Houston Real Estate Buying Process
This website was created to provide all the information and tools that every buyer is looking for, so please take a look around your "tool box" and arm yourself with lots of information you're looking for and don't hesitate to call or email with any questions. Take a look and enjoy the custom search page to view not only homes, but the streets they are on with the "street view" button.
The buying process has been outlined below and it really should be a smooth process, but there are many variables and sometimes there are bumps in the road. Only an experienced realtor® will be able to smooth out the bumps. Why put the most important purchase you'll ever make in the hands of an inexperienced agent...doesn't cost you anything so choose only the best!
1) Get started by choosing your realtor®-one that is preferably an Accredited Buyer's Rep. (ABR®) Less than 4% of all realtors hold this designation and choosing an ABR® will assure you that you are in the hands of an agent that is professionally trained in working with specific buyer's needs. There is no charge if you are a buyer as the commission is a predetermined percentage that the listing agent has agreed with the seller, stated initially in the listing contract. The mere fact that the property is listed in the multiple listing service for the public and other agents to see means that the selling agent must split his/her commission amount with a buyer's agent. This means no cost to the buyer. Buyer agency is generally a foreign concept to overseas buyers but why would you as a buyer want to be represented by the agent that represents the seller? who's looking out for you?
2)Assess your financial situation- Assuming you've examined your credit report (you're entitled to one free report per year) and checked for errors, take a look at the mortgage calculator see what you can afford. Then, talk to a loan/mortgage broker and get pre-approved. An expert in this field will also be able to advise you on different loan programs. I always recommend talking to a couple and by all means, shop around to see who can get you the best rate and terms. Then get pre-approved so you are now fully prepared to make an offer on your new home when you find it!
3) Create a wish list- discuss with your realtor, what you are looking for in a neighborhood, home, amenities etc. A good realtor will know just the right questions to ask. Buyers are savvy and more than 80% of you have been looking online and researching for months before you choose your agent. Your agent should then email you properties that fit your criteria and hopefully you'll have lots to see in person with him/her so go out and enjoy the fun part!
4) Now you've found your perfect home- Your agent will help you make an informed and rational offer based on recent sales in the area and market conditions. Remember, all real estate is local, so market conditions in some areas of the country may be quite different from other areas. Unless the home is under priced, here in Texas it is normal to offer less that the asking price. Exceptions to this rule would be a home that has multiple offers and in this case, you will be bidding against other buyers. Multiple offers also can occur with a house that's just come on the market and is exceptional for the area and priced very competitively. To proceed with the offer your agent will write up a contract that includes your offering price and other terms. Most of the time, there will be a counteroffer from the seller so there may be some going back and forth until an offer is agreed upon. Once you are "under contract" you will enter the option period which is usually around 10 days long and this option period is your "option" to terminate the contact within the 10 days. This option has a fee and it's usually a nominal fee of $150-$500 or more depending on the price of the home. This fee is paid to the seller and will be credited to you at closing, or if you terminate the contract, the seller retains the fee. During the option period, you will hire an inspector to do a mechanical and structural inspection of the property and here in Texas, a termite inspection is a must. Also, if the home has a swimming pool, it is a good idea to inspect it also. Your agent will provide you with a list of reputable, licensed home inspectors to choose from. The inspection and the negotiations for repairs should be completed within the 10 days. At the start of the option period, Earnest money in the form of a check goes to the Title company that will hold the money in escrow and handle the transaction. Earnest money, around 1% of the sales price, shows your "good faith" and intention to buy the property and this money will be refunded to you if you terminate the contract during the option period. If you back out after the option period, the seller has the right to retain the earnest money as a sort of "damages". Not a situation you want to be in.
In the period between the end of the option and the closing, the title company will handle the documents, title search and various other duties. You, the buyer, will obtain homeowner's insurance for your lender and start arranging your move.
5) Closing date-one of the most important terms of a real estate contract is the closing date - the date when documents are signed, lenders fund and ownership changes hands. On this day, you will be given the keys to your new home!