Buying a home takes time and effort, but these 10 steps make it fool-proof so you can call Houston home in no time.
Step 1: Research!
As soon as you can, decide where you want to live. Do you want the awesome schools in Sugar Land? Do you prefer being walking distance to White Oak restaurants and Washington bars? Want to live near your office in the Woodlands?
Look at homes on HAR.com and bookmark your favorites. See if those homes have multiple price reductions or if they go from “listed” to “sale pending” before you can even map the place.
Step 2: Determine How Much You Can Afford
Your heart might be set on a beautiful, remodeled Galveston beauty from the 1800s but unless it’s in your budget, stay away. The typical recommendation is that your house should cost no more than three to five times your annual income. If you’re making the purchase with a spouse, add up both of your annual incomes when doing the math.
Also, it’s a good idea to have 20% of the price of the home in cash in the bank for the down payment (you might qualify for a mortgage with as little as 10% or even 3.5% down, but do the math with 20% just to be on the safe side).
If this is ALL the money you have in your account in total (including all your emergency funds put together) it’s probably wise to readjust your dream home budget slightly down or wait to buy a house until your savings are a little plumper.
You need to have enough money to cover closing costs, inspections, and moving expenses (yes, there are always SOME moving expenses even if you carry most things in your friend’s cousin’s pickup).
Step 3: Get Prequalified and Preapproved
Before we start scheduling showing appointments, you need to know how much you can really afford. We recommend you talk to your bank and get prequalified for a mortgage before first. It’s super easy and free, so don’t panic… just do this:
Go to the bank. Ask for a preapproval letter. Show the bank how much you have saved, how much you owe, your credit history, and how much you make. Let the bank do its fancy math. Walk out of the bank with a preapproval letter in hand. See, it’s not hard.
You honestly don’t even have to go to the bank in person since most have online preapproval but it’s kind of nice to establish a relationship with your banker, which might come in handy in step 7 below.
Step 4: Find the Right Real Estate Agent
Lucky for you, Century Properties Real Estate agents are here to help!
This is why you should hire us: we will be your fiduciaries (a fancy word that means we’ll act in YOUR best interest). Whenever it’s time to negotiate the best price, best options, best seller repairs, best everything, we’ll be right there making sure nobody is short-changing you.
We know the home buying process forwards and backward because we’ve been doing this for years (over 40 years of combined experience). We have negotiating skills and we know the ins and outs of Houston neighborhoods so you don’t get stuck with a house that isn’t your dream home.
On top of all that, our team is equipped with experienced agents and provide exceptional service.
Step 5: Find your Dream Home and Make an Offer
Let’s go shopping! We might look at a few homes, so we recommend taking pictures on your phone and making notes of what you like and dislike about each place we visit.
Once you find THE ONE, we recommend going back for a second visit to make sure all the little details check out. For example:
- Turn on faucets to see how strong the water pressure is and how long it takes to get hot water
- Turn on all lights and switches on and off
- Open and close windows and doors to make sure they’re not wonky
Take a closer look at the neighborhood:
- Do the neighbors keep their houses looking neat or are they all junky and in need of repair?
- Are there lots of street traffic?
- How’s the parking situation?
- Drive a trial run to or from your job during your normal commute time to see what it will be like
Once you’re ready to seal the deal, we’ll put together a comparables report (a “CMA”) to make sure you’re getting the best price. Then we’ll make an offer to buy it. As soon as your offer is accepted, we’ll schedule inspections and do all our due diligence. You usually have 30 days to do all inspections before closing, so we’ll help you stay on track by recommending licensed home inspectors and negotiating any needed repairs with the seller.
Step 6: Hire a Professional, Licensed Inspector
The offer that we made on the home is contingent on the home passing all inspections. Hiring a professional, licensed inspector is critical since this is how we make sure there is no structural damage, code, or compliance issues, or things that may need fixing. Virtually every lender will require you to get a licensed inspection report, so we will help you arrange to have this done within a few days of your offer being accepted.
Both you and the seller get copies of the inspection report. This is the time to ask the seller to fix anything on the property before closing. A few days before closing we’ll do a final walk-through of the home to give you a chance to confirm that everything looks ready for your move-in.
Pro tip: In Houston, a few items are of particular concern and sadly can appear often in inspection reports: flooding damage, mold, termites, and foundation problems. These are major issues that should give any buyer pause. They are not automatic deal-breakers but they are very concerning, especially if they were not addressed up-front in the Disclosure Statement.
Step 7: Prepare for Your Loan
There are a number of different loan programs, so your bank will give you a run-down of what you qualify for and help you pick the best option for you. You might have questions (what’s PMI? what’s ARM? what’s with all these acronyms and why can’t we use real words??).
This is why I recommended actually working with a real-life banker in step 3. Now is the time to call or email all your questions so you can understand how your mortgage will work. We can also help with this, so feel free to ask us as many questions as you want!
Step 8: Get a Home Appraisal
Your lender will arrange for an appraiser to prepare an independent estimate of the value of the home. Appraisers are licensed and independent from the lender. The appraised value is calculated in a standard industry way and will give you the BEST and most accurate value of the home.
Pro tip: Keep a copy of the appraisal handy in case you have to protest your property taxes in the future. Your appraisal report is a great way to show what your home is really worth if the county is arguing for too high a value.
Step 9: Get all your Paperwork Ducks in a Row
There will be paperwork and lots of it. But don’t worry, it will all be worth it in the end when you get the keys to your new dream home. We do our best to keep all the paperwork digital so you don’t have to print and scan a bunch of papers and most lenders and title companies are mostly paper-free these days. The lender will arrange for the title company to handle the paperwork and they in turn will do their due diligence to make sure you’re buying a home with a clean title.
Step 10: Closing Day!
We’ll meet at closing at the title company’s office, where you will sign all of the paperwork required to complete the purchase.
Most lenders I’ve worked with are very quick when it comes to funding your loan, so you should be getting your keys and the seller their money within a few hours to at most a couple of days.
And then that’s it! You’re ready to move into your new home in Houston!
Don’t sit at the negotiating table alone! Let us be on your side!