Real Estate Information Archive

Likely you have noticed if you turn on any financial news program and at some point you'll hear the experts extolling the virtues of diversification.

Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth. In fact, this very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don't trend in the same direction, have triggered a buyer's market in Austin and many other areas of the country.

For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat. While some seasoned real estate investors make it look easy, to be successful, we suggest beginners should follow some basic principles.

Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment's notice. It could take days or months to sell a property, depending on the strength of the market in a particular region. We are happy to share our market information and analysis to get and keep you informed.

Consider cash flow. You'll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.  Investment real estate is not an emotional purchase.  It is a spread sheet purchase. In addition budget and be ready to make fixes quickly and respond to the renter's needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.

Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.

Inquire at the Austin (or your local) Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space. Read and follow local news online.

Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street. Look closely at schools and easy access to major transportation.

Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask us about the area, its history, and how fast (or slow) properties are moving.

Inspect the home you're considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can't always predict problems, try to set aside some of the rental income reserves for unexpected repairs.

Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up? Walk the neighborhood at different times of the day and on the weekend.  Chat with neighbors.

See your tax advisor for related planning and laws that can affect your investment decisions. Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

Call us.  We are happy to share our views and advance in regards to Real Estate Investing. There is never an obligation.  It is our privilege to serve. 

We notice that often our clients are easily confused and frustrated during the appraisal process when buying or selling a home. To help ease there pain and misunderstanding we direct buyers and seller to the Appraisal Institute tips for  for consumers. The institude is key in providing guidance for homeowners and buyers seeking to ensure their sales are completed in a timely manner.

The Appraisal Institute's tips encourage homeowners and buyers to:

• Understand the role of appraisals.
• Make sure their lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute).
• Accompany the appraiser during the inspection of the property, if possible.
• Request a copy of the appraisal report from the lender.
• Examine the appraisal report and ask questions.
• Appeal the appraisal if appropriate.
• Ask the lender to order a second appraisal by a qualified and designated appraiser.
• File legitimate complaints with appropriate state board or professional appraisal organizations.

According to Appraisal Institute President Joseph C. Magdziarz, MAI, SRA, "Credible opinions of value can help to stabilize the real estate market. Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."

Magdziarz noted recently that normal declines in the real estate market have led to increased caution by lenders. That caution has led to delays in completing some real estate transactions.

"Appraisers today are doing the same thorough, fact-based research and analysis they have always done," Magdziarz said. "Nothing has changed in that regard."

We feel is serves neither the lender nor th consumer to enter into an upside-down mortage scenario and we encourage our clients to become actively involved in the process.

Tony DeLisi, Director of Research for the Austin Chamber of Commerce provides a wealth of information pulled from the 5 year US Census surveys. These reports are based on a summary of the annual American Community Survey. By incorporating the data over the last five years, Tony provides an accurate and up-to-date profile of the Austin Region.  

The article below notes that:

• Household Income: $57,109 for Austin vs. $48,199 for Texas and $51,425 for the US.  24% of Austin area residents earn above $100,000 a year.
• Education: 39% of Austin residents hold a Bachelor’s degree or higher, compared to 25% in Texas and 28% nationally
• In-migration of Educated Workers: High income and education levels in the Austin region and attracting new businesses have been drive by the influx of educated workers from across the state, nation, and world
• Mobility Patterns: Mobility patterns show that only an estimated 77% of residents lived in the same house one year previously, with 13% moving locally within their county, 6% moving from within Texas, 3% coming from out of state, and 1% coming from abroad
• Housing Vacancy: The residential real estate market had only an estimated 8% housing vacancy rate over the 5-year period
• Median Home Value: Heat maps are provided showing the median home value and change in median home value since 2000
• Median Rents: Heat maps are also provided showing the same information for Rents

 Link to article: http://austinchamber.com/LiveWork/Economic/report.html

News from the Austin job markets continue to show promise. Data below is from the Texas Workforce Commission and the US Bureau of Statistics.

• Austin, the 42^nd largest job market, consistently outperforms all other metros.

• Based on state and national numbers, Austin grew 2.3% year-over-year by creating 17,300 jobs in the last 12 months (or 5% of all jobs created in the U.S.)

• For the fifth month in a row, Austin takes first place in a ranking of the 50 largest metros based on the percent increase in payroll jobs over the preceding 12 months.

• Total Austin non-farm jobs peaked in November 2008 with 783,400.  September 2010 total jobs of 771,200 are only 12,200 off of our peak. 

• At our current trend rate, Austin could be back to its peak employment by May 2011

• 22 of the 50 largest Metros are now experiencing positive job growth

• Austin’s 2.3% growth rate compares to 1.0% for Dallas, 0.9% for Fort Worth, 0.7%  for San Antonio and 0.1% for Houston

• Texas jobs have grown 4 months in a row. The state added 166,600 jobs or 1.6% increase. 

• On a seasonally adjusted basis, Austin’s September unemployment rate is also 6.8%, down from 7.0% in August.  Texas’ other major metros seasonally adjusted rates are also each down by two to three points from August. The state’s rate is 8.1%, down from August’s 8.3%.

• Nationally, 321,000 jobs (0.2%) have been added over the last 12 months.  This is the third month of year-over-year growth, following 26 straight months of negative growth.

Sources: Texas Workforce Commission / U.S. Bureau of Labor Statistics

During the fun of the summer months it is easy to overlook basic home maintenance.  Here are some tips to keeping your home in safe condition.

1. Check your heating system including filters, pilot lights and burners. Have the system serviced by a qualified professional. Cleaning and servicing now can save you money later. Learn steps to boost your furnace's efficiency and how to replace your furnace filter.

2. Clean and vacuum dust from vents, baseboard heaters and cold-air returns. Dust build-up in ducts is a major cause of indoor pollutants and can increase incidences of cold-weather illnesses. Consider hiring a pro to clean hard-to-reach ductwork.

3. Paint interior rooms while it's still warm enough to leave windows open. Ditto for shampooing or replacing carpets. Give a fresh start to your interiors just in time for fall and winter parties and family gatherings. Learn painting steps to success -- how to choose the right paint, how to solve paint problems and more.

4. Caulk exterior joints around windows and doors. Caulking helps keep your house weather-tight and lowers heating and cooling bills. It can also help keep insects and other "critters" out of your house. When you caulk before painting, it eliminates edges where the paint may start to peel.

5. Protect your home from uninvited critters. As urban limits expand, more and more homeowners have to contend with wildlife in their yards and houses. Installing grates, securing trash containers, even humane traps may help.

6. Start to put away tools and equipment left outdoors during the summer such as play equipment, lawn mowers, barbecues, gardening tools and hoses. It may be time to winterize your pool, too.

7. It's time to think about the condition of your roof. Be proactive and prevent emergency -- and expensive --repairs. Find out about common trouble spots and how to locate a leak from inside.

8. Next to checking your roof, insulating your home is one of the most important tasks to accomplish before the onslaught of winter. Insulation goes beyond simple weather-stripping and caulking (see #4) and may be a job for professionals. The money and energy you'll save will make the job worth it

9. You insulate and weather-strip and think that you have your home all sealed up for winter. But there are some inconspicuous spots through which heat can escape. Learn how to seal these gaps too.

10. Inspect and clean your storm windows to get them ready for installation. Storm windows can help you save energy during the cold months and are significantly less expensive than putting in new double- or triple-glazed windows.

We have a list of qualified professionals that we trust who can handle super small handyman projects to complete to the studs remodeling.  Email us and we are happy to share our recommendations. Kent@CallKent.com

We have historically found the weeks between now and the end-of-the year holidays are the best ones to find a bargain.

Here are some of their tips for fall buyers and sellers:

Fall Sellers:

• Replace faded summer plants with fall-blooming flowers and add autumn decorations to the home.
• Expect low-ball offers, but don't be offended.  Buyers know the market is in their favor.  Keep the buyer/seller conversation open and be prepared to counter with a reasonable offer based on market values.
• Freshen up listing photos by shooting pictures that make it less obvious that the seasons have changed. Spring foliage looks dated at during the holidays as does holiday decorations in the spring.
• Price the home to sell. A price that is a little lower than the competition may be a winning move.  In today's market buyers do not have much that motivates them to purchase.  Price always does.
• Be willing to show the property and hold open houses whenever potential buyers are ready. Work to their schedule, not yours. 

Fall Buyers:

• Look for motivated sellers who have a reason to move on by the end of the year.  Look for high DOM (days on market) and investigate why so long without a buyer.
• Explore new constructions. Builders are often interested in selling before the new tax year.
• Beware of fall maintenance issues. Consider overflowing gutters and leaf-covered lawns.  Look for dampiness issues and deferred maintenance covered up by fall leaves.  
• Shape offers carefully. Even in this market it is possible to turn sellers off with a too-low bid. Selling can be emotional for a seller.  Appeal to that emotion by letting sellers know you love their home.

According to the Milken Institute on best large metro areas to reside Texas dominated the 2010 rankings, eclipsing even last year’s stellar performance. Lone Star State metros occupied 11 of the top 25 positions among the 200 largest metros in the country and five of the top 10. For the second year running, the same two Texas cities claimed the top two spots, except Killeen–Temple–Fort Hood edged past Austin–Round Rock to take first among the 200 largest metros. Another way to highlight Texas’ dominance is that just two of the state’s 13 metros didn’t make the top 25.

The 2010 top performers (with 2009 rankings) among the 200 largest metros are:

1. Killeen-Temple-Fort Hood, TX (2)
2. Austin-Round Rock, TX (1)
3. Huntsville, AL (8)
4. McAllen-Edinburg-Mission, TX (4)
5. Kennewick-Richland-Pasco, WA (n.a.)
6. Washington-Arlington-Alexandria, DC-VA-MD-WV (25)
7. Raleigh-Cary, NC (10)
8. Anchorage, AK (40)
9. El Paso, TX (14)
10. Houston-Sugar Land-Baytown, TX (5)

Excerpt from the Milken report regarding Austin: “Although employment fell in 2009, Austin’s unemployment rate peaked at 7.3 percent, roughly 3 percentage points less than the national figure. Austin’s relatively low cost of doing business for a leading knowledge-based economy hub, combined with a favorable business climate and access to an educated workforce, makes it a very attractive location to start or expand a business. Austin’s net population increased by 32,000 in 2009, according to the Census Bureau, compared with a peak of 48,000 in 2006. Austin hopes to encourage more high-tech services, recognizing that hardware and chip makers will create fewer jobs in the future.

That said, Samsung intends to add a production line in Austin that will employ 500 workers to make logic chips, demonstrating that Austin remains a key center of U.S. chip manufacturing and will attract new incremental capacity in the future.  On the high-tech service side, one recent success is Apple’s acquisition of Intrinsity Inc., which designed key parts of a chip for Apple’s iPad. Intrinsity had around 100 employees at the time of the acquisition, but it is likely that Apple will make additional investments and add more employees.  Apple already has around 2,500 employees in central Texas. Many other high-tech service firms such as Google and Facebook are adding employees in Austin.”

The Milken Institute is a nonpartisan, independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations in the United States and around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity.

As a 501©(3) public charity for more than 15 years the Milken Institute has done research work with the goal of revitalizing regions and finding new ways to generate capital for people with original ideas.

It has always puzzled me that my most innovative thoughts or ideas I seem to have happen at the oddest times? The reason for this I have discovered is that the brain is free to explore new ideas when not occupied with ongoing "to do" lists.

I recently finished reading Getting Things Done by David Allen.  According to David, if you want to do more creative thinking, then you need to establish a system for organizing your tasks.

Begin by collecting them in an in box. What should you do with the items once you've accumulated them?, the first step is to ask, what is it? Is it actionable? If you can't act on it, then put it into one of three categories: reference, such as a noteworthy article; someday-maybe, which is a task that you might do later; and trash. These filing principles work equally well with manila folders and a circular file, but the examples I am referencing here are using Microsoft Outlook.

Many of us use Outlook's tasks function, but for me often the list has degenerates into an "amorphous blob of undoability". Allen suggests organizing Outlook tasks using categories. For tasks that require no immediate action, but might happen eventually, produce a category called someday-maybe. Create each task in this category with a potential start date and a scheduled reminder. If there are items that should be referenced, you can file them in an appropriate folder on your hard drive or in a file cabinet. Remove trash as soon as you can.

If the item is actionable, you will have to decide on the next step. This step will either be to do it, delegate it, or defer it. If a task can be handled in 2 minutes or less, Allen says simply do it. It will take longer to file and retrieve it later.

If you can delegate a task, do so. Outlook gives you the option of assigning a task to somebody else, setting due dates and priority, and sending the task to a recipient in your contacts list. It will also notify you when the task is reported done. You can file this task in your new Outlook category, waiting for.

If you can't handle a task immediately, Allen suggests deferring it to a category where it can be done. Examples include: @phone, if you have to call a client; @home, if you need to mow the lawn; @office, if you need to prepare a presentation, etc. If a task has to be done at a specific time on a specific day, put it in the Outlook calendar. Don't forget to set reminders.

Of course you will have projects that can't be handled as simply. Any task that involves more than one step should be filed in the task manager under projects. David Allen suggests that on a weekly basis, you should review all tasks listed under projects and ask yourself, "What is the next action?" This will ensure that you continue to make forward progress

Making an offer on a house is complicated and legally binding, no one suggests going into it alone. As experienced real estate brokers wel save you time and keep you from overpaying for your home.

It's the biggest first step you'll ever make—in real estate, anyway. Making an offer on a home makes just about everyone a little nervous, so here's some advice on making the process as smooth as possible.

It's a classic misconception that you can save money on an agent's commission by handling the offer on your own. But our our knowledge and experience can actually save you thousands on a home purchase.

For example, we can provide you a comparative market analysis on listing prices and sales prices for homes in the neighborhood of the one you're planning to purchase. If, for example, homes are selling for 5% less than their listing price, you can reasonably offer 8–10% less than the listing price, leaving yourself room to negotiate.

If the market is slow, you could offer less, or, if it's a seller's market, you could be quickly outbid.

When you've settled on a price, you'll make your offer using a purchase agreement that complies with the laws of Texas. The agreement will include everything from the property's address and the price you're offering to details about who will pay for title insurance and inspections, and any state-required information.

Your offer is a legally binding contract—another good reason to work to have a pro on your side. A mistake here can cost you big.

The seller can accept your offer as is, but that rarely happens. Sellers usually counteroffer by changing or adding to the terms of your offer.  As your real estate broker we will help you understand how the counteroffer affects you, and, if necessary, develop a counteroffer of your own.

You'll be in a strong position to negotiate if you:

• Are a cash buyer.
• Are pre-approved (not pre-qualified) for a mortgage.
• Don't have a house that must be sold before you buy.

Until both sides sign the agreement, either can reject the offer, ending all negotiations.

This is a life-changing business transaction.  As competent, experienced professionals who are experts in the market, we are on your side.  Best of all…at no cost to you.

Since purchasing a home is likely the single largest and most complex investment you’ll ever make, it’s wise to utilize our help as experienced professional real estate brokers to help guide you through this monumental step in your life. 

As a Realtor we have a fiduciary duty to work as an advocate on your behalf, representing your best interests in the real estate purchase transaction. This means helping you find the best house, negotiate the best terms and price, and making sure the property disclosure requirements applicable to your real estate transaction have been met. We have invaluable knowledge about the community and the real estate market.

As Realtors we have access to comprehensive for-sale home listings data via a cooperative arrangement known as the Multiple Listing Service (MLS), which combines and markets virtually all of the for-sale home listings in the Austin/Central Texas area. Additionally, we typically share new listing information with each other. Access to this inside track (pocket listings) provides you the most up-to-date listings information that’s available, and could lead you to a for-sale home that has not yet been posted on the MLS.

We are experienced pros when it comes to negotiating the home purchase terms and price. The home seller’s goal is to get the highest possible price for his property and your goal is to get the lowest possible price for the same property. It’s in your best interest to have an experienced and effective negotiator on your team. Other issues likely to be negotiated can include the property’s condition and needed repairs, the closing date, and the home’s contents that will be included in the purchase price. We ensure that you and the seller reach a compromise that is reasonable and efficient, and results in the best possible deal for you.

Home sellers are required by law to disclose certain types of information about the for- sale home that could impact the property’s appeal and your decision to buy it. The disclosure requirements can be complex and the laws vary by state. We work to ensure the requirements pertinent to your real estate transaction have been met.

As a homebuyer, you have nothing to lose and everything to gain by utilizing our services as experienced professional Realtors because it’s the home seller who pays all of the commissions and fees associated with the home sale/purchase transaction.