Home Warranties: What to look for and how to advise your clients

In our competitive and busy market, many buyers are no longer asking for home warranties as part of the purchase contract, and homeowners certainly don’t feel the need to offer them. So why, as an agent, should you worry about home warranties? Because your clients will want to know if they should buy one and they’ll turn to you for advice. Be prepared to offer an expert opinion with our tips.

Coverage

Have the client look at the seller’s disclosure, the inspection report, and think about their personal observations. Home warranties repair or replace things that break down from normal wear and tear. Have your clients make a list of things in the home that are well-maintained but nearing the end of their expected lifespan, are expensive to repair or are necessary for quality of life. These are things like hot water heaters, HVAC units, and appliances. These are the things that your client will want to ensure are covered. Have them keep those things in mind when they are reviewing their coverage options. Remember that major structural items, like the roof and foundation are generally covered by home owner’s insurance and not home warranties. Also, if the home is new or has new systems, the manufacturer warranty may offer some initial coverage, initially reducing the need for a really substantial warranty policy

Pricing versus Coverage Limits

Your client will want to consider the cost of the premium of the plan, as well as service call fees. And they will also want to consider the limits of the policy. If they are really concerned about the HVAC unit breaking down in the middle of a heat wave, then they will want to ensure that the policy they choose will cover the cost of a new system if needed. Some policies will limit the amount of coverage available on certain items. They need to consider the value having a policy given the amount required to repair an item unexpectedly versus the cost of the policy, service fees, and whether the limits will cover the replacement costs.

Keep in mind that home warranties won’t cover problems arising from a lack of maintenance or known conditions. For instance, you can’t buy a home warranty policy if your air conditioning is already broken and then expect the warranty to cover that system.

Who is doing the work?

If your clients have preferred contractors, have them ask whether they are contracted with a home warranty company and which ones. When they are reviewing policies, they should ensure that the warranty company only works with contractors who are licensed and bonded in Texas. Your clients should ask about their vetting process and how they handle work that doesn’t meet correct standards.

Why should your clients consider a home warranty?

The average annual cost of a home warranty is several hundred dollars. That can mean conservable savings if something expensive break down. A $400 warranty is well worth the money if you are replacing an $8000 air conditioner. Cost savings aside, a home warranty can offer some peace of mind if your client is doesn’t have cash on hand to handle an expensive repair.

Make sure your clients read online reviews of different warranty companies before they make their final decision. Not all warranty companies are the same.

Home warranties can be a great option for your clients, and you should make sure they understand what is – and isn’t – covered before they buy their policy. If they do opt to buy a policy ask them to tell you what company and policy they chose. You might even ask if you can write their policy number in their file. Because your clients will call to ask you for recommendations for contractors when the oven breaks, or the garage door won’t open. If they’ve bought a warranty, you could save them a lot of money and heartache when you remind them to call their warranty company. Having that policy information on hand will be a great benefit to your clients.

And THAT’S how you become their trusted real estate advisor for life. 

Helping your clients fit into their new neighborhood

One of the best pieces of advice any Realtor can follow is to try to develop deeper, more meaningful relationships in their lives. This means that in everyday life, you take the time to really listen to what people around you are saying. In work life, it means asking meaningful questions and listening and then repeating back what you hear. Joe Stumpf, renowned coach and author uses his “5,6,7” (word doc) method to really get to the root of what it is that his clients truly want. It’s usually nothing to do with the physical properties of a house, and everything to do with family, friends, and community.

Stumpf believes that if you develop the relationship with your clients by helping them see deeper into themselves, they will look to you to make their goals happen. Which you will do when you help them get into that new property.

Once they’re in that great new home, however, you’ll find that those clients still look to you for advice. And a great way to continue to be an advisor to them – their real estate resource for life – is to help them transition into loving their new community. And if your client has just made a long distance move, then that follow up can really make the difference in how they perceive their new community.

Now, I’m not saying you need to turn up to all of their kids’ baseball games, or have them over to Sunday dinner every week. What you can do is to offer advice from time to time, via a blog, email, or personal note. These little touches will go so much further than any marketing campaign you can dream up, and are much more cost-effective.

Author Melody Warnick recently released a great read called, This is Where You Belong – the art and science of loving the place you live. On its own, it would make a great closing gift for your relocation buyers and sellers. But you can also use some of her ideas as a springboard for providing tips to your clients. For instance, Warnick suggests a two minute exercise to help you focus on the positive. Simply write down, “I love {my new neighborhood} because…” and then write down some positives.

Another great way to get your client invested in the community is to help them feel at home is by getting involved. Volunteer at a local organization, like a community food bank, animal shelter, library or school and ask your clients to join you. A few might join you and those that do will leave feeling inspired to do more. And someone who is focused on giving to the community will inevitably begin to feel more invested, more rooted. If your clients are scattered over a large area, you can help them find community groups that are involved in their hobbies.

Getting out and about on foot will make the area more familiar, too. If the community hosts outdoor performances in the summer, like Shakespeare in the Park or a summer concert series, jot down a few “did you know about these interesting dates” personal notes and mail to your clients. You can also email links to local bike and nature trails. Or join a national movement and invite your clients to participate in something fun like the Audubon Christmas Bird Count or an annual butterfly count.

Help your clients, past and present, discover more about themselves and their community and you offer them greater value than just the initial transaction. You become their trusted advisor, and one they will be happy to refer to their friends, family and coworkers. You develop more meaningful relationships and greater job satisfaction for yourself, too.

August housing sales booming after slower start to summer

DFW home sales increased 12 percent to 10,860 sales in August, in contrast to weaker sales figures in July, according to the July 2016 North Texas housing market report released today by the MetroTex Association of REALTORS.

“August was an exceptionally busy month,” said Russell Berry, president of MetroTex. “We’re seeing strong increases in terms of number of sales and in dollar volume. Prices are up and inventory remains our biggest challenge.”

According to the report, 10,860 homes were sold in North Texas in August, a 12 percent increase from the year prior. The median price for DFW area homes increased 10 percent year-over-year to $230,000 during the same time frame.

North Texas’ monthly housing inventory fell to 2.3 months in August. The Real Estate Center at Texas A&M University cites that 6.5 months of inventory represents a market in which supply and demand for homes is balanced.

Homes spent an average of 37 days on the market in August. There were 19,964 active listings for the North Texas housing market during the same time frame, a 6 percent drop.

August 2016

  • 10,860 – Homes sold, 12 percent higher than August.

  • $230,000 Median sales price for homes, 10 percent more than August 2015.

  • $280,402 Average sales price for homes, an 8 percent increase over August 2015.

  • 2.3 – Monthly housing inventory in August 2016.

  •  37 – Average number of days homes spent on the market in August 2016.

  • 19,964 – Active home listings on the market in August 2016.

The MetroTex Association of REALTORS® represents more than 17,000 members involved in all aspects of the real estate industry. As the largest REALTOR® member association in North Texas, MetroTex represents the entire region. Established in 1917, MetroTex is an advocate for the real estate industry and private property rights. For more information, visit us online at DFWRealEstate.com.

3 easy ways to make your client’s home more appealing to buyers

Help your clients get the most out of their investment with these simple tips for sellers.

Yes, paint it

They’ve probably heard this tip, but it’s worth stressing: Painting a home is one of the easiest ways to improve the impression your client’s home makes on buyers. They can save money by doing it themselves or save time and pay someone else. If you have good references, they will appreciate it. Bring them some popular color samples to help them decide. Ask at your local paint store for popular choices.

They may only need to paint a room or two, and keep in mind that freshening up the trim and doors might be all they really need

Go for the minor remodel

A major kitchen or bathroom remodel can cost tens of thousands of dollars. While buyers will appreciate the results, your sellers may not recoup the cost of the work when they sell. However, they can make smaller changes—most of which are easy to DIY—to bring an updated look that will appeal to buyers.

You can suggest they consider replacing faucets, light fixtures, and cabinet and drawer pulls, especially if they are worn, dated or just not very attractive. In bathrooms, they’ll get a lot of bang for the buck with fresh towel holders, a new shower head, and light-switch and outlet covers. And be sure to offer advice on dated wallpaper or paint colors.

Spend some time outside

We all know well how important first impressions are and the curb appeal of a house is vital. Remember to take marketing pictures after the front yard has been refreshed with new mulch, flowers, and potted plants. Staging the walk up is as important as keeping the inside tidy. You can also suggest they repaint the numbers on the curb or replace a dented or rusted mailbox.

Out back, more potted plants or flowers can add a pop of color even in small spaces. Suggest your sellers trim back overgrown trees and shrubs - especially if they’re getting too close to the structure. If there are bare spots, they can add fresh sod or create a flower bed if it makes more sense.

Finally, point out the common flaws inspectors find and suggest they address some of the easier honey-do items that are routinely mentioned - in other words, introduce them to the wonders of a caulk gun, freshly painted chimney stacks, and clean gutters.

By helping your sellers tighten up the look of their property, you will all enjoy the benefits of a more appealing and marketable property.

Do your buyers know what’s in their credit report?

Many buyers want to look at houses first and worry about their credit later, and many Realtors don’t want to show potential buyers homes unless they’re already working with a lender. You can help explain to your buyers why lenders need all of the information they do and how they use a credit report. Here’s and handy guide to share with them.

You can’t afford not to get your credit report

The Fair and Accurate Credit Transactions (FACT) Act of 2003 made it possible for consumers to access free copies of credit reports (also called credit-file disclosures). The free reports list key aspects of your financial history.

Before you apply for a loan, you should request a free credit report to get an idea of what a lender would see. If the report has errors, you can correct them before they affect your ability to qualify for a mortgage loan. And if you find legitimate flaws, you might be able to take steps to improve your credit standing before purchasing a property. Your Texas Realtor may be able to help you find resources to repair your credit.

How many credit reports can you request?

You can request one free credit report every 12 months from each of the three major consumer credit-reporting agencies: Equifax, Experian and TransUnion. But you don’t have to get all three reports at once. How many you request and when is up to you. If you know you will be applying for a loan soon, you might choose to receive all three at the same time to look for errors or legitimate problems that only appear on one or two of your reports. You can also directly compare all three reports at the same point in time.

Or, you can space out the reports to receive one on a quarterly basis or one each month for three months in a row. Getting the reports periodically can help you monitor changes and is a good way to find out whether you have fallen victim to identity theft.

What’s in the report?

A credit report lists how much you borrow, whether you pay on time, if you’ve been sued or have declared bankruptcy. The disclosure includes some information that a third party would not receive, such as medical-account info.

It’s important to note that a credit report is not the same as a credit score. If you want your credit score, you typically have to purchase that information.

How do I get my reports?

You can request free credit reports online at www.annualcreditreport.com. You’ll be required to provide your date of birth, Social Security number and current and previous addresses so the credit agencies can obtain your information. The site is encrypted to ensure a private and secure connection. During the process, the site may ask you to verify previous addresses or accounts you hold to further verify your identity.

Once your information is verified, your report will appear on the screen and is usually available to download onto your computer. If you find errors, you should work directly with the credit-reporting agencies by submitting written documentation of the mistakes. Their sites are www.equifax.com, www.experian.com and www.transunion.com.

If you do not want to use the Internet to access your reports, you can request them by phone at (877) 322-8228. You can also mail a request to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, Ga., 30348-5281.

Beware of any person or organization that sends you an email offering you a credit report or ads you see claiming to be from www.annualcreditreport.com. The FTC warns that you should not reply or click those ads, as they most likely are scams.

A legitimate report, though, that you request through the Web site, by phone or by mail can help you make sure your credit is in good shape to pursue your dream of buying a home. 

Tips for Buying a Home with Friends

With housing inventory low and prices going up, some people are making the decision to partner with friends and buy a home together. This scenario allows people who otherwise would not be able to afford a house to share expenses and achieve the dream of becoming homeowners. But how do you know if buying property jointly is the right move for your clients?  

It is important to remember that this is a business transaction, so your clients and their friends will have to approach it as such. You are going to have to have a very open, very frank conversation with all parties about their finances, their plans for the future, what to do if someone wants to sell, etc. If these are conversations they are uncomfortable having or they are worried about the effect they might have on their friendships, then buying a home with friends is probably not the right choice for them.

However, if your clients and their friends can come to terms, owning a home while sharing the burden of all the costs can help you build their savings while gaining equity in a home.

Here are some tips on purchasing a home with friends you can share with your clients.

Review your friends’ finances. This is most likely the largest financial decision of their lives, so now is not the time to hem and haw on questions of finance. They will need to be aware of everyone’s credit scores, income, savings and any other relevant assets. It is important to make sure that your clients and their friends are financially prepared to become homeowners.

 

Decide how payments and costs will be split. Questions to consider are how much each person will contribute to the down payment and if that will affect how your clients and their friends divide the mortgage payments? Will the utilities be split evenly every month or will they alternate who pays? It is important that these details be worked out and understood by everyone involved before the home is purchased.

Decide on the type of house. Are they planning on buying a single-family home or a multi-family home? Do they see themselves sharing a kitchen and bathroom, or are they looking to buy a place where they will each have your own private residence. Your clients and their friends should also decide ahead of time on everyone’s must-haves for the home. Knowing that the friends will only buy a house with a big backyard or that they will not buy a house on a corner lot can save you a lot of time house hunting.

Get everything in writing. It is important that all of the co-purchasers keep written documentation of all of the agreements regarding financial and other responsibilities. So many people think that because they are dealing with friends that there is no need to write up a contract, but it can help you to avoid conflicts and surprises down the road.

Work with a Realtor. Buying a home is an important decision, and whether your clients and their friends are doing it on their own or with a friend, using a Realtor® is a smart move. A Realtor can provide counsel, discuss listings, show homes in person, negotiate on your clients’ and their friends’ behalf and help them stay focused on the issues that are most important.

If your clients and their friends enter the arrangement educated and prepared, co-purchasing a home can be a great way to get your clients and their friends on the first rung of the homeownership ladder.

Home Buyers Are Seeking Green Features

Saving energy, keeping homes more comfortable and doing a good thing for the environment are all benefits of adding green features to your home.  In fact, adding green features to existing homes, or building them in from the beginning is becoming more important to most homebuyers today.

Recently, the National Association of Homebuilders surveyed buyers about several types of green features and which were most important to them. Add them to your home and you’ll benefit by making your home more comfortable you’ll also add value to your home.

Not surprisingly, the some of the most historically popular green features are energy efficient appliances, windows and insulation. Recent droughts have moved water saving features higher up the list.

The biggest thing buyers want in new homes is for the whole house to have a green certification, for instance an Energy Star® rating for the whole home. That includes appliances, insulation, windows. Buyers are willing to pay more for homes that will save them on utility bills, up to a point. Interestingly, gas-filled windows were the least popular feature of those surveyed.

If you’re planning to update old appliances, it’s wise to consider tankless water heaters and a high SEER air conditioning system. For other easy upgrades, look for water saving shower heads, toilets, and dishwashers. Adding a rain/freeze sensor to your irrigation system can also help.

Other green features are probably better suited for homeowners who are planning to stay in their homes for some time. Solar panels, for instance, have come down drastically in price, but are better suited for a long term investment than for someone who is planning to move soon.

If you are considering or in the process of adding green features to your home, a great way to get started is to speak to a MetroTex Realtor.  You can also look for MetroTex Realtors who have the GREEN certification, indicating they are knowledgeable about green construction and retrofits. Additionally, Realtors can provide valuable counsel, discuss ROI, and provide you with referrals for licensed contractors. Visit dfwrealestate.com for more information on working with a MetroTex Realtor.

Building Credibility With Foreign Clients

With nearly one in four residents in Dallas County from abroad, chances are pretty good that you’ll work with an expat at some point. There are some unique challenges that foreign buyers face when entering the US market, whether they are moving here or simply buying an investment.

Without a strong US credit history, would-be homebuyers moving into the area face unique challenges when trying to get established. They need to make a cash offer, or they may need to be able to put a large amount (up to 50% down). Before you start working with a foreign buyer, search for an interview local lenders who routinely work with international clients. They’re a great resource to have on hand.

Have other vendors and contractors in your portfolio as well. Whether they’re new in town or not here at all, they’ll greatly appreciate being able to turn to you for reliable referrals.

The process in the U.S. is often pretty different than how real estate is handled in other countries. Be prepared to explain the process down to every step. Clearly outline expectations both verbally and in a follow-up e-mail and be prepared for and open to a lot of questions.

When you’re working with foreign investors, give detailed feedback about their investment portfolios frequently. If you’re also managing their properties, let them know what’s working well and what isn’t. You’ll gain more credibility and repeat business.

Your international clients may not be in town for every showing. If your client is traveling or not able to attend a showing, suggest a virtual walk-through via Facetime, Skype or any number of available apps. Keep in mind time differences when booking appointments.

Finally, it’s a good idea to earn the Certified International Property Specialist designation and to join out Global Business Council here at MetroTex. The designation and the Council will be an invaluable part of building your business. Look for the next meeting and classes on the MetroTex calendar on mymetrotex.com.

A Solution for Rising Property Taxes?

With property tax protest season in full swing, Realtors all over the Metroplex are busy running comps and offering advice to homeowners who are headed into their tax protest hearings. And no wonder. With property values rising quickly, many homeowners are finding themselves paying more and more taxes every year. Unfortunately, salaries are not rising as quickly as tax bills. As Realtors, we need to stay active and advocate property tax reform to protect our clients and the health of the market. That’s why we supported Proposition 1 to increase the homestead exemption and prevent sales tax on homes. As it is, Texans pay some of the highest property taxes in the country; many are being forced out of their homes as values rise.

In Dallas County, Dallas Judge Clay Jenkins and others are considering cutting the property tax rate. That’s a great start. But we’d like to see more. Judge Jenkins’ proposal to lower the property tax rate is not ultimately is not a proposal to lower taxes. Rather, his proposal would equate to a smaller annual tax increase. Lowering the property tax rate still allow the amount of tax that homeowners pay to increase every year as long a property values are on the rise.

Currently, property taxes are calculated by multiplying property values by the tax rate. When value rise, so do your taxes. When property values rise every year, as they have done lately, that means your tax bill gets bigger every year, too.

We’d like to see a more predictable model for homeowners and offer some relief from large tax bills. First, we’d like to see a local homestead exemption by county. This proposal would offer immediate tax relief to homeowners. Additionally, we advocate an effective tax rate. An effective tax rate will fluctuate with the market so that homeowners will have a predictable, stable tax bill regardless of how the market is doing. Local governments will know how much they are going to collect from homeowners, and any additional revenue will only be derived from new and omitted properties. Texas state law requires property taxes to be based on property value, but the law does not require the rate to be set. By using an effective tax rate we can satisfy Texas state law and can offer homeowners a predictable way to plan their budgets.

We’d like your help to advocate for responsible taxing policy. Please visit http://www.thehiddenpropertytax.com/ to learn more about the effective tax rate and how you can help make this happen.

AFFORDABLE SENIOR HOUSING RESOURCES

There is a quickly growing population of folks over the age of 50 in the housing market these days. Known as senior buyers, this huge segment of the population is as widely varied and diverse as you can get. But it does take a certain know-how to handle the concerns of the 50+ market. 


For instance, many elder seniors who have retired want to sell their homes to reduce their costs and capitalize on the equity in their current homes. REALTORS who assist them must remember to counsel them about the hidden costs that may exist some of the housing choices they are considering.  For instance, if they buy a condo with the proceeds from the sale of their home, they may still have substantial HOA dues, fees for assisted care, or monthly fees for offsite storage if they don’t purge their belongings when they downsize. 


REALTORS should also be prepared to be pulled into the issues involved when their sellers are purging. Adult family members might create havoc arguing about who gets certain heirlooms. Sellers may not have time or interest in going through old boxes that have been in storage for years. It’s a good idea to have some good references for senior movers handy to help in these situations.


When affordability is a concern, the U.S. Department of Housing and Urban Development (HUD) does fund a variety of programs that provide rent assistance, home ownership, and assistive services for seniors and the disabled. Keep in mind that these programs often have waiting lists that can be years long, so you’ll have to plan ahead and be patient. HUD programs are primarily focused on independent seniors, and are limited when it comes to assisted living programs. 


One of the largest HUD programs is the Housing Choice Voucher Program. HCVP provides rent vouchers for low income individuals, families, the elderly and the disabled. There are two types of voucher. Tenant-based vouchers move with the renter, while project-based vouchers are assigned to a particular property and stay with the unit. Note that any income from pensions, retirement accounts, etc. are counted when assessing eligibility for these programs. 


For first time home buyers, HUD can provide home-buying vouchers to help cover monthly expenses. There are also programs for current homeowners in need of assistance through HUD and the Department of Treasury. These programs can be used to lower monthly payments, lower interest rates, help with a second mortgage and avoiding foreclosure, among other things.


These are just a few of many assistance programs available for seniors. For a more complete list of resources, go to https://www.usa.gov/housing-help-audiences. If you’re interested in working more effectively with this growing market, it’s a good idea to earn your Senior Seniors Real Estate Specialist Designation. Watch the MetroTex course calendar for upcoming dates. 

 

 

How to Use DFWRealEstate.com to Grow Your Business

Attention agents! Right now there’s a free online tool that gives you leads off your listings and helps you capture the activity of your database. And it’s exclusively available to MetroTex members.

DFWRealEstate.com is a user-friendly portal that is pleasing to the eye and is a powerful tool for consumers, agents and brokers. It’s not an app – it’s a mobile-ready website that performs beautifully no matter what kind of device you use to access it.

Get Started: Register with DFWRealEstate.com, go to Settings, and request to Upgrade your membership to professional status. Once you’re approved, you can go back to your Settings and explore the tools you have available. You’ll be able to update your account profile picture, contact information, and password. And most importantly, you’ll be able to capture and keep leads. To capture the activity of your existing client database, Go to Agent Tools to see your unique Agent Code. Once you have it, encourage everyone in your database to register with DFWRealEstate.com using your Agent Code.

Agent Code: When your clients register with your Agent Code, they can save and share collections of their favorite properties, design ideas, school districts - you name it. As their agent, you’ll be able to track dozens of your clients’ clicking behaviors so you can be more responsive. You’ll see the traffic analytics of their saved collections on your own dashboard. Share data exclusively with them, if you like. And remember, all of your client’s listing inquiries are sent directly to you. Your clients will love the easy-to use platform, access to school rankings, maps and updated status on available properties. And they’ll have fun saving collections and sharing them through their social media – whether it’s sharing design ideas, drooling over dream houses, or finding their new home, they’ll be able to interact with their family and friends through the portal.

Dashboard: You’ll get leads on your listings and be able to track their online activity through your private dashboard. Here you’ll capture powerful data on active listings – how many views they’ve had, clicks and leads they’ve generated. While you’re on the Dashboard, check out the inventory snapshot to see how the market is performing this month compared to last year, and check out the Year-to-Date statistics. There is full data here for all types of property status. If you haven’t won that listing yet, you can use this data to demonstrate how market-savvy you are.

Listing Analytics Is your listing not getting enough showings? Take a look to see if people are looking at it online. Maybe you need to change up the listing photo, or re-word the description if it’s getting impressions but not clicks. Or, maybe it’s time to take the statistics to your seller and use them to help you make your point about reconsidering the listing price.

Lead Management: See which listings have generated leads and who wants to see them.

Lead Pools: If your office is sharing leads, you can look here to see if there are any from your office that are available. Your broker will let you know how many leads you can grab and how often. Once you’ve captured a lead, respond to it and track the results in the palm of your hand or on your desktop.

Leads Report: Here you’ll see which leads have been generated, who the listing agent is, whether the lead was claimed and when.

Prospects: Once you’ve captured a lead and turned it into a prospect, you’ll be able to track and manage their data here.

NAR Report: Information junkies rejoice! The latest market data from NAR is available at your fingertips in a date-customizable format. You’ll also find the most recent data on Sales & Inventory – where you can generate charts to look at trends. Or if you’re curious about how your company stacks up, check out the Market Penetration by Company report. Market Comparisons looks at how the market is performing over time.

DFWRealEstate.com is a robust member benefit. It’s got powerful data and lead generation tools to grow your business. Let DFWRealEstate.com fill your pipeline so you can spend more time working in your business. It’s free, it’s exclusive, and it’s only brought to you by MetroTex.

How about that Texas Market?

How long will this booming market last? Are we in a bubble? Is it a good time to buy or sell? These are questions we are all hearing a lot these days. Unfortunately, we haven’t been able to find a working crystal ball anywhere in the Metroplex. However, we do have something better. Hard data from the experts. The folks at the Texas A&M Real Estate Center regularly publish data about the Texas economy. Here are the highlights from their latest report, boiled down to facts you can use when answering questions from the public.

The Texas economy is robust. Employment is the state is strong and growing. More people are re-entering the job market. The biggest gains in employment recently have been in the services sectors, (financial services, education, health services, professional and business services) as well as in trade, leisure, and hospitality. Analyses of the business cycle and current economic activity point to positive trends in the state.

Texas housing sales appear to be accelerating. Demand for housing is strong in most areas, although Houston is lagging somewhat. Across the state, housing sales increased 7.8 percent in April. Austin, Dallas-Fort Worth, and San Antonio all experienced an increase in sales. Houston dropped 0.2 percent as the impact of the energy sector decline plays out in the Houston economy.

Home building activity is brisk. Houston and Dallas-Fort Worth led the nation in the number of single-family permits issued followed by Atlanta, Phoenix, and Austin in April. That said, Dallas-Fort Worth issued fewer permits than its peak rate in December 2015.

Inventory of available housing is low. Dallas-Fort Worth inventory levels were estimated at 2.2 months in both April and May, compared to 3.7 months statewide, and 5.6 months nationwide. Low inventory levels are contributing to rapid price growth in housing.

Incomes are not following pace with the housing price increase. In the Dallas-Fort Worth area, real earning levels have not increased above January 2007 levels.

Foreign Buyers Flock to Warmer Dwellings

It’s not uncommon to hear of friends, family and neighbors packing up and heading to a second home in warmer states during the winter months. After all, many parts of the country experience brutally long bouts of cold and snowy weather. However, U.S. citizens are not the only people looking to spend at least some of their year down south or out west, whatever the reason. According to the National Association of REALTORS® 2015 Profile of International Home Buying Activity, just four states accounted for half of all international home sales: Florida (21 percent), California (16 percent), Texas (8 percent) and Arizona (5 percent).

Our Own Global Business Council has been working hard to ensure MetroTex REALTORS have the deepest understanding of Dallas’ place in the global market and how to work with international buyers and sellers.

International activity in North Texas is growing quickly. Increasingly, we’re seeing activity from China and India in addition to our important relationship with buyers and sellers from Mexico and their neighbors to the south. Interestingly, the most international online property searches for Dallas-Fort Worth are coming from people in Canada, Mexico, the U.K., Germany and Australia. It’s reasonable to expect interest to translate into dollars at some point. International activity is a big reason why cash sales account for approximately 30 percent of all sales in the region.

Rapid population growth, lots of industry moving into the area and an increasing number of long haul non-stop international flights make the region more attractive to a globally-minded crowd. As a REALTOR®, your ability to take advantage of the global market are dependent on your expertise and knowledge. Becoming a Certified International Property Specialist and a member of the MetroTex Global Business Council should be are essential part of your business plan. Find out more by joining us at the next Global Business Council meeting on July 20 at MetroTex Dallas. Contact stevet@dfwre.com for more information.

Student Loan Debt Causes Homeownership Ripple Effect

For some time, housing industry experts have been discussing the impact of student loans on the ability of many to purchase a home, especially since the number of first-time homebuyers in recent years has dropped and remained lower than usual. In Texas, nearly two-thirds of graduates emerge from college with debt. That’s a lot of potential homeowners waiting longer to buy homes. 

Thanks to a paper by Federal Reserve Board economists, the industry now has a better idea of just how much homeownership is impacted by student loan debt. According to authors Drs. Daniel Ringo and Alvaro Mezza, a 10 percent increase in student loan debt cuts the homeownership rate by 1-2 percentage points 24 months out of school. Additionally, that 10 percent increase in student loan debt increases the probability that a borrower falls into the subprime category (a credit score of 620 or less).

In Texas, students graduating with a bachelor’s degree leave school with an average debt of $26,250. That’s lower than the national average of $37,172 but more than $10,000 higher than it was a decade ago. 

College grads shouldn’t let the news get them down, though. With proper credit management and a bit of financial planning, grads can still find a way to buy a home sooner rather than later. It still makes sense to buy in many cases, too. After all, mortgage rates remain historically low and the cost of rent is rising quickly. If you’re thinking of buying a home in the next few years, it makes sense to speak with a credit counselor and a local lender who can advise you on the best ways to protect and build your credit rating, how much to save for closing costs and down payments, and incentive programs available to first time homebuyers. Do this long before you plan to buy and you’ll have a better idea of what to expect when you’re ready.

For more information about buying or selling a home, visit dfwrealestate.com or speak to a MetroTex Realtor. 

 

Homebuyers Seeking Green Features

Saving money on summer electricity bills is pretty important to most North Texans. And using less electricity in the summer is a great way to start living greener, too. But how many homebuyers are actively seeking green features, and what are they looking for? 

In North Texas, the most popular green features do tend to revolve around keeping the summer cooling bills to a minimum. Updates MetroTex Realtors report seeing most often include 16+ SEER air conditioning units, extra insulation in the attic, solar screens, and energy efficient windows. Less costly updates for the DIY set include blankets on water heaters, low flow shower heads and dual flush toilets. Bigger investments are beginning to make headway in the area, too. A recent search on the local MLS revealed more than 100 homes on the market with solar panels, and about 1850 with tankless water heaters. MetroTex Realtosrs also report that buyers do appreciate green features that are perceived to save them money on utility bills, and will more often perceive homes with green features as a better value.


According to research by the National Association of REALTORS®, 11 percent of new homes are bought for green/energy efficient reasons. As for which features buyers of new homes desire, buyers ranked the following as very or somewhat important: heating and cooling costs (84 percent); energy-efficient appliances (67 percent); energy-efficient lighting (67 percent); landscaping for energy conservation (47 percent); environmentally friendly community features (44 percent); and solar panels on a home (11 percent). And while all generations seem to be going green for environmental and financial reasons, 14 percent of those between the ages of 36 and 50, and 13 percent under the age of 35, bought a newly built home for green/energy efficient reasons.


If you’re considering updating your home, it makes sense to incorporate green features where you can: changing out a toilet to a dual flush system, using LED lighting, replacing windows with broken seals to more energy efficient models. You’ll be more comfortable in your home, save on energy bills every month, and your future buyers will appreciate your efforts. 


The MetroTex Association of REALTORS® is comprised of more than 16,000 licensed agents in the Dallas-Fort Worth area. For more information on buying, selling, and leasing property in Texas, speak with a MetroTex REALTOR or visit www.dfwrealestate.com

 

2016 is All About the Single Ladies

Realtors might not be courting blushing brides this June; new data from the National Association of Realtors suggests that singles women will be a growing demographic when it comes to homebuyers in 2016.

Single women buyers have made up a larger share of the housing market than their male counterparts since the early 1990s, buying at nearly twice the rate. These women have a strong desire to feel settled and be part of a community and do not believe that marriage is a prerequisite to homeownership.

According to NAR’s 2015 Profile of Home Buyers and Sellers, single women accounted for 15 percent of all home buyers. Many believe that number will increase in the next few years. The median age of female buyers was 50, and 72 percent of them purchased detached single-family homes. About 90 percent used a real estate agent or broker to guide them through the purchase process. 

Here are some reasons why single women are set to take the 2016 real estate market by storm: 

Desire to Own. Thirty-seven percent of unmarried female homebuyers said that the desire to own their own home was their primary reason for purchasing a house. Women are the most likely to make sacrifices, like cutting spending on entertainment or luxury items, to afford purchasing their home. This demonstrates just how high a priority they place on homeownership.
 
Rising Incomes. In large cities across the country, women have seen a significant rise in average income the past few years. Traditionally, single female homebuyers have had to stretch their budget to buy a home. Now, with higher incomes, unmarried women can enter the housing market without taking on as much of a financial burden.

Availability of Housing. According to NAR research, single women typically purchase single-family homes with three bedrooms and two bathrooms; the same properties usually targeted by investment buyers. It’s good news that over the last year, people buying homes strictly as investment properties were not as active in the market. If investors continue to back away from the market, that means housing could become even more affordable for single buyers in 2016.

Visit www.dfwrealestate.com to connect with a MetroTex Realtor about buying a home in 2016.

Avoiding Scams

Among the legislative sweep going on in Austin this week is House Bill 2590, a bill which would impose significant penalties on scammers who are claiming vacant houses that don’t belong to them through fraudulent adverse possession claims often known as “squatter’s rights.”

Unfortunately, there are a number of other housing schemes happening around the country right now. With prices on the rise and houses in short supply, the Dallas area could also become a target for these scams.

So what are these scams and how can you protect yourself and your loved ones from becoming a victim? First and foremost, whenever you enter into a real estate transaction, consult a MetroTex REALTOR. Aside from being licensed professionals, REALTORS use standardized contracts which protect both buyers and sellers. Further, REALTORS will advise their clients to use title companies to help ensure that the property is actually owned by the seller without disputes or claims on the title from third parties. If you aren’t sure whether the person selling the house is a REALTOR, you can check for licensee information online at trec.state.tx.us. Remember, the reason we have REALTORS is largely to protect consumers against unscrupulous real estate bandits.

The FBI warns about a number of scams currently being reported across the country. Here’s a run down of the most common schemes and specific steps you can take to protect yourself.

Reverse Mortgage Scams

Reverse Mortgages can be a legitimate option for senior citizens to benefit from equity in their homes without having to move or sell. Legitimate reverse mortgages are insured by the FHA and have specific age, residency and mortgage balance requirements.

Unfortunately, fraudsters are using the legitimate programs as a springboard for some very unscrupulous practices. Basically, they either steal the equity from property of unsuspecting seniors, or use seniors’ good credit and identities to steal equity from other properties. In many cases, people are offered fake foreclosure or refinance help, free homes, or shady investment opportunities.

FBI Tips for Avoiding Reverse Mortgage Scams:

  • Do not respond to unsolicited advertisements.
  • Be suspicious of anyone claiming that you can own a home with no down payment, unless it is a specifically insured mortgage program, like USDA or VA.
  • Do not sign anything that you do not fully understand.
  • Do not accept payment from individuals for a home you did not purchase.
  • Seek out your own licensed reverse mortgage counselor.

Phony Online Rental Ads

Online ads for finding rentals can lead to consumers losing thousands of dollars and ending up without a place to live. In these scams, people will post a classified ad with a great looking house most often at a relatively low rent. The landlord –who is leaving the country quickly, often for business or on a mission trip - will accept your application and will ask you to wire a couple of month’s rent to his account. But when you show up at the house to move in, the house isn’t available and the owners have nothing to do with your agreement. Not only are you out two months’ rent, you might also find that your identity has been stolen.

FBI Tips to Avoid Rental Scams:

  • Only deal with landlords or renters who are local;
  • Be suspicious if you’re asked to only use a wire transfer service;
  • Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English;
  • Research the average rental rates in that area and be suspicious if the rate is significantly lower;
  • Don’t agree to accept a larger payment than is needed and refund the remaining balance.

Foreclosure Fraud

Unfortunately, scammers find a big target in people who are desperate to stay in their homes. Distressed homeowners can be presented with offers that allow them to stay in their homes at half their current mortgage payment so long as they sign over title to their homes and pay an upfront fee. In reality, these schemes are run by people who never pay off the existing loans, instead pocketing the money for themselves and causing the unwitting homeowners to ruin their credit and eventually wind up evicted from their homes.

FTC Tips to Avoid Foreclosure Help Fraud

  • Avoid offers that guarantee to get you a loan modification or stop the foreclosure process;
  • Only use people who advise you to contact your lender, lawyer, or a housing counselor;
  • Deny requests for upfront fees before providing you with any services;
  • Do not transfer your property deed or title to others;
  • Be suspicious of people who only accept payments by cashier’s check or wire transfer
  • Don’t sign anything you haven’t read or don’t understand.

House Stealing

This scam is a variation of the adverse possession schemes being addressed by the Texas Legislature. Basically, scammers steal your identity, forge sales documents and register deed transfer paperwork with the county. Then they claim to own the house and sell it. This often happens with unoccupied or vacation homes. Untangling this mess can be costly and difficult.

Avoid House Stealing

  • Check your property records. When you get your tax bill for the year, verify information pertaining to your property. If you see any changes to title or names you don’t recognize, ask for more information from the deeds office.
  • If you receive correspondence or a payment book from a mortgage company that’s not yours, whether your name is on the envelope or not, don’t throw it away. Read it and if seems suspicious or you don’t understand what it means, follow up with the company that sent it.

For more information on buying or selling a home in Texas, visit dfwrealestate.com

How to make your offer more attractive

In North Texas today, we’re seeing all kinds of creative tactics buyers and their agents are using to get their offer to the top of the pile. You may have heard of buyers writing heartfelt letters to the sellers, or even having warm cookies or bouquets of flowers sent to the sellers in hopes of gaining favor. These are interesting strategies and sometimes they work. But there are a few things you absolutely must do to have your offer considered above all else: get your financing and credit in order long before you make an offer.

When you’re ready to buy a home, one of the first steps you should take is to seek preapproval—or better yet, prequalification—for a mortgage loan. These documents state how much a lender is willing to let you borrow, and when you’re ready to put an offer on a property, they tell the seller you’re serious and that you’ve already taken the first steps toward seeking funding.

Preapproval and prequalification can put you in a stronger buying position, but they are different processes. Here are the steps to take before pursuing either.

Watch your credit report

Don’t go into the preapproval and prequalification process without getting a copy of your credit report, which lists your financial history, including total debt and whether you pay bills on time. Checking your credit report regularly is the best way to spot identity theft, credit-report errors or other financial missteps that could affect your ability to buy a home.

You’re entitled to one free credit report from each of the three credit-reporting bureaus every year. Find out how to obtain your free reports at annualcreditreport.com.

Prepare for questions

When you’re seeking prequalification or preapproval, your loan officer will request information from you, like pay stubs, bank records, your credit history, debts and tax returns. It could take some time to gather these details, so you may want to meet with a loan officer early in your home search. You should also start thinking about your answers to the loan officer’s potential questions:

  • When are you planning to buy?
  • If you’re in a lease, when does it end?
  • Who will be listed on the loan?

This information will help determine your timeline for borrowing.

What is prequalification?

To prequalify you for a mortgage loan, your loan officer uses the information he or she collects to calculate how much money you may be eligible to borrow. However, all information you submit during prequalification is subject to verification when your loan application is actually submitted. The home loan isn’t guaranteed with prequalification because your financial situation hasn’t been verified. You may receive a Conditional Qualification Letter, which states that you’re eligible and qualified to meet the financial requirements of a loan.

What is preapproval?

Preapproval typically means that your financial situation has actually been verified by the lender. If you want to get preapproved, you’ll complete a mortgage loan application and you may have to pay an application fee. After an extensive examination of your financial situation, a lender will commit in writing to fund your loan, pending a successful appraisal of the property and a few other conditions.

Being preapproved for a mortgage loan doesn’t mean you’re obligated to borrow the money, but the lender must stand behind its written loan commitment unless something changes with your situation. Think about how attractive your offer will be to a seller when it comes with a letter preapproving you for the funds needed to make the purchase.

Put major purchases on hold

There are some reasons that could cause a lender to withdraw from providing a loan after a preapproval letter is issued. If your credit situation changes between your preapproval and the loan’s funding, the lender could change your interest rate or even deny the loan application. So, while you’re buying a house, abstain from applying for credit cards or other loans.
Your MetroTex Realtor can give you more information about getting prequalified or preapproved for a mortgage loan. You can also visit dfwrealestate.com to learn more about buying, selling and leasing real estate in North Texas.