Austin's Best Kept Secrets?

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Here is an inquiry for you, The Readers. What are Austin's best kept secrets? Maybe some of them are not secrets at all--but are your favorite part of living in Austin. Are you ready to give up your secrets?

Here is a little secret that is no secret at all. In Texas, we like to rename things like roads and rivers. Ask someone how to get to Hwy 1 or where the Colorado River runs through Austin and it may take them a few minutes to figure it out. Ask them how to get to MoPac or to Lake Austin and you will get instant recognition. I have lived in Texas for more than 20 years and have witnessed this behavior in other Texas cities--not just Austin. I always figured it was how the "locals" tell how long someone has lived here. Like how someone pronounces "Manor" is a dead-giveaway to whether or not they have given in to the local culture or they are still hanging on to the past. 

Austin is filled with little secrets. Tales of Jack the Ripper and the Moon Light Towers? Do you know "what people say" about these bits of history? It is fascinating and I have written about it here on my blog. Pennybacker bridge? How did that name come about? Do you know?

What bits of Austin secrets do you know? Want to post here and tell us?

Tim's Top 10 Rules of Real Estate in 2012

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Rule 1. Experience is truly measured by the number of closed transactions during the past year--not measured by one's "Years in the business".
A Realtor's experience is only as good as the deals they have done during the past 6-12 months. Just because a Realtor has "been in the business for the past 25 years", does not mean that they have sold more than a few houses a year or that they know and understand this current market.

Rule 2.You won't get a better deal by going directly to the listing agent. If you are buying a home and hope that you can negotiate 3% off of the top by going directly to the listing agent--you should understand why this does not work in Texas. The commission for both Realtors has already been written into the listing agreement between the seller and listing agent and if you go into a transaction unprotected without a Buyer's Agent--the listing agent will actually be "paid twice"--their commission will potentially increase as much as double** when there is no other Realtor involved--regardless of how much is negotiated off of the price of the house.  Unfortunately, when you do this, you get ZERO representation and almost no information that you should be getting if you had a Realtor represent you. An experienced buyer is never as experienced as a Realtor who buys and sells houses all day, every day, 25-30 times a year. A good Buyer's Agent can tell you about things about a particular property--things that the listing agent can't tell, because the listing agent is representing the seller--exclusively. The Texas Real Estate Commission is very clear in explaining the roles of the Buyer's Agent and the Seller's Agent. A Realtor either represents the Buyer or the Seller--never both at the same time for the same property. Red Flags that a Buyer's Agent may see in a home, property or locations are often not what shows up on a Seller's Disclosure about the property. Because the Seller's Agent represents the seller, there are some things that he may believe to be true, but just can't tell you, like unverified potential problems with the foundation, roof or other features of the home. And there may be things about the area that the listing agent can't tell you, but you should know. If there is no certified or professional documentation for the potential concern, it is not something that the seller is likely going to disclose and the listing agent can't tell you what he does not know to be true about undisclosed potential issues like an old roof or AC system. This would not be in his client's best interest. And you are not his client.**

Rule 3. Every Market is different.Every state, city, community and street are different in the business of Real Estate. Generalizations don't work and what is happening in one city or area has nothing to do with what is happening in another. This is true of appreciation, growth, foreclosures, short sales and virtually every aspect of the real estate process. 
Rule 4.Living in a community does not make one the real estate expert.
The "business" of Real Estate is far more than knowing where the community pool is located and which neighbors are the ones that people talk about. Everyone can figure out the community map and local "gossip". Having an expert perspective on a community requires real-time experience and an understanding of the local real estate business.
Rule 5.Building or buying new requires just as much experience.
New homes are a unique corner of the Real Estate Market and your Realtor should be well versed in all the normal aspects of Real Estate (community, comps, growth, schools, etc), and the Realtor should understand Time to Market appreciation of new communities, Construction, and when a new home builder is most likely to negotiate on a particular house and to what degree. It's a whole different ball game and the strategies are different out of necessity. 
Rule 6. Every deal is unique.
Having as much information as possible on the history of a home, the seller and what is going on around a specific property is critical to strategic negotiations. Since Texas is a "Non-Disclosure State", published public information is limited to the guesstimates that the county uses to determine tax value in a zip code, not actual sold sales data from the MLS. The county does not have access to MLS sold data and brokers are prohibited from publishing this data publicly.

Rule 7. Buyers determine Market Value for a home--not the Listing Agent. A Realtor that loves your home and is excited about your property will not affect either market value or the appraised value of the home. Buyers and their agents are smart. Pricing a home above market value only prolongs the inevitable re-pricing game.
Rule 8.The Listing Agent does not sell your home.
A robust listing of a home is a function of Marketing and Online Advertising--not Salesmanship. Listing Agents almost never bring "the buyer" to your home and the Listing Agent and their brokerage will almost never be the one that sells your home--no matter how good they feel they are at "selling". The internet has changed this dimension of the business forever.
Rule 9.An experienced Realtor should always know more.More about the history of the house, community and area. More about what has sold during the past 6-12 months. More about what is selling in other areas of town and why. More about financial alternatives, reputable inspectors, the contract documents, title and all aspects of the end-to-end Real Estate contracting process. Your Realtor should be a business person who represents your best interests in a Real Estate transaction. Ask him lots of questions. Lean on him. Find out what he knows that you should know before you buy your next house.
Rule 10.See Rule Number 9.




Disclaimers:
*I am not a real estate attorney and nothing written here should be construed as legal advise or legal counsel. If you have legal questions about any real estate transaction or property, you should seek the advise of a Texas real estate attorney.
**When speaking of commissions and fees, the actual commission rates that a listing agent has contractually negotiated with a seller to sell his/her property is negotiable at the time of the agreement to list the property for sale. There are no set amounts that sellers and listing agent must adhere to when a property is listed for sale.

How To Guide: Listing, Pricing and Selling Your Home in Austin, Texas

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Q1: What is the most significant challenge to getting my house sold? A: Pricing your home to market value. Yes, I know it seems obvious, but pricing a house at it's competitive market value is one of the biggest advantages that you can have over sellers who are priced above market value. Even in a Seller's Advantaged Market--pricing a home above market value means you will likely not get offers right away and you will be disappointed with the offers that are presented on your home when they do come in.
Q2: What is the second biggest challenge to getting my house sold? A: Curb appeal and first impressions inside the house. Buyers want "move in ready" homes these days. Typically only investors are willing to make significant changes to a home and investors don't like paying "move in ready" prices.
  Q3: How do Buyers find out about my listing?A: Online. Very few buyers will find out about your listing in any other way. It is what you are doing right now and it is what buyers do to find a home. Having the very best online presence and online marketing is critical to getting your home seen and sold.   
Q4: How many Open Houses should I have?A: One or possibly none. In this day and age Open Houses are not a strong vehicle to sell your house. When a buyer can see dozens of homes online in less than an hour, homes that fit the size, price and features of their search, why would they drive through communities looking for open house signs to see one house that probably meets very few of their specific needs? The truth is, Realtors conduct open houses to meet neighbors and get new listings. It is another one of those little industry secrets that made me want to start this blog in the first place ("Real Estate Secrets"). 
Q5: Does the Listing Agent sell my home?A: The Listing Agent's job is not "Salesman", but is tasked with role of marketing your home. The Buyers Agent is the Realtor who works directly with potential buyers to find and "sell" your home. The best thing that a Listing Agent can do to "sell" his client's listings is to provide good pricing advice, staging advice, full listing and online marketing for his clients. When an offer comes in--the Listing agent is your trusted adviser, coach and negotiator--but this part of the process does not start until buyers start crossing your threshold. My advice: Hire a Realtor with strong marketing credentials--not an old-school "pitch-man" to sell your house. The Listing Agent seldom talks to buyers, so having a good pitch-face won't help.
Q6: Should I hire a Professional Stager?A:  Yes. Ask your Realtor who he recommends. Every Realtor should have industry professionals that they know, trust and recommend--including a great Stager. Of course, an experienced listing agent may also have some staging experience, but a professional stagger is hard to match.

Q7: What about the competition?A: Know what is going on around you. Similar priced homes with similar features and size will bring more attention to your listing--if you do everything else (above) correctly. Like any other business, competition while you are listing does matter.

Q8: How important are the listing details?A: Critical. We live in a digital age where information is the key to everything. A MLS listing is a digital database with information about your property for sale. Missing pieces of information mean that the person who was looking for your home will not be able to find it because the database did not have enough information to point that buyer to your home. Database data is one business case where more is almost always better and your listing agent needs to fill out every available field of information.

Q9: How important are photographs?A: Critical. Photos need to depict the home and property as it is. Extreme wide angle lens and missing photos will only lead to buyer disappointment and Realtors may boycott your listing. It is a common misconception that making a house look better in photos than real life will help you sell faster. My recommendation--get as many photos as possible and make sure you post as many photos as the MLS will allow (in Austin today that number is 25).
Q10: What about selling FSBO?A: My professional and personal opinion is that while FSBO sellers were a fad in certain Seller's Markets where and when buyer traffic was on Auto-Pilot, I think FSBO homes sales have faded into the shadows and the published statistics seem to support this belief. My own personal experience with FSBO marketing tells me that it is expensive (you pay hundreds of dollars whether you sell your home or not), has no built-in marketing, and has no real coaching to help you sell your home (seminar style--one size fits all advice). Today's attempt to sell FSBO learn the lessons of real estate the hard way--with their own time and money.
In Summary.Price to market. Make sure your home shows better than anything around you. Make sure you have the best possible online marketing presence and database coverage. Make the photographs count. Put the best Realtor you know on your team. And if you don't have a trusted Real Estate professional, call me--I will be happy to help you.

Is it a Lake or a River under the 360 Pennybacker Bridge?

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One of the ways the locals know that you are from Austin (or not) is by the way you talk. No surprise there, but the thing that you may not expect is that Texans (even Austinites) listen to what you say, not how you say it.

If you are crossing Austin's iconic 360 Pennybacker Bridge and you say "Look at those people skiing on the river..." the locals know that you are just visiting or you just arrived in Austin. After you have been in Austin for a short while you will discover that the locals never refer to the Colorado River as a river. Lake Austin. Plain and simple. Yes, it may look like a river, but that does not matter. It is one of our landmark lakes.

The locals refer to the dammed bodies of water in Austin as lakes. Lake Travis. Lake Austin. Town Lake. If you tell someone that you want a home with a view of the river, you might end up looking at houses in San Marcos. At very least, you are going to be asked for clarification as to what river you might be asking about. And for goodness sakes, don't call it the Colorado River. No one in Austin knows where the Colorado River is located! In Austin we believe that the river is a place that has no near by dams--like the Guadalupe or Rio Grande. Lake Austin is...well...a beautiful city side lake.

This secret is brought to you by the Austin Committee on Local Compliance. Sometimes it is easier to just go with the flow than to re-educate 1.8M people.

Cash is King -- Or Is it?

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Here is a common misconception that you hear every day: "CASH IS KING". Cash is commonly thought to give a buyer a position of leverage with a seller. Unfortunately, cash is only an enticement to sellers when lenders are not giving loans. Here is the simple reason why--All deals are "cash" to the seller at closing. No exceptions. So, when presented with a good offer from one buyer vs a cash offer from another buyer for less money--the seller will always gravitate toward the better offer over the cash offer. At closing, every offer is cash to the seller, so the idea that Cash is King is actually a misconception of real estate. In a good markets, Sellers are only interested in the best offer.

Look at this from the perspective of the seller.

Individual Seller Owned Property. The first realization for the buyer with a seller owned property transaction is that sellers seldom care if you are paying cash or your bank is paying cash to them. Either way, in  about 30 days, they are going to get cash for the house. It is exactly the same money to them at closing. So your offer of 3% less for cash vs. an offer of 3% more coming from a buyer with a bank loan is going to get shut down almost every time. On the other hand, if the buyer offers 20% down payment (cash) vs an offer that has 3.5% down payment, your "20% cash offer" may represent a lower risk to the seller and have greater appeal if it is of similar offer value. But is it worth 1% less on the offer? 2% less? 3% less in offer price? Probably not. Bottom line--cash and bank money are all the same on the day of closing. If the seller can wait a few more days, they may make more with a "non-cash" deal than a "cash deal". Why should the seller settle for less?
Bank Owned Property. The phrase that I hear buyers often say when it comes to bank owned properties is this: "With all the foreclosure homes that banks own today, they should be happy to get any offer and get it off of their books." Well, if this were true, bank properties would be flying off the shelf with investors. Believe me, I invest in property and if this were true, I would be buying homes left and right. In fact, why would anyone buy a house any other way if this were true? Unfortunately, this is seldom even remotely true. When was the last time your bank offered to give you "free money"? Bankers have to be fiscally responsible for the homes that they inventory from foreclosures and they have bottom a "bottom line" that they can afford to lose on any given property. There are ways to be smart when buying bank owned properties, but going in and offering 20-30% below market value in cash to a bank and expecting to have your way with the bank is just not smart. Banks, like sellers, are not impressed with cash and more importantly, Banks and their agents most typically know the market value of their properties. They are not guessing what it is worth. Again, it is all cash to the bank when you close on the property and for every 1% more money that the bank receives on a deal, they can afford to sit on it longer. In fact, a bank can sit on a property for a long time without selling it. Most banks have deep pockets and they are not afraid to wait for a better offer. 

Now for the exceptions. There are some instances where cash is a requirement of the transaction and in these somewhat rare transactions, the buyer who has cash often has the opportunity to buy below the future market value of a property, but these properties have other challenges--such as the need for dramatic rehabilitation and work.  The Rehab Property. This is the property that needs cash. If a property is in need of major repairs such as major foundation repairs, holes in the roof or a substantial structural issue that the seller/bank is unwilling or unable to repair before selling--these properties are often considered to be "unwarrantable". In other words--a bank will not issue a loan on these homes. An unwarrantable home necessitates an all cash transaction--thus reducing the number of potential buyers. In these cases, Cash is King indeed. This does not mean that the seller or bank will give the property away, but it does mean that the property will probably sell below the future market value after the rehabilitation is complete. It is still important to note that banks are not in business to give away money. There are breaking points with all deals.
In the end--Cash is helpful. Having cash to put down on a real estate transaction is not only necessary, but is always important. However, the level of importance it has for a particular transaction or strategy varies. More cash can help lower your interest rate, eliminate the need for Private Mortgage Insurance (PMI) or give you some advantage advantage in a competitive bid of similar value. But Cash is almost never the "Four Aces" hand that allows the buyer to control the transaction and have his/her way with a seller. It is much more complicated than that and Cash is Seldom King.

Increasing The Value of Your Home "On The Cheap" -- Before Selling

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If it has been a while since the last time you bought or sold a home, let me remind you what kind of things are important to buyers--that is to say, what makes an impression on buyers that may help you sell your home faster. While every buyer has different needs for schools, budgets, distance to work, size of lot, 1 story/2 story, community pools and many, many other feature needs that are different for each buyer, there are certain things and certain parts of the house that many, if not most, buyers are interested in seeing. First impressions of these key areas of the house are very important. Like staging, there may be inexpensive things that you can do in your home to "dress up" parts of your house that will help potential buyers see the value. 


Kitchens are important in this day and age to most buyers. Running a close second to kitchens are bath rooms and the master bedroom. One thing that you can do to your kitchen for less than $50-100 is to add nice door knobs and draw pulls to the cabinets. Many cabinets, expensive and in-expensive cabinets alike, do not have hardware knobs and pulls. This leaves the cabinets looking a little bit unfinished. You can fix this problem with a quick trip to the neighborhood home store, where you can buy some simple, nice and matching door pulls. You may even be able to install them yourself if you are handy with patterns and the drill. But if you do it yourself, plan it out carefully, get your spouse's opinion first and proceed carefully and slowly. It is not rocket-science, but you can't do it in your sleep the first time either. So pay attention or hire a handy-man to do it for you.

On the surface, you may think that this kind of practice is deceptive, but that is just not the case at all. Buyers sometimes need help in seeing the value. It can be difficult to picture something with mere words or ideas. This is an idea that is easy to put into play so that your potential buyer does not have to imagine what pulls and knobs would look like--they can see them. 

There are lots of little things you can do to help buyers see the value of your home and to help you sell your home faster and get the most money for your listing. A great Home Stagger (like my home stagger) can help you with getting your home ready to sell.

When you get ready to sell, if you have not found a great Realtor to work with, I would love to talk to you about helping you sell your home. 

Happy 2013 New Year!

my best, 

Tt 

Why Ratios Matter- From a Parent's Point of View

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I remember people telling me that kids don't come with instructions.  Still, I read book after book to find something, some answer as to how I was going to handle being a father.  I learned how to tend my daughter's needs when she was hungry, gassy, sleepy, or just needed a diaper change--pretty straight-forward stuff I thought, no problem, I've got this! I even became quite adept at packing her diaper bag!  As time passed by, we settled into a routine, and knew how to handle the day to day part of raising a child.  We came to love her more and more each day as our lives began to take shape around hers.  Well, those days became years very quickly and now it was time to trust her care to someone else.We looked around feverishly to find the right preschool program for her; the due diligence must be done!  I could pull into the parking lot of some of these places and just know that it wasn't right. I scrutinized every last detail of the school from the first second I walked in, to the second I walked out.  How clean was it?  How long has this teacher been doing this?  Is that what you call a playground?!? What will my child be learning? What do they serve for lunch? Can we get a hair sample from everyone employed at this school?  We exhausted our fair share of teachers before we finally figured out what we really wanted to know.  Will our child be safe?  Were these teachers equipped physically, emotionally, and with all the support that they needed to ensure my child's safety?

Overwhelmingly, it came down to this--how many kids will one teacher be responsible for?  Look, I've hosted a few children's birthday parties, and I've seen my home in the aftermath after just a couple of hours of just trying to keep the damage to a minimum!  That was with the help of my wife, and the few brave parents that didn't bolt out of the door as soon as kid party drop off etiquette allowed it!  I couldn't fathom how any one person could handle that, and I wanted to know exactly how they intended to do it.That's when I learned about the teacher to child ratio.  That became just about the first thing I wanted to know.  As important as it is that my child begin to build a strong foundation in mathematics, literacy, and science, knowing that her teacher had some back up was every bit as critical.  Having as many eyes on my child as possible put me at ease.  I knew full well how she got into everything, I mean, let's face it, my kid was unruly at my house---I'm a man, we have a high threshold when it comes to letting our kids run amok before we actually do something about it!  So, how many teachers would be there to look after my one child wrecking crew now that she has joined forces with a whole battalion of kids with the same appetite for destruction?!?That's exactly why the ratio was a major point of concern, and ultimately, the school that we chose had one that was quite favorable.  After three children, I am now a decorated veteran-parent and I've seen things that would have made a first time parent want to ball up in a corner and cry---and maybe someday we'll get back to those--but for now, let's just hold the fort and make sure our teachers have plenty of reinforcements!

Chris Derrick is a father, an author,
and a blogger. You can find his
musings on life, parenting and living
in the South at:
http://myunregrettablelife.blogspot.com/