Build Home Equity

Five tips when shopping for your first home

You’ve budgeted. You’ve saved. You’ve planned. Now, its time to shop for your first home! If youre a fan of TV shows that feature folks shopping for homes, you may think you know all the right strategies. Critique the wall color. Talk about the countertops. Get into a bidding war. Win! Done! 

Shopping for a home is a mix of practical and emotional decisions. We’ve got five actionable tips to lessen your stress. 

Five tips for shopping for a home

1. Get pre-approved

Before digging into listings and falling in love with a home, you'll want to know what kind of mortgage loan you can qualify for. The good news is you can do that through a preapproval. Beyond helping you budget, knowing how much you can afford will ensure a streamlined buying process. 

Preapproval generally comes with a document called a preapproval letter from a lender. This letter states what the lender might lend you up to a certain amount. 

While not a mortgage or a guarantee of a loan, the preapproval demonstrates your creditworthiness to a potential seller and shows that you will likely qualify for financing. Sellers will want to know you're financially qualified to make an offer on their home before being willing to accept an offer.

A preapproval letter may have an expiration date, usually 30-60 days from issue. Keep that in mind as you start the house-shopping process. The process helps you spot something that would prevent you from qualifying for a mortgage earlier so you can rectify any potential issues. If your letter expires before you've made an offer, your mortgage lender can most likely help you get a new one, though you may need to submit or update certain documents if your financial situation has changed. Whatever your situation may be, we are here to help! 

Get preapproved with an experienced mortgage lender. 

2. Hire a real estate agent

Having a trusted agent by your side can be a tremendous asset in the purchasing process. Hiring the right agent will save time, money, and potentially a few gray hairs. 

After you've been preapproved, the next step is to find the agent who’s right for you. Ask for recommendations from trusted friends, family, and colleagues. When they give you a name, follow up and ask what it is about that agent they appreciated and any hesitation they might have. 

We recommend interviewing at least three real estate agents to learn more about their approach and experience. Questions to ask include:

     How long have they been in real estate?

     Ask about their track record — how many purchases and sales?

     Do they specialize in specific neighborhoods?

     What fees do they charge, and are they willing to reduce them to help you secure your dream home?

     Do they have a team?

     What is their current availability relative to your timeline?

     Can they provide referrals from past clients?

     What trends are they seeing?

     Someone with extensive knowledge should be able to speak to mortgage rates, inventory, and whether homes are selling above the listing prices and by how much.

3. Understand closing costs

Many buyers know they need to save up for a down payment. While it's often the largest sum to plan for, there are other fees and costs associated with buying a home you need to prepare for.

The term used to describe these costs is closing costs, because you will pay them when you close on the house — the final step of buying a home. 

Closing costs might include:

     Appraisal fees

     Attorney fees

     Escrow funds

     Prepayments for homeowners insurance and property tax

     Real estate commissions

     Fees for the origination and underwriting of a mortgage

     Homeowners association fees

     Title and settlement service fees 

Underestimating closing costs can be a first-time buyer's nightmare. The good news? There are ways to reduce closing costs.

Insider tips from Fremont Bank

1.    A preapproval will give insight into some closing costs, including a list of the expenses beyond your loan and interest rate. The preapproval may come with a list of vendors who can perform services related to closing. You are not obligated to use them, so you can shop for alternatives or request other names from your lender.

2.    Consider closing at the end of the month. You will usually make your first mortgage payment on the first of the following month. Closing at the end of the month can minimize per diem interest fees assessed between closing and the first mortgage payment.

3.    Seller credits may also help as you negotiate the purchase agreement, especially if your seller is eager to sell. Seller credits can be used for repairs found during inspection or to cover loan origination fees or discount points if you opt for a points and fees loan. 

Another insider tip? At Fremont Bank, we offer No Closing Cost loans that cover customary non-recurring closing costs such as:

  • Appraisal
  • Credit report
  • Escrow
  • Loan document and loan origination
  • Lenders' title insurance  

Get the inside scoop on one of the mortgage industry's best-kept secrets and find out more about how our No Closing Costs option works.

4. Now for the fun part: start looking

If you're like many people, you may have been scrolling through house listings long before you were ready to buy. We get it! Now, though, it's time to search in earnest. No more Zillow Gone Wild listings. You're looking for your first home!

You can begin your search online, filtering by location, features, and price. Or you can tell your agent what you're looking for in a home.

Issues to consider:

     Do you prefer an open-concept floor plan or do you prefer discrete rooms?

     If you are a parent or if kids are in your near future, what are the school districts like?

     How many bedrooms and bathrooms do you need?

     Do you need a place to work from home?

     Are you close to shops, restaurants, or other amenities?

     Is walkability a factor? Public transportation?

     Does the property have a garage or a place for a car?

     Are you looking for a property that needs work or one that is in move-in condition?

     Do you want a low-maintenance backyard or something to let your gardening shine?

As you search homes that meet those criteria, consider exterior and interior conditions, including HVAC, plumbing, and electrical. 

Worried you're being too picky? You may have to make some compromises — maybe a home just outside your preferred area or one with fewer full baths — but during the search process, attention to detail is not just OK; it's beneficial. Your agent can help you find homes that balance your budget with your wish list. 

5. Make an offer

You’ve found a house you love — now its time to make an offer. 

Consider the offer price and get to comparing.

The agent can provide comparable sales: homes that are similar in size and condition near the home you wish to buy. Having a baseline helps you determine what you should offer. 

Most homes are priced higher than their market value because sellers expect to negotiate. The negotiation process can be unnerving, but lean on your agent and ask questions! Not only is the agent an expert in negotiating and knowledgeable about your local housing market, but they are also less emotionally connected to the process. 

You can ask for a lower price if the home has been on the market for a while, if the seller is eager to sell, or if market conditions favor buyers. If the area is a hot market and/or the seller receives several offers, you may need to submit a higher offer.

Always communicate through your realtor during this process. Be sure to get an appraisal and an inspection before you commit to a purchase. The home should be worth what you are paying for it, and you should also know the property's condition. You can include contingencies for both in your offer.

We proudly offer many mortgage choices, and our straightforward Mortgages Without the Mystery loan process removes many of the headaches from shopping for a home. Explore our attractive rates, low down payment options, complimentary preapproval letters, and tailored service.