Table of Contents
- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
Steps For Buying A Home In Texas
In today’s world, being a homeowner is one of the most rewarding feelings that one could have. If you are a first-time or an investment buyer, it is imperative to know the process of purchasing a property.
Today we will discuss five essential steps that you need to remember while buying a home in Texas.
Step 1 - Finding a Licensed Realtor
Whether you are a first-time homebuyer or an investment homebuyer, you must have a realtor who is licensed to do business in your state and has knowledge about real estate in the area that you are looking to buy your home.
We would suggest verifying all the information about the realtor before giving him/her your business. Your first step for purchasing a home in Texas should be finding a trusted and licensed realtor.
Step 2 - Applying for a Mortgage / Pre-Approval
Once you have selected a realtor, you need to make sure you apply for a mortgage through financial institutes like a Bank, Lender, or Mortgage Broker.
Generally, in this process, you will get pre-approved for the amount of loan you require from the financial institution.
Pre-approval will give you an estimate of the amount of a loan that you qualify for.
To get pre-approved, you will have to share some necessary information with the financial institution for them to understand how much money you can borrow.
Pre-approval will also help the realtor find options within your budget. Once you have the pre-approval letter, you are now ready to search the options and find the best home for you.
If you are planning for buying a home in Texas you will need a pre-approval from the lender.
Step 3 - Make an Offer
This is a step in which you write down the price that you are willing to pay to purchase the house, including any contingencies or expectations from the seller before the closing.
For example, if you think that the bathroom floor needs to be fixed, it needs to be mentioned as one of the contingencies while you make an offer.
Once you make this offer, it is up to the seller to counter or accept your offer. Say the seller has decided to counter your offer and has lowered the sales price.
Now you have the option to either counter or accept.
This process goes on until at least one of the parties accepts. Your third step for buying a home in Texas should be to make an offer to the seller.
Once the offer is accepted, the sales contract is signed, and we are ready to move to the next step, which we would like to call “Work In Progress.”
Step 4 - Work In Progress
This is a period between signing the contract and closing. A whole lot of things happen in this period.
After the contract is signed between the borrower and the seller, the borrower now needs to secure the mortgage.
This means that the lender now needs to go through the actual process of processing the pre-approved loan.
The lender will go through documents such as your paycheck stubs, W2’s, and all other financial papers to ensure you will be able to meet your mortgage note.
Once this is done, your mortgage lender gets your loan to a stage known as “Clear to Close.”
While the lender is working towards closing your mortgage loan, a third-party appraisal company does the home inspection.
A certified inspector examines the property to make sure everything in the house functions appropriately and identifies needed repairs.
They will also make sure the value of the property is following the seller’s asking price. A home inspection can force the agreement to be changed if any such concerns are noticed and reported by the inspector.
Next is your home appraisal process. An appraisal is not a home inspection. An appraisal is an opinion of value for the property in question.
The lender will get an appointment from an appraisal management company who will assign a licensed appraiser who will look at the property that you are buying.
The appraiser will assess its value in the marketplace based on other comparable sales; basically, what a reasonable buyer should be paying for the property in question.
The appraiser will then submit a report suggesting the value of the property you are planning to buy. Based on the value in this report, the lender will consider the final loan amount to be financed.
After the appraisal is successfully completed, it is time for you to get insurance for your new home.
The buyer has an option to shop around for the homeowner’s insurance and submit it to the lender.
Your fourth step for buying a home in Texas should be keeping a tab on the loan process.
The lender will insist on purchasing the homeowner’s insurance before the closing in case of any losses or damages caused to the structure of property during the loan period so that it could be recovered or restored.
Step 5 - Closing
Since we have secured the mortgage, obtained the home inspection and the insurance for the house, we are clear to close.
Closing is a step where both the seller and the buyer come together, assisted by the title company for the final transition.
Here, all the remaining papers would be signed between the borrower and the seller. While signing, it is always suggested to go through the closing costs and make sure everything is as discussed.
Finally, once the signing is completed, the ownership of the house will be changed from seller to buyer. With this, you complete the final step of buying a home in Texas.
