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Prospect Power Moves

Educate yourself on the homebuying process.

AUSTIN'S OFFICIAL HOMEBUYERS' GUIDE

Step 1

Know Your Finance Options

Unless you are planning to pay with cash, the most important step before beginning your home search is to get pre-qualified by an experienced reputable lender or mortgage broker. Why is this so important?

EXPLAIN FURTHER


  • It allows you to determine how much your monthly payment will be.
  • It helps us to determine what price range to shop within.
  • It gives you an estimate of how much money you will need to bring to closing.
  • It allows you to select the best loan package without being under pressure.
  • It helps us to negotiate from a stronger position because sellers will find your offer more attractive knowing that you can secure a mortgage loan. This may help your offer beat the competition in a multiple offer situation!





Prospect-Power-Moves-Homebuying-Process-
Prospect-Power-Moves-Homebuying-Process-

Step 2

Loan Approval Process

If you require loan financing, meet with a lender or mortgage broker to determine how much you can afford. Obtain pre-approval for the loan amount you need. This will save time in the home search, and improve your negotiating position with home seller 

EXPLAIN FURTHER


Pre-qualification vs. Pre-approval?
Getting pre-qualified for a mortgage is an increasingly popular practice among buyers who don’t want to worry about going through the approval process until after they’ve found the home they want. It is a verbal exchange in which the lender tells you in advance approximately how much money you are able to borrow, based upon the information you provide the lender about your debt and income.

Getting pre-approved goes a step further than pre-qualifying. Most lenders require you to furnish documents (tax returns, check stubs, etc.) to pre-approve your loan. A pre-approval is an actual commitment to lend you money, provided that, when you are ready to buy, you still meet all the qualifying conditions that were met at the time of conditional approval.

TIP: Many sellers do not accept offers from buyers who are not pre-approved. Lenders may issue either a pre-qualification letter or a pre-approval letter that can be sent with your purchase offer.





Step 3

Start Your Home Search

Decide which neighborhoods you want to live in and whether you want a new or existing home. Consider requirements –such as the number of bedrooms or price range, and preferences – such as whether you would prefer a 1- or 2-story home. I will set up a property search on RealtyAustin.com to show you homes that will fit your needs, and we can view the homes you save as favorite.

EXPLAIN FURTHER


Pre-qualification vs. Pre-approval?
Getting pre-qualified for a mortgage is an increasingly popular practice among buyers who don’t want to worry about going through the approval process until after they’ve found the home they want. It is a verbal exchange in which the lender tells you in advance approximately how much money you are able to borrow, based upon the information you provide the lender about your debt and income.

Getting pre-approved goes a step further than pre-qualifying. Most lenders require you to furnish documents (tax returns, check stubs, etc.) to pre-approve your loan. A pre-approval is an actual commitment to lend you money, provided that, when you are ready to buy, you still meet all the qualifying conditions that were met at the time of conditional approval.

TIP: Many sellers do not accept offers from buyers who are not pre-approved. Lenders may issue either a pre-qualification letter or a pre-approval letter that can be sent with your purchase offer.





Prospect-Power-Moves-Homebuying-Process-
Prospect-Power-Moves-Homebuying-Process-

Step 4

Make Your Offer

When you find the right home, I'll provide a market analysis, and we'll review market conditions together and decide whether to present an aggressive or competitive offer. I will explain all documentation and negotiate terms that are in your best interest. The process may go back and forth a few times between you and the seller.

EXPLAIN FURTHER


EXPLAIN MORE: Once the option period is over, there are several important steps you need to take to ensure a smooth closing.

Obtain Homeowner’s Insurance

Your lender will require Homeowner’s Hazard Insurance to close on your new home. Ask your current insurance agent if you would receive a discount by having your car insurance and homeowner’s insurance with the same company. If you need a reputable referral, please let me know. Once you select an insurer, notify your lender of the insurance company you choose, and send me the information so I can provide it to the title company.

Select Home Warranty Provider (Residential Service Contract)

While new construction homes will typically offer a warranty from the builder, you can also purchase a home warranty – or "service contract" – for a resale home. The warranty usually covers your first year of home ownership, and helps protect you against the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal wear and tear. In most cases, we will attempt to negotiate on your behalf for the seller to pay for most (if not all) of your Residential Service Contract. The basic programs start at around $350-400, and then you can add various optional items, such as certain appliances, pools, etc. If your total exceeds the amount paid by the seller, then the difference will be added to your closing costs. Property Appraisal Your lender will arrange for an appraisal of the property. This typically costs between $375 and $450, which your lender will ask you to pay in advance. The appraiser's report will describe the physical characteristics of the property and compare it to similar properties to determine the market value of the property so you don’t over pay. If the appraisal comes back lower than contract price, the bank will expect you and/or the seller to make up any deficiency. Remember that an appraisal is different from a home inspection. Appraisers do not report on damage or repairs needed; they only report on the market value of the home in its current condition, relative to other properties in the area. Property Survey The buyer usually pays for the survey as part of their closing costs. However, this is a negotiable item. A survey typically costs between $400 and $600, but it could be more on larger lots. The seller sometimes has an existing survey we can use so we don’t have to order one.





Step 5

Going Under Contract

After final acceptance of the contract from both parties, you go “under contract.” At this time, you’ll provide an “earnest money” check for the title company to deposit so they can open escrow, and provide an “option check” to the seller guaranteeing your right to terminate the contract for any reason within the option period. Both checks will be deposited. 

EXPLAIN FURTHER


Pre-qualification vs. Pre-approval?
Getting pre-qualified for a mortgage is an increasingly popular practice among buyers who don’t want to worry about going through the approval process until after they’ve found the home they want. It is a verbal exchange in which the lender tells you in advance approximately how much money you are able to borrow, based upon the information you provide the lender about your debt and income.

Getting pre-approved goes a step further than pre-qualifying. Most lenders require you to furnish documents (tax returns, check stubs, etc.) to pre-approve your loan. A pre-approval is an actual commitment to lend you money, provided that, when you are ready to buy, you still meet all the qualifying conditions that were met at the time of conditional approval.

TIP: Many sellers do not accept offers from buyers who are not pre-approved. Lenders may issue either a pre-qualification letter or a pre-approval letter that can be sent with your purchase offer.





Prospect-Power-Moves-Homebuying-Process-
Prospect-Power-Moves-Homebuying-Process-

Step 6

Option Period

With an "Executed Contract," you start the negotiated Option Period, usually 7- 14 days. Final details are handled and you have an inspection performed to ensure the property is perfect for you. We negotiate contract details such as repairs. During this time, you’ll need to arrange insurance for your new home. Your title insurance company will provide a Commitment for Title Insurance for you to review. 

EXPLAIN FURTHER


EXPLAIN MORE: Once the option period is over, there are several important steps you need to take to ensure a smooth closing.

Obtain Homeowner’s Insurance

Your lender will require Homeowner’s Hazard Insurance to close on your new home. Ask your current insurance agent if you would receive a discount by having your car insurance and homeowner’s insurance with the same company. If you need a reputable referral, please let me know. Once you select an insurer, notify your lender of the insurance company you choose, and send me the information so I can provide it to the title company.

Select Home Warranty Provider (Residential Service Contract)

While new construction homes will typically offer a warranty from the builder, you can also purchase a home warranty – or "service contract" – for a resale home. The warranty usually covers your first year of home ownership, and helps protect you against the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal wear and tear. In most cases, we will attempt to negotiate on your behalf for the seller to pay for most (if not all) of your Residential Service Contract. The basic programs start at around $350-400, and then you can add various optional items, such as certain appliances, pools, etc. If your total exceeds the amount paid by the seller, then the difference will be added to your closing costs. Property Appraisal Your lender will arrange for an appraisal of the property. This typically costs between $375 and $450, which your lender will ask you to pay in advance. The appraiser's report will describe the physical characteristics of the property and compare it to similar properties to determine the market value of the property so you don’t over pay. If the appraisal comes back lower than contract price, the bank will expect you and/or the seller to make up any deficiency. Remember that an appraisal is different from a home inspection. Appraisers do not report on damage or repairs needed; they only report on the market value of the home in its current condition, relative to other properties in the area. Property Survey The buyer usually pays for the survey as part of their closing costs. However, this is a negotiable item. A survey typically costs between $400 and $600, but it could be more on larger lots. The seller sometimes has an existing survey we can use so we don’t have to order one.





Final Step

Closing Day!

You will need to bring a certified check if you’re making a down payment and picture ID to the closing at the title company. Possession of your home will occur when your lender releases funds to the seller.

EXPLAIN FURTHER


EXPLAIN MORE: Once the option period is over, there are several important steps you need to take to ensure a smooth closing.

Obtain Homeowner’s Insurance

Your lender will require Homeowner’s Hazard Insurance to close on your new home. Ask your current insurance agent if you would receive a discount by having your car insurance and homeowner’s insurance with the same company. If you need a reputable referral, please let me know. Once you select an insurer, notify your lender of the insurance company you choose, and send me the information so I can provide it to the title company.

Select Home Warranty Provider (Residential Service Contract)

While new construction homes will typically offer a warranty from the builder, you can also purchase a home warranty – or "service contract" – for a resale home. The warranty usually covers your first year of home ownership, and helps protect you against the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal wear and tear. In most cases, we will attempt to negotiate on your behalf for the seller to pay for most (if not all) of your Residential Service Contract. The basic programs start at around $350-400, and then you can add various optional items, such as certain appliances, pools, etc. If your total exceeds the amount paid by the seller, then the difference will be added to your closing costs. Property Appraisal Your lender will arrange for an appraisal of the property. This typically costs between $375 and $450, which your lender will ask you to pay in advance. The appraiser's report will describe the physical characteristics of the property and compare it to similar properties to determine the market value of the property so you don’t over pay. If the appraisal comes back lower than contract price, the bank will expect you and/or the seller to make up any deficiency. Remember that an appraisal is different from a home inspection. Appraisers do not report on damage or repairs needed; they only report on the market value of the home in its current condition, relative to other properties in the area. Property Survey The buyer usually pays for the survey as part of their closing costs. However, this is a negotiable item. A survey typically costs between $400 and $600, but it could be more on larger lots. The seller sometimes has an existing survey we can use so we don’t have to order one.





Prospect-Power-Moves-Homebuying-Process-

More Buyer Resources

EXPLAIN FURTHER


EXPLAIN MORE: Once the option period is over, there are several important steps you need to take to ensure a smooth closing.

Obtain Homeowner’s Insurance

Your lender will require Homeowner’s Hazard Insurance to close on your new home. Ask your current insurance agent if you would receive a discount by having your car insurance and homeowner’s insurance with the same company. If you need a reputable referral, please let me know. Once you select an insurer, notify your lender of the insurance company you choose, and send me the information so I can provide it to the title company.

Select Home Warranty Provider (Residential Service Contract)

While new construction homes will typically offer a warranty from the builder, you can also purchase a home warranty – or "service contract" – for a resale home. The warranty usually covers your first year of home ownership, and helps protect you against the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal wear and tear. In most cases, we will attempt to negotiate on your behalf for the seller to pay for most (if not all) of your Residential Service Contract. The basic programs start at around $350-400, and then you can add various optional items, such as certain appliances, pools, etc. If your total exceeds the amount paid by the seller, then the difference will be added to your closing costs. Property Appraisal Your lender will arrange for an appraisal of the property. This typically costs between $375 and $450, which your lender will ask you to pay in advance. The appraiser's report will describe the physical characteristics of the property and compare it to similar properties to determine the market value of the property so you don’t over pay. If the appraisal comes back lower than contract price, the bank will expect you and/or the seller to make up any deficiency. Remember that an appraisal is different from a home inspection. Appraisers do not report on damage or repairs needed; they only report on the market value of the home in its current condition, relative to other properties in the area. Property Survey The buyer usually pays for the survey as part of their closing costs. However, this is a negotiable item. A survey typically costs between $400 and $600, but it could be more on larger lots. The seller sometimes has an existing survey we can use so we don’t have to order one.





EXPLAIN FURTHER


Pre-qualification vs. Pre-approval?
Getting pre-qualified for a mortgage is an increasingly popular practice among buyers who don’t want to worry about going through the approval process until after they’ve found the home they want. It is a verbal exchange in which the lender tells you in advance approximately how much money you are able to borrow, based upon the information you provide the lender about your debt and income.

Getting pre-approved goes a step further than pre-qualifying. Most lenders require you to furnish documents (tax returns, check stubs, etc.) to pre-approve your loan. A pre-approval is an actual commitment to lend you money, provided that, when you are ready to buy, you still meet all the qualifying conditions that were met at the time of conditional approval.

TIP: Many sellers do not accept offers from buyers who are not pre-approved. Lenders may issue either a pre-qualification letter or a pre-approval letter that can be sent with your purchase offer.