A Step-by-Step, First-Time Buyer's Guide

Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. This step-by-step, first-time buyer’s guide will help reduce the stress of buying a home and allow you to enjoy the journey. Above all, you will learn what to expect from your agent and how the right agent is your key to success.


Step 1: Research

Do you already know where you want to buy? If you want a condo, townhome, or single-family home? Which features do you like and dislike? What’s available on the market now? If you answered, "No," to any of these questions, now is the time to begin researching. In fact, it's the perfect time to partner with the right agent who can help you organize, plan, and discover exactly what you want and how to turn aspirations into reality. Don't get distracted by the unrealistic practices and techniques in popular real estate shows on HGTV and Netflix. In addition to looking at homes you like online, take note of any price adjustments and how long they have been on the market. That data could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer.


Step 2: Decide on Your Budget

There is a difference between your budget and — the total loan amount a mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the total monthly payment you are comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like common utilities, property taxes, HOA fees, and ongoing maintenance that could easily blow your budget.


Step 3: Get Prequalified

Just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount than you are expecting or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage as you begin working with a real estate agent. Once you choose an agent, you can upgrade your prequalification to a bona fide preapproval. That will be necessary before you can get too serious about buying, as sellers won’t entertain offers from buyers who aren’t already preapproved for a loan.


Step 4: Choose a Real Estate Agent

Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you when it costs you nothing for an expert like me to take much of the stress off your shoulders? Not only will I help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but I also have an intimate knowledge of the market and many other important details that can affect the strength of your offer. In fact, we transform good offers into unbeatable offers, and we procure dream homes for our clients. Looking back to Step 3, I encourage buyers to find an agent before choosing a lender and getting pre-approved. Most agents have worked with great lenders and know first-hand the differences between various types of lenders (e.g. brokers, direct lenders, credit unions, portfolio, etc.). Choosing the right financing can make a huge difference in your qualifications and the overall strength of your offer. (Continue to Step 5 )

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Step 5: Find the Right Home

This should be the most enjoyable step of the entire process (other than moving in). I will arrange private showings, collaborate with other agents who specialize in neighborhoods you like, and if necessary even help you find a property that is not yet listed. When touring, take notes on what you like and don’t like, and make sure to pay attention to less obvious details. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood, keep an eye on the parking situation, and how close it is to necessities like schools and grocery stores. It may be important to visit your favorite homes at various times of the day in order to notice potential changes in natural lighting or to confirm there are no nuisances like barking dogs or noise from air traffic. Rest assured, it is not necessary to do all these things before writing an offer, since offers can be contingent on multiple physical inspections.


Step 6: Make an Offer

Once you have selected the perfect home, we will work together to craft an effective offer. The value of comparable homes on the market is not the only factor to consider. Aside from your needs, each seller also has unique needs and reasons for considering many other terms. Expert negotiators gather all the information before helping their buyers determine what kind of offer will achieve their client's objective. Depending on the current market, your offer may be below, at, or even above the home's asking price. Either way, I will help you and the seller reach mutual agreement and, most importantly, protect your deposit and other interests at all time. Once the seller accepts your offer, or you accept their counteroffer, the home will go into escrow.


Step 7: Have the Home Inspected

In most cases, your offer will be contingent on having the home inspected to ensure there is no major structural damage or large repairs needed. With a well-written contingency and ample amount of time for investigations, you would be free to cancel the purchase agreement for almost any reason. I can help you arrange all inspections, appraisals, and estimates, and you can begin scheduling them within days of making an offer. During your investigation period and depending on what, if anything, is discovered, you can decide to renegotiate, cancel the sale, or remove your contingency, which lets the seller know you are committed to completing the sale. Once that occurs, the process with proceed to Step 8.


Step 8: Loan Approval

At this point, your lender will have already underwritten your credit and income. Final loan approval rests on supplying documents for remaining loan conditions, satisfying specific items of the purchase agreement, a title commitment, and depositing the rest of your closing funds (aka your down payment). Your lender will advise you on when to lock your rate, if that hasn't been done already. Now is the time to resist any urges to purchase new furniture, appliances, or open any new lines of credit. Although most purchase agreements are also contingent on your final loan approval, a loan contingency is typically removed at least one week before closing. Any changes to your credit profile can jeopardize your final loan approval, and I cannot stress enough how important it is to avoid any changes of any kind to your credit report and FICO, unless managed by your loan officer deliberately for your benefit. Your lender will work closely with the escrow officer to determine exact closing dates, fees, payoffs, and other items that affect a smooth and timely transfer of ownership. When closing day arrives, each party will be ready to meet all their obligations. For a buyer, that means signing loan documents and transferring closing funds. For a seller, that means signing the transfer deed, and of course, moving out in time to deliver the home to the new owner in the proper condition by the time specified in the contract.


Step 9: Get an Appraisal

This step more literally happens in the midst of Steps 7 & 8. Nonetheless, your lender will have your new home appraised so they have an independent value of it. The lender determines the amount it will lend you based on this independent value, not the purchase price. For example, if a home appraises for $1,000,000 and you are seeking a loan amount of 80% of the home's value, the loan amount would be $800,000 regardless of the homes agreed upon purchase price and whether or not that amount is more, less, or equal to the appraised value.


Step 10: Finish Paperwork

No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by your escrow officer, lender, title company, and real estate agent, and when you’re finished, you’ll know with official certainty that you are the legal owner of your new home.


After signing the final paperwork to complete the purchase, you will be the owner of a new home. It may take a few days for your loan to be funded once the paperwork has been returned to the lender, but once the funds are delivered to the seller, you’ll be all set to move into your dream home.

Work With Us

To dominate in this market, experience is not enough. It requires an agent with skill and acumen. Andrew has what it takes to help his clients win. But don’t take our word for it! See what Andrew’s clients have to say, and why they would never work with anyone else.