This is the easy part. You have found your dream home, and all that remains is to finalize the deal.

How much should I offer?

Is the asking price in line with similar homes in the area?
Is the home in good condition, or will you have to spend a lot of money making it the way you want it
How long has the home been on the market? If it’s been for sale for awhile, the seller may be willing to accept a lower offer.
How much mortgage will be required? Make sure you can relay afford to buy the home.
How much do you really wan t the home? The closer you are to the asking price, the more likely your offer will be to be accepted. In some cases you may want to offer more than the asking price, if you know you are competing with others.

Earnest Money

Is a deposit paid by a buyer to hold the seller to a deal and to show good faith. Earnest Money may be forfeited to the seller if the buyer defaults. So, the way the public, including many real estate attorneys, interpret that is the more earnest money offered the more earnest is the buyer. The fact is, in Texas the buyer is not required to deposit any earnest money with a seller (or more typically with a title company or a real estate licensee representing the seller).

However, a written offer to purchase a home that is not accompanied by any earnest money would not be considered by most sellers as a “serious offer.”

With a Builder

Because the builder is the owner, they are allowed by the Texas Real Estate Commission to write their own contract. The New Home Consultant will explain the contract in detail to the buyer. Here are some key details to know:

Purchase and Sale Agreement. The purchase price is negotiable between the buyer and the NHC. The buyer may receive an incentive (a discount from the asking price for the model), closing costs paid, and/or a down payment assistance. Every contract is unique. Remember that the amount of money you need to bring to closing is a combination of the down payment and closing costs. For example if you bought a $100,000 home with 3 percent down. You will need to bring to closing $3,000 plus closing costs which will be between $0 and $6,000 depending upon how the contract is written. Closing costs, pre-paids, and/or discount points can be rolled into the contract so that the buyer does not have a large payment at closing.

The down payment depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs:

Earnest Money – the deposit on the home when you submit the offer, to prove to the seller that you are serious about wanting to buy the house
Down payment – a percentage of the cost of the home that you must pay when you go to settlement
Closing costs- the costs associated with processing the paperwork to buy the house.

When you make an offer on a home, your earnest money will be put into an escrow account. If the offer is accepted your money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you.

The more money you put into your down payment, the lower your mortgage payments will be.

CLOSING COSTS – which you will pay at settlement – average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses.