Tag: buying investment properties

Two Scenarios After Your Offer Is Accepted On A Home

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If a seller accepted your offer, congratulations! You are one step closer to owning a home or property. What happens now can vary, but I’ll cover the different scenarios below. In this blog, we’ll cover the two most common scenarios and in our next blog post, we’ll cover the scenarios if you or the seller wants to back out.

Scenario 1: You Sign the Purchase Agreement

This scenario is the most natural progression after an offer is accepted. Signing the purchase agreement means the property is under contract since the agreement has been accepted in writing and signed by both parties. It will include the following information:

  • Identification of participating parties (buyer and seller)
  • Legal description of the property
  • Financial details
    • Purchase price
    • Buyer financing
    • Earnest money deposit amount
    • Closing costs and how it will be split between buyer and seller
  • Condition/specifics of the sale
    • Contingencies
    • Items conveyed in the sale (appliances, fixtures, etc.)
  • Timeline
    • Contingency time frame
    • Offer expiration date
    • Closing date
  • Condition of the home
  • Property disclosures
  • Relevant seller concessions, repairs, or credits

After the purchase agreement is signed and the earnest money is deposited, you now have the legal right to purchase the property. The signing and returning of the purchase agreement with the buyer’s earnest money deposit is the process of moving the sale into escrow.

Scenario 2: The Seller Wants to Negotiate

The seller might like your offer but can still negotiate some terms, so it’s in the seller’s favor. The seller can negotiate by submitting a counteroffer. This is why having a good buying agent is crucial, as they are the key to helping you navigate the negotiation process and helping get both parties what they want. Negotiations can include:

  • Increasing the purchase price or down payment
  • Removing/editing contingencies
  • Adjusting the length of closing schedule
  • Modify seller concessions/contingencies
    • Seller repairs or credits
    • Excluding certain items from the sale
    • Property transfer deadline, also called the seller move out date

Once both parties find terms agreeable to them, a purchase agreement will be drafted for both to sign. Then the buyer can move forward with purchasing the property.

If you need help navigating this fast-paced seller’s market, contact me today! I’d love to help you find the home of your dreams this year. Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

What Does A Homebuyer Pay for in Closing Costs in Texas?

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Home prices have begun to stabilize in Austin! According to the Austin Board of REALTORS® July stats, the median home sales price is $480,000. This is $2,364 less than the previous month. If you’re ready to buy as a homeowner or an investor, read what you’re paying for in your closing costs. 

Title Company Fees for Homebuyers in Closing Costs

These are the following fees your title company will charge you and what you are responsible for paying as the homebuyer. 

Escrow Fee

The buyer and seller will pay their own escrow fee to the title company to process the sale’s closing. 

Endorsements

Endorsements are expanded coverage with a title company’s insurance policy to help cover the specific needs of the transaction. Depending on your title company and unique situation, this price can be as low as $30 or as high as hundreds or thousands of dollars. 

Recording Fees

Once the sale is finalized, documents need to be sent to the county. This can range from $120 to $160, but it will depend on the county. 

Appraisal Fee

The buyer typically pays for the appraisal, and it can range from $500 to $700. The lender you choose will most likely want an unbiased third party to appraise the property to ensure the property’s value matches the contract price. 

Credit Report

A buyer will pay the $50 to $75 fee for their credit report to be pulled.

Lender’s Document Preparation 

This $100 to $120 fee is paid to the lender for creating and organizing all the closing documents. 

Escrow Accounts for Homebuyers

If you’re putting down less than 20% for a down payment, the lender will require you to place your taxes and insurance into an escrow account at closing. As a homeowner, you will pay your taxes and monthly insurance to your lender directly using the escrow account. When the taxes and insurance are due, the lender will use the money from the escrow to pay them on your behalf.

Homeowner’s Insurance

Depending on the property and the coverage you choose, the price can range from $900 to $2000 per year. 

Property Taxes

At closing, the seller will pay the buyer a year-to-date prorated amount for taxes. For example, if the closing happens on October 1st, the seller will give the buyer credit for ten months since the seller owned the property for ten months of the year. The buyer is then responsible for paying the difference between the credit and the total tax bill at the end of the year. Your lender will require several months of taxes in the escrow account. 

If you’re ready to buy or invest in Austin area real estate, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com. 

What Fees Are In Closing Costs When Buying Property

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While everyone is most familiar with saving for a down payment when buying property, closing costs are almost just as expensive! Closing costs are the thousands of dollars spent on closing the deal when you purchase assets. They will vary depending on loans, taxes, and fees, but it is equal to about 1 to 4% of your property’s value. I’ll break down some of the fees included in closing costs. 

Loan Origination Fee

The loan origination fee is what lenders charge to set up a loan. This fee will cover courier fees, underwriting fees, appraisal costs, administrative fees, and more. While it will depend on the lender, it will be close to 0.5-1% of the loan amount.

Application Fee

The application fee will cover your application process for a loan, the cost of running a credit report, and additional administrative fees. Again, it will depend on the lender, but it typically ranges from $300-$500. 

Mortgage Broker Fee 

Closing costs are how brokers make their money. This is why it’s crucial to research brokerages when first looking for a lender. It will vary depending on the brokerage you choose but expect it to be between 0.5% and 2.75% of your property’s purchase price. 

Loan Fee

If you have a loan with the Federal Housing Administration, they will charge a premium of 1.75% of the loan amount. 

Property Tax

Property taxes pay for schools, road construction, fire and police departments, and local services. These are included in closing costs, and it can be as little as $500 to as high as $8,000, based on the area and the property. 

Homeowner’s Insurance

Just like buying a car, sometimes lenders will require homeowner’s insurance before closing. Depending on your coverage and premium, it can range from $800 to $1,200.

Title Search Fee

A property title search will uncover all available information about a property and is commonly performed during the closing process. Typically, the title search fee will be between $75-$200 but will fluctuate depending on your property’s value and the company you work with. 

Title Insurance

Title insurance will help you from a financial loss if there are issues in the title, and it can happen at any time during the buying process. It usually costs between a couple of hundred dollars to $2,000. 

 

If you need helping with the costs of buying property this year, contact us so we can get started! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

Property Management Write-Off’s in 2020

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Owning an Austin rental property in 2020 during the pandemic will continue to be both challenging and an opportunity. Economic changes could create unrest for tenants, and shifts in leasing requirements have proven to provide unique hurdles for landlords. When it comes to handling your property, you need to know what you can do about write-offs.

In 2020, you can still deduct mortgage interest and real estate taxes on your rental properties as well as all of the typical operating expenses. Keep careful track of your spending, and make sure to deduct accurately to avoid paying higher taxes than need be. 

Also, consider your depreciation. A tax-savings can be found on residential buildings over the age of 27.5 years, where you can depreciate the cost even when the value is increasing. There are additional depreciation opportunities with commercial buildings over the age of 39 as well as expenditures on nonresidential building roofs, HVAC systems, and alarm and security systems.   

These are the most simple deductions, but there are many other, more complex tax matters to consider. If you are managing properties, be sure to speak with a qualified accountant about your options. If you need a trusted referral, please contact Dona Brown. 

If managing properties in Austin is getting overwhelming, it might be time to try a local, professional Property Manager that can help boost your return on investment. Contact Dona Brown, Talk Property Management, to discuss your needs and options. 512-721-1094.