The Austin, TX, real estate market has a positive outlook going into 2019. According to Zillow, the company expects residential homes to attract 2 percent more in 2019. Make that investment is now if you want to buy in this market. While you are at it, these are the things to keep in mind.
It Is a Hot Market
A hot market means that for every property in a good neighborhood, there is more than one buyer showing interest. In such a competitive environment, it is hard to find flip properties. It is also hard to compete with people.
You can either compete with a higher bid or hope the seller finds your offer appealing. Personalizing your proposal in a sellers’ market can land you an excellent residential home without overpaying for it.
If you decide to use financial incentives to motivate the seller, you can put in some earnest money. However, be careful about waiving your contingencies. You can lose the money if you breach the contract.
Property Taxes Are Quite High
The current owners pay significantly less than what the current value of the home attracts thanks to a statewide cap on increments. You will get anything from 1.8 to 3.3 percent. However, the average rate is around 2.3 percent.
Since the city sets property taxes immediately after a residential property changes hands, the only hope that a buyer has is to apply for a homestead exemption. Austin also does not have an income tax, which offers a slight relief.
Know Your Funding Options
Your funding choices can affect your chances in the sellers’ market. The notion that you need 20 percent down to guarantee yourself a chance of landing a residential property is true. However, you don’t have to pay all of it. You can retain some for closing and moving.
An FHA loan requires just 3 percent down. Local lenders will demand more. Sellers may have issues with FHA funding option unless the FHA calls the sellers agent to confirm funding.
Several Natural Hazards Are Becoming Prevalent
The population of Austin Metro area will double in a decade if the current wave continues. This statistic indicates that it is a wise decision to invest in the property market today.
However, a wave of flash floods, shrinking soil, and termites are becoming commonplace. A significant number of residential homes have foundation issues. You have to do your due diligence well before making an offer.
Be Careful About Deed Restrictions and Homeowner Associations
The latter is less cumbersome as the aggrieved parties will need a formal litigation process to enforce things. In HOA, the agreement stays in effect even after a sales process. If the members cannot add a room in the unit, rest assured that that will be in full force.
Different housing units have different rules governing them. It is good to furnish yourself with relevant information before making an offer.
Conclusion
Austin, TX real estate market is currently hot. You must be prepared to put in extra work to win. You must also understand the tax, notable natural hazards, and funding options. Further, understand possible residential restrictions.