Home Buyers: Steps to Take with Your Central Texas REALTOR®
Buying a home can be overwhelming. It is a big decision that requires careful consideration, a huge financial investment, in-depth negotiations and complex contracts. The valuable services and expertise REALTORS® bring to real estate transactions can help you find exactly what you are looking for while taking the load off your shoulders. Below are the common steps to take with your REALTOR® when you are ready to buy Austin real estate.
Step 1: Meet with your REALTOR® to discuss your needs.
In this initial meeting, your REALTOR® will ask you a series of questions to help determine what you are looking for in a home. This information is kept completely confidential and is necessary to ensure you find a home that meets your needs. To help narrow down your home search, your REALTOR® will need to know the following information:
Price range – Your REALTOR® can help you determine what homes in Austin you are able to afford and within what circumstances negotiations can take place. A REALTOR® can also help you determine what financing options are available.
Timeframe – If you are moving to a new city or have certain time constraints, it is essential that you let your REALTOR® know up front so he or she can best meet your needs.
Motivation – Some buyers are strictly looking for an investment opportunity while others are looking to buy because they need more space for their growing family. These are serious considerations your REALTOR® can use to determine which Austin real estate will best help you achieve your goals.
Location – Let your REALTOR® know the qualities you are looking for in your new neighborhood, such as close proximity to a child care, work, school or a center of worship.
Lifestyle – Other lifestyle preferences can also be taken into consideration, such as gated communities, fenced yards, parks, special home amenities and more. Your REALTOR® can tell you more about the neighborhood and surrounding areas that interest you.
You can find a REALTOR® on AustinHomeSearch.com, as well as important home search questions you can ask to help build a great relationship with him or her.
Step 2: Complete the buyer’s agent agreement.
Your REALTOR® will review his or her services and make sure you are comfortable with the terms before moving forward. Buyer Agency Agreements set out the main conditions of the relationship between you and your REALTOR®, such as the duration of the agreement, the commission rate and the various rights, duties and obligations of the parties involved. In a typical home sale, your buyer's agent receives compensation by earning a percentage of the commission that the seller pays his or her listing agent. Under the agreement, your REALTOR® is also bound to act loyally honestly and in your best interest; to remain dedicated to his or her purpose; and to honor the other duties stated in the REALTOR® Code of Ethics.
Step 3: Obtain a pre-qualification letter from your lender.
Before looking at homes in Austin, you must know how much you can really afford. Your REALTOR® can help you determine your buying power. Give your REALTOR® basic information about your available savings, income and any debt, so he or she can refer you to lenders best qualified to help you. You will then need to speak with the financial institution to establish a monthly payment plan you are comfortable with and obtain a pre-qualification letter.
A pre-qualification letter comes from a lender who has done a quick review of your financial situation and determined there is nothing to prevent you from getting a loan.
Once you have chosen a house in Austin and your REALTOR® begins negotiations, you will need to obtain a pre-approval letter from the lender that indicates a thorough analysis of your credit, income, employment history and assets to officially pre-approve you for a specific loan amount. A pre-approval gives strength to your offer, can improve your REALTOR®’S negotiating power with the seller and helps speed up the closing process.
Your REALTOR® understands that financing is a very private matter and is obligated under the REALTOR® Code of Ethics to respect your privacy and demonstrate confidentiality while helping you through this process.
Step 4: Research and narrow down your choices.
Once your lender pre-qualifies you, your agent will use the Austin Multiple Listing Service (MLS) and other resources to match you with Austin real estate that meets your qualifications. Your REALTOR® may frequently send you listings via e-mail as he or she conducts in-depth research. Sometimes the property you are seeking is available but not actively advertised in the market, which is why your agent will use other resources and personal connections to find all potential properties that fit your needs.
Your REALTOR® will likely show you 10 to 30 houses in Austin, Texas, but the specific number depends on what you are looking for and what is available in the market. While visiting each home, your REALTOR® may ask you certain questions about what you see, point out unique features and take notes and pictures to remind you later of what you did and did not like.
Lastly, your REALTOR® can help you make the best decision. A REALTOR® can provide objective information such as the pros and cons of each home, what home repairs may be necessary and what marketable resale features each property has in case there is a possibility you may decide to sell the home in the future.
Step 5: Make an offer and begin negotiations.
Making your selection among available Austin homes can be tough. Confide in your REALTOR®; he or she is there to listen and help you through the decision process. Once you are ready to make an offer, there are a myriad of negotiating factors. These include but are not limited to price, financing, terms, date of possession and often the inclusion or exclusion of certain repairs and furnishings. Additions to the house that would make the property ideal to the buyer are also negotiating points, so communicate with your REALTOR® on which upgrades and add-ons matter most to you.
Step 6: Review the Purchase and Sales Agreement and set a closing date.
This document will be the binding contract and agreement between you and the seller. Within the Purchase Agreement will be a provision for the scheduled “Date of Closing.” Setting a closing date officially takes the property off the market and puts you one step closer to moving in. The seller will often choose a closing date that allows him or her enough time to move out and find a new property. Make sure the closing date is set before your lender's commitment expires. The closing date must also allow you enough time to apply for and obtain a mortgage and, if needed, finalize a loan. Your REALTOR® can help you determine a closing date that allows you enough time to conduct property inspections and review the title report. Other special circumstances that might take up time are: one or more parties being out of town; an estate or probate situation; or other complications that may involve legal assistance and a REALTOR®’S expertise.
Step 7: Determine an option period and what inspections are needed.
After negotiations, your REALTOR® can help you determine a period of time within the purchase agreement, called the option period, for you to undertake appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which inspections are recommended or required and offer you a list of providers he or she knows and trusts. Your REALTOR® also provides due diligence during the evaluation of the property and must point out things like the roof condition, septic tank and well tests, faulty structure, dry rot, land survey results and other things you must be aware of and may need to inspect before closing.
Step 8: Make sure financing is in place and secure the title and insurance.
If the option period passes and the property is in good condition, you will finalize the financing and review titles to the property. The title indicates ownership of the property and can sometimes be confusing depending on status of past owners or rights of access. Titles to some properties may also have limitations, such as easements or access rights for utilities. During this step your REALTOR®, title company and attorney will help you resolve any issues. This is also when final approvals take place regarding the property, title and financial conditions to make sure everything is in place. Additionally, your mortgage lender will require homeowner's insurance, which protects you from loss in the event the house is damaged or destroyed. . If you are buying a new home in Austin, consider purchasing a homeowner's warranty, which protects against certain defects in your home.
Step 9: Final walk-through and closing meeting.
Usually 24 hours prior to closing the REALTOR®, attorney and insurance company representative will walk through the property with you one last time. If during this final walk-through you find major problems or violations of the purchase contract, you have the right to hold up the settlement until things are fixed. At the closing meeting, a closing attorney or a title insurance company will make sure all of the required paperwork is complete. At this time you’ll also get a certified check for the funds needed for closing. Lastly, your REALTOR® will go over the last of the paper work and help you officially sign off on your new Austin home.
Step 10: Move into your new home!
Make sure you obtain all the contact information you may need for third parties in the future and ask your REALTOR® for help with any move-in needs you may have.