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I don’t need a Realtor. I am buying a brand new home. How hard can it be? The on-site rep said they would help me through the process.
We hear this comment daily and I worry about these people and what they are getting themselves into. A buyers’ specialist, will focus on your needs of purchasing a home. Even if you have found the perfect community and the perfect home in that community, there is still many things a buyers’ specialist can help with. The on-site sales rep is looking out for the interests of the company they work for (builder/seller). They want to make sure the company gets all the profit they can.
1. Negotating the best possible price. When you choose an expert in new construction, they understand what recent homes in the area have sold for, how many homes have sold in a given period of time, how long in some cases a particular home has been sitting unoccupied, and what the bottom price the seller (builder) will take for the home.
2. Negotiating options, closing costs, and other non-monetary items. A buyer specialist can help you determine what is most important in the negotiations and not only help you determine the best price for the home, but in some cases load in things you normally have to put in after you close. These items include window treatments, washer, dryer, refrigerator, sprinkler system, and landscaping. Closing costs are the number 1 item that buyers forget when they are negotiating a deal with a builder. You know you have $10,000 to put down on the home, but did you know that closing costs are typically 4.5% of the purchase price. If you don’t have the extra cash, a buyer’s rep will get the builder to pay for it. Be careful here, many current loan programs will not allow the seller to give you more than 3%.
Wow! Now you really have the best home for the best possible price. Many traditional agents will stop here. North Texas Home Finders’ agents do not. We are also here to negotiate and help you through the financing process. Many home builders require you to use their lender to get any discount associated with the home purchase. We will make sure that their rates and fees are competitive in the marketplace. Remember, builders can make money on the loan side too.
Finally, a good buyer’s rep will attend all construction meetings. If you are building a home from the ground up, there are several meetings you must attend from the design selections, builder plan review, to the final walk through and inspections. North Texas Home Finders will be there every step of the way. We will even review the HUD statement (closing document) and make sure it is correct before we go to closing. This way there are no surprises at the closing table and we can walk out with the keys to your new home in hand.
So, buying a new construction home, get a buyer’s rep. They will save you not only money, but time as well. After all, wouldn’t you rather be spending your time doing what you love best?
Article by Teresa Robinson, Owner/Buyer Specialist, North Texas Home Finders
Get a Buyer Specialist and rest easy! The builder pays our service charge from their advertising budget which is built into every home they sell. Since these fees do not come out of the home construction budget, you cannot negotiate one penny of a better deal alone. Need a pre-owned home? I can help with that too and the seller will pay my fee! Visit www.northtexashomefinders.com for more information.
“My Dream Home Has Foundation Problems”
You have looked at over 30 homes in the last few weeks, and finally you’ve found the one that you want to buy. You plop down your earnest and option period money and follow your realtor’s advice and schedule an inspection right away.
A few days later, you get a nice report from XYZ Inspection saying that your “dream” home might be a potential nightmare. The inspector sends pictures of the beautiful colonial front door that doesn’t open and shut properly, and several pictures of cracked sheet rock in your perfect kitchen with granite counter-tops. Also, he states that there are cracks in several bricks on the exterior of the home. Your inspector gives you the names of a few structural engineers that he recommends to further investigate the problems, because identifying foundation problems are out of his realm of expertise.
After spending an additional $200.00 and hiring a structural engineer, you find out that your dream home will need foundation repair. You suddenly realize that your dream home is a nightmare and you follow your instincts and walk away from the home. So, you’ve spend about $500.00 in inspections, but hey you will get your earnest money back and you’ve saved yourself tens-of-thousands of dollars in the long run, by passing on this wolf in sheep’s clothing.
By Amy Underwood at www.northtexashomefinders.com
Our first thought once we decide that we need a new home is always, I need to get rid of this one first, before I can do anything. But do you really need to sell your current home?
Many home buyers are enjoying the benefits of rental property ownership by keeping their current home and leasing it out. With the mortgage industry rapidly changing the requirements to gain loan approval, many people that could buy a home a year ago, can no longer do so. But guess what, they still need a place to live. Housing is a basic need. We all need a roof over our head and chances are we have to pay for it. This mortgage crisis is an opportunity for investors. It is also an opportunity to buy that next home and enjoy the tax breaks found in rental properties.
I really need the equity out of my existing home in order to buy the new one. Maybe not. There are several loan programs out there, where you can refinance your current home to pull out the equity for the new home. If you do have your current home up for sale, there are loan products available in Texas and other states where you can get a mortgage for the new home while you wait for your current home to sell.
A good buyers representative can help you decide if you really MUST sell before you move or if you can take advantage of the current market conditions, buy now, and enjoy the tax benefits of being a landlord.
Article by Teresa Robinson, Owner/Buyer Specialist, North Texas Home Finders
Get a Buyer Specialist and rest easy! The builder pays our service charge from their advertising budget which is built into every home they sell. Since these fees do not come out of the home construction budget, you cannot negotiate one penny of a better deal alone. Need a preowned home? I can help with that too and the seller will pay my fee! Visit www.northtexashomefinders.com for more information.
Occasionally, I get the request for a neighborhood without an HOA. In the newer communities around Dallas/Fort Worth, HOA’s are more common than not. So the question remains, is that a good thing or a bad thing?
I’m like most other people, I don’t want someone telling me what I can and what I can’t do to and with my property. If I want to build the world’s largest storage shed in my backyard, and I want to paint in Honolulu Blue (in honor of my beloved Detroit Lions) I should be able to. Heck, I may even get creative and paint the logo on it myself. It’s my property, it should be my choice.
My neighbor, however, loves the Minnesota Vikings. He has decided to build a bigger shed, painted purple, with Vikings paraphernalia all over it. Now we’ve got a problem. I don’t want to see that ugly purple shed every time I walk into my backyard. Someone should tell him to do something with that thing.
Okay, I may have over-exaggerated a bit. However, it represents the truth. We all want to do what WE want to do without complaint. We just don’t want all our neighbors to have the same privilege. Neighborhoods without an HOA can have similar problems. I know of one community in the Lavon area that has beautiful homes on one-acre lots. They declined to have any strict deed restrictions when the community was developed. Consequently, one of the home owners decided to build a giant Quonset hut behind his house. This thing was huge, larger than the house in front of it. Needless to say, the devloper’s next community had more stringent deed restrictions. I’ve seen a community in Denton without an HOA – many yards are left untended, fences are falling down, non-running cars are left in driveways, etc. It brings everyone’s property values down, and makes it almost impossible to sell your house.
Overall, HOA’s are a good thing. Sure, it can feel like extortion at times, but it beats having knee-high grass in your neighbor’s lawn. HOA’s help keep the integrity of the community in tact. HOA’s also help keep all the common areas of your neighborhood in good shape, and in working order. I’ve heard numerous stories about the HOA Nazi that writes up any house with a single weed in the lawn. I’m sure there are a few out there; but when you’re ready to move up or downsize, and you put your home on the market, you’ll be thankful for the diligence of your HOA. Plus – you’ll be happy at closing when they pass on the HOA initiation fee!
Posted by Chad Underwood
What are Option Contracts, Option Periods and Option Fees?
Let’s say you have found the home you want to purchase, but you are afraid that the home might need some repairs. A signed Option Contract by both parties, protects you, the buyer, by giving you a modest amount ot time (5-7 days, or whatever the buyer and seller agree to) to get the home inspected without someone else buying the home out from under you. The option period time gives you the chance to back out without any risk of losing your earnest money, if for any reason you decide not to purchase the property.
Costs: The option fee could be $50-100, or whatever the buyer and seller agree to. This money is not associated with the earnest money and it is paid directly to the seller for your consideration to purchase their property. The seller can cash the check immediately or you can request that the option fee be credited back to you at closing, provided the seller agrees to it.
The earnest money is not associated with the option fee and it is deposited with the Title Company. If the buyer backs out for any reason whatsoever during the option period, then the Title Company is required to return the earnest money back to you, the seller. The seller is not required to give you the option fee back, unless both parties agree to it before-hand.
I know, you don’t want to think about taxes. After all it is just June, taxes aren’t due until next April. What you want to consider is how much extra taxes you are paying if you are currently renting vs. owning your own home. You may actually be paying more per month that what you would if you owned a home if you look at the whole picture. Remember, when you are renting you are paying someone else’s mortgage and they get all the tax advantages.
Let’s look at an example over a 5 year ownership. Please note, the following is just an example, contact your accountant for more details.
Home Price: $180,000
Down Payment of 20%: $36,000
Loan Amount: $144,000
Interest Rate: 5.75% for 30 year fixed
Monthly Insurance: $75
Monthly Property Taxes: $450
Given the above numbers the monthly mortgage amount of principle and interest: $841 per month.
You need to add in the insurance and property taxes to get the TOTAL monthly payment: $1,366.
Over the next 5 years, in this example, you will pay $39,999 in interest. This works out to $667 per month. Now add in the property taxes and you get $1,117 per month in taxes and interest.
Let’s assume you are in the 28% tax bracket. You can save $313 per month on your taxes by owning a home.
So if we take the True Cost of Homeownership, you can see that your monthly payment for this home is:
Principle & Interest: $841
plus Insurance $75
plus Property Taxes $450
minus Income Tax Discount $313
TRUE MONTHLY COST OF HOME: $1,053
How much are you currently paying in rent? In this example, if you are paying more than $1,053 in rent you are losing the opportunity for improved cash flow, not to mention building equity. Real Estate after all is still a solid investment for long term planning. Don’t have 20% to put down, don’t worry. This was just an example to open your eyes to how much renting is really costing you.
Why bring this up in June? In order to take advantage of the tax break on your 2008 taxes, you must own the home no later than December 31, 2008. Many cities have a 6 month build time. So if you are considering new construction or perhaps you need a few months to pay off some bills or clean up your credit, now is the perfect time to look for your new home. Need more information? Email questions to me at teresa@NorthTexasHomeFinders.com.
Article by Teresa Robinson, Owner/Buyer Specialist, North Texas Home Finders
Get a Buyer Specialist and rest easy! The builder pays our service charge from their advertising budget which is built into every home they sell. Since these fees do not come out of the home construction budget, you cannot negotiate one penny of a better deal alone. Need a preowned home? I can help with that too and the seller will pay my fee! Visit www.northtexashomefinders.com for more information.
“We are looking for that once-in-a-lifetime deal.” I recently received this quote in an e-mail sent to me. This person also went on to write, “That new house that a builder just wants to dump for some quick cash!” I say to this person, “Good for you! It’s great that you want to find that incredible deal you’ve read and heard so much about in the news.” Here’s the thing, those deals you read about in the paper, and hear about on the radio and TV don’t exist very often. It’s like the ad you see in the Saturday paper for new car dealers – “Buy this car for only $12,999.” You have to also read the fine print that says, “One at this price.”
There is one glaring problem with finding “the home a builder wants to dump for quick cash.” If a builder truly wants to “dump” a house “for some quick cash”, that builder is probably about to go out of business. Several of the smaller companies have done just that. Once that happens, your new-home warranty is not worth the paper its printed on.
From what we all hear, see, and read in the media, I understand people expect to find unbelievable prices and huge homes with big discounts. Although there are a bunch of fantastic deals, one has to be realistic as well. That home in Plano that was $450,000 is not going to sell now for $200,000. Banks know what a home is worth, and what they need to clear in a sale. The new home in Frisco that originally listed for $375,000 is not going to sell for $275,000. Some builders have some excess inventory, but they still have a profit margin they need to maintain to stay in business.
All real estate markets are cyclical. They will all go up, and they will all go down. Right now, in Dalla/Fort-Worth, it’s the time to buy. Locally, we are at or near the bottom of the cycle. Houses are like stocks, when do you buy? When prices are low. When to you sell? When prices are high. Prices are not as low as some would like to think, we still have a strong market. Texas did not experience the exponential growth that states like Florida, California, Arizona, and Nevada did. We have had a nice, slow, steady rise in prices. Home prices in the aforementioned states are correcting back to where they should. We did not have a bubble, so our home prices stayed constant.
Are there unbelievable deals available? Yes. Are houses being given away? No. Use a good buyer’s agent, who knows their market, and you can find a great home at a great price. Do you want a home more if it costs $5000 less? No, you want that home because it fits your needs and has what you were looking for. If you settle on a home that costs $5000 less than the one you really want, how happy do you think you will be in the long run?
Post by
Chad Underwood
When Chad and I decided to move into a bigger home, we turned our little 3/2/2 into a rental. For the past two years, My husband and I have put an add on Craigslist and a “for rent” sign in the yard, and it has rented in a matter of a week or two.
Today, many families are looking to rent due to bruised credit, or they simply want to get to know the area before making the financial commitment to buy. Singles and college students are prime candidates for rentals because they are in a transitional phase, where home ownership does not necessarily make sense for them.
If you have contemplated buying a “rental” home for a long term investment, now is a very good time to buy. As the DFW area continues to grow by leaps and bounds, along comes the demand for affordable rental property.
A good rental property, in my opinion, should be neat, clean and priced compatible with other rentals in the area. Often pricing the rental $50.00 per month lower than the rest, will help your home rent quicker. The goal is to get it rented quickly. There is no reason to spend a month or two without renters, just to hold out for $50-$100 more a month. If you are making mortgage payments without renters, then you are losing lots of money.
Please contact us so we can help you find the perfect investment property. We can provide you with an analysis of current rental rates in the area you are looking to purchase, and also assist you in negotiating the best deal.
We at www.northtexashomefinders.com currently have New/er homes in good locations, and school districts that would make perfect rental properties. Just contact us with your needs, and we will promptly provide you with suitable properties.
More and more new home buyers are including green features in their lists of preferred amenities. Some are motivated by increased concern for the environment. Others are interested in energy-efficient or environmentally friendly features because they may reduce overall home ownership costs. Either way, the buyers perceive a value attached to green components.
Green building ranges from relatively inexpensive things such as cellulose insualtion made from recycled paper, to extremely expensive ones, such as solar electrical or rain water collection systems. The costs green updates add to a new home’s price vary widely. However, a 3% to 15% premium is a good guide.
According to the National Association of Home Builders (NAHB), 10% of new homes will be constructed using some green elements by 2010. The NAHB has been working with the International Code Council to develop the first nation residential green building standard. This standard will address a number of issues including energy efficiency, water conservation, building material recycling, indoor air quality and homeowner education.
The above information was taken from an article by Dr.Hunt, a research economist with the Real Estate Center at Texas A&M Univeristy.
Many builders in the Dallas-Fort Worth area are using these greenbuilding techniques. If you are looking for a home in Frisco, you should seriously consider new construction. The city has changed its building codes to require many of these green building techniques. This means you can heat and cool a larger new home for the same or less money as a smaller home built before 2005. The percentage increase in costs for the builders also explains how in a community that has both existing homes (1 to 2 years old) and new construction for sale the new construction is priced much higher than the pre-owned homes.
Article by Teresa Robinson, Owner/Buyer Specialist, North Texas Home Finders
Get a Buyer Specialist and rest easy! The builder pays our service charge from their advertising budget which is built into every home they sell. Since these fees do not come out of the home construction budget, you cannot negotiate one penny of a better deal alone. Need a preowned home? I can help with that too and the seller will pay my fee! Visit www.northtexashomefinders.com for more information.
C: So you want to buy a foreclosed home. Why?
B: Well, I’ve seen and heard in the news that we have a record number of foreclosures. I figure I can pick up a deal, maybe I can get a home for way under what it’s worth. If the bank wants to sell it bad enough, they will practically give it away.
C: Hmmm. Have you done any research into what it takes to buy a bank-owned property?
B: No. How hard can it be. All I have to do is find one and make an offer, right?
C: Not exactly. Do you have your financing in order?
B: No. I’ll do that when I find a house that I want.
C: Before a bank will even accept an offer on a foreclosed home, a letter of qualification from a lender or proof of funds (when paying cash) must accompany your offer. And, in many situations, there are multiple offers made on a home before one is accepted.
B: Oh, I didn’t know that. Well, I can at least shop around and see a few houses before I move on one.
C: The very best deals on foreclosures don’t last long. If the house is a real bargain, in a hot area, you can bet it will be scarffed up. Not only are there prospective homeowners on the prowl, but a ton of investors on are the lookout as well. When the home prices are low, investors recognize the importance of buying now. If you find a home you like, you have to be ready to jump on it.
B: But I hear every day about the number of foreclosures increasing.
C: There are more homes on the market, but the homes that sit on the market for a length of time usually need a lot of work. Foreclosed homes are sold “as is.” Do you have some extra cash to make necessary repairs once you buy the home?
B: Not really. I’d rather find a home that doesn’t need a lot of work. I’m also looking for a “no money down” type of loan.
C: Those homes are out there. But keep in mind, the bank that now owns the home calls all the shots. It some instances they require you get another prequalification through their preferred lender. They may or may not allow you to roll in closing costs. If they do allow it, they may only allow some to be rolled in, and not others. The bank can also take 3 – 7 days to get back to you once you make an offer.
B: There’s a lot more to this than I realized.
C: Let’s talk more about what you’re looking for in the home, where you want to live, and get you prequalified. Then, we will be able to find what direction make sense…
I have these types of conversations every week. At http://www.northtexashomefinders.com you will find brand new homes that have been discounted in price. After my clients have seen a few foreclosures, they quite often are ready to go back and look at new homes. If you’re particularly handy when it comes to home repair, you may enjoy working on a foreclosed home. If you’re like me – not very handy – you want to buy something that is move-in ready. We stand ready to help you either way. I just like my clients to know what they’re getting themselves into before getting started.
Posted by Chad Underwood
