This document provides information for home buyers on the home buying process. It discusses reasons for buying a home, benefits of ownership, and outlines an 8-step roadmap for purchasing a home. The roadmap includes hiring an agent, getting preapproved for a loan, shopping for homes, making an offer, negotiating, inspections, closing on the property, and post-closing tasks. It also covers types of financing, distressed properties, and the roles of different industry professionals in the process.

2. Interested in Buying?
 Why do you want to buy?
 Are you tired of paying rent
 Would you rather live in a different area
 Your parents & friends tell you to buy
 Feel like you’re throwing money away on rent
 You want a bigger yard
 Investment vs. personal
•••Have a clear sense of
your reasons for buying•••

3. Benefits of Home Ownership
• Pride of Ownership
• Appreciation
• Mortgage Interest
Deductions
• Property Tax
Deductions
• Capital Gain Exclusion
• Mortgage Reduction
Builds Equity

4. Home Buying Roadmap
Step 1: Hire a Buyer’s Agent
 A Buyer's Agent will represent only you and have a
fiduciary responsibility to look out for your best interests.
 Find an agent you trust & feel comfortable with.
 Buyer's agents may ask you to sign a buyer’s Broker
agreement, but it is the seller who pays the commission.
 A Realtor® can show you any home whether it is listed
with an agency, a builder, or even a For Sale By Owner.

5. What is a Realtor ® ?
 A REALTOR is a real estate agent
or broker who belongs to the
National Association of
REALTORS, or NAR. Members of
the NAR subscribe to a strict
Code of Ethics and belong to
certain state and local trade
associations. If you have any
complaints regarding a
REALTOR, you can file a
complaint with the local NAR
board.

6. Types of Agency
 Listing Agent / Seller’s Agent
 Represent the seller
 Buyer’s Agent / Selling Agent
 Responsible for protecting the
interest of the buyer
 Intermediary
 Agent serves as a transaction
agent. The agent does not
represent either party.
 Legal in Texas

7. Home Buying Roadmap
Step 2: Get Preapproved
 Estimate closing costs & down payment
 Shop around
 Lenders charge different fees
 Discuss different loan options
 Different areas may qualify for specific financing
 Estimate Monthly Payments
 Include Principle, Interest, Taxes & Insurance

8. Home Buying Roadmap
Step 3: Start Shopping
 Discuss ‘must haves’
 Consider resale value
 Ask agent for additional input on top properties
 Observe Open House Etiquette
 Consider all homes on the market, including fixer-uppers,
REOs, foreclosures, short sales and those overpriced homes
with longer DOM.

9. Distressed Properties:
 A SHORT SALE occurs when a homeowner sells
their home for les than (short of) what they still
owe on their mortgage, and their bank has
agreed to accept the proceeds from the sale as
payment in full of the loan balance.
 A FORECLOSURE occurs when a homeowner has
defaulted on the mortgage, and lender initiates a
foreclosure against the property. The property will
eventually be put up for sale at auction.
 A REAL ESTATE OWNED (REO) occurs when the
bank has successfully foreclosed on the property
and the foreclosure auction did not result in a sale
to an outside bidder. Thus the lender ends up as
the new ‘owner’ of the home.

10. Home Buying Roadmap
Step 4: Write a Purchase Offer
 Have your Agent compile an accurate CMA
 Review Sellers Disclosure Notice
 Sales Price & Sellers Concessions are negotiable: Title
Policy, Survey, X amount of $ towards loan costs & down
payment, residential service contract and more.
 Have your agent coordinate with loan officer
 Your offer should contain contingencies
 Inspection Period, Termite Inspection, Financing approval
 Submit prequalification letter with offer

11. Step 5: Finalize Negotiations
 Have all parties sign
 Get Option Fee to seller
 Not a contract unless $$$ changes hands
 Send executed contract to mortgage company
 Receipt earnest $$$ with the appropriate party
 Usually takes 30 – 45 days to close from executed date
Home Buying Roadmap

12. Home Buying Roadmap
Step 6: Home Inspection
 Hire a reputable inspector to
evaluate the homes major
systems. This is typically done
during the option period
 Attend the home inspection
 Realize no home is perfect - and
the inspector will find faults
 Negotiate Repairs

13. Home Buying Roadmap
Step 6: Open Escrow / Order Title
 Title Company & Escrow Holder:
Neutral third party holding all
instruments necessary to the
sale, including funds and deeds
 Order home owners insurance
early. Sometimes previous claims by
a home owner can make it difficult
to get insurance

14. Home Buying Roadmap
Step 7: Comply with Lender Requirements
 Order Appraisal
 If you receive a low appraisal, discuss options with your agent
 Ask for a copy of the appraisal
 Lenders may ask for additional information
 Do not alter your financial situation while in escrow!!!
 Such as new credit cards, furniture shopping, new car
 When the file is complete, the lender will submit it for final
underwriter approval

15. Home Buying Roadmap
Step 8: Close on Property
 Transfer Utilities &
Services
 Final Walk-Through
 Be prepared to sign a
lot of paperwork
 Example of HUD

16. Home Buying Roadmap
Step 9: Post Closing
 You will receive the
recorded deed in the
mail about a week after
closing
 Will receive letter from
Tax Assessor
 Your mortgage will be
do the following month

17. What we lend on:
 Credit: Your history of handling debt
 Income: Your past, present and future earnings
 Assets: Your money verified to close on the home
 Property: Is it a secure asset for a lender to lend on?

18. Types of Loans
 Conventional loans:
 3% to 20% down
 Minimum credit of 640 to 720 depending on down payment
 Tougher standards
 FHA:
 3.5% down
 Minimum credit of 640
 Easier Standards
 Tougher on home quality

19. More loans
 VA:
 0% down
 Better deals for Vets!
 640 minimum credit
 USDA loans:
 0% to 20% down
 Minimum credit of 640
 Rural Property, approved upfront only!

20. Presented By:
Mark Bower
Mortgage Banker
Waco, Texas Area
Oak Mortgage Group, INC
Email: Mark.Bower@oakmortgagegroup.com
Marilee Kahler
Real Estate Broker
Waco, Texas Area
RE/MAX Centex, Realtors
Email: Marilee@254Realtor.com
Web: 254Realtor.com