Buying your first home is exciting, but it’s also easy to make expensive mistakes. You don’t need to be a real estate expert to make smart choices. A few key moves can help you avoid common traps and keep thousands of dollars in your pocket. Here’s what every first-time homebuyer needs to know if they want to come out ahead.
Get Preapproved Before You Look
If you start touring homes before you know what you can afford, you’re setting yourself up for frustration. Sellers won’t take your offer seriously without a preapproval letter, and you risk falling in love with a home that’s out of reach.
Preapproval tells you exactly how much a lender is willing to loan you. It also shows you what your monthly payments might look like with different price points. This lets you narrow your search early, negotiate with confidence, and avoid wasting time on listings that don’t match your budget.
Shop Around for Your Mortgage
Too many buyers stick with the first lender they talk to. That can cost you thousands over the life of the loan. Interest rates, fees, and closing costs vary a lot between lenders—even a small difference in rate can add up fast.
Get at least three quotes and compare them side by side. Ask each lender for a loan estimate. Pay attention to the interest rate, the APR, and the breakdown of fees. Don’t be afraid to negotiate. Lenders want your business, and many will work with you to beat a competitor’s offer.
Don’t Drain Your Savings for the Down Payment
It’s tempting to put every last dollar into your down payment, especially if it means avoiding private mortgage insurance (PMI). But that’s not always the smartest move.
You still need cash after closing. There will be moving expenses, utility deposits, and possible repairs, even in a turnkey home. Set aside a buffer—ideally three to six months of expenses—so you’re not caught off guard when unexpected costs pop up. A solid emergency fund gives you breathing room and keeps you from leaning on credit cards or loans right after moving in.
A First-Time Homebuyer Needs to Hire the Right Inspector
A thorough home inspection can uncover costly problems before you buy. Don’t settle for whoever your agent recommends without doing your own research. Check reviews, ask about certifications, and make sure the inspector has experience with homes in your price range and area.
A good inspector will walk you through the property and explain issues clearly, not just hand over a confusing report. If serious issues come up, you can renegotiate with the seller, ask for repairs, or walk away if needed. This single step can save you thousands and protect you from buying a money pit.
Skip the Flashy Fixer-Upper (For Now)
That run-down charmer with “potential” might seem like a deal, but unless you have serious renovation skills or a big renovation budget, it can become a financial black hole.
First-time buyers are usually better off with a home that needs light cosmetic work—paint, flooring, maybe a few fixtures—rather than major structural repairs or full kitchen and bath remodels. You can still build equity without stretching yourself too thin or living in a construction zone for months.
A First-Time Homebuyer Should Know When to Walk Away
Sometimes, the best move is no move at all. If a home feels overpriced, if the inspection is a disaster, or if you’re being pressured to make a fast decision, take a step back.
Plenty of first-time buyers regret rushing into a deal that didn’t make sense. Stick to your budget, your must-haves, and your gut. It’s better to wait for the right fit than to force a deal that ends up costing more than you bargained for.
First-Time Homebuyer FAQs
How much should a first-time buyer save before buying a home?
Aim to save enough for a down payment, closing costs (usually 2 to 5 percent of the purchase price), moving expenses, and a post-purchase emergency fund. A good rule of thumb is to have at least 10 to 15 percent of the home’s price saved before you start looking.
Is it worth it to buy points to lower my mortgage rate?
Buying points can make sense if you plan to stay in the home long enough to break even on the upfront cost. Ask your lender to calculate the breakeven point so you can make a decision based on your plans and budget.
Can I negotiate the price on a home as a first-time buyer?
Absolutely. Being a first-time buyer doesn’t hurt your negotiating power. In fact, since you don’t have a home to sell, your offer may appeal to sellers who want a clean, fast transaction. Use your preapproval and flexibility as leverage.
What’s the difference between prequalified and preapproved?
Prequalification is a quick estimate based on unverified info. Preapproval means a lender has reviewed your credit, income, and financial documents. Sellers take preapproval seriously, so always get that before making offers.
How do I know if a home is priced fairly?
Your real estate agent can pull comparable sales (“comps”) from the neighborhood. Look at recent sales of similar homes in the same area. Don’t rely on listing price alone—it doesn’t always reflect true market value.
Horizon Inspection Services offers comprehensive home inspection services in Arizona. If you’re buying or selling a home, contact us to schedule an appointment.