Checklist of Steps for Buying a Home

Contact three or four lenders to determine how much house you can afford. Determine how much money you will need to purchase a new home. Do you have enough? If not, create a budget and start saving now.

Get approved for a loan. Don’t forget to get an preapproval letter! We will need to submit it with an offer to buy a house.

Hire a real estate agent to help you with your purchase. You need a professional looking out for your best interest. Send your Preapproval letter or “Proof of Funds” to your agent (see video).

Do you need to sell your current home? Your agent will help with that too. Get it on the market!

View “Dream Home Alerts” (see video) for homes when they “hit” the market.

Tour homes (see video) until you find the one that meets your specific needs.

Sign the legal paperwork and make an offer to buy the house that you chose. Be prepared to write check for Earnest Money (see video). Be prepared for some back-and-forth negotiations.

Deliver the Earnest Money and Option fee to the title company. TIME IS OF THE ESSENCE! If you don’t deliver the Option fee on time, then you have NO Termination Option.

NOTE: Learn about Option Periods in Texas (see video).

Once the title company “receipts” your Earnest Money and Option Fee, then send the executed and receipted contract to your lender and start the approval process with him/her.

After the sales contract is executed, hire home inspectors to inspect the home as needed (learn more). This will cost $300 to $700 or more, depending on the number and type of inspectors you hire. Depending on the home, you should think about the following inspections:

Hire an appraisal if you are paying cash.

NOTE: View my videos on Pricing and Appraisals to learn more.

Discuss insurability with insurance company and get a CLUE report from insurance agent.

Verify the following if they are important issues to you:

·     Square footage of home

·     Schools zoned to home (but those may change with rezoning in future)

·     Property taxes

·     Crime in area (contact police department)

·     HOA covenants and restrictions (usually online at HOA website)

Negotiate repairs to home as needed. Be realistic…small miscellaneous items should be expected because no home is perfect. Negotiate  big-ticket repairs (if any) or walk-away.

Now that you have exact address, compare mortgages and lenders (at least three is recommended). Choose a lender and mortgage and apply for a loan if you haven’t already. Remember, you have a deadline to meet in the sales contract. Be prepared to pay an application fee (approximately $300) and an appraisal fee (approximately $300-400).

Submit items for your loan application (W2s, tax returns, pay stubs, bank statements, etc) as requested by your lender. Time is of the essence! According to the contract, your deadline for Individual Approval and Notice to a Seller (from lender) is à

If you do not get loan approval, then notify your real estate agent immediately.

Check your Title Commitment  (learn more) in a timely manner when you receive it. You have only a few days to “object in writing.” Make sure your real estate agent receives a copy.

Review the Lender’s appraisal in a timely manner. You have only a few days to “object in writing.” Make sure your real estate agent receives a copy.

Review the survey in a timely manner. You have only a few days to “object in writing.” Make sure your real estate agent receives a copy.

Re-inspect home, if you choose, based on agreed repairs.

Obtain home owner’s hazard insurance. Make sure you get at least three quotes. Notify your real estate agent which policy you choose. Don’t forget Flood Insurance!

Select your residential service contract (“home warranty”) if applicable and notify your real estate agent  (learn more). The title company will order and pay for the home warranty.

Plan your move (get detailed list) and order your utilities to be turned on the day you Close. Always allow a week or more overlap to move out of current home and into new home. Do not plan to Close and move on the same day!

Ask your lender for the amount of money you need to Close. Make sure your funds for Closing are available at local bank. Transferring money from investment accounts can take time…work with your lender and bank and prepare in advance.

Your property MUST reach Lender Approval at least 4 days before Closing otherwise you may not be able to obtain a refund of your earnest money due to default on Closing. If there is a delay in getting the loan, notify your real estate agent immediately.

Make sure your Closing is scheduled. You will need photo IDs, checkbook, and a cashier’s check or wiring instructions from your bank.

You must sign your Closing Disclosures (from lender) at least 3 days before your Closing date or you will not be able to Close on time. If you do not sign the CD in a timely manner, this may put you in default and there could be serious financial consequences.

Get your cashier’s check for funds needed to Close the day before Closing.

Do your final walk-through.

Go to the Closing and bring your funds to Close, a checkbook, and a photo ID for each person (husband and wife). Plan on a 2-3 hour process.

Move into your new home and enjoy!

Make sure you receive a copy of your Deed (from the Title company) within a couple of weeks after Closing. Be prepared for mail “scams” offering to file legal docs for a fee.

Apply for your property tax exemptions as applicable in your state.

Contact three or four lenders to determine how much house you can afford. Determine how much money you will need to purchase a new home. Do you have enough? If not, create a budget and start saving now.

Get approved for a loan. Don’t forget to get an preapproval letter! We will need to submit it with an offer to buy a house.