The First Time Buyer is Changing: How Agents Can Help Today’s Buyers Get to the Closing Table

First-time homebuyers have always needed a little extra guidance. But today’s buyers are entering the market with a different set of challenges–and real estate agents who understand those challenges can make a meaningful difference in getting them from “just looking” to the closing table.

It’s no surprise that affordability remains one of the biggest hurdles. Higher home prices, mortgage rates, insurance costs, property taxes, and the upfront cash needed to purchase a home can make homeownership feel out of reach for many first-time buyers. At the same time, today’s buyers may have more opportunities to negotiate than buyers did in the highly competitive markets of recent years. For agents, the opportunity is to help buyers understand not just what they can afford, but what it will take to successfully navigate the entire transaction.

Start With the Full Cost of Buying

A buyer’s budget shouldn’t stop at the monthly mortgage payment. First time buyers may need to account for:

• Down payment
• Closing costs
• Prepaid taxes and insurance
• Homeowners insurance
• HOA or condominium fees
• Inspections and other due diligence
• Moving expenses
• Immediate repairs or improvements
• Cash reserves after closing

Helping buyers understand these expenses early can prevent surprises later in the transaction. This is where your relationship with your lender and title company, like Home First Title Group, can be valuable. Encourage buyers to ask questions early and understand what they’ll need to bring to closing–not just what they’ll need for their down payment.

Don’t Assume the Highest Preapproval is the Right Budget

A preapproval tells a buyer what they may qualify to borrow. It doesn’t necessarily tell them what they feel comfortable spending every month. First-time buyers may benefit from having a conversation about their comfort level, not simply their maximum purchasing power.

Agents can encourage buyers to consider the bigger picture: utilities, maintenance, insurance, taxes, commuting costs, and other expenses that come with homeownership. The goal isn’t simply to get the buyer approved. It’s to help them purchase a home they can realistically afford to keep.

Educate Buyers About Negotiation Opportunities

One of the biggest changes in today’s market is that buyers may have more room to negotiate in some areas. Depending on the property and local market conditions, buyers may be able to negotiate:

• Seller-paid closing costs
• Repairs
• Price
• Home warranties
• Interest-rate buydowns
• Other concessions

That doesn’t mean every seller will agree to every request. But buyers should understand that the strategy isn’t necessarily the same as it was during the most competitive markets. Agents can add tremendous value by explaining where negotiation makes sense and where it could weaken an offer.

Help Buyers Understand the Role of the Title Company

Many first-time buyers don’t realize how much happens behind the scenes between having an offer accepted and receiving the keys.

A good title company, like Home First Title Group, may be researching ownership, identifying liens or other title issues, coordinating payoffs, preparing closing documents, working with the lender and parties to the transaction, and helping ensure the buyer receives clear title to the property. For a first-time buyer, that can feel overwhelming which is why a simple explanation from their agent can make the process feel less intimidating.

Encourage Buyers to Ask Questions Early

First-time buyers may hesitate to ask questions because they don’t want to appear uninformed. But there really are no bad questions when someone is purchasing a home for the first time.

Agents can encourage buyers to ask about:

• What happens after the offer is accepted?
• When is the inspection?
• What does the lender still need?
• What is title insurance?
• How much money will they need at closing?
• When should they arrange homeowners insurance?
• When do they receive their final closing figures?
• How do they safely send funds?
• What should they expect on closing day?

The earlier these questions are answered the less stressful the transaction becomes. And the more the buyers will trust their agent and the home buying process.

Experience the Home First Title Group Difference

Because the HFTG team is knowledgeable and practical, every client receives the professional service that their particular situation requires. Whether that client is a first-time home buyer, or an experienced commercial investor entity, the HRTG team can deliver what is required to make that client comfortable and satisfied with their transaction. The HFTG team is happy to conduct settlements in any of its five locations, or we can even come to you! Contact us today!