Brushes With Fame, HGTV Style

If you watch much HGTV at all (true confession: I do, LOADS) you may have noticed that Austin is not an infrequent locale used for shooting.  I’m guessing it’s partly because we have decent weather most of the year, (making it easier to shoot), our real estate prices are still largely reasonable (at least compared to other currently hot real estate markets, so we have a lot more folks flipping houses here), and because Austin is just an incredibly telegenic city with lots of exciting stuff happening — we are kinda the belle of the ball at the moment!

With all that, you can imagine how excited we were at JB Goodwin when when of our own agents, the amazing Erin Jones, was tapped to do a pilot for HGTV along with her husband Paul. It’s called “Texas Turnaround” and the episode centered on a local condo they flipped over the winter.  As with all their flips, they did an absolutely outstanding job on this renovation; we got to tour it in person before the episode aired on June 10th and it was every bit as gorgeous in person as it was on TV!

We don’t know yet if Texas Turnaround will be picked up by HGTV as a series or not, but we are keeping our fingers crossed.  Meanwhile, hats off to Erin and Paul and their amazing flips!

March Madness

As a seller you love them, as a buyer you dread them: the multiple offer situation.  And in March, when the (somewhat) somnolent winter real estate market starts revving back up into high gear with the onset of spring, multiple offers become a more frequent occurrence.

Let the delight or dismay ensue!

From a buyer’s perspective, the obvious issue is that you don’t know what you might be up against when you hear the dread “submit your your best and final offer” phrase.  If you don’t know what the other offers are, how are you supposed to know how to beat them?  The listing agent can only disclose that there are other offers, but not what’s in those offers (unless specifically directed to do so by the seller — which is rare, but does happen).  You have to know how to structure an offer which will be the most appealing.

Obviously, upping your offer amount is the first thing to look at.  Offering more than the asking price is very common, especially in our crazy hot Austin real estate market, and something I alert my buyers to the possibility of when I’m certain we are going to be in a multiple offer situation.  I have often chosen to go in initially over asking price, as long as I feel that price will be supported by the appraisal.

But one thing to know about multiple offers is that sellers don’t necessarily always go with the highest dollar amount; oftentimes there are other factors which can be more enticing to them.  For instance, it can be a quick closing date that wins the day.  If a buyer can close in 2 weeks instead of 45 days that can be very appealing to a seller who needs to move in a hurry.  Conversely, it can be a buyer who doesn’t need to take possession right away but can allow the seller a leaseback for a certain period after closing while the sellers wait to close on their new home.

When offers received are very similar in price and time needed to close, other things which can tip the scales in your favor are a shorter option period (note: I would never advise NO option period) and/or a higher option fee, a larger earnest money deposit and a greater down payment.  These are things which speak to the seriousness of the buyer and to their financial stability, so there appears less risk that the deal will fall apart from financing issues.  I would also include in that same category (if it’s feasible) for little to no ask for seller contribution to closing costs, or an offer for the buyers to pay the owner’s title policy, which can be a substantial amount of money and is typically paid for by the sellers.  This would translate to a higher net for them — because for some sellers it is ONLY about the Benjamins!

Another contributing factor in some seller’s decision-making process is a bit more nebulous: the sentimentality factor.  While for some folks it’s just a piece of real estate and doesn’t mean anything to them on a personal level, for many sellers their home carries a lot of emotional weight and they want to know it is going to someone who will love the home and care for it as they did.  Many sellers like knowing that, after having raised their own family in a home, the new buyers will be doing the same.  They made many fond memories in their home and they want to see that continue with a new family.  They want their old home to be appreciated, its history respected.

Knowing this, one of the things I like to include in my offers is the “love letter”, which is just a short paragraph or two about the buyers and their hopes and plans for their life in the new house, what they love about the home and/or the neighborhood — them, their kids and the family pets all get starring roles in the love letter!  Nothing schmaltzy, mind you, just something to pluck the heartstrings a bit, or stir up fond memories for the sellers of when they themselves first bought the home.  I have seen sellers turn down a higher dollar offer on their home by investors who were planning to flip it and instead sell it to a family for a little less based on their love letter.  Never underestimate how much of a role sentimentality can play for some sellers.

My final thought on submitting an offer that stands out and hopefully wins the day is make it clean, fill everything out completely, attach all pertinent documentation (financing agreement, lender’s pre-approval letter or proof of funds letter from bank, and any other addenda needed) and summarize the offer in a cover letter with bullet points showing the specifics so they can quickly get a complete picture of your offer without having to read a dozen pages.  And then keep your fingers crossed! 🙂

 

Setting Records

In case you don’t happen to be regularly clicking on my About Real Estate page for market updates (or my Facebook page, or otherwise following along), I’m re-posting this EYE-POPPING headline I put up earlier from the most recent Central Texas Housing Market Report put out by the Austin Board of Realtors: in May we reached an ALL-TIME HIGH of $1.2 BILLION (yep, you read that correctly — that’s Billion with a big, fat B) in home sales!

From the report:

“Coupled with rising home prices, this recent surge in home sales activity made May 2017 the highest-grossing month for Central Texas real estate in the region’s history. For the first time this year, single-family home sales dollar volume topped $1 billion ($1,234,217,617) in a single month within the five-county area, which is an increase of 18.4 percent from May 2016.”

(And this figure excludes most new home construction, which is similarly experiencing phenomenal growth.   New home construction in Austin is at its highest level since 2007.)

This is obviously very exciting news for sellers.  But on the flip side, this trend may be prompting you to ask a very reasonable question:  Is this another real estate bubble which might burst in spectacularly messy fashion?  We all remember what the country went through less than a decade ago when that housing bubble burst.

So is this another bubble?

The short answer, in my humble opinion, is no.  Or at least not in the way it was in 2008-2010; it’s not a bubble created by a whole host of factors which created an artificial inflation of the market, as was the case back then.

The longer answer should include what is a driving force for this increase: job growth.  (Or as my broker like to say: Jobs! Jobs! Jobs!)  Austin’s current job growth rate of 2.9% puts us in place as the 10th fastest growing major metro area in the country.

As reported in the Austin Jobs Postings Report for May, unemployment is at 3.2% (nationwide we are at 4.3%) and more jobs are coming; several companies have announced expansion plans in the area.  To quote from the report:

“The U.S. News & World Report named Austin as the “Best Place to Live in the U.S.” in 2017.  Savills calls Austin “one of the 22 Cities at the Forefront of Global Tech” while SmartAsset named Austin as one of the “10 Best Cities to Raise a Family”.  Austin also comes in 3rd on Gallups’ “Good Jobs Rate” ranking based on the percentage of adults who work for an employer full-time.  Indeed ranked Austin No. 4 on its “25 Best Cities for Job Seekers” list.”

Dang — if I didn’t already live here I’d definitely want to move to Austin after reading all that!

So to sum it all up: with great livability, high consumer confidence, low unemployment, solid job growth and considerable planned expansion coming to the area, I’d say it’s likely that our housing market will remain strong for the foreseeable future. (Barring any big national economic crash, anyway — OH NO, I hope I didn’t just jinx us!) 😉

And finally, to any buyers sitting on the fence I’d say, “Come on in — the  water’s fine!”