Texas Realty Blog

Gotcha Guide™: How to Find a Fixer-Upper

 by DeeinAustin™

Robert Bruss, from InMan News recently offered advice on how to find a bargain fixer-upper. Since the market is softening in the East and West Coasts, now may be the time to start hunting.

One of the best principles for buying real estate that I found is that it's like the stock market. I was told that you buy low, sell high. It's pretty simple, but you'd be amazed at how many people sell real estate or stocks when the market is dropping and then buy when it's on the way back up. It's natural for people to react that way.

Bruss outlined outline 5 days to find bargains. Of course, seasoned investors know this, but it's a reminder. He also gives a little commentary on each. So where are bargains to be found?

1. MLS and Real Estate Agents
2. Foreclosures
3. Probate and Bankruptcy Properties
4. Vacation and second homes

Read the rest: TOP PRODUCER News.

Boise, Idaho is like Austin

The best real estate investors usually do a good job of understanding and evaluating the global and national housing markets to be successful in foreseeing trends in our own markets. My post yesterday mentioned the hot markets in Boise, Idaho and the Midwest.

I wanted to take time to expand on what's happening in those markets because I tend to explain it quite often. In June, I received my Kiplinger magazine, which outlined the Top 50 Smart Places to Live. This was a great article because it picked the top cities in the U.S. that were good places to live based on the stage of life that you were in. For instance, a young couple versus a retiring baby boomer will have different criteria for choosing a place to relocate to.

The life stages were:

1. Singles
2. Young Couples
3. Families
4. Empty Nesters
5. Retires

As expected, Austin was in the top 5, but even better, we were one of only two cities  on the entire list that was named as a good place to live for all five life-stages. If you ask someone from Austin, they'd agree with this assessment because "everyone can find something" in Austin.

I give you this information because it surprised me that, of all places, Boise, Idaho was the second city to be recognized as a city that people from every life-stage would find as a great fit. Now, Boise was actually #40, but it was still very interesting and helps some of us understand why the market is so attractive.

I didn't want to write too long of a column, so found a real estate article that summarizes the other market factors in Boise that made it a hot real estate investment. Read from: Realty Times - Boise Idaho, Real Estate Goldmine

Two Texas Cities in Running for Futuristic Power Plant

Texas is already undergoing an economic makeover compared to where we were a few years ago. Some of us may remember that we were consistently the state with the highest number of real estate foreclosures in the nation.  Now, because of factors that I've been covering in this blog (out-of-state investors, job growth, retiring baby boomers, hurricane evacuees making this their home, etc.) our local economy is on the upswing.

It was previously announced that we were in the running for a prototype of 'clean-burning' power plant. Odessa and Jewett were picked as finalists for the FutureGen plant, along with two locations in Illinois. I'm not going to get into how it works since you can look that up on Futuregen's website, but I can say that it's a great concept.

If Texas can get this plant, it would create jobs in those areas and also help give us the national recognition to keep winning bids for high-profile projects and clients such as this billion-dollar concept. It's definitely excited to be a Texan right now and it seems as if we're going to keep seeing interest from other states as their economies worsen. I'll keep you posted.

Read more: Two Texas sites finalists for clean-burning plant.

Rest of the Real Estate World Slows, but Not Texas

I spoke to a friend yesterday and was shocked when she said she heard that our real estate market was slowing and it's not a good time to buy. I told her, "Obviously, you haven't been reading my blog and, secondly, that wasn't a local agent you were talking to." :-)

Our market is on fire and it's partly because the East and West Coasts are seeing a slump. Yesterday, I  reported a 21% increase in Austin alone while other markets are seeing more inventory stay on the market for a much longer time than they are used to. In Austin, we are experiencing multiple offers on most houses priced under $200-250k. Even new home builders are cutting back on advertising and incentives. The commercial market is also making a comeback, with retail and office space vacancies starting to become less of a problem for owners.

Other good areas for investment seem to be the mid-west. With affordable properties and nice neighborhoods, investors are flocking to places like Boise, Idaho.

With no signs of a slow-down, we're going to keep rising here as the other coasts start to sink.

Read the full story: Realtors' Lereah Blames Inventories For Price Sloth - Forbes.com.

Austin adds 26,500 jobs in past year

According to the Austin Business Journal, "The Austin area added 26,500 jobs during the last 12 months, according to the latest report from the Texas Workforce Commission. Between the months of May and June, area payrolls grew by 4,000 jobs. The unemployment rate in the metropolitan area dropped slightly over the last year to 4.4 percent from 4.5 percent in June 2005."

Most commercial real estate specialists were aware that the job growth, unemployment rate, and occupancy rates are favorable for developments and purchases. Greater Austin and most of Central Texas is primed for an economic boom. Although some feel that were are in a boom, I'd tend to disagree. We are definitely on an upswing, but we haven't reached the high levels of cycles in the past.

Most of us foresee continued growth and expansion into neighboring towns such as Round Rock, Cedar Park, Georgetown, and Buda.

Link: Austin added 26,500 jobs in past year

 

Austin Home Sales Jump 21% in June

The Austin real estate market is hot...almost too hot, according to some buyers and sellers. Existing home sales jumped 21% in June. This is usually great news except industry professionals such as real estate agents, mortgage underwriters, loan processors, and title companies have become abnormally busy.

This new surge in sales has caused loan and title processing to be delayed. I used to be able to close quickly, in about 7 days, but many of my closings have recently been delayed on the day of close. The processing plants for loan are saying that their processors are simply overworked. All of the national attention on our market has caused more out-of-state investors and relocation clients to flock to Central Texas.

Read the full story on TOP PRODUCER News.

Asian-American Home Ownership to Grow

A study this year by the University of California Los Angeles found that Asian-Americans had a 60% increase in homeownership in 2004.  The study, conducted with the Asian Real Estate Association of America (AREAA), found that among naturalized-citizen householders born in Asia, 81% of those who entered in 1974 or earlier were homeowners, compared with 66% for those who entered in 1975 or later. 

The UCLA/AREAA study stressed the need for improved cultural sensitivity toward Asian-born home buying prospects, especially in lending and home buying counseling.  While Asian-Americans are seeing a steady growth in home buying, they still lagged behind the homeownership rates of the national (69%) and non-Hispanic White(76%) populations.

As real estate agents, we have access to many classes and training opportunities in this area. The commercial and international service providers are already skilled in understanding the Asian-American culture and it's impact on our economy.

Bill Bronchick Teaches: Save Up to 90% on Title Insurance

Buyers are often encouraged to obtain title insurance, which is an insurance policy that protects against future loss, should the title condition be any different than when the policy was written. Bill Bronchick wrote a lot of good articles for REIclub.com and I like the one he's written on saving on your title insurance policy, which is often about 1% of the purchase price.

His article pointed out a few ways to save:

• Ask for a "re-issue" rate, which is often 40% of the normal price. If a home has been recently purchased and covered by title insurance, the chances of an encumbrance is often low, so you can instead ask for this re-issue rate by the company who currently holds the title insurance.

• Try a "hold open" policy: "For a small fee (usually an additional 10% on the policy), the title company will hold a title commitment open for a year or more. Rather than issue a policy based on the first transfer (from the seller to you), they will issue a policy on the second transfer (from you to the next buyer). Since the seller usually pays for title insurance, you can pay the additional 10% when you buy, saving 90% on title insurance when you sell."

These are some good tips, especially for investors who often buy title insurance policies in short spans of time. The "hold open" policy seems like a good way to increase profit margins.

Gotcha Guide™ Advice for Investors: How to Close Deals

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

REIclub.com is the most comprehensive resource for investors on the net. I recently read an article about investor follow-up to ensure a smooth closing, but it has helpful information that some average buyers and sellers may find useful. Some consumers think that the real estate agent's job is mostly centered around finding the house or deal. While this "half the battle", the most important process is the follow-up after the deal is accepted. This is where we help move the buyer or seller towards a smooth close. If we represent the buyer or investor, we need to continue our due diligence to make sure the deal is worth the time and money.

Lou Castillo's article suggested that you pay attention to time-lines such as contract expiration date, proactively keep in touch with the lender to ensure that they are on schedule, keeping up with the title company's progress, and keeping in touch with the other party. Many larger real estate teams hire a transaction coordinator to handle these duties. As your investment business grows, you should look to include one of these individuals on your team. As a buyer or seller, look for a real estate agent who may have someone whose job it is to coordinate the closing.

After the closing, there is sometimes issues with the title or inaccurate recording of the deed, liens, etc., so you should be proactive in making sure the after-sale tasks occur without error.

Austin Board of REALTORS® Charged with Antitrust Violation

Ooops! The Austin Board of REALTORS® has been slapped with an antitrust violation from the Federal Trade Commission. The Austin Business Journal reported that they were "charged with violating antitrust laws because of a rule preventing discount brokers from listing property on its public website. In February 2005, Austin Board of Realtors leaders passed a rule blocking MLS information from discount brokers on several public Web sites, including the National Association of Realtors' Realtor.com site, the local board's Austinhomesearch.com site and other public Web sites operated by member brokers."

"The FTC says the policy caused some homesellers to switch from discount brokers to traditional agents. It says that after the policy was implemented, listings from discount brokers decreased from 18 percent to 2.5 percent of total listings in the local Multiple Listing Service."

I guess I am supposed to defend my local board, but I can really say that I wasn't aware of this change and don't have enough background. If what the FTC says is true, I can see how this can result in a violation of trade rules. I'm not sure why the board would be able to justify limiting access to placing homes on public sites for discount brokers, but it looks like they better have a great reason.