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Thank you for visiting Homeowner Herald, the official blog of AustinHomeSearch.com, providing valuable information for both home buyers and sellers. Follow us on Twitter or check in each week for new posts on topics ranging from holiday decorating to the economy to moving into your new home. This blog is maintained by the Austin Board of REALTORS®. If you’d like to suggest a blog topic, contact the ABoR Marketing Department.
Home buying topics
|8 steps to take before making an offer on a home
WEDNESDAY, APRIL 20, 2011
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.
|Three great reasons to buy a home
THURSDAY, MARCH 31, 2011
Buying your first home is an exciting endeavor. You can feel a sense of pride in knowing that the property belongs to you, and so long as you abide by zoning laws and potential HOA regulations, you're free to remodel your home's interior, exterior and yard however you'd like. But did you know that there are financial benefits to owning a home, as well? Below we have listed three great reasons you should buy a home in 2011.
1. Homeowners are eligible for many different tax deductions.
There are a multitude of tax deductions available to homeowners. For example, when it comes to monthly mortgage payments, most homeowners can deduct real estate taxes actually paid to the taxing authority, interest that qualifies as home mortgage interest and mortgage insurance premiums.
Although homeowners are required to pay property taxes, these, too, are tax deductible. HouseLogic.com lists a number of ways to become eligible for property tax breaks, including the installation of energy efficient appliances, having veteran's status or using your property as your primary living space.
2. Owning a home is a fantastic investment opportunity.
In most cases, homebuyers aren't just purchasing a place to live; they're purchasing a property that can be sold for profit later down the road. Unlike renting, owning the property allows you to benefit from its increase in value, which is likely to happen over time.
Homeownership is especially advantageous in a market like Austin, where home prices generally appreciate at a steady rate. For example, the average Central Texas home purchased in 2004 appreciated 23 percent by the time it was sold six years later in 2010 (which is the average period of time Texan's spend in one home).
3. The cost of buying a home can be lower than renting a home or apartment.
Sometimes, buying a home is more affordable than renting. One way to determine if this is true in your case is by calculating a home's price-to-rent ratio. Some websites, such as Realtor.com, have created their own virtual price-to-rent calculators that will verify this ratio for you.
When calculating your price-to-rent ratio, keep in mind that changing markets can cause fluctuations in rental prices. And while rental rates can fluctuate, mortgage payments generally stay the same, depending on what type of loan you have. For Central Texans, economic experts predict that rental rates will steadily increase during 2011. "With increasing rent, renters will have to decide whether to keep paying rent or buy a home," said Eldon Rude, director of the Austin market at Metrostudy.
These are just a few of the reasons why buying a home can be a smart choice. For more great reasons to become a home owner, speak with a REALTOR® by visiting our Find a REALTOR® section here at AustinHomeSearch.com.
|Credibility: Five ways to keep a good credit score
WEDENSDAY, MARCH 23, 2011
Do you know what your current credit score is? Maintaining a good credit score is challenging work, but it's important to keep your score as high as possible. Failure to do so can make acquiring loans difficult or expensive, and can limit your ability to make important purchases, such as a car or a home. Fortunately, there are many ways to improve your credit score. Below, we have listed five tips to keep your credit in good standing.
1. Obtain a copy of your credit report and check it for errors
Your credit report is maintained by three major credit reporting agencies: Equifax®, Experian® and TransUnion®. By law, you can request to see your credit report for free once a year. Subsequent requests are allowed, but doing so will require a fee.
The safest way to make this request is by visiting AnnualCreditReport.com. This is the only website that is officially sponsored by the three major credit reporting agencies. Once you have received a copy of your credit report, check it for any errors or inaccuracies. If such problems exist, correcting them will immediately improve your credit score.
2. Pay your bills and monthly payments on time
Paying your bills on time may seem like a no-brainer, but doing so is more important than you may think. In fact, your payment history accounts for 35 percent of your credit score, according to the Fair Isaac Corporation. Late or missed payments can deduct as much as 100 points off your score. Remind yourself of when payments are due by marking your calendars with due dates. Some banks may even offer programs that send monthly reminders to your e-mail, mailbox or cell phone.
3. Keep your credit card balance low
Lenders love to see a card holder whose credit balance is much lower than their credit limit. This is known as your debt-to-credit ratio. Experts recommend that you try to spend no more than 30 percent of your credit limit each month. Not only will it make it easier to pay off, but it will show the lender that you are financially responsible, which in turn will increase your credit score. If possible, increase your credit limit on your card so that your debt-to-credit ratio is even lower.
4. Whenever possible, keep your credit cards open
The Fair Isaac Corporation states that your credit history represents 15 percent of your credit score. The longer you have owned a credit card, the longer your credit history will be. Lenders like to see that you are experienced using credit and are much more comfortable lending to a loyal customer. Even if you don't use it very often, keep your old credit cards open as long as you can.
5. Refrain from applying for loans or new credit lines too quickly
The frequency at which you apply for a loan or a new credit card can negatively affect your credit score. This could give off the impression that you are desperate for money, which could mark you as a risk in the eyes of a lender. Each time you apply for a loan or a new card, the action is recorded on your credit report. Try to keep these actions to a minimum.
These are just some of the steps you can take to improve your credit score. For more information about credit scores and how you can improve your rating, visit MyFICO.com.
|Austin’s 2010 housing market: A year in review
WEDNESDAY, FEBRUARY 2, 2011
The Austin Board of REALTORS® recently released its Multiple Listing Service (MLS) report for December of 2010, concluding their analysis of the Austin housing market this past year. So how did Austin real estate perform in 2010?
Austin home sales posted year-over-year increases during the first half of 2010, with the biggest upsurges occurring in March, April and May (with increases of 27 percent, 31 percent and 24 percent respectively). John Horton, 2010 Chairman of the Austin Board of REALTORS®, explained that the substantial increase in sales during this period was likely due to the expiration of the homebuyer tax credits on April 30.
Horton noted that "we have the unique situation of the homebuyer tax credits that inspired many buyers to purchase homes sooner than usual. Thus, it's more meaningful to evaluate our market from a year-to-date perspective, instead of month-to-month, to gain a clear picture."
Overall, a total of 17,905 single-family homes were sold in Austin in 2010, a five percent decrease compared to 2009. Homes in Austin took an average of 77 days to sell, which is two percent less than the amount of time it took in 2009. The median price of Austin real estate remained stable, averaging at $193,520 for the year, a three percent increase from 2009.
The Austin market also remained healthy in regards to its housing inventory. The Real Estate Center at Texas A&M states that 6.5 months of inventory indicates a healthy market, with anything above 6.5 considered a "buyer's market" and anything below considered a "seller's market." Austin's month's supply of inventory ranged from 5.4 to 7.3 in 2010, while national housing inventory ranged from 6.9 to 11.9.
Heading into 2011, Austin appears to be on the road to economic recovery. Last month, attendees of the 2011 Housing Forecast co-hosted by the Austin Board of REALTORS® and the Home Builders Association of Greater Austin gained some insight into the future of Austin's housing market and economy.
Eldon Rude, Director of the Austin Market for Metrostudy and one of the speakers at the housing forecast, predicted that slowed home construction, as well as increasing apartment occupancy and rental rates would help Austin's housing market, noting that "with increasing rent, renters will have to decide whether to keep paying rent or buy a home." Rude believes that home pricing pressure, job growth and consumer confidence will help put Austin's economy back on track in 2011 and into 2012.
Statistics from the December 2010 MLS report can be found in our Austin Real Estate Report section. Be sure to check in each month as we evaluate Austin's housing market throughout 2011.
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