Now that Mueller’s first homeowners have been in place for five years, I’m starting to get the question, “How do I sell my Affordable Home at Mueller?” quite often, especially now that savvy owners have seen my sign outside a few affordable homes*, and rumors are abound of early buyers making out like bandits. Here are a few general guidelines, frequently asked questions and an offer or two of help (no obligations!) with the endeavor.
Do I need to sell my home, can’t I just lease it out?
Firstly, you can’t rent out your affordable home entirely as that violates the spirit of the program – providing housing for those earning lower incomes, not for investors. You can lease rooms out to room mates, but must maintain the home as your primary residence. If you don’t live there any more, you have to sell
How do I list my affordable home for sale?
Choose the number one Mueller real estate agent and let him (er, me) talk you through the process of selling your home. Any agent can do it, but of the 10,000+ agents in Austin, not many are familiar with the affordable program from both a buying and selling standpoint. Of course, you have to give the Mueller Foundation the first right of refusal – they have the option to buy your home and keep it in the program. Which means they have 45 days to find a buyer and close on your home. And given that all buyers wanting to purchase in the program must be approved, this means they know who is ready willing and able to buy.
How do I find out how much my home is worth?
Before deciding to sell a home, most people want to have an idea of what it’s worth, and also what they would net from a sale. One way of finding out is to give me a call and I can give you a ballpark based on recent sales that I’m aware of. The other way is to talk to the administration of the affordable program. If the Mueller Foundation chooses to exercise their right to purchase, they order an appraisal – a third party assessment of the value of your home.
Are the appraisals always fair?
Yes. Mostly. The theory is that the independent third party licensed appraiser is able to look at comparable sales data for new and resale homes and arrive at a fair value, understanding the market rate housing and affordable housing markets. In general they do a great job with the data they have. Sometimes appraisals are off. That’s a reality of any market, and I’ve seen it in the affordable market too. I’ve seen them shoot over value by almost 8% and under by almost 2.5%. That’s just compared to my opinion of value, and an appraisal within 3% of the value reached by another appraisal is considered equal and equivalent. If you ever want a second opinion of an appraisal, feel free to get in touch.
Do I need a real estate agent to sell my affordable home?
Certainly not – they’re expensive and make you do lots of work to get your home ready for sale. Joking aside, you don’t really need an agent to sell your home back to the foundation if you’re comfortable with the process of home selling, and assuming there aren’t complex negotiations, and the appraisal value is fair. If the foundation doesn’t exercise their right to purchase it back, I would say your best bet is to use an agent. Sure, it’s a seller’s market for Mueller yard homes right now (not for town homes last month due to the sudden onset of 5 ex-affordable town houses in the late Fall 2012 market), and you might be able to sell it yourself. Still, I would get a professional on your side for a sale to take care of the marketing, negotiations and sale process. The buyer is more than likely to have a buyer’s agent representing them, so it pays to have someone on your team too.
How much will I get from the sale of my affordable home?
There are subtly different schemes under which affordable homes at Mueller were purchased. The easiest way I find to explain the rough numbers to people are to say this. When you bought your home, there was an affordable price X and an appraised price Y. The Mueller Foundation owns the difference (Y minus X) which amounts to a fraction of the home. When you sell it, they get that same fraction of the equity back, with some allowances for selling expenses. So if your home cost you $150,000 but was valued at $200,000, then the foundation owns ($200,000 minus $150,000) or $50,000 of the home, or $50,000 divided by $200,000 – a quarter of your home.
The best and most accurate answer is to ask the Mueller Foundation to help you do the calculations at the expected sales price. They have to do this when you actually sell the home anyway.
What is the resale market for affordable homes like right now?
Clearly it depends when you’re reading this. Some thing to take into account:
- New affordable home competition – the builders with all their marketing might are selling newer homes in different styles in the affordable program. Right now at the start of 2013, you’d be competing with Streetman Homes (row homes), Standard Pacific Homes (Mueller House Condominiums) and David Weekley Homes (Garden Homes).
- Affordable resale homes – these aren’t apparent unless you’re an affordable buyer qualified in the program – they are homes that the program administrators are attempting to sell
- Market rate resale homes – these are homes that are available on the regular resale market – if they have dropped out of the affordable program – the Mueller Foundation haven’t exercised their purchase option to keep them in the program. Often a seller will make their home available on both affordable and market rate markets to increase their selling options
What’s the first step to selling?
Give the Mueller Foundation notice in writing that you’re selling. There’s a set of steps on their website which leads you through this. If you are just curious, I’d say just get in touch with an agent and you can figure out an approximate value and see if that’s something you’re comfortable with. Then you can give the foundation notice if you decide to move forward, and in the event that they don’t proceed to purchase from you, you haven’t lost any time in getting your home ready to sell.
I hope that’s given some idea of the selling process. If it helps, I bought an affordable home for my family at Mueller and sold it in 2013, so I can talk you through the process in more detail. In 2012 I sold two affordable homes on behalf of my clients, more than any other real estate agent. 512 215 4785
* I say savvy owners as the general idea of affordable housing in the neighborhood is that it is practically indistinguishable from market rate housing from the outside.
photo credit: Marco Bellucci via PhotoPin