My Austin clients frequently have questions about who pays for what in a real estate transaction. In Texas, almost everything is negotiable; however, there are certainly norms and the promulgated forms used by Texas REALTORS naturally lend way to certain cost distributions.
In order to think about who pays for what is a real estate transaction, you first most consider what expenses are involved in a real estate transaction. One of the largest expenses in a real estate transaction is commissions. In Texas, real estate commissions are customarily a seller expense. It is most common to see the seller pay six percent of the sales price towards commissions, three percent to the buyer’s broker and three percent to the listing broker. However, this distribution is not set in stone. For multi-million dollar listings, the commission may be lower, and the seller ultimately determines the commission percentage as well as the distribution between the buyer and the listing brokers.
Additional costs involved in a real estate transaction include marketing expenses, title policies, appraisals, surveys, inspections, energy audits, and loan origination fees. Good listing agents will usually take on the marketing expenses incurred to properly advertise a property. These expenses include professional photography, print marketing (including mailers), digital marketing platform expenses, and advertising fees. Staging fees may be paid for by the seller directly or the listing agent.
The owner’s title policy usually costs a little more than one half of a percent of the sales price. Click here for exact title policy costs in Texas. The owner's title policy is typically a seller’s expense. However, with the competitive buying market it is not uncommon to see buyer’s incurring this cost to make their offers more appealing to the seller. The lender’s title policy cost is related to the loan amount for the property and is typically a buyer expense.
Property inspections are a prudent decision for any buyer. These inspections can cost several hundred dollars, and additional specific inspections for items such as wells, septic systems, foundations, etc. may be needed as well. These inspections usually occur during the option period at the expense of the buyer. In certain situations, it may be beneficial to have a property pre-inspected. In this case, the inspection would be a seller fee.
Lender related fees are typically paid for the buyer. In addition to the lender’s title policy, buyer costs associated with loans include loan origination fees and appraisal fees. These fees will vary based on both the property and the lender utilized.
A survey is generally required for the sale of property in Texas. If the seller has an existing survey for the property, it may be used for the sale if it’s approved by the lender and the title company. The Texas Real Estate Commission’s 1-4 Family Residential Contract offers 3 options for how the survey will be obtained. Option 1: an existing survey will be used and it if is not approved by lender/title company you can elect for the seller or the buyer to pay for a new one. Option 2: seller pays for a new survey. Option 3: buyer pays for new survey.
A condo does not require a survey for a real estate deal. However, there will be other fees associated with a condo sale. When you are involved with the sale of a TX condo, you will want to consider who is going to pay for the resale certificate and who pays for the transfer fees. Again, the Texas condo contract is written in such a way that lends way for the buyer to pay for at least a portion of the transfer fees. Thus it is common for the seller to pay for the resale certificate and the buyer to pay for the transfer fees but this in no way set in stone. Both fees are entirely negotiable.
If a home warranty purchase is noted on a real estate contract, it is likely an expense to the seller. This part of the real estate contract states that the seller will reimburse the buyer X amount towards the cost of a residential service contract. Escrow fees, the fees paid to the Title Company, are typically split between the buyer and seller. You may also see legal fees, processing fees, and various fees imposed by municipalities on either side of the closing document.
This list is by no means exhaustive. There are a variety of fees involved with a real estate transaction and who pays for what is usually negotiable. If you’re a buyer in a competitive market, the more “typical seller-related expenses” you agree to take on, the stronger your offer will appear to sellers. If this all appears to be a bit much to take in and you’d like someone to walk you through the details or if you have additional questions, contact me today.
The 4th of July is my personal favorite holiday! What’s better than enjoying a day in the sun filled with good friends, family, and barbecue. Of course let’s not forget the best part of this holiday- fireworks! If you’re looking for a fun way to enjoy the 4th in Austin, there are a variety of festivals and firework shows sure to keep you entertained!
H-E-B Austin Symphony 39th Annual July 4th Concert and Fireworks at Auditorium Shores: This is by far the largest fireworks display in the Austin area. It will be packed, but it’s a great place to watch gigantic fireworks with a picturesque downtown backdrop. Bring a blanket and a picnic, the show starts at 9:30 but I highly recommend arriving early! For more info visit the official site.
Independence Day Celebration at the Hill Country Galleria: If you haven’t been out to the Galleria in Bee Cave recently, you may want to check it out this 4th. The shopping center recently underwent a $16-million-dollar renovation, and to tell you the truth I can hardly tell the difference. The best place to watch the fireworks display is still where it has always been in the large grassy pavilion in the middle of the shopping center. They will have live music starting at 6:30 and the fireworks show starts at 9:15 pm. For more info visit the Galleria's site.
Lakeway’s 4th of July Celebration: The City of Lakeway continues it’s 4th of July tradition with a parade starting at 8:30 am. This year’s theme is "Patriotism On Parade". The parade begins at the Live Oak Golf Course and continues on Lakeway Drive to the Lakeway Activity Center. At 10:30 am, the Pageantry of the Flags program begins at the Lakeway Activity Center. The Lakeway swim center opens its doors at noon, allowing everyone to enjoy a chance to cool off during this hot holiday. For more info, click here.
Rollingwood’s 4th of July Parade, Picnic, and Fireworks: I loved participating in the City of Rollingwood’s 4th of July Parade as a kid. We would get an assortment of red, white and blue paraphernalia, cover our bikes in it, and get to be in the parade! Rollingwood continues its tradition again this year. The parade starts at 8:30 am. Decorated wagons and bikes meet at the intersection of Wallis and Rollingwood Drive while cars and floats start on Riley Rd. After the parade, come play at the Rollingwood Park where there will be face painting, games, a raffle and more. If you’ve still got more energy, you can watch the fireworks from the Zilker Clubhouse in the evening. For more info visit the City of Rollingwood's website here.
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Are you considering buying a home in Westlake? If you are looking at houses for sale in Westlake, it is important to understand the Westlake housing market. Most people refer to Westlake as all of the homes that feed to Westlake High School. In fact, there are many mini-neighborhoods that make up the greater Westlake area.
Houses in the Westlake area tend to be some of the most expensive houses for sale in the Austin area. This is primarily due to the fact that houses for sale in Westlake allow access to one of the best school districts in Austin, EANES ISD. If you have kids and are looking for houses for sale in Westlake, it is important to know which areas feed to which middle schools. There are two middle schools that feed to Westlake High School, Hill Country Middle School and Westridge Middle School. Homes that are located east of Loop 360 are in the MLS area 8E and these Westlake houses feed to Hill Country. Houses west of Loop 360 are in the MLS area 8W and these homes feed to Westridge.
This is important to know. If you are looking at homes for sale in Westlake Hills, you will find many affordable options in the Lost Creek neighborhood. This neighborhood is way closer to Hill Country Middle School, but houses in Lost Creek feed to Westridge Middle School. This means if you have younger kiddos and buy a house in Lost Creek or the Woods of Westlake, they will have a much longer commute during their middle school years.
Westlake houses for sale in the 8E area tend to be a bit pricier than those in 8W since these houses are also closer to downtown Austin. In 2016, houses for sale in the 8E area of Westlake had a median sales price of $1,031,750. Conversely, homes for sale in 8W sold for a median price of $725,000 in 2016. When you are considering buying a home in Westlake it is important to understand these intricacies of the Westlake area. You also want to look at the tax rate in different neighborhoods as these can vary substantially.
Take a look at this post on tax rates in the Austin area if you are looking at houses for sale in Westlake.
Still wondering where the best house in Westlake for your family is located? Give me a call today and we can discuss your exact needs and identify the best house for sale in Westlake for you and your family. Ready to start looking at houses for sale in Westlake, click here to view homes for sale in Westlake's 78746 zip code.
The Austin Board of REALTORS just released their May market report, and the real estate market is strong as ever in the City of Austin! Houses within the city limits of Austin sold for a median price of $380,000 last month, representing a 9% increase compared to last May.
The May real estate market report also revealed increased inventory, although we are still far from a balanced market. Coupled with rising home prices, this recent surge in home sales activity made May 2017 the highest-grossing month for Central Texas real estate in the region’s history.
The May real estate report for home sales in the City of Austin also found that homes sold last month were on the market for an average of 34 days. In my opinion, this figure seems high, after all it is an average. When I am helping my clients buy or sell houses in the Austin area we continue to see frequent multiple offer situations. Similarly, houses flying off the market in less than a week is a common occurrence in the Austin real estate market.
If you’re interested in seeing a more specific report for your Austin neighborhood, contact me today. Is the Austin Board of REALTOR’s May Real Estate Report making you think about selling your Austin home? Visit my site for a quick home value estimate.
As Austin home values continue to rise, I’m often asked by prospective buyers if they should wait till the market turns to buy. Truthfully, no one can predict what the market will do. However, these days, my advice is usually no. Everyone knows Austin is amazing. More people are moving here every day. We have a healthy local economy full of growing businesses. We have a great culture, and beautiful outdoor spaces. We have universities that attract students, who often stick around - choosing to call Austin home. All of these reasons result in a steady influx of residents, and the available housing stock struggles to keep up with demand. There once was a time when I told people who were considering renting for another year to go ahead and renew the lease, call me when you’re ready to buy. That time has passed.
If you can afford to buy a home now, do it. Even if you have concerns about how long you will live in it, you can likely sell for a profit a few years down the line or rent it out while you wait for it to appreciate more. I have worked with a handful of sellers this year who only purchased their homes a few years ago and profited more than 50k when they sold. One of these clients even used a USDA loan and bought the property with 0 down.
If you’re still on the fence, consider these market trends. The median sales price for a home in the city of Austin was $395,000 in May of 2017. The median price for an Austin home in May of 2016 was $364,978. From 2013 to 2017 the median sales price for Austin homes has increased well over 100k.
Interest rates are expected to rise. Interest rates have been extremely low recently, and experts agree they are likely going to rise in the near future. A 1% increase in your mortgage rate equates to about 40k for a 30-year mortgage on a 200k property. If you’re considering buying in the near future, you should discuss locking in your rate now.
If rising home prices and interest rates still haven’t convinced you to dive head first into a home purchase, consider this. If you pay $1,500 in month for 4 years, you have paid your landlord $72,000. Consider this coupled with the appreciation stats mentioned earlier and you can see how there is no better time than now to take the plunge!
Unplugged at the Grove: This summer concert series at Shady Grove presents live music every Thursday this summer on Shady Grove’s front lawn. For the full summer schedule, click here.
Deep Eddy Movie Night: Ok, this one isn’t free but it’s incredibly inexpensive and one of my personal favorites! I remember looking forward to these summer showings as a kid and enjoying some Mangia’s pizza while I watched the flick. Texas’ oldest swimming pool screens family-friendly movies on a large screen in front of the pool Saturday nights throughout the summer. Bring a big floatie to enjoy the show from the pool or a blanket to relax on the hillside. The movie usually starts around 8:45 pm.
Stargazing with Texas Parks and Wildlife Dark Skies Program: Tomorrow, June 9th, Mckinney Falls State park will have a demonstration on how craters are made on the moon, then you can view the moon from their telescope and binoculars. Meet at the Lower Falls at 8 pm. For more opportunities to see the stars, click here.
Summer at the Springs: Wanderlust Yoga puts on free yoga classes right outside the gates of Barton Springs every Monday. Free Vinyasa starts at 7:30 p.m. followed by snack time from Blenders and Bowls at 8:30 and then free swim at Barton Springs starts at 9 pm.
Yard Bar hosts Movie Mondays: Every other Monday starting June 12th running through November this year, Yard Bar will be screening a canine related flick. Popcorn, smores and drink specials are only part of the fun. Grab your lawn chairs and head to the patio! All ages and dogs welcome! Free Admission.
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