You’ve probably got a lot of questions about buying a home in the Houston area. You’ve come to the right place for answers. Buying a home is one of the major purchases you will make in your lifetime. It’s critical to have the information you need to make an informed decision and feel good about it. If you have a question that hasn’t been addressed here, please don’t hesitate to contact us. It would be my pleasure to assist you in obtaining the information you require, as well as to serve as your guide when looking for a home.
Q1. What should be my first step once I’ve decided I want to buy a house?
Get a pre-approval for a mortgage. Unless you intend to pay cash for the property, you will need to obtain a mortgage from a lender. Getting pre-approved for financing before starting your home search will help you determine how much house you can afford. When you know how much financing you can get, your realtor will show you homes in that price range. Pre-approval also informs sellers that you are a serious buyer ready to close a deal and find a home.
Q2. How much will I have to pay the realtor as the buyer?
In general, zero. It is customary for the seller to pay the commission to the seller’s agent, and for the seller’s agent to pay the fee to the buyer’s agent for bringing the buyer to the transaction.
Q3: How long does it take to buy a house?
Once the seller accepts the offer, the average time to close is around 30 days, though this can vary.
Q4. What is a seller’s market?
A seller’s market occurs when an increase in home inventory drives up home prices. In general, four factors can influence demand: 1) economic factors that attract new residents to an area in need of housing—pushing prices up before inventory can be built; 2) downward trending interest rates that improve affordability—especially among first-time buyers; 3) a short-term spike in interest rates can be the nudge for buyers on the fence about whether to buy now or wait; and 4) fewer homes on the market—lower inventory due to a lack of new construction means prices on existing homes may rise.
Q5. What exactly is a buyer’s market?
Reduced demand and falling home prices are characteristics of a buyer’s market. In general, five factors influence this type of demand: 1) an economic disruption, such as a large employer closing or laying off employees, causing people to leave the area in search of new job opportunities, 2) rising interest rates—this lowers the amount of money people hope to borrow, and home prices typically fall to match the level of demand, allowing buyers to find better deals. 3) A short-term decrease in interest rates can provide borrowers with a slight advantage in terms of purchasing power until interest rates change. 4) Increased home inventory, such as a new subdivision, will put downward pressure on the rates of nearby older homes, and 5) natural disasters can have a negative impact on property values in the neighborhoods affected by the disruptions.
Q6. Should I sell my current home before purchasing a new one?
This is a question you should ask your financial advisor, who can help you run the numbers for your specific situation. Your loan advisor will assist you in evaluating your risk profile and credit history to determine whether making a loan on a new home while keeping the title to the old home is feasible.
The solution could be to turn your current home into an investment property by renting it out. In this case, you will not be selling your previous residence. For others, the path to a new home requires the necessary funds from the current home’s built-up equity—the funds are used towards the down payment of the new home.
Q7. How many houses should I look at before deciding on one?
There is no magic number, and chances are “your” home will tick all the boxes for what you’re looking for while also feeling like “your” home. Taking photos and making notes about what you like and dislike about each house is useful during home visits. Take note of the nearby amenities. Consider whether the house is close to important schools, parks, shopping, and restaurants for you.
Q8. How much money do you need for a down payment?
Several first-time home buyer programs, such as the FHA loan program, typically require 3-5 percent of the purchase price. VA and USDA loans are available with no down payment. If you can raise your down payment to 10-11 percent, you will be able to avoid paying private mortgage insurance (PMI) as required by your lender and save money in the long run.
Q9. What type of credit score is needed to apply for a mortgage loan?
Aim for a score of 620 or higher to get better lending terms. Lending requirements continue to change so plan a conversation with your loan officer for the most up-to-date information and today’s lending requirements.
Q10. How long can it take for a seller to respond to my offer?
This can take anywhere from a few hours to as little as 24-48 hours. When presenting the offer, the buyer’s agent can request a timeframe for the seller to respond, but when they respond is entirely up to the seller.
Q11: What if my offer is rejected?
Don’t be disheartened if your offer is rejected; all is not lost. Sellers may make a counter-offer, and if this occurs, the deal is not over. You and your agent will review the counter-offer to see if it is acceptable to you. If you approve the requested revisions, the contract can be executed and moved forward. If you don’t, the next step is to respond with a counter-offer. These can be revised several times, with each revision bringing the buyer and seller closer together on the terms of the transaction.
Q12. Should I order a home inspection for the new home?
Yes, always get the home inspected—new or resale! Home inspections are typically required if you plan on financing with a VA loan or FHA loan. Inspections will reveal any defects not easily seen plus provide you a sense of peace for one of largest investments you will be making in your lifetime. Once the report comes, read it. Ask the seller to act on fixing any repairs or renegotiate the selling price to accommodate these flaws.
Q13: How critical is a final walk-through?
While not required, it is strongly recommended. During the final walk-through, take your time. If any repairs were requested as a result of the home inspection report, make sure they were completed satisfactorily in accordance with the terms of your contract.
Q14: When will I receive the keys to my new home?
Generally, the keys to your new home will be handed to you on closing day after the transaction has been completed and fully funded by the title company. In some cases, the seller may request to stay in the property after the closing date, but this would be known and negotiated well before the closing date.
