Your First Home: A Comprehensive Guide for First-Time Buyers

Welcome to your journey towards homeownership! At The Headrick Team, we understand that buying your first home is both thrilling and daunting. Our presentation is designed to guide you through the process with clarity and confidence. We'll explain key terms, debunk myths, and share invaluable tips to help you navigate every step of the way. Whether you're curious about mortgages, negotiating offers, or understanding closing costs, we're here to empower you with the knowledge you need. Let's make your dream of owning a home a reality together.

1. Here’s 5 things to consider when choosing
a home as a first-time homebuyer.
Choosing Your
First Home?
Todd Headrick (605) 359 - 5581 [email protected]

2. Preparation is Everything!
#01
Buying a home is one of the most important decisions a family can
make. It has serious financial and emotional implications.
Buying your first home requires planning and saving.
As you consider different homes, evaluate each based on values, needs, wants
and financial constraints.
Be flexible, realistic and responsible — Your first home will most likely not be
your dream home.
Prepare a checklist to help you shop for a home.
Can you and your family be happy living in this home?
Prequalify for a mortgage to see how much you can afford.
There are several government programs for first-time & low- to moderate-
income home buyers.
Here’s our Advice:

3. Is the neighborhood safe? 1.
Are the homes in the neighborhood maintained? 2.
Does the house have enough bedrooms & bathrooms? 3.
Is there adequate storage space? 4.
Are there high quality schools in the area?5.
Is the location of the house and neighborhood convenient? 6.
Is there a homeowners association? 7.
Is the area quiet? 8.
Does the floor plan suit your lifestyle? 9.
Is the house energy efficient? 10.
Is the yard easy to care for? 11.
What community services are available?12.
Are the appliances & fixtures adequate? 13.
What are the average maintenance costs for the house? 14.
How high are local property taxes?15.
Here are 15 things
to consider when
choosing a home

4. Steps involved in Buying a House
Interview Process - We get together and determine if I can provide you with the level of service you
require and you can give me the most accurate information to provide you with the best support.
Pre-Loan Approval – Ensures we are looking for homes in the correct price range, saving everyone
involved time and money and to get the best house you can afford. Sellers are also more likely to
accept an offer from a pre-approved buyer.
Determine your lifestyle and needs – I will help you find the areas and homes that best fit your needs.
Together we will create a list of what you absolutely have to have in a home and what’s most important
to you. (Schools, neighborhood, etc.).
Sign agreement and acknowledgements – People usually feel overwhelmed with all the contracts.
Most of the time it’s because they don’t understand what they are signing and why. I will break it down
for you!
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5. Real estate acknowledgement form – This
shows you I’m actually a licensed realtor.
1.
Real Estate Agency disclosure – This shows
what my duties are to the client.
2.
Disclosure/consent form for representation –
This form shows you that I can represent
more than one buyer/seller in a transaction
and documents your consent to let me do so.
3.
Exclusive Buyer/Broker Agreement - This
states that I will act in your best interest while
representing you and you are allowing me to
be your exclusive agent.
4.
Disclosures and
Agreements
Next Steps
MLS Search - Pick out the homes that suit you
and arrange a walk-thru.
Find the best home - From the walk- thrus we will
find the one that best fits your needs.
Determine the price to offer - At this point, we will
make an offer on the house you want. There’s
only a few more forms to take care of.

6. The “Offer” to purchase1.
Buyer’s advisory – This says the price could change depending on contingencies.2.
APA form – This lets you know if the other party is a licensed real estate agent and also lets you know if
anyone in the transaction is related.
3.
Local Area disclosure – This says you have been notified of any out of the ordinary circumstances in the
area you’re moving to.
4.
Forms may vary depending on the type and condition of the property.
Furthermore, I’ll negotiate terms and conditions in your best interest and ensure you are prepared for closing
day, when you will receive the keys to your new home!
This includes:
Managing the process of the transaction - Title, inspections, contingencies, deposits, loan funding,
escrow, timelines and communicating this with you through the process.
Coordinating the closing of sale/escrow.
Coordinating your move date, transfer of keys, utilities, etc.
Final Forms

7. OPENING ESCROW
The first step taken in processing a sale is to "open" escrow. This simply means that the terms of the
agreement of sale, or deposit receipt, which specifies the conditions to which both parties have agreed, is
communicated to the escrow company or broker and that the check offered to bind the agreement is
delivered to escrow. The money is deposited in a trust account and is part of the down payment. The
escrow officer then writes the escrow instructions. The instructions are nothing more than a formal
recital of the terms of the sale with additional conditions and instructions included by escrow as
necessary to ensure both buyer and seller have a clean understanding of the process. Copies are mailed
to all of the concerned parties. If all parties agree to the terms as stated, the instructions are signed and
returned to the escrow officer. If changes are required, the instructions are amended until all parties are in
agreement. Note: it is very important that the instructions are reviewed, signed, and returned as soon as
possible to avoid delay in meeting the scheduled closing date.
Key Terms and Explanations

8. LOAN DOCUMENTS
The lender will draw up loan documents which will give the specific details of the loan you are obtaining-
the amount, interest rate, term in years, due date, etc.
LOAN APPLICATION
Concurrent with the preparation of the instructions, the buyer usually will be processing a loan
application. This application should be very carefully and accurately completed immediately as the
lender's processing is quite time consuming. As soon as the loan application is received, an appraisal is
ordered. It is conducted by the lender to insure that the property is worth the negotiated sales price. This
is done to protect their investment in the property. It can be conducted by an independent appraiser or by
an in-house appraiser. The buyer is usually charged a fee for this up front when filling out the loan
application.
HOMEOWNERS INSURANCE
Although it is not required by law, your bank or mortgage company will most likely require you to get
homeowners insurance coverage. That’s because lenders need to protect their investment. In the
unfortunate event your house burns down or is badly damaged by a hurricane, tornado or other disaster,
homeowners insurance safeguards them (as well as you) against financial loss.

9. HOME WARRANTY
Home Warranty programs are contractual guarantees that certain systems of a property are free from
specified defects, and if such defects appear, those systems will be repaired or replaced, after payment of
a deductible. Home warranties cover undisclosed defects caused by normal usage or lack of preventive
maintenance by the previous owner. A home warranty program can be purchased by either the buyer or the
seller. The price of the program can be included in the purchase price or be treated as part of the closing
costs.
DOWN PAYMENT BALANCE
Approximately 3 days before the closing, the balance of the funds due on the down payment, the insurance
premium and the escrow charges must be brought to escrow. Funds may be wired to the escrow trust
account from an out-of-state bank.
RECORDING OF THE DEED AND TRANSFER OF TITLE
The recording and transfer usually occurs at 8:00 a.m. on the specified date, at which time the buyer has
bought and the seller has sold the house. However, actual possession should be agreed upon in advance. It
is awkward and costly to have two moving vans at the front door at the same time. The sales agent will
provide a key.

10. CLOSING COSTS
Separate forms are available which illustrate the elements of buyer's and seller's closing costs. Such forms
can be completed by your sales agent prior to or at the time the purchase agreement is completed. While the
various pro-rations, insurance premiums, etc. are not known at the time, and thus the costs cannot be exact,
they will be sufficiently accurate to eliminate any "surprises" at closing time. The term "closing costs" is
another misnomer, in that all of the elements are not actually associated with the purchase of the home. For
example, if the seller has paid the taxes in advance, that money is refunded to him through escrow, and he is
charged only for the actual time that he has lived in the house during the tax period. Prepaid interest is
another item or "closing cost". This is interest that is pre-paid by the buyer to cover the time from the close
of escrow until the regular monthly payment begins. There may be added pro-rations that will require cash in
escrow in addition to the down payment.
START OF INTEREST CHARGES
The interest on the loan generally begins the day before closing, concurrent with the funding of the loan.

11. START OF INTEREST CHARGES CONT.
The lender disburses the funds the business day before closing, as the money must be available at 8:00
a.m. the following day.Interest is charged from the date of disbursement (funding).
TITLE INSURANCE
The seller is required to furnish a policy of title insurance to the buyer. This policy protects the buyer
against possible defects in the title and against possible liens that may exist against the property. The
buyer, in turn, is required to provide a policy of title insurance to the lender, which insures the Lender
against loss from any title irregularity.
PROPERTY INSPECTION
A professionally conducted home inspection followed by a written evaluation and report is becoming a
standard procedure in home buying and is strongly recommended. It gives an objective evaluation of the
current condition of a home and its major systems. It is not an assurance that there won't be a need for
future repairs but may reveal the probable life expectancy of some of the home's components. It gives the
buyer the opportunity to learn as much about the condition of the home before finalizing the purchase.

12. The 90 Ways I Assist Buyers
1. Schedule Time To Meet Buyers
2. Prepare Buyers Guide & Presentation
3. Meet Buyers and Discuss Their Goals
4. Explain Buyer & Seller Agency Relationships
5. Discuss Different Types of Financing Options
6. Help Buyers Find a Mortgage Lender
7. Obtain Pre-Approval Letter from Their Lender
8. Explain What You Do For Buyers As A Realtor
9. Provide Overview of Current Market Conditions
10. Explain Your Company’s Value to Buyers
11. Discuss Earnest Money Deposits
12. Explain Home Inspection Process
13. Educate Buyers About Local Neighborhoods
14. Discuss Foreclosures & Short Sales
15. Gather Needs & Wants Of Their Next Home
16. Explain School Districts Effect on Home Values
17. Explain Recording Devices During Showings
18. Learn All Buyer Goals & Make A Plan
19. Create Internal File for Buyers Records
20. Send Buyers Homes Within Their Criteria
21. Start Showing Buyers Home That They Request
22. Schedule & Organize All Showings
23. Gather Showing Instructions for Each Listing
24. Send Showing Schedule to Buyers
25. Show Up Early and Prepare First Showing
26. Look For Possible Repair Issues While Showing
27. Gather Buyer Feedback After Each Showing
28. Update Buyers When New Homes Hit the
Market
29. Share Knowledge & Insight About Homes
30. Guide Buyers Through Their Emotional Journey
31. Listen & Learn From Buyers At Each Showing
32. Keep Records of All Showings
33. Update Listing Agents with Buyer’s Feedback
34. Discuss Home Owner’s Associations
35. Estimate Expected Utility Usage Costs
36. Confirm Water Source and Status
37. Discuss Transferable Warranties
38. Explain Property Appraisal Process
39. Discuss Multiple Offer Situations
40. Create Practice Offer To Help Buyers Prepare
41. Provide Updated Housing Market Data to Buyers
42. Inform Buyers of Their Showing Activity Weekly
43. Update Buyers On Any Price Drops
44. Discuss MLS Data With Buyers At Showings
45. Find the Right Home for Buyers
46. Determine Property Inclusions & Exclusions
47. Prepare Sales Contract When Buyers are Ready
48. Educate Buyer’s On Sales Contract Options
49. Determine Need for Lead-Based Paint
Disclosure
50. Explain Home Warranty Options
#03

13. The 90 Ways I Assist Buyers
51. Update Buyer’s Pre-Approval Letter
52. Discuss Loan Objection Deadlines
53. Choose a Closing Date
54. Verify Listing Data Is Correct
55. Review Comps With Buyers To Determine
Value
56. Prepare & Submit Buyer’s Offer to Listing
Agent
57. Negotiate Buyers Offer With Listing Agent
58. Execute A Sales Contract & Disclosures
59. Once Under Contract, Send to Title Company
60. Coordinate Earnest Money Drop Off
61. Deliver Copies to Mortgage Lender
62. Obtain Copy of Sellers Disclosure for Buyers
63. Deliver Copies of Contract/Addendum to
Buyers
64. Obtain A Copy of HOA Bylaws
65. Keep Track of Copies for Office File
66. Coordinate Inspections with Buyers
67. Meet Inspector At The Property
68. Review Home Inspection with Buyers
69. Negotiate Inspection Objections
70. Get All Agreed Upon Repair Items in Writing
71. Verify any Existing Lease Agreements
72. Check In With Lender To Verify Loan Status
73. Check on the Appraisal Date
74. Negotiate Any Unsatisfactory Appraisals
75. Coordinate Closing Times & Location
76. Make Sure All Documents Are Fully Signed
77. Verify Title Company Has Everything Needed
78. Remind Buyers to Schedule Utilities
79. Make Sure All Parties Are Notified of Closing
Time
80. Solve Any Title Problems Before Closing
81. Receive and Review Closing Documents
82. Review Closing Figures With Buyers
83. Confirm Repairs Have Been Made By Sellers
84. Perform Final Walk-Through with Buyers
85. Resolve Any Last Minute Issues
86. Get CDA Signed By Brokerage
87. Attend Closing with Buyers
88. Provide Home Warranty Paperwork
89. Give Keys and Accessories to Buyers
90. Close Out Buyer’s File Brokerage

14. Off Market Real Estate Property Searching Strategies
I go beyond just looking at the MLS to find the home for you. I employ multiply strategies to
make sure every property, whether on or off the market, is considered for your needs
1. FSBO (for sale by owner) OPPORTUNITIES
Zillow
Craigslist
FB Marketplace
Local FB groups
Signs outside houses in the neighborhood
Word of mouth
2. AGENT OPPORTUNITIES
Asking listing agents what is in their pipeline
New Construction – asking the builders what is in their pipeline?
Buyer leads that need to sell in order to buy
Leads that will not list with us but will sign an ATS (authorization to show)

15. Off Market Real Estate Property
Searching Strategies Continued
2. AGENT OPPORTUNITIES
When making contact with an agent (setting up
showings, inspections, FWT and communication),
asking them if they have anything coming up that they
can share with me
Asking agents in my brokerage what they have coming
up
FB groups (my brokerage’s internal group, and local
MLS group) – I can post what a client is looking for or
look for agents posting their coming soon listings.
Contact agents that represent New Construction
Builders
Contacting agents in my brokerage/internal brokerage
FB Group if any closings may be falling through
3. PROSPECTING OPPORTUNITIES
Reaching out to clients with pending listings
Call pending listings on MLS – are they through all
contingencies?

16. Costs Involved in
Purchasing a Home
Once you have decided to purchase a home, the following costs will need
to be paid:
An initial good faith deposit of at least 1% of purchase price.1.
Closing costs, which can be 1,5% to 2% of the purchase price.2.
Down Payment, which is determined by the loan type.3.
Reserves: Most lenders require buyers to have 2 to 3 months of tax
and insurance payments in savings (unless you have a 20% down
payment).
4.
We do not recommend that you buy outside of your comfort zone. Allow
for a financial safety net in case of emergencies.
#04

17. Who is Expected to Pay for What?
The Seller Will Generally Be Expected To Pay For:
Real Estate commission
Title and Escrow fees
Document preparation fee for Deed
Document recording charges that affect the seller
County Transfer Tax
Any loan fees required by buyer’s lender
Notary fees – seller’s documents
Inspection and repairs according to contract
Any city transfer / reconveyance tax
Special delivery / courier fees
Payoff of all loans in seller’s name
Interest accrued to old lender, statement fees,
reconveyance fees and any prepayment penalties
Homeowner’s Association transfer fee and prorate dues
#05

18. The Seller Will Generally Be Expected To Pay For:
Bonds of assessments according to contract
Home warranty according to contract
All delinquent taxes
Any judgments, tax liens, etc. against seller
Tax proration
Recording charges to clear all documents of
record against seller
The Buyer Will Generally Be Expected To Pay For:
Title insurance premium covering loan policy (ALTA)
Notary fees – buyer’s documents
Document preparation fees – buyer’s documents
Tax proration
Inspection fees (roofing, geological, property etc.)
Special delivery / courier fees
All new loan charges (except those required by the lender
for the seller to pay)
Interest on new loan from date of funding to 30 days prior
to first payment date
Preliminary change of ownership fee
Assumption / Change of records fees for takeover of
existing loan
Other proration where applicable

19. Please feel free to contact me
to start your journey to homeownership. Let us
help you find and make your dream home a
reality!
Congratulations! You're one step closer to
finding your dream home!
(605) 359 - 5581
[email protected]
dakotahomesonline.com
Todd Headrick
REALTOR®
I’ll be waiting to hear from you!