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Information for Buyers

Frequently Asked Questions

So you're thinking about buying a Condo, Loft or Townhouse...

"Where should I start" and "What should I look out for" are two very good questions you might have. We hope the information provided here will be educational and helpful to you. We also recommend that you also get a copy of our exclusive Buyer's Guide, which walks you through the home-buying process in a natural and informative way. Should you have any additional questions, feel free to email us today and we will get you an answer. Meanwhile, enjoy our FAQs! We can also help you find Austin Homes for Sale.

Should I use a professional Realtor?

It will save you time and money to utilize the services of a Realtor® to help you in the selection and purchase of a Townhouse, Loft or Condominium in the Austin area. This service is typically free for buyers as the seller normally pays the buyer agent’s commission.

Texas has adopted the practice of "Buyer Agency" which allows consumers to “hire” an agent to work on their behalf and protect their interests. This makes sense, because the Listing Agents are working for the sellers and are under no obligation to offer advice and/or opinions to prospective buyers.

Your Realtor (Buyer’s Agent) will help you find the right neighborhood, show you properties that meet your needs, assist you with determining a fair price, negotiate the contract, coordinate with vendors (lenders, title companies, inspectors, appraisers, etc) and make sure the transaction goes smoothly.

Should I get pre-approved for financing?

Unless you have the cash readily available to invest in a condominium or townhouse (or any other type of property) in Austin, you should work with a reputable lender and get pre-approved for a loan. It's also a great idea to talk with a lender in order to find the different types of financing available to you, and to get a full understanding of the costs associated with obtaining and paying off the loan.

Lenders are required to give you a Good Faith Estimate of Settlement Charges that outline all the terms, conditions and costs associated with their loans – so make sure you ask for this. You should speak to at least two and preferable three lenders in order to make sure you get the best deal for your particular situation. Credit unions can sometimes be a great source for mortgages as well, so check with your organization if you are a member of one.

When determining how much you want to pay for a home – or what you can afford, it’s best to think about what you really want to pay on a monthly basis, rather than what you can qualify for in terms of a loan amount. And it’s best to make the decision about how much you want to pay before you start looking at potential properties. The lender will work with you to determine the most comfortable price range for your particular situation.

If you’re looking for a good lender, email us today and we will refer you to some very professional and responsive mortgage providers who offer competitive rates.

How does the timing work with the purchase process?

In most cases, the closing on a property will take place around 30-45 days from the time your offer is accepted. This is to allow time for the lender to set up your mortgage, the title company to research the ownership records and prepare the closing paperwork, the inspection and appraisal to take place, and the sellers to prepare to move.

Backing up, this means that you should start seriously looking at properties two and a half or three months before you want to move in or assume ownership.

If you’re a first-time buyer, you may not know that mortgage is paid in arrears whereas rent is paid in advance. Let’s say your lease is up on May 30th. If you close on your new Condominium, Loft or Townhouse in Austin on May 28th and move in on the 29th you will pay your May rent (on the 1st of May) and then will not have a mortgage payment until July 1st.

What’s the best way to search for property?

The best way to search for a Condominium, Loft or Townhouse in the Austin area is to:

  • Find a Realtor to work for you as your Buyer’s Agent. Remember, this is a free service for buyers.
  • Identify the features that are important or necessary to you such as number of stories, number of bedrooms and baths, a covered patio, covered parking or a garage, etc.
  • Think about what you need to be close to in terms of work, recreation, entertainment, education and other activities.
  • Your Realtor will use this information to create a Property Gateway for your exclusive use. This Gateway is essentially your own personal website that contains property listings that meet your particular needs, and is updated daily as new listings come on the market. Click here to sign up for your Gateway.
  • Take a familiarization tour with your Realtor. Properties always look different in person than they do on the internet. You should spend an afternoon with your Realtor looking at your favorite properties on your Gateway and adjust your criteria if necessary. Then you will have a good idea of what your money can buy in the current market.
  • Keep looking until you’ve found the right property. Remember that no property will be absolutely perfect. Sometimes buyers find that the feature they thought they “had to have” is not a feature of the property they fall in love with and purchase.

How do I make an offer to purchase a condominium or townhouse?

When you’ve found the right property, your Realtor will assist you in determining a good offer price by reviewing the comparable recent sales in the area, and considering the condition of the property and the motivations of the seller.

In Texas, Realtors use contract forms that are promulgated (distributed and required for use) by the Texas Association of Realtors. These comprehensive forms cover all contract terms and conditions, and contain disclosures of information that is important to you as a buyer. Your Realtor will guide you through these terms and conditions, explain what is customary and help you decide the details of your offer.

If your initial offer is not accepted, the seller will most likely make a counter-offer and you can negotiate until both parties are satisfied. Your Realtor will help you in this process and protect you from paying too much for a property.

What is a Home Owner’s Association, and why do I need one?

A Home Owner’s Association is an organization that is responsible for and coordinates the maintenance and repair of Condominium, Loft and Townhouse properties. With almost all properties of this type, you will be required to pay a Monthly HOA fee in addition to your mortgage. These fees go into a common budget that is administered by the HOA.

There’s a whole laundry list of expenses that the HOA fees go towards. Some of the most common of these include common insurance, exterior maintenance, common area maintenance, common area insurance, lawn service, trash, and sometimes even water. Check the HOA bylaws and budget to see what is covered for any particular property.

Since you are not paying these expenses directly, they reduce the amount you would normally have to budget for maintaining and using your property. You should perform a thorough review of the HOA’s budget and make sure they have sufficient reserves to cover emergencies. Also, be sure to find out if there are any special assessments. These are levied on property owners if insufficient monies for necessary repairs are available in the HOA fund.

Why is it important to get a Home Inspection?

Sellers are required to provide a document called the Sellers Disclosure of Property Condition to all prospective buyers of a property – whether it’s listed with a Realtor or not. This document outlines the basic structural elements and systems (such as electrical, plumbing and HVAC) of the property and discloses if the seller is aware of any problems with any of them. The key word here is “aware”.

Many sellers are not aware of problems with a property, even if the problem has existed for a long time. What about the seller of a rental property that has never lived in it? In addition, building codes undergo constant revision – so sellers of properties built even five years ago may not be aware that their property does not meet current code requirements.

Just as example, let’s say that Buyer A does not have a Home Inspection and then finds out after closing that there is a plumbing leak under the kitchen sink that has been active for years. The cabinetry has started to rot, the water has seeped into the wall behind the sink and it looks like mold has started to grow. Wouldn’t it be better to find this out before closing and negotiate with the seller for the repair costs?

Will I need a survey?

The survey shows the dimensions and location of a plot of land and the location and dimensions of any permanent structure on the land. Since Condominium ownership is of “the air between the walls”, there is no survey required.

Townhouses, however, do require surveys since they include land as well as a structure.

If appropriate for the type of ownership, lenders will require that a survey be completed and reviewed before they will grant the loan. It’s a way of assuring the lending institution that they are lending you money for something that actually exists.

Mortgage Calculations

How much can I afford?

Lenders will typically limit the amount you spend on housing to a maximum of 32% of your monthly income. Depending on your credit score and outstanding debt, you will qualify for more or less than that. It's best to talk with a lender about your particular situation and to best understand the various loan programs that may help with affordability.

In the meantime, you can use this online Mortgage Qualifier calculator to get an idea.

What are the components of my monthly mortgage payment (PITI)?

The four main components of a standard monthly mortgage payment are:

Principal     - the amount allocated towards reducing your original loan amount.
Interest       - the amount charged by the lender as interest on the loan.
Taxes         - the monthly allocation of your annual property tax.
Insurance  - the monthly allocation of your annual homeowner's insurance policy.

With Condominiums and Lofts, the Homeowner's Association dues typically cover insurance on the structure. You will still need insurance to cover the interior finish-out and contents (commonly called a "walls-in" policy), but you will be able to get this for less money than an all-inclusive insurance package.

Speaking of Homeowner's Association (HOA) dues, you will need to add those to the four components above. Most online mortgage calculators do not include taxes and interest, leading consumers to think they can afford more than they realistically can. You can use this online Mortgage Calculator with PITI to get a more comprehensive calculation. Just remember - you will still need to add the amount of the monthly HOA dues.

Online Mortgage Calculators

Interested in finding out more about different loan programs, the effects of different interest rates or different payoff plans? This Mortgage Calculator site has many tools to answer all your questions. The site is not affiliated with any lender, so you will not be bombarded with advertisements or pop-ups. Happy Calculating!

Buyer Reports from the National Association of REALTORS®

Click the icon at the left to view these comprehensive reports and learn about the following topics:

  • 8 Steps to Getting Your Finances in Order
  • Budget Basics Work Sheet
  • 8 Ways to Improve Your Credit
  • 5 Factors That Decide Your Credit Score
  • Your Property Wish List
  • Tips for Finding the Perfect Neighborhood
  • Tips on Buying in a Tight Market
  • The Pros and Cons of Condos
  • Reasons You Need a REALTOR
  • Questions to Ask When Choosing a REALTOR
  • 10 Steps to Prepare for Homeownership
  • How Large a Mortgage Can I Afford?
  • 7 Reasons to Own Your Own Home
  • 5 Common First-Time Homebuyer Mistakes
  • 10 Tips for First-Time Homebuyers
  • 10 Things to Take the Trauma Out of Home Buying
  • How High Tech Is Your Home?
  • Hidden Home Defects to Watch For
  • 10 Questions to Ask a Home Inspector
  • What Your Home Inspection Should Cover
  • How Comprehensive Is Your Home Warranty?
  • 5 Property Tax Questions You Need to Ask
  • 10 Questions to Ask Your Condo Board
  • 10 Questions to Ask Your Lender
  • 10 Things a Lender Needs From You
  • 6 Creative Ways to Afford a Home
  • Choices That Will Affect Your Loan
  • 5 Things to Understand About Homeowners Insurance
  • 10 Ways to Lower Your Homeowners Insurance Costs
  • 5 Things to Understand About Title Insurance
  • What Not to Overlook on a Final Walk-through
  • Common Closing Costs for Buyers
  • What to Keep From Your Closing
  • Tips for Packing Like a Pro