Yes, the Federal Tax Credit was certainly a strong motivating factor for most of those home buyers, as is indicated by the fact that approximately 64% of homes in Austin and Round Rock that sold in October were priced under $250,000. With the extension of that incredible gift to home buyers, Austin and Round Rock home sales should continue to show improvement over past years.

Despite the increase in sales and the reduction in the number of homes for sale in Round Rock, homes available for Short Sale remained steady. Approximately 1 in 13 homes for sale in Round Rock were available through Short Sale. Obviously, these homes need to be sold and off the market before prices can really improve.  Once the number of Short Sale homes in Round Rock and Austin starts to decrease, the market will be set for home values to appreciate again.

Homes sold through Short Sale still  sell below market, and still affect home prices, and of course the same can be said for Foreclosed homes.  Round Rock home buyers are still taking advantage of the opportunity Short Sales offer, since the number of Short Sales has maintained its pace and the number of sales are increasing.

Take a look at the graph showing the incredible increase in sales:

Although this is awesome news, when home sales maintain an upward trend and foreclosures and Short Sales indicate a downward trend, then we’ll really know our market is gaining strength!

The answer is not as easy as yes or no.  When assessing an Austin home’s value, the other home sales that we consider should be located close by and should have sold recently.  If many of the most recent sales consist of Short Sales, then those sales will be strongly considered.  If less than 20% of those comparable home sales are Short Sales, then those Short Sales may not necessarily be considered when assessing value.

Short Sales are probably going to be a viable part of the Austin real estate market for another 24 months, so they will continue to affect values. I assessed a home value in Round Rock for a home owner last week and only 1 of the 7 recent sales was a Short Sale, therefore I did not consider it when determining that  home’s value.  However, another valuation in Round Rock did include a Short Sale because 3 of the 8 recent sales were foreclosures or Short Sales.

What people needs to realize is this… when Short Sales and Foreclosures are consistent in a neighborhood, home owners will reduce their prices to compete with the lower prices of those homes.  Whether you actually use Short Sales as comparables when you value a home or not, Short Sales and Foreclosures still affect homes values, and that is certainly the case in the Austin and Round Rock real estate market.

As a matter of fact, I inform my clients that it is often other home owners attempting to be competitive that affect home values the most because these are considered arm’s length transactions with no bank influence to push down the price.

That is not pointing fingers in any way… someone who needs to sell in order to move has to do their best to be competitive,  but homes that are not Short Sales or foreclosures will be considered more strongly in assessing home values in any given neighborhood.

Winston Churchill has always been one of my favorites historical figures. It seems you can Google just about any kind of quote and he has a good one.  He is so right about opportunity.  The current market has caused difficulty for so many, and though a much better place to be than most, Austin real estate has its share of home owners who are in difficult situations due to home values as well.

But as Mr. Churchill points out there are those who see opportunity in difficult situations, and Short Sales offer opportunity to home sellers and home buyers alike.

Home sellers have the opportunity to sell their home, avoid possible foreclosure and minimize damage to their credit. This opportunity is bigger than than it may seem to many, as avoiding a foreclosure means saving years of credit problems.

Home buyers have the opportunity to purchase homes in excellent condition at bargain prices.  Depending on the type of existing loan, Short Sales in Austin and Round Rock will sell for 80 to 85% of value.

This Short Sale home in Georgetown is an excellent example as it is in terrific condition and was purchased at a value we believe to be about 80% of market value.

Both the seller and the buyer took advantage of opportunity this Georgetown Short Sale offered here, since the seller could not sell the home for a price that would cover their current mortgage, but because of the Short Sale was able to sell the home.  The buyer was able to purchase a home that would not have been in their price range if not for the decrease in price to  reflect the Short Sale.

Opportunity is available even in adversity, and although real estate throughout then U.S., including the Austin real estate market, has created hardship for many, there are those who will see the opportunity and pounce on it. Short Sales offer that opportunity, so know that it is there, and see more opportunity at www.SeeAustinShortSales.com.

We just encountered a situation where the seller owed back taxes on their property, and were told that the mortgage company would not pay those taxes as part of a short sale.  They had other Austin real estate agents refuse to take on the sale of their home because the feeling was that there was no hope of getting the home to closing.

When they contacted us, we immediately followed up with their lender, calculated the price and closing costs and taxes needed to accomplish a closing, and reached a solution. After placing the home on the market, it received multiple contract offers, and it looks liek the home will be closed by year end.

Realizing that Short Sales are harder work than a typical home sale, and that more hours and more frustration and more patience are required to get one of these sales through to closing, some agents just do not want to take that on.

I can honestly say that I do not blame them.  I personally have handled Short Sales since 1988 and when this market began producing Short Sales, I decided not to handle them because of the sheer manpower and difficlty associated with this kind of transaction. But then one of my personal clients asked me to help a friend of theirs, and then a past client needed help with a Short Sale, and after assisting them, it hit home that those who need Short Sales need expertise more than anyone else in the Austin real estate market right now, so now it is a specialty for us, and we are here to help anyone in need of a Short Sale.

Since then we have assisted clients with Short sales in Austin, Round Rock, Georgetown, Pflugerville, Cedar Park, we have helped with VA Short Sales, FHA Short Sales, conventional Short Sales, and even assisted with IRS workouts.

There are some great agents out there who specialize in Short Sales, but be sure you are hiring an expert, and not just someone who does Short Sales because they have to!

Since so many homes Short Sale homes in Round Rock are still occupied, they are typically still well maintained. Even if they are not occupied, an owner who is seriously trying to minimize the damage to their credit will keep the home in good condition in order to help make the sale.  Just because the terms involve a Short Sale does not mean that a motivated seller is not involved.

Homes available for Short Sale are rarely homes that are run down, or need lots of work.  This Pflugerville Short Sale is an example.

It is in excellent condition and actually has a number of upgrades including covered patio, sprinkler system, whirlpool tub, refrigerator, washer, dryer, and lots more!

It is located in a super neighborhood, close to schools, shopping and has easy access to major thoroughfares like Hwy-45 and SH-130.

It is well maintained, and you knew better, you might not distinguish it from a typical Austin Texas home for sale.

Except of course, the PRICE SEEMS SO DARN GOOD!  The reason for the great price is that a Short Sale is more trouble, more inconvenience and fewer buyrs want to have to deal with the Short Sale process because lenders rarely provide timely answers regarding contract acceptance.

Even real estate agents who are used to the Short Sale process often become impatient.  There are some risks to buying a Short Sale…

• After investing a lot of time and some funds, the home owner’s bank may not approve your contract
• After waiting for months to hear from the bank, your interest rate may move up

But rest assured, the reward can offset the risks, since you should be getting a well maintained home for 10% or more below market. Austin Texas homes are showing a median price of around $185,000, so that is nearly a $20,000 savings… worth a little risk for most buyers.

The number of Short Sales we have seen in the Austin and Round Rock real estate affects the overall market statistics, and we must take that into consideration when analyzing home values for home owners.

In our current market condition, the time on the market is certainly more than we have seen in the recent past, and is most certainly affected by the Short Sale market. The reason that Austin area Short Sales will increase the statistic for time on the market is because they typically take longer to sell, sometimes much longer.

The process itself takes more time…

1. The seller often tries to sell the home for awhile at a price that will pay off the mortgage and pay all closing costs related to the sale.
2. That seller then realizes that the Austin real estate market will not support the price required to cover the mortgage and closing costs, and considers a Short Sale.
3. That home owner often allows the agent they first hired to try to get their home sold via Short Sale.
4. They then realize that the agent is not experienced in Short Sales and contact an agent who does specialize in Short Sales.
5. The new real estate agent could likely sell the home is less than average market time, but because of the time already on the market, this home looks as if it took much longer than average to sell. Because some areas are seeing as many as 1 in 10 homes sell via Short Sale, the increased time on market does affect this overall statistic.

Another negatively affected statistic due the sheer number of Austin’s Short Sales is the list to sell ratio. This is simply the price a home sells for compared to the asking price. In other words, how much did the seller negotiate their asking price. In 2008, the average seller took approximately 97.13% of their asking price.  That percentage is now around 95% and as low as 91% in some areas.

Since Mortgage companies and banks have percentages set regarding the price they are willing to accept, and since some real estate agents are adept at getting close to that number, the list to sell ratio has suffered. Because more of these offers are being negotiated and actually followed to closing, the overall market is feeling the affects.

I have repeated to sellers and agents alike that even after more than 28 years in residential real estate sales in Austin, I have never been involved in a market where I experienced so many “low” offers… offers more than 10% below asking, and even 20% below and yes, 25% or more below asking.

If you’d like to see the homes most likely to sell as “bargains, meaning Short Sales, Foreclosures and even Relocation homes in the Austin area, take a look at this web site.

We recently had an Austin home owner contact us because their previous real estate agent could not get their home closed on a Short Sale because of back taxes.  They felt that it was not a workable situation and declined to work the sale further.

What the previous agent did not realize is that ANY debt incurred regarding that property can be calculated into the equation, and paid at closing when a sale is finalized.  Thus the fact that two years of back taxes, a substantial amount of money, could be paid if the home was sold at a viable price was not considered because all of the guidelines regarding Short Sales were not known… a simple case of “lack of experience”.

Granted, the price of the home would have to be low enough that a buyer would be attracted, while being high enough that the mortgage, closing costs and taxes could be paid, but according to our calculations, this is entirely possible, and we plan to get this Austin Short Sale sold and closed in short order.

I’ll just reiterate that the level of experience and expertise of your real estate professional in closing Short Sales is crucial to your success.  There are so many factors involved in any home sale, and the complications of a Short Sale just increase the odds of failure unless every path, every obstacle has been foreseen, and that just comes from experience.

However we approach it, a foreclosure is still the most damaging information contained on a credit report, and the credit report drives everything in today’s financial environment.  Credit reports determine how much or little your car payments will be, whether you will get that loan for the new living room furniture that your family has wanted so badly, whether you receive that job offer that will improve your life like you have been imagining.

Yes, credit reports are a HUGE part of not only financial, but occupational decisions and yes, sometimes social decisions.  Do you really want to tell your new future better half that your credit score will keep you from getting that new home where you can start your lives together?

Yes, credit reports affect us in ways that we never would have anticipated a few years ago.  For those who watch their dollars closely, even a few hundred dollars a month of extra car, house and credit car payments due to higher interest rates will have a serious impact on future financial well being.

Thus, we want to consider a Short Sale as something that will decrease or at least limit the impact of the harsh reality of our economy.  Rather than suffer for 5 years after a foreclosure, you can move into that beautiful new home after only 2 years if you choose to use the Short Sale process.

Consider that its much easier to explain to the potential employer that you insisted on a Short Sale, even though the process was long and arduous because you felt it was the right thing to do.  Ask employers how they feel about candidates with foreclosures on their credit reports compared to those who worked through a Short Sale.

The impact is more far-reaching than you may even imagine right now, but if a Short Sale has any chance of succeeding, take that path, though it may be the more difficult now, it will be better for you later.

Also, feel free to take a look at Short Sale homes on the market, as well as foreclosures and Relocation homes. These make up the best “bargains” in the Austin real estate market.

1. A Short Sale will probably result in a home purchase that is about 10% below market.  Now that may not sound great except that when you consider that the average home price in Austin, TX is $243,853, that means a $24,385 savings!
2. A Short Sale home is often still occupied by the home owner, who continues to maintain the home in order to achieve a sale.  Even if it is not occupied, the owner is motivated to keep the home up because they want to accomplish a Short Sale rather than go to foreclosure, and keeping the home in good condition gives them a better chance of that.
3. You may have an inspection to determine of there are any issues of concern.  Although the seller probably cannot assist financially in making repairs, at least you know before you are obligated to close if there is anything that would change your mind.

No, the Short Sale may not be as fantastic a bargain as some foreclosures, but you still get a nice discount and you are aware of what you are getting into… no surprises.

In addition, many Short Sale buyers in Austin are not aware that they can opt out of their Short Sale contract pretty much any time they want. Also, if the bank or mortgage company has not provided approval for the sale by a certain date, you can opt out of the contract and receive your earnest money back without even having spent inspection money.  Our buyer inspections are done AFTER bank approval on our Short Sales.

If a Short Sale sounds like a good idea, be VERY aware that you must be patient… you had better not have a deadline to meet, or buying a Short Sale in Austin is not a good idea. In Austin real estate, we are certainly no different than most areas of the U.S. in that we deal with many of the same home lenders, and those lenders do not respond in a hurry.

So, understand that you are getting a great deal and that waiting it out is the only alternative you have.  No amount of threatening to opt out of the contract, no personal emergencies or deadlines will impact the lender’s response time. They will answer when they answer… period. We even had one lender whose voice mail machine said if you leave a voice mail or send an extra fax it would “DELAY” their response time on that file.  WOW… what are you going to do about that?

These lenders MUST have certain documentation in order to get approval for your contract.  I can tell you that the single biggest reason for delays is the fact that they DO NOT have all the documents they need in order to submit an approval.

So, your best bet is to make sure you are dealing with an agent who is expert at pushing Short Sales through by providing EXACTLY what is required. This is not an easy task…many agents try to close Short Sales, few actually accomplish it sccessfully.

Feel free to take a look at All the Short Sales homes for Sale in the Austin area, and let us know if we can help!

The need for experience in the Short Sale process is more important than most home sellers and even most agents know.  When a Short Sale is in play, there is often one shot, and if missed, the seller could lose the home to foreclosure.

Every Short Sale scenario is different, BUT there are some guidelines that can be followed to insure a greater chance of success.  For example if the mortgage on the home being sold is a VA loan, then the process will differ from the transaction where the mortgage is conventional.  The numbers are different, the process is different, and the contract terms will have to differ.

Knowing the details behind the Short Sale process for a seller who has an FHA loan or a home seller who has a first and second lien on their home is critical to the success of that Short Sale.

There are local real estate agents in the Austin area who are versed in the Short Sale process whether the seller’s mortgage is VA, FHA Conventional or otherwise. A Short Sales specialist will know how the process varies based on the type of mortgage.

This is important from beginning to end. For example, just the process of pricing the home is touchy because the price must be attractive enough that buyers are willing to wait for a Short Sale Process, but MUST be priced so that the seller’s mortgage company can receive enough money to satisfy their financial guidelines. Pricing the home in a way that meets both criteria is more complex than a typical home valuation.

When a purchase offer is made, negotiating that offer to an end result that meets the value that the buyer wants, while generating the price that satisfies the mortgage company’s financial needs, is another level of knowledge that requires the experience and knowledge of the handful of agents who specialize in Short Sales.

Take a look at www.ShortSaleDetails.com for more information… decide to hire an agent who can “Close” your Short Sale, and there are not many out there.