Eight steps to buying a home in the DFW Area

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Decide to buy!

Buyers have many reasons to purchase a home, and most of them good- a roof over your head and wealth building rank among the top reasons to purchase a home.  Home ownership, when done right, is an investment in financial security and planning.  There are many financial reasons that are supportive in  your decision to purchase a home which  include tax benefits, value appreciation and equity buildup. 

Make your decision on facts, not doubts.

1. If you are currently renting a home, you likely can afford to purchase a home.
2. Anytime is a good time of year to buy.  The rule of thumb is to find a good deal and have the financial ability to be able to pay for the property for years to come.
3. If you are not able to come up with the down payment, this does not stand in the way of the purchase of your first home.
4. If your credit is less than desirable, this does not mean that you’ll be denied lending.
5. Buying your first home takes you closer to the future purchase of your dream home.
6. Buying a home with a professional to represent you means a hassle free buying experience.

Hire your agent.

Real estate transactions mean the involvement of many professionals.  There’s your agent, the seller’s agent, insurance assessors, bankers, underwriters, mortgage brokers, appraisers, inspectors, escrow officers, title researchers, and many other professionals that will be involved in the transaction.  The role of your real estate agent is to coordinate all the parties involved in the purchase of your home and to represent your best interests throughout the entire process.

Roles of the buyer’s agent include:

1. Educates the buyer about the market.
2. Represents and negotiates on your behalf
3. Analyzes your needs and wants.
4. Presents homes that fit your criteria.
5. Coordinates the work of all professionals necessary in the sale’s transaction.
6. Handles all deadlines and paperwork.
7. Takes care of all problems that might occur.

Questions to ask your real estate agent.

Qualification of your agent is important, but, there are other things that are also important, and your real estate agent should be well-rounded to ensure that you have the best buying experience.  Be sure to ask your real estate agent the following questions when interviewing him/her.

1. What prompted you to become a real estate agent?
2. What makes you the best real estate agent for me?
3. What makes you better than other agents?
4. How will you guide me to find the home that fits my needs and wants?
5. What most often goes wrong during a real estate transaction and how do you handle it?
6. What do you feel are the most common mistakes first time home buyers make?
7. Do you have testimonials and references from past clients which you can provide?

Secure financing.

While the thought of owning your own home is exciting, when it comes to the mortgage, you may find it downright scary.  This is not an uncommon feeling for first time buyers and the thought of the mortgage does make them nervous, as it is a big financial commitment.

From the choosing your loan officer to obtaining the funding, there are six easy steps involved in the process:

1. Select your loan officer.
2. Apply for a loan and get preapproved.
3. Determine the amount of loan you want and select a loan option.
4. Submit to your lender the seller’s accepted purchase offer contract.
5. Have the property appraised and title commitment.
6. Obtain the funding to close.

 Find your home.

Shopping for your home is the most exciting part of the process in buying a home!  While you might be anxious to hop in the car and drive the neighborhoods, which is good, your real estate agent is much better able to direct you to homes that meet your criteria.  You must determine what you need, want and your values for now and in the long term.

Questions to consider

1.  How large of a home do you need, and why?
2. What is most important- the location of the home or its size?
3. Are you interested in a fixer upper?
4. How important is home value appreciation?
5. Is the stability of the neighborhood a priority?
6. Would you be interested in a condo or newly constructed home?
7. What features and amenities do you want in the home?  In the neighborhood?  And, which can’t you live without?

 Make an offer.

When you are house hunting, you are shopping for your dream home.  Once you find the home, the dream is over and it is time to be a businessperson.  You need to have a clear and realistic perspective of the market.  The three main components of the market are price, contingencies and terms. 

Price:  The “right” price is the price that reflects the market value of the home you are interested in.  Here, your agent will be able to help you to determine a fair market value price.

Terms:  Terms refers to other financial and timing factors included which falls under six basic categories:

1. Schedule:  There will be a schedule of events that must happen before the property closes.
2. Conveyance:  Conveyance refers to all items that the seller will be leaving with the property. 
3. Commission:  The commission for both the buyer’s and seller’s agent.
4. Closing costs:  It is standard for the buyer to pay their closing costs.  However, the buyer can have the costs included into the amount of the loan, which will need to be written into the contract.
5. Home warranty:  Home warranty covers the replacements and repairs of major systems and appliances in the home.  Often, the seller will pay for the home warranty. 
6. Earnest money:  This is for the benefit of the seller and is their protection should you unexpectedly pull out of the deal.

Perform due diligence

Unlike a store purchase, when you purchase a home, you can’t return it.  This is the reason for property inspectors and owner’s insurance. 

A home owner’s insurance policy protect property owners in two ways:

• Liability in case someone is hurt on the property.
• Protection against loss or damaged property.

The property inspection is to determine and disclose all issues a home may have that you were not aware of.  This is done before you sign your closing papers.   A property inspection will determine any structural damage to the home. 

Close

Closing is the final stage of the home buying process which is the lender’s confirmation of your credit worthiness, and of the home’s value and legal statue.  There are many parts to this step in the process which include a survey and appraisal, a title search, a credit check and financial status. 

Your repsponsibilites:

1.  Control your finances.
2. Complete and return all necessary paperwork and return all calls promptly.
3. Speak with your real estate agent at least once a week.
4. Confirm that all documents are in place a several days before closing.
5. Obtain certified funding for closing.
6. Conduct a final walk through.

Closing day will entail:

1.  Finalizing your mortgage.
2.  Providing the seller with the money for the purchase price of the home.
3. Pay your closing costs.
4. Title transfer from the seller to you.
5. Arrange to have the property legally recorded as a public record.

Closing, with your agent, should go smoothly provided you have clear expectations and follow directions.

Protect your investment

Throughout the course of the home buying process, you and your agent have likely become quite close.  Just because the process is now complete, that does not mean that your agent cannot continue to help you in the future.  Your agent can still:

1.  Handle your first tax return as a homeowner.
2. Help you to find contractors for remodeling or maintenance projects.
3. Help your family and friends to find homes.
4. Keep track of the current market value of you home.

Home maintenance is an important part of sustaining your property value and fall into two categories:

1.  Keep it clean:  Keep the systems in your home well maintained and all areas of the home clean.

Watch for issues that may arise and fix them right away.