NE TEXAS Real Estate News

Buying a Home Is Cheaper Than Renting in the Majority of the US

Buying a Home Is Cheaper Than Renting in the Majority of the US | MyKCM

The results of the 2018 Rental Affordability Report from ATTOM show that buying a median-priced home is more affordable than renting a three-bedroom property in 54% of U.S. counties analyzed for the report.

The updated numbers show that renting a three-bedroom property in the United States requires an average of 38.8% of income.

The least affordable market for renting was Marin County, CA, just over the Golden Gate Bridge from San Francisco, where renters spend a staggering 79.5% of average wages on rent, while the most affordable market was Madison County, AL where 22.3% of average wages went to rent.

Other interesting findings in the report include:

  • Average rent rose faster than income in 60% of counties
  • Average rent rose faster than median home prices in 41% of counties
  • While median home prices rose faster than average rents in 58% of counties

Bottom Line

Buying a home makes sense socially and financially. If you are one of the many renters out there who would like to evaluate your ability to buy this year, let’s get together to find your dream home.

Posted in:Home Buying Tips and tagged: home buyer tips
Posted by NE TEXAS REALTY GROUP on April 23rd, 2018 3:41 PM
Bidding Wars Abound… How Long Will They Continue? | Simplifying The Market

Bidding Wars Abound… How Long Will They Continue?

  

Just like with any product or service, the law of supply and demand impacts home prices. Any time that there is less supply than the market demands, prices increase.

In many areas of the country, the supply of homes for sale in the starter and trade-up home markets is so low that bidding wars have ensued, and the busy spring-buying season is just around the corner.

CoreLogic recently conducted an analysis on national home prices at the time of sale for their January 2018 MarketPulse Report and found that a third of homes sold for at least list price.

“The share selling above list price was almost three times the trough in January 2008 and represented more than one-fifth of total sales.”

Many markets in the western part of the country and around major cities are experiencing higher shares of homes selling above list price.

“San Francisco had the largest share of homes—76 percent—that sold for at least the list price, and Seattle and Los Angeles followed with 63 and 51 percent, respectively. Miami had the lowest share—16 percent—of homes selling at or above the list price.”

Increased demand during the spring and summer months, the traditionally busier seasons for real estate, will no doubt influence how many homes continue to sell over list price.

This should not be seen by sellers as permission to overprice their homes, though. Buyers are becoming more and more educated, especially those who have been searching for their dream homes for a while now while waiting for new inventory to come to market.

Realtor.com gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

Bottom Line

Without a large wave of new listings coming to market, buyers will continue competing with each other for the homes that are available. If you are thinking of selling your home, now may be the time to do so before more competition comes this spring. Let’s get together to determine the demand for your house in our area.

Posted in:Home Buying Tips and tagged: home buyer tips
Posted by NE TEXAS REALTY GROUP on February 6th, 2018 10:47 AM

Veterans Affairs Loans by the Numbers 

Veterans Affairs Loans by the Numbers [INFOGRAPHIC] | Simplifying The Market

Some Highlights:

  • Since the creation of the VA Home Loans Program, 22 million veterans have been able to achieve the American Dream of homeownership.
  • So far in 2017, $188 billion has been loaned to veterans and their families through the program.
  • VA Purchase Loans are on the rise in 46 out of 50 states and Washington, DC.

Posted by NE TEXAS REALTY GROUP on November 10th, 2017 9:39 AM
Buying a Home Can Be Scary... Unless You Know the Facts [INFOGRAPHIC] | MyKCM

Some Highlights:

Many potential homebuyers believe that they need a 20% down payment and a 780 FICO® score to qualify to buy a home, which stops many of them from even trying! Here are some facts:

  • 40% of millennials who purchased homes this year have put down less than 10%.
  • 76.4% of loan applications were approved last month.
  • The average credit score of approved loans was 724 in September.
Posted by NE TEXAS REALTY GROUP on October 27th, 2017 12:40 PM
Happily Ever Homeowner
Happily Ever Homeowner | MyKCM

Married couples once again dominated the first-time homebuyer statistics last year at 66% of all buyers, according to the most recent Profile of Home Buyers & Sellers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.

Many couples are deciding to use what would otherwise be their wedding fund as a down payment on their first home, as unmarried couples made up 8% of all first-time buyers last year. If you’re single, don’t fret; you can still buy your dream home! Single women made up 17% of first-time buyers in 2016, while single men accounted for 7% of buyers.

According to a survey by the Wedding Report, the average cost of a wedding in the United States at the start of the year was $25,961, which equates to a 10% down payment on a median priced home.

A recent article from the New York Times found that many singles are now asking their parents to allow them to use the money they’ve saved up for their wedding day to instead buy a home.

In the case of Carrie Graham, a Protestant minister from Austin, TX, her parents had saved a ‘five-figure sum’ for her wedding and were more than willing to give her that money as a down payment on her dream home. Graham told The New York Times,

“Buying the home wasn’t me saying, ‘I’m never going to get married’ or I am going to get married.’ My own home had way more than equity benefits. It was a real gift to have a home in an extremely desirable neighborhood in a city that I love. It’s brought me joy.”

Bottom Line

More and more first-time homebuyers are finding a way to purchase their dream homes, even if that means delaying their dream weddings.

Posted by NE TEXAS REALTY GROUP on September 13th, 2017 10:41 AM

Questions to ask movers

When choosing movers, it's important to have them come to your home to give you visual estimates so they can see exactly what you need moved. When they're in your home, it's also important to ask them questions about themselves and the moving company. Here are some to ask them - and the answers you should expect.

  1. How long has the company been around?

    A bad moving company won't stay in business very long, so if it's been around for a decade or more, that's a good sign. Also ask how many moves they do a year - the more they do of something, the better the odds that they're pretty good at it.

  2. How do they price their moves?

    This is a good test of their knowledge of the moving industry, and of their customer service skills. You want someone who explains the often confusing terminology in the moving industry, and not someone who rushes through their explanations or seems to be using insider language in an effort to confuse you. If you don't understand something, ask.

  3. How long have they been giving estimates?

    Experience counts for a lot - it's not easy tallying up the costs for moving quotes, so someone who's relatively new at it, or new to the moving industry, should be a bit of a concern, particularly if they have any problems answering your other questions.

  4. What is my delivery schedule?

    The worst trait in a mover is overpromising, either on price or when you can expect to get your things. You will receive your delivery within a particular time frame, so you should be wary of any moving company that tries to give you an exact date for your items to arrive - there are just too many things that could go wrong to foul those dates. Here's more information on moving company delivery windows.

  5. Does the mover do any repeat work for businesses in the area?

    Most movers have the usual canned references; avoid these. Ask instead if the moving company does repeat work for any area businesses - businesses won't put up with shoddy treatment, so if they use the same mover time and again, that's a great sign.

  6. Are there any extra charges I could face?

    In particular, ask about whether you'll pay for packing materials. A commonly heard complaint is that the moving company overcharged for packing materials that the customer didn't know about. And don't ask about 'hidden costs'. No moving company will admit to the costs being hidden. Instead, they'll say that they're in the contract. So ask to see all of the charges in the contract instead.

  7. How will they handle a challenging or expensive item?

    This is another test of the moving consultant's knowledge, as well as a test of how you can expect to be treated. A thoughtful and complete answer is a good sign that you will be treated thoughtfully during your move.

Posted by NE TEXAS REALTY GROUP on May 2nd, 2017 10:51 AM
Renting or Buying… Either Way You’re Paying a Mortgage | Simplifying The Market

There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained this month in their article, “12 Practical Steps to Getting Rich”:

While renting on a temporary basis isn't terrible, you should most certainly own the roof over your head if you're serious about your finances. It won't make you rich overnight, but by renting, you're paying someone else's mortgage. In effect, you're making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.23% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

Posted by NE TEXAS REALTY GROUP on May 1st, 2017 12:23 PM
Tax Return Depressing? Owning a Home Could Help | Simplifying The Market

Tax Return Depressing? Owning a Home Could Help

Many Americans got some depressing news last week; either their tax return was not as large as they had hoped or, in some cases, they were told they owed additional money to either the Federal or State government or both. One way to save on taxes is to own your own home.

According to the Tax Policy Center’s Briefing Book -“A citizen's guide to the fascinating (though often complex) elements of the federal Tax System” - there are several tax advantages to homeownership.

Here are four items, and a quote on each, from the Briefing Book:

1. Mortgage Interest Deduction

“Homeowners who itemize deductions may reduce their taxable income by deducting any interest paid on a home mortgage. The deduction is limited to interest paid on up to $1 million of debt incurred to purchase or substantially rehabilitate a home. Homeowners also may deduct interest paid on up to $100,000 of home equity debt, regardless of how they use the borrowed funds. Taxpayers who do not own their home have no comparable ability to deduct interest paid on debt incurred to purchase goods and services.”

2. Property Tax Deduction

“Homeowners who itemize deductions may also reduce their taxable income by deducting property taxes they pay on their homes.”

3. Imputed Rent

“Buying a home is an investment, part of the returns from which is the opportunity to live in the home rent-free. Unlike returns from other investments, the return on homeownership—what economists call “imputed rent”—is excluded from taxable income. In contrast, landlords must count as income the rent they receive, and renters may not deduct the rent they pay. A homeowner is effectively both landlord and renter, but the tax code treats homeowners the same as renters while ignoring their simultaneous role as their own landlords.”

4. Profits from Home Sales

“Taxpayers who sell assets must generally pay capital gains tax on any profits made on the sale. But homeowners may exclude from taxable income up to $250,000 ($500,000 for joint filers) of capital gains on the sale of their home if they satisfy certain criteria: they must have maintained the home as their principal residence in two out of the preceding five years, and they generally may not have claimed the capital gains exclusion for the sale of another home during the previous two years.”

Bottom Line

We are not suggesting that you purchase a house just to save on your taxes. However, if you have been on the fence as to whether 2017 is the year you should become a homeowner, this information might help with that decision.

Disclaimer: Always check with your accountant to find out what tax advantages apply to you in your area. 

Posted by NE TEXAS REALTY GROUP on April 25th, 2017 11:38 AM

What is a pre-approval and why do you need it?
                             
When shopping for a home, you're going to be asked at some point whether you've been "pre-approved" or whether you have mortgage "pre-approval." You're going to want to answer "yes" to these questions -- buyers who can are in a much better position to purchase a home. Why? Read on to find out.

  1. What is pre-approval?

    In real estate lingo, to say you have been "pre-approved" or that you have mortgage "pre-approval" means you have a commitment in writing from a lender to lend you a specific amount to buy a home under certain conditions (e.g., length of the loan and interest rate). A pre-approval holds more weight than a loan pre-qualification, which is an estimate of how much you may be able to borrow.

  2. Why is it important?

    It's important to have pre-approval for several reasons: It will let you know how much you can spend on a home and the size of mortgage you'll be able to obtain, it will give you an advantage when it comes time to bid on a property, and it will speed up the process when you find a home you want to buy.

    When you have a pre-approval letter for a loan, you'll know exactly how much you can borrow, and possibly the length of the loan (15 years, 30 years, etc.) and your interest rate. This will give you an idea of how much you can spend on a home and what your monthly payments will be like should you purchase the property.

    Buyers prefer sellers who have their financing in place. They don't want to choose a buyer who seems to be a qualified buyer, but can't come up with the funds to buy the house.

    If you are pre-approved with a reputable lender, you may be able to win a bid over another buyer should multiple buyers be interested in a particular home -- even if the offers from the other buyers are higher.

    When it comes time to place an offer on a home, having a pre-approval letter will speed up the process. That's because you won't have to wait to hear from a lender as to whether or not you've been approved.

  3. How do you get it?

    You'll want to talk to a few lenders to search out loans that will best suit you and your financial situation. The lenders will require certain information, including: your income, your employment situation, how long you've been employed, and any debts you may have -- e.g., student loans, car loans and credit card debt -- and the source of your down payment.

    You may be asked to show your tax returns, bank statements and W2 forms. The lender will use this information to determine the maximum loan you can qualify for and your monthly mortgage payment.

    The lenders will also check your credit report and whether you have funds for a down payment and closing costs.

    But, even when you do get pre-approved, remember that there are some caveats: Pre-approval letters can be time-sensitive and are subject to an appraisal on the home you're purchasing, so while a pre-approval gives you a firm idea of how much you may be able to borrow, it's still not a concrete guarantee that you'll get the loan.

Posted by NE TEXAS REALTY GROUP on January 26th, 2017 12:13 PM

Home buying negotiation tips
                                     
You've found the home of your dreams, now it's time to negotiate with the seller to make it yours. Follow these tips to negotiate the best price you can without upsetting the seller and ruining the deal.

  1. Don't lowball

    Start off negotiations by offering a fair price to the seller. You can offer a price that's lower than the asking price; just don't offer one that's too far off-base from the home's fair market price. If you start off with a severely low-ball offer, you'll negatively taint the negotiations from the get-go, and may even prompt the seller to reject your offer outright.

  2. Be informed

    Know as much about your local market as you can, such as the selling price of homes comparable to the one you hope to purchase -- before entering into the negotiation process. Seek out the advice of your real estate agent (she or he has most likely been through the negotiation process multiple times) and get advice from family and friends who've recently purchased a home.

  3. Get to know the seller

    Try to find out as much as you can about the home seller's situation. Is the seller in a hurry to move, say because of a job transfer or a divorce? If so, he or she may be willing to offer a lower price to make a sale happen. Or, has the seller owned the home for quite some time and seen substantial appreciation in the home? In that case, the seller may be more willing to negotiate on price (versus a seller who's purchased recently and may not have seen much appreciation in the home's value).

  4. Establish a connection

    This may sound silly, but if the seller can see you as a person -- not as some dollar-signs attached to an offer, you may be able to get a better deal. Write a letter to the seller, telling him or her how much you like the home and why it's the perfect one for you. You may want to add why it's a perfect one for your children to grow up in -- don't be afraid to tug a few heartstrings!

  5. But..don't reveal too much

    While it may help to establish a personal connection with the seller, you don't want to let the seller know too much, either. Try not to tell the homeowner exactly how much you love the home -- it may come to hurt you during the negotiation process. If the seller were to know, for example, that the house is the perfect one for you and you'd be willing to do almost anything to get it, this will give him or her the upper hand. Try to keep a "poker face" as much as you can during the negotiation.

  6. Prioritize

    Decide what's most important to you during the negotiation. Is it getting the absolutely lowest price or getting the seller to make needed fixes to the home? If you decide what's most important to you, you can smooth the way during the negotiation process by compromising with the seller on some points while holding out for the ones that matter most.

  7. Get it in writing

    Don't assume that items like the washer and dryer are included with the house. Negotiate what will be included in the sale -- e.g., the refrigerator, the dishwasher, etc., and make sure that those items are written in your contract.

  8. Snap some pics

    While you'll want to get what you've negotiated into writing, you may want to get it in photos, too. Take some pictures of items that you've negotiated to remain in the home and include them with the contract. That way, there's no way to debate, for example, just which custom window treatments are supposed to stay in the home.

  9. Ask for more

    It's a good idea to ask for more than you want during the negotiation process. Don't ask for the sky, but you might want to request more concessions than you need -- say, also asking to keep the dining room chandelier when you really only want the roof repaired. That way, you can "give in" to the seller on items like the chandelier, but get items that really matter -- like moving into a house where the roof won't leak.

  10. Keep your cool

    Negotiations proceed best when both parties are reasonable and don't let their feelings get in the way. When negotiating the purchase of your new home, try not to let your emotions take control. The worst atmosphere for negotiations is an adversarial one, where the buyer and seller are at odds with each other and refuse to compromise. Listen to the seller and try to understand where they are coming from.

Posted by NE TEXAS REALTY GROUP on July 11th, 2016 5:38 PM

What to expect at closing

By | Published: Oct 14, 2009 | 107 Comments

You've survived house hunting and the bidding and negotiating on your new home, and now it's time to make it yours. But to do so, you have to sit down with various people, which may include the seller, your real estate agent, title and mortgage company officials and possibly your attorney at what's known in real estate lingo as the "closing table."

At closing, you will close on the purchase of your new home, and if you are taking out a mortgage, on your home loan, as well. The whole process may take about an hour. Here's what's expected of you:

  • Complete the walkthrough

    Before the actual closing, you'll most likely have the opportunity to perform a walkthrough of the property and confirm that the condition of the home is as it should be, as specified in the sales contract.

  • Bring enough cash

    At closing, you'll be paying for your share of the closing costs, and will be bringing the down payment, so be sure to bring a certified check or a cashier's check. Your lender will provide a lender's check for the remaining balance that's due on the home.

    Your HUD Uniform Settlement Statement (which both you and the seller will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.

  • Show id

    You will also be required to show proof of your identification, such as your driver's license or passport.

  • Proof of insurance

    Bring a copy of and proof of payment for your homeowner's insurance, plus your flood insurance policy, if you have one. Your lender may want to review these before allowing you to close on the home.

  • Sign on the dotted line

    To transfer ownership of the home, both the buyer and seller will be required to sign several documents.

    You may be required to review and sign the purchase agreement, a promissory note for your loan, mortgage documents, title documents, the settlement statement and the truth in lending statement (which will outline the costs of your loan, your payment schedule and amount financed), while the seller will also sign the settlement sheet -- and, importantly -- the deed to the home to transfer ownership of the property to you. Copies of these documents will be filed at the county recorder's office, but be sure to keep your own copies as well.

  • Take the keys!

    Once all the necessary paperwork is completed and everything is in order, you will be given keys to the home. While you will no doubt immediately change the locks upon moving in, the keys are the final sign that the home is indeed yours.

Posted by NE TEXAS REALTY GROUP on April 12th, 2016 11:57 AM

4 Ways to Deal If Your Appraisal Comes in Low

 

 

 

The home-buying process is a high-stakes thrill ride full of exhilarating ups and scary downs, but unquestionably one of the most deflating moments is when the appraisal comes in significantly lower than the accepted offer. This is, to use technical real estate lingo, “a bummer.”

Either you feel as though you got the raw end of a deal by paying more than the property’s worth or, if you don’t have extra cash to hand over, the deal can crumble into dust. (Your lender’s not going to fork over money for a higher loan amount if the appraisal came in lower than expected, so you’ll have to make up that difference yourself.)

“In a rising market, low valuations are pretty common because appraisals are based upon sales that closed when prices were lower,” says Diane Saatchi, a senior broker with Saunders & Associates in Bridgehampton, NY. “The reverse is so in a declining market.”

In other words: Appraisals can’t keep up with how quickly homes are selling in a hot market, so you’re bound to see lower-than-expected values placed on homes.

So, what do you do if this happens to you? You have four options:

1. Appeal the appraisal

Sometimes called a “rebuttal of value,” the appraisal appeal takes some work. In fact, it’s a total team effort.

The homeowner, loan officer, and often the real estate agent work together to find better comparable market data to justify a higher valuation.

That means everyone puts on their best Sherlock Holmes garb and gets to work looking for anything that helps the claim for higher valuation. Perhaps the appraiser overlooked some comps (homes similar in style, location, and square footage sold within the past few years).

It’s not uncommon to discover, for instance, that the appraiser used a comparable sale that looks like it’s in great condition, when in fact the home was trashed when purchased and has already been rehabilitated.

The loan officer writes an appeal using the new comparables and then sends it to the appraiser. There might be some negotiating back and forth until all parties come to a compromise with a new valuation.

Spoiler: It’s a hard battle to fight.

2. Order a second appraisal

Most often, if the appraised value is not as high as the agreed (contract) price, the seller’s agent will ask to see the comps and get a second or third appraisal.

But it will likely cost you–you’re not only paying for the first appraisal (in your closing costs), but you’ll pony up for any additional appraisals as well. They can range between a few hundred dollars and $1,000 depending on the area. Occasionally, real estate agents or sellers will foot the bill if they really want to keep the sale.

3. Negotiate with the seller

If you’re lucky, you and the seller will both budge a little.

You might go back to the sellers and ask them to reduce the price or split the difference. The seller is under no obligation to do so, but they may prefer to do this rather than take a chance of losing you as a buyer, and starting over again. It is likely that another buyer will have the same issue, so the seller might be better off renegotiating with you unless they have other offers.

Sellers might be more willing to cooperate, especially if the Federal Housing Administration is involved. Lenders often require the use of their own FHA-approved appraiser, and these appraisals are “locked in” for six months.

The seller could be forced to take a poor appraisal or wait it out for a buyer with a different loan.

While the seller will usually be upset about the low appraisal value, most reasonable sellers eventually come to terms with the fact that any other appraisal values by potential future buyers will most likely come in at about the same value.

4. Walk away

No one wants to let a property slip through their fingers, especially if it feels like their dream home. But beware of ignoring a low appraisal—you could end up losing thousands whenever you decide to sell.

If you have an appraisal contingency in your contract, you can walk away, get your deposit back, and hope for better luck the next time around.

Posted by NE TEXAS REALTY GROUP on March 11th, 2016 12:07 PM

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