Chances are that if you have purchased a property in the past then you understand the home buying process. However, if you have not it can be daunting confusing process. I have laid out the steps required to purchase a home.
Examine your Finances
This generally starts with taking a look at your credit rating and the amount of money you have saved. There are plenty of options for homes with as little as 3.5% down payment on the purchase price. However, you will need to have decent credit to obtain a loan and if your credit rating has taken some dings then this will give you time to repair it. Also, if you are seriously considering a home then absolutely do not make any large purchases on credit. The most common is a car, furniture, or maxing out a credit card.
Contact a Lender
Most sellers agents will advise their clients not to accept an offer until they have received a pre qualification or pre approval letter from the buyers lender. This is vitally important in competitive real estate markets as the seller might accept an offer from another buyer based on the fact that they have loan approval. If you have a lender in mind, great, if not I can suggest some local professional lenders. When you initially speak with them they are looking to get you pre qualified and later pre approved.
• Pre Qualification is something that most lenders can quickly do over the phone or vial email. The lender will ask you a series of questions about your income and debts. It is best to be transparent with any debts as these can often be worked around but can be extremely detrimental if found later on in the buying process.
• Pre Approval is when you submit all the documents to verify your income , expenses, and debts. This is more involved than the pre qualification process but provides the lender everything they need to know to help get you the proper loan. Pre approval should uncover any obstacles that could hinder the purchase of your home once it us under contract.
• Review Loan Options – The lender will go over the different types of loans that are available to you. Once you have selected they type of loan that you want they will work up a Good Faith Estimate. The Good Faith Estimate shows you how what your monthly payments will be, how much you need as a downpayment, cost of the loan, and how much you will need to bring to closing. Now they won’t know everything exactly until you give them the amount of home that you have under contract.
Contact Us and Begin your Search
Once you have a handle on the financial part you can begin your search. The first part of that is working with a qualified realtor from Austin Centric Realty. We will schedule you with one of our realtors for a preliminary meeting to find out your specifications for your dream home. They will provide a Comparative Market Analysis (CMA) of your target neighborhoods. This CMA finds homes that have been sold that have a similar size, qualities, of the homes that you want. This allows us to come up with the correct offering price. We can then set you up with a customizable search that will send properties you are looking for directly to your email.
Make an Offer
Since you have all your finances in order and have been pre qualified you just need to make an offer when you find a property that you want! You decide on the correct offering price so we sit down and draw up the sales contract. You will need to sign the contract and have funds available for at least two items.
• Earnest Money – This is your deposit for the home that you wish to purchase. It needs to be submitted with the sales contract and is generally 1% of the purchase price.
• Option Fee – This fee gives you the unrestricted right to cancel the purchase for any reason within the allotted amount of days that we decide to put in the purchase offer. This is typically 7 to 14 days which allows enough time to have any inspections done to the house.
The purchase Offer is Accepted. Now What?
• The Option Period – As discussed above, the Option Period is the time that the seller gives you to perform all inspections of the property. We can recommend qualified inspectors and help facilitate their inspections of the property. What you are mainly looking for is anything that needs repair or replacement. You can ask the seller to repair the items, credit you the amount of repairs, or if there are no repairs you simply let the option period expire and wait for closing.
• Financing Period – Unless you are paying cash for your home you will receive financing from a lender. We will put a financing condition in the purchase contract for your prospective home. This contract sets forth the parameters of the loan that you expect to receive for the property within the allotted time that you and the seller agree on. Typically this is 2 weeks to 1 month. If you have been pre qualified, then most of the issues that can derail the transaction have been found. If you have not or if for some reason you cannot get a loan with the terms that you expected, then we can remove the offer and have the earnest money refunded.
• Purchase Insurance – You will need to buy your home owners insurance policy.
Prepare for Move In
• Make sure that you have all of your utilities set to start on the day you move in. This includes electricity, water, gas, trash, and cable tv/internet. Make sure to have your address changed to receive your mail.
• Line up any contractors that will be needed to perform repairs.
The title company will give you the amount that you will need to bring to the closing. You will need to make sure that these monies are in certified funds. Please also remember to bring your drivers license. The closing is mostly a formality where the buyer and seller sign all the paperwork necessary to transfer the property ownership. You will receive the keys to your new property at closing. Now time to move in and enjoy your new home! Congratulations!