8 Steps to Home Ownership

Have you ever been so excited for something that you did not stop to think about the course of action taken in order achieve the end goal? Whether you are an experienced home buyer and have been involved in multiple real estate transactions; or you are a novice buyer and all you can think of is owning a piece of Texas. This article provides the steps you to follow when you are on the hunt for your piece of paradise to call home.

What does the home buying process look like in Texas?

Step 1:

Get all your finances in order. Having all finances in order will help determine a house budget. Take the time to determine annual income, down payment, money set aside to cover any closing costs and fees that will come with a mortgage. There are multiple things to consider when getting finances in order, it may be that a time line needs to be followed to build credit in order to have a better mortgage rate.

Step 2:

Contact the Lender: Once a lender has been chosen and financial eligibility has been determined, choosing the type of loan will be the next step. There are multiple loan options - Conventional Loan, VA Loan, and FHA Loan. 

In Texas, there are a large number of Veteran Buyers that are eligible to use a VA (US Department of Veteran Affairs) Loan. This type of loan is reserved for Veterans who have served in the armed forces. 

There are also options for a USDA (the US Dept. Of Agriculture) Loan as well as another commonly used loan for home buyers is the FHA (Federal Housing Administration) Loan. Talking to a lender about financial affordability and determining possible programs a buyer can qualify for

Calculate your Mortgage Payment

Step 3:

FIND A GREAT AGENT and go tour properties!

Finding an agent may seem like an obvious choice for next step, but in these days of social media, internet, or recommendations from friends and family; there are many people who simply do not know what it means to obtain proper representation. The protections that a qualified and knowledgeable agent will provide can save their client thousands of dollars in a transaction. 

A Real Estate Professional should be knowledgeable in the area, the propety type, and theTexas Real Estate Contract. This legally binding document needs to have a well-versed agent in your corner to guide you accurately! An agent should know the contract front and back and be able to guide any buyer to every option they have to cancel the contract if the need should ever arise. Y

Once you have decided on an agent, it's time to start viewing properties!

Step 4:

Find a Home and Make an Offer

Now that there is a chosen agent and the search for the perfect home has been finalized, it is now time to write an offer. Some of the information an agent should be gathering and using to help write a strong offer are; How long has the home sat on the market? What are the comparable properties in the area that have recently sold or are currently on the market? What are the price ranges and how do they calculate to any offers written for the subject property? A good agent will find the answers to all of this and help their client have a solid offer and a chance to obtain the property they want. 

Step 5:

Under contract

There will be many dates to keep track of once there is an accepted offer. The first important date of a contract is also the first protection a buyer has. This period of time is called the Option Period. This is a set number of days agreed upon in the contract that allows the buyer to inspect the home. Buyers are able to hire an independent inspector to check the property. 

Once the option period of time expires, if the transaction is moving forward then escrow is opened and the transaction moves forward. The next stages include financing deadlines, survey deadlines, appraisals and much more. When a contract is written correctly these will all give the buyer multiple ways of protecting themselves against a bad deal with an option to terminate the contract in a legal manner. This is why it is so very important to have a representative in your corner to keep track of all of these dates to ensure nothing is missed

Step 6:

Appraisal

This is ordered by the lender to ensure the home is valued at the minimum amount of the loan. If the appraisal is below the contract price, negotiations resume.

Step 7:

Mortgage Underwriting and Title Searches

The Mortgage underwriting process is the next step to closing on a home. The Underwriter will look at the ability of the borrower to repay the loan, asses the risk in defaulting on the loan and either approve or decline the loan. 

Concurrently with in the time of underwriting, the title company is conducting a title search. This means looking into the property history, including any legal actions such as liens that may affect a clear title. Once all items are deemed clear and free of inhibitions, the title company will then issue title insurance that protects the lender, assures the validity of the research.

Step 8:

Closing

This brings us to the end of our journey and into your dream home! One of the last steps after clear to close is for the seller to have the home prepared and all moved out so a buyer can perform their final walk through. This will give the buyer one last chance, with their agent, to view the property confirm all repairs and the condition of the property is as agreed. Once confirmed, the buyers should be ready to sign the final paperwork!