First-Time Homebuyer Expectations: Tips and Advice for Success

Welcome to your ultimate guide on how to buy a home! As an experienced real estate agent, I understand that buying your first home can be both exciting and overwhelming. This comprehensive guide offers valuable tips for First-Time Homebuyers to help you navigate the homebuying process with confidence. From working with a lender to finding the right real estate agent, and from making an offer to closing the deal, we cover every crucial step to ensure your homebuying journey is smooth and successful. Whether you’re just starting to explore your options or are ready to take the plunge, this guide will equip you with the knowledge and insights you need to make informed decisions and achieve your dream of homeownership.

Working with a Lender

1. Initial Consultation
   • Discuss financial goals and mortgage options.
   • Understand the types of loans available (conventional, FHA, VA, etc.).
2. Pre-Approval Process
   • Submit financial documents (pay stubs, tax returns, bank statements).
   • Obtain a pre-approval letter to determine your budget and show sellers you are a serious buyer.
3. Understanding Your Loan Options
   • Learn about interest rates, loan terms, and monthly payment estimates.
   • Choose a mortgage that fits your financial situation.
   • Understand what price range is best to search in.

Home Search Process with Your Agent

1. Initial Consultation
   • Discuss your needs, wants, and budget.
   • Set search criteria (location, price range, home features) and set up Compass Collection Search.
2. Viewing Properties
   • Receive listings that match your criteria.
   • Schedule and attend showings with your agent.
   • Attend open houses if you wish. You do not have to be accompanied by an agent.
   • Take notes, compare properties and give feedback. 
3. Evaluating Homes
   • Consider factors such as condition, potential repairs/upgrades, and resale value.
   • Narrow down your choices based on your priorities.

Putting in an Offer

1. Preparing the Offer
   • For First-Time Homebuyers, review comparable sales with your agent to determine a fair offer price.
   • Decide on contingency timelines (inspection, financing, appraisal). The default in California is 17 days, but to be competitive, we may shorten this timeline and/or waive a few contingencies, such as loan and appraisal, if already approved. Any offer we submit will be specific to that property, and this will be discussed when writing the offer.
   • An agent will review the offer with you to ensure we are putting together the most competitive offer for that specific property.
2. Submitting the Offer
   • Once we submit the offer the Seller has 3 days to reply, unless we shorten that timeframe. 
   • Include earnest money deposit as a sign of good faith. This deposit is usually 3%. Should we get an accepted offer this amount is due into escrow within 3 business days of an offer being accepted. This deposit is also fully refundable up until you remove all your contingencies. 

Negotiating

1. Seller’s Response
   • For First-Time Homebuyers, be prepared for a counteroffer or acceptance. It could also be a “multiple” counteroffer, meaning you are competing against other offers. An experienced agent will gather as much information as possible in this situation so you can make the most informed decision moving forward.
   • Negotiate terms and conditions with my guidance. 
2. Finalizing the Agreement
   • Agree on the final price and terms.
   • Seller accepts the offer. All timelines start from this date and they go by calendar days, not business days. 

Escrow Process

1. Opening Escrow
   • For First-Time Homebuyers, the listing agent will open escrow.
   • Escrow is a third party company that holds funds and documents. 
   • Deposit earnest money into escrow within 3 business days. 
2. Title Search and Insurance
   • Title company verifies ownership and checks for liens.
   • We will get a copy of the title report and review as well. 
   • The Seller pays for title insurance to protect against future claims. This is written and agreed upon in the offer. 

Inspections

1. Home Inspection
   • For First-Time Homebuyers , a good agent will arrange a home inspection with a licensed professional company. They will have a network of vetted professionals who can handle all aspects of the home, including but not limited to a general home inspector, roof, sewer, termite, solar, and any other inspections that may be necessary such as electrical, plumbing, or mold.
   • Review the inspection report and identify any issues.
2. Negotiating Repairs
   • Request repairs or credits based on the inspection findings.
   • Agree on a resolution with the seller.
   • Once all repairs and/or credits have been agreed to, we will need to remove our inspection contingency. 

Loan Process

1. Obtaining Loan Approval
   • Once we have an accepted offer, the lender will begin working on the loan.
   • They will order an appraisal within the first few days of acceptance. This may need to be paid for up front. They will discuss this with you.
   • Once First-Time Homebuyers have loan acceptance, we will need to remove this contingency. If it was waived initially, we must ensure the loan is approved before removing the inspection contingency to protect you during escrow.

Closing

1. Final Walk-Through
   • Within 5 days of acceptance we will do a “final walk through” to inspect the property to ensure agreed-upon repairs are completed and the home is in expected condition.
2. Closing Disclosure
   • Review the closing disclosure form, detailing loan terms, fees, and closing costs. The lender will send this out to you and should be sent at least 3 days prior to close of escrow. 
3. Closing Meeting
   • Sign all required documents (loan documents, title transfer) with notary. Escrow will schedule this once they have received loan documents from the lender. 
   • Wire closing costs and the remainder of the down payment.
4. Receiving the Keys
   • Once the transaction is recorded, receive the keys to your new home. If there is a rent back period, we will discuss next steps and timelines specific to the property. 

Post-Closing

1. Move-In
   • Set up utilities and services for the day we close escrow.
2. Maintenance and Management
   • Establish a regular home maintenance schedule.
   • Keep an emergency fund for unexpected repairs and expenses.
   • Feel free to call us should you need any referrals for home maintenance. 

By following this detailed guide, First-Time Homebuyers can have a clear understanding of each step involved in the homebuying process, making it easier to navigate and less stressful.

For help with any of the items above, contact Kelli Miller today and let her make this daunting list feel easy.