Entries for the 'About the Local Market' Category
I WANT TO MAKE AN OFFER – WHAT DO I NEED?
February 5th, 2013 categories: About the Local Market, Assessing the Local Market, Real Estate Resourcing, Real Estate Stats & Issues
Today, I had someone call and want to make an offer on one of our listings. Exactly what we’re in business for! Here’s a non-exhaustive* list of what you’ll need to give me in order to get the process going:
1. How will you take title? In other words, I need your legal name.
2. What’s your mailing address, email, phone number, and fax number? This is primarily so that the title company can send you their title commitment and all the restrictions, easements, etc. that affect the property.
3. How much is the offer and how are you going to pay for it?
This is where people who have not been working with a buyer representative sometimes are surprised and can get a little offended. What you need to keep in mind is that, from the Seller’s point of view, he/she wants to know, “Can this buyer perform?” So …
If the intent is to buy with cash, you’ll need to give me either a copy of a recent bank statement that shows that you have an account balance that is equal to your offer price or you can ask your bank to provide a letter stating the same information. Most banks are more than willing to write a letter for you.
If the intent is to finance the transaction, you’ll need to contact your bank, mortgage company, or credit union, make application, have them run a credit check, and, if you meet the lender’s criteria, they will send me a “pre-qualification letter” that I can submit with the offer. Basically, what a pre-qualification letter says is that the lender is agreeing that they will lend you the money IF you substantiate all that you have told them about your finances (and continue in the same condition through closing – e.g., don’t go out and buy a car or furniture without making sure it won’t affect your ability to purchase the property) and IF the property conforms to their standards.
4. You’ll need to be ready to issue a check for the earnest money and option fee (if applicable – see below). Earnest money typically is $500, $1000, $1500 and up … depending upon the purchase price. It’s what shows that you are an “earnest” buyer. Generally speaking, it will NOT be refunded if the deal falls through unless there are title issues. The only exception to that is if you “opt out” during the option period (again – see below) of if your financing falls through during the financing period. The Financing period is the time period within which you must supply the lender with all of your financial information and get the final “OK” from the Lender.
5. Do you want to do inspections? If so, you’ll need to purchase the right to do so. Typically the right to do so costs $10 p/day and usually lasts from 7-14 days. This 7-14 day time period is what is generally referred to as the option period. It’s called the option period because, if you find something surprising during that time, you can “opt” out and all you lose is your option money. If there are no surprises and you want to move forward, the option fee typically is applied to the purchase price. Another alternative (if there are surprises found during inspections) is to go back to the Seller and ask for concessions or repairs.
Keep in mind that there are different kinds of inspections: A general home inspection, a well inspection, a septic inspection, etc. Also, if you are buying a raw piece of land, an inspection period usually does not apply. And … if you are asking for a REALLY great deal or buying AS IS, you may gain leverage in your negotiations by not asking for an option period. For example, my husband and I have gotten some REALLY REALLY good deals because we offered cash with no option period, and close in 2 weeks. You just have to weigh what you are trying to accomplish.
6. Are there any other conditions that apply? (e.g., Sale of current home, owner financing, etc.)
7. Last but not least, when do you want the closing to be? For a property that is financed, you are looking at between 4-6 weeks. It will vary depending upon the lender’s backlog. For an all cash deal, it just depends upon whether a survey is needed or if there are inspections. Typically, 2-4 weeks.
The best part of my job is drawing up contracts. It means we are doing are job … helping people buy and sell property.
There are a lot of things that can go wrong during the “closing process.” My job is to walk you through the entire process, anticipate the problems that can occur and then resolve them.
So … Are you ready to put an offer in? Call me and we’ll get the ball rolling.
*Obviously, I am just covering contract basics here. There are a lot of other legal issues covered in the standard TAR contract. If you want more information, just ask me and we can go over it in more detail.
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Factors Influencing Choice of Home Location – NAR Research
March 22nd, 2012 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
I saw this entry on the National Association of Realtor’s Facebook Page and thought it was interesting.
According to the 2011 NAR Profile of Home Buyers and Sellers, beating a market does not rank high on the reasons people move. “The biggest factors influencing choice of location were quality of the neighborhood, cited by 67 percent of buyers, convenience to jobs, 49 percent, overall affordability of homes, 45 percent, and convenience to family and friends, 39 percent,” says Walter Molony, a spokesman for NAR. “Other factors with relatively high responses include neighborhood design, 32 percent, convenience to shopping, 28 percent, quality of the school district, 27 percent, convenience to schools, 22 percent, and convenience to entertainment or leisure activities, 21 percent.”
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COMFORT TOWN MEETING REGARDING THE REVISED FLOOD PLAIN MAP, REGULATIONS, AND ENFORCEMENT – Saturday January 14, 2012
January 4th, 2012 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
A town meeting will be held at 9AM, Saturday, Jan 14, 2012 at the Comfort Park Pavilion, to discuss the Revised Flood Plain Maps affecting the Comfort area.
Topics will include:
Overview and history of the flood plain program
Definition of terms: flood plain, floodway, base elevation
Flood insurance available
Building restrictions in the flood plain and flood way
Enforcement programs at the county level
Permits required
Engineering studies required and their price range
Variances available
Penalties for violations
Interpretation of the flood plain map
Tax appraisal of flood plain properties
Speakers will include Rick Tobolka, Kendall County Flood Plain Administrator; Wayne Godsey, Registered Engineer and Hydrologist; Gary Eldridge, Chief Appraiser of the Kendall County Appraisal District; and, tentatively, a representative from the Federal Emergency Management Agency.
Sponsored by the Comfort Area Foundation as a public service.
Contact person is Steve Spence, phone 210-413-0271, email [email protected]
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Is it a Good Time to Purchase Real Estate?
December 30th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
I was talking with a gentleman the other day who commented that he didn’t think he wanted to purchase at this time because he expected real estate values to continue to go down. That was his opinion, not mine and to be truthful, he said that because he had a net “zero” gain on the sale of his house. Truthfully sad … but I believe it is skewing his thinking.
Anyway .. it got me considering whether his reasoning (e.g., real estate is a bad investment right now) was accurate financially. I say that because I look at the real estate market right now and think the absolute opposite.
Prices are back to 2007-8 levels and interest rates are so DARN low right now (4.25% was the last quote I got for a 30 Year, fixed, 740 credit score, 80% LTV). In my mind, real estate seems to be an AWESOME investment right now!
There are two issues that need to be considered in looking at real estate as an investment:
First, what can I get for my money right now? Is that more or less than what I am expecting for the future? Most people translate that into monthly payment. If I only have $1000 per month to spend right now, how much can I get for that $1,000 now? How much will $1,000 per month get me in the future?Second, when the time comes for selling, will I make money or lose money when I get to the closing table?
My assumptions are:
Interest rates or at or near their lows. I am expecting interest rates to rise over time due mostly to the fact that prices generally are rising. Any one who buys groceries or gas on a regular basis knows that prices are increasing. I believe that we have artificially low rates right now. My assumption is a 2% increase in interest rates during the next 2 years. I don’t know that for sure, of course, but that is my assumption. Also, as interest rates increase, prices will also increase. Historically, that is what happens in real estate.
Let’s look at an example:
For a $100,000 home loan, a 2% interest rate increase (from 4.25% to 6.25%) would cause the principal and interest payment to rise from $491.93 to $615.71 per month. That is equivalent to a 25% higher monthly payment meaning that I will have to pay MORE for the same house in the future.
To keep the current monthly payment of $491.93 even though the rates are higher, you would only be able to afford a $80,000 home loan. That is 20% less house. OUCH!
Annually, the outlay from the higher payment would be about $1500. In 2 years, that would be equivalent to $3,000 more in payments. Thus, if you look at these figures by themselves, it would seem that you would “lose” so to speak with real estate if you are expecting prices to drop by more than 3.00% during that 2 year period … let’s say 5%. So, if I am expecting the sales price to be $95,000 in two years, I would have lost a net $2,000. Is that right?
My answer is DEFINITELY NO!!! What you must keep in mind, however, is: What could YOU buy in 2 years if you kept your $100,000?
First, just as an aside, you would have not had any ownership in a home. No tax benefits! Just lease payments which are higher than they have been in a long time.
Second, if you still only have $491.93 per month to spend on principal and interest, you would only be able to afford an $80,000 house. Even if you compare that with the $95,000 you THINK you would have sold your house for, that’s an 18% loss. Doesn’t sound like a wise choice financially! Also, as I stated earlier, historically, home prices usually rise as interest rates rise. So, what you could afford, probably would be even less than the $80,000.
For those who invested in the last 4 years, there truly has been a big hit! No question there! What needs to be kept in mind is the reason for that hit … the housing bubble and stupid mortgage practices. You know the old saying … Hindsight is 20/20. It would have been great if we all knew that the bubble was going to pop.
Historically, real estate has been a great investment. Right now, we have this amazing phenomenon of having both low interest rates and low prices. We feel like it is an AWESOME time to invest in real estate and hope that this analysis will get you thinking along the same lines as well.
To find out what is on the market right now, return to the main page and choose your search area. We’d love to help you invest in the Texas Hill Country. Our number is 830-995-2511.
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Frustrated Sellers: What Do I Need to Do to Get More Showings?
December 19th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Resourcing, Real Estate Stats & Issues
Sellers are often the most frustrated parties in the real estate loop. They don’t understand why they aren’t getting more showings and are frustrated that their realtor can’t work more “magic” for them. Because Sellers aren’t actively out looking at properties (like buyers are), unfortunately, they aren’t privy (unless advised by their agent) to information about their competition and market conditions. Truth is, most of them don’t want to track market conditions. Just sell my house, PLEASE!
Then frustration sets in. Not enough showings and they begin wondering why. Here is what I am discovering and passing on to my Sellers.
Today, as I do every day, I got on my computer, logged onto our local MLS (San Antonio Board) and took a look at what new had come on in our market area (Comfort, Waring, Welfare, Boerne, Fair Oaks Ranch, Bergheim – basically the I-10 corridor of the Texas Hill Country). One number that I like to look at as a comparison of what is going on in the market is: the number of new listings vs. the number of solds. Today, I pulled up the last 30 days figure and they were:
176 New Listings & 62 Solds. That number reveals that for every 3 new listings that comes on the market, there is only one sale that has been removed.
Although the market has been gradually improving, those numbers need to be much closer together. I’d like to see that number nearer to 1 meaning that one on, one off.
Because there are so many houses on the market, Sellers need to be sure that they aren’t shooting themselves in the foot by not taking into account these three things:
#1 Price. How does your current list price compare to historical prices? In our local area, as of this writing (11/11), if you are not pretty close to 2007-8 prices, your house is just not going to get looked at very much. Why? Foreclosures and short sales are pushing market prices back to that level. What you need to realistically be looking at is: How many foreclosures and shorts sales are there at your price point and how does your house compare to those houses. If there are even 2 or 3 foreclosures and/or short sales at your price point and you are priced way above them, the number of showings on your house is going to be minimal. Key point: Make sure your price is in line with what is on the market (including foreclosures and short sales).
What we tell our sellers is that the best time to sell your home is in the first month. If it is priced right to begin with, you’ll get showings and therefore buyers! Not every one of our Sellers listens to us on that point. Regardless, it is never too late to get your price in line with the market. Be encouraged! We have had many sellers start out with prices too high and ultimately come down to the price we suggest and then get a sale!
#2 Repair Issues. Do you have significant repairs required? Another interesting figure is the number of price changes: Today, for that same period, there were 160. Because there are so many price changes, when asked, we are telling people that price changes need to be in the $10,000-$20,000 range to really make an impact. Sellers are reducing their prices right and left by those numbers.
For many Sellers, that $10-$20K really could (and, in my opinion, should) be used to remedy problems instead. These are some basic suggestions: If your well is out, don’t decrease the price, fix it! If the carpet is old and worn, fix that! Listen to what your showing feedback is saying. If people are pointing out that your decks are in disrepair, consider repairing them. What you want is buyers to walk in your house and NOT see problems.
Rule of thumb is that for every dollar that is required for repair issues, a buyers is going to double and sometimes triple that number when mentally calculating how much your house is worth. Keep in mind, also, that THAT number usually gets deducted from the current list price (even when there have been prior price reductions). And that is only for those who are willing to look past the repair issues. Most people don’t like to mess with repairs. If there are other houses on the market that don’t require repairs, buyers will choose the ones without required repairs! Key point: You may want to repair instead of reduce!
#3 Cleanliness. Is your house spic n span during every showing? Related to #2 above, cleanliness is truly next to godliness when it comes to showings on your home! PLEASE PLEASE PLEASE, make sure your house is white glove clean! That means counters, windows, baseboards, fans, light fixtures, floors, etc. Also, make sure it smells good and there is as much light shining in as possible (that means blinds open and windows clean)! People need to be able to envision themselves in your house. For many people, if they walk in a house and it feels dirty or smelly or if it is dark feeling, they’ll walk right back out and say, “This one just doesn’t feel right!” Key Point: Clean your house EVERY DAY. Open the shades. Light a candle.
It is my desire as a listing agent to keep my sellers “in the loop” as to what is going on in the market and to coach them on what to think about to get more showings. Truly, there’s a buyer out there for every property. Sellers, you just have to do “your part” which create the conditions so that buyers discover just how wonderful your house is.
Remember, we all have a mutual goal … to get your house SOLD! We, at Hill Country Home & Ranch Team, truly believe that it is a “team” effort. If you are a buyer or seller, we’d love to help you as well. Hopefully, this primer has given a little food for thought.
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KENDALL COUNTY REAL ESTATE SALES SHOWING IMPROVEMENT – JAN-APR (2007-2011)
May 11th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
Residential Real Estate Sales for the first 4 months of 2011 improved slightly over last year. 84 Sales vs. 81 last year. Also showing improvement was average sales price which increased from $314,055 to $319,152.
2007 was the height of the market. The market is currently down about 40% from that point. Sales are taking more than twice the time to sell and are selling at a deeper discount from original list price than that time period.
Thankfully, the sales curve is finally on an upswing. We have noticed that the number of distressed properties are decreasing. Inventory, however, is increasing daily.
It will be interesting to see how this year plays out … whether sales will grow stronger and eat up the inventory or whether inventory will not be absorbed and a “glut” by year end will create more distress situations. We remain optimistic … but are ever watching the market to stay abreast of the situation. For all of your real estate needs, give us a call.
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REAL ESTATE SALES TREND ON ITS WAY BACK UP – KERR COUNTY, TEXAS
May 11th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
Sales in Kerr County are finally on their way back up. The total real estate market is only at 52% of the market height in 2007 but is up 11% from last year. The average sales price increased slightly from $181,742 to $183,095.
It is our feeling that the market has not recovered as much as in adjoining Kendall County because there have been fewer “deeply discounted” properties. With so much on the market, buyers are looking for “deals.” If a property doesn’t “shine” next to its competition and truly feel like a “deal,” savvy buyers will pass for the next more appealing property. The moral: Property pricing is more important than ever!
Regardless, we are encouraged by the turn in the trend. We’d love to talk with you about YOUR real estate needs. Give us a call at 830-995-2511.
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2010 REAL ESTATE SALES IN COMFORT, TEXAS
January 7th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
Real Estate sales in 2010 totaled $5.194 million, down $1.86 million from the previous year.
There were 18 sales with an average price of $288,579 as compared with 20 sales the previous year, 18 in 2008 and 25 in the peak year of 2007. Basically, 2008-2010 have been very slow years in the Comfort area. 2007 was the peak year and is the bench mark that most people look at in determining how much the market has fallen due to the economic slowdown/mortgage crisis, etc.
Source: San Antonio MLS
Two interesting figure in terms of determining what the market actually is doing are:
OLP:SP which is the original list price as compared with the ultimate sales price. In 2010, that figure was 88.9%. In 2007 (the peak year), the figure was 93.8%. That signifies that market prices (which have gone down already since 2007) are continuing to fall.
DOM is the average number of days it took to sell a property. Average DOM in 2010 was 165 days. In 2007, it was 98 days. Obviously, the longer it takes to sell a property, the worse it is for sellers … not only in terms of frustration but lost opportunity costs (e.g., more months of interest, taxes, etc.).
For a lot of us in the real estate market, the market has been extremely frustrating (albeit not profitable). I hate to be the bearer of bad news … but as the saying goes … it is what it is! Things just aren’t moving like we would like them to! I guess the lesson is that we just need to be smarter about what we are doing. Face reality, accept it and make choices in line with what actually is going on.
I read the following statement recently:
Reality does not adapt to you …. you must adapt to reality.
In my opinion, that does not mean that we “take everything laying down” (as the saying goes). It means that we must actively adjust to reality. For us at Hill Country Home & Ranch Team, we do that IN FAITH … believing that God will lead us in wisdom as to HOW to adjust.
Many in the real estate business are “closing shop.” Others (such as ourselves) are having to do MORE than just real estate. We continue to do as we have been doing (e.g., we aren’t changing anything that we have been offering) but we are adding some additional side businesses to our “mix.”
What kind of “Adjustment” is going to be required of sellers in this market? Adjusting means accepting that:
- The expected days on market (DOM), the time it will take for your property to sell, is going to be longer than originally expected AND
- Your ultimate sales price is likely going to have to be adjusted lower than originally expected.
Obviously, our desire is that our sellers get the highest price that is possible and we all hope for a very quick sale (believe me – we really desire that), but our way at Hill Country Home & Ranch Team is to face reality, be prepared for the worste case scenario (or at least think it through thoroughly), and hope for the best!
For other sellers, refinancing to a lower interest rate might be another adjustment to consider. Also, considering renting while the market recovers. Regardless, we are there to walk WITH you through the process.
Whatever your need is, let Buddy or I know. 830-995-2511
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A LOOK AT FIRST WEEK OF 2011 – WHAT’S HAPPENING IN THE HILL COUNTRY MARKET?
January 7th, 2011 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
Today, as I do every day, I pulled up the market statistics for the Boerne and Comfort area … wondering if the new year is bringing any change. Here is a “snipet” of what I discovered:
Of the 339 Active Listings, 28 new were added, and 23 were price changes. What we like to see is a decreasing inventory. Not by much! 7 went “pending” and 7 were sold.
Of the Pendings, 1 is a “fixer upper” in Boerne under $100,000 (e.g., those don’t come around too often), 1 is a “fire sale” (and I mean fire sale!), 1 is a foreclosure, 3 were in River Mountain Ranch (“seems it’s the hot place to be”), and 1 was a 47 acre tract off Upper Sisterdale Road.
Of the Sold’s, 1 was a foreclosure (e.g., priced low), 3 were sold more than 15% off the list price, 1 for 12% of the list price, and the other 2 were what I would consider “normal” sales (e.g., less than 10% off the list price).
Synopsis: Distressed properties still are impacting the market!
What’s a seller to do? Reduce or Hold (if you can)! It’s just going to be more difficult to “move” your property.
When will things change? As the distressed property inventory gets absorbed, the general market will begin to improve. We’d like to see a higher percentage of sales/inventory. Hopefully we’ll begin to see that trend as we progress into the year.
Difficult times for some. Opportunities for others. We are here to serve you … whatever your situation. Give us a call. 830-995-2511
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KERR COUNTY REAL ESTATE SALES ARE STILL SLOW – January to September 2010
October 4th, 2010 categories: About the Local Market, Assessing the Local Market, Real Estate Stats & Issues
Year to date (January to September) real estate sales are down for 2010 … $7 million from 2009 and a whopping $60 million from 2007.
September sales were just about even from last year providing some hope that sales decreases may have begun to “bottom out.”
There are SOOO many properties on the market right now providing year end opportunities for investors with cash and home buyers “READY” to move. We’d love to help you find what YOU are looking for. Give us a call at 830-995-2511.
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