 If you are purchasing a home using a loan, the bank will require an appraisal. The appraiser visits the home, looks at comparable recent sales, and determines a value for the property. If the appraiser’s value is less than the agreed upon sales price, you have what is commonly referred to as an appraisal problem (very fancy nomenclature). Let’s say you made an offer on a home for $350K. The seller’s accepted your offer, and you are getting very excited about moving into your new home. Then, the appraisal report comes back, and you find out the home only appraised for $330K. You have a few options in this scenario. As the buyer, the best way this could turn out for you is if the seller agrees to drop the sales price to $330k to match the appraised value. Conversely, the worst way it could play out would be that you agree to bring an additional $20k cash to closing on top of the down payment in order to buy the home at the agreed upon sales price of $350k. Often, when a home doesn’t appraise it’s worked out with a compromise. Maybe, the buyer and seller agree to close at $340k with the buyer bringing $10k to the table. Or, maybe, the buyer and seller agree to close at $345k with the buyer bringing an additional $15K to the table on top of the down payment. Essentially, the buyers and sellers agree to meet someplace in the middle, between the appraised value and the agreed upon sales price. The final way this scenario could play out is the buyer backs out of the contract. The third party financing addendum specifies that the buyer has an out from the contract if the home doesn’t appraise. The buyer can back out of the deal, and the earnest money will be returned to the buyer. Unless, the buyer has signed a specific addendum to the contract in which they waive this right to back out of the contract due to the appraised value of the home.  The final way this scenario could play out is the buyer backs out of the contract. The third party financing addendum specifies that the buyer has an out from the contract if the home doesn’t appraise. The buyer can back out of the deal, and the earnest money will be returned to the buyer. Unless, the buyer has signed a specific addendum to the contract in which they waive this right to back out of the contract due to the appraised value of the home.  Feeling overwhelmed with all this information? Don’t worry, I’m here to make things as simple as possible. If you or someone you know is looking to buy or sell a home in the Austin area, contact me today. I’ll make sure you are well-informed of all the steps in a real estate transaction, at the right time, so you can make informed decisions every step of the way.
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 As we approach the high season in the land of real estate, more and more properties are experiencing multiple offer situations. When two or more parties have submitted an offer on the same piece of property, it becomes a multiple offer situation. This is often referred to as a bidding war. However, it’s not always the party with the highest offer price that wins. Many different variables affect the offer that ends up being selected by the seller. It’s important to understand these variables, so that you can craft the strongest offer. First, it’s important to understand what the seller wants. Has the seller already vacated the property? If so, they most-likely would appreciate a quick close. If they are still living in the home, you should inquire as to the seller’s ideal closing date, and craft your offer accordingly. One of the most common oversights I see in offers submitted in a multiple offer situation is in the third-party financing addendum. The third-party financing addendum is required with any offer that involves financing. The first oversight I see is in regards to the term of the loan. The addendum spells out the limits for the interest rate and the origination charges. It puts a maximum value on these terms. For example, say your lender has quoted you a 4.4% interest rate, and 1% origination charge. In the third part financing addendum, you enter these same figures.  What if the interest rate changes, and now you can only obtain a loan with a 4.5% interest rate? You would have an out from the contract. This is good for the buyer, but the seller is looking for the buyer with the highest likelihood of purchasing their home. Would you still purchase the home if your interest rate went up to 4.5% or 4.6%? If so, you should make sure the third party financing addendum reflects the maximum interest rate and origination fee that you would pay. The third party financing addendum also specifies the amount of time, if any, needed for buyer approval.  Oftentimes, I see “21 days” in this paragraph. That means that you, as the buyer, have 21 days to be fully pre-approved by the lender, and you have an out from the contract for 21 days after the execution date. This is a really long time! If you, as a buyer, are fully pre-approved, and the lender has had all of your personal financial documentation go through underwriting, you can enter a much lower number here! Try to make this number less than or equal to the number of days in your option period, and the offer will be much more enticing to the seller.
Increasing the amount of earnest money you will pay also strengthens the offer. The earnest money is held by the title company, and ultimately applied to the sales price. If you have the funds to do so, consider putting a larger amount here. If you back out for any reason, this money will be refunded to you. Similarly, consider the amount of money you will pay for the option period, and the number of days you will need for the option period. In contrast to the earnest money, the option money is not refundable. If you decide to back out of the purchase during the option period, you will not get this money back. However, if you are really serious about the home, and don’t think you will back out, consider increasing the amount of option money. You can, and should, make sure that if you do purchase the home, the option money is applied to the sales price. Additionally, consider how long you need for the option period. How long will it take for you to get an inspection done? The shorter the option period is, the more appealing the offer is in the eyes of the seller. Traditionally, in Texas, we see the seller paying for the owner’s title policy. If you want to make your offer super strong, consider paying for the title policy. Also, think carefully about any other concessions you may want to request. Asking for contributions to closing costs or home warranties negatively affects the seller’s bottom line. Crafting a personal letter to the sellers sometimes works. If you’re in a multiple-offer situation, you might as well give it a shot. Tell the seller why you want to purchase their home. Compliments, and a personal back story often go a long way. Sellers sometimes choose an offer not because it is the highest, but because they can envision you living in their home. Lastly, choose an agent who is experienced, professional, and knows how to write a clean offer. As a listing agent, I have advised my client to consider accepting an offer that was lower than the highest offer, simply because the offer was well-written. I can tell a lot about an agent from the way the offer is presented. If there are mistakes and oversights in the offer itself it makes me doubt their ability to do their best to get the offer to the closing table. If you’re looking for an agent in the Austin area, contact me today. Recently, I was showing a client of mine some condos in central Austin. She was trying to decide between a condo in Clarksville and a condo in 78704, and she asked which area appreciated better. From the seat of my pants, I speculated that 78704 condos have appreciated more than Clarksville condos. This hypothesis was based on the fact that Clarksville condos have been pricier for some time, so it seemed logical that the 78704 condos would have appreciated more in the past ten years or so.  When I got home, I ran some numbers. I looked at the median sales price annually from 2009-2019 for condos in the following central Austin zip codes: 78701, 78702, 78703, 78704, 78705, and 78751. I then calculated the appreciation rate for condos in each zip code between 2009-2018. The median sales price for 2019 would not have provided accurate data since we are only a few months in to 2019. As I suspected, condos in 78704 appreciated more than condos in Clarksville (78703). In fact, condos in 78704 had the highest appreciation rate out of all of the central Austin zip codes. In 2008, the median sales price for condos in Austin’s 78704 zip code was just over $169k. In 2018, that number shot up to $376K. In 78704, we are seeing a lot of condo regimes. A condo regime happens when a developer takes a traditional single family lot and constructs two new units on the lot. Often times these units are not attached and live like single family homes. However, they are technically condos and sell for much more than a traditional condo. Thus, I am not surprised by this appreciation rate.  In 78703, which consists of Tarrytown, Clarksville, and Old West Austin the median sales price for condos in 2009 was a little over $347K, compared to $460K in 2018. Out of all the central Austin zip codes I looked at, 78703 had the lowest condo appreciation rate at just over 32%. As would be expected, condos in East Austin appreciated well over the last 9 years. In 78702, the median sales price for condos in 2009 was about $168K. Last year, that figure jumped to 325K. Condos in downtown Austin appreciated about 78% between 2009-2018. In comparison, condos in 78705, which encompasses the UT campus area, appreciated about 57%.  Overall, condos in central Austin have appreciated well. If you talk to anyone who purchased a condo about 10 years ago, they will usually tell you one of two things, “I wish I bought more” or “I wish I hadn’t sold 5 years ago, even though I thought I was making a killing when I sold.” If you are considering buying a condo in central Austin or are curious how much your condo is worth, contact me today. Central Austin Condo Appreciation Video
There’s nothing better than being able to wake up in the morning and enjoy a cup of coffee while you look out at the lake and see the sun reflecting off the water. If this sounds like a little slice of heaven to you, you may be considering purchasing a home with a lake view. In Austin, there are two main lakes, Lake Austin and Lake Travis. I should mention that both “lakes” are really damned portions of the Colorado River. Regardless, us Austinites refer to them as lakes, and you can find wonderful homes with great views of the water near both of these lakes.
Lake Travis is much larger than Lake Austin. Lake Travis is about 25 square miles opposed to Lake Austin’s 2.5 square mile size. So, as you might imagine there are many more homes for sale with Lake Travis views than Lake Austin views.
The south shore of Lake Travis consists of neighborhoods such as Hudson Bend, Lakeway, and Spicewood. These communities are located about 20-30 miles west of downtown Austin in the the Lake Travis Independent School District (LTISD). According to niche.com, LTISD is rated the #2 school district in the Austin area. The north shore of Lake Travis consists of neighborhoods such as Volente, Jonestown and Lago Vista. The north shore communities of Lake Travis are about 20-40 miles from downtown Austin. However, in my opinion, it seems it usually takes longer to get to these neighborhoods from downtown than it does to get to the south shore communities. Homes with lake view on Lake Austin, can similarly be categorized as homes on the south side of the lake verse homes on the north side of the lake. However, closer to downtown they are often categorized as west of the lake or east of the lake. Residents of neighborhoods like West Lake Hills (west of Lake Austin, duh) and Tarrytown (east of Lake Austin) can usually get to downtown in less than 20 minutes. Further out, you can find homes with lake views in neighborhoods such as Cuernevaca, Lake Pointe, and Apache Shores (all south of the lake). On the north side of Lake Austin you can find homes with lake views in Steiner Ranch, River Point, and Cat Mountain. If you’re thinking about purchasing a home in the Austin area with a lake view, feel free to contact me for insider information on the best neighborhoods for your specific needs.  As someone thinking about a move to Austin, I’m sure you may be curious about how much you should expect to pay in property taxes for any given home. Property tax rates vary drastically across central Texas, and it’s important you have a good estimate of what this cost will be before you buy a home. Your annual property taxes will be calculated using the purchase price of the home and the tax rate for that specific property. If it’s your primary home, you can apply for a homestead exemption reducing the amount of your total annual property tax bill. However, you have to know the tax rate to even have a rough idea of what you may expect to pay in property taxes! Until today, I didn‘t realize just how hard it was to search for this critical number. It’s almost impossible to search for homes with low property taxes in the Austin area. I scoured hundreds of websites and did not find one that had a search field for property tax rates.  Luckily, I have the ability to search for Austin homes with low property tax rates in the MLS. I know, ideally you don’t want to talk to me. What you really want is to be able to just search for it yourself! But, since this isn’t an option right now, and I have yet to create what you really want (a great search interface that lets you search for the EXACT home you want with as many search fields as possible), I thought I would try to make the search just a little easier for you!
You can click any of the following links to view Austin homes for sale with a low property tax rate. Homes and Condos within 10 Miles of Downtown with a Property Tax Rate Under 2% Homes in the Greater Austin Area Under 500K with a Property Tax Rate Under 2% Homes in the Greater Austin Area Under 300K with a Property Tax Rate Under 2% Homes in the Greater Austin Area Under 300K with a Property Tax Rate Under 2.3% These links were created on 2/10/19, and the results will not stay relevant forever. If you want better results and a more customized search, feel free to text, email or call me. Once you let me know exactly what you are looking for, I can set you up to get updates for all Austin area homes that meet your unique search criteria including a low property tax rate :) In real estate, a right of first refusal is a contractual right that gives the holder the option to purchase a specified property when the owner decides to sell. This right of first refusal is usually written up by a lawyer, and the terms are agreed upon by the owner of the property and the holder of the right of first refusal. A right of first refusal may be used in a variety of situations.  Recently, a client of mine inquired about obtaining a right of first refusal on his neighbor’s vacant lot. He was potentially interested in purchasing the lot, and if the owner was going to sell the lot, he wanted the first opportunity to do so. In this way, he could control his own personal quality of life. If someone else was going to buy the lot and build a massive home that would encroach upon his sense of privacy, he could exercise his right of first refusal and purchase the lot. You also may see the right of first refusal used between a landlord and his tenant. If the tenant likes the home, and would someday like to purchase the property, he may seek a right of first refusal to secure this option. As an owner of a property, your initial thought may be that a right of first refusal is a win-win scenario for you. Either you sell the property to the person who initially submits an offer to purchase, or the holder of the right of first refusal purchases the property. However, in reality this may not be the case. If the wording is not incredibly black and white, and there are not strict timelines, you may be stuck unable to sell the property. If you are considering signing a right of first refusal, you should work with an attorney to make sure the terms are incredibly clear and leave no room for different interpretations.  In another recent transaction, I was representing the buyer of a condo. The condo association documents revealed a right of first refusal clause that granted the developers and their successors +21 years, the right to purchase any condo unit in the development. In this right of first refusal clause, it specifically states that if a condo owner receives an offer on his condo, he must provide written notice to the developer (ie the holder of the right of first refusal) and the developer shall have the right to purchase the subject unit upon the same terms and conditions in the initial offer. However, this wording which was drafted in 1973, reveals a lot of ambiguity. My client’s initial offer involved a cash transaction with a closing seven days after the execution of the contract. The holder of the right of first refusal exercised her right of first refusal, but she failed to match these terms. Unfortunately, there was no recourse for the seller. The right of first refusal is worded strongly in favor of the holder. In this scenario, which has yet to come to a conclusion, so far everyone lost. My client was not able to purchase the property. The seller was not able to sell the property, and the holder of the right of first refusal has not proved capable of purchasing the property.  The issue with this right of first refusal clause was that the holder had all the leverage. There was not a strict timeline for the holder to waive or exercise the right of first refusal, and there was a lack of specificity in regards to the terms of the contract. If I was a property owner considering signing a right of first refusal, I would make sure that the holder had a very tight timeline to waive or exercise the right of first refusal, probably less than a week. Furthermore, I would make sure that if the holder exercises the right of first refusal they must do so in a specified time frame, and if he fails to close in that timeline, the right is automatically waived.
If you are considering signing a right of first refusal, I recommend you hire an experienced attorney to make sure you do not fall victim to the same scenario. Likewise, if you are thinking of buying a property where a right of first refusal exists, do your due diligence and make sure you fully understand the terms of that right before you waste your time and money on a purchase that may never come to fruition. If you would like recommendations for experienced real estate attorneys in the Austin area, don’t hesitate to contact me. If you’re planning to sell your home in Texas, you almost always need to provide a seller’s disclosure form. This form is provided to buyers informing them of any known defects to the property, previous repairs, and general property conditions. There are a few exceptions for the mandate to provide a seller’s disclosure, and they are noted in the Texas Property Code. These exceptions include:
While a seller’s disclosure is not required in these cases, you may still want to provide a seller’s disclosure if you have knowledge of the property. One of, if not the most, common reason for lawsuits in real estate is from failing to disclose known information about the property condition. So, if you own a fourplex, and you previously were the landlord for the property. You likely know about some aspects of the property’s condition. I’d recommend completing a seller’s disclosure form even though you are not required to per the Texas Property Code. The seller’s disclosure form I recommend my clients use is the Texas Association of REALTORS® Seller’s Disclosure Notice (TAR-1406). This form is composed of eleven sections. The first section simply lists which features a property has.  The second, third and fourth sections deal with known issues, defects or conditions at the property. The fifth section addresses a range of property conditions including if the property is located in an HOA. The sixth section deals with the survey, and the seventh section asks owners to list any inspections provided within the past four years. If you have an inspection report from this time frame, you must provide it. Section eight pertains to tax exemptions, and section nine addresses insurance claims to the property. Section 11 require’s seller’s to disclose knowledge in regards to the presence of smoke detectors on the property. The last page of the seller’s disclosure notice should not be ignored. It discusses additional notices to buyers and the utility providers for the property. Filling out the utility provider fields will make it much easier for the buyer to transfer utilities when the property is sold.  If you have questions about the Texas Seller’s Disclosure notice, or selling your home, contact me today.
Lady Bird Lake or Town Lake as it was formerly known, is a dammed portion of the Colorado river situated just south of downtown Austin. Currently the lake and its surrounding hike and bike trails serve as an attraction for locals and visitors alike. However, Lady Bird Lake was not always as beautiful as it is now.  The lake was created in 1960 as a cooling pond for the adjacent Holly Power Plant. In its early days, Town Lake, as it was known at the time, was an eye-sore. In the early seventies, the Mayor of Austin, Roy Butler, established the Town Lake Beautification Committee. Lady Bird Johnson was appointed the honorary chairman of this committee. In this role, she led the planting of hundreds of plants and trees and the establishment of the hike and bike trails around the lake. When Lady Bird Johnson died in 2007, Town Lake formally changed its name to Lady Bird Lake in her honor. If you’re visiting Austin, I highly recommend you take a visit to Lady Bird Lake. While you are not permitted to swim in Lady Bird Lake, you can use non-motorized water boats. As a kid, I remember renting a pedal boat for an afternoon on Town Lake, but now stand up paddle boarding is by far the most popular recreational activity on Lady Bird Lake. If you don’t want to be on the lake, you can take advantage of the trails surrounding Lady Bird Lake. A ten-mile loop offers the perfect landscape for one to explore Austin by bike, or if you feel like walking or running you can also make a shorter loop.
This post originally appeared on activerain.com  If you’re considering buying a home in Austin, it’s a smart idea to consider the property tax rate of prospective houses. Property tax rates can vary significantly throughout central Texas, and oftentimes your property taxes are going to make up a significant portion of your monthly mortgage payment. In a previous post, I discussed the benefits of purchasing a brand new home. If you’re looking to buy a brand new home in South Austin, you may want to consider purchasing in one of these three great communities. Each of these new home communities in the Austin area has a property tax rate under 2%.  Hills of Bear Creek The Hills of Bear Creek Development by Milestone Community Builders is located approximately 14 miles south of downtown Austin off FM 1626 in the City of Manchaca. Homes in the Hills of Bear Creek are the most affordable on this list starting at 290K. The Hills of Bear Creek is a multi-phase development that is more than 50% complete. They have inventory and soon to be completed homes available in Phase 4. If you would like to choose your lot and selections, you can do so in the last and final Phase 5. The community offers 9 unique floor plans that all come standard with desired features such as granite countertops, open floor plans and energy-saving technology. Additionally a plethora of community features such as a pool and grilling area offer even more reasons to consider the Hills of Bear Creek home. Homes for sale in the Hills of Bear Creek Bear Creek Crossing MI Homes’ Bear Creek Crossing neighborhood feels like you are in the middle of the country. In reality, the community is less than 15 miles from downtown Austin and about 10 minutes from the South Park Meadows shopping center which has just about every large retailer you can think of and a plethora of restaurants. Homes in Bear Creek Crossing range from 1,825 to 4,000 square feet, and are priced from 313K. Tall ceilings, 42 inch kitchen cabinets, and a plethora of options for customization make Bear Creek Crossing homes a great fit for almost everyone. The tax rate for Bear Creek Crossing is the lowest of all the homes on this list at 1.86%. Homes for sale in Bear Creek CrossingEnclave at Estancia
The Enclave at Estancia is a gated community built by Lennar. The Enclave at Estancia is the only gated community on this list, and the community features a gorgeous community park and pool; homes here start from 335K. All of the homes at the Enclave at Estancia come standard with top of the line features like stainless steel appliances, dual vanities in the master bathroom, and a home automation package. Additionally, the homes all have a TAEXX® Built-In Pest Control System. I had never even heard of this feature before visiting the Enclave at Estancia, but it’s essentially a pest control system of mini tubes that are built in to the walls of your home with an exterior receptacle for pest control service providers to deliver treatments in to the home. There are a variety of different floorpans available at the Enclave at Estancia. However, one of the more unique offerings is the Giallo II home within a home floor plan. It’s essentially a 3 bedroom, 3 bath home with an attached guest suite with 1 bedroom, 1 bath a living room and a kitchenette. This ‘“guest suite” has its own access from the outside, but can also be accessed from the interior of the main home. It’s a great floorpan for families with have an elderly parent or parents with boomerang children. While the tax rate for homes in the Enclave at Estancia is 1.87%; please note homes in this community must also make annual payments towards the PID. Click here to view available homes in the Enclave at Estancia. Would you like more information about other homes that are located in an area with a property tax rate under 2%? Contact me today to learn about other areas in Austin. November Market Report Shows Signs of Another Record-Breaking Year for Austin Real Estate Sales12/19/2018 On the national scale, there are rumblings of a market shift in the real estate market. However, at the local level, real estate sales remain strong. According to Steve Crorey, President of the Austin Board of REALTORS, "Sales are up 3.3 percent year-to-date for 2018”. The Austin-Round Rock MSA experienced growth in both the number of homes sold and the median sales price while the City of Austin revealed fewer sales, but a higher median price. As prices within the city limits continue to increase, buyers are moving farther out in search of an affordable home.  In the Austin-Round Rock MSA, the sales volume increased slightly to 2,201 sales last month while the median home price increased to $301,391. As would be expected, there was an increase in all stages of listings year over year: new listings (+1.7%), active listings (+11.5%) and pending sales (+2.5%). Within the City of Austin, median sales price rose 5% to $374,900. At the same time, November home sales in the City of Austin decreased from 653 sales in November 2017 to 618 sales in November 2018. The total sales dollar volume for the City of Austin remained the same at $288,251,771.  In my opinion, the strength of the Austin real estate market is directly correlated to the health of the Austin job market. The local unemployment rate is extremely low, 2.6%, and major businesses continue to move here or expand operations in Austin such as Apple announced this week.
Furthermore, Austin will also always be home to both the University of Texas and government employers. There are over 50,000 students enrolled in undergrad or graduate programs at UT, and the vast majority of these students stick around and call Austin home. With Austin being the state capitol of Texas, it is also home to a number of other government agencies such as the Texas Comptroller of Public Accounts; Texas Department of Transportation; Texas Department of Public Safety; Texas Water Development Board, and the Texas Department of Health. The bottom line is that Austin has a healthy local economy with a variety of high tech businesses built upon a backbone of government and education. As long as there are jobs, the real estate market will stay strong. If you’re interested in moving to Austin, contact me today for more information about how you can call this wonderful city home. |
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