How to Be a Competitive First-Time Home Buyer in Austin's Hot Market

Austin has been a growing city for many years. Now, this quirky little city known for punching above its cultural weight is shedding its “Keep Austin Weird” vibe as it takes its place among America’s most vibrant centers of dynamic innovation.

Today, it’s home to more than UT Austin, an exceptional culinary landscape, and a music scene upon which its hip reputation was built. Austin is now one of the largest tech hubs outside of Silicon Valley. Tech companies have been relocating to Austin in droves because of the favorable business climate and well-educated, young, and affordable workforce.

National Mortgage News listed Austin as the number 1 hottest housing market in the country in 2021. First-time buyers are naturally feeling a little bit squeezed as supply dropped to an all-time low and prices rose accordingly in 2021 in this super-hot market.

Home price growth is extraordinary, so first-time homebuyers might be priced out if they aren't strategic. We’ve already given you steps to take before making an offer, including looking for deals, saving as much as possible for the deposit, and being an enthusiastic negotiator.

Now, we’re going to help you understand what goes into making an offer in the city of Austin.

Ways to Be a Competitive First-Time Buyer

Get prequalified or preapproved

Prequalification is different from pre-approval. Prequalification is a fast, free, and easy way to get a general idea of your projected home loan amount.

Since it’s only a preliminary check, prequalification doesn’t have an impact on your credit score. You provide some basic facts to give a quick sketch of your financial situation. As a result, you’ll get an idea of available loans and an estimate of your monthly payments. Prequalification is mostly for the benefit of the potential borrower, so there’s no check on accuracy. There’s no reason to exaggerate or hide anything; doing so will prevent you from having a realistic projection of what you can expect to pay.

If you get preapproved for a mortgage, however, you’ll likely get it from a single lender after you give them actual verified information about yourself. That information includes things such as your credit history, credit score, proof of employment, tax documents, and debt-to-income ratio.

The advantage of a preapproved mortgage is that it shows realtors that you are serious about your intention to purchase a home. You know (and can show them) your ability to pay a certain amount, as well as the fact that a lender trusts you enough to lend to you.

Work with a lender you can trust

Don’t take chances when it comes to getting a home loan. The whole process is more than simply living in the home after you select and pay the closing costs. You’re investing in your financial future and the future of your family.

Avoid surprises by going with a lender you can trust, a lender that you know–and that knows you.

Greater Texas Credit Union is community-based and owned by its members. We live and work where you live and work, so what’s in your best interest is in our best interest.

Traditional commercial banks are profit-driven. We pass our wealth along to our members in the form of lower interest rates and higher dividends. Credit unions are invested in your success, both personal and financial.

Why be an anonymous member number or name on a spreadsheet when you can sit down and talk with someone who wants to get to know you and understand your goals?

We’ll not only help you come up with a strategy to reach important financial milestones, but we also offer homebuyer education and personal coaching and counseling.

Work with an experienced agent

When the housing market is heating up, time is of the essence. Once you’ve found a lender you prefer, you’ll want to find an agent who knows the market and is committed to sharing timely, up-to-the-minute information on new homes hitting the market.

Put in a clean/attractive offer

When you’re ready to put in an offer, avoid contingencies. Your offer shouldn’t depend on external factors when you’re not negotiating from a position of strength.

Sellers don’t have the time–or any real reason–to wait for you to sell your house before you can purchase a new one from them. There’s someone who’s just as eager as you (if not more) in line right behind you.

Put in your offer quickly

Prepared to put in an offer without any contingencies? Don’t wait. Do it now!

Consider looking outside of the metro area for affordable housing options

Sure, everyone wants to live in Downtown, Mueller or Tarrytown. But sometimes, looking in communities outside of the metro area helps your dollar stretch further.

If you’re comfortable living a little way outside of the city itself and are alright with a commute, try Round Rock, Hutto, or Georgetown. Each community has a lot to offer in the way of amenities, whether it’s shopping and entertainment in Round Rock or Georgetown’s charming and historic town center.

Be willing to renovate

Everyone imagines moving into a brand new house. But why limit yourself? With some hard work and creativity, a home that doesn’t instantly wow you has potential for customization that can make it perfect for you! Be ready to turn a “good enough” home into your dream home.

Consider writing a (heartfelt) appeals letter to the seller

Consider crafting an offer letter that tells a seller who you are and what makes you unique. Make your case for why you’re an ideal buyer for their home.

Get specific with things you’ve noticed and appreciate about the home, praising them for their hard work and attention to detail. Tell them what has particularly appealed to you.

Be honest without oversharing. Explain your reasons for wanting to buy the home in down-to-earth, relatable terms. It can be a little uncomfortable, but relax. No one expects (nor should you supply) overly personal, distressing, or embarrassing details.

Look into first-time home buyer programs and government-backed mortgages

Researching credits, payment assistance, and other resources and tools available to first-time buyers can help remove some anxiety. Additionally, research government-backed mortgages, such as VA and FHA loans, and identify participating lenders.

Be flexible

Sometimes, you may be required to rent a house back to the seller or otherwise accommodate their needs. If you’re truly set on owning a home in the Austin area, however, a little flexibility can make that goal a reality.

Be a Strong First-Time Home Buyer in Austin

If you’re ready to embark on the home-buying process in the current, high-octane housing market, it’s time to find a mortgage lender. Learn more about the benefits of getting your loan through a credit union!

Why Get a Mortgage Loan From a Credit Union?