If you’ve been renting for a while, I’m sure you’ve at one time considered the idea of buying a home. Yearning for a place where I could rip the carpet out, paint the walls whatever color I wanted, and replace the completely unpredictable electric oven was enough to propel me towards making my homeownership dreams a reality. For many people, thinking about buying your first home can seem like a daunting process. In fact, I talk to tons of people who never even considered a home purchase within reach due to the many misconceptions about the home buying process.
Maybe you are one of those people who is absolutely sick of paying your landlord’s mortgage. You believe in the fallacy that you have to put 20% down on a home, and have succumb to the idea that you will be a renter for life. Luckily, I’m here to show you just how easy it is to buy a home. There are many options for purchasing a home with less than 20% down. There are even USDA home loans that you can obtain for rural homes for 0% down, and a number of local and state programs aid first-time home buyers with various initiatives including down-payment assistance programs.
Your first step towards buying your first home in Austin, is to talk to a lender to determine your home budget. In fact, I recommend you talk to a few. Check to make sure you are getting the best rate possible, and find someone you enjoy working with. Feel free to reach out to me for specific lender recommendations for your needs. Before you start talking to lenders, it is important to gather at least some of the documents your lender will need. Preliminary documents include: w2s, past two years’ tax returns, pay stubs, past two months’ bank statements. A list of ongoing monthly debts such as student loans, car payments, and minimum balances for credit cards is also helpful. Your lender many need additional documents based on your unique situation; however, having these items handy will give you a good head start.
Once you submit those documents to the lender of your choice, you will be given a pre-approval letter that notes the maximum loan amount or the maximum amount you can spend on a home. Now, it’s time for the fun part! You will probably have given a little bit of thought into what you want in a home before this stage. Now, you will refine your needs, determine your must-haves, and start house-hunting. Your dedicated REALTOR, yours truly, will help you locate homes that match your criteria, and tirelessly point out the pros and cons of each home. Eventually, we will find the one!
When we finally locate the perfect place, the one that is destined to be your future abode, and makes you feel all warm and fuzzy inside, I go into energizer bunny mode. We will determine the best price to offer, discuss if you’d like the washer and dryer to stay with the home, determine if you’d like a home warranty to be included with the purchase, and assess all the other details of the contract. I’ll write up the contract as discussed, shoot it over to you for signatures and then we will submit the offer. If it’s a hot home with lots of interest, we may even craft up sweet letter about how this home is just perfect for you and your golden retriever puppy, Bo. Usually, within less than an hour after deciding you wanted that perfect home with the white picket fence, your offer is in the hands of the listing agent.
Once the listing agent receives the offer, she will present it to her clients. They may decide to make some adjustments in which case, we would go back and forth negotiating for what’s best for you but also agreeable to the seller. Or, they may simply accept the contract as is. Regardless, once the contract is agreed upon by both parties, your option period starts. The option period is a set amount of days that you, the buyer, has to do your due diligence on the home and back out if you find anything too scary. We will discuss the exact length of the option period when writing up the contract but usually it’s around 5-10 days. I’ll send you recommendations for inspectors, and we will schedule one to come out and thoroughly evaluate the home. I’ll meet with him after to discuss the findings, and if possible I highly encourage you, my clients, to come too.
After the inspection, we will discuss the results. If there are repairs that need to made to the home, we can either request that the repairs are made prior to the closing date, or request that the sellers give money for the repairs at closing. Ultimately, this becomes another back and forth situation which cumulates in an official amendment to the contract.
Along the same time, that we are reviewing the results of the inspection, the lender is working to order an appraisal on the home. For the home buyer, this is not really a hands on part of the process. The lender will notify you that the appraisal has been ordered and will let us know when it comes back, hopefully at or above the offered value.
At this stage, there is a slight lull in the process. At the beginning, your moving quickly looking at homes, writing offers, negotiating. Now, you’re mostly waiting. Waiting for the appraisal to come back, and you may be submitting additional documents to your lender. Once your lender has the appraisal and all outstanding documents, your file is submitted to underwriting. At this point, you will choose a home insurance policy, a home warranty if you’d like one, and eventually you will hear the sweetest words you’ve been granted “clear to close”.
The day before closing, or the morning of, it’s always prudent to do a final walk-through. You will want to see with your own eyes that the home is in the agreed upon condition, and that any repairs negotiated during the option period have been completed to your satisfaction. The next stop is the title company where will you sign your life away, and become a proud first time homeowner. Unfortunately, you don’t usually get the keys right away.
Once you’ve signed everything, the documents are sent back to the lender and as soon as the loan funds, you get the keys. This usually takes a few hours, so if you’re so inclined, I’d highly recommend a spontaneous mid-day happy hour to celebrate your new status as a proud first time home buyer. After a few margaritas, or maybe a bottle of champagne, the time flies by. Suddenly a consistent vibration or an ascending chime disrupts the chatter; upon answering you find an upbeat title employee telling you the time has finally arrived. Now, you can pick up the keys to the place you will call home.
If you’re sick of renting, and ready to take the plunge into home ownership, contact me today, I’ll show you just how easy it is to buy your first home in Austin, Texas.
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