Top 5 Little-Known Real Estate Facts Every Austin Homebuyer Should Know

Buying a home in Austin? You probably know the basics—get pre-approved, check your credit score, and find a great Realtor. But did you know that your property taxes could skyrocket after closing? Or that an HOA could foreclose on your home for unpaid dues? Before you make the biggest purchase of your life, here are five insider real estate facts every Austin homebuyer should know.

1. Your Mortgage Rate Isn’t Just About Your Credit Score

Most homebuyers assume that if they have a high credit score, they’ll get the best mortgage rate—but that’s only part of the equation. Lenders in Austin also factor in:

• Loan type: FHA and VA loans often have lower rates but come with extra fees.

• Down payment size: Putting down more than 20% can help lower your rate.

• Loan size: If your loan exceeds the conforming loan limit ($766,550 in 2024), you’ll need a jumbo loan with stricter qualifications and a higher rate.

• Property type: Condos and multi-family homes often have higher interest rates than single-family homes.

Austin Insider Tip: Always get multiple mortgage quotes from local lenders to find the best deal.

2. Property Taxes in Austin Can Increase Right After You Buy

One of the biggest surprises for Austin homebuyers is how property taxes work. Just because the seller paid a certain amount doesn’t mean you’ll pay the same.

• Travis County reassesses property values after a sale, meaning your tax bill could jump significantly if your home’s new value is higher than before.

• Homestead exemptions don’t kick in immediately—you might pay full taxes for your first year.

• New construction homes often have artificially low tax bills during the first year, based only on land value. Expect a much larger tax bill in year two.

Austin Insider Tip: Before making an offer, check the estimated post-sale property taxes on the Travis County Appraisal District (TCAD) website.

3. A Low Appraisal Can Kill Your Deal—Or Cost You Thousands

Austin’s competitive market often leads buyers to offer above asking price, but that doesn’t mean the lender agrees on the value.

• If the appraisal comes in lower than your contract price, you have to cover the gap in cash, renegotiate, or risk losing the home.

• Some buyers include an appraisal gap clause in their offer, stating they’ll cover a shortfall (e.g., up to $10K above appraised value).

• You can challenge an appraisal by providing better comparable sales (comps), but success is rare once the appraisal is submitted.

Austin Insider Tip: If you’re bidding over asking price, make sure you have extra cash reserves to cover a potential appraisal gap.

4. HOAs Can Have More Power Than You Think

Homeowners Associations (HOAs) are common in Austin’s master-planned communities and condo buildings, but many buyers don’t realize just how much control they have.

• Some HOAs ban short-term rentals (Airbnb, VRBO)—which can affect your investment potential.

• If you fall behind on HOA dues, they can place a lien on your home or even foreclose.

• Special assessments can be charged for unexpected expenses, like road repairs or roof replacements in a condo building.

• Some HOAs even restrict things like exterior paint colors, landscaping, and parking rules.

Austin Insider Tip: Always request and read the HOA’s Covenants, Conditions, and Restrictions (CC&Rs) before making an offer.

5. Understanding the Title Process Can Give You an Advantage

The title process is a crucial step in buying a home, ensuring that you receive clear and undisputed ownership of the property. A professional title company will:

• Conduct a thorough title search to ensure there are no existing claims or liens.

• Provide title insurance, which protects you and the lender from future disputes.

• Handle the closing process by preparing legal documents and managing funds.

Ensuring a clean title gives you peace of mind and protects your investment. A knowledgeable Realtor and a trusted title company can help navigate this process smoothly.

Austin Insider Tip: Choose a reputable title company and review all title documents before closing to ensure a hassle-free transaction.

Final Thoughts

Buying a home in Austin is an exciting step, but being aware of these hidden pitfalls can save you thousands and prevent major headaches down the road. If you’re looking for expert guidance on navigating Austin’s real estate market, let’s connect!

📩 Ready to start your home search? Contact us today!

~Trigaci Stiles Group