The Home Buying Process

Is Buying A Home Right For You?

Several people have reservations when it comes to owning a home. At times these reservations are warranted. It is better to go over the pros and cons before you find yourself contractually obligated to purchase a home.

Meet with One of Our Buyer’s Agents Today

Purchasing a home can become overwhelming for anyone unfamiliar with the complexities of buying a home. Have one of our buyer’s agents help navigate you through the process supply their knowledge and expertise. This service is free to the buyer in most cases.

Don’t make the mistake of reaching out to the listing agent. Their first priority is to look out for the best interest of the seller. If you do happen to sign with them, they are under the obligation to give you both equal and fair representation. This leaves you in a situation of getting neutral representation, if any at all.

Having your own buyer’s agent allows you the following benefits:

  • You will have a licensed professional looking out for your best interests. Your agent will have an ethical and fiduciary responsibility to make sure you are represented in the most beneficial way.
  • One agent means one point of contact. You can view any home on the market through your buyer’s agent. This eliminates the need for countless phone calls and meeting listing agents on THEIR schedule.

The most important part of buying a home is making sure your finances are in order. This includes having good credit, having your down payment in line, and having access to all of the documents a lender may need.

We are a great point of contact for loan officers. We tend to stick with the lenders who have proved they are diligent in their work and they get files closed. Compensation is not given from a lender to an agent, so rest assured we will only recommend the best in the business.

  • Use one of the many free apps to take a preliminary peek at your credit. See if you need some time to repair you credit or if you are ready to go. Bad credit can still get you qualified for a home loan, so do not get discouraged.
  • Speak to at least 3 different lenders and compare the products of each one. They will give you a fee sheet showing their expected fees for the transaction. Some lenders may have higher closing costs and a lower interest rate, while others may have higher rates but lower closing costs. No two products are the same!
  • Find the right product which fit your needs. Make sure to ask about any special products which you may qualify for.
  • Now you are preapproved! The lender will provide you with a preapproval letter which outlines the price of home you can buy. This preapproval letter will also show sellers you are prepared to buy their home and may make your offer more appealing over an offer without.

Time to Look at Some Homes

Finally it is time to search for your dream home. This is where your agent starts to show their ability in understanding the type of home you are looking for.

  • If your time is limited don’t be afraid to ask us to preview some properties for you. This will help in limiting your time on the road.
  • Tell us your “must haves” and your “would like” and they will be able to find you the perfect home, if it exists on the market.
  • Make sure to take notes! After viewing a few homes they all start to run together. Taking notes will assure you remember which homes you loved after the viewings.
  • You can go to Open Houses without us present. Just make sure to let the listing agent know you are currently represented.
  • Let us know which homes you like and why. If you have any questions before viewing a home, we will reach out to the listing agent and get those questions answered. This can save a lot of time by ruling out homes which do not fit your criteria.

From Offer to Counter Offer to Executed Contract

We found the perfect house and now it is time to submit an offer. Discuss the offer with us and make sure you have a clear understanding of why and how we are coming up with the offer we are submitting. We will help you by using sold comparables to make sure the offer is within reasonable means. Remember, a seller can list their home for any price they wish so we need to make sure you are not over paying your home. Some things to consider during negotiations:

  • Lowball offers work in a buyer’s market while strong offers work better in a seller’s market. You do not want to make the mistake of coming in too low or too high and insult the seller or end up leaving money on the table.
  • Counter offers are common so prepare for this when making an offer.
  • To avoid multiple offers it is recommended to submit your offer as quick as possible and with a strong price. Trying to save a few dollars in negotiations can backfire if another party comes in and causes us to offer highest and best.
  • Once we come to agreements and the offer is signed, we are locked in and the seller cannot execute another offer. This is why it is important to come to an agreement as soon as possible.

Earnest Money and Option Fee Are Due

In the contract you will notice the terms “option fee” and “earnest money”. Both will be due immediately after the contract is fully executed. The option fee will go to the seller for your unrestricted right to terminate the contract, while the earnest money is your good faith deposit made out to the title company. We will help make sure you are always in compliance with the contract so your earnest money is never in jeopardy.

Escrow, Title Commitment, and Appraisal

At this point title will open escrow and your earnest money will be deposited. Shortly after this we will receive a title commitment which will outline any title issues which may need to be resolved before closing. We will go over this document with you to make sure you have a clear understanding of the contents. Following this we will receive the appraisal. This is ordered by the lender and will give us the exact value of the home. As long as the home appraises for the offer price, or above, we move on to closing.

Follow Every Lender Request Immediately

This is one of the MOST important steps in buying a home. Your lender is going to continually ask you for more documents up to the week of closing. No matter how big or insignificant you feel their request, it is important for you to fulfill the request in a timely manner. Lenders understand documents get lost over the years, so if you cannot find something right away, let the lender know so they may find an alternate route to obtain the form. Remember: EVERY document they ask for is necessary to close on your home.

Get ALL of your Inspections Done

In Texas we refer to this as your “option period”. You will pay a small fee to have the unrestricted right to terminate the contract within this time frame. This is when you will get all of your inspections done. The most important inspections to have done are, but not limited to:

  • Home inspection which will be a mechanical, structural and visual inspection.
  • Termite inspection – Houston is known for its termites. While it is uncommon to find termites infesting a home, there have been several instances where they have infested a nearby tree and could pose a threat to the home. Better safe than sorry.
  • Roof and a/c inspection- While this is included in the home inspection, in some cases it is recommended to have a specialist inspect the systems.

Request for Repair

After inspections will be your chance to negotiate any repairs you feel are needed. While the seller is not obligated to make repairs, more times than not they are willing to. It is always recommended to have your own contractors make the repairs after closing and ask for a reduction in sales price in lieu of the seller making repairs. Keep in mind they will generally find the cheapest bid to get the job done.

Home Insurance Policy and Utilities

At this point everything has come together and we have the house you want, the value has been assessed, and the seller has agreed to our terms. All contingencies are gone. This is the time to start looking for your insurance coverage and utilities. The first place to shop for the best rate would be your automobile insurance provider. They tend to offer discounted rates for multiple policies. You may also want to consider a flood policy as well. If you are not in a flood zone, the police will be really affordable. This is also a good time to shop for utilities. Most people will be in a contract with their current provider so setting up the utilities to transfer the day of closing is usually the best option.

Final Walkthrough

The final walkthrough is an important and crucial part of the home buying process. This is the last time you will see the home before it is legally yours. This is the time to see if it was left in the condition you expected it to be in. This is your last chance to catch any unexpected flaws or damage and try to reconcile before closing. NEVER pass on doing a final walkthrough.

Closing Day

The day has finally arrived…..Closing day! The universes have aligned and you made it through the majority of the buying process. Closing will take place at the title company who is working your file. Make sure you show up with the following:

  • A government issued ID
  • Your cash to close in a form of Cashier’s check made payable to the title company
  • Your checkbook in the off chance there is a small shortage

After signing, what seems to be thousands of pages of documents, the escrow agent will make sure all documents have been signed by both parties, all IDs have been collected, and your cashier’s check is for the appropriate amount. The escrow agent will send off for a wire request from the lender and as soon as the file has funded the home is yours!!

The buying process can be a long and convoluted process. Don’t try to go it alone. Contact one of our experts to help keep one of the happiest days of your life from becoming a nightmare.

Terra Nostra Realty is Your Neighborhood Real Estate Firm.

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Contact one of our knowledgeable agents today at 832-554-9941