Thank you for visiting our website and allowing us the opportunity to present our buyer's representation services. Buying a home, especially for first-time buyers, can seem like an overwhelming and complex process. While nothing about real estate transactions is simple, working with the right Realtor can make buying a home a lot less stressful. As a boutique real estate firm, we are focused first and foremost on providing the highest level of service and attention to our clients. When you choose Ravenwood Realty to help you find your new home in the Austin area, you can rest assured that you will have a Realtor that is knowledgeable, professional, accessible and caring.
Although no two transactions or buyers are exactly the same, there are a series of eight basic steps that one will likely encounter when buying a house in Austin.
There's little to be gained by searching for houses to buy if you either don't have the cash to purchase the home outright or the credit to qualify for financing. Since the vast majority of buyers will choose to obtain a loan to buy their home, knowing what's on your credit report is critical. Fortunately, consumers in the U.S. are allowed by law to obtain one free copy of their credit report each year. You can visit www.annualcreditreport.com to obtain your free reports.
There are three credit reporting agencies that creditors report to including Equifax, Transunion and Experian. We recommend that you ALWAYS get your reports for each of the three separate agencies. Some creditors may report to one, two or all of the credit reporting agencies. So while your Equifax score may look great, a creditor who only reports to Transunion may be showing a late payment that would impair your ability to obtain financing.
Credit scores are represented by a number that ranges from 300 to 850. Lower scores indicate poorer credit and higher scores show better payment history and credit-worthiness. If your score is lower than you think it should be, check your reports for errors. In most cases, you can dispute errors online through the credit reporting agencies websites
There are a number of online resources and mortgage calculators that can give you an idea of what an affordable monthly payment would be based on your income, current debt etc. The "how much house can I afford?" calculator at Smartassets.com is one of the better tools because it takes into account your location as well as down payment, closing cost, mortgage insurance etc. Keep in mind that there are loans with low or even zero down payment available for qualified buyers. Above all, it's important to consult an experienced mortgage broker BEFORE you start looking at houses for sale in the Austin area. A skilled home loan professional will help you explore all of your options and explain the closing costs and fees associated with obtaining a mortgage
We're obviously biased in our opinion that Ravenwood Realty is the right choice to represent you as your buyer's agent. That is because we have complete confidence in our ability as Realtors to offer you a level of service and professionalism that is a "cut above the rest". Once you begin to work with us as your agent, we think that you will feel the same way. Our objective is to work as a team with you and the lender to help you find and successfully purchase your new home.
With respect to obtaining a loan, it's generally a good idea to shop around for a mortgage lender. Friends, family and co-workers can often give you recommendations for a good lender. It is also prudent to check the Better Business Bureau's ratings. We recommend that unless you have a specific lender in mind that you have worked with in the past, you should speak to at least 2-4 candidates. Write down any questions you can think of before meeting with them, and don't leave the meeting without satisfactory answers. Much like a good Realtor, the mortgage lender is not there to tell you what you want to hear, but instead to ensure that ALL of your options are clearly presented to you so that you can make an informed decision.
Once you've decided on a mortgage lender, it's important to obtain (at minimum) pre-approval for a loan. Pre-qualification is generally an estimate based on the information you provide to the lender, but pre-approval involves the lender obtaining your credit reports and examining your debt to income ratios. Pre-approval will give you a clearer picture of your borrowing ability, because it involves a complete examination by your lender of all the factors that can affect your ability to repay the loan.
After you've obtained pre-approval for a loan, we can start shopping for your new dream home. As your Realtor, we can help you explore different areas, neighborhoods and subdivisions that might meet your needs. Distance to and from work, shopping, crime rate and the quality of local schools are all factors that you'll want to consider. Prior to touring houses, create a list of must-have features for your new home. How many bedrooms and bathrooms do you need, and how much square footage will you need to accommodate your furniture and belongings? Do you need a large kitchen, big closets and cabinets or a large backyard for your pets?
Keep in mind that there is no perfect home for every buyer, unless you are having a home custom built to your exact specifications. In addition to your must-have features, make a list of "ideal" features. These would be considered things that would be nice to have, but are not a "deal-breaker" if they're not included in a home that otherwise fulfills all your needs.
Once you've located the house you want, you'll need to make a formal offer to purchase it. It's not unusual for sellers to price their homes a bit above what would be considered fair market value. There's nothing wrong or inherently bad about that, because they want to get the absolute highest possible price for their property just as much as you want to pay the lowest price you can. As your Realtor and representative, we will perform a detailed price analysis of the house as well as the surrounding market and advise you on a fair and reasonable offer. The seller may choose to accept your offer or to make a counter-offer. If a counter is given, you can rest assured that we will maintain constant communication with you and aggressively negotiate on your behalf.
Once a price has been agreed upon and both you and the seller have signed the contract, you will need to provide two checks. The first check is for the option fee paid to the seller, which allows you an amount of time specified in the contract (usually 5-10 days) to have the property inspected for any defects. The second check is your earnest money, and is made payable to the title company indicated in the contract. The title company will hold your earnest money check like a deposit while the option period and inspections are taking place. If any defects are found during the inspections, repairs or improvements must be negotiated during the option period. If there are any significant changes or repairs that need to be made, they will be noted on an amendment to the contract.
After the home is under contract, the option period has expired and all parties are satisfied with the terms, your lender's job truly begins. We will coordinate with you and the mortgage lender to ensure that an appraisal of the house is ordered promptly. The last thing you want is to be two weeks past the option period and find out the house won't appraise for the contract price. This is also the time that many buyers will feel like they're under financial investigation, as the lender performs their due diligence and asks for any records and documentation they may need to support your ability to repay the loan. Remember that communication is critical during this time. If your mortgage lender needs something from you to get your loan underwritten, you want to know about it and provide it as soon as possible
It's not always easy to set a closing date that works for both you and the seller, but it's possible and necessary. Remember that if you're currently renting and your lease term is not finished, you will have to make arrangements with your landlord to buy out the remainder of the lease or possibly sublet the property. There are also situations in which the seller is having a new home constructed and may ask as part of the contract to remain in the home until their new house is completed. This is called a lease-back and essentially means that the seller continues to live in the home after the sale for an agreed upon time (usually a month or two) and pays you rent. It's essential that all of these issues are agreed upon in the original contract so that an accurate closing date can be set, and all parties know what their respective timelines for move-in and move-out will be.
Around two weeks before closing, arrange for your utilities to be turned on at your new home on or before the closing date. You should also set a date for the moving company to pick up your belongings from your current residence and deliver them to your new home. Usually within 1-2 days of closing you should receive your settlement statement, which will show all of the fees and credits associate with your purchase. It will also show the exact dollar amount needed for closing. We recommend that our clients verify the amount needed for closing and just wire the funds to the title company.
Your closing documents will be notarized, so remember to bring your driver's license or a valid passport with you to the closing. Typically your loan will be funded the same day as closing and you can pick up the keys to your new home. In some circumstances it CAN take one extra business day to fund the loan, so have a contingency plan in place just in case you don't get the keys on the same day as closing.
Your loan has been funded, the closing is complete and you've received the keys to your new home! All that's left is to move your belongings into your home, arrange the furniture (or buy new furniture) and unpack. Most of us look forward to moving with about the same sense of joy as doing our taxes, but the thrill and satisfaction of moving into a new home that YOU purchased is something else entirely. Getting to this point of the process doesn't have to be extremely stressful or difficult. Choosing an experienced mortgage lender and a knowledgeable Realtor like Ravenwood Realty are the key components of an easy and straightforward home buying experience.