Pauly Presley Realty's
Guide for First Time Home Buyer’s in Texas
How to Buy Your First Home in Austin TX
Buying a home in Austin, TX, or anywhere for that matter, is a huge decision. Sometimes, younger people rush into becoming first time home buyers, seeing it as a signal to others that they’ve made it.
This is a mistake. The process of buying your first home should be made carefully to ensure that it’s a good investment. Don’t be deceived: buying a brand new Austin home, whether it’s your first or your tenth, takes a lot of work. However, when done prudently, buying a home in Austin can be an excellent long-term financial move.
Becoming a first time home buyer in Texas allows you to build equity and ownership in an asset that can provide impressive returns if managed correctly. First time home buyers in Austin, specifically, are able to enjoy the benefits of owning property in a popular, growing metropolitan area. Make sure you have the information to make educated choices regarding your Austin home buying decision. Otherwise, you may risk leaving money on the table.
Texas Real Estate Agents With Expertise
At Pauly Presley Realty, our Austin real estate agents are here to help you with difficult home buying decisions. It has always been essential for our agents and associates to be extensively educated in their specializations. Our entire team shares the passion to bring creativity, dedication, and ﬂexibility to the job when achieving goals for our clients.
Over 35 people are available to represent you, and each of our agents brings something unique to the table. We’re approachable, professional, and know the ins and outs of Austin. Contact the Pauly Presley Realty team today to get in touch with our Austin real estate agents. You will love working With a Pauly Presley Realty agent and the service they provide. Feel comfortable knowing your real estate needs are in good and experienced hands.
In This Article
Step by Step Walkthrough
First-Time Home Buying Process
The home buying process can be intimidating for first time Austin home buyers. If you’re feeling nervous, it may help to know that around six million homes are purchased in the United States each year, and many of them are bought by first-time buyers just like you. In some ways, buying your first home can be a lot like having your first kid. The more you know going into it the better.
With that in mind, it’s important to have a basic understanding of all the relevant steps in the home buying process before diving in. The last thing you want to do is go into the home buying process with no preparation at all. Doing so can lead to you getting held up at a particular stage of the buying process or losing out on a chance at your ideal home. To help you avoid as many risks as possible, our team has compiled this comprehensive, step-by-step guide that home buyers can use to ensure that things are handled the right way. Let’s cover all the basic steps you’ll navigate while buying your first home in Austin, TX.
Narrow Your Search Based on Price
Before you begin the home buying process, you are encouraged to speak with a lender who will help facilitate and determine how much you can afford in a home and what type of loan you will be using. The lender will provide you with a pre-approval letter for the amount you require. This will be vital when you submit an offer.
Search For Your Home
Once you have received your pre-approval from your lender, it’s time to begin your home buying search. Your Pauly Presley Realty agent will help you narrow down your criteria; including which neighborhoods you want to target, school districts, size of home, home features, etc. We will use the Austin Multiple Listing Service to create a customized and real-time search of active listings to begin viewing properties you’re interested in purchasing.
Make an Offer
Once you find the right property, your Pauly Presley Realty agent will review market conditions and determine the best way to approach making an offer. This can mean anything from low- balling to offering over asking price in a multiple offer situation. The negotiations may go back and forth a few times before finalizing terms. This step is a bit more nuanced and involves several steps of its own, so we’ll cover it in more depth later.
After both parties have accepted the terms, you’ll go “under contract.” At this time you’ll provide an “Earnest Money” check to the title company to open escrow and provide an “option check” to the seller for an option/inspection period. You have 3 calendar days to deliver “Earnest Money” and 3 calendar days to deliver “Option Money”. Deliver documents requested by the lender within 24-48 hours.
Option & Inspection
Now begins the negotiated option period, usually about 7 days but can range from 5-10 days. Inspections are performed to get an accurate picture of the material aspects of the property, including any minor and/or major defects that could affect your decision to purchase the property. It is important to note that negotiations will also take place during the option period based on the results of the inspections.
After the inspections are complete, and any changes or negotiations made to the contract have been agreed upon by both parties, your lender will order an appraisal on the property. Please keep in mind that it is imperative that you provide documents to the lender as soon as possible when requested.
On the day of closing, you will need to bring a cashier’s check for your down payment and closing costs along with a photo ID. You will receive keys once all docs are signed and your lender releases funds to the Seller. Once complete, you should have a sore hand and a smile on your face!
Things a Home Buyer Shouldn’t Do
The home buying process can be sensitive to multiple factors, some of which are in the control of the buyer. Avoid the following circumstances to prevent any unnecessary delays when buying your home. These events could possibly disqualify you from obtaining a home mortgage loan.
- Don't change jobs
- Don't hurt your credit by missing payments
- Don't become unemployed
- Don't buy a new car or other high dollar items
- Don't apply for a credit card
- Don't make high dollar purchases on a credit card
- Don't decrease your savings account
- Don't cosign for anyone
Moving through the process
How to Make an Offer on a House
Making an offer on a house is one of the most monumental steps in the home buying process. Just to get to this point, you’ve had to do a lot of work: getting to know your local market, making a list of sales similar to the house you want to buy, etc. Now, it’s time to decide how much to offer on a house.
Here are the general steps involved in making an offer on a house:
- You pick a starting price and make a written offer.
- The current owner either accepts, counters or declines.
- If accepted, you’re under contract.
- If the seller makes a counteroffer, you either accept it or make a new offer. This can go back and forth.
- If the offer is refused, you can make a new offer or begin a new round of house hunting.
It sounds like a lot of work, but if you work with a professional real estate agency like Pauly Presley, you’ll have an agent to do all this work for you.
Costs of Buying a Home
1% of the sales price is customary, but earnest money is a negotiable term. The earnest money is credited to the Buyer at closing as a portion of the down payment or closing costs. Earnest money is refundable if the buyer backs out during the option period.
The amount is negotiable, but generally ranges from $100-500. The option period gives you time to have the property inspected and negotiate any repairs/credits. It also gives you the right to terminate the contract and receive your earnest money back.
During the option period it is recommended that you hire an inspector to look at the property. The majority of the time on a home under 3,000 square feet, an inspection will run around $350-$500. You should also have a pest/termite inspection completed, usually around $100.
An appraisal of the property typically costs between $450 - $550. You will need to pay your lender/appraiser for this prior to the completion of the appraisal.
If the Seller does not have a usable survey, the survey is typically purchased by the Buyer. A survey will typically cost around $500-$700.
Closing costs consist of mostly loan items, title fees, and sometimes taxes. The total amount generally falls between 2-3% of the purchase price. These costs will be paid at closing along with your down payment.
Home Buying FAQs
Your Pauly Presley realty agent will run a comparable sales analysis to determine the best offer for the property and the value it holds for you as the buyer.
Mortgages are standard legal documents used to make large real estate purchases without having to pay the entire amount upfront. When you buy your first home in Austin, you'll have to sign a mortgage that entitles the lender to seize the property if you fail to pay back the loan. A mortgage can also refer to the loan taken out to buy a new home. You'll make regular monthly payments towards this definition of a mortgage until its balance is paid off or you decide to sell your Texas home.
You might be surprised to learn that not all mortgage programs even require you to make a down payment. Some allow for 100 percent financing. It's also possible to procure down payment grants for first-time homebuyers, making it conceivable to buy a home without a down payment. In most circumstances, though, you should expect to pay a minimum of three percent down for a conventional loan or three and a half for an FHA-backed loan.
The average time it takes to close on a house, if there are no home closing delays such as low appraisal, is less than 30 days. However, for first-time homebuyers, particularly when you require help via loans/grants to make your down payment, it can take 35 to 45 days to close.
Meeting the demands of the seller is key. In most multiple offer situations, you get a single chance to present your highest and best offer. Staying flexible and accommodating the seller's needs can often result in a favorable decision.
It is a way to make your offer gain attention. By providing these items, you are personalizing the experience and generating an image of who is purchasing.
This can vary from instant acceptance to a few days. After 7 days, if an offer hasn't been accepted, rejected, or countered, it is void.
When a Buyer or Seller wants to modify the terms of the offer. Once the counteroffer is made, a Buyer or Seller can counter-offer again, accept, or reject.
Your Realty Experts
Pauly Presley Realty, Your Experienced Austin Real Estate Team
Since 2005, Pauly Presley Realty has been building an expert team of Realtors to help the residents of Austin and its surrounding areas find their dream homes, apartments, and condos. With over 35 real estate agents on the Pauly Presley team, we have Realtors specializing in every type of housing that Austin has to offer. From high-end downtown condos to cozy apartments for lease; from vintage homes in trendy neighborhoods to sprawling mansions in the hill country, our agents do it all.
Pauly Presley’s real estate listings in Austin include a wide range of homes and residential properties that are sure to fit whatever budget you’re working with. Let our Austin real estate team know your budget and desired amenities, and we can connect you with options and property listings that fit your preferences. Pauly Presley Realty‘s agents are ready to help you find your dream home today. Our Realtors are ready to help you find a home within your budget and timeframe.
Contact Pauly Presley Realty today for your answers to your first time home buying questions. We look forward to helping you during each and every step throughout the entire real estate process.