There is a first time for everything, and this includes the purchase of your first home. Buying your first house is more than a little bit exciting. But before you get caught up in the tailwinds of your daydreams, you should be aware that real estate transactions take a series of steps, each of which can be challenging and time-consuming. Look at these useful tips for first-time home buyers.

There are steps to take before you scout out houses, but many first-time potential homeowners just can’t help themselves. It’s too tempting to browse and too easy to search online. For that reason, the first thing you should know about your home-buying experience is not to attach emotionally to any property. You look, you fall in love, and then you set your heart on building your dreams in and around that house. But there are no guarantees you’ll be the lucky one to get that house and a lot of things along the way that could prevent you from getting there.

Be Realistic When Searching

Be realistic with your budget. Seriously. Daydreams don’t have limits to what money can buy, but real estate does. You may find yourself widdling down your wish list when you begin to tour properties. Remember, your starter home doesn’t have to be perfect. Even better, your house has time to evolve, to grow with you, and you can always add upgrades over time.

But before you start house shopping, before you even taunt yourself with an online glimpse of properties, you need to secure your funding. You’ll need at minimum a 20 percent down payment, cash on hand for closing costs, a bit of green for an earnest money deposit, homeowners insurance, property taxes, and other expenses that go along with real estate purchases. And, you’ll need money for the cost of the move regarding packing supplies, moving companies, trucks, etc. If the house you decide to purchase is in a community governed by a homeowners’ association, you’ll also have HOA fees on top of your mortgage payment, insurance, taxes, and utilities.

In addition to your savings, you’ll need pre-approval for your home mortgage loan.

What You Need to Know

All too often potential buyers work in reverse — they find the house they love, contact a real estate agent, and then apply for the loan. Sadly, this tends to be heart-breaking. It’s not uncommon for would-be-buyers to be declined for their mortgage loan, especially if they’ve not taken the time to prepare their credit report and educate themselves about the damage of big-ticket purchases before house shopping. Did you know that the new car you bought this year could prevent you from getting that loan? It’s true. Furthermore, sellers may choose a competing offer if it comes with pre-approval. Sellers are motivated to move, and they don’t want to take the time or the risk of your application process.

Find a Real Estate Agent

Only after you’ve completed all those tasks should you contact a real estate agent. Your real estate agent will show you real estate possibilities that align with your criteria. Your agent will help you with the offer, negotiations, contracts, processes, and closing the sale.

When you put an offer on the house and your offer is accepted, it’s not the time to celebrate just yet. Before the seller can transfer the title legally, it must be verified to be free of tax holds and liens. Then, to satisfy your lender, the house must be surveyed, appraised, and inspected. Surveys detail the property lines, inspections verify that there are no major problems with the structure, and the appraisal determines the property’s value in the current market. During these processes, the contract is still open for negotiation. However, once the property has passed all of its inspections, the contract is locked in and you’re one step closer to homeownership.

Closing costs consist of the fees associated with the services provided during your transaction such as surveyor, inspector, appraiser, lender, courier, escrow agent, administrative costs, and real estate agent commissions. On closing day, your escrow agent, who manages the money from the mortgage loan, issues payment to all of those providers, and then to the seller. Then, you receive the keys to your new home.

Your real estate agent is the best source of information about the local community and real estate topics. Give Melanie McLaughlin a call today at 505-489-8504 to learn more about local areas, discuss selling a house, or tour available homes for sale.