Houston Mortgage First-Time Homebuyer – FAQ Part 3

Part 3: Making an Offer on a Home

Once you have found the perfect Houston home to suit your needs, it is time to make an offer. Before you make your offer, however, it is important to complete an inspection and to gain a better understanding of what the process of making an offer entails. With the answers to these Houston First Time Homebuyer Frequently Asked Questions (FAQs), you will be better prepared to make an offer and to complete the necessary steps in the process.

Why should I hire a home inspector?

While a home inspector will not evaluate the home in order to determine its value, the Houston inspector will check the safety and overall condition of the home. Some of the items the inspector will check include:

  • Ceilings
  • Doors
  • Electrical system
  • Floors
  • Foundation
  • HVAC system
  • Insulation and ventilation
  • Plumbing and waste disposal
  • Potential presence of pests
  • Roof
  • Walls
  • Water heater
  • Water source and quality
  • Windows

In addition to determining whether or not repairs are necessary now or in the near future, the inspector will also provide an estimate on making these necessary repairs. Armed with this information, you will be better able to determine whether or not you want to purchase the Houston area home and your Houston real estate agent will be better prepared to negotiate on your behalf. Therefore, you should either have the home inspected before you sign a written offer or you should be sure to include an inspection clause in your offer. With an inspection clause in place, you can opt out of purchasing the home if serious problems are found during the inspection or it may require the seller to fix any problems before you purchase the home.

Do I need to be present during the Houston home inspection?

Although you are not required to be present during the inspection, it is a good idea to be there. This way, you can learn more about the home along with the inspector and you can ask the inspector any questions that you might have. Not only can the inspector provide you with an objective opinion, but he can also tell you more about the general maintenance required on the home and its systems.

Do I just need one inspection, or are there other types of Houston home inspections I should consider?

A general Houston home inspection will cover many areas, but it typically will not involve inspecting certain specific areas, such as testing for the presence of health-related risks or problems with the water or waste disposal system. If you are concerned about the possibility of radon gas asbestos or other specific issues, you may need to hire an additional inspector to complete the job or you may need to pay the general inspector extra in order to include these types of inspections as well.

How do I make an offer on a Houston home?

Once you have decided to make an offer, your Houston real estate agent can assist you with the process of making a formal offer. All of the following information must be included in the offer paperwork:

  •     A complete legal description of the property
  •     The amount of earnest money being paid
  •     The down payment amount and any additional Houston mortgage details
  •     The amount being offered to purchase the home
  •     The proposed closing date and move-in date
  •     The length of time the offer is valid
  •     Any other pertinent details related to the deal

How do I determine how much to offer?

While your real estate agent will be able to provide you with advice regarding how much you should offer, the final decision is up to you. Things to consider when calculating a fair price include:

  •     How much homes are selling for in the Houston area
  •     The condition of the home
  •     The amount of time the home has been on the market
  •     Expected Houston home financing terms
  •     The seller’s situation

After considering this information, you should have a good idea of what the home is worth as well as how much you can afford to pay for it. Just remember that the seller is not likely to accept your first offer, so you should be prepared for a bit of back and forth as you negotiate a different offer.

What is earnest money and how much do I need to pay toward this expense?

Earnest money is a payment made to demonstrate that you are serious about purchasing the Houston home. Therefore, the earnest money required is typically equivalent to about one to five percent of the purchase price of the home. This money will be put into an escrow account on your behalf. If your purchase offer is rejected, the money will be returned to you. If your offer is accepted, the earnest money will go toward your down payment or your closing costs.

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