I bet if we asked consumers to define the terms the only one they would say that they know with certainty is a single family residence.  A few savvy investors might know the difference between a duplex and a quadraplex.  My question is “What consumer really knows the difference between a free-standing condo, a townhome, a stacked condo and a high-rise condominium?” Slim to none if I had to speculate and here I hope to shed some light.

There are four types of condo structures that I am going to describe.  They are free standing condos, duplex condos, townhouse condos and stacked condos.

Free-standing condos or “detached” condos are essentially a house on a small lot.  No walls connect a free-standing condo to another structure i.e. the name “free-standing.”  Typically this type of structure does not share walls, yard or insurance with others in the condo regime.  Generally speaking, the HOA fees are negligible and usually owners have more autonomy than in other types of condo regimes. The reason for free-standing condos is a reduction in the lot size means that a house of similar size would be less expensive than a single family resident on a regular lot.

Duplex condos typically share one wall with another structure/owner and many times the shared wall is the garage.  They usually have a yard and are similar to free-standing except for the one-shared wall.  Many times a duplex condo is desirable for an owner who wants to live in the inner city but can’t afford the price tag of a single family residence in an urban and highly desirable location.  Once again, owners do not share insurance and the HOA fees are negligible.

Townhouse condos typically share 1-2 walls and look like “row or garden style” homes.  The owners share common areas including the costs associated with common area maintenance and insurance.  Because of these shared costs HOA dues are usually higher and there is usually less control over what you can and cannot do with the exterior of the property.

Stacked condos typically share 2+ walls and are often called mid-rise or high-rise buildings.  There is the potential for all four walls to be shared with someone living above, below and next to you on both sides.  Once again, owners share insurance and common areas such as pool, fitness center, and any other community amenities.  Because of this the HOA dues are higher and owners have little control of changes to the exterior of the property.

So, you might ask, “Why does any of this matter?”  In my search for condo clarity I realized that it matters for both buyers and sellers.  A lack of understanding about the nuances and benefits of each of these different structures limits a buyer’s opportunity to buy which in turn affects sellers. Additionally, in the current market, there is a perception that HOA’s are “bad” or take “advantage” of owners.  While this might be the case in some situations, the majority of condo situations can be highly advantageous to certain types of buyers.

For example, a free-standing condo gives a buyer the opportunity to purchase a home in a highly desirable area that they might not otherwise be able to afford.  With that, they have a smaller yard to maintain, lower utility bills, low maintenance fees, low HOA fees and still maintain a high level of autonomy as an owner.

My advice? Don’t be afraid to explore condos. They might be the perfect solution to living in an area that you might not otherwise be able to afford. And for those seeking lower maintenance, lower utilities and less yard work, a condo might just be the way to go.

I hope this article has turned your condo confusion into condo clarity.  If you still have questions please submit them as a comment.

Take a moment to watch our latest lender update:

It’s great that Interest Rates are low, but what does that mean to me?

Did you know that for a $200k home, with 5% for a down payment, with the current interest rate at 4.25% (4.34% APR), your monthly payment would be approximately $935.

Buying that same home at an average interest rate of 7% (7.212% APR) would cost you $1,264 per month.

In other words, the same house with the same down payment will cost you approximately $329 LESS per month.

Or, said another way…you could buy a lot more home for the same amount of money.*

* Hypothetical numbers. To get accurate verified numbers, please call us.

There are 2 different programs here:  Assisted and Unassisted.

• Assisted : a second, silent lien of 5% of the mortgage amount to help with down payment and closing costs. This second lien is interest-free, and will have to be paid back after the 30 year mortgage closes.  Interest rates are a bit above market rates, or about 5.74% interest rate approximately.
• Unassisted: no second lien, but the interest rate will be a bit below market rates, or 4.99% approximately

Who can use the program?

• First time home buyers who occupy the property, it does not matter who else is on the loan, as long as the occupant is a first time home buyer and is on the deed
• Current home owners who purchase in a “targeted” area (see below)
• Meets income requirements (see below)
• Completes a certified Home Buyer Education course prior to underwriting, costs is about $400-$500 and can be completed online

“Targeted” area = low income areas, Travis county only has a handful of these areas: Census tracts 000604, 000802, 000804, 001000, 002311, 002316, check the status of your area here

All properties below $316,000 qualify for the Bond 77 Program in Austin. See a list of Homes that qualify for downpayment assistance via Bond 77.

Income requirements:

• Sum of all persons’ income (all sources) either living in the property or on the Deed
• Targeted area, 1-2 persons = $87,960 max
• Non-targeted areas, 1-2 persons = $73,300 max

Why use the program?

• I have a down payment, but I would like below market interest rates
• I need down payment or closing cost assistance

Restriction: Recapture tax!

If the property is sold within 9 years of the mortgage closing and they profit on the sale, the borrowers will have to pay the lesser of these two amounts:

• 50% of the net gain on the sale, OR
• 6.25% of the original mortgage amount

Example: If you purchase the property and close the mortgage for $130,000, and then sell the property 6 years later using a Realtor for $145,000 (considering 9% approximate fees for closing and commissions), you will net $1950 in profit.  Your Recapture Tax would be $975.  Disclaimer: this is only an example, and numbers would have to be confirmed by a lender.

Contact the Goodlife Team if you would like more information (phone 512-892-9473), or are interested in taking advantage of this first time home buyer program!

Thanks go to John McClellan of Supreme Lending in Austin, TX who gave a great presentation on this program!

Why Us?

Earlier this week, I heard through the grapevine that some industry leaders were asking “what has The GoodLife Team done to be worthy of such an award?”

My response … Good question.

I do not know the metrics, algorithms or methodology used by Inman to select their winners. What I can say for sure, that I found immensely refreshing, is their selection process. We are not affiliated or connected to Inman politically. In fact, it was not until minutes before the award ceremony that I had the slightest inkling that we might win when, via email, I received the following message “please be in the room for the awards ceremony.” I will admit that, even then, I did not think we would win the award and did not know for sure until the exact moment when Brad Inman announced “The GoodLife Team” for most Innovative Brokerage in the Country and asked us to the stage to accept our award.

So, Innovators of the year?

Innovation is an assessment of novelty or that something ‘new’ has been produced. Synonyms for novelty are: originality, newness, freshness, unconventionality, unfamiliarity, difference, imaginativeness, creativity, innovation and modernity.

I can tell you, The GoodLife Team has produced a lot of ‘new’. Our consumer-based, lifestyle website is ‘original’. Our brokerage model is ‘unconventional’-not the “recruiting model” of our competitors. Our communication & database system is ‘fresh’, custom designed and built on cloud-based technologies, enabling rapid response, tight information and secure data. We ‘imagined’ and then created our own social media and marketing strategies that are winning for our customers and being touted as the model to follow nationally. We hear recurrently from people who discover our website, brand, agents, culture, gossip, marketing … that we are ‘different’–that we don’t “look like those other real estate companies”. Also, we have ‘created’ a centralized operating system that is a sophisticated integration of our web technologies, tools, communication systems, social marketing, internet advertising, lead-generation and conversion systems as well as customer service standards and operations. I must admit- I think what we have built is quite the innovation. But, beyond what I think, others are taking notice as well. We were recently featured in a national study of next generation brokerages to watch for their innovations

We at The GoodLife Team consider ourselves ‘modern’. We strive to be unlike all other traditional real estate brokerages. And underneath all of our innovation is a vision, passion and commitment to produce whatever part of the change that we can to raise the bar of this industry. Where at the end of the day, we can finally be proud to say at dinner parties that yes, we are Realtors. Where at the end of that same day, customers are satisfied because they know we exist to take care of their concerns and we are competent to do so.

Why did we really win?

Perhaps it is our passion to raise the bar that earned  us the award. What I can say for sure is that we have in fact been innovating like crazy at The GoodLife Team. And I am deeply honored to have won the Inman Award for Most Innovative Brokerage because to me it validates what we have been working so hard to achieve: A new kind of real estate brokerage designed to take care of the wants of the new generation of home buyer and home seller.

Beyond innovation, why did we win? We won because of YOU.

Without you, the award would be meaningless.

We promised you, if we won with your help, we would throw  a celebration – an intimate celebration with our closest friends. Join us August 6th from 6-8 pm. Click here to RSVP.

A special thanks to those who voted for us in the People’s Choice Award.

Overall Market Summary Report

The Wise Assessment

Let’s review. Supply, or Inventory (single family homes on the market) are at an all-time high of 11,749. Demand, or Sales (single family homes sold) are down 4% over last year. Prices are up 11% over last year (and increased 12% over last month). Yup, we broke the fundamental laws of Economics, Austin!

What do I mean? The fundamentals of Economics say that if supply increases and demand decreases, prices MUST go down. They went up!

Broken? Nah, not really. Altered by external forces? For sure. The government artifically inflated the sales for the first 5 months of the year with the tax credit for home buyers. Essentially, a majority of people buying homes under the $300,000 price range bought earlier this year to take advantage of the tax credit. So, as those buyers already closed on their purchases, demand decreased. So why have prices spiked? Well, buyers in the higher price ranges were not incentivized by the tax credit (they did not qualify) so a much higher percentage of the sales for June were in higher price ranges, thus driving the average price of homes through the roof.

SELLERS: Even though the average sales price increased by 12% in one month, your home is not worth12% more than it was last month. In fact, it is likely that it is not worth much more than it was worth even 2 years ago. Just because the average sales price increases, individual home prices are not necessarily affected.

• Are you selling your home? If you are currently selling or thinking of selling your home, please note that you now have more competition than you ever have. So is it a bad time to sell? Not necessarily. We are still successfully selling homes…that are very competitively positioned in the market.

How do I sell my home in today’s market?

Product – Your home must be in superior condition to your competitor’s home. What does this mean?

• Repairs and updates – Find a great contractor – If there are improvements or repairs that need to be made to your home to compete…complete them before you put your home up for sale
• Staging – Hire a professional stager – Ever walk into a model house and feel right at home? The builder hired a professional stager, and you should too!

Price – Ever wonder why homes sell in a few days, often for more than asking price? The home was priced correctly the very first day it went on the market.

Promotion – Intercept buyers where they begin looking for homes, and give them what they want ~ great photos, and lots of them! And ask yourself, “If I were buying a home today, what would I be looking for, and where would I look?” Then, be there when the buyers begin their search.

BUYERS: This is a great and fun time to be buying a home. Ever go to a tree lot during the holidays when they just unloaded a fresh batch of trees? There are SO many to choose from….and you get to choose the very best tree for your home! Well, real estate is no different. There are so many homes to choose from; just know what you are looking for and you will not waste time looking at hundreds of homes. Want to weed through thousands of homes to find the 7 that may work for you? Use the extensive technology that is available online when searching for homes. Want even more help weeding through the homes? Get a qualified Austin Realtor to help you get direct access to the Realtor’s database system (the Multiple Listing Service) and get up to date notifications of homes that suit your criteria.

• Get pre-qualified with a COMPETENT Mortgage Bank – Make sure that your mortgage professional is tied directly to a bank. And please, save yourself unexpected costs, delays in closings, and major breakdowns ~ hire a local mortgage banker!
• Hire a knowledgeable buyer’s agent - Make sure that your agent is knowledgeable in the area of town that you are interested in. If they specialize in Manor, they may not know Cedar Park.
• Get educated - Ask your agent lots of questions. Not sure what to ask? Click here to get some great questions.

Average Sales Price

Prices are literally OFF THE CHARTS! The average sales price spiked 12% to $278,753 from $244,953 in May. Unfortunately, my home is not worth 12% more than it was last month, darnit!

Sales Closed by Month (Demand)

Sales have taken an unseasonable turn a couple of months too early to follow previous years’ trends. This is what happens when external forces (government) impose their might on the market.

Active Listings (Supply)

Yup, off the charts again (almost). Also, it is taking homes much longer to sell in this market since there are less buyers (demand) and more sellers (supply). Right now, we have an inventory of 6-7 months of homes (this means it could take that long to sell a home). Check out Krisstina Wise’s message to our sellers here.

Offers of Help

• What Is My Home Worth? Want to get a good idea of what your home is worth … and find out right now online? Check out our Market Snapshot for an analysis of the value of your home.
• What Is That Home Worth? “Stop the car, honey … look at that house. I wonder what it’s worth?!?” Does this ever happen to you? Ever wonder what that house is worth? Find out now What’s That Home Is Worth.
• What do I need to know before I sell? Typically when a home does not sell, there is one reason…and it isn’t price. We invite you to look at several key factors to consider before selling your home. Visit One Reason for more information.

BTW, We do have very specific data for every price range and area of town. Want specific data pertaining to your Austin neighborhood or your own home? We have it! Please let us know if you would like a neighborhood-specific analysis by emailing us at experience@goodlifeteam.com or calling us at 512.892.9473.

The data provided to create these graphs are available to you by FREE subscription to our monthly update service.  Please email us experience@goodlifeteam.com to receive your monthly update. Or, catch the wave and follow @GoodLifeTeam on Twitter.