How to buy a home in Austin (updated September 2020)\n\n\n\nSo, you\u2019re ready to make a move to Austin, TX? You\u2019re not alone! Greater Austin has grown nearly 35% over the past decade and now has a population over 2 million.\n\n\n\nNot surprisingly, the Austin real estate market has exploded accordingly. According to August 2020 data from Redfin, homes in Austin sell in around 10 days, with the average sale price at $450,000 which is up 15.4% from last year. \n\n\n\nIn such a competitive real estate market, how do you buy a house in Austin? We\u2019re here with a helpful guide \u2026\n\n\n\nStep 1: Understand the Market\n\n\n\nAs of June 2019 there were over 2,900 homes for sale in the Austin area, but as of September 2020, there were only 2,304. With 20% fewer homes for sale and an increased demand, Austin's market is more competitive than ever.\u00a0\n\n\n\nThe median home price in Austin also saw an increase. In June 2019, it was reported that the median home price was $407,400 but as of September 2020, that number also increased to $450,000, according to Redfin.\n\n\n\nDefining the parameters of your Austin homes search will help you move through the process quicker.\n\n\n\nAnswer these 5 questions before starting your search\u2026\n\n\n\n1. What\u2019s my budget? \n\n\n\nAustin has a higher cost of living than almost anywhere in Texas. So, for that reason, you should really stick to the 3x your income rule. You might be able to bend that rule in other parts of the state, but Austin isn\u2019t one of them.\n\n\n\n2. What part of Austin do I want to live?\n\n\n\nTip: Make sure to check traffic patterns from your potential home to your office. There may be thousands of Austin home listings, but not all will be geographically desirable to you. \n\n\n\n3. What type of home am I looking for?\n\n\n\nDid You Know: The vast majority of homes currently listed in Austin are single-family. Currently, there are less than 100 townhomes for sale in Austin, and only 15 active mobile homes for sale in Austin, according to Zillow. \n\n\n\nCondos can be another option, especially if you work in Austin\u2019s popular downtown corridor. Three new buildings will be completed in Austin\u2019s downtown by 2019, but the average price is expected to remain around $495,000.\u00a0\n\n\n\n4. How quickly am I prepared to move?\n\n\n\nTip: A lot of homeowners want to sell their house fast in Austin. If you aren\u2019t prepared to move right away, your offer may be viewed less favorably. \n\n\n\nStart the shopping process 3-6 months before you want to move. Get a sense of what you are looking for and where you want to live. Then, when you are ready to buy, you will be comfortable acting fast. \n\n\n\n5. Am I prepared to make an offer?\n\n\n\nThis is the big one. From down payment, to mortgage, to contingencies, you want to have all your ducks in a row. Also, you need to decide if buying a home is a good idea for you personally. \n\n\n\nIf you have followed Austin real estate news recently, you know that affordability is at an all-time low. Despite recent efforts to curb this trend, it\u2019s not going to change overnight. Buying a home is a decision you shouldn\u2019t take lightly. \n\n\n\nStep 2: Get Your Financing In Order\n\n\n\nLet\u2019s talk dollars and cents. Remember, buying a new home in Austin is an investment, so making sure you understand the ins and outs of the financing side of the transaction is important. \n\n\n\n1. Get pre-approved for a loan\n\n\n\nDo I need to get pre-approved for a mortgage before finding my new home? YES! This goes back to being prepared to make an offer. You need to have a cursory understanding of the mortgage process, and the steps you need to take to get pre-approved. \n\n\n\nStart by researching your credit score, it can have a big impact on your mortgage interest rate. \n\n\n\nSpeaking of mortgage rates, make sure you are looking into how your rate will affect your monthly payment. Mortgage rates in Austin have been trending down over the past year, which is great for you as a buyer. \n\n\n\nAs of June 2019, the average interest on a 30-year, fixed rate mortgage in Austin is 4.16%, which is down from 4.82% in December of last year. \n\n\n\nA dip like that could mean hundreds of dollars in savings per month for you as a new home buyer, and alter what you are able to afford.\n\n\n\n2. Get your deposit ready\n\n\n\nExperts typically recommend a 20% down payment on your new home. However, there are currently programs in place that would allow you to buy a home with as little as 3% down. \n\n\n\nKeep in mind that a downpayment less than 20% will typically also require a monthly PMI (Private Mortgage Insurance) payment, in addition to your mortgage payment. You can read more about the benefits of a larger down payment here. \n\n\n\n3. Budget for moving and other costs.\n\n\n\nThe actual act of moving can also be costly. According to Unpakt, moving locally in Austin can cost up to $1,400 and storage costs can be upwards of $500\/month. \n\n\n\nStep 3: Find the right home\n\n\n\nYou\u2019re ready to begin your Austin home search! This is the fun part. Make sure to cast a wide net and look for homes that meet your budget and geographic requirements. \n\n\n\nSearch aggregators like Zillow or Trulia can be helpful, but also look for homes on non-traditional sites like REX that may have exclusive Austin home listings that fit your needs. Make to visit open houses in a variety of Austin neighborhoods like Tarrytown, Circle C and East 6th before you make a decision on a certain area. \n\n\n\nYou might find that one are suits your needs better than you thought. Don\u2019t forget to drive during rush hour to see what the traffic is really like. \n\n\n\nWhat about finding an agent? You\u2019re first inclination may be to go online and solicit the help of a local Austin realtor, or real estate agent. But, did you know that there are nearly 10,000 real estate agents in Austin alone? \n\n\n\nFinding the right agent is important. While buyers typically don\u2019t incur a \u201cfee\u201d for working with an agent, there are costs associated with the transaction that you need to be aware of. \n\n\n\nOur suggestion is to meet\/interview multiple agents or real estate companies and pick one that meets your needs. Don\u2019t be part of the 65% of people who choose the first real estate agent they meet!\n\n\n\nStep 4: Prepare an offer\n\n\n\nYou\u2019ve done all the leg work, it\u2019s time to make an offer on your dream home. Work with your agent to make a strong offer and make sure to include any contingencies you may have. \n\n\n\nDiscuss what competition is out there and how you can best compete and make your offer stand out. You may also want to consider personalizing your offer with a letter to the seller explaining why you want to buy their home. \n\n\n\nStep 5: Go through negotiations\n\n\n\nWork with your agent to determine your negotiation strategy if your initial offer is countered, or if there are multiple offers on the table. Just remember to keep your budget in mind and don\u2019t get in a bidding war that stretches your limits financially. \n\n\n\nStep 6: Inspections, Escrow & Close\n\n\n\nAfter negotiations are complete, you will enter into the escrow period. This is when all the financing, paperwork, and due diligence are finalized. Escrow can be an intimidating process, so we have put together this guide to help you through it. \n\n\n\nOnce you have an accepted offer, there are typically inspection contingencies in place to protect you from unforeseen issues with the home. \n\n\n\nIt is up to you to contract a home inspector to take a detailed look and provide recommendations regarding the condition of the property. \n\n\n\nOnce complete, you will be able to assess the findings and determine if any further repairs or negotiations are needed to account for any of these unknown variables.\n\n\n\nAfter inspections are finalized, you\u2019ll pay your closing costs and sign the paperwork. \n\n\n\nCongratulations, you are now one of the many happy homeowners in Austin.\n\n\n\nStill, have questions? We would love to help! Call us at 855-342-4739\n\n\n\nHere are some other articles you may enjoy:\n\n\n\nThe Austin Texas Real Estate Market ExplainedMedian Home Price Austin TX, July 2019REX Continues Growth in Texas, Featured in Austin Business JournalREX Featured in Austin Business JournalREX is coming to Austin, TX!