Why isn’t that home listed in the MLS?

The Austin multiple listing system (MLS) is the system of record for many but not all home sales. In most estimations it accounts for around 60-70% of the overall sales. So some homes sell without the MLS, and buyers often ask the question: “Why isn’t that home in the MLS?”.

There are several categories of homes that aren’t listed for sale:

  • For Sale By Owner – regular resale homes where the owner/seller doesn’t want to employ a listing agent
  • New construction – sometimes one or two of a builder’s homes may be listed in the MLS, but if the builder has an on-site sales agent, sometimes they don’t list all of their homes – the as yet unbuilt, the under construction and the completed inventory.
  • Pocket listings – where an agent is marketing a home for sale by themselves privately. This might be to extend greater privacy to the seller, who may not want attention drawing to themselves (Sandra Bullock – call me when you’re ready to sell), or may not want to have their home in a presentation ready state all the time.

There are also inaccurate data sources which list homes for sale when they’re not. For example, Zillow or Trulia allow people to add their homes for sale directly to the site (the For Sale By Owner crowd), and sometimes the data they import from the MLS is just wrong – homes that sold three years ago are sometimes listed as active.

Then there’s the homes that have a “coming soon” sign out, but haven’t been added to the MLS yet. In some ways, this is the time when a home is worth the most (in a flat market):

  1. As time on market increases, the “market stigma” increases – the “why hasn’t this house sold yet” question that buyers ask means their perception of a home’s value is less.
  2. Buyers often feel that they should scoop up this “exclusive opportunity” before the rest of the crowd come along
  3. However: there are less people looking at the home or made aware of it, so the number of buyers looking at the home is diminished. The people that are looking (for example the people stalking homes for sale in Mueller Austin)

No matter why a home isn’t in the MLS yet, it’s possible to get your trusty buyers agent to find out more details and represent you in any potential purchase. Get in touch if you would like to find out more about any home in Austin. 512 215 4785

University Hills Austin Homes – Market Update

University Hills AustinIn a housing market like Austin where one in three home listings (per the MLS) fails to sell despite local economic indicators looking good, is University Hills faring any better?
It’s certainly a different picture to the one six months ago where the number of foreclosed homes was bringing down list prices and perception of home values. The impact of the distressed homes made for a temporary dip in prices. While there are still a few foreclosed homes set to close soon, there are none currently on the market and we’re seeing mostly equity sales. Remodeled and renovated homes above $200,000 are starting to appear again with eight selling at the time of writing in 2011.
As predicted earlier this year, investors are flipping homes from the distressed market to the upper end of the resale market. This is what I wrote in my May 2011 University Hills newsletter:

Home sales in the area have been dominated by foreclosures as the low average sales price indicates.

In the last year, almost one in three sales in University Hills has been a foreclosed home. The good news is that only 4 out of 21 currently active listings are foreclosed, and the discount inventory has been clearing up. Expect some home flipping activity in the next quarter.

Remodeled home sales are faring well with several under contract including one which failed to sell last year and went off the market. We’re getting to a state now where inventory is low and sales are consistent – demand is steady and showings are up over last year.  This is a good indicator that the very local market is shifting back towards a sellers’ market. This is long awaited good news for sellers.

The market remains broad – sales prices in the last 12 months have spanned from $67,900 to $214,000, and only now are we seeing contracts on two of five homes at the upper end of the market (>$225,000)

Will 2012 be a good year to sell your home in this sleepy East Austin neighborhood? It’s early to say, though I always recommend getting your home on the market before the Spring / Summer rush when there is less competition for the available buyers. Call 512 215 4785 to find out what your home is worth, or check out the competing University Hills homes for sale.

How an MCC Can Save You Money on Your First Austin Home

Mcc

Mortgage Credit Certificate

The Mortgage Credit Certificate (MCC) is an optional tax credit that income qualified first time home buyers may purchase as part of their home loan. What is it, who gets it and how do you save up to $2,000 per year over the life of the loan?

What is the MCC? The Mortgage Credit Certificate is provided by the Texas Department of Housing and Community Affairs to help make home ownership more affordable for low to moderate income groups. It targets certain housing areas, including within the City Austin.

Who can get an MCC? The scheme has the following requirements on home buyers:

  • First time homebuyers (have not owned a home in the last three years)
  • Low to moderate income. This is defined as earning a maximum of 115% or 130% of Austin Median Family Income. This qualification depends on household size, so the maximum allowable income for a family of four in Austin in 2008 is $79,465 per year.
  • Buying a home for primary personal residence
  • Must take a certified home-buyer education class before closing

How much can an MCC save? The scheme provides a tax credit of up to $2,000 per year as an offset to paid income tax. This is available for every year during the life of the loan if the home is still your primary residence. This tax credit is in addition to the regular tax deduction available to regular home owners.

How much does an MCC cost? The application fee is around $75, and the certificate costs 1% of the loan amount at closing.

Which lenders can I use to get an MCC? Only qualified lenders and loan officers can apply for the MCC on your behalf. This is a list of MCC approved lenders, or I could introduce you to some that I have worked with recently who provide excellent service.

The MCC is a great way for income qualified applicants to receive additional tax benefits for the life of their loan.

Contact an Austin Realtor if you have questions about the MCC and how it can save you money on your home purchase. 512 215 4785

What To Do If Your Lender Doesn’t Like Your Home Insurance

House Insurance Austin

I know, but you still have the land

I had a client recently close on their new home at Mueller and they had a conceptual battle with their lender – USAA. It was concerning their home-insurance, also provided by USAA.

The lender was arguing that the insurance coverage was not enough and my client was concerned as the insurance value was less than the loan and less than the price of the home. I asked local insurance expert James Snyder for his take on it, while we were kickboxing. This is my synopsis.

The lender wants the insurance to cover their loan in the event of a catastrophe (fire, asteroid impact, hurricane etc). The insurance company wants to cover the replacement cost of the building, which they calculate based on average construction costs for your area. The insurance company does not generally cover replacement cost for the lot, as their argument is that the lot is (relatively) indestructible, and hence does not need coverage.

So you end up with several different values: the cost of the home (including lot), the replacement cost of the structure, and the value of the loan.

What can you do if the lender won’t accept the coverage provided by your insurance company? Well if you called James this probably wouldn’t ever surface – his number is 512.814.7132. This is how he describes it:

“Should the lender ever fight (maybe question is a better is a word) an insurance company (more specifically me or an insurance agent) on the insured amount of a home here is what I as the insurance agent would say.

“First understand the client/insured probably doesn’t know this is occurring (the fight/the questioning). It usually only takes place between the lender and the agent. The lender wants their “monies” in the event of a loss, understandably. See what isn’t understood is that an insurance company finds replacement cost of the home ONLY, by today’s standards (price per square foot, exterior, interior make (brick, stone, granite, tile, etc)). A good rule of thumb here is about $100 a square foot on average for a 1 story home.
The lender wants replacement cost of their loan and this just doesn’t happen as the lender is lending monies for the land as well as the home. From an insurance stand point there is no replacement risk involved in the land. The land will still be there in the event of a fire, tornado, or hurricane, therefore we do not include the value of the land in replacement cost. Once this is explained the lender is usually accepting of the amount the home is insured for.
If the lender still has a question (or still wants to fight), what I or any great agent would do is work with the lender to come to an agreement or compromise on what value is acceptable. This is done several ways. One we add extended replacement cost to the policy. This is typically a 25% sometimes 50% extension above the insured value of the home or coverage. Second we can tweak coverages to include custom or designer work in the kitchens or bathrooms to increase the value. Obviously both options have and affect on the premium.”
So if you have a good insurance agent working on your side, you would probably never even hear about the issue. As a Realtor it’s something I trust my buyer’s insurer to handle for us. Call me on 512 215 4785 if you want to discuss buying a new home.

University Hills – One Thing Every Home Buyer Should Ask

East Austin – You wouldn’t build a home without first putting down a solid foundation would you? It’s a phrase people bandy about with reckless abandon to illustrate their points about putting the groundwork in first. And in East Austin Realtor circles, and those who know University Hills in particular, you’ll often here the question asked – has it had any foundation work done?

Three little piggiesJust as the three little piggies learned their lesson about building material choice through multiple iterations of house manufacture, so the builders of the latter part of the 20th Century learned about the best way to prepare and pour a slab foundation. In University Hills, the two major builders were Bill Milburn and Walter Carrington, and through the 1960s and 1970s, they built large ranch-style houses amid the hills of 78723.

The challenge homeowners in the area have is that the homes were often built on absorbent clay soils, which swell when wet and contract in the dry summers of Austin. As they do so, the slabs that rest upon them rise and fall, often at different levels in different parts of the house, leading to an unlevel foundation. Which means that foundation leveling companies like Centex and LevelBest earn a living shoring up the foundations, returning the floor to level, and hopefully preventing any future deviations.

So what do you need to know when considering buying a home in University Hills? Has the foundation been levelled? It’s a subject of debate as to whether a foundation that hasn’t moved in 50 years is better than one that has and has been repaired. I advocate that there’s only real value in a foundation repair from a reputable company which offers a lifetime warranty. If there has been repair there are follow up questions – where is the engineer’s report to validate the work?, and is there a transferable lifetime warranty? Digging down further, the engineer may have recommendations about drainage, grading and gutters, so you need to ask if these have been followed.

A buyer’s inspector should check for signs of foundation movement, and recommend inspection by a levelling company as further due dilligence if necessary. These companies typically measure vertical deflection at different points in the home and express a judgment if any deflection is out of typical acceptable tolerance. If you are buying with an FHA loan, then the FHA appraiser will have an acceptable tolerance, and may ask for further investigation from a structural engineer which might cost $400+ for a report.

So the upshot is: if you’re buying in the area, make sure you do your due dilligence. If you’re selling in the area, get this checked out before you get on the market.

Garreth Wilcock used to live in University Hills, where he learned the hard way about choosing a foundation repair company that will still be in business when it’s time to sell your house. He helps people buy and sell homes there. 512 215 4785.

Garreth Wilcock is a licensed REALTOR® in the State of Texas with Sherlock Homes Austin - a PLR Company.
All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental