Buying a new home?

• The first thing you need to do is figure out the financing. How much can you afford to spend? How much do you want to spend? Shop around for a lender who can offer you the best program to suit your needs. Have them provide you with either a pre-qualification or a pre-approval letter. Demand is high in Austin so it is not unusual for a seller to get multiple offers on their home; most likely they will only consider offers from buyers who already have financing in place. See below for more detailed information on the financing process.
• After you have either your pre-qualification or pre-approval, but before you begin looking at houses, make a list of features your ideal home would have. Then go through the list and highlight the items that are most important to you – things you cannot or will not do without.
• Take your list with you when you are out viewing homes. Make notes for each property, jotting down the “must-haves” and additional features for each home. This will help you narrow your options down and make a final decision on the perfect home for you.

• You will need to choose a lender and get pre-approved. Each lender is different, but most of them will require the following:
• W-2s or 1040s for the past two years for all parties on the loan
• Most recent paystubs
• Bank statements (all accounts); usually they will require the last 3 months
• Balance statement for outstanding loans and mortgages
• If you are renting, your landlord should provide you with verification of on-time payments for the past year, and the rent amount. Canceled checks might also be acceptable.
• Profit and loss statements, if self-employed
• Detailed information on all other assets (stocks, other real estate, etc.)

• Loan calculators that you find online can often be misleading. They do not take into account information such as your credit, employment history, debt and income that will ultimately determine the amount a particular lender will approve you for.
• Your best bet is to choose a lender and get a full pre-approval. The lender will explain the various programs they offer so that you can choose which one works best for you. The program you choose will affect the final purchase price and monthly payments, as well as the amount you put down and closing costs.

• A pre-qualification means that you have answered a few preliminary questions about your income and expenses, and based on that information should be able to qualify for a loan in a certain price range.
• A pre-approval is a verification that you have been working with a lender, and have already submitted a basic loan application with detailed income and expense information. A pre-approval is an actual confirmation that a loan will be granted contingent upon final verification of the required documents.
• It is more likely that a seller will take their home off the market for someone with a pre-approval. They might not be willing to accept an offer if they are unsure the buyer can acquire a loan.

Some sellers will list a home that needs work below market value, and in those cases there will not be much room for negotiation. However, in some instances the seller will list the home at full market value with the intention of completing the necessary repairs before closing. If you want a bargain you can offer a lower price and let the seller know you will handle the repairs on your own.

A property’s listing price is usually determined by use of a CMA, or Comparative Market Analysis. A CMA takes information on other properties in the area that are currently on the market as well as recent sales, and compares the features of the home to those properties. By using these guidelines, the seller can see what buyers are willing to pay for homes with similar features and in similar neighborhoods, thereby arriving at a listing price for the home.

• No. A CMA is done by a real estate agent and typically serves to find an estimated market price range for a property. An appraisal is done by a licensed appraiser and is a more official set value used by lenders.
• A CMA is usually provided by a real estate agent as a preliminary step in listing a property for sale. An appraisal typically costs several hundred dollars, and is generally paid for by the buyer as it is required by the lender.

Buyers are not required to have a home inspection done, but many choose to do so. Hiring a licensed home inspector to evaluate the condition of the property has several advantages. The inspection could reveal a problem that was overlooked, or advise you about something that could be a potential issue in the future. They can also explain the home’s systems and provide tips on how to properly maintain them.

You are not required to use an attorney when purchasing a home, but many buyers do opt for one. There is a lot of paperwork involved and many documents to sign, and having legal representation can bring peace of mind. Your attorney may attend the closing with you upon your request. You might want to find out ahead of time if this service is included in their fee.

This will depend largely on the loan program you decide to use. An FHA loan requires 3.5% down and a conventional loan varies from about 5% to 20% down. There are programs to help low-income and first-time buyers. Closing costs might be paid up front or rolled into the loan. Sometimes a seller might be willing to negotiate to close the deal. Your Crown Realty agent can help you decide which program is best for you.