Key takeaways:

  • Understand the criteria for first-time home buyers as they may qualify even if they owned a home before.
  • Walk first-time homebuyers through the homebuying process step-by-step and explain industry jargon.
  • Assist clients in prioritizing their needs versus wants to set realistic expectations.
  • Partner with a mortgage loan originator who can explain pre-approval strategies, review loan options, other lender based down payment assistance programs, and specialized affordability products.
  • Build long-term rapport by providing regular housing market updates, notifications for when rates drop, and clear and consistent communication.
  • Support your client post-purchase by sharing home maintenance tips, community events, and local amenities suggestions.

Making a home purchase for the first time can be an exciting yet challenging experience. As a real estate agent, you can lend a helping hand to first-time home buyers and help them navigate the homebuying process.

Although buying a home may come naturally to you, your client may feel like they’re stepping outside their comfort zone. That’s why you need to understand their unique needs, educate them throughout the process, and establish trust.

Read on to discover the eight best practices real estate agents can implement to help first-time homebuyers secure their dream home.

1. Educate Clients About the Homebuying Process

A common misconception is that first-time homebuyers are buying for the first time. However, there are instances where your client may qualify as a first-time buyer even if they previously owned a home. More importantly, first-time homebuyers often depend on their real estate agent to explain the homebuying process so they know what to expect. Providing them guidance and answering questions may put them at ease, making them feel more confident in their decisions.

During your initial consultation, it’s beneficial to walk them through the homebuying journey. It should include each phase: from getting a mortgage pre-approval to submitting offers, completing a mortgage application, conducting home inspections , preparing for closing costs, and signing the paperwork. Along the way, explain industry jargon to them in plain language so they understand what these real estate terms mean.

You may consider providing educational resources like:[1]

These informational materials can boost their knowledge and confidence when making this life-changing purchase. The more you empower your client, the more efficient the homebuying process will be. 

2. Have Buyers Prioritize Their Needs and Wants

It’s not uncommon for first-time buyers to have ambitious ideas of their dream home (whether it’s their starter home or forever home) that come with a limited budget. Your role is to help them sort their wish list into their must-haves and nice-to-haves.

Providing them with this framework will help avoid unrealistic expectations and guide them toward logical decisions when house hunting. If they're flexible with non-essential features, they may have more listings to choose from, making the home searching process more productive.

To illustrate, this table shows an example wish list sorted into the two categories:

Must-Have (Essential)

Safe and quiet neighborhood

Three bedrooms

Kitchen island with ample seating

Close to public transportation

Open-concept living area

Nice-to-Have (Optional)

Walking distance to local shops

Guest bedroom or home office

Real hardwood floors

Custom walk-in closet

Parking garage

During this process, you can encourage your clients to analyze the different features affecting their quality of life, safety, or potential resale value. Remind them that they’ll have the opportunity to do future renovations and conduct optional upgrades. However, aspects such as the square footage, layout, and location are usually fixed or difficult to modify.

3. Think Long-Term and Lifestyle Compatibility

While first-time homebuyers usually focus on the visible features, you will need to guide them in envisioning their future lifestyle. When they review each listing, they should carefully evaluate the home's compatibility with their living routine and long-term goals.

Initiate discussions surrounding their daily habits, community involvement, and the long-term implications of their home purchase. You can emphasize how specific neighborhoods align with their desired lifestyle, along with other factors, including commute times, access to local services, and relevant information about the community that they’re considering.

Major life milestones such as getting married or having children may affect your client’s housing needs. Other factors like new developments, traffic congestion, school districts, and future resale value of the property may influence a homebuyer’s decisions. Ultimately, shedding light on these considerations will help your buyer choose a home that will match their current and future needs.

4. Provide Localized Expertise

Choosing a home in an ideal neighborhood that suits your client’s lifestyle will require in-depth research. Understanding the local market will help you become a valuable real estate professional. Sharing neighborhood insights, property values, price trends, and days on market (DOM) statistics may help your clients make informed decisions that align with their lifestyle.[2]

Your homebuyers may want to know about the nearby schools, public transportation system, walkability scores, community development plans, and the local scene. Small details, such as where the farmer’s market takes place or where there are pet-friendly parks, may influence your client’s final decision.

If you have first-hand experience living or working in a particular neighborhood, your client will appreciate you offering personal insights. Sharing your perspective may build trust and enable them to envision their potential lifestyle outside of the listing photos and videos.

5. Team Up With a Mortgage Loan Originator (MLO)

Many first-time homebuyers are unaware of how much their financing influences their buying power. Without a mortgage professional providing them with tailored advice, they may overestimate or underestimate how much they can afford.

In the early stages, it’s beneficial to connect your buyers to a well-respected MLO who can share financing options so they can feel more confident in their decisions. Also, government programs such as FHA loans, USDA loans, VA loans, and state or local homebuyer assistance programs may offer significant financial advantages for eligible borrowers. Lastly, your client may be interested to learn about the down payment assistance programs that different lenders offer.

Encouraging your clients to obtain pre-approval from a lender will strengthen their offer and set a price range for a home that’s within their reach. An official pre-approval letter indicates to sellers that your client is financially prepared and a determined buyer, which increases your ability to negotiate better terms.

6. Foster Open Communication

Understanding your client’s needs starts with asking them open-ended questions to reveal their underlying motivations. A buyer wanting a large kitchen and dining area may desire more space for hosting family gatherings and social events. Digging deep will help you understand why they want certain features.

Create a safe environment for your client to ask questions and share their concerns. Be sure to listen and provide thoughtful responses. Also, find out which methods of communication your clients prefer. Some individuals prefer phone calls, while others may wish to receive text messages or email updates. Regularly checking in with your client—and responding promptly to their emails or phone calls—shows your dedication to serving their needs and keeping them informed.

7. Earn Trust and Credibility by Being Transparent

One of the biggest challenges that first-time homebuyers face is opening up to their real estate agents. To let their guard down, you’ll want to be up front and honest from the get-go. Being transparent may enable you to build a long-lasting partnership.

Walk them through the expectations at every stage of the homebuying process. For instance, if there’s high demand but low inventory, inform your buyers that they need to act fast to avoid bidding wars. Or you may need to voice your honest concerns about a property they fall in love with. They will appreciate your genuine candor if they know that you’re acting in their best interest.

8. Prepare Buyers for Closing Costs and Avoid Pitfalls

As first-time homebuyers search for their ideal home, they may lean on you for guidance. Being proactive and sharing common pitfalls can help you steer them in the right direction. For instance, emphasize how conducting a home inspection can uncover hidden problems within a home and help them avoid unwanted surprises down the road.

Aspiring homeowners should understand the closing costs of this significant transaction. Twenty-seven percent of homeowners are surprised by unexpected fees during the homebuying process.[3] So, it’s essential for your client to budget for these anticipated expenses and understand the long-term financial implications of expenses such as:[4]

  • Appraisal and inspection
  • Homeowners insurance
  • Property taxes
  • Maintenance fees
  • Mortgage interest
  • Title insurance and settlement fees
  • Utilities

Your relationship with them doesn’t end once your clients receive the keys to their home. Some lenders have specialized programs and grants that can be used to cover closing costs, which may help make home buying more affordable for them.

Also, providing them with post-purchase support may earn loyalty and generate referrals. You can provide tips on how they can maintain their home, share community events, and provide a list of local amenities. Going the extra mile to check in on them helps show your commitment to keeping them satisfied and may lead to future real estate transactions.

Help Your Clients Achieve Their Homeownership Goals

First-time homebuyers need a trusted advisor who can guide them with their homebuying journey from start to finish. When you take the time to educate and advocate for your clients, you’re not only assisting them in closing a deal, but you’re also building strong relationships. These lifelong clients may help you generate word-of-mouth referrals to grow your business.

It's critical to stay on top of market trends while guiding your buyers through this significant financial milestone. By implementing these best practices, you put yourself in a position to better serve first-time homebuyers and set yourself apart from competitors as a trustworthy and compassionate real estate expert.

Lastly, explore our valuable resources for real estate agents and connect with a PNC MLO who supports first-time home buyers in your area.

Learn more about how PNC is making homeownership more affordable through down payment assistance and special housing programs.