So you want to buy a home, let a Five Woods agent represent you!

One of the first steps towards buying a home is reading up on the homebuying process.  Then you need to begin applying for a mortgage pre-approval. That way, you can shop for your home with confidence – you'll know approximately how much you can afford and the mortgage interest rate will be secured for a certain period. Next you need to identify a good realtor to represent you.  This section of our website contains a summary on all that is needed to carry out a successful home purchase.

Five Woods Loft & Homes is the right choice to represent your interests when planning to purchase a home.  Our buyer's agents are experienced and excel at matching our clients with the right homes for them and their family.  We are homeowners also, so we understand the challenges and difficulties that can arise when trying to make a decision to purchase the right home.  We have created this page to serve as a resource for you in order to help you get started with making the right decisions.  Click on one of the links below to find out information about:

Why Use a Realtor?
Choosing the Right Agent.
Critical Steps in Purchasing a Home
Order a copy of Before You Buy - The homebuyer's guide to buying smart (Coming Soon!)

 

WHY USE A REALTOR?

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:

1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning, schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. A REALTOR® will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

Courtesy of NATIONAL ASSOCIATION OF REALTORS®

CHOOSING THE RIGHT AGENT

Choosing the right agent - Look for an agent you can relate to – one who understands your needs and is willing to work with you to accomplish the sale. Make sure the agent you are considering shows you a marketing plan and discusses how they plan to market your property. Your choice of broker may depend on the location and type of property you own. Larger firms and franchise brokerages tend to be good for residential income properties, while a unique property in a certain location may be better served by a smaller broker who specializes in that area or property type. When you find an agent you like to work with, you are likely to develop a relationship of trust and respect. It will serve your interests to try and deal exclusively with that individual.

 

CRITICAL STEPS TO PURCHASING THE RIGHT HOME

Introduction

Although the home buying process varies with each of our clients according to their specific needs, most transactions follow the general path that is laid-out here. We'll try to show you what the Sales Broker and their Agents are doing at the same time and how they affect the process.

Over all though, there has been an increase in disclosure which allows the buyer to make a more informed decision. This has been of great benefit to the average home buyer. We have found that what many people hate most of all is being horn-swoggled. If they know what is going on from the very beginning and can make an informed judgment of their own, then they readily accept responsibility for the events that follow. What they don't like is not being told something that would have made a difference in how they saw things and how they approached the decision-making process. That's partly why being an exclusive buyers' agent has so much appeal to us. It allows us to secure all the information we can about a property and share it with you so that you can make informed intelligent decisions about the most important investment in your life.

The listing agents can't do that. They are obligated through the laws of agency to represent the sellers. What this means in reality is that it is their job to get the most money and best terms from you as they can for their sellers. There is nothing wrong with this. It is the way real estate has been conducted for years. But isn't it about time someone had your interests as the most important aspect of this transaction? Isn't it about time that your future was considered the most critical part of the transaction rather than just a charge to: "Deal fairly with Buyers".

Nothing is more emotional and more highly charged than purchasing the place where you are going to raise your family, put down roots in the community, become involved in schools and other civic organizations. And to make that decision without having an advocate is nothing short of foolhardy. It is in your best interests to be adequately represented in this, the most important of all financial investments for your family's well being. A time will come in the not too distant future where no knowledgeable consumer would even consider buying a home without this important representation. Be happy that you are at the forefront this time and that you have the vision to protect your family's interests in this way.

Goal Setting

The first and most important part of the process is to determine your specific needs. These include timing for the purchase of the house as well as timing on applying for and receiving loan approval. They are not always the same for each individual. Oftentimes the most important part of the process is setting up the strategy for securing the loan. In the initial meetings the topic of discussion will be your needs and desires and the representation agreement. This is where you interview us as your potential agent and compare our services and approach to real estate with other Realtors©. Your job is to find a relationship that you are comfortable with and then make the commitment to work with them exclusively.

If you decide that you wish to have us assist you in the purchase of your next home, you will be entering into a "Residential Buyer/Tenant Representation Agreement" agreement by signing on the dotted line. This agreement details our mutual obligations -- the services we provide and the fees that you will pay for those services. We'll also have you acknowledge by initialing an "Information about Broker Services" documents that indicates we are serving you as your Agent. These agreements are comparable in nature to the documents that you would sign with a Listing Agent if you need to sell an existing home.

Other important elements that make up the goal setting are questions to be answered like: Where do you want to live? What are your parameters for a house? Is a four bedroom essential or will a three bedroom work better for you? Does a main floor bedroom play a role for your long term planning? Is there a way to have overnight guests access a bathroom without disturbing sleeping children? How far away do you want to be for your commute to work? Is a two story or a split-level better for your family? Which School Districts ? How big a yard?

These and many other questions help determine what you will ultimately buy. And don't expect to have all these answers at the tips of your finger tips. This is an on-going evolving process which will change and grow as you are exposed to more information about what is available to you.

Sometimes the choices are limited. Sometimes they are only limited by your imagination. That applies to people with both unlimited resources and very limited resources. Although money can be important in the home buying process, it is not the most important issue. Determining what your needs and wants are and establishing a path to achieve those goals is the most important part of the process. We have had people in our program for as long as two years and for as little as two weeks. So it all depends on what your needs are and what steps are appropriate to achieve those goals.

Securing a Contract

We use our version of the eight page Houston Association of Realtors© contract with various addenda that are important for your protection or are required by the lender as part of their package; note any Houston Realtor or Houston Real Estate transaction is governed by the law of the Texas Real Estate Commission . We keep these forms on our computers which allow us to write clean, concise documents that are legible and which also limit the number of copies that need to be created. Each time we make a change during the course of the negotiations, that change is annotated on the timeline and logged in your file.

Though highly informative, and user-friendly a contract has to be carefully prepared by your realtor. You will be given a copy of the contract as it initially is to be presented for your signature(s). After you determine that the contract offer as written is acceptable to you and you have signed on the line, the contract is presented to the sellers' agent or the sellers as appropriate.

As part of the offer preparation, we will discuss the deposit check amount that is appropriate to accompany the offer. This amount assures the sellers that you have a stake in the process. Under some circumstances, which are spelled out in the contract offer, the sellers may have a claim to the escrow funds if you fail to perform as stated in your contract offer.

As the contract is amended or countered, you will receive copies of all those papers as well. We will have a duplicate set and the sellers or their agent will have the other set. Once everything is worked out to everyone's mutual satisfaction, a new set with appropriate signatures will be made for you, the sellers, myself, the lender and the title company. Those other copies can be kept by you or not as you see fit. We maintain those records as is required by law for a specified time period.

Negotiations

Very seldom will an initial contract be accepted by the sellers. There is almost always something that they like and don't like about your offer. The purpose of negotiation is to establish a contract that is acceptable to both parties. If it isn't, there will most certainly be problems later. The following is a list of things to keep in mind while we horse-trade back and forth with the sellers:

• Never accept ANY proposal immediately, no matter how good it may sound!
• Never negotiate with yourself. You'll furnish the other side with ammunition they might never have gotten by themselves. Don't raise a bid or lower an offer without first getting a response.
• We never cut a deal with someone who has to "go back and get the boss's approval." That gives the other side two bites of the apple to your one.
• If you can't say yes, it's no. Just because a deal can be done, doesn't mean it should be done. No one ever went broke saying "no" too often.
• Just because it may look non-negotiable, doesn't mean it is.
• We will do our homework before we deal. Learn as much as you can about the other side. Instincts are no match for information or preparation.
• Beware the late dealer. Feigning indifference or casually disregarding timetables is often just a negotiator's way of trying to make you believe he/she doesn't care if you make the deal or not.
• A deal can always be made when both parties see their own benefit in making it.
• Don't discuss your business where it can be overheard by others.
• No one is going to show you their hole card. You have to figure out what they really want. Clue: Since the given reason is often not the real reason, you can usually eliminate the given reason.
• Always let the other side talk first. Their first counter offer could surprise you and be better than you ever expected .

Inspection

· Home Inspection This inspection checks the operational functionality of the various household mechanical systems (appliances, HVAC, electrical. It is limited to visible and accessible portions of the home and may or may not include such items as pools, spas, gutters or chimney as part of the standard inspection.

· Structural Engineering Dependent upon visual inspection and recommendation by the Home Inspector.

· Pest (Termite) The visible and accessible home structure is examined for evidence of pest damage. The report does not generally cover out-buildings or fences.

Escrow

Once the contract is ratified, that is all of the negotiation points are agreed upon and the final contract is signed by both you and the seller and copies delivered, its on to escrow.

The escrow companies job is to act as a neutral third party for both you and the seller. They hold all of the money that you provide and the clear title that the seller effectively provides by signing the contract. They make sure that all of the terms of the contract are met and that everyone gets paid what they are due. This includes the pest inspection company, the appraiser, lender fees, any inspectors, title insurance, us as your agent, the seller's agent if any, etc., with the balance of the funds going to the seller as payment for the transfer of the deed.

One of the key activities that takes place in escrow is the researching of the title. This is done by the Title Insurance company, which here is most often the escrow company as well. The purpose is to prove to you and the lender that the seller has clear title to the property and that is not encumbered by any liens or has other problems that cloud the title. If the title is clear, the Title Company commits to insure both the Lender and you should any covered problems be discovered after settlement.

Title companies have become very customer service oriented in the last few years and have even created a floater signing accommodator, a fancy name for a person who will come to any place we select, even your home, to complete the transaction.

Sometimes, in Texas , the sellers feel that they have the "right" to select the Title Insurance company which is often the escrow company as well. According to RESPA which is the governing regulations concerning real estate settlement procedures, the buyer has the absolute right to make the determination as to which Title Insurance company to use. We have run into difficulty with this in the past since the title companies have done some very intense marketing to the listing agents, so sometimes, as part of the negotiation process and in the interests of your overall success, we may concede the point and allow the sellers to select the escrow company. As time goes on, we will continue to try to educate these people, that just because the sellers may be paying for something, doesn't mean that they are entitled to make the provider choice. But sometimes it just isn't worth fussing over, if you know what we mean.

One of the final, but critical tasks for you to accomplish before closing is to arrange for homeowner's hazard insurance and flood insurance if required. Before closing you will need to provide to the Escrow Officer evidence that you have obtained this insurance. We will help you evaluate various insurers if you wish and obtain competitive bids.

Closing

When all of the inspections are done and all of the paperwork is complete (the lenders paperwork is usually the last to be completed) and in the hands of the Escrow Officer, the final documents will be generated. We will be looking at the Estimated Closing Costs Statement that the Escrow Officer generates for you and comparing it to the one we had previously prepared. This is where the final errors are corrected before you and the seller sign the final documents. In California we do a split signing where the sellers sign, usually first although it really doesn't matter, and then at another time you sign all of the paperwork. The seller's give the keys to the Escrow Officer at this time.

You will have been instructed to come to the signing with a Certified Check for about $100 more that the Escrow Officer's Estimated Closing Costs Statement indicates. This will cover any miscellaneous charges that come up at the last minute. The unused balance will be returned to you shortly after closing, normally within a week.

Once the paperwork is signed, the loan documents are sent back to the lender if a mortgage is involved. The lender makes sure that their instructions were carried out and they have all of the signed documents that they need. When this happens, the lender will wire the funds to the Escrow Officer -- this is the event everyone has been waiting for. The Escrow Officer then has the Deed recorded at the County Recorder 's Office. As soon as this is done you get your keys and the moneys are disbursed. In the case of new construction, you generally get to pick your keys up from the builder after recording has been confirmed, although this varies.

Sara W. Peters

We at Five Woods Loft and Homes realize that you are in the information gathering stage of your home sale/purchase and we respect your privacy.  Should you have any questions, please feel free to call us directly at 832-202-2233 or you can reach us via email at fivewoods@loftandhomes.com.  If you or anyone you know is looking to buy or sell a home, please note that we can provide detailed real estate information and access to homes in:

Houston, Bellaire, River Oaks, West University, Piney Point, Memorial, Galleria, Innerloop, Downtown, Midtown, Medical Center, Heights, Museum District, Meyerland, West Houston, Richmond, Missouri City, Sugarland, Pearland, Katy, Spring