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.
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.
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.
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.
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.
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.
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.
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%.
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.
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.
Red Flags: Be cautious if someone tells you not to worry about paperwork or pressures you to sign without reading. If your agent or lender provides vague answers about costs or timelines, request specifics.
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.
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