The First-Time Homebuyer's Guide

Before you start touring homes, make sure you have enough saved for a down payment. Aim for 5% down. The idea that you need 20% down is one of the most persistent myths in this industry, and it stops a lot of would-be buyers from even starting the conversation. Most buyers don't put 20% down, and plenty of loan programs don't require it.

Lenders will also look closely at your debt-to-income ratio, or DTI: your monthly debt payments, including your future mortgage payment, divided by your gross monthly income. Ideally you want to land under about 36%, but it's not a hard line, plenty of loans allow up to somewhere around 45-50% depending on your credit, reserves, and the rest of your file. The lower your DTI, the more loan programs and pricing you'll have access to.

Reach out to my preferred lender early, before you start touring. A good lender will walk you through your real numbers before you fall for a house you can't actually afford.

Once you're under contract, don't open or close accounts, don't change jobs, and don't move money out of the accounts your lender verified, all of it can jeopardize final approval.

A pre-approval letter is an estimate, a lender's ballpark based on what you've told them. What I want for you is stronger: the Arizona Association of REALTORS® Pre-Qualification Form, signed by your lender, stating that they've actually reviewed your finances and their bank will give you the loan. It's also the actual form you submit when you write an offer, so a pre-approval letter on its own won't cut it. It involves a hard credit inquiry, but the small ding is worth it for the leverage a real lender commitment gives you.

To get there, your lender will generally ask for:

• Two years of residence history
• Two years of employment history
• Two years of tax returns and W-2s
• Three months of bank and brokerage statements

Your monthly payment will typically be quoted as PITI: principal, interest, taxes, and insurance, plus PMI if your down payment is under 20%, and HOA dues if applicable.

Once we know your budget, narrow in this order: location first, then price and affordability, then start touring. Location is the one thing you can't change after closing, so figure out drive times to your parents, your siblings, work, and the airport before anything else. Those drive times matter more over the years you'll live there than almost any feature of the house itself.

On schools, crime, and safety, I can hand you the tools directly: GreatSchools.org for school ratings, the Arizona DPS sex offender registry (OffenderWatch, searchable at azdps.gov) for registered offenders near an address, and CommunityCrimeMap.com for local crime statistics, the same resource the Arizona REALTORS® Buyer Advisory points buyers to.

Before you ever schedule a showing, pull up Google Street View and scout the street: the neighbors' yards, what's across the road, how the block actually looks. It'll save you a wasted drive more often than not. And once something makes the list, drive the neighborhood yourself at different times of day, including evenings and weekends, before you fall in love with anything on a screen.

Price is only one lever. I'll pull comps so we know whether the list price is fair before we decide how to approach it, and we'll factor in days on market and how competitive the area currently is.

The offer should also spell out:

• The title company you want to use
• Who pays for the home warranty
• Your earnest money amount
• When you want the seller's response by
• Any seller concessions you're requesting
• The closing date
• Any additional terms, like HOA fees or solar lease transfer fees

Under the standard Arizona REALTORS® contract, you get 10 days from acceptance to order a general inspection, which typically includes termites, at your expense, from an inspector of your choosing. For anything built before 2000, I recommend a sewer scope specifically, sewer issues don't show up in a general inspection and the repairs aren't cheap. Budget at least $1,000 for inspections, depending on the size of the home.

After the general inspection, we have a review conversation with the inspector. That conversation decides whether we bring in specialists, HVAC, foundation, roofer, plumber, for anything that needs a closer look. If we do, we gather quotes on the specific repairs so we're negotiating with real numbers instead of guesses: here's the issue, here's the solution, here's the cost.

From there you generally have two paths: the seller completes the repairs before closing, or the seller gives you a concession and you handle it yourself afterward, with contractors you choose. I usually lean toward the concession. It's easier to administer and it keeps closing on time instead of waiting on someone else's contractor.

The appraisal only comes into play if you're financing, cash purchases skip it entirely, and if you're putting a large amount down, your bank may issue an appraisal waiver and skip it too. This period is also when you review the CC&Rs and HOA governing documents and handle any other due diligence on the property, don't wait until the inspection period is closing to get to it.

At the end of the 10 day inspection period, you submit the Buyer's Inspection Notice and Seller's Response (BINSR), listing exactly what repairs you're asking for. I'll help guide what's a reasonable ask, and the rule of thumb is repairs, not improvements:

• Roof underlayment past its functional life: fair to ask
• Displaced roof tiles: fair to ask
• A broken sewer line: fair to ask
• Painting the inside walls, or repainting the house: that's an upgrade, not a repair

How much to ask for also depends on the market. In a buyer's market, ask for more. In a multiple-offer seller's market, ask for less, or the seller may just move on to the next offer. Anything safety related is always worth asking for, no matter the market, an old, fire-hazard electrical panel is a good example, Zinsco panels are a known one.

Within 48 hours of your offer being accepted, you'll deposit your earnest money, a good-faith deposit that shows the seller you're serious. It's held in escrow, a neutral third party, usually a title company, not handed to the seller directly, and it's applied toward your purchase at closing. Escrow holds that money and every document in the file until every condition of your contract is satisfied.

Title insurance protects you against defects in ownership history that a records search can't catch, forgery, missing heirs, filing errors, so it's worth understanding, not just signing. Unlike other insurance, you pay the premium once, at closing, for as long as you own the home.

Toward the end of escrow, the title company sends you a settlement statement. It lays out exactly what you're paying, down to the dollar, before you ever sit down to sign. Review it closely and ask questions about anything that doesn't match what you expected.

Before your closing appointment, we'll also do a final walk-through of the home, typically within 24 hours or so of signing, to confirm any agreed-upon repairs were completed and the home is in the condition you contracted for.

Arizona is a community property state, so how you take title has real legal and tax consequences, especially around creditor rights and what happens on death. Common options include community property, joint tenancy with right of survivorship, tenancy in common, community property with right of survivorship, and title-holding trusts. This isn't a decision to make casually at the signing table.

Talk to an attorney or CPA before you decide how to vest, escrow can explain the options but can't advise you on which one fits your situation.

A few days before closing, you'll receive a Closing Disclosure detailing every dollar in and out. Review it line by line and flag anything that looks off before you're at the signing table.

Bring to your appointment:

• Government-issued photo ID (driver's license preferred)
• Wired funds sent ahead, or a cashier's check
• Your social security number