I know how scary it can be to buy your first home! Or any home for that matter! It is a HUGE investment…one of the biggest monetary investments you will make in your life! But don’t worry, I’ve been doing midland tx real estate for 15+ years and will be with you each step of the way!
Here’s a quick synopsis on the way it works:
- Once you find a home that you really like and it feels like “home” then we need to be ready to make an offer on it! Don’t get frustrated in your search because the perfect home is out there and the timing is perfect too! You will know your new home when you walk into it.
- We need to have your financing in place prior to making an offer. Sellers most likely won’t consider an offer if the buyer isn’t “pre-approved”! If you aren’t paying cash….using a local lender is most beneficial to you because they use appraisers, surveyors, etc. that know and understand midland and its current market trends.
Here are 3 local lenders that would love to help you and are incredible to work with throughout the entire process! All are very good so just go with the first one that returns your call. Tracy with Benchmark Mortgage 432-897-4557 Melissa with PrimeWest Mortgage 432-689-0000 Matt with HNB Mortgage 432-683-0081(I am attaching the 10 commandments of home buying – they are the 10 “Shalt Not’s” according to the lender!)
- When we make an offer, we present a sales price, closing date, financing terms, etc….the seller can accept it or counter our offer…when it is back in our court, then we can accept their counter or counter again….we ping-pong back and forth until it is all agreed upon. In this crazy market, it is a little different scenario, if there are multiple offers. At that point, you make your “best” offer and the seller picks one! You can win it by $5k or lose it by $50, but at the end of the day, you need to feel 100% good about your offer and rest easy with either result! Once an offer is accepted and each party has signed the contract, it then becomes an “executed contract” and the days for financing and option time start ticking. Remember in Texas, the buyer always has the last word! A seller cannot terminate once they sign…only a buyer can!
- I will need two checks from you once the offer is accepted. Earnest money check is usually 1% of the sales price and is made out to the title company and deposited with them. The other check is made out to the seller (typically $300) which is your Option money and “buys” you the 10 day unrestricted right to terminate. You get credit for each of these checks at closing. I HAVE to have these checks within 48 hours of the executed contract so have the funds readily available when you make an offer.
- You need to MAKE SURE your financing is approved within the dates that the contract says usually 10-15. After that date, if the financing falls apart for any reason, you will be subject to losing the earnest money! That is a BIG deal! Stay in constant contact with your lender and your approval.
- Once we have an “executed” date on the contract, then we proceed with the inspections (general, termite, pool, septic, water well – we do all that apply) we typically have 10-12 days of unrestricted right to terminate – which means you can terminate for any reason, but generally it is over any major repair that comes up that the seller isn’t willing to do.
- I like the buyers to be at the inspections with the inspector…it is the best education you can get on your home.
There are 4 issues that the seller should take care of for you or any buyer:
- Insurance requirements….roofs, etc….it needs to be an insurable house when you purchase it.
- Termite recommendations…One in every 2.5 homes have termites and the seller needs to treat the property for you or they will have to disclose it to the next buyer and most likely will have to treat it for them. Inspectors say that there are 3 types of homes in midland – those that have termites, those that have had them and those that will! Most of the time it is a relatively simple fix and isn’t a huge concern once they are treated. We definitely want a termite inspection during the option time so the seller should pay for the treatment…and the treatment comes with a one year warranty.
- Safety concerns…gas leak, etc…. if there is an issue that comes to the seller’s attention that is a safety concern or that could cause more damage, then they should fix that.
- “Common Sense” concerns….like sprinkler systems, acts, etc. If the house has these items, a buyer expects them to operate normally. Those are items we cannot know if they operate properly when we make the offer. However, if the seller comes off the price in the negotiations, they may think that they are reducing the price in lieu of these repairs.
The other issues that arise are generally in the category of “code” or “cosmetic”…
- Code issues – the inspector has to call everything that doesn’t currently fall under the present code standards. If you are buying a new house, those items should all pass or be addressed with the builder. If you are buying an older house, it met code when it was built so it is “grandfathered” in and sellers typically don’t do those repairs.
- Cosmetic issues – these are things that you can see when you make the offer, like cracked tiles, stained carpet, cracks in the ceiling, chipped paint, etc….so, if the seller didn’t repair/replace them while they lived there, chances are they won’t do them for you. And, I like to advise my buyers to do cosmetic repairs themselves when they move in or hire people they trust to do it for them after closing.
- I like to meet with you after the inspections once we have the written report to see if there are any repairs to request the sellers to address. At that point, if there are issues, we present the seller with an amendment to the contract asking them to make the repairs. Remember, we only have 10-12 days to have the inspections, get the amendment to the seller and negotiate the If you decide to terminate (for any reason), you will lose the option money ($300-ish) plus you have to pay for your inspections (home $400-700, termite $125, pool $250 and country properties also include inspections of the water well $350 and septic $300) so remember that “it costs you money to TRY to buy a house”. Those fees will be paid at closing if closing occurs, but if not, then they will take them out of your earnest money and pay the inspectors then refund the remaining balance back to you.
- Once we get thru that process, we wait on the appraisal & the survey – the lender orders those….which are taking about 5-6 weeks to get turned in! (if you are paying cash, those two items aren’t required) the delay time on the appraisal and survey is the reason it is currently taking 45-60 days to get closed once you find a property and put a contract on it because of our market conditions. In other markets, you can get closed within 30 days so IF you use an out of town lender, they may not be aware of the delay which causes even further delays with closings.
- We will get a title commitment and a title policy paid for by the seller, which insures the property against defects in title. The seller must give you clear title when you purchase the home, unless you are purchasing new construction because the builders do not typically pay for that so you would have to purchase it as well.
- Then we CLOSE!!!! My office will call you to schedule a time that works best for you on the day of closing. I prefer to close in the morning in hopes that it will “fund” by the end of the day because that is when you get the keys! We will also meet at the property before closing to do a walk-thru and make sure that nothing is broken, leaking or damaged.
- Then it funds and you start moving in! 🙂 🙂 🙂
I hope this “crash course” in Buying real estate 101 was helpful!