Tread Lightly with Sites like Trulia and Zillow

Yet another indication that the Austin rental market is crazy hot right now, I recently listed and leased a property in Georgetown in 4 days.  In the 3-4 days we were actively on the market, I must have had 20+ phone calls and showing requests and we generated multiple applications.  Interesting anecdote but that’s not really where Im going with this.

The day we finalized the lease with the tenants I got a call from a lady who was helping her son and his family relocate from North Carolina.  I explained to her that we’d had a huge response in the first couple of days and actually just finalized a lease.  She was very nice but also exasperated that the house leased before she had a chance to come look at it.  We got into a brief conversation and she said something that kind of caught me off guard.

Her: “I cant believe it, this would have been the perfect house for them.  We could have gotten an application in on the house Friday(this was the following Tuesday).  I’ve been calling the agent that was on the listing every day and he wont return my calls.”

Me: “Really? I’m a little confused.  I am the listing agent on the property and to my knowledge this is the first time that I’ve gotten a call from you. ”

Her: “No, not you, the agent that was listing the property online.”

Me: “Oh, okay, I’m pretty sure I know what you are talking about.  Unfortunately, I think that happens quite a bit.  Im sorry that you feel like you missed out.”

We basically ended the conversation there.  While I had a good idea about what she was talking about, there was no real reason to get into it any further with her on the phone.  She was already frustrated enough.

I immediately reflected back on something that I’d become aware of just a couple days prior to that conversation.  A reputable real estate brokerage in Austin made headlines by deciding to de-syndicate their listings from Trulia and end their advertising agreement with the real estate listing syndication site.  To give you a little background, websites like Trulia, Zillow, Homes.com and others pull listing data from the local MLS systems and advertise those listings to the general public.

If you want to know the entire back story and reason this brokerage made the decision to pull out of Trulia, you can watch a video here.  One of the main reasons was that Trulia has an advertising program that allows agents to pay to have their contact information featured in particular zip codes.  So, their listings, my listings, the next guy’s listings are plastered prominently with the name, picture and contact information of another agent from another brokerage who paid to be there – not that of the actual listing agent.

As a result, potential interested buyers are funneled to agents who are  a) not part of the listing brokerage b) presumably not as well versed in the specifics of the property listing and c) have no real incentive to answer those inquiries.

Im fairly certain that the same thing happened with this particular lease listing of mine.  Fortunately for my clients, the interest level was high enough that we didnt necessarily miss out on an opportunity to get it leased.  However I can see how this can be very confusing and frustrating for consumers.

To give you an idea about what Im talking about, below is a screenshot of one of my current listings.  There is a large and obvious picture and call to action button to the right of the listing that says “call to view this home.”  Last I checked, that is not a picture of me and that is not my contact information.  Nothing against (‘Jay’) Chueh Chun Chen (I don’t know him) who is apparently “Trulia’s Top Agent’ based on the ad, but I doubt he has the same interest in showing that property that I would have if I received a serious inquiry.

You have to scroll a considerable way to the bottom of the page to even see my contact information as listing agent for the property.

To be fair, Trulia is not the only listing syndication site that employs these paid advertising tactics.  Zillow does something similar with its Premier Agent package.  I imagine its a big revenue stream for them.  However, the moral of the story from the consumer’s standpoint is to know who you are calling.  Know what to look for.  The actual listing agent of the property is likely to be more responsive and knowledgeable about the property specifics.

Better Austin Living Newsletter: April 2012

April 2012 Better Austin Living NewsletterThe April edition of the Better Austin Living Newsletter went out this week along with cover letter with pictures.  I’ve gotten into the habit of putting out a reader’s digest version highlighting a few things that have happening on the personal side.  Though, its not something that I do every month, much to the chagrin of my wife.  She always asks me if Im going to do a “picture one” this time because thats what ‘the people’ like.  So, I put together a simple “picture one” as my cover letter this month.

Inside the actual newsletter edition, I have some good stuff – not the dry, boring content that you might find in other real estate newsletters (my opinion).  Mostly because this newsletter is not a real estate newsletter in the true sense of the word.  I did put out a real estate focused newsletter last month and that can be found at www.EyeOnAustinRealEstate.com.  The Better Austin Living Newsletter is more of a lifestyle newsletter: a fun and entertaining way for me to share some anecdotes of things Ive been working on, read or learned recently.

Articles in this issue include: 20 Hours that You May be Wasting Every Month, What to Do in a Car Wreck, My Personal Challenge to Give Something Away Every Day During the Month of March, Gmail: Tips and Tricks, How to Increase Your Productivity by 50%, From My Nightstand and A Clean Sweep for the Spring.  Click on this link to download (or share) an electronic copy of the newsletter (pdf).

As always, if you do not receive a copy of the Better Austin Living Newsletter in the mail and you wish to be included in the monthly mailing, fill out the brief form at the bottom of this page.

Remember - this newsletter is a fantastic and simple way to introduce me to your friends and family. I greatly appreciate your referrals.  If you don’t have the print (mailed) version handy, fear not, you can always pass along the electronic version (pdf) with the click of a button. I’m sure your contacts will enjoy reading the articles and get as much out of it as you do. Thanks for not keeping me a secret.

You Shouldnt Buy a House If . . .

5 Reasons Why Home Ownership Might Not Be Right for You.

You’ve heard it many times I’m sure – things like, “owning a home is a big part of living the American Dream.”  As a Realtor, you’d think that I’d be of the opinion that everyone should own a house but the fact of the matter is that homeownership is not for everyone.  Here are some when I believe owning a home is not the wisest decision.

You Don’t Know Where you Are Going to Be in 3-5 Years

If you don’t know where you are going to be in the next 3-5 years then it probably doesn’t make sense for you to buy a house.  Why? Two reasons.  First off, owning a home is the epitome of putting down roots.  If you know you aren’t going to be in the same place in the next couple of years, the burden (financial and emotional) of having a home that you must do something with before you can move is not attractive.  If you live a transient lifestyle, renting is by far your best option.  The second reason is that the cost of purchasing a home and subsequently selling a home make it virtually impossible (in most instances) to turn any kind of profit within the first couple of years.  In the broadest terms, downpayment notwithstanding, its going to cost you about 2-3% in closing costs on the front end to purchase your home.  In a typical scenario on the back end, you are looking at 7-8% in transactoin fees when you sell.  That’s a 10% chunk of your profit right there.  That does not take into consideration market dynamics and timing.  In most markets, it’s tough to see a 10% appreciation in a short time period.  Not impossible but not something you should bank on.  If you are considering  a new construction purchase in a neighborhood where new construction will continue for years to come, you should know that you will be competing against the builders (and their incentives) when you go to sell.  Therefore, its often even more difficult to turn a shorter term profit in a new construction neighborhood.

You Don’t Have Money for a Downpayment & Closing Costs

Are there ways that you can get into a home with no down payment?  Yes, but they are far less abundant as they once were.  VA (for veterans) and USDA (for rural properties) are about the only two options currently available for any kind of zero down payment.  This is not to say that you shouldn’t pursue one of these opportunities if you and/or the property qualify but you should make sure that you understand all of the terms of the financing arrangement because you are buying into a property with flat or negative equity from day one (see above).  What about closing costs?  There are additional fees associated with purchasing a property and those are referred to as closing costs.  As a buyer, you can request in your contract that the seller contribute monies toward your closing costs but that is a negotiable item and there are limits to seller contributions.

You Think that Home Ownership is an Avenue to Quick Riches

Are there ways to become wealthy through real estate investment?  Sure.  Are there ways to turn a nice profit by flipping or rehabbing the right property? Yes, if done strategically.  Are there guarantees that you are going to make a substantial profit on any property you sell?  Absolutely not.  If you take the approach that you are going to buy a house with the intent to sell it a year or two later for a significant profit either through drastic home improvements or market appreciation, you are simply speculating or gambling.  Sure, if got a great deal when you purchase, make the right improvements and catch a strong market cycle it definitely can happen.  However, those scenarios typically involve very detailed research, planning and strategic investment – not blind faith.  Many of those properties are purchased with cash through foreclosure auction by seasoned real estate investors.

Your Future Employment is Up in the Air

This is a tough one because you really never know when the economy could tank and you or your partner might be out of work for a short or extended period of time.  Case in point – the past 3-4 years.  In the past, some have over leveraged their real estate purchases and been faced with the unfortunate circumstance of one or more foreclosures or short sales.  The real estate market is closely tied to the job market in most areas.   Nowadays, employment plays a huge part in the overall qualification for financing but often its wise to take a bit more conservative approach and not buy the biggest and best house you can qualify for unless you know your future is secure.

You Have No Desire to Maintain Your Property

If your ideal weekend consists of sleeping in until 11am and sitting on the couch for 12 hours a day while the bushes in your front yard grow with reckless abandon, dont buy a house.  If you cant remember to change an air filter and the next time you water your lawn will be the first, dont buy a house.  Now, that being said, you may have the financial capability to pay someone to do all of those things for you so that you can sit on the couch all day long and thats fine.  Just make sure that someone is maintaining your property because if you do not, you might have a whole mess of worms on your hands when/if you go to sell.  When you lease a property if something goes wrong or breaks, you call the landlord or management company and someone else comes to fix the problem.  When you own your home, guess who’s responsibility that is?  Property maintenance is just one of the costs associated with owning a home but a big reason why many still prefer to rent even if they can buy.

More Information on this Topic:

How Do You Know if Renting or Buying is Best for You?
The Real Estate Markets Where Buying Beats Renting
Want to Know How Much Home You Can Afford?

Featured Listing: North Austin Condo

I just listed this clean, comfortable, low maintenance condo tucked away in Austin’s north corridor.  Visit the listing page for more information on 2632 Century Park Blvd #56.

The two story functional space could be perfect for all walks of life: an investment property, an ideal roommate plan, large enough for a family or efficient for a single professional.

The 2 bed 2.5 bath plan offers main living room and kitchen downstairs.  A flexible loft living space can serve multiple purposes (gameroom, playroom, exercise room, home office) so that you dont have to sacrifice one of the two upstairs bedrooms. Both bedrooms have their own in room full bath.

This condo has been well maintained by the original owner.  The unit features wood laminate, tile & carpet flooring as well as granite tile counters in the kitchen.

This particular condo unit  has a fenced in back patio and small yard for added privacy and outdoor living.  Not all units have fences.  It also has its own two car garage and small driveway so you don’t have to worry about fighting for a parking space.

This condo is a potential short sale subject to lender approval – excellent value.  

About the Century Park Condos:  This 78 unit complex is situated behind a private access gate.  The convenient location is just minutes from major throughfares: Mopac, I-35, Parmer and 45 – easy access to the Domain, Arboretum and some of  Austin’s largest employers.  Monthly HOA ($200) includes common area maintenance, trash pick up, pool access, gated community and water bill.

Which Home Improvements Provide the Best Return?

Whether preparing to put a house on the market, remodeling a fixer upper or concerned about building future equity,  homeowners are often curious about where their home improvement dollars go the furthest.  What upgrade, replacement and remodel projects provide the best return on investment?

Each year, Remodeling Magazine in conjunction with the National Association of Realtors puts out a Cost vs. Value Report based on each region of the US.  This report compares construction costs to resale values for 35 of the most common household projects – broken down between mid range and up scale improvements.  In essence this report helps answer the question, where is my time and money best directed?

Nationally, these were the Top 5 Projects for 2011 Based on Overall Return on Investment.  To provide a broad basis for comparison, the typical average return across the 35 projects studied was 57%.

#1 – Replacement of Exterior Siding (including trim and soffits)
Average Project Cost: $13,461
Average Investment Returned: 78%

#2 – Replacement of Front Entry Door
Average Project Cost: $1,238
Average Investment Returned: 73%

#3 – Addition of an Attic Bedroom & Bathroom
Average Project Cost: $50,148
Average Investment Returned: 72.5%

#4 – Minor Kitchen Remodel (facelift)
Average Project Cost: $19,588
Average Investment Returned: 72.1%

#5 – Garage Door Replacement
Average Project Cost: $1,512
Average Investment Returned: 71.9%

The main report summarizes the information from a nationwide perspective and then the data is broken down into subsets based on 9  regions of the United States.  Inside of each region, it is further segmented to compare some of the major cities.  Austin just happens to be one of the cities included in the report.  You can download or view a copy of the Austin area Cost vs. Value Report at the Remodeling Website.

Top 10 Most Profitable Replacement/Remodel Projects in Austin
(based on the 2011 Cost vs. Value Report)

1.  Basement Remodel83.4% ROI compared to 66.8% nationwide.

2. Attic Bedroom Addition/Remodel82.9% ROI compared to 72.5% nationwide.

3. Exterior Entry Door Replacement82.7% ROI compared to 73% nationwide

4. Exterior Siding Replacement80.6% ROI compared to 78% nationwide

5. Minor Kitchen Remodel75.9% ROI compared to 72.1% nationwide

6. Deck Addition75.6% ROI – compared to 70.1% nationwide

7. Garage Door Replacement75.5% ROI compared to 71.9% nationwide

8. Midrange Bathroom Remodel73.2% ROI compared to 62.2% nationwide

9. Major Kitchen Remodel73% ROI compared to 65.7% nationwide

10. Family Room Addition71.7% ROI compared to 60.2% nationwide

Not surprisingly the top ten list is comprised of projects that do one of three things: enhance curb appeal, add interior square footage or remodel areas of high importance (typically) for buyers – bathrooms and kitchens.  Those projects historically bring the highest return on every dollar invested.  Again, if you would like to download the National, Regional or Local Cost vs. Value Report, you can do so for free at Cost vs. Value dot com.

Photo Courtesy of Armchair Builder via the Flickr Creative Commons License

Eye on Austin Real Estate

Austin Real Estate Newsletter The New Kid on the Block - 

Earlier this month I sent out the first edition of my new Real Estate focused newsletter.  I’ve been sending out a monthly newsletter for the past 3-4 years but that particular newsletter focused little on the actual trends and metrics of the actual real estate market in Austin.  While I continue to receive tremendous response from my Better Austin Living Newsletters, I decided it was time to augment that effort with a piece that shared the pulse of the Austin real estate market.

Thus, the Eye on Austin Real Estate Newsletter was born.  Click here to download a copy of the first edition.  In accordance with that newsletter, I’m also building an associated website – www.EyeOnAustinRealEstate.com.

The main purpose of these platforms is to provide more in-depth analysis on the trends we are seeing locally.  One thing to keep in mind is that the only real estate market that truly matters in the grand scheme of things is your real estate market. And when I say your real estate market I’m not only referring to the Austin market but also the  micro-markets inside of that bigger picture.

Part of my duty as a responsible real estate professional is to curate the best insight and information that is pertinent to the interests of an Austin homeowner (or prospective home owners).  In today’s world of intense and sometimes inaccurate media scrutiny, it can be difficult to discern between what is relevant to us as Austinites and what is just plain noise.

My hope is that the content generated through this platform will serve as a voice of reason amongst the digital clutter.Thus, information will only be pulled from trusted sources.

We are starting to see a shift again in local real estate market dynamics and its important to stay on top of the changes as the occur so that you can make educated and responsible decisions.  The website is in its infancy and will continue to evolve over time but I’d encourage you to go check it out: www.EyeOnAustinRealEstate.com