10 Most Common Questions When Buying A Home

• What’s the first step of the home buying process?

• Answer: The Mortgage Pre-Approval.

Unless you are paying cash for a house, you will need to get a mortgage. In order to know how much home you can afford, you will need to get pre-approved for a loan. This is the first-step in the home buying process.

•   How Long Does it Take To Buy a Home?

• Answer: Around 30 days

The timeline for finding a house varies greatly from person to person. Once you find a house and have an accepted offer, it usually takes around 30 days to close.

• What Does A REALTOR® Do?

• Answer: Almost everything.

A REALTOR® is your most valuable asset when buying a home. They will walk you through every part of the home buying process. They will educate and inform you of all your options. They will represent you throughout the transaction and beyond. 

There is a difference between a REALTOR® and a real estate agent; many people do not know this. A REALTOR® is regulated by the National Association of REALTORS® and subscribes to a strict Code of Ethics. A real estate agent does not. It is recommended that you work with a licensed REALTOR® to avoid potential problems.

• How Much Do I Have To Pay a REALTOR® as a Homebuyer?

• Answer: Nothing

In most cases, you do not have to pay your REALTOR® anything to help you purchase a home. The sellers pays their REALTOR® a fee, and then that listing agent pays the buyers agent for bringing the buyer and facilitating the transaction. 

• What’s Your Best Advice for First-Time Homebuyers?

• Answer: Trust the Professionals.

Beware of advice from people who do not work in the industry. Real estate is a popular topic and almost everyone feels like they have some great insight to offer. In reality, the people who know best are the people that work in the business. Good REALTORS® have sold hundreds (maybe thousands) of properties. We know what to expect and what to look out for. Friends and relatives have only bought and sold a few homes, if any at all. Buying and selling a couple of homes does not make someone a well-rounded source of information. Be confident in your decisions and trust the professionals. 

• What Kind of Credit Score Do I Need to Buy a Home?

• Answer: 620+

A 620 credit score, or higher, is recommended. As you are probably aware, a higher credit score offers better lending terms. This is an ever evolving topic, however, as loan requirements are constantly changing. There are some lenders who will approve buyers with a 580 score, sometimes even lower. Your loan officer will be the best source to give you a current answer for today’s lending requirements.

• Are There Special Home Buying Programs That I Should Know About?

• Answer: Yes

There are some great home buying programs to research. The main ones would be VA loans, USDA loans, and FHA loans. Knowing the difference between these loan types is very important.

• How Much Money Do I Need for a Downpayment?

• Answer: It depends on your loan type. Usually 3% to 5% down.

The most common answer is 3% to 5% of the purchase price. FHA loans dropped their requirement from 3.5% to 3.0%. There are also some conventional loans that only require 3% down. Veterans are usually eligible for a VA loan, which requires no money down. Properties in rural areas are usually eligible for a USDA loan, which also requires no money down.

• What Other Fees Are There, Besides the Downpayment?

• Answer: Mainly loan origination and closing costs.

The downpayment is usually the largest cost associated with buying a house. Lending fees are the second largest costs to homebuyers. Most lenders will charge between 2% to 4% of the loan amount for loan origination fees, depending on the loan type. Conventional loans usually have lower loan origination fees, but require more money down. Your loan officer will be able to help you determine how much you can expect to pay towards loan origination and closing costs.

•  When do I get the keys?

• Answer: At Closing

Under normal circumstances, you will get the keys at the closing. A closing typically takes about an hour. In some cases, the lender will need time to fund the loan and you will need to pick up the keys after the loan has been funded. If you have a Friday evening closing and the loan cannot fund until Monday, you may not get the keys until Monday. Make sure to coordinate your closing to get the keys on the same day, if that is what you need.*

*Article Courtesy of GreatColoradoHomes.com.  

Homestead Tax Exemption Deadline is April 30th

An exemption removes part of the value of your property from taxation and lowers your tax bill. In order to qualify for the online Homestead Exemption filing, the property owner must have owned and occupied the property as of January 1st of the current tax year. You must file an Application for Residential Homestead Exemption with the county appraisal district between January 1st and April 30th of the tax year.  Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application.  In that case, you must file the new application. 

 If you need additional information on homestead exemptions, please contact me.

Austin headed for one of the highest rent hikes in U.S.

Austin, brace yourselves for one of the highest rent hikes in the U.S.

Hopefully you’ve invested in residential real estate property in Austin, because 2016 is promising some big numbers. However, if you’re not a homeowner who rents out a property, well, the forecast doesn't look too hot for you. 

HomeUnion, a real estate investment management firm, has identified the top 10 metros with the strongest investment home rental growth in the country. Austin comes in at No. 8, with some data that might excite or scare, depending on which side of the spectrum you’re on.

Austin is expecting a 5 percent price increase in 2016 for home rentals, with a projected year-end average rental price of $1,787 for a single-family home. Factors of population, a healthy economy, and steady job growth place Austin in the top 10. Additionally, more people are choosing to rent versus buy due to the lack of affordable housing options, making the demand for rental properties even higher in our city.

"Austin’s presence as the tech hub of Texas supported the fourth fastest growing job market in the country in 2015," says Steve Hovland, manager research services for HomeUnion. "More than one-third of the jobs created in the market during the past 12 months were in the high-paying professional and business services sector, which includes most tech positions. As young tech workers gravitate towards the city center to practice a live-work-play lifestyle, rental demand is very high.

"Apple’s new 1.1 million-square-foot campus also contributed to the optimistic outlook for rent growth in the metro," he adds.

The top three cities on the list are San Jose, California ($3,459 year-end rent forecast, 7.3 percent growth forecast for 2016); Orlando ($1,348 rent, 6.1 percent growth); and Seattle ($4,191 rent, 5.9 percent growth). The only other Texas city in the top 10 is San Antonio at No. 9, with a $1,165 year-end rent forecast and 4.8 percent rent growth.

While the study spells good news for Austin real estate investors, it means bad news for renters. Even so, compared to some of the nation’s struggling cities like Milwaukee, Cleveland, and Detroit, Austin’s economy is strong, and that’s something to be thankful for.*

*Article Courtesy of Austin CultureMap

5 Misconceptions about Down Payments

5 Misconceptions about Down Payments

Myth 1: Programs are only for first time homebuyers. While first time homebuyer programs may be common, it's important to note that the definition of a first time homebuyer is someone who has not owned a home in three years.  In addition, the index find that 37% of programs do not have a first time homebuyer requirement.

Myth 2: Homeownership programs make financing more difficult. There are now more than 2,400 programs available across the country (206 in Texas) and 85 percent have funds available for homebuyers. It’s important for new buyers to seek homeownership education. It’s often a requirement for down payment programs and it gives buyers confidence with the home buying process, financing options, including down payment programs, and budgeting.

Myth 3: You need to put 20 percent down. Today, a 20 percent down payment is not required and depending on the buyer’s situation, it may not be optimal. Homeownership programs allow buyers to save on the down payment and retain savings for home maintenance and improvements. Today’s programs include grants, first mortgages with below-market interest rates and annual tax credits.

Myth 4: Programs aren’t available in my area. There are programs available in every community across the country – rural and urban. It’s important for buyers to search for programs early in their home buying journey because it may help determine the most affordable part of town or price point.

• There are 19 programs available nationwide.
• 24 percent of programs are available statewide, offering broad opportunities not specific to a county or neighborhood. Statewide programs can often be layered with local programs.
• States with the greatest number of homebuyer programs, ranked in order:
  
  • California (412)
  • Florida (230)
  • Texas (206)
  • Maryland (111)
  • New York (77)
  • Massachusetts (73)
  • Pennsylvania (71)
  • Colorado (67)
  • Georgia (63)
  • Washington (59)
• Complete list of state-by-state data.

Myth 5: It’s too expensive to buy in my market. More than 14 percent of programs are designed for individuals providing an important community service, including educators, protectors, healthcare workers, veterans and other special circumstances. Especially helpful in high cost markets, the programs help workers live in the community they serve.*

*Article courtesy of Austin Board of Realtors

December 2015 Housing Statistics

December 2015 Statistics

 

• 2,390 – Single-family homes sold, 5% more than December 2014.
• $270,000 – Median price for single-family homes, 10% more than December 2014.
• $348,904 – Average price for single-family homes, 13% more than December 2014.
• 57 – Average number of days single-family homes spent on the market, 1 day more than December 2014.
• 1,646 – New single-family home listings on the market, 6% more than December 2014.
• 5,214 – Active single-family home listings on the market, 3% more than December 2014.
• 1,601 – Pending sales for single-family homes, 1% less than December 2014.
• 2.2 – Months of inventory* of single-family homes, unchanged compared to December 2014.
• $833,880,560 – Total dollar volume of single-family properties sold, 19% more than December 2014.

*Courtesy of the Austin Board of Realtors.

End of Year Statistics

Austin Real Estate Statistics  

2015 Year-End Totals

 

• 29,068 – Single-family homes sold, 5% more than 2014.
• $263,900 – Median price for single-family homes, 9% more than 2014.
• $333,558 – Average price for single-family homes, 8% more than 2014.
• 49 – Average number of days that single-family homes spent on the market, 2 days more than 2014.
• 36,810 – New single-family home listings on the market, 4% more than 2014.
• 6,044 – Active single-family home listings on the market, 5% more than 2014.
• 29,839 – Pending sales for single-family homes, 5% more than 2014.
• $9,695,852,178 – Total dollar volume of single-family properties sold, 13% more than 2014.*

*Courtesy of the Austin Board of Realtors

2015 National Association of Realtors Profile

2015 National Association of Realtors Profile Highlights

Buyers

• The typical buyer was 44 years old and has a median household income of $86,100.00.
• Expected tenure in homes was 14 years.
• At 30%, the primary reason for purchasing a home was the desire to own a home of their own.
• Buyers of new homes made up 16% and buyers of previously owned homes made up 84%.
• First-time buyers made up 32% of all home buyers, down from 33% last year.
• 87% of buyers recently purchased their home through a real estate agent or broker.
• 88% of buyers would use their agent again or recommend their agent to others.
• 67% are married couples, 15% are single females, 9% are single males, and 7% are unmarried couples.

Sellers

• The typical home seller was 54 years old with a median household income of $104,000.00.
• The typical tenure in the home was 9 years. 
• The most common reason for selling a home was that it was too small at 16% followed by a job relocation at 14%. 
• 8% of recent home sales were FSBO sales. This is the lowest share recorded since this report started in 1981. 
• Home sellers cited that they sold their homes for a median of $40,000 more than they purchased it. 
• 89%  of home sellers worked with a real estate agent to sell their home.*

*Courtesy of the National Association of Realtors 2015 Profile of Home Buyers and Sellers.