Deciding to Buy
The Charles Pool Difference
Buying a home can be one of your most significant investments. Not only are you choosing a home, you are also investing a large portion of your assets. The more you know about the market and the buying process, the easier the process will be. This detailed information will assist you in making an intelligent and informed decision.
Deciding to Buy
* The best investment
Your rate of return when buying a home is higher than most other investments you could make. As a general rule, homes appreciate about five percent a year. That will vary from year to year, and in some years it may even depreciate; however, history has shown that owning a home is one of the best long-term financial investments.
* Income tax savings
Of course, you are making mortgage payments and paying property taxes; however, the interest on your mortgage and your property taxes are both tax deductible, so the government is essentially subsidizing your home purchase.
* Stable monthly housing costs
You can expect your rent to increase each year. If you get a fixed rate mortgage, you have the same monthly payment for thirty years. Even if you get an adjustable rate mortgage, your payment will stay within a certain range. Imagine how much rent might be fifteen or even thirty years from now. Which makes more sense?
When you rent, you have to get permission to make certain types of improvements. Not to mention, it does not make sense to spend thousands of dollars painting, putting in carpet, tile or window coverings when the person who benefits is the landlord. When you own a home, you get the benefits of any improvements you make, plus you get to create your own living space to suit your tastes.
Apartment complexes are more interested in creating the maximum number of income-producing units than in creating space for tenants. You will probably have more space, both indoors and outdoors, if you own your own home. Even if you are moving up from an apartment to a condominium, you are likely to have much more room available, bigger rooms and your own laundry and storage areas.
Once you’ve shopped around for the best loan terms and have a prequalification letter in hand, head to Charles Pool Real Estate! We’ll get together to talk about your interests and needs, and whether you want to be in town, out in the country, or maybe a little in-between. After our initial meeting, we’ll research properties that fit your criteria. If you see an ad or a sign for property that looks interesting, we’ll secure further information and set up a showing for you.
How long will it take?
In most cases, we’ll be able to see all the properties you might like in a few days. We’ll gather the information you need to make an informed choice, help negotiate the purchase price, and get you started with the loan process.
Will you show me properties that are listed with other offices?
Yes. We can arrange to show you any property on the market. We make sure you see all the properties that fit your criteria, no matter how they are listed.
Charles Pool Real Estate will help you prepare an offer. We use the standard Texas Real Estate Commission forms with the appropriate specific addendums. We keep up with the best interest rates, and, if you need a loan, we can direct you to a qualified lender.
Comparable sales and your offer price
When you prepare an offer, you already know the seller’s asking price. But what price are you going to offer? Determining your offer price is a three-step process.
Comparable Sales: To determine the price you are willing to offer, look at the recent sales of similar homes. These are called "comparable sales." Specifically, you want to compare prices of homes that are similar in square footage, number of bedrooms and bathrooms, garage space, lot size, and type of construction.
There are three main sources of information on comparable sales: public record, the Multiple Listing Service and pending transactions. All of this information is easily accessible for a real estate agent.
Making an offer
Your offer is the first step toward negotiating a sales contract with the seller. Because of the huge dollar amounts involved, you want to build in protections to limit your risk.
In an offer to purchase real estate, you include the price you are willing to pay along with other details, including:
Contingencies in a purchase offer
Most transactions will go smoothly; however, you want to anticipate potential problems so that if something does go wrong, you can cancel the contract without penalty. These are called "contingencies" and you should include them when you make an offer. Contingencies protect you in case you cannot or choose not to buy the home. If you cancel a contract without having built-in conditions, you could find yourself forfeiting your earnest money deposit.
Earnest money deposit
Your earnest money deposit should be large enough to show the seller you are serious, but not so large that you place significant funds at risk. One recommendation: Make your deposit less than two percent of your offered price.
Loan processing usually takes 30-45 days. Most closings take place within 4 to 6 weeks, depending on financing. We handle “behind the scenes” details, including scheduling inspections, ordering the survey and negotiating repairs. We’ll coordinate a closing date with you and the seller, provide you with local utility information, help you with homeowner’s insurance and join you for the closing to answer question.
The closing date
It is essential to include a closing date with your offer. Though most transactions close on the right date, do not be so inflexible that a delay creates insurmountable problems. Sometimes, through no fault of yours, closing can be delayed by weeks, so have a back-up plan prepared.
Transfer of possession
Once the deeds have been recorded, the transaction is considered "closed." You now own the home, but you may not be able to occupy it immediately. The seller may be purchasing a home, too, so it is customary to allow the seller up to three days to turn over actual possession and keys to the home. Transfer of possession should be clearly laid out in your offer to prevent confusion.