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If you’re thinking about selling your house in Austin, you might want to put the wheels in motion soon. An analysis from real estate company Knock forecasts that the seller’s market advantage here is slipping away: By summer, the company expects buyers to have the competitive edge. There are already signs of the slowdown: A report from Realtor.com revealed that prices in Austin dropped by more than 10 percent between June and September of last year.
There’s no need for despair, though. Per Redfin data, the median sale price in Austin was still a high $533,370 at the end of 2022, as more people from around the country set their sights on the capital of the Lone Star State. While the market isn’t as overheated as it was during the peak of the pandemic, you can certainly still cash in on the equity you’ve accumulated in Austin for a nice payday.
Read on for everything you need to know to maximize your profit potential as a seller in this shifting Austin housing market.
Things to consider when selling your house in Austin
What kind of shape is your home in?
If you were touring the house as a prospective buyer, what would you think about the condition? You want it to put its best foot forward. Remember that homebuyers are already spending a lot of cash — they aren’t going to want to spend a lot more on repairs. With that in mind, it’s important to think about what’s worth fixing (hint: not everything). Don’t go crazy: Most home improvements won’t recoup their costs when you’re ready to sell. Instead of undertaking a major project like redoing the kitchen, consider focusing on cheap and easy ways to increase your property value.
How fast do you need to sell?
Compared with a year ago, homes are taking a lot longer to sell in Austin. The typical home in the metro area spent 73 days on the market in December 2022, which is 47 days longer than a year earlier, according to the Austin Board of Realtors (ABOR). That extra time is understandable, given that buyers are struggling with affordability due to higher mortgage rates.
If you’d like to speed up the process, you may want to look into how to sell your house for cash, which avoids the potential slowdowns in the underwriting process. And there’s another route to a super-fast sale: Find an iBuyer. While iBuying has been drying up throughout much of the country, Offerpad and Opendoor are both still purchasing properties in and around Austin. These companies specialize in speed: In most cases, you’ll get an offer within 24 hours.
What’s the market like in your specific area?
If you’re selling a house that is actually within the Austin city limits, you’re in the most valuable section of the metro area: Median prices here are upward of $530,000. If your property is located farther from downtown, the market may look quite a bit different. In Bastrop County, for example, the median is $362,450, according ABOR. Think less about the entire Austin real estate market and more about the buyer activity in your neighborhood and on your block. Be sure to look at comps of homes that have sold in the past 30 to 60 days to get a sense of how much you could expect from the sale and how long the property may sit on the market.
How much will all this cost?
When you’re selling your home, the story isn’t all about how much money you’re going to make; you’re going to have to spend some cash, too. Start your journey with an estimate of how much it costs to sell a house in Austin. Here are some costs to consider:
- Realtor fees: Paying for the real estate agents involved in the transaction is the seller’s responsibility, and it’s likely the biggest line item in your budget. Unless you can manage to negotiate a lower commission fee, plan for around 6 percent of the purchase price (3 percent goes to your agent and 3 percent to the buyer’s agent). On a $530,000 sale, that adds up to $31,800.
- Title insurance: In most cases, the seller pays for the cost of a new title insurance policy for the new owner in Texas. The cost of this depends on the sale price of the home. Title insurance for a $500,000 property would run about $2,940.
- Unpaid property taxes: If you have any outstanding property tax obligations, you’ll need to cover your share of the bill at closing.
- Attorney fees: While you aren’t required to hire a real estate attorney in Texas, you still should. Selling a home involves a lot of money and a lot of confusing contract language, so it’s wise to pay an expert to sign off on the details.
- Concessions: Don’t be surprised if a buyer requests some help in reducing their costs. According to a Redfin report, 33 percent of sellers in Austin agreed to give buyer concessions in the fourth quarter of 2022. While that’s lower than the national average — nearly 42 percent of sellers across the country gave concessions during the same period — it is a signal that you may need to be willing to cover a portion of the buyer’s closing costs.
- Transfer taxes: Luckily for Austin sellers, there are no transfer taxes in Texas. So you get a pass on this typical expense.
Preparing your home for sale in Austin
When you’re getting ready to list your home, think about what will get a prospective buyer excited about it. Depending on the property condition, a professional home stager can be a great addition to your team. The cost for home staging varies. If you just need minor help with decluttering and reorganizing, the tab might be a few hundred bucks. If you’ve already moved out and the space is empty, you’ll pay more to rent furniture that will liven up the space. However, the investment can pay off in a big way. Buyers need to feel like a house can be a real home, which is much easier with couches and chairs than it is with a barren living room.
In addition to focusing on the home, you’ll need to pull the necessary paperwork together. Selling a home in Texas requires completing the state’s seller’s disclosure notice to share knowledge of any material defects with prospective buyers. And if the home is part of a homeowners association, have documentation from them at the ready as well.
Selling your house with or without a Realtor
It can be tempting to think about taking the DIY route to selling a home to eliminate having to pay a commission. However, finding the right real estate agent is well worth the money. Consider this data point from the National Association of Realtors: Across the country, FSBO (For Sale By Owner) listings sell for an average of $225,000, while listings with an agent get an average of $330,000.
Plus, an agent will save you a lot of time. Selling a home involves a ton of marketing work, coordinating showings and negotiating contracts, so you can leave all that hassle up to someone else. Don’t go with the first agent you talk to, though: Set up interviews with a few candidates, and ask them plenty of questions to get a sense of their sales strategies.
Pricing your home to sell
Now, it’s time to answer the (hopefully) million-dollar question: How much is your house worth? Online algorithms can give you a sense of the answer, but your real estate agent will help you figure out your pricing strategy. Don’t automatically expect to get more than your listing price, though: Redfin data shows that homes have been steadily selling for less than list price in Austin. (That’s a big difference from the spring of 2022, when homes were selling for 7 percent more than their asking prices.) Buyers no longer feel compelled to get into frantic bidding wars. So, simply put, don’t get greedy. Work with your agent to come up with a fair and reasonable price.
Getting to closing day
Accepting an offer isn’t the end of your journey to sell a home in Austin: There’s still some work to be done. In fact, according to data from Redfin, around 18 percent of homes that went to contract in Austin in August wound up falling through. So once you get an offer, do whatever is needed to get the transaction to close. That means responding to requests from the buyer’s agent and attorney promptly, and in today’s cooling market, it also means considering any requests for concessions. You’ll also need to clear out and have the property in pristine shape for the buyer’s final walk-through to avoid any last-minute issues.
If you hired an attorney, you don’t need to do anything at the closing: They can handle all the final details and check off the last to-dos to make the purchase agreement official. Then, the net proceeds are yours. Congratulations, and best of luck in the next place you call home.