How to Buy Your First Home in Sioux Falls: A Step-by-Step Guide for First-Time Buyers

Written by:

Rudi Davis

Date:

17 Jan 2026

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Buying your first home is often more complex than expected. Instead of a straightforward process, you may find yourself managing paperwork, strict deadlines, and multiple parties you didn’t know would be involved. Simple mistakes can lead to costly delays or lost opportunities.

Rockwell Tornow, a realtor with Amy Stockberger Real Estate in Sioux Falls who specializes in first-time buyers, sees many clients pause or abandon the process due to confusion. “I’ve had a couple that have worked with other agents and then stopped the process because they were confused,” he says.

To avoid these pitfalls, Tornow emphasizes the importance of knowing the process in advance. Here’s a clear breakdown of how buying a home in Sioux Falls works, and the most common issues that trip up first-time buyers.

Step 1: Get Pre-Approved for a Mortgage

Who’s Involved: You and a mortgage lender

Timeline: 2 to 3 days if you have all the required documents

Cost: Free, though the credit check appears on your report

Common Mistake: Many buyers settle for a “pre-qualification,” which is only an informal estimate based on self-reported data. A pre-approval, in contrast, means the lender has verified your income, assets, and credit. Sellers expect a full pre-approval letter with any offer. Without it, your offer may not be considered.

Step 2: Start Looking at Homes

Who’s Involved: You and your realtor

Timeline: Can range from a few days to several months

Common Mistake: Focusing only on move-in-ready homes in the $200,000 to $250,000 range. Tornow notes these properties sell quickly and attract heavy competition. If you’re open to minor cosmetic updates, such as painting or replacing fixtures, you’ll have more options and face less competition.

Step 3: Make an Offer

Who’s Involved: You, your agent, and the seller’s agent

Timeline: 1 to 2 days

Cost: Earnest money deposit, typically 1% to 3% of the purchase price

Common Mistake: Submitting an offer without attaching your pre-approval letter. Sellers are unlikely to consider offers lacking proof of financing. Buyers may also omit essential terms, such as the inspection period or requests for closing-cost assistance. Ensure your agent includes all relevant details.

Step 4: Home Inspection

Who’s Involved: You, your agent, and a licensed home inspector

Timeline: Usually occurs within 7 to 10 days after offer acceptance

Cost: $300 to $500, depending on home size

Common Mistake: Skipping the inspection to make your offer more competitive. In the current Sioux Falls market, sellers are often willing to negotiate repairs or offer credits for issues identified during the inspection.

Step 5: Appraisal

Who’s Involved: Your lender and a licensed appraiser

Timeline: Conducted within about 2 weeks after offer acceptance

Cost: Typically $400 to $600, paid by the buyer

Common Mistake: If the appraisal values the home below your agreed purchase price, you must renegotiate with the seller, pay the difference in cash, or walk away. While more common in overheated markets, this can still occur in Sioux Falls if a property is overpriced.

Step 6: Final Walkthrough and Closing

Who’s Involved: You, your agent, the seller’s agent, and a title company

Timeline: Final walkthrough 1 to 2 days before closing; closing itself takes about an hour

Cost: Closing costs, usually 2% to 5% of the purchase price

Common Mistake: Rushing or skipping the final walkthrough. This is your opportunity to confirm that the agreed-upon repairs are complete and nothing has changed since the inspection. Also, bring a cashier’s check or arrange a wire transfer for closing costs—personal checks are not accepted.

Common Myths That Mislead First-Time Buyers

Myth 1: You Need a 20% Down Payment

Reality: Many first-time buyers in South Dakota qualify for down payment assistance programs. “We have South Dakota first-time home buyers, which is just a great program that can help with down payment assistance,” Tornow says. Some buyers put down as little as 3% to 5%.

Myth 2: You Should Wait for Interest Rates to Drop

Reality: Delaying a purchase can cost more than a slightly higher interest rate. “If you wait two or three years for your interest rate to get better, that home you already wanted to buy is more expensive than you would have paid in interest,” Tornow explains. Home prices generally rise over time, so waiting can mean paying more overall.

Myth 3: You Can’t Negotiate in a Competitive Market

Reality: Sioux Falls is less competitive than it was a year ago. Homes are staying on the market longer, and sellers are more open to negotiation. If a home has been listed for several weeks, you can often negotiate repairs, closing cost credits, or a price reduction.

What to Watch For

Red Flags: Be cautious if someone tells you not to worry about paperwork or pressures you to sign without reading. “The fastest deals are the ones where everyone slows down and double-checks the details,” Tornow says. If your agent or lender provides vague answers about costs or timelines, request specifics.

Key Terms Explained

• Earnest Money: The deposit you pay with your offer to show you’re serious. If you withdraw for a valid reason—such as a failed inspection—you usually get it back.
• Contingency: A condition that must be met for the sale to proceed, like securing a loan or passing an inspection.
• Appraisal: An assessment by a professional, hired by the lender, to ensure the home is not overpriced. If the appraisal is low, you may need to renegotiate or pay the difference.
• Closing Costs: Fees paid at closing, including title insurance, lender fees, and recording fees. These typically total 2% to 5% of the purchase price.

The Bottom Line

Buying a home involves many steps where minor errors can cause significant setbacks. By understanding the process, knowing what to watch for, and asking the right questions, you can avoid common pitfalls and move forward with confidence. “I pride myself on being dependable and always available,” Tornow says. “If you want to go see a home at 7 p.m. on a Saturday, I’m there.”

This article provides general information about the home-buying process in Sioux Falls and is not legal, financial, or investment advice. Consult a qualified professional for guidance specific to your situation.