For first-time home-buyers, the process of purchasing a home can be daunting and at times, confusing. Fortunately, an experienced realtor can help explain the process to you and guide you through the essential steps you need to take to purchase the home of your dreams. At Domain Realty Austin, our friendly and knowledgeable realtors have helped countless people just like you buy their first homes, so if you are considering purchasing a home in this great city, make sure that we are your first phone call. Since we strongly believe that an educated buyer is a happier buyer, we have prepared this list of eight fundamental steps that can serve as your “roadmap” to buying a home.
Step #1: Select Your Realtor
Choosing the right agent to represent you is the first (and arguably the most important) part of the home-buying process. Because this is likely the largest purchase you have ever made in your life, it is vital that you pick an agent that has the experience you need to help you through the process. An inexperienced or apathetic agent may not have the knowledge or experience to negotiate the best deal possible for you, and you may end up spending more than you need to. An experienced realtor with a strong knowledge in your particular market will likely be able to find you the right house, connect you with the right lender, and negotiate the right price for the home you want. In addition to market knowledge and negotiating skills, make sure the realtor you choose is someone who you trust and want to work with. The home-buying process can be a lengthy one, so select an agent that you can communicate with and has your best interests in mind at all times!
Step #2: Choose a Lender
The majority of people who are purchasing a home for the first time will need assistance from a lender. You can select a mortgage lender yourself, or your realtor may be able to guide you to a broker and title company that they recommend and have worked with in the past. The financial part of the process is often the scariest step for many buyers, but don’t worry, it is an essential step to take toward owning versus renting your home! When selecting a lender, look for one who offers you competitive rates and personalized customer service. When it comes to financing, you don’t want to be viewed as a number or a file; you want to know that your lender cares about you and is there for you when you have questions or concerns.
Step #3: Get Pre-Approved
It may seem like common sense, but many people don’t immediately understand the value of their lender’s pre-approval letter until they start searching for a home in earnest. After reviewing your application, your lender will issue a pre-approval letter letting you know how much financing you may qualify for. This amount will give you a good idea of what you can afford to spend on a home, which will weigh heavily on your home search. Remember to factor in costs like taxes, home insurance, HOA dues (if any), and utilities into your budget, and from there, you should have a reasonably good idea of what your price range is. Your pre-approval letter will also help show potential sellers that you will be able to qualify for a loan, which can help strengthen your offer if you choose to make an offer on a home.
Step #4: Create a Wish List
Once you have your pre-approval letter in hand, work with your realtor to create a “wish list” that outlines the things that are important to you in a home. You should discuss the area of town you would like to live in, neighborhoods that you prefer, school districts, and exterior and interior features including yard size, kitchen features, bath and shower preferences, and other “must-haves.” It is essential to set realistic expectations, but you can let your realtor know what your preferences are to give them a good idea of where to look and what to look for when generating your search list.
Step #5: Take a tour
Many home-buyers find the process of viewing homes to be one of the most fun parts of the buying process. You get to see homes within your price range and can imagine yourself living there. Make sure to take thorough notes on each house, and approach the process with a critical-yet-open mind. Keep in mind that minor cosmetic things can always be replaced or fixed, and sometimes you find the perfect home that is move-in-ready, and sometimes you find a gem that just needs a little polish!
Step #6: Make an Offer
Once you have found a home that you are in love with, it is time to make an offer! An experienced agent’s knowledge will come in handy at this stage, as you will likely have to negotiate and make a competitive offer, especially in a hot real estate market like Austin. Be aware that you may have to put down some earnest money that will go toward your down payment on the home, and you may want to factor in contingencies into the offer, including having the house inspected before finalizing the purchase.
Step #7: Do Your Due Diligence and Finalize Your Loan
Before closing on your home, it is vital that you have your home inspected to identify any potential issues. On the outside, the house may look perfect, but serious issues may be lurking within or underneath. These problems may include plumbing or wiring problems, or foundation problems that can be extremely costly. If your home inspector finds a problem, you may decide not to purchase the home, or you may wish to negotiate with the seller to repair the issue or lower the sale price of the house to cover the cost of the repairs. Once you are satisfied that the home is ready for purchase, you can finalize your loan with your lender. During this time, it is essential not to make any significant purchases (cars, furniture, expensive appliances) that may affect your credit.
Step #8: Close On Your New Home!
The final step to becoming a new homeowner is finalizing the purchase and closing on your home. The deed to the house will finally be transferred to you, and you will officially be the owner of the property. Depending on your specific transaction and the details of the contract, you will likely have quite a bit of paperwork to sign, but your agent and the title company’s closing agent will guide you through the process so that you know what you are signing and why. Once the paperwork is complete, the funds will be transferred from your lender to the seller, and you will get the keys to your new home!
Why Do So Many First-Time Buyers Choose Domain Realty?
First-time home-buyers are looking for an agent that has their best interests at heart. That’s why so many first-time buyers turn to us for help with the most significant purchase of their lives. We know the home-buying process, and we are experts in the Austin market. We work tirelessly on behalf of our clients to explain the process, find the right home for their needs and budget, and will negotiate firmly to get them the very best deal possible. We know that you have many choices when it comes to selecting an agent in Austin, so we strive always to distinguish ourselves from the rest. Call us at (512) 872-4211 to find out why we’re different.
As the fourth largest city in Texas and 11th largest city in the nation, Austin has catapulted itself into one of the fastest growing and most desirable places to live in the country. From “best city to live in” to “best city to start a business in,” Austin routinely finds itself ranked amongst the top 10 cities in the country across a range of categories, and things don’t appear to be slowing down anytime soon.
Along with one of the largest public universities in the country, Austin has recently become a thriving place for young professionals thanks to the influx of close to 4,000 technology companies—including Facebook, Apple, Google, and Dell—across the Austin area. In fact, a net 110 people currently move to Austin every day. With its diverse economy and young age demographic, Austin has experienced an explosion of great new restaurants, bars, and breweries all over town. And with the annual South by Southwest festival, Austin City Limits Music Festival, and identity as the “Live Music Capital of the World,” Austin is more than just a great place to live, it’s a cultural destination.
At Domain Realty, we routinely meet and work with individuals and families who have recently moved to the area from within the state and around the country. So whether you’re looking for a home of your own or want to purchase a rental property and try your hand at being a landlord, we are dedicated to working round the clock to find you the perfect place. Our agents at Domain Realty call Austin home, and we couldn’t be more excited to help you one day call it home as well.
But if you’re still not convinced that Austin is the city for you, let’s look at a few reasons why you should pack up and make that move and finally call get that coveted identifier, “Austinite.”
Why You Should Purchase Now
When Austin cracked the top 10 on PwC US and the Urban Land Institute’s Emerging Trends in Real Estate report of hottest real estate markets five years ago, experts thought it was a fluke. They aren’t thinking that anymore. In 2016, Austin was No. 2 on the list, and in 2017 it took the top spot, making one thing clear, the secret is out!
“Austin’s rise to the top of the list signals the durability of the city’s long-term appeal to investors,” says Mitch Roschelle, PWC partner and real estate research leader. “Austin, along with many of this year’s top 10 cities, boasts attractive, niche neighborhoods and a vibrant, diverse economy.”
For potential investors this means one thing; the time to act is now. Austin experienced a 7.3 percent rise in home prices compared to the rest of the country over the last year. And while projections for the first half of 2018 may not set new records, the research team at Zillow predicts home prices will still rise 3 percent in the first half of 2018.
And while that growth closely mirrors the nation as a whole, there are a few factors specific to the Austin market that could persuade potential investors from buying sooner rather than later.
One of those is inventory. Reports from June 2017 said Austin currently has a 2.3-month supply of homes—compared to a 5.2 month supply five years ago. This below average supply homes compounded with the above-average rate of sales creates a squeeze on the number of homes available for purchase. That’s why you need an experienced and professional real estate team to help you find a house and close the deal quickly.
But fear not. The recent Emerging Trends in Real Estate report did say that “the housing market, both multifamily and single-family, appears to be making adjustments to match supply with the requirements and locations desired by the changing population base.”
Additionally, experts predict Austin home prices could continue to rise through 2018 and into the future. This continual appreciation in home value across the Austin area means buying a home will continue to be a sound investment for years and decades to come.
Up and Coming Neighborhoods
As much as we would like, finding and affording a home in Hyde Park, Tarrytown or Clarksville is near impossible. But that doesn’t mean there aren’t some up-and-coming, off-the-beaten-path neighborhoods to invest in now. You just have to know where to look.
Allandale/Crestview/Wooten – Just north of Hyde Park and Rosedale, these neighborhoods make up the 78757 zip code and offer much more affordable and larger homes than the surrounding areas while still offering proximity to hip restaurants, bars, and public transportation. (Avg. price $350,000 to $450,000)
The Domain – North of Allandale and Crestview, The Domain area, is exploding thanks to the influx of shopping, restaurants, bars, and nightlife in the Rock Rose area. With access to Whole Foods, Topgolf, and some technology companies, it’s a great place to buy single-family homes at an affordable price. (Avg. price $300,000 to $350,000)
Westgate/South Manchaca – South of Highway 290 and east of Mopac, this area is close to the coveted 78704 zip code without the high prices. This area gets you home with bigger lots that are close to downtown, close to parks and other outdoor activities, and close to great restaurants. (Avg. price $350,000)
Windsor Park – If you’ve been in Austin the past couple years you’ve heard of Windsor Park/Mueller. Once the sight of Austin’s airport, it’s now a sprawling community with a new HEB grocery store, new restaurants, and a beautiful park. And while the homes are older, buyers get style and affordability. (Avg. price $350,000 to $400,000)
Whether you’re a first time home buyer or real estate veteran, purchasing a home in a new area can be a daunting and even confusing experience. Our team of experienced and professional realtors is passionate about finding our clients the perfect place to call home. At Domain Realty, we are experts in the Austin market and are here for all of your needs. Call us at (512) 872-4211 and speak with an agent today.
Owning your own home has been an essential component of the American dream since its inception, but renters in Austin still ask the question, “What are the benefits of buying versus renting?” Certainly, renters enjoy some benefits, like not having to perform maintenance (other than basic upkeep and changing the air filters) and being able to change location at the end of their lease easily. Still, many renters say that their preference would be to put down roots and own their home. The flexibility of renting is often convenient, but the long-term benefits of owning the home ultimately tend to win this battle.
The Main Benefits of Homeownership
You are able to put down roots. When you own a home, you have a more significant investment in the community. If you don’t own the house, it is harder to connect with the neighborhood and truly feel like you are a part of it. Once you have purchased your property, you will likely take more pride in your home; it’s appearance and the neighborhood overall. You will probably connect with your neighbors and may seek to make long-term bonds with the others who also have invested in the community. Homeowners often feel a great sense of pride and community in their homes and neighborhood.
Homeownership is an investment in your future. As you pay off your mortgage and increase the equity in your home, you will find that your home is a “live-in” savings account. Over the lifetime of living in the house, you will be able to build wealth, and if it comes time to sell the home, you will be able to realize it’s real financial value.
Homeownership has tax advantages. For many people, the tax benefits associated with homeownership is reason enough for them to make the plunge. Homeowners are allowed to deduct their mortgage interest on their federal tax returns, as well as closing costs and property taxes. These savings can add up to thousands of dollars each year (especially in the beginning years when your mortgage payments are at their highest) that can be extremely beneficial.
Budget stability. Most renters have experienced the routine rent-hikes that seem to occur on a yearly basis. In Austin, especially, the cost of rent has soared in the past decade and renting is an increasingly expensive proposition. If you purchase a home with a fixed-rate mortgage, you can stabilize your budget, knowing that this payment will not change for the 15 or 30-year term of the loan.
Over time, buying is cheaper than renting. While your mortgage payment may be more than you pay in rent right now, over time with the changing rent prices, you may ultimately save money by buying a home. When you factor in the tax benefits, owning your home is usually cheaper in the long run than renting. Because the value of real estate tends to increase over time, the house that you purchased will likely be worth much more later on than it was when you first bought it!
Ready to Buy?
As a renter, you are used to the standard costs that are involved from the moment you find your place to the moment you move out of it: the application fee, the security deposit, the first month’s rent, the optional pet deposit, the monthly rent, the renters insurance, and the utilities. Buying a home is a different process and involves other fees. When you are ready to purchase a home, be sure to talk to your agent about:
- Earnest Money: You the homeowner would pay the seller this deposit, which is placed in an escrow account
- Down Payment: This is also a certain percentage of the purchase price.
- Home Appraisal Fee: This must be paid before your home loan is approved.
- Property Taxes: You must pay the seller upfront for the taxes they paid between the closing date and the end of the current tax period.
- Homeowners Insurance: Paying the first year’s insurance early may be required by lenders.
- Flood Insurance: Depending on where you live and if you live in the floodplain, you may be required to purchase flood insurance along with homeowners insurance (the latter does not include the former).
The following are the recurring costs that factor into owning a home:
- Loan Payments: These, which vary depending on factors such as what kind of mortgage you have, are included in your monthly escrow payment.
- Property Taxes: These, included in your monthly escrow payment, vary according to time and location.
- Homeowners Insurance: This is also included in your monthly escrow payment.
- Private Mortgage Insurance: This is required if your lender is private and if you only paid a certain percentage of your purchase price upfront.
- Utilities: These include internet, cable, water, electric, gas, and trash.
- Repairs & Upkeep: These may not be monthly recurring payments, but they are costs that will come up during your tenure as a homeowner. This includes painting and other home renovations, mowing your lawn, tending to your garden, and paying professionals to fix anything in your home that you cannot fix yourself.
Your Wants and Needs
The price of a home and all associated costs are only one part of home ownership. You must also consider the house itself: its appearance, its location, and its inhabitants — you and your loved ones. Consider your current wants and your current and future needs, factoring in marital status, family size, the number of children expected to live in the home, and the number of pets.
Are you single? Do you have a partner? Do you have a child or children, or are you currently expecting, or do you want children within the next few years? What do you value? These questions will help you determine your home size and location wants and needs. For example, if you have children, the school district and school a home is zoned to will factor into your decision making. Do you have an ailing parent that you would like to live closer to? A nearby neighborhood may be where you begin looking for a home. Would you prefer to have a short work commute? Seeking out a home that is an hour away from your office may not be the ideal route.
Once you have considered all of the things that matter to you and your family, discuss them with an agent that you trust. At Domain Realty Austin, our experienced Austin real estate agents are ready to help you leap from renting to owning your own home. We will help you find the perfect home that fits your needs and your budget, so why wait any longer? Contact us at (512) 872-4211 to talk to a member of our team and get started on your home search today!
After finding each other, planning and executing the perfect wedding, and merging your lives, the next step for newlyweds is preparing to buy their first home together. And while the long and arduous process of pulling off a dream wedding may have felt stressful at times, for many newlyweds, saving up for and purchasing their first home together is a whole new ballgame. Yes, budgeting, saving, and choosing the home that’s right for you is a big decision, but it doesn’t have to be a negative experience. And while it’s essential to understand the significance and size of this purchase thoroughly, it shouldn’t deter you from approaching the process with optimism and excitement.
The real estate market is complicated and overwhelming at times, but with the right preparation and realtor, finding your dream home can be an enjoyable time and significant milestone in your marriage. From choosing the neighborhood to the number of bedrooms, and preparing financially, buying a home is a full-time job. So let’s look at a few ways to simplify the process and get you into your dream home faster than you ever imagined.
Prioritize for Your Life Right Now
When you start looking at different homes and what they have to offer, it’s easy to get swept up in the overall excitement and forget what you specifically wanted in a home in the first place. A house is no small purchase and buying one that isn’t right for your life could be a mistake you regret for years to come.
Before you talk with a realtor or step foot in a single home, sit down with your spouse and determine your priorities. At its basic level, this includes the size—how many bedrooms and bathrooms—and also location. Do you want to be close to your place of work for a short commute or would you rather be close to restaurants, bars, and nightlife? Are you planning on having kids one day? If so, maybe the priority is being in a good school district or area with a low crime rate.
Keep in mind that while you may be planning on starting a family in the future, you should buy a home that’s also the best choice for your current lifestyle and family size for the next five or six years. Purchasing a five-bedroom house in the suburbs because you plan on having three kids one day may seem like a responsible purchase, but the mortgage payments and cost of upkeep in the meantime could be financially straining, especially for a young married couple just starting out.
Being financially prepared is one of the most important aspects of buying a home, and depending on some factors, the most challenging. To purchase a home, you either have to buy it outright with cash or obtain a loan, also called a mortgage. To secure a mortgage, most lenders want a 20 percent down payment. However, depending on the institution and you and your spouse’s total debt load—combined debt including student loans, credit card payments, et al.—a couple with good credit can secure a loan with as little as three percent down.
Along with your credit score and down payment, a couple’s combined income will also determine whether or not they can obtain a mortgage and the total amount. For most couples, their mortgage payment is around a quarter of their income after taxes. Along with your monthly mortgage payment, it’s important also to be aware of closing costs, property taxes, insurance, and other expenses related to furnishing the home or basic upkeep in the first few months or years.
A few ways you and your spouse can be financially prepared when you find your dream home include:
- Build up your credit through one or two credit cards, making sure to pay them off in full every month.
- Work hard to pay down your debts, especially high-interest debts like credit cards.
- Make a budget, stick to it, and save as much as you can for the down payment.
- Speak with a mortgage consultant who can guide you through the qualifying process. The expert mortgage consultants at Great Hills Lending Group offer free consultations and can be reached at (512) 872-4211 or you can visit their website at http://greathillslending.com.
Saving for your down payment takes some sacrifice, but with a little planning and discipline, you and your spouse can be miles ahead of other couples in the home-buying process.
Communicate Every Step of the Way
Combined with everything else in your life, the home-buying process can take up most of your free time and put extra stress on your young marriage. It’s important to keep the lines of communication open, so you and your partner know each other’s expectations, concerns, and feelings every step of the way.
Make communication a priority before you even begin looking. Talk about the expectations you each have for the home as well sacrifices you need to make to save up. Then talk to each other through every phase of the buying process and be completely honest about your feelings.
Find an Experienced Realtor
Thanks to the internet, newlyweds can search hundreds of homes in their desired area from the comfort of their couch. And while this is an essential part of the process to get an idea of what you want, working with an experienced real estate agent makes your experience less stressful and more enjoyable. Real estate agents know the market and have access to in-depth data about neighborhoods, previous owners, and properties you can’t find anywhere else. From unsuccessful attempts to sell the home in the past to the market value of the area, all of this information helps real estate agents get you the best deal possible.
Along with their knowledge of the industry, they also help you search for homes you haven’t seen and negotiate prices, potentially saving you tens of thousands of dollars. Professional real estate agents can also handle the enormous amount of paperwork involved with buying a home, so you don’t have to worry.
At Domain Realty, we are passionate about helping newlyweds begin their life together in the home of their dreams. There’s nothing more comforting than walking in the door of a house you own, cooking dinner with your spouse in your kitchen, and making daily memories that will last a lifetime. Call Domain Realty today at (512) 872-4211 and get started with your search.