So You want to Buy a Home
This is a road map on how to buy a home. As with any map, you will find many different side roads and other shortcuts along the way. When you engage a Realtor® to help you find your way, you will find they not only smooth out the bumps, but they also help protect you, the home BUYER. In Texas, all real estate agents represent the SELLER by default. This is why you should sign a buyer’s representative form. And in most cases, when a buyer hires a Realtor®, they do not have to pay anything. In most cases, the seller is paying the buyers agent.
When hiring a Realtor®, some things to talk to them about are what kind of experience do they have, what kind of reputation do they have, what is their client experience rating and what do they know about the area in which you want to move. Are they the local expert? do they know the area? Do not settle for a part timer to help you buy the single biggest investment of your life. Hire a PRO.
Now that you have decided to buy a home, you have to ask yourself a few questions and find out what you need to do in order to buy a home. First, you will need to figure out how much home you can afford. A trusted loan officer can help you with this. They will look at your gross income, your monthly debt like your car payment and credit card payments, and any other outstanding debt payments you might have. They will also look at your past credit history and find your credit score to help determine what you can afford to buy. The loan officer will give you the all important “Pre- Approval” letter with maximum loan amount you can afford.
Needs and Wants
Now it is time to come up with a list of your needs and wants and MUST haves. Start with your MUST haves. Things like number of bedrooms, numbers of baths and how big the house must be and the location.
You will need to make another list for the type of area you want to invest in. Consider things like drive time to work and major destinations, amenities such as swimming pools, tennis courts, parking, etc., area schools and the demographics of the surrounding area. things like drive time to work and major destinations, amenities such as swimming pools, tennis courts, parking, etc., area schools and the demographics of the surrounding area.
The next step is finding the location in which you want to live. This is where a Realtor® can really come in handy. They are the experts at knowing about the ins and out or every neighborhood where they work. Find 2 to 3 neighborhoods that meet your goals and stick with them.
Find a Home
Before the search begins, find out what your rights are. You should look intoFair Housing: Equal Opportunity for All,Real Estate Settlement Procedures Act (RESPA),Borrower's rights, andPredatory lending.
Now, let’s start the home search. I recommend you take your list of NEEDS and wants to the Realtor® you have decided to go with and start the conversation about where to buy your house. At this point you will have a good idea of what you can afford and the type of area you will want to invest in. The Realtor® will guide you to what it is you want.
Your real estate agent will look in the local MLS,HAR.com, to find what properties meet your needs and wants. Then they will set the appointments and you can start to view the homes that you have agreed upon to see.
You can find available homes by reading local real estate publications, contacting local Neighborhood Associations, visiting the local Chamber of Commerce, looking on the Internet, or driving through neighborhoods that meet your needs. Driving around a particular area looking for a home that is for sale is good because you can actually see the house, but it can be very time consuming and very "hit or miss." This is why you should hire a Realtor® to help you with the biggest investment of your life.
Make an Offer
Now that you have found the home you want to buy, you have to make an offer. Your Realtor® can help you come up with a fair price and walk you through how it works. Some of the things you will have to negotiate are:
- Closing costs
- Appliances and fixtures
- Occupancy time frame
The one of three things will happen:
The offer is rejected. Meaning the seller has just said no. At this point you have two options, first, move on to another house or second, you can submit a different offer.
The Seller Offers a Counter Offer. Meaning the seller wants to work with you, but wants to change some details in the offer; like the price or other details listed in your offer. At this point the buyer and seller should be able to have a meeting of the minds and you may have just bought yourself a new home.
The seller accepts offer. Congratulations, you just bought a new home.
The contract now goes to the title company and they start the process of making sure the title is clear and the survey is correct.
The Option Period
This is the time to perform your due diligence.
In most cases when buying a home in Texas, the buyer can buy a short window of time called an “option period” to do inspections. During this time, the Buyer can back out of the contract and only lose the cost of the option period, typically about $100.00, but it is negotiable between the buyer and the seller, and the cost of any inspections you might have ordered.
This is also the time you should talk to your insurance company to get a quote on your new home.
After you have gone past the option period, you move into the “Pending” phase of the contract. For the most part, your contract is “HARD” meaning if you back out you COULD lose your earnest money and be sued for and be forced to buy the house.
During the Pending phase, your lender will be ordering the appraisal and getting any and all documents needed from you to buy the house and sending it all to the underwriters. This is not the time to start buying new furniture and new cars... You do not want anything showing up on your credit report at this time... DO NOT BUY ANYTHING...
About 10 days out from closing, you should start lining up the the utilities, like the water, gas, electricity and get the binder from the insurance company.
It is not uncommon to be asked by the lender for more info a few days before closing. They have to run a credit report 3 business days before closing to make sure nothing has changed since you first applied to buy the house. This is why I told you earlier not to apply for any credit cards or go on any big buying sprees until after you close on the house.
Closing is where ownership of the home is legally transferred from the seller to the buyer. It is a formal meeting that most parties involved in the process will attend. Closing procedures are usually held at the title company's or lawyer's office. Your closing officer coordinates the document signing and the collection and disbursement of funds.
In order for the closing to go smoothly, each party involved should bring the necessary documentation, a state issued drivers license and be prepared to pay any related fees (closing costs). There may be more than one form of acceptable payment for your closing costs so ask the closing officer which form of payment will be required and to whom it should be paid.
Sellers sometimes pay for a portion or all of the closing costs, depending on local market conditions, terms of the purchase contract, and the seller's cash and timing considerations. Any such concessions should be acknowledged in writing. Most lenders will allow a credit from the seller to the buyer for the non-recurring closing costs. However, they usually won't allow a credit that reduces the amount of the buyer's down payment or any of the buyer's recurring costs, such as expenses for fire insurance premiums, private mortgage insurance (PMI) or property taxes.
Congratulations on the purchase of your new home!
You will receive your keys to your new home once your loan has been funded. Work out the logistics with your Realtor®
Now that you have taken ownership of it you will need to have your electricity, cable and phone set up. Also be aware of typical homeowner expenses such as Neighborhood Association fees, landscaping costs, and annual taxes and budget for them accordingly.
Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources:http://www.texasrealestate.com/ or http://www.har.com/. And for all of your Pearland, TX and Northern Brazoria and Galveston County real estate needs, please visit my site at:http://www.danfrankrealty.com. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.
Remember, Danny Frank is always looking to hire new and experienced real estate agents for the team at Turbo Realty. Are you ready to move to the next level in your career? Call me to join today. You can see my entire blog at: http://www.pearlandrealtyblog.com
Call Danny Frank, at 713-581-4702 to find out how you can become part of Turbo Realty.