The Measure of Things*

* Or, ‘Why square footage listed on the MLS points toward the truth, but might not be truth itself’. 

Just me being silly before leaving for my “What is ANSI?” class at Austin Board of Realtors

I am pretty sure the 100-foot tape measure in the video is older than I am, by the way.  Here’s bringing you information from Friday’s class on measuring square footage…

Where does that square footage number come from on a home-for-sale listing? It will say something like “according to tax records” or “according to owner”. But, really where did the county appraisal district or the owner get that number?

If the house was originally built as part of a subdivision of houses going in pretty much all at once, the builder probably had blueprints for 4 or 5 different house designs and the house in question came from one of those blueprints. Did the builder follow that blueprint exactly, or are there variations in the homes that all came from the same blueprint? Who knows? But, the county probably used the builder’s blueprint numbers to assign a square footage to the house in question.

If a house has no blueprint that is available, the county tax appraiser can come out and, using a wheeled device running along the ground, measure the footprint of the foundation to the nearest foot and calculate the square footage of the foundation from those measurements. (How exact do you think that is?) And, if the house has a second story, the footprint number is doubled to represent an approximation of the size of the house. Imagine if the upstairs portion of the house is a loft with only half the square footage of the room below. Or, imagine rooms under the sloping roofline that are scarcely high enough to stand up in. The county appraiser does not know these things just by looking at the house from outside, so the square footage calculation might be off considerably from the area a person can actually walk on inside the house.

Even square footage that was calculated by a licensed appraiser hired by a previous seller or by a previous lender might be a deceptive number. Until fairly recently, there was no standardized way of measuring square footage. Some measurements would include the thickness of interior walls in the total square footage and some would not. Some would include staircase space, some not. Some older measurements might include square footage of upstairs rooms with only 6-foot ceilings, while newer measurements would not. And so on and so forth.

A licensed appraiser is required now to use methods spelled out by the American National Standards InstituteWhich is a good thing, because we can compare two different house sizes measured recently by licensed appraisers.

But, if we are looking at the work of an appraiser from years ago, we simply don’t know how the square footage was calculated at that time.

Are you starting to be a little skeptical about how personally important that number is on the builder’s marketing material, or on the MLS listing? Yeah, me too. That’s why you always hear me answer the square footage question with exactly what we know, “1843 square feet according to the tax records“, or “5220 square feet according to the builder.” I am not trying to evade the question as much as I am emphasizing the approximate nature of that number we’re all looking at.

How does this affect you? Buyer or seller, you are gonna want the buyer’s lender to see an appraisal that matches what the buyer is offering for the house, right? I mean, what if the appraiser comes up with square footage that is considerably less than the square footage that has been on the county tax records all these years? The appraisal might not match what everyone has been thinking that amount of square footage should be worth! Either the buyer coughs up more funds from her pocket, or the deal falls through, ‘cuz no lender is going to make a loan greater than the ascribed value of the house.

Two lessons:

  1. If you are a seller and the square footage listed on the tax records, or from another source when you bought the house, seems really off from what you are observing when you are in the house, you might want to hire your own appraiser to make the calculation using the most up-to-date methods. Why risk going down a long road toward closing a sale when the whole thing comes to a screeching halt because the buyer’s appraisal is lower than the contract amount?
  2. If you are a buyer and you are running around trying the get the most square footage for the dollar, how are you going to know when you’ve found that touchstone? Can you trust the exact number you are seeing on the listing?

Buyers: calculating the value of a home in your mind should not begin and end with price per square foot. I hope you see by now that this is not a trustworthy number! Like I said, that number is a signpost that points toward truth, but it is not likely to be Truth itself.

Sources: Candy Cooke’s class on “What is ANSI?”

Square Footage- Method For Calculating: ANSI Z765-2013 from Home Innovation Research Labs

 

Glass ‘n’ Me

Did NOT think I could get excited about a pane of window glass. Wrong, wrong, wrong! We have started replacing double-paned window glass at our house and got the first set installed yesterday. I keep staring out the windows in complete appreciation and awe of what just happened!!! It is the difference between squinting through dirty eyeglasses at the sunny landscape and looking boldly through expensive sunglasses- suddenly the view is clear and crisp, yet not glare-y.

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Before

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After

So here’s the deal about double-pane glass: the less reliable the glue between the layers and the less careful the process, the faster that factory seal will fail, ruining the vacuum between the panes. How do you know a seal has failed? You start seeing moisture between the panes of glass; moisture that cannot be removed from inside the house or from the outside. Or, you start seeing a whitish film on the window that cannot be removed because it is between the panes. Or, you see dirt between the panes.

We compared some prices, then called in Fair and Square Glass Repair, a local business that travels widely in the Austin/San Antonio area. They came out and we talked about the situation, and Trey Doran, the owner of the business, educated me on the type of window frames we have and the type of glass we have. He gave me a tutorial on how our particular windows function and on how I can best care for them. Then, I made a spot decision which windows I wanted to change out first. This is not a cheap project, but we had moved into this house with some milky panes, and I knew that it was a repair/update that I wanted to accomplish and enjoy. We decided to do it a little bit at a time. We are also replacing torn and damaged screens with Fair and Square, upgrading the glass panes and the type of screen while doing it.

About a week after Trey took the measurements, he and his son returned with glass and new screens in hand. I am sorry to say that I had to leave during a lot of the procedure, but I took a few pictures at the beginning.

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He popped out these strips that hold the panes from the inside.

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Using a strong suction device to hold the old glass in order to remove it to the outside.

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I don’t know about you, but I’m seeing a torch and a scraper sitting on the outside ledge. Missed this part, but it must have been exciting.

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Oooooo, cleaning up those beautiful new panes!

Aside from the tremendous pleasure that looking through clean glass brings, these panes are highly energy-efficient and they block 95% of the sun’s ultraviolet rays. You know how your fabrics, paintings, and furniture fade near windows? Yeah, well, not with this glass. Not in my lifetime, anyway.

Although we have been pretty prompt on needed repairs to our homes and on decorating to our taste, we have a track record of putting off updating certain features that are still functional until suddenly we decide to put our house on the market. Then, we go into high gear and do all sorts of things to the house that we could have done years before and actually ENJOYED ourselves before we decided to move. We have made a plan for updating and upgrading this house so that we won’t be in a bind, or leave money on the table if we should decide to move, or if some circumstances force a move.

Here’s a question for you: if my house is on the market and my neighbor down the street has her house on the market, which windows are going to give a better impression when  buyers walk in- the milky windows down the street, or my clear, high-definition view of nature?

 

 

And Now For Something A Little Different. And a Cat Video at the End.

I am so excited about a seminar I attended last night and you’ll never guess the topic… keeping a record of my life and possessions so that my heirs can step in and run the show in the event of my unexpected demise! (This includes everything about running a home, so it is a direct tie-in to the overall purpose of this real estate blog.)

Have you ever been so stressed that you almost can’t remember your current address and phone number? I have! My mind shoots straight back to an address from 3rd grade, or something useless like that. So, how in the world could I cope with the avalanche of information I need at hand in the case of a family death? And how could I expect my family to cope in the event of my death? I have bits and pieces of information all over the place, some online and some on paper!  Some is stored only in my head. Yikes! What a nightmare to leave my family. They would miss me and be angry with me all at the same time, right?

On a related note, a couple of days ago, it occurred to me that, since my spouse is away for a week, and I am doing all the cat duties by myself, what would happen to these little living creatures if I keel over and become non-functional while he’s gone???? I thought, “Oh, my gosh, I’ve got to have a plan! I have to write down every detail of cat care, cat medications, as well as cat-related chores. I have to write down how to run the two septic systems, the water softener, the HVAC, the potted plants, the swimming pool, the…… etc. I need to keep a notebook around here where close friends and family know to find it and access it in a mere 30 seconds to start up the routines and keep the place humming, if no one else is here to do it.”

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Amy Praskac

Voilá! Enter my friend, Amy Praskac, of On the Record Advance Planning, who conducted last night’s seminar. Yes, her workbook, available on Amazon or from her website, has a page for pets and their care! And an entire section entitled ‘Household Facts’!!!

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Amy even recognizes what a daunting organizational task this is for most of us, and she provides a three-month calendar along with tips for scheduling this bear of a project to get it finished. Remember the goal? To create a smooth path, rather than a nightmarish chasm for your family and friends to traverse after you’re gone. (Must put that over my desk as a reminder.)

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Here’s what the seminar provides me:

  1. Peace of mind for me, if my spouse dies before I do.
  2. Peace of mind for my spouse, if I die before he does.
  3. Reaaaalllly important: peace of mind for our kids, who would have to step in and take over immediately in the event that my husband and I are in an accident or something shocking like that.
  4. A concrete way to start these conversations with our children about funeral/burial plans, will and power of attorney documents, disbursal of personal possessions, whom to call, financial accounts.

We know from personal experience that this kind of planning is important for adults of any age. My sister-in-law died very suddenly and unexpectedly without a will, half-way across the country from us and from her parents when she was only 30, and getting her simple possessions and simple legal affairs wrapped up was anything but simple! Do your parents a favor- make a will and leave a record of everything they will need to know to pick up where you leave off.

And if you are a homeowner, seriously, how is anyone going to keep the place functional with running water and electricity, if you have not left them operating instructions? Somebody has to pay the gas bill to keep the gas turned on. Take it from me, if your heirs have to sell a house that has been neglected, even for a few months, it is much harder than if the house is in tip-top shape while waiting to go on the market! They will actually lose money if the house is neglected.

Contact Amy on her website if you want more information about the seminar. And contact me at 512-970-9121, if you need to sell a house. Let’s chat!

There is something unimaginably appealing about The Critical Information Workbook: Creating a Road Map for Your Family!

 

Negotiating

It could be that growing up an ‘only child’ gave me a foundation for intuiting a lot about negotiation. After all, I perceived the world as myself “against” two parents (who had my best interests at heart), but whose decisions I saw as overly-restrictive. I am sure I argued them out of their minds! But, over time, I did start becoming more sophisticated about ‘reading’ those parents of mine.

With age and experience, I have a completely different perspective on the goals of negotiation. I no longer want to win just for the sake of winning. I am interested in figuring out what the opposite party wants and needs and in seeing a way to align those interests with the wants and needs of my side. I must remain clear and communicative about the needs on my side, especially because perceived needs are usually more fluid than we like to think they are.

When I am on the buyers’ side of a negotiation, I have learned to ask lots of questions of the other agent in a transaction to find out as much as I can about the sellers’ situation. I also pick up clues from the listing, from the photos, from the house itself, from their expressed timelines. I pick up a lot of clues and often, I’m not even sure how I know what I know. That’s intuition.

A real estate buy/sell negotiation starts at the very first contact with my own client. That is when I start setting the tone for how I do business through negotiating with the client on the terms under which we will act in concert to achieve what they need to achieve.

On the buying side, each contact with a listing agent in setting up an appointment to view a property, in letting the agent or the occupant know when we leave the property, in letting the agent know positives and negatives of my buyer’s and my thoughts about the property sets a standard for a later negotiation, should the buyers decide to make an offer. Being unfailingly courteous and respectful toward the other agent and their clients helps them understand that we are not out to ‘get the best of them’, to fool them, or to be arbitrary in our approach. This relaxes everyone, which reduces fear and defensiveness in later discussions.

When I am in a position in which the opposite party tries to bully me or my client, I take this as a sign that his position is weak and the only tool he has left is to try to force his will onto me or my client. Or, that she is pathological! Bullying behavior sends me into my hyper-calm exterior, hyper-alert interior mode in which I see the possibilities and strategies for disarming the bully and forcing her to face the realities of the situation. Working with reality is more productive than dancing around imagined wrongs and slights with power-moves.

Working the seller’s side is interesting because they have had the time and inclination to build a fantasy world of how the market works before I even talk with them about real estate. My job is to give them the experience of market reality so that they can start moving away from notions and into the actual world. And my job is to walk away from the relationship, if it appears that the sellers are not going to face reality in price or in preparation for a sale.

Being in a position to calmly walk away from a negotiation is gold. Knowing the bottom line frees all parties to search earnestly for a way to work together, if both have a stake in the result, and both realize that the other party can and will end the negotiation if there is no positive movement.

On the selling side, it helps that I am familiar with a buyer’s perspective, and I can help the seller understand that perspective, too, in order to remove as many barriers and negotiating points as possible before the house even goes on the market. Imagine if there are only two or three points of contention in a contract, rather than ten! How much less time and annoyance we all expend when we have taken into account a buyer’s perspective ahead of the negotiation!

On the buying side, it helps that I am familiar with a seller’s perspective; all the time and preparation that has gone into getting a house ready for market, and sometimes, even legal issues that have had to be resolved in advance of listing the home, as well as the ongoing inconvenience or even financial stress that comes from having  a home on the market.

Our Texas residential contracts are set up to be very much to the advantage of the buyer, as if the seller is a business or corporation which might be trying to fool the unsuspecting buyer into acquiring a ‘dog’. Of course, there is an element of that in a sale, and I believe in being vigilant in observing potential problems when buying a house. But, unlike a business or corporation, most sellers are emotionally attached to their property and their dignity, and honoring that impulse really helps a buyer’s side in a negotiation about any part of the contract.

I really love negotiation. I love the feeling of being emotionally calm and mentally charged. I love the flow of intuiting the unspoken and using all clues to reach what the parties feel is a satisfying, or at least fair, outcome.

I love when my buyers pay less than their lender’s appraiser says the property is worth. I love when my buyers win with their offer, even when it is less money for the seller than other offers. I love when a seller gets above-asking price for their home, especially when the house has been priced in accordance with what houses in similar condition have been sold for in the neighborhood. And I love when even the people on the other side of the transaction feel satisfied and free to move into the next phase of their lives unencumbered.

There are two or three basic theories I’ve read about how negotiations should be conducted, but my experience shows me that my best approach is to use intuition coupled with adjustments in my side’s response based on the results of each step we take, learning the hidden parts of each parties’ needs and tolerance as we go, until we reach a satisfactory conclusion.

I’ll be happy to negotiate on your behalf, starting with our first contact.

Ruth Marie was about 14.

Esteemed teacher and young student.

There is a lot of unspoken AND spoken negotiation in playing music together. If one player has a strong idea about which way to take the mood, the tempo, even the pitch, it is well that others adjust, or persuade that outlier otherwise, all in real-time! 

What I’ve Been Thinking About Today

Julia Mae on porch with butter churn jar-1

Yes, kitchens do become dated, and most buyers in our market long for acres of luxurious countertops rather than a dog trot breezeway on which to churn their butter.

In advising people who have been in their homes for a long time and are thinking that they might be moving into a smaller place, or into an assisted-living apartment* in the next couple of years, I realize that folks get information on How To Sell A House from  a variety of sources. Those sources are often national in scope, and are helpful in a way, but never specific enough to a market or micro-market to be completely believable.

In planning home renovations with an eye to a home sale, there is no substitute for consulting with someone who has local market expertise and has walked the walk with a multitude of buyers, hearing their comments and feelings about homes they see. Just because you think you know that most buyers want certain features in a kitchen, or a bathroom, or a certain flooring choice, does not necessarily mean that you will do yourself a favor by spending a lot of money following through with that type of renovation.

When I do a thorough market analysis, I look at every home in your neighborhood, and sometimes, other similar neighborhoods, to see what has sold in the past few months, what those homes looked like inside and out, where they were situated in relation to through streets, scenic views, neighborhood amenities, noise sources, as well as the prices they brought to their sellers. In a neighborhood in which many of the “perfectly good” homes are being torn down to be replaced with a modern version of home, your beloved home might become a tear-down, or a major remodel project, too. If that seems likely based on what the market is telling us right now, it would not be prudent to spend a lot of money updating your home for a sale. It would be more prudent to adjust your expectations to accommodate what the buying public is telling us about price, and for you to put a sales price on the home that reflects what is actually happening in the market.

Please, please do not set off to modernize a badly-dated kitchen or bathroom without getting a pair of expert eyes in to advise you on the likelihood of payoff from such a project.

Much better to keep an eye on home trends all along and periodically make judicious upgrades to your home as you are able. You want to be able to enjoy the fruit of your labor while you are living in the home, right?!?!

*Some of these apartment centers I refer to as “party barges” because the residents live in a stimulating atmosphere of slumber party pranks, laughter over wine and parlor games, endless field trips and educational adventures, and the occasional nap thrown in.

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Happy birthday to this fabulous country of ours, home of beautiful mountains, vast skies, innovative thinkers, and generous hearts. What a great experiment our founders flung out into the world, and may we continue that experiment with creative and supple minds and bodies, that all who enter will sense an awakening to possibilities and promise for everyone and everything contained within these 50 states.

(Almost) Every House is Unique

Cat video. You’re welcome.

Recently, I have found myself consulting with a number of different people about future moves that are not necessarily imminent. I think this time spent together with potential clients is rewarding! Every situation is different and every house is unique in that it is situated in a particular place in the city, in a neighborhood, of a certain age, amount of updating, and is experiencing street changes, or street stability, according to what’s happening in the market.

After asking lots of questions about goals, future desired location, amount of support- family, and otherwise- financial strengths and weaknesses, and determining which emotions are most at play, I put together a suggested plan for tackling all the issues, including prepping the house, for that future move.

Before our meeting, I drive the neighborhood carefully, even if I already know the area well, looking for signs of change, looking for clues to what’s happening. If I see on the MLS that an older home that is mostly in original condition has recently sold, I’ll check from the curb to see what it looks like now. If it is in an area where older houses are being torn down to make way for new ones, I want to know if this particular older home has met that fate, or if it is still being used as a home. Toys and playthings in the front yard six months after the sale are a pretty good indication that this home isn’t being replaced this year.

In advance of my neighborhood drive, I study the MLS and all the properties that have sold in the past six months, or year, depending on the area, searching for sold prices, condition of homes, location in neighborhood, etc. I study the photos that the listing agents put up on the MLS to see the condition of the interiors. I look for homes that might be comparable to the home I am scheduled to visit. I make graphs and charts of market activity in that neighborhood or that feeder district to a particular high school, depending on which parameters I think are most relevant to that house in that location.

When I show up at the door, I already know a lot about the situation, and I bring my graphs, information on comparable homes, a Seller’s Disclosure that the owner will have to fill out sooner or later, and other useful papers. After we sit down and talk about the personal situation, I walk through the house, taking snapshots and noting things that need to be repaired and/or updated.

Depending on the house and the micro-market it inhabits, I use one or more sets of these eyes to examine the property: the flipper-investor eyes, the buy-and-hold investor eyes, the move-up buyer eyes, the downsize buyer eyes, the coming-from-a-different-state eyes, the moving-out-of-the-city eyes, the second-home eyes. The recommendations I make to prepare the house for sale are usually based on the least amount of stuff the homeowner can do to make the house desirable. Of course, price of the home and price of updating and repair is a big factor, too.

Some homes merit new faucets, new flooring, new paint, etc., because through these improvements the homeowner is likely to make a quicker sale, or sell at the higher end of a reasonable price range. Some homes will be purchased by a flipper and price is the only thing that will matter to those folks. Even within my written recommendations, I make two tiers- one is “must do” and the other is “would be nice to do, if possible”.

Here are three short samples from some write-ups I’ve done recently:

The two most important points at which we must capture a buyer’s imagination are from the street and then again just outside and just inside the front door. Those are our ‘hooks’. People have no clue when looking at your neighborhood from the street that there is an amazing view behind the privacy fences, so we have to pull them up and in until they arrive where we want them to be.

The goal of any effort put into your home between now and putting it on the market is to transform it from your ‘home’ into a ‘house’. In other words, it will become a commodity when it hits the market. Your best chance for getting the highest price the market will offer is to get as many buyers aware of its existence as possible (that’s my job) and to pull them from the curb and into the front door (your job and my job). What I am describing now is changes you can make to the real estate to help pull those people in. Staging, our last effort before taking pictures and putting it on the market, will come later.

Because you are looking at a limited time for owning and enjoying the house (5 years is your general estimate, but it could be much less), you will only make changes which, if not made, will result in more days on market to sell your house, or will make the price lower than it needs to be. The changes you elect to make to upgrade the house in the eyes of future buyers must be changes you would enjoy, too, for the length of time you own the house.

Now… why the cat video?  Today I met with a friend and fellow agent who has recently marketed and sold a house that was home to an elderly couple with dozens of rescued cats! What a feat! (It took a village.)  Our rescues in the video? There are only 11 and they are well-loved and cared for. But, I hope we don’t have to move anytime soon!

If You Really Want to Move Now, “Price It Right”

I’m looking at the March 2017 Austin Board of Realtors Market Report from the Real Estate Center at Texas A&M University this morning. Focusing on the zip code 78620, which is the Dripping Springs area. Because A&M is using the Austin Board of Realtors Multiple Listing Service data, I can look at any zip code I want to in the central Texas counties. If you want different area stats from the ones here, just ask me.

In the existing homes category, there are 2.8 months of inventory. Because a market considered ‘balanced’ in which there are about as many people wanting to sell homes as people wanting to buy homes is about 6 months of inventory, we are clearly still in a seller’s market overall. There are more people who want to buy homes than people who want to sell homes.

OK, class, what does this do to price? Yes, that’s right… the market forces keep the prices up. Existing homes are in demand.

Here’s something interesting: the new builds have an inventory of 9.3 months in this zip code. Also, the average selling price of existing homes is $482,145 vs. $430,550 for new homes.

In no category of home; single-family, townhouse, condominium, both new and existing, does the selling price average equal 100% of the listing price average. The ratio is hovering around 94%-95%. On average, sellers are not getting their full asking price for their houses.

However, if you are clever, you will find a REALTOR® who looks at the statistics for your particular neighborhood or area and finds out what the hyper-local market is doing. Amenities, features, well-considered upgrades, location, and landscaping are all factors! With this knowledge you’ll have a better idea of how to price your house.

Remember, the aggregate of buyers who are looking for your type of home, in your price range, in your market is what determines the likely selling price of your home. And, in turn, the aggregate of buyers is influenced by all kinds of forces, from financial, to emotions about the economy and government, to work opportunities, to weather patterns to local government policies and private sector opportunities. And so on.

To put it a different way, if you want to sell your home in this ‘buyer’s market’, it is best not to get too cocky and think that you can pick your own price. I have watched homes sit on the market for weeks and months without very many showings and zero offers. Why? Price per square foot that looks reasonable for the neighborhood and amenities that look good on paper, BUT the fixtures and finishes are dated, or the layout that was suitable for the wants and needs of a family in 1985 is no longer relevant or desirable, or the amenities are not as glam as a typical buyer in 2017 expects to see. In short, a home that was pretty wonderful 30+ years ago has lost its edge and must be priced to attract a smaller set of real buyers. (Real buyers are the set of people who would REALly buy your home.) This is not personal. This is business!

When you price your home too high for what price the market puts on it, you are selling the home down the street, or around the corner, that IS priced right for its market. Buyers see both homes and immediately realize which is the better bargain. And it’s not yours.

By the way, when you and I interview each other about selling your home, I will ask you what you know about any homes that have sold off market around you. That would be homes that have sold by the owner without ever being on the MLS, and homes that were going to go on the MLS, but the owner accepted an offer from a buyer before the MSL thing happened. Having this information helps me to help you price your home right for your hyper-local market.

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