First Time Home Buyers

First Time Home Buyers

Hi, my name is John Peña, and I'm the owner of Peña El Paso and a real estate agent, and I wanted to do a quick video for people who are starting to think about buying a home for the first time. Because if you haven't bought a home before, you know, chances are you don't know how it works, right? So you have a lot of questions.

So I'm not going to get into the nitty gritty of it. But I just wanted to give kind of a general overview for people so they could start to kind of wrap their head around the process. So the first thing you're going to do is you're going to make sure that buying a home is right for you and your family. So if you've been renting and you're just sick of, you know,

paying that monthly rent, you feel like you're throwing your money away. If you are longing for some space of your own where your kids can paint the walls, whatever colors they want, or, you know, your pets can have their backyard so you don't have to walk them on a leash all the time, you can just let them out the back door. If you've decided that buying a home is

what you want, and that is what's best for you and your family, then that's fantastic. Another quick point there is, ideally, you're going to be in this home for at least five years, because if you buy a home and then you sell it a year later, chances are you're not going to break even, you might even lose money on the deal, you just will not have had the opportunity

to put enough equity into the home to really to get anything out of it. So most people suggest that, you know, if you're going to buy a home, you should intend to live there for most of us for around five years or more. So if you've come to the decision, though, that, yeah, I'm going to pull the trigger, I'm going to pull the trigger, I'm going to buy a home, then that's fantastic.

Now, the next step is to see if you can buy a home, because homes aren't free, and they're actually pretty darn expensive, as you know. And the way that most of us buy a home is, since we don't have, you know, $200,000 in the bank, and if you do, then you should call me immediately. But most of us don't have that much money in the bank. So we have to get a mortgage or a home loan.

And that requires us going to a lender and asking them to give us a lot of money. So there's a lot of different lenders that you can reach out to, you can go to your bank, maybe that you already use, they already have a lot of the information on file for you. You can go to a local lender, or you could even go to an online lender,

Rocket Mortgage, we've all heard of these different lenders online. It's really up to you, and you don't have to just go with one, you can actually shop around and pick the one that gives you the best rate and the best terms. So in the spirit, though, of keeping this concise, you're going to go to a lender and essentially ask them if you would qualify for a loan.

And they can't tell you yes or no until they actually look at your financial standing. And they're going to essentially want to see the income that you make. Do you have a job? How much money do you make? How long have you been there? They're going to want to look at the debts that you have. This could be credit card debt, student loan debt,

car loans, or whatever else that might be. And yes, they are going to pull your credit score because they need to look at your credit history and see, you know, have you made your monthly payments? How many different accounts do you have open? Are you current on all of these accounts? You know, is there an account that's in bad standing? So yes, they will have to pull your

credit score. So I know that's a tough thing for some people, but it's not the end of the world. And if you really want to buy a home, your credit score is going to be pulled. So at that point, they're going to crunch all the numbers and they're going to come back and say, okay, yes, we're going to give you a loan for, let's just make up a number, $175,000.

Or they're going to come back and they're going to say, I'm sorry, but no. Or depending on who the lender is, they're going to say, we can't give you a loan right now because of this, but we do have some programs to help you, you know, put yourself in a better position. Would you like to do these programs and maybe six months or a year from now, you'll be able to qualify for

a loan. So that's an option too. So let's go with a happy case scenario where the lender says, yes, we're going to approve you for a loan. At this point, you're in great shape. Now, if you have that prequalification, there's actually a step you can do with a lot of lenders where you can go a little bit further when you really are serious. And you can get like,

when you're going to start putting offers on homes, which I'm going to get to in a second, where you can get a preapproval. And this is a more secure document that essentially virtually guarantees that the lender is going to give you a loan. But now they're going to actually want to see real pay stubs. They're going to want to probably check your taxes from the last year or

two. And they're going to actually look at your actual bank statements. But if you go this extra step and get this preapproval, then you're really in business. Then you're, then you're ready to go. And then you can take, go to the next step, which is to call me and say, Hey, John, I've been preapproved for X amount of money. Let's start looking at homes. And so this is where it gets fun

because now I'm going to start helping you find a home that is perfect for you and your family. Chances are, we're going to look a lot, look at a lot of ones that aren't perfect. And we're going to learn a lot along the way, but eventually, hopefully we're going to find one that you fall in love with. And at that point, what happens is you make an offer to buy the home through me.

So you say, John, okay, this home is listed for $200,000. I'm feeling salty. Let's offer them $190,000 and see what happens. And then I say, you got it. I write up the contract. Contracts are now all signed digitally. So via email. So we'll do the contract. We'll send it off to the listing agent on that home. And then we wait and see. They'll say yes, no, or they'll say, well,

$190,000 is pretty low. How about $195,000? Right. And if you and the seller can come to an agreement, then the next step is we have what is called an executed contract. That means that you, as the buyer, intend to purchase the property and the seller, the owner of the property, intends to sell you the property. We have a legally binding document. And then we have about

30 to 45 days, typically where we go through the process of getting a home inspection to make sure that that home is in good standing, that there are no major problems and that we want to move forward or that we want to maybe negotiate some repairs that we weren't aware of. And the title company is doing their thing. They're getting all the paperwork ready.

Whatever lender you went with, they're getting all their paperwork ready so that they can transfer the funds. And then on closing day, 30 to 45 days out from when we got that executed contract, on closing day, everybody signs the documents, money changes hands, and it's that great moment where we give you the keys to your new home. Right. And basically, that's really how it works

in a nutshell. So for first time home buyers, hopefully this helps out a little bit just to kind of give you an idea of what the process is like. And obviously, as a real estate agent, I'm here to answer any questions you could possibly have. You're probably going to need some clarification on a number of different points in there. Right. Because buying a home,

it is, you know, a rather complicated process, which is why you want professional people working on your behalf. So I hope that helps. My email, my phone number is on the screen. So if you'd like to reach out, I'd be more than happy to answer any questions I possibly could for you. And until next time, we'll see you later.