You're Stressing Me Out!

Should we really be surprised to find out that in a new survey, it was revealed that Americans are more stressed about the economy and money issues now than in the spring. You can't get away from the doom and gloom no matter how hard you try! The nightly news, talk radio, even commercials citing "With higher gas prices and the state of the economy...blah blah blah.

You may not know this but I was a Broadcast News in college and I knew I wanted to be in the media industry since junior high. My freshman year in 1994, the Internet was just starting to hit the mainstream. The good old days of logging on to AOL with the dial up modem and the annoying static sound to get into the Internet. People still prefered to get "ink on their fingers" as my J-30 professor, Bob Woodward said. CNN was really the only 24 hour news network. Sometimes a breaking news story wasn't reported for 30 minutes to an hour. Now, a squirrel causes a four-car pile-up in La Crosse, Wisconsin and it's BREAKING NEWS. I think my life will go on without this information. Breaking News isn't a matter of informing the public of what it needs to know right now. It's about who scooped and carried the story first.

It saddens me to see the state of the media these days. News is no longer the unbiased disimination of important events. It is filled with opinions, false "facts", and personal agendas. I was at the gym several months ago and they had four stations on. Fox News, MSNBC, ESPN and TNT. No local channels so that I could watch The Price is Right! When I asked why there were so many news channels on that were reporting the SAME things, the answer was that people complained that one was too liberal and one was too right-wing so management had to put on both channels. Seriously people! Get over it! A gym is a place to go and relieve stress, not create it because a freaking TV channel!

The bottom line is that with so much instant access to "news" via text alerts on our Blackberry phone, it's hard not to get stressed out over all the issues at hand. My advice is to just remain calm. Don't check your mutual funds everyday and certainly, don't listen to the media. Sad to say, isn't it?

Good News for the Dallas/Ft. Worth Housing Market

With the media inundating us with negative news and not-much-better forecasts for the future, it's nice to read some positive stats from a recent Dallas Morning News article written by Steve Brown.

A local housing market pining for some good news will get a boost from the latest home sales and inventory numbers.

North Texas pre-owned home sales eked out a 2 percent gain in September – the first such increase in over a year.

And while new-home purchases have continued to plunge, the number of vacant new houses on the market is down sharply, the latest industry report shows.

"Yes, the folks in North Texas should feel somewhat better, but the news should be tempered by what's happening – or not happening – in the capital markets," said economist James Gaines of Texas A&M University's Real Estate Center

Still, the improvement in the local home sales numbers "means the market is in better balance with a reasonable inventory and enough activity to keep prices from falling dramatically," Dr. Gaines said.

September's rise comes after a long string of monthly sales declines. The last time monthly home sales in the area were up from the same time the previous year was in January 2007.

Dallas housing analyst Ted Wilson said he's optimistic that housing demand and supply are more in balance.

"I think the wild card is the current economic turmoil," said Mr. Wilson of Residential Strategies Inc. "If the credit crisis derails our local economy or again ratchets up the requirements on getting a new mortgage, then the slide would continue."

Despite last month's small gain in sales totals, median home prices in September were 2 percent lower than a year earlier at $142,500.

About 41,000 pre-owned single-family homes are for sale in the 29-county area, down 15 percent from September 2007.

September's pre-owned home sales gain follows an 18 percent decline in August compared with August 2007.

So far this year, real estate agents have sold about 53,000 pre-owned homes in the area, a drop of 12 percent from the first nine months of 2008.

About a six-month supply of houses is listed for sale by North Texas Realtors.

However, multiple listing service inventories may not reflect total homes for sale. Many foreclosed properties are being sold at auction and are not included in Realtor numbers.

Also, the decline in Realtor home sales listings could indicate that some sellers have decided to sit it out and have taken their homes off the market.

In the new-home market, starts are down almost 35 percent from a year ago, but the number empty new houses is falling.

At the end of the third quarter, about 7,600 vacant new homes were sitting in the Dallas-Fort Worth area, housing analyst MetroStudy said Tuesday.

"Inventory is down 27 percent from a year ago – that's great news," said David Brown, who heads MetroStudy's Dallas office. "That needs to come down to about 4,000, but it's going to take a little while to get there."

Local builders started just over 5,500 single-family homes in the third quarter, the lowest start count in more than a decade.

Quarterly new-home sales totaled 7,185 units, down about 29 percent from third quarter 2007, according to MetroStudy.

"It is my opinion that the drop in new-home construction is going to hit bottom between now and next summer," said Mark Dotzour, chief economist and director of research at A&M's Real Estate Center. "The fact that new-home construction in the D-FW area has fallen off so precipitously in the past two years is going to shield the metro area from significant price declines."

D-FW AREA HOME RESALES UPDATE
Comparisons of September pre-owned home sales and prices in the North Texas with year-earlier statistics:
Single-family home resales 6,392 2%
Median price $142,500 -2%
Average days on market 79 7%
Pending sales 5,410 -16%
Listed for sale 41,604 -15%
Condo-townhome resales 358 -13%
Median price $129,500 -7%
Average days on market 104 27%
Pending sales 305 -18%
Listed for sale 3,807 -10%
SOURCES: Texas A&M University Real Estate Center, North Texas Real Estate Information Systems Inc.

Foreclosures

I recently read an article providing information on a program that the government and the mortgage industry has promoted for homeowners in danger of foreclosure. Here is the article from Inman News:

Hope for Homeowners, a program created by Congress to assist homeowners at risk of loan default and foreclosure that will allow some homeowners to refinance into more affordable FHA-insured mortgages, launched Wednesday.

An estimated 400,000 homeowners could avoid foreclosure through participation in this program, which is voluntary for lenders and is scheduled to run through Sept. 30, 2011.

That program is among an assortment of federal, state and industry efforts intended to stem the tide of foreclosures.

Under Hope for Homeowners, lenders will determine a homeowner's eligibility and consider loan modifications to lower the monthly mortgage cost, and can also consider whether to take a loss on the difference between an existing loan and a new loan set at 90 percent of the home's current appraised value.

I am glad to hear that there is a program like this. But I also don't agree with the government stepping in and bailing people out. My opinion, whether you like it or not, is that if you put your trust in a real estate agent who puts his or her trust in a quality mortgage professional, this whole foreclosure issue wouldn't happen in the first place. That's not to say that the only reason this whole mortgage mess happened was because of bad loans. Many of the loans offered to buyers were based on their low credit scores and many of those buyers obtained 103-105% loan approval. While most homeowners put 5-20% down on a home, they have equity in the home. But when you roll in closing costs into a loan on a house, you have no equity and are immediately upside down on this house. When someone with high-risk credit takes on a high-risk loan, it's a disater waiting to happen. Many of the foreclosures were due to the three-year ARM (adjustable rate mortgages) adjusted this year. Homeowners just can't afford going from a $2000 a month payment to $3500 or higher.

I am fortunate to know and work with several quality lenders that will take care of the financial needs and comforts of you, my important clients. Don't just rely on who is going to give you the best rate. Make sure you understand all of the terms of the loan! I'm here to help in any way I can!

OPEN HOUSE SUNDAY!

Here's your chance to take a look at a unique and absolutely gorgeous home in Flower Mound! Stop by and say hello at 2551 Rock Haven off Wichita Trail and Bruton Orand. I will be there from 1-3 pm. I'd love to show you around this beauty! Bring your checkbook!

The Waiting Game

There is so much activity and rushing around the first 10 days you have a contract on a house that after the option period, you are left saying "What next?"
After the option period you are now "pending". That basically means that all that's left is the appraisal. And when I saw all that's left, that's a really big step. We've seen trends recently because of the mortgage fraud and subprime fallout that homes are getting scrutinzed more. What does this mean for you? Let's say you contracted your future abode for $250,000 but the appraisal only comes in at $245,000. The lender is not going to approve this loan because the home isn't worth what the lender is going to give the borrower. What ends up happening is you have to renegotiate the contract or probably lose the deal all together. There have been instances where the seller believe that his or her is worth more than the silly appraiser thinks and absolutely will not negotiate.
Many times, recently, most of the appraisers are just appraising the house at what the contract is. I find this interesting for two reasons. The first is that it seems to me that most appraisers are just taking the contract price because that's what the buyer is willing to pay for it. It is a personal value to that buyer. The second is they may be just covering their rear-ends since the buyer is putting that value on it so why question it!? I had a listing where the appraisal was scheduled and then cancelled. We questioned why this happened. It was a desktop appraisal so he never even came out to the house. It appraised for the contract price.

The Next Step

Yippee! You found the house you love, wrote an offer, negotiated and you are now in the "option period". During that 7-10 day period, the most important thing to do is get a third party inspection. I like to get my inspections completed the second or third day of the option period. I will elaborate on that later. Some people have an inspector they know through past experience or I can recommend the person for the job. Not only do you want a property inspection from a very anal and precise inspector, but you also want a wood destroying insect report. This is usually called a termite inspection, but there are also other types of nasty bugs that can ruin a residence like carpenter ants. Inspections will usually run from $250-500 and up, especially if there is a pool involved.
Once the inspection is completed, the hardest part comes: the repair request. From my experience, there are two types of buyers: ones that nit-pick the little stuff and those that focus on the big stuff. I understand buyers want perfection. Unfortunately, perfection isn't real in real estate. Even brand new homes have doors that stick or a crooked face plate. Unless it's electrical, heating, air conditioning, foundation, roof or major plumbing, it can be handled for a few hundred dollars and a call to a local handyman. Is a loose hinge and a couple of GFCI plugs REALLY worth losing the house you love? Oh, and the reason I like having the inspections done ASAP is because if the AC isn't cooling properly, there needs to be some extra time built in to get a professional out to the house to clearly make a diagnosis. I don't like to be rushed and with this is a major financial purchase, I am sure you don't want to be rushed either!
What happens next? Tune in next time!

What Does It Mean?

For most people, buying or selling a house isn't something you do every year. OK, so there are investors, those that relocate, or just flat out like to move. Like to move? I hate to move. I haven't been able to find my portable round cake pan and cover since we moved into our home four years ago. I think it's still packed in a box in the garage.
The average American family moves every FIVE years, which is two years sooner than the national average of seven years not too long ago. With that being said, many of you may not remember the process that buying or selling actually is. Being a legal transaction, there are many steps that must take place. Forget to order this or enter that, and your closing is suddenly delayed.
Over the next few days, I plan to discuss things that occur once we (listing and buyer's agent) have an executed contract. Oh, the executed contract is when both parties come to agree on all terms in that said contract and have signed off on it.
Once the contract has been agreed to, we enter into the option period. First time homebuyers and out-of-state buyers don't usually know what this is. For a nominal fee of usually $50-100, you, the buyer have the unrestricted right to back out during a set number of days, for any reason at all. Some reasons to back out are inspection items, financing terms, or you just flat out changed your mind. As the buyer, you lose that money for the right to back out for no reason, but better $100 than a large loan on a home that you realize you hate.
With that being said, here is my Tip of the Day: If you first see the home of your dreams at 10 am on a Monday, make sure that you drive back at 5 pm on a Wednesday to see what kind of traffic, public transportation, neighbors and parking is going on at the property. Knowing that no one parks in their garage after work could be a huge pet peeve of yours. Find that out during the option period!
Next time, I will discuss some other aspects of the contract period. Have a good one!