It’s a great idea to talk to a lender even if you aren’t planning on purchasing a home for a year or two. Sometimes, things appear on a credit report that should not be on there, like a college loan that was paid off years ago. Understand, the challenge often with a credit report is not in releasing the lien — it’s about waiting for that line item to not appear on your credit report anymore which will raise your credit score. It can take 3 to 6 months at minimum for the debt to no longer appear on a credit report, so I encourage everyone to know your number even if you aren’t buying a house anytime soon.

Austin Real Estate Market

The Austin Texas Real Estate Market is strong and will remain strong with mortgage rates in record lows. If you are thinking of selling, I encourage you to talk to me about your local inventory, because after all markets are local. 2009 may not have been your year to sell, but 2012 may very well be.

Visit me on Sunday, January 29th from 1 – 4 pm.

Directions:  South of William Cannon on Manchaca Rd to Right (West) on Shiloh. Second Right onto Manassas Drive . 8108 Manassas Drive is the second house on the left.

Austin Market Data

Crestview
Number of homes for sale                       13        
Median List Price                                   $264,900          
Where in Austin?                                   Central

Rob Roy on theLake
Number of homes for sale                       6         
Median List Price                                   $2,924,500       
Where in Austin?                                   West

Tarrytown
Number of homes for sale                       7         
Median List Price                                   $789,000
Where in Austin?                                   Central

Legend Oaks
Number of homes for sale                       9
Median List Price                                   $259,900
Where in Austin?                                   Southwest

Shady Hollow
Number of homes for sale                       9
Median List Price                                   $304,990
Where in Austin?                                   Southwest

Senna Hills
Number of homes for sale                       4         
Median List Price                                   $532,188          
Where in Austin?                                   West

Great Hills
Number of homes for sale                       11
Median List Price                                   $525,000
Where in Austin?                                   Northwest

Highland Park
Number of homes for sale                       11
Median List Price                                   $589,000
Where in Austin?                                   Central

Jester Estates
Number of homes for sale                       7
Median List Price                                   $457,000
Where in Austin?                                   Northwest

Mueller
Number of homes for sale                       6
Median List Price                                   $746,716
Where in Austin?                                    East

Crossing at Onion Creek
Number of homes for sale                       11
Median List Price                                   $160,000
Where in Austin?                                    Southeast

Legend Oaks home in Southwest Austin features a wonderful bright and open floor-plan. Backs to Greenbelt.  Located at 7117 Ridge Oak Road, this single story home has a Gourmet kitchen with center island opens to formal dining and living room with tile floors, built in entertainment hutch, fireplace and crown molding.  The home is 1,841 square feet per the tax record and has 3 bedrooms with 2 full baths.  7117 Ridge Oak Road has a 2-car garage and 3-sides of masonry exterior finish.

7117 Ridge Oak Road is listed at $239,000

Directions:  From Mopac South:  turn right on William Cannon and turn left on Ridge Oak  or from 290, turn left on William Cannon and right on Ridge Oak

Open House 7117 Ridge Oak Road

Visit me Sunday, January 15th from 1 – 4pm

View pictures of 7117 Ridge Oak Road and other Legend Oaks’ homes here.

How a house is classified is determined by whether the land the residence sits on is fee-simple or undivided. If the parcel is undivided, then the structure is in a condominium regime which gives owners partial interest in the land. When a residence is fee-simple the owner has owns absolute title to the land and structure. In a condominium regime, you own the space the unit occupies and only own a partial interest in the common land surrounding the property.

Austin Condominium regimes can come in garden home, townhouses, single family, duplexes and apartment designs. Many have backyards, which can make it impossible to tell by looking, how the property is classified. Fee simple properties are available in the same styles, with the exception of towers. Some people don’t want to live in a condominium regime because they feel too restricted in how they can utilize their backyards. Understand fee-simple home owners still need to abide by city, deed and zoning restrictions. Fee-simple home owners can also be restricted through their home owners associations. Condominium regimes will often let homeowners improve property with patios and other outdoor improvements as long as they get permission first and comply with certain aesthetic guidelines. People are not always as limited as they think they will be.

I searched Austin MLS listings and selected some active properties so show examples of home styles that are classified as condominiums. Click the link here to see the condos

Click the link below or the picture, which will take you to a pdf. document with national real estate and local Austin housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.

Austin Housing Trends 12_11

The report includes third quarter results comparing the Austin real estate market to the rest of the United States. Mortgage data, employment findings, building permit numbers and pricing trends are posted.

Austin Housing Inventory

There are 17,517 listings currently active in the greater Austin MLS listings. This is LOWER than it was previously

The average price of a Single Family Residential listing is $367,527

The more detailed the criteria I use to find a home, the lower the number of search results.  However, I do have to use some criteria when looking like a zip code or MLS area.  The Austin MLS system will only allow me to pull 100 properties for any given property search.  It is rare though that I do not have enough criteria to narrow the search to less than 100.  After all, everyone typically has some criteria whether it’s a neighborhood, school district and of course – price.

 For those who really want to narrow the field down further, I can get very specific in terms of how I search for a property.  Understand, I may be lucky to find one property if the criteria are too narrow, but the flexibility in how I search for properties is available for those looking for something really specific.

Search for a Home in the Greater Austin area

Here is a list of some unique criteria I can use when searching for a property:

• Elementary School
• Master bedroom located on the first floor
• Number of stairs to enter a house
• Fireplace
• Fractional ownership (time share)
• Year built
• Pool
• Duplex, triplex or fourplex
• Building materials (i.e. all sides masonry)
• Media Room
• Modified for wheel chair
• Area amenities (i.e. club house, jogging path, lake privileges
• Flooring
• Type of utilities
• City view
• No backyard grass

There are too many criteria to list.  The intent is give you some idea of how detailed I can get.  One thing to note is that not all agents add as much detail as they can to a listing.  If an agent does not add that a property has a view of downtown, for example, the system is not going to pull it if your criteria include only city view properties.  There are fields that, as Realtors, we have to fill when entering a listing, while others are voluntary.

Fewer buyers mean fewer offers to sellers. I’ve talked before about wants and needs. Some owners need to sell now, they don’t just want to sell. Many people make job changes this time of year which nowadays, may mean moving to a different state. Sellers are often more flexible this time of year with price because they don’t have the buyer traffic they would have other times of the year – there is simply less demand. Investors know this, which is why I work with more investors this time of year than any other.

Interest rates are also very low right now, which gives you more buying power. You can qualify to spend more on a house when interest rates are low, than you can when they start to go up. Why? Lenders look at debt to income ratio when deciding to approve a buyer for a loan. Debt includes existing data like student loans and car payments, but the principle and interest on your proposed home purchase will also be a factor. The more you spend on interest the lower your principle payment on the house will need to be to meet the criteria of debt to income.

Real Estate Traffic

Ironically, another advantage this time of year for buyers is time. People often take off a few days between Christmas and New Years. When shopping for presents has ended, people often find they have extra time to look for a house without the stress of spending the day at work. In fact the busiest day to search for a home on-line is December 26th, the day after Christmas.

Happy Holidays to You,

Doreen

What all of these dream houses have in common is that they are scarce.  My challenge is often that buyers don’t always believe they are looking at a dream house. I never know when the ideal house is going to come up for someone.  Buyers and houses enter and exit the market constantly.  When a house is only 7 days old on the market and it’s a dream house, buyers often think they can wait. 

Remember a dream house is always going to show up in someone elses dream, so there is no telling when the next buyers are going to see it.  When buyers lose a dream house it can become very discouraging, but often need to go through the experience.  The next time my buyer won’t wait for another buyer to purchase their house.  All houses sell in their own given time.  It could be day 7 or day 150.  If a buyer sees their dream house on day 150 – it’s new to them!
I often find it a helpful exercise to show buyers the difference in inventory between their wants list versus their needs list.  A buyer may easily start with 35 homes that meet their needs criteria, but when I add a golf course view – we wind up with 5.
Remember our goals change in the future as life has a habit of changing.  Buying a new home is a dream in itself. Sticking to the present and what you need now will help keep that dream a reality.

Applicants that do not own a vehicle can use a utility bill showing the matching address, but also must sign an affidavit stating that they do not own a vehicle.

The new law does not affect those who have already received tax exemption status. The new homestead requirements also apply to applications for the over-65, disability, disabled veterans, homeowner’s surviving spouse and manufactured (mobile) home exemptions.

The homestead exemption form must be filed between Jan 1, 2011 and April 30, 2011.   To qualify you must have owned your home by January 1, reside there as of that date and not claim an exemption on any other property.

1908 Glencliff Drive 78704

Lately, I have been spending my time in Central Austin specifically Barton Hills and other areas within the 78704 zip code.  Conditions have varied with some needing a little love, like maybe new paint colors, while others need some major updating.

Homes in need of remodeling can be found in all price points. When you are purchasing a home that is considered ‘dated’, it is best to know what your intended use is for it. For example, if you are looking to just lease the house out, freshening up the paint and re-carpeting may be all you need to do to make it ready for a tenant. If your plans are live in the house, understand that many of the upgrades you will add are for you. They may depreciate over time and not all buyers will appreciate what you have done. When the plan is to remodel a home to flip it, budget is key. Sticking to a budget which should include a miscellaneous fund for unexpected work will keep you from buying yourself right out of the neighborhood.

Here are some houses I have seen in the past week. Doreen’s picks of the week Again, how much work they need, if any, will depend on the buyer’s intended use.

1908 Glencliff (see link above) was designed by James D. Pfluger. It is a work of art with great bones and over an acre of land on the cliff of the Barton Creek Greenbelt, about 200′ upstream from Camel’s Hole. It has privacy and a view, but the view could be better if someone cleaned up the brush and trees and perhaps redesigned the overhang on the back decks. The house has tons of possibilities. Many of the surrounding homes have been completely rebuilt and updated.

One note about investment properties. Leases are on the rise, because properties for lease are in short supply. There are many people who cannot qualify for a loan these days, so they need to lease. There are some people of course that prefer to lease, but with the addition of people that now do not have a choice – the demand is very high. So, if you are thinking about purchasing an investment property – now may be the time. Remember, investment properties also come in all price points. They require 20% down and rates right now hovering around 5% and under.

Rules and by-laws are defined and outlined for each home owners association and can include anything from buildings restrictions, pet limitations and quiet hours. H.O.A.s impose fee’s to manage common charges and services impacted by the community. Mandatory home owners associations are typically created at the time the subdivision is created whether it is a neighborhood of houses or a condominium community.

H.O.A.s are a legal and financial entity designed to fund and manage common services and areas. Gated entrances, pools, fitness centers and playgrounds are all examples of common areas. Common services can include water, cable, trash and even gas. What services are included typically depends on how the subdivision was initially designed. Home owners associations can be powerful; they will impose fines and can even place liens on a property if fees are not paid or rules are not complied with.

Home owners associations often manage community activities as well, which provides an environment to socialize with neighbors within the community.

Austin HOA Rules and Restrictions

Whether or not a home owners association will work for a buyer will depend on many factors. If you are looking to build and want the freedom to choose any material you want or size of home, a neighborhood with a home owners association may not work for you. Having horses or parking an RV or boat next to a house – may not be allowed. You may be limited to the kinds of fences you can have. Dog breeds that are typically labeled as ‘aggressive’ are often not allowed as well.

Some people like limitations and rules within a community. Members of an association often like the structure within the community and welcome the limitations. Some people like a common aesthetic theme limited building materials bring. They also like the sense of community and small town feeling common amenities often provide.

Home owners associations can include many amenities, rules and by-laws or very few. H.O.A.s vary greatly in terms of when fees are due. Some are monthly; others are quarterly or even paid annually. Frequency is often determined by the size and scope of the association.

Unless I have a buyer who truly doesn’t like the idea of a home owners association, I often suggest clients be open to the idea. You can often tell just by driving through a neighborhood if it is heavily restricted or looks fairly laid back. With so many of them in the greater Austin area, it is hard for prospective buyer to completely rule them out.

According to the Austin City Limits Festival website, attendees and The Do Good Bus raised $20,826.90 for The Red Cross and The Texas Wildfire Relief Fund. In addition, C3 Presents matched Friday’s donations for a grand total of $35,088.10.

The ACL Music Festival moves to cooler weather next year during the weekend of October 12, 2012.

Austin Real Estate Close to Zilker

Looking to live close to Zilker Park?  Here is a link to houses and condos for sale close to Zilker Park.  I can also set up a customized search to send you homes specific to your needs.

As I often say, markets are local and that is often widdled down to a particular subdivision or specific condo community. There are markets that are in high demand. Markets can be defined as a subdivision, school district, zip code, etc. So, looking back in time longer than 3 months helps me tell the story of that particular market because – although the list price can’t be predicted a year from now, how hot a specific market is generally can. Price is a moment in time.

I’ll give you an example most people familiar with Austin can relate to, which is zip code 78704. Zip code 78704 is the southern neighbor of Austin’s downtown district. Many consider it downtown and although it certainly has an urban flare, it has a bit more of a small town feeling than a cityscape. Zip code 78704 is the home of Zilker Park and the SoCo, SoLa and SoFi districts which are all popular for their local eateries and shopping. The local amenities coupled with the vast array of affordablility due to a large variety a price points makes 78704 not only hot, but consistently hot. Inventory moves here and will always move here because of the location.

Austin Real Estate Market

Let’s look at the over all story of the Austin market over the first 6 months of 2011 vs the first 6 months of 2010.

• There were 584 less homes sold in 2011 than in 2010. 
• The sales volume is 3 million dollars higher than 2010.
• The average sales price is $14,000 higher in 2010 ($255,000 in 2011 vs. $241,000 in 2010).
• The median sales price was also up for the first half of 2011: $191,000 vs. $185,000 in 2010.

 So, overall houses there are slightly less houses selling, but those that are – are selling for more money. Austin is looking good.

A variety of builders have contributed to the community, including Crescent Estates, Redbud, Precise, Waldrop and Waterford Custom Homes.  Inventory homes are available for purchase or can be built to suit.  All of the homes are very unique from one another, offering different floorplans and aesthetic materials like stonework. 

Homes range from $800,000 to $2 million.  Here is a link to my new Marisol at the Oasis webpage, which shows some of the MLS listings available.

Steps to Lake Travis

I have several clients currently looking for waterfront property. Waterfront is scarce simply due to the limited real estate available that surrounds the lake. What can limit the search even further is the intended use one expects to gain by owning waterfront property.

Waterfront property does not always mean direct access to the lake. Even direct access can vary from walking across a lawn directly into the lake to descending a steep flight of stairs. Maybe you want to have a boat docked in the water or the potential to have one. All of these are points to consider including the biggest one — do you even need to access the lake? Sure, water access may be nice to have, but maybe you only really want the view.

For many, water activities are seasonal. A nearby public boat dock or neighborhood park may offer enough convenience for water access. Maintenance, on the other hand is not seasonal. If a home has direct lake access, someone has to maintain the bock dock and the stairwell used to access the lake. These are added expenses that can be costly.  Another data point to be mindful of is flood insurance. Flood insurance is often required, which is another expense you will need to budget for.

There is nothing like having the lake as your neighbor.  It can provide constant entertainment. Just consider what you want and what you need from it — before you start your search. The greater Austin area touches Lake Austin, Lake Travis and Lady Bird Lake.  Access to the Town Lake Hike & Bike Trail can be found from waterfront condos like Milago.  There is now a waterfront page on my website that captures some of the waterfront properties available.

 

I work with investors often enough to understand no two are alike. The appeal of becoming an investor is often due to the added income one might expect from collecting rent. There are many things to consider though and plan for before becoming one, which are typically not considered until I start asking questions. Understanding what a client’s long term and short term goals are is always a good place to start. Is the goal immediate positive cash flow or long term appreciation? Knowing these answers helps me start to fine tune what type of property and location might be best suited to meet those needs. Does my client want a tenant already in place? Who is going to manage the property and how much can someone afford as a down payment are all questions that need to be discussed up front. Typically, an investor is not going to have a monthly positive cash flow without putting down at least 20%. The down payment in itself can make one shy away. Understand, positive monthly cash flow can be a little as $50 a month after paying the mortgage, taxes, HOA and maybe even a property management company. There is also down time to consider. Once a tenant moves out, you may have one or two months with no income on the residence as you seek and make the unit ready for a new tenant.

Now let’s discuss selling an investment property. When you have a tenant in place that is indeed what you have. Unless the tenant is on a month to month lease, where you can give 30 days notice to the tenant if the unit sells — the lease conveys. Tenants have rights; one being the lease doesn’t become void, just because the owner changes hands. The lease itself often becomes a catch 22 when marketing the property. A good tenant is worth their weight in gold! If they are clean, don’t cause problems, pay on time, etc. — it is clear they have made your house their home. In return, investors often don’t hike up the rent on these tenants because they want them to stay. An owner may not be making any profit on these tenants, but they also have no down time and damages. These tenants are diligent about telling owners about repairs needed as they go along, so there are no surprises at the end of the day. Think about it. If you need to replace carpet, paint and do other repairs all at once — you not only have significant immediate expenses, but you also can’t rent the unit out while the repairs are made, which means no additional income.

A good tenant though can also hurt you when selling. Not only have you limited your buyer pool, to investors only, but they may not be paying market value on their rent. This may work for the current owner, for reasons I stated above, but it may not work for a buyer. For investors, this is a numbers game and if the current rent is too far below what the monthly expenses will be — that property is going to be passed by simply because the numbers don’t work.

Buying an investment property is often a great move, especially if someone has an out of state student who will be attending a college. Out of state tuition is often much higher than in state tuition. Buying a condo for a student will allow them become an in state resident can mean much lower tuition after they have lived in the state a certain amount of time. The differential between the in state and out of state tuition can be significant, making a little off-campus condo a more affordable alternative down the road.

When Austin real estate buyers are looking in a general area, like Spicewood or Northwest Hills, I typically set up a map search.  Older neighborhoods are made up of many micro-subdivisions as the land was and is developed. 

The subdivision list below is random.  It will give you an overall idea of what to expect in terms of available inventory and price points.  If there is a particular subdivision or neighborhood you would like me to highlight in the future, please ask.

 Milwood

Number of homes for sale                       57        

Median List Price                                   $187,500          

Where is Austin?                                   North

Spicewood at Balcones Village

Number of homes for sale                       5         

Median List Price                                   $305,000          

Where is Austin?                                   Northwest

Cat Mountain Villas

Number of homes for sale                       10                    

Median List Price                                   $430,445

Where in Austin?                                   Northwest

Hyde Park

Number of homes for sale                       17

Median List Price                                   $410,000

Where in Austin?                                   Central

Edgemont

Number of homes for sale                       5

Median List Price                                   $648,000

Where in Austin?                                   Central

Travis Heights

Number of homes for sale                       17        

Median List Price                                   $610,000          

Where is Austin?                                   Central

Western Trails

Number of homes for sale                       6

Median List Price                                   $271,500

Where in Austin?                                   South

Lost Creek

Number of homes for sale                       8

Median List Price                                   $597,200

Where in Austin?                                   West

Village at Western Oaks

Number of homes for sale                       20

Median List Price                                   $259,000

Where in Austin?                                   Southwest

Onion Creek

Number of homes for sale                       33

Median List Price                                   $323,900

Where in Austin                                    Southeast

Jester Estate, Crestview, Onion Creek and more….

Jester Estate
Number of homes for sale                       12        
Median List Price                                   $440,750          
Average Active Days on the Market         120

Circle C Ranch
Number of homes for sale                       24                    
Median List Price                                   $316,500
Average Active Days on the Market         57

Parkside at Slaughter Creek
Number of homes for sale                       11
Median List Price                                   $207,900
Average Active Days on the Market         110

Crestview
Number of homes for sale                       16
Median List Price                                   $249,389
Average Active Days on the Market         141

Agave
Number of homes for sale                       6
Median List Price                                   $238,700
Average Active Days on the Market         129

Travis Heights
Number of homes for sale                       9
Median List Price                                   $599,000
Average Active Days on the Market         149

Western Oaks
Number of homes for sale                       25
Median List Price                                   $246,500
Average Active Days on the Market         98

Onion Creek
Number of homes for sale                       32
Median List Price                                   $308,000
Average Active Days on the Market         145

360 Condominiums
Number of homes for sale                       17
Median List Price                                   $339,900
Average Active Days on the Market         117

Spring Condominiums
Number of homes for sale                       3
Median List Price                                   $403,000
Average Active Days on the Market         70

The better educated a buyer is before the option period begins, the smoother the time goes by.  Understanding the loan program you are qualifying for, choosing a home inspector, and having liquid funds available for option and earnest money fees are just a few of the things that add stress and take time. 

Any amendments made to the contract need to be agreed upon by midnight of the last day of the option period.  If the Seller has not signed the amendment by midnight on the last day of the option period, the buyer has 2 choices.  The buyer either accepts the property based on the initial terms and conditions, or must terminate contract in order to get their earnest money.

It’s no fun waiting until the last hours of an option period to wait for either party to decide what to do.  The best advice I can give is to be prepared before you find a home. Don’t waste days during your option period to prepare.  Planning ahead lets you take off like a G6 and allows time to educate yourself on the home, without feeling rushed.

I have said this before, and you will hear me say it again, looking at homes is the fun part, so it’s the item on the list buyers want to do first.  Unfortunately, it should be last on your list.  The first thing you need to do is contact a lender.  Nowadays, it’s not just about what you get paid, but how you get paid. If you get a commission based salary, qualifying for a loan is different.  Your assets, debt and credit score are also significant factors in determining how much of a house you can afford.

I understand, talking to a lender is work and it takes time.  Look at it as a way of self assessing whether you really want to buy at house.  If it all seems like more trouble than its worth – you are not ready. If it seems logical to get a good idea of what you can afford, then you are ready to buy a house.  Looking at homes takes time. Buying a home takes even more.  Spending time looking at things you can afford will save you time, not to mention, unnecessary disappointment in the end.

I had a client ask me last week what I think about sport courts.  While pools can limit your audience, when it comes to attracting buyers, sport courts don’t seem to have the same effect.  The reason is that they have a broader range of use, than a pool.  For starters, they are not seasonal; after all, you can shoot hoops or play tennis any time of year.

In addition to year round use, outdoor courts are rare enough to be considered unique, which is attractive to buyers who are looking for something extra. More often then not, selective buyers don’t even know what it is they are looking for.  We then look at a home with a sport court, and they just connect to it.

Unlike pools, sport courts generally don’t require as much maintenance as pools – after all, it can be as simple as a painted slab.  Sure you may have to patch, paint and repair some fencing from time to time, but over all they generally require less effort.

Sport courts vary in size and shape, tennis and basketball are most well known.   I often see courts that offer a more universal appeal with a basketball net and backboard.  Now, a sport court is not going to have any appeal to gardeners.  It may also impede on building an addition where the amount of impervious coverage is limited.  For properties within the McMansion Ordinance the ratio of non-permeable coverage can’t exceed 40% of the lot size.  So, while a sport court may not appeal to everyone, it certainly can offer unique twist to a typical home making standout from the crowd.

When I’m working with Buyers, I always want to know about where they work and how they live, because the house they ultimately decide to purchase has to fit in with their lifestyle.  People don’t often consider how walkable a neighborhood is when they find a house they love.  More often than not, we then to take a step back and figure out if Johnny can walk to school, or how close we are to the running trail.  

When I refer to a house being walkable, I am talking about proximity, not necessarily walking distance.  Not everyone in Austin has a commute.  Many of my clients work from home, so even the nearest place to get milk, can be a consideration.  Those who work from home have no commuting flight path.  Everyone has something they want to be convenient to.  For me – it’s a movie theater.

Walking scores do actually exist.  Overall, Austin has a walking score of 49, with 100 being the best. It is rated the 29th most walkable city in the country. Looking to find out how walkable your house is?  Go to http://www.walkscore.com/

I support local Austin, after all, I think it’s only neighborly.

 Last week, I was in Round Rock and then, moved on to Downtown, Austin to view some condominiums.  If you haven’t been to the historical district of Round Rock, it is quite charming. Downtown, I went to the Brown Building and the Nokonah.  Located on W 9th Street, the Nokonah is in the heart of Duncan Park and within walking distance to Whole Foods, restaurants and shops.  

Built in 1940, the Brown Building, on Colorado Street holds a historical designation, which gives owners an additional tax exemption.  The building was originally utilized as office space, some of which was occupied  by politicians,  including former President Lyndon B. Johnson. In 1998, The Brown Building was converted to loft style condominiums.  The Brown Bar and Gumbos restaurant are on the first floor, for your dining pleasure. Here’s a peak

Reminder:   we must be under contract by April 30th in order to qualify for the tax credit.

I support local Austin; after all I think it’s only neighborly.

Contact me for real estate needs by:

Phone:  201-286-2504

Email:  doreen@supportlocalaustin.com

It was an amazing week to be in Austin last week. We started with the Zilker Park Kite Festival, then moved on to SXSW, and it was spring break.  All in all people were out and about exploring this wonderful city we live in.  Where was I?  A little bit of everywhere, buyers are hustling to meet the tax credit deadline, and I am moving them along.  My goal is to have everyone who cares about the tax credit to be under contract within the next week.  

Understand, we need our option period to decide whether to go forward with the house, and then there is of course, the financing hurdle.  I am advising my clients to keep the ball in someone else’s court while we shop.  If the Lender wants pay stubs, tax records, employer contact information…whatever it is, let’s get them the information they need, so we can get the file into underwriting as soon as possible.  

Lender qualifications change often, so it is important to keep in contact with them.  If for some reason, we fall out of contract and then need to find another house to purchase, we still have time to meet the deadline.

FHA loans are assigned case numbers.  So, anything under contract prior to April 5th, will not be affected, as long as the loan is approved.

If you have detailed questions, it is best to speak with a lender. Since, we are all more frugal than a year ago, I thought I would give you a heads up.

For Buyers, the more commonly asked question is how much money they need to buy a house.  Unfortunately, there are too many variables that make question easy to answer. A credit score, downpayment and loan program are going to be the determining factors for this.  Those factors, are not only going to determine what your costs, but they are also going to decide your buying power as well.  

A 1% variation in an interest rate can mean a 10% change in your buying power.  The debt to income ratio will also determine your buying power.  Having a great credit score means that you show a history of paying back loans, and therefore you are less of a risk to a bank of defaulting on a loan.  If you are going to buy a house or planning on moving up, your income has to reflect that you can afford to handle more debt.  If a lender thinks you are just making it, with your current debt – you are not going to get approved for more.

What I generally tell Buyers, is to plan on at least 2 percent of the sales price, not including your down payment.  Lenders escrow 3-8 months for taxes up front, which are typically the biggest portion of  closing costs. You will also need 1% of the sales price in earnest money at the time we go under contract.  In addition, you will need an inspection and title fees.  So, the short answer is 2% of the sales price, but that does not include lender fees, which, depending on your loan program, could mean another 2%.