If you are fortunate enough to be able to purchase a new home without selling your current home first, this post is not for you. However, if your financial situation requires that you must sell your current residence in order to purchase another one, you may be wondering how this is logistically possible. First off, this type of transaction is known as a contingent offer in real estate language. The offer you make on a new home is contingent on the sale of your existing house, and there are a few different ways you can make this type of move.
One way to purchase a new home and sell your current home is to simply schedule both closings for the same day. You could sell your home in the morning, and then close on your new home the same afternoon. However, there are a few challenges with this particular method. First of all, you’re going to need to move all of your belongings out of your home and you should have it cleaned for the new occupants. Any savvy buyer is also going to want to do a final walkthrough before the closing. So, you would need to ensure all of your belongings are in the moving truck and the home looks presentable before the buyer does the final walkthrough. Is this doable? Yes, but it may not be pretty. Afterwords, you would need to sign all of the paperwork for the closing of your new home and wait for the lender to fund the purchase. Only, then could the moving truck deliver your possessions to your new home. Lastly, it’s not unheard of to have unexpected delays on either the buy or the sell side. Say the couple purchasing your home runs into unexpected financing issues that delay the sale of your current home a few days, you would need to amend the contract for your new home purchase by a few days too. In this scenario, you would hope that the seller of your new home agrees to the delay, but they don’t have to sign an amendment extending the closing date. You could be left in a very tricky situation. Another option is to negotiate a seller lease back in the terms of the contract for the sale of your current home. A seller lease back allows you (the seller) to close on the sale of your home, and then lease back your home from the buyers for up to 90 days. You can negotiate the exact terms of the lease, but expect to pay something for this lease and potentially include a security deposit too. A seller lease back can be for as short as only a few days, too. If you have a short seller lease back, you would need to already have an offer in on another home that is contingent on the sale of your existing residence. A short lease back allows for a little more wiggle room with moving opposed to the same day double closing. A long seller lease back could be used when you haven’t even identified a new home yet. If you closed on your home with a 90 day lease back, you would have approximately 60 days to go under-contract on a new home, and you would be able to put in an offer that was not contingent on the sale of your current home since you would have already sold it. A contingent offer is often viewed as less strong than an offer that is not contingent. Thus, in a strong sellers market, closing on the sale of your home first with the temporary residential seller’s lease may be your best option to secure a new home. A third option when trying to sell your current home and buy another one is to simply sell your current home, and then buy later. You could sell your home and then move all your possessions into storage and huff it out in a hotel while you look for your next home. You could go stay with family or friends. You could rent an apartment for a few months. All of these possibilities could work, but they would essentially involve moving twice. Lastly, you could make an offer on a new home that is contingent on the sale of your existing home and involves a buyer’s temporary residential lease. This is similar to the seller’s temporary residential lease I outlined earlier, but it’s opposite. You would be leasing the home from the sellers before you purchase the home. This may be a good option if you can’t live in your home and allow showings at the same time. However, this method is also risky. What happens if you can’t sell your home or you suddenly lose your job and no longer can actually purchase the home you are now renting? Remember I said this lease was temporary. The buyer’s temporary residential lease is only to be used for a maximum of 90 days, and you are under-contract to ultimately purchase the home too. If something unexpected happened during those 90 days you could be forced to move back into your old home. Ultimately, which method you decide to use to sell your existing home and buy a new one is up to you and will largely be based on your individual situation and the market conditions. If you have questions about the best strategy to use in your next move, feel free to contact me.
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If you're anything like me, the idea of an entire month of staying home sounds like an incredibly daunting task. That's why I decided to come up with a list of 100 ways to avoid boredom while staying at home during the coronavirus pandemic. I've rounded up a whole lot of activities for individuals of all ages to have fun, be productive, and keep you occupied while social distancing.
Below is a great printer friendly version for you to put on your fridge!
In a previous post, I discussed how the effects of the coronavirus on the Austin housing market are still uncertain. Since, writing that post, many things have changed. A shelter in place order has been put into effect for the City of Austin, Travis County, Williamson County, and Hays County. Each of these ordinances varies slightly, and while real estate services are included as an essential professional service, the extent to which a REALTOR can perform his or her job duties is limited by these orders. The City of Austin ordinance as well as the Travis County order explicitly prohibit the showing of homes during the coronavirus shelter in place. While other counties do not necessarily prohibit showing homes, the spirit of all orders is to allow real estate services that are truly essential. Assisting in the successful completion of closings for homes that are already under contract, providing critical property management services, and housing unhoused individuals is permitted while maintaining social distancing protocols. That being said, these orders severely limit the amount of real estate activity that can legally take place. On March 20th, I took note of the recent market activity for residential homes in the greater Austin area. All stats that follow are based on statistics for all single family homes in the Austin MLS. This includes homes, condos, and townhomes. From 3/19/2020 to 3/20/2020, there were 287 new home listings. One week later, the number of new listings dropped by 114. The number of pending home sales similarly decreased but not nearly as dramatically. On Friday, March 20th, there were 136 pending home sales. In comparison, we saw 18 pending home sales on Friday the 27th of March. Additionally, home sales decreased from 145 on the 20th to 108 on the 27th. The number of homes leaving the MLS is also indicative of the effect of Covid-19 on the Austin real estate market. Between March 19th and March 20th, 16 homes were withdrawn from the Austin MLS. That number rose to 23 between 3/26/2020 and 3/27/2020. Real estate agents also have the availability to change the MLS status of homes to temporarily off market. On Friday the 20th, 35 homes were changed to this temporary status. Yesterday, March 27th, there were 47 homes that went to temporarily off market status. These numbers are more substantial when looked at from a greater duration of time. In the 3 days prior to 3/20/20, 91 homes went to temporarily off market status. In comparison, 196 homes were temporarily taken off the market between March 25th and March 27th.
In short, Covid-19 and the resulting shelter in place orders are affecting the Austin real estate market. If you can’t physically show homes, there will be far fewer home sales. In my personal business, I am seeing these effects first hand. Clients who planned to list their homes and buy new ones are holding off until after the coronavirus pandemic. My new construction deals are continuing; however, the implications of the shelter in place orders will very likely slow construction on many homes. As always, if you have specific questions feel free to contact me. As the coronavirus provides a very real concern to most of the world, one of the most common concerns among many Americans is how to face the immediate concern of boredom. The vast majority of us are practicing social distancing, and staying at home as much as possible. However, you can only binge Netflix for so long, before the yearning to do anything else really kicks in. Now is a great time to think of ways to make this time as productive as possible. Consider tackling some home projects to ease your boredom as we face this global pandemic. If you need supplies, most hardware stores are still open, and many offer online ordering to minimize your interactions. Here are some of my personal suggestions for staying busy around the home. 1.Tackle Deferred MaintenanceBefore you start thinking about watching youtube videos on how to re-tile your master bath, it’s best to start with the regular routine maintenance you may have been neglecting. Do you remember the last time you changed your air filters? If not, now’s a great time to change them. How about that towel rack that came loose 6 months ago? Why not get out your screw driver and finally fix it? Look around your home, and identify all of the little projects that you know need to be addressed. Then, get to work on fixing them one by one. 2.PaintWhile you are identifying the deferred maintenance items on your list, you may have noticed areas where you need to do some touch up paint. Hopefully, you have some extra paint on hand, and can touch up those spots easily. If you don’t, you may want to hold off on that project until after the coronavirus season. However, if you’ve had aspirations to paint an accent wall, or like me have considered an elaborate paint stenciling project, now’s a great time to pick up the roller and get to work. If you’re looking for inspiration, I ordered my wall stencil from a great US company, Cutting Edge Stencils, they have plenty of ideas for using their stencils on their website. Don’t limit yourself to just walls, you can also paint tiles, furniture, and patios. 3.Spring CleaningWith everything happening in the world, the idea of spring cleaning is now more important than ever. In addition to disinfecting hard surfaces, light switches, and door knobs consider some more extensive cleaning projects too. Why not think about cleaning out your junk drawer, organizing your closet, and re-claiming your garage? Why not Marie Kondo your entire home? You know you have the time. 4.GardenI don’t know about you, but just seeing a bright colorful flower brightens my day. That’s why I planted some blue delphiniums in my front porch planters early this week. If you can’t make it to a store to purchase plants right now, that doesn’t mean you can’t work on your garden. You can pull weeds, move rocks around to create beds, and prepare the soil. You may also have some seeds on hand. I found a bunch in my junk drawer earlier this week. Now, I have a nice little cropping of sunflower, tomatoes and basil seedlings that have started growing in my windowsill. Now, more than ever you may recognize the benefits of growing your own produce.
As is the case with almost every aspect of our lives, there is a lot of uncertainty around how the coronavirus will affect the local housing market. Over the past few years, the Austin housing market has been increasingly competitive with the average home sales price rising year over year. Will Covid-19 slow sales or will buyers jump to take advantage of historically low interest rates? The Impact of Covid-19 on Austin Home BuyersThe coronavirus has began to change our daily lives. Many are practicing social distancing, self-quarantining, and generally spending less time outside of the home. Going into someone else’s home is just one more opportunity to come in contact with germs, and surely there are quite a few buyers foregoing showings at the present moment. According to a survey performed by the National Association of REALTORs last week, only 16% of real estate agents said the coronavirus has affected buyer interest. However, I would have said the same thing last Monday when surveyed. It wasn’t until last Tuesday, that I heard from my first buyer client that they would be holding off on their home search until the Covid-19 scare blows over. Will the Coronavirus Reduce the Number of Homes on the Market?Sellers may also have fears about letting strangers into their homes. In Austin, we have had incredibly low inventory for far too long. There are simply not enough homes for sale to accommodate the ever growing buyer interest. Will sellers decide not to list their home due to fears of contamination? It’s quite probable, and this will only exacerbate the low inventory issue. Builders too are seeing the affects of the coronavirus. Nearly 1/3 of our raw building materials come from China, and this doesn’t even account for assembled goods such as appliances and fixtures. First hand, I’ve already witnessed supply chain issues, with new home buyer clients unable to get tile they had originally ordered since it was produced in China. If builders are delayed due to material delays, and sellers are reluctant to list, it won’t matter that interest rates are at historically low levels. Buyers won’t have any homes to buy. How Will the Corona Virus Impact the Seasonality of the Austin Real Estate MarketWe are just entering what is typically the spring selling season in the Austin area. Usually, this is when the largest percentage of sellers list their home, and the majority of buyers purchase. Home sale prices are usually the highest in the coming months as buyers compete with one another to move while school is out of session. However, it’s unknown how the coronavirus will affect the seasonality of the Austin market. Will it delay the spring selling season? Will it have no affect at all? Or, will it cause a mass recession leaving buyers unmotivated to make moves. After all, what good is an incredibly low interest rate if you are not sure you will have a job next month. What Can We Learn From the Past?In the past, Austin has been largely spared from housing market collapses. In 2009, the median sales price dropped from $192,000 in 2008 to $190,000. It increased to $195,000 in 2010 and stayed the same for 2011. Since then, the median sales price has been steadily increasing. We wrapped up 2019 with a median sales prices of $315,000 for the greater Austin area. While the median sales price changes from 2008-2011 were not too significant, the number of sales dropped significantly beginning in 2007. Between 2007 to 2008, the number of home sales in the greater Austin area dropped by about five thousand, and the number of home sales continued to slowly decline each year until 2011. In 2009, the Austin real estate market saw its lowest number of annual sales with only 18,632 sales occurring. In comparison, 35,437 homes sold in the greater Austin area last year.
It’s not unrealistic to think that the coronavirus may slow Austin area home sales yet again. Furthermore, if there is one area that may be more affected than others, I suspect it will be the luxury home market. After the housing market crash, we saw these types of homes suffer the most. Overall, it’s still too early to say how the coronavirus will affect the Austin market. If you have questions about how it may affect your specific real estate goals, give me a call. I’m happy to share my opinions with you. If you want to sell your home quickly and for a decent price you need to understand how today’s home buyers shop. When you truly understand home buyer shopping habits and market trends, you can take proper actions to ensure a speedy sale. You will want to consider how your home appears to buyers both online and in person, the timing of putting your home on the market, and proper pricing. Presentation is EverythingImagine you are swiping through tinder looking for an eligible candidate for a nice date. You see hundreds of images. Some of these are appealing, some of them are not, and then there are those people who have a photo that’s so blurry you can’t even tell what they look like or even worse, no picture at all. Those profiles are almost always going to get an immediate swipe left. You want to make sure prospective buyers swipe right on your listing! First and foremost, your home needs to put on its best dress and get a killer selfie to show the public what she’s got. For a house, this means making sure the curb appeal is killer, adding flowers, power washing the driveway, and sprucing up the front door. You also don’t want to make your home like one of those profiles where the first pic is amazing and then you start swiping through a few more images and then inevitably swipe left. You need to make sure your killer presentation continues throughout the interior of the home. Ensure that any signs of wear and tear like a dog scratched door or worn carpet is rectified prior to listing your home for sale. Make sure all the clutter is eliminated, the beds are made, the furniture is an appealing configuration, and the house is clean. Then, you are ready to call in the pros for a photo shoot that will have prospective home buyers knocking at your door in seconds. Proper presentation isn’t only physical. You also want to make sure you have some meat to your listing. A pretty profile with no details will still leave some people reluctant to swipe right. In addition to showing buyers the benefits of your home, you want to tell them what they can’t see. Explain how you have a brand new HVAC system, the home is minutes away from a beautiful park, and the schools are superb. The bottom line is that if your home doesn’t entice buyers online, most people will never even take it out on a date. Professional photos and a stellar description will get prospective buyers in your door. Timing is KeyEven if your home looks amazing! You may not get as many people in the door if you don’t list at the best time. Every neighborhood will have it’s own peak seasons, market trends, and unique nuances that determine when the best time to list your home will be. It’s important to take these into consideration, and look at the historical sales data in order to determine when you should put your home on the market. You will want to time it well on a weekly level too. Listing your home on a Thursday has proven to lead to quicker and more profitable home sales across the nation. Proper Pricing Solves AllAbove all else, proper pricing solves all. Even if you ignore my other two tips for selling your home quickly, if you price your home properly it will sell. If a home is priced way lower than everything else for sale in the neighborhood and it down’t even have a single photo online, buyers will still make their way over to the home to take a look in person. On the other hand, a home with gorgeous photos, the best marketing you’ve ever seen, and a description that moves everyone who reads it will not get any showings if the price is too high. In order to sell your home quickly and for a decent profit, you need to incorporate all three of these items. Your real estate agent will pull relevant comps, comparable properties to yours that have sold recently, in order to help you determine the best asking price for your home. After comparing your home and it’s quality, size, and benefits to that of the recently sold homes in your area, the best asking price for your home will usually be quite clear.
If you live in the greater Austin area and would like help selling your home quickly, give me a call. I’ll have buyers swiping right in no time! When a property is listed for sale in the MLS, the home can be listed under a variety of different statuses. Most commonly, you are looking at homes that are listed as active. However, sometimes you may see properties listed as active continent. An active contingent property is a property where the owners have accepted an offer on the property, but the buyers must sell another property before closing on the sale of the subject property. In Texas, there is a promulgated contingency form that outlines the terms of this agreement. The Addendum For Sale of Other Property by Buyer form specifies when the buyers must close on the sale of their current home and what will happen if the sellers receive another offer on the home. This form stipulates that if the seller receives another offer on the property they must notify the buyers of said offer. The form also specifies a certain number of days in which the buyers must either waive their contingency or the contract will terminate automatically. If the buyer elects to waive the contingency, the buyer is stating that even if they don’t sell the current home, they will still purchase the subject property. As a seller considering accepting an offer that is contingent, you should be sure to carefully read this contingency form. The date in which the buyers must sell their current home is important to review. If you are looking for a quick close, you want to make sure this date is not too far in the future. You will also want to ask questions to see how far along they are in the selling process. Do they have their current home on the market yet? If so, have your agent review the listing to make sure they are priced aggressively, and marketing appropriately. If the home is not even on the market yet, you will want to ask more questions to determine when they plan on listing the home for sale. You also want to make sure that the number of days required to respond when notice of another offer is received is not too long. In my opinion, three days is usually adequate. If the current buyers have too much time to respond, you may lose out on the second offer. If you are a buyer submitting an active contingent offer, you should also consider how the seller will feel about the contingency. By providing proof that your current home is actively being marketed for sale and is priced correctly, you can ease the seller’s apprehensions about accepting an offer that is contingent.
One more interesting caveat in the active contingent scenario is that if you receive a second offer that is higher than the first, you can’t simply accept it. In fact, the only way you can accept the second offer is if the original buyers decide not to waive the contingency and the first contract automatically terminates. In this event, the earnest money that the contingent buyers submitted would be refunded back to them, and you could proceed to accept the second offer. If you have any other questions about active contingent status in Texas or general real estate questions, I am always here to help. Feel free to give me a call or send me an email. 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. Foundation InspectioN 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. Pre-drywall InspectioN 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. Final InspectioN 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. 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! |
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