Sign In
Create an account and enjoy all the benefits of HAR.com!
Sign In
Sign in using social account
What an exciting time, Buying your first home! I can remember my first purchase very well. I had no idea of the process, I just knew I might have to have some money saved - I wasn't sure how much. I was very fortunate because we had rented our home we were currently leasing through a Realtor. I reached out to her to start the process and that was the best decision. She guided me through the entire process and I was so thankful for that!
Buying your first home can seem overwhelming. That is why it is important to find experts in the field to help you with the process. My steps are going to conflict with others online, but, I have been selling real estate for over 20 years in Texas so I am confident in the things I am getting ready to share with you.
1. Find a local REALTOR in the area where you would like to purchase. This is the first step because the local REALTOR knows the area and can also give you insights on lenders whom they have worked. They send you in the right direction according to your needs and wants. A REALTOR will ask you questions such as how much money you have saved, location where you would like to live, if you are a teacher, first responder, military or veteran, etc. There are different lenders that specialize in different loans and most REALTORS have worked with lenders in different categories to help you find someone that is right for you. Sometimes your local bank is able to help you out, but some lenders specialize in different types of loans. You may qualify for a grant program and the REALTOR can help you locate a lender who is familiar with those types of programs. Sit down with the REALTOR and sign a Buyer's Representation Agreement. This agreement is for your protection and benefit when searching for and purchasing a home. A REALTOR is unable to show any homes to a buyer without a Buyer's Representation Agreement.
2. Get Pre-qualified with a Lender. This is a very important step in the Home Buying Process. If you are not Pre-Qualified, you will not know what your budget is for a home. You might end up looking at homes that are below your price range, or above your price range. It is hard to start shopping if you do not know how much you are able to spend. Most sellers will not even look at a Buyer's offer unless they have seen the buyer is Pre-Qualified for the loan, or they have proof of funds if the buyer is paying cash.
After you have been pre-qualified, you can look at homes up to the amount you have qualified for and decide what would work best for you. Just because you qualify for a certain amount, doesn't mean you have to buy a home for that price. Talk to your lender regarding payments, loan terms, etc. At this stage it is also a good idea to ask your lender to give you a breakdown in loan terms. You can do 15 years, 20 years, or 30 years. The lender can show you an amortization of payments over the different terms. This gives you the knowledge you need to make an informed decision about what is best for your financial future.
Very Important - Once you are PreQualified Do Not Make Any Purchases. Do not buy furniture, cars, rv's, boats, jet ski's, appliances, etc. Do not make any New purchases on credit or with your cash reserves. A purchase can affect your credit score or debt to income ratio and kill the purchase of your home. This is a mistake several first time home buyers make. They go and buy or lease a car a week before closing. After going through this whole process, they can no longer buy the home due to this purchase.
3. Start Home Shopping. Contact your REALTOR and let them know your price range, and what you are looking for. There are several websites that have property listings, but your Realtor can narrow down a search for you for almost exactly what you are looking for. The Realtor can set up a search for you that will send you new listings as soon as they hit the market. The Realtor may also know of pocket listings - just an in office listing that is not on the mls or online. As soon as you see a home, or homes you would like to view, set up an appointment with your REALTOR to view the homes in person.
4. Making an offer. Your REALTOR will be able to share with you what other comparable homes in the area have sold for, what is currently for sale, and what is currently under contract. Several factors go into the process of making an offer. For example, Do you need the seller to pay some of your closing cost? Are there repairs that need to be done? Are you asking the seller to leave some of the appliances that would not normally be left? Are you asking for any of the seller's personal items to stay with the home? These are all things to consider when making an offer. Also, how hot is the market? Are there lots of other buyers looking for the same type of property you are trying to buy? If this is the case, you might have to offer more than the asking price. Your REALTOR would be able to let you know if they believe the house will appraise. If the market is not a hot market for Sellers, then your Realtor will be able to let you know that as well. Your REALTOR should be looking out for your best interest.
5. Home Inspections/Option Period. When making an offer in Texas, a Buyer can have what is called an Option Period. The Option Period is a timeframe, usually 7-10 days, after their contract has been accepted to do inspections on the home. If possible, this is a very important step. You always want to have the property inspected. There might be something you don't see that a home inspector will find during the inspection. You don't want to find out there is a major issue with the property after you have purchased. The home inspector will inspect the electrical, a/c, roof, water heater, appliances, foundation, check for termites, etc. The seller will provide you with a Sellers Disclosure showing anything they know about the home, but if there is something they missed or forgot, usually the home inspector will find it.
Very Important - Once you are PreQualified Do Not Make Any Purchases. Do not buy furniture, cars, rv's, boats, jet ski's, appliances, etc. Do not make any New purchases on credit or with your cash reserves. A purchase can affect your credit score or debt to income ratio and kill the purchase of your home. This is a mistake several first time home buyers make. They go and buy or lease a car a week before closing. After going through this whole process, they can no longer buy the home due to this purchase.
6. Re-Negotiations. After having the home inspected, and Before the Option Period Ends, you can renegotiate the contract. For example, if the home has wood rot, or termites, you can ask the seller to pay for treatment or do repairs. If the repairs are something you can do yourself, then you can ask for a price reduction or for the seller to pay part of your closing cost.
7. Pay for Appraisal. - The lender will get with you for payment for the Appraisal. The Appraisal is the lenders inspector who will go to view the property on the behalf of the lender to insure the property meets the lender's approval. The appraisal will normally come back in between 7-14 days in a normal market.
8. Shop for Homeowners Insurance. Homeowners insurance is required on homes that are financed. Your lender will be able to tell you what types of insurance you will need. You can reach out to your local insurance agent, ask your REALTOR, or ask your Lender for referrals. We all have friends and family also who are happy to refer us to their insurance person. I usually recommend getting 3 different quotes and go with the one that works best for you. After you have decided which company to go with, have them get in touch with your lender so they can get the information over to them. If you live in an area that is prone to flooding, but not located in a flood zone, I recommend getting flood insurance as well. Flood insurance is usually not that costly, but if a disaster happens and you do not have it, then you will have to pay out of pocket for the damages. Most flood insurance does not cover tide waters. Some coastal areas will require flood insurance, even though tide waters are not covered.
9. Check Back in with Your Lender. Make sure the lender has you fully approved and they do not need anything else from you. Once the lender has you fully approved and your loan has been approved by the lender's underwriter, you can start packing! You are moving towards your closing date! The lender will notify you when the appraisal comes in and when they have the Clear to Close. As soon as the lender has the Clear to Close - then you are almost at the finish line.
10. Set up a Closing time with your Realtor. The REALTOR will set up a time for you to close at the title company, a mobile notary, or online. After the seller and buyer have signed, the title company will send copies of all of the signed documents back to the lender. As soon as the lender receives and approves the documents, the lender will send funds to the title company and they will fund the file. As soon as the file is funded, you will get keys and you guessed it, you will be a homeowner.
If you are looking for a REALTOR who has helped many first time home buyers, seasoned home buyers, investors, home sellers, etc., please do not hesitate to give me a call at 361-688-7064. I would love to help you through the process for a smooth transaction and closing. I am a full time REALTOR who loves helping buyers and sellers get through the process.
I have been helping First Time Home Buyers, Seasoned Home Buyers, Investors, 2nd Home Buyers, Multifamily Home Buyers, etc. for many years. Sometimes the process can become so routine. The market continues to change, but with education, the process can be a simple one.
If you are looking for a REALTOR to help you navigate through this process, I would be honored to earn your trust and your business. Give me a call at 361-688-7064, send me a text or email brenda.andrew@ymail.com or just subscribe to my blog. I am here to give my knowledge and expertise I have gained over the past 20 plus years.
First Time Home Buyer Advice From a Realtor
What Residential Home Loan is Best For You? Conventional? FHA? VA? Jumbo?
Lender Placed Insurance - What Is It and What Does It Mean For You?
Erase note
You currently have no custom folders