Aerial View - Old American Golf Course

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.

Who will win the contract race?

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 Buyers agent, I extend offers that ask for a very quick response to keep the above scenario from happening. If my Buyers 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 backup 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.

2011 Mortgage Interest Rates from http://mortgage-x.com/

I just got a great present in the mail!! I was notified of the annual adjustment to the interest rate on my Adjustable Rate Mortgage. It was reduced by 0.5% for the upcoming year and now has the stunning rate of 3.000%.

I originally took out the ARM 10 years ago. It is a 7/1 ARM meaning that the rate was fixed for the first 7 years, and adjusts annually after that point. The rate is based on a defined index with a 2.25% premium.

I chose this mortgage 10 years ago with the idea that it was highly unlikely that I would own this house for 7 years. The longest I had ever lived in a home previously was 4 years. I truly thought that I would have sold and relocated long before the rate ever adjusted.

However, in selecting the loan, I did make sure that future adjustments were based on a defined index and that the high end of the rate scale was capped. Although I didn’t expect to get this far into the term, you never know for sure.

As the loan started to adjust, I have watched the market. With interest rates in steady decline, I have seen no reason to refinance. I will refinance as rates start to rise, which means that I will miss the bottom of the market. Had I already refinanced, I also would have missed the bottom of the market – I think we just got there. I’ll take a close look next Fall and see if refinancing will be beneficial or if once again I will let the rate on my loan adjust.

In the end, the strategy of using an adjustable rate mortgage is going to work well for me. Properly utilized, I don’t think all ARM’s are evil. In the right market conditions, they can be a very useful tool, and I believe there will be a resurgence in their use once interest rates inevitably rise to more historically normal levels. Given the current interest rates, an ARM may be a great product again if your borrowing needs have a short horizon.

So what was the effect of the First Time Homebuyer Tax Credit? It may still be a bit early to tell, but one phenomenon is easy to indentify. The number of properties placed under contract in May 2010 was at its lowest level in years. However, this should not be surprising. Buyers in the market for the first time, or the first time in a long time, had plenty of incentive to get their contracts executed before May. The net effect was to accelerate what would normally have been May contracts into April.

If this were indeed the case, then April contract should have been at an all time high. And, yes, they were. April’s new contract numbers are larger than they had been in recent memory, validating the “hurry up” mentality in the market.

But this does not answer the larger question of whether or not the First Time Home Buyer Tax Credit achieved its purpose. The purpose was to stabalize the housing market and housing prices across the country by adding pruchase demand to the economy. The increased demand fueld by the tax credit should have placed housing prices in check. If this incentive had achieved its purpose, housing markets would stabalize and the incentive could be removed. The US government decided that the end of April was a good point to check this correction.

I think it will be late summer to early fall before we get a true reading on the full effect. I hope it worked, but I have the sinking feeling that it did not run for quite long enough. Jobs reports continue to be suspect with claims that the private sector is now paying the lowest percentage of wages since the Great Depression. This does not bode well for increased housing sales. Bully for the average American, savings rates are rising across the country, indicating that people have learned at leasst a partial lesson for the time being. However, that too means that large expenditures are being placed on hold.

I believe the housing market in total will continue to be fragile. But what about your home? What if you “have” to move?

The news can get better. While the housing market is fragile, it is also starved for quality product. I can’t tell you how disappointed I am with many of the hoomes that I tour. There are a number of inexpensive repairs that can be done to a house to get it ready to being to market. New carpet and paint, a deep cleaning and decluttering, inexpensive cosmetic updates, cleaning the yard, timming the bushes, removing debris, etc.

If you need to sell, please give me a call. I would be happy to schedule a walk-through and show you some of the easy things that will make your home sell fast, even in a less robust market.

For those inclined to move up, this remains the best of markets to increase your home size.

Here’s a Spring present for all you homeowners. As usual, the Dallas Central Appraisal District (DCAD) is lagging the market. Just as real estate values and activity are increasing, The Dallas Central Appraisal District has announced that sixty percent (60%) of homeowners will see a decrease in their taxable property value this year – YEAH! That means that most of us will be receiving a decrease in our property tax bill for 2010. Enjoy the break – I believe it will reverse next year!!

The Dallas Central Appraisal District also stated that approximately twenty percent (20%) of home values will rise. I suspect a number of these are homes which had permitted improvements accomplished over the last year, or are recent sales of previously undervalued real estate. The final twenty percent (20%) of values will remain constant.

That’s a fairly substantial move for the Appraisal Distict to have made, adjusting the values of about eighty percent (80%) of the homes in Dallas County.

For a complete report on this issue, please see the Dallas Morning News article.

Link to VA Home Loan Benefits

First, if you have served in the armed forces, thank you for your service! I am proud to have served with the US Navy as both a Surface Warfare Officer and as a recruiter. During my service as a recruiter, I bought my first Dallas home using a VA loan. At closing, I wrote a check that was between $100-200 and got the keys to my brand new home. I also took advantage of a small loan from the Texas Veterans Land Board. Together, these benefits of military service helped me to achieve the dream of home ownership.

I recently received an e-mail with information on obtaining a VA Loan from VA Mortgage Center.com. As they are one of the leading service providers for VA loans, I wanted to share their information with you. Hopefully this will help you achieve the dream of owning a Dallas home.

More than 1.7 million veterans reside in Texas, and about 38,000 live in Bell County where Fort Hood fulfills the role of the largest active duty armored post in the U.S. Yet it’s highly unlikely that all these veterans take advantage of the VA home loan program since less than 10 percent of the nation’s 24 million veterans capitalize on the program.

The VA loan program is one of the last remaining home-buying options that lets borrowers put no money down. Compared to conventional loans, VA home loans tend to offer lower interest rates and eliminate the private monthly mortgage insurance. As a result, borrowing veterans’ monthly payments are greatly reduced.

Fort Hood is full of starter homes that veterans could buy with the help of a VA loan. In 2007 and 2008, homes that cost between $100,000 and $159,999 accounted for 44.3 percent and 45.2 percent of homes sold in the Killeen-Fort Hood area, according to Texas A&M’s Real Estate Center (REC). Even during hard economic times, homes in the Killeen-Temple-Fort Hood area appreciated about 2.5 percent in late 2008 compared to 2007. In the same area, the REC found that the annual average rate for a 15-year fixed mortgage was about 1.2 percent, which is quite borrower-friendly.

By the end of 2008, homes in the U.S. began to depreciate, but Texas’ home values did not, according to the REC. The median house or condominium value in Texas in 2008 was $126,800.

Veterans who want to make use of a VA loan to buy a home in Texas need to confirm their eligibility first. For the most part, veterans who are in one of these categories may have va loan eligibility:

-Military members who’ve served 181 days on active duty or three months during war time
-People who have spent at least six years in the National Guard or Reserves
-Spouses of those killed in the line of duty

The maximum VA loan limit in Texas is $417,000, but it’s important to note that VA does not issue loans, it simply backs about one-quarter of the loan. Because of that insurance, lenders, such as the VA-certified VA Mortgage Center.com, are often happy to help veterans get a loan.

Texas Real Estate Commission

My Dad always told me that if something seemed too good to be true, it was probably not true. This simple piece of advice has kept me out of many sticky situations. I just received an e-mail from the Texas Real Estate Commission (TREC) warning the public about real estate brokerage scams in the DFW area. I felt compelled to pass the warning along. It is very easy to find out if a person hold a license from the Texas Real Estate Commission – you can look up any persons license number by following this link.

Here is the beginning of the warning message from the Texas Real Estate Commission:

The Texas Real Estate Commission Standards and Enforcement Services Division (TREC) has received complaints against a group of individuals and companies that have been doing business in the Dallas/Fort Worth area. The individuals and companies named in the complaints represent themselves as real estate agents and real estate brokerage companies but do not hold Texas real estate licenses. Owners of real property, tenants, buyers, and investors claim to have lost large sums of money related to the group’s real estate schemes. Among other things, the complainants allege that the group takes and keeps deposits for properties over which they have no authority or no control. They allegedly do not pay rent to property owners on property they claim to manage for those owners, or take large security deposits from tenants and then keep the money. They take deposits or earnest money on properties that they claim are available for a short sale but in reality are days away from foreclosure. Apparently, much of the solicitation of potential victims has been conducted through www.craigslist.com.

For the full article, click here.

The Federal Reserve announced that it will end the purchase program of mortgage backed securities as scheduled this month. I give this three hips and a giant hooray! After providing about $1.25 trillion in economic support, ending this program will force the private sector markets to fill the gap that the Fed has left. And I have all of the confidence in the world that they will do so. However, they will likely not do so at the same returns that the Fed was seeking. Rather, I suspect, the private sector will demand greater yield on their investment than did the US Government.

So what does this mean to the “average Joe” trying to buy a home? I suspect it will mean slightly higher interest rates. If the secondary markets begin demanding a higher return, it is going to force mortgage originators to write at higher rates. I don’t think this rate will have to be dramatically higher, but could be in the range of 500 basis points (0.5 percent). That’s a tough pill to swallow if you’re right on the edge of taking out a loan. If you have the option, I would recommend locking a rate quickly.

For the broader market, I think this is a promising move, thus my cheers at the beginning of this post. If the Fed is willing to cease this program, it must have confidence that the private sector will step forward to continue the function. Lacking that confidence, the program would have been extended to ensure that credit markets remained liquid. I take this as a very positive sign that the mortgage markets are healing.

It will be very interesting to see what happens with the first time home buyer tax credit at the end of April. I can feel the demand that this program is generating in the market. Homes that are in the range of both size and price to be attractive to first time home buyers are seeing significantly more demand than larger, more expensive homes. So, a final word of encouragement to those who own small homes and have been thinking about moving up – do it now!