Love Thy Neighbor

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The number one reason why sellers do not want to have an open house is because they don’t want neighbors to come.  Yes, sometimes the neighbors you love, like or could live without, will transition into ‘nosey’ neighbor status when its time to sell your home.  All of their curiosities about what color you painted the living room, or what room that window looks out from, can all be answered at an open house.   While I do appreciate and respect a seller’s desire for privacy, let me point out the benefit of neighbors visiting the open house.

There is no greater billboard for the positive features of your neighborhood,  than your neighbor.  Your neighbors have the inside scoop on what it’s really like to live in your community.  They know how long it takes to commute to a variety of areas, about local hot spots, even what corner the bus picks the kids up for school. 
The best part about neighbors coming is that they generally like the seller’s house better than their own.  Either the storage is better, or the floorplan in the kitchen makes more sense, what ever the reason — it’s always positive and they are always eager to share their opinions with potential buyers.
There is no greater testimonial for a potential buyer, then hearing how happy neighbors love their community.  So, love thy neighbor.  They are your greatest cheerleaders. Remember, they have relatives, co-workers and friends and have the potential to bring you a great buyer.

Step 1: Call a Lender

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Tony Robbins is a pretty well known motivational speaker.  One of the things he is known for, are his Personal Power® seminars, which are designed to motivate and reorganize your life.  I had one of his first tapes years ago.  The first lesson was about making a list of the things you need to get done or want to do.  The advice he gave, which has always stuck with me, is to do what you have the least desire to do first. 

I have said this before, and you will hear me say it again, looking at homes is the fun part, so it’s the item on the list buyers want to do first.  Unfortunately, it should be last on your list.  The first thing you need to do is contact a lender.  Nowadays, it’s not just about what you get paid, but how you get paid. If you get a commission based salary, qualifying for a loan is different.  Your assets, debt and credit score are also significant factors in determining how much of a house you can afford.

I understand, talking to a lender is work and it takes time.  Look at it as a way of self assessing whether you really want to buy at house.  If it all seems like more trouble than its worth – you are not ready. If it seems logical to get a good idea of what you can afford, then you are ready to buy a house.  Looking at homes takes time. Buying a home takes even more.  Spending time looking at things you can afford will save you time, not to mention, unnecessary disappointment in the end.

Austin Market Spotlights

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I have selected some random subdivisions, zip codes in Austin and cities surrounding it, to provide some current real estate market data.  If there is an area or neighborhood you would like spotlighted -please let me know.

Overall, the Austin market is strong.  Areas averaging 3 months or less are considered to be seller’s markets.  Four to six months are considered neutral markets.  Six months or more time on the market is considered to be buyer’s markets.  The exceptions to this are:   luxury properties over $800,000, because there are less buyers and new construction where the projects are actively marketed before or during building.

Austin Condominiums

78704 Condos

Number of Active Condos on the Market:  113

Average Days on Market:  138

(new construction projects make the average days high)

Median Home Price:  $ 275,000

Downtown Condos

Number of Active Condos on the Market:  151

Average Days on Market:  127

Median Home Price:  $ 349,500

Austin Single Family Homes

Circle C Ranch

Number of Active Homes on the Market:  33

Average Days on Market:  67

Median Home Price:  $ 314,900

Travis Heights

Number of Active Homes on the Market:  15

Average Days on Market:  115

Median Home Price:   $ 499,000

City of West Lake Hills

Number of Active Houses on the Market:  29

Average Days on Market:  136

Median Home Price:    $1,220,000

Shady Hollow

Number of Active Houses on the Market:  26

Average Days on Market:  108

Median Home Price:    $284,450

Cat Mountain

Number of Active Houses on the Market:  21

Average Days on Market:  134

Median Home Price:    $520,000

Barton Creek West

Number of Active Houses on the Market:  8

Average Days on Market:  58

Median Home Price:    $562,363

Austin City Limits Music Festival sells Austin to future homeowners

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The Austin City Limits Music Festival is an event for all of Austin, not just music lovers. Now in its nineth year, it has been reported that ACL will generate over $80 million for the city, of which $51 million will come from visitors.  Austin will host an average of 65,000 guests per day, most if not all; will be visiting Zilker Park where the event is held.  Those visitors will be staying in hotels, dining out, shopping and going to nightclubs, taking in everything Austin has to offer.

Real Estate sales are always interesting this weekend.  People often get sold on Austin this weekend, which generates home sales in the future when visitors ultimately decide to call it home.  Serious buyers will take a break from the music and will be shopping, simply because time is of the essence.  The Barton Hills, Zilker, SoCo, City of West Lake Hills and downtown, Austin areas will take center stage in terms of real estate, as visitors drive around exploring the shops and eateries thinking about what it would be like to actually live in the area, as they pass a house for sale.

Will it be a big open house weekend?  No.  Again, this is a weekend for serious buyers, but it doesn’t mean it isn’t a big real estate weekend.  The Austin City Limits Music Festival helps sell Austin to future buyers, who will decide to stop visiting and one day call it home.

Keeping Reality and Real Estate ‘Real’

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HGTV is powerful.  I cannot even begin to tell you how many homeowners I speak to who got an idea to attempt a do-it-yourself project as a result of watching a home makeover show.  If you are chuckling on the inside, it may be because you are one of them.  I use the word ‘attempt’, because while these shows inspire and educate, they also tend to make projects seem simpler than they are.  Remember, it’s an 8 hour project shown in a half and hour.  These shows have the power to edit and often have a team completing the handiwork behind the scenes. It’s a reality show, just like any other.

I laugh on the inside and try not to show my angst on the outside when I go on a listing appointment with those who lost their drive on a remodel.  The results range from unfinished faux painted walls, tile put in place that was never grouted and crown molding that doesn’t completely go around the ceiling.  All of these unfinished projects are going to affect the sales price of your home.  It is easier to sell a dated home that is fully functioning and completed, than a home that seems to stop mid sentence. 

To a buyer, the project needs to be finished.  I often have to change the perception of the seller, to see these things with buyers’ eyes, because after a while the seller doesn’t see the projects anymore.  They have been living with them for so long; they just tend to blend into the background.

Many home supply stores offer classes on do-it-yourself projects.  I often recommend someone take one before making a decision to start a project.  We are all good at something, but certainly not good at everything.  Have a reality check with yourself when you are watching those reality shows. Get a real education on what’s involved with a do-it-yourself project, before you begin one.

Buying Power – By the Numbers

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School is back which adds to a little more traffic, but also tends to re-focus people overall as we move out of vacation mood and settle into the daily grind. What am I seeing out there? Interest rates are in the 4’s, which haven’t been this low in decades.

Low interest rates give people more buying power.

For example, a $200,000, 30 year fixed rate loan at 4% will be $954.83 a month, while the same loan at 6% will be $1,199.10. Not only is your monthly payment lower, but your total debt-to-income ratio is lower too. In other words, you may qualify for a higher loan amount, than you normally would at 6%. People are taking advantage of this in 2 ways, by re-financing their existing loans or selling their existing homes and moving up.
 
Understand, re-financing costs money, so while you can often add some of your closing costs into the new loan — it still costs something because you are adding to the principle. If you don’t see yourself living in the house for 3 years or more, if may not be worth it. If you are saving $100 a month because you received a lower interest rate, but is costs $3,000 to close — are you really saving any money if you move in 2 years?

I am starting to see slightly longer days to close as a result of the lower interest rates. Although purchases tend to take priority with lenders, re-fi’s still add to the amount of work that needs to be done. I am starting see lenders ask for 40 days, when it normally takes 30 to close.

Pride of Ownership doesn’t have a Price Tag

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Pride of ownership does not come at a price point.  Homes can be found that are either cared for or neglected, whether you spend $150,000 or 1 million.  Just because you are willing spend more money, doesn’t guarantee a home in better condition.  People have relationships with their homes (not unlike how they relate to other people).  If a problem arises, some choose to ignore it, while others attack it head on.  There is often a reality check for the owner, when it comes time to sell, when the problems can’t be ignored anymore.

Sellers often realize that what hasn’t been repaired or replaced, will ultimately cost them in the end.  Money makes things go away. Owners think they are simply saving money by ignoring foundation problems, roof repair or whatever else may be deficient.  In realty though, they are simply differing the payment to the sale.  The home is worth less to a buyer and will take longer to sell when systems are in need of repair or replacement.