The Basics of Buying a Home in Eight Step
For first-time home-buyers, the process of purchasing a home can be daunting and at times, confusing. Fortunately, an experienced realtor can help explain the process to you and guide you through the essential steps you need to take to purchase the home of your dreams. At Domain Realty Austin, our friendly and knowledgeable realtors have helped countless people just like you buy their first homes, so if you are considering purchasing a home in this great city, make sure that we are your first phone call. Since we strongly believe that an educated buyer is a happier buyer, we have prepared this list of eight fundamental steps that can serve as your “roadmap” to buying a home.
Step #1: Select Your Realtor
Choosing the right agent to represent you is the first (and arguably the most important) part of the home-buying process. Because this is likely the largest purchase you have ever made in your life, it is vital that you pick an agent that has the experience you need to help you through the process. An inexperienced or apathetic agent may not have the knowledge or experience to negotiate the best deal possible for you, and you may end up spending more than you need to. An experienced realtor with a strong knowledge in your particular market will likely be able to find you the right house, connect you with the right lender, and negotiate the right price for the home you want. In addition to market knowledge and negotiating skills, make sure the realtor you choose is someone who you trust and want to work with. The home-buying process can be a lengthy one, so select an agent that you can communicate with and has your best interests in mind at all times!
Step #2: Choose a Lender
The majority of people who are purchasing a home for the first time will need assistance from a lender. You can select a mortgage lender yourself, or your realtor may be able to guide you to a broker and title company that they recommend and have worked with in the past. The financial part of the process is often the scariest step for many buyers, but don’t worry, it is an essential step to take toward owning versus renting your home! When selecting a lender, look for one who offers you competitive rates and personalized customer service. When it comes to financing, you don’t want to be viewed as a number or a file; you want to know that your lender cares about you and is there for you when you have questions or concerns.
Step #3: Get Pre-Approved
It may seem like common sense, but many people don’t immediately understand the value of their lender’s pre-approval letter until they start searching for a home in earnest. After reviewing your application, your lender will issue a pre-approval letter letting you know how much financing you may qualify for. This amount will give you a good idea of what you can afford to spend on a home, which will weigh heavily on your home search. Remember to factor in costs like taxes, home insurance, HOA dues (if any), and utilities into your budget, and from there, you should have a reasonably good idea of what your price range is. Your pre-approval letter will also help show potential sellers that you will be able to qualify for a loan, which can help strengthen your offer if you choose to make an offer on a home.
Step #4: Create a Wish List
Once you have your pre-approval letter in hand, work with your realtor to create a “wish list” that outlines the things that are important to you in a home. You should discuss the area of town you would like to live in, neighborhoods that you prefer, school districts, and exterior and interior features including yard size, kitchen features, bath and shower preferences, and other “must-haves.” It is essential to set realistic expectations, but you can let your realtor know what your preferences are to give them a good idea of where to look and what to look for when generating your search list.
Step #5: Take a tour
Many home-buyers find the process of viewing homes to be one of the most fun parts of the buying process. You get to see homes within your price range and can imagine yourself living there. Make sure to take thorough notes on each house, and approach the process with a critical-yet-open mind. Keep in mind that minor cosmetic things can always be replaced or fixed, and sometimes you find the perfect home that is move-in-ready, and sometimes you find a gem that just needs a little polish!
Step #6: Make an Offer
Once you have found a home that you are in love with, it is time to make an offer! An experienced agent’s knowledge will come in handy at this stage, as you will likely have to negotiate and make a competitive offer, especially in a hot real estate market like Austin. Be aware that you may have to put down some earnest money that will go toward your down payment on the home, and you may want to factor in contingencies into the offer, including having the house inspected before finalizing the purchase.
Step #7: Do Your Due Diligence and Finalize Your Loan
Before closing on your home, it is vital that you have your home inspected to identify any potential issues. On the outside, the house may look perfect, but serious issues may be lurking within or underneath. These problems may include plumbing or wiring problems, or foundation problems that can be extremely costly. If your home inspector finds a problem, you may decide not to purchase the home, or you may wish to negotiate with the seller to repair the issue or lower the sale price of the house to cover the cost of the repairs. Once you are satisfied that the home is ready for purchase, you can finalize your loan with your lender. During this time, it is essential not to make any significant purchases (cars, furniture, expensive appliances) that may affect your credit.
Step #8: Close On Your New Home!
The final step to becoming a new homeowner is finalizing the purchase and closing on your home. The deed to the house will finally be transferred to you, and you will officially be the owner of the property. Depending on your specific transaction and the details of the contract, you will likely have quite a bit of paperwork to sign, but your agent and the title company’s closing agent will guide you through the process so that you know what you are signing and why. Once the paperwork is complete, the funds will be transferred from your lender to the seller, and you will get the keys to your new home!
Why Do So Many First-Time Buyers Choose Domain Realty?
First-time home-buyers are looking for an agent that has their best interests at heart. That’s why so many first-time buyers turn to us for help with the most significant purchase of their lives. We know the home-buying process, and we are experts in the Austin market. We work tirelessly on behalf of our clients to explain the process, find the right home for their needs and budget, and will negotiate firmly to get them the very best deal possible. We know that you have many choices when it comes to selecting an agent in Austin, so we strive always to distinguish ourselves from the rest. Call us at (512) 872-4211 to find out why we’re different.
Tips for Buying Your First Home as Newlyweds
After finding each other, planning and executing the perfect wedding, and merging your lives, the next step for newlyweds is preparing to buy their first home together. And while the long and arduous process of pulling off a dream wedding may have felt stressful at times, for many newlyweds, saving up for and purchasing their first home together is a whole new ballgame. Yes, budgeting, saving, and choosing the home that’s right for you is a big decision, but it doesn’t have to be a negative experience. And while it’s essential to understand the significance and size of this purchase thoroughly, it shouldn’t deter you from approaching the process with optimism and excitement.
The real estate market is complicated and overwhelming at times, but with the right preparation and realtor, finding your dream home can be an enjoyable time and significant milestone in your marriage. From choosing the neighborhood to the number of bedrooms, and preparing financially, buying a home is a full-time job. So let’s look at a few ways to simplify the process and get you into your dream home faster than you ever imagined.
Prioritize for Your Life Right Now
When you start looking at different homes and what they have to offer, it’s easy to get swept up in the overall excitement and forget what you specifically wanted in a home in the first place. A house is no small purchase and buying one that isn’t right for your life could be a mistake you regret for years to come.
Before you talk with a realtor or step foot in a single home, sit down with your spouse and determine your priorities. At its basic level, this includes the size—how many bedrooms and bathrooms—and also location. Do you want to be close to your place of work for a short commute or would you rather be close to restaurants, bars, and nightlife? Are you planning on having kids one day? If so, maybe the priority is being in a good school district or area with a low crime rate.
Keep in mind that while you may be planning on starting a family in the future, you should buy a home that’s also the best choice for your current lifestyle and family size for the next five or six years. Purchasing a five-bedroom house in the suburbs because you plan on having three kids one day may seem like a responsible purchase, but the mortgage payments and cost of upkeep in the meantime could be financially straining, especially for a young married couple just starting out.
Prepare Financially
Being financially prepared is one of the most important aspects of buying a home, and depending on some factors, the most challenging. To purchase a home, you either have to buy it outright with cash or obtain a loan, also called a mortgage. To secure a mortgage, most lenders want a 20 percent down payment. However, depending on the institution and you and your spouse’s total debt load—combined debt including student loans, credit card payments, et al.—a couple with good credit can secure a loan with as little as three percent down.
Along with your credit score and down payment, a couple’s combined income will also determine whether or not they can obtain a mortgage and the total amount. For most couples, their mortgage payment is around a quarter of their income after taxes. Along with your monthly mortgage payment, it’s important also to be aware of closing costs, property taxes, insurance, and other expenses related to furnishing the home or basic upkeep in the first few months or years.
A few ways you and your spouse can be financially prepared when you find your dream home include:
- Build up your credit through one or two credit cards, making sure to pay them off in full every month.
- Work hard to pay down your debts, especially high-interest debts like credit cards.
- Make a budget, stick to it, and save as much as you can for the down payment.
- Speak with a mortgage consultant who can guide you through the qualifying process. The expert mortgage consultants at Great Hills Lending Group offer free consultations and can be reached at (512) 872-4211 or you can visit their website at http://greathillslending.com.
Saving for your down payment takes some sacrifice, but with a little planning and discipline, you and your spouse can be miles ahead of other couples in the home-buying process.
Communicate Every Step of the Way
Combined with everything else in your life, the home-buying process can take up most of your free time and put extra stress on your young marriage. It’s important to keep the lines of communication open, so you and your partner know each other’s expectations, concerns, and feelings every step of the way.
Make communication a priority before you even begin looking. Talk about the expectations you each have for the home as well sacrifices you need to make to save up. Then talk to each other through every phase of the buying process and be completely honest about your feelings.
Find an Experienced Realtor
Thanks to the internet, newlyweds can search hundreds of homes in their desired area from the comfort of their couch. And while this is an essential part of the process to get an idea of what you want, working with an experienced real estate agent makes your experience less stressful and more enjoyable. Real estate agents know the market and have access to in-depth data about neighborhoods, previous owners, and properties you can’t find anywhere else. From unsuccessful attempts to sell the home in the past to the market value of the area, all of this information helps real estate agents get you the best deal possible.
Along with their knowledge of the industry, they also help you search for homes you haven’t seen and negotiate prices, potentially saving you tens of thousands of dollars. Professional real estate agents can also handle the enormous amount of paperwork involved with buying a home, so you don’t have to worry.
At Domain Realty, we are passionate about helping newlyweds begin their life together in the home of their dreams. There’s nothing more comforting than walking in the door of a house you own, cooking dinner with your spouse in your kitchen, and making daily memories that will last a lifetime. Call Domain Realty today at (512) 872-4211 and get started with your search.