Based on the success shared by our agents, first time home buyers in Austin who take the following pieces of advice as fact, and not opinion, can benefit from avoiding costly mistakes competing for your first home.
According to Austin home sales for the last year, if you are searching for a house between $150,000 and $250,000 you are not alone. In fact this places you right in the thick of battle among others looking to buy.
Within the last 90 days, home buyers have faced even grimmer statistics. Half of all homes sold at above asking price, and even more shocking, more than half of these homes sold within 5 days of being listed on MLS. It should go without saying that most of these homes had multiple offers from competing buyers. Of the many reasons it is difficult to buy a home for first timers, affordability, competition and rejection are the most challenging.
Problem 1: Affordability
Solution: Reconsider your priorities.
First time home buyers make the classic mistake of believing that there is one perfect home for them. Those who succumb to FOMO (fear of missing out) waste precious time believing their dream home is out there. The truth is, a starter home is just that. Jackie Ogier of our Northwest Austin market center advises,
“Making compromises on your first home in order to build equity and make money is important. Buy something that can work for the next 5 years, take your profits, and buy up. ‘Waiting’ for the ‘perfect’ house, in this market, means losing purchasing power. I can’t tell you how many buyers stayed on the fence and have said, ‘Man, I wish I bought last year…I would have gotten so much more or closer into town, etc.’ Most importantly, don’t trust the internet to guide you through buying a home by yourself. This is a very smart generation of first time homebuyers, but negotiating a price is just the tip of the iceberg. An experienced Realtor® will help you avoid costly problems and educate you on areas you would never think to ask about.”
― Jackie Ogier
In reality your perfect home is the one built just for you, with the custom finishes you specifically desire. Until that happy day arrives, it’s best to find a home that weighs the consideration of both your expectations, and that of the future homeowner when you are ready to sell and trade up. In all likelihood, the money you may have budgeted to swap out those laminate counters would best serve as part of your war chest to sweeten the offer and successfully win the bid on your first house.
Friendly neighborhoods inside school districts with favorable ratings are strong hedges to ensure a property’s resale value.
Even if you have no intention of raising kids, there are plenty of prospective buyers who might appreciate these benefits from such a property. However, this strategy does come with a catch; properties with bragging rights to exemplary schools, safe neighborhoods, and clean streets come at a cost buried within the listing price. Cindy Langle from our Lake Travis office explains,
“I really school them on the tax rates because most first-time homebuyers don’t understand that taxes are a debt that never goes away.”
― Cindy Langle
Just because buyers are pre-approved for a certain loan amount doesn’t mean they can afford to keep it, specifically if costs from homeowners associations and property taxes aren’t considered. If the mention of taxes, debt and loans has you squirming in your seat, take heart and consider the following words of wisdom from Realty Austin’s Trish Deen from our Southwest Austin office,
“The only reason to be nervous, is if you are not financially prepared or if you do not have a realtor who is genuinely interested in looking out for your best interest. For this reason, meet with several loan officers to understand the financials and choose an experienced realtor who you trust and who has time for you. If you have questions, always ask a professional – no question is insignificant.”
― Trish Deen
Problem 2: Competition
Solution: Consider the location you want to live on a map of Austin, and realize why.
There is a mystique to the classic Austin neighborhood that is an intangible blend of old and new, which is usually the appeal for first time homeowners. Sadly, once the popularity of a neighborhood becomes apparent, regions like this become more exclusive, and unsympathetic to potential residents of modest means.
The results from our realtors produced a huge variety of valuable lessons when surveyed about what they would advise new home buyers, but only one topic produced an overwhelming consensus of answers. South/Central Austin is what made many people fall in love with this city, and it also broke their hearts. Now, imagine your favorite coming of age movie, where the protagonist spent all their time chasing a crush, only to discover in the end, that the one who had their best interests at heart, was the quirky friend right beside them.
Just as every celebrity had an awkward adolescent phase, so do many neighborhoods still in transition.
The key is to consider that showing up late to the party will cost you in the end. Successful first time home buyers embrace this wisdom, and look to see what is happening now, rather than where it has already happened.
Those attracted to the vibrant culture of East Austin have successfully found starter homes in the Chernosky and Oak Lawn subdivisions in addition to Windsor Park and University Hills. Realty Austin has recognized this growing attraction for homes east of I-35 and, in response, we will be opening our new office in the Mueller development. Our East Austin market center manager Jennifer Korba and staff are well-equipped with our strong culture, superior technology, marketing automation and the #1 home search website realtyaustin.com to assist first time homebuyers.
While the terms “affordable” and “West Austin” remain at odds, first timers still find greater opportunities the further north they search. A large number of sales within Wells Branch and parts of Willow Run prove that the aforementioned prices are still attainable within North Austin.
Problem 3: Rejection
Solution: Patience is more than just a virtue, it is absolutely essential to your success.
“Never, never, never, never give up.”
― Sir Winston Churchill
This statement reflects what the majority of our agents believe is the final and key ingredient to every first time homebuyer’s success.
Contenders seeking a home at the prices we have mentioned need to understand that the sweet taste of victory is earned from going the distance.
Realty Austin’s Jeff Arnold from our Northwest Austin office explains it this way,
“Get pre-qualified, accept that you are not going to find the perfect home, and be prepared for a potentially long battle of multiple offers/losses…but keep your momentum up, we just have to outlast those we’re battling against in multiple-offer situations. When a property finally speaks to you, be prepared to act on it right away…but don’t go crazy from desperation, your new home is out there.”
― Jeff Arnold
Fortunately making a move and actually bidding on the property is where the heavy lifting is done for you. Before being admitted to Realty Austin, each of our agents must have already proven themselves to be successful Realtors® in Austin. Our success (and yours) is built from providing professional guidance where newly licensed agents often blunder.
In closing, consider that the insights from the associates we quoted here represent only a fraction of the talented Realty Austin agents ready to advise you, and keep you informed from start to finish. And for those ready to make that dream a reality, congratulations. As of right now, you are one step ahead of the competition. Contact your Realty Austin agent and let them help you rest of the way.