Homebuyer's Guide:
Specific to the Killeen-Ft Cavazos Area. Catch the Perfect Home with CTX Buy Sell.
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Central Texas is nestled among the picturesque hills and tranquil lakes. Let CTX Buy Sell be your angler in the real estate waters. 🏡🎣
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The Initial Step is to Get a Pre-Approval Letter from a Lender and Then Ask Yourself, "Am I Comfortable with the Maximum Monthly Payment I'm Pre-Approved For?"
After discussing how much house you can afford with a lender, it's essential to reassess your buying power and decide on your preferred monthly mortgage payment. Consider whether the maximum purchase price you're approved for aligns with the maximum monthly payment you're willing to pay for your home.
For veterans: BAH estimates your monthly mortgage payment — but ask yourself, is this estimated payment truly comfortable for you?
What other budgets must you consider at this point in your life? Can you cover your mortgage as well as other expenses?
Dive To a Section for More Insights on Homebuying.
Here Are Some Things You Might Not Notice Right Away.
Every home has factors that affect its value, like recent sales, the number of rentals versus owned homes nearby, and the typical commute.
Just type in any address to learn more about the neighborhoods you're considering.
Thank you for trusting me. If you have any questions or need more details about the purchase process, please reach out. I'm here to help.
Benefits of Pre-Approval
✔ Determine the loan amount within your budget
✔ Identify the minimum down payment you're eligible for
✔ Streamline your home search process
✔ Be ready to present an offer confidently
✔ Enhance the efficiency of the closing process
Pre-Approval Documents Checklist
✔ Photo Identification and Social Security Card
✔ Bankruptcy Documents
✔ Divorce Decree
✔ Financial Statements for past 2-3 months
✔ Tax Returns
✔ W-2s/Leave & Earning Statements (LES)
✔ Pay Stubs
✔ DD214 & Military Orders
✔ VA Certificate of Eligibility (COE)
Are You Eligible for a VA Home Loan?
To secure a VA home loan, you'll first need to obtain a VA Home Loan Certificate of Eligibility (COE) from the Veterans Administration. This certificate is accessible to veterans, active duty, guard and reserve members, and military spouses. While the COE is an essential step, it's just the beginning. Having it allows you to apply for a home loan, but approval isn't guaranteed.
Next, ensure you have your Certificate of Eligibility (COE) and your Service Record (DD-214) ready when reaching out to lenders. From there, it's similar to tackling any mission: review your credit reports, scout for pre-approvals, and seek competitive rates. If you're pre-approved for your VA Home Loan, you'll have a clear idea of the houses within your budget.
A VA-approved lender can help identify any credit issues and offer you a loan estimate. It's essential to shop around: compare closing costs, which are the fees incurred by both buyers and sellers during property transfer, and other associated fees from different lenders.
Thank You for Your Service to Our Country and For Trusting Jessica with Your Real Estate Needs.
Closing Costs for Texas Homebuyers: How Much Will They Pay?
In Texas, the average buyer's closing costs typically range from 2–6% of the home's purchase price. However, the total closing costs will vary depending on the lender and the concessions provided by the seller. To get a clear understanding of your closing costs and the fees you'll need to pay at closing, it's best to reach out to a lender directly. They can provide you with a breakdown of the different types of costs you can expect.
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Say it with me.
I DO NOT need 20% down.
I DO NOT need perfect credit.
I DO need dedication from a great agent.
When using a Power of Attorney (POA), please ask the lender first.
Not all mortgage companies allow them.
Paragraph 12, "Settlement and Other's Expenses"
- Homebuyers Have the Option to Request Concessions to Help Offset their Closing Costs.
- Homebuyers Have the Option to Request Concessions to Help Offset their Closing Costs.
Seller concessions involve specific expenses in home buying that the seller could cover. Concessions can enhance a deal and expedite the sale.
While many sellers may be willing to cover your closing costs as part of the home sale, it's crucial to remember that they aren't obligated to do so. However, you do have the option to request that sellers contribute towards your closing costs when making an offer on a home. This arrangement needs to be clearly outlined in the purchase contract as a seller concession.
In today's market, sellers commonly agree to cover: 1) Title Policy, 2) Survey, 3) a portion of closing costs, and 4) a home warranty. Estimated costs are detailed below.
👉🏼 Seller concessions for VA Loans typically cap at 4% of the purchase price.
👉🏼 Seller concessions for FHA Loans typically cap at 6% of the purchase price.
Use seller credit towards closing costs,
not for home inspection issues. Lenders do not want to see the Home Inspection.
Anticipated Homebuying Expenses to Consider.
During the homebuying process, buyers must be prepared to pay fees associated with the lender, title company, and inspections. Before finalizing your budget, ensure to discuss these potential expenses with your lender and incorporate them into your overall financial plan.
Home Inspection - Approximately $500
Wood Destroying Insects Inspection (WDI)* - Approximately $90
The WDI inspection is mandatory for VA loans* and may be required for FHA loans.
Septic Inspection - Approximately $225 - $475+
Well Water Testing - Approximately $100
Foundation Inspection - Approximately $150
Pool Inspection - Approximately $100
Chimney Inspection - Approximately $500
As an informed buyer, it's your responsibility to carefully examine your potential new home's condition and to identify any potential issues with qualified inspectors prior to closing.
It's advisable to accompany the inspectors during the inspections and address any questions directly to them.
As a big fan of fireplaces, I recently attended a seminar conducted by chimney professionals, and I was shocked by what I learned. The construction of fireplaces and the surrounding elements (framing, electrical, insulation, ductwork, etc.) can be quite concerning, even in new constructions. While your home inspector will look at the fireplace, please note that they are not chimney specialists. Their inspection covers only the basics. I highly recommend scheduling a chimney inspection if a chimney is present. It costs about the same as a home inspection and is essential for ensuring fire safety.
Home Warranty - Approximately $580-660
Many sellers agree to provide a credit for a home warranty, offering added peace of mind for homebuyers. While a home warranty is not mandatory for a buyer to finalize a home sale, it's common for buyers in this area to opt for a home warranty, even if the seller doesn't cover the cost.
Title Policy
This is the insurance policy that protects the lender (and the buyer, if desired) against any defects in the title of the property. The cost of the title policy varies depending on the purchase price of the home and the location. In Bell County and Coryell County, it's typically paid for by the Seller and is an essential part of the closing process.
Survey - Approximately $400-$1,000
A survey will be required to verify, clarify, correct, or create a legal description. A survey is a professional on-site measurement of a property’s lot lines and the dimensions that make up its boundaries. The survey includes the location of any improvements (such as buildings or other structures) on the lot, any encroachments that may exist, and any easements of public record.
In Bell County and Coryell County, sellers typically provide an existing survey unless there have been changes to the property boundaries. If a new survey is required, sellers generally cover the cost, as it's a crucial aspect of the closing process.
Credit Report Fee - Approximately $85
Appraisal Fee - Approximately $600
An appraisal is different from a home inspection and does not replace it. Appraisals estimate the property's value for lenders and are required to ensure its marketability.
Property Taxes
Depending on the timing of your purchase (beginning or end of the year), you may need to pay property taxes upfront or prorate them at closing.
Homeowner's Insurance (HOI) - Approximately $1,700
Proof of homeowners insurance is typically required by most lenders prior to closing, as it impacts your monthly mortgage payment.
HOA Fees
If the property is part of a homeowners association, you may need to pay HOA fees upfront or prorate them at closing.
Utility Setup Fees
You may need to pay fees to set up utilities in your name, such as electricity, gas, water, and internet.
Moving costs
Don't forget to budget for the expenses associated with moving into your new home, such as hiring movers or renting a truck.
Step Into a Home That Echoes the Tranquility of Your Favorite Fishing Spot.
The local builds are a real catch, with kitchens that lures you in like a secret fishing hole. Whether you prefer framed or finished, starting from scratch gets pricier as the cost to build increases. Why wait? Move into complete construction in the many local sought-after subdivisions and use the builder and lender incentive to lower the price, buy the rate down, and possibly snag some appliances. Ask me about current builder incentives for buyers!
How to Pay Closing Costs?
Most title companies will only accept closing costs in a form of a wire or cashier's check. There may be a charge for wiring closing costs from your bank account.
Closing funds of $1,500.00 or more MUST be in the form of a wire transfer ONLY.
Paragraph 5, “Earnest Money and Termination Option.”
In the Sales Contract, you'll find the specified amounts for Earnest Money and Option Money on the second page under Paragraph 5. These payments are due within 3 calendar days, excluding Saturdays, Sundays, or legal holidays.
👉🏼 Earnest Money generally amounts to around 1% of the Sales Price.
Option Money, on the other hand, is a fee agreed upon by both Buyer and Seller. This fee grants the Buyer the unrestricted right to terminate within a specified timeframe.
The Option Period concludes at 5 PM on the last day of this timeframe.
Per the purchase contract, "The Option Fee will be credited to the Sales Price at closing."
How Do You Determine the Fee You're Willing to Pay for the Option Period?
It's entirely up to you. Option money amounts are negotiable, so it's advisable to offer the highest amount you're comfortable with.
👉🏼 On average, option money ranges from $10 to $50 per day. So consider:
How badly do you want the property?
Is it a newly listed property or has it been on the market for some time?
Are there competing offers?
Option Money Examples:
Least Aggressive: $100 fee for a 10-day Option Period ($10/day)
OK: $100 fee for 7-day Option Period ($14/day)
Great: $175 fee for 7-day Option Period ($25/day)
Aggressive: $200 fee for 5-day Option Period ($40/day)
Savage: $500 fee for 3-day Option Period ($167/day)
Should You Buy a House Now or Wait?
Renting means you're essentially paying someone else's mortgage, not building equity in your own property. If you're sticking with renting because of interest rates, remember that you're essentially paying 100% of that interest to your landlord.
Curious about how monthly mortgage payments have shifted by county for a typical home? Click the link below to compare the payment for a 30-year fixed-rate mortgage now versus a year earlier.
Adventure Awaits in Central Texas!
Relocation is common within this "Prairies & Lakes Region" of Central Texas. Thanks to the mild winters, you may spend the entire year enjoying the outdoors and exploring lakes nearby.
Review Common Homebuying Concerns:
It's extremely important for homebuyers to conduct their own due diligence when purchasing.
What school district is the property within?
Be sure of the attendance zones for the property you're looking to purchase.
Are there any crime concerns in that area?
I have a large truck, boat, trailer and/or travel trailer. What should I know?
Does the property require flood insurance?
It's important to understand that flood damage is typically not covered by most homeowners insurance policies, irrespective of whether you reside in a high-risk zone or not. Surprisingly, if you live in an area with low or moderate flood risk, you're five times more likely to encounter flood damage than fire damage in your home within the next 30 years. Fortunately, you can safeguard your home and possessions by securing flood insurance through the National Flood Insurance Program. Many homeowners can obtain this type of insurance for less than $400 per year.
I'm interested in making the property a short-term rental. What do I need to know?
Are thre any substantial changes that could lead to eminent domain?
Before finalizing your property purchase, it's crucial to conduct a thorough city search to identify any pending property changes in the vicinity. Keep an eye out for any substantial developments that could potentially lead to eminent domain actions. This proactive approach ensures that you're well-informed about any potential risks or changes that could affect your property investment.
Should I invest in a property located in farm and ranch country? Does the property qualify for any government subsidies?
When dealing with properties situated in farm and ranch country, it's wise to engage with key local resources to gain valuable insights. Start by reaching out to the Agri-Life Extension Agent and representatives from the Farm Services Agency (FSA). The FSA office can provide access to historical aerial photographs of area properties dating back to the 1940s. Additionally, they can offer information on whether the property qualifies for any government subsidies.
Another valuable step is to visit local farm implement dealers like John Deere or Kubota, feed and seed supply stores, lumber yards, hardware stores, and oil and gas landmen in the area. These local contacts often have a wealth of knowledge about the land, its history, and potential opportunities or challenges associated with it. By tapping into these resources, you can make more informed decisions about your property investment in farm and ranch country.
Is the property within a Groundwater Conservation District (GCD) jurisdiction?
Visiting the Texas Water Development Board website and the Texas Commission on Environmental Quality (TCEQ) website can provide valuable maps indicating the jurisdiction of local Groundwater Conservation Districts (GCDs) over groundwater resources in the state. These maps offer insight into the regulatory framework governing groundwater usage in your area.
If your property is situated near a watercourse like a creek, river, or stream, it's advisable to consult the TCEQ website to determine if there are any existing water rights associated with the property, particularly for irrigation or industrial purposes. Additionally, engaging with local water well drillers can offer valuable insights into both the quantity and quality of available water resources.
GCDs often maintain comprehensive websites containing valuable information such as contact details, regulations, and by-laws. These online resources are readily accessible to the public and offer detailed insights into groundwater management practices and policies. Determine if the groundwater rights to the property are in the jurisdiction of a GCD by reviewing the Map of Texas GCDs.
To gain a thorough understanding of groundwater regulations and exemptions pertinent to your property and its surroundings, it's essential to engage directly with the GCD's general manager and staff. These discussions can provide valuable insights into various aspects, including water usage restrictions, conservation measures, and any exemptions that may apply.
Proactively reaching out to the GCD enables you to acquire a deeper understanding of how groundwater resources are managed in the area. This includes familiarizing yourself with specific regulations or policies that could impact your property. Armed with this knowledge, you can ensure compliance with local regulations and make informed decisions regarding water usage and conservation practices on your property.
Lastly, don't overlook the importance of speaking with the local electrical power company. Inquiring about easements, metering issues, and future expansion plans can help you better understand any potential impacts on your property and ensure you're fully informed about all relevant considerations.
Where can I access information on active and inactive water rights and water use data?
You can find comprehensive GIS information and water rights data files through the Texas Commission on Environmental Quality (TCEQ). These files contain details about all active and inactive surface water rights permits and water supply contracts. You'll be able to access information about the water right holder, basin, authorized water amount, and more. This data allows you to review surface water rights holders in the state and gather essential information about a property's surface water rights.
Your Committed Partner in Central Texas Real Estate. 🤝🏻
I'm dedicated to networking with top-notch local contractors and service providers to address all your CTX real estate needs. From searching listings to negotiating and closing, your success in Central Texas real estate is my commitment. If you're eyeing a home to transform into your dream space, let's chat!