All Forum Posts by: Moises Guerra Garcia

1800 sq ft home; 4 bedrooms / 2 baths. Are there any contractors out there licensed in asbestos removal that y'all recommend?

YouTuber Travis Spencer recently published this video: 

Housing Crash definition

In this video, Travis starts off by defining a Housing Crash.
Travis defines a housing crash as a 15 percent loss in value since its peak during the same year.

Overvaluation

Travis attributes employment, and institutional real estate investing as the main drivers for Austin's real estate market overvaluation. He explains that a lot of the companies contributing to the rise in job listings are tech companies. Because tech companies are taking a beating in today's market (just like real estate), tech companies will soon begin laying off people. One example of this is Facebook which recently made announcements about laying off 15 percent of its workforce. Unemployment will push more homeowners to sell.

Now in the case of big Institutional Investment companies coming to Austin to invest, as rents rise, many of these investment company-bought homes will need to be sold. This will also fuel the price drop.

Price Drop accelerators:

Travis then focuses on the events that will continue accelerating the price drop of homes in Austin, Texas. Those include: (1) dropping rents, (2) Increasing Inventory, and lastly (3) New builds.

He concludes that Austin has already CRASHED 17 percent since its peak in May 2022.

I have recently been interested in a home in the Highland neighborhood area (just north of North Loop) that was originally priced at $1.2 million in May 2022 (the height of the peak). Now the property is being listed at $599k. This $1.2 million price might have just been a terrible price chosen by the seller's agent given that according to the home's tax records, in 2021, the home was appraised at $478k while in September 2022, it was appraised at $700k.

Any thoughts on this video? What should be the expected price drop percentage (from peak [May 2022]) that we should expect in Austin, TX?

Hi! I am interested in knowing when a home was last bought and at which price. It would be great to also know the date on which it was bought. 

Is this information accessible anywhere? Maybe through MLS? Should my agent provide this information?

My agent just sent me the tax records, but these records do not show the day on which the property was bought. I may be reading the tax record wrong. It is my first time buying a property.

140 days ago a house built in 1950 was listed for $1.2 million.

After about 130 days of being on the market, the property's price had already dropped to $599k.  I made an offer for $550k. After some back and forth, we landed on $565k.

It's been 6 days since the option period started. During this period, the home has been inspected by a general inspector (Pillar to Post), an electric inspector (Mend Services), a plumbing inspector (Mend Services), and an HVAC inspector (Service Wizard). On the phone, I also spoke with an insulation inspector (Affordable Insulation) who read over the general inspection and provided me a quote to address repairs needed on the household.

Based on the inspection reports and quotes compiled this past week, even though some of the household components work, they are old, have had many repairs done on them, and will probably give out soon.

Electrical Inspection:

About 39 receptacles (or outlets) are not grounded. 22 receptacles are in a single circuit, and this could lead to an overloaded circuit. Lastly, 17 of the ungrounded receptacles do not have a ground cable at all so a ground cable would have to be run under the home (pier and beam home) from the breaker box to the outlets. Lastly, one kitchen outlet is reversed. 

I was given a quote of $4.2k from the Mend Services Inspector to address all these issues.

Plumbing inspection:

The tank from the gas-based water heater is from 2008 so it's 14 years old. It works, but according to the plumbing inspector, it needs to be replaced every 10 years.

The home's plumbing uses galvanized pipes, and based on what the plumbing inspector said, they need to be replaced or as he put it "I wouldn't buy a house with galvanized metal plumbing".

The inspector hasn't given me a quote yet (but he will send me an official tomorrow Monday, Oct 10), but it is my understanding that replacing the water tank can cost at least $1k. Meanwhile, replacing the pipes can cost at least $4k if they are replaced with PEX (based on some quick Googling). 

This brings the total to $5k from a plumbing perspective.

HVAC inspection:

The HVAC system is from 1988. The system works, but according to both the general inspector and the HVAC inspector, clearly, a lot of fixes have been done to the HVAC system throughout the years. The HVAC guy noticed multiple broken parts as well as parts that look like they will give out soon. 

The HVAC inspector gave me a quote to fix the issues he noticed. The cost would be $2k. On the other hand, he recommended replacing the entire HVAC system. The quote for a new system will be $8.6k. For negotiation, I could mention the cost of the new system, but I will not put that on the seller. I at least want to mention the repairs.

Insulation inspection:

Both the HVAC and the general inspector stated that it was very bad how little insulation was in the attic. I sent the report to an insulation company (Affordable Insulation), and the specialist was stunned by the pictures shown in the report. He gave me a quote of $2k for adding the missing fiberglass insulation in the attic.

Summary / Recap

$4.2k (electrical repairs)

$5k (plumbing repairs)

$2k (HVAC repairs NOT a new system)

$2k (insulation)
---------------
total = $13.2k

Is it outrageous or offensive if provide the seller with an offer of the current price, minus the total cost of repairs quoted by the inspectors?

In this case, the new offer would be $551.8k. 

Given the situation, what is the worst that could happen? 

I apologize if these are dumb questions. It is my first time buying a home. It is my first time ever being involved with real estate. I have learned so much from following the Bigger Pockets podcast. I am so thankful for it!

Additional Information

I spoke to the neighbor about the property. The neighbor mentioned that the current owner had a lot of problems with both the property itself (fixing issues) and with its tenants. The neighbor mentioned the house had a high tenant turnover. Maybe it was due to the problems with the home. I also want to add that the owner is not the original owner. The original owner sold the house 20 years ago, and since then, the house has had at least 2 other owners.

Hi! 

I recently placed a $550k offer on a home priced at $599k on Zillow. The seller eventually agreed to $565k. The house was built in 1950. I am currently under contract until Tuesday. Can I still negotiate after finding issues during the inspections? Things work, but many things in the house are not up to code and seem like they could break soon.

I've done a general inspection of the house as well as an HVAC inspection. 

The HVAC system is from 1988. According to both the HVAC and general inspector, it seems many repairs had been done to the HVAC system throughout the years. According to them, after looking at the heating system, they inferred that multiple technicians worked on the HVAC system, and each one did their own hacky fix on it without talking to each other. The HVAC guy felt that the technicians who had worked on the heating system throughout the years were not HVAC technicians. They recommend replacing the entire system for $8.6k,  instead of investing $2k on it for minor fixes. They believe if it doesn't break down now, it will break down soon. 

After sending the general report to an electrical technician, he gave me a $2k quote to address all the electrical issues. There were many written in the report. One that I recall is that only 2 out of 30 plus outlets are grounded. 

Now insulation. The attic has barely any insulation, and according to the general inspector, the HVAC technician, and the insulation inspector who I sent the general report, it's definitely not up to code, and my electricity bill must be huge because of it. The insulation technician gave me a $2k quote.

Plumbing. The gas tank-based water heater is from 2008. It is my understanding, these need to be replaced every 10 years. I have not received a quote to replace the water heater tank yet. The water heater works though.

Based on this inspection, the house will need at least another $12.6k more investment. Can I use these quotes as an argument to keep negotiating the price down? Things work, but inspectors so far recommend replacing things.

Tomorrow, I will have a different electrician and plumber from  look at the house's electrical and plumbing system. I am just trying to get a second opinion. Any thoughts y'all?

The offer was accepted late Monday evening (October 3rd, 2022). The closing date chosen is October 21st. My agent chose this date. There are 18 days between these 2 dates. 

Since this is my first time purchasing a home, I didn't put too much thought into it. Today I decided to consider other lenders to see if I get a better rate. The Bank of America mortgage banker, who I spoke with on the phone and who was working on giving me a loan offer, was baffled by the 18-day period. The banker mentioned this period is usually 30 days. During this call, I learned a bit about the steps that take place during these 30 days (closing period). One step I recall right now is the lender appraisal. The banker recommended that I talk to my agent to get that change, otherwise, I could lose the escrow and option fee money on the closing date since the bank will not have enough time to get everything done by this date. 

Is there any reason perhaps that my lender chose this date as the closing date? What is the reason behind such a short closing period?

@Bryan Noth The City of Austin does offer a lot of information about the rezoning process:

https://www.austintexas.gov/pa...

It doesn't seem impossible. The City of Austin states that basically one just needs to fill out a form:

https://www.austintexas.gov/si...

And then pay the application fee.

Hi! I am trying to house hack here in Austin, TX in the Highland neighborhood, but I do not want to break the rules either. I want to gain an understanding of how many people can I fit in a single property.

Property stats: 

Home area: 1.8k sq feet

Plot area: 14.5k sq ft

4 bedrooms, and 2 full baths.

Property zone: SF-6-NP. (according to https://www.austintexas.gov/gi...) (other plots in the area are zoned as MF or TOD)

I have been living in a "6 bedroom / 3 full bathrooms"  apartment with 13 other people (14 total) for 4 years (about 3 people per room in most rooms). I have been managing the place myself as a tenant/renter. Now, I am looking to house hack, and possibly apply the same system.

I was reading over the rules on this page: https://www.austintexas.gov/de...

This page referenced the "Duelling unit occupancy limit" code (code 25-2-511): https://library.municode.com/t...

According to point (B) from code 25-2-511, I cannot fit more than 6 people (unrelated adults). Point (D) states I cannot fit more than 4 people for SF-6-NP zoned properties. Is this correct? I just want to make sure I am reading this correctly.

If I am only allowed to fit 4 people in the entire house, that would suck. If I only put down 3.5% as down payment through an FHA loan, that would make the monthly payment really expensive (about $5k). If this is the case, I would want to consider going through the process of re-zoning the lot to MF. Has anyone gone through the rezoning process here in Austin, and how long can it take?

Any input y'all?

Hi! Recently I spotted a property priced at $600k. The property had come down from $1.2m. 
I proposed to my agent that we make an offer for $550k. The real estate agent refused and claimed her/his time is valuable. What should I do? Should I change agents if I have yet to sign any "exclusive agreement" contract?

For now, these 3 properties seem worth considering:
https://www.realtyaustin.com/3...

https://www.realtyaustin.com/2...

https://www.realtyaustin.com/1...