The Rg BLOG

As a listing agent I regularly get asked about the value of upgrades. Specifically, will a particular improvement increase the sale price enough to justify the cost? The answer is, it depends. The biggest returns are going to be for a home who's condition is below the norm for the neighborhood. If most of the homes in the area have tile floors, the vinyl will be a disadvantage. On the other hand, it will be hard to recover the cost of adding granite counter tops to a home where most of the competition has Formica. As a rule of thumb you can start by consulting statistics complied by Remodeling Magazine which has results for specific areas of the country. Click here to download results specific to Austin. It's kind of interesting that the highest return is for a basement remodel, so I have to wonder how they collected their data for Austin. The lowest return is for addition of a sun room. If you're interested in property values in your neighborhood and an opinion on your specific project, give me a call and I'll be happy to share what I know.

Did you buy a new home in 2011? If so you probably know that you have until April 30th to apply for your homestead exemption. This exemption reduces the taxable value of your home by $15,000 for school taxes, which can save you some money on your annual bill. As it's name implies, this exemption is intended for your primary residence. In the past you just needed to send in a form, but starting in 2012 you'll have to provide proof that you actually live at the address where you're claiming the exemption. Here's what you'll need: The homestead exemption application A copy of your Texas driver’s license showing your new address OR or a state identification card Your vehicle registration receipt with your new address OR a current utility bill showing your name and address, along with an affidavit provided in the application indicating non-ownership of a vehicle For more information click here to see the official press release.

We sold the house at 929 E. 54th a few weeks ago, finishing a successful re-hab. Final results were about a 10% annualized ROI. Not bad, but a little lower than we hoped for given the amount of risk involved. On the other hand this is a lot better than current alternatives like the stock market, the bank or cash. As a review, here's what the house looked like when we bought it.  The arches on the front were made of 1/4" plywood, and the carport on the right had been enclosed to make a low ceilinged room / workshop. Inside it was a 3/1 with a very unusable layout. We worked with Scott Cason of the Austin Rebuild Team who came up with a new floor plan including a 400 ft2 master suite addition. Once we tore off the fake facade and converted the carport back to the original configuration it regained it's classic charm. Scott completed the interior following a mid-centrury modern theme that won rave reviews. Our biggest challenge in marketing the home was the number of unimproved properties in the neighborhood. Although some potential buyers were looking for a more established location, others saw opportunity for property values to appreciate to match the surrounding areas. While the new owners [More...]

Remember the 60-second rule: That's all the time you have to create a winning first impression. Here are some simple to significant ways to maximize your home's appeal. Exterior Keep the grass cut and remove all yard clutter. Weed and apply fresh mulch to flower beds. Apply fresh paint to wooden fences. Tighten and clean all door handles. Clean windows inside and out. Powerwash home's exterior. Ensure all gutters and downspouts are firmly attached and functioning. Paint the front door. Buy a new welcome mat. Place potted flowers near the front door. Interior Evaluate the furniture in each room and remove anything that interrupts "the flow" or makes the room appear smaller. Consider renting a storage unit to move items off-site. Clean and organize cabinets, closets and bookshelves. Clean all light fixtures and ceiling fans. Shampoo carpets. Remove excessive wall hangings and knick-knacks. Repair all plumbing leaks, including faucets and drain traps. Make minor repairs (torn screens, sticking doors, cracked caulking). Clean or paint walls and ceilings. Replace worn cabinet and door knobs. Fix or replace discolored grout. Replace broken tiles. Replace worn countertops. Special details for showings Turn on all the lights. Open all drapes and shutters in the daytime. Keep pets secured outdoors. Buy new towels for bathrooms. Buy new bedding for bedrooms. Replace old lamps or lampshades. Play quiet background music. Light the fireplace or clean out the ashes and light [More...]

As the seller, you can control three factors that will affect the sale of your home: The home's condition Asking price Marketing strategy However, it's important to note that there are numerous other factors that influence a buyer, and you need to understand these consumer trends when you enter the sellers' market. The more your home matches these qualifications, the more competitive it will be in the marketplace. Your real estate agent can advise you on how to best position and market your home to overcome any perceived downsides. Location Unfortunately, the most influential factor in determining your home's appeal to buyers is something you can't control: its location. According to the National Association of REALTORS(r), neighborhood quality is the No. 1 reason buyers choose certain homes. The second most influential factor is commute times to work and school.  Size While some buyers want to simplify their lives and downsize to a smaller home, home sizes in general have continued to increase over the decades, nearly doubling in size since the 1950s. Smaller homes typically appeal to first-time home buyers and "empty nesters," or couples whose children have grown up and moved out. Amenities Preferences in floor plans and amenities go in and out of fashion, and your real estate [More...]

Let's face it: When your house goes on the market, you're not only opening the door to prospective buyers, but also sometimes to unknown vendors and naive or unqualified buyers. As with any business transaction, there is an expected protocol to how sellers, buyers and their respective agents interact. Should you find yourself in a sticky situation, alert your agent so he or she can address and remedy the problem. The aggressive agent When your agent puts your house on the market, typically all promotional materials state clearly that your agent is the primary contact for buyers and buyers' agents. However, sometimes a buyer's agent will contact a seller directly to try to either win over their business or cut the seller's agent out of the deal. This is not reputable behavior and you should report it to your agent immediately if it happens to you. The unscrupulous vendor Have you ever started a business or moved into a new house and suddenly found your mailbox full of junk mail? Unfortunately, this also can happen when you put your house on the market. When you sell your home, it necessitates all kinds of new purchasing decisions and less-than-ethical vendors are keenly aware of this. Though MLS [More...]

The asking price you set for your home significantly affects whether you will profit in the sale, how much you will profit and how long your home will sit on the market. Your real estate agent's knowledge of the overall market and what's selling - or not selling - will be invaluable in helping you determine the price. The objective is to find a price that the market will bear but won't leave money on the table. Here are some points to consider: Time. Time is not on your side when it comes to real estate. Although many factors influence the outcome, perhaps time is the biggest determinant in whether or not you see a profit and how much you profit. Studies show that the longer a house stays on the market, the less likely it is to sell for the original asking price. Therefore, if your goal is to make money, think about a price that will encourage buyer activity (read: fair market value). Value vs. Cost. Pricing your home to sell in a timely fashion requires some objectivity. It's important that you not confuse value with cost - in other words, how much you value your home versus what buyers are [More...]

Where to Start? Starting a search for a new home? Today most of us start on the Internet, but type "Austin Homes for Sale" in the search box of your favorite browser and you'll be presented with lots of options. Where to begin? Here's one thing to keep in mind. With the exception of some For Sale by Owner listings, almost all of the data about homes for sale comes from the same source, the local Multiple Listing Service or MLS. This is a private organization affiliated with the local board of Realtors(R) that collects and disseminates information on properties for sale and lease. This data is shared with others in the real estate industry via a technology called Internet Data Exchange (IDX) or syndication agreements. What this means is, if you want the most timely and accurate information you'll want to stick with sources that are well connected. This is especially important if you're an active shopper. Local Sources are Best In Austin the most accurate public source of information is AustinHomeSearch.com which is run by the Austin Board of Realtors (ABOR). Although this site is accurat,e it's a fairly utilitarian design and lacks some of the more modern features such as map search or the ability to create an [More...]

I'm experimenting with a new home search product that's pretty interesting. It combines information on homes for sale with other information about the community. The company that developed the product calls it 'Lifestyle' data. For instance, you can add schools, shopping hospitals or other locations that you might want to consider when you search for a home. You can also add custom locations, for instance your work address. Here's an example of a map that shows a one mile radius around all of the Central market locations in the city. The idea is that you can create a search that combines the characteristics of the home you're interested in with other needs, such as schools, distance to work, and shopping. There are lots of other features, so it takes a bit of exploring to understand the capabilities. Click here if you're interested in taking a look. I'd like your feedback on what features you find useful.    

If you're a Realtor(R) or investor in Austin you probably know Wayne Morgan and the Austin Institute of Real Estate. Here's a copy of an email that I recently got from AIRE with a list of reasons why he thinks real estate is such a great investment. Interesting observations. Twelve Reasons Why Real Estate Is Better Than A Mutual Fund First of all, there is nothing mutual about a mutual fund. Usually the only person making money is the person who sold it to you. Additionally, to help break it down, here are the reasons why I think real estate is a better choice: Mutual Funds: You have to use your own money Real Estate: Use OPM One of the keys to wealth is using other people’s money, especially when rates are low. Mutual Funds: Bank won’t loan on MF Real Estate: Lenders compete for business Call your bank and tell them you found a smoking hot deal on a MF and that you can buy it for 60% of its real value, and then see what they say. Look in the Sunday paper; lenders are competing for your real estate loan business. Mutual Funds: Give your money to someone else Real Estate: You control others’ money In a MF purchase, you give your [More...]

Quarterly update for the Austin Real estate market. Click on the image below to view the pdf.

The Dallas fed just relesase its July report on the Texas economy. Job growth declined significatly and home sales fell slightly. Exports are steadily rising. For more information you can read the full report here.

By now you probably know that I like data. If I'm going to buy, sell or invest in real estate I want to know as much about the market as possible. After all, there's usually a lot of money at stake. If you're 1% off on a $300,000 sale that's $3,000 at stake. Like many of us I'm also a visual person. I like pictures, charts and graphs that help to illustrate the dynamics of a market. Are prices going up or down? Where are the best areas to look for opportunities? Here's an example that I recently put together. It shows a heat map of year to date sales of single family homes that were listed on the MLS as located in Austin. The red areas mean that there were a lot of sales. Green, less. What does this tell me? Notice the little cloud out by Garfield? That's probably the result of the racetrack development. There's also quite a bit of activity on the North Shore of Lake Travis. And South Austin is really hot. Have an idea for a visualization of the local real estate market? Send it along and I'll see what I can do. In the mean time, when [More...]

Sometimes when I'm working with a client I'm asked "is this a safe area?" Of course this isn't a yes or no type of question, so I refer clients to one several tools that can be used to view statistics on crime in the city. The Austin Police Department maintains an online crime database and viewer called Crime Search which allows you to view crimes located near a specific address. Although relatively easy to use there's no way to browse the city or see an overview to compare levels of crime by area. Click here to take a look. Another tool, called Spot Crime, provides better functionality, allowing an overview of the city and the ability to set up an alert based on your address. You can pan and zoom around the city, and the map shows crimes by category using (somewhat goofy) icons that give a feel for density of crime in a particular area. The newest addition to this category is from Trulia, a well know real estate oriented website. Their tool provides a 'heat map' of the city with blocks coded from green to red based on the number of incidents. This is the most direct way to answer the question about the [More...]

We get an update on lending issues from United Lending every week and yesterday's news was that rates are still well under 5%. 4.5% for FHA and VA and about 4.875% for 30 year fixed conventional. ARMS are under 4%. I keep expecting rates to rise, but we're starting into the most active time of year for real estate sales and they're still near record lows. If you follow national news on the real estate market you know that much of the country is still in a slump, which is keeping a damper on rates. In Austin we get the benefit of a strong local economy and housing market, plus low rates. This is a great time to buy sell or invest in Austin real estate.

Brenda and I work with clients in Austin. For listings we can cover much of the city, but we usually only work with buyers in the central and southwestern part. Why? As a buyer's agent local knowledge is helpful, and we don't feel as though we can exonomically do a good job for a buyer in Pflugerville, for instance. We can help with purchases outside of our area though. How do we do it? Since we're affiliated with Keller Williams, the second largest brokerage in North America we can help find the perfect agent for a transaction almost anywere in the U.S. or Canada. Once we know the type of property, price range, and area, we can connect you with a top KW agent who's an expert. Even for commercial transactions. The benefit is that you get an agent that has a proven track record of success with a premiere agency. And if you have other suggestions from friends or relatives you can interview all of them and choose the best option. This can help defuse the situation if you have an aunt that you really like, but don't think she's the best choice for your transaction.  Why do we do it? We may get [More...]

  Tenaza 26 Some of you may know that we are long time investors in Mexican real estate. We started out with a lot in Playa del Carmen and until recetnly had two rental houses. Our current house is in Guanajuato, a colonial city in the central highlands about 50 miles from San Miguel de Allende. Our original tenant had trouble paying the rent, so after a six month ordeal we finally managed to get him moved out and are starting some renovations and repairs for the next tenant. Give us a call if you know anyone looking for a nice house in a great neighborhood. And if you like traveling in Mexico and haven't visited Guanajuato, you should consider a visit some time. It's a great city, and San Miguel is close by if you are more comfortable in a town that caters to US toursts.   

We're well into demolition on our new investment project. With the plywood facade off the front you can see the classic stonework on the front now. It looks a little rough at this stage, but I think that once we re-establish the carport, extend the roof and replace the windows and doors it's going to look great. Here's a sketch of what we have in mind. Let us know what you think.

Home affordability in the United States is nothing short of amazing. The chart below dramatically illustrates the impact of lower interest rates on housing costs, and the relative affordability of housing in the United States. The cost of a loaf of bread and a gallon of gas has more than tripled since 1989, and car prices have nearly doubled. While the median price of a new home has increased by 70 percent, mortgage interest rates, which stood at 10 percent back in 1989, are less than half of what they were back then. The impact of rock-bottom interest rates is that the monthly mortgage payment on a median priced home in the United States has increased by a mere $4 since 1989. Unless you're paying cash, the monthly payment tends to be a far more important than the home’s actual purchase price. So if you've been waiting for home prices to hit the floor you shold realize that a slight drop in the price of a home will have very little impact on the monthly payment, while even a slight rise in interest rates (a far more likely scenario) will have a significant impact. Want to know more? Give me a call if you or someone you know [More...]

One of my friends said recently "if buying real estate is such a good idea why aren't you doing it?" What he didn't know is that we have been looking for an invesment and recently bought a house in north central Austin that we're going to re-hab. I"ll post on our progress now and then so you can see how we're doing. Suggestions and comments are welcome.