Ready, set, buy! How to trade in your house for another by summer

Austin American-Statesman

Sunday, March 28, 2010

The weather is warming up and spring break is over. In the real estate world, that means the year’s most action-packed season is just around the corner. If you want to sell your house and move into a new one, now is the time.

Follow our step-by-step guide to be in a different house by summer.

Get preapproved for a mortgage

This is a simple process you should undergo before you start looking for a house, so you know how much of a loan you qualify for, says Max Leaman, a senior loan officer for PrimeLending in Austin. Make an appointment with a loan officer. Make sure you bring 30 days worth of pay stubs (for both of you if you are buying as a couple), two months’ worth of bank statements and the last two years’ W-2s and tax returns.

“Once we get an idea of what their income is, we can get them preapproved within 24 hours of the time they fill out an application,” Leaman says.

Figure out where you want to live

Todd Smith and Shaunna Terry, real estate agents and co-owners of Fine Austin Living, recommend visiting the neighborhoods you are interested in during the evening. You’ll get a truer feel for what living there would be like, they say.

“You see if the kids are out, or not. You can stop and ask the guy you see in his front yard how he likes living there and why,” Smith says.

Terry recommended visiting the neighborhood amenities – parks, pools or walking trails – during the weekend to get a feel for the neighborhood’s atmosphere. You also should plan on doing both the morning and evening commute from that location to your workplace, so you have a realistic idea of commute time.

Find a real estate agent

You’ll need a professional to act as the seller’s agent for your current home and as your buyer’s agent for the house you purchase.

“A good Realtor will take the time to interview you about your personality and lifestyle,” Terry says. “You can tell them what you are looking for in terms of schools, recreation, price point, closeness to work.” The real estate agent should ask, “Why are you doing this?” Smith says.

“Both the client and the Realtor need to understand why you want to move.”

Get current home inspected; do repairs

It’s a good idea to have your current home inspected and make any necessary repairs before you put the house on the market, says Randal Pitts, a licensed home inspector and the owner of Home Inspections Austin. He offers a pre-list inspection that goes over all the areas a regular home inspection would.

This way, when your potential buyers bring their own home inspector in, you are ready.

“I give them a list of things that need to be done. You can choose to have it repaired. It can help your home sell faster and for more money,” Pitts says. “Buyers are walking away from homes that have a lot of problems in this market. It prevents deal-killing inspections at the last minute.”

In addition, houses that are within the Austin city limits, receive energy from Austin Energy and are more than 10 years old are required to get an ECAD (Energy Conservation Audit and Disclosure) audit from a certified auditor. There are some exceptions. Make sure you have an audit done if your current home requires one, and ask to see an energy audit report for homes you are considering purchasing.

Stage your house to sell

Karen Sue Graves, the owner of Sellright Homes Staging in Austin, has staged more than 300 houses in the six years she has owned her business. A good stager can rearrange your current furniture to make the house look more attractive, as well as place their own pieces in your house to improve its appearance.

She recommends that people rent a storage unit and put away most of their stuff. Remember to “clean, clean, clean, so it looks like there is plenty of space,” Graves says.

Graves meets with her clients for consultations, and gives them an estimate of what her staging would cost. The actual staging usually only takes one day.

Graves also recommends hiring a professional photographer. A well-staged and well-photographed home will draw more attention more quickly and usually sell faster than a property that was not staged or photographed well, Graves says.

Find a house you want

At the same time as you negotiate with the sellers for a home you want to buy, negotiate with interested buyers for the sale of your current home. Keep in mind, your perception of what your current house is worth might not be the same as the market value of your house, Terry says. Many times, people have a number in mind as the price they want for their house, but realistically in their neighborhood at this time, it is not a price they will get.

“The market value dictates what the house will sell for,” Terry says.

And when it comes time for you to make an offer for a house that you want, make an intelligent offer, Smith says. It’s also important to pay attention to what the market is like in Central Texas right now, Terry says. You might know someone in Florida who says properties there are selling for far less than their list prices, but we have a different and healthier market here.

Get your new mortgage

Although you have already been preapproved, it’s a more serious process to have the mortgage on your new property approved.

If you have a good loan officer, “by the time you are under contract, we should have everything we need to know,” Leaman says. If it’s been a while since you were preapproved, you might have to provide more recent documentation of your income.

The loan officer will lead you through the process of getting the title work done, obtaining insurance and getting an appraisal of the house.

Although there is a perception that obtaining a mortgage is much more difficult since the recession began and loaning laws changed, for most people it’s still a relatively easy process, Leaman says. It is more difficult for self-employed people to get mortgages than it used to be, but if you are a regular salaried or hourly employee who receives a W-2 statement, and your credit score is above 620, you should have no problems, he said.

Close on both homes

The day you close on the purchase of your new home is an important one. As the buyer, make sure you have a cashier’s check or are wiring the money for the funds you will need the day of the closing, Leaman says – a personal check or cash will not work. Review the settlement statement before you go to closing, Leaman says. If you’ve done your homework, everything should go smoothly, and all that’s left to do is to move into your new home.

For sellers, the day of closing is also a much-anticipated day. Leaman advises sellers to examine the settlement statement closely beforehand.

Here is what happens on the day of closing: The buyer’s mortgage company wires the loan money to the title company. The title company disburses commission to both the buyers’ and sellers’ real estate agents. Typically, the agents each get 3 percent of the sales price. These commissions are written into the settlement statement. The title company then disburses the rest of the loan money to the sellers, as their profit. These disbursements can be wire transfers or cashier’s check.

In most cases, the sellers have moved out of the home already, and “all that’s left is for the buyers to get their keys,” Leaman said.

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About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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