Houston Real Estate FAQs: Common Questions Answered
Is this home in a flood zone?
Knowing whether a home is in a flood zone is VERY important in Houston. Your real estate agent can help you check the FEMA flood maps and local information to see if the property is at risk. If it is, you might need to get additional flood insurance.
Is this house in a high crime area?
Safety is a top priority for most homebuyers, and with some areas considered risky it is always better to investigate. To find out about the crime rate in a specific area, you can check local crime reports and statistics online. Your real estate agent can also provide insights based on their knowledge of the community.
Is the house in a good school district?
If you have kids or plan to in the future, being in a good school district can be a BIG deal. You can look up school ratings and reviews online, or ask your real estate agent for information about the schools in the area to help you evaluate the local schools.
Is this property in a Municipal Utility District (MUD) or a Public Improvement District (PID)?
Municipal Utility Districts (MUDs) and Public Utility Districts (PUDs) are special districts that provide utilities like water and sewage services to a property, Your real estate agent can help you find out if the property is in a MUD or PUD and what that means for your bills, but consider this;
Municipal Utility District (MUD):
MUDs finance the construction of public infrastructure (such as utility facilities and roadways) that does not yet exist.
Developers within a MUD can be reimbursed for water, sewer, drainage, and sometimes road infrastructure through property taxes.
Homeowners in a MUD receive a monthly bill for water and sewer usage, as well as an annual tax bill. This MUD tax replaces the city tax.
MUD taxes are deductible property taxes.
Public Improvement District (PID):
PIDs serve similar purposes as MUDs (water, sewage, and infrastructure), but they can also fund sidewalks, roadways, landscaping, parks, public safety, parking facilities, and affordable housing.
Unlike MUDs, PIDs are not political entities.
Some developments use PIDs instead of Homeowners’ Associations (HOAs) because PID assessments are tax deductible.
PID vs. PUD:
Although the acronyms are often used interchangeably, PIDs and PUDs are distinct:
A PID is created by a city or county and focuses on providing utilities and amenities.
A PUD (Public Utility District) is created by the community and operates under an elected board. It exists solely to provide electricity, water, sewer, and telecommunications. PUDs are controlled by homeowners but operate independently from HOAs.
Can I pay my property taxes separately?
In Texas, many homeowners choose to pay their property taxes through an escrow account set up by their mortgage lender, which spreads the cost over monthly mortgage payments. However, you can also choose to pay your property taxes directly to the county if you prefer. Just make sure you budget for it, as it’s a significant expense that comes due once a year.
What are “closing costs”?
Closing costs are all the fees and expenses you need to pay when you're finalizing the sale or purchase of a property. Think of it as the last step in the process where everyone gets paid for their part in helping you buy or sell a home. This can include things like loan fees, title insurance, and appraisal fees to list a few, the lender is required by law to provide the buyer with a closing disclosure 3 business days before a scheduled closing date, although they may vary for each specific case, the closing costs are typically between 3% and 6% of the purchase price.
How long will it take to sell my house?
It takes from 30 to 100 days on average to sell a home. but in reality it depends on factors like the market conditions, the price you're asking for, and how appealing your home is to buyers. A good real estate agent can give you a better estimate based on the current market and specifics of your home, but the market will always somewhat unpredictable.
Do I need a home inspection?
Yes! getting a home inspection is highly recommended (it is more like an essential step actually). It helps you understand the condition of the property you're buying, so you can avoid any nasty surprises after the purchase. It will make you aware of the costs of repairs and maintenance the home may require immediately and over the years to come.
Do I need a down payment to buy a house?
Yes, most home purchases require a down payment. This is usually a percentage of the total price of the home. While the standard down payment is 20%, there are loan options that allow for smaller down payments, sometimes as low as 3-5%. There are also some unique options for first time home buyers to buy a house without a down payment at all so make sure to ask for recommendations and all the information to your real estate agent.
What is the selling/buying process like?
For sellers, it typically involves preparing your home, listing it, showing it to potential buyers, negotiating offers, and closing the sale.
For buyers, it starts with getting pre-approved for a loan, finding the right home, making an offer, getting a home inspection, and then closing the deal.
Why do I need a real estate agent?
Because is like your personal guide through the complex world of buying or selling a home. With the knowledge and experience to help you navigate the process, negotiate the best deals, and handle all the paperwork. Plus, they can give you valuable insights into the market to make sure you're making smart decisions.
What is a seller’s market vs. a buyer’s market?
In a seller’s market, there are more buyers than homes for sale, which can drive up prices and lead to quicker sales. In a buyer’s market, there are more homes for sale than buyers, which can mean lower prices and more negotiating power for buyers.
Can I sell my house without a real estate agent?
Yes, you can sell your house without a real estate agent, but there is a catch, it requires a lot of time, effort, and knowledge of the real estate market. You'll need to handle listing, marketing, showings, negotiations, and all the legal paperwork on your own. Many people find that hiring an agent saves them time and stress, and can even help them get a better price.
What is home equity?
Home equity is the portion of your home that you own outright, calculated by subtracting your mortgage balance from the market value of your home. As you make mortgage payments and your home appreciates in value, your equity increases.
What is the difference between being pre-qualified and pre-approved for a mortgage?
Pre-qualification is a preliminary assessment where a lender gives you an estimate of how much you might be able to borrow based on your financial information. Pre-approval is a more in-depth process where the lender verifies your financial details and gives you a specific loan amount. Pre-approval carries more weight with sellers because it shows you’re serious and financially prepared to buy.