If you stumbled across this blog post, I’m guessing you may be curious when the best time to sell your Austin area home is. Generally speaking, homes in Austin tend to sell for more during the spring. However, this isn’t true for every neighborhood or every home. Regardless of what time of year you list your home, homes that hit the market on Thursdays tend to do better. This is why I always advocate for my seller clients to list their home on a Thursday. It may appear to be an arbitrary day; however, when you think about it, the rationale for listing on Thursday is quite strong.
Home buyers often shop for homes on the weekends. When you list on Thursday, your home is top of mind among buyers who then must coordinate with their agents to see your home. A 2018 study by real estate brokerage, Redfin, found that homes listed on Thursday sold for $3015 more on average than those listed on any other day of the week. Those homes also sold more quickly. The same study found that those listed on Thursday went under contract 6 days faster than those listed on Sunday, the worst day to list your home for sale.
So, there is certainly a strong case for listing your Austin home for sale on a Thursday, but which Thursday will yield you the most money on your home sale? The seasonality of the Austin Real Estate Market strongly correlates to the public school year. Most people want to move when the kids are out of school for the year. This is why you often see the highest sales prices in May or June. In 2019, the highest median sales price for Austin Area homes occurred in May. Based on the median sales price for the Austin area, you could argue that selling your home in May vs. February would result in an extra $60,000.
Now, you must be thinking, if you live in an area where there are families, you should list your home for sale on a Thursday in May. Not so fast, the highest median sales price usually occurs in May, but that does not mean that listing your home in May will result in the highest price paid for your home. If home sales in May are the most profitable, you must list earlier. It usually takes about 30 days to go from contract to the closing, and in May of 2019 the average days on market was 48. This means, if you want to sell your Austin home for the highest price, you need to list your home in March or April in order to sell for the most money,
What about the UT area condo you purchased as an investment property and now are thinking about selling? It may not follow these same trends. Every property is different, and determining the best time to sell your unique property is not black and white. If you’re curious about when the best time to sell your Austin Area property is, contact me today. I’d be happy to provide a thorough analysis of your unique market.
In my opinion, you should almost always get a home inspection. If you are buying a tear-down, you may not want to have the property inspection, but aside from that one instance where you may not want to get an inspection, you should always have your home inspected by a licensed professional. When you are building a new home or a buying a brand new home, it’s also a prudent choice to have it inspected by a third party inspector.
Often times builders will have their own inspections, and the city will require various inspections for major components such as plumbing and electrical too. However, you should also hire your own independent third party inspector. This individual will work for you! They are looking out for your best interest, and in addition to pointing out any areas of concern that may need to be rectified, they will also teach you how to maintain your home moving forward.
There are four main opportunities for an inspection on a new construction home. The first inspection is a pre-pour foundation inspection. During this inspection, an inspector will assess the engineering of the foundation. During this inspection, the depth of the footings, post-tension cables and other integral parts of the homes foundation will be assessed. In central Texas with the varying soil conditions, it’s a good idea to ensure your home’s foundation is properly built to last.
The second opportunity for an inspection on a new construction home is the pre-drywall inspection. As you may have guessed, this inspection occurs before the sheetrock is installed. This inspection allows the inspector to see all of the integral components of your home before they are hidden behind drywall. The home is fully framed and your plumbing, electrical and HVAC is usually all fully installed and visible. It’s common for inspectors to find minor oversights at this stage, and it’s easy for the builder to correct these issues at this stage. This inspection also allows you to see all of the framing of your home, and plan accordingly for things such as TV mounting and avoiding drilling a hole into your main water line.
The last opportunity for an inspection on your new home before you officially close occurs when the home is complete. This inspection usually occurs a week or so before the closing. During this inspection, all utilities should be on, and the inspector will be able to assess the functionality of appliances, outlets, sprinkler systems etc. This is also the time to look for minor cosmetic items such as opportunities for paint and drywall touch up.
One Year InspectioN
After you move into your home, theres one more opportunity for a home inspection. Most new construction homes come with a builder warranty. The builder warranty will cover various aspects of the home, and it will cover some systems for longer than others. Commonly you will see what is referred to as a 1 - 2 - 10 warranty. The “1” refers to the one year builder warranty on workmanship. The “2” usually means the 2 year warranty on electrical, plumbing and HVAC, and the “10” is in reference to the 10 year structural warranty. Thus, it’s a good idea to have a third party inspection performed shortly before the 1 year builder warranty expires. After living in your home for around 10-11 months you should schedule this inspection. Then you can provide a copy of the inspection report to your builder and have all of your maintenance items addressed prior to the lapse of that warranty.
Inspections provide peace of mind, and oftentimes save you money in the long run by eliminating the need for you to pay for costly repairs. You may not feel the need to utilize all four of these inspections; however, it is up to you to make that decision and I hope this article helps you understand the options available to you. If you have general questions about buying a new construction home in the greater Austin area, feel free to give me a call or send me an email.
What happens if you just bought a home, and you suddenly realize it's no longer a good fit for your lifestyle?
Imagine this. You purchase your dream home. It has a great open floor plan, large windows that look out over the oak tree filled lawn, and a closet big enough for his shoes too. Then, six months later you suddenly get pregnant, and realize there is no way you could raise a family in what you thought was your dream house.
Well, you essentially have two options in this case.
1. You sell your current home
2. You rent out your current home
There are other options, but in order to determine the best option you really need to talk a REALTOR. A real estate agent will be able to give you a realistic estimate of what you can sell your home for and what you could expect to get in monthly rent if you decide to lease the property. They will also factor in your unique lifestyle and financial situation to help you strategize the best course of actions.
In an ideal world, you will be able to sell your home for more than you paid for it. A real estate agent can provide you with comparable home sales, and a net sheet showing what you would make on the sale after expenses.
But, what happens if that number is negative? This is where you need to get creative. Maybe, you can lease your home for enough money each month to cover the mortgage and any additional costs such as repairs, HOA fees, etc. But, what happens if you can't?
This is when you have to put your thinking cap on and start really looking outside the box. I love problem-solving and a few creative solutions could get you pinning insta-worthy nurseries in no time.
If you can't sell your home for enough money as is, maybe you could make some improvements that would yield incredible returns. Invest a few grand in flooring and paint, and sell your home for $30k more! It's possible if you have an experienced professional by your side who can advise you on the best home improvement projects.
Maybe, you can't rent your home long-term for a profit, but have you considered renting it short term? Airbnbs can provide way more rental revenue than a long-term tenant. You will have to look carefully at your HOA guidelines and city laws to ensure this is a viable solution. Many HOA’s limit short term rentals to leases of 30 days or more. This would eliminate the airbnb solution, but you could still rent your home furnished. I once had a client who was a traveling nurse, she told me about how traveling nurses often need a furnished rental for a few months, and they pay inflated rates for these brief leases.
Furthermore, I know first hand how a monthly rental can bridge the gap between homes. When we moved into our home, we had to find a place to stay for two months before our home was ready. We paid a premium for this brevity, and many families find themselves in similar situations when they are moving.
No matter what your unique situation is, I’m positive there is a solution that will allow you to move forward! Contact me today, so that we can start working on the solution that will be the easiest for you and leave the most money in your pocket!
If you have been thinking about buying a home on Lake Austin, you have probably been debating the pros and cons of different Lake Austin neighborhoods. There are many different waterfront communities along the shores of Lake Austin, and they can have very different vibes. You have gated neighborhoods such as Bellagio Estates, and you have neighborhoods where it seems that anything goes such as Cuernevaca and Apache Shores. However, just because a home is in a Lake Austin community you like, does not mean that the property will be a home run for you. You need to consider the characteristics of the specific property in addition to the qualities of the Lake Austin neighborhood.
How Many feet of Lake Austin Waterfront
One of the most important things to consider when identifying a solid Lake Austin purchase is how much lake frontage does the home have? Frontage on Lake Austin is scarce, and price is largely based on this figure. You need to understand how much actual waterfront a specific property has in order to determine a fair asking price. Also, is the property on true Lake Austin waterfront or is the property on a canal. There's nothing wrong with being on a canal, but it is important to ensure the property is priced correctly based on the waterfront quality.
Topography of the lake austin property
All lake frontage is not created equal. Just because two parcels in the same neighborhood both have 100 feet of waterfront doesn't mean they are equal. You need to consider the topography of the land and determine how accessible is the waterfront. Certain areas like Rob Roy on the Lake have homes with easy, level waterfront and homes where you would need to scale a cliff in order to get down to the Lake. If you are afraid of heights, you may want to consider the topography of the parcel before you waste your time going to look at a home that requires a steep tram to access the water.
What's on the other side of the Lake
Lake Austin is narrow, and you can see the other side of the lake from your boat dock. You want to think about what is across the lake from you. Is the other bank attractive? Are you facing vacant natural land? If it appears that there are beautiful, unobstructed natural views from your dock, you want to do your due-diligence to see who owns the property. If the property is privately owned, your beautiful views could turn into a massive development down the line.
Finding a property on Lake Austin that is perfect for you requires a competent agent with a hustler mentality. Many of the properties on Lake Austin are not listed for sale on the MLS. You need someone who will network with other agents, identify off-market homes, and ultimately show you all of the Lake Austin options, not just those that are on the MLS.
If you are ready to enjoy the best lake living in Austin, contact me today.
A few months ago, I spoke with a couple who were referred to me by a previous client. They were interested in selling their new home and buying a new one. They mentioned that they were considering selling their home with Opendoor. I’m not going to lie, my first instinct was to tell them to run in the other direction.
iBuyers such as Opendoor are causing quite a stir in the real estate industry today, and they are directly competing with agents such as myself. They prey on eager home sellers who value convenience, offering a smooth and simple sale with a hefty price tag. They offer almost instantaneous cash offers and charge a higher fee to allow sellers the convenience of selling their home without having to do any work. You don’t need to de-clutter or clean or stage, and you don’t have to allow buyers to come see your home either. All you have to do is inform the iBuyer about your property’s condition, and then a representative comes to verify what you reported is accurate.
Much to my surprise, about a week after I was cursing iBuyers in my head, I found myself advising my clients to accept the offer from Opendoor. I did not come to this conclusion quickly. I was turning down a potential commission. First, I reviewed the comparable homes in my client’s neighborhood. I looked at the recent sales, and I crunched the numbers. Then, I went and looked at the available homes currently listed for sale in their neighborhood. I noticed that there were homes that were sitting on the market, and had not sold yet – homes that frankly were in better shape than my client’s home, and they were asking for less money. After reviewing all of the data, I came to the conclusion that a fair asking price for my client’s home would be around $210,000. But, in order to get this, they would need to do a few things. The carpet was in rough shape and needed to be replaced. They needed to do some paint touch up; the back fence was in need of repair, and a deep clean and staging would be critical for my clients to get top dollar.
Assuming my clients were able to sell their home for $210,000, and I dropped the listing agent commission to 2%, my clients would be getting approximately $199,500 for their home. (I’m leaving out other costs such as the title commitment and loan payoff amounts for the simplicity of this post.) Additionally, they would have to put about $2,000 into repairs to get the home show ready – so they’re now at about $197,500. Opendoor offered my clients $216,600 cash with a $17,328 open door transaction fee. Selling to Opendoor would essentially yield $199,272 to my clients - almost two grand more than I projected they would make selling their home traditionally.
But, it wasn’t just the bottom line that accounted for my recommendation for my clients to sell to Opendoor. With Opendoor, they pretty much had a sure thing. There would be no question of if the right buyer would make an offer on their home, there would be no work preparing the home for sale, and there would be no unknown repair costs that came up after the inspection. There was no potential for a loan to fall through at the last minute, and there was no need to rearrange their lives to accommodate showings.
In the end, selling to Opendoor was absolutely the right choice for these clients. However, I did remain skeptical through the process, and made sure to advise my clients on potential pitfalls. With Opendoor, you are dealing with a lot of different people. You don’t have one main point of contact, and you don’t have anyone dedicated to representing your best interests. You need to pay attention to the contract, and understand the implications. There are deadlines, and fine print that if you don’t pay attention to may have significant repercussions.
Overall, it worked out great for my clients. They were selling this home to buy a new one, and having a “sure thing” deal on the sale side made facilitating the often challenging double closing much easier. Opendoor gave my clients what they refer to as a “late checkout” and what is commonly referred to in the industry as a lease back. This allowed my clients to stay in their home after the closing, and gave them extra time for the proceeds from the sale to be delivered to their bank account, and then used to purchase their new home. They also had a week with both homes so they could gradually move. They never had to clean up, or take the dogs out so that a buyer could see their home. They didn’t have to change their lives in any way.
In the end, they moved into a beautiful new home, and Opendoor is still trying to sell their old home. They fixed the fence, replaced the carpet, and currently have it listed for sale for $210,000. Will ibuyers change the real estate industry as we know it? It’s hard to say, but I can certainly tell you they are losing their shirt in this deal.
The temperature is not the only thing heating up in Austin this time of year; the central Texas real estate market is HOT, HOT, HOT! Last week, the Austin Board of REALTORS released the July 2019 home sales report; it revealed that the median sales price increased year over year for single family homes located within the city limits and those in the greater Austin area. Additionally, Austin area home sales set an all time high for any July on record with total sales topping out at 3,439 for the entire greater Austin area.
Within the greater Austin area, the median sales price for single family homes increased 3% from last year to $325,000. Simultaneously, the sales dollar volume increased 15.4% to $1,407,009,110.
Within the city limits, a shortage of supply is keeping the total number of homes sold lower. Last month, 943 homes sold in the city limits down just slightly from 952 homes sold in July of 2018. Additionally, those homes that are on the market are staying there for less time. The average days on market for homes in the city limits dropped to 29 days last month. Within the city limits, the median sales price increased 3% year over year to $410,000.
However, this figure is still lower than the median sales price for homes that sold within the city limits last month. In June, the median sales price of single family homes within the city of Austin was $420,000. This is not surprising, as historically you tend to see highest sales prices in the Austin area throughout the spring and early summer months.
All in all these stats show that the Austin market is still going strong. As long as there are homes to buy, people will keep buying them, and they are willing to pay a premium in order to do so!
Purchasing a vacation rental offers a unique opportunity to grow your wealth and personally benefit from the investment. If you were to invest in the stock market, would it also offer you a comfy bed to relax in on the weekend? I don’t think so.
Investing in real estate has a few inherent rewards compared to investing in the market. In comparison to traditional investments where your gain is in relation to your investment, in real estate, your gain is based on the total value of the property. For example, if you invest $10K in the stock market and you receive a 10% return on your investment, you end up with an extra $1K in your pocket. If you buy a $100K home with $10k down, and it appreciates 10%, you’ll end up $10K richer. Obviously, I’m simplifying this theory for the purposes of this post. However, the bottom line is as long as your rental revenue covers your expenses and the real estate market stay strong, you can make a lot more money in real estate investments.
This theory works for any investment property, but when you invest in a vacation rental, you get the added bonus of being able to enjoy the property too! Want to spend a weekend on the lake, you can just stay at your vacation rental. You’ll save money by not booking a hotel or someone else’s vacation rental, and you’ll get all the bragging rights associated with having a second home.
Why Austin ?
Austin, Texas is a fun place to vacation! We have a great local music scene, a plethora of nationally acclaimed festivals, and a vivid bar scene that’s pulling in all of the bachelor and bachelorette parties from across the country. Hell, tons of people pay their entire mortgage for the year by simply booking out their home for the month of March to SXSW goers. Furthermore, the Austin market is strong! It continually ranks in the top 10% nationally for real estate appreciation.
Will I have to manage the vacation rental?
Not if you don’t want to. There are plenty of vacation rental management companies that specialize in short term rentals. If you want a completely hands off investment, you can have that. These companies will literally do everything: advertise your home across all the different platforms like airbnb and vrbo, schedule cleanings between stays, address maintenance issues, collect payments, and field 2 am guest calls so you don’t have to!
What should I look for in an Austin area vacation rental?
Probably the most important thing to consider is identifying a property where you can legally operate as a short term rental. The City of Austin regulates the number of short term rentals allowed within the city limits. Currently there is a moratorium on permits for single family homes within the city limits. You can obtain a permit for condos in Austin, and you can also look outside of the city limits for opportunities. Next, you should consider the revenue potential of the property. You are looking for an investment property, right? Luckily, I can help you navigate the licensing requirements and evaluate the estimated rental projections for an Austin vacation rental.
If you’re thinking about investing in the Austin market, give me a call today. I’d be happy to guide you through the process, and fast track you to enjoying Margarita’s on the porch at your new Austin vacation home.
Have you ever considered putting a funky retro tile in your bathroom? Or, maybe you’ve been wanting to add a farmhouse sink to your kitchen thinking it will make doing the dishes enjoyable. Or, maybe you’ve been dying in the Texas heat and you’ve been dappling with the idea of installing a pool in your backyard?
Each of these upgrades is going to affect the resale value of your home differently. While the pool may provide an immediate value in your quality of life, the return on investment when you go to sell usually doesn’t add up. Even if you’re not planning to sell your home anytime soon, you should consider which home improvement projects will give you the most bang for your buck when you eventually decide to sell your home.
My top tips for prioritizing home upgrades are as follows:
1. If there are any major systems or parts of your home that are in need of repair, you should address these issues first. I know you’ve been fantasizing about wallpapering the powder room with a trendy print, but you should really fix that leaky faucet before you get all fancy. Look at the major home systems and components, things like the HVAC, plumbing, and roof. If there are any known issues, get them fixed now. Not only will buyers pay attention to these items when you eventually sell, but also, if you wait to fix these items they may lead to more costly repairs down the line.
2. If you are ready to invest some money in updates, consider upgrading your kitchen and baths. Spending money in these locations pays off. Both of these home improvement projects usually rank fairly highly on reports of popular home renovations that increase your home’s value. The kitchen remodel usually has a higher ROI, but be careful not to overdue it here. You don’t have to spend and arm and a leg to get the effect you and future buyers are looking for in a kitchen. If you have Formica countertops that have seen better days, consider replacing them with quartz, a natural stone, or even butcher box countertops. I’ve even seen concrete countertops done quite inexpensively, yet they can make a serious WOW factor when paired with a fun backsplash. Consider painting your cabinets instead of replacing them entirely, add a fun backsplash, and replace your hardware to get a new look without breaking the bank.
3. The expenditure with the best payoff when you decide to sell your home is probably something exterior. When you have killer curb appeal, it attracts buyers, and attracting buyers leads to a high sales price. The exterior of the home is like your home’s headshot, and it needs to look amazing! The first photo you usually see of a home online is the exterior, and if it doesn’t look amazing, buyers probably won’t want to come inside. There are a few easy ways to boost your curb appeal without spending a ton of money. You may want to paint the entire facade, or maybe just add a pop of color with a fun front door paint selection. One of my favorite ways to boost curb appeal is by adding sleek address numbers. I find these on amazon for mere dollars! Lastly, consider boosting your landscaping- pretty flowers always make me swoon over a home.
4. Focus on flooring, to maximize your return on investment. Worn out carpet or a combination of four different flooring types on one floor can seriously mess with the vibes of a house. If possible, try to keep the flooring the same throughout the entire main living spaces and choose anything besides carpet! Life happens, you may have pets or enjoy wine, and honestly neither of these things go well with carpet in the long run. In general, buyers prefer something else too. If you’re on a budget, consider replacing your outdated flooring with a laminate or even a vinyl wood look flooring (trust me they have come along way in recent years).
Finally, if you want to make some upgrades to your home, do yourself a favor and think carefully about which ones will enhance your life and pay off in the long run. Getting quotes from multiple contractors to find the most qualified and economical contractor is always a good idea. Ask a friend or contact me for specific recommendations in the Austin area. You may even want to consider DIYing some parts of your remodel. It’s amazing what you can teach yourself to do with the power of youtube at your fingertips. Also, don’t forget to shop around for materials! You can find great deals online, and I’ve found some serious bargains on brand new materials such as flooring and tiles at the Habitat for Humanity RE-Store.
Want more personalized tips on the best upgrades for your Austin area home? Give me a call today, I’ll give you my two cents and I won’t pressure you to sell.
Are you thinking about selling your home? Maybe, you feel like the REALTOR commission fees seem awfully high, and you could save a ton of money by listing your home for sale by owner (FSBO). Possibly, you were ok with paying a listing agent fee, but then you found out the buyer’s agent fee would come out of your home sale proceeds, and that left you scratching your head.
Well, if you really want to sell your home by yourself, i’m going to walk you through all the steps to do it! First, you need to evaluate your home. Is it ready to go on the market? Are there little things that drive you crazy, like peeling paint, or a dead lawn, that you think may turn off buyers too? If so, and you have the resources to fix them, do it. If you were working with a competent real estate agent, he or she may call multiple contractors, provide you with quotes, and advise you on which actions will have the biggest payoff. But, you’re not, so just do whatever is easiest and feels right.
Next, you need to figure out at what price you should list your home for sale. Be careful this is the most difficult part for all FSBOs. If you price too high, you will royally f*** yourself. Your home will sit on the market. Then, you may reduce the price, but buyers will wonder why it's been on the market for so long. Eventually, it may sell, but probably at a lower price than if you had just priced it correctly from the start. So, how do you determine the asking price? You could look at zillow, and realtor.com, and ask Suzie who lived across the street from you how much she sold her home for when she sold it last fall, but this probably isn’t the best method. You need access to the sales data for the most comparable homes in your neighborhood that sold the most recently. In a state like Texas, this info can be hard to find. Since we are a non-disclosure state, you will probably need to enlist a real estate professional at this stage.
First, set up a new email address, something realistic, but something you will only use for this process such as email@example.com. Once you have the new email set up, contact ten agents and tell them you’re curious what your home is worth. Some of them may just respond with a rough estimate. This is somewhat helpful, but they don’t know anything about the current condition of your home so it's probably not the best estimate. A handful of agents will send you what’s called a CMA. A CMA is a comparative market analysis. This is gold. It will show relevant home sales to base your list price off of. Most of the REALTORS will now start emailing you non-stop to list your home, so this is the part where you will be glad you created a new email. If a ballsy one stops by your house, just tell them you decided to list with someone else. DO NOT tell them that person is yourself, unless you are genuinely considering listing with a REALTOR.
Once, you have some relevant sales, you need to compare your home to the homes listed on the CMAs. Do you have a nicer kitchen than the house four doors down from yours that sold last month? List your home for more than that one. Is your house also half the size? Maybe your home should be listing for less. You really don’t know what you’re doing here, so just google “remodeled kitchen value”, and then determine an asking price that seems right to you.
Ok, now that you have a list price, and your peeling paint is fixed, you can just put a sign in the yard and call it a day! Not so fast; first, you want to make sure your home shows well. You’ve been looking at homes online to possibly move into when you sell, so you know what I am talking about here! Are you “hearting” any of those homes with zero pictures, or clutter all over the countertops? I didn’t think so. You need to make sure your home looks its best so buyers fall in love. If you had hired a listing agent they may have paid for a maid, a stager, and helped you with strategies to de-clutter. But, you didn’t. So, watch ten episodes of Marie Kondo on Netflix, and then decide this spark joy method isn’t really for you. Shove half your belongings into the garage, turn the Roomba on, and call it a day.
Now that your home is show ready, you need amazing photos to showcase it! A real estate agent would pay for amazing professional photos from a pro who specializes in real estate photography. They may even have videography or drone footage done to show buyers how special your home is. But, since you’re on your own, you will need to find these professionals by yourself. Google "real estate photographer" and choose the one that can get out to your home the fastest, or just take some iPhone photos, apply a filter and decide these images are just as a good as any a professional would take.
Ok, now you have a beautiful show ready home, great photos to showcase it, and a listing price. Time to put a sign in the yard. You go to Home Depot, get a sign and a sharpie to write your number across it. You grab the hammer, wonder why its so hard to put a stinking sign in the Texas dirt, and then decide to reward yourself with a cold beer on the porch while you take all of the phone calls that will be pouring in shortly. You finish one, then another, and wonder why no one is calling. Then you remember your home is in the back of the neighborhood and no one really sees the sign besides your neighbors who already know you are selling.
You must re-strategize. You realize that your home must be on the internet! You put it on Zillow, and you wait. Finally, you get a call. It’s an agent who may have a buyer that’s interested. She wants to stop by and take a look. She comes over, looks around, says the home isn’t for her buyer, but asks if you would like to list with her instead.
After 15 or so of these, you finally get a real buyer who comes to look at your home. You leave work early, rush home, and open the door for them. They think they can afford your home, but they haven’t talked to a lender so they don’t really know. If you were working with a REALTOR, they would vet potential buyers before they came to your home. You wouldn’t have to deal with the inconvenience of all of these phone calls and physically being at the home to show it to buyers, but you are not. So, you stress out, and your work and personal life suffers.
After the fiftieth real estate agent calls you to list your home, you finally cave. You are sick of wasting your time and energy trying to sell your home by yourself, and you realize that the fees may be worth it. The real estate agent tells you about all sorts of disclosures you didn’t even know you needed. She explains that while your attempts at marketing were ok, that in order to really market your home you needed to do a lot more. Lastly, she explains that in 2017, only 7% of homes were sold FSBO, and those that did sell for sale by owner sold for about $66,000 less than those sold with a real estate agent. She shows you how she will do the hard work for you, marketing the home, following up with buyers after showings, making sure buyers are qualified before seeing your home, and most importantly, that she is here to protect your best interests throughout the entire process. She is going to make sure you understand all the forms, are kept in the loop with all activities related to the home sale, and she is going to walk you through the pros and cons of every offer you receive. This way, you can make an informed decision on the best offer to accept when you sell your home, and you can get back to doing what you are good at.
Congratulations! You have finally found a house that you want to call home! Once you are officially under-contract (which means that you submitted an offer on a house, and the sellers have accepted the terms and signed the offer to acknowledge the acceptance), there are a few things you will need to do right away!
First things first, if you are using a loan to purchase the home, make sure your lender has a copy of the executed contract. This will ensure that he or she gets the ball rolling on the funding side. Next, you will need to write two checks, the option money check and the earnest money check. The amounts for each of these checks will already be determined in the contract. You will want to make the option money check out to the sellers and the earnest money check out to the title company. You have three days to submit these checks. For the earnest money check, that means three business days since that check is going to the title company and they probably won’t be open over the weekend. For the option money check, that one must be delivered within three real days. This sounds pretty easy in theory, but in reality it can be a bit trickier to execute. What if you are out of state, and the contract is executed late on Friday? You may need to have the checks overnighted, or sometimes, you can wire the total amount for both checks to the title company and the title company will cut the option check out of the total wire.
Aside from making sure your two checks get to the appropriate parties on time, you also will want to schedule your inspections. A home inspection is always a prudent choice. The inspector will go over all the various aspects of your home with a fine tooth comb, and point out any areas of concern. You may want additional inspections during the option period too. If the home is on a septic system, it’s a good idea to get a septic inspection. Likewise, if it has a pool you may want to get that inspected too. The option period is your time to do any and all necessary due-diligence on the property. If there is something unveiled that’s a deal breaker, you can back out of the contract without losing your earnest money.
You may also consider scheduling some contractors during the option period. If you’re planning to remodel or make any structural changes to the home, you can get quotes and advice from qualified contractors during this time. If purchasing this home is contingent on being able to remove a wall, and the contractor reveals it will cost way more than you can afford, you can still back out of the contract during the option period.
Before your option period ends, you have the opportunity to renegotiate. If there were serious issues revealed in the inspection, you can prepare an amendment to state that the seller will either fix these issues, or you can negotiate money off the sales price so that you can complete these repairs. This is not the time to ask for $5k off the sales price because you don’t like the color of the home. This amendment should only be used to address concerns that you were not aware of until the inspector pointed them out to you.
If there are concerns you would like addressed, you will present your proposed solution to the seller. If the seller agrees to fix the issues or give you money off the sales price, you will both sign an amendment to the contract clarifying this agreement in writing. If you cannot come to an agreement, you can either back out of the contract or proceed with the sale knowing that you are going to have to fix these issues at your own expense after closing.
It’s important to schedule all of your inspections early in the option period to allow the time to review the findings and negotiate with the sellers if necessary. While you can still negotiate repairs after the option period, you have little leverage after the option period is over since you no longer have the ability to back out of the contract without losing your earnest money.
Once, the option period is over, there will be little for you to worry about until the closing date. You may need to provide more documentation to your lender, and if the home doesn’t appraise that could be another opportunity to negotiate the sales price. If you have questions about the buying process in Texas, feel free to contact me today. I’d be honored to help guide you through the process of finding a house to call home.
Erika Rae Albert
Sharing my Austin real estate updates, home owner tips, & more.