As most of you know, Austin’s housing market is HOT. The amount of jobs being created, and the amount of people moving to Austin each day are overwhelming the amount of housing available. As home prices skyrocket, rent prices are doing the same. Being a young professional in Austin, I had rented a nice duplex in South Austin in a great location. A few months ago, my landlord decided he was going to raise the rent significantly! This is when my house hunt began.
Working for a real estate brokerage, I was familiar with the rising home prices, and the multiple offers being presented at almost every listing. I realized, however, that for just a few dollars more than I was going to be paying with my new rental price, I could own a home. The first thing that went through my head was, am I able to get a loan? I have pretty good credit, a solid rental history, and I had enough for a down payment saved up, so the first step was to get in touch with a lender to get pre-approved.
Pre Approval: My lender of choice (and some darn good people, I might add) was Supreme Lending. They asked me to gather some basic information: my monthly income, any debt I had accrued, student loan payments, and personal identification information. They used the information provided to give me an estimate of how much I would be able to afford on a mortgage. This is an incredibly important step in the process, as you learn what price point you should be searching within. There is no point in looking at $240,000 homes if you can only take out a loan for the amount of $140,000. Any realtor you work with should require you to have a pre-approval letter to begin searching, so this step is imperative.
After I learned which price point I should begin searching in, I decided to take a look at my options. Using an advanced home search tool like the one on HomeCity.com was incredibly helpful. One can search by price point, by neighborhood, by school district, or by drawing a polygon on a map and searching within those parameters. Educating yourself about what is on the market currently is important, so that you don’t have unrealistic expectations when beginning your home search. For example: I began to realize that in this market, one can’t realistically expect to find a larger sized house in south central Austin for under $200,000. You just don’t see them that often. If you want a larger house at a lower price point, you’re going to have better luck in the suburbs. Places like Buda, Kyle, Round Rock, and even Del Valle are good places to start. Once I had a good grasp on what areas of town were realistic and acceptable for my price point, and what I was generally looking for in a house, I decided to find a Realtor to help narrow it down and negotiate a deal.
Hire a Realtor: Finding a real estate professional to help guide you during your home buying process is so, so important. Not only can they help you narrow down your search, but they can help you negotiate in this hot market, as well as guide you through the sometimes complicated process after your offer is accepted. I chose a Realtor that is familiar with the areas I wanted to search in, as well as with my specific needs. Some places have a customer service team that will set you up with the most qualified Realtor for your needs, if you aren’t sure where to start.
After choosing a Realtor, they will usually set up a search for you on their brokerage's website, and also show you properties that meet your search criteria. I began to realize that this could be a long process in a market as hot as ours, especially when looking in the more highly desirable areas. Homes in many areas are spending one or two days on the market, so buyers need to act quickly if they see a home that they like. After searching the available homes daily, I found some homes that met my qualifications. My Realtor helped me put in several offers, the first three of which were refused (beat out by higher bidders or better offers). This was a bit frustrating, but expected. Those refused offers turned out to be a blessing in disguise, because I found the home I liked most of all, and our offer was accepted! I will cover this process and my experiences in my next article, coming soon!