This document provides a comprehensive guide to the home buying process, covering essential topics such as financing, types of real estate agents, and the importance of pre-approval. It emphasizes the need for buyers to understand their personal needs and financial position while exploring their options. The document also outlines various aspects of closing the transaction, including necessary inspections and insurance, to ensure a smooth purchasing experience.

1. AGENT
MICHAEL CHALAMBAGA
HOME PURCHASING 101 THE PROCESS, ROLES, AND OBSERVATIONS
CREDENTIALS
LICENSED TEXAS REAL ESTATE BROKER & CERTIFIED HOME MARKETING
PROFESSIONAL © Copyright 1997-2011 Michael Chalambaga All Rights Reserved

2. About Knowledge
We are drowning in information but starved for
knowledge. John Nabs
A little learning is a dangerous thing. Alexander Pope
Knowledge itself is power. Sir Francis Bacon
The essence of knowledge is, having it, to apply it ...
Confucius

3. Are you Ready to Buy?
Whether you are a first-time home
buyer or entering the marketplace
as a repeat buyer, you need to ask
why you want to buy ?
What would you like in terms of real
estate that you do not now have?
Do you have a purchasing
timeframe?

4. Issues to Investigate
Do you have any equity in your
current home ?
Are you upgrading or avoiding a
problem within the house, school, or
are ready to upgrade?
Do you have a down payment,
usually 5 to 20 percent of the
purchase price ?
What are “costs” of buying your
house ? Commissions, loan fees,
inspections, title transfer, and
taxes ...

5. Consider your options
Upgrade to Move
Improve your Home
Stay Put Stash the Savings
These are highly dependent on
your personal needs, desires, and
financial position.

6. Home Buyer Tax Credit
Act
First Time Buyers $8000
Credit
Move up Buyers $6500 Credit
Deadline April 30, 2010

7. Path to Buying a Home
Clean your credit
report
Find a buyer's RE
agent with whom
you’re comfortable
Determine how much
house you can afford
Secure financing and

8. Realtor or No Realtor ?
Most would say “Yes”, as no two properties
-- even two identical models on the same
street -- are precisely and exactly alike.
Another train of thought, would also
recommend “Yes”, as contract terms,
financing options, inspection requirements
and closing costs. Also, no two transactions
are alike.
Buying and selling real estate can be a
complex matter.

9. Types of Real Estate Agents
Sellers Agent
The Sellers Agent works solely for
the seller.
Buyers Agent
The Buyers Agent works solely for
the buyer.

10. Going Solo without a
Realtor
If you choose to deal with a seller, then you
are working on sellers terms, sellers pricing,
and their word as to the worthiness of the
home. A discount of fee is an illusion as
sellers pay the cost of the sale of real estate
in Texas.
Once the transaction is started you may
need more advice as you move toward
purchase. These items add cost, complicate
transactions, and can be wieldy.

11. National Association of Realtors
Timing of Sale
20
Season Off Season
15
10
5
0
March April May June July Aug Sept October Nov Dec Jan Feb

12. Local Real Estate Data
Timing of Sale
Season Off Season
March
April
May
June
July
Aug
Sept
October
Nov
Dec
Jan
Feb
0 3.75 7.5 11.25 15

13. Local MLS Numbers 2009
Date Sales Volume Avg. Price Median price Total Listing Mon. Inventory
Jan 37 $5,985,000 $161,757 $135,700 366 3.4
Feb 53 $7,670,000 $144,717 $130,000 389 3.8
Mar 80 $11,971,850 $149,648 $136,400 406 4.1
Apr 63 $8,321,511 $132,087 $128,800 407 4.4
May 71 $12,500,000 $176,056 $144,300 432 4.8
June 70 $9,724,500 $138,921 $133,300 438 5.1
July 82 $11,762,650 $143,447 $137,800 477 5.8
Aug 64 $7,843,402 $122,553 $113,300 486 6.5
Sept 77 $10,661,256 $138,458 $127,800 448 6.3
Oct 88 $13,209,052 $150,103 $130,000 454 6.6
Nov 88 $12,226,635 $138,939 $118,500 472 6.8
Dec 74 $11,918,700 $161,064 $138,200 480 6.8
Yearly Averages 70.58333 $10,316,213 $146,479 $131,175 437.92 5.37
DATA SOURCE: Real Estate Center at Texas A&M University

14. Pre-Approved Home Loan
What is it?
"Pre-approval" means you have met with a
loan officer, your credit files have been
reviewed and the loan officer believes you can
readily qualify for a given loan amount with
one or more specific mortgage programs.
Once pre-approved you will receive the upper
limit range of how much home you can
purchase. You will also receive an important
document - a pre approval letter.
A pre - approval letter shows financial
strength, sincere ability to purchase, and can

15. Finding your Dream Home
What do you want from your next home ? Have a
list of desires.
There are many 3 bedroom, 2 bath homes in any
city; so you must refine your price, location and
amenities to your situation.
Will you home provide the flexibility for the years

16. Choosing your New
Home
An Important Decision - Is it THE
House?
A house is shelter, but a home is far more. It's
where you live, relax, entertain friends, raise
families, and work. A home is where you
spend much of your life, and so choosing a
house is an enormous decision.
My working knowledge and advice is to set
your criteria and then look as many homes as
you can within your timeframe as this will
produce personal knowledge as to what you
don’t want; thus yielding a strong sense of the

17. Funding the Home
Purchase
Selection of your financing source
Mortgage Lenders
Federal Housing Administration
Private Institutions
Personal Lender
CONSUMERS DISCLOSURE: THERE ARE SEVERAL HUNDREDS LENDERS IN TEXAS, SELECT A LENDER THAT YOU FEEL COMFORTABLE WITH AS THEY WILL
BE IMPORTANT TO YOUR PURCHASE

18. Negotiating Points
Sellers agent wants
to convince you
house is worth the
price.
You and your agent
want to convince
them otherwise

19. Making the Offer
Back it up with
$1,000 earnest
money check
Have your valid
mortgage credit
approval letter from
your lender
Put in some "outs":

20. Home Inspection
The home inspection removes doubts
about finding any significant defects,
problems, or issues before the purchase or
mortgage is executed for years.
The average cost can be from $250 -$500
Most lending institutions will require a
professional home inspection before
approving the final loan.
A sellers disclosure document also
supplements your home inspection report.

21. The Other Agent
Insurance Agents and various
coverages in the home ownership
process

22. Insurance Issues
Title Insurance - Title Company
Home Insurance - General Agent
Flood Insurance - Federal
Government
Home Warranty Insurance - Private
Companies

23. Title Insurance
Title Insurance - Title Company
A policy which insures a property owner
should a prior claim arise against the
property after the purchase has been
completed. This also covers a lender
should a question of ownership arise.

24. Home Insurance
Home Insurance - Insurance
Companies
A standardized insurance policy
package that covers a residential real
estate owner against financial loss from
fire, theft, liability for property damage,
personal liability and other common
risks.

25. Flood Insurance
Flood Insurance - Federal
Government
Supplemental insurance which covers a
homeowner for any loss due to water
damage from a flood; often required by
lenders for homes located in FEMA-
designated flood zones.

26. Home Warranty
Insurance
Home Warranty Insurance - Private
Home warranties for existing homes are
typically one-year service agreements
purchased by sellers. In the event of a
covered defect or breakdown, the warranty
firm will step in and make the repair or
cover its cost.

27. The Closing
What is it ? - Closing is a brief
process where all of the necessary
paperwork needed to complete the
transaction is signed. Closing is
typically held in an office setting,
sometimes with both buyer and
seller at the same table,
sometimes with each party
completing their papers separately.

28. The Closing
What Happens ? - The result is
that title to the property is
transferred from seller to buyer.
The buyer receives the keys and
the seller receives payment for the
home. From the amount credited
to the seller, the closing agent
subtracts money to pay off the
existing mortgage and other
transaction costs. Deeds, loan
papers, and other documents are
prepared, signed and filed with

29. The Closing Move
Transfer Utilities Before Closing
Final Inspection
Pre- Cleaning
Move In

30. Course: Home Purchasing Basics 101
Email: michaelchalambaga@gmail.com
Author: Michael Chalambaga
Credentials:
Licensed Texas Real Estate Broker
Member National Association of Realtors
Member Texas Association of Realtors
Certified Home Marketing Specialist
© Copyright 1997-2011 Michael Chalambaga All Rights Reserved