You've found the perfect home, written an amazing offer with your agent, and now the offer has been accepted! Next, before you can close on your home, there are still a few more steps to make sure your purchase is a sound decision.
Property Inspections
Since buying a home is one of the largest investments you will ever make, the $200 to $800 expense of professional inspections is well worth the cost. It is important to use inspectors with the proper licensing and credentials. You can use anyone you’d like, or an experienced agent can recommend a few people if you don’t have a
preference.
GENERAL HOME INSPECTION
We always recommend this inspection. This inspector should be licensed by the Texas Real Estate Commission. He or she will visually inspect the condition of the home, including the foundation, the roof, appliances, central heat & air, plumbing, electrical, doors, windows, attic framing, etc. If there are concerns with the foundation or central heat & air, he or she will typically recommend a further inspection of those items. You can find a blank copy of the standard inspection report at trec.state.tx.us. It will give you an idea of what may or may not be covered in the inspection.
PEST INSPECTION
We recommend this inspection and some lenders will require it before issuing a loan - also called a Wood Destroying Insect Report. This inspector is licensed by the Texas Pest Control Board. He or she is looking for bugs that will destroy your property like termites, carpenter ants or carpenter bees. They will also note conditions
that are conducive to those bugs even if they are not currently on the property.
HEAT AND AIR INSPECTION
This inspection can take place during the general home inspection, or it might be addressed later, depending on the home inspector’s recommendations. The inspector is licensed by the Texas Air Conditioning Licensing Board and can disassemble the units, as well as diagnose general system problems and notify you of code changes.
FOUNDATION INSPECTION
This is usually performed by a Professional Engineer who will assess the building and the soils to determine the extent of any damage. He or she will also make maintenance and repair suggestions. If we already know there are issues with the foundation, we may just get bids from foundation repair companies. This would only be needed if the home inspector recommends it.
Additional inspections may be desired if you have a pool, septic system, water well, plumbing system, or environmental concerns.
Amendments & Negotiations
Once all your inspections are done, you and your agent may decide to prepare an amendment and negotiate repairs, allowances, or sales price reductions based on evaluating your situation and the house.
Homeowner’s Insurance
Now is the time to start working on homeowner's insurance; you'll want to be insured from day one, which means doing some leg work now.
- Shop around and do it early! All rates and coverage are not the same.
- Consider a higher deductible if you can afford it. A deductible is the amount you pay toward a loss before your insurance kicks in. Raising your deductible from $500 to one percent of the insured value could save you up to 35 percent annually.
- Buy your home and auto policy from the same carrier for a discount.
- Insure your home, not the land. While your home and its contents are under threat from weather, theft and other peril, the land is not. Don’t include the value of the land when deciding how much insurance to buy.
- Improve safety and security. Many insurance companies provide discounts for security systems, smoke detectors and deadbolt locks.
- Your policy should reflect the value of your home and your belongings. Re-evaluate every year. If you’ve bought or sold valuable art or jewelry you may need to change your coverage. If you’ve added a structure to the property like a garage or pool you may need to increase your coverage.
- Save insurance claims for real disasters. Don’t file a claim if the loss is only a few hundred dollars above your deductible. Your rates will increase and you will end up paying more than you received for the claim.
Property Survey, Title Policy, Appraisal
Your lender will require a land survey for any property on which they issue a mortgage. The survey will show the property boundaries, setbacks, easements and improvements. A seller’s existing survey can often be used if there have been no changes to any of the items noted on the survey. The lender and title company will make the determination and let you and your agent know if you will need a new survey.
The title policy is your guarantee that the property you are buying conveys all its rights to you. This would be the right to own, possess, use, control and dispose of the property. Title Insurance protects you from possible defects in the title of your property.
Your lender will require an appraisal of the property, which is an assessment of market value by a licensed appraiser. Since they are loaning you the money they want to be sure they are loaning an amount that can be covered by the collateral, which is the property. This is more in depth than my CMA analysis and will confirm square footage of the home you are buying.
Closing
We’re almost there! Closing is the legal transfer of ownership from the seller to the buyer. It usually takes place at the title company. About 10 days before the closing date in the contract, we will coordinate with you, your lender, the title company and the sellers to make sure everything is ready and confirm the date and time of the
actual closing. If you or anyone who is buying the house with you cannot attend closing in person, alternative arrangements can be made. It is very common for buyers or sellers to close by “mail out.” Documents can either be emailed to you for you to print and sign, or they can be sent to you by mail. (You will need several of these to be notarized.) Then you just need to send them back by FedEx. All this is coordinated by the title company. Additionally, you can appoint a power of attorney to sign for you. If you cannot attend closing, let your agent know as soon as possible.
For closing, you will need a legal form of I.D. like your driver’s license, military I.D. or passport — it cannot be expired! The day before closing your agent should let you know how much money you will need to bring to closing. You will need to provide the money in the form of a cashier’s check (made out to the title company) or a money wire. In order to reduce the risk of fraud, make sure you speak to your agent or the title company for specific instructions. Also bring a checkbook in case the balance has had a minor change and you have a small negative discrepancy. The title company cannot accept large checks or cash.
As excited as you may be about purchasing your new home, you do not always get keys at closing. The seller may hold keys until the title company funds the file. This can take up to 24 hours.
...
And that's it! Congrats on the purchase of your new home. If you have questions about the closing process in Texas, or would like any other information about buying or selling a home, reach out to one of our experienced agents. Also be sure to check out our Home Buyer's Checklist.
