Buying a home in McKinney? You’ve already made a great choice.
I’ve been a homeowner in McKinney now for six months.
Life has unexpected surprises. I was showing a home in McKinney one day to a client, and across the way I saw another home with a for-sale sign in the yard.
Somehow I knew I would end up buying that house, and I did!
I grew up in neighboring Denton County, but I never imagined I’d ever live in McKinney. In the 1990s, McKinney was something you’d see on a road sign: 37 Miles to McKinney.
There was nothing out that way. To me it was an abstraction, but not a place.
Back then, you’d say the same thing about Frisco and Allen, and a lot of other hot, nearby towns here.
Then the boom happened, and today McKinney is one of the best places to live in America.
Table of Contents
- Why Buy a House in McKinney?
- Get to Know McKinney
- School Zone
- Know Your Down Payment
- Talk to a Lender
- Comps & Negotiation
- Get It Inspected
- Final Walkthrough
Why Buy a Home in McKinney?
As a town, it came on the scene in 2008, and debuted at #14 on Money Magazine’s Best Places to Live in America.
Nowhere else can you get the combination of small-town charm, urban trends, social and family life, European architecture and affordable Texas housing.
It’s quaint and bustling, and tuned-out and plugged-in.
Oh, and McKinney is the capital of the the crepe myrtle.
Get To Know McKinney
When buying a home in McKinney, there are essentially four main areas centered around the north side of the intersection of the Sam Rayburn Tollway and US Highway 75, extending to U.S Route 380.
The older side of McKinney is east of 75, and here you’ll usually find one-story homes with a median house price of $232,500 and average year built of 1968. Make sure you the seller provides you with full disclosure about any possible lead paint used in homes built before 1978. It’s the law!
Lots of fixer-uppers and renovations here, and you can pick up a really trendy home with a classic retro exterior and completely remodeled interior.
West of 75 is where the newer side of McKinney’s growth began back in the 90s.
Look here if larger and more stately homes are more your thing, and expect to drop around $315,000 for a four-bedroom, 2,500 square foot home built in the early to mid 2000s.
New construction is expanding northward to the fast developing east-west 380 highway, otherwise known as the Golden Corridor, and southbound towards the Tollway.
In these areas you’ll find brand new homes averaging at around $380,000 for four-bedroom homes at around 3,000 square feet, and with all the modern trimmings.
If “zero-lot” homes are your thing, i.e. small backyards, but maintained shared common areas, this is your new home in McKinney.
Finally, there’s a spot for the keen buyer with a lot of TLC to give, and that’s downtown McKinney. It’s experiencing a renaissance of art, music, gourmet dining and start-up companies.
Houses here in downtown McKinney start at just under $250K, but keep a good amount of Gs in your pocket for updating them.
Nice growth, right? I know, I know, and we all wish we had bought in 2009, but look at 2018.
We’re experiencing a slowdown after the “Toyota Bump” when they moved their headquarters nearby to Plano, TX.
The market is correcting, and it’s a good time to buy. Look at this graph which shows how long homes sit on the market before getting sold:
The longer homes sit on the market, the more sellers are willing to bargain. Case in point:
In short, this is the best buyer’s market in McKinney in years!
There’s not much I can say about the school districts in this area that hasn’t already been said.
However, what matters to you is knowing what school your children will go to after buying a home in McKinney, and how far away it is.
Fortunately, that’s as simple as clicking here.
The listing info for a home in McKinney could be outdated, and sometimes agents make mistakes.
So it’s always best to verify everything for yourself. Even this app could be wrong, but you can go here to see accurate maps published by McKinney ISD.
For other options, check out the Imagine International Academy of North Texas, a publicly funded K-12 charter school where graduates can apply to any university in the world.
The average commuter drives 27 minutes to get to work from their home in McKinney.
Consider Dallas Fort-Worth is massively spread out, and that’s actually great here for local folks. We consider anything within 30-minutes-drive to be practically next door.
For those of you moving to McKinney from out-of-state, you’re about to learn how Texas pays for things despite not having a state income tax. Property tax.
McKinney clocks in at just under 2.38%, and that goes to fund schools, services, roads and all the expansion we see daily around us.
Proposition A just passed on November 6th, and that will issue $600M in bonds to build non-toll highways for McKinney’s growing infrastructure.
That is a blessing, and for a metroplex that is notoriously dependent on tollways to get around fast, a discount.
Living in McKinney comes with inalienable rights, and one of which is you don’t have to show to the government how much you paid for your house.
That’s right, they have to guess. And they often guess wrong in the wrong way, but you can protest their assessment once a year.
Know Your Down Payment
Now we’re getting serious. I consider education on this matter to be so important that I’ve devoted a section of one of my main pages on this site to the issue.
20% down has long been the gold standard for buying a home, but it’s not the only way.
For veterans, you can get 0% down payment. Nothing like paying nothing and getting the key in your hand, and walking in the door as a return for your service.
0% down payment is also on offer from the government to settle in “rural” areas. Buying a home in McKinney, that means places that are not the centers of development, but they will be.
Get a killer deal on some land and a homestead, and remember the words of Kevin Costner in Field of Dreams: “If you build it, home equity will come.”
These are guaranteed by the government, and if you qualify for FHA, you can buy a house with only 3.5% down payment. That’s practically giving it away.
You may be thinking you have bad credit, but it’s surprisingly easy to get approved for FHA.
(That’s the Federal Housing Administration, and they exist to help people become homeowners.)
(In other words, the opposite of Emergency Economic Stabilization Act of 2008, which existed to help people lose their homes.)
Conventional, or an otherwise fancy word for normal mortgage loans that cost more upfront. They start at 5%, and are usually said to make the most sense at 20%.
For all the other loans we’ve discussed, you have to pay more per month in something called PMI, or private mortgage insurance.
What that means is, you thought you were saving money on the down payment, but you thought wrong, and you’ll pay for that over the next 30 years!
Just kidding. All these loans serve their purpose depending on what works best for you.
(That, and it could also be something you’re paying for only 15 years.)
Confused yet? Great!
Talk to a Lender
They’re not scary, I promise. If they were, I wouldn’t always be hassling them to hurry up and close loans on time for my clients!
Look, lenders want your business. They are in the business of selling money, and they would like nothing more than to sell their money to you.
Take advantage of that, and use them as a resource when you’re dipping your toes into the real estate market for buying a home in McKinney, and for when you’ve found the one you love.
They’ll teach you for free on how to improve and arrange your finances to get pre-approved for a loan, and that’s when you can start home shopping!
Tip: Don’t rule out your small, local lenders. They’re fast and flexible, and want to earn your business.
The big names like Chase and Bank of America will entice you with potentially lower rates if you are already have an account with them, but if you’ve ever spent an hour on hold with customer service only to press “4,”, I need not say more.
Comps & Negotiation
Now comes the fun part for buying a home in McKinney. For me, anyway.
Here’s where you are going to need to get a Realtor. (But Jonathan, I can go on Zillow and know everything a Realtor does!)
Imagine you’ve decided to go swimming with sharks. You can hire a professional shark guide, or you can Google “how to swim with sharks” and get the gist of it.
Ready to jump in? Didn’t think so…
Besides Zillow having more inaccurate information than a Taco Bell recipe, you simply cannot replace the experience of a Realtor who is in the market every single day, haggling and negotiating, and knowing first-hand how homes are valued in your area.
For buying a home in McKinney, some things are valued more than others. Big backyard? Primo. Sledding shed? Not so much.
Searching comps* is just the first step. Your Realtor has developed a sense of market trends, and knows which comps to consider highly, and which not so much.
Like what having that pergola in the backyard is really worth, and if that one broken fence post is going to get you $5,000 off the listing price or not.
Most importantly, they know how to call the opposing agent, and not sound like a pimply teenager asking for a first date.
*comparative sales, i.e. similar homes that have sold in the vicinity at best within the past 90 days
Yeah, Yeah, But How Much?
Buying a home in McKinney, know that you do not pay commissions.
I’ll repeat that, buyers do not pay commissions, but the sellers do.
You want the house you want, but your Realtor will always be in your corner. We get paid either way and, besides, it’s the law!
Try to work with your Realtor, and use their experience to your advantage. The seller always thinks their house is worth more, and the buyer always thinks it is worth less. Both the buyer and seller agents are going to have a good idea of what it is really worth.
However, like anything else, the true value is what you buying a home in McKinney are willing to pay for it. Take what your Realtor says into consideration, but go with your gut.
The Option Period
Sounds like something nerds went to after lunch in high school, right? Actually, it’s the greatest thing ever invented for buyers since money.
On the Purchase Contract AKA the Offer Contract you’ll fill out with your Realtor, and near the end is a section referring to the Option Period.
This section has two blanks: X number of days and X amount of dollars. For buying a home in McKinney, this should run you around $300.
The X amount of dollars gives you in X days, and that is the option to back out of the contract, and for any reason.
This is actually what makes the “Purchase Contract” more accurately called the “Offer Contract,” and you can think about whether you really want to go through with the purchase or not.
The fee paid is for the seller’s implicit agreement to take the house off the market while you think. The seller is locked in, and you are not.
Isn’t that awesome?
Get It Inspected
This sounds like a no-brainer, but I was surprised to learn that a over a third of Millennial homebuyers don’t do this. I guess we’ve been trained to believe that everything looks as it appears on our screens, and to trust what we see.
Home Inspectors are licensed, and by the same state institution that licenses and oversees Realtors.
However, they are not Realtors, and have nothing to do with us. (In fact, Realtors can’t even see their inspection reports unless you authorize them to.)
Buying a home in McKinney, an inspection will cost you a couple of hundred bucks, and it depends on the size of the home.
Ideally you want to do this during the Option Period. You can do an inspection afterwards, but it doesn’t do you much good to learn the house is built of Q-Tips and matchsticks after you can’t back out.
And, yes, you’ve already sunk in a few hundos for the Option Period, and here’s a few hundo more, but what you’re buying is knowledge about an asset that costs 500x that amount.
We’ll go through the details of the post Inspection Report in a future post, and you can sign up below.
You’re a day or two away from buying a home in McKinney, and you’ve even bought a new car to celebrate.
(Just kidding. Do NOT do that!)
Hit up your Realtor and request one last time to see the home, and make sure a meteor hasn’t crashed through the roof or anything.
Check if the house since your offer was accepted has suffered any kind of damages. Not only are you not on the hook to buy the house in the present condition, but the seller has to fix the issues..
So it’s very important you see the house again, and before you pay for it!
Happy House Hunting!
Congrats! You made it, and those are the 10 things you need to know first before buying a home in McKinney.
Now, what to know next? Keep reading this blog by signing up below, and give me a call for any direct questions!