the home is yours.


Congrats, it's time to turn the key to your new home!

Its time to turn the key to your new home.


Major Take Away


Buying a home for the first time is scary and exciting all at the same time. Some people get so overwhelmed they can't even remember the process.


You may not shake the scary feeling no matter how many articles you read, but at least you won't be surprised and uneducated about the process.


A win is a win!

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