February, 2022
Austin - Luxury Market Insights (1M+)
Active Listings 349 1.9 Months of Inventory
29 Closed Days On Market
$1,726,631 Average Sales Price
181 Total Sales
Avg. Sales Price PSF
$545
The Austin area is in a seller’s market. A seller’s market occurs when demand exceeds supply. To put it another way, real estate inventory is low, and there are not enough homes for sale - aka low inventory. These conditions give sellers leverage over buyers because when supply is low and demand is high, the market is forced to respond.
In a buyer’s market, real estate prices decrease, and homes linger on the market longer. In a seller’s market, homes sell within days -sometimes hours - and prices rise rapidly. Typically, buyers will make offers well over the list price (15-30% in Austin) to compete. Furthermore, sellers are much less willing to negotiate during the option period as they often have another buyer waiting in the wings.
At this time we are experiencing an unprecedented demand for housing. Coupled with an extremely low housing inventory, the results are constantly changing. Homes are selling quickly and often well above the listing price. We will evaluate all of this together.
As homes continue to rise in value, many of them are not meeting this value during appraisal. As a result, buyers are often being asked to waive their appraisal contingencies and make up the difference between the appraised value and the sales price in cash. This can also be accomplished as a partial waiver. You may be asked for a “proof of funds” in this amount.
Due to low inventory, expect to make some compromises on your criteria.
Here are some ways we are pivoting our model due to these conditions:
• Searching areas for off-market homes, including “coming soon”, expired, temporarily off-market, terminated, and “For Sale By Owner” listings from Zillow and Facebook.
• Leveraging relationships with top agents in your area of interest
Purchasing a home is one of the biggest decisions of you and your family’s lives. Let Douglas Elliman Real Estate help. All of our Realtors are experienced, full-time, agents licensed by the state of Texas, who specialize in making the buying process as easy and stress-free as possible. No firm knows the Austin area better than we do
Make a wish list of what you want in a home before you start looking. Include what you want and what you need, which items you are willing to give up and which are most important. This will help you decide which type of home will be the best fit: new construction or an older home; single family, townhome or condominium.
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Your Douglas Elliman Realtor will guide you through this process. Frequently, the seller will request a pre-approved letter when an offer is presented.
Issues to consider include the price of properties, the school district, travel distances to work and school, property taxes, and area amenities. Your Douglas Elliman Realtor will provide you with detailed information about the neighborhoods you are interested in, and coordinate the showings of appropriate properties.
All copies, forms and documents required for signature, will be provided to you by your Douglas Elliman Realtor. You will come to appreciate the seasoned negotiation skills of your sales associate during this stage. He or she will take care of every detail, such as helping you choose a qualified home inspector.
Your Douglas Elliman Realtor will continue to represent your best interests all the way to closing. Our two buyer’s checklists (1) Prior to Closing and (2) Required at Closing will help you know what to expect.
There are four ways in which you can be represented by a real estate agent during the process of buying a home. Buyers are sometimes not aware that an agent can represent their interests exclusively and negotiate on their behalf.
When you work without a buyer’s agent representing you, the seller’s agent’s fiduciary duty is exclusively to the seller. In this scenario, a buyer should not mention anything they do not want the seller to know because the seller’s agent must disclose to the seller any important information that affects the home sale. This is important to remember when meeting listing agents at open houses or inquiring about listings.
When you hire an agent to represent you, their fiduciary duty is solely to you. The agent must put your interests as a buyer first and must provide you with any important information that affects your home purchase. This allows both parties to be represented equally.
An Intermediary Relationship occurs when one Broker/Company represents both parties in a transaction and assigns agents to represent each party exclusively. Each party of the transaction will agree to the relationship in writing. If the home you buy is listed with another Douglas Elliman agent, then I will be assigned to you in an intermediary capacity. The other Douglas Elliman agent will represent the seller. I will still have exclusive fiduciary duty to you and cannot disclose any of your information to the seller or the seller’s agent.
If an agent shows you homes without having you sign a Buyer Representation Agreement, they are, by law, acting as a subagent to the seller and have fiduciary duties to the seller, not the buyer. In this case, the buyer should not reveal any confidential information as the subagent must disclose to the seller any material information they may know.
Working with a lender is an important early step in the home buying process. Applying for a loan is time consuming and so it is important to begin the paperwork as soon as possible.
• Pay Stubs
• W-2 Forms
• Bank Statements
• Information about other loans
Once you submit your application, your lender will provide a Loan Estimate, which will state the terms of your loan and total estimated costs.
• Home Appraisal
• Underwriting
• Credit Report
Once you submit your application, your lender will provide a Loan Estimate, which will state the terms of your loan and total estimated costs.
Once you receive a loan with a favorable interest rate, proceed with that. Most lenders will lock in your chosen interest rate for 30-60 days to give you enough time for approval and closing on your home.
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Banks use credit scores to evaluate the risk of lending to individuals. If you know you’ll need to borrow money from a bank to finance your home, learn your credit score as soon as possible and work to boost it as needed. Reputable credit score websites will provide your credit details without damaging your score.
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You typically could be asked to put down as much as 20% of the sale price upfront, plus additional closing costs. Your real estate agent will be able to provide you with a complete breakdown of these associated costs.
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This can easily be done over the phone with your bank or mortgage professional. A loan officer will ask you about your income, assets, debts and projected down payment. They will then determine the amount you’ll most likely qualify for based on the information you’ve provided.
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It is important to understand and evaluate your home buying needs in your first meeting. This will better prepare your agent to help you locate your dream home.
New construction homes are typically lower maintenance, easily customizable, and come with warranties from the builder. If you are looking for a home that will be a great canvas for renovations or models, then resale would be a great option.
Sellers occasionally choose to list their homes themselves rather than with an agent. We will work together to help you locate and work with these sellers.
The process for buying foreclosed and short sale homes is incredibly different from a regular home purchase. Due to the complications, you will need an experienced agent to guide you through the process.
The Douglas Elliman website syncs with the MLS to ensure you have access to the latest listings.
When purchasing a new construction, there are two main options for you to consider:
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• Buyer chooses the floor plan, lot, and makes selections
• Price consists of:
o Base Price
o Lot Premium
o Design Upgrades
o Structural Upgrades
• The time from contract to close is between 7-10 months
Your agent will serve as your advocate throughout the process of negotiating a new, finished home as well as through the building phase of a “to-be-built” home. This includes helping you arrange pricing and terms, navigate builder contracts, and more.
It is important to set a budget for upgrades and prioritize what is best to have the builder incorporate now versus what might need to wait for later.
Some builders might suggest or require that an agent attend the first meeting at a model home in order to represent you.
• Builder chooses the floor plan, lot, and makes selections
• Builder sets a price which includes base price, lot premium, and upgrades
• Builder sets an estimated completion date and buyer can purchase prior to completion
“To-be-built” homes often have decision deadlines for floor, paint, cabinet, and hardware selections. Stick to the builder’s schedule to avoid closing delays.
Construction delays are common. Thus it is best to have a place lined up for 60-90 days after your tentative closing date.
While most new homes come with a warranty, to prevent headaches it is best to hire a home inspector to inspect your new priority to spot punch list items and issues prior to move-in.
Builders often partner with mortgage companies to offer incentives in exchange for using their lender of choice. To ensure you get the best deal, it is best to compare all of your options before you decide.
• Make a list of your top 4-6 homes
• We will schedule the showings with the listing agent/seller/Builder (24 hr notice is preferred)
• “Decision makers” should be present at the showings
• After we view all of the homes, we will rank them.
• Our typical buyer views between 5-10 homes to find their match.
• Make sure you take a look at the neighborhood during different times of the day.
• Determine what is included in the HOA and what the ultimate fees are.
• Evaluate the potential utility costs.
• Talk to neighbors.
• If you pull up to a house and you are not interested, please let us know.
• It’s okay to fall in love with the first home.
• Sales Price: We’ll discuss a competitive offer based on the specific home you are interested in purchasing
• Earnest Money Deposit: Typically 1-2% of the purchase price. This is your “Good Faith Deposit” held by the Title Company due within 3 days of execution (wired or personal check)
• Option Period: Due diligence period where buyer has the “unrestricted right” to back out.
• Option Fee: $500-$1500 - Due within 3 days of execution (wired or personal check)
• Owner’s Title Policy: (Title Insurance) Based on the sales price ($300k - $2k | $500k - $3k | $750k - $4,500 | $IM - $6k).
• Survey: Shows the footprint of the property, including boundaries, easements, encroachments, etc. ($500-700).
• Home Warranty: Covers appliances for the first year of the home ($500-600).
• Closing Date: Typically -30 days from an accepted offer
Know when you have reached your affordability or comfort limit. Talk to your real estate agent about the maximum price you are truly willing to pay during this process.
Between flexible closing dates to increased earnest money and option fees, there are many avenues to increasing the odds of a seller accepting your offer. It is important to discuss with your agent in advance to determine which items might be of importance to the seller of your desired home.
Here are some ways to strengthen your offer:
• Have pre-approval letter or proof of funds.
• Make a cash offer if you are able. If not, make as large a down payment as possible.
• Use a local lender that communicates effectively with all parties.
• Offer more than the asking price.
• Keep your offer clean and simple.
• Waive the appraisal and financing contingencies if you can.
• Shorten the option period.
• Have your earnest deposit ready.
• Offer to pay for the seller’s closing cost or at least the title insurance policy.
• Offer flexibility with your closing date.
• Include a personal letter with a family photo.
• Offer an additional earnest deposit after the inspection period.
• Be diplomatic with negotiations. Remember that the seller has other interested parties to fall back on
In a multiple offer situation, many agents will ask for each party to submit their “best and highest” offer. Usually, there are no revisions to this once submitted. In order to maximize your chance of getting the property, speak with your agent about your offer as soon as possible.
We know that emotions can often run high during this stressful time. Both parties are simply trying to negotiate for the best solution for their needs and finances.
• It is highly recommended that you hire a licensed home inspector to perform a third party inspection (even when purchasing new construction).
• Inspectors are licensed through TREC and their job is to identify any deficiencies in the home.
• The home inspection is scheduled during the Option Period and typically costs between $350 - $550.
o Please note there are additional costs for pools, septic systems, pier and beam foundations, etc
• The inspection report is typically sent directly to the buyer within 24 hours of the inspection.
When negotiating, it is important to see what affects to functionality of the home. There are five things we will focus on during this process:
• HVAC
• Plumbing
• Electrical/Safety Hazards
• Foundation
• Roof
There are 3 common ways that repairs are negotiated:
• Ask the seller to make repairs
• Ask the seller for money towards your closing costs
• Ask for a reduction of the sales price
• An appraisal is a subjective third party opinion of the home’s value performed by a licensed appraiser.
• Appraisal is ordered by the buyer’s lender and paid for by the buyer. We recommend budgeting $600, though rush fees may increase the cost.
• Ideally, the appraiser will appraise the home at or above the sales price.
• Due to rapid rising home values, it’s not uncommon for the appraisal to come in lower than the sales price. Appraisal concerns will be discussed prior to offer submission and mitigated through communication with the listing agent, appraiser and sharing of market data. If you waive the appraisal contingency, you will be responsible for making up any appraisal differences in cash. You agent can guide you through this process in more detail.
The walk-through is an important part of the due diligence process. We must ensure that negotiated repairs have been completed, that the seller has truly vacated the home, and that no damage was done during the move-out process. You can also check that any non-realty items negotiated remain in the home.
When
Walk-th roughs generally occur the day before or the morning of the closing. This timing is flexible.
Generally speaking a final walk through takes about 30 minutes
Closing Day
Identification
Please bring your driver’s license or passport for identification. The title company cannot close your property sale without these IDs.
Please bring a cashier’s check (no personal checks) or your wiring instructions and confirmation number for your down payment funds to provide to your title company closer.
In case of small last-minute adjustments, a personal check is nice to have on hand.
Please note you will not receive keys until the Title Company authorizes funding.
In order to receive the highest level of representation and service, the next step is for you to sign the required documents. Below you will find a description of the documents you’ll need to sign to move to the next step of the home buying process:
• Information About Brokerage Services: An informational document required by the Texas Real Estate Commission (TREC) which explains a broker’s minimum duties to their clients. It also defines the different types of agency.
• Buyer Representation Agreement: An agreement that officially allows me to represent you while we search for a home. Without a Buyer Rep. in place, I can assist you but do not represent you and must place the interests of the owner first (see “Subagent” on the LABS document).
• General Information & Notice to Buyer: An informational document that acts as a glossary of terms you may encounter throughout your home buying experience.
• Wire Fraud Warning: An informational document that warns you about the dangers of wiring funds without confirming wiring instructions with the Title Company.
Lander
PeermanGlobal Real Estate Advisor
c. 512.517.2514
lander@landerpeerman.com
@lanerpeerman
For Lander Peerman, helping her clients buy or sell their dream home is an incredibly rewarding process. From first-time homebuyers to seasoned investors and everything in between, there isn’t a real estate challenge that Lander won’t dive into with determination and passion.
Additionally, Lander’s love for design is apparent when you walk through any of her listings. From trendy bungalows in Zilker to mid-century modern Tarrytown homes, to house renovation projects in Northwest Hills, Lander’s eye for design is unparalleled. Most importantly, the natural-born communicator and leader make her clients feel like friends, and you’ll often find her out and about with them at her favorite Austin hot spots.
As a native Austinite, Lander grew up alongside her father and grandfather, both of whom spent their lifetimes in the real estate industry. After living in New York City and Dallas, and founding two successful businesses, one of them located in the heart of Austin, it was only natural that Lander would launch her own real estate career. Her wealth of knowledge and expertise in central Austin neighborhoods makes her an extremely savvy resource for clients moving to Austin for the first time. Combine that with her professional connections across the US, including in luxury markets in Dallas and Aspen, and Lander becomes a unique and invaluable asset for all her clients.
Lander’s incredible level of service is seen from start to finish when she is guiding her clients through their real estate transactions. Hence, it was only natural to join the Douglas Elliman’s team to continue to align herself with other brokers and agents who deliver an unbeatable level of professionalism and world-renowned service for luxury real estate.
Realtor Associate
c.512.718.1907
shaine.rozman@gmail.com
Born and raised in Austin, Texas, Shaine couldn’t be more proud to call this her home. Since she can remember, Rozman has always taken an interest in architecture and real estate. Teaming up with Lander Peerman was a no brainer, as she wanted to made her way into the luxury real estate market after her schooling. The new duo happily made themselves at home at the Douglas Elliman, and couldn’t be happier about what the coming years have to bring. When Shaine isn’t closing deals, she is working out at Barry’s Bootcamp, shopping, or finding the next best brunch spot in Austin.
Lander Peerman:
Instagram: @landerpeerman
TikTok: @lpeerman
Youtube: Lander Peerman
With over 7,000 agents and more than 100 offices in key markets across the country, we have the reach and resources to promote your property from coast to coast.
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