Lake Highlands Property has joined, and we would like you to join too! Next Door has had it’s next major boost in the market, and it is a great way to get to know your neighbors, get updates from local public services, increase safety in your neighborhood, and find excellent recommendations for local services.
Steve Brown, Real Estate Editor for Dallas News, recently wrote an article examining where D-FW starter home sales failed in 2016. It is certainly an important topic to consider as we trek into the Spring in 2017, and there may be more to it than Brown suggests:
Homes selling in 3 days is the driving force behind the fallout. The article mentions what used to be the predominant drivers, and I believe those are still occurring at “normal levels”. What the article failed to address is the speed of the current market. It used to be that a Buyer would see a house, like it, go home and sleep on it, come back in the next day or two and see it a second time, and then make a well considered offer. Take that much time making a decision now, and the opportunity will be gone. So, now, Buyer will spend 30 minutes to an hour in the house, and decide to make an offer. At lower price points, they may make several offers, just trying to get to contract. Once the contract is executed, the real decision gets made. And more frequently than in the past, the Buyer decides there is just something they don’t like about the house. Or they execute the contract on their 2nd or 3rd choice home because they could, and then their 1st choice also offers them a contract. They drop the contract done in haste to execute the one they *really* want.
Rising interest rates may quell this a bit. The higher interest rates go, the more impact will be made on affordability. In turn, the ability of Buyers to offer higher and higher prices will diminish. Forecasts I am hearing for mortgage rate in 2017 is perhaps a rise over the past couple years, but likely not higher than 5%.
So I see another year of increasing prices in the DFW market. Perhaps not in the double digit range we have seen for the past 3 years, but likely in the 4-6% range, maybe as much as 8%.
Buying a home should be one of the most fun times of your life, not stressful. As you look for your first home, next home, or dream home, keep in mind these tips for making the process as peaceful as possible.
Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the Buyer’s Agent you chose is both highly skilled and a good fit with your personality. One thing to look for is responsiveness. Looking at sites with agent reviews like Zillow is a good way to see what others have found from their experience regarding agent responsiveness, local knowledge, process expertise, and more!
Remember, there’s no “right” or perfect time to buy. When you find that perfect home, don’t try to second-guess interest rates or the housing market by waiting longer — especially if your purchase timeline is for 3-5 years or longer or you risk losing out on the home of your dreams. In a low inventoried market like we are in right now with less than 4 months of housing supply in much of our market, this can cause others to jump in and make offers and you might miss out! Zillow is predicting housing prices up 4% nationally this year so the 2014 housing market probably won’t change fast enough to make that much difference in price except for up, and a good home won’t stay on the market long. Last fall mortgage rates showed us just how quickly they can go up! Rising 150 basis points or so from the lows of last summer, we now see rates in the 4.5%-4.625% range and probably moving higher over the next six months. As the economy perceptively improves so will mortgage rates move higher!
Know that no house is ever perfect. I have built homes before that I still saw things I would change or do differently next time. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repair. Make a list of your top priorities and focus in on things that are most important to you. Ask the seller to address them upon inspection and prior to closing or if unimportant, let the minor ones go.
Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price in a market like this one where inventory is so low we are back in a “Seller’s Market” or by refusing to budge on your offer may cost you the home you love. Negotiation is give and take and meeting in the middle! This is a distinctly different market than it was 2-3 years ago when there was 15-18 months’ supply of housing sitting on the market and aging rapidly with high days on market. Seeing in certain areas of our market homes going under contract in “days” once again!
Plan ahead and “first things first!” Buyers contact me every day wanting to know when we can go see a specific property! I always try and educate Buyers I work with that the first thing that needs to be done, is to get pre-qualified for a mortgage. Takes minutes and hours not days anymore! Most of the time it can be done online without ever having to go to a mortgage company or bank! Don’t even need financial docs most times to get pre-qualified! The lending process is drastically different than it was 6-8 years ago. If it has been that long (or longer) since you last purchased a home, don’t assume because it was no problem before to get financing that today is going to be the same. Also, and this is important for first time home buyers, getting a mortgage is more than having a good credit score and a job! It is about a combination credit score, “documented income,” access to down payment funds, and falling into a precise range of “debt to income” ratios that determine how much house you can afford! Waiting until you’ve found a home and made an offer to get approved for a mortgage, investigate home insurance, and consider a schedule for the home inspection is too late! Too, it makes your offer weaker, and in the presence of this being a “Seller’s Market” once again with multiple offers, low inventory, and homes not staying on the market long it might cause you to miss that purchase you are looking to make on that next, first, or dream home because you weren’t ready to fully make the strongest offer you could. Presenting an offer contingent on a lot of unresolved issues will make your offer much less attractive to sellers.
Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be costs. Don’t leave yourself short and let your home deteriorate.
Look at differences in MI or Mortgage Insurance. Most are still going FHA. FHA mortgage MI has gotten much more expensive over the past six months. Look at differences between FHA and a Conventional mortgage as to whether you can qualify and the cost of doing both!
Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased.
Choose a home first because you love it; then think about appreciation. While U.S. homes are expected to appreciate at an average of 1-2 percent annually above inflation between now and 2020 from one report I recently read, a home’s most important role is to serve as a comfortable, safe place to live.
For more information about the home buying process please contact me! Let me take your stress so you can relax and enjoy your new home!
How long will I be there?
Purchasing a condominium is like any other real estate purchase. You’ll need to own the Condo for at least a couple of years in order to recoup the closing costs. For shorter term needs, leasing may be a better option.
What amenities are offered at the complex?
There are a broad array of potential amenities to a condo complex. Some are sparse with simple covered parking and a little landscaping. Others have grand work out facilities, picnic/barbeque areas, work out facilities, playgrounds, pools, common libraries, media centers, laundry facilities, etc. Determine what extras you are looking for before you begin your search.
What are the current condo market conditions?
The condo market may be quite different from the single family housing market at any time. And like all real estate, the location of the condo will also make a large difference in the value of the unit. Study recent sales in the neighborhood and building you are seeking. Be sure to account for the differences in amenities between the complexes/buildings when studying these figures.
What is the reputation of the building you are considering?
Different condominium buildings/complexes have different senses of community. There are many buildings that are principally owner occupied, while others have a stronger tenant base. Some communities have very stable populations while others see more turnover. For example, condo complexes closely located to a large university will likely have a younger population and frequent turnover as students move in and out each year. Determine the characteristics that are important to you and talk to some of the neighbors.
Do the owners get along, or are they at each others throats?
Condominium ownership is a cooperative community effort. The common areas and structures of the community are supported by payments from all of the owners. By requesting copies of the HOA minutes, you can get a feel for how unified the residents are. No one wants to move into an atmosphere of strife and turmoil. Look to see if there are any hot issues that are burning in the community.
How well funded is the HOA?
As an owner, you are ultimately responsible for the common maintenance of common amenities and structures. You will pay a monthly HOA fee representative of your “fair share” of these costs. In the event that major repairs or maintenance is required, a special assessment may be charged of all owners
if the HOA account does not have sufficient balance to cover the expense. You will want to make sure that the HOA is financially sound so that you don’t get hit with an immediate assessment upon buying into the property.
What is the history of Special Assessments?
Request the Special Assessment history for the last ten years. Take a look at the patterns that have emerged. A well managed condominium should not see regular special assessments.
Are you comfortable with the association rules and by-laws?
Closely review the rules of the community and make sure that your lifestyle matches with the community that they have developed. Talk with the condo association and the residents to see how closely these rules are enforced. This will be the community that you are joining. You will want to be sure that you like the structure set in place, and that it actually occurs.
What are the parking arrangements for guests?
As an owner, you will have parking for your vehicles. You will be limited in how many vehicles you can park on the property. Generally, guests will be directed to specific parking places. In some complexes, that parking available for guests may not be either convenient or plentiful. Make sure you understand how parking works, and that it is sufficient for your lifestyle. This seems to be one of the leading sources of aggravation in a condominium community.
Who actually manages the condo property, and what services do they provide?
Some condominium complexes are self-managed by the owners while others employ a professional management company. For owner occupants, the idea of self-managing can be quite appealing. Who has a more vested interest in the property than the unit owners that live there. For landlords, it is frequently easier to deal with a professional management company than with local owners. Along with association management, be sure to also explore association insurance. Make sure that in the event of catastrophe your investment is protected.
It has been a banner year for real estate sales in the DFW market. We are experiencing activity levels not seen in many years, and events with which many agents are not familiar. In Collin County, homes priced in the typical range for first time home buyers are receiving multiple offers, frequently on the day which they are listed. During a recent search in which I represented the Buyer, I had conversations with several listing agents indicating they were unfamiliar with how to handle the influx of offers they were receiving. It has been many years since homes attracted multiple offers, and quite frankly, agents who have only been in the market for 3-5 years have never experienced this phenomena.
In east Dallas, the activity levels are also similar. I had the pleasure of representing a Seller who was able to convey their existing home at the highest $/square foot seen in over 5 years. This allowed them to purchase a much larger home, and they got a great deal on the mortgage. For while sales prices are high, interest rates are still at historical lows. This combination makes today the perfect time to right size your life!
Whether you need to increase the size of your living space, or step down into a smaller home and save a little money, there has never been a better time to act.
For many, it’s the American Dream: Life, Liberty and the Pursuit of… Golf Course Living. In 2011, the first Baby Boomers turn 65 and the demand for golf course real estate in Sunbelt states will likely skyrocket as Boomers look for homes in a climate conducive to their hobby.
But those who have long dreamed of living adjacent to fairways and greens could be disappointed. Development of a golf course community is exceedingly rare in this slumping economy. After almost two decades during which new golf course communities spread like wildfire across the Sunbelt, both the real estate and golf industries have suffered major setbacks.
In 2010, builders started on 15,000 homes in the Dallas-Fort Worth area, according to Ted Wilson of Residential Strategies, Inc. That’s down nearly 70% from the 51,000 housing starts in 2006.
New golf course construction has also taken a major hit. The overbuilding of courses in the 90’s and early 00’s oversaturated the market. When the recession descended upon the industry, many courses were forced to close, some in the middle of construction.
With every rule, however, there is an exception. In 2010, only one course opened in The Metroplex. What vaults this course from exception to veritable anomaly is it is part of a residential community.
The Old American Golf Club, located in The Colony’s The Tribute Resort Community, opened its doors to public play in September 2010. In addition to fairways, greens, bunkers and water hazards, The Old American features brand new residential lots alongside select sections of the course and dozens more just off it. In the desert that is the current landscape of new golf course development, The Tribute is an oasis, affording golfers the opportunity to live alongside the game they love.
The Old American and The Tribute were brought to life by Matthews Southwest, a DFW-based developer that has transformed The Metroplex’s real estate market through urban redevelopment and suburban lifestyle development. In The Tribute, Matthews Southwest saw the opportunity to deliver a suburban community where people could enjoy their hobbies right outside their front door. The community’s location on the shores of Lewisville Lake, combined with The Old American and The Tribute Golf Club (opened in 2005), has provided residents with access to golf, boating and fishing.
Even in the down economy, builders and homeowners have pounced on the opportunity The Tribute presents. Matthews Southwest reported a more than 100 percent year-over-year increase in residential lot sales at The Tribute in 2010. The community’s 1,150 acres showcase many of North Texas’ most prominent and distinguished builders, offering home designs that emphasize the Old World-themed atmosphere of The Tribute and begin in the 240’s.
As Baby Boomers and golf enthusiasts search for a place to live in harmony with the game they love, they may be hard up as developers and builders continue to tighten purse strings. However, The Tribute serves as proof that golf course real estate still has a pulse in the Heart of Texas.
A real estate BROKER is licensed to conduct a real estate transaction between a Buyer and a Seller and must be present in every transaction where real estate agents are involved. Most frequently, this person is the head of the real estate office where the agents work.
A real estate AGENT is a professional with a license that must be sponsored by a real estate broker. They are the people that you as a consumer will encounter in the transaction. They work for the real estate broker, and can not complete a real estate transaction without the broker’s oversight.
This creates an apprenticeship in the industry. In most states, a newly licensed professional must work for a broker for a certain number of years before they can qualify to become a broker themselves.
There are also many very experienced agents who have never chosen to pursue a broker’s license. They like working “in the field” as real estate agents, rather than running an office as a broker. They can be very experienced and may have amassed as much or more real estate knowledge than the broker that they work for, but prefer the job of working directly with Buyers and Sellers to that of an office administrator.
So to make a long story short, the broker is the person that runs the real estate office. The agents are the people who work directly with the consumers in the transaction.
Finally, there are some people who are licensed as Brokers, but still perform the role of an agent. This is usually the result of a preference for field vs. office work – at least that is the case with me.
I have encountered this question a few times recently, so I thought I would write a brief explanation.
First, let me clearly say that in the great State of Texas, there can only be one fully executed contract on a property at a time.
Now for the part that seems to create confusion. When dealing with residential real estate, an offer is generally submitted on a contract form and the agents have a habit of referring to offers as contracts. So you may hear that “we have received multiple contracts on this property”. What is really being said is that there are multiplte offers. An offer, even though it is submitted on a contract form, does not become a contract until both Buyer and Seller agree to every term and fully execute the document. Then, to remain a valid contract, the terms specified in the contract must be executed. On of the first of these terms is the deposit of earnest money.
So, when I represent a Buyer and I hear that “there is a contract on the property”, I always ask if it has been fully executed. If the answer is “no”, then it is only an offer, and there may still be a chance for my Buyer to get into the mix.
Now for the multiple offer scenario. As a listing agent, it is always my objective to attract multiple offers on a property. This creates a bidding war environment. When I receive the first offer, I will call other agents who have expressed interest in the property and let them know that we have received an offer. My hope is that it will move their client to action to also submit an offer. If we can get two or more in play at the same time, the outcome is usually better for the Seller.
As a Buyer’s agent, I extend offers that ask for a very quick response to keep the above scenario from happening. If my Buyer’s offer is the only offer in play, that tends to make the negotiation go better for the Buyer.
But at the end of the negotiations, there is only one contract that will get fully executed. The other party may wish to enter into a back-up position. If the first contract does not close, the back-up contract immediately moves into first place without the property going back to market. Finally, there can be only one back-up contract.
After a back-up contract has been executed, any other offers received remain “in limbo” until something happens to the first contract. If the first contract fails to close, the back-up contract moves into first place. If there are still other offers that have come forward, one of these can be selected to go into the back-up position. This continues until the property sale closes.
It is rare to have this much interest in a property, but occasionally it does happen. I have had success in closing back-up contracts from both the Listing and the Buying position.
I hope this provides some clarity on the issue. There can be only one fully executed contract at a time, and the rules for forming a queue behind this contract are very clear – one at a time.
The idea of an HOA is that all of the neighbors join together to maintain infratstructure that they all enjoy. HOAs take two forms, voluntary and mandatory.
In a voluntary HOA, membership is just that, voluntary. Each home decides whether or not to participate. The HOA usually does some community building activites, may form a crime watch, and sometimes does little beautification projects like planting flowers by the neighborhood sign.
A mandatory HOA exists when a neighborhood is built with additional community infrastructure such as a community pool, private parks, gated entrance, etc. Membership is mandated in the deed to each property. There are guidelines established for how the HOA is to run, how dues are determined, etc. These HOAs are frequently managed by professional companies and take care of the maintenance of all of the common grounds.
Fees for voluntary HOAs are usually very small – less than $100/yr. Fees for mandatory HOAs all depend on the amount of common infrastructure in the neighborhood and can range from $50 to hundreds of dollars per month.