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Everything Younger First-Time Homebuyers and Women Should Know BEFORE Buying a Home in the Austin Texas Real Estate market!
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Let me be the first to congratulate you - as you’ve made a great financial decision to explore the idea of becoming a homeowner! Here’s my easy 1, 2, 3 proven technique that makes the home buying process easier, less stressful, and really fun buying Austin Texas Real Estate.
Smart Ideas for Austin's First Time Homebuyers!
Homer Simpson may have destroyed his and Ned Flanders home over 47 times on the Simpson’s show – but owning your very own Austin house is actually fun – and really simple to do…and rarely will your new neighbors be as dumb and clumsy as Homer!
Yet, buying a home is sort of ‘confusing’, especially if you're a younger buyer – as there are "so many steps" you must do to close on your home! Here's an easy 1, 2, 3 method to help you get started...
1. Start the smart way. Begin your home buying process by talking to an experienced Austin real estate agent and have a “general discussion” about YOUR specific real estate situation – and tell them where you might prefer to live. You might be 22 or 42 years old, but its still smarter if you talk to someone who knows the whole buying process and can explain our Texas real estate laws and legal procedures to you.
We’ll be glad to discuss schools, trends in that area, neighborhoods, positive and negative attributes of the area, dangers to avoid and the best places to find a “deal” on a new builder home, resale home, townhome, condominium or loft. A Realtor who won't take fifteen minutes to help you understand what to expect when you're buying your first home isn't much of an agent (…if you’re ready now – I’d be glad to help answer your questions, just call me at 512-289-9900.)
If you don't want to talk with a real estate agent initially, then talk with friends or co-workers who live in the area. Although they may not really “understand” the precise housing market (both good & bad situations) this is a good start. As you become more interested in details like house pricing & sales statistics, you’ll want to find a sharp Realtor to really help you.
2. Despite what anyone else tells you, the MOST important thing you do during the entire home buying process is getting pre-approved for a loan AND being totally comfortable with your mortgage financing and monthly payments. You can drive around looking new houses for 6 months, make low-ball offers on HUD home foreclosures, or wait 4 months for the next new condo complex to be built…but the ONLY way you are going to BUY that property is to have a loan done that actually closes!
So, please spare yourself the misery of thousands of other ‘dumb’ Austin first time homebuyers and get PRE-APPROVED for YOUR loan right up front. By knowing what you can and CANNOT afford to buy and “feeling comfortable” with the loan terms & your interest rates will allow you to actually sleep at night…as buying a house can be rather stressful for some people!
Many Austin first time home buyers have credit scores and credit histories that aren’t exactly perfect, and you may need some extra time to “fix that mess” in order to qualify for a loan. You might also learn that you’ll need to liquidate a 401k – or sell some stock options to use as a down payment in order to qualify for your loan – which can take 20-40 days. (so have a competent Loan Officer tell you “what” you need to do and the timeline to have it done!)
3. Ask every single question you can possibly have on loan financing and on the real estate process! Statistics show that “truly satisfied” buyers never felt confused or overwhelmed…and stated that they never went more than 24 hours without getting a question or situation explained - or fixed!
Even simple problems can be a mental burden when you have so many house buying details to take care of – and moving and packing to do! Don't over-react if you hit a few snags on the way to closing on your Austin home, as it’s very common to have delays, title issues and other problems. Going from renting to home ownership is a complicated process – acknowledge that up front. Keep a cool head and “deal with” the people helping you through the transaction to resolve any issues that pop-up. Ask every single question you have – and you’ll never go to bed worrying like “confused buyers” usually do.
That was pretty simple - huh…just 1, 2, 3 and you’re all set!
At this point, your remaining steps are no different than the steps nearly every Austin Texas home buyer must take! It's time to start digging into the details you need to get through the home buying process now.
You're Only 10 Quick Steps Away From Buying a Home!!!
The specific way you progress through a home buying transaction varies depending on what kind of a property you want to buy and where you buy it. Most of these home buying steps are standard for everyone, even though they might not be accomplished in the same order in every location.
Step 1, Get Your Finances in Order!!!
Like I mentioned above, most Austin first time buyers need more help on getting their financing done than they spend on the entire home buying process!
Your credit reports and credit histories are what a competent Loan Officer is going to need to see to help you get initially qualified and then pre-approved. We’ll need to pull a tri-merged credit report (TransUnion, Experian and Equifax blended one single credit report) and look at your front and back end debt ratios – as most loans REQUIRE that your total new anticipated house payment, taxes and insurance NOT EXCEED over 50% of your gross monthly income.
My “general rule” is that if you know you have a 620 or higher scores, you should be okay! Anything below 620 and we may have issues!
If you’re looking for special $0 money down financing – or have damaged credit, then you need to find a very competent lender too! Whereas, if you have perfect credit and at least 5% down payment saved up – any good lender can help you.
Step 2, Get Familiar with Your Mortgage Loan Options
Finding the right loan and lender is crucial to your home buying success, when you are looking at Austin Texas Real Estate. It's up to YOU to determine which loan option is best for your needs and your situation. Everyone may want a 30 year fixed rate at 6%, but NOT everyone ‘qualifies’ for those loans!
If you don’t have much cash saved up for a down payment and for your closing costs (which can be $4,000 to $10,000) – then you need to find a “specialty lender” that can still help you get a loan to help you buy your house! At my mortgage company, Texas Mortgage Specialists LLC, over 92% of the home loans we close are $0 Down loans to buyers with excellent and damaged credit – just very little cash saved for your down payment and closing costs.
Do you really know how much house you can afford? Do you have the proper documentation to “prove” to an underwriter that you should qualify? Many ‘dumb’ Austin first time home buyers think that buying a house is like buying a car…you pick the car out you want and then wait 2 hours for the financing to get approved. This works HORRIBLY in the house buying process – it's the "stupidest" way to buy Austin Texas Real Estate!!!
Why be driving around looking at homes that YOU CAN’T QUALIFY to buy? Or worse yet – you miss out on homes if your credit history needs some quick ‘repairs’ and that you can’t get a loan for 60-90 days instead of 30 days like most buyers? Call a competent Loan Officer to help you first!!! I can be reached at 512-289-9900.
Consider this scenario: A home seller gets two similar offers. One is accompanied by a written Lender Letter from your lender - that states you are Pre-Approved for a mortgage in the amount of the offer, the specific interest rate is noted on the loan, credit scores have been verified, you “have” been told all the paperwork “documentation” you are going to need (and you have it) and your debt ratio’s are acceptable to the lender – as noted in this formal letter. The other competing offer has no supporting documents, no Lender Letter, just a verbal promise from Suzie the Austin Texas real estate agent that the offer is “good”. Now - which offer do you think the seller will consider first and which offer do you think they’ll accept? What if you were the pre-approved buyer in with the Lender Letter – and your offer was $2,000 - $4,000 BELOW the other offer – which offer do you think the seller would pick? Which offer do you think the sellers will want to negotiate with? …Get the point here?
Step 4, Determine Your Wants and Needs
Buying an Austin Texas home isn't as difficult as you might think, even if you're short on funds, but the process will go a lot smoother if you get familiar with your real estate market and narrow down your wants and needs before you start looking at houses.
Although “location, location, location” makes sense – you need to consider drive time to work at a BIG consideration, followed by specific schools, house styles, neighborhoods, big or small yards, bedrooms, baths, and year built. Do you like newer or older Austin home layouts and styles? New built homes will be virtually maintenance free for the first 5 years or so – and will eliminate major problems – and HUGE cash outlays like older homes can have. Normally you can buy a new Austin Texas home builders house for less than $1,000 cash-out-of-pocket, where as resale homes might be $1,000 to $3,000.
Then, do something I personally recommend: spend about 1 hour talking with your spouse (or talking to yourself if it just you!) about how long you REALLY anticipate living in this house. Why you ask?
Well, you might initially “think” you are going to live there 5-6 years – but most first time buyers get great job raises every year and nice promotions frequently, so you might “realize” that you could afford a $100,000 to $200,000 higher priced house in only a few more years. Talk to your Austin Texas Realtor, they may be able to help you find a better and bigger Austin house – if that’s the case with you. Sometimes buying a much higher
or much lower priced house is “perfect for you” once you’ve given real “thought” to your financial situation in the next 2-5 years!
Step 5, Pick an Experienced Real Estate Agent to Help You
Although you might have talked to several Realtors in the beginning to get ideas and answers to your initial Austin Texas Real Estate buying questions, now you want to make a decision and hire one to actually represent you. Beware though, as the ONLY people who complain about the “home buying experience” are usually the people who hired the wrong agent – or a dumb one!
You want a competent Realtor that enjoying answering your 10,000 questions – and who enjoys working with first time clients! (…Like me!) If your Realtor isn’t fun or smart – then find someone else who is!
Don’t forget too, that Realtors who represent buyers get paid by the sellers…were you aware of that? Hiring a competent Realtor costs you nothing and you especially need one if you’re going to be buying a new builder house – call me and ask me why!!!
Finally, and most importantly again – make sure you really like the Austin Texas Realtor you are working with!
You’re going to be stuck with them for about 4-6 weeks - and a slacker or stupid agent is going to drive you insane…trust me! You might not mind buying a $35,000 car from the newly hired car dealer salesperson, but you will ABSOLUTELY want to
peel your skin off working with a dumb – or sloppy Realtor when you have a problem come up!!!
Here’s my resume… In town, there are about 9,000 licensed Austin Texas Real Estate agents, but a high percentage of them are new or part-time – so be careful. (I’ve been doing real estate as a full-time career for 8 years now, have a MBA, and have personally bought and sold 11 houses for myself in the past 5 ½ years – most were for rentals and Fix & Flip bargains!) I’ve closed nearly $100 million in real estate transactions working almost exclusively with first time home buyers! Many real estate agents you see advertising are really listing agents (who do 80-90% or more of their business representing the sellers in the transaction.) You NEED to hire a buyer’s agent who specializes in helping 80-90% buyers – not a listing agent. Call or text me at (512) 289-9900 – and let’s get going!
Step 6, Start Searching for an Austin Texas Home
Let’s go house shopping! Assuming you’ve got your loan done and are
Pre-Approved – now we get to go look at houses to buy! The very best part!
To help you narrow down your home search, or do a more specific home searches - you'll enjoy using my “very convenient” website – which has all the Austin Texas homes listed for sale in the Austin MLS (the Multi-List Search.) Why drive around and waste gas to begin with when you can start searching from your home computer! You can enter your “very specific” search criteria’s – like: bedrooms, baths, price range, with or without air conditioning (…just kidding there!) city, zip codes, square feet, and more. Just remember – all Austin home photo’s can be very deceiving. But, this should give you a great start without ever having to drive around and getting lost looking for these Austin homes (that’s my job - haha!)
Or, call or text me and we’ll go over exactly what you’re looking for on the phone – and I’ll do the computer search for you. You’re the boss!
Step 7, Handle Pre-Offer Tasks
Once you’ve seen a half dozen or so homes – most first time buyers start to get a “real feeling” on what you like and don’t like. Then, once you begin looking at “real specific” homes - based upon your new criteria’s - you’re bound to find something nice pretty darn quick. When you walk into the “house of your dreams” – you’ll just “know it”…
Deciding whether or not you want to buy this specific house involves looking at its structure, its features, and the price you are paying for it. But how well do you know if it’s in “good structural shape”? In Texas, we traditionally do a “full inspection” after you have the home under contract. But - Austin Texas foreclosure homes and HUD homes may require you to have them inspected BEFORE you write a contract!!! So, once you find the house you want to make an offer on – we normally do a good “look around” and pre-inspection – and base your purchase offer price on the current condition of the house that we can see.
If we’ve missed a “bad air conditioning unit” (assuming you want A/C - haha) a few electrical outlets aren’t working or there’s a plumbing leak under a sink – then the full inspection after your contract gets accepted gives you the legal rights to tell the sellers to “fix it” (…or you can cancel the contract if you wanted to and find a better house.)
Step 8, Make an Offer
When you locate the “house of your dreams”, now it’s time to make your offer. There's only one set of “contracts” that the Texas Real Estate Commission approves of – and all homes are normally ‘written-up’ on these forms unless you want to pay extra for an attorney – or are ‘forced’ to use the ‘limiting’ contracts of Austin Texas new home builders. All new home builders use their own contracts – so please be aware that you will be offered “less legal rights” and protection if you want to buy a new builders home instead of a resale home – but I’ll explain the pros and cons of that to you – so you don’t get screwed over like buyers who don’t have realtors help them buy new homes!
So, what dollar amount do you offer the sellers on the house or your dreams? Full price? $2,000 lower? $5,000 lower? Hire me and I’ll show you how to get the sellers to pay your closing costs too! That’s right - it depends on the house and that’s why you hire a competent Austin Realtor.
Call me and I’ll explain my favorite purchase offer strategies based upon today’s market – as you NEVER want to make a wrong offer price and possibly lose the house of your dreams!
Step 9, Home Inspections and Other Tests
Now, you have the house of your dreams under contract – the work begins and you now have to start packing and making moving arrangements right away.
Home inspections are your next step and are normally done after a Purchase Offer is finalized in Texas. No matter when you do them, it's critical to decide which inspections and tests you want to perform. Although you and your family members can do the inspection – most professional inspectors charge about $250 to $350 to perform their inspection services. Talk to me – and I’ll advise you to find out which inspections should be handled - and if additional types of testing are important for your specific area. Do you know what bentonite and radon are? Is a certified roof and furnace necessary for your situation? You need to know, so please use a good Austin Texas Realtor!
Step 10, Avoiding and Correcting Last Minute Problems…
As your closing date nears, everyone involved in your Austin Texas real estate transaction gets stressed out…it’s only natural.
If you’re doing a loan with us – you shouldn’t have to much to worry about – as we rarely need last minute paperwork and loan explanation stuff (because we’re so thorough up front – it’s rare that we didn’t already have you provide that information to the lender to begin with.) If we’re not your lender – then I’ll help you to make sure the other lender strictly follows the loan deadline dates – as REQUIRED by the contract. This way, you will most likely close on time!
Finish packing…you’re almost done!
FINALLY -- You're on the Way to Closing!!! As you're driving to your closing…ready to BUY your very first home – remember that closings are the fun ‘event’ that transfers ownership of the property from the sellers – to YOU!!! Closings normally take place at a Title Company and take about 1 ½ to 2 hours to do the paperwork. You will sign a 1-2 inch stack of all the loan and legal documents, and will have the title closing person briefly explain every piece of paperwork you are signing. You are usually notified the night before or the morning of the closing - on the amount of money you need to bring to close for the down payment and closing costs – or the amount of money you get back at closing (like many of my buyers get – ask me why!) Bring a certified check otherwise.
After closing – all you need to do is massage your arm after signing all that paperwork - and now you’re ready to move in! Yeah – you’re now an Austin homeowner!!!
Closing Thoughts…
Buying an Austin Texas house is a blast – the emotional high you get during the whole process is really fun. Just knowing that you get to quit renting and to begin building wealth is such a great feeling.
Call me at (512) 289-9900 – and I’ll be glad to help you get started…
Thanks, if this was helpful, then I'd like to help you too - call me!
Jeff
copyright@ 2008 Jeff Boyce and Texas Mortgage Specialists LLC