Home Sales Continue to Show Increases in Austin Area

July 2012 Multiple Listing Service Data:

Units for Sale: (compared to July 2011)
New listings are up 9.67%.
Pendings are up 18.66%.
Solds increased by 24.35%

As for Average Prices:
The "New Listings" average list price is up 2.65% to $304,219.  In July 2011 the average list price was $296,359.

Sold average sales prices increased 7.58% to $276,822.  For July 2011 it was $257,322.

Did you know...that we had 10,720 active listings during the same week in 2011?  Today we have 8,941 active listings!  That is a 16.60% decrease from 2011.

Preliminary MLS Data - April 2012

Preliminary April 2012 Data: 
Units for Sale: (compared to April 2011)

• New listings are up 1.86%.
• Pendings are up 27.40%.
• Solds increased by 5.76%

 As for Average Prices:

• The "New Listings" average list price is up 4.74% to $336,915.  In April 2011 the average list price was $321,670. 
• Sold average sales prices increased less than 1% to $270,952.  For April 2011 it was $270,571.  

Did you know...that we had 11,315 active listings during the same week in 2011?  Today there is 8,756 active listings!  That is a 22.62% decrease from 2011.

What are Easement Restrictions? How to Ensure Clear Title on a Property

When buying a home you’re bound to encounter some things that you don’t know anything about. They are things that outside of the home buying process you won’t ever run into. And since the average homebuyer only goes through this process a few times in his or her lifetime, it’s understandable that these things would be unfamiliar. A couple of items that seem to be perplexing are title insurance and the property survey, specifically how easements are represented.

When purchasing a home with a mortgage you need to get title insurance and a survey. This is required for all financed home purchases. An attorney or title company typically orders property surveys. Though the buyer has to pay for this service they usually don’t need to be directly involved in the process.

What is Title Insurance?

Title insurance is just another line item expense when purchasing your house, paid for one time at closing. Essentially, it is protection for you and your mortgage company that the person selling you the house has full and clear title to the property and was able to legally pass it to you. The title insurance company investigates the ownership of the property and then insures their work. If the seller didn’t rightfully own the home, and someone else does, the mortgage company and the homebuyer are financially protected. Fortunately, issues of title defects are relatively rare, meaning that title insurance isn’t too expensive and really not something to worry about.

What is a Property Survey?

A property survey is a carefully measured drawing that shows the land that is for sale and all structures on the property. It shows how large all the structures are and how far they are from each other and the borders of the property. Most importantly, it shows setbacks and easement lines.

Wait, what? It seems like the property lines and structures should be most important, but they are not. The setbacks and easement restrictions are actually the most critical elements of the survey because those are usually where the biggest problems are found.

What is a Setback?

A setback is the required distance between the house you wish to buy and other property features. For example, a city or county ordinance (or even a homeowners association) may require that homes be set back 20 feet from the road. So even though you own your front yard, you cannot extend your house any closer than 20 feet from the road.

Other setbacks indicate how closely you can build to your property boundaries or to your neighbors’ homes. If you live in an area with natural features like streams or lakes, certain special setbacks may also dictate how close you can build to these structures.

What is an Easement?

Easements refer to property with common usage rights. For example, you may own the land that a sidewalk is on, but anyone can walk on this part of your property.

Why Setbacks and Easement Restrictions Matter

What happens if the survey reveals that part of the house (the actual structure) up for sale sits within a setback or an easement? It’s a problem! In some instances it means that part of the house will need to be torn down before it can lawfully be sold. Otherwise title cannot be passed to a new owner because someone is attempting to sell property that was not built legally.

Surprisingly, this situation is not so uncommon. It may not affect the main domicile on a property, but garden sheds or pool equipment are occasionally located in an area where they don’t have a legal right to be. In these cases your lawyer has some work to do. Hopefully, you’ll discover that the structures are grandfathered because they were erected before certain setbacks were enacted. But definitely investigate these matters fully, as doing future improvements on the property may necessitate that they be corrected in the process.

Spend Some Time With Your Property Survey

For some, the survey process is one of those “check the box” items during home buying. Most get it done and move on. But it’s important to look over everything carefully and ask questions. Surveyors are happy to discuss the survey with you, and errors on surveys can occur. Spending 15 minutes looking this over will save you the headache of having it redone down the road when you want to build or make a change on your property.

Have We Found the Bottom to the Housing Market?

Home sales across the board, comparing 3Q2010 and 3Q2011, have increase, activity increased 1.7%, latest patterns offers signs of a finding a bottom to the housing bust.

Next year, the market will continue to work through the shadow inventory of foreclosures. Banks will not flood the market with foreclosures, that would further weakening the housing market, but we will continue to see a steady stream. In Texas is below 30% foreclosure and we fair better than other states in foreclosure because we did not see the appreciation in home values other states achieved in their market.

What does this mean in the Austin market? For buyers there are still deals to be found. However in the Austin market, we have 100% saturation in apartment rentals, and rents all over Austin are increasing we will see more and more qualified buyers move off the fence. Sellers are still holding tight. We are experiencing a low number of listings but ever increasing sales. The best homes that are price competitively are going fast.

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.