All Encompassing Mortgage and Real Estate Thread

[Anastasis 23191]

21 hours ago, jimmyjazz said:

Who would I contact for an appraisal in Austin w/o having to deal with realtors?  I would just like to get an idea of current value.  I don't want to sell, I'd just be happy paying a little $ to get an idea of where I stand.

Whatever price you can imagine you might probably get. Especially in the city core. 

[jimmyjazz 45055]

3 minutes ago, Anastasis said:

Whatever price you can imagine you might probably get. Especially in the city core. 

Let's just say I've never trusted Zillow, but I sure want to trust Zillow now.

[A-Tex Devil 2405]

10 minutes ago, jimmyjazz said:

Let's just say I've never trusted Zillow, but I sure want to trust Zillow now.

We got an unsolicited full cash as is offer for our house at about 30% more than I would have been thrilled to sell at last summer.  The problem is we have nowhere to go.  

[Dbeasy 14733]

4 hours ago, Gil Bang said:

In a crazy market like y'all are discussing, I wouldn't advise using a buyer's agent to find a house.  I'd advise dealing directly with the listing agent. 

When I take a listing (I take them at 5%, sometimes less), the seller agrees to pay me 5% of the sales price.  I, as a "Realtor", and Member of the local MLS, agree to "split" that commission with an agent representing a buyer (not always an even split, but agreed upon in advance).   If I represent the buyer ("dual agency"), I "keep" the entire 5%, effectively doubling my commission on that given home.  

So, although the ethics are questionable, who's offer to you think listing agent "Jones" is going to push the buyer to accept...the offer written by agent "Smith" or the one that Jones wrote himself?   And, who's in the best position to advise the seller what to offer?  Hint: It's the guy that gets all the other offers sent directly to him.

Normally what you describe does influence the selling agent and works. Right now, there are so many offers on houses it is way more important to know what the winning price and terms will be because if you are off, they won’t even circle back around to you for a re-bid. It’s that crazy right now.  In addition, for whatever reason, some sellers agents won’t entertain a buyer without an agent, which is strange.  You won’t get return phone calls. There is no negotiation. It is an auction where they review the bids at a set time, and if there is anything left to be concerned about they resolve it with the top two bidders typically. 
 

Also, a minor point but dual agency is illegal in Texas, so that term isn’t an appropriate term for Texas. However, the maneuver you describe can still be accomplished as long as you have the buyer acknowledge in writing that they have no representation. The listing agent still represents only the seller. 
 

I don’t want to sound like I’m always advocating use of an agent, because many times you can do better without one. Just right now it is nuts. 

[jimmyjazz 45055]

18 minutes ago, A-Tex Devil said:

We got an unsolicited full cash as is offer for our house at about 30% more than I would have been thrilled to sell at last summer.  The problem is we have nowhere to go.  

We're approaching the point where we'll need to downsize.  I don't want to miss out on further appreciation, but at the same time this is a bonus we never counted on.

I don't mind renting, and I don't even mind moving out of Austin, although we do need to stay within AISD for one more year, unless we pull some sort of "live with an aunt" stunt.  

Honestly, I don't think it's time to sell yet.  The way values are climbing, hanging on for 6 months and then taking a 25% haircut on a downturn might break even.  The facts are that people are pouring into Austin and there is almost no supply.

[Dbeasy 14733]

1 minute ago, jimmyjazz said:

We're approaching the point where we'll need to downsize.  I don't want to miss out on further appreciation, but at the same time this is a bonus we never counted on.

I don't mind renting, and I don't even mind moving out of Austin, although we do need to stay within AISD for one more year, unless we pull some sort of "live with an aunt" stunt.  

Honestly, I don't think it's time to sell yet.  The way values are climbing, hanging on for 6 months and then taking a 25% haircut on a downturn might break even.  The facts are that people are pouring into Austin and there is almost no supply.

My guess is that it will cool off by the fall somewhat for multiple reasons, but that is purely speculation. 

[Anastasis 23191]

38 minutes ago, jimmyjazz said:

Let's just say I've never trusted Zillow, but I sure want to trust Zillow now.

I hear you. My Zestimate is ~40% over my 2017 purchase price.  Which doesn't take into account a good chunk we've thrown at the place remodeling and adding on.  I have neighbors packing it up and moving out cause they are seeing the off MLS deals going down right now. I'd love to just put a number, but I am not sure that I could buy back in. Kinda kick myself for not cash flowing the place in Hyde Park cause shit hole it was could have probably named our price right now.  

[Anastasis 23191]

32 minutes ago, A-Tex Devil said:

The problem is we have nowhere to go.  

And there is the rub. 

[Wulaw Horn 18917]

17 minutes ago, jimmyjazz said:

We're approaching the point where we'll need to downsize.  I don't want to miss out on further appreciation, but at the same time this is a bonus we never counted on.

I don't mind renting, and I don't even mind moving out of Austin, although we do need to stay within AISD for one more year, unless we pull some sort of "live with an aunt" stunt.  

Honestly, I don't think it's time to sell yet.  The way values are climbing, hanging on for 6 months and then taking a 25% haircut on a downturn might break even.  The facts are that people are pouring into Austin and there is almost no supply.

This is the argument I have been making to people on here and IRL why I wouldn’t bet on it getting any more affordable any time soon. 

[LebongJames 1765]

I’m sure it will cool at some point but Austin has had 21 corporate headquarters move to town this year. Certain parts of Austin will never have more homes. I do think the prices are a new normal.

I don’t think people will be paying $100k over asking on a $450k house but I do think we won’t see much of a decline in prices and if we do it may be a short reset. I can’t remember the exact figures but I believe Austin has had 1 year of decline in prices in like the last 25 years.

Edited April 6, 2021 by LebongJames

[CHIEF 5035]

We are getting empty nesters out of DFW, Californians, and those that have figured out they can work from home, and just drive the 45-90 minutes into DFW for meetings. So we are very much like Bertram/Liberty Hill. Our prices have jumped about 25-40% in the last four months. Here is a home that would have brought $335,000 in September of 2020, that we just sold for $425k, a full price offer. If clients are willing to sit for a couple of more weeks than the new normal, someone eventually comes along and offers a full cash price. This house currently holds the record high price for a basic 3/2/2 car in our neighborhood. I thought it would bring $450k, in this crazy market, but the owners decided to stay at $425k. But, it is under $200/sqft., and riverfront. My POS tract home on a 55 foot wide lot in a mundane subdivision would bring that now, in Cedar Park. If you don't have to live in the city for work, I have no idea why you would still live there.

https://matrix.ntreis.net/matrix/shared/D6TVC3Yg5Qc/8702RavenswoodRoad

CHIEF

Edited April 6, 2021 by CHIEF
Link

[jimmyjazz 45055]

11 minutes ago, CHIEF said:

If you don't have to live in the city for work, I have no idea why you would still live there.

Hypothetically, I'd rather own an $800K house appreciating at 15% annual than a $500K house appreciating at 12% annual.  (I'm making up the numbers, I have no idea what they really are.)  It's not the whole story, but the facts are that for most Americans home equity is as big a factor in "wealth building" as anything else.  Right now central Austin is killing it.

[jimmyjazz 45055]

1 hour ago, Anastasis said:

I hear you. My Zestimate is ~40% over my 2017 purchase price.

We bought one of very few available lots in Austin in late 2014 and completed construction by Jan 2016.  Our current Zestimate is 2.36X what we paid to buy the lot and build the house.  That's over 18% annual.  It's insane.  It can't be real.

[CHIEF 5035]

2 minutes ago, jimmyjazz said:

Hypothetically, I'd rather own an $800K house appreciating at 15% annual than a $500K house appreciating at 12% annual.  (I'm making up the numbers, I have no idea what they really are.)  It's not the whole story, but the facts are that for most Americans home equity is as big a factor in "wealth building" as anything else.  Right now central Austin is killing it.

If you are talking cash, I could see it. But if you have a house payment, I'm not sure if the interest plus principle would work out. $800k is a big nut, even $500k is a big nut for most Americans. Depends if you have a payment or not.

CHIEF

[LABEVO 928]

Zillow estimates 40% over what I paid in 2018 for my central Austin house and doesn’t even take into account the remodel + addition we did. 
 

totally normal market 

[jimmyjazz 45055]

4 minutes ago, CHIEF said:

If you are talking cash, I could see it. But if you have a house payment, I'm not sure if the interest plus principle would work out. $800k is a big nut, even $500k is a big nut for most Americans. Depends if you have a payment or not.

It's not a simple problem.  First, you need to subtract the cost of renting, because that's essentially fixed.  You have to live somewhere.  Then, you need to account for interest and property tax effects on your income tax bill.

If I can afford it, I'm going with the more expensive house in a skyrocketing real estate market.  This doesn't even begin to account for the more recession-proof nature of a central city home versus the ever-expanding suburbs.  In Texas, there is always more land just a little farther out.  There is essentially no more land downtown.

[Sam Lin 3532]

That general rule of going for the more expensive house may apply for 800 vs 500, but needs an asterisk if you pick higher and higher prices for the high comparison. The higher you go, the fewer the buyers. It's a lot easier to sell a 500 than a 1.5m or a 2.5m and you're more likely to get a bidding war that gets you premium over ask. For the same money I'd buy 3 500s. Also spreads your risk and provides steady rental income even if one sits empty between tenants.

Also, at the individual neighborhood level, it's a lot easier to make money not being the top-valued home in the neighborhood, as the comps then help to pull you up instead of pulling you down.

[LABEVO 928]

“They just keep coming,” Congrove says. “The fleece vests, the tech bros—that’s definitely imported from California.”

https://www.bloomberg.com/news/articles/2021-04-08/austin-texas-ready-or-not-becomes-hot-spot-for-silicon-valley-transplants

[CooterBrown 17695]

“They just keep coming,” Congrove says. “The fleece vests, the tech bros—that’s definitely imported from California.” https://www.bloomberg.com/news/articles/2021-04-08/austin-texas-ready-or-not-becomes-hot-spot-for-silicon-valley-transplants

A long term (7 years) resident tech bro calling out newcomer tech bros. SMDH.

[Neonmoon 38126]

Yeah Zillow just did a an update on price estimates in Austin. Holy shit. 

[Updawg 2239]

It is crazy. Houses just started going on the market in my neighborhood and are selling in a day or two for crazy prices

[Armybrat 40464]

8 hours ago, CooterBrown said:

A long term (7 years) resident tech bro calling out newcomer tech bros. SMDH.

I’ve been here since 1959 and still feel like an outsider.

[Updawg 2239]

I’ve been here since 1959 and still feel like an outsider.

Ha, same here. Moved here in 94

[orangecat92 306]

Just hit zillow on the home my parents built in 1971 - paid about 35k.    My dad remodeled within a couple of years, turned half of the garage into an additional living area to accommodate a new sibling.  2500 s. f.  Zillow says it is worth $760,000!

Wow!  

 

[CooterBrown 17695]

Just hit zillow on the home my parents built in 1971 - paid about 35k.    My dad remodeled within a couple of years, turned half of the garage into an additional living area to accommodate a new sibling.  2500 s. f.  Zillow says it is worth $760,000!
Wow!  
 

Just got mine appraised for $724k. Zillow says $910K. Honestly, I would’ve laughed at that idea 6 months ago but I’d bet I could get that now.

[DalTxHornFan 3066]

6 hours ago, Armybrat said:

I’ve been here since 1959 and still feel like an outsider.

1961 Austin newbie here.  The outsider pain is real, especially in the 78703.

[Pato del Muerto 51913]

This weekend will be the third time I’ve moved to Austin metro. Travis, Hays, and now Williamson. 

[dcar00 13861]

9 hours ago, Neonmoon said:

Yeah Zillow just did a an update on price estimates in Austin. Holy shit. 

this.  it was a 25% bump almost overnight on my house. I laughed.

[dcar00 13861]

On 4/5/2021 at 10:10 PM, jimmyjazz said:

It's not a simple problem.  First, you need to subtract the cost of renting, because that's essentially fixed.  You have to live somewhere.  Then, you need to account for interest and property tax effects on your income tax bill.

If I can afford it, I'm going with the more expensive house in a skyrocketing real estate market.  This doesn't even begin to account for the more recession-proof nature of a central city home versus the ever-expanding suburbs.  In Texas, there is always more land just a little farther out.  There is essentially no more land downtown.

well yeah but it doesn't have to cost anything

[jimmyjazz 45055]

8 hours ago, dcar00 said:

well yeah but it doesn't have to cost anything

Have you TRIED getting into an Austin homeless camp these days?  Waitlists are a mile long.

[Gil Bang 25504]

Zillow's values are so, so full of shit.  If your house seems to be worth about what they "zestimate", it's pure coincidence, I assure you.  

 

Y'all might remember this:

 

Zillow CEO Spencer Rascoff may have recently given real estate agents a gift they won’t soon forget: a sure-fire way to show that Zestimates can miss by a mile.

How? By selling a property for much less than its Zestimate.

On February 29, Rascoff sold a Seattle home for $1.05 million, 40 percent less than the Zestimate of $1.75 million shown on its property page a day later.

The gap between the Zestimate of Rascoff’s former property and its sales price has decreased only modestly since then.

[Neonmoon 38126]

17 hours ago, CooterBrown said:

Just got mine appraised for $724k. Zillow says $910K. Honestly, I would’ve laughed at that idea 6 months ago but I’d bet I could get that now.

My brother bought a house 6 months again for 750, and someone offered him 900 for it recently. 

[UT_OB1 2193]

On 4/5/2021 at 8:23 PM, A-Tex Devil said:

We got an unsolicited full cash as is offer for our house at about 30% more than I would have been thrilled to sell at last summer.  The problem is we have nowhere to go.  

Be careful with those people. For one, you’re not getting to dollar for it no matter what because there is no competition. Also, a lot of times they will get you under contact and either try to negotiate you down a lot with the inspection or they will try to sell the contract to buy your house and hold you in limbo hell for a while.

[Wulaw Horn 18917]

17 minutes ago, UT_OB1 said:

Be careful with those people. For one, you’re not getting to dollar for it no matter what because there is no competition. Also, a lot of times they will get you under contact and either try to negotiate you down a lot with the inspection or they will try to sell the contract to buy your house and hold you in limbo hell for a while.

All of this is true. 
Don’t ever do that unless you are desperate. 

[Gil Bang 25504]

57 minutes ago, UT_OB1 said:

Be careful with those people. For one, you’re not getting to dollar for it no matter what because there is no competition. Also, a lot of times they will get you under contact and either try to negotiate you down a lot with the inspection or they will try to sell the contract to buy your house and hold you in limbo hell for a while.

Or, you tell them to place 100% of the cash in escrow day 1.   That tends to weed out the wankers

[A-Tex Devil 2405]

2 hours ago, UT_OB1 said:

Be careful with those people. For one, you’re not getting to dollar for it no matter what because there is no competition. Also, a lot of times they will get you under contact and either try to negotiate you down a lot with the inspection or they will try to sell the contract to buy your house and hold you in limbo hell for a while.

It was legit.  Proof of cash, etc.  I know the buyer’s agent well.  It’s happening all over our neighborhood in the ‘33.  These are strange times, though.  And if you can’t buy before you sell, don’t sell. 
 

 

[CooterBrown 17695]

Yeah, the unsolicited cash offer buyers don’t give a shit about inspections. They’re looking for tear downs. Tear downs running $700k+ in central austin.

[Esque 135]

Home in Dallas went to market Thursday at $375,000 and had best and final last night, 24 hours later.  I'm in Houston and didn't have a chance to see it, but still put an offer in for $400,000 cash with a flexible close (10 days or seller discretion).  Also broke most of the other options the seller's way and told the agent I don't have representation, so they could collect the full fee.

Got a call back last night saying they had 14 offers in 24 hours and I wasn't even top three, so was letting me know I'm out.  I was able to confirm they have multiple bids above $425,000 with waiving inspections, appraisals, etc.  She expects the home will end up at $450,000.

That is crazy.  Glad I played around with it just to see how crazy the market really is, but I see renting a home in my future.

[A-Tex Devil 2405]

We’ve jus this week started to also look at some lots with old, small houses in neighborhoods we like for eventual tear down and builds.  Let me know if I have process here about right assuming we don’t have architect/builder lined up yet:

1. Buy new property as investment property, rent it out if it makes sense.

2. Get the plans done with architect/builder

3. Go get construction to permanent loan to lock in mortgage rate when build done, which will take out initial mortgage and finance the build.  Would need to put 20% down on that aggregate value I assume (remaining mortgage + loan cost).  But if there is a way to prevent that cash outlay up front with the construction loan, I am all ears.

4. Move in when construction done and pay down the rest as a normal amortized mortgage.  

Am I missing a step?

[Horns99 155]

Relative listed their house in prosper yesterday for 499k . As of this morning she had 65 showings scheduled & 1 offer 35k over asking w/ free lease back, etc all in her favor. Crazy out there


Sent from my iPhone using Tapatalk

[T’Boo Ted Marshall 2718]

For those selling in this type of market are you negotiating agent commissions?

[Esque 135]

5 hours ago, T’Boo Ted Marshall said:

For those selling in this type of market are you negotiating agent commissions?

The Seller sets the commission and the agents negotiate on how to split it.  In a stabilized market, the historical commission has been 6.0%.  However, this has bee under downward pressure due to increases in technology, i.e. online platforms that integrate machine learning to help Buyers browse the market.  My understanding is in this market the commission has been cut down to 3.0%.

The practical reality is homes are being sold at unprecedented levels.  You can list a home today and within 24 hours get your asking price, or above it.  So work the math.  You list your home for $400,000 and for 24 hours of work, the Seller agent walks away with $6,000.  The kicker / reality is most buyers are working without agents and are letting the Seller's agent represent them, so they walk away with the full $12,000.  Why?  Because as a Buyer if you submit an offer, which offer do you think the Seller's agent is going to push?  The one where they have to split a commission or the one where they can double up?  Or guess who is going to get that last minute call informing them what number they need to get to if they want the home?

Agents are making out like bandits in this market.  The issue is there's not enough inventory and too many agents.  I've known a number of people who used work from home during 2020 to get their real estate license.  The market is flooded with agents, so not sure how well they're actually doing in aggregate.

 

 

[Gil Bang 25504]

1) I wouldn’t accept an offer from a buyer that hasn’t seen the property.

2) commissions out here are still staying at around 5%. Sure, the redfin types will do it cheaper but the full service agents are holding firm to their pricing. I would be happy to take a listing these days at 4.5% myself.

[UTPhil2006 3753]

I can almost assure you those new agents either don’t have business or are doing their neighbors deals and likely getting ran over in this market. 
 

You can get your license all you want is what I tell people, but you better have a book of business first 

[Catpfish 618]

An agent also risks their license by divulging any facet of an offer to anyone other than their client before the transaction closes. That includes telling another agent how much other offers are.

[Catpfish 618]

The other thing about lower commissions, don't necessarily believe those tv offers until you read the fine print. Many times they are still paying 2.5-3% to the selling agent. They advertise their listing commission only, not the total commission.

[Esque 135]

In this market, putting offers in without seeing the Property is standard operating procedure.  We're actively looking for homes and saw another home we called on today.  The Property was listed on Friday and it had 65 tours scheduled this weekend.  We didn't bother putting an offer in, but only a fraction of those tours are going to get scheduled and seen, but I bet you that house has many, many offers.  It really is a crazy market.

As far as "new agents," I'm seeing a lot of part-time or side-hustle agents.  They have a day job but are working with clients in their immediate network on finding a home.  But their client list is very, very small.  The barrier to entry for an agent is low as it isn't hard to get a license.  I was talking to a construction sub-contractor for us and their design engineer got his license during 2020 and has been representing people buying ranchettes in Central Texas.  I think you had a lot of people with extra time of who weren't as productive as they should have been getting their license in 2020.  So the market is flooded with these part-time agents and they're not worried about "pissing in the pool" as this isn't their main source of income.  A 3.0% commission on a $400,000 home is a nice $12,000 windfall for them.

This isn't a market where the agents really have to hustle and therefore even as a Seller, you wouldn't be too worried about your agent's abilities.  If you get 20 offers thrown your way, it's pretty easy to compare and contrast them and present top three or five to your Seller.

[Pato del Muerto 51913]

Ok austin I can rationalize, with Tesla and apple and others, but prosper?

[bluto 4800]

Ok austin I can rationalize, with Tesla and apple and others, but prosper?

Good schools, 20 min from Frisco/west plano hq’s, new homes, not in the Frisco bullshit crowdedness. I have family up there, no way in hell I could do it but those that do seem to love it. If you ‘fit in’ there’s a strong community up there so a lot of it is word of mouth hype from friends/family. We’ll see how fun it is when the tollway expansion starts though and the shit show development that comes with.

[ZB'Tejas 593]

On 4/5/2021 at 11:21 PM, Sam Lin said:

 It's a lot easier to sell a 500 than a 1.5m or a 2.5m and you're more likely to get a bidding war that gets you premium over ask. 

Not in central Austin. Plenty of buyers between 1.5 - 2.5.

New Zillow pricing making me want to sell... too bad kids just about to be in Elementary so no where to go now unless it's way out. Fairly new build just around the corner just listed for 1.5 (2300 sqft)!