How To Properly Prepare For A Home Purchase
Having a place to call your own is certainly part of the American dream. One of the greatest aspects of our role as real estate advisors, is assisting our clients make home ownership possible. We’ve detailed some tips below to help prepare you for the road to home ownership here in Austin.
Step 1: Know Your Budget
There is nothing worse than looking at the home that checks all your boxes and then realizing you can’t afford it. The best way to avoid this is by speaking with a lender and determining your budget.
Austin has a variety of lending options and loan products that can fit most any situation. You will be surprised at how many low-down payments and first-time home buyer assistance programs are available. A skilled lender will help you find the best option for your situation.
Don’t have a relationship with a lender? That’s ok. I have a network of lenders that I can recommend based on your specific situation.
Step 2: Find an Agent You Trust
Hiring an agent to represent you through your home buying journey can make a world of difference. We advise finding an agent you trust and who has proven their skill set. Look at their reviews and ask them what they will do to earn your business. A talented agent wears many hats, some of them being an inventory sleuth, negotiator, contract reviewer, mitigator, timeline orchestrator, facilitator of communication along with a slew of other things. Good representation will ensure that you get through each step with ease. The good news is representation won’t cost you anything, as the seller is responsible for paying the buyer’s agent commission.
Step 3: Determine What you Want and Need
Now that you know what you can afford and you have an agent to advise you, start thinking about all the things you desire in a home. How many bedrooms do I need? What type of outdoor space do I like? Brainstorm everything that you would want in a home.
Based on your needs, wants and the budget you’ve decided, you can work hand and hand with your agent to analyze
different areas and look at all available inventory that is a match.
A skilled realtor can help provide information on nearby schools, amenities and historic price trends. They can also assist in showing you areas that are near public transportation, grocery stores, entertainment centers, etc. Be sure to also drive through neighborhoods of interest on various days and at different times to check out traffic noise and activity levels.
It is important to keep in mind that everything in the world of real estate is a compromise. Have an understanding of what you truly NEED and be able to separate that out from all the things you WANT.
Step 4: Be Prepared for Additional Costs
Along with your down payment, there are a few other cash concessions that you will need to be prepared for:
Closing costs – Estimate at about 2-5% of sales price. This can vary by lender.
Earnest money- This is the deposit that goes into the escrow account when your contract has been accepted. 1% of sales price is typical.
Option fee- This amount can vary and essentially secures a contingency period for you to do your due diligence. $250-$1000+ This amount is all dependent on area, price point of home and if there are multiple offers on the property.
Inspection costs - This amount can vary based on size of home, slab foundation or pier and beam, if there’s a pool or a sprinkler system, so it’s best to budget anywhere between $350-$700.
Step 5: Prepare for Some Competition:
Austin is an incredible place to live with an abundance of jobs, great weather and a plethora of activities! 150 people move here every day and that puts a strain on housing inventory. You could find yourself with a limited amount of time to make a decision when there is a bidding war on the home you are most interested in. Ensure that your agent is experienced in working in multiple offer situations as it can make all the difference in getting your offer accepted!
Interested in making a move in Austin? Let’s set up a time to meet and discuss your personal strategy session.