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Buyer

Guide


urchasing a home is at once an exciting and fun experience and also a time of major decision making. Buying a home is the single largest financial decision most people make in their lives. It is not surprising then that a tremendous amount of anxiety and stress is generated. It is a time when moving might be complicated by a new job, relocation to a new area and perhaps a time when you are moving away from friends and/or family.

service and a willingness to go the extra mile are a must in a real estate transaction. Prompt followup and attention to detail are important factors

are working. Texas law requires all real estate licensees to give the Information About Brokerage Services to prospective buyers, tenants, sellers and landlords.

to look for in a REALTOR. There are someti on whom the broker represents. If you are a mes prohundreds of people involved in a single home spective seller or landlord (owner) or a prospe purchase and your REALTOR should be a coo ctive rbuyer or tenant (buyer), you should know that dinator of all those events and details. Look for the a knowledgeable individual with a willingness to broker who lists the property for sale or lease i listen and understand your needs combined wit s h the owner’s agent. A broker who acts as a suba work ethic that will serve you well during the agent represents the owner in transaction. Efficient, quality process of locating the home Sofelecting your choice. YourFrRealtor you . A broker who acts as a buyer’s agent represent om the initial home-search through the offer and s contract, on to closing and beyond, you will wa the buyer. A broker may act as an intermediar nt y someone to be with you every step of the way. between the parties if the parties consent in w ritInformation About Brokerage Servic ing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining es. financing without representing you. A broker i Before working with a real estate broker, you s should know that the duties of a broker depen obligated by law to treat you honestly. d

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A copy of Information About Brokerage Servic Establishing Your Needs. Determining some of the basic absolutes you would like to have in es should the home you purchase, combined with some of be furnished to you by any Realtor with whom your “wish list items,” is a major first step in the house-hunting process. Consider such basics as distance from work, new construction vs. resale, single family vs. townhome and numerous other influences that are important to you. The “House Hunting Priorities” page is a general guideline to help you organize some of these details.

Loan Pre-Qualifying.

An important tool to

utilize in your home purchase process is to obtain a “pre-approval” from a mortgage lender. It will simplify your house-hunting by giving you financing options, information about possible down-payments, price ranges, terms, and funds necessary for closing. Pre-qualifying with a loan officer will also give you a distinct advantage in getting your offer accepted by a seller when you are able to provide a “pre-approval” letter from your lender.

Selecting Your Home.

Review your priorities

and focus your home search in areas and price ranges that meet the particular needs you have established. Discuss options, likes and dislikes, needs and wants with the Realtor working with you and the hunt for your new home has well and truly begun.


Buying Your Home Loan Application. Comparing types of loans

the property go to someone else. The s

and then making a loan application are important

obligated to respond to an offer. If anot

steps in the home buying process. At the time of

her offer

loan application, the lender typically charges an

is received which meets the seller’s nee

application fee. This fee tends to cover the lender’s

ds, there

cost of pulling your credit report and the cost of

might not be an opportunity for you to

a professional appraisal on your property. Once

negotiate.

these loan application tasks have begun, the fee is

However, if the market is soft and suppl

not refundable.

y is great,

Making an Offer. When you have found the

the opportunity to negotiate the terms

home of your choice it is time to write an offer.

tions of your offer are much greater.

The offer is usually written on a contract form

When negotiations are complete and an

promulgated for Realtors by the Texas Real Estate

offer is

Commission. When buying new construction,

accepted and signed by the seller, it bec

however, the builder might require his or her own

omes a

contract form.

legal binding contract.

The contract form details the many aspects of your transaction and upon acceptance serves as an instruction booklet to the Title Company and others involved in the transaction. Decisions need to be made at the time of the offer regarding such items as the closing date, terms, conditions, possession, sales price, down-payment, an option time and fee, a request for repairs or inspections or an offer without a repair request. Your Realtor will work through the many details with you. When you start your home search it’s a really good idea to ask your Realtor for a sample copy of the forms…and don’t hesitate to ask questions.

Negotiating to Contract. The market will give you many clues about the best way to begin negotiations with a seller. If it is a “seller’s market” and properties are selling quickly, perhaps with multiple offers, it would probably be best to make your very best offer initially or risk having

eller is not

and condi-


Deposit of Earnest Money. The Realtor you

papers needed to create your new loan and send

are working with will follow up to see that title is

the escrow officer. The final details such as home

opened on the property you are purchasing. At

insurance, tax escrow, survey and funds necessary

this point, the earnest money will be deposited

to close will come together at the Title Company.

with the Title Company. This will typically hap-

The escrow officer will complete a “HUD” State-

pen within 24 to 48 hours of the final signing of

ment, which details all of the financial obligations

the contract. When the Title Company opens title

for the buyer and the seller. Ask your Realtor to

on a property, their “plant” will research the his-

have the Title Company provide a copy of the

tory of the property and issue a title commitment.

“HUD” at least 24 hours prior to your closing.

This commitment will detail items that might

When you go to closing at the Title Company

need to be cleared before issuing a title policy.

to sign loan papers it is necessary to bring “good

Mortgage Details. During this time your loan

funds” to cover your costs. Examples of “good

officer is finalizing any items needed for your final

funds. If in doubt, check with your Realtor or the

loan approval and ordering an appraisal of the

escrow officer at the Title Company.

property. Loan approval details will vary depend-

Coordinator of Events. The Realtor with

ing on the type of loan you are obtaining. The

them to the Title Company to be reviewed by

funds” would be either a certified check or wired

lender will also order the survey.

whom you are working is the Coordinator of

Repairs. If repairs have been requested and

events and will be with you every step of the way,

agreed to by the seller they will typically be com-

might occur.

helping to solve any difficulties or delays that

pleted between loan approval and closing.

Closing and Funding. The lender will draw the

Up-front Costs Making an offer: Resale 1. $1000 or 1% of sales price made payable to Title Company for earnest money. This money will be credited back to you at closing if you move forward with contract. 2. $100 option $ that will be made out to Sellers and cashed upon execution of contract New home 1. $2000 or 1% of sales price made payable to Title Company for earnest money. This money will be credited back to you at closing if you move forward with contract. 2. No option fee


After 1. 2. 3. 4.

execution of contract Structural and Mechanical Inspections—$350-$425 Termite Inspection—$75-$125 Credit Application fee with lender—$65-$350 Appraisal fee—$350-$400


The Hunt Begin Deciding where you want to live goes a long way in determining the type and style of house you’re likely to find. If you like inner-city life for instance, your search could include properties very different from those in some of Houston’s planned communities such as Greatwood, Cinco Ranch, Kingwood or The Woodlands. Whether new construction or old, inside or out-

• Are eating areas, including those outdoors, easily accessible from the kitchen? • Does kitchen traffic flow outside the work area? • Are the stove, sink, and refrigerator arranged in an efficient triangle? • When appliance doors are open, do they

side the Loop, one story or two, under $100,000

block access to other appliances, cabinets, or

or over $1,000,000, Houston has something spe-

doorways?

cial to offer the first-time, move-up or move-down home buyer.

Narrowing the Search No doubt, a house has to feel right. But emotions

• Do bedrooms have two uninterrupted wall surfaces to make furniture arrangements easy? • Are there enough baths for the size of your family? Is access convenient?

can change quickly if a house doesn’t work right,

Inside the Home

too.

• Are there signs of excessive dampness or

Once a home makes it onto your “seriously considering” list, you want to make a good preliminary personal inspection. Scrutinize the house with an eye toward how well it will work for you. No house will be perfect. Your job is to make sure

flooding? • Do exposed beams and joists appear to be in sound condition? • Is the attic well-insulated? Any water damage from a leaky roof ?

that you can live with any problems (or repair

• Are floors even and sturdy?

costs). Here are some of the things to look for:

• Are walls free from large cracks?

Outside the Home

• Do all windows and doors work smoothly?

Do trees and shrubs appear healthy?

• Are bathroom fixtures in good condition?

Does the yard slope so that water will drain?

Does the water flow remain steady when taps

Look for low spots near the house.

are on and toilets are flushed? Does water

Are sidewalks and driveways in good condi-

drain well?

tion? Will water drain? •

Are the surface materials of the house in good repair?

Do windows, doors, and chimney sit plumb and square?

rooms? • Is the capacity and recovery time of the water heater adequate for your family? • Are kitchen appliances in good repair? Which

Is the roof free from sags and dips? Are

ones come with the sale? Will your appliances

shingles in good repair?

fit if need be?

Are gutters and downspouts in good shape?

Check to see if weep holes are clear and

• Are there enough electrical outlets in all the

• Do the furnace and air conditioner appear to be well-serviced?

above ground level.

When interest turns to decision-making and an

Does the main entry lead you to the living

offer is written, plan to bring in a professional

room, or did you have to pause to figure out

inspector of your choice to help you determine if the property meets your needs and requirements. Several choices concerning repairs are built into the TREC contract.


House Hunting Priorities Getting Started. House hunting doesn’t have to be

_______________________________

an agonizing process of elimination or a series of

________

wild goose chases. Use this checklist to help you

Interior Features ______ Number of bedrooms ______ Master bedroom suite ______ MB Rm. up or down

set priorities and determine exactly what you want in your home.

Location General location _______________________________________ Distance from work _______________________________________ Close to schools _______________________________________ Other location features _______________________________________ _______________________________________

Overall Features ______ One story ______ 1.5 story ______ Two story ______ Single Family Home ______ Townhouse ______ Condominium ______ Average-size lot ______ Large lot ______ Wooded lot ______ Patio ______ Deck ______ One/two/three car garage ______ New Construction ______ Pre-Owned (Age Range) ______ Other: _______________________________________


______ Number of baths ______ Average-size kitchen ______ Extra-large kitchen ______ Eat-in/country kitchen ______ Family/great-room ______ Office/den ______ In-house utility room ______ Formal living and dining rooms ______ Fireplace ______ Walk-in closets Style & Decor ______ Exterior elevation: contemporary, traditional, colonial, other ______ Brick exterior ______ Wood exterior ______ Formal or informal interior ______ Open floor plan

______ Wood floors ______ Tile floors ______ Fully carpeted ______ Built-ins Great Extras ______ Pool ______ Greenhouse ______ Skylights ______ Hot tub ______ Exercise room ______ Media room ______ Wet bar ______ Burglar-alarm system ______ Quarters ______ Other: _______________________________________ _____________________________________

Buying Your Home LOAN APPLICATION MAKING AN OFFER NEGOTIATING EXECUTED CONTRACT DEPOSIT OF EARNEST OPTION PERIOD


INSPECTIONS APPRAISAL TITLE COMMITMENT LOAN APPROVAL REPAIRS/NEW CONSTRUCTION SURVEY—IF NEEDED CLOSING & FUNDING

MOVING DAY !!!!!

Mortgage Options and Info As a homebuyer, you have many kinds of mort-

one of the lowest possible fixed monthly

gages from which to choose. Before you can start

pay-

comparing rates and lenders, you’ll need to decide

ments. This long term also causes it to be

what type of home loan suits you best.

more

30-Year Fixed Mortgage. This is one of the most

expensive over the length of the loan bec

popular loan options with first-time homebuyers.

ause the

Because of the longer term this mortgage offers


interest accrues for much longer. It is important to

If you’ve ever shopped for a home loan, you have

know however that extra principal payments can

discovered that rates vary from lender to lender.

be made which would reduce the overall term of

The benefit of a low interest rate might be offset

the loan and decrease the total interest paid.

by higher lender costs. To help in comparing

15-Year Fixed Mortgage. For those looking to

rates, lenders are required by law to divulge the

build equity quickly this loan is an excellent op-

Annual Percentage Rate (APR). The APR is the

tion. Interest rates are about a half percentage

calculation that combines rates, points and related

point lower than on a 30-year fixed note. A bor-

fees to more accurately reflect the costs of the

rower will pay only about half as much interest

loan.

over the life of a 15-year fixed loan vs. a 30-year

With the mortgage market constantly changing, it

fixed loan.

is imperative that you find a reputable lender. Also

Two-Step Mortgage. This is usually a 30-year

visit www.hud.gov for other financial questions.

loan with a rate that adjusts after seven years. The

For most mortgages, paperwork is a basic neces-

benefit is the low initial interest rate, but at the

sity. Because missing paperwork can delay the

point of adjustment, the rate can climb several

process, it’s important to have the following docu-

percentage points, often to just above the average

ments in order as soon as possible:

interest rate for a 30-year fixed loan. This mort-

• Earnings statements or proof of self-

gage is an excellent option for those who plan to

employment (W-2 form, pay stubs and

move within the seven-year period.

tax returns)

A wide variety of other types of loans are also available to the home-purchaser. Examples of some of these financing options are as follows: •

Jumbo Conventional Loans to 5 Million

FHA Loan Programs

VA Loans

Portfolio Loans

Construction Loans

• Debt information, such as car notes and credit cards • Bank statements for the most recent 2 months, all pages.


Mortgage Companies ZEUS MORTGAGE Steve Kaufman 713-275-7801 skaufman@askzeus.com Gibraltar Mortgage Services Christine Boles 281-773-3853 cell www.Cboles.com christine.boles@gibraltarmortgageservices.com RMC Vanguard Mortgage Corp

Joe Paoly 415-699-6346 office jpaoly@rmcv.comjpaoly@rmcv.com

This list has been compiled as a service for the client. The client needs to feel no obligation to use any of the above lenders and may use any lender of their choice.


Home Inspections A home inspection by a qualified inspector of the Buyer’s choice is a major component of most residential real estate transactions. The inspector should be a person who regularly provides such service and who is either licensed as an inspector by the Texas Real Estate Commission or otherwise permitted by law to perform inspections. Home inspections might include but are not limited to the following:

Structural Systems foundation, roof, bracing-walls, framing, ceilings, floors, windows, screens, doors, water penetration, fireplace and chimney, stairs and landings,

toilets, faucets, drains • Other Systems swimming pool & equip-

attached balconies-decks and porches

ment, spa, hot tub, sauna, lawn & garden,

Mechanical Systems heating system,

sprinkler system, alarm & fire detection

cooling system, built-in equipment: range,

ment

oven, disposal, dishwasher, trash compactor, microwave, vent hood, exhaust fans •

• Plumbing water heater, tubs, showers,

Electrical main breaker box, attic wiring,

equipment, gas lines, outdoor cooking equip• Environmental lead based paint, asbestos, wetlands

switches, outlets, fixtures, circuit breakers, ceiling fans, G.F.C.I. test, aluminum wiring A typical home inspection might include structural, electrical, mechanical and plumbing inspections. It is important for you, the buyer, to call and interview the inspector to arrive at an understanding of what your inspection will cover. Pest control inspections should be made by a company licensed to do so in the State of Texas. Environmental inspections are generally made by specialists.

TEXAN INSPECTION Ray Hinsley 281-342-5762 www.texaninspection.com

Pro Tex Property Inspections Richard Burgess 281-556-5608

Protexusa.com

Accu-West Inspection


Dennis Bowen 281-392-0442

Insuring Your New Home Asking key questions when shopping around for a

ued and you are paying too much, ask a

policy can lead to less expensive rates.

n agent to

How do you obtain a reasonably priced hom-

do a cost estimate.

eowner’s insurance policy without sacrificing

Because you’ll need to prove that you h

protection?

ave home

A basic policy may cover losses to home and

insurance at the closing, the best time to

property due to fire, windstorm, hail, theft, and

shop for

vandalism. Damage from nuclear radiation, flood,

rates is after the offer has been accepted

and war is typically excluded. Be sure to compare

and you

what a policy does and does not cover.

are waiting to close.

In the Houston area it is important to check into and consider the possibility of acquiring flood

Money Saving Ideas

insurance. This is a separate insurance policy and

on some homes may be a lender requirement.

e deduct-

You may want to look for a policy that automatically increases coverage to match inflation. Review it each year. The added value that remodeling projects bring to your home is not covered automatically. If you think your house is overval-

Raise the deductible. By raising th ible from $500 to $1,000, you coul

d save on the policy premium. Raising the d eductible


to $5,000 might net an even larger savings.

• Ask about discounts for items like burglar

This makes particular sense for high-value

alarms, smoke detectors, dead bolt locks,

properties where the dollar savings are more

and fire extinguishers. Some companies offer

significant.

discounts for an indoor sprinkler system or an

Inquire about loyal customer discounts. Stud-

alarm system that reports to a central office

ies show that customers who insure long term

or police.

with the same company have fewer and lower claims.

• Shop around. Check with friends to see what kind of service they get when making claims, and read up on consumer publications. • Ask about a non-smoker’s discount. Consider an umbrella policy that combines the home, other real estate, and vehicles all in one policy. Having one policy may save on your total insurance premium. When shopping for home insurance - take care - if a policy seems too inexpensive to be true, it probably is. A low premium isn’t much of a consolation if you can’t get a claim paid.

Home Warranties You may also want to consider a home warranty program. Coverage typically includes such items as water heater, central air & heating systems, kitchen appliances, and some plumbing and electrical items. Optional coverage is also available for items such as garage door openers, pool/spa and whirlpool bath equipment and clothes washer and dryer. Review the policy carefully as the coverage, terms and conditions may vary based on the type of coverage requested or the company furnishing the warranty.


Insurance Companies Gibraltar Insurance Services Devon Neely 281-250-1400 devon@ghfs.net State Farm Manny Molinar (713) 266-4545


Katy Area Utilities ELECTRICITY Reliant Sarah Flores Power To Choose http://www.powertochoose.org GAS Centerpoint/Entex: 713-659-2111 TELEPHONE/ INTERNET/ CABLE Consolidated Communications: 936-539-7296 http://www.consolidated.com Comcast/ XFinity 1-800-226-2278 AT & T Uverse (depending on area) http://www.att.com/shop/availability.html 1-800-228-2200

Dish Network www.dish.com 1800-823-4929 Entouch 281-225-0598


Making a Smooth Move Six to Eight Weeks Out: Set up a calendar for your move. Contact a moving company. Decide what goes with you, what to sell or give away. Hold a garage sale. Begin packing seldom-used articles. Organize a list of individuals, companies and institutions for change-of-address notices. Collect and keep important papers handy (medical, insurance, etc.). Gather information on prescriptions.

Start collecting suitable containers and packing materials if you plan to do the packing yourself.

Four to Six Weeks Out: Begin to use up supplies of canne d goods, frozen foods and other household items. Buy only what you need. Alert the post office that you will b e moving. Send out change of address cards. Visit some of the places that hold

Organize a list of important phone numbers. Create a list of individuals, companies and institutions to notify of change-of-address. Order a telephone directory for your new area and inquire about phone connections. Find out how much advance notice is required to set up utilities. Choose a new bank. Check school schedules and enrollment requirements. Transfer records. If required, call the Department of Motor Vehicles for information on changing your drivers license. Inquire about activities for your children.

happy memories. Hold an open house for friends to say goodbye. Keep it simple. Arrange disconnect dates with loca l utilities. Set up a moving expense log.


Two to Four Weeks Out:

Take pets to the veterinarian. Most states

Service your car, especially if traveling a

require health certificates and rabies inocula-

distance.

tions.

Dispose of flammable liquids such as spray

Pack an “Instant Aid” box containing things

paints, solvents, thinners and gas in lawn

you’ll need upon arrival: paper towels, pow-

mowers.

dered detergent, sponges, light bulbs, paper plates, toothpaste, trash bags, hand soap,

Return/retrieve borrowed items. Clear up outstanding accounts.

hammer, and toilet paper.

One to Three Days Out: Pack suitcases for the trip to your new home.

Transfer checking and savings accounts and contents of safe deposit box.

Empty the refrigerator and freezer so they can dry at least 24 hours.

Help your children host their own going away

Keep information lists, moving details and

party.

phone #’s in an easy to find location.

Have rugs and draperies cleaned.

Collect and organize items that should be Return library books.

packed together.

Begin serious packing of items you won’t need over the next few weeks.

Moving Day: Be on hand for the movers. Check and sign

One to Two Weeks Out: Organize packing and moving of special

the inventory. Keep a copy.

items such as: electronic equipment, lamps, china, crystal, fine furnishings.

Each transaction is unique. The order of events may vary and the steps in one transaction may be very different from another. The information contained in this report was obtained from reliable sources.


Up buyer packet 2014 (1)