Real Estate Information

To Build or Buy – Pros and Cons

to come to the right decision for you real To build or buy a spec home is a personal decision that depends on many factors such as your financial situation, time, budget, criteria, intended use and family or business needs. There are many new spec homes that are more economical and require a lot less time commitment than a custom built home.  You may want to look at spec homes in The Woodlands or surrounding areas first, unless you already own a piece of land that you want to develop.  Let’s take a look at some pros and cons:

Pros of Custom Built Home

A custom built home means buying the land and having a builder build your Texas dream home. Keep in mind that a custom build home can take approximately 6 -8 months to complete. You will need to work with an architect as well to draw up plans. It is always smart to get estimates from a couple different builders and architects.  Be sure to work with a knowledgeable real estate agent that can give you comparables to let you know about future growth and appreciation and who works with new construction. Be careful on the upgrades and custom design. Do not over upgrade you may not be able to get your money out. Stick with neutral colors and traditional designs for resale purposes.

Pros 

·        Getting exactly what you want

·        Living in the location you want

·        Builder warranties

Cons

·        Higher costs

·        Takes approximately 6 – 8 months to build

·        Construction delays

·        May be harder to sell later if you have the most expensive home in the neighborhood.

Pros of Purchasing a New Spec Home

Many large builders and general contractors build spec homes. They build certain models that they can predict costs on because they have repeatedly built the same type of homes. They know their profit margin. However, many Texas new home spec builders got caught with new housing inventory that they could not sell at the prices they originally intended because the real estate market prices declined the last two years.  These builder close outs are available now to buyers looking in The Woodlands and surrounding Spring and Magnolia areas.  The builders are offering all sorts of great incentives such as paying $10,000 towards buyer’s closing costs, buying down mortgage points, offering upgrades, paying taxes and homeowner dues, etc.   Although the complete freedom of a custom home is not available with a spec home, the buyer can usually choose from several different models and some options such as lighting, cabinetry, flooring, appliances and paint.

Pros

·        Costs are less

·        Home is brand new

·        Offer limited choices on upgrades

·        Builder incentives such as paying closing costs and upgrades, taxes and HOA fees, buy down on mortgage points.

·        Waiting time for home to be completed is less than custom built home 

·        Builder warranties

Cons

·        Loose complete freedom over choice

·         The builder may have already pre-selected upgrades that can or cannot be changed. 

After weighing all the pros and cons and doing a bit of research on comparable homes sales in the area you choose, you should be able estate wants and needs.    

Check out breath-taking neighborhoods in The Woodlands at http://www.utahburden.com/The-Woodlands-Villages

Find more financing information at  http://www.utahburden.com/Buyer-Resources/Buyer-Finance/Finance-Information

Texas First Time Home Buyer Programs

Home buyers and their Realtors should be aware of programs available to assist first time home buyers with down payment assistance.

As of July 7, 2009, The State of Texas Department of Housing and Community Affairs (TDHCA) released $7.5 million in funds available for two new loan programs for first time home buyers. The first program will provide an advance on the $8,000 first time home buyer federal tax incentive that can be used towards their down payment.   

Approximately $5 million will go towards a 90 Day down Payment Assistance Program (DPAP). The program offers a 90 day interest free loan to qualified first time home buyers in amounts equal to 5% of the total purchase price of a home, with a maximum loan of $7,000. This will help first time home buyers who do not have enough money saved for a down payment and closing costs to be able to purchase a home. After the closing, the home buyer can amend their 2008 return to file for their tax refund credit.    If the loan is not repaid in 90 days, then it will be restructured over two years at 10% interest.

The second program is the Mortgage Assistance Program, which provides loans up to 5% of the total purchase price, with a maximum loan of $6,000. Loans under this program qualify for a 120-day interest free period. This program is available only in conjunction with the Texas First Time Homebuyer or Texas Mortgage Credit Certificate (MCC) programs sponsored by TDHCA.

These two programs are geared towards lower income limitations. Home buyers must complete a homeownership class and also pay a $250.00 fee in addition to normal closing costs. Under the programs, first time home buyers mean anyone who has not owned a home in the past three years.  You must have good credit as well to qualify.

Other programs available are as follows:

Is Buying a Bank Owned Property Right for You?

Buying a bank owned property (REO) in The Woodlands/Montgomery County is an opportunity to buy real estate at a discounted price.  However, REO’s are not for everyone, especially if you are looking for a turnkey property with little or no rehabbing.  Most REO’s need rehabbing, and some need major repairs.  If you do find the right Woodlands/Montgomery County REO property, then there are a few things that you should be aware of before you purchase:

·        REO’s are sold in an “as is” condition. Banks generally will not do any repairs to the homes.  In addition, banks are not required to provide buyers with a statutory disclosure statement. 

·        Banks are usually very slow in getting back to buyer’s offers.   Expect at least a week or longer before you get a response. This delay could cause you to lose an opportunity to purchase another bank owned property or short sale.  So you need to be patient.

·        Verify if there are any other offers on the bank owned property you are interested in. Your Realtor can find out this information for you.  It is common to find multiple offers on bank owned houses.  Multiple offers drive the purchase price up because buyers are competing for the same property.

·        You must submit a pre-qualified letter from your lender stating that you are qualified to purchase the house. If you are paying cash, then be prepared to show proof of funds.

·        Cash offers have a stronger chance of being accepted than offers with financing contingencies, especially if there are multiple offers.

·        Keep in mind if you ask for any seller concessions such as closing costs you may lose your REO to another bidder if there are multiple offers.  Banks will counter out the concessions or they won’t respond to your offer at all. Most banks expect the buyer to pay the customary closing costs.  

·        Always negotiate a physical inspection contingency and a loan contingency if you need to obtain financing in your contract.

·        Be prepared to deliver an earnest money deposit. The amount varies. Many banks require payment in the form of a cashier’s check to be deposited with the escrow holder upon acceptance of the offer.

·        You have the right to inspect the property and cancel the contract should the inspection reveal that the property needs major repairs or is not in a physical condition that is acceptable to you.

·        You are entitled to receive title insurance insuring that the property has clear title and is free of any encumbrances. 

·        Bank owned homes are usually not very well maintained and sometimes have been stripped of everything including counter tops, appliances, toilets, cupboards, etc. by angry former owners who lost their homes.  Some bank owned homes are major fixers. While others may only need new paint and carpet.

·        Since bank owned houses are vacant, banks like to close quickly- usually between 30-45 days.  Be sure to have your financing available if you are obtaining a loan.

Many first time home buyers and investors are choosing to buy bank foreclosures because the prices are affordable and typically below market. When the real estate market bounces back, you will already have built in equity in your property.  You will need to factor in any rehab costs so make sure that your budget allows for this.

It is critical to work with a buyer's agent who specializes in the purchase and sale of REO and foreclosure properties in The Woodlands or surrounding Spring and Magnolia areas to help guide you through REO home buying process. 

Find bank owned homes at http://www.thewoodlandsareaforeclosures.com/

 Don't confuse staging with decorat­ing or interior design. There are similarities, of course: all of these specialties use color, design, scale, and other elements. However, where interior design caters to likes and dislikes, life choices, and personal style, staging is about neutralizing

In other words, staging is essen­tially a marketing tool for selling a house.

Style that is too personal or spe­cific to a particular homeowner or type of homeowner can limit the pool of potential buyers. When the home remains too personal, buyers often feel like they are intrud­ing. They may even have difficulty separating the property from the personality of the owners or decor of the property.

Here are some practical staging tips to consider.

Culture  and ethnicity - play it down, but not out  Given the multicultural, multi-ethnic nature of our society, styles from around the world have been incor­porated into home decor. Diverse elements don't have to   be eliminated, but they should be used sparingly so that the home doesn't feel specific to any one ethnicity or culture.

Politics - keep away

Remove anything that projects political convictions. Buyers who have different beliefs may find themselves thinking about the owners and their politics instead of the features of the house. They may also wonder if the rest of the neighborhood is of the same political persua­sion as the homeowners and whether they would fit in.

Color statements - make them safe, not boring  

Neutral colors come to mind, and rightly so. But, remember, you can go too far with beige. Sophisticated  taupes, rich tans, soft moss greens, and warm creamy yellows can create a welcoming ambiance without mak­ing a strong design statement that may eliminate buyers

Gender neutral - aim for the middle of the road

Homes and rooms should not be so gender-specific as to make half the population uncomfortable. For instance, if it's obvious your seller loves pink, recommend she minimize it; combine it with charcoal grey or black and limit it to a bathroom or a child's room. Relegate lace to the baby   girl's room, and replace flowery brick  with leaves or geometric or abstract patterns.

And it's not just the feminine touches that need to be addressed. This works both ways. Repurpose trophy rooms, take down the motorcycle and car calendars from the garage, and turn that poker palace back into the wholesome family room the builder intended (and most buyers want).

Religion - this isn't the time to display faith Religion is very personal and, for that reason, should remain out of a home on the market. This can be a touchy subject, so handle with care; you don't want to offend. It can be especially awkward if you don't share the same belief system as the homeowners.

Encourage your sellers to remove anything that strongly conveys their specific beliefs. Remember, it is about selling the home, and the decor needs to be some­thing of a blank slate on which the buyer can superim­pose his own life.

 Get your home ready to sell! Find easy staging tips at http://www.utahburden.com/Seller-Resources/Seller-Tips

A Fed forecast, early in the week, that inflation should remain low for the next couple of years moved mortgage rates lower. Later in the week the economic news was less favorable. Strong earnings reports produced a stock market rally, which pushed our rates higher. Also the June Existing Home Sales report contained positive news for the third straight month, climbing 4%. The inventory of unsold homes fell to a 9.4 month supply, from 9.8% in May. And the national median home price rose 4% in May. According to the National Association of Realtors, home sales were helped by the first-time buyer Tax Credit and Historically high affordability conditions. As for mortgage rates, pricing ended this week close to the level of last week. Conforming conventional, with higher credit scores, 740, and higher loan balances ended at 5%, with government rates improving to 5.5%. Next week New Home Sales is due out Monday, Consumer Confidence is due out Tuesday, Durable Orders Wednesday, and GDP due out Friday. I think that we should expect the market to continue like this week, with some quick ups and downs.

Find homes for sale in The Woodlands at specific price ranges at http://www.utahburden.com/Search-The-Woodlands-Village-Map

The best reason to buy your first home NOW 

 If you're a potential first-time home‑ buyer who's been sitting on the fence, now may be the golden moment to take the leap. In fact, there are at least seven good reasons why buying your first home now makes good financial sense. 

1.    Softened Prices Increase Home Affordability

The most current survey on home affordability from the National Associa­tion of Realtors® brings great news - more buyers are able to financially afford to purchase a home today .The survey shows that, in order to purchase the av­erage median priced home of $164,600, a buyer would only need qualifying an­nual income of $34,416. This is based on a 20% down payment, a monthly prin­cipal and interest payment of $717 and a mortgage rate of 5.1%. While softened prices haven't been good news for sell­ers, they definitely benefit first-time buyers, boosting your ability to qualify.

2.   Low Interest Rates

With interest rates lower than they've been in more than forty years, now's an excellent time to lock in a long-term fixed rate. Not only will you be able to afford more homes, but you'll have the peace of mind knowing that you've made a sound financial decision taking advantage of historically low, bargain basement rates. One thing we know for sure: At some point in time, interest rates will rise; and that factor alone could disqualify you for the mortgage you need. 

3.    Large Inventory to Choose From 

Combine low prices, low interest, with large inventory and it's a buyers' paradise! In markets of the past, many first-time buyers were relegated to buying a very small, almost cramped, starter home. With inventory high in many parts of the country, you'll be able to select a home that exceeds your first-home expectations. But caution: Don' t be like a kid in a candy store spending so much time searching that you miss this great buyer's market opportunity!

4.    An $8,000 Tax Credit Bonus 

If you're a first-time home buyer mak­ing a purchase before December 1, 2009, you'll receive a tax credit of 10 percent of the purchase price, up to a maximum of $8,000. Unlike previous home-buyer tax credits, this one is refundable ... mean­ing that the credit can be claimed even if you have little or no federal income tax liability to offset. For example, if you had a tax liability of $2,000 and received a tax credit of $8,000, Uncle Sam would send you a check for a whopping $6,000.

Who says it doesn't pay to buy now? 

Find homes for sale in The Woodlands and surrounding area at http://www.listingthewoodlands.com/

Ready to place your home on the market? Do you understand the process of selling your home - all the "little" details? Before you list with an agent, educate yourself about all the possible things you could face. Be as informed as possible, so you can make the absolute best business decision. After all, the sale of your home is a business decision.

Most of us are not tuned in to the trends and fluctuations of the real estate market. Additionally, we are not aware of the steps necessary to maximize profits from the sale of our home. Typically, you rely heavily on an agent to lead you down the most profitable path. Well, when you consider your home is probably your largest financial asset, doesn't it make sense to list with someone who will maximize your profits? But how do you find that agent?

I. The Phone Interview- Place a call to each of the agents on your list. Document how quickly they returned your call; keep in mind, they will be returning calls to your prospective home buyers. Do an initial 'feel-out' interview over the phone so when you meet, you will both be prepared.

2.    Request a Complete Plan- From title to escrow, request a complete plan of all the services they will provide you when you list with them.

3.    Evaluate Their Team- Top producers will have established relationships with lenders, title reps, inspectors, etc. These professionals are there for your benefit. If they are ill-prepared to handle all the steps of your transaction, look elsewhere!

4.    Detailed Report of your Property- Request a complete report about your property with ideas for improvements, cosmetic changes, structural repairs or anything that could add profit to your sale. Remember, a small investment up front can often pay high dividends at the time of sale.

5.    Alternative Report- Request a complete report of alternatives to the home sale. What would current market leases generate? Rentals? Responsibilities attached with leasing? Have your agent educate you about all your options.

6. Insist on Pre-qualification- Don't waste valuable time negotiating or showing your property to unqualified prospects. Insist that your agent pre-qualify candidates to screen out all unwanted prospects.

How much is your home worth? Find out at http://www.magnoliamarketvalue.com/

The South Montgomery County 4th of July parade begins at 9 am and runs through The Woodlands Town Center and Market Street, beginning and ending at The Woodlands United Methodist Church on Lake Woodlands Drive. The theme is “Traveling the USA.” The Grand Marshal of the parade will be Dr. Don Stockton, Conroe ISD Superintendent. Pre-parade entertainment, including Darrel the Fire Juggler, Uncle Sam, Clowns, Spiderman, Scooby Doo, Sponge Bob, a stilt walker, balloonist and magician will mingle with the crowd from 8 -9 am in Market Street’s Central Park.

Find more entertainment in The Woodlands at http://www.utahburden.com/Recommended-Links

Star-Spangled Salute

This free concert on Independence Eve, July 3 at The Cynthia Woods Mitchell Pavilion begins at 8 pm. Patriotic music from the Houston Symphony will be performed with a finale of fireworks. Led by Principal Pops Conductor Michael Krajewski, the symphony will perform a variety of traditional favorites, American classics and patriotic medleys, ending with Tchaikovsky’s ever-popular “1812 Overture” complete with cannons blasting away at the top of the hill. Joining the symphony will be The Cactus Cuties, a group of four talented young people who have delighted audiences for years with their beautiful harmony and charismatic presence. Their arrangement of “The Star-Spangled Banner” garnered 5 million hits on You Tube in only three months, touching hearts all over the world.

Gates open at 6:30 pm for pre-concert activities including free photos with lovable mascot of The Woodlands, Puffy Pine Cone. The concert is sponsored by The Woodlands Development Company.

Happy 4th of July to all my friends and clients , I'll see you there!

Jutta"Utah"Burden

For more events in The Woodlands, visit http://www.utahburden.com/Recommended-Links