The home buying process – a brief step-by-step overview
If you’re like most people, buying a home represents your single biggest investment and financial commitment. As such, the home buying process can be one of the most exciting and stressful experiences you ever go through. This can be true whether you’ve bought many homes or you’re looking to buy your first. If you’re in the market for a new primary residence, an investment property, or that perfect vacation getaway our goal as your REALTOR® is to make the process as stress-free and rewarding as possible.
Moreover, never has the real estate market offered more great opportunities, or been fraught with more risks than now. There are many factors to consider and many decisions to make. That’s why, when buying it’s crucial for you to have all the resources available to make a well-informed decision. You should enlist us as your trusted REALTOR® from the start so that we can help you through the whole process. Our exceptional experience and knowledge of Austin real estate will be beneficial in your home buying process, Contact us.
For your convenience, we have outlined the home buying process below. Scroll through the page to read the step-by-step process of home buying, or just click on the topic to go to that part of the page..
1: Define Your Goals and Write Down Your Wants
2: Get Pre-Approved for A Loan
3: Plan your move 4-8 weeks before closing
4: Finding the Right Property & Location just for You
5: Making an Offer and Negotiating with The Seller
6: Under contract - Option Period - Due-diligence Inspction
7: Appraisal and hazard/homeowner insurance
8: Congratulations You are Approved to Close - Plan your Move
9: Final Walk Through/The Settlement/Closing
10: Keys and Possession of the property
11: Value of Realtor-Expect great service from us as your realtor
12: Information about homestead exemption and how to file
13: Buyers Closing cost and fees
1: Define Your goals Make Your Plans, and Write Down Your Wants - Given that buying a home is such a big step it’s very critical for you to educate and prepare yourself as much as possible in advance, Contact us so that we can help.
This means precisely determining why you’re buying and what kind of home you’re looking for. And because buying and financing a home are so closely related, it also means examining your current financial situation and projecting how much you can afford. Once you’ve answered these questions, even tentatively, you’ll be in a better position to research your housing and mortgaging options, as well as create an action plan and timelines for moving forward. We, as your real estate broker, can help with this process right from the start.
Buying real estate is a complicated matter at the best of times, given that there are so many factors to consider and no two homes or transactions are alike. However, with all the unique opportunities and potential pitfalls of the current market, it’s even more important for you let us help you in the decision-making process! As a team, we have help thousands of buyers and sellers through this process, and we can help you too. contact us.
2: Get Pre-Approved for A Loan - In today’s market is essential that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. Most of sellers will not even look at your offer unless they know you are pre-qualified for a loan. The pre-approval process involves meeting with a lender and authorizing them to examine your current financial situation and credit history. Based on this examination the lender will provide you with a document that details how much you can borrow to buy a home.
When submitting an offer to sellers, most sellers request that you provide them with a copy of the pre-approval letter from your lender. This tells them you can buy their house and you are a serious buyer. Contact us with any questions you might have.
Real estate financing is available from many sources. We will provide you with a list of good loan officers and lenders. These loan officers and lenders have worked with us and helped many of our clients in the past and present; they only make our list if they have a good track record with us and our clients. Contact us for our select list of lenders.
With a pre-approval letter, you will have, in writing, what you can afford. As a qualified and motivated buyer, sellers will take you more seriously when making an offer on their property. Also, you can check many different financing programs and chose the one that best suits your needs(particularly if you’re a first-time buyer).
3: Plan your move 4-8 weeks before closing -
- If you are being transferred understand your company's policy.
- Schedule an in-home estimate, and get three estimates from three different moving companies. As your REALTOR®, we can provide you with a list of movers.
- If you are renting, make sure to view your lease agreement and determine your lease terms to give proper notice of your departure to your landlord.
- Book your move with the moving company. Keep in mind; moving companies get busy so make sure to book ahead of time.
- Determine what to toss, sell, or give away.
- Prepare your friends and family, and especially your children for the move.
- Plan for your pets’ move.
- Notify your utility and service providers of your move.
- Work on last minute details of your move.
- If you are moving from out of town, arrange for moving of your cars.
- Check on school registrations, and schedules - each school might have their own requirements.
4: Finding the Right Property & Location just for You- One the most important aspects of buying a property is deciding on the location of the property and the neighborhood. If you are not familiar with communities in Austin, we, as your REALTORS®, will educate you on the important aspects of each region, community, and neighborhood to help you find the perfect home for you. We will provide you with a list of schools and answer questions about community amenities. Working together, we will find you a neighborhood and home that best suits your lifestyle and needs. Royarealty.com is full of information about regions, communities, neighborhoods and schools for your review. To serve you best we like to meet you in person to discuss your needs and help you with this process. Neighborhood factors to consider when searching for the home include school district, distance to amenities, price, proximity to your work, style, and age of the home.
The key to finding the right property is knowing what you’re looking for. You also should distinguish between “must-haves” and “like-to-haves. Our goal is to help you to identify your ideal home. We have access to 99 percent of the homes listed in Austin and its surrounding areas. By defining your ideal home, we can provide you with a list of homes that meet your criteria. Here are some factors to consider when buying a home:
- Price that you are comfortable with - your price range.
- The features you’ve always wanted.
- The neighborhood and surrounding area.
- Neighborhood, lot, and size of the home.
- The age of the property.
- Your ideal home style.
- The right amount of space for you and layout you like.
- The potential for future project, like adding pool or patio.
- Compromises you can handle.
We will start the process by personally meeting with you and discussing your time frame, needs, wants, and budget. We will start sending you a daily list of homes in those selected communities, and then make arrangements for you view your top choices in person. While the property details may seem similar online, homes can be very different regarding the layout, design, workmanship, and other aspects. As your REALTOR®, our experience and knowledge enable us to notice things you might miss. We provide you with expert market analysis and act as an impartial sounding board. Our experience is essential for your benefit, Contact us to put our real estate knowledge of Austin to work for you.
5: Making an Offer and Negotiating with The Seller - Now that you’ve found the home you’d like to buy, you’re ready to make an offer. Texas Real Estate Commission, Texas Realtor Association and Austin Board of Realtors all have worked with legal counsel to develop the forms we use for any transactions in Texas. As Real Estate Brokers and REALTORS® we are not allowed to make any changes to the body of those forms. These contracts enable you to specify a sale price and include many clauses for specifying various terms of purchase, such as the closing and possession dates, deposit amount, and other conditions. We as your REALTOR® will help you review these clauses to ensure that they express your desired offer. As a member of the National Association Realtors, Austin Board of Realtors, and Texas Association of Realtors, we have access to all these forms. Also, we can send them to you via the online system to review or sign. Of course, we are always able to meet you personally to go over your offer if you prefer. We gather all the disclosure notices provided by sellers, and we make sure to go over them with you. Our job is to help you make an educated decision.
Once you’ve reviewed the offer and seller’s disclosures and sign them, we will present it to the seller and the seller’s representative with your pre-approval letter from your lender, and any other forms that go with your offer. Negotiations depend on the market condition; therefore, the eventual sale price is subject to supply and demand. At Roya Realty, we use our market expertise to help you to make an educated decision during this process. The seller can accept your offer, reject it, or counter it to initiate the negotiation process.
Negotiation process: Successive counter-offers, with deadlines for responding and meeting conditions, will be exchanged between you and the seller until a mutually-satisfactory pending agreement is reached or the negotiations stop. In today’s market, it is very common for the sellers to get multiple offers for their property from several willing buyers, so depending on the price range and market condition for given area we can help you with the situation. We have been through this process many times in past thirty years and have the experience and knowledge to guide you. Negotiations can involve many factors relating to different market conditions and seller's motivation. Negotiating the transaction is usually the most complex aspect of buying a home. At the same time, it’s the one that can involve the most creativity. That’s why it’s important to have an experienced and savvy REALTOR® who has successfully worked through many different transaction scenarios. We believe our 30+ years of experience can help you.
That being said, what follows are a few strategies for negotiating a good deal in a seller’s market like the Austin market: presenting yourself as a serious buyer while, at the same time, keeping your emotions in check; trying to understand and respect the priorities of the seller; being creative and, when necessary, willing to compromise to get the deal done.Strike A Balance – Motivated but not too eager as a buyer in a seller’s market. It all starts the first time you see that home you think might be “THE ONE.” Now, it’s important that you not give yourself away to the listing agent by getting too excited about your “find.” If anything, ask a few questions, maybe take a few notes, and let us, as your REALTOR®, do most of the talking. Ideally, you’re trying to strike a balance by appearing to be a qualified, motivated buyer while not appearing to be too eager. When you make the offer, the sellers will want to know the following:
- Have you already sold your present home (if you have one); or in any case, make it clear that you’re not dependent upon selling to buy.
- Make an offer with a pre-approval letter or cash.
- Are you putting at least 20 percent down as down payment? When you put less than 20 percent down, the seller worries about your ability to get financing.
- Provide an attractive “earnest” deposit with the offer.
- Make an offer that still gives you room to negotiate your price.
- Ask for reasonable amount of time for your option period (time to do your diligence, inspections, etc.)
- Possibly do sellers lease back - seller’s temporary lease for a short period.
- Payment of title search, insurance, and survey.
It is important to understand the seller’s priorities in a seller’s market. The more you know, the more you’ll be able to work with the sellers to achieve your personal goals. While a home’s sale price is the focus of negotiations, look beyond the price - often sellers will have needs such that the terms of purchase can significantly influence the final deal. Additionally, the terms – which can represent thousands of dollars in value – is where you can get most creative when it comes to resolving the obstacles to transacting.
- You can make an all-cash offer.
- You can make your offer where the contract is not contingent on personal finance approval. How do you do this? By getting totally pre-approved for the loan.
- The amount of down payment.
- The amount of earnest money deposit you provide.
- Closing and possession dates.
- The inclusion of appliances, fixtures, etc., not considered part of the property.
- Option period days and amount of option money (usually 7-12 days, $200-$500).
- Possibly lease back to the seller, seller’s temporary lease back.
- Payment of title search, insurance, and survey.
Along these lines, all these terms must be in writing within the signed agreement. As your REALTOR®, we will make sure these terms are carefully reviewed and clearly understood by both you and the seller. Also, we will ensure all terms are included in the contract so that you’re on the same page and the negotiations move forward. If this is the property you want, we will help you make it happen. In a seller’s market, like the Austin market today, if you’re interested in buying the property you should be willing to make some compromises to make the deal happen. If that’s not the case, then you should listen to your heart and consider looking for another property. That said, here are a few basic principles of successful negotiation to consider if you’re committed to completing your purchase: remember your priorities and respect the seller’s – don’t let small things get in the way of your better judgment - use us as your sounding board – and if small issues do get in the way of big ones, focus on and consolidate your agreement on the big issues and do not sweat the small things. At the end of the day, if there are disagreements about relatively small expenses, split the difference and smile. Our knowledge of the real estate market will be useful in that we can provide you with market data to help with your decision, Contact us with any questions. Contract us with any questions.
6: Under contract - Option Period - Due-diligence Inspection - - Once you have a pending agreement, it’s time to go back to your chosen lender to finalize your mortgage details so you can close the deal. As your REALTOR®, we will make sure your lender gets a copy of the executed contract and is in touch with the title company escrow agent to be given the required paperwork. This means finalizing your down payment, interest rate, regular payment schedule, and any other financial conditions associated with the closing. The contract will have a financing addendum with a deadline for you to meet during this process. As noted in the section on loan pre-approval, if you’ve already been qualified with a lender for an individual loan and home purchase, this phase of buying your new home should be a relatively straightforward matter that centers around finalizing the loan details and signing the mortgage papers. Your due diligence and inspection of property - Now that you have the property under contract, you are at the option period (usually 7-12 days). We will help you to use the option period to make arrangements to have the property inspected by a licensed inspector. As the buyer, you are required to pay for the inspection at the conclusion. It is crucial that you get this done during the option period that way you can cancel the contract, before the end of the option period, if there are major issues with the property. We will provide you with a list of licensed inspectors to hire. Contact us for the list of inspectors. Inspectors make our list if they are experienced and our previous clients have used their services and were satisfied with their service. It is best for you to meet the inspector at the property 30-60 minutes before they are finished with the inspection to go over the inspection report personally, that way you can ask them questions and get an explanation.
Repairs and negotiations - If there are items that need repairs that were not addressed in the seller's disclosure, then you have the option to make a list of those repairs and ask the seller to repair or compensate you for the repairs. The seller has the option to reject your request for repairs or agree to pay for some or all. We, as your REALTOR®, will help you with this process and will always be at your side to help. The goal is to negotiate this with the seller before the end of the option period, which starts the day after the contract is executed and ends at 5:00 pm on the last day of the option period..
7: Appraisal and hazard/homeowner insurance - The second part of the third-party financing addendum has to do with the appraised value of the property. After you are financially approved for the loan, your lender will order the appraisal of the property. Lenders want to make sure the property appraises for the price you and the seller agreed upon. Keep in mind; the lender has a huge interest in making sure they have the right collateral for the money they are lending you. Many buyers and sellers misunderstand this critical component of the home buying experience; your lender is giving you a large portion of the money to buy the property. In a nutshell, an appraisal is a valuation of the property; it’s a way for lenders to ensure that they aren’t providing a mortgage that isn’t worth what the property is worth. Your appraisal must match or exceed the value of your sale price. Otherwise, you’ll run into hiccups.
An appraiser is someone who uses comparable sales in the neighborhood where the house is located as well as the condition of the home to make a sound valuation of the property. This evaluation will include factors both inside and outside the property. If an appraisal is lower than the sales price you have several options: try to renegotiate the deal with the seller, pay the difference as a down payment, or terminate the contract. If it’s higher, it benefits you as the seller cannot terminate. The lender will submit the transaction for final approval, and you will have to meet all the contingencies.
Your lender will also ask you to obtain a hazard/homeowner insurance from your insurance company. We recommend you call the company who provides your car insurance. Or, if you would like, we can provide you with a list of insurance agents and companies we recommend. We ask that you ask your insurance agent to provide the premium invoice to title company so that the title company pays for it at the closing. As a general rule, lenders usually require 12 months of payment and two months of escrow. We are always ready to answer your questions and help you through the process, contact us., contact us.
8: Congratulations You are Approved to Close - Plan your move – the underwriter approves the loan, and the closing documents are ordered. If you’ve efficiently taken care of everything connected with purchasing your new home, the experience of taking ownership will be a positive joy with no surprises. As you work on your final approval of the loan, your lender and you will get copies of title commitment, survey, deed restriction, etc. from the title company to view. Remember the lender is as much interested in making sure there no problems with the survey, title, etc. One positive of getting a loan and having the lender on your side is that their lawyers will work with the title company to make sure there are no problems with the title, survey, etc.
9: Final Walk Through/The Settlement/Closing - Final Walk Through - We as your REALTOR® make arrangements for you to do a final walk-through of the property to make sure all is good and check if any repairs needed to be done are complete. You’ll be given a chance to look at the home to make sure it’s in the same condition as when you signed the sale agreement.
Typically, on the closing date, we make arrangements to meet you at the title company to verify and sign all the paperwork required to complete the transaction. The settlement will include paying your closing costs (title company will provide the closing statement/HUD to us ahead of time to go over with you, and they will give you a chance to wire the funds to the title company), legal fees, adjustments and credits on property taxes, your hazard insurance premium for 14 months, etc. At that point, you’ll receive the title to the property and copies of all documentation about the purchase. Here are 7 steps to smooth closing from one the title companies we trust.
10: Keys and Possession of the property – After the transaction is funded, you will be given the keys to take possession of the property. Sometimes, there is an agreement for seller's temporary lease. In this situation, you still will get the keys but have to wait to take possession of the property until after the seller vacates the property as per seller's temporary lease back agreement.
11: Value of Realtor-Expect great service from us as your realtor - As a REALTORS®, we are buyer specialists and focus on helping people successfully find and buy the homes they’ve always wanted. One benefit of using our services is that we hear about listings before they hit the market or right when they come on the market – that’s just the first step.
- We will inform you about buyer agency, outlining our professional responsibilities to you, including full disclosure, loyalty, confidentiality, obedience, and accountability.
- We help you explore your financing options and, if required, refer you to some excellent mortgage professionals so you can make the best possible mortgage decision.
- We save you time by regularly searching the market for affordable homes that meet your criteria.
- We email your specific home requirements to top producing agents in the area, so they know they have a qualified purchaser.
- We view homes with you and provide comparative analysis. We also provide you with a list of expert home inspectors that will provide in-depth analysis and advice.
- We provide consultation about your written offer to purchase and work with you side by side on the offer, what to offer, and other terms of your offer, with all terms approved by you.
- We negotiate the best possible price and terms for you and take care of all the documentation details.
- We will keep you fully informed about all activities that lead to the transaction closing.
- We assist you, if necessary, in finding any home-related services you need. In short, we will provide you with comprehensive, high-quality buyers services. So, when you decide to buy a home, or if you hear that any of your family or friends are looking to buy, please be sure to take advantage of our knowledge and services, contact us.
We are here to help you, please contact us, with any questions you might have, we want to make buying a house a pleasant experience - we have your back.