Before You Look for a Home
What Can You Afford?
- Monthly budget: Figure out what you can afford on a monthly basis (including real estate taxes, utilities, insurance, loans, memberships + your mortgage) — your total debt-to-income ratio. Lenders generally want this to be under 36% gross income.
- Down payment: What can you afford to use for a downpayment? If you can set aside 20% of the total mortgage, you’ll avoid paying extra insurance to the bank, or PMI (private mortgage insurance).
- Get pre-approved for a mortgage. You may have already have a lender in mind, or we can connect you with a local bank that knows Austin. They can help you consider types of mortgages and shop for rates. It’s a good idea to do a little looking on your own, like with a site like http://www.bankrate.com/. Also, it’s a good idea to check your credit rating.
Your Wish List
- Prioritize: Force yourself now to prioritize before you get in a situation where emotions run high. Use our Buyer’s Checklist to rank your criteria in order of importance so you can make smart decisions later.
- Environment: Also make sure to consider the community and its schools, hospitals, public spaces, retail areas and commuting time.
- Timing: When do you need to move, and is there any flexibility?
- Find an agent: Find a local real estate agent you are comfortable with and trust to be your advocate. No slick wise guys allowed!
During Your Home Search
Get Smart & Be Ready
- Stomping Grounds: Zone in on the Austin neighborhoods to help narrow your search. You can get started in our Neighborhood section.
- Ready Position: The market has been scorching in Austin, so homes go really fast. It may surprise newbies to our town. We will help you be as ready as possible to pull the trigger when we find your match.
Things to Evaluate
- Don’t forget to consider things like property tax (it hurts a bit in Austin), HOA fees (if you’re buying a condo) and property tax exemptions.
- Check whether the property will require flood or windstorm insurance.
- Consider the condition of heating, cooling, roof, ventilation, plumbing, and sewage equipment. Ask when updates were made and what the monthly energy costs are.
- How much renovation will be needed, if any?
Making the Offer
- We’ll work with you to determine an offer, while leaving some room to negotiate. This will depend on time on the market, condition of home, other offers and how the asking price compares to recently sold similar properties (comps).
- Offer is accepted.
- Home inspection is next. This is your chance to make change requests based on the home inspector’s report. (The seller will negotiate these requests with you, and we will facilitate.)
- Home insurance. Talk with multiple agencies to get pricing, narrow it down so you know who you'll choose once you're ready to close.
- Final Negotiations completed. Now you’ll need to gather documents for your mortgage application.
Closing the Purchase
- Get your financing in order and make sure you have everything into the lender when they ask for it.
- Finalize the title policy information with the title company selected, and get them contact information for you.
- Get your homeowners insurance. Get quotes, compare and finalize homeowners insurance before you take possession.
Congratulations! You are a new home owner. Time to pop some bubbles and plan your move.