No homeowner wants to think about the possibility of losing their home, but foreclosure can become a reality if you fall behind on your monthly mortgage payments. Whether you're dealing with foreclosure now or worried about impending financial hardship, it's crucial to remain calm and tackle the issue as soon as possible. Below, we've provided tips to help you keep foreclosure at bay.

1. Speak to your lender immediately
If for any reason you suspect you might miss a house payment, you should notify your lender right away. Lenders often have programs that can assist you in dealing with economic issues. Explain to your lender why you're missing your payment and how long you expect the situation to last.

2. Read any mail or notices sent by your lender
It's usually in your lender's best interest to help you keep your house. In the event of a financial issue, you'll likely receive mail from your lender detailing options they provide to help homeowners avoid foreclosure. Make sure you're opening and reading these messages to stay on top of the situation.

3. Know your mortgage rights
It's a good idea to know how foreclosures are handled in the State of Texas. More importantly, you should know how your lender will respond in the event that you miss mortgage payments, so review your loan documents carefully.

4. Develop a stronger budget
When faced with the possibility of foreclosure, saving money should be a priority. Examine your monthly spending habits and see if there are any areas in which you can make cuts, such as entertainment, dining out and monthly subscriptions or memberships.

5. Use your assets to your advantage
Do you have any valuables you could sell to help make your mortgage payment? This could include jewelry, additional vehicles or other expensive purchases. Alternatively, perhaps someone in the family could take on a second or part-time job. Any money you can put towards your payment will help your situation.

6. Avoid falling for foreclosure prevention company scams
Though they may provide sound advice, enlisting the help of a foreclosure prevention company may only further your debt, as they often charge a hefty fee to provide you with answers. It's best to speak with your lender or an HUD-Approved Housing Counselor to help get yourself back on your feet.

Unexpected disasters can make monthly house payments difficult, but remember that you are not alone. There are many resources you can call upon to help you solve your dilemma. For more information about avoiding foreclosure, visit HUD.gov.

In June 2009, the Austin City Council approved the Energy Conservation Audit Disclosure (ECAD) Ordinance. The aim of this ordinance was to make Austin homes more energy efficient, and it required some homeowners serviced by Austin Energy to have an energy audit performed on their home prior to selling. To date, more than 4,000 energy audits have been conducted on homes in Austin.

Recently, changes have been made to the ECAD Ordinance (effective May 2, 2011). Below is a rundown of the recent changes that affect residential properties.

• Austin homeowners affected by the ECAD Ordinance must disclose energy audit results to a potential buyer no later than three days prior to the end of the option period defined in the sales contract. In the event that an option period is not available, the results must be disclosed before the sales contract is executed.


• Condominiums are now subject to the ECAD Ordinance.


• Multifamily properties whose energy usage is above 150 percent of the average usage for similar communities are required to reduce their energy consumption by 20 percent. In addition, it must be disclosed to potential tenants that the property uses a higher amount of energy than comparable properties.

Want to know whether you qualify for an energy audit? Visit Austin Energy's ECAD Audit Self Check page and fill out the form provided. For more information about the ECAD Ordinance and how it may affect you, talk to your Central Texas REALTOR®.

On April 12th, over 2,000 Texas REALTORS® convened at the state Capitol to participate in the 2011 Texas Legislative Hill Visits. REALTORS® met with State Representatives Donna Howard and Paul Workman, staff members for Representatives Dawnna Dukes, Elliott Naishtat, Eddie Rodriguez and Mark Strama, as well as Senator Kirk Watson, to discuss bills supporting real estate professionals and homeowners alike. Below, we have summarized three specific issues discussed during the 82nd Legislative Session and how they affect homeowners.

1. TREC: Self-Directed, Semi-Independent Status
The Texas Real Estate Commission (TREC) requires real estate agents and brokers to be well educated and licensed to perform their duties. HB 1680 and SB 1000 would grant TREC self-directed, semi-independent status, allowing the Commission to retain the licensing fees it collects. With more funding, TREC would have a stronger impact on the real estate community, which would allow real estate professionals to provide higher quality services to their clients.

2. Private Transfer Fees
Certain developers can impose private transfer fees on a property. This means that if a homeowner wanted to sell their home, they would be required to pay a fee to the developers before closing. HB 8 and SB 1459 would make private transfer fees illegal in the state of Texas. Dwight Hale, Chairman of the Texas association of REALTORS®, stated that, "These fees are scams that decrease affordability and serve no public purpose."

3. TREC Housekeeping Priorities
Customers take comfort in knowing they are working with the best in the business, and the real estate industry is no exception. SB 747 intends to change the education and licensing requirements for real estate professionals, holding them to a higher standard. Changes include increasing the years of experience required before a real estate agent may become a broker and making a real estate license mandatory for individuals who accept deposits or rent.

The aforementioned bills are supported by both the Austin Board of REALTORS® and the Texas Association of REALTORS®. These bills would help further REALTORS®' efforts to protect private property rights and the interests of Texas homeowners. You can check on the current status of these bills by visiting the Texas Legislature's website and entering the bill number in the search engine provided.

Buying a home is a multi-step process that involves many moving parts and a good amount of "up front" work. Though your personal circumstances may dictate how you go about the homebuying process, we've provided a general checklist of tasks that will likely need to be accomplished before you even make an offer on your dream home.

1. Check your credit score
Make a request to see your credit report and check it for inaccuracies. You'll want to correct any erroneous information before speaking with a mortgage lender. Mistakes in your credit report could reflect poorly on you, which in turn could have a negative impression on the lender.

2. Think about how much you want to spend each month
Outside of monthly expenses such as groceries and entertainment, you'll need to consider how much you are willing and able to put toward homeownership expenses, such as a mortgage, real estate taxes and insurance rates. Depending on where you live, you may also need to take an HOA fee into account. To get a feel for what mortgage amount may be within your budget, use the online mortgage calculator provided by AustinHomeSearch.com.

3. Decide how much you can put towards a down payment
Most down payments will be anywhere from 5 percent to 20 percent of the home's selling price; however, you may be able to opt for a rate lower than 5 percent depending on which type of mortgage loan you go with.

4. Find a REALTOR®
Not only do REALTORS® know their markets and particular neighborhoods like the back of their hand, but they can also assist in negotiations and legal paperwork. Finding a REALTOR® to guide you through the home buying process can save you time, trouble and money. It's a good idea to interview your REALTOR® (or several REALTORS®) to make sure you find the real estate professional who is right for you.

5. Talk to a REALTOR® about your wants and needs in a home
Although you may have conducted a preliminary Austin real estate search to get an idea of where you might like to live and what home features you like, discussing your ideal home with your REALTOR® is very important. With this information, your REALTOR® will be better able to introduce to you to homes that meet your criteria, possibly within neighborhoods you may have never before considered as an option.

6. Find a mortgage lender
Banks and credit unions are common places to find a mortgage lender. You'll want to do some research to find a lender that can give you a good rate. Lenders can also help you determine what type of loan is right for you.

7. Get your paperwork in order for your lender
You'll likely need to provide personal documentation to your lender, such as your driver's license, employment information, pay stubs, recent tax returns and credit history. Make sure to confirm with your lender exactly what documents they need to see.

8. Find out how much money you qualify for
Banks use a certain percentage of your monthly income, as well as other factors, to determine what amount of money you are qualified to borrow and at what rate. Keep in mind that, once qualified, the mortgage rates you've been quoted may only be locked in for a certain period of time.

Once you've accomplished these steps, you'll be prepared to make an offer on a home and begin the most exciting part of your journey. Your REALTOR® will be there to offer his or her expertise, assist in the negotiating process and guide you through the closing process until you finally receive the keys to your new home. For more great tips on buying a home, visit our Consumer Tools section here at AustinHomeSearch.com.

You may have heard about—or even been affected by—the recent foreclosure freeze and be wondering exactly what led to this situation and what it means for home buyers and sellers. If so, the following information may help share shed some light on the issue.

Earlier this month, Bank of America froze home foreclosure sales in all 50 states after reports indicated that employees of the lenders may have mishandled foreclosure documents. Other major lends such as JPMorgan Chase and GMAC Mortgage followed suit, though they limited the freeze to 23 states, not including Texas. The freeze was a response to allow these lenders time to review the foreclosure process and determine whether recent foreclosures were in accordance with state laws.

Suspicions are aimed at an illegal practice known as "robo-signing," which refers to signing an affidavit without adequately reviewing the document. The practice is called "robo-signing" because the documents are signed quickly, almost automatically, as if a computer performed the task. Without fully understanding the affidavit being signed, lenders risk placing foreclosures on homes without having the legal right to do so.

In Texas, a demand letter was sent to 30 mortgage banking and servicing institutions by the Texas Attorney General, requesting that they "suspend all foreclosures, all sales of properties previously foreclosed upon, and all evictions of persons residing in previously foreclosed upon properties." The letter's definitions of possible infringement includes "signing documents without reading them," and "filing documents with records attached that did not correctly reflect loan payments, charges and advances."

John Horton, Chairman of the Austin Board of REALTORS®, recently spoke to KVUE news in regards to this matter. For sellers with non-distressed assets, Horton noted that the situation may help them compete with foreclosures, as buyers may be less inclined to purchase properties affected by the foreclosure freeze. Horton also mentioned that the freeze shouldn't have a drastic effect on the Austin area, as only about five percent of the Austin market consists of foreclosed properties. However, Horton noted: "...for sellers, if they can wait to put their home on the market in the Spring, they probably should."

Recently, Bank of America and other banking institutions have begun lifting the freeze in many states. In states where the freeze has been lifted, court cases have been proceeding to determine the validity of foreclosures on a case-by-case basis. In states such as Texas, where judges don't sign off on foreclosures, the freeze is scheduled to continue for an undisclosed period of time.

For more information and updates on this issue, talk to your REALTOR® or visit the National Association of REALTORS® website at www.realtor.org

If you're a current or soon–to–be homeowner—congratulations! Homeownership is wonderful right that we enjoy as Americans and one of the best ways to begin building wealth. Because buying a home is likely the largest investment you'll ever make, it's important to protect that investment and your interests as a homeowner. Below are several ways to do so:

1. Ask your REALTOR®
Through organizations such as the Texas Real Estate Political Action Committee (TREPAC) REALTORS® work as a group to advise elected officials and influence public policy in order to protect private property rights, real estate licensees and—most importantly—home buyers. Ask your REALTOR® about current issues affecting Austin homeowners and what actions you can take together to protect your rights.

2. Sign up for legislative alerts
The Texas Association of REALTORS® (TAR) will be glad to alert you via e-mail when legislation arises that could infringe on your homeowner rights or lead to additional taxes. Rest assured that the e–mail you provide TAR will be used only to send you legislative alerts and will not shared with other parties.

3. Contact your legislator
Once you're aware of issues that could affect you as a homeowner, contact your state and local representatives to share your opinion and influence the decision-making on Capitol Hill. Together, homeowners and REALTORS® can raise a strong voice to help support all citizens in living the American Dream.

When it comes to buying a home in Austin, there is a world of financing options to choose from. Descriptions of some of the most popular loans are listed below.

Conventional Mortgages -- Mortgages not insured by the federal government are called conventional loans. Conventional loans are either kept in the lender's investment portfolio or sold to a secondary market. Because there is no standard regulation from state to state or from lender to lender for conventional mortgage documents, these types of loans are specific to the lender. This means that the lender may determine unique guidelines that pertain to the lender's conventional loans and may add certain clauses to the loan document. Because the lender can underwrite conventional loans at the its discretion, loan rates may exceed those of loans backed by the government.

Fixed Rate Mortgage (FRM) -- With a FRM, the interest rate of the mortgage remains fixed throughout the life of the loan. While the rates on FRMs are sometimes higher than rates on other types of mortgages, an increase in market rates will not impact the rates on the loan. Monthly payments on FRMs change only when there are changes in tax and insurance rates.

Adjustable Rate Mortgage (ARM) -- With an ARM, the rate on the loan is adjusted according to various market fluctuations. The interest rate and monthly payment can change each month, quarter, year or a term determined by the type of ARM; however, there are caps limiting the amount the interest rate can be adjusted per period. Buyers interested in adjustable rate mortgages should be sure to obtain the indexes that the lender uses to adjust the loan.

Federal Housing Administration (FHA) Loan -- FHA loans are insured by the federal government. This means that if the borrower defaults on the loan, the federal government will pay the lender and the lender will not have to write off the loan. A borrower's down payment may be as low as 3.5 percent, and closing costs can sometimes by included in the loan. Rules regarding credit qualification and gifting for down payments are relaxed, and financial hardship rules may be less stringent.

VA Loan -- A VA Loan is insured by the Department of Veterans Affairs and protects a lender from loss should an eligible veteran default on the loan. VA loans have established credit and income guidelines and the buyer usually does not need a down payment; however, down payment may be necessary if the lender requires one or if the purchase price of the home is greater than the reasonable value of the home. Mortgage insurance premiums are not required and the VA provides temporary assistance should the buyer encounter financial hardships.

Be aware that there many more types of loans to choose from. Some, such as Graduated Payment and Growing Equity loans, cater to those who currently have a low income but expect their income to increase substantially within the next five to ten years. Others, such as Reverse Mortgages, cater to homebuyers over the age of 62. Be sure to continue your research and talk to your REALTOR® about which option may be best for you.

Though Texas fares better than most U.S. states with regard to foreclosure rates, Texas homeowners are not immune to this life-changing event. For those living in fear of foreclosure, there is good news.

On February 18, 2009, President Obama announced his plan to help millions of families, neighborhoods and communities combat the threat and negative effects of foreclosure: the Making Home Affordable (MHA) program. This program is designed to help responsible homeowners get back on track by modifying or refinancing their mortgage loans.

Some homeowners who have remained current on payments but have experienced a loss of income, an increased interest rate, or a decreased property value may now be able to make the adjustments needed to continue making affordable payments toward their mortgage. If you think the MHA program could help you, look into its eligibility requirements today.

Above all, remember that foreclosure help is free—if anyone asks you to pay a fee in exchange for counseling service or modification of a delinquent loan, it’s most likely a scam. Beware of those rushing you to sign paperwork or pressuring you to sign over the deed to your property. Take a moment to read more about foreclosure rescue scams and learn about the free resources made available to you by the U.S. Department of Housing and Urban Development (HUD). For more information, talk to your Central Texas REALTOR®.

You’ve probably heard the term "green" used to describe everything from grocery bags and cars to buildings and cities. But what does "green" mean for Austin, and what does it mean for you?

While "green" can refer to practices that promote healthy living and aid in resource conservation, it’s often used in reference to practices that reduce one’s carbon footprint, boost sustainability and increase energy efficiency.

Austin consistently ranks high on lists of America's greenest cities, largely in part to its Climate Protection Program, which puts Austin on track to become carbon neutral by 2020. Austin is also among cities leading the nation in the number of Energy Star qualified homes available to homebuyers. These homes meet strict energy efficient standards in regard to insulations systems, windows, construction and appliances.

Because Austin takes seriously its mission to "go green," Central Texans are buying more energy efficient homes, saving money through reduced energy costs and living in a city on track to become "the most livable city in the country."

So, what does "green" mean for Austin homeowners? In short: lower energy costs, a more sustainable standard of living and, of course, bragging rights.

To learn more about Austin’s Climate Protection program and how it affects Austin homeowners, read our post on "Understanding’s Austin’s energy efficiency ordinance."

If you’re looking to buy a home in Austin, Texas, we have good news for you: The state of Texas’ disclosure laws help safeguard your best interests in the real estate transaction.

It wasn’t always this way.

In the early 1960s real estate agents were required by law to represent the seller's interests, leaving no need to disclose a property’s defects to potential buyers. Today, however, real estate disclosure is codified into national and state laws as an extension of consumer rights. Home sellers now have specific duties to buyers in real estate transactions.

A good example of a nationally codified disclosure law is the 1992 Estate Disclosure and Notification Rule, which requires sellers of homes built before 1978 to disclose potential or known lead-based paint hazards and provide available written reports to buyers or renters.

Texas law now requires that sellers provide buyers with a completed Seller's Disclosure of Property Condition Notice on or before the effective date of a contract. The notice must disclose all potential or known structural defects, as well as information concerning issues with any of the following:

• Heating
• Plumbing
• Mechanical and electrical systems
• Easements
• Environmental hazards
• Landfills
• Flooding
• Zoning violations or noise problems
• Termite and pest infestations; or
• Treatments or damage

Though all real estate agents are required to adhere to disclosure laws, REALTORS® go a step further to ensure that clients are treated fairly not only by legal standards but by strict ethical standards as well. In following a strict Code of Ethics, REALTORS® disclose any and all relevant information to their clients to avoid misrepresentation of themselves or the property at any time during the transaction.

Working with a REALTOR® can help you avoid legal issues common in real estate transaction. For more information about your real estate rights, visit the Consumer Tools section of AustinHomeSearch.com.

If you’re in the market to buy or sell Austin real estate, you may have heard of Austin’s energy efficiency ordinance, officially known as the Energy Conservation Audit and Disclosure (ECAD) Ordinance.

Under the ECAD Ordinance, some Austin homeowners are required to have an energy audit performed on their home prior to selling it and share that audit report with potential buyers. In most cases, an audit is required for homes lying within the Austin city limits that are older than 10 years and serviced by Austin Energy. (Exceptions apply, so talk to your REALTOR® about whether the ordinance will affect you.)

Though the ECAD ordinance took effect June 1, 2009, the city’s effort to “go green” and stop manufacturing excess carbon dioxide (CO2) dates back much further.

In 2007, 70% of the city’s electricity was being used by homes and commercial buildings, with the average home generating twice the greenhouse-gas emissions as the average car (roughly 11,450 pounds of CO2 yearly, according to the Environmental Protection Agency).

With this in mind, the Austin City Council established the Austin Climate Protection Plan (ACPP) with the goal of making Austin “the most livable city in the country” and a carbon-neutral city by 2020.

As the ACPP consists of five components, each with their own specific initiatives, the ECAD Ordinance was created to address but a single part of the puzzle: how to pursue energy efficient upgrades for existing buildings. The ECAD Ordinance seeks to educate homeowners on potential for energy savings within their home in hopes that they will voluntarily opt for cost-effective upgrades.

Energy audits are good for 10 years, so consider having an audit performed on your home now to prevent a last-minute scramble and begin benefiting from the audit findings today. For more information on the ECAD Ordinance, talk to your Central Texas REALTOR®.