Guidance for First Time Montana Home Buyers

Finances, House Hunting and Closing Costs

If you are beginning to consider buying your first home, here is some information that will help you get started. It is never too soon to begin preparing for your first home purchase.  There are three basic steps to buying your first house:  preparing your finances, hunting for your new home, and closing the sale.

Before you begin shopping for your new home, it is a good idea to know your budget.  Preparing your finances will help you determine the price range you should be looking in.  Start by gathering together your income, debt,  banking and tax information.  This includes pay stubs, automobile and school loans, credit card records, statements from brokerages, banks and retirement accounts and income tax returns.  Then, make an appointment to review your documents with a local lender, who will calculate the amount their institution will be able to lend you.

Once you know your budget, you are free to house hunt.  You have already been watching the market and doing slow drive-bys of your favorite listings – now it’s time to connect with a RE/MAX real estate agent and receive the full tour.  You should start by choosing an agent to represent you, the buyer.  A buyers agent will save you time and energy, focusing the search on properties that fit your criteria, and working to arrange showings and find open house events.  Open Houses are great for getting the feel for a neighborhood and a property.

Once you have found the right house, you will make a written offer to purchase the property.  Your RE/MAX agent will assist with the purchase details, including price, inclusions and contingencies.  The seller will then either accept, deny, or make a counter offer.  The offer is not accepted and binding until both the buyer and seller have signed the agreement.

There will be an additional expense beyond the agreed upon purchase price for your new home – these are called closing costs and fees.  You will encounter fees from your lender, including loan origination fee, points, appraisal fee, credit report fee, an escrow fee and perhaps an interest payment.  Title fees will pay for the full researching of the title history for the property you are about to purchase, to ensure the title is free and clear and the seller is legally able to sell the property.  You will pay title insurance as well, in the event there is ever a lawsuit concerning the title to your new property.  Other third party fees you may see at closing are for document preparation and underwriting.