Real Estate Information

Even if you don't have kids at home, you might consider sharing this with someone you know who does.

Recently I was surprised to read an article in Newsweek that child identity theft is now one of the fastest-growing segments of ID theft! Children are born without a credit report, so if a child has personally received any of the following then there's a very good chance their ID could easily already have been compromised:

• Credit card offers
• Debt repayment notices
• Letters from the IRS that the Social Security number is a duplicate
• Notification from your health insurer that your child was declined coverage of a procedure because it's already been covered

So how can we protect them?

• Don't give out their birth certificate - even if one is requested by coaches or teachers, make a copy, show it to them, and then put that copy into a sealed envelope for their files.
• Don't let your child have their own Social Security card until they're old enough to understand what it means.
• Keep the amount of information you share about your kids on your social networking sites to a minimum, especially their complete DOB.
• If they have started using social networking themselves, talk to them about the dangers involved in responding to or friending people they don't know.

Every child's credit report should be checked each year when you check your own. It's free, go to www.annualcreditreport.com. In their case, you hope to find nothing!

Typically in a sales contract, the sellers of a home agreed to leave various items. For example; light fixtures, curtain rods, custom blinds, ceiling fans, some appliances and so on.

I final walk thru prior to closing is super important to confirm the buyer truly is receiving the home in the condition agreed.  It is quite a surprise to walk in on moving day all of those things are gone. In addition, the locks on the back door are broken, there is a huge stain on the living room carpet, and the garage opener doesn’t work.

Although this may be extreme, it does happen, which is why it is important to have a final walk thru of the home you are purchasing before the closing. A pre-closing walk thru gives the buyer one last opportunity to verify that they are getting all that was promised in the sales contract. Although buyers still have legal recourse if they discover—even after closing—that the condition of the home is not as it should be, the best time to identify problems is before closing when the seller will be motivated to correct any deficiencies in order to close the transaction.

Typically, a buyer takes possession of a property one to three months after signing the sales agreement. But, a lot can happen before the actual move-in. Appliances and fixtures can break down, and walls, carpets and doors can be damaged during the seller’s move-out. Sometimes the seller will simply have forgotten that he or she has agreed to leave the refrigerator or window coverings with the house. Whatever the reason, problems identified before the closing have the best chance of being remedied.

If possible, schedule the walk thru right before the closing, such as the day before. Ask your real estate professional to attend the inspection with you. What should you be looking for? Using a copy of the sales contract as a checklist, first make sure that all items that should be in place (appliances, built-in furniture, window coverings, fixtures, etc.) are there.

Test each appliance to make sure they work properly. Bring along an electrical clock or radio to test electrical outlets if warranted. Test all electrical switches and the garage door opener, if there is one. Run the garbage disposal and turn on every water faucet, checking under the sinks for leaks. Flush the toilets. Inspect the floors, carpets, walls and doors for recent damage.

If you discover that something is damaged or missing, make a note of it and inform so you and your real estate professional can address the isseu immediately. The seller is usually able to take care of small problems quickly, either by making a needed repair or offering compensation to handle it. And, if there are major problems, the seller can even sign a statement acknowledging the deficiency and agree to correct it. Although preclosing inspections take time and may be inconvenient, they are important and well worth the buyer’s time.

This is the time of year that we receive many calls from home owners in regards to property tax protests. According to the Austin Board of Realtors (ABOR) MLS data, values have dropped in some area 10% or more, but overall the median home price in Central Texas has risen 1.6%. 

Below are some tips to help you prepare for your tax protest.

Why is tax-assessed value different than market value?
The tax-assessed value is what your county believes your home or condo is worth. The county attempts to set their values at a market value. However, they do not evaluate comparables nor do they perform individual market analysis on every home. The county simply values your home according to the area, not the house. Meaning, the value may be too high or too low, depending on the size, location, amenities and condition of the specific home.

How do you determine your market value? You can: contact your Realtor who can provide you with market information, collect information from neighbors who have recently purchased their homes, or contract a company who specializes in assisting with tax assessor valuation protests.

Should you appeal your property valuation?
If the market value on your home is lower than your tax-assessed value, then you should appeal. If the market value is higher, then you should not appeal.

When should you receive your property valuation and how long do you have to appeal?
The County Appraisal Districts began mailing property valuations sometime after April 15th. Most homeowners should have received their valuation on or before May 1st. Homeowners have until May 31st, or 30 days from the date they receive their valuation (whichever is later), to appeal.

How to Appeal Your Property Taxes
If you believe your property valuation is higher than the current market value, you should appeal your taxes. When people don’t appeal, the taxing authority accepts that their value is correct which affects all homeowners in a given area. By appealing the assessed value, we all help keep our real estate taxing authority valuations in line with market value.

1. File your protest using the protest form available from the County Appraisal District. After you have filed, it can take several months for the Travis County Appraisal District to schedule your informal hearing.
2. At the hearing: The purpose of the informal hearing is for you to present your evidence and facts to support your claim that they have over-valued your Austin home or condo.

Present Your Evidence The following information can be helpful to present at the hearing:

• Comparable Market Analysis: A comparable market analysis looks at Market Value and shows recent sales for homes that are similar to yours in size, age, location and type of construction.
• Documentation Regarding Your Home’s Condition: Do you have foundation issues? Plumbing problems? Anything that would adversely affect the Market Value of your home should be documented. Take photographs and bring them with you to your hearing.
• Documentation Regarding Your Home’s Location: Once again, anything that would adversely affect the Market Value of your home is evidence that you can use in your appeal. (ie: if home backs up to a busy street - consider printing off a Google map to document your location.)
• Recently Purchased Homes: If you purchased your home in the last several months, and the purchase price was lower than your appraised value, bring a copy of your settlement statement.

Here are a couple of things to keep in mind for the day of your hearing:

1. The Appraisal District is responsible for setting the appraised value, they have nothing to do with the tax rate.
You are not going to the hearing to protest your tax rate or how much you are paying in taxes, you are only appealing the county’s assessed value of your home.
2. Be polite and courteous.
3. Bring an extra copy of your supporting documentation to leave with the county.

To find out more information about protesting your tax appraisal visit:
Hays County: www.hayscad.com • Travis County: www.traviscad.org • Williamson County: www.wcad.org

“Property Tax - Notice of Protest” Form (can be used for any Texas county)
http://www.window.state.tx.us/taxinfo/taxforms/50-132.pdf

source: Gracy Title 

It’s that time of year.  Questions about termites are starting to surface from our buyer and seller clients.  Especially with our unseasonably warm Texas weather and wet fall weather. Termites (and ants) have started their annual “swarm”.

According to termite inspector Gary Pruett, a swarm happens during the reproductive stage of the insect as they are bursting out of the ground to find a mate and establish a new colony.

When viewing properties as potential buyers we suggest you be aware if you see:

• Dead termites or wings around windows, doors, heating vents, or in bathtubs and sinks - these are certain signs of termite activity.
• Specks or trails of dirt on sheetrock or wall boards, typically on an outside wall, unless the termite infestation is coming from a bath-trap.
• Termite mud tubes on walls located outside or inside the structure. The tubes are either round or flat and usually measure at least 3/16" to 1/4 inch or wider. They look like their name - a tube of mud.

Below are some examples to watch for.

Everyone wants a home of their own – it’s the American dream. Gone are the cranky neighbors and snooping landlords. Being a homeowner gives you the freedom to express yourself and enjoy a great deal of privacy. You can do virtually anything you like with your living space and that includes cranking up your stereo and painting the kitchen walls chartreuse – if that is what you want to do. And if you're like most Americans, a home purchase is the single largest investment you’ll ever make, which someday can be sold in a deal that nets a decent profit. Even though our market is currently a little flat on average over the past 30 years Austin home values annually increased by about 3-4 percent.

But are you truly ready to settle down and take on the financial responsibilities and lifestyle changes that come with homeownership? Or might you be better off renting? We are happy to spend some with you evaluating your near-term goals. Might a better job opportunity send you packing to another city or state? Is your income likely to remain the same, increase or could it decrease and jeopardize your ability to meet your monthly housing costs?

Homeownership is best viewed as a long-term commitment because selling a house can be costly and time-consuming endeavor. The serious homebuyer plans on staying in the house for at least two years – though that's a minimum and a better rule of thumb is at least five-seven years. It's simply not profitable and it could be costly to buy and then sell a home within less than two years. Even if a red-hot housing market allowed you to turn a nice profit, the proceeds could be subject to capital gains taxes.

Making the transition from renting to homeownership is both exciting and challenging. The homeowner is the landlord and that means when a repair is in order, it’s up to you, the homeowner, to either personally fix the problem or hire and oversee a contractor who will remedy the situation. The same goes for maintenance and overall property upkeep.

But for those who’re willing to take on the challenge, the benefits are many. Homeownership is a form of forced savings; mortgage interest and property taxes can be deducted from income taxes. Homeowners can rest easy knowing their housing costs will remain relatively stable (depending on the type of mortgage loan), and long-term owners build valuable equity.

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