People are constantly flocking to Austin, Texas, for its thriving job market, world-class restaurants and nightlife, and excellent educational opportunities. The city’s popularity has created a competitive real estate market, so it’s crucial to be prepared before jumping into the home-buying process in the area. Here are some tips and resources for first-time homebuyers in Austin, Texas:
As we’ve mentioned, the Austin real estate market is competitive, so you may need to set yourself apart from other prospective homebuyers. Here are a few ways to stand out from the crowd:
Hiring an experienced real estate agent is especially important for first-time homebuyers in Austin. Plus, it won’t cost you anything because they work on commission. Find someone who knows the area well and comes with ample recommendations. Then clearly express to them what you’re looking for in a home, with a list of “must-haves” and “nice-to-haves.” A good real estate agent can help you locate a home that meets your standards, negotiate a competitive offer price, and close on a home with minimal hiccups.
Some people assume that you need to put down 20 percent of the home’s purchase price, but first-time homebuyers can actually put as little as 3 percent down with a conventional mortgage, although they might need to purchase private mortgage insurance. Unless you have substantial savings, a smaller down payment can be a smart move because it allows you to maintain a financial cushion to cover any unexpected expenses.
If you don’t have significant savings, but you have a healthy retirement account, you can take up to $10,000 from your IRA without a penalty for early withdrawal, and couples can use $20,000 together.
One of the many perks of living in Texas is the lack of state income taxes. However, if you’re planning on becoming a homeowner, you need to be prepared to pay property taxes. Austin has a relatively high annual property tax rate of 2-3 percent of the home’s sales price. According to Zillow, a typical home in Austin is valued at $454,896, which would come with annual property taxes between $9,000-$13,600.
The majority of homes in Austin are not cheap, but there are several loan and homebuyer assistance programs that can make homeownership more achievable.
It’s a good idea to take a first-time homebuyer class because they offer a crash course on the home-buying process and are often required for assistance program eligibility. Here are a few available classes for those in Austin:
In addition to completing a homebuyer education class, it might be helpful to seek out a housing counselor to walk you through the process.
The home-buying process can be overwhelming, especially the first time around. Discover more tips for navigating the path to homeownership in Texas with our guide.