Austin Real Estate Blog

Selling your home during the holiday season can be challenging; winter is usually a slow time in the real estate market. The good news is that buyers who brave the cold are usually motivated to buy and looking seriously for their new home. This can work to your advantage in selling your home quickly and for the right price. By setting the stage properly, you can present your home to its best advantage during this joyous time of year; here are some hints to get you started.

Celebrate the season, not the ceremony
Make sure your holiday decorations are not overly faith-specific; religious themes can make some buyers uncomfortable. Opt for general holiday ornaments like a tree or lights, rather than a full-scale Nativity scene. Avoid excessive clutter or overly elaborate decorations; a clean, simple holiday display can let your home shine without overwhelming potential buyers.

Everyone loves a bargain during the holidays
While severely underpricing your home is probably not the best idea, pricing it just below the listings for comparable homes in your area will attract more attention and ensure your home is one of the first stops for buyers. It may sound simple, but if you price your home to sell, it’s much more likely to sell. In today’s market, opting for a realistic asking price can prove more effective than starting high and expecting to negotiate with buyers later. A lower initial price will attract more views and can help your home sell fast.

Say it with pictures (and video)
Clear, attractive pictures of your home will help attract buyers who otherwise might not be willing to journey out in the cold. An online video tour is even better, letting potential home buyers take a virtual walk through your home and attracting additional attention for your property. If at all possible, post pictures of your home’s exterior in different seasons; this will give buyers a better feel for your home’s unique appeal.

Offer a warm welcome
When it’s cold outside, a crackling fire in the fireplace can add a warm glow to your home and showcase an important selling point. For homes without fireplaces, keeping the temperature at a comfortable level and offering fresh-baked goodies like cookies or brownies can create a holiday atmosphere and add to your home’s appeal.

Fix it up and save
If there are any nagging home projects you have been putting off, the holidays are an excellent time to take care of them. Little improvements can make a big difference in your home’s appeal; prices are usually lower off-season, so investing a little now could reap large rewards at the time of sale.

You might want to think twice about the lamps you put out as you can see from the above video.

What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **

30-yr Fixed – Lower
This Week:  4.78% (lowest since April 30, 2009)
Last Week:  4.83%
1yr Ago:  5.97%

15-yr Fixed – Slightly Lower
This Week:  4.29% (record low)
Last Week:  4.32%
1yr Ago:  5.74%

Jumbo Fixed (Average 30-yr Fixed)
Last Week:  5.75%Previous Week:  5.75%

Highlight of This Week’s Major Economic Reports

Despite the nation’s economic challenges, there’s a lot to be thankful for this year.  For one, the housing market has started to see stabilization – thanks in combination to historic low interest rates and increasing affordability.  Then, there’s the first-time buyer tax credit, which was set to expire on December 1^st and has since been extended to April 30^th.  The original expiration helped to prop up home sales in October, which saw the fastest sales pace since October 2007, with existing home sales jumping over 10% and new home sales spiking 6.2% from September’s figures.

What to Look for Next Week

The latest unemployment picture will be framed with the release of November’s employment report.  Even though unemployment claims have slowly dropped in recent weeks, it’s expected we’ll see a rise in the 10% unemployment rate through the end of the year.

Short-Term Rate Outlook
Relatively Unchanged

Stay Informed:  What’s in the News

“America’s Fastest Recovering Cities” – Austin #3 from Forbes.com

http://www.forbes.com/2009/11/19/cities-recovery-unemployment-lifestyle-real-estate-top-ten_print.html

“Texas’s Existing Home Sales Climb, Prices Inch Up” from Texas A&M Real Estate Center

A total of 19,347 existing single-family homes were sold in Texas last month, a 15 percent increase from October 2008, according to MLS data compiled by the Real Estate Center at Texas A&M University.

The median price rose 1 percent to $143,300 during the same period, and the state finished the month with a 6.9-month inventory of existing homes.

Here is how select Texas cities fared in October (data current as of Nov. 24, 2009):

“US Job Losses to Bottom out Next Quarter: NABE” from CNBC.com

Economists expect the joblessness that has weighed down the nation’s economic recovery will start to slowly abate in 2010, but they predict consumers will continue to keep a tight rein on spending, according to a new survey.

“Fed Remains Cautious on Strength of Recovery” from The New York Times

The Federal Reserve’s new economic forecast and minutes from a session earlier this month reveal that policymakers continue to fret over whether the economy is strong enough to hold up without government stimulus efforts, such as the temporary fiscal programs for the housing sector. Concern about the recovery comes as Fed officials begin debates on when to start raising interest rates, which have been held at virtually zero since last December, and on ending their program to purchase $1.25 trillion in mortgage-related securities. The real estate industry fears an increase in mortgage rates, but the Fed also wants to focus on reducing its holdings and bringing its balance sheet back to normal.

Marie Funston | Sr. Mortgage Advisor | (512) 750-7270
9442 N Capital of Texas Hwy., Suite 1-600
Austin, TX 78759
Fax:  (512) 343-1224
Marie@austinmortgageadvisor.com

In real estate, as with any investment, the last thing you want to find is that you are on the wrong end of the deal that should have been equal. There are ways to avoid common pitfalls and simple misunderstandings.

The first thing to keep in mind when approaching the investment, regardless if it is a private home or otherwise, is to investigate the terms and options applicable to you. The second is to move through the investment process logically. Lastly double check what information you find against what you know and consult with your real estate agent, or representative. The agent will be able to tell you if there are better options applicable to your needs.
One common problem that homeowner encounter in the investment process is receiving the wrong information.

This can often be attributed to misunderstandings or not asking questions when something appears to be difficult to understand. It is important to make sure you are getting all of the information applicable to your situation. You do not need to sign papers that lock you into a loan with a payment schedule you do not understand, or that turns out to be the wrong form of financing for your needs. Understanding the terms and possibilities associated with your loan is important from the start. Ask questions, and consult often with your representative or lawyer.

The second common pitfall that people encounter is ‘falling in love’ with a property or area before they are aware of all of their options. This creates a sense of urgency instead of a mood of understanding and evaluation. This urgency will often cloud judgment and create an obstacle. Approach each aspect of the investment process with an open mind and rely on your real estate agent to provide you with every suitable option, before you settle on which investment you will make.

Approach this investment with ears, eyes and mind wide open and the possibilities will come. As questions with every aspect related to the investment, and you will obtain the best information. Ask the questions that sound insane to you, because those are easily misunderstood. This can be and often is a lifelong investment, so approaching it correctly the first time will provide the foundation of the future.

If you’ve conducted meticulous investigations on a foreclosure home and effectively placed the winning offer at public auction, it may still take time to be able to move in or start making repairs. There’s a possibility the previous owners of the newly purchased property may yet be living there, making it complicated to take possession. If you’re not equipped for that possibility, you may possibly be in for an arduous as well as messy eviction. Properties arrive on public foreclosure auction platforms at the conclusion of a pre-foreclosure phase, after property owner’s failure to pay the monthly mortgage expenses.

A hectic eviction procedure can be avoided with careful research in addition to effective planning. Though regulations and procedures differ from state to state, these procedures can be of assistance in learning the eviction process and how to avoid a lengthy eviction process.

First – establishing ownership

At the conclusion of the auction, make sure you are given every one of the essential documents from the auctioneer to prove you have made the purchase and are the new owner. At that time speak with the auctioneer and a real estate attorney concerning further steps that have to be taken before taking custody of the property. In several states the auctioned sale is confirmed by the court within a specified period of time, potentially up to 3 months. Verify as soon as the auction is completed.

For some locations and states there is a redemption period. This is designed to allow the original owners to purchase the property from you for the price paid at auction, plus applicable fees. In some states this period is as brief as one month or as long as one year. Review your state here: Applicable State Laws to identify if and how your state fits into this. This is often a reason given by the previous owners for not vacating the property..

Understanding the eviction process

Every state, and at times every county has a different eviction law and process. It is vital that before you enter the auction, you contact a local real estate attorney or the county sheriff. They are best equipped to prepare you for the eviction process in the location you are reviewing for purchase. By doing this you will be protecting everyone involved with the sale and purchase of the home, every step of the way.

The court process often takes months, so knowing your rights and the rights of the previous owner are vital. Contacting the court system for the eviction process should occur at the soonest possible moment, to assure everything is handled correctly and fairly. As the case comes to an end, the judge will give you are writ of possession and order the local sheriff to evict the occupant. AT this time the sheriff will serve the notice and remove the occupant 24 hours later.

Obviously this is general, so verify locally to make sure you are aware exactly what the process is.

Refinancing is on the minds of many, even today. There are several options available and we’ve worked out a short list to assist in determining what would be the best choice for you.

First list your goals for the refinance. This includes even the most simple or obvious reasons. It is a crucial step to choosing the right refinancing product for you and your needs. Some of the common reasons people will refinance include:

• Reducing monthly payments
• Debt Consolidation
• Lower interest rates
• Achieving equity sooner

These popular reasons are not necessarily the only reasons a person would want to refinance. The above short list is a good way to get started thinking about what you need and what your goals are for the refinance of your most fiscally valued asset, your home.

The next step is to contact and consult someone who is an expert in refinancing mortgages. They are versed in products and options available. They undergo several levels of training and receive updates steadily regarding market numbers, financing options and new banking strategies. Together with the homeowner it is their job to identify the best fitting product, obscure or popular, for you.  Meet with the expert regardless of the level of research you have done personally. Markets can change in the blink of an eye. It is the job of the refinancing expert to achieve the best possible results for you.

The next step in this process is to keep your mind open to the possibility that refinancing is not the best choice for you. As you initially begin to research you will learn many options available, however until you have sat down with your refinancing expert, and evaluated all of your options, you will not know if refinancing is the correct choice for your situation.

As companies downsize their budgets, commercial loans have defaulted by more than double over the last year. It is currently at 7% which is double the default rate from the previous year, but that does not stop there, the rate increases will harm small and regional sized banks. As the commercial side of mortgage loans defaults, the smaller banks find larger gaps to fill. Today it is nearly impossible to obtain a new commercial loan.

New construction options have been limited by lack of funding and many businesses are foregoing the commercial ownership prospects. This creates other options. For many businesses who are not ready to buy have options to rent, and finding a prime location that is available in their budget. This enables expansion options, even in an otherwise difficult market.

For companies who are ready to buy, with minimal or no loan, this is the time to do it. There will be no better time to find a deal on a commercial property, and there is no better city than Austin. Contact Joe Cline today to get started finding the best location for your business and budget.

This message is to alert you to changes in the federal Truth-in-Lending Act regulations, which will have an impact to every mortgage provider.  It will require a fundamental change to how we finalize loan terms for the borrower prior to closing. Changes at the closing table could require the borrower to reschedule the closing date if a revised Truth-In-Lending (TIL) is needed.

The rules for the Mortgage Disclosure Improvement Act were finalized Friday, May 8^th, and it is applicable to all mortgage lenders (federally chartered or state licensed).  For applications taken as of July 30, 2009, new requirements about the delivery and the accuracy of disclosures will apply.  One of the new requirements is that the borrower must be provided with an accurate APR disclosure at least three business days prior to closing.

Remember the new rule with “3/7/3”

3 days after application – An initial Truth-In-Lending (TIL) statement must be provided no later than 3 business days after receipt of the loan application.  Our current process generates an auto-compliance package that complies with this requirement, so no changes are needed.

7 business days after initial application – Waiting period – the borrower is not permitted to close until at least seven business days have passed since the TIL was placed in the mail or provided to the borrower.

3 business days prior to closing – Waiting period – the borrower must receive an accurate APR on their TIL at least 3 business days prior to closing. If it was provided before that period of time, because the loan terms were locked in earlier in the process, no new TIL is required if there is no change to the APR or the change is less than 1/8th of a percent.

If the final loan terms cause the TIL / APR to be understated by more than 1/8th of a percent, a revised TIL with an accurate APR must be provided to the borrower so that they receive it at least three business days prior to closing. It must be in their hands at that time, and they may close on the 3rd business day after that day.

What this means to you? All Realtors and buyers need to be advised of these new timing requirements, which will limit rush closings and could even delay closings.

1. Affordability is available at the moment. Austin home prices have remained constant regardless of the national results. There is no reason to consider they will lose considerable value.

2. There is a huge selection available.

3. Historically low Mortgage rates are beginning to climb. This effects your monthly budget.

4. Federal Tax Credit, developed and launched by the American Recovery and Reinvestment Act of 2009, allows for qualified buyers to receive up to 8000 dollars credit.

Starting this June, those who wish to sell a home in Austin will be required to have their home inspected for energy efficiency. This new ordinance does not require the seller to upgrade any leaks or other problems that may be found, but it does state that the buyer be made aware of the outcome of the audit via disclosure. Of course, given the current market and economy, anything that may decrease the value of a home should be repaired prior to sale. Buyers don’t want to think of what needs to be fixed when looking at a home, so it will be better to make any necessary upgrades before putting the house on the market.

The energy audit will be looking into four areas of energy efficiency. There will be a duct pressure check on the air conditioning unit to check for leaks. Weather stripping around doors will be inspected. Shades and screens, especially on the east, west, and south sides of a home will be looked at, as will the type of insulation found in an attic. Energy Raters can be found online at Austin Energy’s Website, and will generally run about $300 for every 2,000 square feet. If you decide to go ahead with the upgrades, the home will need to be inspected again when complete.

There is another option considered in compliance with the new ordinance. Homeowners can participate in the Home Performance with Energy Star Certificate program. Homes that have already done so within the last ten years are exempt from the ordinance. In this case, a home performance contractor will inspect the home, sometimes for free with a bid for work. The same areas will be reviewed as with the energy audit, and then the information will be sent to Austin Energy for review. To receive a certificate of completion, three of the requirements must be met or the homeowner must have received a rebate of $500 or more from Austin Energy.
In either case, Austin Energy must approve the upgrades for energy efficiency. The information must be contained within the Seller’s Disclosure and is good for ten years.

The city of Austin has been thinking about the environment for quite some time now. There are many incentives given by the city to encourage residents to reduce energy usage. Whether building a home, or remodeling, it is always a good idea to check with the city to see what it can offer. Recycling is another major part of Austin’s green thinking. The city has a goal of more than 50% recyclables within the next several years. Along these lines, the city is now offering a rebate for recycling your old refrigerator or freezer. They will even come and pick it up for you.

Over a lifetime of use, a refrigerator can produce up to 10 tons of carbon dioxide. This is a major contributor to greenhouse gases affecting our atmosphere. By recycling your old, but working, refrigerator or freezer, you are removing emissions equal to two cars out of the environment. Many homes may have an additional fridge or freezer in the garage for overflow. These units work up to 30% more while combating the hot Austin summers. By recycling your old fridge or freezer, you can save up to $250 per year in electricity and energy usage. It is also important to note that newer units are more energy efficient and can save even more than that.

As an added incentive, Austin is offering a cash rebate of up to $50 to recycle working refrigerators and freezers. More information about this program can be found online at www.austinenergy.com.