I just did something for which I am, on one level, ashamed. I entered a sales listing into the Austin MLS that is not properly cleaned, prepared, staged or photographed. The yard isn’t groomed. The photos are crappy 4-year-old rental listing photos I took when I started managing the property for the owner. The tenants moved out Monday, and it’s now live in the Austin MLS in tenant “move-out dirty” condition.

Have I gone mad? Perhaps.

I called the owner today and simply said, “look, this may sound crazy, but I think we should go on the market right away, without delay, and not spend any of the $2,000-$3,000 budget I told you to be ready to spend on yard grooming, landscaping, repainting the interior, preventative maintenance, repairs, etc., because I have a feeling the house may just sell as-is really quickly without doing any of that”.

Then I confessed that this advice goes against every grain of professionalism I have. We always fully prepare our listings before placing on the market. I curse and ridicule listing agents who don’t. It’s an embarrassment to show an unprepared listing to buyers. Yet, I just entered one.

After clicking “submit”, a full 3 minutes elapsed before the first Realtor called to ask about it. 3 minutes.

The final outcome of this experiment will determine whether I’m smart or just overconfident. But let me put into context the events that led up to this decision.

• I closed the sale of a listing Monday April 30 that never even made it into the MLS. Sold as-is, no repairs.
• Sylvia put another South Austin listing under contract tonight, full price, sold from the “Coming Soon” sign before we could finish prepping it or enter it into the Austin MLS. Something is going on here.
• My listing is a small 3 bedroom with a garage in 78704 listed for $225K. The next cheapest 3 bdrm w/garage in 78704 is $350K.
• There is, at present, only one other listing cheaper than mine in 78704, period. And it’s a foreclosure with 2 bedrooms and no garage.
• I talked to my friend and fellow Realtor, Carry Bills yesterday, who is a 78704 expert, and she said buyers simply can’t move fast enough.
• Data analysis aside, I have a gut feeling about this. I trust my gut more than my brain, usually.

The Austin real estate market has shifted. That doesn’t mean every home sells fast and without proper preparation. We have some listings in Belterra and South Austin, and one in North Central, that don’t have buyers beating down the doors yet, even though they are well staged, professionally photographed, priced right and show great. This is a market of shifting pockets and neighborhoods rather than a monolithic market moving in unison. Austin agents in a shifting real estate market have to change our thinking a bit, when circumstances dictate.

What kept bothering me was the possible outcome of having a seller, based on my standard advice that I give every seller, spend money to prep a home that may sell just as fast for full price with no prep at all. That is a very real possibility. I think it’s my responsibility to explain that to an owner and suggest that we try it.

If you’re a buyer with a search portal set up by your agent or elsewhere, waiting for a 3 bedroom with a garage to come on the market in 78704 for less than $349K, you should have already received your email alert, just like the agent who called me after 3 minutes. There is now a total of 1 listing that matches that particular search. And it’s in a great location on a huge pie shaped culdesac lot for $225K.

Is $225K too low a price?
Why not prep it well and try $235K or more? No, this home comps out at $200K to $220K in this particular location. We add value for a rising market and price it just past the top end of the range. Even a hot market has its limits, as do appraisals. If the price is right in that sweet spot, buyers will react and compete for the listing. Too high and it might get a lot of quick showings, but no offer. It’s tricky hitting the right price, and easy to miss the mark if overexuberance plays a role, but I think we’re there.

If I’m wrong about this, we can always pull the listing after 10 days, mark it “T” for Temporarily Off Market, do the prep and go live again with the good photos and all. There is plenty of selling season in front of us and the Austin real estate market just keeps getting hotter.

This isn’t a full-blown market update, but I wanted to post a few graphs real quick to show current market activity and movement. Let’s start with the graph below showing Average and Median Sold values for homes in Austin for the past 49 months.

So, what looked like a pretty bleak December/January (lowest of lows for past 49 months. See the previous bottoms) quickly turned into an upswing. This isn’t necessarily unusual. In fact, if you look back at every May in the chart, that’s when the price peaks normally occur, and we’re heading that direction again this year. What is unusual is the fast and sudden absorption rate of homes combined with shrinking inventory. This is a sudden “spike”, at minimum, and may develop into a sustained upswing. I’ve been monitoring this and don’t see any let-up yet.

Let’s look at the Active/Pending chart below.

Above, we see the aftermath of the Tech Bust in 2000/2001, and what happened to the Austin sales market in 2003. For 2003 there was an inverted Sold/Not Sold ratio. More listings failed to sell than actually sold. That’s a really weak, sour market when that happens. Dismal in fact.  But then it happened again in 2010 in Austin. More sellers gave up (Expired or Withdrew) than successfully sold their homes in Austin. 2010 was the 4th year in a row of declining sales volume.

Then in 2011, we see these lines achieving separation again as the number of failed sales drops and the number of closed sales increases. And the separation is sudden and pronounced, indicating very strong buyer demand.

Now let’s see what that graph would look like for just the first 3 months of 2012.

So, as we see, the Sold/Not Sold lines are moving apart rapidly. I didn’t chart it in a way that shows percentages, but the Sold/Not Sold ratio for March 2012 is the lowest I’ve EVER seen at 26%. That is, take the total number of listings that departed the Austin MLS (Sold+Exp+With) and divide into that total the number of Failed, or “Not Sold” (Expired or Withdrawn) listings, and we get 26%. As comparison, even the HOT 2006 market depicted in the chart previous to the one above had a ratio of 28%. Even in good, solid seller’s market there will be about 1/3 of homes that fail to sell for various reasons, so I can’t over-emphasize how strong 26% is.

So, demand is strong and accelerating. I’m less unwilling to call this the “beginning”  of Austin’s next “up” cycle. I still have hesitation, just because. The world financial markets are still unsettled as is the U.S. job market. We have a Presidential election to get through. Etc. Still, just looking at the Austin real estate stats, it’s hard to not declare the current level of demand a “hot” seller’s market. And the degree to which I think this may just be a market burp is rapidly declining. We’ll know for sure by mid-June 2012.

Winning Multiple Offers in Austin

The last time the Austin real estate market saw this many multiple offers was in 2006 and 2007. Back then, buyers working with me and Sylvia won more than their share of these competitive offers by following a simple strategy, which was, make your offer acceptable and ready to sign with no mistakes or weird language. That’s it, basically. There is also the cover letter, and offer price strategy, but it’s not rocket science. More on that in a minute.

I was fired by a buyer in 2006, who told Sylvia “I only want to work with you from now on. Steve is pushy, arrogant, rude and doesn’t listen to me“. Actually, I did listen to the most important thing this buyer was telling me. She really, really wanted this house and would be very upset if she lost it to another buyer. Understood. I know the mission and what we must do, I told her. We need to write a winning offer, and I know how to do that.

So we sat in Starbucks and started writing the offer, at which point this California buyer wanted to instruct me about how and what to write, which included some non-standard language and quirky California nonsense. I was confused, because on the one hand, buyer really wanted to be selected over the other multiple offers, but on the other hand buyer was insisting we write the offer in a way that would doom it to failure.

Therefore, I repeatedly said, “no, we’re not going to write that in. You want your offer to be the one the seller likes most and decides to sign without countering“. It was like pulling teeth, partly because we were both “Type A personalities, but what we ended up presenting the seller was a super clean, ready-to-sign offer, with no mistakes or goofy non-standard provisions. Seller indeed liked our offer best and signed off as-is, without countering everyone for “best and final”. The buyer got the outcome she really wanted and was happy about that. But then she fired me because she was so upset with my refusal to write the offer her way. I felt less bad about that than I would have felt about sending in a crappy, embarrassing offer that failed the buyer. Sylvia took over and everything went smooth through to closing.

Fast forward to yesterday.

Sylvia received a call yesterday from the buyer agent for a buyer who, at first, had submitted the highest offer in a multiple offer situation for one of our listings. Though it was the highest offer, it contained goofy, non-standard provisions which the buyer stubbornly refused to change. This after our seller decided to pick his offer and work it first, rather than countering everyone for “best and highest”.

First, Earnest money was too low, less than 1/2 the normal amount. That confused us. We told the agent “that needs to be 1% at least“. Then there was the long Option Period with low Option Fee, a demand that seller provide a new survey, an extended closing date, and more.

We tried to clean up the offer with a response, saying “fix these things and send it back and the seller will favorably consider signing if we don’t receive something better before then“. Buyer stubbornly refused, so we turned our efforts to another offer and got that one to work under the same terms this buyer could have obtained.

The winning buyer has survived the Option Period and is on the way to close later this month.

The losing Buyer agent called yesterday to tell us the losing buyer is extremely remorseful because buyer can’t find a house as desirable as the one he missed. Buyer wants to know if there is any way to get another shot at the house.

Yes, write a backup offer.

But, to the agent, or any agent who knowingly allows a buyer to dictate losing terms in a multiple offer situation, I would ask, why did you let your buyer dictate the losing terms of the offer instead of cleaning it up and presenting something clean? I mean, you knew it was multiple offers, and you sent that garbage offer anyway, which had zero chance of being signed as-is. You should have forced your buyer to write a proper offer. You should have stopped your buyer from shooting himself in the foot.

I could divert here into a sidebar conversation about the fiduciary role of a real estate agent, and what that means, but I’ll instead state simply that some agents believe their role is to simply follow the instructions of a client, no matter how misguided, and others believe that the agent has a duty to advise and counsel a client, even if that means arguing and disagreeing with a client about which move to make, or how to respond to a certain situation. I’m in the latter camp. It’s the difference between a Fiduciary Agent vs. Functionary Agent.

If you are an Austin buyer, or thinking of becoming an Austin buyer, and you’ll be searching for a home in one of the many areas in Austin that have become a Seller’s Market, such as the 78749 zip code, Circle C, South Austin, an important question to ask your buyer agent is:

Do you know how to write a competing multiple offer that wins?

Then, in response, that agent should be able to articulate a strategy and “best practice”, that, though not guaranteeing success, allows you to know that the offer you present is an offer that was not set aside over an avoidable technical issue or mistake.

So What are the Best Practices for Multiple Offers that Sylvia and I employ?

1) Identify the correct “Regret Point” for your offer amount.
The price at which, even if you lose, you are at peace that you didn’t offer more, and you’ll simply move on with no regrets, focusing on the next house instead of dwelling on the one that got away. You find that tricky “perfect offer amount” spot by not thinking about how much you want the house, but how much you might regret not getting it. Think “regret avoidance”, not “happiness gain”. I always ask buyers, “if we offer this amount and lose to a higher offer, are you ok with that or will you deeply regret not offering more, beat yourself up and tell me you should have offered more?” It’s a very subjective, emotion based exercise, but it’s the most important thing to determine before writing the offer.

2) Write a clean offer, leaving nothing but the price to be countered.
This is not difficult, but most agents don’t do it. If it’s multiple offers, use the Title Company the listing agent prefers, not the one your agent likes. Offer a higher Option Fee and shorter Option Period. Earnest Money should be 1% of offer price or higher. Show that you’re serious. Don’t ask for a new survey, money back at closing, excess Home Warranty amount, and don’t write demands such as “seller to clean windows before closing”. Don’t insult the seller. This isn’t rocket science, but so many buyers and agents really foul up offers with dumb and unnecessary offer provisions.

3) Communicate clearly any narrative that enhances the desirability of the offer.
This item could be the topic of an entire article, but, in short, sellers will in fact often choose the people they like, or relate to, over a higher offer from an unknown buyer. For example, if you are a family with three young kids making an offer for a home being sold by a family on a cul-de-sac full of families, and you’re competing against an investor, then that seller needs to know who you are because they want their neighbors to have another family, not an investor and renters. If you don’t convey who you are and give yourself that advantage, you and your agent are blowing it. Your agent should know this. You can either write a cover letter directly to the seller or your agent can write a letter or speak with the agent when sending the offer.

4) Communicate clearly ALL areas of flexibility that you’re able to offer
If you can be flexible on closing date or by offering a Seller Lease-back, make sure the seller know this. If you are an investor buyer and not moving into the home, and we know the seller will be closing on a new-built home in 5 months, we can make your offer include an offer to lease-back to the seller for 5 months. The owner-occupant buyer can’t be that flexible, and if the seller is looking at an offer that allows them to remain in the home after closing and only move once, they are going to give a lot of value to that offer even if it’s not the highest offer price.

5) Use a Competent Agent
I almost didn’t add this last point, because it should go unsaid. But we do in fact have a buyer under contract who won a multiple offer situation in the 78749 zipcode last month primarily because the listing agent knows and likes Sylvia. The agent told Sylvia, when letting her know our offer was selected, that he told the seller, “I know Sylvia. She’s a good agent who runs clean deals. And this is a clean offer. I don’t know these other agents or how they do things“. The reputation and experience of your agent can matter.

The Austin real estate market is looking up. I’m withholding exuberance in favor of a calm, measured hopefulness that we’re seeing the front end of a sustained upswing instead of a short, temporary spike. Should the former prove to be the case, many buyers will be competing for the same homes through multiple offer situations. The above best practices won’t guarantee success, but you’ll know you brought your “A” Game, and, if you lose, you can move on to the next home without regret. But bringing your “A” Game will increase your odds tremendously. Make sure you have an “A” Game Agent helping you so that you won’t feel the deep regret that the above mentioned buyer is now feeling.

As I start typing this blog article at about 6:15PM on a Tuesday, a crazy reality befalls me. It’s almost my bedtime. In less than 2 hours, maybe 3 at most. I have to get to bed around 9PM Sundays through Thursdays because of a new lifestyle commitment I’ve made. And it’s messing up my longstanding habit of splitting my “productivity” time into daily and late-night chunks.

For one month now I’ve been waking up at 5AM M-F, cooking and eating some eggs, out the door by 5:15AM. Getting to the gym by 5:30 for a 6AM-7AM fitness bootcamp workout. I have to arrive by 5:30AM because the classes fill up by about 5:40AM, and I don’t want to miss a class, and I like getting my same spot every time. I get back home around 7:15AM, about the exact time I use to wake up normally, before the workouts. At first I thought, “wow, I’ve captured 2 hours that would have been wasted sleeping each day”.

Not quite.

My old schedule only required 5 or 6 hours sleep at night. For many years, I’ve had very productive “work” time between 10PM and 2AM. I can go to sleep at 2AM and get up at 7AM with no trouble. Been doing it all my adult life. But getting up at 5AM is different. I just can’t go to sleep at Midnight and get up at 5AM. And then busting it in a 1 hour workout class. The math seems simple, but the reality doesn’t work. It just requires more rest than before.

And as the Austin real estate market seems to suddenly be coming to life, Sylvia and I have a bulging pipeline of upcoming listings and buyer prospects, and now I’m wondering how I’m going to get my work done without the peace and quiet of those late night, no interuption hours.

By the way, I’m down 8 pounds so far and have taken 2 inches off my stomach and am already getting unsolicited “have you lost weight?” comments from friends. That feels good. I’m feeling great, eating right too. I’ll be turning 50 in September and I’ve decided I want to be “fit at 50″ as a birthday present to myself. And I have undertaken to make that happen with a manic determination. Thus the 5AM wakeups.

What I didn’t contemplate or factor in is the lost late-night productivity. My life as a Realtor is working with people, in person and on the phone, usually during daylight hours, but there is a LOT that happens behind the scenes with paperwork, planning, research, admin stuff, writing blogs, working on the website and just general “getting caught up”. That’s where those late-night productivity hours become so valuable. Time during which one can sit, undisturbed by phone calls or unplanned showings, emails that need immediate or quick response, etc. In fact, those hours are, in a way, “super hours”, worth maybe 1.5x or 2x because of the concentrated effort that can be accomplished.

If you’re one of my new buyers and we’re out looking at homes after you get off work this summer and I say, “it’s almost 8:30, we need to hurry because I need to get home and into bed”, you’ll know I’m not crazy, I just need my rest. My daytime hours use to feel like “part time” effort because I knew I had those late night hours to catch up and do stuff. Now I feel like a 9 to 5er almost, and pressured to get stuff done during the day instead of deferring to late night.

Such is life. I’ll acclimate, I hope.

Almost overnight, with little warning, the Austin real estate market has caught fire. We are encountering multiple offers and buyer frustration. Not everywhere, but in the popular neighborhoods. Let’s look at some Active/Pending stats for popular neighborhoods.

Circle C
27 Active Listings. Average Days on Market = 35
31 Pendings.  Average Days on Market = 32

Over half of all listings under contract. A normal ratio is about 1 of 5 listings under contract in a balanced market.

Southwest Austin 78749 Zipcode (includes Legend Oaks, Village at Western Oaks, Westcreek)
25 Active Listings. Average Days on Market = 88
49 Pendings.  Average Days on Market = 38
Double the number of homes under contract than there are available. This is an ASTOUNDING ratio reflecting a lot of pent up demand.

South Austin 78704 Zipcode  - MLS Area 7 – Zilker/Barton Hills
10 Active Listings. Average Days on Market = 126
16 Pendings.  Average Days on Market = 50
Like SW Austin, the Active/Pending ratio is inverted, with more Pending listings than Active.

Northwest Austin 78759
60 Active Listings. Average Days on Market = 59
51 Pendings.  Average Days on Market = 47
Nearly half of all listings under contract.

The ratio for the entire Austin MLS at present is 1 of 3 listings under contract, which is very strong overall, even in typically weaker areas like Manor and Hutto. What does this mean for the Austin real estate market?

Our Austin real estate slump, which began the second half of 2007,  may be over. Prices are increasing as demand increases. If this demand carries over into the summer, and job growth continues, we might be at the start of our next 4 to 7 year uptick, and we may have just turned into a seller’s market.

This also could be a temporary spike that doesn’t carry over into the summer selling season. We will need to see if it is a sustained surge or a short spike. Also, the increase in demand may just trigger a whole bunch of “sellers in waiting”, who have either held off or rented their homes, to list and sell this summer as the leases end or they decide to move up. That will increase inventory and perhaps balance the excess demand. It’s going to be an interesting Spring/Summer season, and I’m really excited about the possible end of the doldrums.

Meanwhile we continue to have a lot of difficulty with lenders. A deal we closed yesterday was delayed a couple of days because the lender suddenly wanted an IRS “receipted” copy of the buyer’s 2011 tax return. the accountant’s signed copy along with the Certified return receipt wasn’t good enough. They wanted something directly from the IRS. The underwriter decided this was needed a couple of days before closing.

Another of our buyers had to terminate a contract because the lender would not approve the income using a signed employment contract for the buyer’s new job in Austin. Bank wanted a paystub, which buyer obviously didn’t have as the job has not started. So, buyer will have to move to Austin, find temporary digs, start the job and get the first paycheck before buying a house. What a hassle.

So, we’re dealing with a lot of this sort of stuff with lenders, which, oddly, is reducing the already strong demand we’re seeing. And if investors, like Sylvia and I, could get multiple new loans again, there would be a lot more investor activity which always follows an upturn in the market.

I’ll try to increase the number and frequency of the market updates I use to produce monthly but have been slack in doing since the market has just been slogging along in an uninteresting way the past couple of years.

I’ve been busy the past several weeks attending real estate education events. First was the NARPM Convention (National Association of Residential Property Managers) in Las Vegas last week. Immediately upon return, there was three days in Austin at the Texas Association of Realtors Winter Meetings at the Hyatt. Then last Monday at an all-day Realtor Technology Forum, stupidly named “xplode“. I’m all educated out. Now I need to figure out what to implement and what to ignore. The “ignore” list is huge. The “implement” list is small.

But there is one thing all these Real Estate related education conferences have in common other than real estate. They could all double as Baby Boomer Conventions. Very few young Realtors.

While in Las Vegas the first night, Sylvia and I ate in a steak restaurant in our Casino/Hotel the, Orleans. While eating, looking around at the 1960′s decor and all the old people there, I commented to Sylvia “we’re the youngest people in this place”. She responded with one of the gentle, rhetorical “wife” responses that every husband will recognize, “So, you think we look younger than everyone in here?” Translation: “Uh, we look that old too, honey”.

No way! Say it ain’t so! I’m 49 and 1/2 and these people all look so old. Like they’re at least …well, … 50. Or older.

I guess maybe my age-perception of myself and Sylvia hasn’t kept up with the actual aging we’ve experienced. We were both in our late 20′s when we started in real estate. As of Sept 2012, we’ll both be “in our 50′s”, like the average Realtor.

Question: Will us older Realtors be able to relate to and help the younger generation of buyers?

Yes, I believe so, contrary to a lot of myths fed to us Realtors at education seminars.

Myth #1: Younger buyers don’t want to talk on the phone or use email. Older Realtors need to start texting and use Skype.
Baloney. Sylvia and I have helped a lot of young buyers in their 20′s and 30′s. They all talk on the phone and use email just fine. None of them, not one, has ever asked to use “Skype”. And they don’t text at a higher rate or any differently than people in the 40+ demographic.

That’s not to say Austin Realtors should stick our heads in the sand and not pay attention to “generation gap” issues, but a lot of Realtor “Seminar” Education on this topic serves up trite and stereotyped descriptions of the “younger generation” as tech crazed, gadget dependent people who reject “old school” ways of communicating, such as phone or email. We haven’t seen that at all in our practice. You can’t do a deal properly without email or talking by phone. That’s not going to change, ever.

Myth #2 – Austin Realtors need to know and use every possible App, Gadget and Social site out there to remain relevant.
Baloney. At one of the Realtor Tech forums I attended, one of the speakers did nothing more than rattle off a list of a couple of dozen iPhone/Android “must have apps for Realtors”. What she failed to do, as pointed out by one of the attendees, was explain what specific problem each app solves. For example. Pintrest.

I know about Pintrest, and I don’t have an account or use it. According to the About page, “Pinterest lets you organize and share all the beautiful things you find on the web“. So what? What specific problem does this tool solve for a Realtor or a real estate client? Or, how does it help prospective buyers and sellers find you? If these questions are not asked and answered about every App presented as “must have”, it’s just useless pabulum being fed to naive Realtors trying desperately to stay relevant in the tech age.

Yes, some Realtors are making very effective use of some very good tools such as Evernote and DocuSign. One presenter also shared a list of web and device apps, but in her presentation she followed a pattern of explaining what it is, followed by, what problem it solves or what function and benefit it provides.

For example, Evernote. I picked up that tip and am just now becoming acquainted with Evernote as a productivity tool. I don’t know if I’ll adopt it, but it’s certainly worth a scheduled block of time to learn more and see if it can help me in my business.

I could rattle off some more myths, but let’s stop at those 2, which are the most egregious.

If you’re a Realtor in Austin, or anywhere, you’ve heard all these “must have” things. Be careful. Don’t think you have to adopt 100 new ideas or technologies to stay effective and “up to speed” as a real estate professional. Informed, yes. Aware, yes. Early adopter of every gadget, app and idea fed to you at a seminar? No.

Yes, we’re getting older and our clients are getting younger. But they still want good advice and someone they can trust to help navigate the transaction. Age may even be an advantage if the younger crowd recognizes the value of wisdom and experience. We should keep up with technology, but not stress out over trying to implement every new thing technology has to offer.

On March 9th I’ll start 5 days of “education” at SXSW Interactive. I last attended SXSW Interactive two years ago. This is very tech heavy education, but NOT real estate related, which is a good thing. A real good thing. There won’t be any old lady Realtors telling me I need to download and use Pintrest in my real estate business. And I’ll get to rub elbows with people who look as young as I feel.

IDX Choices when entering a new Austin MLS Listing

When an Austin Realtor enters a listing into the Austin MLS system, we have to make some selections about where the listing will display online. (See screenshot to the left) Of course it will be an “MLS” listing, available to any other Realtor who is a member of the Austin MLS. But we also have to select which other third-party sites will display the listing.

Recently, in Austin and elsewhere, listing agents have become increasingly frustrated with how listing data is used and displayed, and in fact sold back to us. Some are starting to question whether the current “sharing” of listings to other sites, such as Realtor.com, is in fact beneficial.

The real estate industry was stupid and foolish over a decade ago when it resisted the placement of listings online in the first place. Instead of recognizing where the industry was headed and what consumers wanted, the industry and its “leaders” operated from an old 1980′s “MLS Book” mindset. This opened the door to lawsuits and eventually third party aggregators who saw the void and filled it.

Let’s look at the internet choices selected by Realtors when adding a listing to the Austin MLS, and what they mean.

IDX:  Allow listings to be displayed on IDX sites. When you visit a listing search page on a Realtor’s website, you are accessing an IDX site. Ours is at: http://www.mlsfinder.com/tx_actris/crosslandteam/ and provides a way for consumers to “search the Austin MLS”. Buyer Agents use IDX search sites to capture leads. If you see a listing that interests you on an IDX site, the “Contact Us” form you fill out goes to the agent running the site, not the Listing Agent.

As of this writing, there are 63 Austin MLS listings flagged “No” for IDX of the total 6,643 homes listed for sale. That’s about 1%, or 1 out of every 100 homes for sale. The percentage of luxury homes is much higher. Of 398 Austin homes listed for $1M or more, 28 are flagged “No” for IDX, which is 7% of the total. So, if you’re searching online for a $1M+ home, you’re only seeing 93% of the MLS inventory.

Some of the luxury Brokers in Austin are not happy with IDX and have voiced complaints to the Austin Board of Realtors and sent around a petition letter demanding changes. Other Brokers in Austin, who like IDX, and whose buyer agents depend on it for connecting with new buyers, responded with a counter-petition. The drums have started beating.

Internet Display: If seller selects “No”, this listing will not be included in MLS data feeds to Internet websites that display property listing data, whether intended for advertising the property (AustinHomeSearch.com, Realtor.com) or providing online brokerage services (IDX or VOW sites). The listing will in fact not appear anywhere on the Internet. It will be an “MLS Only” listing. Only 14 of 6,643 Austin homes for sale have this flagged as “No”. Obviously, very few sellers/agents want a listing to be completely offline.

AustinHomeSearch.com: If “No” is selected, the listing won’t appear on AustinHomeSearch.com, which is the public-facing MLS feed of the Austin MLS. It would be dumb to select “no” here, because the listing agent contact info is displayed with the listing instead of some other agent’s contact info. 34 listings of the current 6,643 have this flagged as “No”.

Realtor.com: If “No” is selected, the listing won’t appear on Realtor.com. 77 listings of the 6,643 total have Realtor.com flagged as “No”. I expect if I follow up this article in a year from now, that 77 will have increased quite a bit. More on that later.

 Prop Addr (Internet): This can flag a listing to not display the property address on the Internet. 149 listings have the address not displayed on internet sites. Some sellers may want this for privacy reasons, but the listing will still be mapped and not hard to find.

Allow Automated Valuations: Some Virtual Office Websites (VOW is like an IDX site, but can show more info to registered users, such as days on market, original list price, etc.) may provide an automated valuation model function. An AVM uses statistical calculations to estimate the value of a property based upon data from public records, MLS, and other sources. The accuracy of AVM’s have been criticized because they do not take into consideration all relevant factors in valuing a property.

If “No” is selected, a VOW website may not display an automated valuation next to the property listing.

We mark “No” for this on all listings. There are however, 1,197 listings (18% of total Active) for which this is flagged “Yes”. This astounds me, but doesn’t surprise me. I think a lot of agents just don’t know what it means, and since they mark all other of these fields “Yes”, they do the same for these last two as the listing is entered. Marking “Yes” is not, in my opinion, in a seller’s best interest.

Allow Third Party Comments: Some Virtual Office Websites may provide functionality that permits the customer using the VOW website (such as redfin.com) to enter comments about the listed properties. If “No” is selected a VOW may not display comments or reviews with the listing.

This is dumber that the Automated Valuation. Do you really want random people on the internet to be able to leave comments and “reviews” about your home for others to read? We mark “No” for this on all listings, but there are currently 771 listings in the Austin MLS for which this is allowed. This cannot benefit a seller.

As a Seller, Should You Care?
If you have hired a Realtor to sell your home, you want it sold for the highest price possible, in the fastest amount of time with the least amount of hassle. You probably are not even aware of the mechanics of the above minutia. You just know that buyers will be able to find your home online and see it with their Realtor.

But what if your Realtor explains to you that the listing will be in the MLS, on AustinHomeSearch.com and on the Broker’s website, but nowhere else? Not on Realtor.com, Zillow, Trulia, etc. Just on the Austin MLS, Broker website, and the public side of Austin MLS AustinHomeSearch.com. Would that be ok with you, as a seller? It’s your listing.

You might ask, “will that cause it to sell slower and for less money?”, and if the answer is “no”, you probably won’t care.

For 2011, the average Days on Market for homes sold in Austin was 80 days. Those homes sold for 93% of the Original List Price. For listings marked “No” for IDX, the average Days on Market was 64 days, and the SP/OLP percentage was 93%. So, non-IDX listings sold faster, and for the same sold/list ratio as IDX listings. Of course the non-IDX sample size is too small to be trusted, but still.

Realtor Revolt – It’s Coming
I predict more agents are going to start doing exactly as I’ve described and restricting where their listings are displayed online. Some Brokerages around the country have already started pulling ALL listings from the online IDX sites.

We’re all sick and tired of the scumbag telemarketing vultures from Realtor.com, Trulia and Zillow calling and trying to sell us “Featured” or “Enhanced” agent products that would “allow” us to “fully benefit” from the search traffic on those sites. That’s the same search traffic that wouldn’t exist without our listings.

Realtor.com Request Form

For example, at Realtor.com, if we pay the extortion fee, then online inquiries will actually be placed in contact with the listing agent instead of the agent who “bought” the zipcode in which the listing is located.

As it is now, if you fill out the generic form (screen shot to left), you will be contacting someone who, at the moment they receive your inquiry, knows less about that property than you. They’ll probably have to research it quickly in the MLS before they respond. Or maybe they won’t. And when they call, you’ll wonder why they are so clueless about their own listing, until you figure out it’s not their listing. You have reached an “Advertiser Realtor”, not someone knowledgeable about the home that interests you. You are a “lead” that agent paid to receive. Your a number adding to the revenue of Move, Inc., which owns Realtor.com. That’s how it works.

Sylvia and I haven’t decided to stop placing our listings on IDX sites, or Realtor.com. But I’ve been thinking about it a lot lately. It probably won’t happen this year, but I think many Realtors are tired of having our own listings marketed back to us by the third party advertising sites.

And it’s not about trying to “double dip” a listing. We rarely even work with buyers who call from our signs but instead refer them to a buyer’s agent so that they can be properly represented. It’s not about that. It’s about sellers being well served, and buyer/consumers getting what they want and being well served as well. Where we’ve ended up doesn’t accomplish that outcome.

I don’t think it serves a buyer well to be placed in contact with an “advertiser”. I don’t like reducing the person, the human being, that a buyer is to a “lead” to be sold by Realtor.com to a completely untested, nonvetted agent/advertiser. At least Redfin, in its attempts to disrupt the real estate industry, has from the start been focused solely on creating a great experience for real estate consumers. They fire lousy agents who get bad reviews. Realtor.com could care less about the agent or the consumer experience. It just wants to sell ads.

I hope other Realtors start getting as irked about all this as I am. I hope I start seeing the percentage of non-IDX listings rise. I wish consumers knew that, already today, you are not seeing every available listing on Realtor.com or Trulia or Zillow. Yes, you’re seeing 99%, but not 100%. Don’t you want to know about that 1% one you’re not seeing? Or, if searching above $1M, don’t you want to know about the 7% of listings you are not seeing?

When the 1% becomes 10%, which is what I hope, the business model of these third party advertiser display sites, which exist not to serve consumers but to sell ads, will start to unravel. When consumers start to realize that they could be missing the one listing they would have wanted, then the issues of data integrity and data trust will come into play. You can trust what’s in the MLS, but you can’t trust what you see on a third party site.

And when that happens, when we start to clear the clutter and get back to really taking care of consumers instead of selling advertising to Realtors, sellers and buyers both will be better served. See Jim Abbott’s video announcement explaining why his San Diego Brokerage has pulled all listings from 3rd party syndication.

I showed homes to a buyer yesterday, and now my inbox is filling with these annoying automated email feedback requests.

Each time an Austin Realtor opens a lockbox with the electronic key (or iPhone or Blackberry key), the visit is logged and reported via wireless transmission, sometimes in a matter of minutes. If the listing agent has properly assigned the Supra Lockbox ID to the MLS Number of the listing in the Austin MLS System, the listing agent will receive an email notifying of the showing.

Sylvia and I set up all listings like this to gain feedback from showing agents. This helps us understand what buyers liked or didn’t like about a property. If we hear the same negative feedback about an aspect of a house or the pricing, we can make appropriate adjustments. We use it for a reality check and as an excuse to follow up with agents and encourage an offer if there is interest.

While Sylvia conducts our feedback requests manually, sending a short personal email to each showing agent with a link to the listing (to remind them of which one it was) and inquiring as to any interest, more and more Austin Realtors instead subscribe to automated feedback systems that automate the process. Though I’m happy to respond to phone call or direct email requests for feedback, I ignore the impersonal automated requests. Here’s why.

Perhaps I’m too picky or persnickety about this, I’ll admit, but real estate is still very much a relationship business. Dumping me into an automated feedback machine which repeatedly email blasts me with boilerplate requests to click a link and complete an online feedback survey is not an effective way to get good and valuable feedback information from me. Pick up the phone or shoot me a quick personal email and I’ll respond 100% of the time with an opinion, or sometimes an honest “sorry, I just don’t remember much about that one other than it didn’t make their short list”.

Austin Realtors, once upon a time, actually spoke often with one another. It’s how we got to know each other, and was vital to the business. That has changed a lot, and is still changing in these modern “electronic communication” times. Our most important relationships as Realtors are with each other, yet the leveraging of electronic tools is diminishing this important aspect of the business.

I received a text last night from a Realtor saying she might be writing an offer for one of our listings. I texted back and said “It would be a good idea if we talked first, call anytime”, because there are some important bits of information that an agent and buyer need to know about this listing before writing an offer. I never write an offer without trying to talk with the listing agent first to see what I can glean about the seller and the listing. But this seems to be a declining practice among the newer techie agents, and some of the old ones as well. And I don’t like it. Often, an offer will show up via email, out of the blue, with no prior communication, not even a cover letter or anything.

I did a past deal in which the listing agent and I never spoke at all. She responded to every phone message I left with an email. It was all email and text. I have no idea what her voice sounds like. The deal went smooth, with no problems, but I did not establish a relationship with that agent, nor can I say I know her at all after having completed a transaction together.

When a Realtor calls and catches me at my desk or on my cell phone and asks for feedback on a home I showed, he get’s it right away and can ask follow-up questions. He gets more than a survey result. We can also move to more generalized conversation such as “so what do you see happening in the market up there in Round Rock”, which I personally enjoy and find valuable as part of my “keeping up with the market” efforts. That one-on-one, 2 minute conversation about the market and what’s happening, from the perspective of a fellow Austin Realtor, is something I need and want from my fellow agents.

So, as the selling season picks up and gets into full swing, I don’t relish another year of these spammy automated feedback requests filling my inbox on their way to my Delete folder. I do enjoy getting phone calls or personal emails though, about the listings I’ve shown and what my buyers thought.

Austin Realtors, cancel the auto-feedback service and pick up the phone, or type a quick email. Let’s talk! You’ll obtain better feedback for your sellers and you might actually get to know another Realtor outside your own office.

The Austin real estate 2011 sales breakdown by MLS area is below. Most areas of Austin are holding steady. I’ve color coded the results columns of each area to show whether or not that area performed above or below the greater Austin market on whole.

For example, let’s look at MLS area “W” (West Austin).

This shows are W outperformed the Austin real estate market in some categories, but not in others. Those categories break down as follows:

Number of Sale: The number of sales overall in the Austin market rose by 6.9% in 2011. Number of sales rose by 5.95% in MLS Area W, so it gets flagged a red colow code for under-performing the overall market.

Avg Sold Price, Median Sold Price, and Sold Price per Square Foot all outperformed the market as a whole. Avg and Median Days on Market underperformed as well.

That said, pricing metrics are the most important in determining the direction of the market, so keep that in mind as you review the various areas and how they did in 2011 compared to 2010. Squre footage is not ranked but is shown for referrence and used to calculate sold price per sqft.

The color coding allows you to see in a glance areas that did well, did not do well, and that were mixed. A row of “all red” means the area under-performed on all metrics. Several areas unfortunately did just that.

MLS Area 8E (Westlake), RN (Steiner) and DT (Downtown Condos) were the only three areas to earn green stripes all the way across. (Note: Downtown is the only area we report Condos. All other areas are houses only).

Areas HH (Kyle/Buda), N, NE (North and Northeast Austin), PF (Plugerville) and SWE (Deep South Austin) all Redlined across all metrics. Many other were mostly red save for the number of units sold.

If you’re not familiar with Austin MLS area, see the map below.

No doubt every Austin Realtor has forgotten – or almost forgotten the electronic MLS key when showing a property. That really stinks when it happens. Me and Sylvia are still old school and carry around these horrible devices. The alternative would be to use an iPhone app that requires a small infrared stick that plugs into the bottom of the iPhone. The problem with that is if you lose your iPhone, or the battery goes low, you’ve also lost your MLS key.  I’d rather spread the risk to separate devices. I also don’t want to have the tiny plugin stick to keep track of or junking up my key ring.

Anyway, I drove way up northwest by the lake today, past Lakeway, to show some buyers who had driven up from Corpus Christi to meet me at a house. This was a 45 minute drive from my house. About 15 minutes away I realized I left my MLS key laying on my desk, where it had been charging.

I quickly assessed the options in my head while not panicking, but almost panicking. I checked the listing agent on the MLS printout and noticed it was a KW agent in Lakeway. I just happened to be on 620 not far from the KW office.

I called the agent and got ahold of the assistant. “I’m on my way to show your listing on {Street name} and left my MLS key at home. Is there a combo box on the property or is the MLS box the only way in?”, I asked cheerfully, keeping my optimism high. “No”, the well informed assistant told me, “there is no combo box”.

“OK”, I said. “Do you have a spare key in the office that I could come by and pick up? I’m not far from you” . There was no spare key either.

I was now about 12 minutes away. I could either:

a) Turn around and know for sure that although I’d be terribly late arriving (like, 75 minutes late), I could call and ask the client to go get lunch and show up later for the appointment.

b) Show up on time and deal with it, knowing I might not be able to get in.

c) Call a Realtor friend close by and beg them to meet me there.

I’ve always been lucky. I decide to give myself a chance to get lucky and proceeded to the appointment to face the music. I’d just have to figure out a way to get inside.

Showing up, the clients’ vehicle was there but they were nowhere to be seen. They were walking around in back I guessed. It was a big lot. I headed to the front door and tried the doorknob. No luck. I checked under the mat. No key. I ran my hand across the top of the trim above the door. No key. I looked around the porch for a nearby rock. There was one to the right, in the dirt next to the porch. A nice small flat one about 6 inches wide and looking completely out of place. Underneath there was a key. I tried it and it opened the door. Then I went and hunted around for my clients.

Disaster averted. I already had my script worked out. “I’m sorry but I forgot my MLS key. Have you guys had lunch yet? Let me buy you lunch at a great place down the road while I run and get my key. It will take me about an hour and a half”. Luckily, I didn’t have to make the embarrassing confession or the offer.

I’ve had agents call me from our listings when they’ve forgotten their MLS key. We usually also have a combo box on vacant listings, but not occupied ones. A few agents have been saved by that, and by having me luckily answer when they called (our office line rings simultaneous to our cell phones).

Once I showed a house and saw another agent’s MLS key laying there on the counter, but the people and the agent were long gone. Woops. Bet they didn’t get far. That would suck. I had no way of doing anything with it so I left it on the front porch and assume the agent came back and was grateful to find it mysteriously laying there. She would have had no way to go inside to get it had I not left it outside.

Even if you don’t forget the MLS Key, the battery can drain and it becomes unusable. These devices of ours really have us. Without them we’re helpless as Realtors. I don’t experience malfunctions that often, but I’ve heard about agents who have suddenly been unable to open a lockbox with a key, for no explainable reason. I heard one griping about it at the Board of Realtors office a few months ago.

But the moral of the story is about luck. I’ve been very lucky in life because I give luck a chance to happen. That often requires a leap of faith, and the ability to just trust that things will somehow work out. Think about that. If I had turned around and went to get my key, and called the clients with an apology that I was going to be late, I would have guaranteed myself a bad outcome, though a more predictable one.

Buyers often foreclose on the opportunity for luck by ruling homes out. Not making that lowball offer. Not loosening up the search criteria a bit. Or ruling out homes just based on internet photos, which can be very deceiving. As humans, the more we make ourselves available to be lucky, the more likely it is luck will bump into us, as it did me today.

The Austin real estate market did about what we expected in 2011, which wasn’t much. Basically treading water with some slight improvements, but nothing that represents a notable shift in market activity. Instead, it looks like momentum is building for a breakout year of increased activity and rising prices either in 2012 or 2013.

Let’s start with a look back at the past 12 years for some context.

From 1999 to 2001, you see the effects of the Tech Bubble, as Austin experienced strong job growth, which in turn drives housing demand. From 2002 through 2004 (and most of 2005, though not obvious from the graph), Austin housing prices were flat, as we suffered the hangover of lost jobs after the Tech Bubble bust. Then in 2005 jobs returned as well as a lot of real estate investors who felt that other areas such as Phoenix, Las Vegas, Boise, Florida, etc. (which we now know were in a severe bubble) were playing out. So we had a mini burst of strong buyer demand through about the middle of 2007. After dipping in 2008, prices have slowly climbed since then, though many homes still sell for 2007 prices. By 2010, overall values were back to 2007 prices and have now surpasses the 2007 high. That’s the Austin real estate market in a nutshell, for the past 12 years.

Let’s look at the gains in 2011 compared to 2010.

The number of homes sold increased by 6.67% in 2011 compared to 2010. That’s a fairly solid increase. At the same time, the number of “failed sales” (expired and withdrawn) listings fell from 48% in 2010 to 40% in 2011, meaning more sellers were successful in eventually selling their homes. In 2010 almost half of all MLS listings failed to sell. For 2011 it dropped to 40%. Days on market increased, which ties into the lower failure rate as sellers allowed their listings more time to sell instead of giving up. All the other stats, as you can see above, showed only slight movements. Prices are up 1.6%, not enough to get excited about, but moving in the right direction if you’re a “waiting” seller.

I’ll be working on a breakdown area by area later this month to see if there are notable trends in “hot” or “not hot” areas. I suspect there are, but not to the degree that one might imagine. As usual, comments and questions are welcome.

We recently had a transaction where the seller refused to negotiate any repair adjustments. None at all. This is actually not completely unusual, but most of our buyers do receive at least a small amount to offset repair and condition issues that were revealed by the inspection and not disclosed on the Seller’s Disclosure form.

But on this particular transaction, the buyer received a favorable contract price. The seller felt that the home was a good deal as-is at the contract price and was unwilling to offer anything else. Buyer was ok with that, so no problem.

But then the listing agent wanted to buyer to go ahead and terminate the Option Period in writing. Buyer had no motivation to do so and didn’t want to give up that right, so the seller and agent ended up have to fret and worry (needlessly) for an additional 5 days. This could have been avoided if the seller and agent had been willing to give up at least a token amount toward repairs. Here’s why.

Most transactions do in fact have a “2nd negotiation” or “repair negotiation” following the inspection. I haven’t sold a “perfect” house yet. Even brand new homes produce a list of deficiencies that need addressing. The offsets or allowances for repairs are most commonly cured by agreeing to an amount to be inserted into paragraph 12(a)1b of the sales contract, via a final amendment.

That paragraph is the “buyer closing costs paid by seller” paragraph. So, if buyer and seller agree to a $500 offset in lieu of repairs, $500 would be inserted into 12(a)1b and would thus reduce the cash buyer brings to closing by $500, which is essentially the same as the seller giving the buyer $500 at closing toward repairs. We do it this way because it’s cleaner.

Also on the final amendment is a checkbox terminating the buyer’s Option Period. So, this 1-page final amendment works to seal the deal, so to speak. Buyer says to seller, via the amendment, “you give me some money to help with these repair costs and I’ll terminate my Option Period and we can move forward”. That’s a fair trade.

In the example about which I am writing, there was no repair allowance, thus no final amendment. Yet the seller and listing agent still wanted the buyer to terminate the Option Period prior to the end of the 10 days. Our response was “the termination of the Option Period is normally done in exchange for some repair offsets on a final amendment, and since there is no final amendment, the Option Period will just expire on the date provided”.

Still, agent and seller fretted and worried about the fact that it was still technically not a “done deal” because the buyer still had 5 days to “change his mind and cancel”. This is where, if I was listing agent, I would advise the seller to offer a small repair amount, which would be addressed in the final amendment along with the termination of the Option Period.

Most sellers probably don’t worry this much about it, but if you’re a seller who does like a sense of conclusion to the repair phase (Option Period) and you want to know that the buyer is ready to move forward, then be ready to give up something in exchange for that certainty, even if it’s just a token $100 toward repairs.

Almost a year ago I wrote about the Austin Short Term Rental (aka STR, Vacation Rental, VRBO) issues surfacing in the Austin community. That blog article generated 57 comments and a lot of heated back and forth. I eventually had to close the comments for that article because I felt everything had been said that could be said at that stage of the process. This article is an update on what has happened with STRs in Austin since the last blog post, and what will happen next.

The issue has moved forward through a “Working Group” process which concluded last August. City Staff is currently reviewing a draft set of regulations. The full Planning Commission will consider the recommendation after City Staff finishes the review. From there, a Code Amendment and set of new rules will be sent to Austin City Council. That probably won’t happen until 2012.

The Working Group Process
I participated in the Working Group process in the role of a Government Affairs Committee member of the Austin Board of Realtors. The Austin Board of Realtors involves itself in any local issue which could affect the private property rights of home owners. In many ways, ABOR is somewhat of a “Silent Knight’” working for the benefit of Austin homeowners, though most home owners are probably unaware that they are served in this manner.

ABOR seeks to protect the rights of property owners and opposes rules or laws that would diminish the private property rights of Austin property owners. The ABOR position on Short Term Rentals in Austin is, in short:

The Austin Board of REALTORS® supports preserving the character of Austin neighborhoods and protecting the quality of life of its residents. ABoR also believes homeowners have a right to lease their homes, regardless of the length of the lease, without municipal licensing requirements or registration fees. We also believe that the City of Austin should hold formal stakeholder meetings to address the issues concerning short-term rentals and develop a solution that balances the needs of neighborhood residents and residential property investors.

The stakeholder meetings did occur, a middle ground was determined which, as predicted in my earlier article, didn’t give either side the warm fuzzies, but that’s how these things go.

The Board of Adjustments Decision
Meanwhile, those opposed to STRs in Austin used the Board of Adjustments process to have one STR in Allandale declared in violation of a newly made-up-on-the-fly 10-day rule. The Austin Board of Adjustments essentially decided, capriciously, that since the word “transient” was not defined in City of Austin Code as a specific number of days, it would make up a number. It came up with “10″. Meaning, the rental of an Austin home for 9 days would be a “transient” use of the property, whereas 10 days would not be “transient”.

The City of Austin ignored and continues to ignore that ruling. As reported in the Austin Statesman August 2011:

“The City of Austin is allowing short-term, or vacation, rental homes to operate for now in residential areas despite a city Board of Adjustment’s ruling that rentals for a period of less than 10 days violate city code.

The Adjustment Board’s decision, which overturned a city staff decision earlier this year, has triggered a lawsuit by five owners of rental homes who contend that if upheld, it would deprive them of constitutionally protected property rights.

Meanwhile, the city’s decision to defer enforcement is drawing the ire of critics, including some who live next door to short-term rental homes and who want the city to enforce the Adjustment Board’s decision now.”

The anti-STR group continues to press on, having now passed a reolution through the Austin Neighbors Council. That resolution was voted down by the Zilker Neighborhood, which contains the highest concentration of STRs in Austin. Other neighborhoods did sign on though. ANC states that the support of the resolution was better than 2 to 1.

The ANC Resolution for Short Term Rentals would impose an outright ban on STRs, except for homestead owners. The language is:

Be It Resolved that the Austin Neighborhoods Council supports the following Resolutions:

That the Land Development Code’s definition of permissible residential uses in single family zoning districts be expanded to allow properties that are homesteaded as defined above and are the owner’s primary residence to be rented on a transient, short term basis, defined above as a residential rental of between one and thirty days, for a maximum total of 60 days per calendar year.

That the City Council of Austin, Texas specifically enact an ordinance disallowing short term residential use in single family zoning districts as being a transient use, unless exempted by the property being homesteaded and the owner’s primary place of residence. This ordinance, by the definitions and wording above, would emphasize that STRs have always been and continue to be in contradiction with the permissible residential uses allowed in single family zoning districts, and that the current use of a property as a CSTR is not a legal nonconforming use and that this use shall not be grandfathered.

This proposal, which ANC is pushing at City Council (ABOR and HomeAway are also pushing our separate but similar positions as well) would shut down existing STRs in Austin except for homestead properties. So, if you owner-occupy your homestead, I guess ANC is OK with you renting it out to overnight guests 30 weekends a year while you leave town. The “strangers” that you rent to would somehow be “acceptable” or “different” strangers than the ones renting non-homesteaded houses, and presumably pose none of the problems or issues that are used as the basis of complaint for outlawing STRs in non-owner occupied homes.

Sorry, but I call B.S. on that. Come on. It’s dumb. Makes no sense. It’s intellectually indefensible to say that a class of renter can be split into “problematic” and “not problematic” categories based solely on the homestead status of a home.

Meanwhile, I’ve personally been drawn into the argument in another way via my previous blog article. Anti-STR people have taken to passing around and posting snippets of my earlier blog comments out of context. I guess this is as close as I’ll ever come to understanding what politics is like.

The first article I wrote was written intentionally to acknowledge the concerns and feelings of those opposed to STRs in Austin. It was written as a balanced presentation of both sides. For example, all things being equal, I said in the article that I personally would also prefer to have a family next door rather than an STR home. That’s still true. I’d also not want to live next to a fire station or a school, or a middle school tuba student, or a Harley owner who leaves for work at 5:30AM each morning. But I don’t want those situations banned or outlawed either.

To be clear, I would not object or complain if my neighbor converted his home to an STR. That would be his right as the property owner.

The anti-STR people apparently don’t understand that, as humans, we can hold nuanced positions about things. I can fully understand and even sympathize with the feelings of someone with whom I disagree. In this case, written expressions of that understanding and sympathy have been cut and pasted into cherry-picked excerpts used to exclaim, “Look! Crossland said he wouldn’t want to live next door to and STR!”.

What is this, Middle School? Good grief people. Context.

Yes, I understand your position. I agree with your right to feel upset. I get it. And I happen to have the ability to relate to your position and am willing to state as much. And I am 100% against the banning of STRs in Austin. Any quotes attributed to me need to be read inside the paragraph and article in which those quotes were written, not plucked out and used out of context in an attempt to discredit me and/or ABOR.

What’s Next?
We’ve (ABOR) met will all the Austin City Council members and stated our position, as summarized above. The other side is doing the same. We’re now just waiting to see what comes up from Planning Commission. At these meetings, my role was to point out, as I have all along, the lack of data to support any of the anti-STR complaints, and to relate some facts and realities about to STRs that can’t be ignored.

The 99 Percent
Short Term Rentals in Austin, in terms of property condition and appearance, are in the 99th percentile of homes in excellent condition. Want to drive randomly through Travis Heights or Zilker and try to pick out which homes might be STRs? You’ll be zeroing in on the prettiest, most well kept properties in those neighborhoods. Yard of the Month candidates. STRs make neighborhoods more attractive, helping support property values of the surrounding homes.

On the inside, these homes have to be in excellent operating condition, clean and safe with good furnishings. Guests will not tolerate anything less. The STR industry lives or dies by online reviews. Any owner trying to make a go at it with a subpar property in poor condition will be out of business quickly because they will get killed with bad reviews. In this way, the STR industry in Austin self-regulates and naturally weeds out the bad operators. Nobody will rent one of these places without first checking the online reviews, and if you want to be a successful STR owner, you better pull out all the stops to create a great experience for your guests.

No Evidence of Code Violation Problems
With regard to code violations, it follows that it’s statistically impossible that 1/10th of 1% of the single family housing stock in Austin (about 300 out of 330,000 homes in Austin are STRs) could be responsible for anything even close to a statistically significant portion of code complaints.

How could 1/10th of 1% of homes that are in the top 99% of good condition be deemed a “problem” that Code Enforcement needs to address through new laws or regulations? Existing Code rules and occupancy laws already cover STRs the same as every other home in Austin. STRs are not a source of Code problems.

No Evidence or Data Support Increased Crime
With regard to noise, crime, etc., if we ask Chief Acevedo if STRs are a source of problems for Austin Police, he won’t have a clue what we’re talking about. The guests who stay in STRs are less “vacationers” than we first knew. In fact, a great percentage of them are relatives of people in Austin who want to avoid a hotel during a visit. Many are families. As a subset of people coming to Austin, the ones choosing to reside in a Short Term Rental home instead of a hotel cannot be proven or characterized to be troublemakers or people here to disrupt the vibe of the neighborhoods in which they are staying.

So, neither the Code Violation or Criminal Troublemaker argument hold water. In fact, there is absolutely no data that describes any sort of problem that is not a universal issue existing in non-STRs. Giant parties, such as the Halloween Party every year in Travis Heights that drew 500+ people this year, are thrown by home owners, not weekend visitors. So there is no “party avoidance” to be had by banning STRs in Austin.

Finally, the city will probably want some sort of registration system identifying which homes are Short Term Rentals. While some of the STRs may remain STRs for many years, many more will phase in and out of that status rather quickly. Some may be placed into service only until the real estate market improves. Others are routinely rented alternately to long term renters. So, at any given time, the answer to “which homes are actually being used as STR?” is a moving target.

I’ll continue to follow this process. By early next year we should know what the Planning Commission is proposing. It will no doubt be “too much” and we’ll fight to par it down while the other side will fight to make it more restrictive, per the ANC proposal. But in the end, I do believe we have to fight these fights lest we allow the slippery slope of over-regulation to creep into the property rights we enjoy as property owners. That said, I do believe that both sides of this argument care about Austin and have chosen the position that they believe to be in Austin’s better interest. In that regard, we all want the same thing, a better Austin. But we’ll continue to disagree over what that looks like.

Sylvia and I recently installed new hardwood floors in our entire home. Bedrooms, closets, kitchen, hallway, etc. Everywhere except the laundry room and 2 bathrooms, which received new tile the month before. The process of doing this in an occupied home required a packing and moving of stuff not dissimilar to actually moving. Every part of the home had to be emptied out completely, just not all at once. So we migrated piles of stuff from one part of the house to the other as the new floors were installed. Meanwhile, we lived in a semi-construction zone for 10 days.

I learned a lot about wood flooring and the install process, but this article is about our stuff. I heard myself say at some point, while carting boxes out to the garage, and will now quote myself, “how is it possible that people who have gotten rid of so much stuff still have so much stuff?!”

No joke, our living space over the last 4 homes in 12 years looks like a bell curve. We’ve gone from 2,000 sqft to 3,700 to 3,300 and now down to 1,800 square feet. During each move, we’ve parted ways with what seemed like massive amounts of stuff. I’ve always enjoyed that aspect of moving. The cleansing and thinning out of the material barnacles that cling to us as we live life. We could fill a semi trailer with all the stuff we’ve given to Goodwill over the years. Especially on this last move going from 3,300 sqft down to 1,800.

Yet, here I am trying to move stuff out of the way for new floors and I just can’t believe we still have too much. How do people who’ve unloaded so much still have too much? By only getting rid of the easy stuff. Now it’s down to the emotional stuff, and that’s harder. Way harder.

Aria-pro II precise bass 1977

Today I sold my vintage 1977 Aria Pro II Precise Bass guitar. I don’t really even know how to play bass, but I’ve hauled this guitar around for over 15+ years. It’s a Fender copy, but a better made guitar than the original Fenders of that era. I kept thinking I’d take bass lessons and learn to play it. Yet it never happened and the bass actually survived 5 moves without getting let go. Today I did let it go.

We also let go of the piano. I’ve played it since I was about 5 years old – about 44 years. Mom gave it to me some years ago. I can bang out some old Beatles tunes and chop around on the keys, but with only one living room and the kids well beyond piano lesson years, that’s some pretty valuable living room space to have dedicated to a seldom used piano. We donated it to Sylvia’s 5-year old nephew.

I still have some vintage guitar amps and guitars. I may just keep the acoustic I bought when I was 16, and the Telecaster and 1 amp. The rest needs to go. Sylvia has a bunch of artwork and other knick knacks that could use thinning out. And we have boxes full of artifacts of our kid’s lives. Old school papers, art, drawings, etc. That stuff takes up a lot of space also, but will probably survive this latest culling.

Like many Americans, we’ve made the recent decision that we don’t want to live in a big home anymore. We value being in the urban core of Austin in a smaller house. The location is so wonderful. 6 minutes to down town. Austin feels small again when you don’t start every drive from 3 miles past the Y in Oak Hill. I can get most places I need to go in 15 minutes or less. I even walked to Zilker Park for the Shakespeare play one night last summer (though it took an hour).

The trend to smaller homes is not going to abate. People are downsizing. The corner has been turned and the Builders know it. But in order for the American Consumer to be happy living in a smaller home, some stuff is going to have to go – or not be bought in the first place. Theoretically, that’s easy to know and accept. But when you’re actually picking up your stuff and deciding whether it goes into the “keep”, “goodwill”, “sell” or “trash” pile, it’s not so easy.

I’m going to miss that bass. Even though it went untouched, unplayed for years at a time, I knew I still had it. I liked owning it. I’m sad it’s gone. But if we’re going to be “small house people”, we just don’t have the luxury of clinging to impractical sentimental possessions like that anymore.

Eanes ISD Boundary Shown in Green

Where exactly is “Westlake” in Austin? Well, it depends on which boundaries you use. In the broadest sense, “Westlake” is considered to be those areas which attend Westlake High School, or those areas within the Eanes ISD boundaries, as shown on this map.

So, in general terms, the area west of Austin known as “Westlake” is everything that feeds into Eanes ISD schools.

If a buyer tells us they want a home that attends “Westlake Schools”, we will restrict the search in the Austin MLS to homes where School District = Eanes ISD aka “Westlake Schools”.

Many people also think of “Westlake” as the 78746 zipcode. In fact, the entire 78746 zipcode is contained within the boundaries of Eanes ISD, except for a small southern portion that crosses Barton Creek into the Barton Creek Greenbelt and Austin ISD. None of that area is developed though, so all homes in the 78746 zipcode attend Eanes ISD schools.

The 78733 zipcode is also contained within Eanes ISD. This includes neighborhoods such as Barton Creek West and Cuernavaca. But if you ask people there where they live, they are more likely to self-identify with the neighborhood rather than say “Westlake”. See map below.

But isn’t Westlake a separate city? Yes, it’s the City of West Lake Hills. See the map below and the area in puple, which shows the actual boundary lines of the municipality known as West Lake (two words) Hills.

City of West Lake Hills shown in purple

Notice that the city of Rollingwood is also located within Eanes ISD. People who live in Rollingwood would probably self identify as “Rollingwoood” residents instead of “Westlake”, though they live in the “Westlake Area” and attend Eanes ISD. The blue area just south of the municipalities of West Lake Hills and Rollingwood is technically inside the boundaries of City of Austin. This is the area north and northwest of Barton Creek Mall and includes subdivisions such as Woodhaven and Bee Cave Woods.

Residents of Woodhaven and Bee Cave Woods live in “Westlake”, but not inside the municipality of West Lake Hills. Sylvia and I live in Woodhaven, in Westlake, just a few blocks from Westlake High School, but we are residents of the City of Austin. Woodhaven is within walking distance to three Eanes schools – Cedar Creek Elementary, Hill Country Middle School and Westlake High. Thus, the neighborhood is heavily populated by families, as is Bee Cave Wood. In fact, we moved here specifically to be walking distance from Westlake High, though we also enjoy the awesome west/central location.

Finally, where exactly is Westlake High School? Surely it’s in West Lake Hills, right. Nope. It’s actually not located within any municipality. See the map below.

Westlake High School Austin TX

See those white areas on the map, and where I type “Westlake High School” in red? Those are unincorporated areas of Travis County. So, any crime at Westlake High would fall under the jurisdiction of the Travis County Sheriff, not West Lake Hills or City of Austin. People caught speeding through the school zone at Westlake high will be issued a ticket by the County.

So, if any purists would wish to argue that “Westlake” is only those areas located within the municipality of West Lake Hills, they would also have to say that Westlake High is not in Westlake. I’m sure there is a tax, finance or other logistical or political reason for leaving Westlake High in Travis County instead of annexing it. I haven’t investigated that, but it does seem odd that it’s not located inside West Lake Hills.

Hopefully you have a better sense of where “Westlake” is now. To me, it’s easiest to just think of it as those areas with Eanes ISD, per the first map above,. When a buyer says “we want Westlake Schools”, that’s what they mean.

Below are the Austin housing market stats for October 2011 and year to date.

As shown above, average and median sold prices are down 2.3% and 3.6% for Oct 2011 compared to Oct 2010. The number of homes sold increased and the number of failed sales efforts (Withdrawn or Expired) decreased. The sold to list price ratio increased a bit and the Days on Market improved.

Nothing really suprising or new here. The Austin real etstae market is still moving along somewhat, treading water for the most part. See the Year to Date and 44 month graphs below.

Year to date stats through Oct 2011 look more promising, from a color-code standpoint, but the movements are small.

Below is a “past months” chart I started a few years ago. I paiants a pretty good graphical picture of the Austin real estate market price movements the past 44 months. Pretty boring except for that one blip there in summer 2010 which quickly subsided.

Monthy Avg and Median Sold prices for Austin Homes

You can sort of see on the chart above that average prices want to increase, but really just haven’t more than a slight amount. This is over a 44 month period, almost 4 years. Still, many real estate markets in the US have done much worse over the same time period, so we’re not complaining.

We have job growth in Austin. We have good interest rates. But we also have a lot of financial uncertainty nationally and internationally, and an upcoming election. Investors are out there, just not that many. Many investors can’t get loans. Buyers seem content to wait, though we’re still closing deals each month.

I feel like there is pent up demand in the Austin market that is going to explode at some point. Our leasing market is very strong with very qualified renters who could actually buy, but are renting first.

Questions and Comments welcome.

Sylvia and I just sold a couple of acreage lots that we purchased in Oak Hill back in Feb 2007. For those who remember, Austin’s real estate market was still running full tilt in early 2007. I bought three lots in a new subdivision, we built a new custom home on one of them and moved in, and held the other two for investment.

The Original Plan - what was suppose to happen 
We bought the lots directly from the developer for around $85K and $90K each. I figured they would be worth $150K or more within the following year or two. The house we built, which we really didn’t need but which I though would be a good investment, cost about $475K to build turnkey, including lot purchase. It appraised for $610K when we closed the loan, which I thought was a bit high, but nevertheless I figured the value would appreciate to over $700K within two 2 years. We’d sell it, take the tax free capital gains, and buy again in Westlake near the high school.

I think of this strategy as “laddering up”, whereby each successive home purchase/build and move-up results in tax free income and an increase in net worth. Others I know have done this with “slow flips”, buying fixers and staying the required 2 years while renovating, then capturing the tax free capital gain and reinvesting into the next home. Over time, this is a powerful formula.

On paper, this all made sense. The home we’d lived in prior and sold to build this one was built in 2003 on another lot we’d owned since 1999, and it had appreciated nicely. Because of our convoluted tax system, there was a sizeable capital gain profit to be taken tax free on the sale of that one. Those proceeds were dumped into the new one to start a new two-year clock ticking. Any home you sell that you’ve owner-occupied for at least 2 of the past 5 years is not subject to capital gains tax upon sale, so in an appreciating Austin real estate market, moving often can actually be a wealth building strategy and a way to earn tax free capital gains.

What Actually Happened
The plan didn’t work out as expected.

The instant equity we had upon completion of the home vanished in Austin’s real estate downturn. We sold the house for slightly more than we paid to build it, but that wasn’t the plan. The lots did not go up in value either. After holding them for 4.5 years at a cost of about $8,400/yr each (interest and property taxes) we sold them for slightly more than we paid.

Everything I predicted will eventiually happen with regard to values, but over a 7-10 year timeframe instead of 2. Basically, as I look back on all of our real estate investing in Austin since the 1994 when we purchased our first rental property, that house and those lots rank up there near the top with real estate investments that lost money instead of making money.

Why I’m Not Upset
If you want to be a real estate investor in Austin, or more specifically, if you want to use real estate as a wealth building vehicle, you have to be on the field playing. That means taking risks in search of rewards. In hindsight, are there real estate investments I wish we would have avoided? Of course. But there are even more that did work out, some exceptionally well. Sometimes you hit a Grand Slam, other times you strike out. Meanwhile the singles and doubles keep things moving along. Over time, especially over decades of time, it all pans out in the end. So I’m not upset or worried about this hiccup at all.

But What About Small Investors Doing Just One Deal
This is what scares me. One investor doing one real estate investment one time that doesn’t work out. The real estate investing landscape all across the U.S. is littered with these investors who got in during the bubble, many using their home equity as down payment, and watched their real estate investments crater. Some hung on and still own those properties. Others went into foreclosure or short sales. Most are permanently wounded psychologically, having gone though difficult financial stretches trying to hang on. They never should have invested in the first place because they were not financially prepared to do so. Most will never buy real estate as an investment again.

Which is good news to the rest of us. Thank goodness the Amateur Decade of real estate investing is over. Renting has come back into favor, which benefits those of us holding long-term rental investments. Loans are no longer being given to unqualified borrowers. People are now more aware and skeptical of “get rich quick” real estate programs and flip shows on TV. Ironically, since I sold my two lots each for more than I paid, a cable TV show on real estate investing would call that a “profit”, albeit a small one. Hopefully people are smarter than that now, and understand that there are “silent” carrying costs that these shows ignore in favor of the sexier gross numbers they show on the recap.

Meanwhile, Austin’s market is coming back. I sold my lots at the dip. Had I kept holding another 3 years, the values would have increased substantially. But sometimes you just cut your losses and move on.

The Real Estate company Redfin recently announced the release of its Agent Scouting Report in its various markets around the US. This allows Redfin “clients” (term in quotes because anyone can sign up at Redfin.com and instantly be a “client”, whereas most agents think of a client as someone who has signed an actual Listing or Buyer Representation Agreement).

What is the Scouting Report? It allows consumers to view some stats on the current and past activities of Austin real estate agents. Here is a screen shot of Sylvia’s below, so you can see what we’re talking about, then I’ll elaborate further.

Click to Enlarge

It would be a good idea to click on the screen shot to view an enlarged version. If you have a Redfin account, you can click here to view the actual live version.

The Scouting Report allows anyone, in seconds, to type in the name of an Austin Realtor and see what the past 36-month production stats are for that agent. If this becomes a widely adopted and accepted way for consumers to evaluate agents before hiring, it could be a game changer for our industry. I’m all for it, with some reservations. But overall, I think it’s a good thing.

For example, Sylvia’s Scouting Report will reveal that, in the past 36 months, she’s closed 107 sales (53 Buyers, 54 Sellers), which is about 3 per month over a 36 month period, through the Austin MLS. It doesn’t include builder sales or non-MLS sales. The report will show a map of the location of each home and a link to the photos, sold price and full details of each sold home. The easy-glance maps helps a consumer see the geographic areas of operation of an agent, and where the concentration of business is for that agent.

One word keeps appearing in most of the articles and Blogs I’ve read about this – “Disruptive”. As one who thinks the term “disruptive is thrown around too often by the media, especially in the past 5 years about the real estate industry, I think this could actually be disruptive to the real estate industry and its agents.

Let’s start with one well known fact. Real Estate Consumers do a very poor job of selecting agents. The Scouting Report might change that and start weeding out the dead wood agents from the industry.

Most (over 70%) of real estate consumers hiring an agent from scratch hire the first agent to return their call, according to NAR surveys. More than half only interview one agent. So, as an agent, you don’t have to have a record of success, you just have to return calls fast.

This is why so many real estate Lead Conversion workshops and courses focus on agents becoming “hyper-responders”. There are all sort of products that enable this hyper-responder mode. Software that instantly texts you the phone number of a sign caller. Call Capture products that route sign callers to live agents who collect the lead info and text and email it to you. Caller-ID capture systems that even email to you public data info on callers based on Caller-ID (creepy). Email auto-responders that reply to inquiries with multiple automated follow-ups.

Sylvia and I have never bought or used any of these “instant response” or “lead capture” products. We just try to answer the phone and return calls reasonably quickly. During business hours, our phones ring simultaneously at our desks and cells, so we’re pretty easy to reach. And, for sure, I’ve returned a lot of calls the next business day to be told “we already hired an agent”. So, I know it costs us business, not being hyper-responders, but I don’t want to live life as a tweeked out hyper-responder, ready to jump and jerk into action at every ding or tweet that my iPhone emits. If I’m at my daughter’s volleyball game, I’m at the game and I’ll return calls later. If we’re out for dinner, we’re out for dinner, not talking on the phone in the restaurant. I don’t believe in the 24/7 access that some agents try to provide.

Maybe the Scouting Report, or the inevitable copycat industry clones that will follow, will raise awareness with consumers and ultimately help with the public perception of real estate agents as professionals with records of success, or lack thereof. If you’re going to hire a listing agent who has closed 2 sales in the past 36 months instead of the one who has closed over 100, do it for reasons other than the immediate return call. If that consumer behavior doesn’t change, the Scouting Report will be a nice tool for a small few only, and the wider general real estate consumer population will continue to reward instead call-backs instead of evidence of success.

Problems with the Scouting Report
There is some data the Scouting Report doesn’t convey well. For example, my own Scouting Report makes me look lame. Sylvia and I are a team, and we’ve always run most of our deals through her Agent ID in the MLS. Almost every listing and buyer sale is run through her MLS ID, so a Scouting Report on me doesn’t show my level of production. This is true of other husbnad/wife teams, and the larger Mega Teams.

For example, I know and agent with over 500 closed sales in the past 36 months. Most of those were handled by “listing specialists” or “buyer specialists”, but the deal was credited to the primary agent. Therefore, there may be a listing agent under that team scenario who has successfully transacted dozens or 100+ transactions but for whom a Scouting Report will show a big Goose Egg. That’s going to be a problem for some.

There are other shortcomings in the data that was chosen for display, and the data NOT displayed (for example, Expired/Withdrawn Ratio for listing agents, Sold Price to Original List Price ratio, etc), but overall, I’m in the camp that this is a good thing for consumers, if they will take advantage of the data and use it wisely.

Most homes in Austin have fenced back yards. Most fences are built on the property line. The standard wood fence lasts about 8-15 years before it needs replacing (less if it’s a cheap starter home fence).

Usually, when replacement is needed, reasonable neighbors work it out and get it done, sharing materials and labor in a way agreeable to both, depending on who gets the “good” side and who wants the fence the most. Ideally, this is just an old fashioned handshake agreement and all goes well, and both neighbors are happy with the result.

But often things don’t go well. It only takes one unreasonable neighbor to make things difficult. Having managed and owned rentals in Austin for 20+ years, I’ve had many more “fence encounters” the past three months alone than most Austinites will encounter in 2 decades. What have I learned? … there are some very weird Austin kooks out there when it comes to dealing with fence issues.

Scenario #1 – Petulant ManBoy Brat and his Parents, Fiancee and Great Dane
I own a duplex in South Austin. I use to own the duplex next door as well. I purchased both in 1999 and sold one in 2003, keeping the other. There had never been a fence between the two duplexes, though there had always been fences along the surrounding lot lines in back and the outer sides. I’ve never rented to tenants with pets at the duplex, so I never needed or wanted a fence for each individual yard.

At some point, the new owner next door, without my knowledge or permission, installed a chain-link fence connecting the front corners of the two duplexes, thus creating a large combined “shared” fenced yard in back encompassing the back yard of my Unit B and their Unit A. Apparently, the tenant (daughter of the owner) asked my tenant at the time if it would be ok for them to have a dog. My tenant, as I’m told by the neighbor, said it would be ok. I never knew of this. Besides, the tenant wasn’t the proper person to ask as they don’t own the property.

Recently my new tenant reported to me ongoing problems with the neighbor, now the owner’s son, and dogs roaming the back yard, crapping in it, and making the yard a health hazard for her small kids because of all the dung.

At this point, and perhaps I expect too much of people, one would think:

A) Good pet owners don’t let their dogs run loose and crap in their neighbor’s yard.

B) it should take no more than a simple request to keep someone else’s dogs off my property.

That’s not how it went.

Upon talking in person with the ManBoy/tenant, a petulant college punk with no common sense, he took the brazen position of “if you don’t want my dog crapping in your yard, pay me to build a fence”.

Reason and logic failed to persuade the young man, so I gave him my business card and asked him to have the property owner, his father, call me. I never received a call. I eventually mailed a Certified Demand Letter to the owner address listed in the County Tax Records stating, in short, “keep your dog off my property and pick up your dog feces”. No response, the letter was never signed for. I explained to my tenant the steps I had taken and told her to let me know if the problems continue.

Next, another email letter from my tenant:

Neighbors Dog Poop Picked up from My Property

“So sorry to be a bother again.  I try so hard not to complain .  The dogs next door, or more correctly the neighbors next door, are just too much.  They are back to two dogs and double the poop.  I’ve included a pic of the amount I’ve picked up in the last three weeks just from our side of the yard.

I guess I’m thinking that if you have the contact info for their land owner and if you felt comfortable with me contacting him, I would like to ask him to take care of the yard problem. I think it is worth a shot, especially considering my kids have to play in this backyard that is just covered in poop.

If you don’t think this is the right approach let me know what you think might work. I thought that leaving a mountain of poop by their back door step would give them the hint but they simply don’t seem to care”.

(Landlord/Tenant Legal Sidebar: The above represents notice from my tenant that a condition exists on my property that constitutes, as Texas Property Code terms it, “a threat to the health and safety of an ordinary person”. The average person may read it as a polite request from a frustrated tenant, but experienced landlords will see the red flags and understand that there are legal ramifications if I don’t take immediate steps to address the problem, regardless of who caused it.)

Having attempted to resolve this through conversation with the ManBoy/tenant, and finding him to be a recalcitrant moron unwilling to even admit that his dog’s poop doesn’t belong on my property, and having received no response from the letter sent to the owner, I felt there was no reason to attempt further dialog.

I sent my fence guy to my property the next day and had him simply remove the portion of fence on my side of the property line. This eliminated the existence of the enclosed yard and meant that the dog-owner neighbor would no longer be able to let the dogs out, lest they leave the yard and run off. It’s illegal to chain dogs outside in Austin, so a dog owner has the obligation to provide a fenced yard for the dog, or only let it outside while being walked on a leash.

I also called the City of Austin Health Department, which resulted in a visit the same day and a citation for accumulated dog feces. I even received a call from the health official updating me. He said “yeah, it was a significant amount of accumulation … and lots of flies”. Tell me about it. ManBoy thinks it’s all cool though. I’m the jerk.

Removal of the fence from my side, along with the health violation notice, got the attention of the neighbor/tenant. Starting the same day, I received separate phone calls from his Father, his Fiancee, the ManBoy/tenant himself, and finally his Mother. The content of all these conversations was essentially about their dismay at how unreasonable and rude I am and how a “good” neighbor would have simply offered to pay half for a new fence to divide the yards.

These conversations were truly bizarre, to any normal person. I mean, bizzare might not even be a strong enough word. Here’s an example:

Me: What I want is simple; keep your dogs off my property and pick up your poop. How you accomplish that is up to you and doesn’t involve me.
ManBoy: The dogs aren’t even mine, they’re my Fiancees’.
Me: Then tell your Fiancee to keep her dogs off my property and to pick up the poop.
ManBoy: She’s 6 month’s pregnant and doesn’t want to be out in the heat picking up Poop.
Me: Then do it for her.
ManBoy: But they’re not my dogs. I don’t see why you won’t just pay me half the cost to build a new fence. That would solve everything.

The above is just an example snippet of the mindset I was dealing with. Astoundingly stupid, self-absorbed people. Would I have been willing to pay half under different circumstances? Maybe. But I never could, and still can’t, get past the fact that I’d have to be willing to do business with people who think like this and can’t understand much less accept the concepts of responsibility, accountability and responsible pet ownership. Paying for half a fence isn’t going to cure that core problem. It would be no different than giving an alcoholic more booze in exchange for a promise to not act drunk anymore. Sharing the cost, in this particular case, is not something I would consider a good and wise investment, and it was an easy conclusion to arrive at.

The saga resulted, nevertheless, in me agreeing to come look yesterday at where ManBoy staked out his new fence line. He wanted me to “approve” it. A simple glance instantly revealed a crooked (diagonal) line splitting the fence line about 1/3 my side and 2/3 his side, between the units. Clearly off-center and improperly placed. Even a kindergartner could make a straighter line down the middle of two buildings.

“That’s obviously not the middle” I said, thinking silently that the stupidity of this kid knows no bounds. “These side lot lines are 5 foot setbacks, you need to measure it properly and put the fence in the middle”. He wanted instead to attach the fence to the remaining part of the existing fence on his side, which still extended a couple of feet across my lot line. I said “no, build it in the proper location, you can’t have part of my yard inside your fence line”.

I asked him if he smelled the strong stench while we were standing there. Literally, it smells like a pig farm. Not just slightly, but a strong putrid odor of dog shit. The kind of smell that causes a normal person to wince and wave her hand in front of her nose while saying “peeww”. These are Great Dane turds remember, many dozens of them peppering the yard in the hot 100 degree sun. Baking there every day in the hot grass, attracting flies.

Not responding to the smell question, he again started in on how rude it is of me to not pay for half the fence. I calmly listened as this escalated into a full blown verbal assault as I simply kept saying “no, it’s your dog, your fence”. He progressed to shouting, complete with expletives telling me “F… You. Build your own damn fence”. I thanked him for his input, told him I heard what he was saying and that we just don’t agree, and I left.

He followed that encounter up with the following emails:

ManBoy: You are a terrible person. Your mother should be ashamed of herself. I was trying to be a peaceful person this morning but your rudeness has no end, I regret my outburst. But seriously Mr. Crossland, you are a very terrible person. Either build your own fence or pay me both labor and half for the materials to do it. We are out.

My Reply: Thanks for your helpful note. I think you’re making the wrong move here. Since you’ve left the ball in my court, and seem unwilling to take responsibility for your situation, I will be taking the appropriate next steps legally.

I’m sorry you’re not able to see the absurdness of your position and how your failure to be a responsible pet owner and good neighbor has created this entire scenario. I won’t try to convince you further but will instead allow that to happen through the legal system and through City of Austin Code Enforcement.

ManBoy: You shouldnt try to be convincing us to build the fence on our own, it splits our property so we should be splitting the costs. Just split the cost for the materials and ill put up the damn fence. I guarantee you would be saving a lot more money splitting the cost than dealing with lawyers. Be a good neighbor and stop being an asshole.

My Reply: Thanks again for another kind and helpful note. My previous email stands. I’ll allow the authorities to educate and inform you regarding your obligations and responsibilities as a pet owner in the city of Austin.

I next heard from the Mother of the ManBoy, who called to apologize on behalf of her son. He’s under a lot of stress with school work, his job, a pregnant fiancee, and now having this fence issue “thrust” upon him “out of nowhere”, by me.

Incredible. Mom thinks her precious boy does no wrong and, like her son, thinks the only problem is me. If I would simply act right and agree to pay for the fence, all of this strife could be avoided. She was just as incapable as the boy of understanding the basic facts of the case and why I removed the fence from my side of the property. To the Mom, I was just an unreasonable person causing undo stress on her poor, sweet boy, which caused him to lose his composure and curse at me and send nasty emails.

I had previously heard from the Fiancee as well.  She wanted to lodge a complaint that my tenant’s small boys (2 and 4) were allowed to play naked in the back yard. This, she explained, was illegal and prevented her from being able to grill in her back yard with friends, because of the offensive sight of naked little boys frolicking in the grass (the grass from which my tenant had picked up the Fiancee’s dog’s pile of turds pictured above).

This was helpful for me to know. That a 6-month pregnant fiancee of ManBoy feels deprived of her right to relax with friends in her stench-filled back yard – surrounded by dozens, if not 100′s, of human-sized festering dog turds and swarms of flies – and grill up some tasty burgers. I guess I can see how the sight of the young naked boys could completely ruin the carefully established ambiance that the poop, flies and odor provide to the outdoor burger grilling experience. Frankly, I’m suprised a pregnat woman could be exposed to that back yard odor without vomiting.

In case you’re wondering, the conversation with the father was no less absent of reason than the conversations with ManBoy, Mom and the Fiancee. I’m still wondering if I might hear from the Grandparents next.

As it stands, these dog-owner neighbors are either going to start acting like responsible Austin pet owners or I’ll just keep sending City Code Enforcement to the property each week to write citations. If the fence is built improperly or substandard, code enforcement will be sent. If it’s not where it’s suppose to be, it will have to be moved. The dog poop must be picked up and not allowed to accumulate or attract flies. Unfortunately, with some people, anything less than a firm, unbending stance, including involvement of City of Austin Health Department is required. When reason fails, forced compliance becomes the only effective tool.

Scenario #2 – Neighbor Doesn’t like Instant, Free Repair to Fence

On another fence episode this past summer, high winds blew down the fence at a rental home I manage. Tenant reported it to me. I immediately sent my guy to replace two snapped posts and put the fence back up and make sure it’s stable. On small repairs like this, I just get the job done and don’t drag my feet trying to find the neighbor and have discussions. This was less than a $100 repair, not worth the logistics of asking for a shared expense.

The adjoining neighbor called to complain that the the new wood posts and the one new top stringer added doesn’t match the old wood and looks ugly. (her side has the exposed posts and framing). There was no thanks for simply handling it quickly at our own expense. No offer to share the cost. Just complaining. I told her my efforts were complete and that I’m sorry she is unhappy with how it looks, but that new treated lumber looks like that and it will eventually fade and blend in. She said she was going to get a bid to “make it look right”, but I never heard back and it ended there.

Scenario #3 – Petulant Home Owner Angry We Won’t Split Cost on Unneeded New Fence

Finally, last month, owner adjacent to another rental property calls and wants me to split the cost of replacing a 6 year old fence. It was supposedly “falling apart”. I sent my guy, he evaluated the fence, tightened up a couple of spots and replaced one broken picket. He reported back to me “the fence is in really good shape, is stable and isn’t even close to needing replacement”.

I informed the neighboring owner of this and explained that we won’t be doing anything further, that the fence is in good shape and performing as expected.

He responded with an email with photos showing his side of the fence. The photo reveals dog damage on his side from the dogs knawing and scratching and jumping on the fence. In fact, the broken picket we replaced was broken from the other side by the dog, as indicated by the manner, height and direction from which the slat was split.

The photos also reveal that his mal-adjusted sprinklers were soaking the fence, as evidenced by the arc-shaped degraded and faded areas where the water sprays directly on the fence. His side does visibly look worse than ours, but it’s because of his dogs and his sprinkler. I explained that to him and advised that he should keep his dogs away from and off the fence and adjust the sprinklers to prevent further deterioration of his side of the fence.

His email response:

“I have all the evidence I need to provide efficient information to ensure you take responsibility for your property. I don’t need or asked for your opinion, just fix what is clearly your responsibility and in a timely manner. I will take whatever action is necessary to ensure it happens.

Now you say that it’s my fault. I don’t think making excuses or coming up with theories of the dog and sprinklers being the cause. I’ve been willing to work with you but now I will make sure you fix your own problems.”

I didn’t respond. I did notify my client (the owner of that property) that if he hears from a concerned neighbor regarding my unwillingness to spend my owner’s money to replace a perfectly good fence, just refer him back to me and I’ll handle it. The owner was perplexed as well, having occupied the home not long ago and knowing the fence is in really good shape.

Conclusion

For those lucky enough to rarely encounter unreasonable people and situations like these, count yourself lucky. Those of us in Real Estate and Property Management in Austin have interface with hundreds of strangers every year under all sorts of scenarios. We have to learn to set boundaries with others and make decisions about things. Learn when to stand ground and when to give in. When to be flexible and reasonable and when to go hard core straight by the rules and law with no give at all.

Fences create these scenarios more than any other issue. Trees are right up there also, when they are on property lines and/or have branches hanging over, but fences have much less of an easy outcome than trees, and there are clear laws controlling trees whereas fences are, unless in volation of code, mostly a neighbor-to-neighbor issue.

If you’re a home owner with a fence, you have to have the proper mindset and expectations, depending on which side of the equation (or yard) you’re operating from. Splitting things 50/50 is what happens in an ideal world, but we don’t live in an ideal world. Fences are highly subjective with regard to appearance and condition. One neighbor’s “needs replacing” might be another’s “looks great and has plenty of useful life remaining”. Fences are subject to dogs abusing them, digging under them, kids throwing balls against them, climbing and breaking them, trees falling on them, blowing down in high wind, water damage from sprinklers, posts snapping off, boards curling, nails popping, and just plain aging and falling apart.

If you want a new fence real bad and your neighbor doesn’t, then you buy yourself a new fence and move on.

The burden of cost  falls primarily on the person with the greatest need or motivation. No neighbor can force another neighbor to pay anything whatsoever. The law isn’t set up that way. This truly is one of those “reasonable people will work it out” things in life. If you build a new fence at your own expense, then think you can bill the neighbor half the cost and sue in Small Claims Court if they refuse to pay, you will lose. Your neighbor’s obligation to participate financially in your new fence simply does not exist.

In the ManBoy scenario above,  had the owner approached me at the beginning, prior to obtaining a dog, and said:

“We’re thinking about getting a dog. Obviously we can’t have it running loose in your back yard and crapping in your grass, so we’re going to build a fence before we get the dog so we can provide it with its own private yard. Are you interested in participating in the design and cost of the fence? If not, we’ll take care of it on our own since it’s us who wants a dog and we know you never rent to tenants with dogs, but we just wanted to see if you’re interested anyway”.

Under that scenario, the neighbor would have found me to be an extremely reasonable and willing neighbor, ready to work out a fair deal. I love making win/win deals. I like to make improvements to my properties. I would have shared in the cost. I was never given that opportunity though, to come to a reasonable agreement with reasonable people. Thus, plan B ensued.

If you want to build a fence, give your neighbor a chance to help, but don’t act bitter or offended if they don’t. Life isn’t fair. I explain that to my kids constantly. Life doesn’t owe you fairness. Take responsibility for what you want and don’t expect others to act in your best interest. In the end, what comes around goes around. If I want to build a new fence at a property I own and my neighbor doesn’t want (or maybe can’t afford) to help, it’s ok. Not a problem. My expectation is already that I’ll pay the entire cost if I really want the fence. Something good will come my way in some other way in life, and it all balances out in the end.

One of the toughest things to balance as an Austin Realtor is finding the right frequency and methods for staying in touch with our past clients. On the one hand, we have the National Association of Realtor (NAR) surveys of buyers and sellers showing that over 90% of real estate consumers never hear from their Realtor again after closing.

Wow! This, in an industry where repeat business and referrals are extremely important to succeeding, is amazing. Clearly most Realtors drop the ball on “after the sale” follow up.

At the other extreme are those Realtors who follow up too much. Consider the quote from this Inman article titled “Is your real estate client a friend?“:

“There are salespeople out there who have inserted themselves into my life with constant contact, and I don’t seem to be able to get rid of them. They put themselves into my online conversations and follow me everywhere. Once we get onto their mailing list we can never get off”.

As my teenage daughters would say, “Eww, creepy”. I know what the author means. I’ve met mortgage and insurance people at industry events such as “lunch and learns”, we exchange cards, and next thing you know I’m receiving regular automated email newsletters and junk mail, getting followed on Twitter and Friend Requested on Facebook and LinkedIn.

None of those “connections” makes me more likely to become a customer or referral source. And in these instances, I’m not even a client or past client.  That said, I do receive follow-ups and “just touching base” calls and annual birthday and/or holiday communications from various vendors, and I do value those follow-ups. But the weekly email newsletters from the mortgage gal I met just once at a Realtor lunch? Not valuable or useful in an way.

Sylvia and I don’t generally seek out clients online and try to “Friend” them or otherwise get connected. Many “Social Networking for Realtors” workshop classes encourage this as a lead building strategy and as a way to stay in touch and “connected”. No thanks. Feels too creepy. They should title those classes “how to be super annoying and bother people”.

The exception is for the clients who actually do become real off-line friends as a result of the real estate transaction, or for those who initiate the connection with us themselves.

So, for an Austin Realtor, what is the right mix and balance of staying in touch with past clients without bugging them or becoming a creepy Social Networking Stalker?

It depends. Let’s start with examining the reason for followup and why it’s important.

Remaining Top of Mind
This really is the one and only reason. People forget. Even highly satisfied past clients will forget who their Realtor was 5 or 10 years later when they need help again. Not all, but many. Even if they don’t completely forget, why should they reward with repeat business a real estate agent who has completely ignored them after the sale?

So, some sort of follow-up and “staying in touch” is absolutely required. It would be stupid not to. Therefore, we must.

By reminding past clients that we’re still around, still in business and still ready and able to help if needed, we make it easy for people to remember us and possibly use us again or refer friends or family.

I just spent the past month entering all mine and Sylvia’s past clients into a new contact database. The database allows us to track referrals and repeat business. I’ve always had a vague sense that about half our business comes from the internet, and the other half is repeat and/or referral business. But the new contact management system let’s me see the exact stats.

From above, we can see that referrals are an extremely important source of new business for Crossland Real Estate. Each of these broad categories has sub-categories that I haven’t split out in our tracking yet. For example, most referrals are from past clients, but many are from other Realtors and non-client friends/family.

The “Internet” category includes internet searchers as well as long-time blog readers (who I suppose were initially web searchers). In the 1990s, when we were brand new, Direct Mail would have been the largest category, along with “Cold Calling”. As Realtors mature in the business and remain long-term, the percentage of Referral business should always be growing.

If Sylvia and I had completely ignored and never followed up with any past client, the graph above would look completely different and so would our productivity. The Referrals would be far less. Referrals are the most valuable type of new lead, as they usually come having already decided to do business with us.

So, how have we managed to create a solid referral base? Well, it’s not because we’re smart or have any secrets. Nor have we utilized technology or a brilliant follow-up plan with automated emails or “drip” campaigns. Mainly, Sylvia just tries to have some regular, genuine “touches” with past clients. Those “touches” (as we term any form of contact with a past client) are generally non-intrusive “hellos” or notes, gifts, birthday cards or other form of contact that serves as a friendly reminder that we’re still here and still thinking of you.

What we don’t do is what is considered to be most effective. That’s the phone call pretending to just say hi but with an eventual “who do you know that needs help buying or selling a home in the next 90 days” pitch. We’ve been to those seminars. That stuff actually works, believe it or not. And for the hard core, numbers-driven Realtor trying to rapidly increase production, it’s the most effective thing to do, whether it bugs people or not. You have to be on the phone talking to people and asking for leads every day.

But there is something about that direct approach that never felt right for us. We tried the scripts (pre-fab things to say on the phone) at one point but quickly stopped, as it felt phony and forced. Unnatural for us. For those who can pull it off without feeling like a pest, more power to you. You’ll probably sell more homes than us if you do it consistently.

We prefer the “soft touch” method over the direct and blatant asking for leads. It’s a tough balance, especially when business slows down as it has this year. If we had a real estate coach, she’d be hammering us to “get on the phones and start calling your database and asking for referrals”.

But, in the end, we have to like what we’re doing. Every Realtor has to find his or her way of staying in touch and asking for referrals whether it’s direct and to the point or passive and more subtle.