Avoid Buyer’s Remorse By Staying Clear of These 3 Pitfalls

For most people, purchasing a home is the biggest monetary commitment one makes. Investing in a property that makes financial sense and meets your essential requirements is crucial. Unfortunately, budgetary restraints and other unforeseen situations, including losing out in a multiple-offer situation or unsatisfactory inspection reports, can force a buyer to settle for something other than what he/she desires. Not acquiring one’s dream home doesn’t mean you should settle for a nightmare instead. According to Texas Association of REALTORS®, here are three perils to bypass before you say “I do” to your next home.

1. Inspect for signs that determine the quality of a home. Excitement sets in as you walk through the house you are considering buying. On the surface, everything looks great. The seller has gone through the trouble of adding a master bedroom addition complete with a sitting area. They updated the kitchen and bathrooms. Just because everything looks new doesn’t mean it was done properly. It could equate to putting “lipstick on a pig.” By taking emotion out of the equation, do your research and ask the right questions. Was the addition permitted? Will the seller’s DIY shortcuts eventually cost you more money to fix?

This is why it is necessary to have a home inspection—even if the property is sold “as is.” You will have the satisfaction of knowing what you are investing in, so you won’t be unpleasantly surprised when preventable mishaps occur. Yes, you might have to pay a little more for quality, but by settling for a lower-quality home, you end up spending more in the long run than you saved.

2. Determine the type of house that fits your lifestyle, and stand your ground. Even more important than the look of the house is the particular type of property you choose. Sometimes, people purchase homes that simply don’t suite their needs.

Are you an individual or a busy, young couple who prefer a residence where you don’t have to bother with exterior maintenance and offers just enough room to live comfortably? Then, consider a condominium or townhouse. Prefer to take care of the exterior yourself and forgo the monthly homeowner’s association fees usually associated with condo life? Or does your must-have include a sizable yard young children can play in? Then a detached home is ideal. To make the best choice, consider the type of the house you can live in comfortably for at least seven years and plan accordingly.

3. If it’s all about location, location, location, don’t settle for a home not within those parameters. It is understandable that you prefer to look in areas that make your morning commute bearable. Or if you have children, you might opt to live in a city with an academically-recognized school district. A location might also make it convenient for family get-togethers. No matter why you choose a specific area, keep that in the forefront during your home search. You can always upgrade the home, but it is much harder to pick up and move it.

McKinney Residents Eligible for SETH 5 Star Texas Advantage Program

Courtesy of the City of McKinney

The City of McKinney Housing & Community Development Department has announced the city has been added to the Southeast Texas Housing Finance Corporation (SETH) 5 Star Texas Advantage Program.

The SETH 5 Star Program makes homeownership possible for families and individuals wanting to purchase a home in McKinney by providing support for down payment and closing costs. The program provides qualified buyers a grant for up to 6 percent of the total loan amount. The grant can be used toward a buyer’s down payment and closing costs. Mortgage options include 30-year fixed rate FHA, VA, USDA, and conventional financing. The program is intended to assist a broad range of families that include middle- and low-income households.

With this program, there is no first time homebuyer requirement. All borrowers on the mortgage loan must complete the SETH on-line Homebuyer Education Course. The program can be used for the purchase of single-family homes, townhomes, condominiums, and owner-occupied properties containing up to four units. Interested homebuyers can find more information about the program here.

title insurance

A Brief Overview of Title Insurance

by Katie Thompson, Vice President and Sales Executive – Fidelity National Title

A title is a legal term used when referring to the ownership records about a piece of real estate. Title insurance protects a policyholder against challenges to rightful ownership of real property that arise from circumstances of past ownership. Title problems can potentially show up months or even years after the original purchase of the property, and that’s the reason you need the help and support of a title company.

The title company makes sure a property title is legitimate, so that the buyer may be confident that once he or she buys a property, he or she is the rightful owner of the property. To ensure that the title is valid, the title company will do a title search, which is a thorough examination of property records to make sure that the person or company claiming to own the property does, in fact, legally own the property and that no one else could claim full or partial ownership of the property.

During the title search, the title company also looks for any outstanding mortgages, liens, judgments or unpaid taxes associated with the property, as well as any restrictions, easements, leases or other issues that might impact ownership. The title company may also require a property survey, which determines the boundaries of the plot of land that a home sits on, whether the home sits within those boundaries, whether there are any encroachments on the property by neighbors, and any easements that may impact an ownership claim. Once the title is found to be valid, the company will likely issue a title insurance policy, which protects lenders or owners against claims or legal fees that may arise from disputes over the ownership of the property.

Closing, which is also known as “settlement” or “escrow,” is the event where the title to a property is transferred from seller to buyer. Closing is typically held in an office, such as that of a title agent or title insurance company, and involves the completion of all the necessary paperwork to finalize the agreement between buyer and seller. In addition, all financial issues are settled at closing (closing costs), and once the title is successfully transferred, the necessary documents are prepared, signed, and filed with local authorities.

Millennials, Baby Boomers Impact Housing Market

For those either anxious to seek out their starter home or anticipate their final move as they embark on their retirement years, the topic of home ownership is imperative for the two largest generations: Millennials and Baby Boomers. Since the two account for the largest population segments in the United States, it comes as no surprise then that the two also have the greatest impact on the housing market.

Generally categorized as individuals born between 1980-1995, Millennials seem to have a unique view of the world and their living situation. “Many reports show that Millennials tend to live with their parents during and after their college years,” said Melissa Hailey, CCAR President-Elect and owner of North Texas Top Team. “This generation is still finding out how expensive it is in the ‘real world.’” Hailey said Millennials oftentimes have to consider which takes precedence: Having their own place or continuing the lifestyle they are accustomed to, which places a value on acquiring the hottest new technology, dining out frequently, and shopping on a regular basis­.

“Many times, they find that living with family is a more affordable option–or maybe the only option–to continue that lifestyle,” she said. “However, my children are in this generation, and none of them are living at home with us…yet.”

In decades past, there was a stigma associated with being an adult who still lived with his or her parents. Today, however, this is common for 20- and 30-somethings. In a 2014 Pew Research Center census data report, it stated that “for the first time in more than 130 years, 18- to 34-year-olds in the U.S. were more likely to be living in their parents’ home than with a spouse or partner in their own household.”

Some experts have alluded to debt caused by the cost of rising college tuition as one possible reason behind this growing phenomenon. Others cite the lack of high-paying jobs, the cost of living, and the lack of affordable housing.

Although the percentage of Millennials who opt to stay with their parents has increased significantly, other Millennials have found ways to make home ownership both possible and affordable. “I believe that Millennials are open to other housing options,” Hailey said. “Those could include renting long-term, roommates, tiny houses, condos, and multi-generational housing.”

For Baby Boomers, their concern is not primarily focused on the cost of homes. Rather, they seek homes that adapt to the challenges of aging. Baby Boomers usually elect to transition from larger to smaller homes as they generally look to down-size their living arrangements.

“The catch is that many of them want the upgrades and updates that they are accustomed to in their current homes,” Hailey said. “Our market definitely has room for building upscale, smaller, single-story homes for this generation.”

According to the National Association of Home Builders, Baby Boomers, individuals born between 1946-1964, want a variety of options that suite their more active and sophisticated lifestyles. These include home offices for second careers or part-time work, wider doors and hallways for wheelchair accessibility, bigger windows and better lighting, and low-maintenance exteriors and landscaping.

While some Baby Boomers consider townhomes as an option, others prefer a single-level residence to accommodate their long-term living plan. “They are concerned with aging in place and while stairs may not be an issue today, it could pose problems in their future,” Hailey said.

A Seller’s Delight: Demand for Housing Incite Competitive Buyers

For CCAR Chief Operating Officer Steve Haid, rising home prices and the scarcity of inventory strengthens the current seller’s market. Coupled with increases in mortgage interest rates, buyers are most affected. “Agents who work mostly with buyers will want to make sure buyers are prequalified or preapproved and prepared to write an offer on the home they choose,” he said.

Although it cannot be said of all major cities, the Dallas-Fort Worth metroplex has witnessed a strong seller’s market since 2011. This presents a great opportunity for sellers to not only sell their homes quickly, but to maximize their investments as well.

“It follows the basic economic principles of supply and demand,” Haid said. “When demand is high and supply is low, prices increase.”

Collin County is a perfect example of this. In 2008, houses were on the market an average of 100 days. In 2012, houses spent typically 61 days on the market. Fast forward to 2016, and the days on the market dwindled to 34.

Melissa Hailey, CCAR President-Elect and owner of North Texas Top Team, attributes a portion of the supply-and-demand imbalance to growth and economic development. “Houston and Dallas-Fort Worth led the nation in the number of single-family permits issued,” she said. “Job growth continues, and new construction building is continuing strong.”

Mortgage Rates Hit Highest Level in Years and Continues to Soar in 2017

Since early November, several hikes to the mortgage rates took place. Financial experts expect them to continue to surge in 2017. According to a November report released by the Real Estate Center at Texas A & M University, “the Federal Home Loan Mortgage Corporation ticked up 30 basis points to a 3.77 percent average rate on a 30-year-fixed-rate mortgage, while the ten-year U.S. Treasury bond yield edged up to 2.14 percent from 1.76 the month prior.” In December, the interest rate increased by .25%.

“The rate increase indicates that the U.S. economy may be on a rebound, and consumers and businesses can afford to pay more to borrow money.”

– Melissa Hailey, CCAR President -Elect and owner  and REALTOR® of North Texas Top Team

While it is predicted that up to three additional hikes totaling up to 1.25% will take place within the year, CCAR Chief Operating Officer Steve Haid said the overall outlook remains optimistic.Despite these small interest rate hike projections, mortgage rates are very low in comparison to other times in our history, such as the 1980s,” he said.

Melissa Hailey, CCAR President -Elect and owner of North Texas Top Team, advices REALTORS® to become knowledgeable about interest rates and how the changes affect their consumers’ decisions to purchase a home. “With the possibility of rates continuing to rise, first-time home buyers looking for more affordable housing may want to consider buying now before rates increase and home sale prices rise any further,” she said.

 

Top 3 Real Estate Trends of 2017

Like most milestones, purchasing a house is an exciting time in one’s life. Along with the anticipation of settling into a new home, feelings of uncertainty and anxiety are common. For those looking to purchase a home this year, here are three notable changes that will impact your decision.

  1. Mortgage interest rates are expected to steadily increase over the next year. Due to several hikes that began in late 2016, mortgage rates are the highest they have been in two years.
  2. It is a competitive seller’s market. The demand for houses surpasses the supply, limiting the amount of available houses.
  3. Home prices will continue to rise. When one couples the reduction of available homes with the growth and economic development of the Dallas-Fort Worth area, the result is an inflation of the median sales price.

Know What You’re Signing: Read Forms, Ask Questions

Have you ever put your signature at the bottom of a contract or form that you merely skimmed over? You’d be surprised how many people sign real estate documents without truly reading them. The forms and contracts hold important details which could impact your future for better or worse. Signing blindly is a bad idea.


 

Did you know there are real estate forms other than your sales contract?

If you’ve never worked with a Collin County REALTOR® before, you may not know what to expect beyond touring houses together or pricing your home for sale. Your REALTOR® will explain every step of the process, but you can get a head start by understanding some of the forms you’ll see besides the sales contract. Here’s a rundown of a few common ones.

The Information About Brokerage Services form

One of the first forms you’ll get is the Information About Brokerage Services form, which you may also hear referred to as the IABS form. Texas law requires all real estate license holders to provide this form to prospective buyers, tenants, sellers, and landlords. The form gives you general information about how a real estate transaction in Texas works. For example, it explains the difference between a broker and a sales agent, and it outlines the services a client should expect from a broker as required by Texas law. Don’t be afraid to ask your Collin County REALTOR® questions about this form before you sign it.

The Residential Real Estate Listing Agreement form

Once you find the REALTOR® who is the right fit to sell your home, he or she will ask you to sign the Texas Association of Realtors Residential Real Estate Listing Agreement – Exclusive Right to Sell. This form helps you both know what to expect while your REALTOR® represents you. It will cover the time period your REALTOR® will manage your listing and how much your Collin County REALTOR® will earn from the sale. It also authorizes access to your property while it’s on the market and provides other details about how you will work together. Make sure you understand what the agreement entails and how your REALTOR® will handle your listing.

The Seller’s Disclosure Notice form

Texas law requires most home-sellers to disclose the condition of their property and any property defects they are aware of. The Seller’s Disclosure Notice is for sellers to complete and provide to buyers on or before a sales contract’s effective date.

Completing the Texas Association of Realtors Seller’s Disclosure Notice will help sellers meet Texas’s legal requirements about disclosure and reduce your risk of facing problems after the sale. The disclosure is also helpful for buyers, but buyers should not rely only on this completed form for information about a property. It’s a good idea for buyers to hire a professional to inspect the property in addition to carefully reviewing the disclosure notice.

But wait … there are more forms!

There are several other types of forms you may encounter depending on your situation. For example, you might see an Information About On-Site Sewer Facility form if your property has a septic system, or the Request for Information From an Owners’ Association to get information from a homeowners association about its bylaws or restrictions. Your REALTOR® has exclusive access to these and dozens of other forms that other real estate license holders who aren’t members of the Texas Association of Realtors can’t use. The TAR forms are useful for many situations you will encounter in your transaction.

Find a Collin County REALTOR® on texasrealestate.com and ask how these forms will help you when you’re buying, selling, or leasing property in Texas.