One Strategy To Help Buyers and Sellers Win

How interest rate buydowns can help both buyers and sellers win.

What exactly is an interest rate buydown? There are a lot of terms within real estate that we can negotiate, including price, closing date, closing costs, and repairs. However, recently the phrase “interest rate buydown” has come up more than it has in the last five to 10 years, so it’s important that you’re informed on what it entails. 

In our market, mortgage interest rates have become what we're calling now “the great equalizer.” Buyers have some power when negotiating contracts, and sellers are using these buydowns as a proactive way to attract buyers. Right now, interest rates are at about 7%, and that is not that palatable for most buyers, so interest rate buydowns are being used to bring down the price. 

There are a couple of different ways to structure an interest rate buydown. The classic way is to do one permanently, which means that you’re paying the lender to bring the cost down for the entire span of the loan. It’s usually a point or 1% of the loan and buys the rate down 0.25%.

"Buydowns are a great temporary solution to help buyers and sellers both win."

What’s becoming more common is a 2-1 buydown. This is temporary and costs less money. It buys the rate down two points for the first year, one point for the second year, and then after that, it will reset up to the full interest rate that was originally quoted. It saves everyone money.

We're anticipating that interest rates will drop back down to normal levels, which is in the 4% to 5% range, in the next 6 to 24 months. Therefore, these buydowns are a great temporary solution to help buyers and sellers both win even with today’s rates. 

If you'd like to talk about buying a home, selling one, or implementing the 2-1 buydown strategy, please reach out; I’d love to help you. Call or email anytime! I am looking forward to connecting with you.

Pricing Your Home in a Correcting Market

These three strategies are the keys to pricing well in a correcting market.

How do I price my home in a correcting market? Many people are asking this question lately. With this, there are a few common things people are talking about: rising interest rates, decreasing sales, and increasing inventory. Does that mean we are going to experience a housing crash? I don’t think so. After two years of an incredibly hectic market, we’re just settling down to a normal seller’s market. Therefore, how do we price accordingly?

1. Don’t be overpriced. There are many things you can do to get your home ready, but this is not the kind of market to test a higher price. In the previous market, we could take the last sale and ask a little higher, but that is no longer the case. The last thing you want to do is chase the market down, as that leaves you looking desperate and open to lowball offers. 

   “We’re just settling down to a normal seller’s market.”
   

2. Price below the market value. This works well because, as the market is shifting down, we’re already below the sales that we are comparing to. If you have a lot of comparable sales that are waiting on the market, you can undercut them and sell quickly. 

3. “Test market” your price. How do you test the market without actually being on the market? We use a comprehensive, pre-market strategy called “test marketing”. We come up with a price range and shop it around to buyers in the area, like a pre-sale. Then we gather that feedback and use it to prepare your home and get it priced accurately for the market while building interest in the home.

These are my favorite strategies for pricing in a correcting market. To learn more about them, reach out to me for a consultation. Call me today, I’d be happy to help you out.

Should You Sell Before Buying a New Home?

Five methods you can use to sell your home before buying a new one.

A topic that comes up often is when someone is looking to buy their next home and they’re fairly sure they need to sell their current one first. There are two main reasons you might need to sell your current home. First, you need the down payment money from the equity in the home. Second, you don't want to or can't carry two mortgages at once. Here are five ways you could handle this kind of transaction:

1. The traditional way. We list the home on the market and pray we find that next home while it’s under contract or during a leaseback.

2. You have a home in mind. You found your next home, and we can help you get it. However, that would require us potentially making a contingent offer on that property. If they accept it, then we can figure out how to sell your home.

   “To find your best-case scenario, call your trusted real estate advisor.”

3. Utilize a home-buying service or bridge loan service. There are a lot of these out there. I can walk you through the different programs to see if they are a good fit for you.

4. iBuyers. iBuyers make you a quick cash offer that’s smooth and seamless, so you don't have to think about selling at all. They just close whenever you're ready, but the downside is that you’ll likely end up giving away a lot of your equity. Please call me first if you’re considering this option. I don’t want you to leave money on the table.

5. HELOC. A home equity line of credit lets you take out a loan on your current property, and then you use that down payment for the next home. Once you close, then you can pay off that HELOC.

To find your best-case scenario, call your trusted real estate advisor. We’ll review your situation and see which option is the best fit. I also highly recommend talking with a lender right away. If you have any questions, don’t hesitate to reach out to me by phone or email. I look forward to hearing from you.

Buying a Home With Parent's Help? Here’s How

Are you purchasing a home with your parents’ help? See this first.

Is it a good idea for parents to help their kids buy a home? It’s a big financial decision, but these two questions will help you make the right choice for you: What’s the best way for parents to help their kids purchase a house, and what are the benefits that come with it? 

The Austin housing market is competitive and relatively expensive. For first-time homebuyers, it may be harder to purchase a property. Having your parents’ help to get into our market would be a huge advantage. After all, the sooner you can own a home, the faster you can build wealth.

“Having your parents join you on the home buying journey will strengthen your relationship with them.”

I’m not a CPA, a mortgage lender, nor an attorney, but I know a few creative ways for parents to do this. First is by giving a “gift” of up to 20% of the down payment on the home. It’s not a loan, but the lender will require a gift letter for it. This helps you get into the home easier and will remove the private mortgage insurance (PMI) from your purchasing costs. The second way is having your parents loan you some money so you can become a cash buyer. This method essentially makes your parents your lender. Last, the parents can co-sign on the mortgage. I recommend your refinance the home and remove your parents from the cosign at some point. 

Purchasing a house is a milestone and one of the entry points to becoming an adult. Having your parents join you on the home-buying journey will strengthen your relationship with them and help you build long-term wealth

If you have more questions about this topic or have any real estate questions, don’t hesitate to call or email me. I’d love to connect with you.

SOLD with multiple offers: 4603 S 2nd, 78745

Another Beautiful #BIRDHOMElife remodel!

South Austin Mid-Century Modern Home with a refined, updated finish 

Don’t miss this opportunity to own a #BIRDHOMElife remodel! This 1950’s home beg to be updated. With some funky, cool features and some contemporary touches, this home is ready to go.

4603 South 2nd Austin, TX 78745

Neighborhood: Greenwood Forest

Specifications: 3 Bedrooms, 2 Bathrooms, 1,637sqft

Taxes: 2018 - $6,380

Asking Price: $409,900

If you live here, you will enjoy a light, bright mid-century home with all the modern finishes.

Enjoy everything that this mid-century modern home has to offer. 200 year oak trees greet you as you pull up to the home. Custom landscaping frame the custom-cut stacked stone exterior once featured in Southern Living magazine. New windows and doors let in lots of natural light. We salvaged the retro-wall that greets you upon entering. New premium wood floors throughout. The well appointed kitchen features custom cabinets, quartz counter-tops, stainless steel appliances and tasteful brass hardware. The oversized family room is anchored by a stacked stone fireplace and has plenty of room to entertain. The master bedroom features en-suite office and laundry room.

Home Upgrades Include:

• New windows and doors throughout

• New water-resistant premium hardwood floors

• Stainless steel appliances

• New Fixtures, hardware throughout

• New Custom Kitchen Cabinets and quartz counters.

• Bathrooms were completely gutted and redone.

Find local businesses, view maps and get driving directions in Google Maps.

Location:

• South Austin neighborhood of Greenwood Forest

• Easy access to 290, I35 and Mopac

• Minutes from:

  • South Congress

  • St Elmo Brewery

  • Public Development

  • HEB

• 15 minutes to Downtown Austin

BEFORE PHOTOS