As a realtor in Texas, I receive a monthly magazine called Texas Realtor. There was an article in the April edition with questions that realtors are constantly asked by buyers. It listed nine questions but didn’t provide any responses. Here are my responses to their list of questions:
1. How long does the buying process take?
Once you have a signed contract on the house you want to purchase, a lender should be able to get your loan processed and complete within 30-45 days. If you are a cash buyer, all the needed paperwork should be ready for you to close at a title company within 7-14 days.
2. How many homes does the average buyer visit?
This totally depends on the buyer. Some people know exactly what they want while others are in the dark. Oftentimes you learn during the house-hunting process that you and your partner are on totally different pages. (That is another post for another day….the awkwardness of sitting through a couple’s argument.) With the help of HAR, Houston buyers have access to lots of information on homes and see photos without even seeing the house in person. This can narrow down their list of homes at the early stages of looking.
3. Is there anything I should not do during the house-hunting process?
Do not change jobs and do not go out and purchase a bunch of high dollar items that might affect your credit and loan status. (examples: all new furniture, new car, etc) Lenders typically run your credit a second time prior to your close date and a large expense can create a problem.
4. When should I make an offer?
In today’s crazy real estate market you need to be prepared to make an offer on a house the first day it is on the market. A couple years ago I would not have said this. However, todays market is very tight with low inventory and lots of buyers. Most first time homebuyers are not very comfortable with this advice. They often have to lose out on a few homes before they fully understand this concept and are ok with it. This scenario isn’t always going to be case, but it is very common these days.
5. How much should I offer?
Prior to offering on a property, your realtor should research comparable properties in the area and see what they have recently sold for. Today’s market has improved from even 6 months ago. Your realtor needs to be aware of these value increases and be able to confidently tell you if a house is listed above market value.
6. Will I get my earnest money back if the contract is not accepted?
Yes. The earnest money is typically 1% of the sale price. You will write a check out to the title company where you will be closing and the money is put into an escrow account. The money is refundable to the buyer in a variety of situations that your realtor should go over with you. If your contract is never accepted by the seller you will not even provide a check for earnest money. Earnest money is required within 48 hours of the contract being executed or signed by both parties.
7. Do I really need a home inspection?
The short answer here is yes. You should always hire your own inspector (general and termite at a minimum) to inspect any property you are considering purchasing. You should get this done as quickly into your option period as possible. Inspectors are not cheap. However, spending $500 on an inspection is cheaper than finding out you just purchased a $400,000 money pit.
8. What happens at the closing?
You will close on your property at a title company. The main thing you will do is sign tons and tons of paperwork that your lender provides to the title company. You are signing off on loan documents, your deed, your loan application, tax papers, and tons of disclosures. The escrow agent at the title company should be able to clearly explain what all the forms mean and how they might affect you. If you are THAT person who reads each document, have your relator ask the title company for the paperwork the night before so you can take up your own time and not everyone elses reading all the fine print. (The reality is that if you have a problem with a document and don’t want to sign, the lender won’t send over the funds, which means you don’t get a house.) The other big thing that often happens at closing is meeting your seller. This can be really fun or really awkward, depending on how smoothly the transaction went down. Make it known if you would prefer to sign separately from the seller.
9. When will I get the keys?
You should get the keys once the loan funds. Typically, this is the same day as when you sign all your paperwork but sometimes the loans don’t actually fund until the next day. You technically should not receive the keys until the money has transferred but often times agents just leave the keys at the title company. Remember that you might need more than just keys….garage door opener, gate openers, mailbox key, etc. Your realtor should coordinate this all for you with the sellers realtor.
Hopefully these questions and answers were helpful to some of you who are starting the home buying process. Feel free to send me other questions you might want answered.