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6 Things First-Time Home Buyers Should Know

6 Things First-Time Home Buyers Should Know

2019–2020 has seen the largest growth of first-time homebuyers in the U.S. in over a decade. With COVID-19 and related hardships leading people to leave cities for the suburbs, places like Long Island have seen property values increase rapidly, while availability has been dwindling.

Here are 6 things first-time homebuyers should know before purchasing a property.



Before you start looking at homes, take a hard look at your funds. Determine how much you can afford to spend and how much of a down payment you’re willing to make.

Note that the down payment for lending is different than the down payment for contract of sale. The lending down payment is the amount you’ll need to put toward the total purchase, with the balance paid from your mortgage. The contract down payment is the amount you’ll need to put down upon signing, which is held in escrow by the seller’s attorney. Contracts normally state that this down payment will be retained by the seller in the event you default.

Also determine what type of mortgage you’ll be taking out: conventional loan, FHA loan, VA loan, etc. Your attorney will need the type and amount for the contract.

If you’re expecting financial assistance from family or other source, make sure to notify your loan officer. Failure to disclose might result in being disqualified for the mortgage and wasted attorney and closing fees.



Determine in advance what the closing costs will be and how much you’ll be spending in total.

Aside from your down payment (which is part of your home cost), closing costs usually include title charges (recording fees, mortgage tax, insurance premiums, title searches, etc.), bank fees (loan processing fees, escrow for taxes, bank attorney fees, etc.), survey fees, and attorney fees. These can add up to thousands, if not tens of thousands, of dollars.



Before you make any commitments, get a professional inspection or engineer’s report to determine the condition of the property.

A professional inspection will reveal any problems or damages in the home that may not be apparent. It will allow you to determine any additional costs involved, if the purchase price needs to be adjusted, or whether you want to go through with the purchase.

Note that once you sign the contract, unless specifically stated otherwise, you’ll be buying the property “as-is,” meaning in its condition at the time of signing (with the exception of any utilities or appliances not in working order). Skipping the inspection in a rush to “close the deal” can end up being very costly.



Understanding the steps of the process will help you be prepared, reduce stress and frustration, and avoid unpleasant surprises.

First, you should meet with a loan officer to determine your funds and purchasing power. With that in place you can start looking at homes.

Once you’ve found a property and your offer is accepted, you should have a professional inspection performed. This is also the ideal time to retain a real estate attorney; they’ll guide you from the onset to ensure a smooth and quick transaction.

If following the inspection you still want to move forward with the purchase, a deal sheet will be prepared with basic terms (purchase price, party names, etc.) and sent to your attorney. The seller’s attorney will then prepare a contract for your attorney to review.

Once a mutually agreeable contract is arrived at, you’ll review and sign it with your attorney and send it to the seller, along with your down payment check. Once it’s returned to you signed by the seller, the contract becomes binding.

This is when you should proceed with your mortgage application. Your attorney should also order a title report (waiting further may cause delays).

Once you receive a mortgage commitment from your bank, the bank’s underwriter approves your loan as “clear to close,” and the title is cleared, you can schedule the official closing.



You should also know what timeframe to expect for the process.

If you’re applying for a mortgage, the contract will most likely be contingent upon you getting a mortgage commitment, which you must provide within a certain number of days. This is normally 45 days from the date of contract.

Your contract will also include an anticipated closing date. This is normally “on or about” 60 days from the date of the contract. It can be adjusted as you get closer, but is usually within a month of the “on or about” date.

If you anticipate needing more time (or less), it can be addressed in the contract.



Are you married? Are you engaged? Are you purchasing with friends or other family members? How you’re listed on the deed will determine your rights to the property. It’s also a factor in determining to whom your share of the property goes after your death. Have a conversation with your attorney to determine how you want to hold title.


Phillip Hornberger is an associate in the firm’s Real Estate Law and Business & Transactional Law Practices, with a focus on residential real estate. He can be reached at phornberger@vmmlegal.com and 516.437.4385 x104.