As a first-time homebuyer, you will need a clear roadmap that shows the entire home-buying journey from “thinking about buying” all the way to closing. If one of your goals for the new year is to buy a home, you are going to love our step-by-step guide!
Buying your first home is exciting, but it can feel overwhelming without a simple plan to follow. This guide will walk you through each step, while highlighting Arkansas-specific programs. Here is what you can expect from offer to closing.
Buying Your First Home
Step 1: Get Your Finances Ready
Before touring homes, you need a realistic budget and a clear picture of your financial health. This will help you avoid the heartbreak that can come if you focus on homes that aren't a good fit for you.
CHECK YOUR CREDIT EARLY:
Pull your credit report and address late payments or high balances. You can request a free copy of your credit report every year.
Many Arkansas loan programs require a minimum score around 640, so improving credit can open more doors.
CREATE A REALISTIC MONTHLY BUDGET YOU CAN STICK TO
Don't just look at the principal and interest. You need to include taxes, homeowner’s insurance, utilities, and maintenance. Forgetting these expenses can make a home you are approved for unrealistic financially.
Closing costs often run about 2–5% of the purchase price, so be sure to plan for that upfront. Sometimes sellers cover closing costs, but you don't want to count on that and then be short on funds.
Step 2: Explore Loans and Programs
Now that you have an good idea of your budget, the next step is to explore mortgage options and local assistance. Arkansas offers several programs that can reduce upfront costs for qualifying first-time buyers.
COMMON LOAN TYPES
Conventional, FHA, VA, and USDA loans are all widely used in Arkansas, especially in rural and small-town areas.
Note that FHA loans often allow higher debt-to-income ratios than conventional loans, which can help some first-time buyers qualify.
ARKANSAS-SPECIFIC ASSISTANCE
Arkansas Development Finance Authority (ADFA) offers homebuyer assistance, including down payment and closing cost help plus education courses.
Many cities, like Little Rock, also provide local down payment assistance or grants for income-eligible first-time buyers, sometimes up to $10,000.
HOMEBUYER EDUCATION
Several Arkansas programs require a homebuyer education course, which can often be completed online and helps buyers understand the process.
Step 3: Get Pre-Approved With a Local Lender
Pre-approval is the green light you need before serious house hunting. We know it's tempting to start looking right away, but in a competitive market, sellers look for buyers who already have a lender ready to go. And, you want to be sure you are looking at homes in the right price range.
PRE-APPROVAL VS. PRE-QUALIFICATION
Pre-qualification is an informal estimate of what you can afford that is based on what you tell the lender, and not based on a more thorough credit check.
Pre-approval involves submitting documents (income, assets, debts) so the lender can issue a written letter stating the price range. This letter strengthens offers and helps narrow down neighborhoods and price points.
WHY LOCAL MATTERS
Local Arkansas lenders understand state programs, property types (from small farms to townhomes), and typical timelines.
They can also explain estimates of closing costs early, so you aren't surprised at the closing table.
Step 4: Choose the Right Neighborhood
With a budget and pre-approval in place, you are ready to think about where you want to live. Arkansas offers everything from quiet rural settings to vibrant college towns and growing suburban communities.
DEFINTE LIFESTYLE AND COMMUTE
Think about the distance to work, schools, churches, shopping, and outdoor recreation.
Different areas of Arkansas offer their own rhythm and amenities.
PRIORITIZE NEEDS VS. WANTS
List your non-negotiables like bedroom count, yard size, or one-level living.
Then list “nice-to-haves” like updated finishes or a larger lot, so you can make smart tradeoffs when inventory is tight.
Step 5: Partner With a Local Realtor
A knowledgeable Arkansas agent makes the process smoother. A good Realtor can keep you updated on the market, help you negotiate with the seller, and coordinate the many moving pieces between contract and closing. A Realtor's job is to protect your interests in the transaction.
MARKET EXPERTISE
An agent who knows the local market can help you understand fair prices, typical days on market, and realistic offer strategies.
They can also flag issues common to local homes, such as aging systems or rural property quirks.
GUIDANCE THROUGH PAPERWORK
From writing offers to explaining contingencies, an experienced Realtor will help you understand what you are signing.
The agent also tracks deadlines for inspections, appraisal, and loan approval so nothing falls through the cracks.
Step 6: Start House Hunting
This is usually the most fun part, but we recommend you approach it with a clear strategy. A focused plan will help you compare properties logically rather than getting swept away by décor. Remember: In most cases, that beautifully decorated home won't come with the beautiful furniture, artwork, etc.
IMPORTANT THINGS TO REMEMBER
STAY WITHIN THE APPROVED PRICE RANGE
It's best to search within or even slightly under your pre-approved budget, leaving room for negotiations and repairs.
Also consider future expenses such as furnishings or small updates.
TAKE NOTES AND PHOTOS
keep a checklist for each property so you can remember the condition, layout, neighborhood feel, and any concerns you might have.
Visit the area at different times of day to get a better sense of traffic, lifestyle, and noise levels.
Step 7: Make an Offer and Negotiate
Once you find the right home, it's time to write an offer and negotiate terms. This is where your Realtor’s experience and local market knowledge are especially important and valuable.
WHAT GOES INTO AN OFFER
Price, earnest money, closing date, and contingencies (such as inspection or financing) are all key parts of an Arkansas purchase contract.
The agent will also review recent comparable sales to help you choose a competitive but sensible price.
NEGOTIATION BASICS
You may go back and forth with sellers on price, closing costs, repairs, or included items like appliances.
Remember it is normal to negotiate and your agent is there to keep emotions in check.
Step 8: Inspections, Appraisal, and Title Work
After an offer is accepted, Arkansas buyers move into the “under contract” phase, which includes inspections, appraisal, and title work. This is where the home is checked more closely to protect your investment.
HOME INSPECTION
A licensed inspector evaluates the home’s structure and systems and lists any issues or safety concerns.
You can use the report to request repairs, credits, or in some cases to cancel within contingency timelines.
SURVEY
This is critical! We have seen nightmares on real estate deals that didn't include a current survey. Things like part of the house being on the neighbor's property! This isn't an area you want to cut costs on.
APPRAISAL AND TITLE
The lender orders an appraisal to make sure the home’s value supports the loan amount.
A title company checks for liens or ownership issues, then prepares the documents needed to transfer clear title at closing.
Step 9: Prepare for Closing Day
Closing is the final step when ownership officially transfers and you get the keys. With good communication between the you, your Realtor, lender, and title company, closing in Arkansas is usually pretty straightforward.
REVIEW THE CLOSING DISCLOSURE
The lender provides a closing disclosure outlining the final interest rate, payment, and closing costs, which you should review carefully.
Always confirm the amount of funds you must bring to closing and how those funds should be delivered.
SIGNING AND RECORDING
At closing, you will sign loan documents, pay the remaining costs, and the title company records the deed with the local county.
Once recorded, the home is officially yours and you can begin moving into your new Arkansas property. (Assuming, of course, you didn't agree to delayed occupancy.)
There is nothing more exciting than buying your first home, and we want the experience to be an enjoyable one! If you need a great Realtor to walk through this journey with you, give us a call at Live Love Arkansas (479) 747-2466
