The Start-To-Finish Guide for First Time Homebuyers
From locating potential properties to placing an offer and closing the deal, buying a home for the first time can seem overwhelming at first. There’s much to think about and keep track of throughout the process and having an agent can make all of the difference. The following information is a start-to-finish guide for first time homebuyers.
Start researching well before you plan to buy. As soon as you are able, start looking into properties to see what spikes your interest. Take location, neighborhood, architectural style and amenities into account. If you can, familiarize yourself with the market so you know how long homes stay on the market in a given area and how asking prices differ.
Determine what you can afford. Lenders recommend homebuyers look for properties that exceed no more than the total of three to five times their annual household income if they’re hoping to make a 20% down payment. If you’d rather talk to a professional than try and calculate what you can afford, contact one of our agents for help.
Get prequalified and preapproved for credit for your mortgage. In order to know how much you can realistically spend, you may think about getting prequalified for a mortgage. You will need to provide basic info to your mortgage banker, which a lender can then review before giving you a suggested amount they can lend.
Find the right real estate agent. We’re lucky to have many talented agents within our company – Click here to find a list! Your real estate agent is a very important partner throughout your transaction. They will lead you through each step of the way and help you navigate the waters of your local market. You’ll want to look at what kinds of homes they’re familiar with selling ( someone experienced in selling waterfront homes its great if you’re looking for a new lakehouse, but someone who knows the Texas Hill Country could be helpful if you’re looking to buy in surrounding areas outside of Austin.)
Make an offer on your dream home. Once you’ve toured homes within your price range and think you’ve found one that is a great fit, your real estate agent will work with you to make an offer. Fair offers are negotiated based on the value of comparable homes in the surrounding area.
Go under contract. Once both parties agree to all the terms and conditions as modified during the negotiations, both the buyer and the seller will sign a contract. The earnest money check is given to the title company with the contract, and the property is then considered to be under contract and in escrow.
TERMS TO KNOW
Offer: A written proposal to begin negotiations on the purchase of a home.
Counter Offer: A response from a seller that negotiates price and terms
Contract: When both parties agree to all the terms and conditions as modified during the negotiations and when signed by both the buyer and the seller
Escrow: The remaining period of time that it takes to complete the remaining home buying steps
Earnest Money: Earnest money is a deposit made to a seller that represents a buyer's good faith to buy a home.
Inspections, repairs and appraisals. Once the property is under contract it is time for the inspections. You will hire a licensed inspector to check the structural and mechanical condition of the home and a written report will be given to you and the seller. From the inspection report, it will be determined what repairs will need to be made. The buyer’s mortgage company will order an appraisal of the property as well. This is a requirement for the lender in order to be certain that the property is worth the agreed upon sales price.
Coordinate paperwork. There is a sizeable amount of paperwork that goes into the process of homebuying. Your real estate agent and lender will arrange for a title company to help you through the paperwork and make sure everything the logistics of the sale are legitimate.
Closing day! You will sign all of the required paperwork to complete the purchase of your new home on closing day. It may take a few days for your loan to be funded upon the completion of paperwork, but once the check is delivered to the seller, you’re ready to move into your new home.
OTHER HELPFUL INFO
Information on Brokerage Services
Understanding your relationship with the Broker is often confusing. It is important, however, that you fully understand this relationship before you sign any Buyers Representation Agreement. Moreland Properties is very serious about the relationship we have with our clients. Please review the information about Brokerage Services, written by the Texas Real Estate Commission, provided by your agent.
The Seller’s Disclosure
This document is required by Texas law and will be made accessible to potential buyers. It is essential for a seller to inform a buyer of any potential defects. This document has been designed to protect both the buyer and seller. Your Moreland agent can help explain any concerns you may have.
Austin Central Texas Realty Information Service (ACTRIS) and Lockboxes
ACTRIS is a computerized service to which the members of the Austin Board of Realtors belong. This service enables each member to enter the data concerning each listing (property) into the computer database. All members have access to this data through their computers. Within minutes of an agent loading the information onto the computer, fellow agents in the city can call and make appointments to view the property or to show it to prospective buyers. It is extremely important that this information be accurate. As the status of the listing changes, such as contract pending or sold, the information is updated.
If appropriate, your home may have an electronic key box attached to it for ease of showing. In the computer printout are specific instructions as to how your home is to be shown. Appointments are made with the owner or realtor and the showing of your home begins. For your protection and for security reasons, we advise sellers to always have an agent use the lockbox when showing their home. This will ensure that every agent entering your home is a registered member of ACTRIS and your agent has an accurate list of who has shown your property.
If you are starting the homebuying process for the first time or have further questions, our agents can help you along the way. Contact one of our skilled agents today!