Myth: If I price my home higher than market value, I’m leaving room for negotiations.
Truth: Buyers have no idea you’re employing this strategy and won’t understand why your price is too high. Many won’t even view your home, much less put in an offer. When your home is priced improperly, it’s more likely to sit on the market, making potential buyers think there’s something wrong it. When that happens, you’ll probably wind up with lower offers than if you had priced the home fairly at the start.
Home sellers in the Austin area are in maybe the hottest seller’s market we’ve ever seen. However, REALITY CHECK: A seller’s market doesn’t mean a stupid market! What’s really interesting about our current market is that buyers have also never been more savvy than they are now. Prospective home buyers have access to more information at their fingertips than at any other point in human history. Many buyers in the modern era know- even without the help of a Realtor- if a home is overpriced.
Even in this crazy seller’s market, overpricing is by far the most costly mistake you can make when selling your home.
Wow! It’s been a wild and crazy start to the year! I’ve been focusing (apart from normal business activities) a lot on trying to get all of my blog posts cleaned up and reformatted- starting with the oldest. After moving brokerages back in October, I also changed blogging platforms and moved all of my YouTube videos over to my personal YouTube account. Sounds easy, right? HAH! So, apologies for the scarcity in new blog posts as of late- but they’re coming!
In light of that, what better way to come back than with a 2016 year-end wrap-up! Unless you’ve been living under an enchanted rock, you know that 2016 was a nutty year in Austin real estate. You’re either feeling squeezed by rising rental rates or rising property taxes.
It’s a catch-22 really. I mean, we love Austin because it’s an amazing city to live in. Almost no one can deny that. However, because it’s such an amazing city, the number of people wanting/willing to relocate here is ever-increasing. For those of you feeling the financial squeeze of housing costs, I hate to tell you- but I think the pressure will continue for a while. The good news: I don’t think the acceleration of the intensity will be quite like it has been the past few years.
Check out the video below where I break down Austin’s most recent market numbers for the month of January. Additionally, I go over the stats for 2016 as a whole and attempt to take stock of where the heck we’re at with the housing market in this sweet town. (If the video doesn’t show up below, check it out HERE on my YouTube channel!)
The Austin Board of Realtors just released the newest round of stats for the month of August. Check out the video below where I break down (what I think are) the most important take-aways! Everyone knows this market is a bit nutty. But how nutty is it, you ask? Watch the video and judge for yourself!
If you are a home-seller in Austin, TX, you’ve still got the upper hand. As long as you are priced somewhere in the range of what’s reasonable, you should sell very quickly…and you’ll likely have several interested parties. Multiple offers have really become the norm.
In the video below, though, I talk a bit about an area that is growing significantly in popularity. With pretty good schools, easy access to I-35, MoPac, HWY 183, etc., and relatively affordable prices, Williamson County (Cedar Park, Round Rock, Leander, Georgetown, etc.) is experiencing somewhat of a boom.
“Devastating termite damage is pretty typical, right?” (photo courtesy of Wikimedia Commons)
Here are a few specific examples:
How long does it typically take for a seller to respond after an offer is submitted?
Sellers won’t typically contribute to a buyer’s closing costs, right?
Do the washer and dryer typically stay?
Do sellers typically repair any items in the inspection not up to code?
Will a buyer typically pay over asking price for a home like mine?
Homes in my neighborhood typically sell pretty quickly, right?
…I could go on and on…
Well, I’m here to tell you that there is no “typical” in real estate. Before getting into real estate, I was a middle school math and economics teacher for about eight years. In teaching, there were certainly many obstacles- many of them you couldn’t prepare for. However, most of my day was literally planned out by me or someone else. Our curriculum was planned a year in advance. I knew what lessons I’d be teaching each day; I knew when grades and report cards were due; and if any of my students misbehaved, there were plans of action. Especially with respect to the academic content- there were rules and theorems that had to be obeyed in order to succeed. I mean, none of my students ever asked, “Mr. Raven, if I were to divide 56 by 8, would I typically get an answer of 7?”
This was on the door of my classroom for a couple of years.
So, back to real estate! One of the things I love most about this (Realtor) job is that everything is different virtually all the time. Every property is different and comes with its different quirks. Every seller is different. Every buyer is different. Every listing agent is different. Every buyer’s agent is different. Every mortgage lender is different. Of course, the market can change on a dime. Lending laws change all the time. Even the real estate sales contract changes occasionally.
Let’s break this idea down with one simple scenario: I’m sitting in front of a home with my buyer clients and they love it. They say to me, “Barrett, we love it. But we really want to pay $20,000 less than what they are asking. But sellers in this market don’t typically consider offers below asking price, right?”
In this example, the outcome primarily depends on the seller’s motivation. (e.g. Are they just selling to see what the market will bear? Do they even care if they sell or not? Or did the husband just get a job in Chicago and they need to sell FAST!?) If the seller is highly motivated to get a sale done, they might be willing to give a little on price.
Is the home priced appropriately? The price of any given home on the market may or may not be based on reality. In my opinion, a good real estate agent should give you an accurate projection of the market price before you ever offer on a home. If it appears the market supports a price $45,000 less than where they are listed, there’s a decent chance a $20,000 price reduction may be successful. Or maybe there are obvious defects present in the home that the seller did not take into account when they listed.
Another important factor in this scenario is the method and strategy by which your agent presents the low offer. In the end, someone wants to sell their home and someone else wants to buy that home. This is a very cooperative process. There’s no reason to present a low offer in an insulting or condescending way. We are all on the same team here! As a buyer’s agent, I am still helping the seller get their home sold. Of course, I must do this while representing the buyer’s interests. I could write about this particular topic all day. But if my client’s interest is to buy the home for $20,000 below asking, I believe I am much more likely to achieve that for them if I treat the listing agent with kindness and bring data to the table demonstrating that my client’s offer is a reasonable one. (Someday, I will write a post just about this…but this one is getting too long.)
Of course, there are market factors at play. For example, if the average days on market in a particular neighborhood is 15 days and you are asking for a $20,000 price reduction on the third day, you’re probably not going to get it. But you never know!
Lastly, there is the financing component. Are you paying in all cash? If so you may be able to get a price reduction. If not, how much are you putting down?
There are even more pieces of the puzzle than this! So, to just say that you can’t typically get this or that is oversimplifying things pretty drastically. What a beautiful process we get to experience together!
2015 has finally come to a close…at least with respect to reported housing market stats! 2015 was a major record-breaking year for the Austin area. Check out the video below where I break down some of the numbers for the entire year!
One quick point that I didn’t really mention in the video:
It’s a little misleading to say that inventory in Austin is so low and just leave it at that. It can be a bit confusing for someone who isn’t intimately familiar with these numbers- especially when you hear that there was a record number of homes sold. If you’re like me, you think, “Wait, first you said tons of homes were sold and that there were record numbers of homes hitting the market…and then you said there’s hardly anything available. What the heck? Which one is it?!”
It might help to phrase it this way: There is very little housing inventory available in Austin relative to the number of people who are wanting to buy homes.
If you live remotely close to Austin, I have a recommendation. Scratch that- I have a mission for you. Scratch that, I have a demand: Drive to Georgetown, TX at your earliest convenience and have breakfast at Monument Cafe. Then, walk around Georgetown for a while until you get hungry again. At that time, walk down to El Monumento (owned by the same restaurant group) and have yourself a tasty margarita (the “El Classico” is what I got…I think) and just pick something on the menu for lunch. I guarantee it will be amazing. After lunch, take a walk along the river trails and soak in the amazingness you have just experienced.
My sons and I enjoying some brunch at Monument Cafe recently.
On that note, I couldn’t be more STOKED about my new listing in Georgetown!
According to tax records, this BEAUTIFUL home was built in 1930. However, based on some additional research I’ve done, it looks like it might actually have been constructed closer to 1900! Some quick specs:
3 bedrooms/1.5 bathrooms (the half-bath is plumbed for a tub and would be super easy to install)
Just under 0.25 acre lot
Pier & beam foundation
Updated kitchen, wiring, plumbing, and wood floors- it’s basically been fully restored!
See more pics below!
Can you tell I’m pumped? Also, the angle of these shots makes me look gigantic.
Arguably, my favorite features about this home are the lifestyle ones. For example, this home backs to San Gabriel Park, is 0.25 miles from the San Gabriel River, and (most importantly) is a three-minute drive to EL MONUMENTO! Be still my heart! One could easily bike, walk, or drive along the beautiful river to one of the best and most vibrant old town squares in all of Texas. GOOOOOOO!!!!! Seriously, don’t hesitate to holler at me if you want any additional info about this stellar home. Hurry before I buy it myself!
Sweet car not included.
I want to chill here.
New casement windows galore!
Plumbed for a full-sized tub.
Master bath (toilet to the right)
Back “bedroom”. To me, this home lives like a 2/1.5 with a game room.