Texas Realty Blog

Sellers Say OverPricing Biggest Mistake

Inman news: Consumers surveyed about top real estate errors.
Thursday, March 09, 2006

According to the following article from Inman,  home sellers point to overpricing their home as their biggest mistake. The national emailed survey was conducted by HouseHunt and had interesting results.

Overpricing is the number one mistake home sellers said they made when listing their homes, according to a new national e-mail survey conducted by HouseHunt. The margin was nearly three-to-one over the second choice, HouseHunt reported.

Survey respondents said their next-biggest mistake was "dealing with the same real estate agent who represented the buyer," thereby setting up a possible conflict of interest and possibly a perception that the buyer was getting a better deal.

The third-biggest mistake noted by the nearly 400 survey participants was "failure to disclose known defects or problems." Virtually tied for fourth place were: "underpricing their properties" and "not utilizing Internet technology to market their properties."

Read the full Inman News Article.

Houston RealNews a Handy Resource

If you're an investor in Houston, you should already know about HoustonRealNews.com, a news resource for area investors. Recently, the group interviewed the CEO of Trademark Properties, Richard Davis. Davis and his team  has been featured on Flip this House, a popular (and more realistic) rehab show on cable television.

You can read the interview here.

Visit the Houston Real news website.

Gotcha Guide™: 9 Mistakes Home Buyers Make

NOTE: This information may be included in a forthcoming book, the Gotcha Guide™ to Buying and Investing in Real Estate.  

Buying a home is one of the biggest investments you will make. To get the best deal, you should cut costs by avoiding these 9 Common Buyer Mistakes. What are the mistakes? Here are the top 4.

1. The Wrong Home. Choosing the wrong home is the easiest mistake to make.Buyers often get emotionally attached to a particular home without properly evaluating it.

2. Bidding Blind. Some buyers offer a contract above the true market value of the property or fail to bid on a great value because they don’t know the market.

3. Title Trouble. A title search may reveal encumbrances on the property title such as tax liens, easements, leases or an undisclosed co-owner.

4. Survey Surprises. The property survey may show that the lot boundaries are different from the property plat, a neighbor’s fence is over the line, or zoning regulations have been violated.

Read the full text.

SXSW Brings International Crowd to Austin

South by Southwest is a great time to visit if you're interested in the Austin market. The annual film and music conference, in it's 20th year, began Saturday. Each year, the event draws an international crowd and is a great way to understand Austin's unique culture.

CNET.com, the Washington Post, Dallas Morning News and other news outlets are paying close attention to the gathering of artists and their fans. With the rise in podcasts and blogs, SXSW marries the tech culture of Austin with our image as the "Live Music Capital of the World".   Before SXSW started, potential buyers received text-messages via their mobile phones when tickets were available for purchase. Schedules and showtimes are also available via text message and concert-goers can even vote for their favorite bands on their cell phones.

The Austin Chronicle newspaper will cover the event in detail. Read our real estate column in the Chronicle Classifieds print edition.

Read the CNET article.
Dallas Morning News article.
Washington Post article.

Texas Real Estate Investors Create Association

I recently joined the Texas Real Estate Investor's Association as a full member. I am currently a member of the Austin Real Estate Investment Club. The state-wide  association was formed in 2005 as a result of laws that were passed in our state that severely limited the use of lease options. Investors realized that we did not have a governing body to represent our interests or obtain our input.

The purpose of Texas REIA is to create a higher level of ethical standards for honest and trustworthy  real estate investors in our state.  Similar to the National Association of REALTORS® and other large, member-based associations, Texas REIA will have a code of ethics, bylaws and a political action committee. As investors, we are often not against consumer laws. We often support them, but must join together to to guide legislators.

"Real estate investors must gain a foothold in politics and legislative activity all across the country. We must begin to protect ourselves and our customers from the recent series of laws and ordinances passed by many state legislatures, ranging from anti-lease option initiatives to landlord registration requirements and mandatory inspections. More are coming! These overreaching and often destructive measures become law because small investors and landlords have no voice or influence in the local, state and national legislatures".

The Texas REIA site is currently under construction, but the group is currently accepted new members.

Homes Price Growth Slows

Although Central Texas home prices are increasing, the rest of the nation's home prices are on a decline.

Reported March 02, 2006 by Inman News....

"Home price growth has slowed in Freddie Mac's quarterly national Conventional Home Price Index released today, adding to evidence the nation's housing market is cooling.

Freddie Mac's home-price-growth index rose 12.5 percent in the fourth quarter on an annualized basis, down from a revised third-quarter-2005 annualized rate of 13.4 percent and a second-quarter-2005 growth rate of 15.4 percent.

"Mortgage rates rose sharply in the fourth quarter and we are starting to see marked slowing in the rate of home-price appreciation," said Frank Nothaft, Freddie Mac vice president and chief economist. The monthly average for fixed-rate mortgages and 5/1 adjustable-rate mortgages rose about one-half of a percentage point between September and December, he said. Rates on one-year ARMs also increased.

Freddie Mac expects mortgage rates to rise gradually throughout this year, causing housing activity to ease, Nothaft added.

Interim Development Regulations Site Launch

From a recent email...

The City has now set up an electronic bulletin board, at which you can share comments and ideas with the Task Force reviewing the issue of residential regulations. That bulletin board is located at <http://residentialregs.org>.

Please note that this website is not a City of Austin website and the City provides this link without any implied or express warranties. This link is to a Web site outside the control of the City of Austin. If you access this non- City of Austin Web site, you do so at your own risk. The City of Austin does not endorse, sponsor, warrant or accept responsibility for this Web site. The City of Austin reserves the right to delete the posted link or terminate the discussion group at any time and without notice. Notwithstanding this right, the City of Austin will terminate access through this Web site link no later than May 31, 2006.

Laura Morrison, one of the co-chairs of the Task Force, has kindly put together a list of the many mechanisms by which you can communicate with the Task Force and they are listed below.

Link: Interim Development Regulations.

How to Flip Properties in Austin

Many new investors are joining the flipping properties craze. There are so many books, shows, and seminars that say it's easy. I recently had an email from someone who wanted to be realistic. Here is what I told him, so I decided to post it on the blog.

"I work with new flippers. There are many experienced rehabbers that I work with as well. They typically have private financing or use cash. They're looking for 70% including repairs. If someone wants to flip, they need to secure financing. A line of credit, cash, or money partner is a must.

I worked with new flippers who tried to do 100% with private money, but with points and fees, they needed to get a property at 60% including repair costs, which is not completely impossible, but shuts them out. If they happened to come across a seller who would sell for that amount, they'd be very lucky.

I'd first say to brainstorm about financing because once you have the details about money, then you can match a property to meet those numbers. I have new investors who are getting started on flips, but they have all had a line of credit. If you can't close within 14 days and pay cash, I'd say you had a 10% chance of getting a property unless it was a bad deal.

All the big boys can write a check on the spot. No muss, no fuss, no hassle for the seller. They can move when they want and don't have to worry about lenders and lender fees. Any escrow period over 15 days is too long for the seller, so the deal has to be sweetened. You also miss out on the more motivated people."

Commercial Real Estate Women Network (CREW) Still Growing

The CREW Network is still helping women grow their commercial business. The group has national and local chapters in many of the 50 states. Texas has a few CREW chapters, including Austin, Dallas, Houston, and San Antonio .

According to the CREW Dallas website:

"We offer opportunity a framework where dedicated professionals can meet and work on an ongoing basis, develop leadership skills, exchange ideas, pinpoint opportunities and cultivate business referrals...We encourage our members to work with each other, to refer business opportunities to each other, and to members of other CREW organizations."

CREW will often help raise awareness of issues affecting the local and national real estate industry. Each organization also has charitable functions and fundraisers.

Home Sales on Decline

National home sales are on the decline, according to an article by Inman News last Friday, March 03,2006.

Consumer confidence fell in February as home-buying attitudes dropped to their lowest level in 15 years, according to the University of Michigan's Survey of Consumers released today.

"The latest survey indicates that consumers have adopted a less favorable outlook for economic growth, expressed heightened concerns about potential increases in unemployment, and no longer anticipate any additional declines in the inflation rate," according to Richard Curtin, the director of the University of Michigan's Surveys of Consumers.

Favorable home-buying attitudes fell to their lowest level in 15 years in February due to increased resistance to high home prices and rising mortgage rates. "Complaints about high home prices were voiced by more consumers in February than any other time during the past quarter century," Curtin added.

Greater Austin and Texas real estate sales are on the rise. Investors, second home buyers, relocation clients are flocking to the warm clients of Austin, San Antonio, Houston and Dallas. With the influx of victims from Katrina, rental rates are also on the rise.

Read the article