I can only begin to tell you, or guess, the number of times that nice has helped navigate us or our clients out of a marginal situation and into good.  Real estate involves a lot of money and an equally impressive collection of emotions and nice goes a long way in working it out, in creating peace and results in a life-changing process.

Nice has fixed a few leaky faucets.  Nice has calmed an expectant mother and a demanding parent.  Nice has impacted an overwhelmed title assistant, helped Bank of America get a settlement statement on the last day of the month, smoothed complex negotiations on the eve of a major holiday.  Nice made the difference in a sellers trust and, ultimately, in our offer being accepted over another.  Nice moved us up on the engineer’s waiting list.  Nice helped obtain a plumbing estimate at 5 o’clock on a Friday.

Time and time again, nice made the difference.

For every time nice made the difference, impatience hurt the forward progress, rude did the client no justice, mean shut the process down, unprofessional created doubt, anger made for a generally unpleasant day, an outburst created damage control.

Our pledge to you:  to bring nice to the table everyday.  Sure, we can pull aggressive out of our bag of tools when we need it but our promise to you is that we will default to nice not only because it comes naturally but because it gets results.

Here’s the latest on extension of the homebuyer tax credit:  http://www.google.com/hostednews/ap/article/ALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPFFR01

Senate voted yesterday, House votes today … I think it will pass.  A few hightlights:

• not just for first-time buyers
• up to $6500 for current homeowners who have owned for 5 years
• up to $8k for first-timers
• primary residence up to $800k
• income limitations

Stay tuned.

• must be under contract by April 30 and close by June 30

I listened to Austin economist Jon Hockenyos (President, TXP) speak this week and he says we’re past the bottom but it will be slow going for a while. He said the bottom most likely hit summer 2009.

Mr. Hockenyos reiterated that Austin is a blue dot in a red sea and is where smart creative people want to be. We know that and it’s why Austin will continue on the path of doubling in population the next 20 years … that’s another article per what that will look like but it makes for a sound real estate outlook.

A few notable points from the economist:

• 80% of stimulus spending yet to come into the economy. 50% to hit in 2010.

• Austin technology has shifted from hard tech to soft tech … “It’s not about making things, it’s about adding value.”

• Confidence and capacity to spend are slowly recovering – expect about another year before balance has been restored. Recovery is U-shaped at best.

• TX economic stats are some of the healthiest in the country.

• Californian’s move to TX, New Yorkers move to NCA.

One observation this week is that the W hotel has re-secured financing to restart their build downtown. I find this particularly good news because available commercial financing is a strong economic indicator. In other words, if the construction downtown stops mid-build, that is bad; if it continues as planned, that is good (remember the “Intel Not Inside” banner downtown).

I am asked almost every day how Austin is doing and my typical response is that it’s better than you may think. Average home prices in Austin are only down about 4 ½% in Austin from last year (compared with the hard hit cities – Phoenix, Vegas, the west coast – down 20 and 30 and 40% in some cases … Vegas the 4-yr loser at 39%). The Austin market has pockets that are still adjusting (over $500k, 2-year supply of homes over $1M, trendy east Austin) and pockets that are rockin’ hot (south Austin, homes around $200k).

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and that’s just what they’ll do … check out this cool website that lets you rank the walk-ability of a particular address: http://www.walkscore.com/get-score.php?street=4701+Duval++st.+Austin%2CTX

Where are the deals in Austin real estate right now? Get your wallet … they’re in the higher price brackets.

This is a big generalization but under $225k in Austin is more or less a sellers market right now. Ask us about all our multiple offers the past few months or talk to any first-time buyer trying to buy that cool little casa in South Austin and they’ll tell you that they have to move fast on the good ones.

The deals are in the higher price brackets.

Examples:

Water – There are 46 homes for sale right now on Lake Austin. There are never this many properties for sale on Lake Austin and most have been on the market 6 months or more. This is prime 7-figure property and there are some deals out there on that beautiful cool water.

Westlake – There are currently 54 homes for sale between $1M – $2M in sought-after 8E. These are ½ – full acre lots, most over 4 or 5,000 sqft, Eanes ISD and they are pretty much selling at under $300 / sqft.

Downtown Condos – There are 166 condos for sale downtown in the MLS today. 53 of them are >$500k, 13 >$1M. Some of these properties have been on the market over a year.

Tax Appraisals – We have many stories of folks buying at $200k or $300k below the current tax appraised value.

Dripping Springs – The market is slow in Dripping, many homes on the market for 9+ months. Long days on market = opportunity.

If you are a serious buyer with financing or cash, we’ll scout out the best deals for you. Stay tuned to our blog for additional data & opportunity analysis.

Another reason why you need to seriously consider a rainwater collection system if you live in Travis or Hays County … per our sellers on Saddlehorn:

From what I’ve read, the Trinity recharges around .1 to 2 inches a year (it’s deep and thus slow to recharge).  That is the deepest well and only the new houses in Saddletree go down to that well.  It’s between 600-1000 feet down.  The Glen Rose is the one that is in dire straights and all the older houses in Saddletree pump out of that one.  The Glen Rose sits on top of the Trinity.

All projections state that the Trinity cannot keep up with current demand nor future growth.

http://www.blanco-texas.com/powslade.html

http://www.twdb.state.tx.us/publications/newsletters/waterfortexas/wftspring00/article4.htm

www.404Saddlehorn.com

(Due to popular demand, this is a re-post of an earlier blog.)

Gay or straight, doesn’t matter.  Two “non-married” persons purchasing a property together in Texas need to know a few things about owning that love shack (or investment shack).  Primarily, co-ownership does not necessarily convey the same rights as with a married couple.  Many of these rights should be specifically created at the time of purchase of the home or shortly thereafter with appropriate legal documents such as a will. 

This article is not intended to scare but it is scary how many non-married couples own property together without the appropriate legal documents in place to protect themselves in the case of death, disability or separation.  Lovely topic, we know.

Did you know that if you own property with your friend, steady, lover, partner, college roommate, whatever non-married person you like and he or she dies without the appropriate and challenge-proof legal documents in place, that you now, more or less, own half of that property with their heirs?  Oh joy.  You may love the family to pieces but do you want to be in a business relationship with them? 

What are your intentions if one person wants out?  One person needs to move out of state for a new job?  You break up?  Or there is a death or disability.  In the case of partners, is it the intention for the surviving person to keep the house, take over the full responsibility of the loan or does the deceased’s heirs now own half the house?

You could end up putting yourself in a position where you may have to refinance to buy out the other person’s family at today’s market value and mortgage conditions or be forced to sell the home if you do not qualify for the new loan? 

If you assume ownership of the property upon the death of the other co-owner, you may potentially have to address probate, inheritance challenges, inheritance taxes or risk the mortgage being called due.  We recommend legal counsel at the time of purchase or shortly thereafter to help you avoid these possibilities.

So a little advice when purchasing property:

• Talk.  Talk about wills and estates and what-ifs.  Call it a pre-nup if you wish, but have an understanding and, best, an actual agreement in writing.
• Ask your agent to put you both on the contract even if just one of you is on the note. It will help get the ball rolling in the right direction.  Some lenders will allow this, some will not.  Consult with your lender and Realtor to assess your best approach. 
• Ask your lender and title company about Joint Tenancy With Rights of Survivorship (JTWROS). Many lenders will not permit them, especially if just one of the partners is on the Note.   Sometimes you’ll have a choice, sometimes not but you should ask.  
• On tax benefits and who takes what, part or whole, talk to a good CPA for guidance.

We recommend working with Realtors, lenders, attorneys, tax advisors and title companies who are well-versed on working with non-traditional couples, non-married persons as this information is commonplace for them.  A professional who is not may not understand these nuances and may waive them off as not important.

Let’s take care of ourselves and our relationships.  Legally sound home ownership is sound business.

Disclaimer:  As licensed Realtors, financial advisors, mortgage brokers, we cannot give legal advice.  We encourage you to discuss the details of your situation with appropriately licensed attorneys, financial and tax advisors.

Protesting tax appraisals can be a strategic move for the majority of homeowners. If you are approaching your golden years and considering a reverse mortgage now or in the future, you may want to give it thoughtful consideration.

Homeowners age 62 and over may be eligible for a reverse mortgage. This mortgage product insured by the US Department of Housing and Urban Development allows homeowners to eliminate their mortgage payment. Reverse Mortgages allow homeowners to maintain favorable tax treatment, benefit from potential property appreciation while eliminating mortgage debt. No income or credit qualifications apply however; the amount you are eligible for is connected to the value of your home. It is a collateral based loan and if the homeowner has reduced the taxable value of their property at the time of application it can have an effect on the amount the owner can qualify for.

There are serious dollars at stake. President Barak Obama signed a new bill called the American Recovery and Reinvestment Act of 2009 which has increased the loan limit from $417,000 to $625,500. This increase allows many senior homeowners living in higher valued homes to receive more money with an FHA reverse mortgage than they had in the past. This change has a direct effect on many urban dwellers in Austin that have experienced appreciating values in recent years. Not to mention, the update may be temporary through 2009. The $625,500 limit will revert back to $417,000 at the end of 2009 unless Congress passes another bill to extend or increase the limit.

If you are in the process of applying for a reverse mortgage be careful about appealing your property taxes at the same time. As with all significant financial decisions, we recommend you do your research and talk with qualified professionals before signing on the dotted line.

- from one of our favorite mortgage voices, David Reed, CD Reed Mortgage Bankers, Austin

… not knowing condo rules can kill your deal….

 A few newsletters back I let you know about HUD’s decision to eliminate not only ’spot’ condo approvals but all previous HUD condo approvals.  The new ruling doesn’t apply to HUD approvals issued since October 1, 2008, but the ruling affects about 70,000 condominium associations across the country.

 If your buyer was using an FHA loan to buy a condo they’d better hurry.

 Not only that, but fewer and fewer lenders are issuing approvals on “non-warrantable” condos.  I know our company stopped approving non-warrantables some time ago.

 This affects both the listing agent as well as the selling agent.  Let me give you a few common “condo killers” you need to be on the lookout for.

 Owner occupancy levels

 Fannie Mae and Freddie Mac like to see at least a 51% owner occupancy status.  If the condos have 100 units, at least 51 of those must be occupied by their owners and not rented out.  If a condo has been foreclosed on and is bank-owned, the REO is considered owner-occupied.

 Lenders however can have their own occupancy requirements and they can vary depending upon their current appetite for condos.  A lender can require that any condo they approve has to have a 70% owner occupancy, for example.  Regardless of Fannie/Freddie rules.  A mortgage broker can do his own homework and find out that the condos indeed have an owner occupancy rate of 60%, submit that to a lender and get declined at the very end because the lender requires 70%.

 And with new disclosure rules in place, there’s little, if any, time to change lenders mid-stream.

 Litigation

 A deal-killer.  Any time there’s a lawsuit a lender will stop everything dead in its tracks.  What type of litigation is it?  Structural?  Something wrong with the building?  What if the HOA loses and the owners are hit with a huge, unexpected assessment to cover attorney fees?

 I’ve done a few deals in the past where I got a letter from an attorney explaining the nature of the lawsuit while also providing a copy of the HOAs insurance policy showing there was enough insurance to cover a loss but only in instances of very minor lawsuits, say a few thousand dollars.  Rarely do lenders accept this, and only if they’re assured the insurance company has agreed to pay the suit if they lost.

 Even if there’s no lawsuit filed but one that is “pending,” the lender will balk.

 If you’ve got a condo listing it’s good to keep a pulse on the HOA.  I’ve seen HOAs that are “lawsuit happy,” especially if there’s an attorney on the HOA Board.  If you’ve got an offer on your unit and there’s been a recent lawsuit filed there’s little chance of anyone getting a loan.

 Conversions

 If the condos have been converted from an apartment building within the previous three years the lender might want to know some more details such as how much conversion was done, were the apartments completely gutted from wall to wall and other construction details.

 Conversions are often found in university cities where someone buys an apartment building, converts it to condominiums then sells the individual units one by one.

 You can’t tell a conversion just by looking at it, the conversion will be noted in the HOA documents.

 For better or worse, condo lending guidelines have become more stringent.  In fact, some lenders aren’t making any condo loans at all.  If you’re listing a condo or searching for one for your clients, do your homework up front and avoid the egg-on-face scenario.

(we posted this last spring and are re-posting it for reference) 

• File your protest as late as possible then request an extension (the later in the year your hearing, the better the results).
• On protest form Step #3 – always check 1st 2 blocks (1 – Value is over market value and, 2 – Value is unequal compared with other properties).
• On protest form Step #4 facts: never put a value in there, instead put “request tax payer info package” (shows the 5 homes they are using as your comps).
• Study those 5 comps (your Realtor can help with this).
• They use only closed comps from Sept ‘08 – Feb ‘09 (nothing else counts).
• What neighborhood grid are they using?  Fight that your house is not typical for your grid.
• Take marginal photos of your home.
• The more you study, the better chance you have.
• You have your best chance with the informal hearing vs. going before the Board (not flexible).
• Travis protests must be filed by May 31st. 

Here is a helpful link:  http://www.window.state.tx.us/taxinfo/proptax/protests.html