December MLS Statistics - Austin Area Homes Sales Outpace Prior Year for 7 Straight Months

According to the Multiple Listing Service (MLS) report released today by the Austin Board of REALTORS®, single-family home sales in December 2011 outpaced the same month of the prior year for the seventh straight month, and year-end figures show momentum in Austin real estate heading into 2012.

In December 2011, a total of 1,581 single-family homes were sold in Austin, which is 11 percent more than December 2010. During the same time period, the median price for Austin homes was $187,940, which is one percent less than the same month of the prior year.

In December 2011, the inventory of Austin-area homes decreased to 4.1 months, which is 1.4 months less than December 2010 and the lowest figure reported since the organization began tracking the statistic in January 2009.

2011 Year-End Totals

19,220 – Single-family homes sold, seven percent more than 2010.

$193,000 – Median price for single-family homes, unchanged from 2010.

84 – Average number of days that single-family homes spent on the market, seven days more than 2010.

30,668 – New single-family home listings on the market, 12 percent less than 2010.

8,609 – Active single-family home listings on the market, 15 percent less than 2010.

21,002 – Pending sales for single-family homes, seven percent more than 2010.

$4,931,910,843 – Total dollar volume of single-family properties sold, nine percent more than 2010.

What are the Costs Involved in Selling My Home?

It's often said that it takes money to make money, and that's certainly true when you're selling your home. If you're thinking about selling your home, you may be asking yourself, What are the costs involved in selling my home, and how can I lower them? The first step to lowering the costs involved in selling your home is being aware of what they are, so be prepared for the following costs when shopping for settlement services.

How Can I Lower Real Estate Agent Costs When Selling My Home?
The first thing to decide when selling your home is whether or not you will sell your own home or use a professional real estate broker to act as your proxy, show your home to buyers, and assist you in closing the deal. If you decide to use a real estate broker, he or she will be paid a sales commission based on a percentage of the selling price of your home. The real estate agent's sales commission is one of the largest costs when selling your home, and, in a down economy, the real estate agent's sales commission is usually paid by the seller. Therefore, one of the most important things you can do to lower the costs involved in selling your home is to negotiate with the real estate agent for a lower sales commission.

Typically, the average commission for a real estate agent is six percent of the final home sale value. This amount can vary, however, from a low of approximately four percent to as high as eight percent. When you do the calculations, you realize this can amount to a significant amount of money deducted from the gross sale amount. For instance, using the above range of 4 to 8 percent, the sales commission on a $300,000 home could be anywhere between $12,000 and $24,000. Most real estate agents like to negotiate their sales percentage by agreement before starting any selling work. The agent's payment for selling your home happens when the home sale is paid for, so be prepared for that cost at that time.

How Can I Lower the Transfer Costs Involved in Selling My Home?
The actual transaction of selling your home will require the services of several licensed experts. Escrow services, title insurance, appraisals and attorney's fees all generate costs when selling your home. When these costs are added together, these technical expenses can cost between $5,000 and $10,000 a sale, and most of them are required in order to close a sale under many states' real estate laws. One of the best ways you can lower the costs of selling your home is to be proactive by making calls, getting referrals, and negotiating fees.

In a seller's market, the buyer would pay these costs, but when economic times are hard, you should be prepared to take on some if not all of these costs involved in selling your home in order to convince a buyer to commit and close the deal.

How Can I Lower My Transfer Taxes?
Whenever large sums of value are exchanged, the government and financial services sectors find ways to attach costs. Some of the costs involved in selling your home may be taxes on the sale in the form of transfer taxes or sales taxes imposed by federal, state, or local jurisdictions. If a transfer tax applies, the recipient of the funds, the seller, frequently ends up paying the cost. Collection can happen at the time of the sale, when title documents are transferred, or it could happen after the fact with a tax bill sent to the seller. The amount due will be a percentage that is based on the total sale cost of the house. You can lower the costs involved in selling your home by taking steps to avoid capital gains tax after selling your home.

How Can I Lower My Property Taxes?
There is little you can do to lower the cost of property taxes, but usually property taxes are the responsibility of the new buyer. Sometimes sellers will assume this cost, however, to sweeten the deal for a buyer. If the sale happens in the middle of a property tax cycle, both the seller and the buyer can be charged. Most jurisdictions collect property taxes in two payments. The first payment may happen while the seller owns the house and the second may occur right after the buyer takes over. To make sure these taxes are paid, sellers or a financing bank can require the buyer to put these monies forward to ensure taxes are paid in the first year of ownership.

Other Potential Costs Involved in Selling a Home
Loan Origination Fees. These are sometimes called a "point" or "points." Loan origination fees cover the lender's administrative costs in processing the loan. The fee, which is usually expressed as a percentage of the loan, will vary among lenders. Typically, the buyer pays the loan origination fees, unless otherwise negotiated.

Appraisal Fee. This charge pays for an appraisal report made by an appraiser.

Conclusion

Many of the costs involved in selling your home can be negotiated and can either be the responsibility of the buyer or the seller. Educate yourself independently on the costs of selling your home so you know objectively what a definite seller's cost is and what is negotiable.
In addition to the information provided here, the U.S. Department of Housing and Urban Development offers articles and sample calculations to help you estimate the costs involved in selling your home.

2012 Forecast - Austin Area Continues to Stabilize

Data released by Clear Capital Monday shows year-over-year, national home prices were down 2.1 percent in 2011. The company says movement in home prices began to stabilize somewhat during the latter half of the year and REO sales as a percentage of total home sales began to decline, which helped to moderate depreciation for the year overall.

Clear Capital expects 2012 to play out much like the last half of 2011, with only a very subtle price change at the national level. A minimal decline in the beginning of the year is expected to turn into a meager gain by year’s end, the company explained.

For the Austin market, year-to-date from 2010 to 2011, is stronger. Closed home sales are up 5.2 percent, Pending sales are up 8.6 percent, and inventory of homes available is down 12.6 percent, which means fewer homes and more buyers.

These numbers are possible indicators that the real estate market here in Austin is improving. With the low inventory of homes currently on the market, compare it to the number of new jobs being created, apartment rentals at capacity, then the market should continue to see improvements for next year.

What Does it Mean to Buy and Bail?

“Buying and bailing” refers to the act of buying a second property and allowing a first home to fall into foreclosure. Homeowners who purchase second properties in this scenario are typically “upside down” on their primary residence, meaning they owe more on their first home than it is worth in the current market. It's likely that they had an adjustable rate mortgage and their monthly mortgage payment grew to a payment they could no longer afford. For some, an easy solution appears to be buying a second property at a depressed price with a fixed rate mortgage in order to lower their monthly mortgage payments. At the same time, they let their first home fall into foreclosure hence the term buying and bailing.

You may wonder why a lender would loan someone money for a second property when they are already having difficulty making the mortgage payments on their first home. Typically, the buying and bailing homeowners will state in their loan applications that they intend to rent out the first property, but it should be noted that lying on a loan application constitutes fraud. Fannie Mae and Freddy Mac have instituted rules to curb the practice, but it continues. In addition to fraud, homeowners could get themselves into deep water when dealing with foreclosure and second properties.

Things to Consider About Foreclosure and Second Properties

There are two different scenarios that can occur with foreclosures and second properties. The first is the buy and bail situation explained above where the homeowner buys a second property and allows the home that has been his primary residence to go into foreclosure. The second is where a homeowner has a second property, perhaps a vacation home, and allows that second property to go into foreclosure.
When a home goes into foreclosure it will be auctioned off usually for a much lower amount than what is actually owed on the property. The difference between the amount owed and the amount received at auction is called a deficiency balance.

How the settlement of the deficiency balance will be handled varies greatly depending on where you live and your state's laws regarding foreclosure and the enforcement of deficiency balances. In about two-thirds of U.S. states, deficiency balances are treated like all other unsecured debts, and lenders may pursue a borrower after foreclosure by seeking a deficiency judgment. This allows a lien on the second property for the amount still owed on a previous mortgage. In states such as California and Arizona there are restrictions on lenders, and they may not have that option if the original home was a primary residence.

If you have a vacation home that goes into foreclosure, and end up owing a deficiency balance after foreclosure on that second property, the lender may file a lawsuit against you to collect the debt. This could result in garnishment of your wages, levies on your bank accounts, and/or liens placed on your property, including your primary residence, depending on your state's laws relating to the enforcement of judgments.

After foreclosure, the lender, otherwise known as the judgment creditor, may be able to force the sale of your primary residence to obtain the money needed to pay off its judgment depending on the state in which you live. Judgment creditors are more likely to pursue a forced sale of your property if you have a lot of equity in your home. Therefore, if you have a substantial amount of equity in your primary residence, you may want to think long and hard before allowing a foreclosure on your second property. A consultation with an attorney specializing in real estate law is advisable before deciding to let a foreclosure on a second property to occur.

What Does Short Sale Mean?

Buying Short Sales: What You Need to Know

As the real estate market remains volatile, one of the best options for many new homebuyers is purchasing a short sale home. But, what does "short sale" mean? A short sale is when lenders have the opportunity to sell a property before the bank forecloses on the home rather than after. While buying short sales creates the opportunity for real estate investors to pay well-below-average housing prices for properties within ideal locations, there are still drawbacks.

If you're interested in buying short sales, here are a few things you need to be aware of:

Why Banks Short Sale Pre-Foreclosure Homes

The last thing a bank wants to do is own a property secured by the bank's loans. When a property owner is in default and owes more than what the home is currently worth, the bank will work with the seller to offer the property for less than they owe on the mortgage loan.

How much money will banks take off? When buying short sales, how much should I expect prices to fluctuate? On average, banks estimate that holding on to the property after foreclosure will cost up to 18 percent of the home value to complete the inspection, appraisals, repair and maintenance. Instead, it is a much easier and financially sound decision for banks to sell the home "as is" to avoid any third-party inspection process.

What to Consider Before Buying a Short Sale

Buying short sales might seem like a good deal for the buyer, but that's not always the case. Here are three major conflicts buyers and sellers face when a short sale, pre-foreclosed home is on the market:

Time: Don't let the name fool you. Buying short sales takes a very long time. There's a whole gambit of scenarios of why a short sale might be delayed, but many of the hurdles buyers have to overcome have to deal with secondary financing on the homeowner's original mortgage, bank processing delays and private mortgage insurance policy breakdowns. Buying short sales is a very complex process, which can leave the short sell buyer in housing limbo for up to six months.

Condition: Short sale homes often need additional maintenance and repairs. When the current property owner is unable to pay the mortgage on the home, more often than not the condition of the property diminishes over time. Additionally, short sale homebuyers should take into account that the property will have had more than one previous owner, which adds to the wear and tear.

Lender Restrictions: Banks can renegotiate a short sale at the last second. If a new law passes, the market begins to change or the bank finds out more information about the property, they reserve the right to change the terms of the contract at any point in the process. Banks will also refuse to pay for extra services like seller closing costs or inspections. If you want something specific inspected on the property, you're probably going to pay for it yourself.

Short sale homes are the real estate market's diamond in the rough. It's true that buying short sales can be a very tricky process, but for the flexible and patient homebuyer, the short sale home can be the dream house they've been searching for.

How to Avoid Rental Scams

You find yourself in the market to find a new place to rent, and you are searching through Craigslist to find your next place.  Craigslist is a great place to search but be forewarned, there are many unscrupulous people out there ready to take your money.

There are a number of fake rental scams on Craigslist and other classifieds.  People are out to steal your money so here are some tips from the Better Business Bureau on how to avoid these scams.

The email addresses they use usually are from yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses. They frequently change their aliases.  Some things to watch for:

• The deal sounds too good to be true. Scammers will often list a rental for a very low price to lure in victims. Find out how comparable listings are priced, and if the rental comes in suspiciously low, walk away.
• They use photos stolen from other property advertisements or from home furnishing catalogs or hotel websites.
• They use fake names, often stolen from Facebook profiles or networking sites. Often they assume the identities of previous victims.
• What they all have in common is that sooner or later you get a request to transfer funds via Western Union, Moneygram or some other wire service.
• Never under any circumstances, wire money at the request of any prospective “landlord” via Western Union, Money Gram or any other wire service.  Even if they tell you to wire the funds to a friend or relative’s name “to be safe,” it’s a trap!
• Never send a scan of your passport or other ID.  These thieves will use your identity to scam others. Ask to see the landlord's ID - record all the information you can from it.
• Use a browser to search for the person's name who you're dealing with. Be sure to add quotes around their name. You could add the words "fraud" or "scam" at the end of your search terms.
• Use reverse directory look up if the person has given you their telephone number. It's important to double check that they are who they say they are.
• Visit the local county courthouse to look up property ownership for the property in question. Who really owns it? Is it the person you're dealing with? Or someone else?
• Scan any provided photographs carefully. Do they match up with what you've seen in person? Do they look like they all came from the same place?
• They don't ask for an application or permission to check your credit? That's a red flag!
• Considering the current state of our economy and the rise in foreclosures, ask the landlord if they're current on their mortgage payments, and then get their answer in writing.
• Consider using another method for obtaining a rental, i.e. real estate agent, going through a rental agency, etc.
• Always check bbb.org to see if the “company” has any complaints.

New Wal-Mart Coming to Cedar Park

Retail giant Wal-Mart expects to build another store in Cedar Park on the northwest corner of RM 1431 and Ronald Reagan Blvd.

The 150,000-square-foot store will employ about 300 associates, said Kellie Duhr, director of public affairs and government relations for Wal-Mart.

Wal-Mart has not announced construction dates or a timeline for opening the store, she said. Cedar Park Director of Economic Development Phil Brewer said he is excited Wal-Mart chose Cedar Park as the site for another store.

“It obviously is an economic impact from a tax standpoint, from ad valorem and sales taxes generated,” he said. “Typically your big box stores like this are going to produce something like $80-$100 million in total taxable sales.