A Guide to Buying Your First Home
So you’re ready to buy your first home. You’ve fallen in love with the Brazos Valley and feel that this is a place where you can set down roots. We don’t blame you – its natural beauty, high quality of life, and prime real estate make it an obvious choice.
Don’t let the excitement of buying a house in Texas turn into anxiety – this first time homebuyers’ guide will help you navigate the process from start to finish.
Getting ready to buy a home
Prepare your finances. When buying your first home, it’s not enough to save money for the down payment. You’ll encounter many expenses throughout with the buying process, such as inspections, closing fees, and relocation fees.
Likewise, you’ll need an emergency fund for when you move to your new place just in case something breaks within the first few months of your stay.
If you have existing debt, such as student loans or consumer debt, pay it down as much as possible – it will reflect more positively on your credit score, which is one of the main factors lenders take into consideration when approving (or rejecting) loan applications. You can also consolidate multiple loans to make them more manageable.
It’s also generally advisable to avoid making big ticket purchases, like a new car or flat screen TV, in the months leading up to your loan application.
Talk to your financial advisor about how you can best prepare your finances for a home purchase.
Gather the necessary documents. The loan application process entails a great deal of documentation and paperwork. Get everything ready before speaking with a lender to speed up the process.
These are some of the necessary paperwork when applying for a home loan in 2020:
- Pay stubs reflecting at least 30 days of income
- Names and addresses of previous and current employers within the last two years
- W-2 forms from the last two years
- One or two years’ worth of tax returns
- An accomplished Form 4506-T/4506T-EZ
- Bank statements from the last two or three months
- Information on existing debt (Car loans, student loans, etc.)
- Security accounts (stocks, bonds, etc.)
- Dividend earnings
- A copy of earnest money deposit
- Year-to-date profit and loss statement (if self-employed)
- Signed returns from last two years (if self-employed)
- Social Security and Disability payments
- Proof of pension income
- Child support1 Footnote
- Alimony1 Footnote payments
Know your reasons for buying. This may seem like an obvious question, but there’s no harm in clarifying your reasons and motivations for buying. Are you looking for a forever home? Will you upgrade to a bigger house in the future? Do you have plans to resell within the next few years? The answers to these questions will help guide your decisions as well as manage any expectations you might have of the process.
Applying for a mortgage
Find a lender. It’s generally recommended to speak with more than one lender in order to find the best terms possible. Shopping for a lender lets you compare terms and rates.
Get a preapproval letter. Having a preapproval letter can give you an advantage in buying process, especially if the seller receives multiple offers. A preapproval letter sends the seller the message that you’re serious about buying the home and that you’re in a financial position to buy.
Finding a real estate agent
Work with a licensed agent. There’s substitute for professional guidance when buying a home in Los Brazos Valley, or in any market, for that matter. Buyers have access to more real estate information than ever, thanks to technology. However, information doesn’t always translate to knowledge. Only a seasoned agent can help interpret data and anticipate every scenario that can come into play during the buying process.
The agents at Berkshire Hathaway Home Services (BHHS) Caliber Realty offer quality service to first time homebuyers in Brazos Valley. The agency has won numerous awards in the area, including the Newman 10 Award for small business growth.
Choosing a home
Go through your options. With so many gorgeous homes in the Los Brazos Valley, choosing is truly the hard part. Buyers have the pick of the litter, from luxury townhomes to custom built single family homes.
Working with an agent will give you access to the MLS, which contains numerous listings. Your agent will also utilize their network to find off-market listings and other listings that match your criteria.
Attend open houses. If the home will serve as your primary residence, it’s worth taking time off your schedule to attend the open house. This allows you to get a first-hand impression of the home as well as ask the seller’s representative questions about the property.
Have the home inspected. Perhaps one of the biggest mistakes buyers make is skipping the home inspection. It’s a necessary expense, as it can help uncover underlying issues with the property, such as cracks in the foundation or dampness in the basement.
Making an offer
Craft a strong offer. Once you’ve found your dream home, don’t let it slip away by making a lowball offer. Although it’s customary for agents to offer just below the asking price, then countering with a higher offer when the seller refuses, this may not work in instances where there are multiple offers on the home. Assess the situation carefully and work with your agent to come up with a good offer.
Closing the deal
Open escrow. Once the seller accepts your offer, you’ll have a short window of time in which you must review and accomplish the necessary paperwork as well as entrust the funds with an escrow company.
Get the keys to your new home. If the escrow period goes by without a hitch, you can do a final walkthrough of the home to determine whether it’s in the same condition as when you made an offer.
If you’re satisfied, the property will be transferred to your name and you will finally be able to move into your new home.
Ready to explore the Brazos Valley real estate market? Berkshire Hathaway Home Services (BHHS) Caliber Realty is at your service. You can reach the team here. You can also get in touch with them at 979.694.8844, 979.694.2299, and Sales(at)BHHSCaliber(dotted)com.