Buying a home

There are tons of people who like to look at houses in their spare time. They play on the internet, or they drive around and pull listing fliers constantly. This is not really buying a house. If you really want to buy a house and get a good deal, one must follow an ordered set of steps to get the best out come. This all starts with making the decision to buy a house. Once you have made it past the looky-loo stage it is time to hire a broker.

As the saying goes, “If you swing a dead cat in Austin you will hit a Realtor” funny and tragic all at the same time. Austin has an abundance of agents running around. Going with the first agent you see is not necessarily the best idea. There are several good questions to ask before signing up with an agent.

• #1 How many transactions did you complete last year? The average Realtor only make 12k a year. That is two transactions. So find someone above average.
• #2 Is real estate your agents only job? Lots of people get their real estate license because they think they can make it big in real estate. Many of them don’t and move onto other occupations but keep there license just to have it. When you want to see a property at 10am on Tuesday morning you don’t want your agent to have to ask for time off work, do you?
• #3 Do you think we should pay full price? I like this question because the answer should always be “NO!”, but some Realtor’s are just looking for the commission and don’t really care how much the buyer pays. You may have to watch for facial reactions with this one. In realty, sometimes buyers pay more than full price. Your Realtor should be able to tell you about the current market conditions and how much people are paying.
• #4 How often is your website updated? Most, (98%) of buyers find the home they buy on the internet. It is important for an agent to have a great website. They need to know what you are looking at and what you like and dislike about everything you are seeing.
• #5 Why are they in real estate? I know the agents answer does not really mean anything to you, but it will give you some information about what the agents goals are, and that should tell you how something about how they will treat you.

So now you have an agent, and they are ready and willing to help find your dream home. But wait! How much can you afford? This is a really big question. We need to know the answer for this questions before we ever think of bedrooms, baths, or the play-scape for the kids. I know this is not the fun part but it does need to come before you waste any time looking at homes you can’t afford. So ask your Realtor or go online and find a mortgage banker or broker and figure out how much home you can afford to buy.

Are you excited? I know we are. This is by far the best part of the process. Since we already know how much you are qualified to borrow, we can now turn our attention to finding what you want! A few things to think about beyond beds/baths are, LOCATION, LOCATION, LOCATION!

Location is really the first part of the home search process. It is much easier to update/change a house than to relocate it to a better location. So find the best location and then figure out how to make the house the best it can be.

Your REALTOR® will help you prepare a written offer. In most transactions you will offer to deposit earnest money with the escrow agent, showing your sincerity in making a reasonable offer and abiding by the terms of the written contract.

Contract forms Your REALTOR® will help you prepare an offer using standard forms. The offer, if accepted, will become a binding contract. This document is the most important paper you will sign because it lays out all the terms of the transaction. It contains:

• a legal description of the property,
• any property that will be transferred with the home, (blinds, curtains, fireplace screens, etc.)
• the price
• financing conditions and contingencies
• amount of earnest money deposit
• name of the escrow agent and title company
• proration of insurance, taxes, and interest
• fees to be paid and who pays for which
• rights to inspect the property and for repairs to be made
• dates of closing and possession
• what happens if either party defaults on the contract

Inspections and warranties Before signing the contract, take precautions to protect yourself against unseen defects in the home. An inspection by a qualified inspector can provide you with unbiased opinions about the condition of the foundation, mechanical systems, plumbing systems, appliances, etc. If you can, accompany the inspector at the time the inspection is conducted.

It’s also a good idea to get a termite and other wood-destroying insect inspection.

You may also want to have your REALTOR® request that the seller furnish you with a one-year residential service contract as part of the deal. This is common practice with the purchase of existing homes (after the first year, you’ll have the option of renewing coverage at your expense) and ensures that certain items will be repaired by the company if they fail to function after you move in. If you buy a new home, the builder may offer a warranty as well. Whether you get a residential service contract or receive any other warranty, find out how claims will be processed and how any necessary repairs will be made.

The closing is the end of weeks or even months of research and decision making. The closing could last less than an hour but may take longer, depending on the complexity of the transaction. It often occurs at the title company’s office. The title company officer will explain each document before you sign. You may want your attorney present as well.

The home is yours At the end of the meeting, you will likely receive keys to the property. At that moment, the home will be yours. Occasionally, possession of the property will occur after closing. For example, the seller may have negotiated with you for a few extra days after closing, or the loan will not immediately fund, or other concerns. But, in most transactions, you will be the new owner at the end of closing.

The closing is over, the movers have left and the endless trips to home depot are over. It is time to sit back and enjoy what you have worked so hard for. The joy of home ownership. The simplest thing you can do increase you net worth, social standing and place in the community. Studies have all shown those to be true. So sit back relax, enjoy what you have worked so hard to earn.