How to Buy a Home in North Texas

So, you've decided to pack up your bags and turn in your move-out notice to your landlord. Maybe you've decided that living with mom & dad isn't so great for your social/love life. Perhaps you've just gotten a promotion and your new office will be located in the "Big D". No matter what your situation, you are going to be purchasing a home in the North Texas (McKinney, Frisco, Plano, Allen...) area and you don't know where to begin. Until NOW...

As a Buyer Specialist for the last 11 years, I've had the privilege of working with tons of home BUYERS. Not that sellers aren't great, but my heart belongs to the buyers. Many times I get the most satisfaction from working with First Time Homebuyers or buyers that are relocating to this area. In many ways, the relo buyers are like first time buyers. How? Buying a home in California and buying a home in New York and buying a home in Dallas or McKinney are completely different ballgames! Different laws, customs & processes are involved.

Below is a step-by-step guide to buying a home in my neck of the woods.

1. Make Decision to Purchase!

2. Choose a Realtor - ANY of our dedicated, knowledgable (and all around FUN) agents!

 3. GET PRE-APPROVED! Meet with a lender who will tell you how much you can spend!! This is the MOST important step!! If you do not have a lender please ask me and I will provide a list of Loan Officers that have done a great job for us! Having a pre-approval letter that can be sent to the seller with your offer is a way of showing the seller that you are a serious buyer. DO THIS NOW!

4. Make your "Wish List"! Tell us all about your ideal home! Start using the Prospect Gateway Portal - a special website we'll create JUST FOR YOU that automatically emails you when a new listing hits the market that meets your specific criteria! Make notes and sort listings by "Favorite", "Possibility" or "Reject". We want to know your likes & dislikes. Our goal is to not waste your time showing you the wrong houses!

5. Preview Homes! With rising gas prices, there is no need for you to drive from house to house! Leave the driving to us while you make notes and learn about the neighborhoods! We will call and schedule all showings - don't make the mistake of shopping on your own and having to call each & every Realtor to see a home! Just because we are an independent brokerage, DOESN'T mean we can't show other homes listed by other companies. We're members of the MLS (multiple listing service) and can show ANY - yes, I mean ANY - home on the market!

6. Make an Offer! After researching comparable properties we will make an informed offer. We'll explain the contract, answer your questions and negotiate all terms of the contract with your best interest in mind! We will address contingencies, such as: Home Inspection, Financing, Closing Date, etc.

      $$ You will deposit an Earnest Money check and Option Fee check with the contract. Earnest Money is customarily 0.5% - 1.5% of the purchase price (depending upon the price range you are shopping in) and is made out to the Title Company. The Option Fee is negotiable, but typically $50-250 and is made out to the Seller. Both checks will be credited to you at closing.

 7. Contract Acceptance! Yeah! This begins Day Zero in our timeline. This begins in Texas what is called the "Option Period". Home inspections will be scheduled during this time. During the Option Period (which is also negotiable and usually anywhere from 5-10 days) you have the right to walk away from the contract for any reason and still get your Earnest Money back. You will only lose the Option Fee you paid to the seller.

 8. Home Inspection/Termite Inspection. We will attend the home inspection once it is completed. The Inspector will review the report and answer your questions. Based upon the findings of the inspection we can negotiate any repairs you would like the seller to make. Both parties must sign an amendment to the contract, with all negotiated repairs listed, before the Option Period expires. The termite inspection is typically performed at the same time as the home inspection. Your lender may require a copy of this report.

    $$ The Home Inspection is a cost to the Buyer. Cost of the inspection is dependent upon square footage and other factors, but averages $250-600. You pay this cost up front by check/credit card or sometimes it can be added to your closing statement.

 9. Title Work. The title company is working in the background to make sure they can provide clear title to the property for the buyer when it closes.

   $$ Survey - If the current seller does not have a survey or the survey is not deemed to be good, then you may be required to pay for a new survey. The title company or your lender will be responsible for ordering this according to the contract.

   $$ Appraisal - This is typically paid up front with your lender, and it is also ordered by your lender.

  *You must have a clean survey and the home must appraise in order to close! We will monitor these activities and keep you updated on each step of the process.

10. Obtain Homeowners Insurance! Your lender and the title company will need this information prior to closing. Shop around and compare quotes  

11. Contact Utility Companies & Make Moving Arrangements! Make arrangements to have water, electric, gas, cable & phone service prior to your move-in day. 

We're getting closer...

12. Final Walk-Thru - This gives you the chance to visit the property one last time before closing to make sure any repairs that were requested have been made and that the home is in acceptable move-in condition (per terms of the contract).

13. Closing & Funding - Closing means the paperwork has been signed by both the buyer and seller...but that's all. The property is not legally conveyed (read-you don't get the keys) until the funds from the buyer are wired to the title company and then wired to the seller. **It is also important to note that many times a home does not fund on the same day it closes. Sometimes it won't fund until the next day, or if it closes on a Friday not until the following Monday. Be wary of long holiday weekends too! For this reason we suggest a morning closing, mid-week if possible. Particularly if you plan on moving over a weekend!

You're a new homeowner!

So, You Want to Buy a New Home?

If you are in the market for a brand new home anywhere in the DFW area, you are in luck! Right now the market is HOT! Drive down any street and you're sure to see a "For Sale" sign begging you to "Stop The Car" and check out the "Immaculate" home.

But with so many homes on the market you can afford to be a little choosy, right? Heck, you may have even entertained the thought of buying a brand new home from a builder. When given the option of buying a new home that has never been lived in versus buying a pre-owned home that doesn't have exactly the interior you desire, the choice becomes clear! Nothing beats that new car, I mean, new house smell!

There are many benefits to buying a new home:

  • YOU pick the floorplan, possibly modifying it to fit your taste even more. Closet not big enough? Bump this wall out a foot here, 6 inches there - PERFECT!
  • YOU pick the finishings: flooring, paint, brick, countertops, carpet, lighting fixtures, plumbing fixtures, tile, cabinets, exterior elevation, etc etc.
  • NO ONE ELSE has ever lived there! No "skeletons in the closet" to find later.
  • Builder warranty - "bumper to bumper" for ~1-2 years, structural warranty up to 10 years.
  • YOU get to watch it being built from the ground up!
  • Depending on the builder, you may even recieve closing cost assistance.

We've worked with MANY buyers and I know how easy it is to get wrapped up in the excitement of buying/building a brand new home. Those model homes work wonders! They've got them decked out with ALL the upgrades, beautiful interiors, over-the-top gamerooms with surround sound & up-to-date 100" Plasma TV's that have the men drooling while the kitchens are decked out with lavish granite countertops, custom cabinetry & stainless appliances that the women want. Oh, and don't forget about the picturesque landscaping out front! Yes, the model homes smell great, look great & before you know it you are collecting stacks upon stacks of folders from all of the area builders you can find. Mounds of floorplans. Elevations. Feature Sheets. Buyer Incentives. Community Features. Your mind is swimming. You begin dreaming new homes. Googling new homes. STALKING new homes.

That's where WE come in. Without a third party involved it could be very easy to make some BAD decisions when it comes to creating your dream home. Here are a few pitfalls that every new home buyer should look out for:

  1. The "Prices are Going up Next Month" pitch. Suddenly, you feel you must make a decision right away. The base prices will fluctuate as long as the builder is still building in the neighborhood. Don't settle for a builder that isn't offering exactly what you are looking for. Once you are locked under contract, it could be very costly or impossible to make changes to design options that you made in a hurry.
  2. The "$XX,000 Buyer Incentive IF YOU USE OUR LENDER" pitch. Most every builder out there is tied in to a "preferred lender" or "in house" lender. By getting you to use their lender, the company makes money on the loan, therefore they can offer you the discount on the purchase of your home. BE CAREFUL! Many buyers see this and think "Why wouldn't I use this lender?". The answer is easy. Unless you've done your homework, the interest rate that the "preferred lender" is charging you could be MUCH higher than the competing lenders. In the long run, the $xx,000 you got knocked off the base price of the home could be less than what you end up paying over the LIFE of the loan. My advice - SHOP AROUND! Some lenders might be able to match the builders incentives.
  3. Picking out a bad lot. Once you've chosen the builder, the floorplan and the options, you've also got to choose the LOT that your home will sit on. If you choose wrong, it could cost you dearly when you try to sell. Try to choose a lot that does not back to a busy street, have a funky slope, or back to commercial. Put yourself in the mind of a buyer in a few years - would YOU want to buy a house in that location? I believe spending a little extra on a lot premium is one of the best places to spend your money when building. You can always add those upgrades later, but you can't ever get a new lot!
  4. Pricing yourself out of the neighborhood. What do I mean by this? Let's say the base prices of homes in the neighborhood you want to build in ranges from $150-200K. You choose a plan that costs $175K -base price before any upgrades/lot premiums. You're pumped. You're staying in your budget. You're not the biggest house in the neighborhood, and your're not the smallest. And then comes the trip to the design center. $40,000 and 2 pages of upgrades later, you are now paying $215,000 for the same house. When you go to sell this house in a few years you will be compared to all of the other floorplans like yours that cost $175K (base price). Let's say the average homeowner tacked on $15K in upgrades. This means that your competition will be able to sell the same home for $25K LESS than yours. Thus, you've priced yourself out of the neighborhood.
  5. Going NUTS at the design center/showroom. This is where the builder makes most of their money. Builders have a large mark-up on their upgrades. For example, if you choose to have the builder install a garage door opener you will pay ~$400. If YOU install the opener, you can buy one at Home Depot for $150. Get the picture? You need to have someone (cough, cough) that can help you decide what is a smart upgrade decision, and what is a bad one. Do you NEED to have the entire house covered in the most expensive hardwood flooring, or could you be happy if you just got the dining room and study done now, and did the rest later? Or could you settle for a mid-grade wood? Is it a MUST that you get the top of the line appliance package now, or could that be something you upgrade in a year or two?

These are just a few of the important decisions you will need to make when it comes to buying a new home. Having a REALTOR represent you in the transaction will be the smartest decision you could make. OH...and let me just clear up another misconception about having an agent represent you in a new home transaction:


Many buyers think that if they come without an agent that the builder can cut them a deal. The fact is, that most of the commissions paid to agents are already accounted for in the builder's marketing budget. This money has already been set aside. In fact, having an agent represent you can SAVE you money, by knowing how to negotiate the BEST deal for you! 

Our job is to find you the best home for the best price! If you are looking for a North Texas Realtor, we would love to assist you in your home search!