How to Pick the Best Home Warranty For Your Client

Guest Blog by Joshua Lopez, Landmark Home Warranty

As a buyer’s agent, you’re responsible for a lot in a real estate transaction to make sure everything goes smoothly. One of those things can be picking out a home warranty. But – how do you know which home warranty plan is the best for your client? After all, picking a good home warranty plan reflects well on you and can result in future business from the homeowner – or referrals. Unfortunately, there’s not a “one size fits all” home warranty plan that works for every home and homeowner, either. Use these tips to pick the best home warranty for each unique homeowner and house.

1. Determine What Coverage the Home Needs

To begin, look at what type of coverage the home needs from a home warranty. It might be easy to say, “Well, I want my buyers to have coverage on everything!” But unfortunately, you’d be hard-pressed to find a home warranty that covers every part of a home’s systems and appliances. Otherwise, their yearly premiums would be sky-high. Instead, pick the home warranty based on what your clients’ needs are. You can determine what your clients need coverage on from a home warranty by asking these three questions:

1. Are there systems or appliance that are well maintained, but nearing the end of their lifespans?

2. Are these systems and appliances expensive to repair or replace?

3. Are these systems and appliances integral to the comfort of the home?

Systems and appliances that meet these requirements should go on the list of what you want covered in your client’s new home. These are the “problem areas” and what they’ll probably need help repairing or replacing in the upcoming years of home ownership. Once you have a list of the systems and appliances that need coverage, begin looking at the home warranty companies that provide coverage on these items.

It’s important to note that using the home inspection report as a guide to what may need to be covered by a home warranty is a good start. However, a majority of home warranties do not cover systems and appliances that show they have problems in the home inspection report. You can use the home inspection as a jumping off point, but if you want those items to be covered by a home warranty, you’ll need to give the home warranty proof that they were repaired before the date the warranty begins coverage on the home. 

2. How Experienced Is Your Buyer?

Next, consider how experienced your buyer is with home repairs. A home warranty not only provides cost savings, but it also provides a guarantee for a qualified professional to do the repairs and replacements.

If your homeowner is an avid DIY repairer who likes to get their hands dirty and is extremely experienced, they might want something that covers the bigger systems in the home that they don’t have enough experience to repair. If your homeowner is a brand new homeowner, you’ll probably want a home warranty that covers a lot more of the smaller repairs and replacements within a home. You may want to include some add-ons to the basic home warranty plans to help cover new home buyers. Some home warranties have things like roof repair coverage or extreme pipe-leak repair that may be attractive to first-time buyers.

3. Read Through the Contract Thoroughly

After determining what your buyer needs coverage on and how much they need, it’s time to start comparing home warranty contracts. Make sure to read through the contracts with your buyer to help them understand the basics of a home warranty. Teach them that a home warranty has two main parts: the yearly premium and the service call fee that they must pay to the contractor who comes out to their home for diagnosis. Most home warranties allow you to look at a sample contract for your state or region that outlines what they cover, exclude, and limits. For your convenience, we’ve outlined their basic descriptions below:

Covered: This is what items the home warranty will repair or replace if they fall in line with the overall coverage of the home warranty contract. (This means, for example, a home warranty may cover an oven and it will be listed in the covered items section of the contract, but they’ll only cover the oven if it has failed from normal wear and tear, not because someone has purposely damaged the oven because they want a brand new one.)

Excluded: This section explains what is not covered under the contract. This may be smaller parts of a system that are less than the service call fee, so a waste of your buyer’s money, or systems or appliances that are obscure.

Limits: Home warranty companies do limits two ways. Some home warranties have an overall limit on contracts, meaning they’ll cover any repair or replacement in their contract up to a certain monetary amount, and after that, the home warranty is useless and the homeowner has to pay all repairs and replacements out of pocket.

Other companies just have limits on certain parts of their home warranties, meaning that they’ll pay up to a certain dollar amount for a repair or replacement on that item, and then the homeowner will have to pay the rest out of pocket.  Beware: most home warranties that are low in price have lower limits, making your buyer pay more out of pocket for repairs.

After reading and comparing the coverage from each home warranty, pick the one that has the best coverage for your buyer based on what they need coverage on, your buyer’s homeownership experience level, and what the contract states.

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.

Why home inspections aren’t only for buyers

Most people associate inspections with buying a house, but sellers can benefit from them, too. Before you go live with your listing, consider advising your clients about the potential benefits to having a pre-sale inspection on their property.

Why? Because a home inspection identifies deficiencies with a property, some of which the seller may not be aware of. This can ease the stress burden on the seller; once the house is listed, the seller will know what to expect and won’t be as likely to be hit with nasty surprises.

Get there first

An inspection will give your client a better understanding of conditions that may be discovered by the buyer's inspector. It allows you a chance to review potential issues with them and it gives them time to correct conditions before a buyer has a chance to ask for a concession. Eliminating problems ahead of time, even minor ones, also lets potential buyers focus on what’s right about the property instead of what needs repair. A house that has been tightened up by fixing a handful of little things can give a better impression of pride in ownership.

Know exactly what to fix

Inspection reports explain the nature of needed repairs, often with photographs that show the problem. If your seller decides to correct a condition, the detail found in the report can be of great assistance whether they’re fixing it themselves or explaining to the plumber what needs to be done. Fixing minor defects are as important as good staging in any market. In a seller’s market like we have now, people know they are likely paying top dollar. Buyers want a certain assurance that they are not going to be immediately saddled with a lot of repairs – especially if they’ve just put all of their cash into the purchase.

“I have nothing to hide”

Providing potential buyers with a recent inspection of the home is a good-faith gesture that shows forthrightness. Such a gesture might make buyers more comfortable submitting an offer, knowing their own inspection won’t likely discover hazards or major systems in need of immediate repair.

Inspectors are neutral

You can tell buyers that the home is in good shape, or you can show them a report from a licensed inspector that tells them your home’s in good shape. Which source will they trust more?

Make sure the price is right

A thorough inspection and report regarding the condition of your home can help you and your Texas Realtor arrive at a fair asking price—and defend it. Plus, knowing about major defects and pricing accordingly can smooth the way in a challenging transaction.

If they decide to get a seller’s inspection …

Be ready to refer a licensed inspector. Give them an idea of the fee, and what is included and what is excluded. Also make sure to explain disclosure requirements before the inspection is performed. If they’re leery of having a current inspection, ask them if they still have the report from when they bought the house (if it was fairly recently) and review it with them to see if there are some honey do’s on that report that should be addressed.

Whether or not your seller decides to have a pre-sale inspection, when you explain the pros and cons of an inspection, you demonstrate that you have their best interest in mind, and that you want to make the process as smooth as possible. Your sellers will appreciate it when you demonstrate that you are mindful of their time, money, and stress level. 

Why you should tell your clients not to assume the highest offer for their house is the best one

There are many factors involved when considering competing offers with your clients. Here’s a handy guide to help your clients better understand all of the offers on the table. Share it with them and let the referrals roll in!

Consider all of the factors that will determine which offer is right for you.

Where’s this money coming from?

Without cash or a letter from a lender that is providing a mortgage loan, buyers may not be able to afford the price they’re proposing. Ask your MetroTex Realtor to find out if potential buyers are prequalified or preapproved.

How serious are the offers?

Potential buyers will put a certain amount of earnest money toward the sale in advance of the closing to show they’re entering into this transaction in good faith. Your MetroTex Realtor can help you verify if the amount of earnest money is a strong offer, which is a sign of serious buyers. If the transaction closes, the money counts toward the down payment; if it doesn’t close, you may get to keep the earnest money.

When’s moving day?

Determine if the proposed timeline for the transaction matches your schedule. If the buyers want a closing date that’s too soon for you, temporary-housing costs could eat into that higher offer. Of course, if the buyers don’t want the transaction to close for a few months, you could end up paying two mortgages for a while.

They want the TV and the dining room set?

Buyers can put all kinds of things in an offer. They can request an option to terminate, ask for repairs, see if you’ll leave appliances or furniture, and make the offer contingent upon the sale of their current home. Your MetroTex Realtor can help you decide what is reasonable.

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.

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.

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.

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

Simple Tips to Crush the Clutter Now

Spending more time indoors around the holidays tends to highlight one fact: most of us have too much stuff and no good place to keep it. The problem with clutter is this: it tends to create stress and anxiety. Unorganized spaces also take up a lot of time and money. We spend more time trying to find what we need and cleaning around the clutter. And we spend more money because we either don’t remember what we already have, or don’t think about the consequences of bringing more objects into an already full house.


Crush the clutter  - First, establish a one in, one out rule. If you bring home a new dress, get rid of an item of clothing you no longer wear. If you buy something knowing you’re going to have to get rid of something you already own, buying the new thing becomes less attractive. If you’re really downsizing, establish a one in, two out rule. Remember, the goal here is to get rid of what’s weighing you down.


So now that you’re committed to not adding to the problem, you can progress into organizing and slimming down what you already own.


15 Minutes - Give yourself 15 minutes of focused organization time. And don’t stress about taking more time to complete the task. Don’t get overburdened by feeling like you have to keep going or complete many tasks in one day. Pick one drawer, shelf, or basket to go through. Quickly categorize each item into one of three categories: Keep, Recycle/Discard, and Donate or Give Away. Organize items that you are keeping as you put them back into place. Make a list of each room in the house and once all drawers and shelves in the room have been organized, cross it off the list. Don’t try to complete the list all at once, just remember that incremental progress adds up!


Donate or Give Away - When you decide to place something in the “Donate or Give Away” category, start a box or grab a trash bag for those items. Make it a goal to identify one item every day that you can donate to a local shelter, school or charity. Get the kids involved once a week or so, too. Have them sort out clothes that no longer fit or toys that they no longer want. Remember to keep an itemized list of donated items on your phone that you can use that for tax deduction purposes in the spring. Think creatively about what you decide to donate. Craft and art supplies, magazines, and scrap fabric can often be used by schools or day care centers for fun art projects. Unused travel size soaps, detergents and personal care products are often welcome at shelters. Old towels are always needed at pet shelters and rescues. Don’t be afraid to call a charity about what they need. 


Recycle/Discard - Start with a trash bag and look for items to recycle. Fill it and take it straight to the bin. Then look for other items that need to go. If it’s not useable by someone else and you don’t need it, then into the bag it goes. See how quickly you can fill it. Look for food and medicines that are expired and get rid of them. Remember that a lot of municipalities collect unused medicines and set aside a box for proper disposal. Old or unused cosmetics can go at this point, too. 


Do it Now - Once the bag or box marked for donation is full, put it in your trunk and make an effort to drop it off. You’ve worked this hard to get this far. Just finish the job and cross it off your list.


Drawers - Look for places in all of your drawers for ways to organize them. Take the clutter off your nightstand by using dividers to organize remote controls, phone chargers, glasses, books, and beauty products. Use them same method to organize bath vanities with your cosmetics, and in credenzas to store candles. Use utility trays in office drawers to corral batteries, pens, and odds and ends. For best results, bring along measurements of contents and drawer dimensions when you shop. With clothing, fold and roll items like socks, undergarments, and t-shirts and use dividers to keep rows tidy.


Linen closets and reach-in pantries - Custom fit an existing closet with gliding shelves or drawers to keep linens and dry goods accessible and neatly organized. Label the shelves or drawers so items go back where they belong. Choose over-the door hooks that have multiple tiers to take advantage of all of the space you have.


Tame the Pet Mess - Pet toys, leashes, brushes, waste bags and small accessories can be stored neatly in a decorative divided lidded basket. If you have a dog, keep the basket in or near an entry closet so it’s handy when you’re ready to go for a walk. 


Get the kids involved - Small kids and their older siblings can help keep their toys neat and organized with a system of baskets or bins on shelves or bookcases. Label them with photos or simple drawings so kids can put away like toys when it’s time to clean up. For example, use one bucket for trains, and another bucket for play kitchen pans and food. Use an art storage cart on wheels so kids can keep crayons, paper, play dough and other messy things together. By keeping it portable, you can make sure that they’re used where it’s ok to make messes (like the kitchen) and then stored out of sight when the kids are done.


Control Papers, Mail and Receipts - Use a small rolling file to keep a handle on mail and receipts that you want to keep. Bring the file along when you want to watch TV or if you’re hanging out with the kids while they do homework. The small space available will encourage you to only keep what you need, address the matters that need addressing and get rid of the rest. Recycle newspapers and magazines with you weekly trash collection. Remember that most subscriptions come with online access to articles, so you don’t really need to keep back issues. Take pictures or scan kids drawings or school papers and save them in cloud storage rather than keeping all of the macaroni art and finger paintings from the 18+ years your children are home.


For a referral to a reliable home organizer, call your MetroTex Realtor for a referral. And be sure to visit the most trusted source for information on buying or selling a home, at www.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.

Answering the question “Should I Remodel or Sell?”

You should sell. It’s a great time to be in the market. Take advantage of today’s interest rates and the hot market.

At least, that’s what you want to answer. But the quick answer isn’t always the best one for your potential client. A better solution is to walk through the pros and cons with your client and really let them know that the answer you give is in their best interest. Even if you don’t end up listing that house right now, you’ll be more likely to get referrals – and their business- if you take the time to have a conversation. Here are our thoughts about how to answer, “should we remodel or sell?”

1.   “How long are you planning to keep the house?” If they love the neighborhood but hate the bathroom, then a renovation keeps them in the house and neighborhood where they are comfortable. If they need more space because their family is growing and they want a long-term solution, then it’s probably time to go. Find out where they are in life and what’s coming down the pike in the next 5 years.

2.   “How much are you planning on doing to the house?” Usually it’s updating flooring, kitchens and baths. Keep a running tally in your head of roughly how much they’re looking at spending. A typical bath remodel of flooring, tub/shower surround, cabinets, paint, sinks, lights and faucets can run between $6000 - $10,000 depending on size and quality of finishes. Kitchens average from $15,000 - $50,000 or more. Installed carpet is typically about $5-7/sf and hardwoods average $8-15/sf. Of course, you’ll want to recommend that they have contractors come give them more accurate quotes, but you’ll have a general idea of how much money they will need to spend to get the house they want. If they start talking about moving a lot of walls, plumbing, or adding on then unless they are absolutely in love with their location, it’s probably time to start looking for something else.

3.   “How much equity do you have in the house?” If your client has a lot of equity in the house, then it opens up more financing options for them to pay for the remodel. They could consider a home equity line of credit or home equity loan. Interest on these loans is tax-deductible like a mortgage so it takes the sting out of the bills a little. Alternatively, if the client doesn’t have much equity, they may end up putting themselves underwater. Granted, in this market they likely wouldn’t stay underwater too long, but you don’t want to be the one to give them the advice to remodel when it’s financially a poor decision if they’re planning to sell soon anyway.

4.   “Are you willing to put up with construction mess for 3, 6, or 12 months? Because no matter how long you think it should take, it will take longer.

5.    “What do you think your house would sell for as it is? What would it sell for if you updated a little? And what would it sell for if you completely remodeled? Finally, what would your budget be if you bought new? Would that budget get you what you want?” This part of the conversation probably involves running comps and means a follow-up conversation. Never a bad thing.

Take the time to engage in a longer, meaningful conversation with your client and you’ll create a foundation of trust with your client that will lead you to more business. Don’t dread the question. Consider it your lucky day. If they’re asking, then they’re already feeling like the house they have no longer suits their needs. And that means they’re probably going to end up selling. Even if they don’t sell, you’ve already established yourself as a trusted resource that they’re more likely to refer to their friends.