How You Buy a Home in El Paso, TX (Even If You Have No Idea Where to Start!)

How You Buy a Home in El Paso, TX (Even If You Have No Idea Where to Start)

If you haven't purchased a home before, or if this is your first time purchasing a home in Texas, this step-by-step guide will walk you through exactly how to complete the home purchase process here in El Paso, Texas.

Step 1: Get Your Financial House in Order and Plan Ahead

Before you do anything, get your financial house in order and plan ahead. Unless you're purchasing a home with cash, you're going to have to get preapproved for a loan. To get preapproved, you need to have your financial house in order.

Make sure you're up to date on all of your payments. You don't want any overdue bills. If you have credit cards or outstanding debts that can be paid off, think about paying those off. When the lender looks at your finances, they'll look at your debt to your assets to your income and decide whether to preapprove you and for how much. If you can get your credit score in good shape in the meantime, that's going to be to your advantage.

As far as planning ahead, make sure you're not making any big purchases that might jeopardize your credit standing. When you start the home buying process, that's no longer the time to consider purchasing a car or taking on bigger debt. It's certainly not the time to go on a big vacation. You want to keep your financial house in order. You want to have plenty of cash on hand for down payments and closing costs. Make sure that financial picture for yourself looks as good as possible.

Keep in mind that the home buying process takes most people about 2 to 3 months to complete from beginning to closing.

Step 2: Get Preapproved for a Loan

Reach out to a lender or lenders and get preapproved. This is a really important part of the process because when we start to submit offers on your behalf, we have to include the pre-approval with those offers so that the sellers know you're a serious qualified buyer.

You can reach out to a mortgage lender that could be your bank, an online lender like Rocket Mortgage, or there are plenty of lenders we can recommend throughout the state of Texas. Just make sure you have a mortgage lender who's licensed in the state of Texas.

The lender is going to ask how long you've been working at your job, how much you make, what debts you have (credit cards, car payments, etc.), and what assets you have (savings, stocks, etc.). They're going to put that picture together and check your credit score. Don't worry-when a lender checks your credit score, it's not going to ruin it. That's a misconception. They're going to thoroughly go through your finances and hopefully come back and say, "Congratulations. We preapprove you to purchase X amount of home."

That X amount is really important because you want to know how much home you can afford. If you get a pre-approval for $400,000 but you've spent the last month looking at homes that are $500,000, you're going to be disappointed. Getting that preapproval before you do much of anything else is key.

Step 3: Look at Homes

This is the fun part. Most people are probably on Zillow or other apps looking at homes, starring things they like, and getting excited. Now that you have the pre-approval, you know it's go time. You know you can purchase a home. This is when we're actually going to start seriously looking at the homes you're most interested in.

If you're in El Paso, we're going to show you homes in person. If you're not here, we're going to make walkthrough videos showing you the good, the bad, and the ugly of these homes. It's a great way to see if the home functionally works for you, if you're vibing with the neighborhood, and if the home is priced where you want to be.

Searching for homes is super important. You want a great real estate agent who is very familiar with the market. Not only can they point out things you might not notice about the physical aspects of the home, but we can also point out whether the home is priced well, if it's in an HOA, or if it has solar panels that aren't paid off. You really need a great real estate agent who can guide you through that home search process.

Step 4: Submit an Offer

Once you've identified a home you really like, it's time to submit an offer. In addition to including that preapproval, we're also going to set all the terms of your offer. There are three really important terms to set:

First, the sales price. How much are you going to offer for the home? A fantastic real estate agent is going to do a comparative market analysis, comparing it to other homes around there that are similar, and tell you whether the home is overpriced, underpriced, or priced well.

Second, you'll potentially ask for seller concessions. Depending on the market, a seller might help you out with your closing costs.

Third, we're going to negotiate other terms like getting your buyer agent commission covered by the seller and all the other little details like earnest money and termination option fee. All of this goes into crafting a fantastic offer while making your offer competitive and trying to negotiate the best terms on your behalf.

Step 5: Get an Offer Accepted and Go Under Contract

Congratulations when you get an offer accepted. We say that the offer has been executed and you are now under contract. Once you're under contract, several things kick off.

First, you have three business days to turn in the earnest and option money. Earnest money is essentially a deposit showing good faith that you're interested in this home. Depending on the price of the home, the minimum earnest money is typically $1,000, but it goes up to about 1% of the sales price.

Then there's what we call a termination option fee. Once you get under contract, you have the next 7 to 10 business days to complete a home inspection, ask about or negotiate repairs or price changes, or walk away for any reason. The termination option fee and earnest money need to get wired or delivered to the title company.

We're going to get your home inspection done. If it's a VA or FHA loan, we may have to do a pest termite inspection. There are lots of different inspection options we can walk you through. Behind the scenes, your lender is really starting to work because we've sent them that executed contract and they're jumping through all the hoops, working with the underwriters, and getting everything ready to close.

Typically, it's 3 to 4 weeks from the time that you get your offer accepted to the time that it closes and you're the owner of the home.

In the second or third week, the lender is going to order an appraisal and a licensed appraiser will go out to the home to make sure it's valued at the price you're paying for it. If the appraisal comes in low, we're going to try to renegotiate that price. At this point, the lender is going to be reaching out to you, making sure they have all the documents they need. It's really important that you stay attentive to your lender because that's a key part of the transaction.

Step 6: Close

When a home transaction closes, several things happen. You, the buyer, have to sign all the closing documents. Typically, you'll do that in person if you're here in El Paso at the title company and we'll be there with you. If you're not in El Paso, no problem. You can sign with a mobile notary where you'll meet them somewhere or they'll come to you with all the documents. You'll sign, they'll send them back.

Next, the seller has to sign the closing documents and you have to pay any down payment and closing costs. Your lender has to pay the remaining balance of the loan. Once the title company has received all those funds, they transfer it to the seller and the transaction is finalized. It's closed and funded, and you are now the owner of a new home.

What About When Things Go Wrong?

Does everything work out perfectly all the time? Absolutely not. Why? Because there are so many people and variables involved. There's a seller, you the buyer, your lender, the seller's lender, a title company, your real estate agent, and the listing agent. There are a lot of people and parts involved, so sometimes things do go sideways for whatever reason.

You need a great real estate agent who has been through this process and can manage all of that for you. That's the purpose of your real estate agent-to make it as smooth, seamless, and enjoyable as humanly possible. We're always here to help. If you have any questions or need clarification about anything in this video, reach out to us. Call, text, or email. We're always here to help.