Expecting to buy your first home?  Maybe just beginning to think about taking the plunge?  You probably have a so many questions swirling around your head you don't know where to start!  Well, first off you probably already know a few things - like the mortgage interest rates right now are the lowest they have been in at least 30 years, or that home prices are down but could start creeping up any moment now, or that the $8000.00 tax credit doesn't have to be repaid.  You already know this.  What you may not know is just how does the entire process of finding and buying a home happen?  Well, I'll try to lay out the process here and hopefully it will shed some light on the process for you.

  First lets start with your current situation - you may be living in an apartment, have a new baby, or maybe renting a house - possibly living with family and you are thinking you need more room, or maybe that this "perfect storm" buying opportunity it too good to let pass by. 

1. The first thing you should do is talk to a good mortgage professional.  Would you go shopping without knowing how much money you have?  You will learn a fantastic amount of information after speaking with a lender.  They will start by asking how much you earn, what your obligations are, do a quick credit check and assuming you have been completely honest with them they will give you a pre approval for a mortgage - they will tell you how much you qualify to borrow, how much you'll need for down payment, and what your monthly payment will be for any given loan amount.  This information is crucial to have before you start looking at homes!!!  If you don't know who to talk to, most Realtors have recommendations, they will have worked with many lenders and will be able to tell you who works hard (and lenders do work hard!) and who doesn't.

2.  Meet with a Realtor and they will talk with you to help determine what you are looking for in a home.  Things like how many bedrooms and bathrooms are the easy part, the hard part ends up being things like location, kitchen layout, alley or street driveway, and many other things.  Don't be at all surprised if what you "have to have" at the beginning of your search changes completely by the time you find your home!  It happens regularly!  They will help you determine if what you want and what you can afford are a possibility.  Some people have Cadillac expectations on a Kia budget and a dose of reality may be necessary for them but the vast majority of people we work with are surprised by what we find for them in their budget. 

Oh, did I mention that as a buyer your Realtor doesn't charge you any money?  How can that be?   Well, Realtors are paid by commission and only get paid when a contract for a home closes.  Whoever is selling their home has signed a Listing Agreement with their Realtor, and have agreed in writing to pay a certain commission to whoever sells their home.  If the person who listed the home also ends up being the one who sells it (someone calls the guy/girl on the sign and buys the house through him/her) that person makes double the pay!  The smart move for everyone is to have your own Realtor with whom you have signed a "Buyers Representation Agreement".  This Realtor will work with you as long as it takes to find your new home and represent you all the way through the process from looking for a home to making a smart offer, to actually closing on the deal and becoming the new owner! 

3.  Time to look for homes.  Using criteria determined in #2 there are numerous ways to begin your search.  On-line being 'normal' today.  You can look using one of many sources and your Realtor will do the same.  When you come up with about 5 you'd like to see your Realtor will schedule appointments to go check them out.  I don't recommend looking at more than 5 or 6 at the most any single day because you will get tired and the homes will become difficult to remember later.

4.  You found "The One"!  Now your Realtor will do some research to determine what a good offer will be.  You will be given a contract to initial and sign, it will have many pages and could look intimidating but everything there is for your protection as well as the sellers protection.  At this point - the contract is an 'offer'.  it is presented to the seller by various means - around here faxing or email is most common.  We now wait for a response from the other party.  If they flat out agree with everything on the contract and sign it without any changes we now have what is called an "executed contract"  This means both parties (buyer and seller) agree to everything in the deal.  What normally happens though is the seller will "counter".  They will make some changes to the deal, like maybe the offer price is too low and they come back with a higher price.  Maybe they aren't happy with some of the terms of the deal - maybe the closing date is too soon - or too far off. 

5.  After going back and forth once or twice, you now have an "executed contract".  Now you need to schedule a home inspection during your negotiated "Option Period"  This is a number of days (in Texas no more than 10) when you the buyer can if necessary exercise your "Option" and get out of the contract.  Your Realtor can recommend a few good inspectors for you to choose from or you can find your own if you like.  They generally charge around $300.00 and you the buyer pay for it at the time of the inspection.  Occasionally the inspection uncovers signs of more serious problems that may require more specialized investigation - like wood destroying insects (termites) maybe foundation or roofing problems. 

6.  Ok, you've got our inspection done and there are a few things you want addressed or you're going to cancel the deal!  Your Realtor gets with the Selling Realtor with your list and they get with their clients to see what they say.  Usually there is a little back and forth on what the seller will do or pay for.  Once you come to agreement both parties sign a contract amendment and make it official.

7.  At the same time as the inspection you will be getting documents to your lender to get the mortgage in place.  They will need things like W-2s, previous years tax return, bank statements.  Don't procrastinate here, this information is critical and not being prompt can cause problems getting the mortgage approved on time!

8.  You have a little time to relax now, the last several days have been hectic with lots of phone calls and needed signatures.  From now until closing you basically wait.  Check in frequently with your lender to make sure everything is going as it should.  Your Realtor should also be doing the same.  If the seller has agreed to fix things on the home your Realtor should be monitoring that it gets done.

9.  Just before closing your Realtor will schedule a "Walk through" of the soon to be yours home to make sure everything is as it should be.  Any agreed to repairs must be done, nothing has been damaged or is missing.

10.  Closing time!  Show up to your scheduled closing at the agreed upon title company to sign documents making the home yours!  If you're required to pay any closing costs you will already know what they are from your earlier discussions with your Realtor and Lender.   You'll be there about half an hour, after which the home is now yours!!!

As you can see, there is alot to buying a home.  Hiring a good, qualified Realtor and lender that you communicate well with is critical to having as trouble free a buying process as possible.  Choose carefully, you have to be confident that you will not be treated like just another client - you need to be treated like their only client!