Congratulations! You have finally found a house that you want to call home! Once you are officially under-contract (which means that you submitted an offer on a house, and the sellers have accepted the terms and signed the offer to acknowledge the acceptance), there are a few things you will need to do right away!
First things first, if you are using a loan to purchase the home, make sure your lender has a copy of the executed contract. This will ensure that he or she gets the ball rolling on the funding side. Next, you will need to write two checks, the option money check and the earnest money check. The amounts for each of these checks will already be determined in the contract. You will want to make the option money check out to the sellers and the earnest money check out to the title company. You have three days to submit these checks. For the earnest money check, that means three business days since that check is going to the title company and they probably won’t be open over the weekend. For the option money check, that one must be delivered within three real days. This sounds pretty easy in theory, but in reality it can be a bit trickier to execute. What if you are out of state, and the contract is executed late on Friday? You may need to have the checks overnighted, or sometimes, you can wire the total amount for both checks to the title company and the title company will cut the option check out of the total wire.
Aside from making sure your two checks get to the appropriate parties on time, you also will want to schedule your inspections. A home inspection is always a prudent choice. The inspector will go over all the various aspects of your home with a fine tooth comb, and point out any areas of concern. You may want additional inspections during the option period too. If the home is on a septic system, it’s a good idea to get a septic inspection. Likewise, if it has a pool you may want to get that inspected too. The option period is your time to do any and all necessary due-diligence on the property. If there is something unveiled that’s a deal breaker, you can back out of the contract without losing your earnest money.
You may also consider scheduling some contractors during the option period. If you’re planning to remodel or make any structural changes to the home, you can get quotes and advice from qualified contractors during this time. If purchasing this home is contingent on being able to remove a wall, and the contractor reveals it will cost way more than you can afford, you can still back out of the contract during the option period.
Before your option period ends, you have the opportunity to renegotiate. If there were serious issues revealed in the inspection, you can prepare an amendment to state that the seller will either fix these issues, or you can negotiate money off the sales price so that you can complete these repairs. This is not the time to ask for $5k off the sales price because you don’t like the color of the home. This amendment should only be used to address concerns that you were not aware of until the inspector pointed them out to you.
If there are concerns you would like addressed, you will present your proposed solution to the seller. If the seller agrees to fix the issues or give you money off the sales price, you will both sign an amendment to the contract clarifying this agreement in writing. If you cannot come to an agreement, you can either back out of the contract or proceed with the sale knowing that you are going to have to fix these issues at your own expense after closing.
It’s important to schedule all of your inspections early in the option period to allow the time to review the findings and negotiate with the sellers if necessary. While you can still negotiate repairs after the option period, you have little leverage after the option period is over since you no longer have the ability to back out of the contract without losing your earnest money.
Once, the option period is over, there will be little for you to worry about until the closing date. You may need to provide more documentation to your lender, and if the home doesn’t appraise that could be another opportunity to negotiate the sales price. If you have questions about the buying process in Texas, feel free to contact me today. I’d be honored to help guide you through the process of finding a house to call home.
As we approach the high season in the land of real estate, more and more properties are experiencing multiple offer situations. When two or more parties have submitted an offer on the same piece of property, it becomes a multiple offer situation. This is often referred to as a bidding war. However, it’s not always the party with the highest offer price that wins.
Many different variables affect the offer that ends up being selected by the seller. It’s important to understand these variables, so that you can craft the strongest offer. First, it’s important to understand what the seller wants. Has the seller already vacated the property? If so, they most-likely would appreciate a quick close. If they are still living in the home, you should inquire as to the seller’s ideal closing date, and craft your offer accordingly.
One of the most common oversights I see in offers submitted in a multiple offer situation is in the third-party financing addendum. The third-party financing addendum is required with any offer that involves financing. The first oversight I see is in regards to the term of the loan. The addendum spells out the limits for the interest rate and the origination charges. It puts a maximum value on these terms. For example, say your lender has quoted you a 4.4% interest rate, and 1% origination charge. In the third part financing addendum, you enter these same figures.
What if the interest rate changes, and now you can only obtain a loan with a 4.5% interest rate? You would have an out from the contract. This is good for the buyer, but the seller is looking for the buyer with the highest likelihood of purchasing their home. Would you still purchase the home if your interest rate went up to 4.5% or 4.6%? If so, you should make sure the third party financing addendum reflects the maximum interest rate and origination fee that you would pay.
The third party financing addendum also specifies the amount of time, if any, needed for buyer approval.
Oftentimes, I see “21 days” in this paragraph. That means that you, as the buyer, have 21 days to be fully pre-approved by the lender, and you have an out from the contract for 21 days after the execution date. This is a really long time! If you, as a buyer, are fully pre-approved, and the lender has had all of your personal financial documentation go through underwriting, you can enter a much lower number here! Try to make this number less than or equal to the number of days in your option period, and the offer will be much more enticing to the seller.
Increasing the amount of earnest money you will pay also strengthens the offer. The earnest money is held by the title company, and ultimately applied to the sales price. If you have the funds to do so, consider putting a larger amount here. If you back out for any reason, this money will be refunded to you.
Similarly, consider the amount of money you will pay for the option period, and the number of days you will need for the option period. In contrast to the earnest money, the option money is not refundable. If you decide to back out of the purchase during the option period, you will not get this money back. However, if you are really serious about the home, and don’t think you will back out, consider increasing the amount of option money. You can, and should, make sure that if you do purchase the home, the option money is applied to the sales price. Additionally, consider how long you need for the option period. How long will it take for you to get an inspection done? The shorter the option period is, the more appealing the offer is in the eyes of the seller.
Traditionally, in Texas, we see the seller paying for the owner’s title policy. If you want to make your offer super strong, consider paying for the title policy. Also, think carefully about any other concessions you may want to request. Asking for contributions to closing costs or home warranties negatively affects the seller’s bottom line.
Crafting a personal letter to the sellers sometimes works. If you’re in a multiple-offer situation, you might as well give it a shot. Tell the seller why you want to purchase their home. Compliments, and a personal back story often go a long way. Sellers sometimes choose an offer not because it is the highest, but because they can envision you living in their home.
Lastly, choose an agent who is experienced, professional, and knows how to write a clean offer. As a listing agent, I have advised my client to consider accepting an offer that was lower than the highest offer, simply because the offer was well-written. I can tell a lot about an agent from the way the offer is presented. If there are mistakes and oversights in the offer itself it makes me doubt their ability to do their best to get the offer to the closing table.
If you’re looking for an agent in the Austin area, contact me today.
There’s nothing better than being able to wake up in the morning and enjoy a cup of coffee while you look out at the lake and see the sun reflecting off the water. If this sounds like a little slice of heaven to you, you may be considering purchasing a home with a lake view. In Austin, there are two main lakes, Lake Austin and Lake Travis. I should mention that both “lakes” are really damned portions of the Colorado River. Regardless, us Austinites refer to them as lakes, and you can find wonderful homes with great views of the water near both of these lakes.
Lake Travis is much larger than Lake Austin. Lake Travis is about 25 square miles opposed to Lake Austin’s 2.5 square mile size. So, as you might imagine there are many more homes for sale with Lake Travis views than Lake Austin views.
The south shore of Lake Travis consists of neighborhoods such as Hudson Bend, Lakeway, and Spicewood. These communities are located about 20-30 miles west of downtown Austin in the the Lake Travis Independent School District (LTISD). According to niche.com, LTISD is rated the #2 school district in the Austin area.
The north shore of Lake Travis consists of neighborhoods such as Volente, Jonestown and Lago Vista. The north shore communities of Lake Travis are about 20-40 miles from downtown Austin. However, in my opinion, it seems it usually takes longer to get to these neighborhoods from downtown than it does to get to the south shore communities.
Homes with lake view on Lake Austin, can similarly be categorized as homes on the south side of the lake verse homes on the north side of the lake. However, closer to downtown they are often categorized as west of the lake or east of the lake. Residents of neighborhoods like West Lake Hills (west of Lake Austin, duh) and Tarrytown (east of Lake Austin) can usually get to downtown in less than 20 minutes. Further out, you can find homes with lake views in neighborhoods such as Cuernevaca, Lake Pointe, and Apache Shores (all south of the lake). On the north side of Lake Austin you can find homes with lake views in Steiner Ranch, River Point, and Cat Mountain.
If you’re thinking about purchasing a home in the Austin area with a lake view, feel free to contact me for insider information on the best neighborhoods for your specific needs.
Buying a home can be super exciting! You’re likely looking for something that has enough space for your family, is convenient to work or in a good school district. You may be looking for something that is your style, or maybe you’re looking for something with good bones that has the potential to be your dream home. No matter which of these items you are looking for in a home, you should also play close attention to the physical elements of the home. Understanding the expected life expectancy of the various aspects of the house will help you make an informed decision and save you from unexpected expenses down the line.
When I am helping a client find a home, there are a few areas I look at right away to determine if they are in decent condition. Before I even step foot in the home, I like to look at the seller’s disclosure notice. This will inform me of any known past or present issues with the home. If there is anything of note, I will make sure to take a closer look when I get to the home. The seller’s disclosure sometimes includes the age of the roof. Oftentimes, the current owner may not know the age so, the first thing I do when I get to the home is take a look at the roof. Rarely can I fully view the roof from the ground, but I can see if there are tree limbs that may be damaging it. Sometimes, I can visibly see the roof is in poor condition.
Next, I enter the home. One of the most-costly home issues is a home with a poor foundation. If the foundation is not performing as designed, the entire home can have various issues. I am not an inspector, nor a foundation expert. However, I do know of some tell-tale signs of foundation issues. Uneven cracks in walls, a floor that feels un-level, cracks in the exterior of the home are all signs of foundation issues. These characteristics could also be entirely unrelated to a foundation problem. A floor may simply be uneven due to a poor sub-flooring job. But, If I suspect foundation issues, I will let my clients know. This way, they can then make an informed decision if they want to still pursue the house, and then hire an inspector and foundation expert to give their professional opinion.
In Texas, a good AC system is important. I want to take a look at the system right away, and see if I can ascertain more information about the home’s HVAC. Simple things like dirty filters can tell you if a person takes care of their system or not. I also like to look at the condenser unit and see if I can find a serial number. The serial number of most appliances is coded to tell you the age of the appliance. A simple google search will usually help me decipher the code for any given manufacturer and consequently the product’s age.
As I mentioned before, I am not a home inspector. However, if I can identify a potential major money pit simply from walking through a home, I’m going to make sure my clients know. This way, my clients don’t end up getting their hopes up about the home, spending money on an inspection and then realizing the home is going to be too problematic in the long run. When you’re looking for a new home, make sure to keep an eye out for more than just a gorgeous master with his and hers closets. Also, look at these important elements of a home to make sure you are not moving into a money pit. If you’re considering buying in the Austin area, contact me today, or take a look at these homes for sale in Austin.
The Westlake area is home to some of the priciest residences in the Austin area. The convenient location with a close proximity to downtown coupled with the exemplary schools makes this area highly desirable for many families. Unfortunately, many home buyers may find this neighborhood to be at the top of their budget. Last year the median home sales price for residences in Eanes ISD was $860,000. However, as prospective Westlake home buyers know, there are many homes that sell for far more in this neighborhood.
Fortunately, now is a great time to buy in Eanes ISD. Historically, home prices in Westlake tend to soar in the late spring/early summer. Since this area is family oriented, most buyers prefer to move in the summer months when the kids are out of school. However, if you are willing to move in the fall/winter, you can get a much better deal on a home in Eanes ISD. Historically, the median home sales price tends to be the least in Westlake between September through January.
That means now is a great time to be looking at homes if you want to get a fantastic deal on a home in Eanes ISD. There are currently 69 homes under 1 M for sale in this great school district. There are two definitive clusters of moderately priced home in Eanes ISD; homes in Lost Creek and homes in Cuernavaca. However, there are also homes at this price point scattered throughout Westlake.
If you are willing to consider a condo for your residence, there are many great options including the new construction condos at the Walsh, the condos at Davenport Ranch and condos on Lake Austin off Westlake Dr. There’s also this great modern condo in Lost Creek with beautiful views and a plethora of energy efficient upgrades.
Thinking about purchasing a home in Westlake? I highly encourage you to consider buying in the “off-season”. Click here to view all homes for sales in Eanes ISD for under one million.
If you’re thinking about buying a home, you may begin your search by looking at a diverse array of properties. Even if you know you want a move in ready home, you may be comparing new construction homes to remodeled homes built in the 70s. There are pros and cons to both; however, more and more buyers are gravitating towards new construction communities as the prices of existing homes continue to increase. Below you will find eight great reasons to consider a new construction home.
1. Energy Efficiency
New homes are much more energy efficient than older homes. First of all, new homes are well insulated. They also come with brand new HVAC systems. This means not only is the system designed to be more efficient, but there is less energy waste because the home is well-insulated. Additionally, new homes have brand spanking new windows. In older homes up to 30% of your utility bill may be going straight out the window. Furthermore, we’ve come a long way in terms of creating more energy efficient appliances. In a new home it’s likely that almost all of your appliances will be energy star certified. Even if they’re not, the appliances of 2018 are simply more efficient than older models. All of these items add up to serious savings on your utility bills. I wouldn’t be surprised if you compared two homes of the same size, one built in the 1970s and another built this year, and the 70s home utility bills are twice that of the brand new home.
2. Modern Finish Out
With a new construction home, you will likely have more modern finishes. You may or may not have something that matches your exact tastes (I’ll touch on that point later), but you certainly aren’t going to have mustard yellow formica countertops. You will also have a modern floor plan that meets the needs of today’s buyers. Builders are listening and creating homes with open floor-plans, larger closets and bonus-spaces for the kids. In older homes, you may not even have a master bedroom, and if you do, the bath may be quite small.
One of the biggest lures for buyers thinking about buying a brand new home are the warranties. When you buy a new construction home, there is usually a builder warranty. There may be additional warranties from sub-contractors for items like the HVAC and plumbing. Also, you will likely have warranties for all of your appliances. At minimum, most new homes offer a one-year builder’s warranty. This will cover almost every aspect of your home. If something stops working or doesn’t look quite right, you have peace of mind knowing you can call someone to get it taken care of with no cost to you.
4. Less Maintenance
Similarly, new homes require less maintenance. When you purchase an older home, it may be filled with surprises, and I’m not talking about the good kind. Things like rusty pipes can lead to costly repairs, and it’s often quite difficult for an inspector to evaluate all elements of a home when he or she is simply doing a visual inspection. When you buy a new home, you have a pretty good idea of the lifespan of the various aspects of your home. You know the AC should last for about 15 years and the roof should be good for about the same amount of time. With an older home, you can have sudden unexpected repair costs that happen in the first year turning your dream of installing marble countertops to dust.
Another top reason that buyers gravitate towards new construction homes is the idea of customization. Having the exact home that matches your family’s needs and design tastes is a common aspiration. Unfortunately, many buyers have unrealistic ideas of the depth of the customization with new homes. Unless you are having a true custom home built, you won’t be able to customize everything. However, you often will have the liberty to make some design choices. With a new home, you often are able to choose your paint color, floors, tile selections, and countertops. You may be able to add an extra room or further customize selections such as bath and light fixtures. These choices often come at a price; but new homes do offer you the ability to personalize your house.
6. Builder Perks
Purchasing a new construction home may have economic benefits too. Oftentimes builders offer incentives to entice home owners to purchase one of their units. These incentives can come in many forms. Builder sales goals may provoke simple price drops, or the builder may offer more complex deals to make the purchase more affordable. Offering to pay for the title policy or other closing costs is common practice among many Austin area builders. Some builders offer free upgrades to make your customizations more luxurious, and other home builders even offer specific benefits for teachers, police officers and fireman.
When I purchased a new construction home last year, I immediately fell in love with this one thing that has become one of my favorite aspects of my new place: a USB wall outlet. I know, it sounds simple enough but this little piece of technology is so useful. There is one in the kitchen and a few more in the bedrooms. No searching around for one of those little white apple boxes in this home, we can plug our devices straight into the wall. In older homes, you may not even have enough outlets to charge all of your devices. New homes are much more tech friendly. They are wired to meet the needs of today’s buyers with multiple outlets, practical places for wifi routers and walls designed for flat screens to be mounted.
Last but not least, new homes are safer than older homes. New construction homes must be built to current building codes. Older houses do not have to be brought up to code. In an older home you may have lead based paint or asbestos siding. New homes are built with materials that are better for you, and in a way that minimizes the risk of accidents. There are safety mechanisms on almost every item that could cause harm. Outlets are all GFCI protected, there are mechanisms on your hot water heater to prevent over pressurizing or over-heating, and there are smoke detectors in every room.
If you’re considering purchasing a new home in the Austin area, I’d love to discuss the best communities for your needs with you. Alternatively, you can search all new homes for sale in the Austin area here.
Just ten years ago, buyers had many more options when looking to invest $200 K in the Austin real estate market. The median sales price of residential homes in 2008 was only $192,000. You could buy a cute little Bouldin cottage, pretty much anything east of I35, or a modest sized home in Lakeway.
Today, options are far more limited. In my opinion, with a $200,000 budget in Austin you have four options: a condo, a home in the suburbs, a fixer-upper in a less desirable area or land.
If you’re thinking about putting that $200K into a condo, you’re in luck. There are quite a few condos available for that price today. Unfortunately, the majority of them are 1 bedroom units, and they average around 600-700 square feet.
Need a little more space? You will likely need to go farther out to find the right home. New construction neighborhoods in Buda and Kyle have three plus bedroom homes starting at under 200K. You can also find move-in ready homes at this price point in northern suburbs such as Round Rock, Hutto, Pfluggerville, and Leander. East of Austin in Manor, you can also find homes at this price point.
Considering going the fixer upper route? If you want to be as close to downtown as possible. Your search will likely occur mostly in the East Austin neighborhood of Montopolis. Approximately five miles from Downtown, you can’t find another pocket with this many homes for sale under 200K so close to the city’s center.
If you want to follow the wisdom of Mark Twain and buy land, you have a few options with a $200K budget in the Austin area. You could buy a tiny, postage stamp lot in Crestview or close-in East Austin. Or, you could have your money go a little further and get almost half an acre in Oak Hill. Take your money up north, and you can likely find an acre or more in someplace like Hutto or Liberty Hill.
If you’re looking to purchase a property in the Austin area, it’s important to consider property tax rates. Throughout central Texas, these rates can vary drastically from just under one and half percent to over four percent in some areas. These rates can make a big difference in your monthly mortgage amount and in your purchasing power. For a $300,000 home with a 1.5% tax rate your annual taxes would be around $4,500. With a 4.9% tax rate, you would expect to pay about $14,700 annually for a home of the same price. Of course, if you intend to use this home as a primary residence you would be eligible for a homestead exemption which reduces your annual property taxes. Regardless, if you’re considering moving to the Austin area you may want to look for homes in areas with lower tax rates. Thus, I have compiled this list of South and West Austin neighborhoods with property tax rates under 2%.
Sunset Valley (1.87%) is a small city about fifteen minutes southwest of downtown Austin. Homes in Sunset Valley are in the lowest tax rate on this list, and it is also one of the closest neighborhoods to Downtown. Unfortunately, the population is small (less than 700 residents according to the latest census), and that makes available inventory in Sunset Valley scarce. Click here to view all homes for sale in Sunset Valley.
Rollingwood (1.96%) is another independent city adjacent to Austin city limits. Residents of Rollingwood enjoy a great quality of life enjoying the benefits of a small town community feel while also being less than 10 minutes from downtown Austin. The median home price in Rollingwood is one of the highest in the Austin area. However, homes in this neighborhood do feed to the exemplary Eanes ISD. Click here to view all homes for sale in Rollingwood.
West Lake Hills (1.91%) is located just west of Rollingwood. It is another one of Austin’s most affluent neighborhoods. The median sales price was over 1 M last year. However, you can find homes in the 500-800s in this Austin suburb. Also, there are some unincorporated pocket neighborhoods where you can find homes that have lower property tax rates like this home in Westwood with a 1.846% property tax rate. Click here to view homes for sale in West Lake Hills.
Cuernavaca (1.86%) is located further west in Westlake off of Bee Caves Rd. The community is located between Bee Caves Rd (2244) and Lake Austin. This community is the most affordable area feeding to Westlake High School. Residents of Cuernavaca also have the ability to join the voluntary Lake Hills Community Association granting residents access to the lakeside park and swimming pool. Click here to view all homes for sale in Cuernavaca.
Rob Roy (1.84-1.95%) is a community in Westlake located between Loop 360, Bee Caves Rd. and Lake Austin. The gated community consists of a number of micro neighborhoods that were developed staring in the 80s with the original section of Rob Roy. Overtime additional sections were added to Rob Roy including Rob Roy on the Creek and Rob Roy on the Lake.
Deer Creek Ranch (1.98%) is a moderately-priced single family residence community in Dripping Springs, Texas located between Hamilton Pool Road and R R12. The area was first developed in the early 2000s and consists of Highland Creek Lakes, Mountain Creek Lakes, Valley Lake Hills, and Twin Lake Hills. Homes in this area are usually priced in the 300s. Residents of Deer Creek Ranch enjoy a number of community amenities such as walking trails, lake access, and fishing ponds. Homes in this area also feed to Lake Travis ISD.
Montebella (1.98%) is also located about 25 minutes west of Austin in Dripping Springs off Hamilton Pool Road. Construction began about 5 years ago in this community which features an array of styles with most homes boasting open-floor plans. Most homes in Montebella tend to be around 2,000 square feet and sell in the mid 300s. Montebella homes feed to Lake Travis ISD. Click here to view all homes for sale in Montebella.
Pedernales Canyon Ranch (1.98%) is a community in Spicewood, Texas located west of Hwy.71 and South of the Pedernales River. Pedernales Canyon Ranch is about 26 miles west of downtown Austin, and about 10 miles west of The Hill Country Galleria where dining and shopping opportunities abound. Residences in this neighborhood tend to be on larger lots and many offer gorgeous hill country views. Click here to view all homes for sale in Pedernales Canyon Ranch.
Angel Bay (1.98%) is a quiet gated community in Spicewood, Texas. Homes in Angel Bay tend to be on the larger side, between 4,000-7,000 square feet and usually are on lots of at least a few acres. Angel Bay is a waterfront community offering ample opportunities for residents to enjoy Lake Travis. Many homes in this neighborhood are also suitable for horses. Click here to view all homes for sale in Angel Bay.
Milam Ranch (1.98) is a community in Spicewood located between Old Ferry Road and the Pedernales River. Homes in Milam Ranch also feature large lots usually of at least a few acres. Milam Ranch feeds to Lake Travis High School. Click here to view all homes for sale in Milam Ranch.
Shady Hollow (1.91%) is a community in South Austin located east of Circle C and about 15 miles from Downtown Austin. Homes in Shady Hollow were built from the 70s to the early 2000s. The median home price in Shady Hollow is just under 400K. Shady Hollow is located in Austin ISD with homes in Shady Hollow feeding to Bowie High School. Click here to view all homes for sale in Shady Hollow.
South Grove (1.86%) is a community of free-standing condos in Manchaca, Texas about 12 miles south of downtown Austin. Homes in South Grove were built between 2015-2017 and usually sell in the high 200s - low 300s. Most homes in South Grove have 3 bedrooms and 2 baths although there are some 2 bedroom and 4 bedroom homes. South Grove feeds to Austin ISD and Akins High School. Click here to view all homes for sale in South Grove.
Enclave at Estancia (1.87%) is a planned gated community in South Austin. Homes in this community are relatively new with Lennar beginning development of this neighborhood in 2015. Residents in the Enclave at Estancia enjoy community amenities such as parks, trails, a community center, and pool. Homes in the Enclave at Estancia range from around 1500 sqft. to 4,000 sqft. and usually sell for between 350-450K. This community is located about 20 minutes south of downtown Austin and also feeds to Akins High School. Click here to view all homes for sale in the Enclave at Estancia.
The Austin real estate market can be quite competitive. It’s not uncommon for lower priced homes to have more than one offer within the first day of being listed for sale. As a buyer, there are a variety of strategies you can implement to put your best foot forward in this situation.
First, it’s important to find out what is important to the seller. Are they looking for a quick close? Will they appreciate your emotional attachment to the home? Or, do they simply want to accept the offer that will net them the most money?
What you find out about the seller’s motivations will help you craft the most competitive offer. Regardless, of their preferences, a significant amount of earnest money will illustrate serious interest in the home. For example, if you traditionally would put $3,000 in earnest money on a $300,000 home. You could instead offer $5,000 in earnest money. This money will be applied to the sales price if your offer is accepted and you move forward with the purchase, or will be returned to you if you back out during the option period.
That brings me to my second point, the option period. The option period is a specific amount of days you pay for to do all necessary due-diligence on the home. This is typically when the inspection is performed, and if you decide to back out during the option period, your earnest money is returned to you and you just lose the option money. Shortening the number of days in your option period strengthens your offer. Additionally, increasing the amount of option money shows you have more skin in the game. Using the same example as before, consider offering $300 option money for a 5 day option period verse $150 for a 10 day option period. Again, if you proceed with the purchase, this money will be applied to the sales price. Click here to learn more about option money vs earnest money.
Traditionally, the seller pays for the owner’s title policy. Want to make your offer uber competitive? Offer to pay for the owner’s title policy. Similarly, consider taking on the survey expense if needed.
Ultimately, multiple offers are a numbers game. Various items take away from the seller’s net proceeds such as: home warranty, survey, closing costs, and the title policy. Consider removing these from your offer, or come in with a higher purchase price to counteract them.
Illustrating that you have the financial capacity to purchase the home is also critical. If you are submitting a cash over, make sure to send proof of funds. If you are using financing, sending a pre-approval letter is the minimum. A phone call or email from the lender directly to the listing agent is even better. In Texas, the third party financing addendum specifies the number of days required for buyer approval. The shorter the number of days, the more appealing your offer is to the seller. Furthermore, consider waving the appraisal contingency if you can. By stating upfront that you will pay the difference in cash between the appraised value and the offer price, you show the seller that you mean business.
Combine these strategies with what you know about the seller to craft the strongest offer. If the home is vacant, they may value a quick close. Can you move your closing date up to be more competitive? Did you see a beautiful dog house in the back and recognize the sellers as animal lovers? Maybe a hand written note with a pic of Spot will help you win over the hearts of the seller.
If you’re interested in purchasing in the Austin area, don’t be frightened. This market is competitive, but with a strong agent by your side, you can get the home you deserve. Contact me today to get started.
When you put an offer in on a home, one of the negotiable items in the contract is a residential service contract, more commonly known as a home warranty. It’s quite typical for the buyer to request that the seller contribute a certain amount of money towards the buyer’s home warranty purchase. Why you should request a home warranty, how much money you should request towards a home warranty, and how to choose the right home warranty are all questions worth asking when you are purchasing a new home.
Why should you get a home warranty?
A home warranty reduces the costs of home repairs by providing an insurance policy of sorts on the maintenance of your home. If an appliance breaks, you will pay a service fee for the repair which is much less than the actual repair cost. There are really only a few situations when I will not recommend my client get a home warranty. If the home is a fixer upper or tear down, it doesn’t make sense to purchase a home warranty. New construction homes sometimes come with builder’s warranties. It’s a better use of my client’s funds to hold off on the home warranty if the builder’s warranties are as good or better than those offered by a home warranty company. If you know it’s a multiple offer situation, you may not want to request a home warranty. The home warranty weakens the offer by requesting an added expense for the seller. Otherwise, I will advise my clients to request money towards a home warranty. My job is to protect my client’s best interests so I will usually write in that the seller will pay a certain amount towards my client’s home warranty. If the sellers don’t like this part of the contract, they can always make a counter offer, but the initial offer is going to be skewed towards my clients’ best interests.
How much does a home warranty cost?
Since you have to put a monetary amount that the seller will contribute towards the buyer’s home warranty in the contract, it’s a good idea to have a rough idea of home warranty costs before you submit an offer. Home warranty costs vary significantly based on the type of home you are purchasing; a condo home warranty will cost less than a home warranty for a duplex with double the number of appliances as a single family home. The average amount I recommend in the contract is $500, this will cover an extensive condo plan with extra money for added coverages, and it will cover a mid-level policy for a single family home. Once we are under-contract on the home, I send my clients brochures from a few different companies so they can choose the policy that’s best for them.
Which home warranty should I choose?
Choosing a home warranty policy is challenging. You need to determine what coverages are most important to you, compare annual costs as well as service fees, and take a look at the fine print to really determine which one’s the best. There are a number of different home warranty companies out there, and they all have multiple products to choose from. Usually they will have 3 service tiers, a basic plan, a mid-level plan, and the ultimate plan. Reviews.com did a great assessment of the options available for consumers looking to purchase a home warranty. In their article, they point out some great tips for finding the best home warranty company for you, and they also made a key conclusion that rates may be negotiable. Calling the home warranty company directly can often lead to obtaining the best rate.
If you’re planning to purchase a home soon, it’s a good idea to understand the different home warranty options available to you. Contact me today, and I can send you brochures for a variety of home warranty providers in the Austin area.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.