First Step to Buying a Home

realtor

Most people begin their home buying search on the internet by visiting Realtor.com, Zillow or Trulia. Today’s technology tools have given us the world at our fingertips, but step 1 to buying a home should be to hire a Realtor to represent you.

Searching the web on your own takes a LOT of time. A Realtor can set you up for an automatic search in MLS – Multiple Listing Service. When a property matching your criteria is listed, you will be emailed the listing, saving you A LOT of time. The MLS is in real time, which is to your advantage when properties sell quickly.

How do you find a Realtor?

Hopefully you will call me at 830.305.5248 or email me at krista@acutaboverealty.com so we can meet and see if we would be a good fit together. You need someone who is great at his or her job, but you also need someone you like, because you will be spending a lot of time together. Determine if that person has the customer service, experience and understanding of the market. Does the Realtor quickly respond to your initial phone call or email? This business moves quickly and deals can be lost if your Realtor doesn’t respond quickly on your behalf.

Interview the Realtor

Ask very specific questions: Are you a full time Realtor? What areas do you primarily work? How do you handle negotiations? Do you attend inspection and walk-thru?

Expect to sign a buyer representation agreement. Legally before you disclose confidential information to your Realtor, you should have a signed buyer representation agreement. That helps to insure that your Realtor will keep private information confidential.

If you have any questions, please feel free to contact me at 830.305.5248 or krista@acutaboverealty.com.

Step 2: Getting Pre-Approved for a Mortgage

Once you’ve found a Realtor to represent and advise you on what is going to be the biggest financial transaction you ever make, step 2 to buying a home is to get preapproved by a mortgage lender. As Realtors, we won’t put an offer in on a home for a client unless he or she has been preapproved, because the seller needs to be assured that you qualify to buy their home.

It’s also important that you know how much you can comfortably afford to spend on a home, what your monthly payments will be, what interest rate you qualify for, and how much you’ll be paying each month in taxes, etc.
Having a good mortgage lender is a crucial part of ensuring a smooth transaction. Working with a bad mortgage lender can make the process very painful and put your purchase in jeopardy of not closing on time or at all. You also might end up regretting the lender you chose for years if you end up paying a higher interest rate than you should have if you had shopped your loan through various lenders. You could also lose out on your dream property because your mortgage lender was disorganized and couldn’t get you fully approved during underwriting, etc. That’s why it’s important to work with the best.

My Recommended Lenders

First United Mortgage Group
Jennifer Guidry
Email: jguidry@firstunitedbank.com
Website: www.SALending.com
Phone: 210-619-2690

Gateway Mortgage Group
Steve Brown
Phone: 210-862-2885 email: steve.brown@gatewayloan.com
To prequalify online: www.gatewayloan.com/apply-online

Union Home Mortgage
Ryan Kuhn
Phone: 210-410-2401 email: rkuhn@unionhomemortgage.com
Paperwork You Need
Each lender has slightly different requirements regarding what documentation they need from you for the preapproval process, but in general, expect to provide the following items:
 A completed application. The lender will provide this to you directly
 Last two years tax returns, all schedules and W2s.
 Two most recent bank statements
 Most recent asset statements: 401K, IRA, stocks, bonds, etc.
 One month paystubs
Getting Pre-Qualified
The lender should be able to pre-qualify you verbally based on a condensed version of information given. For example, they can pull a credit report once you provide your social security numbers, birthdates, and current address. They will ask for your salary and current debt information to determine the approximate amount you can afford. You will need to submit all documentation to obtain a solid pre-approval letter.

Getting a Pre-Approval Letter
Generally, once you submit the above items to your lender you should receive a pre-approval letter within 2-3 business days. The lender may ask for additional documentation. They are not trying to be difficult by asking for additional documentation, rather, after the housing bubble burst, underwriters became much stricter regarding the loan approval process so a lot more documentation is needed today than it was 10 years ago. In addition to receiving a pre-approval letter which shows the amount you can afford to purchase, you should ask your lender to show you what that preapproval amounts into in terms of a monthly mortgage payment plus any PMI, taxes, and insurance. That way you can make sure you are comfortable with what your monthly housing payment will be. Once you’ve received your pre-approval letter, forward it to me for your file so I have it when we are ready to submit an offer.

Get a Loan Estimate and Understand Your Closing Costs
In addition, mortgage lenders are required to provide you with a Loan Estimate (LE) within 3 days of receiving your pre-approval. The LE provides an estimate of the closing costs you’ll need on top of your down payment and shows exactly what fees the mortgage lender is charging you. Make sure you understand these fees. Generally, we estimate closing costs to be approximately 2% of the purchase price of the property. Your lender can provide you with more detailed estimates based on your exact pre-approval price. Remember, these closing costs are due at closing (except for the appraisal and inspection fees which are due on the day those services occur) and are on top of your down payment. Therefore, if you’re buying a $500,000 property and putting down 20% towards the loan you’ll need to have $112,500 cash available at closing ($100,000 for your down payment and approximately $12,500 for the closing costs).

Should You Shop for Your Loan?
Absolutely. Every lender charges different fees and different interest rates so it’s crucial you shop your loan around to at least two lenders, in my opinion. We recommend waiting 2-3 weeks between meeting with lenders as the lender will need to pull your credit report in order to give you an accurate preapproval letter. If your credit is pulled by various lenders in the same week it could affect your credit by a few points. If you wait a few weeks between having your credit pulled it generally won’t affect your credit at all.
Questions about the pre-approval process? Call me at 830.305.5248 or email me at krista@acutaboverealty.com.

Step 3: Checklist

Step 3 to Buying a Home: Download Checklist For Buying A Home

Congratulations!  You have a Realtor, and have gotten mortgage pre-approval.  Download my complete Checklist for Buying a Home, so you can see the steps of the entire home buying process in one place. This will give you an overview of everything you need to do along the way.  But don’t worry, I’ll be here to remind you as we work on this together.

Download checklist here.

If you have any questions or concerns, please contact me at 830.305.5248 or email me at krista@acutaboverealty.com.

Step 4: Finding Your Dream Home

Step 4 to Buying a Home: Finding the Home of Your Dreams

At this point, you’re probably excited to begin your home search journey.  You’ve gotten pre-approved, your checklist printed out and have (hopefully) started to complete it.  Now comes the most important step. Finding the right home.

Before we start, make a list of your top 4-6 needs and a list of your top 4-6 wants.  Examples of needs are:

  • Updated and move in ready
  • 4 bedrooms
  • Central AC and Heat
  • Yard for the dog
  • In a particular school district

These are the things you cannot live without.  You won’t view a property unless it has every one of the above items.

Then, make a list of your wants.  Examples of wants are:

  • Hardwood floors throughout
  • Double vanity in master bathroom
  • Updated kitchen with granite and stainless steel
  • Fireplace
  • Media room
  • Pool in backyard

These are the things you’d really like, but can live without if needed (unless your budget is $40 million then we can probably find something with everything on your list).

Once you’ve made your lists, email them to me.   That way when you see a property you love with the kitchen of your dreams we can remind you that it doesn’t have four bedrooms so we don’t waste time seeing it.  Once that’s done, I will set you up for auto search on MLS.  This means that each evening you’ll get an email with all of the new properties that have come on the market that day matching your criteria as well as any price changes which put homes in your budget that were previously over your budget. It’s the best way to find a great home in this area.

When the email comes in I need you to:

  1. Check the MLS email daily and review all of the properties I’ve sent you that day.  If there’s something you want to see, send me a quick email or call me letting me know when you can view the property and I’ll get a showing appointment set up.
  2. Most properties require 24 to 48 hours notice for showings and are usually available to view during the day time.  Sometimes sellers are more flexible, but it’s up to the individual.  Great properties sell quickly, so it’s important that you review the MLS email daily so we can jump on a property as soon as you see it.  
  3. Once we know when you’re available, we’ll set up the showings and let you know where we are meeting and when.
  4. We’ll bring printouts for each property so no need for you to bring anything other than snacks or drinks if you think you might get hungry.

At this point there should be no need for you to continue to look on other sites such as Zillow, Trulia, etc. as all of those properties should be showing up in your MLS feed. If one isn’t for some reason let us know so we can tweak the search parameters of your MLS feed.

Now on to the showings! 

If you have any questions or concerns, please contact me at 830.305.5248 or email krista@acutaboverealty.com.

Step 5: Time for Showings!

Step 5 to Buying a Home: Time For Showings!

Once you have found properties you are interested in viewing, we will set up showing appointments, as most sellers require advance notice.  When looking at homes, focus on the property, not the owner’s furnishings or pictures.   Imagine yourself living in the home. 

 Before we go, here are a few tips to remember:

  • Most sellers require you are pre-approved before being able to see their home.
  • Sellers usually require 24 hours notice prior to showings. They may also put other limitations on showings such as no showings after 6pm or on Sundays, etc.  
  • If a lot of sunlight is important to you in a home, then try to do showings during daylight hours.
  • Don’t assume we’ll be able to use the restroom so plan accordingly.
  • Focus on the property not their furnishings, artwork, etc. as you’re buying the property not their stuff.
  • Avoid touching furniture or personal items as we don’t want to be responsible should something break.
  • Remind children not to play with the toys and things they see in the house.
  • The home inspection comes AFTER a contract is agreed upon and signed by both the buyer and seller.   During a typical showing we should not be in the crawl spaces, attic, etc.
  • If sellers are home, be careful not to give too much away about yourself and why you’re buying as that information could hurt us later during the negotiation process.
  • Bring drinks and snacks as looking at lots of homes can be grueling!

Generally the day before we are scheduled to look at homes I will get in touch with you about where we are meeting and when. If you prefer I pick you up and drive you, that’s perfectly fine, just let me know.

If you have questions or concerns, please contact me at 830.305.5248 or krista@acutaboverealty.com.

Let’s go see some homes!

Step 6: Make an Offer!

Step 6 to Buying a Home: I Want to Make An Offer On A Home I Love

Fabulous! You’ve found the perfect home and want to put in an offer.  In today’s market we need to put your offer in asap; ideally within a few hours. Before we can put an offer in on a home, there are things we will need:

Full legal name:   The full legal name of anyone who will be on the contract as well as their phone number and email address.

Offer price:  What price do you want to offer for the home?  We will have a discussion about the listing and the comps in the area to determine a fair offer for the home.

Your walk away price:   Don’t expect to pay your initial offer price as it’s rare for a seller to accept your initial offer without some negotiating back and forth.  That’s why it’s called an initial offer.  In addition to deciding what offer you want to put in to start, you need to decide now how much you’re willing to pay for this property and what your walk away price is before negotiations get started. 

Closing date:  Typically, closing takes place 45-60 days from contract acceptance.  Sometimes you can ask for a longer closing date depending on the seller’s needs, but we wouldn’t expect it.  Therefore, if you want to move around July 1, plan on putting in offers at the beginning of May. If you’re paying 100% cash you can often close faster than 30 days, but 45 days is usually the required minimum if you are getting a mortgage.

Earnest money:  How much earnest money are you comfortable putting down on this property? Typically, this will be $1000 – $2500 depending on the property.  This is due once the contract is signed by both parties, but we will send a copy of the check with the offer to purchase to show good faith to the seller.  The earnest money is part of your down payment.  Therefore, if you’re planning to put $10,000 down for a down payment and you’re paying $2,000 in earnest money then at closing you would owe an additional $8,000 for the remainder of the down payment.

Option money:   Option money is paid directly to the seller, and “buys” you a specific number of days to thoroughly check out a property and have a home inspection done before you become contractually obligated to proceed with the purchase.  If you have a change of heart or discover a huge problem with the home, you may cancel the contract during the option period.  The number of days can vary from 5-10, but the customary amount is $10/day for every day of the option.   

Down payment:  For the contract, I need to know how much you’re going to put down for your down payment.  Your lender will be able to help provide this information.

Closing cost credits:  Do you want to ask for any credits for closing costs which would go towards the amount of closing cost fees you have to pay for on top of your down payment?

Home warranty:  Do you want to ask the seller to provide a home warranty on the property?

Contingencies:  Any other contingencies we need to be aware of? Do you need to sell your current home before we can buy this home?

Once we’ve talked through the above and we have reached an agreement, we can either meet in person or I will forward you the contract and have you sign it via a program called DocuSign.  We’ll then submit it to the seller’s agent.  While negotiations sometimes go quickly, be prepared that it could take 24 – 72 hours to negotiate the purchase price if the seller is out of town, wants to sleep on the offer for a night, if we’re dealing with a bank, etc.  Every seller is different and some people can make decisions quickly whereas others need time to think things through.

Patience is now the name of the game once an offer has been submitted!

Step 7: Accepted – NOW WHAT?

Step 7 to Buying a Home: You Have an Accepted Contract – Now What?

Congratulations on having an accepted contract on a house, but now what? Often contracts are accepted verbally by the seller’s agent first while signatures are gathered from the sellers.  It can take 1 – 2 days for all parties to sign and return the contract so be patient.  Until we have an executed contract (which means everything has been signed by both the sellers and the buyers) we do not have an enforceable contract.  Therefore, it’s urgent that a signed contract be received by all parties asap.  Once a signed contract is received, several things need to happen:

  1. The contract will be sent to the title company.  I will take care of this for you.  The earnest money check will need to be made out to the title company.  Once the contract is processed at the title company, you will receive an emailed copy.      
  2. The contract needs to be sent to your mortgage lender.  Again, I will take care of this for you.  This lets your mortgage lender know that you’re under contract and starts the process for getting you approved for the mortgage (remember, right now you’re only pre-approved). Be sure to respond promptly to your mortgage lender. They will ask you to fill out a lot of paperwork. Unfortunately, it’s not optional; it’s required and the quicker you can fill it out and get it back to them, the better.   
  3. You need to schedule the home inspection. This needs to be done ASAP.  See Step 8.

After the above items have been done, I will be in touch with you every couple of days to advise you what happens next.  I want to help you make sure everything gets done smoothly and on time.

Questions?  Call me at 830.305.5248 or email me at krista@acutaboverealty.com

Step 8: Home Inspection

Step 8 to Buying a Home: Schedule a Home Inspection

Once a contract has been submitted and accepted, you need to schedule a home inspection.  It should be scheduled at the very beginning of your option period, 2-3 days from contract acceptance. 

It is in your best interest to attend the inspection which takes approximately 2-3 hours.  This is usually done during the day on weekdays.  Wear comfortable clothing as the inspector may want to show you something in the attic, roof, etc. 

Typically, the inspector will arrange for the termite inspection to be done the same day as the home inspection.  Please be sure to verify that this will happen. 

You will be responsible for paying for both of these inspections when they are scheduled.  You can expect to spend at least $350 on the home inspection and $100 on the termite inspection.

It’s important that the home inspection occur quickly as it takes the inspector at least 1 day to write the report after the inspection. Once the report is written we still need some time to review the report and ask the seller for any credits or repairs before the option period ends.

My favorite home inspectors in this area:

Matt Hoffman

Seguin Inspection Services

830.556.5589

www.seguininspections.com

Joe Barnett

Bumblebee Home Inspections

512.774.5094

www.bumblebeehomeinspections.com

As soon as the inspection is scheduled, let us know so we can confirm that day and time will work with the seller’s Realtor.  

Questions?  Call me at 830.305.5248 or email me at krista@acutaboverealty.com

Step 9: The Report

Step 9 to Buying a Home: The Inspection Report

Once the inspection report comes back, you need to review it thoroughly. Don’t be surprised if it’s 30 + pages long with more than 25 “issues” that need to be repaired. This is typical. We’ve never seen an inspection report that didn’t have at least 5 items that needed repair. However, there is a big difference between small mainly cosmetic repairs such as needing to recaulk a shower or repair a broken microwave handle and large issues such as a non-working air conditioner.  Remember, the home inspection is an informational report for you, the buyer, not a to-do list for the seller.   We should only be concerned about structural issues, safety defects, or appliances/mechanical items not working.  Therefore, here are our tips for reading the inspection report:

  1. Pay particular attention to issues relating to the electrical, plumbing, roof, foundation, or water intrusion issues as these can be big ticket items to repair.
  2. If there are any big ticket items which are concerning to you, decide if you want to have additional inspections performed. For instance, we can bring in a structural engineer, a sewer inspector, an electrician, a pest inspector, etc.  If you want to bring in additional inspectors, you’ll be responsible for paying their fees. 
  3. Make a list of items you feel the seller must repair or you’re not willing to go through with the transaction.  
  4. Make a second list of items you’d like the seller to fix, but would be willing to still close on the house without the seller fixing.  
  5. Make a third list of the items you’re OK with fixing yourself or feel don’t really need to be fixed. 
  6. Once you’ve done this, we will meet and review everything and make suggestions based on what we see.
  7. Keep in mind that you can ask the sellers to repair items or provide a credit for you to fix the items after closing.  Credits go towards your closing costs. For instance, if we negotiate a $2,000 inspection credit that amount would come directly off your closing costs.  Therefore, you’d bring to closing $2,000 less than originally expected.  That way you have that $2,000 to do needed repairs after the closing.
  8. Remember that the things on the inspection report which are important are:
    1. Safety issues
    1. Structural issues
    1. Working components such as appliances which are not working.
    1. We should NOT be asking for paint to be touched up, the gutters to be swept out, etc. Unless you are buying new construction, no home is going to be perfect.  If you want a perfect home, buy new construction. If you aren’t buying new construction, then we need to accept the house with its cosmetic flaws or find a new house.  Remember, we are concerned with safety issues and things not working.

Once we’ve agreed on a strategy, we’ll negotiate the inspection repairs with the seller’s agent. If there are only a few minor issues which need to be fixed, the negotiation will probably go quickly. However, if contractors or trade people need to be brought in to give estimates, expect the inspection negotiations may take 3 – 7 days.

If we are able to come to an agreement with the sellers, we’ll write up an amendment, which becomes part of the contract which both buyer and seller will sign.  The repairs then need to be completed by the final walk through with receipts proving the work was done sent to us ahead of time. If we are not able to come to an agreement, you have the right to cancel the contract instead and get a refund of your earnest money.

Questions?  Call me at 830-305-5248 or email me at krista@acutaboverealty.com

Step 10: Don’t Spend $$$

Step 10 to Buying a Home: Don’t Spend Extra Money

This is VERY IMPORTANT!  Please read!

Your mortgage pre-approval was granted to you based on the amount of money you had at the time of the pre-approval in your savings accounts, checking accounts, retirement accounts, etc. and was based on the amount of debt you had at the time (car payments, student loans, your current mortgage if you already own a home, etc).

If you go out and buy a TV, a new car, new furniture, etc.  between now and closing it could put your chances of being approved for your mortgage in jeopardy AS THE LENDER PULLS YOUR CREDIT ONE MORE TIME THE DAY BEFORE CLOSING.  Therefore, it is imperative that you spend as little money between now and your closing date as possible.

In addition, be sure to pay all of your monthly bills on time going forward, don’t open or close any credit cards, don’t take extravagant vacations, etc.   Often buyers think it won’t make a difference if they buy a couch, new TV, appliances and charge it to their credit card, but it very well could put your loan in jeopardy.  So please do not buy ANYTHING big until after closing.

If in doubt as to whether a potential purchase will affect your ability to obtain a mortgage, please speak with your mortgage lender.

Questions? Call me at 830.305.5248 or email krista@acutaboverealty.com