Buying Your Austin TX Home or Investment
Provided below are answers to common questions about purchasing real estate in Austin TX and surrounding areas. If you have any questions that are not addressed here in the Austin Buyer FAQ, we invite you to call us at (512) 327-3900 or contact us through our contact page.
How do you help me find the right property?
First, we have to define what “the right property” means to you. We start by having a conversation with you and becoming aware of the circumstances surrounding your decision to buy. It’s important that you are clear about the type of property you want to buy, the price you can afford, and the criteria most important to you. Is it location? Best size for the money? Moving closer to your job? Moving up to a nicer home? A neighborhood with good schools? Low maintenance costs? Appreciation potential? Investment viability?
Finding a home or investment property in Austin is about knowing what you are actually looking for, being educated about the market and prepared to buy, then looking for it! By listening to your reasons for buying and understanding your criteria, we can better advise you and find properties that match your needs.
Do I need to be pre-approved for a loan?
Yes. You will need to visit with a lender if you have not done so already. This will establish the price range of homes we can show you. If you don’t know a lender, we know many good ones and can refer some to you.
Once I am pre-approved, what’s next? When can we start looking at houses?
Once you are pre-approved and know your price range, we will start discussing the areas you are interested in and the types of homes available in those areas. After we identify the best candidates for you, we will start touring those homes and look for the one that best matches your criteria.
How often will we go looking at Houses?
Once we start, we don’t stop until we find your new home. If we’ve done a good job listening to your needs and understanding what you are seeking in a home or investment property, we will be, on the first day, taking you directly to houses that will be serious candidates for purchase. Often, you will find the right home on the first or second time out looking. Other times, it may take many trips, and some adjustments to your criteria if suitable properties are not turning up.
Think about this; whenever you buy a home, there are three main criteria you most likely base your search upon. The first is price. You want to find a home in your price range. Second is location. You want to find a home in the area you like, close to the places you frequent or close to your employment. If you are an investor, you want an area that renters desire. Third is the physical aspects of the property such as size, amenities, age, condition, etc.
What if we can’t find homes that fit my criteria?
If your search stalls, it’s most likely because one of the above three items needs to be adjusted. You must often choose which is most important – price, location, or physical characteristics – and relax your expectations on one or two of the others. This doesn’t mean you have to settle for less than you want. In fact, paying more can solve almost any problem. Most buyers, however, are in fact bound to a certain price range and must choose from the available homes in that price range. This may mean purchasing a smaller home in better condition, or a larger home that needs some TLC. We help you stay focused on what you tell us is really most important to you.
What about New Homes in Austin and surround areas?
We can assist you in searching for a new home as well. You have to be careful purchasing a new home. You want to avoid areas that are being over-sold to out of state investors otherwise you’ll end up having a bunch of renters as your neighbors, and your home value could remain flat if the neighborhood does not mature in a favorable way. Also, picking a good lot and floorplan in the new subdivision requires a bit more knowledge than one might think. We think like investors so we know what to look for and what to avoid.
That said, buying a new home can be a lot of fun. It’s exciting to move into a brand new home. We think it’s a good idea to consider a new home as long as you are certain you will remain in it for at least 3 to 5 years, allowing time to build equity, especially if your downpayment will be low. The biggest risk in purchasing a new home is that if you have to move too soon, you’ll have a hard time selling it for enough to break even. This is due to the competition you will face from the builders nearby, plus the costs of selling your home. As your real estate consultants, we’ll make sure you are a smart buyer and that you consider all factors before purchasing a new home.
What happens once we find the right home?
After we find a home you like, we perform a market analysis for you to determine what an appropriate offer price should be. You will receive a comparative market analysis showing the market activity for properties similar to the one you are interested in purchasing. This tells you whether or not the seller’s asking price is reasonable, and it identifies for you a range of pricing within which a reasonable offer can be made.
We also review the Sellers Disclosure Form, which is a legally required disclosure by the seller informing you, the buyer, of all know defects and items not functioning with the home. The Seller’s Disclosure may or may not reveal items that affect your offering price, but we will review it with you and discuss anything noteworthy.
What happens during the offer process?
We write up an offer for an amount that you feel is appropriate based on the market analysis, age and visible condition of the home, and other factors. We know how to write good offers that will merit serious consideration, while still trying to get you the best deal we can.
Our philosophy is to write “clean” offers that are easy to understand and give sellers as many reasons as possible to say “yes”. If we are offering an aggressive price, perhaps lower than market value, it’s always helpful to give something to the seller that they will value more than a few extra dollars, such as a quick close, a shorter option period, a higher option fee, more earnest money, or anything else we learn from the other agent about the seller’s needs. We try to write win-win offers, while at the same time insuring that you obtain terms and conditions that work for you.
What happens after the Seller has my offer?
We will allow a reasonable amount of time for the seller to consider your offer. This could range from one day to several days depending on weekends, holidays, whether the seller is living in the home or is out of state, or other factors. We don’t want to rush the seller, but at the same time, you should expect the courtesy of a prompt response.
The seller can do one of three things with your offer. He can accept it as-is, he can reject it, or he can respond with a counter-offer. You may in turn accept, reject or counter-offer his counter-offer. This process will eventually result in an agreed deal, or no deal.
Once the seller signs our offer, what happens next?
The next phase is what we call the “Option Period”. Unless you submitted an “as-is” offer and waived the right to inspect (not recommended unless you are an experienced investor), there will be a period of time, usually 5 to 10 days, during which you complete an inspection and any other related due diligence in order to determine whether or not you still wish to purchase the home. We will meet with you to go over the inspection report and help you decide if there are items that cause concern.
What are my choices after receiving the property inspection report?
You have three choices prior to the end of the option period. 1) You can cancel the deal and forfeit the option fee to the seller – in which case we start looking for another home. 2) You can report that everything checked out fine and ask for nothing further – in which case the deal moves forward unchanged. 3) You can request changes to the original contract, which the seller may or may not agree to consider. Most commonly, your inspection will reveal minor and/or major condition issues that may cause you to worry about future repair costs related to owning the home.
For example, if the inspection reveals that the roof is at the end of it’s life, and that fact has not been accounted for in the contract price, you may seek an offset for the estimated cost of a new roof. However, the seller doesn’t have to agree to your request.
Doesn’t the seller have to fix things that are broken or worn out when they sell a property?
Absolutely not. The seller has no obligation to perform any repairs whatsoever related to the sale of the home. Real Estate is sold “as-is” except for those items agreed to in advance and in writing by you and the seller. In most instances, the original offer will contain no such agreements.
On the other hand, if the inspection reveals problems that will cause you to cancel the deal during the option period, letting the seller know about your concerns, and giving the seller a chance to keep you in the deal by agreeing to remedy or compensate for property defects, is a reasonable way to proceed. After all, if you back out, the seller now knows about these condition problems and will have to disclose the information to the next buyer. So it’s in the seller’s best interest to try and work with you.
Every deal is different, as are all buyers and sellers. Our role at this juncture will be to negotiate on your behalf so that you have the best chance of paying a price that reflects not only the current real estate market but also the current condition of the property. This is where it helps to have perspective. If you have submitted a full price offer on the home, you are not unreasonable to expect some help on repair issues that are revealed by the inspection. On the other hand, if you made an aggressive offer, below market value, and essentially took the seller down to his bottom dollar already, the seller may have no room left to negotiate further allowances.
Once the Option Period ends, is it smooth sailing until closing?
Somewhat, but not completely. We still have to get your home appraised by your lender. Having done our homework, and made an offer which is supported by market data, you can feel confident that your lender will agree with our valuation, but one never can be completely certain of what lenders and their underwriters will do.
We must also remain diligent with regard to your loan and make sure your mortgage officer receives a copy of the contract and anything else she asks for related to the sale. Of course, being pre-approved lets you know that your initial financial numbers are satisfactory, but you also have to know that you should do nothing that may impact your credit report or your credit score, such as deciding to buy a new car before your sale closes. We will be in direct contact with both you and your lender making sure that everything is progressing as needed.
If you are purchasing investment property, this is also the stage where we need to get you connected with a Property Manager in Austin if you have not selected one already.
So, once my deal survives the option period, the home appraises as expected, and I receive final loan approval, it’s smooth sailing to the closing, right?
Usually. But our job is to remain on top of things and not simply assume that everything is ok. We will be following up with the lender and the Title Company, and making sure everything needed is in place.
Do you attend the closing with me?
Absolutely. Our role at this point is to review the settlement statement with you and look for any errors or mistakes that affect your bottom line. We also help coordinate move to the property and make sure the seller’s agent has everything needed for a smooth transition. We’ll have a checklist for you to help make sure you don’t forget to handle your utility transfers, phone and cable, postal change of address, etc.
How long will the home purchase process take?
From the time your offer is accepted until closing, normally 25 to 45 days?
What happens after closing?
Our sincere hope is that your experience working with us will be such that we remain in contact and hear from you occasionally. If you ever have any questions about real estate, need our services again, or have friends or family who need help, we will always remain a resource available to you.
The above is an overview of the real estate purchase process. Of course there are many details to attend to and items to keep up with during the sales process. What we want you to know most of all is that when you enlist our services to find a home or investment property, we have a specific set of steps that are followed that will result in the successful acquisition of a property that matches your wants and desires. Please call (512) 327-3900 or use our contact page if you have questions or would like to get started.