Buying With Confidence

So, you want to buy a house—now what? The first time buying a home should be a happy and memorable experience. You may be wondering along the way though what all to expect. 

• Do some preliminary online searching. Check into what homes are selling for in the areas you’re interested in to give you an idea of what you’re looking for. This will help later on when communicating your wish list with your real estate agent. Make a list of "must haves and don't wants".
• Take care of the budget. Use an online mortgage calculator to estimate what your monthly mortgage payment would be. Account for utilities, taxes, and insurance and see if this fits into your budget. Your lender can run the numbers and be able to get a closer estimate of down payment, monthly payment, interest rate, etc.
• Get pre-approved, not just pre-qualified. To get pre-approved for a mortgage you’ll need to get some paperwork ready: pay stubs, W-2s, bank account statements, tax returns for the past two years, credit lines, etc. (Pre-qualification is only a quick round of general financial questions, then you are given a letter showing potential agents and sellers where you have started the process of speaking to a lender. Keep in mind, this is not the same thing as a pre-approval, and does not give you the official available loan amount so you know which price range of homes to be looking at. It also won't hold a lot of weight in a multiple offer situation if you're competing for the same property with other buyers who have turned in all their financial documents to their lender and have officially been pre-approved.)  Start with your current bank, but make sure you check out other local lending options too. Check out their reviews and recommendations. Also, consider the amount your lender approves you for as a maximum – this is by no means what you should spend if it puts you in a bind.
• Find an agent. A good real estate agent will help you navigate the process every step of the way. Look into agents that are local to the area you are considering, read their clients reviews, checkout their education/disciplinary actions on the Texas Real Estate Commission website, also call them and ask some questions. This will give you a feel if they are the right fit for you and your family during this major event in your life.  
• Look at homes. Your real estate agent will start scheduling and showing you homes based on that "must have, don't want" list you made. Give your agent detailed feedback after the showings, so they can fine tune the home search to suit you better. Sometimes that perfect property, just isn't on the market yet. Also, make sure you let friends and family know you’re looking for a new home, they may hear of something coming up.
• Make an offer. Once you’ve found your dream home, your agent will guide you on a reasonable first offer to start negotiations based on market conditions of comparable properties. Also, make sure you consider closing costs which could account for 2-5% of the home price. If you plan to do any inspections, make sure your agent has added the option period information needed on the offer. 
• Negotiate. Prepare to go back and forth with the seller a few times on price and selling conditions. Your real estate agent will be your advocate here and try to get you the best deal for your money, while being fair and respectful to the seller and their real estate agent.
• An accepted offer. If you reach an agreement, you’ll make a deposit to an escrow account to show good faith. Escrow is usually 30-45 days at least, where the seller takes the house off the market with the contractual expectation that you’ll purchase the house - provided you don’t find any serious problems during the inspection. (Important reminder! - No large financial changes during a home purchase - such as new credit cards, buying a car/truck, new furniture, or even job change ups.)
• Do a home inspection. Even if the home appears to be flawless, there’s no substitute for having a professional inspector review the property for quality, safety, and general condition. You don’t want to be surprised with a home that needs a lot of unexpected repairs. If the inspection reveals undisclosed serious defects, you can negotiate further to have the seller make repairs or discount the selling price. You’ll also likely have the option to withdraw your offer, (if an option period exists) and request to get your earnest money deposit back.
• Closing. When your negotiations with the seller are successful, all contingencies are met, the inspection is complete, survey is done if needed, appraisal report is satisfactory to the lender, title has a clean commitment, lender has given clear to close and numbers are balanced, you should soon be getting scheduled to close. At closing, they will make a copy of driver's licenses and you’ll spend a little time signing paperwork. When title confirms funding, the keys are handed over. Time to celebrate!