Buying your First home in Austin, TX: 8 Easy Steps

It has been quite a while since I blogged. I usually always have something to talk about, don't get me wrong, but I have been debating what would be something relevant for readers right now.

I cannot believe it is already December! The year has gone by so fast, and 80% of my business this year was FIRST TIME HOME BUYERS! I am sure the majority of that reasoning is the fact interest rates have remained at a nice and stagnant low, as well as home prices here in Austin, TX (homes under $200k have definitely moved faster and more in volume sold over any other housing group). Also, many of my friends, past co-workers, and friends of friends are at that age where it is time to buy. So, what does it take to buy exactly? Here are the basic steps of buying your first home as well as a few credit and lending tips.

First off, before the 8 steps, can I just add that due to the financial situation we are in (the "lending crisis", the "housing crisis" you hear mentioned on the news), lending regulations and guidelines have strengthened and there is a lot more red tape that comes into play when getting a home loan. Austin and Texas in general have remained strong and economically are better off than the rest of the US...so that is always good to hear.

For example: you will want at least 3.5% saved up to put down on a home...and really, you want more, for 1. reserves and 2. closing costs.
How will I know what I am approved for? 
A lender will tell you based on income, debt to income ratio and overseeing your credit and employment history as well.
Is it ok if I talk or shop more than one lender?
Absolutely. You can always start with your bank (if you have banked with them for a long time), but in my personal experience have found it is better to deal with a mortgage broker. Often times I recommend a few lenders to any first time buyer, whom they feel more comfortable with regarding confidence, personality and rates is up to the buyer to move forward with in helping them process their home loan.

What are closing costs? And what do they usually run me?
Closing costs are "the cost of doing business" and the money you need to bring at closing (when signing a million documents to your new home purchase).
Estimate for closing costs 4-6% of the sales price. It will vary if a seller or buyer pays for closing. Often times if a seller refuses to pay for closing costs, a buyer can roll it in to the price of the loan, should they not want to bring that much to the table (aka closing).



What else will I need to prove to buy a home?
Depending on the loan program, you will need a credit score around 640. If your credit is lower, than often times it can take someone reviewing your credit report, and anywhere between 3-9mo to establish better credit.
Tips for maintaining great credit: Several different lines of trade (i.e credit card, car payment, furniture lines). Paying on time (this is the BIG one, that can really hurt you if late). Paying over the minimum amount. No delinquencies. Keeping your credit card balances at 30% or less of the total limit. If you have a credit card open, but never use-charge at least one item per month on the card and pay it off. Lines of trade that aren't recent (the longer established lines of credit show that you can month after month manage credit, pay on time and be responsible for your charges). No debt in collections.

What are some other costs, as a buyer, I will be expected to pay?
Once you find the home you like, it is a very good idea to get in professionally inspected. You are looking at a few hundred dollars, depending on the size of the home, and arranged between the buyer and inspector. Even if the home was recently pre-inspected, it is always a good idea to still get another inspection.
Also, the appraisal. Once under contract and inspection looks good, the lender will need to make sure the home they are about to lend on appraises for that amount, this is usually charged to the buyer as well and arranged between buyer and lender.

You will also need proof of income. Independent contractors and small business owners/people who work for themselves, need to have income proof of at least two years to buy a home. Steady income can be hard to prove to receive a loan, so make sure you keep an accurate track record of your finances, while also accounting for taxes and saving for your first home purchase. You also don't want to make a big career change right before you buy (after perhaps), but if you do decide to make a change, it is much easier and more explainable if in the same field.

So, you have had steady income, your credit looks stellar, you are tired of apartment living and rent going down the drain, what's next?

Steps To Buying Your First Home:

1. Decide to Buy

• There is never a wrong time to buy the right home. The key is finding a good buy and taking the time to carefully evaluate your finances.
• A home purchase is an important step in the path to long-term wealth. Purchasing your own home is a great investment that provides specific financial advantages, including equity buildup, value appreciation potential and tax benefits. It's also an automatic savings plan that you cannot get from renting!
• You don't have to know everything. Let me help you and walk you through the process.

2. Hire an Agent

A great real estate agent will:

1. Educate you about the current conditions of the market.
2. Analyze what you want and what you need in your next home.
3. Guide you to homes that fit your criteria.
4. Coordinate the work of other needed professionals throughout the process.
5. Negotiate with the seller on your behalf.
6. Check and double-check paperwork and deadlines.
7. Solve any problems that may arise.

3. Secure Financing

Ultimately, your lender will pre-approve you for a certain amount, but YOU will decide what you're comfortable paying every month. Remember, your lender only sees your finances on paper. It's up to you to decide how much you're willing to stretch your budget in order to get into your dream home.

Be sure to follow these six steps to financing your home:

1. Choose a loan officer (your agent may be able to recommend a few)
2. Complete a loan application and get PRE-approved.
3. Determine what you want to budget monthly and select a loan option.
4. Submit to the lender an accepted purchase offer.
5. Get an appraisal and title commitment.
6. Obtain funding at closing.

4. Find your Home

So you are pre-approved and ready to begin your search. But how or where do you begin? There are a lot of homes out there and diving in without a guide can become overwhelming and confusing. A great agent will help you more accurately pinpoint homes that fit your criteria and budget. The right home will meet all your important needs, and as many of your additional wants as possible. An agent can guide you in the right direction if you are unsure.

You'll learn as you look at homes, your priorities will probably adjust along the way.

5. Make an Offer

Once you've found a home you love, the next step is making a compelling, educated offer. While emotions are probably in high gear once you've found a home you love, it's important to remember that a home is an investment. Your agent will research similar properties in the neighborhood to help you determine the market value, and fair price, for your home. Look to your agent to explain and guide you through the offer process.

• 3 basic components of your purchase offer: price, terms and contingencies.
• Price is the dollar amount you are approved for, willing and able to pay.
• Terms cover the other financial and timing factors that will be included in the offer.
• Contingencies are clauses that let you out of the deal if the house has a problem that didn't exist or which you weren't aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.

6. Perform Due Diligence

Just because you love a particular property doesn't mean that it's perfect. In fact, this is where reason has to trump emotion. You'll need to have a property inspection (which your agent can recommend a few, and they will go over their full report in detail and any hidden issues). This way you'll know what you are getting into before you sign closing papers.

• Your main concern is the possibility of structural damage. This can come from water damage, shifting ground, or poor construction when the house was built.
• Don't sweat the small stuff. It's the inspector's job to mark everything discovered no matter how large or small. The inspectors report may be long, but, things that are easily fixed can be overlooked for the time being.
• If you have a big problem show up in your inspection report, you should bring in a specialist and if the worst-case scenario turns out to be true, you might want to walk away from the purchase.
• Even if your home passes inspection, you'll still need to buy a home owner's insurance policy that protects you against loss or damage to the property itself and against liability in case someone sustains an injury while on your property.

7. Close

Once you've made your offer and have completed the inspection process, you're in the "home" stretch! But, in order to ensure that you don't put your closing date, or your mortgage at risk, you have a few pre-closing responsibilities that you'll need to be mindful of. These include:

• Staying in control of your credit and finances. If you are tempted to make any large purchases during this time, it's best to talk to your lender first.
• Keeping in touch with your agent and lender, returning all phone calls and completing paperwork promptly.
• Communicating with your agent at least once or twice a week, and verifying with your lender that all mortgage funding steps are completed.
• Conducting a final walk-through of the home with your agent.
• Confirming with your agent, home insurance professional, and lender that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.

8. Protect Your Investment

Congratulations, and welcome home! The home-buying process is complete, but just like any big process, there's a maintenance plan! It's now your responsibility, and in your best financial interest, to protect your investment for years to come. Performing routine maintenance on your home's systems is always more affordable than having to fix big problems later. Be sure to watch for signs of leaks, damage, and wear.

And remember, just because the sale is complete, your relationship with your agent doesn't need to end! After closing, your agent can still help you - providing information for your tax returns, finding contractors and repair services, tracking your home's current market value and when you are ready to buy again and sell!

I reiterate these steps on my website as well, and maybe all this reading can seem quite overwhelming, but so long as you are ready to take on the financial responsibility, and can afford to, as I mentioned before--there's never a bad time to buy the right home. You can find reviews from some buyers (first time as well), by clicking on my reviews on the Zillow website here! First time and in the Austin area? Call me, I am happy to help and walk you through the process. I love helping buyers.

Single Life in Austin, TX: A single female Austinite's perspective

It is no secret that I love this town. It is young (or young at heart at least),  fun, vibrant, laid back, and there is always something to do. I know you can say that about a lot of cities, but there is something different about Austin, and most Austinites would agree.

We boast list upon list of best places to live, work, retire, have pets, raise a family etc. etc and one thing I keep hearing is that we are one of the best cities to be single in. After the past few months I told my friend that I would have to disagree. I was just saying to her the other day that I didn't feel like anyone really "dated" any more these days and that I heard Austin was supposed to be a great place to be single in. She brought it to my attention that it IS a great place to be single in, it didn't say anything about "Best City to Meet People," or "Best City for Dating" and so yes, Austin is a great place to be Single in, but the question is do I...or anyone want to be single...FOREVER?

Single in Austin PROBLEM #1: NO ONE IS EVER GOOD ENOUGH...
In a town where there are tons of good looking people, always things to do with your friends, a very hoppin' night life for young professionals and on top of that--a very well educated city at that...no one wants to settle. I have expectations. I think everyone should. There are times when I have gone out on a date or two with someone that doesn't necessarily meet all the requirements on the list, but I felt the need to give them a fair shot. Big mistake. I know I am not the only one that has regretted giving up a Friday night for a lame-o date. And so the search continues...
The willingness to take time out from meeting new people and a fun night with the girls, to a few hours spent with someone new (which could be the most awkward few hours of your life) becomes less appealing.

Single in Austin PROBLEM #2: CHIVALRY JUST MAY BE DEAD
Guys who open doors, say nice things, offer to pay or (heaven for bid go out of their way to do something nice) is few and far between these days (or is it just me?). (Sigh). It is kind of sad when you think about it. I know it isn't 1955, but don't guys want to impress girls and make them feel good and show them how awesome they are? Have they not read that book about "The Game" or seen a Rom Com once or twice? Women like and appreciate the little things, and if you have ever seen Chris Rock's stand up, we also love compliments! Maybe it is us ladies to blame, when we put up with certain things we are then lowering the standard, instead of demanding more...or at least what we deserve. We don't have to go to a fancy dinner, we can go grab a bite at the trailer park eatery, play some putt-putt at Peter Pan, even walk Lady Bird Lake with our dogs for all I care! I am pretty laid back, and so are a lot of chicks here in Austin, can you please just make a plan and follow through with it...nicely? One time a guy told me that he wasn't going to "spend a lot of money on someone he wasn't sure about" Who said anything about spending a lot of money?! You don't have to impress a girl by buying her Eddie V's one night. And by making a plan I don't mean get my number and text me or add me as your friend on facebook. I don't even care if you do the three day rule or three hour rule, if you want to see me or hang out with me, let me know. Which leads me to my next "problem in the dating world"...

Single in Austin (ok maybe everywhere) PROBLEM #3: TEXT MESSAGE GAMES
Ok, I admit it. I text a lot. I "multi-task," I keep in touch with most my friends this way and my voice mail even states, "...or you can text message me for a quicker response..." But if there's any lesson I have learned regarding dating, it's not to resort to text messaging. It becomes to easy of a form of communication....or miscommunication. Do you know how bad my typos are on the iPhone for texting?! There's a reason there's a website for such disaster, and I cannot believe I don't have more entries on there. Secondly, you can never judge someone's tone and thirdly it is a cop out! Guys, if you got a girl's number: call her. If you do text her it should only be to say: Hey it's _ from the other night, now you have my number can I call you this evening? Then you follow through--and call her that evening, because believe it or not if she gave you her (correct) number, chances are she is maybe (yeah, just maybe) excited about hearing from you...and your voice. THEN when you talk you make a plan. And if something comes up (and it shouldn't, it really shouldn't) you don't send a text stating you have been really busy with work or whatever your sorry excuse is, you CALL the girl and explain. In addition to calling them to set up a date, if the date is a few days away, on the day of or day before the date--let them know you are still on or you may even go out of your way to be chivalrous and say, "I look forward to seeing you tonight," I would let a text message be acceptable in this case. Can you tell this is something I have experienced and learned from?! ha.

Single in Austin PROBLEM #4: GEN Y GEN X
Perhaps some of today's dating woes and frustration lies in not only cultural differences, but the social and economic changes of today. When I lived in New York City dating was more..."acceptable", is maybe the word I am looking for. Not to dog on Southern men, because I am from Texas, but there was something kind of refreshing about the forwardness of men in the Northeast (not all of them, but more so than men I have met here in Texas). They'd buy you a drink, and get your number and call to hang out, simple as that. No games, no silly texting, and often times it wouldn't be that dumb "three day rule," but "well, you're kind of fun, are you free tomorrow night, want to catch a movie?" And again, when you live in a city like NY the options are endless, so it brings us back to Problem #1...no one wants to settle because they feel like they can always find someone better! When I lived in Kansas City, MO, on the other hand. I felt like everyone around me (and I worked at a fairly young company) was engaged or married. The single scene was quite pathetic. It was hard for me to find other similar singles to hang with and meet others. I can see why so many people meet online after living in Kansas City, which is funny because when I was doing some reading on Austin being the best city for dating, I came across THE WORST CITIES FOR DATING, what do you know KCMO was on the list! So besides every city being different due to its make up of people or origin, the way our parents dated back in the day is probably not along the same story of what you will be telling  your children of how you met your spouse. "Yes, daddy winked at mommy online, and from the first email I knew he was a keeper!"

Single in Austin PROBLEM #5: ME!?
Maybe it is me? I don't like the games. I hate following these stupid rules of "not calling back" for a while or being available but not TOO available. And why can't I suggest we do something? I know I mentioned being somewhat traditional above, "the guy should call, the guy should plan the date, etc" but what if I am free and feel like hanging with the guy, is it wrong for me to suggest we do something?  I have learned the hard way: yes, yes it is. Somehow engrained it our genetic code is the need for guys to be able to chase. Don't get me wrong, being single is fun. I enjoy it. I often wonder if I would have time to really "date"--whatever that is these days, anyway, but some times I just want someone to hang out with... not a girlfriend, not my dog, Jack, someone different, intriguing, someone fun, someone easy to talk to, nice...and all that other good stuff that everyone tends to look for.

IN CLOSING
Don't really know what to say to end this rant on being single in Austin. I have mixed feelings. Single life is fun, lots to do, always new people to meet,  no one to answer to or worry about, just go with the flow and take time to get everything selfish out of the way now. Single Life in Austin= Good. Dating Life in Austin= Not so good, but do I blame the city or the times for the way dating is in 2011? When it comes to dating I wish for a little more honesty and straightforwardness...I know I always try to be upfront about my feelings, and have to admit it is lame when people fall of the face of the planet Don't just not answer me--be honest, or at least make up something not lame! Often times there's nothing there-that spark, or butterflies, so can't we just be friends? Oh another thing I learned regarding straight men who don't work out as "boyfriend material:" No, not really, you cannot just be friends with a guy, they won't have it. Ha.
And that is all I have for now, be happy being single!...or dating...or whatever you like to best spend your time doing (and with whomever)...
Best Austin Date Places: Peter Pan Golf
Highball for bowling, karaoke with friends or a sing-a-long
Stroll Lady Bird Lake
If you both have dogs: Dog Park date
Walk S. Congress and have a little Amy's Ice cream
Stand Up Paddle boarding or Kayaking on the Lake
Free Tango Lesson at Caffe Medici
Salsa at Enzo
Live music..just about anywhere
Austin Duck Adventures
Tour the UT Tower or Capital
Pottery Making/Painting with a Twist
Whole Foods Cooking Class
Picnic at Sunset at Mt. Bonnell (ok this romantic act could scare her off)
Austin Rock Gym
Coffee and People watching at Jo's on S.Congress or 2nd Street
Esther's Follies after (dinner/drinks...so you get your conversation in, then laugh together)
**Key to a good first date in my opinion is getting to know one another a little out of your element, but still doing something you both enjoy. Movies and quiet low-lit places come a little later in my opinion...
Would love to hear your feedback on great date places in Austin!

Austin, TX Economic Forecast for 2012: Where is the housing market headed?

I am no economist, however if you know me at all, you know I carry a spiral with me just about everywhere (I know it's no iPad) and inside that trusty spiral are some notes. I take notes when on the phone, when I randomly think of something while driving (I mean while stopped at a red light of course), and for my infinite to do list...(aka Success list as a motivational speaker once told me it should be called). Anyway, without further a d0 (thanks Tim for the grammar correction, I can't believe I graduated college), here are some notes on the Economic Forecast for 2012 meeting I attended a few weeks back, and the trends we have seen the past few years in Texas and Austin especially. Since I am such a list maker, a lot of this may be bulleted, please remember I went through a bunch of slides pretty fast with graphs and charts.
I know it isn't the most exciting information in the world, but it sure is important!

• Officially the Recession of 2007 has been declared over. Does it feel like it, perhaps not, but it is.
• New home construction is what took us into the recession, but it will be what takes us out
• Our economy won't recover until the housing market recovers
• Most election years are slow (this I can tell you from personal experience) then not necessarily based on who is elected, but what they promise to do will determine how the housing market will turn around

Hurdles for 2012:

• Tepid growth in private sector
• home prices declining
• Government restrictions from falling revenues
• Commercial Real Estate (RE) still dragging due to lending and regional banks
• Uncertainty in the Gov. due to lack of confidence re: actions, regulations, taxes, national debts and deficits, global disruptions
• Credit contractions for consumers and businesses
• Confidence in RE increasing in value still down, consumers making lifestyle choices over investment opportunity

Reasons for Optimism!: Why I am happy to be a Texan

• Tx job growth is double the National rate
• Relentless population growth in Texas
• Government budgets finally getting real
• Pent up demand due to: retiring, moving to a new location, buying a house, relocating biz to Tx, expanding a business
• Texas Recession was 2009: 2010 and 2011 have been recovery years
• Texas is the fastest growing state 2000-2010 (21% increase)
• Projected: 40yrs 13.9million people, 703k per yr (2000-2010)
• Austin, Tx has increased 37% since 2000, 6.8% of Texas and projected at almost 50k ppl per year moving to Austin, TX
• Texas is a young state: 27% of Texas is 18 and under, only less than 10% is 65+

Forecast Factors...a Closer look at Age:

• Generation Y is much bigger than baby boomers
• Generation i--> what they are calling the next group because they will have come into this world not knowing what it was like to not have internet (crazy, huh?!)
• Baby Boomers: Home Ownership Grows (since the '70s)

1. It was the "American Dream" for the Boomers
2. Last serious time of deflation of home owning: 1930's
3. Loss equity in real estate
4. Because of Boomers Gen X and Gen Y have shifted attitudes due to seeing their parents lose value in their home
5. Since 2007 we see more people "doubling up" moving in together even after college, or back in with parents

Boomers Own--> Gen Y Rents

• 25-35 yr olds > 50% are already home owners
• Took advantage of tax credits, interest rates, and timing in the market/opportunity

Austin, TX  Breakdown:

• Echo Boomers: Gen Y 16-34 (31.8%)
• Baby Bust: Gen X 35-46 (17.6%)
• Millenials: Gen i

• Austin owner occupied units have become younger and foreclosures are declining
• Because Tx is a non-judicial foreclosure state, we really are declining here compared to other states
• 550days!!!!!--> National average of days before foreclosures happen

A Closer Look: Households in #s:

• In the 1960s--40% of people had 4ppl in a HH (household not happy hour)
• In 2009--30% had 2 person and 31% had 1 person per HH
• Also noted--married couple decline in HH types

Current Housing Issues:

• Low demand and high supply=weaken home values (I really don't see how this applies in Austin so much...rental market was tight due to influx of people, with more coming-where are we going to put them all??)
• Gov stimulus efforts prolong market recovery (tax credits and mortgage workouts)
• Lenders in Difficulty: Told to make loans, but are punished for making RE loans or CRE loans
• Renting a more viable option to buying (only if you can't qualify and it makes sense financially)
• FHA essentially a sub prime lender

Overall Texas Housing Markets Info:

• 2010 sales decreased from 2009: The Good News?: After flattening we'll increase
• All metro areas in Tx after tax credit home sales went down
• End of 2009 and beginning of 2010 we see an increase in sales due to the tax credit (these factors will always need to be examined closer when comparing year to year housing prices)
• Homes sales haven't increased, but employment has
• National delinquency is much higher nationally
• Foreclosures: 2Q2011:      US: 4.43       TX:1.87

AUSTIN, TX:

• Top 10 in US metro areas for healthy housing, in fact all 4 major markets in Tx are in the top 10, alongside North Carolina
• 2011 Home sales up in Austin (19k-21k)
• Median price of homes: Up 2% from 2010, $192,800
• Historically 4% increase
• Rest of the US is down
• "Flat is the new Up!" (referring to charts where our prices and values stay steady, because at least they aren't declining!
• Generally strong market due to Supply and Demand
• Multi-family building permits up in June

In conclusion, I hope you took a little from those notes (I know they were somewhat overwhelming). I always think it is interesting to analyze numbers based on sales, housing prices, building permits and growth, alongside cultural changes. Generation Y shifting in attitudes, each generation becoming more entitled... more need for instant gratification and honestly, in my opinion, lacking financial self discipline and money smarts. With lending regulations being as tight as they are, I feel it is our responsibility to start informing and educating those younger than us the importance of paying on time, income to debt ratio and saving money, and that they don't have to have the best of everything right now. Ok I will get off my soap box, because I am such a great parent and all...
So, really now, in conclusion Texas is doing great. Overall we will see steady until after the election of 2012. Rates will remain low for a while (not forever), Texas and local markets will continue to grow and make modest improvements and there will be some enthusiasm come Spring 2012. In Austin, due to tight lending regulations, while there have been some multi-family building permits approved, this doesn't necessarily mean they are getting done. While there being an influx of young people moving here, they are more likely to be renters and studies have actually shown that more unemployed college kids move to Austin (live off parents and savings) because they hear how great Austin is (Great! More unemployed college kids stimulating the local Austin economy with their parents' money, awesome!) Austin, known for its Technology sectors will still increasingly grow...a youthful city at that. Being there will be so many moving here from other places, I predict rental market to still be high, and decent places with desired location to still move fast (especially homes under $200,000, as they have been). If you have been paying the same amount in rent for the past two years...consider yourself lucky! I also predict (based on what I have seen and read) the same shift toward people "doubling down" and rooming together. I hope you found this Economic Forecast of 2012 interesting, rewarding and something to take home. Call me if you are ready to buy while the rates are low and the rents are high and as always, thanks for reading!

Ashley Brinkman
Realtor, Prudential Texas Realty
My Website