What is your Austin home worth, right now? When considering a sale, it’s generally worth “market value”, defined loosely as the highest price a buyer would pay, and that a seller will accept in an open, competitive market. This assumes neither buyer nor seller are under any undue stress or duress external to the transaction itself.
Many homeowners want to know their home value even when not considering a sale. Such as when protesting assessed property value at Travis County. Or maybe you are just curious, or you want to update your Net Worth spreadsheet with a current value.
If you don’t want the “market” to determine your home value, because you don’t want to sell, there now exists a plethora of “Automated Valuation Model” (AVM) tools that will tell you the supposed value of your home online based on mathematical algorithms and data. The most well know is perhaps the Zestimate on Zillow.
Let’s take a look at these AVM tools and see how accurate they are. I’ll use a home I own in SW Austin as the subject property, as I am preparing to sell it and in the process of determining the best list price.
I receive regular inquiries from prospective investors about investing in real estate in Austin. At the outset I try to determine the objective of the investor by asking some questions. Usually it will be an open ended question like “Why do you want to own investment property in Austin TX?“.
Then I just listen.
It’s amazing how many prospective Austin real estate investors cannot articulate a coherent reason for their interest in investing in real estate. The responses vary from wholly uninformed dream seekers, kicking tires and “researching” on a whim (which is fine!), to incredibly informed wealth builders who really do know their numbers and what they hope to accomplish with a real estate investment over time.
It’s the latter we seek to help, though I like to think I’m always helpful and friendly to the ones with unreasonable hopes and expectations by discussing it a bit, or directing them to our Investing in Austin Real Estate page.
The most striking disagreement I have when talking to prospective investors comes about with the ones focused solely on “cash flow”. They want to buy a “property that cash flows at least a couple of hundred a month“.
I don’t personally care about cash flow, so I’m unsympathetic to this requirement. I’m not tuned in to it, because it’s not how I think about wealth building. Cash Flow is meaningless to me. Many are confused when I say this.
I just think it’s the wrong thing to focus on because that’s not what ultimately determines the success or failure of a real estate “buy and hold” investment, over time. I’ll explain further below with an actual real life example of a property I actually own.
What I do want from my real estate investment is that it produce a slow, steady, reliable increase in Net Worth over time. That’s it. I’m patient, as this is something that happens over decades, not a quick flip. I am a “Buy and Hold” real estate investor, and that’s who I specialize in helping as well. I help people seeking wealth accumulation, not income. Read more …
Austin Realtors can now enter For Sale listings into the Austin Central Texas MLS before the listing is ready for showing. For up to 14 days prior to the “Active” date. And, therefore, buyer agents and buyers can get a “heads up” on listings that are (supposedly) about to come onto the market live in the MLS.
What Problem Does This Solve?
During Austin’s red hot seller’s market of the past 5 years, it had become increasingly frustrating for Buyer Agents and Buyers trying to operate in a low inventory market. We heard tales of buyers literally driving zig zag through neighborhoods looking for “Coming Soon” signs. Every new listing that popped up live in MLS became a Red Alert fire drill, as I wrote about previously, saying Every Offer is an Emergency Now, pointing out that as a buyer, you have been largely “competing” for homes for sale in Austin, not buying them.
The “Coming Soon” in MLS idea is to move that physical “Coming Soon” sign from the front yard into the digital space where every Realtor can see it from a screen, instead of driving around. This is no doubt a more organized way than yard signs, or the myriad Realtor Facebook groups where agents announce an upcoming listing, but which has no search or alert capabilities such as the MLS.
Does it Actually Solve the Problem?
I don’t know, you tell me. You’re the Buyer. Instead of a new listing in the MLS that you and your agent can immediately go see and write an offer on, it’s a “Coming Soon”. It may NOT be showable, and seller may NOT be accepting offers just yet. There may not be photos or any actual detail. The required fields to enter a Coming Soon into the MLS are very few, only about 10 or so data fields. But you will have a “heads up” that it is “coming soon”. Read more …
“I love you Austin, but we’re growing apart emotionally. I can feel it. You can feel it. I’ve been spending time in another city, and I think I’m falling in Love”.
That’s how I would start my “Dear John” letter to Austin. I’m not ready to write that letter yet, but as empty-nesters and longtime Austinites, Sylvia and I have in fact been spending a lot of time at our place in Wimberley.
As I was surfing through my XM Radio channels the other day, I happened across a “relationship” show on which a caller and the host were discussing whether the caller’s friendship and time spent with a man not her husband constituted “Emotional Cheating“. The conclusion was that it did, and she needed to stop it.
If I were to call into that same show and describe mine and Sylvia’s time spent with Wimberley since early August, our weekends at our cabin, swimming and canoeing on Cypress Creek, walks to Blue Hole preserve and to the Wimberley Square coffee shop, and ask if that time spent constitutes “Emotionally Cheating” on Austin, then we’d be guilty as charged!
How did this happen? Let’s imagine a conversation between me and a confused Austin, wondering if I still love it: Read more …
As the owner of a business where 100% live answer is not possible or cost effective, I do receive my fair share of angry voicemails from people wanting to talk to a human right now. It’s kind of interesting actually. I received this one just recently.
Many would just delete it, as I usually do with rude voicemail tirades. We receive all manner of unbelievably incoherent, garbled and plain crazy voice messages from people.
But as a blunt-spoken no-BS type of person myself, I appreciated this voicemail. I played it proudly for my wife. And I played it for my assistant, “listen, … this is great!” And now I’m blogging about it.
The caller scolds me with the blunt, to the point assertion, “if no one is available you get no sales“.
Listen to it again yourself. It’s perfect! It’s the kind of communication I respect. Clear, concise, to the point. No fluff. I like people who communicate like this.
So, is he right? Am I losing sales?
Of course I am. I just don’t know how many, or if setting up a 24/7 live answer would capture enough lost sales to offset the cost of outsourcing to a live answer call center. To dig into the question a bit more, I’ll go into my call logs for my phone system and dig up some stats, then discuss the pros and cons of live answering services. Read more …
New York Times columnist Paul Sullivan recently wrote about this DJ posing as a financial advisor. It was one of those setups like you see on TV. They removed his dreadlocks and body piercings, put him in a suit, taught him some basic scripts like “a 401K is the way to go“, and had him meet with actual financial clients to discuss their financial needs and how he can help.
When he went for the “close”, all but 1 client said they would work with him. He had zero experience, no qualifications (though I’ll bet his conversational skills helped). But since he looked the part and knew some buzz phrases, and the prospective clients didn’t know the right questions to ask, he was able to win their trust just by being nice and personable.
The point of the experiment was to illustrate that the vast majority of financial clients do NOT know how to determine the suitability of the financial planner they are hiring. They just don’t hire well.
The exact same thing is true in Real Estate.
Most prospective real estate customers could sit down with an imposter “Buyer’s Agent” who knows some rehearsed scripts, and be convinced that this person is the right agent to help them. And they would sign a Buyer Representation Agreement within 20-30 minutes. Even if it’s just an unemployed Barista dressed in kakis and a polo shirt, using some scripts I teach him, but with zero experience. Same with listing appointments.
A study on the problems facing the Real Estate industry resulted in what is called the DANGER Report. DANGER stands for Definitive Analysis of Negative Game changers Emerging in Real estate. This article isn’t about that report. But the #1, leadoff, main conclusion of the report was: “Masses of Marginal Agents Destroy Reputation”.
In other words, incompetence and unethical behavior by masses of Realtors. Which begs the question, who hires these dummies and why?