First Time Homebuyer Guide: What You Can Expect When Buying Your First Home

Everything You Need To Know Start To Finish When Buying Your First Home

Buying your first home is exciting, it is one of the biggest milestones you'll ever experience. As a first time homebuyer having the right information (and the guide!) can make all the difference. Below you will find everything you need to know before stepping into homeownership: 

Know Your Budget: 

Before you begin scrolling through listings online, it's important to know what you can comfortably afford. 

Talk To A Mortgage Lender: This is where everything starts. A Lender will be able to set you up with plan based on your budget. They will take a look at all of your current assets, debts, investments and income. You will walk away from your first appointment with something called a Pre Approval, the number you get back is generally the max budget you are aiming for. 

Your lender will walk you through what type of loan works best for you and will break down different First Time Homebuyer Assistance Programs. 

Note: What you get Pre Approved for might not always be what you're most comfortable spending monthly. Communicate what makes you the most comfortable and me and your lender will find ways to make it work! 

Don't have a Mortgage Lender? Give me a call and I will get you connected with trusted professionals right away! 

Cash to Close:

A common misconception in real estate is that you need to put 20% of your purchase down to by a home. This is untrue, especially for first time homebuyers. Depending on your loan program you could put as little as 3% down (0% for VA Buyers). 

With that being said, when you put less than 20% down you will have to incorporate something called PMI, Private Mortgage Insurance. Your credit, mortgage payment and rate will help determine your PMI which will be incorporated into your monthly mortgage payment. PMI payments are unique to everyone but generally, expect anywhere from $100-$250 extra a month.

How Much Will I Need To Spend Initially?

General expenses for buyers include Inspections/ re-inspections, appraisal, Lender Fees, Escrow Fees and occasionally repairs. 

Outside of your down payment, a lender recommended amount to set aside for these closing costs can be anywhere from $10,000-$20,000. 

Closing costs can be intimidating, especially since you are putting down a good chunk of money towards your down payment already. But there are ways around this to help you like closing credits. It isn't always guaranteed depending on the seller but it is becoming more and more normal amongst sellers to give buyers seller credit. 

This Is Where I Come In To Help You 

This is where choosing an agent that understands the power of negotiation comes in handy. As a homeowner in her mid twenties I understand the stress of not knowing how to afford all the things buying a house comes with. It can be overwhelming but negotiating on more than just the price with a seller can make your dreams a reality. 

Lets talk about Seller Credits and how it can benefit you. 

Seller credit can help in a few different ways. One way can be asking for a certain amount of money to help pay for closing costs. A normal ask can be anywhere from $2,500 to $10,000, if the seller is willing this could be a game changer for first time homebuyers. 

Another option is asking for credits to go towards a 2 to 1 buydown. What's a 2 to 1 buydown? The seller gives cash to help buy down your rate for the first few years making the stress of a mortgage less intimidating after making such a big purchase. Here is an example-

Your Total Monthly Mortgage Payment is $2,560. The seller gives $5,000 to help you buydown your rate, so your first year mortgage payments are $2,150. Year 2 your payment is $2,310 and your third year on is that $2,560. 

Talk with your lender to see if this option makes sense for you. 

Escrow Timeline

Once you are in contact there is a order of operations being completed. Here is your 30-40 day roadmap:

In Contract > Schedule Inspections > Schedule Appraisal > Inspections > Repairs > Appraisal > Signing > Closed > Keys! 

Now lets talk inspections and repairs and what to expect:

As the buyer, it is typical that you will be paying for inspections. What does that look like?

Home  Inspection:$300-$500

Pest Inspection: $150

Sewer or Septic Inspection: $150-$300

Appraisal:$300 -$600

What happens when something that needs to be repaired comes back on the inspection? 

This is normal, almost every inspection will have items come back that you want fixed. Together we will put together a Notice Of Required Repairs or NORR. Once we send this back to the seller, they have the opportunity to accept the terms we sent over or to reject them and negotiate with us. As your agent I will strongly negotiate for you, but a tip to remember is that sellers are usually more willing to work with you on repairs if you don't come at them with a laundry list of demands. So, narrow down your big ticket important items you want fixed and I will fight to get those done for you!

Buying a home is a balancing act, your lender and agent work with you to throw numbers around to see how we can make it work. We have your back and will help get you the best deal we can, with that being said it is important you understand the sellers have a threshold for how low they can go and you have to be willing to respectfully negotiate. 

Why Working With The Right Agent Matters

As your agent I am not there just to open doors and write offers, I am your advocate, guide and storyteller. Buying your first home is a deeply personal experience and you want someone who takes the time to truly understand your goals, challenges and what "home" means to you. 

When you work with an agent who specializes in first time homebuyers, you get more than just real estate expertise. You get a partner who knows how to make the process stress free and clear. I will help you understand each step, negotiate on your behalf and make sure your offer stands out in a competitive market. 

Your story is important to me, but I also make it important to the seller. One success story I have is from a young couple who got their home with other offers on the table because I was the only agent who had spoken with the selling agent. I was able to tell her about this young families cute story and shared how much they adored the home. The seller stopped looking at other offers and accepted ours right away with credits to my buyers. 

That is the power of working with the right agent. Someone who doesn't see you as just a transaction but as a person who has a story worth fighting for. If you are a first time homebuyer and are considering me as your agent here are some things to expect:

   - As your agent I know how to structure creative and competitive offers that still protect your budget. 

   - I will explain this process in plain language, no confusing real estate jargon leaving the conversations open for questions and discussion. 

   - I understand first time homebuyer hurdles and how to overcome them.

   - I will always keep your best interest front and center from your first showing to the champagne toast in your new home.