Comfy Austin

Just returned from another excellent seminar offered by Austin attorney John Daves on advanced legal strategies landlords may use for addressing problem tenants that need to be evicted.

Handling evictions is a lot like childbirth.  If the delivery is uncomplicated, with a minimum level of know-how, a pregnant woman may well manage it by herself in an emergency.  On the other hand, the slightest complication can lead to very messy results.

With evictions the story is the same.  Tenant does not pay rent.  Landlord delivers a notice to vacate. Shortly after that the landlord goes to the justice precinct where the rental property is located and fills out a simple form and pays some money and shortly after that the tenant receives an invite to go to court for a hearing and may simply decide -- too much trouble --it is time to move on. Boom.  They disappear.  How simple is that?

On the other hand, there are lots of twists and turns to evictions and landlords are held to the highest level of accountability when it comes to their actions. Have a lease that says rent is due on the first, but the landlord has been routinely accepting payments that are two or three weeks late. Could be a problem.  How about a tenant who pretends to be interested in working out a settlement agreement prior to going to court, but is really just stalling.  Or a tenant who requests a jury trial, or continuances, files appeals, or pauper's affidavits, or claims retaliation.  Suddenly on every landlord's mind is how can I speed up the process or get this thing over with. 

Austin area property management companies are typically experienced at routine eviction procedures and know the right paperwork to present to the courts and the time lines for action.  Sometimes an attorney is needed particularly if possession bonds are involved, or specialized lien agreements are being considered, or there will be a jury trial.  Sometimes a simple consultation with an attorney can help chart a correct course for the problem.  Eviction is not always the answer.

Getting the right tenant in the property can avoid many problems. Having proper procedures in place for the collection of rent and handling delinquent rent or non-rent breach of contract is important.  Acting swiftly when a problem arises is crucial and having documentation of all your actions from the lease to rent receipts will help you should you need to pursue an eviction in Travis, Williamson, or Hays Counties.  It take work to make money as a landlord.  If you are considering buying Austin real estate for investment and would like to know what that entails, contact me.

There are currently 78 duplexes on the market in the Austin TX area that are priced below $180,000.  The average price is $133,000.  With prices like that it may be possible to buy a duplex and have the rent cover the mortgage.  Of course, there are other expenses associated with property rentals besides the mortgage such as leasing and property management expense, cleaning between rentals, changing the locks, ongoing repairs, and tenant evictions  Owners who choose to find and screen their own tenant oftentimes rely heavily on their own "instinct" in tenant selection and take a hit and miss approach toward the property tenant application analysis.  This can be a costly mistake that months later can cost the owner perhaps as much as $1500 in attorney fees for assistance in extracting a shrewd tenant from the property.  There are proven steps to avoid leasing to the wrong people. 

• Step 1:  Let all prospective tenants know that you require a written lease application, copy of driver's license, and their authorization to perform criminal, credit, and rental/income verification checks.  This will fend off the bulk of your deadbeats and time-wasters.
• Step 2:  Collect a detailed rental application from each applicant 18 years and older.  Make sure they sign it and the application is complete.
• Step 3:  Run the numbers based on their stated employment.  Can they truly afford the rent?  As a guideline, many landlords require the gross income be a minimum of 3 times the gross rent.
• Step 4:  Run the credit check. Don't rely on the score alone. Look in depth at the recent past. Is there credit headed up or getting shaky. Take at least 10 minutes to develop a clear picture of what you see from the report.  If the person has a bunch of charge offs at places like the cell phone company, the flower store, and a general history of not honoring their obligations, you are probably next in line to be injured by their bad luck or indifference to their financial obligations.
• Step 5:  Call the former landlords.  Go back beyond the current one if possible because the current one may give a more favorable review if they are trying to get them out of their unit.  Do an eviction check as well.
• Step 6:  Look at their driver's license.  Make sure you have positively identified the person you are handing the keys to and have not run a credit/background check on a stolen identity. 

Finally, engage them in conversation about how the unit fits their needs, ask what they like best about it.  If they tell you it's perfect because they have to have a place by the next day, consider this statement a yellow flag.  People in a hurry might be expecting to be evicted from their current place.  Be cautious and go through your detailed process of tenant evaluation.  Don't give them the keys until you are satisfied. 

The National Association of Hombuilders tracks the confidence levels of home builders in the housing market.  For the fourth straight month, the confidence level for the group's Housing Market Index reads 16.  So what does this mean in the context of the Austin-San Marcos metropolitan area.

First of all, a value of 50 or better indicates “favorable conditions” for home builders.  So if the reading is only a 16, it means that builders are not making plans to furiously expand their operations, however, it may signal they believe the market is stable.

As a market indicator, Housing Market Index has been tracked for more than twenty years and reports on a 1-100 scale. HMI hasn’t read higher than 50 since April 2006.

So what was happening here in 2006 in the Austin area?  Builders in 2006 produced 17,615 new homes for buyers.  Then in 2007, that figure dropped to 12,120.  Builders caught unprepared for this drop in activity folded or merged with stronger competitors. The home building industry began shedding jobs and consolidating. In 2008, there were only 7,710 homes built.  In 2009, builders produced 6,678 homes and finally in 2010 they produced 6069 homes.  Big slide there in activity, but notice how the numbers in 2009 and 2010 were close to the same. 

Homebuilder confidence in the market for newly-built, single family homes appears stable as the 2011 spring buying season gets underway in Cedar Park and surrounding communities.

For home buyers across Texas , this month’s Housing Market Index reading may foreshadow tougher negotiations in the months ahead with builders. Builders do not have a lot of spec homes they have to liquidate quickly. The likelihood of getting discounts and free upgrades may be diminished as builders see their respective sales levels grow, and as the economy expands.  Although it is not mandatory that a new home buyer be represented by an Austin Realtor when negotiating the purchase of a new home, common sense dictates that the buyer have his or her own real estate agent to help negotiate the best price and provide additional assistance with the selection of upgrades and construction oversight.

If your plans call for buying a newly-built home this year, think about moving up your time frame to take advantage of still low interest rates. Builder confidence appears to have bottomed. As it rises, so should home prices.

This past Saturday morning, I drove over to Lakeline Mall and was pleasantly surprised to find a Farmers Market in full swing on the south side of the parking lot near FM 620 in North Austin.  There was this one vendor selling different kinds of olive oil and the samples were very buttery.  The produce looked so fresh.   Shopping is not normally my favorite thing to do, especially when there are crowds, but one aspect of the crowded stores that I do like is that those in the know say that it signals that full-on rebound is likely underway with the U.S. economy.

Tuesday, the Census Bureau released its national January Retail Sales figures and, for the seventh straight month, the data looked good. The economy is scratching back after a prolonged recession.  Hopefully, people are buying with budgeted cash and not overdoing the credit card thing.

As the economy gathers steam, the days of 4 percent, 30-year fixed rate mortgages are over. Five percent is the new market benchmark. Unless the economy keeps showing strength. Then, that number may rise to six percent.  Somewhat higher interest rates may be a reasonable tradeoff for a booming economy.  People need jobs more than they need bargain basement loan rates.

Austin Texas has shopping for everyone.  Three of my favorite places to recommend to people who are needing home decor items to dress up their home in preparation for selling it are:  Burlington Coat Factory, 13739 Highway 183, Austin; Pottery Barn, 10000 Research Blvd, Great Hills, Austin; and Next to New Shop in the Allandale area at 5335 Burnet Rd, Austin.  Burlington Coat Factory has some great, affordable, decorative pieces for the kitchen.  The Pottery Barn offers can't go wrong furniture choices and themes with wide appeal for Austin home buyers.  The Next to New Shop is hit or miss, but sometimes have amazing thrift store finds.

If you’re thinking of selling your home and plan to spend money to fix it up, contact me for a professional real estate analysis of where to spend your dollars. 

Dated kitchen and bathroom faucets remind youthful home buyers of their "parents" house.  Youthful home buyers in Austin, TX are unlikely to buy a home that reminds them of good ole Mom and Dads.  Austin homes with bright gold faucets that were installed about 15 years ago may be fully functional and very expensive when installed, but the color will make a thumbs down impression among today's thirty-year-old home buyer.

If your kitchen faucet is ready for replacement, and you are slightly handy with tools, you may be able to update your faucet for the price of materials.  Lowe's has nine home improvement stores in and around Austin, including Round Rock, Leander, and Hutto and they carry a decent selection of faucets suitable for basic to nice homes (under $400,000).  There are other stores that offer comparable products, but Lowe's has taken the time to make a nice video showing you exactly what you need to do this project, which is why I mentioned them.  If you have never replaced a faucet, the video will boost your confidence.  The 3 minute video covers:

1. How to shut the kitchen water supply off and drain the residual water from the pipe.
2. How to detach and remove the old kitchen faucet. (this can be tricky.)
3. How to align the new faucet and reconnect to the water lines.

When you are making your color selection, rubbed brass and oiled bronze are popular in classic, Victorian, and shabby chic homes.  Stainless and nickel are good choices for homes with a modern or contemporary feel.  You will see both choices in older neighborhoods such as Allandale or Anderson Mill as the homes interors have been remodeled in a variety of ways.

If you are uncomfortable working with your home's plumbing and would like a referral to a plumber, please just ask.  I'm happy to help how I can. 

It has been in the news that mortgage rates are surging but it is important to note that existing rates remain very affordable.  The 30-year fixed rate mortgage now averages 5.05% nationally.  This is much higher than the rates we saw last November when mortgage rates were closer to 4.17 and looked headed down from there. 

Over the past 7 days, conventional, 30-year fixed rate mortgage rates have jumped 24 basis points, or 0.24% according to Freddie Mac's weekly Primary Mortgage Market Survey.  Fortunately, because the rates are so low to begin with the actual difference in a buyer's loan payment is not nearly as hard to absorb as it was when rates were in the 12-13% range. In the 1980s, even a small rate increase knocked thousands of buyers out of the home buying market because interest rates were so high to begin with. 

If you are in the market to buy an Austin home and have identified one that would suit you just fine, waiting for further price "drops" or shopping for better housing bargains, may cost you in the form of increased loan payments.  That is something to factor into your decision.  If you end up with a rate you don't like, refinancing may not be an option or if it is, it may cost up to $5,000 or more. Austin Realtors such as myself can help you understand the steps to securing a home and loan. 

Foreclosure activity in California posted a decline of 7 percent on an annual basis last month.  This news makes me cheery because it means my phone might start ringing again with calls from California investors or California families wishing to relocate to Texas. 

Many Austinites are unaware of the migration patterns between California and Texas or the role that Californians have played in Austin home price appreciation. When the real estate market is good in California, it means that California residents may sell their smallish house in LA, for example, and buy a luxury-size home in Austin.  Oh my gosh, it is such a delight to show them what their money will buy in the Austin TX real estate.  Have not had much opportunity to do that in the last year or so because when California experienced real estate market distress, many California pocketbooks snapped shut and one segment of the Austin Texas buyer market dried up.  Our freakishly cold weather is supposed to be over by next week and the temps in the 70s.  Perfect weather for house hunting in Austin.

According to a foreclosure report put out by RealtyTrac, several other states have experienced foreclosure declines as well.  In fact, six of the nation's 10 most foreclosure-strapped states posted an annual foreclosure filing reduction.  These states include  Florida, Illinois, Michigan, and Arizona. A foreclosure filing includes default notices, scheduled auctions, and bank repossessions.  Overall, foreclosure activity dropped 17 percent on an annual basis last month. It's possible that some of that decline is due to the lasting effects of a "robo-signer" controversy (involving foreclosures done too rapidly without thoughtful oversight) but I think the trend is still favorable.

If you are in the market for a foreclosure, it is possible to pick up a foreclosure property for less than a property in which the seller is under no urgent obligation to sell.  I was running some stats the other day for a two-story home located in the Carriage Hills subdivision in Cedar Park and 36% of the competition of existing homes for sale in the neighborhood was from foreclosed properties.   Buying a foreclosure can be a great deal or it can be more trouble than it's worth.  Knowing the difference involves more than understanding the property's physical defects.  If you are in the market for a foreclosed home in Cedar Park or the Greater Austin area, I would be happy to share with you my experiences in buying foreclosed properties for my own portfolio as well as for my clients.

It's a chilly day in Austin, TX with freezing sleet and cars turned over in ditches due to icy roads, but one thing that is on fire is mortgage rates for Austin real estate.  Anybody who happens to be in the market for houses in Austin may have noticed that mortgage rates worsened everyday over the past week.  Conventional rates are now about five percent, which is certainly not bad, but that is still a huge increase from just about three months ago.

For anybody who is thinking about buying an Austin house may wonder just what happened.  Well, apparently, about 11 weeks ago, mortgage rates were riding an 8-month hot streak, and appeared headed into the 3s. Then the Federal Reserve did its thing.  On Nov. 3rd, it announced a second round of bond buys, a $600 billion program called Quantitative Easing, Round II.  I can't explain the purpose of that move as it's beyond my area of interest, but I can say that Wall Street investors got spooked about runaway inflation.

Inflation would mean that the U.S. dollar would lose its value.  Since U.S. mortgage payments are paid in U.S. dollars, inflation would make the mortgage bond repayments lose their value. What does this have to do with home loans, you might ask?  Well, whenever bond prices fall on Wall Street, mortgage interest rates rise on Main Street here in ATX.   And so because Wall Street investors feared this happening, buying a home in Austin is going to come with a more expensive loan.

Let's just take a quick example.  Supposing you were interested in buying a listing I have in Round Rock Texas at 1601 Belvedere.  The list price is $217,000 for this great one story. If you were to finance that house in the Sonoma subdivision today with five percent down, the P.I. portion of your payment would be about $1102.  Last fall, that same portion of your payment would have been closer to $980.  Because of rising rates, home buyers lost roughly 10% of their purchasing power.  If you were thinking about buying in Round Rock or the greater Austin area, the time to get under contract may be now.