(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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Live in Austin? You’ll Need to Do An Energy Audit

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Newsflash for you who have lived in your Austin home since the Year One: before you put that home on the market, you must get an energy audit done by an energy professional.

Yes, it’s true, the City of Austin has an Energy Conservation and Disclosure ordinance. If you are an Austin Energy customer, you live in the Austin city limits, and your house is more than 10 years old, you must get an audit done. They check heating/cooling efficiency, amount of air escaping your home, the insulation level, and the window efficiency, all of which require specialized equipment.

This will cost you several hundred dollars, based on the size of your home. Be sure to get quotes from several energy professionals, and get a recommendation from someone who has used an auditor, if possible, before hiring one.

Just like any other aspect of home improvement, you can wait until you decide to put your house on the market before you take action. OR, you can choose to take action early and enjoy the fruits while you are still living in the home. You might go ahead and get an energy audit and get yourself some beautiful new windows. Or, you might decide to upgrade to a more efficient HVAC system and enjoy the savings on your utility bills.

In any case, the city does not require you to make upgrades based on the energy audit. It just requires you to pay for the audit so that potential buyers will understand what might be involved in owning the home in the condition it’s in.

A Few Things I Wish Sellers Knew

Thematic Thursday is the day when I post about buying and selling and leasing transactions, which are mysterious if you don’t do them at least every couple of years.

  1. The market does not care what price you need or want to get for your house. The market price is not set by you or by me. It is set by what buyers will pay for it at this time and in this place.
  2. Your house will sell faster, and likely for a higher price, if you make it look its best. This might mean replacing worn floor covering and putting on a tidy coat of paint, in addition to making repairs and making every corner sparkle for the nose, eyes, and ears of potential buyers.
  3. If your house is not going to sparkle, is not going to be repaired, is going to be worn and dated, don’t worry. You can still get lots of eyeballs and potential buyers by presenting a discounted price. Some buyers are looking specifically for a bargain!
  4. As soon as you decide to, or are forced to, sell your home, it becomes a house; a commodity. It is no longer your home. Get therapy, if needed, to get through the grieving process, then do yourself a favor and help me do my job of getting your house sold for the best possible price in the least amount of time. Please take my advice to heart, because I work in this business all the time and I see what is effective for selling and what isn’t.
  5. You will be leaving your house for scheduled showings, and you will be taking the pets with you. Especially the snake. It might be kinder for you and the pets if you can find a  loving and gentle home-away-from-home for the animals during the selling process, so they are uprooted once, instead of daily.
  6. If your house or property has unusual or challenging features, they will reduce the number of buyers from the buying pool for whom the house will be a good match. This often translates into a longer  time on the market before a sale. You might have to go through several rounds of fresh buyers before a match is found. In case you were wondering, this is a LOT like dating- the quirkier or more difficult we are, the more potential mates we have to meet before finding one that sticks. The alternative is to quit being quirky and/or difficult, but this isn’t always an option.
  7. When you pay my brokerage to sell your house and for me to get you through the process as gracefully as possible, you are paying for my experience, my work ethic, and my character, as well as the depth of knowledge and integrity in my brokerage. I draw on all these qualities when working on your project. By way of analogy, in buying art, you are paying the artist for focus, observational skill, imagination, practice, and creativity, all of which are worth far more than these particular molecules of ink on this particular piece of paper.

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    Horse from Leonardo da Vinci’s notebook

Stats Working for You

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Here is an example of what the MLS (Multiple Listing Service) statistics reveal when using them to help price a house that is going on the market.

This graph is data from the past year regarding the median list price versus the median sold price for all single-family homes in the Dripping Springs Independent School District. As you can see, in general, the homes listed on the MLS were listed at higher prices than the price for which they eventually sold. The exception is this month. (Do you think a single spectacular sale skewed the numbers? Maybe. We need to look at the coming months to find out)

This graph is one of many data points I can generate when helping a selling client decide on an asking price for their house. This is a graph I would use in passing to demonstrate how a majority of homes in this school district start off being priced higher than the market says they should be.

Graphs such as this one are points of interest when anticipating the market for your home.

In preparing for your home listing, I look at all the homes that have been sold recently in your area, the sold homes that are similar to yours, the average days on market compared with price per square foot, the current listed prices of homes similar to yours, the number and quality of upgrades on your home and homes of similar size in your area, and many other parameters.

Knowing the numbers helps you to be smart about pricing your home to be the most desirable in your market. Smart price, quick sale, most money in your pocket.

Next up: The Cost of Having Your Home on the Market.

Your Move and Your Pets, Part 1

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So, you’ve decided to move. Caution: big changes ahead!!!

Selling a home and moving is always more work than we think it is. Even with the smoothest of transactions, there is still a lot of upheaval for the people in the household. Our pets want us to know that they are feeling stressed, too!

If we want our home sale to go as well as possible, we MUST plan ahead to keep the pets as emotionally and physically secure as possible. Having a plan takes a load off the people.

We have cats at our house, and being the emotional creatures that they are, cats can freak out at even small changes in their environment or routine, and disrupt a perfectly staged house faster than anything. The lovely animal in the photo above will eat any plant in the house, whether natural or fake, and throw up the leaves afterward.

This isn’t hard to remember under ordinary circumstances, but when staging a home to look inviting for potential buyers, it would be super-easy to forget the cat’s predilections and place cut flowers in strategic places. BAD MISTAKE!

Or, when rushing to get knick-knacks packed away and out of sight, it would be sooooo easy to leave a plastic bag lying out where this tuxedo lovely could get it:

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Here is a partial list of pet challenges I work out with sellers ahead of putting their house on the market.

  1. Pet safety when readying house for market.
  2. Being intentional about addressing the pet’s feelings.
  3. Securing, or even better, removing pets from the house before showings.
  4. Stain and odor removal.
  5. Planning pet transportation to the new home.
  6. Readying the new home for the pets.

Austin-area Action Past 7 Days

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We are talking residential market here, Folks.

852 residences newly on the market in our Multiple Listing Service area

429 residences already on the market which have decreased prices in the past week

103 residences already on the market which have…wait for it…. PRICE INCREASES

149 residences which were temporarily off the market, but have been put back on

42 residences which have a contract on them, the closing of which is contingent on something else happening, like the buyers selling another piece of property first

869 residences pending– They have a contract on them and are moving through the process towards a closing. (Notice how few residences are “contingent” compared with “pending”. Not very many sellers are interested in accepting an offer that is contingent on ANYTHING else happening before the closing.)

514 residences sold this past 7 days.

There were no leases through the MLS.

84 residential properties were withdrawn from the market.

24 residential properties on the market expired, meaning that the lengths of listing times agreed to by the agents and sellers has now passed on each of 24 properties, and the listing now goes bye-bye. Not very many properties unsold here, compared with the 514 that did sell. Time to assess why these properties did not sell in the desired time!

55 residences temporarily off market. Remember those 149 residences back on market? Yeah, well, residences are temporarily taken off the market for a variety of reasons, including responding to comments from potential buyers about the condition of the property by installing new kitchen counters or some such, or taking the property off the market to accommodate a big family reunion happening in the home over a period of time.