Gorgeous image of Austin’s growing skyline by Fellowship of the Rich.

Austin is in the midst of a massive explosion of population and housing growth and the downtown skyline is shadowed by endless, towering cranes and each new condo development is taller than the last.  It seems like trillions of units are being approved to be built in the downtown area and many speculators are salivating over the impending doom of the high rise condo units, anticipating that there are so many being built that they will all sit there, collecting dust and they’ll swoop in and get incredibly bargain basement prices.

Wrong.  Consider these facts:

• Austin’s downtown population is 6,000.
• That population is projected to double in 24 months. 
• There are 4,000 units planned or under construction.

Texas economist Ray Perryman noted, “there is an ample population to absorb these units.”  Oh really?  Yes.  Perryman posited that if less than 1% of Austin’s population decided to live in these units, they’d fill up in a snap!

There are many buildings that are completely lease units, other buildings are made up of individual units for sale, and there are proposed projects for affordable living, making downtown Austin an incredibly lucrative place to be.

Why are people moving downtown?  Some move because of gas prices, others for traffic or the environmental impact of driving, others enjoy attached amenities (fitness centers, pools, etc. in the same building) while others move for the social scene of being immersed in the downtown environment.  Others simply moved to the suburbs and it didn’t end up being a fit so they’re moving closer to the heart of the city.

So, for those saying that downtown Austin will never fill up, all I can say is that you’re wrong.

Yahoo blipped this article across my screen and it embodied many things we frequently tell those clients that are preparing to begin flipping/renovating/fixing their new purchases. Maybe you’ll find it helpful also! We will be printing this out for all our agents who aren’t RE.net compatible!

Click the links for about each DIY mistake:

1. Not taking out the required permits.
2. Starting a job without the necessary tools and supplies.
3. Inadequate preparation of the job site.
4. Skimping on materials.
5. Using the wrong paint.
6. Improper preparation of walls for painting.
7. Unsafe job conditions.
8. Inaccuracy.
9. Working beyond your limits.
10. Failure to get a clue.

Last week, my husband closed a beautiful new home in a new subdivision. The buyer (we’ll call him JR) reads this blog (being a tech-savvy guy and a new friend of ours), so he’ll get a kick out of it (hi JR)!

What a dud. After all the spin and after all the hype, the phones still rang this week in the office. There was hustle and bustle, people in and out, and it was business as usual. I watched the traffic in and out, listened intently for signs of blow back, and still, nothing. There were happy conversations with buyers and sellers eager about their business of buying and selling and agents facilitating. What a great week it has been. Even online there were 10 or 15 blogs on the subject of the huge dump CBS took on your living room floor and a whole lot of commenting, but honestly, it was not the doom and gloom I think some had hoped for.

It got me to thinking about some of the things I had written about earlier in the week- my main point was that NAR is not a business model as some would like to portray. It is still 1.3 million agents all around the country that all do business in thousands of ways. Some would like to think that the idea of a discount is a new thing, but alas, the reality is still true- Realtors invented the discount brokerage over 20 years ago. Some practice it, others do not, but the truth to those who want to hear it is still loud and clear- real estate as we know it will adapt day in and day out (you thought I was going to say something else) as it always has, and so will the 1.3 million agents who practice it.

When the phone was invented, did the world as we knew it stop? Did the candle business cease at the advent of electricity? Did Bell keel over when cell phones were born? Did the desktop or laptop computer get pushed out the window to the awesome technology of the PDA? No. Most even suspected the end of American Airlines when Southwest Airlines popped onto the scene, but it just did not happen. Those businesses adapted and pushed forward, and so will we.

I personally am not worried about the fin I see in the water, I have come to the conclusion that Most in the Know have come to, and that is when you throw everything in the air- the hype, spin, blame, accusations, ill comments and everything else possible you see this cloud of smoke and haze, and beneath it all, you see a client and their Realtor. It will be on the ground, face to face with our clients that the air will be cleared. All the spin in the world cannot stop the one-on-one relationship a client has with his agent. Think about it… from their desk with their dual monitors and snappy headsets, it is hard to relate to the buyer or seller the way we do. On the phone, a client can hang up if he or she gets annoyed, but the service agent has the advantage of being there. That is where Real Estate is practiced- on the ground, face to face. That is precisely our advantage- the ability to do whatever it takes to make a buyer or seller happy. You just can’t do that from a call center. In time, even at a discount, the discounters will be held up to light about their commissions due to this inadequacy. What’s next? In order to become more profitable, the online discounter ships the jobs overseas to India? “Press one for English”

By no means do I advocate ignoring the issue- you should debate it in your office, in your mirror, or even with your clients as I have this week. Sharpen yourself and your business, and keep your eye on the ball. Negativity breeds negativity and that is their game.

Turns out it’s just a perch after all.

-T.R.E.G.

GUEST ARTICLE by That Real Estate Guy

It should be noted and stated loudly that the same folks who would bring down the NAR or redefine the industry as they put it are the same people who hate and want to bring down Wal-Mart. Not sure what I mean? I’ll explain…

WAL-MART

Before Wal-Mart, the streets were lined with mom and pop shops- from the corner drugstore to the large department stores that had been family owned and operated for years in their communities. When Wal-Mart came along, the nation rejoiced and flocked to the big discount store to buy many of the same products they were getting at the stores I just described, but they were obviously lower quality, lower quantity; you name it, it was lower than just the price. Little by little, the old mom and pops fell off one by one. This phenomenon has been noted on popular shows and your local news. You’ve seen it for yourself when you visit your old hometown only to see the old fashioned drug store sitting vacant on the corner. The reality was explained away on major news networks as capitalism at its best, and the way of the world much the way CBS has done.

NAR is much the same as the mom and pops as the National Association of Realtors is made up of 1.3 million independent contractors (every day average people, mostly sole-proprietors) who already work to the advantage of their individual clients. Realtors assess the situations of all clients and are generally reasonable with them in their listing or buyer commissions. Realtors negotiate their price and sometimes settle with a reduced commission to build a stronger trust with the client because the clients’ needs were put first.

Mom and pops of yesteryear were much the same way. They knew their clients personally and by name most of the time, and knew when the O’Brians needed a helping hand and let them pick up a few essentials on credit until next month. The O’Brians would be grateful and would remain customers for life.

Somehow today, the same folks that would redefine our industry are the same folks who hate what Wal-Mart has done to the landscape of downtown main street- they’ve basically rendered them useless as the independent owner could not compete at volume discount pricing. The Anti-Wal-Mart lobby jeers at the idea of “one more Wal-Mart” while the Capitalists applaud. Slowly over time, the competition has faded away and we really aren’t sure if we’re getting every day low prices at the Wal-Mart because we really have nothing to compare it to. We simply have to pay for quality.

But again, the Anti-Wal-Mart Klan would have you believe that tearing down the network of 1.3 million independent contractors of the Real Estate Industry would fix what may or may not be wrong with it. I would argue that the industry is fine. There is room for argument about real estate practices (such as the argument of dual agency), but fundamentally, the industry could not be more diverse in its current state. Another example of this phenomenon is the oil industry. I remember when independent gas stations were competitive and abundant, creating the kind of competition that kept prices in line. Today, we have roughly five major suppliers around our cities basically deciding what we pay. Let’s face it, tearing down the independents of our country is fast becoming the way of the land; and to be honest, it is scary. Last I checked, there are no discount gas stations opening up, nor an outrage over the fact that real gouging is taking place on a daily basis. Are we going to continue this vicious cycle? I pray not.

THE MEDIA SPIN

I would say to online vendors such as Redfin, pay your dues- your Realtor dues. Be a member of the Board and agree to the CODE OF ETHICS and we’ll work with and trust you; join the list of the already competitive 1.3 MILLION independents in the industry. Work within the guidelines that have already proven to work countless times a day when Buyers and Sellers shop their list of local professionals and make their choice based on their needs. The bottom line of what this is all about is that companies like Redfin want to practice real estate without paying to be a Realtor and following the Code of Ethics. I noticed this was omitted.

The title of the 60 Minutes Story says it all about the spin that the media has already begun to spew- (“Chipping Away at The Realtors’ 6%”). The last time I checked, I only charge 3% of the transaction, and the buyer’s side (the other Realtor) charges 3%. So you aren’t chipping away at 6%, you’re simply chipping away at my little old 3% that I earned by being married to my client for 30, 45, 60, or 120 days or more. You’re chipping away at my ability to earn the trust of my individual clients (the O’Brians) by giving them back what I see is needed to make a sale work. When bringing a buyer to the table, many listing agents already discount the buyer’s side anyway, so the Redfin argument is moot on the so-called 6%.

CBS was also bias in the fact that it brought one couple from the discount side, versus clients from the 1.3 Million agents around the country to say exactly the same, only at least 1.3 millions times over. Another telling moment of the interview was: “Redfin very proudly says that they returned in rebates $3 million last year to its buyers,” Stahl remarks. “You can’t boast of anything like that.” “Absolutely not,” Arends acknowledges. “I don’t know how to answer that one.” I have the answer to this question- ONE POINT THREE MILLION INDEPENDENT AGENTS can boast a hell of a lot more than 3 Million dollars saved- we save it in equity at purchase, we save it in profit at sale, and you know what? We save it in rebates too. I’ll need a bigger calculator for that one….

Redfin is a tic tac in scale to 1.3 million Realtors in the United States, who are all independent voices and advocates for their clients- and Redfin aims to “redefine” 1.3 Million small businesses, 1.3 Million opinions, 1.3 Million consumer advocates that proudly stand up for their clients daily! Are you kidding me? We don’t need to defend ourselves. The DOJ needs to buck up and get the fact that 1.3 Million voters/agents/human beings make up NAR and those 1.3 Million voices know a little more about “the O’Brians” than a faceless machine that is designed to spend even less focus on consumer advocacy- the small fraction of those complaining or having problems with Realtors are guarded by the local Boards and Real Estate Commissions, we are already held to a higher standard than those that are not members of the Board and believe me, we are held to account!

Commission levels of 3% (standard in Texas) per agent were set to protect consumers from gouging. In the past, that number has remained the standard regardless of the market or home prices. With the home prices spiking, protecting the seller’s equity has become even trickier and even more needed. Realtors have never been MORE needed, yet all we hear is how they need to reduce agent income. If your profit margin on your home is $80 grand, then why are we debating over $2,400- how is that a price gouge? If I had $80k to net on my home, the last thing I would be doing is attempting to go it Wal-Mart style.

REFORM: Redfins needs reform to be able to compete with 1.3 Million agents that make up NAR

Redfin does not scare me nearly as much as this so-called reform many say this industry needs. Why does it need to be reformed? The reality is, the MLS is a product of NAR- not an open source code for any and all to access, much like Zillow’s product offered. Let them build and develop their product the way NAR has done.

Imagine a world with five different NARs and you have the world as envisioned by Redfin. Are you telling me that Redfin is going to allow the other four Redfin-type companies to list on their version of the MLS? Consumers are not best served by this business model that forces home buyers to search four, five, maybe six online listing systems. It’s like the BCS- the MLS may not be the best system in the entire world, but it does work!

CLOSING

NAR represents 1.3 million diverse independent contractors that practice real estate under one code of ethics and one common application of fair Real Estate practices that safe guards consumers. The alternative is to “redefine” ourselves into a corner where we go back to having numerous Listing Services, a lack of industry standards and an overall discord in Real Estate. The alternative is not even viable.

I would suggest that all Realtors throw away the talking points and simply say that all 1.3 Million of us already guard your interest, less than 100 say otherwise.

NAR is not something you just change without affecting the 1.3 Million Mom and Pop voices (who only average $47,700 per year) within it; you don’t just do that because a tic tac says so.

Be careful what you ask for!
That Austin Real Estate Guy

My husband bases his entire Real Estate philosophy on the advice given to him from a busy, sophisticated mother of six- “I never give my kids more than two options for dinner.” No buyer should be equated to a toddler, but the advice still rings true- never overwhelm your client. If your kids opt for chicken, God forbid you serve trout- confusion will abound, dishes will break, and tears will fall.

When someone calls looking to buy, a good Realtor should be able to listen and understand the complicated nuances of subjective wants vs. needs. While discussing a buyer’s future home, the Realtor should already have 5 MLS numbers in mind and be checking availability from his laptop (with a Sprint wireless card if he’s not in the office). By the end of the conversation, the Realtor should know the area the buyer desires (probing questions may reveal that they said they wanted North but they didn’t know the Tollway opened, so now they are open to the more affordable options in the West), have 5 homes in mind to tour, know 5 things the buyer wants in those homes by asking questions regarding subjects even THEY haven’t thought of (you have a baby coming? Perhaps you could use a study instead of an additional bedroom- that will open up some options. You want red brick? You’ll love this red brick with limestone accents featured by a prominent local builder. You say you want to landscape? Oh, you mean you want a 2’x4’ space for your hydrangeas!). After all, knowing 5 things they want is good because, as my husband says, “you can’t argue with your own data.”

If you (as a buyer OR Realtor) find yourself in home number six and are getting closer to a selection, the Realtor should discuss with the buyers their original 5 wants/needs and address how these have changed. Regrouping is pertinent at this point because buyers CAN change their minds midstream. If the Realtor isn’t even close to the mark, the connection might not have been made and the relationship should be optional beyond that point.

Too many Realtors simply have fun playing around in vacant houses and forget that the buyer’s time is precious too! Everyone loves dreaming about replacing floors and what color the valances will be, but shopping should be the easiest, smoothest, and often the shortest part of the home buying transaction. After the home is selected, most Realtors consider their job done and suddenly stop answering calls. This is pathetic- the best Realtors know to hold a buyer’s hand through the lending process, to follow up with title, to go to all inspections, help coordinate insurance and warranty, be at the closing table and be there to open the front door with the buyers. This is an incubation period which is often neglected in the Real Estate industry, but is CRUCIAL to the buying process. No wonder builders are experiencing so many cancellations!

Look, my husband has a 99% closing ratio because his background in PR and marketing has given him the unique advantage of being able to listen effectively and narrow down people’s comments into 5 desires or needs (and being able to distinguish the difference between the two), and in most cases being able to show buyers the home they will buy in the first shot (but will show 2, 3, or 4 more to ease the “what if” questions buyers may have). He tells buyers up front that they will look at up to 5 homes, they will not be stalked (and can walk away if it is not a good fit), and they will have someone on their side watching over the entire process. Most times, they will take their chosen home off the market the same day he shows them. He loathes the long term buyer’s agreement and doesn’t feel the need to subject a client to 120 days of his “service”- if a Realtor hasn’t gotten close within the first 5 homes, maybe they just don’t get it and all parties should part. After all, he wants to be at the house warming party and he will be the Realtor to sell that same house in the future!

To summarize- when your buyer calls and is prequalified, you need to

(1) ask questions, listen, and assess their wants versus their needs into 5 specific targets

(2) don’t beat around the bush, show them the house they described first (often this can rule out your other four homes, but show them the next best thing anyhow).

(3) If you’ve realized that you missed the mark, don’t waste their time- reschedule and research with new current data in hand.

(4) For home number three, with your new data, show them the home most closely matching their new description- since this is post-reassessment, you should be spot-on. And here you are at home number 3 or 4 as opposed to 33 or 34.

(5) Now that you’ve saved time shopping, you can spend more time with the closing process and should be able to give more (aka better) service to the buyer!I see this work every day- it should be the norm in the industry, not the exception to the rule!

When my husband and I were dating and he was a new Real Estate Agent practicing apartment locating, we loved “previewing” apartments around town. This involved picking the fanciest, most expensive apartments that had just been built and going on tours so we could get to know the products we intended to promote.

We lived in far North Austin in a gorgeous apartment we had no intention of moving out of, but for “business sake,” we drove all the way to Southwest Austin to see a new property. When we walked into the elaborate lobby, I anticipated the glittery blonde in a suit to offer us champagne. Well, we didn’t get champagne, but we were taken via stretch golf cart (oooh la la) to an apartment that would suit our “clients.”

We strolled up the steep stairs which immediately turned me off, but when we entered the 900 square foot apartment, we were in love! Centered around the kitchen, the bedrooms flowed together and angels sung as we immediately pictured how our new sofa would look in the living room with the view and what walls we would paint and oh, where would our 6” mirror go? Obviously, we broke character and my boyfriend (now husband, keep up!) literally threw himself down on the floor with a face-stretching grin in the master bedroom and did a carpet angel where the bed would be placed. The bubbly blonde figured out that we too would consider living there and wouldn’t it be great to show clients a stylish, furnished apartment?

I call this the “Carpet Angel Phenomenon.” I am a researcher through and through and when apartment hunting would drive even the most patient person crazy by my desire to see EVERY apartment on the market. But, had I not assumed I could find a suitable home on my own (and seen that apartment first with a skilled professional), the “Carpet Angel Phenomenon” would most certainly have taken place, removing any need for future shopping. So, if you’ve asked your REALTOR to show you “just one more,” you either haven’t found your Carpet Angel moment, you are overly analyzing and self-doubting, or your REALTOR has not listened to what you want. I hope that soon, the “Carpet Angel Phenomenon” gets you!

My Two Cents,
Austin Realtor’s Wife

And yes, that is a picture of our very own dog!