Garreth Wilcock Central East Austin Real Estate

"Should I pad my listing price so that there is negotiation room?"

When seller's think about the negotiation process, it's natural for them to ask more to settle for their target price. But in reality, a correctly priced home will sell quicker, and possibly for more than an initially overpriced home.

Let's think about that for a second. The way most people search for homes initially is on the internet - putting in a maximum home price. If a seller raises their list price, buyers may not even see their home in the search results. So right pricing is key.

"How about if we put a high price in now, and drop it if it doesn't sell?" That's certainly one approach, but the longer your home is on the market, the more a potential buyer will think you will be prepared to discount. That's not even accounting for the holding costs of a home.

Here's some research I was doing from MLS data for real estate in Cherrywood, Austin, TX. Cherrywood is an appreciating area adjacent to the Mueller redevelopment, and is mainly comprised of homes built mainly in the 1940s.

The first chart shows the sales for the last 2 years in the 290k-410k price range. It shows the ratio of original list price to sales price versus the time the home was on the market. As you can see, when initial list price was within around 5% of the actual sales price, around half of the homes sold in under 30 days. The homes that were priced "with some negotiation room in" ultimately took longer to sell.

The second chart of the same home sales shows the sales price to list price ratio against time. The majority of homes sell between 90% and 100% of original list price, but this includes the ones that are overpriced! A correctly priced home will not sell at 90% of list price with all other things being equal.

If I tell someone that I think we should list their home at a certain amount, it's because I think that's the list price that will get buyers to come and see it. I don't then need to add 10% on to make sure that they net that amount.

Also, don't forget that there are a whole slew of points above the 100% line. There are multiple offers and people paying over list price. The list price is just a guide to get your home in front of the largest number of qualified buyers.

Garreth Wilcock is Mueller's Resident Realtor®, sells homes in Cherrywood, and blogs about real estate in Austin, TX.

The last time I bought a home in the UK, it was somewhat like buying a used car.

I'm not going to make any tired analogies between Realtors® and used car salesmen here, but just say that the last time I bought a home in London, I was unrepresented. The "estate agent" was either representing himself or the seller, I can't tell which, and I was left to fend for myself. This is typical. This is how it works:

• An estate agent is a small geographical entity, or franchise, and takes exclusive or non-exclusive listings in it's catchment area.
• A buyer will approach the estate agent and ask to see inside one of their listings.
• The buyer can make an offer through the listing estate agent, who is representing the seller.

Conflict of interest? Who can say - that's just the way things are done. I can see advantages in both systems

Explaining how the typical homebuying process in Austin, TX works to someone familiar with the UK system is fun. I did it last night again. Explaining:

• As a buyer's agent I work for free and can show any home in the MLS
  
• That the agency transaction fees for a listing may be around 6% (as opposed to around 1.5-2% in the UK)
• That there's a Multiple Listing System

Are always eye-popping moments. Moments I enjoy, it has to be said!

Garreth Wilcock is an Austin Realtor® who advises people throughout the real estate purchase and sale process. He was born in England, and knows the meaning of the phrase "estate agent".

I was looking at statistics for MLS Area 3 in Austin, TX which covers zip codes 78722 and 78723. Year to date sales are down in volume, but the sales are up in price. Windsor Park, University Hills, Vintage Hills, Delwood et al. have all seen dramatic rises in property values over the last four years, in part because of the unique character of the homes, and in part because of their convenience - close to UT and to I35, Hwy 290 and Hwy 183.

The Mueller Airport Redevelopment has also had a large impact, bringing new retail, commercial and urban residential real estate to the area. The majority of the hundreds of homes that have sold at Mueller were not listed in the MLS, but the ones that were have had an impact. If you look at the Median List Price of MLS Area 3 in 2008, you'll see that it is a healthy, above Austin median value: $209,900. Taking out the six Mueller MLS year to date sales, that price would drop to $199,777, over $10,000 less.

It's fair to say that Mueller is impacting 78722, and the rest of 78723 North of itself - known by the residents as The Upper East Side.

(All data to April 26^th in respective years)

The national average amount of home inventory is 10 months according to the National Association of Realtors. As you've probably heard, here in Austin, we're doing something completely different to the average!

“The number of active listings available in Central Texas represents approximately five months of housing inventory, which economists agree is present in a healthy market,” said the Austin Board of Realtors® Chairman according to the recent press release.

Homes in Austin have experienced a five percent increase from March 2007 according to the report, though sales volume is down from last year.

University Hills Property Taxes Rise

University Hills residents are receiving their property tax appraisal valuations for 2008. This ad valorem property appraisal has been rising on average throughout the Greater Austin area, and in University Hills too. Area unemployment rates are low, and area job growth is steady.

According to Chief Appraiser Patrick Brown, the average home value in the City of Austin rose from $237,055 to $266,807 in 2007, and increase of 12.6 percent. This is an averaged figure, so some homeowners could theoretically see their valuations fall.

Don't Want To Pay More Taxes?

When the property valuation rises, taxes rise (subject to caps and exemptions). It is possible to protest your property valuation, and you have until the end of May each year to do so. You present your case to the appraisal review board, and details of how to do that can be found in the Taxpayers' Rights Remedies and Responsibilities pamphlet. If you haven't received notice of appraised value, you can search for your property on the TCAD website.

To protest your taxes, you need to have data to back up your claim that the valuation is too high. Photos, repair estimates, and a rough valuation based on market sales are all useful. If you need a University Hills Realtor® to provide a free rough valuation - call or email me today at GARRETH@KW.COM.

Should I Sell At Appraised Value?

It's very easy to confuse appraised value with market value. Market value for your home is defined as the price a buyer would pay for your home in an open market. This number, the potential sales price, is very different to the appraisal value. They can be different for a number of reasons:

• A significant change may have impacted an individual property's market value. Someone could have remodeled the kitchen of their home without the appraiser's knowledge.
• The home may be a new build, and the real estate may only be valued as unimproved land at the start of the year. The market value of real estate with improvements (buildings) is obviously very different to the raw land.
• The appraiser uses a very broad-brush approach on many properties at the same time, yet there may be distinct reasons why one property has a significantly different market value to the others in its area.

Due to these possible variances between market value and appraised value, we should be careful when we value homes. When I value a home for a potential seller, I use the comparable sales method. I look at home sales for homes with similar qualities to the subject home (which takes particular skill in the varied streets of University Hills!), and examine list price, sales price and condition to derive an understanding of market value.

What's The Easiest Way to Find My Home's Value?

As a Realtor® I have access to the sales price data within the MLS with which to do this. Even the Travis County Appraisal District don't necessarily have the actual sales price for a home - Texas is a non-disclosure state. (This is one reason why sites like www.zillow.com struggle to give indicative pricing) Though it may be tempting to look at appraisal to list price ratios, these are often misleading too, and don't take into account condition which is crucial in our market. To sum up, to get an accurate picture of how much your home is worth, consult a full-time professional.

If you're thinking of selling your home, or protesting your tax appraisal and would like a free, no obligation estimate, please call me on 512 694 8873!