Robin's Real Estate News

DO YOU NEED A HOME INSPECTION?

2008-07-18T07:19:00.000-07:00

ABSOLUTELY! In Texas, home inspectors are licensed and all have the same checklist form to fill out. You may want to ask your REALTOR® for names of home inspectors they like or check online with Texas Real Estate Commission who licenses inspectors or Texas Association of Home Inspectors or if from another state try Google for your states home inspection association.

A home inspector will check everything from the roof to whether the windows open and close to the temperature in your oven. When you buy a home, you should know what condition it's in so you will know what challenges you will face as a home owner. An average inspection takes 3 hours. Yes, it should be very thorough. It's also your opportunity to ask the inspector questions about the property condition and often they will explain how to care for the house like the foundation, air conditioner or water heater. A good inspector will also advise you as to the seriousness of each imperfection. For instance if it's an easy fix with a 39 cent item from the hardware store or if the foundation is questionable enough to check with an engineer.

If there are serious repairs like needing a new roof or many repairs like several dripping faucets you may want to negotiate that the seller make those repairs before you purchase or compensate you for those repairs. The seller cannot give the buyer money for repairs because that is a violation of the mortgage rules and considered mortgage fraud but options we use in Austin are for the seller to pay the repair amount toward the buyer's closing costs or reduce the price of the home by the repair amount.

Happy home hunting.

If you are interested in buying or selling a house in the greater Austin area email or call me. robin@robinscottrealtor.com or 512.589.7988

Also visit my Web site at http://www.robinscottrealtor.com

What's an Option Period?

2008-07-17T13:35:00.000-07:00

In Texas, the Texas Real Estate Commission has included a paragraph in the standard residential resale contract that offers home buyers the unrestricted right to terminate an offer and receive their earnest money (see previous blog entry about earnest money) back. The option period is defined by a term of days and compensation to the home seller. Usually the term is 7-10 days in which time the buyer may get a home inspection, secure final financing and make sure they can acquire home insurance. The compensation I have seen runs between $50-250.

ABSTRACT OR TITLE POLICY?

2008-07-16T14:06:00.000-07:00

In some states, closings happen in an attorneys office but in Texas they most often happen at the title company.

Either way, the home buyer will want to be sure that there aren't any liens or encumbrances on the property like unpaid fines, bills, taxes or another's property extending onto your property line.

To accomplish this the buyer will either have an attorney of their choice examine an abstract of title or obtain a title policy insuring that the title is free and clear from the title company. In Texas, we usually submit the contract and earnest money (see previous blog entry "What About Earnest Money"), to the title company and they prepare everything for closing including ordering a survey (see previous blog entry "When Buying or Selling a Home, What's a Survey?")if one is needed. The charge for the title policy (also called a title commitment) is negotiable but usually the seller's expense.

When Buying or Selling a House, What's the Survey?

2008-07-15T13:52:00.000-07:00

The survey is the document that defines the property and shows the parameters of the lot, where the house sits on the lot, where the building setback lines are, the utility easements and fences. A survey is created by a licensed surveyor and is very precise. The title company uses it to determine if there are any encroachments.

At one time, Texas law didn't allow surveys to be reused but that has changed. Since it's usually a buyers expense and it costs about $450, the buyer will probably ask the seller to provide the existing survey for title company review. If there have not been changes like adding a pool or moving the fence line, the title company will usually accept it but requires the seller to sign an affidavit that there have not been changes to the property that would effect the survey.

In short, if you are selling your house, locate the survey. The buyer will want it. If you can't find it you may contact the title company where you closed and ask them for a copy. If you are the buyer, be sure to ask the seller for the survey because it can save you some money.

To the right is an example of a survey.

WHAT ABOUT EARNEST MONEY?

2008-07-14T06:35:00.000-07:00

You've probably heard the term "earnest money" and wondered what it meant or how it worked.

What is earnest money? Earnest money is the amount you give to the seller to show you are earnest about your intent to purchase their property. After all, if they are going to remove their property from the active market they will want assurance from you that they are not wasting precious time.

When do you pay earnest money? The check is written at the time the contract offer is made. In Texas, the earnest money check is written to the title company whom you have chosen to provide the title insurance and handle the transaction. When all parties to the transaction (buyers and sellers) have agreed to all contract terms and signed or initialed where necessary and the contract has been executed, the earnest money check will be cashed and deposited with the title company in an escrow account. The money will be credited to the buyer at closing.

How much is the earnest money? Customarily, it's 1% of the purchase amount but sometimes the buyer writes it for less. The higher the figure, the more impressed the seller will be when evaluating multiple offers.

What if you decide not to buy the house? Traditionally, you forfeit the earnest money if you decide not to buy but in Texas we have written into our contracts an "option period" clause that allows you a limited amount of time to withdraw your offer and get the earnest money back. Both parties and both agents must sign a release for the earnest money to be returned to either party.

What if there is a dispute about who should receive the earnest money when an offer is terminated? In Texas, the contracts suggest you first seek mediation before litigation. Recently, I attended a luncheon with a guest speaker from DRC Dispute Resolution Center in Austin. He mentioned that the most common dispute they see relates to earnest money in real estate transactions. To learn more about mediation see my blog entry from July 11, 2008 "Mediation/dispute Resolution." The other option would be to contact a real estate attorney.

1 BEDROOM CONDO/UT SHUTTLE/POOL/GATED- FOR LEASE

2008-07-13T12:55:00.000-07:00

FOR LEASE. $1095/mo. Clean and bright 1 bedroom, 1 bath with covered parking and small patio. 2-story so no neighbors above or below. Large living/dining, kitchen with refrigerator, full-size washer & dryer, upstairs bedroom and bath. Large walk-in closet. Area pool, gated community between Spicewood Springs Rd and Far West Blvd. on UT shuttle and bus route. Close to MoPac, Walk to shopping (HEB, Post Office, Library, Austin Regional Clinic) and major employers. Available August 20. for more information call Robin owner/agent at 512.589.7988 or robin@robinscottrealtor.com. This is my property and not listed on MLS.

MEDIATION/DISPUTE RESOLUTION

2008-07-11T06:38:00.000-07:00

In Texas, most of our written real estate agreements (buyer's representation, listing and contract offer)request or require mediation in the case of a dispute before litigation but what is mediation and where do you go to find it?

Mediation is a process where a neutral person (the mediator) facilitates dispute resolution between two or more people involved in a dispute. A mediator does not judge or decide who is right or wrong but provides a program through which each party has an opportunity to state their position and helps them develop a workable solution.

Recently, I attended a luncheon with a guest speaker from DRC Dispute Resolution Center in Austin. He mentioned that the most common dispute they see relates to earnest money in real estate transactions so I thought this was an important topic to discuss today on my blog.

The DRC is a nonprofit organization in Austin and the mediators are community volunteers with a minimum of 40 hours of training which meets the standards of Texas Alternative Dispute Resolution Procedures Act and Texas Mediation Trainers Roundtable. They have very reasonable rates. In Travis County, at the time I write this, it's only $35 each for a four hour session. They will also hear disputes from other counties but the rates vary.

For more information on mediation/dispute resolution visit http://www.austindrc.org

And remember, if you know anyone who wants to buy or sell a house contact me at robin@robinscottrealtor.com Thanks for your referrals!

ILLUSTRATOR FOR HIRE

2008-07-10T06:45:00.000-07:00

I try to find something pertinent to say every day and today it's about my husband who is a terrific illustrator and looking for work. One of the fabulous things about his career is that he can work for clients anywhere in the world from his home base because he can send product over the internet. Please take a moment to look at his work and if know anyone looking for an illustrator for marketing, advertising, book publishing or other, please forward this link on.

http://sites.google.com/site/johnfscottillustration/

johnfredscott@gmail.com

CALL/DO NOT CALL

2008-07-09T13:29:00.000-07:00

I post my cell phone number everywhere because I'm advertising my services and want home buyers and home sellers to be able to get in touch with me. I can't put my number on the do not call list or potential clients and customers wouldn't be able to call.

My business has a marvelous quality - I only advertise to those looking for my services. I'd never try to talk someone into buying or selling a house if they weren't already interested.

Yet, solicitors try to talk me into buying their services and use up my time and my cell minutes. Unfortunately, solicitors have started calling me daily. I feel as though I'm fending off salespeople and defending myself all day long.

If you're interested in buying or selling a house, I want to talk to you. If you want to sell me something, call my home phone.

HOW REAL ESTATE SHOPPING HAS CHANGED

2008-07-07T06:28:00.000-07:00

Yes, in the last 9 years since I've been an agent things have changed and here are 5 ways how:

1. Buyers used to depend on their REALTOR to help them identify properties of interest. Now, with so much information available, most buyers look for homes online and send me the list of what they want to see. In fact, according to the National Association of REALTORS, statistics show that 80% of buyers are looking online before they even contact an agent.

2. Holding an open house used to attract buyers and sellers that could be converted to clients. Now, often no one comes to the open house and if they do, they don't want to talk to the agent. They are just shopping on their own.

3. Newspaper advertising was once critical in selling a home. Now, I find it useless and do all my advertising online where the buyers are.

4. Clients seem to be more respectful of an agents time. In the past clients expected REALTORS to work weekends and holidays, now I rarely get calls for those times and when a client requires my services on weekends, I'm very happy to comply and they always ask rather than assume.

5. As business professionals, we kept our personal lives separate but now we are encouraged to be more personable by sharing our family news and personal interests in such ways as through online profiles and networking sites.

HOUSE FOR SALE IN MILWOOD - Windrush

2008-07-03T08:54:00.000-07:00

Back on the Market. This home is in my neighborhood and I just can't say enough great things about the area. Location, location, location. Close to shopping, employeers and good schools. Also a great park system with pool, clubhouse, tennis, hike/bike, basketball and more. The house is great too. Especially since it backs to the greenbelt and has a wonderful deck in back. It's a 4/2.5/2 with 2 living/dining areas, all tile downstairs, freshly painted, large bedrooms with lots of light and updated bathrooms. About 1900 sq.ft. built in 1990. Take a look at the photos and email me or call 512.589.7988. There is a virtual tour at http://www.robinscottrealtor.com select features properties. ONLY $200,000

UNDERSTANDING AGENCY RELATIONSHIPS

2008-07-01T07:08:00.000-07:00

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:

Seller's representative (also known as a listing agent or seller's agent)
A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Buyer's representative (also known as a buyer’s agent)
A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller’s agent.

Subagent
A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

Disclosed dual agent
Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.

Designated agent (also called appointed agent)
This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.

Nonagency relationship (called, among other things, a transaction broker or facilitator)
Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

The Cycle of a Neighborhood

2008-06-30T10:47:00.000-07:00

In the mail, I received a great community news magazine, IMPACT that had an article about the life cycle of a neighborhood. It was so well outlined that I was in total agreement. Basically, it lists 4 stages a neighborhood goes through. In the beginning, it's just the builder selling homes and the builder sets the prices and value. Sometimes you can negotiate. Next, some homeowners have a need to sell; perhaps relocating for a job and they must compete with the new construction so their best opportunity is to lower the price and be competitive. Then, some homeowners are not able to sell for enough to cover their mortgage and fees so they go into foreclosure. finally, the neighborhood will either stabilize or the values will continue to decline.

One of the advantages to buying in an established neighborhood is that it's already gone through the cycles.

I was shocked to find there were 303 foreclosures in my zip code - 78729.

FIREWORKS IN AUSTIN

2008-06-24T06:09:00.000-07:00

As 4th of July approaches you may be thinking about fireworks but I'm thinking about the drought. My house backs to a greenbelt and my neighborhood is not in the city limits so previously there has not been a ban on fireworks in our area and people have fired them off in the greenbelt behind our house. Every year it's made us nervous but last year the neighborhood banned the use. Many people didn't get the notice. In a drought situation like we have in Austin now, it's an accident waiting to happen.

Please check area restrictions before you set off fireworks. Currently there are drought conditions in Travis, Hays, Williamson and Bastrop counties.

FIREWORKS SAFETY TIPS
1. Read all the instructions on the fireworks packaging materials
2. Make sure the area is clear of anything flammable
3. Have an extinquisher ready in case of emergency
4. Don't use fireworks if there's a wind because it can blow sparks on someones roof or to a tree
5. Carefully supervise children. It's fire!

AUSTIN AREA FIREWORKS SHOWS
July 3 8:30 PM at Avery Ranch Golf Club, 10500 Avery Ranch Drive
July 4 at 9 PM
Austin Country Club, 4408 Long Champ Drive
Lady Bird Lake at Auditorium Shores
West Lake Hills, 3311 Westlake Drive
Lakeview Pavilion at Settlers Park in Round Rock, 3369 E. Palm Valley Blvd.
San Marcos Plaza in San Marcos, 202 N. C.M. Allen Parkway
July 5 9 PM at Grey Rock Golf Course, 11511 RM 1826

HAVE A SAFE 4TH OF JULY!

AUSTIN AREA MARKET STATISTICS - from April

2008-06-23T10:32:00.000-07:00

Compared to April of 2007, there is more inventory but homes are still selling.
1981 homes sold in April as compared to 2,295 April 2007. 10,034 active listings as compared to 8,354 April 2007 with 66 average days on market.

WHAT'S A HOME WORTH?

2008-06-20T07:14:00.000-07:00

Not $65,000 below market value.

Do you think he was kidding? When I first started this blog I wondered how I could come up with something new to write every day but opportunity usually presents it's self.
Today I got an email asking if my seller would sell for $65,000 less than the asking price.

When a REALTOR prices a home, she does it by analyzing comparative sold properties. Now in Texas, sold information is not public information so the consumer is not privy to it but if a property is listed in the MLS system, the seller must agree to allow the sold information be posted for REALTORS to use in determining market value. The REALTOR doesn't set the value, the market does. So most homes are priced within a reasonable market range.

Everything is negotiable but if you were the seller you'd want to get the most for your property, right? Well, so does everyone else. Exceptions would be if the seller were in financial difficulty but even then they are limited. A seller usually can't sell their home for less than they owe on the mortgage unless they are in arrears on payments and the bank has agreed to do it or they determine that it will cost less in the long run than a double mortgage and they have the financial ability to eat the difference (this is not most people.)

If you're interested in low-balling a seller, consult your REALTOR as to the best way to present an offer that will be within realism and aide negotiations rather than waste everyones time.

10 Questions to Ask When Picking a REALTOR®

2008-06-19T06:14:00.001-07:00

10 QUESTIONS TO ASK WHEN CHOOSING YOUR REALTOR•

Make sure you choose a REALTOR® who will provide top-notch service and meet your unique needs.

1. How long have you been in residential real estate sales? Is it your full-time job? While experience is no guarantee of skill, real estate, like many other professions, is mostly learned on the job.

2. What designations do you hold? Designations such as ABR and CRS®, which require that agents take additional, specialized real estate training, are held only by about 14% of real estate agents.

3. How many days did it take you to sell the average home? How did that compare to the overall market? The REALTOR® should be able to present market statistics from the local MLS.

4. How close to the initial asking prices of the homes you sold were the final sale prices? This shows how skilled the REALTOR® is at pricing homes and marketing to buyers.

5. What types of specific marketing systems and approaches will you use to sell my home? Look for someone who knows how to market your property competitively on the Internet.

6. Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction? Your REALTOR® should explain her agency relationship.

7. Can you recommend service providers who can help me obtain a mortgage, make home repairs and help with other things.

8. What’s your business philosophy? There’s no right answer but the response will help you assess what’s important to the agent and determine how closely it works with your own.

9. How will you keep me informed about the progress of my transaction? How frequently? This is not a question with a correct answer you should make sure your your needs are met.

10. Could you please give me the names and phone numbers of your three most recent clients? Ask recent clients if they would work with this REALTOR® again.

WILL WORK FOR FOOD

2008-06-18T14:20:00.000-07:00

For years there have been people standing at busy intersections in Austin with signs that read "Will work for food." Things have changed and now they say things like "Please help." They have no intention of working. They just want a donation.

I've heard a lot of arguments about why it's not a good idea to give these people money. And I've debated the matter with myself for years. One time I saw a man who appeared to be in his 80's with a sign that read " WWII veteran. Please help" and when the light turned green, I drove away.

When I drive past these people, I always feel guilty. You can tell I still feel guilty about the WWII veteran. I'm fortunate enough not to find myself in similar circumstances and I'm grateful I have had better opportunities in life and perhaps made better choices.

I decided that I don't care if they really need the money or not. I don't care if they may spend it on drugs or alcohol. I'm just not going to pass judgment on them any longer and drive away feeling bad the rest of the day.

Now I keep a few $1 bills in my car and anytime I stop at a light and someone is there with a sign asking for help, I roll down my window and hand them $1. It probably costs me less than $10 a month and I feel like I'm helping someone.

My daughter told me that sometimes she keeps bottles of water in her car to hand out.

Next time you see someone holding a sign, just think about.

DONATE RICE AND INCREASE YOUR VOCABULARY

2008-06-17T07:30:00.000-07:00

http://www.freerice.com

Here's something to do when you're bored that will both make you smarter and help end world hunger. You'll feel better than if you just play tetris. It's a vocabulary game with the result ending in a donation of rice to areas in need.

A SUCCESSFUL CLOSING - 5 THINGS BUYERS SHOULD KNOW

2008-06-16T08:23:00.000-07:00

Today I had another successful closing. Yahoo! My buyers bought new construction and I'm so happy for them to be able to move into their new home. The closing was painless but there are always some things I want my buyers to know about home ownership and I usually cover it at closing.

1. Rents are paid in advance but mortgages are paid in arrears. That means that it feels like you skip a payment because if you close mid June, your first payment will not be due until August 1.

2. In Texas we have homestead exemptions. They may be filed the January after you have lived in your home and will reduce your property taxes by about 12 percent. I always send the forms to my buyers in January but you may find one on the county appraisal Web site. It's easy to fill out and mail in. Don't pay anyone to do it for you.

3. If your neighborhood has community mailboxes, take your settlement statement to the post office and they will assign a box to you and rekey it so no previous owner will have access.

4. If you are buying a resale, be sure to have all the locks rekeyed. Who knows who may have a copy of the key. There are many companies who can do this for you and a nominal cost.

5. For new construction, the tax appraisal in the first year is probably based on unapproved property so expect the taxes to go up the following year when they are appraised to include the home. Plan for it by saving every month so you won't be caught short the following year.

If you have any further questions you may contact me at 512-589-7988 or robinscottrealtor@gmail.com

THEY'VE GOT TO UNDERSTAND

2008-06-13T08:35:00.000-07:00

"They've got to understand" is something I often hear from a buyer or seller during negotiations. From sellers I hear "They've got to understand that our house can't be kept tidy because we live here," or "They've got to understand we can't leave for the showing because . . ." and from buyers "They've got to understand that we need this to be a profitable investment for us," or "They've got to understand we can't leave our lease any sooner."

Well, I'm here to tell you that the other party does not understand and does not "have to understand." That is a negotiating perspective that makes the other party angry because they don't have to sell to you or buy from you. It's your responsibility to make it work for you not the other persons or the other person's REALTOR.

THE COLOR GREEN

2008-06-12T06:45:00.000-07:00

A well landscaped home is something that brings you enjoyment while you live there and improves your curb appeal when it's time to sell. But what to plant and how to care for it is often a puzzle. Did you know that in Austin, the city office Texas Cooperative Extension publishes many free brochures and flyers on everything from garden pests to indigenous plants? It's a very friendly office and they love for you to visit or you can go to the Web site at http://www.growgreen.org and find out about grass, trees and flowers and hwo to care for them.

I believe this is the bloom of a the Gulf Coast Penstemon. It's seen in a lot of landscaping around the Austin area growing 1 to 2 feet high is partly shady areas.

BUYERS WITHOUT A REALTOR

2008-06-11T11:41:00.000-07:00

Today some colleagues of mine and I were discussing buyers without REALTORS. What's up with that? I have one listing in particular that seems to attract them. If you're a buyer out there reading this, then I have some information to convey to you.

A buyer without a REALTOR may think they can do all the work themselves and have the cost of the the buyers agents commission converted to a reduction on the price of the home but it doesn't usually work out the way they imagine.

First of all, the seller has contracted with the sellers agent to pay a set commission regardless of whether there is another agent involved or not. If you are a buyer without an agent than the sellers agent is entitled to retain the full commission and deserves it because the work they will do to close that sale has now doubled without another agent carrying the load for the buyer. I've had buyers ask me if the seller will agree to credit them for the commission. What? They should be asking the agent because the seller has already (and in writing) agreed to pay the sellers agent the full commission. Now it's up to the sellers agent to decide if they will give up part of their commission for the buyer.

Secondly, the buyer usually can't find their way through the processes and procedures without asking questions and help of the sellers agent. Hey! The sellers agent doesn't represent you and is not obligated to help you in any way. Now the sellers agent is caught between a rock and a hard place because they don't have a knowledgeable agent on the buyers end to work with toward a successful conclusion.

Thirdly, the aid that a buyers agent provides showing properties should not be under valued. I have buyers calling to schedule showings on my listings and they expect me to make it convenient for them. Why? I don't represent them. If they want convenient showings then they need to hire an agent that can show them properties in their time frame. If it's my listing, I represent the seller!

SELLERS BEWARE

2008-06-10T08:03:00.000-07:00

It seems that since the market has shifted to a buyer's market there are a lot of buyers looking for a real deal and there is so much inventory they jump from showing to showing.

This is having an adverse effect on sellers because so many buyers are not committed to the offer they make. Recently, I've experienced listings go under contract as soon as they hit the market only to be terminated within the option period for no explainable reason. I'm surmising that the buyer found another property that was a better "deal."

Since in Texas, the buyer has the unrestriced right to terminate within the option period the buyer does not have to explain why he is pulling the plug. One listing I have is in a hot area and we had an offer the first day. The buyer number 1 terminated before he even had an inspection. No problem because buyer number 2 was waiting in line and shortly after they sent an amendment asking for repairs they terminated with no explaination so now we are on buyer number 3. With another lisitng I had a similar esperience receiving an offer the first day on the market and then a termination before there was an inspection. I even had a buyer I represented terminate an offer to chose another home.

So if you have a home to sell, hang tight. The first offer may not fly. The best advise I can give is to make your home very appealing by keeping it clean and attractive, make sure it's in good repair and price it competitively.

5 COMMON FIRST-TIME HOMEBUYER MISTAKES

2008-06-09T07:58:00.000-07:00

1. They don’t ask enough questions of their lender and end up missing out on the best deal.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right agent who’s willing to help them through the homebuying process.

4. They don’t do enough to make their offer look appealing to a seller.

5. They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.

Source: Real Estate Checklists and Systems, www.realestatechecklists.com.