Buyers

Getting Ready To Buy Abilene Real Estate

Purchasing a property is probably one of the biggest financial decisions you will ever make. Regardless of whether you are a first-time home buyer or an experienced investor, you must make careful decisions throughout the buying process. Below are some things to consider before you buy.

Why Are You Buying?

Are you tired of paying expensive rent or simply outgrown your current home? Are you looking for an investment property? Having a clear sense of your “why” behind a new purchase will help you evaluate the right factors and choose the best property.

Are You Ready to Invest?

Property ownership has been one of the top strategies for building wealth - and still is! Whether it’s your first home and you’re building your first asset, or looking for a rental property, it’s a great time to invest. Property investments are also some of the most stable assets to build and don’t carry the risk like other forms of investment, such as stocks or collectibles.

Other Things To Consider

Get Your Financials in Order

Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability. Large purchases or loans can affect your credit and balance sheet in a way that can limit your buying options. Your credit score will have a significant impact on the type of property you can buy, your interest rate, and overall property price. We can work with one of our preferred lenders to get an updated credit report to know exactly where it stands. The lender will research your credit ratings from the three credit reporting agencies Equifax, Experian, and TransUnion. We are happy to recommend seasoned, knowledgeable lenders in the residential, construction, commercial, and investment real estate fields.

Organize Your Finances

When it’s time to make an offer, you’ll want to know you’re fully prepared to close the deal. In order to avoid delays, bidding wars, or conflicts, preparing your financials is crucial.

• Bank accounts
• Recent pay stubs
• Check Your Credit Rating
• Financial statements
• Investments
• Tax returns for two years
• Credit cards
• Auto and other loans
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information

Pre-Qualified Vs. Pre-Approved

The difference is the verification process lenders use to determine how much you qualify for. With a pre-qualification, lenders rely on self-reported information to offer you a quote. It doesn’t typically require them to verify your credit, employment, or financial documentation. On the other hand, pre-approval involves verifications to approve you for a mortgage loan. Lenders review your credit, verify your employment, and look at financial documentation, like pay stubs, bank statements, and tax returns.

A pre-approval is a stronger indication to the seller that the offer is solid and will close.

Choosing the Right Agent

Partnering with the right agent can determine your entire buying experience. Buying a property can be a complicated undertaking. The purchasing process requires a comprehensive understanding of complex legal issues and lots of paperwork. Your agent will be walking you through the entire process, so it’s important to choose a compatible partner.

Here are some factors to consider when choosing your real estate professional:

• Consider a Full-Time Agent: They’re usually more committed to being available and have dedicated their career to the profession.
• Interview a Few Agents: Are they familiar with the area in which you are interested? Have they beenaround the area for at least a few years?
• Agent Availability: Ask how much time the agent will have for you, and if they are available at night and on weekends if needed?
• Experience and Education: How many years of experience do they hold? Are they continuing to stay current on legal changes? Are they studying market conditions?
• Communication: Do they respond promptly? Are they handling too many clients at once and unable to work with your schedule? Would you trust them to negotiate on your behalf?

Select an agent who listens attentively to your needs and concerns, has the necessary experience, is familiar with the area, and is dedicated to finding you the right property. Interview a few different agents so you know your options and feel comfortable with your decision.

Find out how we can help you reach your real estate goals by completing the form .

Time To Start House Hunting

Once you’ve secured the right agent and prepared your financials, it’s time to start shopping!

Explore

If you can, take a drive around the neighborhoods and communities that interest you to get a feel for the area. You can look online at listings as well. If you’ve found a property you like, contact your agent and they can schedule a time to visit the home. When looking at properties, ask your agent about their long-term resale value.

Narrow Your Search

Talk with your agent about your desired property and establish criteria together. How many bedrooms and baths would you like? Do you want a yard? Is there a specific school district you’d like the property to be zoned in? There are many factors to consider, so communicating them will help your real estate agent focus on the right potential properties.

It's Time to Buy

Your real estate agent’s negotiating skills will be important for handling the offer process. Once you’ve found the property you want to purchase, it’s time to make an offer. Your real estate professional will do all the necessary analysis to help you create an advantageous offer. A good agent will examine the potential costs and expenses associated with the property.

During the negotiation process, your agent will draft the purchase agreement. Home warranty, escrow arrangements, and title will be included in the offer. Your agent will advise you of all protective contingencies, local regulations, and customary practices as well. Remember, your real estate professional will advise and notify you of important information, but it is ultimately your decision as to the terms and exact price you wish to offer.

Find out how we can help you reach your real estate goals by completing the form .

The Process

Initial Agreement and Deposit

An effective agreement is a legal arrangement between a potential purchaser and the property’s seller. Some important tips to keep in mind to streamline the process:

• Keep written records of everything. This includes verbal agreements, counter-offers, and addendums. We can assist drafting all written records and provide copies for each party.
• Keep up with the schedule. You and the seller will be given a timeline to seal every stage of the real estate closing contract.

The Closing Agent

Once both parties have agreed upon a contract and signed all documents, either a title company or an attorney will act as the escrow, or closing agent, and you will put down your deposit. The escrow is a neutral third party that will hold, receive, and distribute all funds associated with your transaction until the closing date of the property. They will research the complete history of the property to ensure that the title is clear of encumbrances by the date of closing and that new encumbrances are added correctly to the title. Before escrow can be closed and you can officially purchase the property, all contingencies agreed upon in the Purchase Agreement must be met.

Learn More

How to Hold Title

There are several types of ways to hold title, or ownership, of a property. Each title method has different implications on ownership transfer, collateralization, financing, and taxation. We recommend speaking with an attorney or tax advisor about the pros and cons of each method, so you can determine the best option for your property. We would be happy to connect you with trusted attorneys and tax advisors in the area.

Inspections

As part of the contingencies outlined in the Purchase Agreement, you will schedule a licensed property inspector to come to the home within the time frame agreed upon by both parties. Inspectors will determine the condition of the property and alert you of any problems. You may wish to have multiple inspectors look at the property who specialize in certain areas (ie, roof or plumbing inspectors). If you are purchasing a commercial property, you might be required to complete an environmental audit or soil test on-site for the lending institution. If the inspections reveal issues with the property not specified in the purchase agreement, you may request a renegotiation of the terms of the contract (usually the price). Once you are satisfied with the inspections and terms of the purchase agreement, the contingencies will be removed.

Appraisals and Lending

Keep in contact with your lender so you are notified when new documents are required to approve your loan. If the Purchase Agreement is conditional upon financing, the lending institution will require a home appraisal by a third-party licensed appraiser. The appraiser will confirm that the investment in your property is accurate. Appraisers are experts in determining the value of property based on a variety of factors including building costs, square footage, operating income, and more. Double-check with your lender two weeks prior to closing to confirm the loan will be approved on time.

Association Approval

Some properties might require an association’s certificate of approval prior to purchase. If so, make sure to request all rules, regulations, and necessary documents from the seller. In the Purchase Agreement, you and the seller will agree on a time frame for you to submit paperwork or set up any appointments required for the association’s approval. Once accepted, your closing agent will request the original copy of the approval letter, so it can be recorded with the deed in the county record books during the property closing.

Property Insurance

Basic property insurance plans will protect you from damages to your property, including fire, theft, and certain weather events like wind or hail. While most states do not require a property owner to have coverage, most mortgage lenders will. Depending on your intentions for the property, you will be required to either purchase homeowners' insurance if you plan to live in the home, or landlord insurance if you wish to rent out the property as an investment initiative.

Closing The Deal

Time to Start Moving In!

Some celebrate with champagne and some are just thankful to finish the deal! Either way, you’ll want to do a few housekeeping things at this point in the process.

Final Walk-Through Inspection

The final walk-through is the last time you will inspect the house before purchasing. At this point, the contingencies in the Purchase Agreement should be met and all of the seller’s belongings removed from the home. Usually, the final inspection takes place the day before or the day of closing.

Closing

When you are satisfied with the inspection, then, it is time to close. You, the seller, and the closing agent will sign the settlement agreement, which details the financial transactions enacted through the process to certify its accuracy. You will sign your loan documents and deposit the balance of your down payments and closing costs to escrow. If you are bringing funds to the transaction, then you can choose to either bring a certified bank check to the closing in the amount specified in the settlement statement, or you can have the funds electronically wired to the escrow account. Once everything has been completed, the deed will be recorded at the County Recorder’s office and you will officially take ownership of your property.

Find out how we can help you reach your real estate goals by completing the form .

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