How to Buy a Home in Austin Without Overpaying
In a city like Austin where the median single-family home price continues to climb year over year while inventory remains relatively flat, buying a home you love and can afford is no small task. The median single-family home price in Austin rose to $367,701 in February, a 12.2 percent increase from the previous year. And while that’s great news for sellers, it puts more of a strain on buyers saving up for the home of their dreams. And the market doesn’t appear to be slowing down. After being named the number one city to live in the U.S. for the second year in a row by U.S. News and World Reports, the housing market is expected to be as competitive as ever over the next few years thanks to an increase in demand and a low number of available homes. For first-time homebuyers, this can be the perfect storm for overpaying for a home.
According to research, first-time home buyers typically spend on average $2,200, or 0.79 percent, more for their homes than experienced buyers. And while that doesn’t seem like a lot of money compared to the overall cost of the house, it can make a big difference in not going over your budget. The reason people are susceptible to overpaying for a home in a popular market is it can be tough to exercise discipline and stick to your budget. Keeping a level head and not being swayed by the frenzy of the market isn’t as easy as it sounds, especially if you’ve been looking for months and are growing impatient. Fortunately, there are ways to make sure you don’t overpay for a home, even in a hot market like Austin.
Avoid Open Houses
Many potential home buyers, especially first-time buyers, are under the impression that the only way you can view a house is by attending as many open houses as possible on a Saturday or Sunday. These showings aren’t mandatory and can lead to overpaying. The purpose of an open house is for the seller to get as many people interested in the property as possible, but the very nature of an open house makes buyers more competitive and more likely to overpay. Hearing a seller drop a line like, "there's another couple here who's interested," can cause even the most frugal of people to up their offer price without thinking twice. Instead of attending open houses, ask for a private showing by speaking with your real estate agent so you can view the home without any distractions or over-the-top stagings that make the home look more desirable.
Patience is a Virtue
Good things come to those who wait and the same can be said for buying a home. Looking for and buying a home is a huge decision and when the process gets compressed into one or two weekends, financial mistakes happen. Ideally, you should spend months looking for a home to avoid overpaying. By staying patient and keeping a level head throughout the search, you can maintain control of the process as opposed to becoming reactive and desperate. Of course, there are some instances such as moving to a new city or going through a divorce that may affect one’s timeline. However, for many homebuyers, staying patient will help you avoid buyers remorse from overpaying or purchasing a home in an area you didn’t research or know anything about.
Part of staying patient and maintaining control is avoiding buyer fatigue. In a competitive market like Austin, potential buyers may spend months looking at homes, make multiple offers, and still come up empty. After a while, the homebuying process can leave you feeling exhausted and dejected, and that can put you at serious risk of overpaying. Whether you’ve lost two or three bidding wars with another buyer or didn’t get an offer in quick enough, buyer fatigue can lead to increasing your budget and overpaying. Consulting with an experienced real estate agent is important during this period. He or she can help you stay calm and also work to find you more options in up and coming areas you may not have considered.
Stay in Control of Your Emotions
As humans, we’re conditioned to put a lot of pressure and emotion into big life decisions and larger purchases. From our first car to our first paycheck, these milestones are signs of growing up and becoming an adult. The same happens when buying a home. It’s an emotional process, and first-time home buyers can especially be susceptible to letting their hearts and not their heads drive their decisions. Falling in love with a home early in the buying process and the excitement of seeing oneself moving in and decorating it can increase the chance of overlooking potential negatives and inevitably overpaying. If you feel yourself becoming attached to a home, make a pros and cons list for different properties, or bring along a parent or friend who can objectively assess the home. In the end, as a homebuyer, you have to be willing to stick to your budget and walk away, even if it hurts.
Contact Domain Realty Today
Buying a home is a big decision that can affect your life for years to come. And while we know it can be an exciting and emotional process, it’s important to do your research, stay patient, and work with an experienced real estate agent who can help you every step of the way. At Domain Realty, our agents excel at helping Austinites find their perfect home. Whether you’re a first-time buyer or looking to upgrade, contact an experienced Austin real estate agent today by calling Domain Realty at (512) 872-4211.