Everything You Need to Know to Start the Loan Process When Buying a Home

I hear it constantly... "I can't afford to buy a house.", "I have to save for 2 years until I'm ready to buy.", "The prices are going up so much in Austin, I just have to keep renting.". These statements may be true or they may not be. You won't know until you talk to a lender.

As you know, the first step in the home buying process is to hire an exceptional real estate agent. You need a great team to help you though this process, and your agent is the Team Captain. Read more about the "Top Ten Interview Questions You Should Ask a Real Estate Agent" for guidance on what to ask when you are interviewing an agent.

Great, now that you have hired an amazing BIRDHOME agent, the next step is to talk to a lender. What is the one thing you want to find out in this meeting...how much house can I afford, right??!

First, let's prep. You will need a few documents to begin the loan process. If you are a salaried or hourly earning employee you will need:

  • 2 Years of your most recent Tax Returns & W2's
  • Your last 2 pay stubs
  • Most recent past 2 months of bank statements - all of them! Checking, Savings, IRA, 401K, Stocks
  • Address for your residence the past 2 years
  • Past 2 years employers name and address
  • Photo ID

If you are a self-employed borrower, you will need:

  • 2 Years of your most recent Personal and Business Tax Returns
  • Any 1099 forms for the last 2 years (if applicable)
  • Most recent past 2 months of bank statements - all of them, personal and business! Checking, Savings, IRA, 401K, Stocks
  • Address for your residence the past 2 years
  • Photo ID

Based on this information, the lender will be able to determine the sales price that you are qualified for. More importantly, when you are financing a home, what we are really talking about is the monthly payment not the actual sales price. So lets talk numbers!

Below are examples of 5% down, 10% down, and 20% down on a 30-year fixed rate and 15-year fixed rate loan. These are estimates based on the median home value in Austin as of February 2017 at $330,000. The interest rates* were the current rates as of March 2017. We also assumed $7,500 yearly tax payment and $1,200 for homeowners insurance for the year.

*Rates change daily. I would like to take a moment to call your attention to the fact that interest rates have risen sharply since October of 2016 and are on the rise. With every tiny increase in interest rates, you are losing buying power because your monthly payments will increase but your total sales price will not.

Here is a quick comparioson of these different loan options:

Before we move on the the nitty gritty of each of the loans, I wanted to take a minute to talk about Keller Mortgage, who provided the loan estimates below. Keller Mortgage provides a new type of loan with no lender fees and $1,000 credit to closing costs available exclusively to buyers using a Keller Williams agent or a buyer who is buying a home from a Keller Williams agent. Here's a little bit of information from their website:

A new model allows us to deliver a new type of loan. When we say No Fees*, we mean it. No lender fees! Additionally, we credit $1000 toward 3rd party closing costs.  Just use a Keller Williams agent and finance with us. We offer fantastic rates and a loan that lets you keep more of your money for something more important to you. (*Min loan amount – $150,000. Buyer must qualify for loan.)
Our No lender fee loan + $1000 credit is exclusive to KW transactions. Buyers must be working with a KW agent or submitting an offer on a KW listing. By working with a Keller Williams Realtor, buyer can save thousands upfront and sellers make their home more attractive to the market. If you are not working with a KW Realtor but are submitting an offer on a KW listed property, you are also eligible for this special deal.

When I first heard about Keller Mortgage, I didn't believe it. It sounded too good to be true, so when we decided to buy a house recently, we decided to give it a try. All I can say is "wow"! They walk the walk and talk the talk.

Below are the initial fees worksheets provided by Keller Mortgage for you to dive in deep with all the details on closing costs, how much cash you need at closing and monthly payment breakdown.

I love using Karl's Mortgage Calculator to compare different loan scenarios as well. This allows you to enter different variables than those used in this example so you can tailor it to your situation. They also have an iPhone App as well! 

Ready to get started?! Here is a list of our most trusted lenders:

Debbie Foley | Keller Mortgage
(614) 310-3116 | Dfoley@kellermortgage.com
www.kellermortgage.com

Carson Vaughn Team | Guild Mortgage Company
(512) 439-7555 | carson.vaughn@guildmortgage.net
http://www.guildmortgage.com/officers/cvaughn

Cody Daniel | Capstar Lending
(512) 750-2999 | cody@danielmortgagegroup.com
www.capstarlending.com

Jason Buckley | Cornerstone Home Lending
(512) 771-4365  | Jbuckley@houseloan.com
www.jasonbuckleylending.com

Michelle Alberts | Supreme Lending
(512) 698-8738  | Michelle.Alberts@SupremeLending.com
https://michellealberts.com/


One of the things we love most about aligning our business with Keller Williams is the access to the education that they provide. Gary Keller and Jay Papasan wrote an amazing, best selling book called The ONE Thing.

In this book, Gary Keller has identified that behind every successful person is their ONE Thing. No matter how success is measured, personal or professional, only the ability to dismiss distractions and concentrate on your ONE Thing stands between you and your goals. The ONE Thing is about getting extraordinary results in every situation.

Our ONE Thing is helping you reach your real estate goals. We'd love to share a copy of this book with you, so you can discover your ONE Thing!

Name *
Name
Address *
Address
Phone *
Phone

The Biggest Mistake We Made When Listing Our Own Home

What a wild ride this has been! If you missed our last blog post, we are walking the walk of the talk we talk and purchasing an investment property that we will move into, fix up and pay off in 3 years. Just as a reminder, here is the timeline of our "Building Wealth Through Real Estate" adventure:

  • Tuesday, March 7th - We made an offer to the seller.

  • Sunday, March 12th - We executed the contract for the purchase of the house.

  • Thursday, March 16th - We attend the inspection and I saw the house for the first time.

  • Tuesday, March 21st - Pictures and Videography are taken for our current home, getting ready to go on the market.

  • Wednesday, March 22nd - We go live in the MLS and plan to host an Open House on Thursday evening, Saturday and Sunday afternoons.

  • Friday, March 24th - A buyer made us an offer we couldn't refuse and we signed off! Under contract!

One of my big ahas from the Keller Williams conference we attended in February was "If you want to impress people, talk about your accomplishments. If you want to influence people, talk about your mistakes." - Matt Townsend, The Art of Adding Value

So, let's talk about the biggest mistake we made when we decided to sell our house: WE DIDN'T HIRE A REALTOR TO HELP US!

What do you mean? This is what you do and you're consistently ranked in the top 5% of real estate professionals in Austin. 

KelseyButlerPhotography-Birdhome-17.jpg

True, but there is so much more to it than just the process, marketing, communication, paperwork, prep, staging, negotiation, etc.  - selling a house is emotional.

Home is the second most emotional word in the english language. Can you guess what the first is? (Click here to send me your guess and the first 5 to answer correctly get a prize!) Buyers buy homes, sellers sell houses, so from the very beginning when we sit down with a client to discuss selling, we begin the transition from home to house through our language.

I have always said that our #1 job is to manage emotions despite expectation and have such an incredible appreciation for what we do as real estate professionals, because you can't put a price on helping with the emotional side of a transaction. As a Realtor, we absorb all of the emotion in a transaction on behalf of our client so that they can focus on their daily life and making plans for their upcoming move.

If you notice in the video tour of our house above, I mentioned "home" and "favorite" and "love" more times than I care to count. Naturally, we take pride in the place where we live, laugh, love, entertain and create memories. There is an art to packaging and marketing a house as a commodity in order to get the highest value for the seller.

Moving forward, our goal is to never sell another home, but if we do you can bet that we will be interviewing real estate agents to list our house. Read our blog post on the "Top Ten Interview Questions You Should Ask a Real Estate Agent" for guidance on what to ask when you are interviewing an agent.

As I mentioned in my previous post, we would like to share our resources that have helped us on this journey - The Total Money Makeover by Dave Ramsey & The Millionaire Real Estate Investor by Gary Keller.

I'd like a copy of:
Name *
Name
Phone *
Phone
Address *
Address

P.S. I think I found my first gray hair 

Our Personal Journey to Building Wealth Through Real Estate Investing

When Patrick and I got married our net worth was negative over a hundred thousand dollars. Student loan debt, credit cards, unpaid taxes and million tiny poor decisions contributed to that. Fast forward to now, and we have powered our way almost back to zero debt, a positive number in our net worth with 2 fully paid off cars, 2 investment properties and a beautiful home.

Now it's time to walk the walk of the talk we talk. When we got married, we made a promise to each other that we would never have a car payment. Sure enough, shortly after we got married, we needed a new car. So, what did we do? We literally bought a grandma car. It was our friend’s grandmother’s 2001 Cadillac Catera that she had been given upon graduation from law school. We paid her and her huband $3000 cash for the car (her husband requested that to be in $100s so he could "make it rain") and Patrick drove it for 18 months.

Fast forward to today. We started our own business a little over a year ago and have a beautiful, amazing daughter. Things sure do change when you have kids, right? We have decided to embark on our next family promise - never having a mortgage payment ever again. What the what?!?

Total financial freedom can mean many things to many different people. For us, it means to never have to make a business decision based on our personal finances. It means unlimited opportunities for the future and leverage.

When your why is big enough, the how will come. Ok, so how? We are going to start by selling our house. We have had the amazing opportunity to purchase another investment property way under market value and have set a goal to pay it off in 3 years. 36 months. We will take the proceeds from the sale and use part to pay off our last remaining debt, part for the down payment and a small amount for paint, flooring and a few small updates.

The first home we purchased was in 2012 for $160,000 (current market value today is $275,00). We kept that home as a rental and moved to our current home at the end of 2014 which we paid $340,000 and will be putting on the marker for $429,000. In 2015, we had the opportunity to purchase another investment property in our neighborhood for $300,000 (current market value today is $400,000). We did a 1031 exchange with an investment property we owned up north for that purchase. It was one of those "right place at the right time" while walking the dog late one night. As you can see, all of these properties are within less than 2 miles.

At this point we owned 3 properties, but our 2 investment properties are just breaking even. We're in it for the long term, but we started flirting with an uneasy feeling of not having enough saved when inevitably something would go wrong. Let's not also forget that we took the leap to start our own real estate company at the end of 2015.

Our original plan was to move back into our first investment property - the one we moved from in 2014. We owed the least on that house, so it would be the easiest to pay off. One catch, we have a unicorn of a tenant. For anyone who owns investment properties, you know that it's worth doing whatever it takes to keep them.

Since forming and maintaining relationships in our old neighborhood, we have had a "coming soon listing" across the street on Kandy for 4 months. The seller has been trying to get the house ready to go on the market in that time. So, last Tuesday (3/7) I called Patrick and said "Let's make him an offer". It's a win-win. He doesn't have the hassle of going on the market and we get to have another future investment property. He said "Are you sure? Don't you want to see it?" to which I replied "No, it will distract from the goal." So we signed the paper work on Sunday (3/12) and then did our inspection and my first walk through on Thursday (3/16). I will be sharing full financial details once we are closed.

Here is a peek inside the house:

We are so excited to share this journey to debt freedom. Our hope is to set an example of making a sacrifice in the short term for long term future gains. Want to know more? We are so excited to share our message that we want to send you a free gift of the resources we used on this journey - The Total Money Makeover by Dave Ramsey & The Millionaire Real Estate Investor by Gary Keller.

I'd like a copy of:
Name *
Name
Phone *
Phone
Address *
Address

PS: We're going to paint the front door pink!

Austin Real Estate in 2017: Predictions, Educated Guesses and Random Fun Facts

GetMedia.jpeg

Everyone wants to know what will happen with our amazing real estate market in 2017.

Many are asking about the slowdown in growth and fewer job openings reported in recent months. In all honesty, is it really feasible for one city continue to grow by 4% per year?

Others have asked about the National trends happening right now. With a change in direction in Washington and a slowdown in some real estate markets around the country, can Austin real estate continue going up in value?

Finally, there are some in Austin that are just ready for a breather. They are ready for our market to take a break and at least feel like they can afford to live here again. I understand this sentiment more than any of the others. One, because we have started to feel the economic pinch. And two, because the pace at which we have to work to keep up with the real estate market is intense.

Supply and Demand

There is only one factor that I have learned to pay attention to in real estate and it is very simple. Supply and Demand dictate what will happen more than any other economic indicator.

When the supply of homes is down… prices will go up.

When the supply of homes is up… prices will soften or go down.

Other factors can manipulate the market in some ways. Interest rates have started to go up slightly. A year ago they were around 3.5% for a 30 year fixed rate loan. Now that same loan is between 4-4.5%.

Schools, walkability, area amenities can drive local niches to be more in demand than others. For example, in Austin the St. Elmo Public market with condos, shopping, hotel, restaurants and office space is set to change the 78745 zip code in a big way. Home prices have been going up steadily in the area in line with the rest of the housing market. Look for a large spike to happen in the next few years as the area becomes more desirable for millennials and boomers alike.

kitchen-to-nook.jpg

The nitty gritty of our real estate market

As an overall market, the Central Texas 5 county MSA has about 6,300 homes actively for sale on the market. In the last 3 months, about 2300 homes have been selling per month. This is a 2.74 month’s supply of homes. Meaning, if we sold every home on the market and no new homes came on the market, it would take a little less than 3 months to run out of inventory.

As a quick guide, a seller’s market has 3 months or less of housing inventory, a balanced real estate market has around 4 to 6 months supply of homes and a buyer’s market has 7 months or more of inventory.

What is interesting about these numbers and somewhat deceiving is what this “inventory of homes” actually consists of.

Here are a few fun facts to noodle over:

  • Only 36% of this inventory is in the city limits of Austin. Of which, the average asking price is $750,000 and the median asking price is $460,000.  

  • 12.7% of the housing inventory are condos or townhomes. Condos are a little more affordable with an average asking price of $321,000 and median asking price of $258,000

  • An astonishing 38% of this inventory is new construction. ⅔ of which is not being built in Austin. As per my usual spiel… new homes are selling for a premium over resale homes.

Here is a little more interesting fact:

  • 18.5% of the current housing inventory actively for sale on the market is price below the median price sales of $290,000. Median, meaning in the middle, would indicate that either 31.5% of the current active housing is over-priced. And/Or, a large portion of the properties above the median sales price are not going to sell at all.

Lets look at something a little more indicative of where the market is heading:

  • 11.2% of the the housing inventory has been on the market for less than 2 weeks.

  • 26.5% of the housing inventory has been sitting on the market longer than 2 months… which is when I start to see houses get stale on the market. I.e. Fewer showings, less interest, etc.

  • This is all relative, because the average days on market is currently sitting at 55 days, while the median days on market is 29.

Do you think Price doesn’t matter?

The average asking price of homes that HAVE NOT SOLD is $629,000. The median asking price of homes that HAVE NOT SOLD is $400,000.

The average asking price of homes that have sold is $382,000 and average sales price is $370,000. The median asking price is $300,000 with a median sales price of $292,000.

Again, these numbers are all relative… I’m not saying that the homes not selling are wildly out of line with the market. I am saying that the asking price matters more than a lot of sellers want to admit.

Lastly, I wanted to include a price band breakdown of what the market currently looks like. This is very much in line with the last several years of Austin’s growth… prime for our market to continue to go up, especially for homes under a million dollars.

It’s amazing how so many people want to hear that the real estate market is slowing down in Austin. The typical assailant to our market is the disgruntled buyer. This is a very short term thought process. Yes, affordability is a very real problem here. However, if you want the market to slow down for personal reasons, it will also be a short term payoff. If the market continues to grow and expand and---appreciate, it would be in everyone’s best interest for the market to continue going up in value.

Yes, there are pockets of our market that are experiencing a bubble and/or have a high supply of homes. Mainly, the upper end of the market has begun to experience a slow down and I still tend to think East Austin is experiencing a bit of a bubble.

For example, on the upper end. There is currently an inventory of 8.2 months supply of homes. Compared to market average of 2.3 months supply of homes, this represents a more balanced market headed towards a buyer’s market.

East Austin still has inventory that favors the seller--2.76 months of housing supply and prices are climbing to new highs every month. I don’t see this slowing anytime soon, I just see it being the first area in Austin to experience a major pricing correction if the overall market slows down.

Nationally… the finance guys on Wall Street are feeling bullish. When they feel confident that the economy will continue to expand, so should you.

If we look at Austin, outside the context of the national economy we are still experienceing record low housing inventory… it has certainly increased at the top of the market with over 13 months supply of homes over $1.5M and up.

Resources:
Austin Doubling
http://www.bizjournals.com/austin/news/2016/10/11/get-ready-for-new-neighbors-austin-to-nearly.html
Inman predictions
http://www.inman.com/2017/01/04/the-ultimate-guide-to-what-2017-has-in-store-for-real-estate/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=sundaysend&utm_content=20170106_hero
http://www.inman.com/2016/12/06/8-experts-predict-the-2017-housing-market/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=sundaysend&utm_content=20161208_hero
http://www.inman.com/2016/12/14/10-things-real-estate-agents-know-feds-rate-hike/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=saturdaysend&utm_content=20161216_imagelink
http://www.inman.com/2016/12/13/brad-inmans-crystal-ball-real-estate-predictions-for-2017/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=saturdaysend&utm_content=20161216_imagelink
http://www.inman.com/2016/12/13/will-2017-be-a-buyers-market-or-a-sellers-market/?utm_source=weeklyheadlines&utm_medium=email&utm_campaign=sundaysend&utm_content=20161216_hero
Can Austin Weather a National Downturn from September
http://www.mystatesman.com/business/could-austin-housing-market-weather-national-downturn/JmFwCWliE7Af4yOvPz6xUO/
Here is why this housing market boom is different
https://blog.abglobal.com/en/2016/09/can-we-afford-a-housing-boom.htm
Redfin predicts…
http://www.businesswire.com/news/home/20161213005834/en/Redfin-Predicts-2017-Fastest-Housing-Market-Record
Trump and housing
https://www.thestreet.com/video/13919680/here-s-what-donald-trump-can-do-to-help-the-housing-market.html?cm_ven=APPLENEWS&puc=applenews
Blackstone
http://www.cbsnews.com/news/blackstones-plan-to-cash-in-on-a-10-billion-housing-bet/?ftag=CNM-00-10aac3a
Fortune… one big trend
http://fortune.com/2016/11/27/real-estate-trends-2017/

Sell Your Austin Investment Property and Get TOP DOLLAR

So you’ve decided to sell your Austin investment property. There are a number of reasons you might be considering this… you’re tired of dealing with tenants, you are moving the money into other investments, it’s time to retire, it’s time to pay for your kids college or you think the market will bust soon and you want to sell at the top. (Call me if you think the last one is true… I would love to hear your reasoning). Either way, it’s time to sell. Here is my list of the top 5 things to do to ensure you sell for top dollar.

Get the tenants out of the property.

Out of all the advice I have, this is the most important to ensure you get top dollar. TENANTS ARE DEAL KILLERS. Their motivations are typically not in line with yours, they have ugly stuff, they don’t clean up and they make the property hard to show. In short, THEY WILL COST YOU MONEY.

Let’s do the math.

The average rent a tenant is paying in Austin is $1,849/month over the last 90 days.

Getting a tenant out and making the house market ready will net you another 1-3% more than if they were in the property. If the average homes sells for $357,859 in Austin, that is potentially another $3,500-$10,500 you are leaving on the table. Between the median days on market at 29 and the average days on market at 55, you’re talking about one or two months rent that you would possibly be missing out on.

You have to put yourself in the buyers shoes… tenants legally have a right to request 24 hours notice for all showings. This right there makes it really hard to show the home. More than likely they won’t be cleaning up, sometimes tenants don’t even leave the property. As a Realtor, try getting professional photos of the home with tenants present. It’s next to impossible.

Now I know this isn’t always the case. I have had some really great tenants who keep the house nicer than I keep my own. If properly motivated---guaranteeing they can keep their deposit, even paying them to work with us on showings, can create a win-win situation. I just wouldn’t count on it and I don’t think you should either.  

Get the Property Market Ready

Depending on your budget, you need to be prepared to spend some money getting the property ready for the market. Depending on how long your property has been a rental and how proactive you have been maintaining it will determine your budget.

The first rule is, your tenant’s deposit is only for damage caused by your tenant. Don’t use their deposit as your updating budget. Getting carpets cleaned, air filters changed out, etc are perfectly fine. Replacing the carpet with hardwood floors on their dime is something you could potentially get in trouble for.

Now that we’ve got that out of the way, let’s do a quick run down.

You have a $1k budget:

Do a deep clean of the property--carpets, baseboards, windows.

Have a handyman come in and make minor repairs and paint touch ups.

Get the yard under control and do some light landscaping.

Tune-up HVAC and any other appliances that may need attention.

If you can spend $2500-5000:

Paint the house--possibly inside and out

Consider replacing flooring. If you have to choose which rooms, always start with the living rooms, before moving on to the master bedrooms and then the other bedrooms, baths, etc.

Big Budget of $10,000 to $25,000:

This is where I would consult a professional. If the home is really outdated and/or needs a lot of work, it might make sense to do a more major renovation. I really like the National Association of Realtors Cost vs. Value Report here as a guide for best ROI projects.

However, my list would be the following:

  1. Scrape ceilings and get that popcorn texture out of the home.

  2. Curb appeal is huge. Make sure the front of the home pops.

  3. Get the kitchen updated. On this budget, doing the countertops, backsplash, sink and new fixtures is best. You can always paint the cabinets and put on new hardware to freshen it up.

  4. Faux wood tile is a huge hit right now for flooring. It’s easier and cheaper to install than real wood. Another alternative I would consider is a high-end laminate. They make them now that are very durable and don’t make that strange popping noise when you walk on them.

  5. Updating light and plumbing fixtures is inexpensive and goes a long way. I would also consider changing out all the electric outlets for an easy refresh.

  6. My last item is windows. If you can stretch it, new windows means you care about who is buying the home. They are aesthetically pleasing and will save the buyer money on their electric bill.

Additional resource: Tips and tricks for finding a good contractor

Price it to Sell

I know that everyone wants top dollar right now. It is a seller’s market and the entire reason you might be considering selling is to take advantage of that. The biggest mistake you can make with selling is over-pricing the home.

It is logical to think that if you price it too high to start and no one is willing to pay what you are asking, a simple price adjustment will do the trick. Sometimes it does. However, if you sit on the market too long and right now, I think 6 weeks is too long, the property will develop a stigma. Instead of buyers coming in and being excited about the home, they are looking for reasons not to buy it.

On the flip side, I would not be worried if you didn’t get an offer the first week or two on the market. I’ve had properties sit on the market for a few weeks and then get multiple offers. Sometimes it is good to price it slightly higher and be patient.

This all feeds into my last point at the end of this article regarding hiring a pro. The right agent knows that real estate is hyper-local and every neighborhood has different market tendencies. Make sure the agent you hire to market your home understands the area your home is in. More on this later...

Staging/Styling the House

Buying a home is an emotional experience. You want a buyer to connect with the property, feel like they can live there, start a family there and so on. We firmly believe that staging a vacant home can increase the selling price by an additional 1-3%. Above you will see a home that was on the market for months and didn't sell (top row of pictures). Below is the exact same house that was staged by BIRDHOME and sold the first weekend on the market.

The average buyer CANNOT imagine themselves living in a home. You have to curate that experience for them. Staging does come with an expense and you can decide to do some very light “vignette” staging or you can stage the entire house. I really prefer homes that have the living room, dining room and master bedroom staged. The other bedrooms can sometimes be small to start and can feel smaller with furniture in them.

Additionally, when you have the home staged, it makes the professional photography so much better. It gives the photographer a point of view and helps guide the buyer through the home visually online. And since 99% of buyers start their home search online and decide whether or not to even look at a home in person based on their perception of the home online, this is crucial.

Need help staging? Click here. We offer complimentary staging to our sellers and help other Realtors stage on a case-by-case basis.

Hire a Professional REALTOR

I am going to keep this last point short and simple. I am a firm believer in hiring professionals and paying them well for their services. Anytime I have ever gone for the lowest bid or cheapest alternative, I have paid for it dearly. I know this may come across as self serving, but I can’t help it if it is true.

That being said, here is our guide to interviewing real estate agents. If there is another thing that I stand by, it is interviewing more than one agent for the job. Most people think that all Realtors are created equal. I challenge you to interview more than one to three agents and you will be surprised at the varying levels of professionalism and services they offer.  

I still stand by my first point that getting the tenants out will net you the most amount of money when going to sell. Hiring a professional real estate agent to help you navigate preparing the home for the market, determining an asking price for the home, properly marketing your property and negotiating top dollar is a very close second on that list.

Call us, text us or connect with us on social media to get your home sold today.

Additional resources:

Wondering if it is time to sell your investment property? Here is an in-depth analysis.

Interviewing real estate agents? Here is what to ask.

Staging/styling help: Click here

Need help fixing up the house? Tips and tricks for finding a good contractor

IN CONCLUSION:

  1. Get the tenants out of the property.

  2. Make the property “market ready”.

  3. Price it right.

  4. Stage/style the home.

  5. Hire a pro.




 

It’s time to file your Homestead Exemption

Happy New Year and welcome to 2017!!

Thank you for being a part of BIRDHOME in 2016 and buying a home with us. We want you to start off 2017 on the right real estate foot by filing your homestead exemption form so you can SAVE MONEY on your tax bill at the end of the year.

Depending on the price of your home, filing this exemption can potentially save you thousands of dollars per year.

Who should apply?

You! If you bought a home in 2016 and it is your primary residence, the time to apply and save is now. The deadline to apply is anytime between January 1st and April 30th.

How to Apply for a Homestead Exemption

Below are a list of counties where we sell real estate. Depending on where you live, you will download and file differently.

 

Travis County Appraisal District

Mailing Address: P.O. BOX 149012, Austin, TX 78714-9012

 

Williamson County Appraisal District allows for Online filing

Mailing Address: 625 FM 1460, Georgetown, TX 78626-8050

 

Hays County Appraisal District

Mailing Address: 21001 IH 35 North, Kyle, Texas 78640

 

What you will need to file

Besides filling out the form and sending it in, you will also need to send a copy of your Texas driver's license and the address must match the homestead address.

Cost of filing for a homestead exemption

There is absolutely no cost associated with filing your homestead exemption. You will get mail from third party vendors offering to file your exemption for a fee. Do not pay them to file for you.

Resources

Texas Comptroller’s FAQ

Texas Property Tax Exemptions Tax Code

Other Exemptions you can potentially file for are here.

As a quick recap….

(1) If you bought a home in 2016, and

(2) it’s your primary residence as of January 1st, 2017, you can

(3) apply for a homestead exemption with your county appraisal district.

(4) The deadline to file is April 30th, 2017 and

(5) you will need to include a current Texas driver’s license or ID with the address matching the homestead address.

(6) The cost associated with filing for the exemption is ABSOLUTELY FREE.

Selling Over the Holiday Season

Historically, December is a better month to sell than the rest of the Fall or Winter, which is generally considered part of the "slower" season in real estate. There are a few reasons why this is the case and why it might be a good time to consider selling your house around the holidays. We also have a few tips and answer some often asked questions that you should need to know about if you are planning of selling during this time. And be sure to check out Patrick on Fox 7 below as he shares his tips for selling during the holidays.

Serious Buyers Only

This is one of the best parts about selling in the "slower" season - you're really only going to attract serious buyers. While this can seem like a bad thing it is far from it. This means that the buyers you get are extremely motivated to move on a house and they aren't as finicky and flaky as some spring buyers can be. Beyond this there are some specifics that make December a great time to sell if you are willing to play it right. 

December Buyers are usually some combination of this:

  • People that are relocating for jobs. There are lots of people that are relocating around this time of year and have a strong need to buy. They are usually under a time constraint and are looking to buy fast. 
  • People with a little extra cash to spend. This is the time of the holiday bonus; large cash bonuses get paid out when companies do well and this usually happens around the holidays. This means that there is a good chance that buyers have a little extra cash to use for that downpayment. 
  • People with time off. In December you have 2 weeks of downtime that you just don’t get any other time of the year. That means people who are looking to buy have a larger window of time to look and want to visit and see more houses.

Low Supply 

December is historically one of the months with the lowest number of houses on the market. In December of 2015 there were just under 8,000 active listings on the market in Austin. For the months of May through September there was over 11,000 listings. That is 3000 less homes available to buyers in December than in the Spring. What this means is that there isn't a lot of competition from other sellers. Additionally as we detailed above the buyers are more motivated during this time of year, this can lead to low supply and high demand - which is always beneficial to the seller. 

The Election

Now these reasons are general to most Decembers, however its important to remember that some effects are specific to certain years. For this December we just went through a very contentious election that had a lot of people on either side concerned. And traditionally when people are concerned about jobs or the future they are less likely to spend money, especially when it comes to something like a house. Now that the election is over we can expect a bit of a bounce back and some people who were thinking about buying in November but didn't, start their search up again. 

 

Best practices for marketing/selling:

  • Should I/should I not put up holiday decorations?

    • Yes, but keep it tasteful, don’t go overboard. It can create an emotional connection for the buyer as well. Still want to declutter/depersonalize.

  •  What do I do if someone wants to see my house on Christmas?

    • Yes. Only a very motivated buyer wants to see homes on a National holiday.  

  • Pictures of the home during winter should be done sooner than later before the leaves change and before decorations go up. 

Love It Or List It? A BIRDHOME Recap!

SHOULD I LOVE IT OR LIST IT?

We had the joy of participating in an amazing event last night with the incredible Amity Worrel & Co. that we just had to share with you! Over the past few month they have been putting on their Design 101 events to help share professional advice on interior design, architecture, and real estate amongst other things. We were ask to contribute to their Love It or List It event last night and it went so well that we decided we need to share some of the knowledge and advice from the event with you! So read our recap below and be sure to check out the three amazing ladies that we had the pleasure of speaking with last night: Amity Worrel, Dianne Kett, and Maureen Hodges. They are inspirations to us and we can't recommend them enough!

1. Make a list of what you love and what you don't love!

Even if you think you already know you want to renovate your house, its always good to go through and make a list of everything you love and don't love just to make sure you don't miss anything. And be sure to include things beyond just what is in the house itself, consider the neighborhood, neighbors, commute, and location as well! This will help you narrow down your list to the things you can change versus the things you can't and you can decide if you can just renovate or if you need to sell and something different.  

2. Talk to an interior designer and architect

Once you have your list of what you love and don't love you can talk to an interior designer and/or an architect to get their opinion on budget and feasibility. A good general rule is that if you are just changing the setup of a room its okay just to reach out to an interior designer, but once you start talking about moving walls, changes plumbing or electrical, or adding on the house you'll need the knowledge and expertise of an architect as well. And any good interior designer will help you find one that you can trust! So make sure to reach out to them early and often - they are always will to help and get you moving in the right direction.  

3. Decide - Love it or list it!

Now that you've talked to an interior designer and an architect its time to make that decision. Are you going to love it or are you going to list it.  Maybe the architect comes to you and tells you that you can't add a second story or there is a heritage oak preventing you from extending that porch. Or maybe the budget and time just doesn't work for you. Or perhaps everything lines up perfectly and you're ready to move forward with making your house into a dream home. Either way - you'll be confident that you've got all the information to make the right decision for you!

4. Run the numbers

Either way though, once you've decided on what you're going to do make sure to reach out to a trusted real estate professional. Because a good agent will help you run the numbers. As we tell people all the time, buying or selling your house is a business transaction so its important to treat it like one. We can provide a valuation of your house currently and then what it would be after you renovate. If you are going to sell, we can help you through the process to make sure you can get top market value for your house. So don't hesitate to reach out to us, we understand that while this can be a very emotional moment it is also a very important financial one as well. 

5. Think Like a Buyer

So once you've decided to sell and interviewed and hired your real estate agent its important that the goal of selling your house becomes the priority. And the best way to do this is to take it from being your home to becoming a house that someone else can turn into their home. We always recommend to our clients to run through our Seller's Checklist and start to think like a buyer. The easiest way to do this is to have a stager come in and make your house appeal to potential buyers, they can remove the emotion from the process of selling your house and make it so much easier for a buyer to imagine and dream of living there. This is such an important part of selling a house that we started our own staging company!

 

We hope this helped you as you consider remodeling or selling your house and if you have any questions please don't hesitate to reach out to us or the wonderful women that spoke (we'd be happy to connect you as well). And if you're interested in attending the next Design 101 class be sure to sign up to be on Amity's mailing list!

Why You Should Buy In The Fall

It's no secret that Austin is considered by just about every metric to be a strong seller's market right now. In our most recent market report we shared that for August there were 2.8 months of inventory within Austin and balanced market is considered to be 6.5 months of inventory. This just further confirms what we all know - it's great to be selling your home but it can be difficult if you are looking to buy. However if you are looking to buy hope is not lost, we've got a few tips that can help you get the house that you want for the price that you're looking for.  

Currently there 2,519 homes on the Market in Austin, with another 4,874 are listed for sale in the surrounding areas. That is 5% more homes on the market than there were last year. And 958 of them are new construction homes.  Within the last week, of those homes on the market, 404 have lowered their price, 49 homes fell out of contract and came back on the market and about 90 homes came off the market (either withdrawn or expired). This creates an environment that can benefit a smart buyer. 

Here are four reasons it can be better for you to be buying in the fall:

 

Less Competition

Most homes sell in the spring and summer months. Everyone clamors when new houses come on the market during those months and all that competition can make it harder get an offer accepted, or even submit an offer in the first place. This past spring we saw it was quite common that buyers had to submit an offer immediately after the house when to market if they wanted a realistic shot of getting the house. With less buyers crowding the playing feel you've got opportunity to really search for the home of your dreams without worrying it will get snatched up immediately.

 

Serious Sellers

There are generally two types of sellers in the Fall, those who's homes went to market in the spring and summer and then sat until the fall or those who have to move out immediately, either because of jobs or family or something similar. This means that most sellers are seriously movtivated to sell. They aren't just testing the market or seeing what's out there, they need to sell and this is to the buyers advantage. 

 

Negotiating can be a little easier

Now can be a good time to make lower offers to see if the seller will accept them. The average sale in Austin goes for 98% of the asking price. Based on a median sales price of $289,990, that’s an average of about $6,000 of the seller’s asking price.If you can negotiate the seller’s another 1-2% off of that, that translates into a savings of about another $3,000 to $6,000.

Sellers who have been on the market for awhile are more ready to deal    

Of the 2600+ homes in Austin currently on the market, the average days they’ve been on the market is 88. This is double the normal average days on market of 40.  It’s a great time to negotiate for that dream home or that smart investment property purchase.

 

We hope this post has shed some light on some of the advantages that buyer's have in the fall. Be sure let us know if we can help you out with your home search or if you want to talk about any of the topics we've talked about in this blog. 

Where is Austin's Housing Market Going?

Recently an Austin-American Statesman article about the Austin housing market and its relationship to the national state of housing has been making the rounds on social media. And I think it deserves more than a simple share and/or typical Realtor, “Buy or sell with me” comment. So let's dig into what that article has to say and what it really means for you in the coming years.

Recently Gary Keller gave a speech at the Keller Williams Mega Agent Camp a few weeks ago focusing on the future of the housing market in the US. He predicted a coming downturn and warned agents to prepare for this. I was in the room for this and was beyond impressed with his in depth research and analysis of the topic. Not only is he looking at current economic trends both nationally and internationally, he is considering historical market cycles and shifts. And I agree with him on this - we are definitely trending towards a downturn. 

I even wrote an in depth article about this very subject about a month ago titled, “Is it time to sell your Austin Investment Property?” The article is specific to real estate investors who tend to lead the market. My biggest concern is my investor clients getting over-leveraged in their real estate holdings, betting on the market, rather than truly investing in it. When the bubble burst in the housing market in 2007, because a lot of investors were over-leveraged with the rest of the overzealous homebuyers, the bust had a compound effect that could have easily been avoided with more conservative investing tactics.

 

What does the article say?

But if the national market slows down what does this mean for Austin? Let's take a look at what the article had to say. Shonda Novak, who’s work I’ve admired for years, has done an excellent job getting several top economists to give them predictions for our housing market. I want to tackle each one of their responses separately and dig into what they had to say and what my thoughts are on each of their answers. 

  • Mark Sprague:

The most pointed comments were given by Mark Sprague of Independence Title. His acknowledgment of the housing market still being extremely hot, yet pricing increases have slowed down, is right on. However mark my words… it will continue to be a seller’s market for at least another 2-3 years. As Mark stated, the election will cause the market to slow for a short time. Once we settle into a new Presidency, the Austin market should settle back into it’s natural rhythm by Spring time with prices going up 3-5% per year, instead of the 8-12% of the past 3-4 years.

  • Mike Castleman:

Mike Castleman’s point about jobs is the most important aspect of his diagnosis of our real estate market. “Because unemployment is so low, when we create a new job, we have to import that employee, and that creates a housing demand unit immediately,” I like the phrase, “import employees” because it is so true. If you want to be gainly employed in Austin, there is opportunity everywhere. Case in point, we are going to be hiring at least 2-4 people in the next 3-6 months. If you know anyone that wants to break into the real estate world - send them our way.

  • Charles Heimsath:

The luxury market is always the first part of the market where we see a slow down. Most of the time this is because prices get so high, even the wealth start to shy away. Buyers aren’t able to “trade-up” into more expensive homes and their is just a much more limited buying pool at the top. This was the best part of Charle Heimath’s analysis. In looking at the luxury market in Austin ($1M or higher), there is currently 10+ months of housing inventory. For reference, the overall average of housing inventory is at 2.3 months. Historically, before the market began to improve in 2011, there was close to 64 months of luxury home inventory. Even though luxury home inventory is indicating that it might be more of a buyer’s market, there is still strong demand for homes that are priced right.

  • Eldon Rude:  

Eldon Rude’s comments mainly focused on the strength of the job market. His observation that employment has increased by 28% in the last 6 years is eye-opening. As long as we continue to see job growth, the housing market should follow. And as stated above, the robust job market in Austin should shield us from most of a national downturn, should it occur. 

What does this mean for us?

It looks like the top of the market is starting to soften some. The election and other National and International economies might begin to slow down our market. But as long as we continue to have steady job growth, we will see steady that population growth and housing will follow for at least another 2-3 years, if not longer. Any further questions? Let me know and I'd be happy to sit down with you to talk it over!

 

MORE RESOURCES

Gary Keller’s Slides from Mega Camp

Further reading on the housing market both locally and nationally: MarketWatch

Aquila Commercial’s Q2 Market Report - In depth study of the Austin’s economy and how it relates to real estate