If you’re a first-time purchaser, buying a home in Texas can initially seem daunting, but this is if you aren’t up to speed with what it takes to purchase a home in this cowboy state. This short guide provides four things you should be looking for when scouting for a residential property in Texas.
1. Scrutinize The Seller’s Disclosure Notice
While this requirement isn’t specific to Texas, in the notice, a seller seeks to describe a property’s condition to the best of their knowledge. Sometimes, a seller may not be aware of all the defects their home has. Interestingly, in Texas, a seller isn’t required to disclose the results of their home’s inspection. However, the Texas REALTORS® disclosure form features disclosures exceeding the basic requirements.
It’s therefore important to scrutinize the disclosure notice, but as you do, remember that it may not be comprehensive. Just as no one will readily agree that they haven’t seen a dentist in five years, although adults aged between 20 and 64 haven’t, according to the National Institute of Dental and Craniofacial Research, don’t take the seller’s disclosure notice at its face value. Dig deeper to establish the actual state of the house you want to buy.
2. Lessen Legal Issues
Texas is one of 28 states in the U.S. that doesn’t require one to hire a real estate attorney, and yet you need one for guidance when closing. Hiring a real estate attorney is a great idea for several reasons. First, they are crucial when preparing mortgage deeds, funds transfer documents, and title insurance policies. You’ll also find their advice invaluable when reviewing all documents to ensure they’re complete and error-free.
Sometimes, a real estate transaction can get complicated, and an attorney’s guidance can be critical. Besides, they’ll help you understand complex legal terms. Should things come to a head, they’ll argue your case in court besides dealing with surveyors and other real estate professionals on your behalf.
3. Acqiure Fire Insurance
Residential buildings are responsible for 30% of all fires, according to Worth Insurance. Add this to the fact that Texas has the second-highest incidence of wildfires after California. While there’s no such thing as a fully fireproofed home, you can minimize fire incidences by installing fire-resistant landscaping and windows and by using fire-rated, non-combustible materials.
In case of a fire, you’ll need a plan to get your family out of harm’s way. An evacuation plan with an emergency supply kit will be crucial. Lastly, read the homeowners insurance policy, most of which cover wildfires, although you may have to pay extra for more coverage if your area is considered high-risk.
4. Meet the Debt-To-Income (DTI) Ratio Requirements
This involves several calculations, such as back-end and front-end ratios. In other words, you want to know how much you’ll pay in total housing expenses per month. You’ll also need to calculate all fixed monthly costs, such as credit card fees, debts, and mortgages. To get an estimate of your DTI, add your fixed expenses to your best estimate of variable monthly expenses and then divide the total by your monthly gross income, that is, your income before taxes.
Purchasing a home in Texas is a noble thing. Much like buying a car, you’ll need to factor in several things that may not be instantly apparent. For instance, according to the Texas Department of Insurance, if you own a vehicle, you must secure minimum liability insurance of up to $25,000 for property damage, $60,000 per accident, and $30,000 per person. These are all critical facts to consider when purchasing a home in Texas.
