Register Real Estate Advisors

DEER PARK (Bloomberg BusinessWeek) – Deer Park has been named “best affordable suburb” in Texas by Bloomberg BusinessWeek.
To choose the top town for each state, the magazine looked at living expenses, income, crime rate, school data, commute, local economy, racial diversity and green space in 863 communities.
Located near Houston, Deer Park has a population of 31,049, a median family income of $89,348, median home price of $131,709, an unemployment rate of 8.3 percent and a violent crime index of 35.

The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier’s check. The title company or other entity conducting the closing will tell you the required amount for:

• Downpayment
• Loan origination fees
• Points, or loan discount fees, you pay to receive a lower interest rate
• Appraisal fee
• Credit report
• Private mortgage insurance premiums
• Insurance escrow for homeowners insurance, if being paid as part of the mortgage and insurance in escrow accounts as they are paid with the mortgage , then pay the insurance or taxes for you.
• Deed recording fees
• Title insurance policy premiums
• Survey
• Inspection fees – building inspection, termites, etc.
• Notary fees
• Prorations for your share of costs, such as utility bills and property taxes

A note about Prorations: Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved out. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end of the month. The seller would owe for the first five days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.

Reprinted from REALTOR Magazine Online by permission of the National Association of Realtors, Copyriht 2005, All rights reserved.

If your income and savings are making home buying a challenge, consider these options…

1. Investigate local, state, and national down payment assistance programs. These programs give loans or grants to cover all or part of your required down payment. National programs include the Nehemiah program ( http://www.getdownpayment.com ) and the American Dream Down Payment Fund from the U.S. Dept. of Housing and Urban Development ( http://www.hud.gov ).
2. Get the seller to provide financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you do a mortgage.
3. Consider a shared-appreciation, or shared equity, arrangement. Under this arrangement, your family, friends, or even a 3rd party may buy a portion of the home and thus share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and all maintenance costs, but all investors’ names are usually on the mortgage. There are companies that can help you find such an investor if your family can’t participate.
4. Get help from your family. Perhaps a family member will loan you money for the down payments and/or act as a cosigner for the mortgage. Lenders often like to have a cosigner if you have little credit history.
5. See if you can qualify for a short-term 2nd mortgage to give you the money to make a higher down payment. This may be possible if you have a good income and little other debt.

Reprinted from Realtor Magazine Online by permission of the National Association of Realtors, Copyright 2005, All rights reserved.

The $8,000.00 First Time Home Buyer Tax Credit is available until April 2010.  The following are ten tips for those First-Time Home buyers:

1.  Be picky, but not unrealistic.  There is no perfect home.

2.  Do your homework before you start looking.  Decide specifically what features you want in a home and which are most important to you.

3.  Get your finances in order.  Review your credit report and be sure you have enough money to vover your downpayment and your closing costs.

4.  Don’t wait to get a loan.  Talk to a lender and get pre qualified for a mortgage before you start looking.

5.  Don’t ask too many people for opinions.  It will drive you crazy.  Select one or two people to turn to if ou feel you need a second opinion.

6.  Decide when you could move.  When is your lease up?  Are you allowed to sublet?  How tight is the renatl market in your area? 

7.  Think long-term.  Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer?  This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that suit you best.

8.  Don’t let yourself be “house poor”.  If you max yourself out ot buy the biggest home you can afford, you’ll have no money left for maintenance or decoration ot to save money for other financial goals.

9.  Don’t be naive.  Insist on a home inspection and, if possible, get a warranty from the seller to cover defects within one year.

10.  Get help.  Consider hiring a REALTOR as a buyer’s representative.  Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you.  And often, buyer’s reps are paid out of the seller’s commission payment. 

Reprinted from REALTOR Magazine Online by permission of the National Association of REALTORS, Copyright 2005, All rights reserved.

If you are a renter, you might be wondering how much mortgage you can afford.  Please use the Rent vs. Buy calculator on my website to figure out what you can afford.  I thought the following information was interesting, so I am sharing it with you.  It is reprinted with permission from the National Association of REALTORS and reprinted from REALTOR Magazine Online.

The following calculation assumes a 28% income tax bracket.  If your bracket is higher, your savings will be, too. 

Rent: _____________

Multiplier:  X 1.32

Mortgage Payment:  __________________

Because of tax deductions, you can make a mortgage payment – including taxes and insurance – that is approximately 1/3 larger than your current rent payment and end up wtih the same amount of income. 

Not only does owning a home give you a haven for yourself and your family, it makes great financial sense, too.  Right now, if you are a first time home buyer you can take advantage of the $8,000 tax credit available.  You must hurry, because it ends in April!  Call me today so we can get started.

Increase your chances of getting your dream house instead of losing it to another buyer, with these easy steps.

1.  Get prequalified for a mortgage.  You’ll be able to make a firm commitment to buy and make your offer more desirable to the seller.

2.  Stay in close touch with your real estate sales associate to find out first about new listings that come on the market.  And be ready to go see a house as soon as it goes on the market.

3.  Scout out new listings yourself.  Look at Internet sites, newspaper ads, and drive by the neighborhood frequently.  Maybe you’ll see a brand-new “for sale” sign before anyone else.

4.  Be ready to make a decision.  Spend lots of time in advance deciding what you must have so you won’t be unsure when you have the chance to make an offer.

5.  Bid competitively.  You may not want to start out offering the absolute highest price you can afford, but don’t try to go too low to get a deal.  In a tight market, you’ll lose out.

6.  Keep contingencies to a minimum.  Restrcitions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing.  In a tight market, you’ll probably be able to sell your house rapidly.  Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.

7.  Don’t get caught in a buying frenzy.  Just because there’s competition doesn’t mean you should just buy anything.  And even though you want to make your offer attractive, don’t neglect inspections that help ensure that your house is sound.

Reprinted from REALTOR Magazine Online by permission of the National Association of REALTORS.  Copyright 2005.  All rights reserved.  http://www.REALTOR.org/realtormag.

WASHINGTON (Associated Press) – Home builder confidence in current sales rose two index points in February to 17 after falling two consecutive months, according to the National Association of Home Builders.

 Builders’ outlook for sales over the next six months climbed one point to 27, and traffic by prospective buyers remained at 12 index points. 

The index for the Midwest and South regions increased two points but dropped one point in the Northeast and West.

 The index reflects a survey of 528 residential developers across the nation. Index readings below 50 indicate negative sentiment about the market. The last time the index reading exceeded 50 was April 2006.

The neighborhood you choose can have a big impact on your lifestyle – safety, available amenities, and convenience all play their part.

1.  Make a list of the activities – movies, health club, church – you engage in regularly and stores you visit frequently.  See how far you would have to travel from each neighborhood you’re considering to engaging in your most common activities.

2.  Check out the school district.  The Department of Education in your town can probably provide information on test scores, class size, percentage of students, who attend college, and special enrichment programs.  If you have school-age children, also consider paying a visit to schools in the neighborhoods you’re considering.  ven if you don’t have children, a house in a good school district will be easier to sell in the future.

3.  Find out if the neighborhood is safe.  Ask the police department for neighborhood crime statistics.  Consider not only the number of crimes but also the type-burglaries, armed robberies-and the trend of increasing or  decreasing crime.  Also, is crime centered in only one part of the neighborhood, such as near a retail area?

4.  Determine if the neighborhood is economically stable.  Check with your local city economic development office to see if income and property values in teh neighborhood are stable or rising.  What is the percentage of homes to apartments?  Apartments don’t necessarily diminish value, buyt they do mean a more transient population.  Do you see vacant businesses or homes that have been for sale for months?

5.  See if you’ll make money.  Ask a local REALOR or call the local REALTOR association to get information about price appreciation trends in the neighborhood.  Although past performance is no guarantee of future results, this information may give you a sense of how good an investment your home will be.  A REALOTR or the goveernment planning agency also may be able to tell you about planned developments or other changes in the neighborhood – like a new school or highway – wthat might affect value.

6.  See for yourself.  Once you’ve narrowed your focus on tow or three neighborhoods, go there, and walk around.  Are homes tify and well maintained?  Are streets quiet?  Pick a warm day if you can and chat with people working or playing outside.  Are they friendly?  Are their children to play with your family?

Reprinted from REALTOR Magazine Online by permission of the National association of REALTORS.  Copyright 2005.  All rights reserved.  http://www.REALTOR,org/realtormag.

WASHINGTON (Associated Press) – Construction of new homes and apartments in January rose 2.8 percent to 591,000 units at a seasonally adjusted annual rate, surpassing economists’ expectations of 580,000 units, according to the Commerce Department.

Construction of single-family homes increased 1.5 percent to a seasonally adjusted rate of 484,000 units. Multi-family construction reported a 9.2 percent increase to an annual rate of 107,000 units.

 Construction rose 1 percent in the South and 3.2 percent in the Midwest. The majority of last month’s improved construction rates were due to the 10 percent jump in activity in the Northeast and the 8.9 percent increase in the West.

 January’s numbers represented a 21.1 percent increase from January 2009 and the fastest building rate since July.

 Additionally, December’s construction rates were revised by the Commerce Department from 557,000 units to 575,000 units. However, even with the revision, activity fell 0.7 percent in the last month of 2009. This dip was attributed to severe weather in many parts of the country.

 Applications for building permits, considered a good measure of future activity, fell 4.9 percent last month to a rate of 621,000 after two months of significant increases.

Today rates went up…our Real Estate Research Center at Texas A&M said it was coming…

(COLLEGE STATION, Tex.) — Mortgage interest rates are low right now, but don’t expect that to last. When the government quits buying mortgage-backed securities, rates will head up and away.

Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University, explained why mortgage rates were so low at the end of 2009.

“First, the global consensus among bondholders appeared to be that inflation will remain low in the United States for an extended period. This caused the ten-year U.S. Treasury rate to fall to between 3.2 and 3.6 percent for much of the second half of 2009.”

With extraordinary levels of federal deficit spending,  Dotzour said it is unlikely that the low-inflation scenario will be popular when the economy starts to rebound.  Consumers should expect mortgage rates to rise when signs of improvement appear.

A second factor contributing to the low mortgage rates is the Federal Reserve Bank’s unprecedented purchase of nearly all the mortgage-backed securities issued by Fannie Mae and Freddie Mac in 2009, he said. Totaling more than $1 trillion for the year, this program has been extended through the end of March 2010.

“The Fed has never done this before in its history, “said Dotzour. “They are doing this to stimulate the economy by keeping mortgage rates as low as possible. When the Fed stops buying these securities from Fannie and Freddie, mortgage rates are likely to increase, possibly quite abruptly.”

How far will rates go up when the Fed terminates its buying program?  Dotzour said that question is difficult to answer precisely, because this has never been done before. But many experts think that rates could move up one-half to 1 percent.

“The combination of extraordinarily low mortgage rates and current price levels are making homes extremely affordable to American families. In fact, national and Texas housing affordability indices indicate that homes are more affordable than ever. But this will not last. When the economy recovers and the Fed stops purchasing mortgages, rates will rise.”

To read more on this subject, see Dotzour’s article in the January 2010 issue of Tierra Grande magazine.