Essential Tips for First-Time Homebuyers in St. Louis, MO

St. Louis, MO is a vibrant city famous for its music, smoky barbecues, award-winning breweries, and legendary baseball team, the St. Louis Cardinals. It offers an affordable cost of living, an abundance of family-friendly activities, cultural diversity, and a strong sense of community. With so much going for it, this city is a great location for first-time homebuyers looking to start building financial stability and even more importantly, raising a family.

If you’re looking at homes for sale in St. Louis, MO, here are 10 essential first-time home-buying tips to get you started!

1. Understand St. Louis’, MO Real Estate Market

Before you start your St. Louis, MO home search, get a solid understanding of its real estate market.

The city has a vibrant housing market that draws families and professionals not only because of the affordability of the housing but the diversity of property types on the market. Homes for sale in St. Louis cater to a variety of tastes and budgets. You’ll find historic brick bungalows in established neighborhoods, modern condos downtown, and spacious family homes in the suburbs.

Compared to the national average, median home prices in St. Louis are significantly lower. The national median price of a home hovers at around the $400,000 mark, in St. Louis, the median is just a little under $200,000. This is significant for first-time homebuyers who are not typically at the height of their earning power and often struggle to raise a large enough downpayment.

2. Evaluate Your Financial Situation

Are you in a financial position to undertake being a homeowner? To ensure you’re prepared, we recommend a thorough financial audit. Here are some key steps to take:

• • Understand your expenses and income. Take time to crunch the numbers. You can start by gathering your financial documents to get a clear picture of your income and expenses.
  • Calculate your debt-to-income ratio (DTI). Your DTI is the percentage of your gross monthly income that goes toward debt payments (loans, credit cards, etc.). Aim for a DTI below 43% or even lower to ensure you can comfortably manage a mortgage payment on top of any existing debts.

• Estimate your housing costs. While paying a mortgage will be the biggest monthly payment, remember to factor in property taxes, homeowners insurance, and potential HOA fees. It’s also important to set aside finances for unexpected maintenance and repairs.
• Secure pre-approval for a mortgage. Obtaining a pre-approval from a mortgage lender is a crucial step in the home-buying process. This will provide you with a clear understanding of your borrowing capacity, allowing you to focus your search on properties that align with your budget. This also strengthens your offer by providing additional credibility in a competitive market.
• Check your eligibility for special mortgage programs. Take note that Missouri has special mortgage programs for first-time buyers through the Missouri Housing Development Commission (MHDC). This includes:- MHDC First Place Loan Program provides competitive fixed-rate loans for conventional, FHA, VA, and USDA mortgages. You can be eligible for this loan if you’re a first-time homebuyer, haven’t been a homeowner for the past three years, or are a veteran.
  – MHDC Next Step Program offers affordable mortgages with or without down payment assistance for both first-time and repeat homebuyers. Income limits are generally higher than the First Place program, making it suitable for a wider range of buyers.
  – Mortgage Credit Certificate (MCC) offers first-time homebuyers and veterans a tax credit on a portion of their annual mortgage interest, potentially saving up to $2,000 per year as buyers live in the home.

In addition to Missouri’s first-time homebuyer programs, consider exploring these nationally available options:

– FHA Loans offer a lower minimum credit score requirement (580) and a down payment as low as 3.5%, which opens opportunities for first-time homebuyers who find it difficult to secure loans.
– VA Loans provide veterans and active military personnel with zero-down payment mortgages.
– USDA Loans are designed for rural home purchases (USDA-approved areas) and also offer zero-down payment options with a minimum credit score requirement of 640.

3. Find a Real Estate Agent

Buying your first home can feel like a whirlwind. But having a real estate agent by your side can make the whole process much smoother and a lot less stressful. Think of your agent as your guide throughout the journey. They can help you navigate all the steps needed, steering you away from dangerous pitfalls while helping you reach your aims.

Here’s why working with an agent is a smart move:

• In-depth knowledge of the local market. Real estate agents know your desired area inside out, from pricing trends to hot neighborhoods. They’ll find ideal listings that fit your budget and save you valuable time searching.
• Skilled negotiators. They can strategically present offers and counteroffers to get you the best possible price for your future home. Beyond the price, agents are skilled at negotiating other terms that benefit you. This could include concessions like closing cost assistance, seller-funded repairs, or extended inspection periods to ensure your peace of mind.
• Smooth handling of paperwork. The home buying process involves a significant amount of complex documents. Real estate agents will help you understand its intricacies, and ensure all documents are completed accurately and filed on time.
• An established professional network. Real estate agents often have established relationships with a network of qualified professionals, including mortgage lenders, home inspectors, and other professionals in the home-buying industry.
• Safeguards your purchase. Real estate agents have a legal and ethical duty to disclose any known material defects in a property. This proactive approach protects your investment by ensuring transparency and potentially leading to repairs, price reductions, or other favorable outcomes for you as the buyer.

4. Define Your Priorities: Needs vs. Wants

Once you’ve identified the right home type, make a list that distinguishes between your non-negotiable needs (e.g. number of bedrooms, proximity to schools, pet-friendly space) and desirable but flexible features (e.g. yard size, design/styling, appliances). This focused approach streamlines your search and reduces decision fatigue when comparing properties. With clear criteria, your real estate agent can search for properties that align perfectly with your needs, making the search more targeted.

This may sound straightforward, but it can be a challenging task. Don’t be afraid to consult your real estate agent as they’re likely to be very experienced in helping their clients crystalize what is of utmost importance and what is negotiable.

5. Make Sure to Do a Walk-Through

An important step of the home-buying process is the walk-through. While your agent can represent you when viewing homes for sale in St. Louis, MO, and meeting sellers, it’s still best for you to be present during the walk-throughs. Take this opportunity to get a firsthand feel of the property, its layout, and any potential issues you might not catch otherwise. You can ask any questions that come to mind and ensure you and your agent are on the same page about the property’s condition.

Before scheduling your visit, here are some key questions to ask your agent:

• Does the square footage and number of bedrooms/bathrooms meet my requirements?
• How does the location fit with my needs for commute time, schools, and amenities?
• Is the asking price fair?

Take the time to explore the area to assess its accessibility to everyday needs such as grocery stores, pharmacies, and maybe even your favorite coffee shop.

While envisioning your future life in the home is exciting, a careful inspection with your agent should be the priority. Avoid showing too much enthusiasm and expressing critical opinions about the property. Just take detailed notes while you examine the place and keep a checklist of things to look out for.

Here are some essential things to keep in mind during your walk-through:

• Inspect for repairs. Look for warped floors, foundation cracks, or outdated fixtures.
• Watch for red flags. Check for mold, moisture issues, or doors/windows that don’t shut properly.
• Confirm inclusions. Identify appliances, fixtures, or furniture that come with the home.
• Document your visit. Take photos and notes for each property.

6. Submit an Offer With Confidence

With the help of you’re agent, it won’t take long to set your sights on the perfect home for sale in St. Louis, MO. Then it’s time to make an offer.

Before submitting your offer, sit down with your agent to determine the offer price, any contingencies you want to include, and the amount of earnest money you’ll put down as a good faith deposit.

With a clear strategy, you and your agent will collaborate on a formal letter outlining your terms. Once the offer reaches the seller, the negotiation phase is likely to begin.

A seller has a few options: accepting your offer as-is, rejecting it entirely, or proposing a counteroffer with revised terms. If a counteroffer comes your way, your agent can act as your trusted liaison throughout the negotiation process until you reach an agreement or decide to move on.

With a well-defined strategy and a supportive agent, you can submit your offer with confidence, knowing you’ve done all you can to secure the home.

7. Conduct a Home Inspection

During this process, a professional home inspector will thoroughly evaluate the property. They’ll search for issues such as foundation cracks, faulty HVAC (heating, ventilation, and air conditioning) systems, and more. They’ll then provide a detailed report outlining their findings.

With the home inspection report, you can approach the seller if any major problems arise and request repairs or even a price reduction.

It’s important to remember that an inspection is different from an appraisal. While an appraiser estimates the home’s market value, they won’t delve into specific repairs needed. An inspection, however, provides a much more detailed picture of the property’s condition, highlighting potential issues you’ll face as a homeowner.

For a secure home purchase, be sure to schedule both an appraisal and an inspection before finalizing the deal.

8. Prepare for Closing

We’re getting closer to the finish line! This is where everything comes together, assuming that the home inspection went smoothly with no major surprises.

On closing day, expect to sign numerous documents to finalize your purchase. Typically, other parties would be present during the signing. Apart from the seller and their agent, you may be joined by representatives from the lending and title company and perhaps even a real estate attorney.

Here are some important steps to consider before the big day:

• Consult with a real estate lawyer. To ensure a smooth closing and to protect your interests, consider hiring a real estate lawyer. This isn’t mandatory, but having a legal expert by your side can help avoid unforeseen complications and give you peace of mind in the long run.
• Take your time to go through the closing documents. If you hired a real estate attorney, this is the perfect time to ask them any questions you might have as you review all the paperwork. Your real estate agent will also be able to help you understand the purpose of each document. These documents include the purchase agreement, loan estimate, mortgage or deed of trust, initial escrow statement, and closing disclosure.
• Verify ownership history. An important step of the closing process involves running a title search. This will uncover potential ownership issues or claims against the property, like unpaid taxes or outstanding liens from contractors.
• Explore options to minimize your closing costs. Closing costs can add up, but remember that some can be flexible. You can negotiate with your lender if they can reduce the origination fee or waive application fees entirely.
• Schedule your closing date. Confirm the closing date with the seller. The date is often scheduled at least a month after the acceptance of the purchase offer. Once you agree on a date, it’s a green light for packing and booking movers.

9. Do a Final Walk-Through

Before the seller hands over the keys to you, doing a final walk-through of the property is a must to ensure that you’re getting exactly what was agreed upon. This is usually done on or before closing day. Take a look around with your agent and check for any damage that may have occurred since your last visit.

The final walk-through will also allow you to identify any last-minute issues, confirm inclusions and exclusions such as fixtures and appliances, and give you peace of mind knowing that everything’s in order for your big move.

10. Moving In

This is the moment you’ve been waiting for – you can now unlock the door to your new home! Here are some tips to help you settle in smoothly:

• Unpack and get organized. Unpack your belongings and find designated spots for everything, one room at a time. This will help you feel less overwhelmed and make day-to-day living easier.
• Set up utilities in advance. Ensure all essential utilities like electricity, water, heat, and gas are connected before your move-in day (unpacking in the dark isn’t ideal).
• Get acquainted with necessary functions. Before the move, you should already have an idea about where the circuit breakers and emergency shut-offs are, and label them if needed. We also recommend testing whether smoke and carbon monoxide detectors are working properly.
• Help your kids and pets settle in. It can be especially challenging for kids to adjust to a new place, so give them some time to familiarize themselves with your new home. Involving them in unpacking can help them feel more connected to the space. If you have pets, give them the chance to explore but keep them in a quiet place along with some of their favorite items (e.g. toy or blanket) while you move heavy furniture.
• Explore the neighborhood. Need a break from unpacking? You can take your family and drive around the neighborhood to get a better feel of the community. Meet the neighbors, check out the nearby shops and parks, and take the time to ease into your new life.

Work with The Wallner Team to find your dream home!

Looking to buy your first home in St. Louis, MO? The Wallner Team can help you navigate through the vibrant St. Louis, MO real estate market.

Born and raised in St. Louis, husband and wife real estate team, Rodney and Jen Wallner, are your ideal guides to finding your dream home in this beautiful area. Call 314.810.7652 or send them a message to start your homeownership journey.