First of all, 90 days is not a long day for a home to be on the market, in that price range. In fact, that's the norm. Since all Listing agents require that an offer is accompanied by a Loan letter, which means there is a pretty good chance the buyer is qualified, the only thing a seller has to gain, by accepting your cash offer, is about one mortgage payment. (of course, your agent will have to find the motivation for selling and I've found that many sellers agents give up way too much information.) Most resale properties are going for 96-97% of the asking price and that discount is disappearing. (not a lot of huge discounts in Austin, TX) In fact, if you submit a low ball offer, and a few of my clients can tell you this, recently, not only will the sellers perhaps ignore your offer, but you've just ensured that they will drag their feet, and the back and forth will cost you the home, as there's a pretty good chance someone will come in with a better offer. Remember, you're not under contract until both sides agree on a price and conditions. I'm not a "rose colored sunglasses" Realtor, but I assure you, that the market has turned a corner, i.e. multiple offers, etc. My broker just got a contract on a house, for full price, within 4 hours of being on the MLS!
Buy from a builder or a resale home? All depends on the motivations, again. Look at all the houses. Look at the comps. Buy the one you want after looking at all the data, and make an offer that supports the data. Know the supply of houses in a neighborhood, i.e. the absorption rate. That data alone, will tell you the market in your chosen area.
What you're looking for is about 60% of market value. Even foreclosures and short sales are priced at 85-90% of market value, so your expectation to pay 250K in a 350K neighborhood isn't likely. Nonetheless, best of luck!
Best advice - find an agent. There are quite a few excellent professionals in the Austin area and it would be good to have one on your side.
I would suggest if your approved for $250K to look just under that price. You don't want to be working/living just to pay the higher mortgage. You can get a lovely home for $225-240K. Leaving your self some breathing room will allow you to take vacations or be able to save more for college or retirement. There are four homes in Steiner Ranch under $250K right now. If you want more details on these homes just let me know and I can send them to you to look at. Your other option is if your confident about a $250K mortgage then look about $5-15K over your target price. Your agent should be able to help you get a slight reduction in price. The thing is homes are selling around 95%-97% of list price, so I don't see you getting $100K off the list price. If I may be of help just let me know.
Betina Foreman - Realtor
Austin Home Girls Realty
Your best bet is to work with a knowledgable Buyer's Agent to discover which homes in these particular neighborhoods MIGHT be had for closer to your price point. If you can't find one closer to $250K, then expand your search in areas you would like to live (ie. other parts of Lakeway, Bee Caves, West Austin). I've seen homes in Steiner going for a range much closer to what your looking for ($250k - $300k).
There isn't as big a discount as you might expect for buying all cash. It's all relative to what the Seller's expectations are in gross proceeds they plan on netting from the sale of their home. I wouldn't expect to find a 10%-20% discount on a price unless you find a unique situation whereby a seller HAS to sell in less than 30 days and still has enough equity so they don't have to 'short sale' their home. That would be finding a needle in the haystack.
Regarding buying from a Builder or Reseller, most Builders have looked at their Austin operations (vis a vis the rest of the country) as a stronger performing market and are less likely to take a major haircut on price because they simply don't need to. Additionally, most builders are running a much 'leaner' shop and don't have a lot of speculative homes on the ground unlike a few years ago. I think you'd get more price movement from a Reseller than a Builder.
Homes with a higher DOM should be more open to a lower offer since they are a bit overpriced to start, but it's up to you and your negotiating skills on how low you can get them on price.
Let me know if you need any assisstance & good luck on your search.
Mortgage Banker, NMLS #313531
Maker Capital Group, LLC
2307 Lake Austin Blvd.
Austin, TX 78703
It would be very rare for you to find something listed at $350 that you could get for $250k, it's just not going to happen. Also when you look at homes priced $50-100k more than you are willing to spend I can guarantee you will like them and that will spoil the home in the range you want to be in.
Builders are not as flexible but when I present comparable homes I can typically save my clients money on a new build home. Everything is negotiable and knowledge is power. Make sure you do not buy a new build home by yourself... the builders sales representative's #1 job is to get you to pay top dollar for each home. Realtor commissions are part of their marketing budget and you do not ever get a better deal when buying one alone.
Good luck with your search and if you have any questions please let me know.
REALTOR | Mortgage Broker | Consultant
Buy - Sell - Lease - Invest
Keller Williams Realty | 360 Lending Group
As you have already heard, the builders are giving great incentives right now so they are are to compete with...unless you find a HomePath or HUD home.
As is everyone below, I too would love to help you find your home (maybe even that diamond in the rough)!
Sean Graff, Realtor
You have gotten lots of advice, so I will just addd my experience.
My area of focus is as a Buyer's agent, which is what I suggest you use, to NEGOTIATE the best possible deal. You probably already know that there is no charge to use a buyers agent. (the seller pays the commission)
In my experience with cash investors and homebuyers, I have presented (and had accepted) offers significantly lower than asking. Often massively lower!!! This has been especially true with new home builders. They often have incentives on inventory homes. Many buyers and even some Realtors do not realize that you can negotiate and play hardball with new home builders!!
I have been nick named Bulldog Creevy by sellers in Austin, because I stubbornly fight for the best deal for my buyers. Obviously, how much you can negotiate on New Or resale depends on neighborhood comps & many other factors that other Realtors have already mentioned.
My best advice is get a Realtor that specializes in representing BUYERS and will find the best value for you & negotiate the best deal for you, in your price range!!
Let me know if you need a Bulldog on your side!!
All the Best,
Torquil "Bulldog" Creevy
You ask a great question. Unfortunately as you can see there is no one definitive answer. Only the best answer for you in YOUR specific situation. Is your price of $250k a budget or limit? Those are two very different scenarios. Usually most homes are selling within 95-100% of the listing price depending on a multitude of factors.
Both desired areas you mentioned are nice areas. You can find both resale and new builder homes. As to which is best for you, that depends on what you require or desire in your new home.
In terms of overall value - i.e. the best deal, you will probably find the greatest opportunity with builders as they are pressured under the current market to move product. A resale owner at the end of the day does not in most cases have to sell. Sometimes they are forced to- financial loss, job loss, divorce, etc. But builders are in the homebuilding business. They always have to sell product. The trick is to be at the right place at the right time and negotiate the right home based on your needs/wants. All of the factors you mention in your question will come into play and should be considered but actually knowing how to best negotiate the deal in terms of "maximum value" or "maximum savings" is the key regardless of the home. Unless you have this background or experience, you need a professional who is skilled and experienced. Find a realtor who has the background, knowledge and experience you need to truly represent your best interest.
Feel free to visit our web site at http://www.CornerstoneNewHomeSolutions.com where you can preview both areas by new product or resale. If you have questions or need further assistance please feel free to contact me.
Stephen B. McClain, Broker / Owner
Cornerstone New Home Solutions
You have identified all the points to negotiate off the list price(DOM, cash, etc.) However, $350k to $250k is probably a stretch unless the home is already grossly over priced according the neighborhood comparables. As others have expressed, 96% of list is the average on correctly priced homes
I would be happy to run a price analysis on your target neighborhoods
Keller Williams Realty
Whae a buyer give a real estate professional a top number it is reasonable in the present market to look at homes up to $30,000 above their limit.
The best deals for buyers at this time appears to ne in resales since many sellers are coming to grips with the current distressed market and are now ready to make a deal and move on. The willingness for builders to accept the maket conditions and move on is non-existant. Their mode of survival is to modify the product and save on construction.
DOM is less significant that the number and frequency of price decreases. Through studying these patterns it's often possible to get a feel for a seller's level of motivation.
Majority of listings in the Austin area are selling close to list price, especially in the Steiner Ranch neighborhood. Cash is always good to sellers, however sellers are still wanting to recieve offers close to the list price regardless if its cash or financed. DOM does play into account, and can have more leverage for buyers. Both builders and sellers should be willing to negotiate good clean offers. It depends on the neighborhood in regards to going with new construction or resale. For example, in Steiner Ranch builders are in the last phases of construction, so it may be advantageous to go that route. Its always best to look into at the opportunity for resale, and Steiner Ranch offers schools in the highly rated Leander ISD- also the new high school will feed into Steiner.
Let me know if you are interested in more information about how I represent buyers, or more neighborhood information. I'll be glad to help!
Cynthia Mattiza, REALTOR
John Mick REALTOR
RE/MAX Capital City
Coldwell Banker United Realtors
1701 Williams Drive
Georgetown TX 78628
An average list to sales price in these neighborhoods is around 96%. I'd love to help you find the right home. Please call text or email me.
Cindy Crawford, REALTORÂ®, PSC
Keller Williams Realty
101 Old Settlers Blvd #190
Round Rock, TX 78664
"The Highest Compliment our Clients can give is the Referral of Their
Family, Friends and Business Associates. Thank You for Your Trust."
When it's time to buy or sell, give me a call. I have up-to-the-minute information on the real estate market in your area.
Each Office Is Independently Owned and Operated.
Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords: http://www.trec.state.tx.us/pdf/contracts/OP-K.pdf