Looking for a Home Like Their Parents
It is very important for first-time homebuyers to remember that most people do not buy their dream home right out of the gate. Your parents or other family members and friends likely started out by purchasing a smaller house in the Greater Austin area. As they balanced what they wanted with what they could afford, their finances played a large role in determining what they purchased. As time went on, they paid down their mortgage and gained more equity in their home through appreciation. Only then did they trade up to a larger, nicer home in the Austin area. With that home, they had to worry less about how much the home cost and could focus more on finding what they really wanted.
As a first-time homebuyer, it may be very difficult to lower your expectations a bit. Do not let those expectations keep you from missing out on a great first home and keep you from taking advantage of the still very low interest rates available! When you have built your finances and some equity in your home, you will then have the perfect opportunity to move up to your dream home!
Buying a home for the first time is a very exciting time – do not let unrealistic expectations kill that joy! If you are considering purchasing a home or would like to learn about your options drop me a note. You can also check out my other blog post – What You NEED to Know Before You Buy a Home.
Own a home and thinking about moving up to your dream home? Download the FREE Guide >>> Timing the Market in 2014
The real estate market for the Austin area has shown consecutive growth month after month for almost 2 years now. While it could a great time for any home owner to take advantage of the rise in home values, I think that this time could be a special opportunity for people who own homes that fit the profile and budget for first-time home-buyers. Let me explain…
The huge influx of people to Austin, rising rental rates and low mortgage rates have all contributed to a seemingly ever-rising demand for homes for first-time home-buyers. That demand has caused home prices for those first-time home-buyers to rise as well, increasing the possible equity for home sellers if they chose to sell in this market. Below is a report on the active number of listings on the market in Austin, Round Rock, Cedar Park & Pflugerville for between $130,000-$180,000, a common price point for many first-time home-buyers. As you can see from the graphic, the number of home available to would-be buyers has recently increased, but is still well below the levels we saw two years ago.
If you own a home in near this price range and think your home might be a great home for a first-time home-buyer, now could be a great opportunity for you to take advantage of your increased equity and move-up to a larger home and also take advantage of the super-low interest rates yourself. If you are considering selling your home, learn how I can help you sell your home for top dollar and deliver a high net to you as well as help you find a new home to move into. Drop me a note if you are interested in finding out the value of your home.
Interested in selling your home and saving some money on commissions? Ask me about my “Move Out, Move Up” program.
The Kyle Pfaffe Real Estate Team
#4 – Not Making an Offer When They Find the Right Home
The story starts so promising. A couple is so excited to be looking at homes for the very first time! The window shopping is over; no more are they only looking at pictures online. They just received their pre-approval from their lender – they have the green light to make an offer!
That first Saturday, I show them a half-dozen homes, all of which match most of their key criteria. While each one is appealing in different ways, one stands out above the rest as the “best option so far.” But that’s only the best option so far, right? With a few thousand homes on the market, there certainly is the perfect home out there waiting for them. So they decide against putting an offer in on this home – we’ll go and look on Monday afternoon and find another good home to compare it with.
We look on Monday, but do not find any homes that are nearly as good as “the one” we visited on Saturday. The problem? The first home is no longer available because the owners accepted an offer on Sunday afternoon. That home is forever remembered as the one that got away.
Lessons & Thoughts
First time home buyers hesitate to place an offer on a home when they just begin, but many of the other buyers they are competing for homes with (yes, it is a competition) have been searching for months already. Also, many homes in the Greater Austin area are selling in only a few days which can further decrease your chances at getting the home you really want. There are a few thoughts I try to make sure my clients understand when we look at homes:
- There is no perfect home. I work very hard to match your needs & wants most closely with the homes available on the market, but likely no home has everything you are looking for at the price you can pay.
- The market is moving FAST. In April 2013, the average home sold 30% faster than in 2012 and many homes are selling within 72 hrs of going on the market. When you find a home you really like, MAKE AN OFFER!
- Be quick but don’t hurry. While I encourage my clients to be decisive, I never want them to feel rushed into a decision. This is the biggest purchase they have ever made – don’t rush into the wrong decision.
- Keep the main things the main things. I try to help my clients differentiate the “must haves” from the “nice extras” in their criteria. Because there is no perfect home (see #1), be careful to pass up on a home that really is just what you are looking for though it may be missing a few bonus amenities.
Buying a home for the first time is a very exciting time – you are choosing where you will live for years to come! When you find a great home, MAKE AN OFFER! At the end, I want my clients to know that I am here helping them make the best decision for them. If we miss out on a home they really like, I’m ok with that if they are, because ultimately all that matters is that they are happy and comfortable with whatever decision they make. If you are considering purchasing a home or would like to learn about your options drop me a note. You can also check out my other blog post – What You NEED to Know Before You Buy a Home.
A common question I have people ask me is whether or not they really need a home inspection when they buy a home in the Austin area. I have had clients say, “The home looks like it is in really great condition and the owners look like they have taken good care of the home. I’m sure everything is fine. Besides, an inspection costs around $400 and I really could use the money for something else.”
You will not be required by your lender to have an inspection on your home before you purchase it (unless you are using a VA loan – that requires a Wood Destroying Insect [WDI] Inspection). That being said, I always recommend that my clients have a home inspection prior to purchasing a house.
Why You Need a Home Inspection When Buying a Home in the Austin Area
- No matter how good the home looks on the surface, you never really know the condition of a home without an inspection by a professional. What you overlook can cost you huge in the future.
- Spending $300-$400 now can save you a lot of money it the future. The inspection is usually performed during your option period so you can back out of the contract if the home has major issues. You can also negotiate for some repairs to be performed by the sellers prior to closing
- With an inspection, you get a lot of good information and reports on the home. Most inspections will include an energy audit of the home for free. You can also get a termite inspection or a foundation inspection (usually free as well).
- You know what you have to fix. Even if there are no major issues, an inspection will tell you what maintenance items you need to address when you move in to prevent future issues.
What reports are included with a home inspection?
Most home inspections are just a “general home inspection.” They inspect almost every area of the home and give you a general report. Some inspectors provide more detailed reports for different areas and you can always order more detailed reports in certain areas. Those would include foundation inspections, WDI or termite inspections, septic inspections and energy audits.
I’ll be writing another blog post soon that you’ll probably be interested in… What makes a good home inspector?
If you have any questions about getting an inspection, when to get an inspection or any other issues concerning the sale or purchase of a home in Austin, drop me a note or text/call me at 512-636-9707 and I’d be happy to help.
Kyle Pfaffe, REALTOR® e: KPfaffe@cityscapepg.com
m: 512-636-9707 w: MoveSmartAustin.com
Part 3 – Making Low Offers on Homes in the Greater Austin Area
As a first time home buyer in the Greater Austin area, you may be reluctant to offer full price, or above asking price, on a home that you want to purchase. You may also think that your real estate agent does not have your best interests in mind if they suggest that offer a higher amount than you might think is necessary. you may think they are looking for a quick sale or to make a higher commission.
While you may have these doubts and reservations, you should know that the Austin area real estate market is very hot right now. Homes are selling more quickly and for a higher percentage of list price than they were just a short time ago. For example, in 2011, the average (median) home for sale in Austin sold in 45 days. By the end of 2012, that time period had shrunk to only 24 days! One of my listings recently sold within 24 hours of being put on the market! Also, the average home sold in Austin for 97% of the listed price but that number had climbed to 98% in 2012 (a $2000 difference on a $200,000 home).
If you are willing to miss out on a property by trying to save a few thousand dollars in our asking price, then you can afford to wait for the best “deal.” However, for most buyers, My advice would be for you to move quickly and decisively when you find a property you love. It could be the difference between heartache or wasting your time and moving into the home of your dreams!