Unless you have been hiding under a rock the last few months, you may have noticed Austin, Texas entered into a seller’s market. Properties within 5 miles of downtown Austin are selling for more money and in less time than they have in years. However, this hot market trend is not true for ALL of the properties for sale in Austin. The successful sale of an Austin property comes down to two separate factors: price and presentation.
Presentation of Austin Homes for Sale
We’ll start with the presentation. Lately, homes listed that need improvements and upgrades are typically not selling nearly as fast as the improved properties. This should come as no surprise to anyone. But there are ways to counter this issue if you don’t have the budget to improve your Austin home. As an example, we recently listed a home in South Austin neighborhood of Maple Run. Our clients had owned the home for more than ten years and had two kids. They had not improved the home one bit. It had carpet and linoleum floors to compliment the Formica countertops.
What we did with this property is give them an in-depth staging consultation. They did not have the budget to put in new flooring or countertops so we decided the best course of action was to design the home in a way so as to not bring focus on those unattractive features. We hung curtains in the main living areas, removed all of their personal pictures, created clean spaces on the walls, and for God’s sake, remove all the toys! Then, we came in with our stylish art and accessories and prepared the home for the photographer.
The result: the home sold in 3 days with 4 offers at list price. An amazing result. We have to give credit to the homeowners. They did exactly what we asked and made the front flowerbeds look amazing. Presentation prevailed for this South Austin homeowner.
Price of Austin Homes for Sale
After the property is presented well, we focus on price. Pricing can be a touchy subject with most Austin home sellers. Everyone has an emotional attachment to their home and most think their home is the best on the block. What I tell people is this fact: there is little danger in under pricing your home in a seller’s market. On the contrary, there is enormous danger in overpricing your home.
We recently listed a home in Austin’s Zilker Neighborhood, right next to Alamo Darfthouse on S. Lamar. My company, Spyglass Realty, competed against two other Austin real estate agents to win the listing. The reason the home sellers chose us was the home needed to be painted and carpet needed to be installed. The wife had three kids and no time. We manage a full-time crew dedicated to our clients, so choosing us to sell the home was a no-brainer for these clients. Plus, the house was empty and we agreed, as we always do, to stage the home.
In the process of choosing their real estate agent, the home sellers had all three agents come up with a price for the home. The three prices he was given were 720K (us) 735K and 750K. At $720,000, the home was the highest price per square foot home in the area and among the highest price per square foot that would ever sell. The other agents were trying to “buy the listing,” which means they tell the owner the home is worth more than the price for which the home is likely to be sold. They tell the client what they want to hear so they can get the listing. Then, after the home doesn’t sell for a few weeks, they urge the seller to drop the price of the home.
We told the home seller we need to price the home low enough so we can procure multiple offers. If we are wrong in under pricing the home, then we WILL get multiple offers. If we overprice the home, it will certainly generate lower than list price offers and if the market does not respond to the home, the seller will be forced to lower the price. Studies show overpricing the home will usually lead the seller to end up with a price that is lower than if they would have priced it right at the beginning.
The key to pricing a home on the low end is you have to give the market a chance to respond to the home. You can’t list on a Thursday and take the first offer that comes your way. It’s best to wait until the Sunday. If we get an owner that will price on the aggressive side, we will put in the comments “Seller will not respond to offers before Sunday at 7PM.” It lets the market know this is a hot property.
The result: we sold the home in 4 days at $741,000. Twenty one thousand dollars OVER list price. And the other offer we received was just a hair underneath THAT price!
When you price a home like this and it goes that far over list price, you need to have a plan to fight the appraiser. We change the Austin MLS system to show there is no lockbox and the showing instructions to “appointment with agent.” This allows us to meet the appraiser at the property and demonstrate why we think the property should appraise at list price. Every now and then we get the appraiser that says “Oh I can’t talk to you about value, per the law.” Yeah, well that may be true, Mr. Appraiser but I can talk to you. We kill them with kindness but we also let them know the following information:
- We had a bidding war on the property (which in itself is a demonstration of market value),
- We point out the upgrades to the home,
- We let them know the market trends in the neighborhood. Appraisers are not experts on any certain neighborhood. We are, so sharing our knowledge of the area is a plus, and for the most part, the appraisers appreciate it.
Importance of a Pre-Inspection When Selling Your Austin Home
One other thing we do when listing an Austin home is we get a pre-inspection done. This has a lot of positive affects on the transaction. It allows us to negotiate from a position of strength rather than a position of weakness.
As an example, we list a home at $400,000. Let’s say we get multiple offers on this home and end up settling on an offer of $400,000. On that same offer, the buyers asked for a 10-day option. We tell them we our countering at 5 days because we have painted a “transparent” picture of this home with the inspection report and we are not giving concessions for anything found that was already on our first inspection report.
Did you know agents typically ask for three times the actual amount of repairs when you are in contract? And if you don’t give them the concessions and you have to re-list; there is a stigma on the property by potential buyers that something is wrong.
These are just three of the techniques we use to market and sell property in a seller’s market and all of them have been hugely successful for our Austin real estate clients.