We love working with first-time home buyers; helping you find your first home, teaching you the home buying process, and guiding you from house-hunting to move-in day gives us the warm fuzzies. Here are three things you should know before you start looking:

1. Work with one real estate agent.

It’s best to have one agent who is helping you with your search. Your agent will be dedicated to finding you the right property, and then negotiating on all the terms of your transaction on your behalf. You want that person to get to know you and your family’s needs and preferences, rather than starting over with someone new each time you go to look at a house. Keep in mind that the agent who shows you a home is, ethically, the one who should continue the transaction. Also to note, when you call an agent from a yard sign or advertisement, you are dealing with the seller’s agent. While most real estate professionals are adept at handling both sides of a transaction professionally, it makes more sense to deal with someone you have already taken time to get to know and who has your best interests at heart as the buyer. You aren’t paying your buyer’s agent; unless otherwise stated, he or she is paid by the seller upon closing. Still, you are hiring someone to work for you, so feel free to interview multiple agents and pick the one that you feel fits you best.

2. You need to be pre-approved for financing. 

Unless you are paying cash for your home, you must talk to a lender before you even start looking at houses. One reason is that it helps you set an accurate price range for house hunting- Looking at homes that you can’t afford to make an offer on, just leads to frustration. A mortgage lender will not only tell you what amount you can borrow, but also your projected monthly payment, your closing costs, and what you should or shouldn’t do with your finances to maintain your eligibility throughout the lending process. Another reason for having an up-to-date pre-approval in hand is so you don’t lose out to another buyer. If you find the perfect house, you will want to get an offer in before someone else gets it, and that pre-approval letter must accompany your offer. We would be happy to provide you with names of mortgage lenders in our area who have provided excellent service to past clients.

3. There are some up-front costs. 

When you find the right house, and you and the seller have agreed on the price and terms and have signed the contract, you will first need to make your “good faith” deposit. This is a deposit that shows the seller that you are serious about moving forward in the contract; it’s usually it is between 1% and 3% of the sales price but can be more or less depending on what you and the seller agree to in the contract. The good faith deposit is also credited towards your down payment amount, and is protected as long as you have contingencies at play; however once your contingencies are all removed, this deposit is at risk if you decide to back out of the contract.

Most sellers will have already done inspections prior to listing the home, however if they have not done any, then it is up to the buyer to either order inspections, or waive them. The cost varies depending on the size, condition, age, and features of the home, but is usually a few hundred dollars and can either be paid at the time of the inspection, or added to your closing costs. You want to get as much information during your inspection period as you need to confidently move forward with the purchase.

The main cost that most buyers are unaware of are closing costs, which can accrue from lenders and third parties that are involved in your loan transaction such as escrow, home appraisers, and title companies. Closing costs can range anywhere from an additional 1% to 3% of the mortgage, and are due at the close of escrow when the buyer pays the remainder of their down payment.

We can guide through all of these steps throughout your home buying journey. Ready to get started? Give us a call!