Navigating the Real Estate Market: Tips for First-Time Homebuyers

Buying a home is the largest purchase most people will ever make, so it’s important to approach the process prepared. It can seem daunting to enter the world of real estate, but there are many tips and techniques to keep you ahead of the game no matter how much experience you have. If you’re a first-time homebuyer, this guide will prepare you to start the journey with ease.

First-Time Homebuyers

Being a first-time homebuyer puts you in a special category. You can qualify for many first-time homebuyer loans, interest rates, and grants to make homebuying more accessible. However, this also indicates you’re new to homebuying, which can be stressful and intimidating. Researching the housing market and loans you’re looking at can make a significant difference.

Needs and Wants

The most basic step to starting the homebuying journey is to know what you want and need in a home. Your wants in a home are things you desire but don’t require in a home at the end of the day, such as a white kitchen or a claw-foot tub. Your needs are typically non-negotiable, such as a bedroom for your child or a guest bathroom. It’s ideal to make a list of these wants and needs to show to a real estate agent when the time comes.

Research the Housing Market

The housing market differs widely depending on the area. Some areas are a buyer’s market, which favors homebuyers. Some areas are a seller’s market, which can mean making an offer will be more difficult. Take a look at what the average home price is in your area and the ideal neighborhoods to live in.

Loan Types

Research different loan types. Conventional loans are great for any homebuyer, but they will require a 20% down payment unless you’re paying mortgage insurance. Other loan types require lower down payments, such as Federal Housing Administration (FHA) loans, which may be ideal for lower incomes.

First-Time Homebuying Programs

Many first-time homebuyer programs offer down payment assistance or competitive rates simply for being a first-time buyer. Each city and county has different programs, so research what is offered in your specific area. Don’t be afraid to bring up these programs to your lender—that’s what they’re there for. 

Debt-to-Income Ratio

Learn what your debt-to-income ratio is; this is what will largely determine what your loan amount will be. If you have more debt than income, it will be difficult to secure a loan. Pay off as much debt as you can without compromising your down payment savings. Know what your income total is and how much you can contribute to your mortgage and homeowners insurance each month.

Credit Scores

Credit scores are also a determining factor for securing a loan, and interest rates may be higher for those with lower credit scores. A loan may not be issued for those under a certain credit score. You can improve your credit score by paying off debts, making on-time payments, and managing a credit card well.

Down Payment and Closing Cost Savings

Be certain to save up for down payment and closing costs, or it can cost you your home! A down payment can be as high as 20% of the home price, and closing costs can be as high as six percent. Make sure to calculate mortgage payments to understand your monthly obligations accurately.

Research Lenders

You can research lenders by searching for local ones online. Don’t meet with just one; your credit will only take the temporary hit once to allow for multiple lender searches. Find the best lender with the most competitive rates before deciding.

Pre-Approval and Real Estate Agent

Income and debt information submitted to your lender will usually earn a pre-approval amount. Remember this amount and find a real estate agent that you mesh well with and understands your needs in a home.

Home Search

When searching for your home, in-person recommendations by your real estate agent is a great start. Don’t be afraid to look online as well. Online searches such as ‘Philly homes for sale’ or ‘Dallas homes under $400,000’ can give you an idea of what open houses to visit.

Home Inspections

You will always want to get a home inspection for any home you’re considering purchasing, new or old, as you never know what can go wrong with a home. You can also potentially lower the purchase price with certain inspection results.

Home Offers

Your real estate agent will help provide a competitive offer for a home. Be certain to include contingencies for the sellers, such as certain repairs, before the offer is made. Making a winning offer on a home involves strategic considerations, including offering a fair price, being flexible with the closing date, and possibly waiving certain contingencies to appeal to the seller.


Home buying for first-timers can be intimidating, but with the right research, lender, and agent, it can be a breeze. Prepare for stress, but don’t let it get you down. Come to the lender and agent prepared with your homebuying goals, loan preferences, and market research in mind. Thoroughly inspect any home you want to buy with a professional. Happy hunting!

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