Your Ultimate First Time Homebuyer Vocab Sheet

How to walk the walk and talk the talk into buying your first house with confidence.

Knowledge is power, baby! As a first time homebuyer there sure is a lot to know when it comes to writing up your first offer. If you've never done it before you're probably brand new to terms like earnest money, appraisal, and knowing what the heck a title officer does or why you need them.

And that's okay! If you've never done something before, it's completely understandable that you'd have a few questions. The real estate industry was built on the very questions you're having. The old way of thinking is centered around professionals gatekeeping the information as a way to prove their value. And, to that I say... no more!

Once you find the perfect home that you want to put an offer on, that's when the real fun begins! As a realtor specializing in helping millennials buy their first home, I start with a few key questions and wam-bam-thank-you-ma'am (an hour or two later) those answers turn into 7+ pages of legal jargon. Here they are.

1. Do you have a pre-approval letter?

A pre-approval letter is a letter from your lender signifying that you have been pre-approved up to a certain amount for a mortgage. This assurance is sometimes the factor that sets competing offers apart and will help signify to the seller that you are a serious and qualified buyer.

2. What price do you want your offer to be? I can provide comps to let you know the market data for that neighborhood, square footage, year built, etc.

Comps or comparable properties are properties sold, pending, or actively being listed that are mostly a match to the property you are looking to write an offer on. No one wants to over-pay, but the goal is also not to insult the seller with so low of an offer they don't want to counter. In a lot of ways, we look to the current market to determine that sweet spot in the middle.

3. How much do you have for your down payment and how much do you have for the earnest money?

The notion of having to have 20% down for a mortgage is outdated. Lenders have a variety of programs available to them and some allow as low as 3-5% down. There are even programs that allow zero percent down. There are tradeoffs with putting less down; however, it's good to talk to a Lender skilled at helping first time homebuyers to understand what option works best for you. Earnest Money is the part of your down payment that you deposit with the Title Company which, for Oregon, typically has to happen within 3 business days of your offer getting accepted. This means the amount you have for earnest money needs to be able to be liquid ASAP.

4. How long do you want your inspection period to be?

The days of potential buyers waiving their property inspections are as dead as the sourdough starters from the beginning of the pandemic. The inspection period is the time you and your Realtor schedule a property inspection and if needed, get bids on any repairs. Sometimes having a shorter inspection period is more attractive to the seller (who wants to get the transaction closed ASAP) and sometimes a longer inspection period is needed.

5. When do you want to close?

Hooray! You made it to the end. The date the transaction closes is (most often) also the date you get the keys to your new home. Sometimes the seller will need a rent-back period while they transition out, but this is becoming more rare as properties are sitting on the market longer. The typical time frame for a closing is 30-45 days; however, for buyers looking to move in ASAP, I work with several lenders that can get a transaction closed in as little as 14 days.

To bring it all together - there's a lot to learn and a lot to think about when buying your first home. And, as with everything in life, it's a heck of a lot easier when you speak the same language.

Don't worry if you have questions that weren't answered here. Even when I was selling my first property and buying my second, I still had a TON of questions. Questions are all a part of it. You've got this.

---

Contact Caitlin

---

Caitlin Mitchell is an Oregon licensed Realtor and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to accuracy of any description. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.

© Copyright 2022