Preparing to purchase your very first home can be an exciting time, and for good reason. This is a step toward putting down roots, toward more financial stability, and maybe even a more serious phase in your current relationship. But before you get too ahead of yourself, make sure you're equipped with the right knowledge to make your first home purchase go off without a hitch. Here's what you need to know.

Know Your Market

It's easy to brush this off as part of your real estate agent's job. But truthfully, it's just as important for you to understand the market you're trying to make a purchase in. Say you lived in Hawaii and wanted a house in Maui. If you aren't aware that almost 45% of homes sold in Maui go to out-of-state buyers, you might go into your housing search unprepared for that complication. Even in markets that typically don't cater to vacation home buyers, there may be certain trends that could make or break your home buying experience. Looking at factors like the market demographics, past housing trends, and local institutions can give you a better idea of what kind of challenges you might face looking for homes in any particular area. If you're not sure where to begin, working with your real estate agent can help you get a better idea of what kind of market you're getting into.

Determine Your Budget

There's almost nothing more exciting than looking at beautiful homes. But before you get attached to the prettiest house on the block, you need to determine just how much house you can actually afford. This means determining how much you're willing to put forward as a down payment, as well as what your monthly budget will look like after you've made your purchase. And before you settle on an ideal monthly mortgage payment and move on, make sure you're leaving extra room in your monthly budget for things like HOA fees, taxes, insurance, and the like. Even security system services need to be factored in. When you consider that police respond to upwards of 38 million alarm activations annually, it might be something worth setting money aside for. Ideally, you want these things to take up no more than 25% of your monthly budget.

Ask the Right Questions

When you're touring different homes, asking questions is a must. But more than that, asking the right questions is a must. It's easy to ask about when the building was constructed and what the neighborhood is like, but that information won't tell you what kind of issues you could be inheriting with your purchase. As an example, almost 50% of homes in the DC area didn't sell the first time they were listed. Don't you think it would be beneficial to know why? Make sure to come in with a keen eye. Look for stains on the ceilings and floors, make note of any strange smells, and check different items for signs of disrepair. And if you're at a loss for questions, make sure you include the following:

• How long has this house been on the market?

• When was the roof last replaced?

• What is the reason for selling?

• What's the condition of the flooring under the carpets?

• How often has this property been sold?

When in doubt, make sure you're asking these questions during any house tour. They can give you some excellent insight into the condition of the house you're looking at. In addition, the answers might alert you to a hidden issue the previous owners didn't describe in the listing.

When you're purchasing your first home, it's important that you don't leave anything up to chance. Good research, great planning, and a willingness to ask some tough questions can help you make buying your first home a good experience.