Home Buyers Guide

The Insider’s Guide to Saving Money & Eliminating Costly Mistakes 

Buying a home is an exciting adventure, and whether this is your first home or your second, it’s important that you take your time when evaluating potential properties.

When considering properties, it is important that you consider ALL of the costs of buying your home, and not just your monthly mortgage payment. 

Does the property costs more because in your desired location?  Are property taxes reasonable? Are you responsible for sewer charges?  Are there any zoning regulations or restrictions that you should be aware of?  

It’s important to look at the big picture when choosing a property.  After all, this is your home and you are going to spend many years building a life there!


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2-Minute Walk-through Videos 

Chapter 1

Understanding Location Costs

Chapter 2

Finding The Perfect Realtor is Priceless

Chapter 3

Watching The Market

Chapter 4

Negotiating A Lower Cost After A Home Inspection

Chapter 5

Getting The Lowest Interest Rate

Chapter 6

Making An Offer

Chapter 7

Closing The Deal


2-Minute Walk Through Videos


Zillow Walk-Through

Redfin Walk-Through

Mortgage Rate Calculator

Negotiating A Lower Cost After A Home Inspection 

Chapter 1

Understanding Location Costs


One of the greatest factors in regards to overall costs of property is in the neighborhood.  In real estate, location is everything and depending on what your personal preferences are, you should expect the costs of properties to change based on location, even when all other features and factors are similar.

For many home buyers, location is the most important component when choosing a property and it’s also the key factor in which they spend the most time evaluating.  

How does the location effect your cost?

The location of your home can effect your cost in several ways.  If you choose to live in a metro area,  inside the city zone, or a really popular area…a property of the same age and size could be significantly higher.

You want  to pay attention to additional costs and factors such as property tax,  metered water, sewage costs, and any by-laws that you may be affected by when deciding on a location.

Selling Price

Knowing the average selling price will help you set a realistic budget and determine how much of a loan you need to be able to qualify for.  You can get an idea of the average selling price of a neighborhood on Redfin.com

Property Taxes

You want to have a good idea of the property taxes in the location you are looking. This can significantly affect the mortgage payment and yearly cost of owning your home.    Zillow is a great place to get free information about an area including property taxes.  They even include a link to the county assessor website where you can get even more tax information (this varies based on location).

Commuting Cost

Your commute is not only stressful it can also be very costly.  Cost such as gas, maintenance and wear and tear on your car can add up fast.  Commute Solutions has a Commute Cost Calculator that will calculate your commute cost for the month and year.

Chapter 2

Finding the Perfect Realtor is Priceless

Realtors can be an invaluable source of information when you want to know more about homes, neighborhoods, and other questions about the communities you are looking at.

Great real estate agents will know about the neighborhood, the city or town, and any other questions you need to know in order to make an informed decision.  So it is important to take the time, and ask the right questions when finding the perfect realtor.  




Why is finding the right realtor important?

Having the wrong realtor can cost you thousands.  When purchasing your house a 1% mistake can literally cost you thousands of dollars. 

Your agent should be a wealth of knowledge.  They should be very knowledgeable about negotiating the right price for your new home.  Understanding the different loan types and how it affects your payment.  They should be able to guide you in buying or walking away from any property you are not sure about.

This is why it is so important to take the time to find the right agent before signing any type of agreement. 

Your agent should be knowledable about:

  • Price reductions
  • Prices of comparble homes in the area
  • Community dues
  • Property & other taxes

This is not an extensive list but a great start.  While your realtor should know these things it is always great for you to know them as well.

Why are Price Reductions Important?

Price reductions are important because it helps to gauge if your seller is motivated to sell.  The more motivated a seller is the better deal you can get.  A seller who drops a price is probably getting anxious to sell.  For whatever reason they can’t sell the house for the price they want so in order to “just sell it” they will reduce the price. 

If there are several price reductions this could mean:

  1. You could be getting a great deal if you buy at this reduced price. 
  2. The seller could be really motivated to sell and you can possibly negotiate the price even lower.

Zillow  is a great place to research price reductions for yourself.

What are comparables?

Comparables are houses that have recently sold that are similar (in size, features etc.) and close to the home you are interesting in purchasing.  You compare recently sold homes to the current home for sale.  This helps you to price what the homes in the area are selling for and how much you should pay.   Use Redfin to view comparables online.

Home Owners Association Fees

Finding the exact HOA fees can be hard for a non realtor.  However Redfin does a good job of highlighting if they have HOA dues and how often they are paid. 

Chapter 3

Watching The Market 

Now that you know more about finding a real estate agent, you should begin watching the housing market carefully in the weeks or months before buying your first home in order to get a feel for whether it is in your favor.

Owning a home is a big responsibility. Knowing how the market is moving and spending your money wisely will help when you are creating a budget, applying for a mortgage, deciding how much to put down, and the best time to buy.


What exactly is “watching the market”?

Watching the market is simply following current market trends to help decide the best time and price to buy a home.  While you should not become a slave to the housing market, you should keep the following in mind before buying your home:


  • Neighborhood buying trends
  • Home Appreciation
  • Current Mortgage Rates
  • Number of Foreclosures

Neighborhood Buying Trends

Pocket Sense said it best…

No matter what you do to improve your property, your neighborhood will always have a say in the value of your home. Redoing your bathroom, throwing on a fresh coat of paint or replacing your roof may be obvious steps in making your home more appealing, but no cosmetic improvements will increase its market worth if no one wants to live in your neighborhood.

Some things to consider when evaluating the neighborhood are:

  • The average days home are on the market before they sell.  Highly sought after neighborhood will sell faster. 
  • Number of homes for sale in the neighborhood.  If there are a lot of homes for sale in the neighborhood it may men people are not wanting to buy in that area. 
  • The price of renting vs buying.  Over the last few years people have been debating if buying a home is actually better than renting.  Only you can decide that but knowing the cost between the two will help you make the best decision. 

Average Days On Market & Number of Homes Sold

Redfin has a market analysis tab on the main search page. It shows the market analysis for your search area.  It looks at last month activities.  This includes average days on the market and homes sold. 

Rent vs Buying

Nerd Wallet has a rent vs buying calculator that does an excellent job of showing you your cost of rent vs buying.

What is home appreciation?

Home appreciation is how much the value (or worth) of your home will increase over time.  Just because you buy a home for a great deal does not mean you will make a huge profit when it is time to sell it. The housing market will continue to change.  There is no way to predict the future but you do want to look at what the experts are forecasting for the value of your home.    Zillow is a great place to get this information.  It tells you what they estimate the value of the house to be in a year. 

Current Mortgage Interest Rates 

Even though the housing market may be going your way does not mean that the interest rates you could be paying are. 

The interest rate you receive will depend on many factors, including, current credit score, credit history, other loans & credit cards, income, debt, type of mortgage, lender, economy etc. While this final number will be determined closer to closing it is good to have an idea of current mortgage rates. 

Bankrate reports the current mortgage rates as well as the three-month trend. 

Check the number of foreclosures 

Checking the foreclosures in the market is good for two reasons.

  1. You maybe able to find a great deal on a property.
  2. If you see a lot of foreclosures in a particular area or neighborhood it maybe an indication that the neighborhood value is going down.

You can get a free listing of foreclosures for your area by visiting Auction.com.  If you are thinking about purchasing a foreclosure please talk to your realtor.  This is a special process.

Chapter 4

Negotating A Lower Cost After A Home Inspection

Buying your home will probably be one of your biggest investments.  Protect it with a home inspection. A home inspection will give you a chance to discover more about the home before you purchase it.

In case there are serious problems with the foundation, mold issues, or underground leaks, you will be prepared to ask for repairs, a reduced price, or walk away from the property.

You may be asking are home inspections worth it? In most cases, the answer is yes. Although you will have to pay for a home inspection, it may save you a lot of money in the long run.


Home Inspection 101

A thorough home inspection will include checking the following:

  • Electrical systems
  • Heating and cooling systems
  • Foundation
  • Siding
  • Structural elements
  • Roof
  • Insulation
  • Exterior
  • Doors and windows, and
  • Plumbing


Most homes will only experience a few minor issues, but some older homes may have more problems than they are worth. The damage to the homes could cost you thousands of dollars if you are unaware of the damage prior to purchasing the home.  While disclosure of some problems is mandatory, many homeowners do not even know that some of these problems exist until they try to sell their homes.

On the day of the inspection, you should expect to hear about some problems. You should be given a detailed home inspection report of the findings that will outline drastic problems and those that can be fixed easily.  Some lenders will not approve the home loan until the problems are fixed and another inspection is conducted.

Even though you will have to spend money upfront for a home inspection, you may save more money than you anticipated once the results come back. This is especially true for older homes or new homes that were not built using the right materials or according to safety codes.

There are a few ways you will be able to negotiate a lower price on the home before signing the final contracts.

  • Ask the homeowner to make repairs
  • Ask the homeowner for price reduction
  • Ask the homeowner to pay closing cost


Ask homeowner to make repairs

This is the best way to save money on your new home. While you will not see a reduction in the final price of the home, you will not have to make as many repairs down the road. Also, you will not have to worry about the repairs once you have moved into the home.

Ask homeowner for price reduction

If the homeowners do not want to spend money on the repairs that you have requested, they may agree to drop the final price of the home. 

If the homeowners suggest a reduction in the final price, you should consider the offer and find out how much the repairs will cost you. If it seems like a fair deal, then take it. If not, you can always ask for a larger reduction.

Home Advisor has a True Cost Guide.  It tells you the nationwide and local cost averages for home repairs.  It is a great tool when negotiating a price reduction. 

Ask homeowner to pay closing costs

Another way to save money without relying on the homeowners to pay for the repairs is if they agree to pay the closing costs on both sides. This will free up some of your money so that you can make the repairs yourself.

You may have to have a separate contract drawn up that will explain what the homeowners are responsible for paying, and what you are responsible for paying. This will make buying the home much easier.

You can use the closing cost calculator by nerd wallet to get a general idea of your closing cost.  Use this with the above repair cost guide to negotiate a fair price.

Find Pre-Inspected Homes

Finding a pre-inspected home can save you time and money.  When you have a pre-inspected home you get a report that gives you upfront information about the home condition and any potential problems.  This way you don’t have to worry about finding the home of your dreams and the deal falling through later if you find a major problem.  It also helps you negotiate (like some of the ways I suggested above) upfront.

Some sites to find pre-inspected homes are


Chapter 5

Getting the Lowest Interest Rates


Financing your first home can be overwhelming.  Most people have to take out a mortgage.  Many people have questions like..Which mortgage loans is right for me? How much of a down payment will be necessary? What is escrow?

You will have many questions about financing your home. By knowing the facts, paying attention to interest rates, and looking into all of your mortgage options, you will be able to choose repayment terms that will fit your current income and allow you to safely make those monthly payments while saving thousands of dollars on interest. 


How do I get the lowest interest rate?

The interest rate you receive will depend on many factors, including, current credit score, credit history, other loans & credit cards, income, debt, type of mortgage, lender, etc.

But there are things you can do to increase the chances of you getting a good interest rate. 

  • Improve your credit score
  • Give a Higher Down Payment
  • Go with a shorter loan term
  • Shop around

Improve your credit score 

Get A Truly Free Credit Report

By federal law you get a free copy of your credit report every year.  It is truly free and you do not have to sign up for anything.  Go to annualcreditreport.com to get your free reports.

Get A Truly Free Credit Score 

Credit Karma gives you a truly free credit score.  This is not your fico score but it will give you an idea of your credit standing.  

With this information you can take the steps to improve your credit score.  Credit Karma even give you recommendations on how to improve it and let you create scenarios of how changes would affect your credit score. 

How do loan terms effect interest rates? 

Many variables will effect the interest rate. For example, a 15 year long will have a lower interest rate than a 30 year loan.  A loan where you give a 20% down payment will likely have a lower interest rate if you only put down 5%. 

Some things that effect your interest rate includes:

  • Selling Price
  • Down payment
  • Credit Score
  • Loan Term
  • Loan Type

Realtor.com has a mortgage rate calculator that lets you see what your interest rate would be based on different factors.

Shop Around 

Mortgage rates vary greatly  from day to day and lender to lender.  You can save thousands by getting quotes from different vendors.  You also want to get quotes on different days.  Remember rates change daily.  Many sites let you compare different mortgage.  The most popular one is Lending Tree.  But you can also get quotes from Bankrate.com, Nerd Wallet, Realtor.com etc.  

What not to do when applying for a home loan

There are a few things you should not do after applying for a home loan:

  • Buy a new car
  • Begin a new job
  • Buy new furniture and other large items using your credit cards
  • Apply for a credit card, or
  • Default on student loans or other loans

All of these actions will cause your credit score to change which will give lenders an inaccurate view of your spending habits and your overall credit score.

If possible, do not begin a new job until you have moved into your home. Try not to spend money on credit cards. Buy furniture and other items using cash, or wait until you have signed the final contract and are a homeowner.

Chapter 6

Making An Offer


By this point, you should have found a real estate agent, contacted a few lenders, and seen a few homes. You have finally found the home of your dreams and want to make an offer. Making an offer on a home is a huge step. 

Am I ready to make an offer?

Only you can decide if you are ready to make an offer.  Having the knowledge of this guide and a good realtor can give you the confidence you need to make such an important decision.

When making an offer consider the following:

  • Details about the property (taxes, selling price, history etc.)
  • Taxes in the area
  • Seller motivation
  • Buyer’s market vs Seller’s market
  • Home Inspection Results
  • Appraisal Results

These considerations will help you make the most informed decision possible when it comes to buying your home.

What should I offer? 

Luckily you are reading this guide so you should be prepared to make a knowledgeable offer. All the things we discussed in previous chapters will help you decide on the offer amount.  Knowing what other homes have sold for, average days on the market, sellers motivation, property taxes etc. will aid you. There is no magic formula when making an offer because each house and seller will be different.  However having the right information can save you thousands.

There are some general rules you can follow based on if your buying in a sellers market or buyers market.

Zillow has  tool that helps you to determine the market type.

What To Do In A Buyers Market

In a buyer’s market, you will have more choices when it comes to the types of homes you can purchase. Depending on how long the market favors the buyer, you will also have the luxury of taking your time because bidding wars are much less.

When looking for a home in a buyer’s market, you should do the following:

  • Stay current with the listings in your area
  • Sign up for free email listings and newsletters
  • Check out homes that have recently been reduced
  • When making an offer, ask for closing fees to be paid for by the seller
  • See if there are other offers, such as appliances that come with the home
  • Ask for certain allowances (carpeting, roofing, siding, ect.)
  • Do not be afraid to offer a lower price, and
  • Ask for a shorter response time

What To Do In A Sellers Market

In a sellers market, you will have to play the game slightly different than you would in a buyer’s market. In this type of market, there are many buyers who will want to buy homes that are attractive and priced within their budget. Homeowners will have their pick of offers to choose from so your offer will have to stand out in more than just price.

When looking for a home in a seller’s market, you should:

  • Make an offer that is close to the asking price or slightly over
  • Send a pre-qualification letter from your lender with the offer
  • Choose a closing date that is sooner rather than later
  • Do not ask for too many contingencies
  • Send a personal letter
  • Promise more of a down payment, and
  • Use a real estate agent that gets things done quickly

What do I include in the offer?

If you are using a real estate agent they will know what to include in your offer.  However it is good as an inform buyer to know what’s included. 

The purchase offer should outline everything you expect from the homeowner and what they can expect from you. You should include the following in your offer:

  • price being offered
  • amount of deposit on the home
  • amount of money you will be putting down on the home
  • mortgage terms
  • Contingencies (such as appliances that will stay repairs that will need to be made, removal of items in the yard, etc.)
  • when closing will take place
  • specify who will pay which fees
  • any reports that will be needed, and

Each of these categories should be explained in its own paragraph. Be as specific as possible when writing up a purchasing offer.

Each state has its own laws concerning contingency, amount of time a buyer has to respond to the offer, and fees that are to be paid. Be aware of these laws before sending your offer or you may end up with a counter offer or a rejection.

Chapter 7

Closing The Deal 


Drawing up contracts, having the final walk-through, and going to the closing are the last steps you will have to take when buying your first home. This is the time when having a real estate agent you can trust, and a little knowledge of home buying comes in handy.  

The Closing Process

There are a lot of steps & costs that come up during closing. Your realtor can walk you through these and get you to the finish line.

When you finally arrive at the closing, you should expect to:


  • Sign contracts
  • Do a final walk-through
  • Pay closing costs, and
  • Get your keys

Sign Contracts

When you sign the contracts, read them carefully to make sure that everything that has been discussed is in the contract. Ask questions that you may have at this time.

Final Walk-Through

The final walk-through of the home will take place before or during the closing. This is the final chance for you to see the home before it becomes yours. Make sure the items on your contingency are in place so that you can sign the contracts.  Trulia has a home final walk-through checklist that you can use when performing yours.

Paying Closing Cost

Typically, the buyer will have to pay the closing costs associated with buying a home. But in a buyer’s market, you may be able to add a contingency that states the seller will be responsible for some or all costs. This may appeal to sellers who want to sell their home quickly.

You can use the closing cost calculator by nerd wallet to get a general idea of your closing cost.  

Get Your Keys

Congrats your a home owner!!!! After signing the contracts, you will receive the keys to your new home. This is an exciting feeling and one that will be with you for a long time!