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9 04 2008

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Is it Cheaper to Close at the End of the Month?

31 12 2007

When you obtain a loan to purchase a home, you’re required to prepay any interest that will accrue from the date of closing until the end of the month. So, in theory, the closer your closing is to the end of the month, the less you have to pay in closing costs.

This portion of interest is charged to the buyer at closing because mortgage payments are made in arrears. Unlike paying a rent, a monthly mortgage payment actually covers the previous month. For example, if you were to purchase a home and close in January, your first mortgage payment would not be due until March 1. The payment on March 1 would cover the principal and interest owed to the lender for the month of February. For a visual illustration, take a look at the sketch above.

Regarding the prepaid interest, assume your actual closing date is January 15th. Your prepaid interest charge is as follows:

Mortgage amount:    $175,000
Annual (fixed) interest rate: 6%
Daily interest charge:    $28.68

Now compare the potential savings in prepaid interest when closing on the 31st vs. 15th.

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Should I Buy a Home In a Good School District Even If I Don’t Have Kids?

5 12 2007

Perhaps you’ve heard this before: Buy a home in a good school district even if you don’t have kids.  There’s no doubt those who choose to live in a good school district pay a premium in the form higher property taxes. So, is it really a good strategy to follow?

YES, so long as you can afford the higher taxes. Even if living near exemplary schools is not a priority for you, still consider the strength of the schools in the area in which you are searching. Generally, homes in a good school district, enjoy the benefit of healthier appreciation and less time on the market when it’s time to sell (assuming the price and condition are not more than the market will bear).

On the other hand, by purchasing in a less-reputable school district, it’s likely you will have reduced the pool of buyers down the road, namely, families searching for a home near quality schools.  

WHERE TO FIND THE BEST SCHOOLS IN AUSTIN

Great Schools is an excellent place to start. There you can browse the top-rated public and private schools in Austin, as well as, compare schools near a particular address or school district. In addition, you can find the most recent Accountability Ratings, which measure how well schools and districts within Austin are performing. Lastly, the site provides a useful platform for parents to hear what other parents have to say about their child’s experience in a particular school or district.

Here are the  Top-Rated Elementary Schools in the Austin Independent School District  for 2007.

  • Mills Elementary

  • Casis Elementary

  • Highland Park Elementary

  • Baranoff Elementary

  • Hill Elementary

  • Gullett Elementary

  • Kiker Elementary

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Should I Buy the Most Expensive House on the Block?

30 11 2007

You’ve heard the old sayings before. They’re proverbial bits of wisdom and tend to surface in most conversations concerning real estate. And they’ve been around forever. But are they really true? And if so, why?  

Recently, Texas Realtor magazine highlighted a few of these rules of thumb:

  • “Don’t buy the most expensive house on the block.”

  • “Location, location, location are the 3 most important things.”

  • “Buy in a good school district even if you don’t have kids.”

TRUE OR FALSE: DON’T BUY THE MOST EXPENSIVE HOUSE ON THE BLOCK

True. Generally speaking, lower-priced properties tend to pull down the value of higher-priced properties, and more-expensive properties pull up the value of lower-priced properties.”

Mark Dotzour, chief economist at The Real Estate Center at Texas A&M agrees, 

“The underlying theory is that people want to feel like they’ve moved into the nicest neighborhood they can afford. Ignoring that theory may hurt sellers on resale. If sellers have a $250,000 home, and the rest of the homes in the neighborhood are valued in the $180,000s, they’ll be competing with properties that aren’t in their neighborhood.

If all the homes in another neighborhood are worth about $250,000, buyers might think, Do I want a really nice house in a lesser-quality neighborhood or a more-moderate house in a higher-quality neighborhood?

EXCEPTION TO THE RULE

The exception might be a property with a unique feature for the neighborhood, for example, the only house on the block that backs to the greenbelt or has a desirable view of the hill country or downtown.

Buyers, however, will want to find out if any future developments might affect or diminish this unique feature. For instance, a new phase of the subdivision could replace the greenbelt, or a new high-rise building could block the once cherished view. 

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INHABIT AUSTIN Real Estate Defined

15 11 2007

IN•HAB•IT \in-‘hab-bet\ 

1. To occupy as a place of settled residence or habitat.

2. To be present in or occupy in any manner or form.

AUS•TIN \aw-stuh-n\

1. The greatest city in the greatest state in the greatest country in the history of the world.

2. The place we inhabit.

YOU ARE WHERE YOU LIVE sm

With all Austin has to offer, it is no secret why more and more INHABITANTS are calling the city home. This place is rich in history, lush in nature and there’s always a great place to eat right around the corner.

Local is the native language. And it only takes a stroll down South Congress Avenue or a Gospel Brunch at Stubb’s to expand your vocabulary. Yet, words alone never fully capture the vibrant energy that permeates the air.

Whether you dwell downtown or in the surrounding areas, there is never a shortage of creative inspiration to be found. Our city celebrates culinary uniqueness, all forms of art, eclectic shopping and a sensational night life. This place is, has and always will be a destination.

WHO WE ARE

INHABIT AUSTIN is a local real estate firm owned and operated by husband and wife, Jason and Shayla Groves. We opened our doors shortly after planting our own roots in this fabulous place. And ever since then, we have been giving full service to buyers and sellers of residential properties throughout the city.

What we love about Austin directly influences how we serve every one of our clients. Your lifestyle is our focus. And we are passionate about helping you find your place among the diversity Austin affords. Through exploring neighborhoods, evaluating financing options, negotiating offers and smoothly navigating the closing process our value is evident. Not to mention, our property marketing will knock your socks off!

Our approach to real estate is different. No self-indulgent mug shots on the business card or huge magnets plastered on the side of the car. Conversely, INHABIT AUSTIN thrives on personal relationships. The focus is on you, even long after we’ve signed all the papers at closing. We don’t just buy and sell, we INHABIT.





Urban or Suburban: How Much Does it Cost to Own in Downtown Austin?

1 11 2007

There’s no doubt the downtown Austin buzz is growing. It seems there are more than a few people considering a lifestyle change by moving out of the suburban areas and into downtown. Until recently, there hasn’t been a large supply of downtown residential space available. Predictably, demand for condos and lofts in the urban core continues to swell.

For example, the W Hotel & Residences saw 80 percent of their units reserved within a week of breaking ground and the sales center opening its doors (1 reservation = $10,000.00 deposit per unit). That’s remarkable given the expected completion date is still 3 years away… But even if you’re not willing to wait 3 years for your condo, there are at least 10 other projects under construction and roughly 2,000 units due to be complete by the end of next year. All of this begs the question… How much will it cost to own a downtown condo?

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The INHABIT INDEX: How to Know When It’s a Buyer’s or Seller’s Market?

22 10 2007

 

First it’s important to know the definition of both market conditions. In a sincere attempt to avoid insulting anyone’s intelligence, a buyer’s market is characterized by supply outpacing demand. In other words, there are too many homes on the market for the number of buyers. Typically, we see the following in a buyer’s market: 

  1. Flexibility in negotiating price.
  2. Added seller concessions (closing costs, repairs, etc.)

Conversely, a seller’s market is characterized by an insufficient level of supply for the ready, willing and able buyers. In a seller’s market, it’s common to see this happening: 

  1. Multiple offers.
  2. Shortened time on the market.

Regardless of when or where you want to move, generally the market is trending in one of two directions defined above. Yet, it is possible for the market to be stagnating in transition, which is all the more reason buyers and sellers need to anticipate which way the market will move. More specifically, you should have a clear understanding for which direction the particular neighborhood that you’re searching or selling in is trending. The real estate market is not monolithic. Some neighborhoods outperform others (see below).

Markets constantly fluctuate. Unfortunately, by the time we read about it in the paper, it’s already history. So apart from negotiating transactions on a regular basis how can you remain informed and know if Austin is presently a buyer’s or seller’s market? How can you know which way things are headed? (faint drum roll) ….Behold, the INHABIT INDEX. I developed and routinely update this index for my clients to easily gauge how supply and demand is faring in the Austin, Texas real estate market. Here’s how it works.

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