The Austin real estate 2011 sales breakdown by MLS area is below. Most areas of Austin are holding steady. I’ve color coded the results columns of each area to show whether or not that area performed above or below the greater Austin market on whole.

For example, let’s look at MLS area “W” (West Austin).

This shows are W outperformed the Austin real estate market in some categories, but not in others. Those categories break down as follows:

Number of Sale: The number of sales overall in the Austin market rose by 6.9% in 2011. Number of sales rose by 5.95% in MLS Area W, so it gets flagged a red colow code for under-performing the overall market.

Avg Sold Price, Median Sold Price, and Sold Price per Square Foot all outperformed the market as a whole. Avg and Median Days on Market underperformed as well.

That said, pricing metrics are the most important in determining the direction of the market, so keep that in mind as you review the various areas and how they did in 2011 compared to 2010. Squre footage is not ranked but is shown for referrence and used to calculate sold price per sqft.

The color coding allows you to see in a glance areas that did well, did not do well, and that were mixed. A row of “all red” means the area under-performed on all metrics. Several areas unfortunately did just that.

MLS Area 8E (Westlake), RN (Steiner) and DT (Downtown Condos) were the only three areas to earn green stripes all the way across. (Note: Downtown is the only area we report Condos. All other areas are houses only).

Areas HH (Kyle/Buda), N, NE (North and Northeast Austin), PF (Plugerville) and SWE (Deep South Austin) all Redlined across all metrics. Many other were mostly red save for the number of units sold.

If you’re not familiar with Austin MLS area, see the map below.

No doubt every Austin Realtor has forgotten – or almost forgotten the electronic MLS key when showing a property. That really stinks when it happens. Me and Sylvia are still old school and carry around these horrible devices. The alternative would be to use an iPhone app that requires a small infrared stick that plugs into the bottom of the iPhone. The problem with that is if you lose your iPhone, or the battery goes low, you’ve also lost your MLS key.  I’d rather spread the risk to separate devices. I also don’t want to have the tiny plugin stick to keep track of or junking up my key ring.

Anyway, I drove way up northwest by the lake today, past Lakeway, to show some buyers who had driven up from Corpus Christi to meet me at a house. This was a 45 minute drive from my house. About 15 minutes away I realized I left my MLS key laying on my desk, where it had been charging.

I quickly assessed the options in my head while not panicking, but almost panicking. I checked the listing agent on the MLS printout and noticed it was a KW agent in Lakeway. I just happened to be on 620 not far from the KW office.

I called the agent and got ahold of the assistant. “I’m on my way to show your listing on {Street name} and left my MLS key at home. Is there a combo box on the property or is the MLS box the only way in?”, I asked cheerfully, keeping my optimism high. “No”, the well informed assistant told me, “there is no combo box”.

“OK”, I said. “Do you have a spare key in the office that I could come by and pick up? I’m not far from you” . There was no spare key either.

I was now about 12 minutes away. I could either:

a) Turn around and know for sure that although I’d be terribly late arriving (like, 75 minutes late), I could call and ask the client to go get lunch and show up later for the appointment.

b) Show up on time and deal with it, knowing I might not be able to get in.

c) Call a Realtor friend close by and beg them to meet me there.

I’ve always been lucky. I decide to give myself a chance to get lucky and proceeded to the appointment to face the music. I’d just have to figure out a way to get inside.

Showing up, the clients’ vehicle was there but they were nowhere to be seen. They were walking around in back I guessed. It was a big lot. I headed to the front door and tried the doorknob. No luck. I checked under the mat. No key. I ran my hand across the top of the trim above the door. No key. I looked around the porch for a nearby rock. There was one to the right, in the dirt next to the porch. A nice small flat one about 6 inches wide and looking completely out of place. Underneath there was a key. I tried it and it opened the door. Then I went and hunted around for my clients.

Disaster averted. I already had my script worked out. “I’m sorry but I forgot my MLS key. Have you guys had lunch yet? Let me buy you lunch at a great place down the road while I run and get my key. It will take me about an hour and a half”. Luckily, I didn’t have to make the embarrassing confession or the offer.

I’ve had agents call me from our listings when they’ve forgotten their MLS key. We usually also have a combo box on vacant listings, but not occupied ones. A few agents have been saved by that, and by having me luckily answer when they called (our office line rings simultaneous to our cell phones).

Once I showed a house and saw another agent’s MLS key laying there on the counter, but the people and the agent were long gone. Woops. Bet they didn’t get far. That would suck. I had no way of doing anything with it so I left it on the front porch and assume the agent came back and was grateful to find it mysteriously laying there. She would have had no way to go inside to get it had I not left it outside.

Even if you don’t forget the MLS Key, the battery can drain and it becomes unusable. These devices of ours really have us. Without them we’re helpless as Realtors. I don’t experience malfunctions that often, but I’ve heard about agents who have suddenly been unable to open a lockbox with a key, for no explainable reason. I heard one griping about it at the Board of Realtors office a few months ago.

But the moral of the story is about luck. I’ve been very lucky in life because I give luck a chance to happen. That often requires a leap of faith, and the ability to just trust that things will somehow work out. Think about that. If I had turned around and went to get my key, and called the clients with an apology that I was going to be late, I would have guaranteed myself a bad outcome, though a more predictable one.

Buyers often foreclose on the opportunity for luck by ruling homes out. Not making that lowball offer. Not loosening up the search criteria a bit. Or ruling out homes just based on internet photos, which can be very deceiving. As humans, the more we make ourselves available to be lucky, the more likely it is luck will bump into us, as it did me today.

The Austin real estate market did about what we expected in 2011, which wasn’t much. Basically treading water with some slight improvements, but nothing that represents a notable shift in market activity. Instead, it looks like momentum is building for a breakout year of increased activity and rising prices either in 2012 or 2013.

Let’s start with a look back at the past 12 years for some context.

From 1999 to 2001, you see the effects of the Tech Bubble, as Austin experienced strong job growth, which in turn drives housing demand. From 2002 through 2004 (and most of 2005, though not obvious from the graph), Austin housing prices were flat, as we suffered the hangover of lost jobs after the Tech Bubble bust. Then in 2005 jobs returned as well as a lot of real estate investors who felt that other areas such as Phoenix, Las Vegas, Boise, Florida, etc. (which we now know were in a severe bubble) were playing out. So we had a mini burst of strong buyer demand through about the middle of 2007. After dipping in 2008, prices have slowly climbed since then, though many homes still sell for 2007 prices. By 2010, overall values were back to 2007 prices and have now surpasses the 2007 high. That’s the Austin real estate market in a nutshell, for the past 12 years.

Let’s look at the gains in 2011 compared to 2010.

The number of homes sold increased by 6.67% in 2011 compared to 2010. That’s a fairly solid increase. At the same time, the number of “failed sales” (expired and withdrawn) listings fell from 48% in 2010 to 40% in 2011, meaning more sellers were successful in eventually selling their homes. In 2010 almost half of all MLS listings failed to sell. For 2011 it dropped to 40%. Days on market increased, which ties into the lower failure rate as sellers allowed their listings more time to sell instead of giving up. All the other stats, as you can see above, showed only slight movements. Prices are up 1.6%, not enough to get excited about, but moving in the right direction if you’re a “waiting” seller.

I’ll be working on a breakdown area by area later this month to see if there are notable trends in “hot” or “not hot” areas. I suspect there are, but not to the degree that one might imagine. As usual, comments and questions are welcome.

We recently had a transaction where the seller refused to negotiate any repair adjustments. None at all. This is actually not completely unusual, but most of our buyers do receive at least a small amount to offset repair and condition issues that were revealed by the inspection and not disclosed on the Seller’s Disclosure form.

But on this particular transaction, the buyer received a favorable contract price. The seller felt that the home was a good deal as-is at the contract price and was unwilling to offer anything else. Buyer was ok with that, so no problem.

But then the listing agent wanted to buyer to go ahead and terminate the Option Period in writing. Buyer had no motivation to do so and didn’t want to give up that right, so the seller and agent ended up have to fret and worry (needlessly) for an additional 5 days. This could have been avoided if the seller and agent had been willing to give up at least a token amount toward repairs. Here’s why.

Most transactions do in fact have a “2nd negotiation” or “repair negotiation” following the inspection. I haven’t sold a “perfect” house yet. Even brand new homes produce a list of deficiencies that need addressing. The offsets or allowances for repairs are most commonly cured by agreeing to an amount to be inserted into paragraph 12(a)1b of the sales contract, via a final amendment.

That paragraph is the “buyer closing costs paid by seller” paragraph. So, if buyer and seller agree to a $500 offset in lieu of repairs, $500 would be inserted into 12(a)1b and would thus reduce the cash buyer brings to closing by $500, which is essentially the same as the seller giving the buyer $500 at closing toward repairs. We do it this way because it’s cleaner.

Also on the final amendment is a checkbox terminating the buyer’s Option Period. So, this 1-page final amendment works to seal the deal, so to speak. Buyer says to seller, via the amendment, “you give me some money to help with these repair costs and I’ll terminate my Option Period and we can move forward”. That’s a fair trade.

In the example about which I am writing, there was no repair allowance, thus no final amendment. Yet the seller and listing agent still wanted the buyer to terminate the Option Period prior to the end of the 10 days. Our response was “the termination of the Option Period is normally done in exchange for some repair offsets on a final amendment, and since there is no final amendment, the Option Period will just expire on the date provided”.

Still, agent and seller fretted and worried about the fact that it was still technically not a “done deal” because the buyer still had 5 days to “change his mind and cancel”. This is where, if I was listing agent, I would advise the seller to offer a small repair amount, which would be addressed in the final amendment along with the termination of the Option Period.

Most sellers probably don’t worry this much about it, but if you’re a seller who does like a sense of conclusion to the repair phase (Option Period) and you want to know that the buyer is ready to move forward, then be ready to give up something in exchange for that certainty, even if it’s just a token $100 toward repairs.

Almost a year ago I wrote about the Austin Short Term Rental (aka STR, Vacation Rental, VRBO) issues surfacing in the Austin community. That blog article generated 57 comments and a lot of heated back and forth. I eventually had to close the comments for that article because I felt everything had been said that could be said at that stage of the process. This article is an update on what has happened with STRs in Austin since the last blog post, and what will happen next.

The issue has moved forward through a “Working Group” process which concluded last August. City Staff is currently reviewing a draft set of regulations. The full Planning Commission will consider the recommendation after City Staff finishes the review. From there, a Code Amendment and set of new rules will be sent to Austin City Council. That probably won’t happen until 2012.

The Working Group Process
I participated in the Working Group process in the role of a Government Affairs Committee member of the Austin Board of Realtors. The Austin Board of Realtors involves itself in any local issue which could affect the private property rights of home owners. In many ways, ABOR is somewhat of a “Silent Knight’” working for the benefit of Austin homeowners, though most home owners are probably unaware that they are served in this manner.

ABOR seeks to protect the rights of property owners and opposes rules or laws that would diminish the private property rights of Austin property owners. The ABOR position on Short Term Rentals in Austin is, in short:

The Austin Board of REALTORS® supports preserving the character of Austin neighborhoods and protecting the quality of life of its residents. ABoR also believes homeowners have a right to lease their homes, regardless of the length of the lease, without municipal licensing requirements or registration fees. We also believe that the City of Austin should hold formal stakeholder meetings to address the issues concerning short-term rentals and develop a solution that balances the needs of neighborhood residents and residential property investors.

The stakeholder meetings did occur, a middle ground was determined which, as predicted in my earlier article, didn’t give either side the warm fuzzies, but that’s how these things go.

The Board of Adjustments Decision
Meanwhile, those opposed to STRs in Austin used the Board of Adjustments process to have one STR in Allandale declared in violation of a newly made-up-on-the-fly 10-day rule. The Austin Board of Adjustments essentially decided, capriciously, that since the word “transient” was not defined in City of Austin Code as a specific number of days, it would make up a number. It came up with “10″. Meaning, the rental of an Austin home for 9 days would be a “transient” use of the property, whereas 10 days would not be “transient”.

The City of Austin ignored and continues to ignore that ruling. As reported in the Austin Statesman August 2011:

“The City of Austin is allowing short-term, or vacation, rental homes to operate for now in residential areas despite a city Board of Adjustment’s ruling that rentals for a period of less than 10 days violate city code.

The Adjustment Board’s decision, which overturned a city staff decision earlier this year, has triggered a lawsuit by five owners of rental homes who contend that if upheld, it would deprive them of constitutionally protected property rights.

Meanwhile, the city’s decision to defer enforcement is drawing the ire of critics, including some who live next door to short-term rental homes and who want the city to enforce the Adjustment Board’s decision now.”

The anti-STR group continues to press on, having now passed a reolution through the Austin Neighbors Council. That resolution was voted down by the Zilker Neighborhood, which contains the highest concentration of STRs in Austin. Other neighborhoods did sign on though. ANC states that the support of the resolution was better than 2 to 1.

The ANC Resolution for Short Term Rentals would impose an outright ban on STRs, except for homestead owners. The language is:

Be It Resolved that the Austin Neighborhoods Council supports the following Resolutions:

That the Land Development Code’s definition of permissible residential uses in single family zoning districts be expanded to allow properties that are homesteaded as defined above and are the owner’s primary residence to be rented on a transient, short term basis, defined above as a residential rental of between one and thirty days, for a maximum total of 60 days per calendar year.

That the City Council of Austin, Texas specifically enact an ordinance disallowing short term residential use in single family zoning districts as being a transient use, unless exempted by the property being homesteaded and the owner’s primary place of residence. This ordinance, by the definitions and wording above, would emphasize that STRs have always been and continue to be in contradiction with the permissible residential uses allowed in single family zoning districts, and that the current use of a property as a CSTR is not a legal nonconforming use and that this use shall not be grandfathered.

This proposal, which ANC is pushing at City Council (ABOR and HomeAway are also pushing our separate but similar positions as well) would shut down existing STRs in Austin except for homestead properties. So, if you owner-occupy your homestead, I guess ANC is OK with you renting it out to overnight guests 30 weekends a year while you leave town. The “strangers” that you rent to would somehow be “acceptable” or “different” strangers than the ones renting non-homesteaded houses, and presumably pose none of the problems or issues that are used as the basis of complaint for outlawing STRs in non-owner occupied homes.

Sorry, but I call B.S. on that. Come on. It’s dumb. Makes no sense. It’s intellectually indefensible to say that a class of renter can be split into “problematic” and “not problematic” categories based solely on the homestead status of a home.

Meanwhile, I’ve personally been drawn into the argument in another way via my previous blog article. Anti-STR people have taken to passing around and posting snippets of my earlier blog comments out of context. I guess this is as close as I’ll ever come to understanding what politics is like.

The first article I wrote was written intentionally to acknowledge the concerns and feelings of those opposed to STRs in Austin. It was written as a balanced presentation of both sides. For example, all things being equal, I said in the article that I personally would also prefer to have a family next door rather than an STR home. That’s still true. I’d also not want to live next to a fire station or a school, or a middle school tuba student, or a Harley owner who leaves for work at 5:30AM each morning. But I don’t want those situations banned or outlawed either.

To be clear, I would not object or complain if my neighbor converted his home to an STR. That would be his right as the property owner.

The anti-STR people apparently don’t understand that, as humans, we can hold nuanced positions about things. I can fully understand and even sympathize with the feelings of someone with whom I disagree. In this case, written expressions of that understanding and sympathy have been cut and pasted into cherry-picked excerpts used to exclaim, “Look! Crossland said he wouldn’t want to live next door to and STR!”.

What is this, Middle School? Good grief people. Context.

Yes, I understand your position. I agree with your right to feel upset. I get it. And I happen to have the ability to relate to your position and am willing to state as much. And I am 100% against the banning of STRs in Austin. Any quotes attributed to me need to be read inside the paragraph and article in which those quotes were written, not plucked out and used out of context in an attempt to discredit me and/or ABOR.

What’s Next?
We’ve (ABOR) met will all the Austin City Council members and stated our position, as summarized above. The other side is doing the same. We’re now just waiting to see what comes up from Planning Commission. At these meetings, my role was to point out, as I have all along, the lack of data to support any of the anti-STR complaints, and to relate some facts and realities about to STRs that can’t be ignored.

The 99 Percent
Short Term Rentals in Austin, in terms of property condition and appearance, are in the 99th percentile of homes in excellent condition. Want to drive randomly through Travis Heights or Zilker and try to pick out which homes might be STRs? You’ll be zeroing in on the prettiest, most well kept properties in those neighborhoods. Yard of the Month candidates. STRs make neighborhoods more attractive, helping support property values of the surrounding homes.

On the inside, these homes have to be in excellent operating condition, clean and safe with good furnishings. Guests will not tolerate anything less. The STR industry lives or dies by online reviews. Any owner trying to make a go at it with a subpar property in poor condition will be out of business quickly because they will get killed with bad reviews. In this way, the STR industry in Austin self-regulates and naturally weeds out the bad operators. Nobody will rent one of these places without first checking the online reviews, and if you want to be a successful STR owner, you better pull out all the stops to create a great experience for your guests.

No Evidence of Code Violation Problems
With regard to code violations, it follows that it’s statistically impossible that 1/10th of 1% of the single family housing stock in Austin (about 300 out of 330,000 homes in Austin are STRs) could be responsible for anything even close to a statistically significant portion of code complaints.

How could 1/10th of 1% of homes that are in the top 99% of good condition be deemed a “problem” that Code Enforcement needs to address through new laws or regulations? Existing Code rules and occupancy laws already cover STRs the same as every other home in Austin. STRs are not a source of Code problems.

No Evidence or Data Support Increased Crime
With regard to noise, crime, etc., if we ask Chief Acevedo if STRs are a source of problems for Austin Police, he won’t have a clue what we’re talking about. The guests who stay in STRs are less “vacationers” than we first knew. In fact, a great percentage of them are relatives of people in Austin who want to avoid a hotel during a visit. Many are families. As a subset of people coming to Austin, the ones choosing to reside in a Short Term Rental home instead of a hotel cannot be proven or characterized to be troublemakers or people here to disrupt the vibe of the neighborhoods in which they are staying.

So, neither the Code Violation or Criminal Troublemaker argument hold water. In fact, there is absolutely no data that describes any sort of problem that is not a universal issue existing in non-STRs. Giant parties, such as the Halloween Party every year in Travis Heights that drew 500+ people this year, are thrown by home owners, not weekend visitors. So there is no “party avoidance” to be had by banning STRs in Austin.

Finally, the city will probably want some sort of registration system identifying which homes are Short Term Rentals. While some of the STRs may remain STRs for many years, many more will phase in and out of that status rather quickly. Some may be placed into service only until the real estate market improves. Others are routinely rented alternately to long term renters. So, at any given time, the answer to “which homes are actually being used as STR?” is a moving target.

I’ll continue to follow this process. By early next year we should know what the Planning Commission is proposing. It will no doubt be “too much” and we’ll fight to par it down while the other side will fight to make it more restrictive, per the ANC proposal. But in the end, I do believe we have to fight these fights lest we allow the slippery slope of over-regulation to creep into the property rights we enjoy as property owners. That said, I do believe that both sides of this argument care about Austin and have chosen the position that they believe to be in Austin’s better interest. In that regard, we all want the same thing, a better Austin. But we’ll continue to disagree over what that looks like.

Sylvia and I recently installed new hardwood floors in our entire home. Bedrooms, closets, kitchen, hallway, etc. Everywhere except the laundry room and 2 bathrooms, which received new tile the month before. The process of doing this in an occupied home required a packing and moving of stuff not dissimilar to actually moving. Every part of the home had to be emptied out completely, just not all at once. So we migrated piles of stuff from one part of the house to the other as the new floors were installed. Meanwhile, we lived in a semi-construction zone for 10 days.

I learned a lot about wood flooring and the install process, but this article is about our stuff. I heard myself say at some point, while carting boxes out to the garage, and will now quote myself, “how is it possible that people who have gotten rid of so much stuff still have so much stuff?!”

No joke, our living space over the last 4 homes in 12 years looks like a bell curve. We’ve gone from 2,000 sqft to 3,700 to 3,300 and now down to 1,800 square feet. During each move, we’ve parted ways with what seemed like massive amounts of stuff. I’ve always enjoyed that aspect of moving. The cleansing and thinning out of the material barnacles that cling to us as we live life. We could fill a semi trailer with all the stuff we’ve given to Goodwill over the years. Especially on this last move going from 3,300 sqft down to 1,800.

Yet, here I am trying to move stuff out of the way for new floors and I just can’t believe we still have too much. How do people who’ve unloaded so much still have too much? By only getting rid of the easy stuff. Now it’s down to the emotional stuff, and that’s harder. Way harder.

Aria-pro II precise bass 1977

Today I sold my vintage 1977 Aria Pro II Precise Bass guitar. I don’t really even know how to play bass, but I’ve hauled this guitar around for over 15+ years. It’s a Fender copy, but a better made guitar than the original Fenders of that era. I kept thinking I’d take bass lessons and learn to play it. Yet it never happened and the bass actually survived 5 moves without getting let go. Today I did let it go.

We also let go of the piano. I’ve played it since I was about 5 years old – about 44 years. Mom gave it to me some years ago. I can bang out some old Beatles tunes and chop around on the keys, but with only one living room and the kids well beyond piano lesson years, that’s some pretty valuable living room space to have dedicated to a seldom used piano. We donated it to Sylvia’s 5-year old nephew.

I still have some vintage guitar amps and guitars. I may just keep the acoustic I bought when I was 16, and the Telecaster and 1 amp. The rest needs to go. Sylvia has a bunch of artwork and other knick knacks that could use thinning out. And we have boxes full of artifacts of our kid’s lives. Old school papers, art, drawings, etc. That stuff takes up a lot of space also, but will probably survive this latest culling.

Like many Americans, we’ve made the recent decision that we don’t want to live in a big home anymore. We value being in the urban core of Austin in a smaller house. The location is so wonderful. 6 minutes to down town. Austin feels small again when you don’t start every drive from 3 miles past the Y in Oak Hill. I can get most places I need to go in 15 minutes or less. I even walked to Zilker Park for the Shakespeare play one night last summer (though it took an hour).

The trend to smaller homes is not going to abate. People are downsizing. The corner has been turned and the Builders know it. But in order for the American Consumer to be happy living in a smaller home, some stuff is going to have to go – or not be bought in the first place. Theoretically, that’s easy to know and accept. But when you’re actually picking up your stuff and deciding whether it goes into the “keep”, “goodwill”, “sell” or “trash” pile, it’s not so easy.

I’m going to miss that bass. Even though it went untouched, unplayed for years at a time, I knew I still had it. I liked owning it. I’m sad it’s gone. But if we’re going to be “small house people”, we just don’t have the luxury of clinging to impractical sentimental possessions like that anymore.

Eanes ISD Boundary Shown in Green

Where exactly is “Westlake” in Austin? Well, it depends on which boundaries you use. In the broadest sense, “Westlake” is considered to be those areas which attend Westlake High School, or those areas within the Eanes ISD boundaries, as shown on this map.

So, in general terms, the area west of Austin known as “Westlake” is everything that feeds into Eanes ISD schools.

If a buyer tells us they want a home that attends “Westlake Schools”, we will restrict the search in the Austin MLS to homes where School District = Eanes ISD aka “Westlake Schools”.

Many people also think of “Westlake” as the 78746 zipcode. In fact, the entire 78746 zipcode is contained within the boundaries of Eanes ISD, except for a small southern portion that crosses Barton Creek into the Barton Creek Greenbelt and Austin ISD. None of that area is developed though, so all homes in the 78746 zipcode attend Eanes ISD schools.

The 78733 zipcode is also contained within Eanes ISD. This includes neighborhoods such as Barton Creek West and Cuernavaca. But if you ask people there where they live, they are more likely to self-identify with the neighborhood rather than say “Westlake”. See map below.

But isn’t Westlake a separate city? Yes, it’s the City of West Lake Hills. See the map below and the area in puple, which shows the actual boundary lines of the municipality known as West Lake (two words) Hills.

City of West Lake Hills shown in purple

Notice that the city of Rollingwood is also located within Eanes ISD. People who live in Rollingwood would probably self identify as “Rollingwoood” residents instead of “Westlake”, though they live in the “Westlake Area” and attend Eanes ISD. The blue area just south of the municipalities of West Lake Hills and Rollingwood is technically inside the boundaries of City of Austin. This is the area north and northwest of Barton Creek Mall and includes subdivisions such as Woodhaven and Bee Cave Woods.

Residents of Woodhaven and Bee Cave Woods live in “Westlake”, but not inside the municipality of West Lake Hills. Sylvia and I live in Woodhaven, in Westlake, just a few blocks from Westlake High School, but we are residents of the City of Austin. Woodhaven is within walking distance to three Eanes schools – Cedar Creek Elementary, Hill Country Middle School and Westlake High. Thus, the neighborhood is heavily populated by families, as is Bee Cave Wood. In fact, we moved here specifically to be walking distance from Westlake High, though we also enjoy the awesome west/central location.

Finally, where exactly is Westlake High School? Surely it’s in West Lake Hills, right. Nope. It’s actually not located within any municipality. See the map below.

Westlake High School Austin TX

See those white areas on the map, and where I type “Westlake High School” in red? Those are unincorporated areas of Travis County. So, any crime at Westlake High would fall under the jurisdiction of the Travis County Sheriff, not West Lake Hills or City of Austin. People caught speeding through the school zone at Westlake high will be issued a ticket by the County.

So, if any purists would wish to argue that “Westlake” is only those areas located within the municipality of West Lake Hills, they would also have to say that Westlake High is not in Westlake. I’m sure there is a tax, finance or other logistical or political reason for leaving Westlake High in Travis County instead of annexing it. I haven’t investigated that, but it does seem odd that it’s not located inside West Lake Hills.

Hopefully you have a better sense of where “Westlake” is now. To me, it’s easiest to just think of it as those areas with Eanes ISD, per the first map above,. When a buyer says “we want Westlake Schools”, that’s what they mean.

Below are the Austin housing market stats for October 2011 and year to date.

As shown above, average and median sold prices are down 2.3% and 3.6% for Oct 2011 compared to Oct 2010. The number of homes sold increased and the number of failed sales efforts (Withdrawn or Expired) decreased. The sold to list price ratio increased a bit and the Days on Market improved.

Nothing really suprising or new here. The Austin real etstae market is still moving along somewhat, treading water for the most part. See the Year to Date and 44 month graphs below.

Year to date stats through Oct 2011 look more promising, from a color-code standpoint, but the movements are small.

Below is a “past months” chart I started a few years ago. I paiants a pretty good graphical picture of the Austin real estate market price movements the past 44 months. Pretty boring except for that one blip there in summer 2010 which quickly subsided.

Monthy Avg and Median Sold prices for Austin Homes

You can sort of see on the chart above that average prices want to increase, but really just haven’t more than a slight amount. This is over a 44 month period, almost 4 years. Still, many real estate markets in the US have done much worse over the same time period, so we’re not complaining.

We have job growth in Austin. We have good interest rates. But we also have a lot of financial uncertainty nationally and internationally, and an upcoming election. Investors are out there, just not that many. Many investors can’t get loans. Buyers seem content to wait, though we’re still closing deals each month.

I feel like there is pent up demand in the Austin market that is going to explode at some point. Our leasing market is very strong with very qualified renters who could actually buy, but are renting first.

Questions and Comments welcome.

Sylvia and I just sold a couple of acreage lots that we purchased in Oak Hill back in Feb 2007. For those who remember, Austin’s real estate market was still running full tilt in early 2007. I bought three lots in a new subdivision, we built a new custom home on one of them and moved in, and held the other two for investment.

The Original Plan - what was suppose to happen 
We bought the lots directly from the developer for around $85K and $90K each. I figured they would be worth $150K or more within the following year or two. The house we built, which we really didn’t need but which I though would be a good investment, cost about $475K to build turnkey, including lot purchase. It appraised for $610K when we closed the loan, which I thought was a bit high, but nevertheless I figured the value would appreciate to over $700K within two 2 years. We’d sell it, take the tax free capital gains, and buy again in Westlake near the high school.

I think of this strategy as “laddering up”, whereby each successive home purchase/build and move-up results in tax free income and an increase in net worth. Others I know have done this with “slow flips”, buying fixers and staying the required 2 years while renovating, then capturing the tax free capital gain and reinvesting into the next home. Over time, this is a powerful formula.

On paper, this all made sense. The home we’d lived in prior and sold to build this one was built in 2003 on another lot we’d owned since 1999, and it had appreciated nicely. Because of our convoluted tax system, there was a sizeable capital gain profit to be taken tax free on the sale of that one. Those proceeds were dumped into the new one to start a new two-year clock ticking. Any home you sell that you’ve owner-occupied for at least 2 of the past 5 years is not subject to capital gains tax upon sale, so in an appreciating Austin real estate market, moving often can actually be a wealth building strategy and a way to earn tax free capital gains.

What Actually Happened
The plan didn’t work out as expected.

The instant equity we had upon completion of the home vanished in Austin’s real estate downturn. We sold the house for slightly more than we paid to build it, but that wasn’t the plan. The lots did not go up in value either. After holding them for 4.5 years at a cost of about $8,400/yr each (interest and property taxes) we sold them for slightly more than we paid.

Everything I predicted will eventiually happen with regard to values, but over a 7-10 year timeframe instead of 2. Basically, as I look back on all of our real estate investing in Austin since the 1994 when we purchased our first rental property, that house and those lots rank up there near the top with real estate investments that lost money instead of making money.

Why I’m Not Upset
If you want to be a real estate investor in Austin, or more specifically, if you want to use real estate as a wealth building vehicle, you have to be on the field playing. That means taking risks in search of rewards. In hindsight, are there real estate investments I wish we would have avoided? Of course. But there are even more that did work out, some exceptionally well. Sometimes you hit a Grand Slam, other times you strike out. Meanwhile the singles and doubles keep things moving along. Over time, especially over decades of time, it all pans out in the end. So I’m not upset or worried about this hiccup at all.

But What About Small Investors Doing Just One Deal
This is what scares me. One investor doing one real estate investment one time that doesn’t work out. The real estate investing landscape all across the U.S. is littered with these investors who got in during the bubble, many using their home equity as down payment, and watched their real estate investments crater. Some hung on and still own those properties. Others went into foreclosure or short sales. Most are permanently wounded psychologically, having gone though difficult financial stretches trying to hang on. They never should have invested in the first place because they were not financially prepared to do so. Most will never buy real estate as an investment again.

Which is good news to the rest of us. Thank goodness the Amateur Decade of real estate investing is over. Renting has come back into favor, which benefits those of us holding long-term rental investments. Loans are no longer being given to unqualified borrowers. People are now more aware and skeptical of “get rich quick” real estate programs and flip shows on TV. Ironically, since I sold my two lots each for more than I paid, a cable TV show on real estate investing would call that a “profit”, albeit a small one. Hopefully people are smarter than that now, and understand that there are “silent” carrying costs that these shows ignore in favor of the sexier gross numbers they show on the recap.

Meanwhile, Austin’s market is coming back. I sold my lots at the dip. Had I kept holding another 3 years, the values would have increased substantially. But sometimes you just cut your losses and move on.

The Real Estate company Redfin recently announced the release of its Agent Scouting Report in its various markets around the US. This allows Redfin “clients” (term in quotes because anyone can sign up at Redfin.com and instantly be a “client”, whereas most agents think of a client as someone who has signed an actual Listing or Buyer Representation Agreement).

What is the Scouting Report? It allows consumers to view some stats on the current and past activities of Austin real estate agents. Here is a screen shot of Sylvia’s below, so you can see what we’re talking about, then I’ll elaborate further.

Click to Enlarge

It would be a good idea to click on the screen shot to view an enlarged version. If you have a Redfin account, you can click here to view the actual live version.

The Scouting Report allows anyone, in seconds, to type in the name of an Austin Realtor and see what the past 36-month production stats are for that agent. If this becomes a widely adopted and accepted way for consumers to evaluate agents before hiring, it could be a game changer for our industry. I’m all for it, with some reservations. But overall, I think it’s a good thing.

For example, Sylvia’s Scouting Report will reveal that, in the past 36 months, she’s closed 107 sales (53 Buyers, 54 Sellers), which is about 3 per month over a 36 month period, through the Austin MLS. It doesn’t include builder sales or non-MLS sales. The report will show a map of the location of each home and a link to the photos, sold price and full details of each sold home. The easy-glance maps helps a consumer see the geographic areas of operation of an agent, and where the concentration of business is for that agent.

One word keeps appearing in most of the articles and Blogs I’ve read about this – “Disruptive”. As one who thinks the term “disruptive is thrown around too often by the media, especially in the past 5 years about the real estate industry, I think this could actually be disruptive to the real estate industry and its agents.

Let’s start with one well known fact. Real Estate Consumers do a very poor job of selecting agents. The Scouting Report might change that and start weeding out the dead wood agents from the industry.

Most (over 70%) of real estate consumers hiring an agent from scratch hire the first agent to return their call, according to NAR surveys. More than half only interview one agent. So, as an agent, you don’t have to have a record of success, you just have to return calls fast.

This is why so many real estate Lead Conversion workshops and courses focus on agents becoming “hyper-responders”. There are all sort of products that enable this hyper-responder mode. Software that instantly texts you the phone number of a sign caller. Call Capture products that route sign callers to live agents who collect the lead info and text and email it to you. Caller-ID capture systems that even email to you public data info on callers based on Caller-ID (creepy). Email auto-responders that reply to inquiries with multiple automated follow-ups.

Sylvia and I have never bought or used any of these “instant response” or “lead capture” products. We just try to answer the phone and return calls reasonably quickly. During business hours, our phones ring simultaneously at our desks and cells, so we’re pretty easy to reach. And, for sure, I’ve returned a lot of calls the next business day to be told “we already hired an agent”. So, I know it costs us business, not being hyper-responders, but I don’t want to live life as a tweeked out hyper-responder, ready to jump and jerk into action at every ding or tweet that my iPhone emits. If I’m at my daughter’s volleyball game, I’m at the game and I’ll return calls later. If we’re out for dinner, we’re out for dinner, not talking on the phone in the restaurant. I don’t believe in the 24/7 access that some agents try to provide.

Maybe the Scouting Report, or the inevitable copycat industry clones that will follow, will raise awareness with consumers and ultimately help with the public perception of real estate agents as professionals with records of success, or lack thereof. If you’re going to hire a listing agent who has closed 2 sales in the past 36 months instead of the one who has closed over 100, do it for reasons other than the immediate return call. If that consumer behavior doesn’t change, the Scouting Report will be a nice tool for a small few only, and the wider general real estate consumer population will continue to reward instead call-backs instead of evidence of success.

Problems with the Scouting Report
There is some data the Scouting Report doesn’t convey well. For example, my own Scouting Report makes me look lame. Sylvia and I are a team, and we’ve always run most of our deals through her Agent ID in the MLS. Almost every listing and buyer sale is run through her MLS ID, so a Scouting Report on me doesn’t show my level of production. This is true of other husbnad/wife teams, and the larger Mega Teams.

For example, I know and agent with over 500 closed sales in the past 36 months. Most of those were handled by “listing specialists” or “buyer specialists”, but the deal was credited to the primary agent. Therefore, there may be a listing agent under that team scenario who has successfully transacted dozens or 100+ transactions but for whom a Scouting Report will show a big Goose Egg. That’s going to be a problem for some.

There are other shortcomings in the data that was chosen for display, and the data NOT displayed (for example, Expired/Withdrawn Ratio for listing agents, Sold Price to Original List Price ratio, etc), but overall, I’m in the camp that this is a good thing for consumers, if they will take advantage of the data and use it wisely.

Most homes in Austin have fenced back yards. Most fences are built on the property line. The standard wood fence lasts about 8-15 years before it needs replacing (less if it’s a cheap starter home fence).

Usually, when replacement is needed, reasonable neighbors work it out and get it done, sharing materials and labor in a way agreeable to both, depending on who gets the “good” side and who wants the fence the most. Ideally, this is just an old fashioned handshake agreement and all goes well, and both neighbors are happy with the result.

But often things don’t go well. It only takes one unreasonable neighbor to make things difficult. Having managed and owned rentals in Austin for 20+ years, I’ve had many more “fence encounters” the past three months alone than most Austinites will encounter in 2 decades. What have I learned? … there are some very weird Austin kooks out there when it comes to dealing with fence issues.

Scenario #1 – Petulant ManBoy Brat and his Parents, Fiancee and Great Dane
I own a duplex in South Austin. I use to own the duplex next door as well. I purchased both in 1999 and sold one in 2003, keeping the other. There had never been a fence between the two duplexes, though there had always been fences along the surrounding lot lines in back and the outer sides. I’ve never rented to tenants with pets at the duplex, so I never needed or wanted a fence for each individual yard.

At some point, the new owner next door, without my knowledge or permission, installed a chain-link fence connecting the front corners of the two duplexes, thus creating a large combined “shared” fenced yard in back encompassing the back yard of my Unit B and their Unit A. Apparently, the tenant (daughter of the owner) asked my tenant at the time if it would be ok for them to have a dog. My tenant, as I’m told by the neighbor, said it would be ok. I never knew of this. Besides, the tenant wasn’t the proper person to ask as they don’t own the property.

Recently my new tenant reported to me ongoing problems with the neighbor, now the owner’s son, and dogs roaming the back yard, crapping in it, and making the yard a health hazard for her small kids because of all the dung.

At this point, and perhaps I expect too much of people, one would think:

A) Good pet owners don’t let their dogs run loose and crap in their neighbor’s yard.

B) it should take no more than a simple request to keep someone else’s dogs off my property.

That’s not how it went.

Upon talking in person with the ManBoy/tenant, a petulant college punk with no common sense, he took the brazen position of “if you don’t want my dog crapping in your yard, pay me to build a fence”.

Reason and logic failed to persuade the young man, so I gave him my business card and asked him to have the property owner, his father, call me. I never received a call. I eventually mailed a Certified Demand Letter to the owner address listed in the County Tax Records stating, in short, “keep your dog off my property and pick up your dog feces”. No response, the letter was never signed for. I explained to my tenant the steps I had taken and told her to let me know if the problems continue.

Next, another email letter from my tenant:

Neighbors Dog Poop Picked up from My Property

“So sorry to be a bother again.  I try so hard not to complain .  The dogs next door, or more correctly the neighbors next door, are just too much.  They are back to two dogs and double the poop.  I’ve included a pic of the amount I’ve picked up in the last three weeks just from our side of the yard.

I guess I’m thinking that if you have the contact info for their land owner and if you felt comfortable with me contacting him, I would like to ask him to take care of the yard problem. I think it is worth a shot, especially considering my kids have to play in this backyard that is just covered in poop.

If you don’t think this is the right approach let me know what you think might work. I thought that leaving a mountain of poop by their back door step would give them the hint but they simply don’t seem to care”.

(Landlord/Tenant Legal Sidebar: The above represents notice from my tenant that a condition exists on my property that constitutes, as Texas Property Code terms it, “a threat to the health and safety of an ordinary person”. The average person may read it as a polite request from a frustrated tenant, but experienced landlords will see the red flags and understand that there are legal ramifications if I don’t take immediate steps to address the problem, regardless of who caused it.)

Having attempted to resolve this through conversation with the ManBoy/tenant, and finding him to be a recalcitrant moron unwilling to even admit that his dog’s poop doesn’t belong on my property, and having received no response from the letter sent to the owner, I felt there was no reason to attempt further dialog.

I sent my fence guy to my property the next day and had him simply remove the portion of fence on my side of the property line. This eliminated the existence of the enclosed yard and meant that the dog-owner neighbor would no longer be able to let the dogs out, lest they leave the yard and run off. It’s illegal to chain dogs outside in Austin, so a dog owner has the obligation to provide a fenced yard for the dog, or only let it outside while being walked on a leash.

I also called the City of Austin Health Department, which resulted in a visit the same day and a citation for accumulated dog feces. I even received a call from the health official updating me. He said “yeah, it was a significant amount of accumulation … and lots of flies”. Tell me about it. ManBoy thinks it’s all cool though. I’m the jerk.

Removal of the fence from my side, along with the health violation notice, got the attention of the neighbor/tenant. Starting the same day, I received separate phone calls from his Father, his Fiancee, the ManBoy/tenant himself, and finally his Mother. The content of all these conversations was essentially about their dismay at how unreasonable and rude I am and how a “good” neighbor would have simply offered to pay half for a new fence to divide the yards.

These conversations were truly bizarre, to any normal person. I mean, bizzare might not even be a strong enough word. Here’s an example:

Me: What I want is simple; keep your dogs off my property and pick up your poop. How you accomplish that is up to you and doesn’t involve me.
ManBoy: The dogs aren’t even mine, they’re my Fiancees’.
Me: Then tell your Fiancee to keep her dogs off my property and to pick up the poop.
ManBoy: She’s 6 month’s pregnant and doesn’t want to be out in the heat picking up Poop.
Me: Then do it for her.
ManBoy: But they’re not my dogs. I don’t see why you won’t just pay me half the cost to build a new fence. That would solve everything.

The above is just an example snippet of the mindset I was dealing with. Astoundingly stupid, self-absorbed people. Would I have been willing to pay half under different circumstances? Maybe. But I never could, and still can’t, get past the fact that I’d have to be willing to do business with people who think like this and can’t understand much less accept the concepts of responsibility, accountability and responsible pet ownership. Paying for half a fence isn’t going to cure that core problem. It would be no different than giving an alcoholic more booze in exchange for a promise to not act drunk anymore. Sharing the cost, in this particular case, is not something I would consider a good and wise investment, and it was an easy conclusion to arrive at.

The saga resulted, nevertheless, in me agreeing to come look yesterday at where ManBoy staked out his new fence line. He wanted me to “approve” it. A simple glance instantly revealed a crooked (diagonal) line splitting the fence line about 1/3 my side and 2/3 his side, between the units. Clearly off-center and improperly placed. Even a kindergartner could make a straighter line down the middle of two buildings.

“That’s obviously not the middle” I said, thinking silently that the stupidity of this kid knows no bounds. “These side lot lines are 5 foot setbacks, you need to measure it properly and put the fence in the middle”. He wanted instead to attach the fence to the remaining part of the existing fence on his side, which still extended a couple of feet across my lot line. I said “no, build it in the proper location, you can’t have part of my yard inside your fence line”.

I asked him if he smelled the strong stench while we were standing there. Literally, it smells like a pig farm. Not just slightly, but a strong putrid odor of dog shit. The kind of smell that causes a normal person to wince and wave her hand in front of her nose while saying “peeww”. These are Great Dane turds remember, many dozens of them peppering the yard in the hot 100 degree sun. Baking there every day in the hot grass, attracting flies.

Not responding to the smell question, he again started in on how rude it is of me to not pay for half the fence. I calmly listened as this escalated into a full blown verbal assault as I simply kept saying “no, it’s your dog, your fence”. He progressed to shouting, complete with expletives telling me “F… You. Build your own damn fence”. I thanked him for his input, told him I heard what he was saying and that we just don’t agree, and I left.

He followed that encounter up with the following emails:

ManBoy: You are a terrible person. Your mother should be ashamed of herself. I was trying to be a peaceful person this morning but your rudeness has no end, I regret my outburst. But seriously Mr. Crossland, you are a very terrible person. Either build your own fence or pay me both labor and half for the materials to do it. We are out.

My Reply: Thanks for your helpful note. I think you’re making the wrong move here. Since you’ve left the ball in my court, and seem unwilling to take responsibility for your situation, I will be taking the appropriate next steps legally.

I’m sorry you’re not able to see the absurdness of your position and how your failure to be a responsible pet owner and good neighbor has created this entire scenario. I won’t try to convince you further but will instead allow that to happen through the legal system and through City of Austin Code Enforcement.

ManBoy: You shouldnt try to be convincing us to build the fence on our own, it splits our property so we should be splitting the costs. Just split the cost for the materials and ill put up the damn fence. I guarantee you would be saving a lot more money splitting the cost than dealing with lawyers. Be a good neighbor and stop being an asshole.

My Reply: Thanks again for another kind and helpful note. My previous email stands. I’ll allow the authorities to educate and inform you regarding your obligations and responsibilities as a pet owner in the city of Austin.

I next heard from the Mother of the ManBoy, who called to apologize on behalf of her son. He’s under a lot of stress with school work, his job, a pregnant fiancee, and now having this fence issue “thrust” upon him “out of nowhere”, by me.

Incredible. Mom thinks her precious boy does no wrong and, like her son, thinks the only problem is me. If I would simply act right and agree to pay for the fence, all of this strife could be avoided. She was just as incapable as the boy of understanding the basic facts of the case and why I removed the fence from my side of the property. To the Mom, I was just an unreasonable person causing undo stress on her poor, sweet boy, which caused him to lose his composure and curse at me and send nasty emails.

I had previously heard from the Fiancee as well.  She wanted to lodge a complaint that my tenant’s small boys (2 and 4) were allowed to play naked in the back yard. This, she explained, was illegal and prevented her from being able to grill in her back yard with friends, because of the offensive sight of naked little boys frolicking in the grass (the grass from which my tenant had picked up the Fiancee’s dog’s pile of turds pictured above).

This was helpful for me to know. That a 6-month pregnant fiancee of ManBoy feels deprived of her right to relax with friends in her stench-filled back yard – surrounded by dozens, if not 100′s, of human-sized festering dog turds and swarms of flies – and grill up some tasty burgers. I guess I can see how the sight of the young naked boys could completely ruin the carefully established ambiance that the poop, flies and odor provide to the outdoor burger grilling experience. Frankly, I’m suprised a pregnat woman could be exposed to that back yard odor without vomiting.

In case you’re wondering, the conversation with the father was no less absent of reason than the conversations with ManBoy, Mom and the Fiancee. I’m still wondering if I might hear from the Grandparents next.

As it stands, these dog-owner neighbors are either going to start acting like responsible Austin pet owners or I’ll just keep sending City Code Enforcement to the property each week to write citations. If the fence is built improperly or substandard, code enforcement will be sent. If it’s not where it’s suppose to be, it will have to be moved. The dog poop must be picked up and not allowed to accumulate or attract flies. Unfortunately, with some people, anything less than a firm, unbending stance, including involvement of City of Austin Health Department is required. When reason fails, forced compliance becomes the only effective tool.

Scenario #2 – Neighbor Doesn’t like Instant, Free Repair to Fence

On another fence episode this past summer, high winds blew down the fence at a rental home I manage. Tenant reported it to me. I immediately sent my guy to replace two snapped posts and put the fence back up and make sure it’s stable. On small repairs like this, I just get the job done and don’t drag my feet trying to find the neighbor and have discussions. This was less than a $100 repair, not worth the logistics of asking for a shared expense.

The adjoining neighbor called to complain that the the new wood posts and the one new top stringer added doesn’t match the old wood and looks ugly. (her side has the exposed posts and framing). There was no thanks for simply handling it quickly at our own expense. No offer to share the cost. Just complaining. I told her my efforts were complete and that I’m sorry she is unhappy with how it looks, but that new treated lumber looks like that and it will eventually fade and blend in. She said she was going to get a bid to “make it look right”, but I never heard back and it ended there.

Scenario #3 – Petulant Home Owner Angry We Won’t Split Cost on Unneeded New Fence

Finally, last month, owner adjacent to another rental property calls and wants me to split the cost of replacing a 6 year old fence. It was supposedly “falling apart”. I sent my guy, he evaluated the fence, tightened up a couple of spots and replaced one broken picket. He reported back to me “the fence is in really good shape, is stable and isn’t even close to needing replacement”.

I informed the neighboring owner of this and explained that we won’t be doing anything further, that the fence is in good shape and performing as expected.

He responded with an email with photos showing his side of the fence. The photo reveals dog damage on his side from the dogs knawing and scratching and jumping on the fence. In fact, the broken picket we replaced was broken from the other side by the dog, as indicated by the manner, height and direction from which the slat was split.

The photos also reveal that his mal-adjusted sprinklers were soaking the fence, as evidenced by the arc-shaped degraded and faded areas where the water sprays directly on the fence. His side does visibly look worse than ours, but it’s because of his dogs and his sprinkler. I explained that to him and advised that he should keep his dogs away from and off the fence and adjust the sprinklers to prevent further deterioration of his side of the fence.

His email response:

“I have all the evidence I need to provide efficient information to ensure you take responsibility for your property. I don’t need or asked for your opinion, just fix what is clearly your responsibility and in a timely manner. I will take whatever action is necessary to ensure it happens.

Now you say that it’s my fault. I don’t think making excuses or coming up with theories of the dog and sprinklers being the cause. I’ve been willing to work with you but now I will make sure you fix your own problems.”

I didn’t respond. I did notify my client (the owner of that property) that if he hears from a concerned neighbor regarding my unwillingness to spend my owner’s money to replace a perfectly good fence, just refer him back to me and I’ll handle it. The owner was perplexed as well, having occupied the home not long ago and knowing the fence is in really good shape.

Conclusion

For those lucky enough to rarely encounter unreasonable people and situations like these, count yourself lucky. Those of us in Real Estate and Property Management in Austin have interface with hundreds of strangers every year under all sorts of scenarios. We have to learn to set boundaries with others and make decisions about things. Learn when to stand ground and when to give in. When to be flexible and reasonable and when to go hard core straight by the rules and law with no give at all.

Fences create these scenarios more than any other issue. Trees are right up there also, when they are on property lines and/or have branches hanging over, but fences have much less of an easy outcome than trees, and there are clear laws controlling trees whereas fences are, unless in volation of code, mostly a neighbor-to-neighbor issue.

If you’re a home owner with a fence, you have to have the proper mindset and expectations, depending on which side of the equation (or yard) you’re operating from. Splitting things 50/50 is what happens in an ideal world, but we don’t live in an ideal world. Fences are highly subjective with regard to appearance and condition. One neighbor’s “needs replacing” might be another’s “looks great and has plenty of useful life remaining”. Fences are subject to dogs abusing them, digging under them, kids throwing balls against them, climbing and breaking them, trees falling on them, blowing down in high wind, water damage from sprinklers, posts snapping off, boards curling, nails popping, and just plain aging and falling apart.

If you want a new fence real bad and your neighbor doesn’t, then you buy yourself a new fence and move on.

The burden of cost  falls primarily on the person with the greatest need or motivation. No neighbor can force another neighbor to pay anything whatsoever. The law isn’t set up that way. This truly is one of those “reasonable people will work it out” things in life. If you build a new fence at your own expense, then think you can bill the neighbor half the cost and sue in Small Claims Court if they refuse to pay, you will lose. Your neighbor’s obligation to participate financially in your new fence simply does not exist.

In the ManBoy scenario above,  had the owner approached me at the beginning, prior to obtaining a dog, and said:

“We’re thinking about getting a dog. Obviously we can’t have it running loose in your back yard and crapping in your grass, so we’re going to build a fence before we get the dog so we can provide it with its own private yard. Are you interested in participating in the design and cost of the fence? If not, we’ll take care of it on our own since it’s us who wants a dog and we know you never rent to tenants with dogs, but we just wanted to see if you’re interested anyway”.

Under that scenario, the neighbor would have found me to be an extremely reasonable and willing neighbor, ready to work out a fair deal. I love making win/win deals. I like to make improvements to my properties. I would have shared in the cost. I was never given that opportunity though, to come to a reasonable agreement with reasonable people. Thus, plan B ensued.

If you want to build a fence, give your neighbor a chance to help, but don’t act bitter or offended if they don’t. Life isn’t fair. I explain that to my kids constantly. Life doesn’t owe you fairness. Take responsibility for what you want and don’t expect others to act in your best interest. In the end, what comes around goes around. If I want to build a new fence at a property I own and my neighbor doesn’t want (or maybe can’t afford) to help, it’s ok. Not a problem. My expectation is already that I’ll pay the entire cost if I really want the fence. Something good will come my way in some other way in life, and it all balances out in the end.

One of the toughest things to balance as an Austin Realtor is finding the right frequency and methods for staying in touch with our past clients. On the one hand, we have the National Association of Realtor (NAR) surveys of buyers and sellers showing that over 90% of real estate consumers never hear from their Realtor again after closing.

Wow! This, in an industry where repeat business and referrals are extremely important to succeeding, is amazing. Clearly most Realtors drop the ball on “after the sale” follow up.

At the other extreme are those Realtors who follow up too much. Consider the quote from this Inman article titled “Is your real estate client a friend?“:

“There are salespeople out there who have inserted themselves into my life with constant contact, and I don’t seem to be able to get rid of them. They put themselves into my online conversations and follow me everywhere. Once we get onto their mailing list we can never get off”.

As my teenage daughters would say, “Eww, creepy”. I know what the author means. I’ve met mortgage and insurance people at industry events such as “lunch and learns”, we exchange cards, and next thing you know I’m receiving regular automated email newsletters and junk mail, getting followed on Twitter and Friend Requested on Facebook and LinkedIn.

None of those “connections” makes me more likely to become a customer or referral source. And in these instances, I’m not even a client or past client.  That said, I do receive follow-ups and “just touching base” calls and annual birthday and/or holiday communications from various vendors, and I do value those follow-ups. But the weekly email newsletters from the mortgage gal I met just once at a Realtor lunch? Not valuable or useful in an way.

Sylvia and I don’t generally seek out clients online and try to “Friend” them or otherwise get connected. Many “Social Networking for Realtors” workshop classes encourage this as a lead building strategy and as a way to stay in touch and “connected”. No thanks. Feels too creepy. They should title those classes “how to be super annoying and bother people”.

The exception is for the clients who actually do become real off-line friends as a result of the real estate transaction, or for those who initiate the connection with us themselves.

So, for an Austin Realtor, what is the right mix and balance of staying in touch with past clients without bugging them or becoming a creepy Social Networking Stalker?

It depends. Let’s start with examining the reason for followup and why it’s important.

Remaining Top of Mind
This really is the one and only reason. People forget. Even highly satisfied past clients will forget who their Realtor was 5 or 10 years later when they need help again. Not all, but many. Even if they don’t completely forget, why should they reward with repeat business a real estate agent who has completely ignored them after the sale?

So, some sort of follow-up and “staying in touch” is absolutely required. It would be stupid not to. Therefore, we must.

By reminding past clients that we’re still around, still in business and still ready and able to help if needed, we make it easy for people to remember us and possibly use us again or refer friends or family.

I just spent the past month entering all mine and Sylvia’s past clients into a new contact database. The database allows us to track referrals and repeat business. I’ve always had a vague sense that about half our business comes from the internet, and the other half is repeat and/or referral business. But the new contact management system let’s me see the exact stats.

From above, we can see that referrals are an extremely important source of new business for Crossland Real Estate. Each of these broad categories has sub-categories that I haven’t split out in our tracking yet. For example, most referrals are from past clients, but many are from other Realtors and non-client friends/family.

The “Internet” category includes internet searchers as well as long-time blog readers (who I suppose were initially web searchers). In the 1990s, when we were brand new, Direct Mail would have been the largest category, along with “Cold Calling”. As Realtors mature in the business and remain long-term, the percentage of Referral business should always be growing.

If Sylvia and I had completely ignored and never followed up with any past client, the graph above would look completely different and so would our productivity. The Referrals would be far less. Referrals are the most valuable type of new lead, as they usually come having already decided to do business with us.

So, how have we managed to create a solid referral base? Well, it’s not because we’re smart or have any secrets. Nor have we utilized technology or a brilliant follow-up plan with automated emails or “drip” campaigns. Mainly, Sylvia just tries to have some regular, genuine “touches” with past clients. Those “touches” (as we term any form of contact with a past client) are generally non-intrusive “hellos” or notes, gifts, birthday cards or other form of contact that serves as a friendly reminder that we’re still here and still thinking of you.

What we don’t do is what is considered to be most effective. That’s the phone call pretending to just say hi but with an eventual “who do you know that needs help buying or selling a home in the next 90 days” pitch. We’ve been to those seminars. That stuff actually works, believe it or not. And for the hard core, numbers-driven Realtor trying to rapidly increase production, it’s the most effective thing to do, whether it bugs people or not. You have to be on the phone talking to people and asking for leads every day.

But there is something about that direct approach that never felt right for us. We tried the scripts (pre-fab things to say on the phone) at one point but quickly stopped, as it felt phony and forced. Unnatural for us. For those who can pull it off without feeling like a pest, more power to you. You’ll probably sell more homes than us if you do it consistently.

We prefer the “soft touch” method over the direct and blatant asking for leads. It’s a tough balance, especially when business slows down as it has this year. If we had a real estate coach, she’d be hammering us to “get on the phones and start calling your database and asking for referrals”.

But, in the end, we have to like what we’re doing. Every Realtor has to find his or her way of staying in touch and asking for referrals whether it’s direct and to the point or passive and more subtle.

Last year I made (saved) $120 by spending 3 minutes on the telephone. All I did was call Sheraton Hotel in Seattle and say “I’d like to convert my reservation to the internet rate“. A couple of minutes later it was done. No fuss about it. I then paid $30 less per night during our 4 night stay, saving me $120 plus whatever the taxes would have been on the extra $120, so probably more like $150. That paid for all of mine and Sylvia’s dining out.

Why didn’t I make the original reservation with the internet rate? Because the “internet rate” is non-refundable and is charged to the credit card immediately. The “normal” reservation is refundable and you don’t pay until you stay. A lot can happen in the two or three months between a hotel reservation and an arrival, so paying in full months in advance, and having it be non-refundable, just isn’t the best way to manage your travel expenses. The smart-money thing to do is make a fully refundable hotel reservation and convert it just prior to your arrival, thereby receiving the benefits of a refundable reservation at the discounted non-refundable price.

I use this example because so much of our modern money management efforts require knowing stuff and doing something extra as a result of what you know. Prices that seem “cheaper” are often not, especially in the airline and hotel industry when you factor in the risk value of up front non-refundable charges. And they gloss over that small detail that when you make the reservation (and/or you don’t read the fine print). You have to know about it, or learn about it the unfortunate way, when life circumstances force the cancellation of a trip.

I bring up this topic because so many real estate consumers get bogged down in the infinitesimally small cost factors of buying and owning a home, as if the homes we live in are the only source of expenses and savings in life. And, as American consumers, we often remain blissfully unaware of the multitude of simple things that can be done daily to, as Clark Howard puts it, save more, spend less, and avoid being ripped off.

So, let’s say you’re a buyer of a new home and you’ve negotiated the seller down to the steel-cage-death-match bottom-dollar price you wanted. You’re happy. Then on the repair negotiations, you held tough and obtained even more concessions. And you’re happier still. You’re getting a great rate on your mortgage too. You feel like you’ve done well and “saved” a lot.

Yet the typical American home buyer will follow up the purchase of a home with some of the worst purchase decisions they’ll ever make. It starts with a trip to the furniture store where you’ll pay way too much for some very poorly built furniture. And worse, buy it on a payment plan.

Next, a large flat screen TV for the new Media room. I mean, now there are 4 places to watch TV in the home, right? That great new TV deserves the deluxe package on the Cable or Satellite TV service, so you upgrade upon moving. Next, since those purchases feel so good, that 8 year old car starts looking inadequate, especially compared to what you see your new neighbors driving, and suddenly the garage is just begging for something newer, and within a few months you have a new car also.

If you’ve purchased at least one home, you probably remember the emotions that motivate this spending. It’s insidious and powerful. And frugal people are not as immune to it as they might believe themselves to be.

And thus, as all economists will attest, home purchases in America produce a massive amount of secondary retail activity following the home purchase. All manner of household goods and products are on the menu, as you’ll soon be reminded of daily via the massive amount of junk mail showing up in your new mailbox as a result of you being flagged “recent buyer” in all the junk mail lists that advertisers can purchase. This is all very good for our economy but bad for your personal financial situation.

And, getting to my main point, it’s interesting for me to observe the way in which a $500 difference between a buyer and seller can (and sometimes does) kill a deal, yet both buyer and seller, as typical Americans, waste vastly much more than that in their everyday purchase habits and decisions. The average American Consumer might not have had the opportunity to waste all this post-home-purchase money on wasteful consumer spending had they not been able to get past the insult of that final counter-offer from the seller. The final counter-offer that closed a much, much smaller gap in the negotiation than the post-purchase spending ended up being. And an amount which, as part of the purchase price, would represent an investment of $500 in an appreciating asset rather than a depreciating consumer product.

There is something interesting and odd that happens to the value of a dollar in the context of getting to final agreement in a real estate transaction. As the distance between final agreement becomes smaller and closer, the meaning and value of a dollar magically grows by enormous proportions for both parties. The dollars somehow become more precious. Whereas the buyer and seller may have negotiated in $1,000-$5,000 chunks during the initial 1 or 2 offer/counter phases of purchase negotiation, once the gap gets below $1,000, each side often seems to treat the next $500 they’d need to concede to seal the deal as if it was a first-born child.

This is really weird. But experienced Austin Realtors will back me up on this and say “oh yeah, been there, done that .., many times”.

What’s the solution? I haven’t really figured that out, other than to set expectations with clients and set the context within which a client can still feel good about being flexible about that final amount. More on that below. It’s as if all negotiation up to and leading to a final $500-$5,000 gap is pragmatic and sensible, and all negotiation seeking to close a $500 gap is purely emotional, and subject to feelings of insult. Spending $1,500 on an unneeded 4th Flat Screen TV feels good after the purchase, but giving up the last $1,500 in negotiating a final purchase price that would allow the deal to happen, for many, feels bad.

If I could tell buyers and sellers how they should feel and why, I could overcome more of these negotiation gaps. But I can’t tell someone how to feel, and I can’t tell someone that, in proper context, $500 is a virtually meaningless amount of money. Though I guess I’m trying to do that in this blog article, it doesn’t work during negotiations.

I’d need a Therapist or Psychologist to explain this increased importance we, as humans, place on the next last dollar, and I recognize that I myself am subject to it as well, even though I intellectually understand and recognize when it’s happening to me.

Remember when we still rented videos at Blockbuster instead of using Netflix? Remember way back when Blockbuster charged late fees? I do. And I remember wondering why and how a $1 late fee could infuriate and insult me to the degree that it did. One dollar doesn’t mean anything to me, really, until I’m told I owe it as a penalty. Then it’s like a knife going through me. I don’t like it. I want to fight. I, sir, will not stand for such an insult! The dollar becomes emotional, even though it’s only a dollar.

I think buyers and sellers feel a similar emotion when asked to give up the last $500 or so that would close the deal and make it work. Because it’s such a small amount, it means more. Really it does. On a $300,000 purchase, does the $500 really matter? Not in a strictly financial sense, as part of long-term building wealth toward an ultimate financial freedom amount, over a lifetime. But to that part of our brain controlling that part of our emotion, at that moment, it does. And for many, it’s hard to get past that and still feel good about the deal. And for many buyers and sellers, feeling good about the deal is as important as the dollars involved, often more so.

So, whether you’re a buyer or seller, the best way to protect yourself from this deal-killing emotional impediment is to always agree to meet at a point a bit better than you’re ultimately willing to go. For sellers, that means making that “final” counter-offer one that leaves you a little bit of undisclosed wiggle-room, or at least accepting that this may be what it required. Same for buyers. And for both buyers and sellers, leaving still a bit more wiggle room, mentally, for the repair negotiations that follow the contract negotiations will allow you to still “feel good” about where you ultimately end up. As a seller, if your honest-to-god bottom dollar price is $300,000, make the “final” counter $303K or $305K, and be willing to not feel insulted if the buyer comes back at $302K and you accept. And then if the buyer comes back asking for another $1,000 in repairs later, you’ve already provided yourself with the financial buffer needed to still “feel good” and stay above the $300K you wanted. And if the buyer had the same undisclosed ceiling, you both successfully allowed yourselves enough wiggle room to do the deal and still feel good about it.

I’ll close by asking a rhetorical question I like to use in stalled negotiations. Who is dumber, the Seller who let a good buyer walk away over a $1,000 difference in price, or the buyer who walked away from a good house over a $1,000 difference in price? The answer is “neither”. They both simply acted like normal buyers and sellers and the deal just wasn’t meant to be. That’s too bad, because if both had approached with a different mindset, it could have worked and both could have felt good about it.

Dear AT&T,

Thank you for the nice letter you sent me after I terminated my business phone service with you and switched to Ring Central. I had no idea I was such a coveted customer. You did such a good job of fooling me into thinking I wasn’t important through your nearly 20 years of abuse and poor customer service. Wow, you really did love me though. I guess the joke’s on me, you stinker!

The outside front of the envelope containing your love letter to me has printed in large-font blue lettering “We miss you already“. Awe, shucks. Really? I’m blushing. Immediately below that is something that you had heretofore not shared with me, “How about Broadband and Unlimited Nationwide Calling, now starting at $60/month*? Plus, a one-on-one business consultation. Details inside”.

Wow, if I knew you had such a great offer that you weren’t telling me about, I would have left sooner! As soon as my goosebumps settled, I opened the letter to be greeted with more love. “We want you back”. I especially like how, after almost 20 years as a loyal customer, I’m affectionately known to you as “Dear Business Customer”.

But the overwhelming amount of goodness is ladled on even thicker in the rest of the letter.

You invite me to “Come back today and get it All for Less. Now starting at $60 a month”, and you say that I can “have everything you need and nothing I don’t”. Fancy words. Very enticing.

But here’s the thing, AT&T. You truly do suck, and you always have.

Remember when I moved my business line from Travis Heights to a new location in South Austin in 1996, and you screwed up the order and caused a “this line has been disconnected or is no longer in service” message to be played to my business callers for three days before you fixed it? Remember that?

Remember in 1997 when I moved again and the same thing happened? By the time I moved in 1999, I got smart and set up a new line in my new location first, with a brand new phone number before moving. Then, after telling me my old business number would port to the new office location on Manchaca Rd, you told me it wouldn’t. That was fun. I had to move it to a neighbor’s house and manually forward it to my new business number as a workaround.

In fact, I don’t think I’ve ever had a trouble free move with AT&T. Remember in 2007 when I moved to a new house I built in Granada Oaks 3 blocks from my old house, and when the number was switched you discovered you had not yet run the fibreoptic from Hyw 290 to the new Granada Oaks neighborhood? Guess someone just forgot about that when you took my move order. And remember how, once again, my business callers heard “this line has been disconnected or is no longer in service”?

And remember how I had to file a formal complaint with the Texas Public Utility Commission to get a higher-up at AT&T to call me and then suddenly, that day, you were able to hard-forward my business phone number to my cell phone temporarily after you had previously emphatically insisted that it wasn’t possible?

And remember how, at my new location in Westlake, I’ve had pooor line quality since day one? My lines crackle when it rains and sometimes even when it doesn’t rain. You sent a guy out and charged me over $500 for him to troubleshoot the problem only to tell me it’s my fault, my lines, and it would cost $180/hr to keep troubleshooting? I’ve suffered for a year with those crackling phone lines and and determined myself that they crackle at the outside connection by simply plugging a phone into the demark, meaning the problem is on your side. But since you’re so difficult and expensive to deal with, and I don’t trust you to not rip me off, I never had you back out to try to fix it. Most of the time I just had calls manually forwarded to mine and Sylvia’s voicemail system from where calls could be routed to our cell phones instead of the landline. Also, as you know, you’ve been overcharging me for this lousy service just because I wouldn’t sign a contract and be locked in to your service.

A New Dawn Breaks

Well, with my new Ring Central service, if I move again, I simply take my phones and plug them into my internet connection and it’s done. I can my move my new Polycom phones to any internet connection anywhere and plug them in and they’ll work, just like that. Amazing.

Also, I now have TWO business lines, so Sylvia and I don’t have to take turns making business calls from a land line, or use our cell phones. And, oh, the line quality is beautiful. It’s the cleanest, quietest sound quality I’ve ever had. It took some getting use to, hearing absolute silence on a phone line, but that’s what my Ring Central phones sound like when noone is talking.

And guess what else? I have free long distance and super cheap (pennies per minute) international calling. Remember back in 2006 when you charged me a total of over $400 for those calls I made to a client in Germany because - stupid me – I apparently hadn’t subscribed to your “International Plan” and didn’t realize that you would charge over $5 per minute for those calls. $5 per minute. You’ve got some nerve AT&T. Well, I don’t have to worry about that sort of thing anymore.

Oh, and this is really cool, with my new Ring Central system, it allows me to have calls ring my cell and desk phone simultaneously, so I don’t have to remember to forward lines when I’m in the field, I can just answer from whichever phone I’m at. Ain’t that cool, AT&T?

And if I want to return a call from my cell phone without giving away my personal cell phone number, I just use the RingCentral iPhone App to dial out and talk. The person I’m calling sees my business phone number 512-327-3900 as the caller ID. When Sylvia travels to Europe next month with a friend, she’ll be able to use her Ring Central App to make Voip calls for free back to the U.S. whenever she has a WiFi connection.

Meanwhile, we’ll need to do lots of Googling and reading before she goes to Europe to learn exactly what settings are required to be turned off on her iPhone to avoid another one of your super high surprise bills. You really make your customers work hard to avoid your predatory billing practices.

Oh yeah, my last regular business line phone bill from you, AT&T, was a total of $162.92, for ONE crappy, noisy business line. This included 17 different line item fees and charges, plus $46 in long distance charges.

My Ring Central invoice, for TWO lines of service and a bunch of amazing bells and whistles is $92.72 total, with no long distance charges because it’s included. The bill is just a single page, simple to read.

And, unlike your AT&T customer support system that suckers callers into 7 minutes of button pushing and holding only to be finally told at :02 after closing time to call back during business hours, RingCentral has 24/7 customer support and people who know something about the service on the other end. I can call at midnight if I need something. But other than getting set up the first week, I haven’t needed their support because everything just works.

So, even though I know you still love me AT&T, and you really, really want me back and would even be so generous as to rip me off for less than you have been, I have to say I’m not coming back. No way. It ain’t gonna happen, ever, in my lifetime. I’ve never felt so free since escaping your horrible tentacles with my business line. Now, you do still have me as a home customer, and of course we have the iPhones, but that will eventually change as well. The home phone will for sure, later this month.

Some Free Advice

Maybe you should start showing some love and good customer service to your existing customers instead of your departed ones. I won’t be coming back. I never loved you. I only remained in the abusive relationship with you because I felt trapped. But no longer. Adios AT&T.  And don’t bother sending me anymore pathetic letters.

From my inbox recently a familiar news update: “California-based 58Phases, an online affiliate marketing company, said it is moving its headquarters to Austin to take advantage of the lower cost of business here.” Article can be read on Statesman.com. “We’re doing interviews from California by Skype and hoping to hire as quickly as possible,” said Dylan Ramsey , 58Phases co-founder and CEO.”

California just keeps making it harder to do business there, for all types of businesses, which continues to drive new and existing businesses to Texas and Austin. There is a new Carl’s Junior burger joint down the street from me. I remember these growing up in San Diego but I had never seen one in Texas. When I read the writeup about Carl Juniors’ expansion into Texas, it had similar quotes about Texas’ business friendly environment.

“We’re going to do a lot of restaurant development in Texas over the next 10 years,” Puzder (CEO) said. “We’re considering maybe moving some of the headquarters — or all of the headquarters — here if we have a good business reason to do so, because the tax structure is certainly right, and the business-friendly environment is right.” …

“It’s much easier to build restaurants in Texas,” Puzder said. “There’s a lengthy list of regulations that you have to comply with in California that make doing business virtually impossible. If you’re going to grow, you want to grow someplace like Texas“.

And it seems there are news stories like this with quotes like this almost weekly in Austin. And this, during a bad economy. Wait until things turn around nationally.

That said, is the City of Austin itself becoming more like California than it is Texas? Is the City of Austin starting to overburden business owners with petty regulation and red tape? Absolutely. So, Cedar Park, Leander, Round Rock, Kyle and other surrounding cities in the greater Austin Metro area may come to see Austin as as good a source of new business as Texas now sees California.

What are some examples of Austin’s over-regulation and attempted over-regulation?

Rental Registration – Last year, the Austin Board of Realtors and Austin Apartment Association succeeded in getting the City of Austin to table the terrible idea of forcing mandatory rental registration of all rental property owners, along with registration fees to fund the new staff that would be needed to administer such a program. This would have been a complete over-reaction to problems caused by a very small minority of landlords.

Short Term Rental Registration – This one is on it’s way to happening. Short Term Rentals are a thriving business in Austin and help to augment the accommodation options of visitors to our city. A small minority of vocal complainers from a few neighborhoods are leveraging every resource they can to accomplish very restrictive regulation. I don’t think the city will actually ban these,  but the small and vocal group against STRs are very active in the neighborhood associations that support a majority of council members.

Plumbers and Trees - Live in an older home and need a new sewer line? One of my plumbers told me that a standard $2,500 job to replace a collapsed sewer line turned into a $10,000 ordeal for the home owner because of Austin’s rules disallowing cutting through tree roots. The new line had to be routed in a large circuitous route around trees to avoid cutting roots, which caused the new line to not have proper fall, which casued the city tap to have to be lowered, which caused the driveway to get busted up by a big tractor. Plumber says he’s been cutting through roots for over 30 years and has never killed a tree and this nonsense is about enough to make him want to retire. Ask any veteran plumber what it’s like to do business in Austin compared to surround communities and you’ll hear an earful.

ECAD Ordinance – The Energy Conservation and Disclosure ordinance went into effect June 2009 in Austin. At present, this ordinance is just an additional minor nuisance to the sales process and a roughly $200-$300 expense to the seller. It hasn’t fouled up any of our deals but I’ve heard other agents tell stories of problems it caused. Having it in place represents the City of Austin’s intrusion into the real estate sales process. for homes 10+ years old. There are those who would like to make the recommended repairs and upgrades suggested by the energy audit report mandatory at the point of sale. That was the original intent of the backers of the ordinance and there’s no reason to think they’ve given up. I agree with the intent of the ordinance, but fear that Austin will eventually try to further insert itself into real estate sales transactions.

Be careful Austin. Don’t become the “California of Texas”. There is a tipping point to all of this regulation.

Today I attended a property tour for my listing in Great Hills. There were 11 homes on the tour, including our listing. The other agents on the tour were the listing agents for the other 10 houses. This gives us a chance to see each other’s listings and to offer feedback on pricing, staging, etc.

This particular tour was a van tour. There are two types of Realtor tours – caravan or van.

Caravan Tour
On a caravan tour, agents travel in a caravan either alone or carpooling. This limits interaction and always results in the caravan getting stretched out with the faster ones getting way ahead and the slower ones getting way behind. So, the last few listings end up having the agents straggle in at staggered times and then that listing agent has to lock up and in turn becomes the final straggler on the next home. This is a bummer, but that’s how it goes. It’s also a huge waste of gas to have 11 agents travelling in 7 cars.

Van Tour
On the van tour, we all ride together, talking on the drive in between homes, and there is more interaction and discussion about the houses and the market. This is better in every way except one. When riding in the van I lose track of where I am because I’m not driving or paying attention to where we’re going. This affects my ability to offer an accurate pricing opinion on the feedback sheet. It’s not easy to say how much I think a house is worth if I’m disoriented and fuzzy about the neighborhood I’m in.

Imagine being blindfolded, driven to a property and let out in the front driveway. You walk inside, look around and then have to write down a price opinion. That’s what it’s like. Yes, I know I’m in Millwood, but which side of 183? Which schools does this one attend? Wait, are we down the street from that park? Can you hear the railroad tracks from here?

This disorientation doesn’t happen when I drive myself into a neighborhood and up to a house with buyers. When I’m driving, I have a clear sense of where I am. I’m taking notice of the street and the other homes as I approach the subject property. Now I see why buyers sometimes get turned around and confused about where certain homes were that we saw, because they are riding instead of driving.

So, are property tours even worth the time and effort and is the opinion I wrote down on the 10 feedback sheets today worth anything to the listing agent and the seller? Are the 10 feedback sheets I received for my listing helpful? Yes, here’s why.

More Sets of Eyes
We offer feedback on more than just price. Often, a listing agent (and sellers) just don’t notice things that a fresh set of eyes picks up. Make it 10 sets of eyes and you get some instant feedback about the awful accent color on that dining room wall that the listing agent and seller thought was ok. When a listing agent can tell a seller “9 out of 10 agents today said we need to repaint that wall and tone it down – it’s distracting”, that’s valuable and useful feedback.

Sometimes the agent already knew this and has already told the seller, but hearing it from a “group” of Realtors finally drives the point home and the seller agrees to call the painter.

Pricing Reality Check
On a lot of pricing feedback I simply have to write “seems high but I’m not an expert in the neighborhood”. I don’t want to dog the other agent if I’m not sure (though some agents are hoping for as many “price drop” recommendations as possible because  the seller is being stubborn and the too-high price).

But offering a legitimate pricing opinion is hard sometimes on these van tours. I’m looking at one house, for which I just stepped out of a 15 passenger van on the driveway and I wasn’t really paying attention to how the neighborhood looked as we drove in because I was talking with the other agents. Yes, I have a general sense based on the part of town, type of home, price per square foot, but do I really know if $225K is too high? Not really. I’d need to run a CMA. Maybe in my main stomping grounds of South/SW/Central Austin I do, but less so up in Millwood and Northwest Hills.

Now, if I walked into the same home in Millwood west of Hwy 183 as the 8th one I’m showing to buyer on 10 a home outing in a that same area, I walk into it with a context of the other similar homes we’ve been looking at that day because they were all in a more narrow price range, size and geographic location. I can in fact stand there and say “this one is priced too high. It needs to be in the low $200s instead of $240K. And I can be confident of that because I’m viewing that home relative to its direct competition.

Today’s tour ranged in prices from $184,999 to $429,990 and was stretched across vastly disparate areas of Northwest Austin and a wide range of ages and sizes of homes. It’s harder to zero in on a pricing opinion when viewing a mismatched batch of homes from different neighborhoods. No buyer would have had the set of homes I saw today on a list of candidate homes, because it wasn’t a group of homes that would result from a focused search in a narrow range of criteria. This makes these homes harder to judge.

Nevertheless, if 10 out of 10 say a price is too high, that agent should take note and discuss with the seller.

Shop Talk
Finally, other than being more efficient from a logistics standpoint, the other advantage of riding in a van with a bunch of listing agents is that we can trade notes and thoughts on the current market, how things are going with their listings, etc. What did I learn? Sylvia and I are in the same boat as a lot of other agents.  Some listings sell faster than we thought, at better prices than we expected, and others sit with no offers.

Frankly, a couple of the houses I saw today seemed like really good buys (including our own listing) but the agents say they are not getting any nibbles. If it’s price right and staged well, it’s hard to know what else to say to the agent for feedback other than being patient or trying a price drop. Austin is indeed a frustrating and schizophrenic market in many ways.

If someone would have told me 3 months ago that we would list one in Avery Ranch at top value and sell it in 3 days with multiple offers, I would have said “fat chance, not in Avery Ranch”, but it happened. If someone would have told me that we’ll list a home in Round Rock in Vista Ridge and go under contract in 1 week, I would have been just as skeptical. There are a LOT of homes for sale in Round Rock. Conversely, our listing in Great Hills is a fantastic home in great shape and priced well for that area, but we’ve had no offers yet. That surprises and frustrates me. It’s a tough market to read right now.

The Takeaway: The Property Tour process is helpful as it adds just a bit more context, additional opinions and sets of eyes to help us decide whether to hold tight or make a change with our listings. If you have a home listed for sale right now, ask your agent about getting it on a property tour. We so do with all of our listings because we value the feedback.

I recently read the autobiography Keith Richard’s Life. In it, Keith Richards, of Rolling Stones fame of course, talks about becoming a songwriter and how it changed his perspective on life. It caused him to more closely observe people and how they behave. To more closely listen to comments and phrases people use, always keeping an ear tuned for that next catchy song line. Explaining how the songwriter part of him is always active and aware, “never turning off. Unconsciously constantly running.”

I totally understand. It’s like that for me as a real estate person. Not that I’m literally “always thinking about” real estate, but I easily connect real estate concepts and the behaviors I observe in people to things outside real estate. It happens automatically, whether I want it to or not. When I go into a house I’ve never been in, such as a friend’s house, I notice things about the house automatically. Not that I judge good or bad, I just notice. If I was quized later about ceiling height, flooring, layout, updates, etc., I’d probably be able to recall whereas a normal nRealtor wouldn’t pay attention to those details.

I also take note quite often of how people make choices and decisions. This can happen in line at Amy’s Ice Cream, in the parking lot at Barton Creek Mall (it’s curious the effort people go through to get a closer spot, or “better location”), or even eating out and observing the phenomenon of how often “I’ll have the same thing” is selected. Decision-making just interests me, which is why I like working with and helping home buyers so much.

Thursday night last week I escorted my youngest daughter and her friends to see the midnight showing of Harry Potter and the Deathly Hollows Part II. We arrived about 8:45PM, waited in a line for a while, then we were let into the theater at 10:30PM, an hour and a half before showtime.

As we were about middle in line, the best seats were already taken, but there were plenty of good ones remaining in the top section, though they were filling fast. Our group of kids stalled at the bottom entrance as they scanned the remaining supply of seats. I said bluntly “Don’t think, just go”. and one of the boys said “good idea” and they immediately hauled it up to the third row from the top where they claimed 5 seats in a row, relegating me to sit a row below on an end seat (most likely to the delight of my 15 year old daughter, who would have preferred an even greater distance I’m sure). This actually proved to be an excellent vantage point from which to observe the slow stream of remaining viewers enter the theater and look for seats.

Latecomers to theater seating exhibit almost the same behavioral attributes of buyers in a sellers market, where there are no easy pickings. Here’s what I observed.

Theatergoers arrived at the bottom left of the seating section and quickly looked up to the right to scan the available “inventory” of seating. Several different behaviors were repeated.

The Doddlers
I’m not a professional lip reader, but “Oh no!” and “Oh sh*t!” are pretty easy. Groups ranging mainly from 2 to 6 kids would arrive, see that there were no easy pickings, then stand, frozen, not moving while they processed the options. Those options were to head up to investigate whether some of the empty seats were truly available (as some in fact were), perhaps split the group into two smaller groups, or head down to the dreaded front section, just below the screen, which is generally considered “too close” (bad location). As these indecisive doddlers stood contemplating, others arrived, made quicker decisions, and eliminated what would have been the best available choices had the doddlers not doddled. Eventually they made a move, but an uncertain one, and the delay cost them by reducing the available choices.

This is just like buyers in a tight Austin real estate market, or the somewhat overpriced market we currently have. They arrive in Austin, are surprised to find the pickings not as easy as they were expecting, and often fall into a trance of inaction, not wanting to settle for lesser pickings, but observing that it’s not getting better while they wait. Eventually they make a decision, but waiting has not necessarily benefited them as others more ready to decide select the best homes available.

The Investigators
These kids also expressed “oh, no!” upon glancing up at the seating, which deceptively had some open spots, most of which were already “saved” though. Unlike the doddlers, they take immediate action, moving tentatively toward the unavailable seating just to make sure. Asking politely “are those taken?” as they move up the rows. Some got lucky, but only the first groups. After confirming that all the rows of 3-5 empty seats are “Pending” (being saved), they reluctantly move down to the available seating in the less desirable section near the screen. Some made this assessment and moved on quickly, others remained in denial a bit longer, paying an opportunity cost for delay as the lower sections continued to fill with the next group of arrivals.

This behavior is just like the buyer who wants a nice, charming cottage in central Austin with a remodeled kitchen and bath for $200K. We tell them it doesn’t exist, but they need to see for themselves and check it out a bit. See firsthand. They email listing after listing. “What about this one?”. We’ll go see it tomorrow. It’s a dump, you don’t want it, trust me. Eventually they accept reality, make search criteria adjustments, and expand the search.

The Decisive Opportunists
Another type of theatergoer would arrive, look up at the mostly full seating, look down at the less full lower seating, and immediately, without delay, head toward the best remaining lower seats and take them. Not much time was spent thinking about this. Literally, just seconds. Maybe some of those empties up higher might actually be available, but they don’t care, they want a quick, sure thing and to be done with it. Usually there was a leader commanding the others to follow. “Let’s go .. come on!”

There are buyers like this. They size things up rather quickly, scan the adequate choices and make a decision. Oddly, as I’ve written in past blog articles, including this one back in 2007, these are often the happiest buyers. Much less stressed. Perhaps slightly disappointed there wasn’t more to pick from, but unwilling to torture themselves agonizing over improbable long shot efforts. They go for the low hanging fruit and seem satisfied to a higher degree than those who search endlessly for the “perfect” find.

The Researchers
Finally, there was one young couple, about 15 years old each, dressed in costume. The girl, dressed like Hermione was trailed by a young Harry. She arrived at the same location as the others, looked up and started scanning seats. They only needed two together. Using a combination of eye contact and hand motions/pointing, she located a lone empty seat and started straight toward it, with Harry right behind. This was about three rows below me. “This one is available?”, she confirmed. I was surprised. I thought at that point everything was full. Then glancing down about 8 seats to her left, she located another lone seat. She walked straight to it, Harry in tow.

Alas, it was taken. But I knew what she was trying to do. Had the second been open, she would have orchestrated an 8-person shift to the right and created a 2-seat spot for her and young Harry. She gave one last glance at the other options, then immediately marched across the rest of the row, down the other side to the very front of the theater, and again scanned the entire theater top to bottom, ending up identifying what was probably one of the last remaining sets of two seats on the edge of the second row from the front, and securing them immediately. That young girl is going to be a leader some day, if not already.

There are buyers like this too. They don’t settle for first and easiest, but they don’t waste a lot of time sizing things up either. They methodically explore all options quickly, then make a decision. Most commonly, these are the investors we use to help back in the 2005-2007 boomlet we had in Austin. Fly in on a Thursday night, look on Friday, make an offer Friday night or Saturday morning, wrap things up by Sat night then fly out Sunday. Occasionally, an owner-occupant on a 1-trip purchase visit will do the same, but these buyer-types were usually investors unencumbered by emotion.

The funnest thing for me though, in killing an hour and a half watching teenagers and young adults demonstrate their assessment and decision-making skills in a “market” of an ever shrinking ‘supply” of seats, was witnessing how hard it was for some, and how easy it was for others, to size things up, accept reality, and make a decision.

This is exactly what we see in adults buying houses. Some really, really, honestly have a very difficult time making a decision. Others are very quick and sure. Most are somewhere in between. In this way, the young Harry Potter fans are not much different than adult home buyers. All eventually learn, you can’t always get what you want, but if you try, sometimes, you get what you need.

One Last Thing

Finally, at the end of the night, at 3:30AM as my younger daughter and I pulled up to the house, my older daughter and about 6 of her friends were sitting out on the driveway still talking. They had attended a different theater. On the ride home, my younger daughter had explained to me why this Harry Potter movie “wasn’t one of the best. It was ok, but not that great”.

She recounted scene after scene that departed too much from the book, in her opinion, or was left out. It wasn’t the right two guys (Crab abd Goyle) in the scene with the fire. The scene with Griphook the Goblin didn’t explain enough. The final showdown with Voldemort was all wrong, and anti-climactic. She liked the movie despite all that, but, as she explained to me in great detail, it had a lot of room for improvement.

We greeted my other daughter and her friends on the driveway. “What did you think?” I asked. She said, “it was the best movie of them all. My favorite”. All her friends agreed.

Had they seen the same movie as my other kid?

The next day we drove to Padre Island for a short weekend vacation at the beach and, along the way, the two girls debated in the back seat whether Harry Potter and the Deathly Hallows Part II was a good movie or not. Finally, the older daughter nailed the younger with the following truth:

“The reason you don’t like it is because you let yourself be annoyed and upset by small things that don’t matter and aren’t important to the big picture. All the important stuff was perfect, line for line just like the book. Snape’s memories were perfect. Your just choosing to focus on little things because you don’t want to like the movie”.

Whoa! This is exactly like a lot of buyers. “I don’t like the color of the garage door”. “The front porch seems small”. “I don’t like brick”. Even homes in the perfect location, the right price and with a good, decent floorplan are not good enough because the minor items are not up to snuff and are allowed to become important factors.

This fault-finding plagues a lot of buyers, the jumping out to them of small imperfections while the overall greatness of the things that are most important – location, price and layout – go unrecognized because of the “noise” of minor and curable imperfections. It’s a human condition, really. Not everyone has it, but a lot of home buyers do. It makes it really hard to fall in love with a house, because all homes are imperfect in some way. Even brand new homes.

I’ll leave it at that.

Earlier this week someone I’ve never met, Paul B from Round Rock, blessed Crossland Real Estate with a disparaging 1-Star review on Yelp. It reads:

Unprofessional and unpleasant demeanor.  General lack of realistic market knowledge and trends.  Probably better suited as a property manager, but lacks the proper people skills to be effective as either a listing or selling agent.  Argumentative and combative.

Definitely would NOT recommend, especially as a listing or selling agent

It’s hard to describe how jarring this was to read at first. Hit me smack in the face. I haven’t felt a jolt like that since the final scene in Boogie Nights. Crossland Real Estate has escaped all such “bad reviews” online until now, though I knew the day would come. After the initial shock and dismay, it settled in that Crossland Real Estate now had a 1-star rating on Yelp, which in turn displays next to certain search results. Not good. Not the sort of visual indicator that motivates a prospective new client to click through to our website from a search results page. For a moment I leaned back in my chair and stared at the ceiling and thought, “it was so much less complicated in 1993″.

To add insult to injury, Yelp has “filtered” the two legitimate 5-star reviews and the 4-star review written by actual past clients of ours because the reviews are deemed “suspicious”. Yelp considers those reviews “suspicious” because they are the only Yelp reviews written by those reviewers. I actually talked to a Yelp rep about this last year and he said that the automatic “filtering” system hides solo 4 and 5-star reviews to prevent abuse. That makes sense, but these are actual client reviews, not bogus made up reviews. Yet, since Paul B from Round Rock has written 12 reviews, he’s considered a valid Yelp reviewer, even though, as I reported to Yelp, he’s never been a client of ours and we know not who he is or why he wrote what he wrote.

So, determined not to let a 1-star review from Paul B of Round Rock stand as the only visible Crossland Real Estate review on Yelp, I decided I needed to somehow dilute Paul B’s opinion with some rebuttal reviews more reflective of the truth. But this needed to be done without running afoul of Yelp’s rules. Here’s what I did.

After reading through Yelp’s rules, I found that asking for reviews, while frowned upon, is not expressly prohibited. Here is what Yelp says in its FAQ section:

Q: Should I ask customers to write reviews for my business?
A: Probably not. It’s a slippery slope between the customer who is so delighted by her experience that she takes it upon herself to write a glowing review and the customer who is “encouraged” to write a favorable review in exchange for a special discount.  

OK, then. I get it. And I’m willing to get on that “slippery slope”. But knowing that it’s not forbidden to ask for a review as long as it’s not in exchange for special discounts or other considerations, who should I ask? We have a notebook full of paper Client Surveys that we mail out to clients after closings, which they return to us in a pre-addressed stamped envelope. That’s real old school but we’ve never stopped doing it. Just received another one back yesterday, all “10s” with some very nice comments. On each survey is a Yes or No section which asks “Can we use you as a reference?” and “Will you write a recommendation letter for us?”. Everyone always answers “yes” to these.

So, I could ask those past clients, but what good would it do if their reviews are just going to be “filtered” and hidden. What I needed was some reviews from past clients who are also established Yelpers.

Digging around further on the Yelp website, I found a “find friends” section which allows the import of contacts from Google Contacts, Outlook, Yahoo, Hotmail, etc. This is the same way you find “friends” on Facebook or Linkedin when you first sign up. I entered my Gmail credentials since all my contacts are in Google Contacts. The process produced a page loaded with hundreds of contacts who also have Yelp accounts. Next to each contact name were small icons indicating how many “friends” each contact has on Yelp, and how many reviews each contact has written. Bingo. That’s the data I needed.

Now I knew which of my current and past clients, colleagues and contacts are established Yelp reviewers. These are the people who can write a review that Yelp will presumably deem legitimate. These are the people who can help me . These are the Yelp users who can help me dilute and disempower the unflattering words and 1-star ranking of Paul B. of Round Rock.

Next was the decision of what to say in a personal “review request” email to each selected contact. I agree with Yelp that this needs to be done carefully and with integrity. Therefore, the message was short and factual.

“Would you be willing to write a Yelp review for Crossland Real Estate, based on your knowledge of our business practices, your experience and interactions with us?”

And then the factual reason for the request.

“Someone we don’t even know and have never worked with wrote a disparaging Yelp review about Crossland Real Estate, so now we have a ”1 star” rating. Meanwhile, Yelp hides/filters the 3 positive reviews we have because those reviews were the first and only Yelp reviews written by those clients. This is frustrating and has prompted me to become more proactive and start requesting reviews from current and past clients, colleagues and peers who have written at least 1 previous Yelp review, as you have.”

For any of you thinking of using a similar process to ask for and build reviews, I think it’s important not to request a specific star rating. I would never ask someone “can you give me a 5-star Review?”. That’s way too car-salesman-like. I don’t want just 5-star reviews, I want honest, helpful feedback, whatever the “star” rating. It’s also important, I believe, to not even directly encourage a positive review, or to say anything sleazy like “if you don’t feel you can provide us 5-stars, please call to discuss”. Ever bought a new car and received that blatantly shameless plea for “all 5s?”. Disgusting. Don’t do that. If I ask someone for an opinion, it’s for better or worse, and the chips ought to fall where they may.

I think, over time, those of us who provide services that are valued by our clients will achieve a natural balance of “mostly great” 4 or 5 star ratings that hopefully help review readers gain insight into what to expect should they use our services. No company or service provider is perfect, and I am frankly skeptical of the companies I see on Yelp, especially restaurants, plumbers or other services of a highly subjective nature, with gobs of 5-star reviews. That doesn’t seem natural to me and I don’t believe those reviews. I suspect it’s a result of an effective campaign of some kind instead of naturally occurring. And if you read some of the writings, some seem almost “professional” in nature, too well written in fact. Though I’d love to be so well thought of, it’s not my expectation to achieve “all 5s” year after year and I would never expect that outcome.

That said, as I wrote personal emails all morning and early afternoon that day, sending them one at a time and personalizing each one to some degree or another, the result was a slow trickle of 5-star ratings starting to appear. By the next morning, 6 in total yielded from 12 emails sent to a combination of past clients and industry peers.

One current client wrote back “That bad review kind of irks me.  I have posted one in your defense. Thank you, it is my pleasure to help any way I can.” Others were similar.

Finally, I wrote the “public response” to Paul B’s contribution to the Crossland Real Estate Yelp page. Yelp allows a “public response” in answer to negative reviews. I kept this clean, cordial and fact-based, but also used it as an opportunity to throw in some plugs for our accomplishments and industry experience.

As a result, instead of one lonesome 1-star review on Yelp, we now have, as of this writing, six 5-star reviews, among which Paul B’s 1-star review seems rather silly, ridiculous and impotent. In fact, I hope he leaves it there. It creates a brilliant contrast and, as I said before, makes the reviews in whole seem more “real” than a slate of all 5-stars would be.

What’s the saying, “if life gives you lemons, make lemonade?” That’s how we as business owners need to approach the online world of reviews. Paul Bs 1-star review of Crossland Real Estate on Yelp isn’t a bad thing. It turns out to be the catalyst that sparked a real serious motivation for me to start thinking of ways to proactively address this internet rating/review phenomenon. Without that 1-star review, it may have remained on my back burner. So he actually did me a favor because Crossland Real Estate now has a more impressive online reputation than it would have had the 1-star never been written.

There is more work to do. Aggregating the various reviews we do already have in places other than Yelp and making those reviews easier to find and read for prospective clients is next on my list. Unless there are WordPress plugins or other tools to accomplish this, which I haven’t researched yet, I’m probably going to have to create a “Reviews” page with snippet quotes and links to the full content on the various repositories. This would be the next generation of our “Testimonials” page.

Also, figuring out a way to invite reviews without causing an uncomfortable sense of obligation for those being asked might be tricky. The 1-star review provided a concrete reason with urgency attached. That made for a nice context for a direct “call to action” request for a review. That’s not the case going forward. So, like anything else I want in life, I simply ask with no expectations, and make sure people know where we can be reviewed.

So here goes: if you are a past client, regular blog reader, have knowledge of Steve, Sylvia and Crossland Real Estate, have something you want others to know, and feel so inclined, we can be reviewed at any of the following repositories:

Sylvia’s Linkedin Account - 10 reviews already (must have Linkedin account).

Steve’s Linkedin Account - 3 reviews already.

Crossland Real Estate Facebook Reviews - 5 reviews already (must have Facebook account).

Crossland Real Estate Google Places page – 2 reviews already (must have Google account).

Crossland Real Estate on Yelp - 7 Reviews + 3 hidden. (must be Yelp Community member and have posted prior reviews)

Crossland Real Estate on CitySearch - 0 Reviews thus far. Can use Facebook login.

Crossland Real Estate on Yahoo Local – 0 Reviews thus far. Can use Facebook or Google login.

CrosslandTeam.com Testimonials Page - 47 Reviews (can’t be created online, just for reading if you’re interested. Havent updated in two years, which is next on my list as well)

I’ve been working with buyers recently looking in Central Austin neighborhoods. A recurring scenario always develops. Buyers are in love with neighborhoods such as Allandale, Travis Heights, Zilker, Barton Hills, Hyde Park, East Austin, etc., but cannot find an acceptable home to purchase in the Central Austin areas they love.

A couple of months ago we did get lucky and find a newer home in an older Allandale area and my buyers got exactly what they wanted at the price they wanted. More recently though, after exhausting all available inventory in Allandale, a different set of buyers finally gave up. We eventually found a great house in a Northwest Austin “family subdivision” of cookie-cutter homes that is now awaiting closing. The buyers are, however, very, very happy with the home they are buying, having decided against being hard core Central-Dwellers.

This is a common outcome for buyers who start off in love with Central Austin. Many end up in a newer subdivision further out because the just can’t handle the Central Austin housing stock.

This morning, I received a call from an agent about a lease listing I have in East Austin. “Will the owners consider selling instead of renting?” she wanted to know. “Let me guess”, I responded. “Your buyer wants East Austin but you’ve shown all the available inventory and it’s all either over priced or too ratty, or you keep losing out to multiple offers”.  Bingo.

The buyer, I was told, has lost out on multiple instances of multiple offers, losing the last one even after bidding $14K over list price. Ouch. Been there, done that with buyers myself. Very frustrating. Welcome to the Central Austin home buying experience.

So, the Austin everyone falls in love with – the non-cookie-cutter central areas with charming homes on tree lined streets close to everything, walking distance to the funky little coffee shop and the hip new restaurant and 6-12 minutes from work – contains these older Austin homes that are actually not suitable for the majority of buyers who fall in love with the neighborhoods in which they are located. That’s the reality of it.

It’s sort of like being enamored by the aura and ambiance that cool, funky hippy chick you met at the party last Saturday night. The conversation was great and you had the time of your life! You think about her constantly for three days and you’re certain it’s real love. Then over lunch in the light of day three days later you realize she has some deal breaker “issues” going on that you’d really rather avoid dealing with.

Central Austin is that cool hippy chick and you’re just some poor dude with good credit who wears Dockers, works in a cube and wants desperately to be anything other than a bland, normal person. You want to be a cool Austinite, or that cool couple living in Central Austin, near a park where your dog can run. But when you and/or your wife get inside that charming Craftsman in Hyde Park and get your first look at that grungy small bathroom, you immediately feel repulsed and rule out that house. Could you really be expected to get by in a 5×8 master bath with a commode, standard tub and a one pedestal lavatory sink? “Who can wake up to that every day?” you might wonder.

And this continues until frustration and deflation cause a rethinking of either your price range, home size/condition and/or location. Suddenly, Circle C, with big soaking tubs and separate showers, separate commode closet, double vanity sinks and huge master closets seems much closer to downtown than before, especially when you walk into a $350K home in Circle C and compare it to what you get for $350K two blocks from the cool coffee shop.

So how does one actually find a suitable home in Central Austin? You have to either lower your standards or raise your price. One word: Compromise.

From my experience, something has to give. You have to compromise on something. First on the list would be decor and finish-out, or the visual appeal of the inside of the home.

Be Less Picky
For Sylvia and I, location trumped everything when we super-downsized a year ago from our nice big 3,300 sqft custom home on 1 acre in Oak Hill to our cramped little 1800 sqft 1970′s tract house in Eanes ISD. For us, being walking distance to Westlake High School and the local shops, and a short easy drive (or bus ride) to Zilker and Downtown overcomes everything else. This is the best location for school-aged families in Austin, in my opinion. The house is livable, but I’ve helped many buyers who would walk in to our very home if it was for sale and say “no thanks, needs too much updating, too small, no 2nd living room, etc”.

So, we’ve given up on space and the quality finish-outs we’ve become accustomed to the past decade-plus, and we are happy with the decision. We are going to update and upgrade eventually, but we’re durable old Austinites who know how to rough it in a fixer-upper for a year or two. We lived in Travis Heights for 5 years in the early 1990s without A/C, we both had frugal upbringings, so living in a 1970s track home with popcorn ceilings, old bathrooms and thick wall texturing is not a big deal for us.

By default, we are less picky than 90% of the buyers we work with. Because of that, we got a great deal on a house the seller previously had been unable to sell.

If you can become less picky, you open up a lot more options.

But some buyers just can’t get there. They just can’t do it. If you’re that buyer, then your candidate pool of Central Austin homes just shrank big time. By well over 70%. You have very few suitable properties to consider, unless you can swing my second suggestion and raise your price range.

Raise your Price Range
For some buyers, raising the price range $50K to $100K will do the trick. Going from $350K to $450K opens up a lot of options. Oddly, many buyers have already raised their price range in a round-about way, but are not aware they have done so. I’ll show an older house with dated kitchen, baths and decor, and watch and listen as the buyers walk through and muse about how they would need to redo the kitchen, baths, etc. and I’ll mentally be adding up those costs and say “you just rattled off about $50K in updates and upgrades to the home”. And they’ll say, “oh, it will cost that much?”. Yep, it will. And if you’re willing to spend that much on a fixer-upper, why not raise your price rage and find something already fixed up?

For example, on a 1,500 sqft home Central Austin 3 bedroom, 2 bath home, let’s run through some rough numbers:

New engineered wood flooring throughout, with tile in the wet areas = $8 per sqft = $12,000
New kitchen cabinets and countertops, another $12,000-$18,000.
Update master and Hall baths, $3,000 + $6,000 = $9,000.
Scrape all popcorn ceilings = $1.50 per sqft = $2,250
Custom two-tone paint throughout, walls, trim and doors = $2.50 per sqft = $3,750
Misc Repair and updates to fixtures, ceiling fans, etc = $2,000
Mechanical updates if needed to HVAC, Electrical, Plumbing = $5,000 +/-

So, on a typical walk-through of a home that cosmetically is sound but “needs everything” with regard to updating, you can easily get to $40k to $50K before you even start talking about  moving walls and making structural changes such as opening up kitchens, adding arched openings to closed in formal dining rooms, etc. And if you’re going to do all that – and do it right – you might as well replace all the trim and doors and do the exterior and landscaping as well.

In a blink of an eye, you’re at $80K to $100K in improvements before even factoring in the costs/value of lifestyle disruption and possible displacement from the home during the work. But you’ll end up with an awesome home.

That said, it would be easier for most to simply find the home that has already had all of this (properly) done and pay more for that home. Often, these are the homes that attract multiple offers though, because there are more buyers who are unwilling or unable to imagine or complete a remodel project to a home do to time constraints or they just don’t want to deal with it, than there are buyers willing to take on a rehab project. Thus when a nicely done remodel appears on the market in Central Austin, it receives a lot of attention if priced right.

Expand your Geographic Boundaries
There are a lot of really super nice people living in Circle C and Steiner Ranch. Many are old Austintes who grew up in South Austin, got real jobs, got married and have two or three kids. I assure you they are still very cool and young at heart. But they are living the parenting phase of life. Also, many transplants, so you get a good mix. They want good schools and more home for their money, and in Circle C or Steiner Ranch, you get a great house for about $120-$135 per sqft as opposed to $200-$300 per sqft in Central Austin. And your kids will have more kids to play with than in Central Austin. That’s not to say Zilker or Travis Heights isn’t a great place to raise kids, but it’s a statistical fact that families in Central Austin are a dwindling demographic.

Yes, some buyers  have their sensibilities offended by the production builder subdivision look and feel of these type of planned unit neighborhoods, but I can tell you a lot of our buyers end up there after getting Central Austin Fatigue. It’s not the cool “Austin Hippy Chick” neighborhood, but rather it’s the “Sensible Mom in the MiniVan” type neighborhood. We all find the right blend of wants and needs, cool versus bland, sensible versus exciting in our housing selection. For some, forcing themselves into a small central Austin home just doesn’t survive the reality check of two days of looking.

Don’t give up on the great Central Austin house until you have to, but many of you will in fact give up and move further out. For those who swing it, enjoy your cool Central Austin ‘hood!

Would I love a Travis Heights Cottage with wood floors and a giant oak tree in front? Sure, but it wouldn’t make sense at this stage in life. A 1970s home in Eanes does make sense because of the schools and the location. If Sylvia has her way, this is our last house. We’ll see.

Homes values in Austin are trending up overall. This graph shown below can be deceptive though, because market activity is highly localized within pockets and neighborhoods. Let’s have a look and I’ll discuss further below.

It’s impoortant to understand what a graph like this is and what it isn’t. It’s not an indicator of the value of your specific home. Many homes in Austin still won’t sell for the price they sold for in 2007. Many will sell for more now. It’s very dependent on activity and demand in your local area.

We recently listed a home in Avery Ranch at a farily agressive price and had multiple offers right out of the gate. That actually surprised me. Many other homes in Avery Ranch are just sitting though. We put our listing through a lot of prep and staging in preparation for the market, and the market responded. I see a lot of listings that may look similar on paper, but when you walk in, they fall flat on preparation and staging, often with dumb things left undone such as minor touchup paint and yard cleanup.

Meanwhile, one of our Central Austin  listings which is priced well (a 3/2 under $250K) in a great location off S. 1st  in the 78704 zipcode isn’t receiving the level of activity we’d expect at that price point in that location. It’s staged and well prepared as well (though it did have tenants occupying it at first). But we’re still waiting for the right buyer. This is frustrating. I know this house is a good deal but can’t explain why the market isn’t responding.

So, “prices in Austin are up” doesn’t apply to every home.

Nevertheless, the chart is meant to show the overall macro trend as indicated by the data in the entire Austin MLS for all homes sold. From that viewpoint, the Austin real estate market has surpassed the former peak of 2007 and looks to be experiencing increased values overall. Eventually, a rising tide floats all boats and that’s where I think we’re heading. I think Austin is on the leading edge of what may be a steady 4 to 7 year up cycle. Not a boom per se, but steady and reasonable value appreciation of 3% to 5% annually.

One of the indicators of this can be found in the new home market. Many builders are slowly increasing prices on floorplans. It’s very tentative, but, for example, in one neighborhood in which we sold a buyer a home in Lakeway, the on-site agent says they’ve already sold more homes this  year than in the previous two combined. And they just raised prices again and they are entering into the last third of available lots. There will be a shortage of “Grade A” lots soon, so builder are going to be hesitant to run out of inventory and will instead slow that by increasing prices. This will in turn affect resale values.

Let’s have a look at the month-by-month Austin home sales for the past 40 months.

The Market spiked in July last year because all of the lower priced sales close by June 30 (remember the $8,000 tax credit that caused a lot of buyers to pay $10K over value to get the $8K credit?), so July 10 saw a disproportionate number of higher price listings sold. Remember, this is the first summer in 4 years where we don’t have some sort of government meddling and interference in the market. So out look-back stats are still looking back at distorted data and the resulting market hangover that persisted through the remainder of 2010.

Not show in these charts is the decrease in the “Not Solds” (the number of Expired/Withdrawn listings versus sold listings each month) which, for June, dipped to about 32%. More on those stats in a later post.

On a side note, I’ve been in a blogging slump. I just haven’t felt like writing, but I’m trying to get my Mojo back. After 5 years of cranking out blog articles about Austin real estate and other various stuff, I sort of hit a wall this year. They use to just drip off my fingers without much effort, but it’s become difficult for me to sit down and start writing. I think June 2011 was the first month ever where I didn’t write anything at all. My plan is to try to start writing shorter articles and more of them, and see if I can get back in the groove. We’ll see how it goes.