Your monthly housing payment consists of more than just your mortgage payment. When you are looking at purchasing a new home, it’s important to consider everything that goes into your total payment so that you can identify homes that fit in your budget. Although looking at a home’s price is a good starting point, two homes that are the same price can have very different monthly payment amounts.
Principal and InteresT
The majority of your monthly housing payment will likely consist of principal and interest payments for your home loan. This will vary based on the amount you put down on the purchase of the home, and the terms of the loan. However; if you putting 20% down or less on a 30 year conventional loan, the principal and interest portion will be the bulk of your payment. Initially, you will pay more in interest than you are paying down on principal. Over time, you will gradually see more of this total payment going towards principal than interest.
If you put less than 20% down on the purchase of your home you will also have some form of mortgage insurance in your total monthly housing payment. Private Mortgage Insurance (PMI) is required for conventional loans with less than 20% down and Mortgage Insurance Premium (MIP) is an insurance policy required on Federal Housing Authority (FHA) loans. Both PMI and MIP are protection for the lender in the event of default. A borrower may request that PMI be removed when the loan to value ratio reaches 80% either through payments to the principal, appreciation of the home, or a combination of both. MIP also may be able to be removed, but it will vary based on the loan terms and could even require a re-finance.
If you’re purchasing a home, you are going to want to insure it, and a lender will require that the property is insured. Insurance rates can vary by company, policy details, and the property. An older home will likely have a higher insurance rate. If there were many claims on the property over the years, the rate may be higher. The rate will also vary based on the location. The safety of a neighborhood and the likelihood of natural disasters is also going to influence your monthly home insurance rate.
Here in Texas, it’s especially important to pay attention to property tax rates. After your principal and interest payment, this will likely be the second largest portion of your total monthly housing payment. Property tax rates in Central Texas can vary from under two percent to over four percent. On a $400,000 home with a two percent property tax rate, you will pay around $667 per month towards property taxes. For another $400,000 home with a four percent tax rate that amount doubles to $1,334 per month. It’s easy to see how even a small change in the property tax rate can have a significant impact in your monthly housing payment. Make sure to pay attention to property tax rates when looking for a new home that’s in your budget!
Although they are not traditionally included in your monthly mortgage payment, Home Owner’s Association (HOA) fees are something that should be included when thinking about your monthly housing expenses. HOA fees for some Austin area homes exceed $1,000 per month! Even though these figures are not paid in conjunction with your monthly mortgage payment, they are factored in when determining loan eligibility. Other factors to consider include utility costs. An older home may have higher utility bills compared to a newer home that has more energy efficient upgrades. A home located in a Municipal Utility District (MUD) may have a higher tax rate because of that MUD payment. Homeowners in a Public Improvement District (PID) will have to pay a fee, usually annually, to cover the costs of the infrastructure.
As you can see, your monthly hosing payment is made up of many different factors. It’s important to consider all of these items when looking for a home you can afford. Make sure to look into all of the details before you fall in love with your next home. If you have questions about the home buying process, or want a dedicated broker to help you navigate the Austin real estate market, contact me today.
There are quite a few equestrian friendly neighborhoods in the greater Austin area, and there are other properties that may not be located in a horse community, but are well suited for horses. Obviously, the most important factor to consider when looking for an equestrian property is if the deed restrictions permit horses. Once you ensure the property can legally have horses on it, you will want to make sure the property is suitable for horses too.
When looking for an equestrian property in the greater Austin area make sure to consider these factors:
Map of horse friendly properties for sale in the Austin Area
Austin Area Properties For Sale in Horse Friendly Communities
Horse Friendly Communities in Bee Cave:
Horse Friendly Communities in Spicewood:
Ranch at Windemere
Horse Friendly Communities in Driftwood:
Horse Friendly Communities in Dripping Springs:
Polo Club at Rooster Springs
Horse Friendly Communities in Southwest Austin:
Bear Creek Estates
Horse Friendly Communities in Hutto:
Heritage on San Gabriel
Horse Friendly Communities in Georgetown:
Ranches of Sontera
Horse Friendly Communities in Leander:
Lone Mountain Ranch
When a property is listed for sale in the MLS, the home can be listed under a variety of different statuses. Most commonly, you are looking at homes that are listed as active. However, sometimes you may see properties listed as active continent. An active contingent property is a property where the owners have accepted an offer on the property, but the buyers must sell another property before closing on the sale of the subject property.
In Texas, there is a promulgated contingency form that outlines the terms of this agreement. The Addendum For Sale of Other Property by Buyer form specifies when the buyers must close on the sale of their current home and what will happen if the sellers receive another offer on the home. This form stipulates that if the seller receives another offer on the property they must notify the buyers of said offer. The form also specifies a certain number of days in which the buyers must either waive their contingency or the contract will terminate automatically. If the buyer elects to waive the contingency, the buyer is stating that even if they don’t sell the current home, they will still purchase the subject property.
As a seller considering accepting an offer that is contingent, you should be sure to carefully read this contingency form. The date in which the buyers must sell their current home is important to review. If you are looking for a quick close, you want to make sure this date is not too far in the future. You will also want to ask questions to see how far along they are in the selling process. Do they have their current home on the market yet? If so, have your agent review the listing to make sure they are priced aggressively, and marketing appropriately. If the home is not even on the market yet, you will want to ask more questions to determine when they plan on listing the home for sale. You also want to make sure that the number of days required to respond when notice of another offer is received is not too long. In my opinion, three days is usually adequate. If the current buyers have too much time to respond, you may lose out on the second offer.
If you are a buyer submitting an active contingent offer, you should also consider how the seller will feel about the contingency. By providing proof that your current home is actively being marketed for sale and is priced correctly, you can ease the seller’s apprehensions about accepting an offer that is contingent.
One more interesting caveat in the active contingent scenario is that if you receive a second offer that is higher than the first, you can’t simply accept it. In fact, the only way you can accept the second offer is if the original buyers decide not to waive the contingency and the first contract automatically terminates. In this event, the earnest money that the contingent buyers submitted would be refunded back to them, and you could proceed to accept the second offer.
If you have any other questions about active contingent status in Texas or general real estate questions, I am always here to help. Feel free to give me a call or send me an email.
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.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.