What You Should Know Before Buying in DFW

Short Answer

Buying your first home can feel like there are a lot of moving parts. You don't need to have everything figured out before you start.

I want my buyers to understand the numbers, financing, contract terms, inspections, taxes, insurance, and the specific property they're considering. My job is to give you good information so you can make a confident decision.

1. When should I start talking to a Realtor or lender?

You don't have to wait until you're ready to make an offer before you start asking questions.

I actually prefer talking with buyers early. Some of my best conversations happen six months or even a year before someone purchases a home.

We can talk through what you're looking for, what you can comfortably afford, which areas may make sense, and what the buying process actually looks like.

A lender can also help you understand your financing options and determine what you may qualify for.

I don't want you falling in love with a house before you understand the numbers.

My advice: Start with good information first. Then decide when you're ready to move forward.

2. How much house can I comfortably afford?

I care much more about your comfortable monthly payment than the maximum amount somebody says you qualify for.

A lender may tell you that you qualify for a $600,000 home. That doesn't necessarily mean you should buy a $600,000 home.

I usually start with:

"What monthly payment would feel comfortable to you?"

Then we work backward with the lender and consider:

• Principal and interest
• Property taxes
• Homeowners insurance
• HOA dues, if applicable
• Down payment
• Other applicable housing costs

Especially in Texas, property taxes and insurance can make two similarly priced homes have very different monthly payments.

I want my buyers looking at the whole picture.

3. How much do I need for a down payment?

One of the biggest misconceptions I hear is that you need 20% down to buy a home.

You don't necessarily need 20%.

The amount you need depends on your loan program, financial situation, property, and lender requirements.

Some current loan programs allow eligible buyers to purchase with significantly less down. For example, certain FHA, conventional, and VA programs may offer lower or even no down-payment options for qualifying borrowers.

The important thing is finding out which options apply to you rather than assuming you need a specific percentage.

I also want buyers to understand that the down payment and closing costs are two different things.

4. What costs should I expect besides my down payment?

Your down payment is only one part of the money you may need to purchase a home.

Depending on the transaction, you may also have:

• Closing costs
• Home inspection
• Appraisal
• Earnest money
• Option fee
• Homeowners insurance
• Prepaid taxes and insurance
• Other lender and transaction expenses

The CFPB says closing costs typically range from about 2% to 5% of the purchase price, excluding the down payment. Your actual costs can vary based on your loan, lender, property, and other factors.

I like to estimate these expenses before my buyers write an offer so they understand the complete financial picture.

5. Can a seller help with my closing costs?

Depending on the property, market conditions, contract, and loan program, we may be able to negotiate seller concessions.

For example, seller concessions could potentially help with certain closing costs or an eligible interest-rate buydown.

But seller concessions aren't automatic. The amount and permitted use can depend on the loan program and lender requirements.

That's why I look at the entire transaction rather than focusing only on the sales price.

Sometimes the terms we negotiate can be just as important as the price.

6. What should I know about making an offer?

Price is important, but price isn't the only thing we're negotiating.

When I write an offer, I'm looking at the entire deal, including:

• Purchase price
• Seller concessions
• Closing date
• Financing
• Option period
• Earnest money
• Title policy
• Survey
• Other contract terms

Before recommending a number, I also look at comparable sales and what's happening with similar homes in that specific neighborhood.

Sometimes the best strategy is negotiating hard on price.

Other times, getting money toward closing costs or repairs may be more valuable to the buyer.

And if it's a great house that's priced appropriately and has multiple interested buyers, I'll tell you that too.

My job isn't to tell you what you want to hear. It's to give you the information and strategy so you can make a confident decision.

7. What are earnest money and the option period?

These are two different parts of a Texas residential transaction.

Earnest money is a deposit made after the contract is executed and is generally credited toward the purchase at closing.

The option period is a negotiated period under the Texas contract that can give the buyer time to perform due diligence and, under the applicable contract terms, potentially terminate the contract.

The option fee is connected to that negotiated termination option.

The exact terms and consequences depend on the contract being used. That's why I explain these terms to my buyers before they sign.

I don't expect you to know all of this going in. Part of my job is explaining what we're doing, why we're doing it, and what decisions need to be made along the way.

8. What should I know about inspections and appraisals?

An inspection and an appraisal serve two very different purposes.

The inspection helps you learn about the condition of the home and identify items that may need attention.

I also tell buyers not to panic when they see a long inspection report. Inspectors are supposed to find things. Even very good homes can have a list of items.

My role is to help you separate normal homeownership items from things that deserve more attention.

The appraisal is a professional opinion of the property's value and can help the lender determine whether the property's value supports the loan.

If an appraisal comes in below the contract price, the next steps depend on the contract, financing, and circumstances.

Understanding both processes before you make an offer can help you know what to expect.

9. What should I know about property taxes, insurance, HOAs, MUDs, and PIDs?

These are some of the costs and property-specific considerations I want buyers to understand before purchasing in DFW.

Property Taxes

Texas property taxes can have a significant impact on your monthly payment. Two similarly priced homes can have different monthly costs because their taxes may differ.

Homeowners Insurance

Insurance is another important part of the monthly payment. Premiums can vary based on the property, coverage, deductible, location, and other factors.

HOAs

If a property is subject to an HOA, I want buyers to understand the dues, rules, restrictions, assessments, maintenance responsibilities, and applicable association documents.

MUDs

Some Texas communities are located within Municipal Utility Districts. Buyers should understand what district applies to the property and what taxes or charges may be associated with it.

PIDs

A Public Improvement District can involve assessments connected to improvements or services within the district.

The important thing is to look at the specific property rather than assume every home has the same costs.

10. What should I think about before choosing a home in DFW?

DFW isn't one market.

East Dallas can behave differently from Richardson, Plano, Frisco, Rockwall, or another part of the Metroplex. Sometimes two neighborhoods only a few miles apart can have different pricing and demand.

That's why I don't love broad statements like, "It's a buyer's market" or "It's a seller's market."

My question is:

"What's happening with this house, in this neighborhood, at this price point?"

I'm also thinking about things buyers may overlook when they're excited about the kitchen or backyard.

Even if you tell me, "Chris, we're going to live here forever," I'm still thinking about the next buyer.

I may look at location, busy streets, unusual floor plans, foundation history, neighborhood trends, and other factors that could affect how easy the home may be to sell someday.

You should absolutely love your home. I just want you to understand what you're buying along with it.

Summary

You don't have to know everything before you start the home-buying process.

I want you to understand your comfortable monthly payment, financing options, upfront costs, contract terms, inspection, appraisal, taxes, insurance, and the specific property you're considering.

And I don't think buying a home should start with finding a house.

The first step isn't buying a house. It's getting good information.

Ready to Talk About Buying in DFW?

If you're thinking about buying a home, you don't have to have everything figured out first.

Let's talk through your goals, your numbers, and what the process could look like for you.

Disclaimer

This article provides general educational information about buying residential real estate in Texas. It is not legal, tax, financial, mortgage, insurance, or engineering advice. Loan requirements, costs, contract terms, and program eligibility can vary. Consult the appropriate licensed professional for advice specific to your situation.