Buying a Home in Austin

First, when I say Austin, I really mean the Austin Metro area and all the surrounding communities – Lakeway, Round Rock, Westlake, Barton Creek, etc. Every area has it’s own set of pros and cons – diversity of schools, demographics, topography, social stereotypes, typical home price range, etc., and everyone buying a home should be aware of these styles and differences, and recognize the vastness of lifestyles representative in these areas. Everyone has his/her own reasons for buying a home, and those reasons, although varied, are usually placed in a “pecking order” before one decides to purchase a home. The order, from most important to least important, will dictate not only the initial tour of homes, but also the eventual purchase. For some, the priority may be the best school district – for others it could be the shortest commute to work, a larger lot size, a golf course community, a home with a view, a home on the lake, or simply the most house for the least amount of money!

But for whatever the reason(s), a tremendous amount of thought and research should be done prior to selecting that “dream home”, and committing oneself to the most expensive investment most people will make in their lifetime! This investment will not only offer tax benefits, but hopefully an appreciation in value that will play an eventual role in achieving long-range financial status, and a lifestyle and sense of pride in home ownership that is part of the “American Dream”! Conversely, not following the steps, not doing the proper research, not being familiar with Texas Real Estate procedures, and/or simply not having the expertise to understand the home buying process, can be a disaster, and potentially lead to financial and personal problems.

Although there are no “absolutes” or “guarantees” in purchasing real estate (absolutely the best deal, always remain the best school district, guarantee the home to appreciate, etc.), there are several ways that are “absolutely guaranteed” to hedge-your-bet in the right direction. Below, in no particular order of importance, except for Number (1), are some tips to help guide you on the road to the “American Dream!”

FIND THE RIGHT REALTOR

For most people, this is the most important beginning to finding the right home. Notice I said the RIGHT REALTOR. Do your homework for a REALTOR just as you would your homework for a house. There is so much more that goes into purchasing a home than just facts, figures, and pictures on the Internet, and a good REALTOR is one that can and will be able to sift through this information, develop opinions and offer advice about such, and implement the strategies to achieve your ultimate goal of home ownership. Can you find the perfect home WITHOUT a REALTOR? Sure, and you could also either accidentally or by sheer luck win playing Texas Holdem’ in Vegas without reading a book by Doyle Brunson, shoot a caribou in Alaska without an experienced guide, and win in a court-of-law without an attorney, but why leave it to chance? You can hire a professional REALTOR assisting you as your exclusive “Buyer’s Agent”, and have the seller pay for these services! Know the questions to ask and the qualities to look for to find the right REALTOR.

GET PRE-QUALIFIED

Until you know HOW MUCH you can purchase, you won’t know WHAT you can purchase. And that doesn’t necessarily mean once qualified through a particular lender, that you have to use that lender (some new home Builders offer incentives to use THEIR lender – if you are pre-qualified before choosing their new home, sometimes it is financially feasible to change lenders). It simply gives you an idea, based on income, credit status, and debt ratio, what the maximum amount of mortgage you can afford. Here again, this is where a professional REALTOR can come in handy. They usually know who the reputable lenders are, what kinds of various loan programs (and there are many) they offer, and what the best interest rates are at any given time (a half point interest rate can means thousands of dollars in saving over the life of a loan!). Not only will getting pre-qualified give your Realtor/Buyer Agent an idea of price range/type home to begin a home search, it is normally required by the seller to place an offer on a house.

SET YOUR PRIORITIES WITH LIMITS

Define it, then refine it. As stated above, have your criteria for purchasing a home in order from most to least important, with a willingness to compromise if necessary. This applies whether you think you want a resale home, a new home, or a custom-built home. There are advantages/disadvantages to owning each of the above, and a compromise may even be made on new or resale once you consider and know these facts. Regardless, make two lists: a “wish” list (huge swimming pool, granite kitchen countertops, 5000 sq. feet of living space w/5 bedrooms & 4 baths, exemplary school district, and 10 minutes from work), and a “need” list (the features that you refuse to live without – a heated spa, Corian countertops, 3000 sq. feet of living space, 4 bedrooms/3 baths, recognized school district, and 20 minutes from work). A good REALTOR with the proper negotiating skills will be able, in most cases, to get your “needs” taken care of, at the right price, and get a few “wishes” thrown in at no additional charge! I cannot begin to tell you the number of times I have negotiated a seemingly “done deal” with the selling agent, and at the last minute said, “Oh, by the way, my client would also like…", and had it thrown in at “no charge”! This is especially true with new home Builder “on-site” agents – there are some things you ALWAYS ask the Builder to pay for that most people never think about! Having worked “on-site” with Builders for five years, I know those questions to ask!

VISIT COMMUNITIES

Notice I said communities and not properties. You can preview lots of properties via the internet and have an idea of the type home you want, but you will only know if you want to live in that home if you like the community. Guess what? Without sounding repetitious (which I am…), a good REALTOR will know which communities may fit your lifestyle better than others, which ones have historically retained better resale value, which ones have trees, views, golf course lots, community pools, hike/bike trails, etc., but only you will know if it is aesthetically appealing enough to warrant looking at homes built or being built there if you visit the community in person. Tell your REALTOR what your ideal community would have, and let him do the homework before you start driving all over town – with so many wonderful Austin neighborhoods to choose from in this great city, chances are the ideal home can be found in one of them! You can live in a mediocre house in a great subdivision, but it’s tough to live in a great house in a mediocre subdivision! Bring your camera and/or camcorder and a note pad, because not only do you need to take pictures of the homes you like, but also the areas, and make detailed notes of your likes/dislikes after every tour.

MAKE AN OFFER BASED ON FACTS

Now comes the inevitable hard and scary part – trying to make a complicated, too-often emotionally based decision, relying on non-emotionally based cold, hard facts. Trying to decipher and compare the floor plans, price ranges, amenity packages, school ratings, etc., etc., and choose the perfect home using common sense and logic rather than emotion, can be very intimidating. It doesn’t matter that the home you just previewed have sellers that lived in the same town you just moved from if that home is in a bad area; it doesn’t matter that the school principal you just talked to is the sweetest lady you ever met if her school is academically unacceptable; it doesn’t matter that the Builder can build you a home that backs to the 18th green if that home is $50/sf overpriced – get the point. Be practical as you assess homes – a purchase based largely on emotion and not on value-based facts can sometimes lead to financial and/or personal woes in the long run. A good REALTOR will always keep this in mind and know how to balance these two concepts – one tangible, one intangible - sometimes even to the point of third-party referee/liaison between spouses!

GET THE HOME INSPECTED

So you’ve got your loan approved, you’ve found the perfect home, signed the earnest money agreement, your Realtor has applied for the title insurance, and everything is set for closing – right? Not exactly – one of the most important things to do, for your sake and your lender’s, is to get the home inspected. There is a new provision in Texas real estate contracts called the “option period”, where, for a small fee, you have the “option” of having the home inspected for any/all defects, giving the current homeowner time to fix any/all problems, and opting out of the contract if he does not do so. These items to be repaired are negotiable between you and the seller, and the earnest money contract is contingent upon both parties agreeing to which (if any) items will be repaired. Except in extremely rare occasions should one ever purchase a home “as is” where an inspection is either not allowed by the seller, or deemed not necessary by the buyer. A resale home will always have a “property disclosure addendum” available to see, but this will only give you an idea of what the current homeowner warrants is working “to the best of his knowledge.” Mechanical and/or structural defects (cracked slab, improper wiring, insufficient heating/cooling systems, incorrect or improper plumbing, etc.), as well as the potential for termites are examples of items the homeowner may have no knowledge of, and only found with a good home inspection. . Check out the web site of Apex Inspections, www.apexhomeinspections.net, a company I have been using as one of my “preferred” inspectors for over 15 years, to answer most of your questions regarding what an inspector will look at and for during an inspection, and go to this link to find out more about home inspections, especially regarding a home you are going to have newly constructed (find a lot, choose a floor plan, and wait 4-8 months before completion).

THE CLOSING

A question I am asked a lot by out-of-state buyers is, “Do I need an attorney with me at closing?” My answer is if you want one and it will make you feel more comfortable, go for it. But if you close at a reputable title company, your REALTOR has checked all the numbers on the HUD statement, and the REALTOR reviews every document before you sign it, I don’t recommend you spending the $200-$300/hr. that most attorneys charge just to hold your hand. Bottom line is, if you want the house, and the monies are correct on the closing documents, the title company officer will not allow any of the paperwork to be modified or excluded by the attorney. The title company escrow officer and/or your REALTOR will have previewed and reviewed almost every piece of paperwork before you get to the closing table, and will have informed you of the exact amount the cashier’s check should be, and have your homeowner’s insurance policy at the closing for certification. Once all the papers have been signed and monies exchanged, your new set of keys to your dream home are yours! Now comes the hard part – moving and unpacking those boxes! Good luck!