Here are some simple tips to help you with the buying process:
What is the actual buying process like? I have never seen two real estate transactions that were alike. Every one of them is different. Every property is slightly unique in comparison to the next one and every seller and buyer has a different situation. So with that said, even if you are a seasoned veteran or a first time buyer, just be prepared for the unexpected.
Who represents me during the process? This is a great question and one you must have with your agent. The Texas Real Estate Commission (TREC) requires all real estate agents to explain about representation to both buyers and sellers. Your agent should explain representation to you when you have your first serious conversation about wanting to purchase a home.
Where do I go to get a loan? Ask your professional REALTOR® for their help. More than likely they have a list of lenders they work with in their area that know the market. Through the years I have noticed that when buyers use local lenders who are just as competitive as the large national lenders, the loan process seems to go so much easier and it is less stressful.
Can I make the seller buy me a new survey? This is always negotiable. However, with that said, just so you know, as long as the seller has a legal description on their property, they do not need a survey to sell their property. Most of the time there is a lender involved and it is the buyer’s lender that is asking for the survey so it becomes a lender’s expense. Again, all of this is negotiable and you may be able to have the seller agree to pay for a new survey or share in the expense of a new survey. If the seller does have a survey that is stamped, dated and signed by the surveyor then your REALTOR® can ask for a copy of the survey and a T-47. Having these two documents should be acceptable by both your lender and the title company which will keep you from having to buy a new survey and save you money. Talk to your agent about this.
Should I get a home warranty policy? I would say absolutely “yes”. I consider this to be a cheap form of insurance for your home. Ask the seller to pay for it but if the seller will not then you should buy one. I have had very expensive homes pass a home inspection with flying colors and two weeks after the buyers moved in and did a load of dishes in the dish washer, it leaked like a sieve. They have a home warranty policy and the company ended up replacing the dishwasher.
What about HOA’s and restrictions? Make sure you get written copies of both the HOA’s guide lines and any restrictions. You need to read over those more than once and make any notes about anything you do not understand. Make sure you know what the HOA fees are and ask how many assessments have there been to the property owners in the past 10 years.
What do I do after I get a contract on a home? Your agent will walk you through the process but it typically goes like this. After you have an executed contract you will want to have your agent furnish you a list of home inspectors. You will want to talk with a minimum of two and preferably three home inspectors to find the one you are the most comfortable with and set a date to have the home inspected. If your home inspection goes well then you may want to have your home surveyed. This is addressed in your contract. If a new survey is needed, the process is much like the home inspection. Have your agent furnish you a list of surveyors and you go with the one you are the most comfortable with or who can get your survey done the quickest. If you have a lender involved, they will have the property appraised. If you are paying cash, you should still have the property appraised. Your agent can furnish you with a list of appraisers. When all of these have been completed and you are satisfied with them, then you move to close on your home.
How much will my closing costs be? This is not a question you ask of your REALTOR®. There are too many different types of loan programs out there so this is a conversation you need to have with your lender. They need to provide you with a GFE (good faith estimate) and you need to ask them when they can provide that and within what percentage of their GFE will they actually be on your closing costs. They should have no problems providing this to you. In addition to this, you will have your closing costs with the title company and your agent will be able to estimate these expenses for you. Combine the two and anything else you may have agreed to in your contract and you will have a very good estimate of what your closing costs will run. Be sure and ask your lender if they would allow any of your closing costs to be wrapped into your permanent financing.
What do I need to bring to closing? It does not matter whether you are financing your home or paying cash, any monies you need to bring to the closing will need to be a cashier’s check or a wire to the title company in advance. You would need to contact the title company and have them help you with wiring instructions. You cannot write a personal check to the title company unless that dollar amount is less than $1500.00. You will need a copy of your driver’s license and some title companies are asking for a second proof of ID such as your social security card. You might want to call the title company and ask them what all do they need from you.
What do I do about utilities? Your agent and the seller will furnish you a list of all of the utility providers and their contact information. You should do this about a week to ten days before closing. Some of the utility companies may want deposits or letters of references. Some also may require certain documents to be notarized. Try to get these documents from them before going to closing and if you have them, let your closer notarize those documents for you.