Our Austin Home Buyers Guide
Buying a home in Austin, TX can be an incredibly exciting and rewarding experience. For many people, it's a sign of having achieved success, and with a prudent and thorough approach, it can be a worthwhile endeavor and an excellent financial investment.
In fact, becoming a new Austin home buyer will allow you to build equity and ownership in an asset that can provide impressive returns. And, as a homeowner in Austin specifically, you’ll be able to enjoy the benefits of owning a home in a popular, bustling, and still rapidly growing metropolitan area.
That being said, buying an Austin home–whether it’s your first or your tenth–does take a lot of work. Which is why it’s so important to know what to expect, and to have the right information at every step. By preparing in advance, you can make smart choices when it comes to your home buying decisions and ensure a more favorable outcome.
Not sure where to start? No problem! We wrote this handy guide to help you make the most of your home buying experience! In this informative Austin home buyers guide, follow along as we touch on everything you need to know to navigate the Austin home buying process, find the right property, and make a sound investment in your new Austin home!
Why Trust Us?
Pauly Presley Realty is Austin’s go-to real estate company, known for our best in class Austin home search tools and first-rate Austin Realtors. For nearly twenty years, we’ve helped thousands of people make informed decisions when it comes to Austin real estate, as well as find and secure the homes’ of their dreams. With more than 35 professional Realtors available to represent you in finding an Austin home, you can rest easy knowing that with Pauly Presley Realty, you’ll get the home you’ll love at the best possible price.
In This Article
Step by Step Walkthrough
The Austin Home Buying Process
The home buying process can be intimidating for first time home buyers. If you’re feeling nervous, it may help to know that around six million homes are purchased in the United States each year, and many of them are bought by first-time buyers just like you. In some ways, buying your first home can be a lot like having your first kid. The more you know going into it, the better.
The last thing you want to do is go into the home buying process with no preparation at all. Doing so can cause you to get held up at a particular stage of the buying process or lose out on a chance at your ideal home. To help you avoid as many risks as possible, our team has compiled this comprehensive, step-by-step guide to help you make the best decisions at every step in the process.
Follow along as we coverall the steps you should take to find, secure, and purchase a home you’ll love in Austin, Texas.
Narrow Your Search Based on Price
Before you even think about buying a home in Austin, it’s often smart to speak with a lender who will help you determine how much you can afford in a home and what type of home loan is best for you. They can even provide you with a pre-approval letter for the amount you require, which will come in handy when you submit an offer.
Search For Your Home
Once you have received your pre-approval from your lender, it’s time to begin your official Austin home buying search. This is another step where working with a professional can help. At Pauly Presley Realty, for example, our Realtors can help you narrow down your search criteria; including which neighborhoods you want to target, school districts, size of home, home features, etc. From there, we’ll configure our Austin home search tool to provide you with up-to-the minute listings of all the homes that meet your criteria, and assist you in securing any of those you’re interested in.
Make an Offer
Once you find the right property, it’s time to review market conditions and determine the best way to approach making an offer. This can mean anything from low-balling to offering an over-asking price in a multiple offer situation. The negotiations may go back and forth a few times before finalizing terms. This step is a bit more nuanced and involves several steps of its own, which is why it’s so important to work with an experienced agent to assist.
Once both parties have agreed to the terms, the home purchase will then be considered “under contract.” From there, you’ll need to provide an "Earnest Money" check to the title company to open escrow and an "Option Check" to the seller for the option/inspection period. Both of these checks will need to be delivered within three calendar days, and, additionally, documents requested by the lender will need to be delivered within 24-48 hours.
Option & Inspection
From there, the “negotiation process” for the purchase of the property will begin–a step that typically lasts for about 7 days, though it can range from 5-10 days. During this time, inspections will be conducted to get a comprehensive understanding of the condition of the property, including any minor or major defects that could impact your decision to purchase. Note that the negotiations may be altered based on the results of the home inspections.
After the inspections are complete, and any changes or negotiations made to the contract have been agreed upon by both parties, your lender will order an appraisal on the property. Please keep in mind that you’ll need to provide documents to the lender as soon as possible when requested.
On the day of closing, you will need to bring a cashier’s check for your down payment and closing costs along with a photo ID. You will receive keys to your new home once all documents have been signed and your lender releases funds to the seller. Once complete, you should have a sore hand from signing and a smile on your face!
Things a Home Buyer Shouldn’t Do
The home buying process can be sensitive to multiple factors, some of which may be in your control. That said, it’s best to avoid the following circumstances to prevent any unnecessary delays when buying your home. These events could possibly disqualify you from obtaining a home mortgage loan.
- Don't change jobs
- Don't hurt your credit by missing payments
- Don't become unemployed
- Don't buy a new car or other high dollar items
- Don't apply for a credit card
- Don't make high dollar purchases on a credit card
- Don't decrease your savings account
- Don't cosign for anyone
Moving through the process
How to Make an Offer on a House
Making an offer on a house is one of the most monumental steps in the home buying process. Just to get to this point, you’ve had to do a lot of work: getting to know your local market, making a list of sales similar to the house you want to buy, etc. Now, it’s time to decide how much to offer on a house.
Here are the general steps involved in making an offer on a house:
- You pick a starting price and make a written offer.
- The current owner either accepts, counters or declines.
- If accepted, you’re under contract.
- If the seller makes a counteroffer, you either accept it or make a new offer. This can go back and forth.
- If the offer is refused, you can make a new offer or begin a new round of house hunting.
The Costs of Buying a Home
1% of the sales price is customary, but earnest money is a negotiable term. The earnest money is credited to the Buyer at closing as a portion of the down payment or closing costs. Earnest money is refundable if the buyer backs out during the option period.
The amount is negotiable, but generally ranges from $100-500. The option period gives you time to have the property inspected and negotiate any repairs/credits. It also gives you the right to terminate the contract and receive your earnest money back.
During the option period it is recommended that you hire an inspector to look at the property. The majority of the time on a home under 3,000 square feet, an inspection will run around $350-$500. You should also have a pest/termite inspection completed, usually around $100.
An appraisal of the property typically costs between $450 - $550. You will need to pay your lender/appraiser for this prior to the completion of the appraisal.
If the Seller does not have a usable survey, the survey is typically purchased by the Buyer. A survey will typically cost around $500-$700.
Closing costs consist of mostly loan items, title fees, and sometimes taxes. The total amount generally falls between 2-3% of the purchase price. These costs will be paid at closing along with your down payment.
General Home Buying FAQs
First time buying a home?No problem! Find the answers to the most frequently asked questions about home buying in general below.
Mortgages are standard legal documents used to make large real estate purchases without having to pay the entire amount upfront. When you buy your first home in Austin, you'll have to sign a mortgage that entitles the lender to seize the property if you fail to pay back the loan. A mortgage can also refer to the loan taken out to buy a new home. You'll make regular monthly payments towards this definition of a mortgage until its balance is paid off or you decide to sell your Texas home.
You might be surprised to learn that not all mortgage programs even require you to make a down payment. Some allow for 100 percent financing. It's also possible to procure down payment grants for first-time homebuyers, making it conceivable to buy a home without a down payment. In most circumstances, though, you should expect to pay a minimum of three percent down for a conventional loan or three and a half for an FHA-backed loan.
The average time it takes to close on a house, if there are no home closing delays such as low appraisal, is less than 30 days. However, for first-time homebuyers, particularly when you require help via loans/grants to make your down payment, it can take 35 to 45 days to close.
Meeting the demands of the seller is key. In most multiple offer situations, you get a single chance to present your highest and best offer. Staying flexible and accommodating the seller's needs can often result in a favorable decision.
It is a way to make your offer gain attention. By providing these items, you are personalizing the experience and generating an image of who is purchasing.
This can vary from instant acceptance to a few days. After 7 days, if an offer hasn't been accepted, rejected, or countered, it is void.
When a Buyer or Seller wants to modify the terms of the offer. Once the counteroffer is made, a Buyer or Seller can counter-offer again, accept, or reject.
Austin Home Buying FAQs
Buying your first home in Austin? Wondering if it’s worth it, or where to look to find the perfect home? Find out the answers to the most commonly asked questions about home buying in Austin below.
That depends on your individual situation, but if you're looking for a vibrant city with great job opportunities, a vibrant culture, excellent quality of life, and a lot of outdoor activities, Austin is an excellent choice. The city is also known for its low cost of living and great investment opportunities, and with its booming population and growing economy, it’s an excellent place to make a long-term home investment.
To learn more about why so many people are moving to Austin, check out our blog of the same name.
There are many great neighborhoods in Austin, so you should do your research to find the best fit for you. Popular neighborhoods in Austin include Downtown Austin, South Congress, East Austin, Hyde Park, Zilker, and Great Hills.
The housing market in Austin is still competitive, so it's best to begin your search early. You should also consider the current trends in the housing market and the time of year to get the best deal. Ultimately, timing is based on your individual situation and goals.
The home buying process in Austin is similar to other cities. First, you should get pre-approved for a mortgage. Then, you should look for an Austin real estate agent who specializes in the local area and can help you find the right property. Finally, you should research the Austin housing market and learn about the different neighborhoods to find the best fit for your needs.
As a first time home buyer in Austin, there are many things to keep in mind that can help ensure you make the right decision and don’t overspend. While it’s best to work with a Realtor who can guide you through all these considerations, here’s a few of the most important to keep in mind:
First, make sure you research the market and Austin’s many neighborhoods to make sure you're buying in the right place at the right time. Second, take the time to get pre-approved for your first mortgage to ensure you can even afford the purchase, and read up on how to make your home purchase more affordable, as doing so can save you thousands of dollars. Finally, don’t forget about getting home insurance to protect your real estate investment–many home buyers don’t think about it until it’s required.
Your Realty Experts
Pauly Presley Realty, Your Experienced Austin Real Estate Team
Since 2005, the team at Pauly Presley Realty has helped thousands of Austin residents find and buy their dream homes, apartments, and condos, and with our help, we can help you do the same! With over 35 real estate agents on the Pauly Presley team, we have Realtors specializing in every type of housing that Austin has to offer. From high-end downtown condos and cozy apartments to vintage homes and sprawling mansions, our agents do it all.
Contact Pauly Presley Realty today for assistance buying your Austin home! We look forward to helping you through each and every step of the Austin home buying process!