 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
|
|
Where do I start?
What do I do when I'm ready to start looking at houses?
How do I find a REALTOR®?
How should I choose a REALTOR®?
Do I have to use a REALTOR®?
How do I figure out what I can afford?
Should I contact a lender before I start looking for a house?
What is the difference between prequalification
and pre-approval?
How should I choose a lender?
What do I do when I find a home I like?
How do I make sure I don't offer too much?
Is a really low offer a good idea?
Is it ever a good idea to offer more than asking price?
Does a seller have to consider my offer before looking at others?
Buying a home is an exciting proposition. For most people, it's not an impulse decision. You might want to spend some time driving around neighborhoods, looking at homes for sale in the newspaper and on Web sites, and talking to your friends about their homebuying experiences.
After a while, you will get a general idea of where you want to live, what styles of homes you like, and how much homes cost in the areas you like.
What do I do when I'm ready to start looking at houses?
First, you need to figure out how much you can afford. Then, determine the most important elements of the home you hope to buy. The combination of these two pieces of information will help you determine where to start your search.
Your REALTOR® can help you compile a list of houses in your price range that meet the requirements on your wish list. The REALTOR® will then arrange for you to view those properties.
Finding a home you like is the fun part, but it's only the tip of the proverbial iceberg. A REALTOR® can help you through each step of the process, giving you information to help you make better decisions.
Recommendations from friends and acquaintances can be very helpful. You can also look in the Texas Association of REALTORS® "Find a REALTOR®" search or contact your local board of REALTORS® for a directory of their members.
Remember, not all real estate agents and brokers are REALTORS®. Find out the difference.
How should I choose a REALTOR®?
You may want to contact several REALTORS® before deciding on one to help you. Make sure you are comfortable dealing with the person that you will be working with for quite some time.
Some REALTORS® specialize in certain areas of real estate, and many have completed advanced educational requirements in those areas. You may be interested in working with a REALTOR® who has achieved a designation such as Accredited Buyer Representative, Certified Residential Specialist, or Graduate, REALTOR® Institute. Read about the various REALTOR® designations.
No. Before you choose to go it alone, though, make sure you are prepared to handle all aspects of this complex transaction. After all, if you make an offer that is too high, negotiate poorly, fail to exercise options available to you, or any number of other mistakes, you could potentially lose much more than you would save by doing it yourself.
How do I find out what I can afford?
There are guidelines that can help you determine what price house you can afford. But remember, no one knows your personal situation better than you. Just because a lender will give you a loan for a certain amount does not mean you can afford it. For example, if you know you are likely to have less income in the near future when you go back to school or switch careers, you could be digging yourself into a difficult position buy buying the highest-priced home you can afford today.
General lenders' guidelines say that a homebuyer should spend no more than 28% of income on housing, and that the buyer's total debt should be no more than 36% of income.
So someone with a monthly salary of $4,000 dollars should spend no more than $1,120 per month on total housing costs. (Total housing costs are usually considered to be the principal and interest on the home loan, property tax, and homeowners insurance. These items are often referred to as PITI.) If that same person has a monthly car payment of $300 and monthly student loan payments of $100, then the limit on total monthly housing costs would be $1,040 ($4,000 x 36% = $1,440. $1,440 - $300 - $100 = $1,040).
To help you get a rough idea of how much home you can afford, use the above information with a mortgage calculator.
Your REALTOR® or a mortgage professional can help you determine a more definite price.
Should I contact a lender before I start looking for a house?
Contacting a lender before you're actually ready to make an offer on a house can be a good idea. This head start gives you a chance to work out any problems that may arise without the pressure of contract deadlines. You also can get pre-approved for a loan, which will put you in a strong position if you end up making an offer on a house that receives offers from other buyers.
What is the difference between prequalification and pre-approval for a loan?
Prequalification only provides and estimated amount for how much you can borrow based on information you provide. Pre-approval is typically a commitment from a lender to lend you a specific amount based on documented information about your finances.
Though you definitely want the lowest rate, there are other considerations. Read this Texas REALTOR® magazine list of questions you should ask a lender. And ask your REALTOR® if he or she has a list of lenders from which you can start your search.
What do I do when I find a home I like?
It's time to make an offer. Your REALTOR® will help you fill out a standard offer. You will make several decisions including how much you are willing to pay, how much earnest money you will deposit, and when the sale will close. The seller will decide whether to accept your offer, make a counter offer, or neither.
How do I make sure I don't offer too much?
While, "too much" is subjective, there are ways to help you arrive at a price for your offer. A REALTOR® can gather "information on comparable recent sales in the area. That information, together with how much you want the home and whether the market is a "sellers" or "buyers" market (or neither), will help you determine how much to offer for the house.
Is a really low offer a good idea?
You can make an offer that is substantially lower than the sellers asking price. Some experts think this negotiating strategy often backfires, putting the seller in a defensive posture and giving the seller the idea that you are not serious.
Is it ever a good idea to offer more than asking price?
There may be situations when you want to offer more than the seller's asking price. In a competitive market, a higher offer may give you the inside track on a house. You might also be willing to offer more than asking price if you are inflexible on other details, like when you want to close the sale.
Does a seller have to consider my offer before looking at others?
No. A seller can look at all offers no matter what order the seller receives them in.
Buying
a
Home
