By Riki Markowitz
No matter what’s going on in the rest of the country, the Austin real estate market is still red hot. And at the same time housing affordability remains a challenge across the state, according to experts at Texas A&M University’s Real Estate Center. With homeownership demand up and inventory down; some Austin buyers are shopping for smaller spaces at a price they can afford. In this seller’s market, selling a small home here isn’t that hard, but if you’re the seller’s agent, there are ways you can be sure your client is getting the most out of his or her small property.
Last October, a cute bungalow in the popular Holly neighborhood of central east Austin sold for $316,300. The 870-square-foot pad with three bedrooms and two bathrooms has new hardwood floors, marble countertops, a side and backyard upgrade, plus new windows, doors and trim. Just three blocks south, a bungalow that’s in slightly shabbier condition, less modern and with much fewer upgrades, sold five months later for $637,500.
Most of the agents we spoke with agree on the major point that perception is everything. “Making small spaces work for a sale is partly a staging issue,” says Shawn Rooker, a REALTOR at Realty Austin. Staging alone may not be the main reason one Holly bungalow sold for twice as much as its nearby neighbor. Granted, one house is located on a retail thoroughfare. But for a small home that’s sitting on the market longer than a seller is comfortable with, “staging is always less than your first price reduction,” according to Lynne Rhea, RESA-PRO and owner of MomBo Interiors. It has not only been Lynne’s experience that staging reduces a property’s time on the market, the Real Estate Staging Association has studied and confirmed it.
The trade organization found that on average, homes sell 73 percent faster when they’re staged prior to going on the market, compared to those that are not staged.
When a home sells in less time, it also reduces the seller’s mortgage liability. A study by Coldwell Banker Real Estate Corp. estimates that staged homes sell at six percent above asking price and one survey by ASP Home Staging Statistics indicates that, “88 percent of staged homes sell at or above asking price.”
If you don’t watch home design reality TV shows or are new to the real estate industry, home staging is simply making a home more visually attractive to a larger number of potential buyers and making it easier for those buyers to visualize living in the space. But staging experts don’t just set their sights on indoor spaces, especially not when it comes to smaller properties. Rhea, also a member of Austin Board of REALTORS (ABoR), says she tries to let buyers envision ways to use outdoor spaces. For instance, she’ll create a lounge or party ambiance on the patio, including a bucket of local ales and bottles of refreshing Topo Chicos. Rhea calls this “understanding your livability.” She even sees to the landscaping in the front of the house. “Dressing the front of a property is one of the most important things you can do. While the REALTOR is getting the door unlocked, buyers are looking around.” Sellers have about 15 seconds to impress buyers, says Rhea. That’s how long it takes most people to decide whether they can envision living in that home.
Not all sellers of small homes are looking to offload a small dwelling as their main parcel. To a majority of brokers in the Austin area, a granny flat behind or adjacent to a larger home is actually a huge selling point. Rooker says he doesn’t get a lot of requests to see, specifically, small spaces. Same with Jonathan Ryan, a broker assistant at Karen Derr REALTORS. But both multimillion-dollar producing REALTORS say that homes that have a granny flat or small home on the property are often very much in demand and adds a lot to the home’s value. A staging professional can help buyers visualize using the smaller space to house a grown child, says Karen Derr. It can also be used as an office, an art studio, guesthouse, and yes, a granny flat.
Every day, more and more older neighborhoods in Austin are catching the eye of younger, wealthier buyers. This demand may not lead to additional inventory — it likely won’t — but selling small houses in these areas shouldn’t be seen as a challenge if you approach it right. Just keep in mind, with some TLC, small homes can sell faster and are more likely to sell for over asking price. RL