Austin Metro Real Estate Real estate market conditions in the Austin Metro Area

Sellers

Selling 'As Is' Versus Fixing to Sell in the Austin Market

Times have changed. Years ago, it was almost always better to do fix-ups on a house before putting it on the market but that is no longer true. Today, the decision largely depends on when the house was built. Today's Buyer wants an open floor. Older homes in downtown areas that were built in the 50s and '60s can be renovated to today's tastes but doing so requires expertise, an extended time period, and large amounts of money. A contractor's cost for turning a 1200 sq ft one-story home into a home that looks like a just-built model home can run about 100-120K in Austin. In general, homes built before 1978 are best sold "as is" and homes built after 2000 are worth updating. When in doubt, call on an experienced REALTOR® before starting on a project.

First Time Buyer

Think Twice Before Buying a Fixer-Upper

If you are cash poor, have no prior experience in renovating houses, and have a busy demanding career/life you should think twice before buying a 'fixer-upper'. There have been major changes in the building industry that impact remodeling, repair and renovation costs.

  • No fire hazards from aluminum wiring and no more lead based paint hazards after the 1970's.
  • No easily rotted Masonite siding after the mid 1990's.
  • You usually don't have to worry about polybutylene pipe leaks, or scraping "popcorn" or "cottage cheese" ceilings after 2000.
  • The standards for newly installed heating & cooling systems changed in 2010 but many recent homes were built with the new standards.

If you wish to buy in an older neighborhood, consider buying a house that has been professionally updated by a licensed contractor and then have it carefully inspected and get a good residential service contract. Sometimes the true bargain sells at the highest dollar per square foot and the so-called bargain turns out to be a "money pit".

Austin Area Real Estate Market Conditions

Flipping Activity in Central Austin

Finally one can now buy homes in Austin at a price low enough to renovate and flip - some even show up in the Multiple Listing Data Base (MLS). These homes are not for amateurs trying to flip on a shoestring budget. The homes that are being flipped were built in the 50's & 60's in central Austin, usually have significant foundation problems, are priced "as is" in the 250-350K price range and need 80-100K of major of renovation work. These homes are in bad enough condition that traditional mortgage lenders won't loan money on them until after they are renovated. The contractors who are buying them are using "hard money" lenders who charge interest rates ~ 15% so speed of renovation is very important.

The good news for retail buyers is that a many of these contractors are highly skilled and take great pride in the quality of their design and workmanship. If you are an end user Buyer looking for a central Austin home, make sure you use an experienced REALTOR to help you evaluate the homes that you look at. Find an area that you like and get to know the contractors working in that area. The really skilled contractors usually have multiple offers within in hours of putting the renovated house on the market.

 

Austin Area Real Estate Market Conditions

Rent to Own

"Are the owners willing to rent to me until my credit is repaired?" The short answer is "No, not in this market." This question comes up all the time. The Austin area market is "Hot". Why would an owner who wants to sell, tie up their property in a rent to own deal? My suggestion is to get with a REALTOR and a patient mortgage lender who can guide you in cleaning up your credit. In most cases, the mortgage lender can give you a realistic estimate of how long it will take to get you in a position to buy. This information will help you to decide if you want to stay put and buy in X number of months or find a rental until you do qualify. Call me if you need more help or a referral to a good mortgage lender.

Sellers

I Need to Sell My House Now What Can I Do?

  • Never turn down a showing even if you're cooking or have company or the house is messy. Tell the Buyer's Agent why the house is not at its best but let the Agent show the house. Coming back in two hours or two days might not be an option. Some Buyers have very limited time off or are in from out of town and their Agent is showing them property over a wide geographic region or the Buyers may fall in love with the Builder's Model in a new construction neighborhood. If you turn down the showing, you may never get a 2nd chance.

  • Do not leave negotiating room when you price your house. If the Buyers need closing costs, they can be added back into the price of the house. The lower you price your house, the larger the number of Buyers who will want to see your house. Most Buyers looking at resale homes today are looking for a bargain. The best thing that can happen is that you get multiple offers.

  • Your house needs to be clean and uncluttered even if it needs updating. Most Buyers buy with emotion and a dirty and/or cluttered home is a turn-off. Take a look at some nearby model homes to see how the small bedrooms are furnished. Too much furniture in a room makes the room look small. Too much stuff in a closet makes the closet look small.

  • Light is your friend! Use the maximum allowed wattage light bulbs in fixtures and open the curtains and blinds. Dark houses seem sad and Buyers buy with emotion even if they won't admit it.

  • All documentation needed to write an offer needs to be readily available to the Buyer's Agent. Uncertainty makes Buyers hesitate. Is the house in a flood plain now that the flood plain maps have been redrawn? What is planned for the adjacent vacant land? What are the HOA rules? What does the Seller Disclosure say?

  • Your goal is to make your house easy to buy! You want to create such a sense of urgency in your Buyers that they want to skip the rest of the houses on their list and go back to the office immediately and write an offer NOW before somebody else does. That way the Buyers never see that beautifully decorated model home with all the $$$$ Builder incentives.