Tired Pigeon - Excellent advice!
Extreme Focus - Congrats to you, on your way to becoming a homeowner. At 23, I was collecting Hard Candy and Urban Decay nail polish.
Anyway this may get kind of long, as my husband and I have purchased a few homes, but I hope it can help you.
Before you apply for a mortgage, pay off (this is best) or pay down as much of your debts as possible. Zero balance, but leave accounts open, and don't use them. Less debt = more house or purchase power. If you don't have a car note don't get one.
Work with a mortgage lender at attaining an incontingent pre-approval letter, then a good faith estimate after you find your house. This isn't etched in stone, if you can get one then great, if you can't, it doesn't mean you wont close, it's just good to have things in writing. I can't tell you how many horror stories I've heard of people getting "pre-approved", but not underwritten, only to find out at just before closing and after they put down earnest money (which they lose) that they weren't really qualified.
After you get your pre-approval, and make your first offer, do not buy a new car, or anything that will change your debt to income ratio. Banks may rescind their offer.
Also the sale pending sign means nothing, do not tell anyone you bought a home until you have the key in your hand, sellers can back out at the last minute, and anything can happen.
Beware of the Realtor pushing their listing on you, that's double commission for them.
I cannot stress this enough, spend the 400-500 for a good home inspector. Be careful when asking the Realtor for a referral, some of them have their own inspectors that overlook flaws in the home, to close smoothly, without risking the sale. You shouldn't depend on the bank appraisal. Open and close every window and door, especially closet doors, garage doors.
Personal example: Our first home - water hose when used sprayed water back in house - clogged drains - small water heater - no chimney cap resulted in several dead birds in furnace - move the couches for holes in wall or floor - move paintings. The roof was supposedly 5 years old, but 2 months later, we get a letter from the insurance company that the roof needs repair, omitting all roof damage liability, until we fixed it. I assure you if you are buying an old house, as in lived in before, our first home was >10 years old, you need to check everything. Make seller repair it or get estimates so the seller can compensate you at closing.
We lived in our first home only two years and we sold our home, but the buyers had a great inspector, we had to do SO many repairs about problems we didn't even notice! We opted to deduct from the price of the home and pick up the closing cost, just to get rid of it.
A few more things, avoid mechanics liens, as in home improvement loans, within the first 2 years, if you cant see yourself living there longer than 10 years avoid them, I would avoid them completely.
Before you buy, find out from the Tax Assessors office, what the current taxes are on the house, and whether or not the taxes would go up, the year after you purchase. This is known as the pop up tax, sellers taxes are locked at the market value at the time they purchased the home, when you take over they reevaluate the current market value. We've had our taxes jump from 1800 to 6000 in one year (second house).
You must ask for a final walk-through the day of the closing. People move their bulky furniture, and tear up the floor, and walls and door hinges. They switch appliances, blinds, lighting fixtures, the works. We put money down on a nice home with a finished basement. The sellers moved out 10 days before the closing, and offered us a walk-though, everything looked fine. The day of the closing, we asked or should I say demanded another walk-through. These sellers turned off the electricity and because it was raining, the basement was completely submerged in old moldy water, because the sump pump couldn't run. Both of the Realtors tried to convince us, that this happens all the time, and they would take care of it. My husband and I left the both of them standing there.
If your in a sub, find out the association fees, if any, and peep out the rules, such as fences, pools, home upkeep, color scheme, sheds, etc.
I'm not trying to scare you, there is nothing like your own home. It's just that there is a lot more to it, and unfortunately there are people that are just out for a quick buck, and they will try to keep you in the dark, it's less work and more money for them.
One more thing, don't be modest, get pre-approved for the highest amount of money you can get, even if you don't want to buy that high. The banks hate for you to come back to them for more money, when you find out the houses in your price range fall short of your expectations, the market is really good, so you shouldn't have that problem.
You couldn't be in a better market for buyers.
Good Luck.
