What’s the first step of the home buying process?

Answer: The Mortgage Pre-Approval.

You will need to get a mortgage unless you are paying cash for a house. To know how much home you can afford, you need to get pre-approved for a loan. This is the first step in the home buying process.

How Long Does It Take To Buy A Home?

Answer: Around 30 to 45 days

The timeline for finding a house varies greatly from person to person. However, once you find a home and have an accepted offer, it usually takes around 30 days to close.

What Does a Realtor Do?

Answer: Almost everything.

A Realtor is a highly-valued asset when buying a home. They will walk you through every part of the home buying process. They will educate and inform you of all your options. They will represent you throughout the transaction and beyond.

Check out my article: What Do I Do As Your Austin, Texas Real Estate Agent

There is a difference between a Realtor and a real estate agent; many people do not know this. A Realtor is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. A real estate agent does not. Therefore, it is recommended that you work with a licensed Realtor to get the best service.

How Much Do I Have To Pay a Realtor as a Homebuyer?

Answer: Nothing (kinda)

In most cases, you do not have to pay your Realtor anything to help you purchase a home. Instead, the sellers typically pay their Realtor a fee, and then that listing agent pays the buyer’s Realtor for bringing the buyer and facilitating the transaction.

This is a hotly debated topic among real estate agents, lawyers, and consumers (buyers and sellers). While technically the real estate agent commission gets subtracted from a seller’s net sheet, the money is coming the buyers (and the bank).

So it all depends on how you want to look at it. Either way, the listing agent and buyer’s agent don’t get paid until the house closes, so we all have skin in the game.

What’s Your Best Advice for First-Time Homebuyers?

Answer: Trust the Professionals.

Beware of advice from people who do not work in the industry. Real estate is a popular topic, and almost everyone feels like they have some great insight to offer.

In reality, the people who know best are the people that work in the business. Good Realtors have sold hundreds (maybe thousands) of properties. They know what to expect and what pitfalls to avoid.

Friends and relatives have only bought and sold a few homes. Buying and selling a couple of houses does not make someone a well-rounded source of information. First-time buyers may become persuaded by well-meaning friends and family, only to be disappointed later. Be confident in your decisions and trust the professionals.

What Kind of Credit Score Do I Need to Buy a Home?

Answer: Usually 620+

A 620 credit score, or higher, is recommended. This score will be compared with your debt-to-income ratio. As you are probably aware, a higher credit score offers better lending terms. However, this is an ever-evolving topic as loan requirements are constantly changing.

Some lenders will approve buyers with a 580 score, sometimes even lower. Again, your loan officer will be the best source to give you a current answer for today’s lending requirements.

Are There Special Home Buying Programs That I Should Know About?

Answer: Yes

There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is essential.

How Much Money Do I Need For A Down Payment?

Answer: It depends on your loan type. Usually 3% at a minimum. 3.5% for FHA loans. 0% for some VA programs. 25% for investment loans.

The most common answer is 3% to 5% of the purchase price. FHA loans have a 3.5% requirement. Some conventional loans require 3% down. Veterans are eligible for a VA loan, which requires no money down.

Properties in rural areas may be eligible for a USDA loan, which also requires no money down. A good loan officer will walk you through all of these options.

What Other Fees Are There, Besides the Downpayment?

Answer: Mainly loan origination and closing costs.

The downpayment is usually the most significant cost associated with buying a house. Lending fees are the second-largest cost to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type.

Conventional loans usually have lower loan origination fees but require more money down. Adjustable rate mortgages are less common. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs. Ask them about private mortgage insurance to learn the best way to avoid that fee.

Interest rates are a large deciding factor in your monthly payment amount. In addition, they have a long-term effect on your overall loan payoff amount.

One unpredictable homeowner fee is the cost of maintaining everything in and around the home. For example, water heaters break, HVAC needs servicing, and appliances break down. Over time, these items will need to be replaced or repaired.

For a detailed list of all potential home buying fees, see our article entitled “6 Common Fees For Buying A Home In Austin, TX”

Your mortgage lender may forget that you’ll need $300 to $500 to hire a home inspector to perform a home inspection. So be sure to budget that money.

How do you handle negotiations?

Negotiation is one of my strengths. I aim to get the best possible deal for my clients by thoroughly understanding both sides of the transaction. I keep you informed during each step, and I always have your best interests at heart, whether that means securing a higher sale price or negotiating repairs.”

How do you determine the listing price for a home?

I begin with a comprehensive comparative market analysis (CMA), looking at recently sold properties in the area similar to yours. I also consider unique features of your property, current market conditions, and our timeline. My goal is to maximize your home’s value without overpricing it, which can deter buyers.”

When Do I Get The Keys?

Answer: At Closing

Under normal circumstances, you will get the keys at the closing. Closing typically takes an hour. Sometimes, the lender will need time to fund the loan, and you will need to pick up the keys after the loan has been funded. For example, if you have a Friday evening closing and the loan cannot fund until Monday, you may not get the keys until Monday.

Make sure to coordinate your closing to get the keys on the same day if that is what you need. Once you get the keys, make your monthly mortgage payment on time.

Finding the correct answers to your most popular real estate questions can be challenging. However, the reward for learning about real estate can pay off many times over when buying a home.

A good Realtor is your best source of information when buying a home. Once you have a real estate agent you trust, ask as many questions as possible. They will gladly inform and educate you through each step of the home buying process.

Remember to have fun with your home shopping experience. It’s an exciting achievement that many folks long to experience. Whether buying your first home or fourth, it’s always a whirlwind of emotion and excitement.