Torrid tales of a house seller in Austin, TX

[amy]

Background – my husband & I moved to Carlsbad with our three young sons in April of 2007 from Austin, TX. We were looking to buy here, but my husband really felt the market was going to go down steeply, so he wanted to rent. Since we hadn’t yet sold our house in Austin and he made a very persuasive arguement, we signed a year lease for a home in La Costa Greens, where we still live in a month-to-month agreement. He was right, and we’re glad we’re renting.

In July 2007 we had an offer for a lease-purchase option for our Austin house, and as it more than paid for our mortgage there, plus a nice monthly profit, we agreed. When the term expired, the potential buyers decided not to exercise their option due to health reasons (they moved to a much smaller one story house) and so we now have the house on the market again. Austin is the #3 seller’s market in the country, and although it’s not nearly as slow as it is here, it’s still not what it was even a year ago.

We know we had the house priced too high last year for what it was, so before listing it in late June of 2008 at a more realistic price we had it totally painted inside & some out, new carpeting put in, landscaped, cleaned & professionally staged (the tenants are out so it’s vacant). We have it priced at $349,900. It’s 3,613 sq ft, 4/3, built in 2001, in an award-winning school system (walking distance to the middle school) and backs up to conservation land which will never be developed, so the backyard is very private. There are two parks and a community pool within walking distance, and it’s less than 20 minutes to get to downtown Austin/University of TX.

We’ve had a decent amount of showings – 1-3 a week, but no offers (I do realize this is a decent amount of action in this slow market). We seem to be priced reasonably compared to other 4/3 in the area, and at $96.84 psf we’re less than the other listings in the neighborhood (with one exception – a new listing nearby with a similiar floor plan but one less bedroom and a yard that backs to another just came on the market at $315,000. The house is currently rented and is not in very good condition). Feedback from other realtors and buyers has been mostly positive. Negatives have been the floor plan (upstairs there is a huge game room & one huge bedroom & a full bath – we used it as a guest area, but you either love it or hate it) and the lack of a 1/2 bath. Nothing that we can really fix. We’re offering $2500 towards closing costs as an incentive. We can reduce the price, but our agent thinks we should hold out another month or so as it’s “just taking longer to sell things these days”.

My husband is getting very impatient and would like us to lease the house again rather than reduce the price – he thinks even if we get a decent offer that it’s too hard to get a loan right now and the chances of actually closing are slim. I am very hesitant about doing so as we just invested $4K in getting it ready for market, and I want to be able to purchase a house here when we (and the market conditions) are ready. Pros are that we could probably lease the house for about $2200-2400 month. Our mortgage is currently $1700/month, but we could refinance into a 15 yr loan and get it paid off quickly & have an investment property. Cons are that since we live here in SO Cal, we’d have to have a property manager. I am also nervous about the tenants – we were very lucky last time, but we might not always be. Plus we’ve already lost our homestead claim so our property taxes are increasing. And finally, that would mean we would need to continue renting here indefinitely.

Here’s the MLS link to our Austin house:
http://austinhomesearch.com/Search/Details.aspx?li=50337&or=1&cp=1#

I’d appreciate any feedback, opinions, comments – whatever. Y’all are a remarkable crew and I have learned a lot about the market here in So Cal thanks to this site. My husband also thanks you as you all say pretty much what he’s been telling me, so I am not driving him TOO crazy about buying a house here.

[gn]

– From what I know, property tax in Texas is pretty high, so if you total the mortgage + tax, you may have a very small monthly profit if your house rent for $2200 – 2400.

– You said: “… that would mean we would need to continue renting here indefinitely.” It sounds like most of the down payment for the eventual home purchase in So Cal would come from the equity of the house in TX. If that’s the case, consider this: the market in Austin is not likely to improve any time soon.

In fact, the market in Austin is likely to turn worse. This means that you’ll lose even more equity in the next few years. So the following scenario is likely to become true: in 2 or 3 years, when the market in So Cal is close to the bottom & the time is right to buy, you’ll have less equity in the Austin house to use for a down payment.

You mentioned that your mortgage is $1700. Assuming that you have a 30-yr fixed, this means you owe about $250k. If this is true, your equity in that house is about $100k. Much of this $100k is likely to “vanish” in the next few years, as home prices will continue to go down.

I would lower the price & sell as quickly as posible because once you enter Oct/Nov, with all the holidays coming up, it’ll be much harder to sell. And next year, it’ll be worse.

To sum it up:

If you continue to lease that house: you’ll get a small monthly profit & all the downside potentials. The risks clearly outweigh the rewards.
If you sell ASAP, you’ll lock in today’s market price & avoid all the downside potentials.

[gn]

– From what I know, property tax in Texas is pretty high, so if you total the mortgage + tax, you may have a very small monthly profit if your house rent for $2200 – 2400.

– You said: “… that would mean we would need to continue renting here indefinitely.” It sounds like most of the down payment for the eventual home purchase in So Cal would come from the equity of the house in TX. If that’s the case, consider this: the market in Austin is not likely to improve any time soon.

In fact, the market in Austin is likely to turn worse. This means that you’ll lose even more equity in the next few years. So the following scenario is likely to become true: in 2 or 3 years, when the market in So Cal is close to the bottom & the time is right to buy, you’ll have less equity in the Austin house to use for a down payment.

You mentioned that your mortgage is $1700. Assuming that you have a 30-yr fixed, this means you owe about $250k. If this is true, your equity in that house is about $100k. Much of this $100k is likely to “vanish” in the next few years, as home prices will continue to go down.

I would lower the price & sell as quickly as posible because once you enter Oct/Nov, with all the holidays coming up, it’ll be much harder to sell. And next year, it’ll be worse.

To sum it up:

If you continue to lease that house: you’ll get a small monthly profit & all the downside potentials. The risks clearly outweigh the rewards.
If you sell ASAP, you’ll lock in today’s market price & avoid all the downside potentials.

[gn]

– From what I know, property tax in Texas is pretty high, so if you total the mortgage + tax, you may have a very small monthly profit if your house rent for $2200 – 2400.

– You said: “… that would mean we would need to continue renting here indefinitely.” It sounds like most of the down payment for the eventual home purchase in So Cal would come from the equity of the house in TX. If that’s the case, consider this: the market in Austin is not likely to improve any time soon.

In fact, the market in Austin is likely to turn worse. This means that you’ll lose even more equity in the next few years. So the following scenario is likely to become true: in 2 or 3 years, when the market in So Cal is close to the bottom & the time is right to buy, you’ll have less equity in the Austin house to use for a down payment.

You mentioned that your mortgage is $1700. Assuming that you have a 30-yr fixed, this means you owe about $250k. If this is true, your equity in that house is about $100k. Much of this $100k is likely to “vanish” in the next few years, as home prices will continue to go down.

I would lower the price & sell as quickly as posible because once you enter Oct/Nov, with all the holidays coming up, it’ll be much harder to sell. And next year, it’ll be worse.

To sum it up:

If you continue to lease that house: you’ll get a small monthly profit & all the downside potentials. The risks clearly outweigh the rewards.
If you sell ASAP, you’ll lock in today’s market price & avoid all the downside potentials.

[gn]

– From what I know, property tax in Texas is pretty high, so if you total the mortgage + tax, you may have a very small monthly profit if your house rent for $2200 – 2400.

– You said: “… that would mean we would need to continue renting here indefinitely.” It sounds like most of the down payment for the eventual home purchase in So Cal would come from the equity of the house in TX. If that’s the case, consider this: the market in Austin is not likely to improve any time soon.

In fact, the market in Austin is likely to turn worse. This means that you’ll lose even more equity in the next few years. So the following scenario is likely to become true: in 2 or 3 years, when the market in So Cal is close to the bottom & the time is right to buy, you’ll have less equity in the Austin house to use for a down payment.

You mentioned that your mortgage is $1700. Assuming that you have a 30-yr fixed, this means you owe about $250k. If this is true, your equity in that house is about $100k. Much of this $100k is likely to “vanish” in the next few years, as home prices will continue to go down.

I would lower the price & sell as quickly as posible because once you enter Oct/Nov, with all the holidays coming up, it’ll be much harder to sell. And next year, it’ll be worse.

To sum it up:

If you continue to lease that house: you’ll get a small monthly profit & all the downside potentials. The risks clearly outweigh the rewards.
If you sell ASAP, you’ll lock in today’s market price & avoid all the downside potentials.

[gn]

– From what I know, property tax in Texas is pretty high, so if you total the mortgage + tax, you may have a very small monthly profit if your house rent for $2200 – 2400.

– You said: “… that would mean we would need to continue renting here indefinitely.” It sounds like most of the down payment for the eventual home purchase in So Cal would come from the equity of the house in TX. If that’s the case, consider this: the market in Austin is not likely to improve any time soon.

In fact, the market in Austin is likely to turn worse. This means that you’ll lose even more equity in the next few years. So the following scenario is likely to become true: in 2 or 3 years, when the market in So Cal is close to the bottom & the time is right to buy, you’ll have less equity in the Austin house to use for a down payment.

You mentioned that your mortgage is $1700. Assuming that you have a 30-yr fixed, this means you owe about $250k. If this is true, your equity in that house is about $100k. Much of this $100k is likely to “vanish” in the next few years, as home prices will continue to go down.

I would lower the price & sell as quickly as posible because once you enter Oct/Nov, with all the holidays coming up, it’ll be much harder to sell. And next year, it’ll be worse.

To sum it up:

If you continue to lease that house: you’ll get a small monthly profit & all the downside potentials. The risks clearly outweigh the rewards.
If you sell ASAP, you’ll lock in today’s market price & avoid all the downside potentials.

[Bugs]

If you think the market in Austin will turn around sometime in the next few years then the strategy of trying to wait the market out might make some sense. The key, of course, is dependent on what you think the long term trend for that area is.

If the property were here, I’d tell you to discount it like you really mean it and get out now before it gets even worse. But that’s because I am of the opinion that this type of home in this area is going to take a beating for the next few years.

Austin was late to the speculation party and apparently has also lagged going into correction. That doesn’t mean it’s immune or that the correction will somehow overlook that area.

[Bugs]

If you think the market in Austin will turn around sometime in the next few years then the strategy of trying to wait the market out might make some sense. The key, of course, is dependent on what you think the long term trend for that area is.

If the property were here, I’d tell you to discount it like you really mean it and get out now before it gets even worse. But that’s because I am of the opinion that this type of home in this area is going to take a beating for the next few years.

Austin was late to the speculation party and apparently has also lagged going into correction. That doesn’t mean it’s immune or that the correction will somehow overlook that area.

[Bugs]

If you think the market in Austin will turn around sometime in the next few years then the strategy of trying to wait the market out might make some sense. The key, of course, is dependent on what you think the long term trend for that area is.

If the property were here, I’d tell you to discount it like you really mean it and get out now before it gets even worse. But that’s because I am of the opinion that this type of home in this area is going to take a beating for the next few years.

Austin was late to the speculation party and apparently has also lagged going into correction. That doesn’t mean it’s immune or that the correction will somehow overlook that area.

[Bugs]

If you think the market in Austin will turn around sometime in the next few years then the strategy of trying to wait the market out might make some sense. The key, of course, is dependent on what you think the long term trend for that area is.

If the property were here, I’d tell you to discount it like you really mean it and get out now before it gets even worse. But that’s because I am of the opinion that this type of home in this area is going to take a beating for the next few years.

Austin was late to the speculation party and apparently has also lagged going into correction. That doesn’t mean it’s immune or that the correction will somehow overlook that area.

[Bugs]

If you think the market in Austin will turn around sometime in the next few years then the strategy of trying to wait the market out might make some sense. The key, of course, is dependent on what you think the long term trend for that area is.

If the property were here, I’d tell you to discount it like you really mean it and get out now before it gets even worse. But that’s because I am of the opinion that this type of home in this area is going to take a beating for the next few years.

Austin was late to the speculation party and apparently has also lagged going into correction. That doesn’t mean it’s immune or that the correction will somehow overlook that area.

[amy]

These are just the type of thoughts I was hoping for. We actually owe about $200K on the house, and property taxes are included in what I referred to as our $1700 monthly mortgage payment (and yes, they are high – about $6500 annually). My husband thinks keeping it as a rental propery might make financial sense – he agrees that there will probaby be some loss of value in Austin, but because houses are so much cheaper there & so much more aligned with salaries, that it won’t be as severe as we’re seeing here. And he may be right, but why play with fire? I would rather just sell and get out while we can. Any suggestions on what we should lower the price to? I talked to my realtor today & she thought $339,900 if we are “serious about selling it quickly”.

[amy]

These are just the type of thoughts I was hoping for. We actually owe about $200K on the house, and property taxes are included in what I referred to as our $1700 monthly mortgage payment (and yes, they are high – about $6500 annually). My husband thinks keeping it as a rental propery might make financial sense – he agrees that there will probaby be some loss of value in Austin, but because houses are so much cheaper there & so much more aligned with salaries, that it won’t be as severe as we’re seeing here. And he may be right, but why play with fire? I would rather just sell and get out while we can. Any suggestions on what we should lower the price to? I talked to my realtor today & she thought $339,900 if we are “serious about selling it quickly”.

[amy]

These are just the type of thoughts I was hoping for. We actually owe about $200K on the house, and property taxes are included in what I referred to as our $1700 monthly mortgage payment (and yes, they are high – about $6500 annually). My husband thinks keeping it as a rental propery might make financial sense – he agrees that there will probaby be some loss of value in Austin, but because houses are so much cheaper there & so much more aligned with salaries, that it won’t be as severe as we’re seeing here. And he may be right, but why play with fire? I would rather just sell and get out while we can. Any suggestions on what we should lower the price to? I talked to my realtor today & she thought $339,900 if we are “serious about selling it quickly”.

[amy]

These are just the type of thoughts I was hoping for. We actually owe about $200K on the house, and property taxes are included in what I referred to as our $1700 monthly mortgage payment (and yes, they are high – about $6500 annually). My husband thinks keeping it as a rental propery might make financial sense – he agrees that there will probaby be some loss of value in Austin, but because houses are so much cheaper there & so much more aligned with salaries, that it won’t be as severe as we’re seeing here. And he may be right, but why play with fire? I would rather just sell and get out while we can. Any suggestions on what we should lower the price to? I talked to my realtor today & she thought $339,900 if we are “serious about selling it quickly”.

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