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First Time Home Buyers

Lake Highlands Little Helpers Vol 1

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Home prices hit new record – The Dallas Morning News, 2017-06-10

There has never been a better time for you to cash out on your equity growth and invest your profits in the home of your dreams!

Home prices hit new record - The Dallas Morning News, 2017-06-10

North Dallas is going as strong as ever, Lake Highlands is no exception. This summer looks exciting for our community with the surge of new retail at Town Center and The Hill.

In other news, Keller Williams has proudly debuted Keller Mortgage, giving Buyers with Keller Williams agents more buying power with no lending fees and $1000 credit to close. (For owner occupied homes over $150,000)

Are you ready to make the trade up to the home of your dreams? Is it a uptown condo, a quiet ranch with some acreage to spare, a serene lakehouse with a view, or the new build in the ‘burbs that you have been pining for?

Read the Full Article Here:

Home prices hit new record – The Dallas Morning News, 2017-06-10.

The driving forces behind home purchase deal fallouts in DFW:

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:

View Full Article: Why are more D-FW home purchase deals falling through?

Source: Trulia

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%.

 

Taking Stress Out Of Home Buying

New home search fulfilled – THIS is the objective!!

By: Hank Bailey
From: Realty Times,
January 2014
Full Article








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!

    Right Size Your Life – The Time is NOW!!

    Another home SOLD by Keller Williams

    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.

    What is the Difference Between Broker and Agent?

    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.

    After the Tax Incentive

    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 identify. 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 homes that I tour. There are a number of inexpensive repairs that can be done to a house to get it ready to bring 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 quickly, even in a less robust market.

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

    Veterans: Consider a Zero Down VA Loan

    US Military Logos

    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.

    Fed’s Mortgage Purchase Near End

    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!

    FHA Lending Standards Tighten

    FHA logo

    Click logo for FHA homepage

    Beginning in the spring of 2010 and continuing into the summer, The Federal housing Administration will be tightening the lending policies of one of the most highly sought mortgage loans in the country.  FHA insured loans currently comprise about 30% of all new mortgages originated in the United States, up from only 3% just 3 years ago, cites a recent USA Today article.


    .

    So in a nutshell, here are some of the more relevant changes:

    • Credit Scores increase – to qualify for a 3.5 percent downpayment, the hallmark characteristic of an FHA loan, borrowers must have a credit score of at least 580.  Failing to achieve the 580 mark will not eliminate the possibly of obtaining an FHA loan, but it will increase the required downpayment to 10 percent.
    • The limit on Seller contributions toward closing costs, currently 6 percent of the total sale (a amount generally sufficient to cover most to all of the buyers closing costs), will decrease to 3 percent.  This is a return to a previous standard, and still offers substantial assistance to Buyers, but will in the end require the Buyer to show up with more cash at the closing table in the future than is currently needed.  The purpose of this change is to help contain appraisal values.  When Seller contributions are large, the value of the home must appraise for the sales price of the home plus the Seller contributions.  By reducing the amount of the Seller contributions, the FHA hopes that appraisals will begin to more accurately reflect market conditions.
    • The amount of prepaid mortgage insurance will rise to 2.25 percent, up from the current level of 1.75 percent.

    So what’s the desired point behind all of these changes?

    The quick answer is that these changes are the next attempt by the FHA to help stabilize the housing market in the United States.  “These changes are overdue,” said David Stevens, the FHA commissioner, speaking to reporters. “FHA has a responsibility to be fiscally sound” and to provide homeowners with “financing that’s going to give them the ability to live in their home long term.”

    The Wall Street Journal also reports that the FHA is also announcing a series of measures to boost its ability to police lenders that originate loans with FHA backing, and the agency will ask Congress for greater authority to take action against lenders who originate loans with high rates of default.

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