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Buying a House in austin

Buying a House in Austin 🏠 | Tips + Guide to Buy a House in Austin & First Time Buyer Programs

Last Updated on: 18th September 2023, 05:07 pm

Austin is the state capital of Texas and is famous for its hundreds of live music venues and some of the top music festivals in the country. Austin has world-class museums, art galleries, and many retail districts, as well as Texas barbecue and Tex-Mex cuisine. Austin also has the second-largest number of food trucks per capita in the United States.

The University of Texas Longhorns are a big draw for sports fans. The city is also home to MLS soccer, rugby, and a Triple-A baseball team. Austin has consistently top-ranked public schools as well.

Residents buying a house in Austin Texas also enjoy the many parks and lakes for hiking, biking, swimming, and boating. Austin also sits on the edge of the Texas Hill Country, with lots of open space to explore. Many famous people hail from Austin, including actress Sandra Bullock, musician Willie Nelson, and actor Matthew McConaughey.

Should you buy a home in Austin? The home buying process can be stressful and can feel overwhelming at times. This step-by-step guide will help alleviate your worries and help you find the perfect home in Austin for you and your family.

The Steps to Buying a House in Austin


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How Much Does it Cost to Buy a House in Austin?

How much house you can afford involves several things. Beyond the price of the house, you have a downpayment, interest rate, property taxes, homeowners’ insurance, and maintenance to consider.

When considering your downpayment, you’ll have to put 20% down to avoid paying private mortgage insurance (PMI), which will increase your monthly payments and doesn’t go toward your principal. So, it’s important to save enough to avoid paying PMI. Closing costs are typically 3% – 6% of your home’s value, and you pay them at closing.

The debt-to-income ratio (DTI) determines how much you can afford to pay each month, including principal, interest, taxes, and insurance when you buy house in Austin. The DTI compares how much you owe each month to how much you earn. Your monthly mortgage expenses shouldn’t exceed 28% of your monthly income. To find your DTI, multiply your monthly income by 0.28.

A home affordability calculator estimates your monthly payments based on the price of the home, your downpayment, and the interest rate. If the payment comes out higher than 28%, you will need to find a less expensive home or increase your downpayment.

If you have a credit score of 620 or higher, you typically qualify for most loans. A score of 720 or better will get you the best loan terms and interest rates. Your payment history, amount of debt, and credit history all affect your credit score. Making payments on time and reducing debt helps increase your credit score.

The property tax rate in Austin is $0.318239, or 31.8 cents, per $100. The median home value in Travis County is $604,900, so the average homeowner can expect to spend about $1,924 on county property taxes ($604,900 x 0.318). The cost of living in Austin is 7% higher than the national average, and housing costs are 33% higher. Is buying a house in Austin a good investment? It can be, depending on your use for the home.

Is it worth buying a house in Austin? The Austin housing market is somewhat competitive, and the median sale price of a home in Austin was $604,900, a 2.9% home price in Austin decrease from last year. The median sale price per square foot in Austin is $330, down 10.3% since last year. If you want to buy a house in Austin, you won’t need to rush. Homes in Austin sell after 42 days on the market, up from 29 days last year. Homes sell at about 97.6% of the list price.

Where’s the best place to buy a house in Austin? Here are the median home prices in some of Austin’s best neighborhoods:

  • Northwest Hills – $930,000
  • Allandale – $815,000
  • Tarrytown – $1.51M
  • Hyde Park – $860,000
  • South Lamar – $862,750
  • Mueller – $850,123

What Is Needed To Buy A House In Austin?


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Unless you’re buying a house in Austin and paying cash for your new home, you’ll need a home mortgage loan. The amount you can be approved for will depend on your credit score, assets, and income. Lenders typically use the 28/36 rule as a guide to determine how large a mortgage you can afford. The two parts are:

  • Front-end ratio – no more than 28% of your income should go toward housing expenses, including taxes, homeowners insurance, and private mortgage insurance.
  • Back-end ratio – this ratio compares all your expenses (including mortgage, child support, car loans, credit card payments, etc.) to your income and shouldn’t exceed 36% of your income.

The 28/36 rule helps ensure that you can still pay your debts and build a healthy savings account that can get you through tough times.

With several different types of mortgages out there, you will need to determine which one is right for you so you can buy a home in Austin comfortably. Here are the most common loan types:

  • Fixed-rate conventional loan – A fixed-rate conventional loan is typically a 30-year loan, although you may qualify for a 15-year term, where the monthly payment will be higher, but you’ll pay off your loan in half the time and save tens of thousands in interest.
  • FHA loans – these loans are backed by the Federal Housing Administration and are easier to qualify for than conventional loans, but they have stricter requirements for mortgage insurance.
  • VA loan – If you’re an active or former service member, you are eligible for a VA loan from the Department of Veterans Affairs. You can typically get a VA loan without a downpayment.
  • Adjustable-rate loan – An adjustable-rate mortgage is typically not a good idea because the interest rate could go up significantly.

You should always get preapproved for a home loan before securing one. There are also special first time home buyer grants Austin to check out. A mortgage lender takes a look at your financial status, including your income, assets, pay stubs, tax returns, and bank statements. They factor in your downpayment and calculate how much you can afford for your mortgage. This makes it easier when you start your search for a home because a preapproval letter shows that you’re a serious buyer.

Find an Austin Real Estate Agent


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Using online searches is a great way to look for a home in Austin. You can quickly narrow the field to your top few choices. Once you’ve done that, you’ll want to find a real estate agent to help you. Some wonder if it’s worth buying a house in Austin without a realtor. Real estate agents have access to tools and expertise to find homes you’re interested in based on your requirements as to size, cost, location, and more.

A real estate agent can sometimes find homes before they hit the market. An agent will set up showings at the properties you’re interested in, help you write offers, and expertly negotiate the best deal for you. The best part is working with a real estate agent is free! The seller typically pays the buyer’s real estate agent a commission, usually 3% of the purchase price.

You can buy a house without a real estate agent, but navigating the home buying process on your own can be intimidating, especially for first-time buyers. Having an experienced real estate agent in your corner can give you the peace of mind you’ll need.

The best way to find a good real estate agent is by asking friends, family, and colleagues, as well as searching online. Look for agent websites and online profiles. Check their specialties, experience, and customer reviews. A good agent will be experienced in the Austin market, have excellent communication skills, and have 5-star reviews.

House Hunting in Austin


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When it’s time to go house hunting in Austin, make a list of which features you want, what area you want to live in, and other criteria important to you, such as schools, lot size, pool, and home size. Make two lists: one for “must haves” and another for features you’d like to have.

An important thing to consider is location because you can’t change it later as you can with paint color or flooring. You want the best place to buy a house in Austin, and your agent will work with you to determine the best locations based on your requirements, including:

  • Near good schools
  • Near parks, shopping, and amenities
  • Type of home (single-family townhome, 2-story, etc.)
  • Distance from work
  • Amount of traffic
  • Planned construction in the area
  • Churches/places of worship
  • Low crime
  • Lot size
  • Number of bedrooms
  • Age and style of home (new, old, modern, Colonial, Ranch, etc.)

Some of the top neighborhoods in Austin, depending on what you’re looking for, are:

  • Northwest Hills – This family-friendly neighborhood has a quiet, suburban feel, top schools, and large, beautiful homes, yet is only 15 minutes from downtown.
  • Tarrytown – Tarrytown is one of Austin’s most expensive neighborhoods, with home prices in the millions. With all the amenities you can ask for, excellent schools, virtually no crime, and lots of open space, Tarrytown is a great place to live if you’re looking for affluence.
  • Downtown Austin – If you are a young professional, downtown has a thriving business district, exciting nightlife, restaurants, cafes, and much more. Downtown features many high-rises and condos with luxury amenities.

As no home will be perfect, always go house hunting with an open mind and a level head. Keep your emotions in check because they can often lead you away from a potentially great option.

Submit an Offer!

Once you’ve found that perfect home, your agent will submit your approved offer based on the Austin real estate market. The seller can then accept it, reject it, or make you a counteroffer. You either accept or negotiate back and forth until an agreed price is reached between you and the seller. After the seller accepts your offer, you are officially under contract.

As part of the offer, you might consider adding in an earnest money deposit, typically 1% – 2% of the purchase price, to show the seller you are serious about buying the home. The deposit will go toward your downpayment and closing costs. If you agree to buy the home and then back out, you will typically lose your deposit.

Close On Your New Home!

It takes about 60 days to close after both parties sign the purchase agreement. The escrow process before closing involves the buyer finalizing the mortgage and purchasing homeowner’s insurance. A home inspection is done, the bank appraises the home, and a title search is completed. Any contingencies, such as negotiated repairs, are met, and a final walkthrough is conducted.

During closing, make sure the documents you sign are correct and you understand all of the terms or conditions. After that, you are officially an Austin homeowner!

After you’ve gone through the step-by-step process of buying a house in Austin, congratulations! You are now an Austinite. Give our Austin moving company Unicorn Moving, the best mover in Austin, a call at 512-339-9922 for a free quote!

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