They’re Getting Offered Thousands Of Dollars For Their Homes. He Says They Deserve More.

By Blair Waltman-Alexin | Monday, June 24th 2024

Erik Vega learned a lot of things growing up in Dove Springs. Home ownership, he says, was not one of them.

“No one told us about equity, or stuff like that. We didn't know what a cash out refinance was, or be able to get a HELOC loan on your house,” Vega says. “That's why my phone rings so much … they want to know, what’s my property worth?”

Vega can answer those questions because he’s been working as a realtor since 2019. His niche is working with Dove Springs residents. Some are old acquaintances–high school friends and former neighbors–but others know Vega by his reputation: if you want to sell, he’s the guy who’s going to try to get you top dollar. That trustworthiness is what sets Vega apart in a market that he says is is rife with unscrupulous lenders and cash-for-homes deals.

“This is your house,” Vega says. “If anyone deserves to get all the money out of it, it is you.”

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A bright yellow home for sale in Dove Springs. Vega says he routinely hears about homeowners getting offers thousands of dollars below the home’s value.

Vega had no intentions of going into real estate. It wasn’t until Aaron Gordy, a local broker who worked with Vega’s father, suggested it that the idea began to take root. Initially Vega balked. He informed Gordy that he was about to start serving a prison sentence after being convicted of felony possession with intent to distribute.

“I said you’ve been an entrepreneur, but you’ve been in the wrong industry,” Gordy says.

An interesting thing had happened in his time away. In Austin’s booming housing market, investors were on the lookout for land to buy. Caught in the middle of these market drivers were family and friends Vega had grown up with, people that he says didn’t always know the true value of their home. Vega, newly licensed after defending himself in court against the Texas Real Estate Commission, now had a window into that world.

People were often surprised when he told them that in some cases, their homes were actually worth several thousand dollars more.

“And it blows your mind, like, what do you mean?” Vega says. “I'm like, yeah, that's what your house is worth. Not $100,000,” Vega says. “There’s nothing in Austin that starts with a one.”

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Vega (right) talks with a potential buyer.

Gordy says he’s seen how intense the Austin housing market has become since he started in the 90’s. He says offers often come from ‘shadow lenders’--wholesalers who find real estate for investors. These are often the groups behind the signs saying ‘we buy houses for cash.’ It can be appealing to homeowners because they can sell their house faster than they potentially could on the open market, and they’ll be paid in cash.

“They approach people in desperate situations, so they’ll go in and lowball them, and the seller may not even know better,” Gordy says. “That's the bad part of the real estate business.”

Even working with licensed realtors can prove challenging. Not only do Black and Latino households experience significant homeownership gaps compared to white families, they also don’t get as much money from selling a home. In a recent report, lending company Freddie Mac found that Black and Latino homeowners received lower appraisal values than the contract price more often than white applicants. They also found that gap increased if the census tract had a larger Black or Latino population. This underscores a recent U.S. Treasury post stating that Black and Latino residents earn roughly two to four percent less on home sales than white households. These are difficult barriers that can make a cash offer more appealing, says Gordy.

“So there’s a need but they precipitate those shenanigans,” Gordy says. “Trust and legitimacy is everything.”

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Vega works on a laptop during a lull in an open house. Many residents are offered immediate cash for their homes, which can sound more appealing than waiting for it to sell on the open market.

Vega found that Dove Springs residents had that trust in him.

“People trust me with their parents, their grandparents,” Vega says. “Even if we don't know each other, just the fact that I grew up here and I'm here and I can show people I sold this house over here.”

Vega says it saddens him to see longtime residents leaving Dove Springs, but he understands why they’re going. Increased property taxes and affordability issues have pressured many residents to relocate. Vega sees his job as making sure that if they want to leave, residents get what they’re due.

“You put blood, sweat and tears into this house,” Vega says. “If anybody deserves to get all the money out of it, it's you.”

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