Home Buyer Guide: Home Buying Process
The 1st step, that is so often overlooked, is to Talk to a lender to make sure you qualify for a home loan.
There are many places you can get started. Of course you can use your bank, a local credit union, or mortgage banker. There are a lof of mortgage loan options available, so be sure to listen to inquire about the options they might have for you that will impact the down payment requirements, and later the monthly payments and term of the loan. There are also many different qualification requirements, so if one company turns you down, don’t get discouraged and Don’t give up! Once you are approved ask for a good faith estimate
and pre approval letter. Some costs can be negotiated and it never hurts to ask.
We have several lenders that we work with regularly, and can recomend one based on your situation. Please contact us if you would like some assistance or direction to get you started. We also offer a $100.00 gift card to Home Depot when you close on your home with us and got a quote from both a preferred lender and preferred homw insurance company - even if you choose to use neither of them!
Search homes online and drive around neighborhoods-
The best place to start looking for your home is RIGHT HERE!
Your online home search
will help you identify the area in which you want to live. Consider your lifestyle, your commute to work and your family needs. Will you want to live close to restaurants, parks and entertainment venues, etc.? Do like new homes or the character of an older historic home? Would you prefer the latest and greatest that may require you to live farther out, or would you be ok with an older home for the location? Do you prefer a big yard for the kids to play in, or would you prefer not to maintain it? Is a community pool important to you, or maybe one of your own? Is there a specific school district that you would like to be in?
Choose a Full Time Professional Realtor, and become their client.
It Costs you nothing to enter into a client relationship with a Realtor, but it provides a great value to you!
A Realtor will be able to further refine your home search, offer valuable insight and advice, and will be able to show you the homes that are a good fit for you. By using a full time Realtor you will have an agent who can work when it’s convenient for you, not them. A Realtor can advise you on the value of comparable sales and help you make informed decisions. A Realtor will provide all contracts and assist you in making and negotiating the offer on a property. If it is a pre-owned home your Realtor work to negotiate based on your needs of payment, or to reduce your out-of pocket expenses depending out your needs. If it is a new home they will help negotiate the best price including your upgrades, then work with you throughout the selection and build process. And your Realtor is there to look out for you and your interests rather than those of the seller.
Once you have found the right home for you - It is time to Make the Offer.
You have found a property you love.....Now it is time to make an offer! Your Realtor will help you decide on a price and terms that suit your budget, the value of the property, and the market that the home is in. When you place an offer be prepared as there will be a few early expenses. Part of an offer to purchase, is earnest money, and option fee. The earnest money will start the process at the title company. The option fee will buy you an unconditional right to walk away from the contract in the 1st several days to allow you to have the property inspected, and make certain it is the one for you. So, you need to be prepared to write a check for both the earnest money, and option fee at the time of placing the offer. The Earnest money is typically equal to 1% of the sales price. While the option fee is usually .1% This money is held by your agent until you have a final contract agreement, then within 48 hours of the agreement will be surrendered to the title company (earnest) and the seller (option). The earnest money will then go towards your closing closts, the down payment, or be refunded as fit. The option fee will go to the sellers as consideration for the right to opt out, and will be theor to keep if you cancel the contract, or will be applied to the purchase price of the home should you complete the purchase.
The Final Contract -
Most offers are only a starting point, as many aspects of the offer are negotiable. The strength of that initial offer depends largely on the city, neighborhood, asking price, time on market, market conditions, and more. The initial offer and consequesnt negotiation is one of the many areas that your Realtor will be of great value. They are professionals and area market experts.
The final contract is the result of the negotiation process from the original offer to a complete agreed upon legal contract. The terms and price may be changed as needed for both buyer and seller to reach that final agreement. All changes must be in writting, and will require the initials of both buyer and seller and will be signed by all parties and dated to execute the contract by the Realtor, then surrendered to the Title Company to start the title work for the transfer.
Inspecting the property.
The Option Period negotiated in your contract allows you a time period to have the property inspected and for you to ensure the property is in the condition you anticipate, and that you are comfortable in your decision to purchase this home. You may use any inspector or professionals that you need to ensure the property is right for you. Your Realtor will recomend inspectors, and help you order inspections as needed, and will help make certain that you stay within your time frame allowed. Typical inspections include a termite inspection, a heating/air inspection and a general home inspection and some times will also include additional inspections for pool or foundation. After you inspect the property, you can decide if you want to continue and purchase the home or terminate your contract, or have your Realtor negotiate for repairs to be completed prior to your purchase completion.
Getting your loan. Your lender will need documents from you supporting your income and other various documents. The lender will
order a real estate appraisal
for the property, order title work and get all the loan documents ready for a closing.
Closing. This is the Final Step to your home purchase!
In Texas a closing usual takes place at a Title Company, but can be done with a mobile Notary if needed. Other states may differ, so check with a local Realtor. An attorney will review and prepare documents as will the title company representatives, and the lender. So be prepared to sign a lot of pages at the closing. If you will want to review all of the documents in detail prior to signing them, rather than having them explained to you at the closing, be sure to inform your loan officer, Realtor and Title Representative prior to the closing date. Most of the time the buyer and seller will attend the closing with their real estate agents. The buyer signs documents giving him ownership of the property, and if a mortgage loan is taken the loan documents, while the seller signs away his ownership. Any monies due are given to the closing agent in the form of a cashiers check. Finally, once all monies due have been transfered to the approporiate parties, the sale is closed, and the keys are exchanged.
You are now a home owner!
Time to move in and enjoy your new home, and the wonder and bennefits of owning your own home!