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The Most Important People You Need to Know When Buying a Home

by Rebecca Shahan

How do I get approved for a loan? Who will help me find the right home? Who can help me? Don’t panic! Here are the top four people you need to know when it comes to buying a home.

The Person Who Approves the Loan

One of the first people you’ll need to work with is a loan officer or lender. This is the person who helps you understand the ins and outs of getting a loan, as well as any requirements or conditions.

Before speaking with the loan officer, however, you may want to estimate what a monthly mortgage payment may look like, which you can do with a simple mortgage calculator. Your monthly payment will include homeowners insurance, property taxes paid into an escrow account, and, if you put down less than 20%, PMI or private mortgage insurance.

Remember: The bank will provide an initial number of what it thinks you can afford based on your gross monthly income. But it’s up to you to account for your own personal budget and living expenses.

Once you’ve spoken with the lender, it’s worthwhile to get a preapproval letter, which shows how much the bank would be willing to lend you based on your full financial picture. Without this letter, most sellers won't take you seriously and may not even accept your offer.

The Person Who Finds the Home

A real estate agent is usually the first person that most people speak to during the homebuying process. Before my husband and I moved to Tennessee, we contacted an agent who specializes in out-of-state relocations. She did an excellent job of searching for properties in Memphis that met our needs and even suggested a few that we wouldn’t otherwise have considered.

When you begin your home search, you might start with an online search. While these property listing sites provide formatted data on available properties, a REALTOR® will have access to the latest information and can provide any updates or correct misinformation found online.

A REALTOR® can work on your behalf or on behalf of the seller. When you’re buying a home, it’s important to work with a buyer’s agent, whose responsibility is to you, not the seller.

You should ask the agent all the questions that are important to you — how much other homes in the area recently sold for, how long those homes were on the market, and any other questions that might help you make an informed decision.

While we were searching for a home, we really wanted to get a sense for what types of events are held in the city as well as activities around the area, all the things that the REALTOR® had a great sense for.

The Person Who Inspects the Home

Once you have found a home, made an offer, and signed the contract to buy, it’s time to hire a home inspector. The contract will specify how many days you have to get the inspection. The home inspector will come to check things like structural integrity, plumbing, electrical systems, heating and cooling, the condition of windows, walls, door frames, ceilings, the attic — basically anything that can be seen without going into walls.

The Person Who Checks Ownership of the Home

The title officer or title company checks the ownership of the home to make sure there are no potential disputes with previous owners, and, ultimately, will issue title insurance for the property. This insurance protects you and the lender if there are claims or lawsuits against your ownership of the property.

Each person has a distinct role in the homebuying process and being informed about exactly what you need from them helps make the process run smoothly. The key is patience — it’s all worth it when you get the new keys to your home!

Visit our blog every week for more real estate advice for Austin and Lake Travis. Selling your home in Lake Travis or Austin? Get a FREE Home Evaluation of your home's value today!

How To Cope with Rising Home Prices in Austin

by Rebecca Shahan

Real estate prices in the Austin market are expected to rise at a steady pace throughout 2019. If you're considering moving to Austin or Lake Travis, there are a few creative ways to cope with rising housing costs and get into your dream home sooner rather than later.

Consider Nearby or Adjacent ZIP Codes

The old adage in real estate is “location, location, location,” but often the location is the very thing that makes certain ZIP codes so pricey. When looking into a desirable area, consider the nearby or adjacent neighborhoods to scout for more affordable finds. The good news is that if your house is near a pricier area, home prices are expected to remain strong or even rise as demand for the area increases.

Purchase a Foreclosure or Fixer-Upper

After my own disaster of a renovation, I know better than to think home makeover projects are as easy as they look on HGTV. Still, purchasing a foreclosure or home that needs a little work is a smart move if you want to buy into a more expensive neighborhood and stay in your price range.

Fixer-uppers can yield significant discounts in major urban areas, as much as 40% to 50%, according to research conducted by realtor.com, but inventory may be low, and the competition may be fierce.

Consider a Roommate

If you can afford a home but are concerned about what the monthly payment will do to your lifestyle (and budget) consider renting out rooms in your house to a long-term roommate or on housing-share apps.

This way, your housing payment gets covered and any extra can go toward paying down the mortgage, paying off student loans, or maintaining your lifestyle.

Try a Starter Home Before Thinking of a Forever Home

Think about what you really need in a first-home purchase as opposed to what you fantasize about having. With so many first-time buyers now delaying home ownership until their early 30’s (when a family and kids comes along), many skip the notion of the starter home and leap right into the forever home - often at a cost.

Starting small allows buyers to start putting housing payments into equity, not rent. Should property values rise, after a few years a buyer would then be able to upgrade into something bigger or more practical for their lifestyle.

Also keep in mind that just because you qualify for a loan amount, it doesn’t mean you have to borrow the maximum. When shopping for homes, be sure to find something that sits comfortably in your budget once you factor in insurance, taxes, home maintenance, and even discretionary funds.

While these tips may not land a first-time buyer in their ideal neighborhood straight away, equity (the amount of your house that you “own”)  builds over time and works in favor of the buyer. Remember: With time and patience, many may be able to cash in on the equity in their first home and move into their ideal square footage or location.

Visit our blog every week for more real estate advice for Austin and Lake Travis. Selling your home in Lake Travis or Austin? Get a FREE Home Evaluation of your home's value today!

5 Signs You’re Ready to Buy a Vacation Home in Lake Travis

by Rebecca Shahan

Do you enjoy vacationing? If you find yourself vacationing in Lake Travis or Austin more than a few times a year, maybe it's time to think about buying a vacation home and renting it out when you're not using it. But how can you be sure you're ready to take on this investment?  Here's 5 indicators that will show if you're ready to buy a vacation home.

You Can Afford It

Well, this seems obvious. But it's a deeper factor that needs to be honestly analyzed. The last thing you want is to be swimming in debt when you're trying to make the most of your new vacation home.

The purchase price of the home is only one part of the whole cost of owning a vacation home. Just consider the expenses you pay now on your primary home - utility bills, maintenance fees, insurance, HOA fees, etc.

Here are a few questions to decide if you have enough money in the bank for your vacation home:

  • Do you have at least 3-6 months of take home pay in emergency savings?
  • Can you make down payment of up to 20%?
  • Are you planning to set aside money for your kids to go to college?
  • Will you be able to save for retirement?
  • Is your existing home paid off?
  • What is the return on investment for this home if you rent it out?
  • How does it fit into your long-term investment goals? 

You've Done the Research

Visiting and living in a place can be two different things.  Take time to understand the surrounding area and what it has to offer. You should also visit during different times of the year to get a feel for what it's like to live here. You should also think about the long term and short term factors of buying a seasonal home, especially if you plan to be staying here a lot.

You Know the Market

Knowing whats happening in the housing market will help you be able to buy your vacation home at the right time. Seasonal demand can affect home prices, so keeping up with the local  home market will help you make the best decision.

You've Made a Plan

Do you know exactly how you want to use your vacation home? Do you plan to rent it out when you're not using it? If so, you need to consider advertising and logistics. You'll need to come up with a rental agreement and payment method for renters.  You may also want to hire someone to keep the home clean and keep an eye on the home. A property management can be helpful, but they often charge as much as 50% of the rental cost.

You Know How Much Taxes Will Be

Rental income is included in both state and federal returns. Have you determined how much those taxes will cost?

Buying a vacation home is a serious investment. But if you have these five factors in line, you can make that investment with more confidence and success.

Visit our blog every week for more real estate advice for Austin and Lake Travis. Selling your home in Lake Travis or Austin? Get a FREE Home Evaluation of your home's value today!

Keep Your Lake Travis Home Sale from Falling Apart

by Rebecca Shahan

Finding a buyer for your home in Lake Travis and Austin is just the beginning of the selling process. Now you need to make sure you keep that buyer happy until the sale closes.

Here are some mistakes to avoid to make sure you close the deal.

Mistake #1: Ignore Contingencies

Don't ignore the contract if it requires you to take care of something on the home before the sale. If a contingency requires you to make some repairs, don't do it on the cheap and expect it to go unnoticed.

Mistake #2: Don’t Bother to Fix Things That Break

Keep up your home during the selling process. If something breaks that was working when the buyer made their offer, they could notice it during the pre-closing walk-through. If the buyer thinks you aren't maintaining your home, it could end the deal.

Mistake #3: Get Lax About Deadlines

Deadlines are deadlines. Make sure you stick to all the deadlines.

Mistake #4: Refuse to Negotiate Any Further

After you negotiate a price, it's not uncommon for problems to be found during inspections that need to be fixed. Or the appraisal may be below what the offer is. You need to be able to negotiate further when issues arise, or the buyers may back out.

Mistake #5: Hide Liens from Buyers

If you have a lien on your home or have unpaid HOA fees, the buyer will find out during the title search. Those fees must be paid off for the deal to close. You could have the buyers pay those fees as part of the deal if you can't pay them. But if they aren't paid, the sale won't happen.

Selling your home in Lake Travis or Austin? Get a FREE Home Evaluation of your home's value today! And check back on our blog every week for more helpful articles about living in Lake Travis and Austin.

Don't Make These Mistakes When Buying a Home in Austin

by Rebecca Shahan

Your home buying experience in Austin and Lake Travis should be one that creates great memories and excitement. The trick is to not let all that excitement get out of hand and lead to you making mistakes during the home buying process.

Here are some common home buying mistakes and how you can avoid them.

"I Saw the House Online. It's Perfect — Let's Make an Offer Before It's Gone!"

Photos are never enough to show you everything you need to know about a home. They are meant to be a preview.

Consider this:

  • Agents take photos that they want you to see. They can't show every nook and cranny.
  • You need more than just sight to truly evaluate a home. How does the home flow? What can you smell or hear?
  • Wide angle lenses are used in photos sometimes to make homes look larger.

Before you make an offer, look at the home, the yard, and the neighborhood in person.

"I Want to Buy This House. And Look, There's an Agent Right Here!"

When you go to an open house, the seller's agent is usually there to host it. You might think that's convenient. But remember that the agent represents the seller, not you.

If you start trying to negotiate with the seller agent on your own, you could compromise your negotiation. So make sure you hire a buyer's agent who will work on your behalf and help you get the best home for your needs.

"If a House Doesn't Have Everything On My List, I'm Not Looking At It."

You should make a "needs" and "wants" list of what you want in a home. But don't turn it into strightjacket. It should be a guide to help you find the home with the right balance of features.

You need to prioritize your list to make sure it guides you to the right home and not keep you from it.

Not sure what should go on your list? This worksheet can help you get your priorities straight: The Ultimate “I Wanna Buy a House" Checklist.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.

5 Tips For First Time Home Buyers

by Rebecca Shahan

5 tips for first time home buyersIf you're ready to buy your first home, no doubt you've realized already there's a lot of things you need to think about. It can seem overwhelming. But it doesn't have to be.  Millions of people have bought homes before, and we know what makes the process go more smoothly. All it takes is planning and patience.

There are some simple steps you can take to make sure your home buying experience goes more smoothly. Here's a few things to think about before you decide to buy.

How Much Home Can You Afford?

Like any purchase, you need to know how much you can afford. It can be disappointing to find out you can't afford the home you fall in love with. The best thing to do is to determine the maximum amount you can afford.  An online mortgage calculator is a great way to start. You can find out your maximum price limit based on a 30 year mortgage.

You can also pin down a more exact amount of what you can afford is to talk to a loan officer at your bank. A loan officer will have a better idea of what the bank will loan you and what your down payment will need to be.

Knowing how much you can afford in advance, along with being pre-approved for a loan, will give you an advantage over buyers who haven't taken this step.  And it will save you time, since you know exactly what you can afford before you start your home search.

What Are The Must Haves In a Home?

Knowing what you want in a home, and what you don't want, is important. Sit down and think about all the things that you must have in a home, and the things that will make life miserable. Write it all down and use it in your home search. Show it to your agent as well so they know what to look for. You can adjust your list as you look at homes and see first hand what's available.

Use an Experienced Local Real Estate Agent

The right agent who knows the area inside and out makes a huge difference. Research the real estate agents in the are you're moving to.  If you have friends or family who've bought a home there recently, ask them for a referral. If not, read reviews online.

A good agent will know the area you're moving to inside and out, and will pay attention to your needs. In many cases, a great agent will have repeat clients over the years. They will also be able to connect you to loan officer and real estate attorneys, along with other needed professionals.

Compare Prices

You should look at homes in the area that are comparable to get an idea of what they're selling for.

You can easily compare homes in the area you plan to move to using tools such as our Home Search feature.

Ask Your Real Estate Agent About Closing Costs

Closing costs can vary, so make sure you determine the expected costs in advance to avoid any nasty financial issues during closing. Closing costs can include the costs of hiring an attorney to look over the  seller agreement, along with a home appraiser to inspect the home before the sale. A good real estate agent will be happy to help you determine closing costs.

Being a first time home buyer may seem daunting, but it's something you can accomplish successfully with the right planning and information.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

Hiring the right real estate agent makes all the difference in a successful real estate transaction in Lake Travis and Austin.

You also need to understand who's side an agent is on when you buy or sell a home and move towards closing.

There are a number of ways agents may represent clients.

By knowing where your agent’s loyalties lie, you’ll know what you can tell her and what you can’t. If, for example, you’re dealing with an agent who doesn’t represent you but is representing the sellers of a home you want to buy, you won’t want to tell her how high you’re willing to go on the price.

No matter what form of representation you agree to, or where you live, watch out for your own interests and understand the six ways brokers and agents represent clients below.

Buyer’s Agency

Do you want the agent to represent you and only you when you buy a home so that all the information you share with her is confidential? Opt for an exclusive buyer’s agent.

Who pays the buyer’s agent? Surprisingly, even if you hire a buyer’s agent, you can still ask the sellers to pay his fee. You can pay your buyer’s agent yourself, or ask the seller (or the seller’s agent) to pay your agent a share of their sales commission.

Seller’s or Listing Agency

An exclusive seller’s agent represents only the sellers, not the buyers. If your exclusive seller’s agent finds a buyer for your home, he may have another agent - maybe even a co-worker from the same brokerage - represent the buyer in your transaction. In some cases the buyer may have no agent at all. Your exclusive seller’s agent is loyal only to you, so it’s OK to discuss strategy with him.

Who pays the seller’s agent? The seller pays a commission to the seller’s agent from the proceeds of the sale. The seller’s agent may, and often does, share the commission with the homebuyer’s agent.

Dual Agency

In many states, agents can represent both the buyer and seller. These dual agents seek to bring both sides together. They can’t do something that’s only good for you and not for the other side.

A dual agent situation often arises when one agent represents the buyers and the sellers of the same home. The agent must disclose the relationship and, in many states, you must agree in writing to such dual representation because of the potential for conflicts of interest. While dual agents have an obligation not to share any confidential information of a client without their permission, be sure to inform the agent that the information is confidential and know that any non-confidential information may be shared with the people on the other side of the transaction.

Who pays the dual agent? Usually the seller pays the commission.

Designated or Appointed Agency

What happens when the buyer’s agent and the seller’s agent both work for the same broker?

To make sure both sides of the home sale are treated fairly in this situation, some brokers designate an agent in their company to represent only the buyers and another to represent only the sellers. A designated agent or appointed agent will be loyal to you and only you. The strategy helps avoid a dual agency situation.

Who pays the designated agents? The sellers pay the commission and the designated agents share it.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.

5 Tips For Starting Your Home Search

by Rebecca Shahan

Buying a home can be both an exciting and frustrating time. There's a great many things to think about and line up for a successful home purchase.

What are some basic steps you can take to reduce the frustration and guide your way to success? 

1. Get Pre-Approved

Getting pre-approved for a mortgage is more and more becoming a crucial first step in the home buying process. It's a relatively simple thing to do, yet it gives you so much power in return.  It not only shows the seller that you mean business, but it also let's you know more exactly what you can afford.  In the end, it saves everyone more time and helps you more quickly find the right home for your budget.

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

What do you really want versus what you really need in a home? Is that farmhouse sink really your key to happiness? Is a two-car garage a must, or can you deal with a smaller garage? Can that man cave wait for a later renovation or do you need it right now?

Before you begin your home search, write down all the features of a home you want, then categorize them as ‘must-haves’, ‘should-haves’, or ‘absolute-wish list’ items. This way you can keep focused on what's really important in a home.

3. Research Neighborhoods

The neighborhood can be just as important as the home. You can find a home that fist all your needs, but if it's in a neighborhood you don't like, that can ruin it. Make a list of things you want in a neighborhood, factoring commute times and schools, shopping, etc. 

Then explore neighborhoods that fit your needs. You can also look up crime stats and other important information to make sure the neighborhood you chose is also safe.

4. Stick With a Particular House Style

Decide what home style works best for your family and stick to that when searching. This will keep you from touring homes that won't fit your needs.

For example, if you have kids and want your bedroom on the same level, stay away from Cape Cod styles, as they usually have the master bed on the main floor and the other rooms on the upper level.

5. Document Your Home Visits

When you visit homes, write down what you love and don't love about each one, as features will start to bur together. 

If you take these few steps, you can get much closer to finding the home that fits your needs.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

Buying Is 23% Cheaper Than Renting in Austin

by Rebecca Shahan

According to the latest Rent vs. Buy Report from Trulia, owning a home continues to be cheaper than renting in the largest metro areas in the US, based on a 30 year mortgage. Austin stood out as one of the top cities in this report, with owning a home being 23.5% cheaper than buying.

Only two cities in the study turned out to be cheaper to rent than buy - San Jose and San Francisco CA. Median home prices in those cities rose to over $1 million this year. This is the first time in the six years that Trulia has being doing this study that this happened. Home values rose by 29% last year, while rent remained the same.  But not in Austin!

For the 98 metro areas where owning a home is cheaper than renting, 97 of them are in the double digits in advantage when buying. Austin was one of those metro areas that stood out at 23.5%.

Trulia arrived at these figures by taking into account all renting costs, including deposits, and compared them with the monthly costs of owning a home. Those costs included insurance, mortgage payments, taxes, and maintenance, along with one-time costs such as down payments, closing costs, and sale proceeds. The study also assumes that most homeowners stay in their home for seven years, put 20% down, and have a 30 year fixed mortgage.

In 2016, when buying was 41.3% less expensive than renting, the average mortgage rate was the driving force behind the difference. Rates this year are the highest they have been in six years which has narrowed the gap, all while home price appreciation has also been driven up by a lack of homes for sale.

Cheryl Young, Trulia’s Chief Economist, had this to say,

“One point deserves emphasizing: The ultra-costly San Francisco Bay Area is not a harbinger for the nation as a whole. While renting may outweigh buying in San Jose and San Francisco, it is unlikely that renting will tip the scales nationally anytime soon.”

There's many benefits of owning a home beyond just the money. If you're renting a home and would like to explore the possibility of owning a home, we would be happy to help you analyze the costs and benefits.

Check back on our blog twice a week for more real estate news, ideas, and local events in Austin and Lake Travis. You can search for the perfect home on our website using our powerful home search tools. You can also get free listing alerts of homes as they hit the market at WelcomeToLakeTravis.com. And you can always feel free to call us at 512-657-4467​ to talk to an experienced agent today.  

Millenials - Take Advice From a Millionaire: Buy, Don't Rent

by Rebecca Shahan

Millenial Home BuyersAre you a millennial and currently renting a home? Why not take some solid advice from a self-made millionaire? David Bach is just such a person and has written nine consecutive New York Times best-selling books. For 31 weeks his book, “The Automatic Millionaire,” was on the New York Times bestseller list.  He is also one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes. 

In a recent CNBC article, Bach says that: “The biggest mistake millennials are making is not buying their first home.” Then he said that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”

Here's his reason why buying a home is so important:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

 “Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years?

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

When a well-respected millionaire gives you advice, it’s usually a good idea to follow it.  But this is hardly the first time that experts have given advice on the wisdom of buying a home. Many successful individuals have found that over time, buying a home is the most advisable course toward financial security.

As an additional note on David Bach’s experience, he has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. Not a bad resume!

If you are currently renting a home in Austin or Lake Travis and are looking to take this advise, give us a call at 512-657-4467 to see how this dream can become a reality. Make sure to check back on our blog every week for more real estate advice.

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