Do I Rent or Buy?

February 13, 2012 Leave a comment

People are always asking whether they should rent or buy.  Of course, most people would prefer to own their own home, is it the BEST choice for everyone?  I have put together a checklist of items to consider when deciding if now is the right time for you to BUY.

1.  Do you have savings?  The minimum down payment for mortgage is 3.5% for an FHA loan.  You will also need additional funds for closing costs such as lender fees, title fees, escrows including taxes and insurance.  A rule of them is closing costs will run you 3-5% of your loan amount.  Some types of loans are also now requiring that you have 2 months PITI (payment, interest, taxes, and insurance) in your bank account when you close.  Good thing, is that most will allow you to use your retirement savings for the reserves.

2.  What monthly payment can you afford?  First things first…before you start shopping for a new home, you need to get pre-qualified for a mortgage.  The lender can help you determine what sales price you qualify to purchase and what monthly payment you are comfortable with.   Don’t forget interest rates are super low right now, so you can lock into a low payment, or maybe afford a little more house that you initially thought.

3. How is your credit?  Mortgage guidelines have changes a lot over the last 3-4 years.  They require larger down payments and higher credit scores.  Not to mention stricter rules on calculating your actual income.  If you have current delinquencies such as charge offs, collections, bankruptcies, liens or judgments, foreclosures, etc., you may have to wait a certain number of years to be able to qualify (even if your credit score is high enough).   If you’re planning on purchasing a home in the near future and have a low credit score, you want to start making an effort to increas it now because this is not a quick process.

4.  Do you have a house to sale?  If you have not sold your current home you will need to be able to qualify for both you current home payment and your new home payment, sometimes even if you plan on renting your old home out.  Otherwise, you will need to sell your home before you purchase a new one.

5.  Are you ready to maintain?  The days of calling your landlord to fix a leaky pipe or broken garage door are over.  You will need to be prepared for maintenance expenses especially if you plan on purchasing an older home.  Home Warranties are great for older homes…at around $500 a year  plus a small $50-$100 deductible, they cover major expenses on items such as:

  • Air conditioning
  • Dishwashers
  • Doorbells
  • Furnace / heating
  • Water heater
  • Ductwork
  • Garbage disposal
  • Inside plumbing stoppages
  • Ceiling fans
  • Electrical systems
  • Range and oven
  • Telephone wiring

6. You have a built in retirement account…EQUITY!  Home prices are low right now, so chances are that when the economy is back on its feet you will start to see appreciation.  (We could be 3-5 years from this right now).   This means that you will have equity in your home when prices start to increase.  Not to mention that if you have a 30 year mortgage, your home will be completely paid for in 30 years — about the time you want to retire, right?

7.  Save on your taxes.  Did you know that owning a home is a tax deduction?  You get to write off interest and taxes you pay every year on your home.  This alone, will save you a lot of money every year!

8.  It’s your home, your style. Now that you own your own home, you can decorate it exactly how you want.  You don’t want carpet or that old dingy countertop anymore?  Just change it out.  If you can afford to upgrade, it will typically be worth it in the end.  You will get more for your home when you’re ready to sell if it’s been well taken care of and upgraded to today’s styles.  Plus, you don’t need anyone else’s permission (unless we’re talking about spouses!)

It’s up to you to decide if renting or purchasing a new home is what is best for you.  You may decide it is best to rent for a couple of years so that you can save money for a down payment or perhaps, clean up your credit.  Not jumping into some thing without preparing properly is never a good choice.  Always weigh out your options and choose what works best for your situation.

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If I can’t sell my house I will just rent it….Or maybe NOT!

December 7, 2011 Leave a comment

First you make all the preparations for selling your house…cleaning, painting, staging, interviewing agents, etc.  Next, you take the plunge and put the sign in your yard and prepare for showings.  Every day, you wake up, make sure the house is clean and sparking…no dishes in the sink, no toys on the floor, carpet is vacuumed, and so on. 

Since you have already been prequalified for a mortgage and have been visiting new homes with your realtor, you finally decide bite the bullet and sign a contract for a brand new home.   You write the $2000 earnest money check and start picking out all of the items you just can’t live without in your new home.  Because the house will take nearly six months to build, you figure you’re safe…Your house will certainly sell by then. 

The time starts ticking away, and before you know it you are 60 days away from closing on your new home and no offers on your home for sale.  You are starting to get worried that you will not be able to sell in time to close on your new home.  What on earth are you supposed to do now?  You call your lender to see if you qualify with both house payments…Of course, you don’t intend to have to make both house payments at the same time, but you figure it will buy you some time.  For instance, if you close on your house in January, you won’t have a mortgage payment until March.  So, you get an extra month to sell.  Unfortunately, you get the news that you do not qualify with both house payments. 

So, then you think, “Hey! I’ll just rent my house!”  The rental market is really hot right now and your agent tells you that you can find a tenant in only two weeks.  That will solve everything.   You can cover your mortgage payment and then qualify for your new home and everything will be just fine.  So, you call your loan officer to double check that this will work, although, you’re quite sure it will.  Then, what do you find out?  In order to lease your home and be able to count the rent to offset the mortgage payment you must qualify under the following guidelines:

  • 30% equity in the home that will be leased  (and must be supported by an appraisal)
  • 6 months reserves (PITI) in the bank for the home you will lease
  • 6 months reserves (PITI) in the bank for the home you will be buying
  • First month’s rent and security deposit from the tenants, deposited into your bank
  • Signed lease from the new tenants for one year from closing date of new home

Are you kidding me?! You find out you can use your 401K for reserves, but only 60%.  So if you have $40,000 in your retirement accounts, you can use $24,000 of it.  Then you do the math…Your home is worth $175,000, so you can only owe a maximum of $122,500.  The problem is you owe $150,000 on your home and only have about 15% equity in your current home.  This is the problem, which tends to be a common one these days. 

So, then you are in panic mode again and back to square one.  YOU HAVE TO FIND A WA TO SELL YOUR HOME!  You know your agent has done all they can do…open houses, marketing, postcards, flyers, etc.  You have reduced the price and you even offered a realtor bonus if an agent can sell your house in the next 30 days.  You are getting showings and positive feedback, but just can’t seem to get an offer.  You only need one offer to make it work!

So, what is the solution? You will lose your $2000 in earnest money and the additional $3000 you paid in options.  That’s $5000 you will lose if you cannot buy your dream home you spent so much time and money building.  What do you do?

YOU SELL YOUR HOUSE!  That’s it…plain and simple.  The lending laws have gotten much tighter than they were just 4-5 years ago.  There are certainly ways around issues with financing, but they have to meet the guidelines.  In this situation you would have to sell your house or not purchase the new one. 

The builder will often hold your house for only a certain number of days past your closing date and then they will put it back on the market.  Typically, builders will not give you your earnest money back, but they will often hold it for you.   The good news is, once you sell your house (because, eventually, it will sell).  The builder will typically let you come back and purchase a new home from them and apply the funds you already paid them for the new home.  If you get lucky, your home you already built will still be there, but if not, you’ll have to start all over again.

So, what is the moral of this story?  Sell your home BEFORE you buy a new one.  You never know if your home will sell in 2 weeks, or one year.  Even if you have to move into an apartment or with family before your new home is built, it’s better safe than sorry when it comes to selling.

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The Golden Country – Gunter, TX

October 4, 2011 Leave a comment

What more could you ask for?  Not so far away country style living with all the luxuries of a 4 star resort.  Do you want to move to the serene country but don’t want to give up all the amenities and convenience of living near major cities?  I have found the place for you!  The Bridges at Preston Crossing is located in Gunter, TX near Frisco, McKinney, Sherman, and Dennison.  This North Texas countryside is located about an hour north of Dallas and offers easy access to major freeways.  You can enjoy the tranquility of the country living, while having the convenience of some of the best shopping, dining, and sporting events in the area. 

The Bridges beautiful pond and clubhouse

This “Golden Corridor” was once known as the Double M Ranch and was the site of the prestigious Baron’s Balls and Polo Tournaments.  Celebrities and even US Presidents were known to arrive by helicopter to attend the exquisite galas and rodeos on this Northern Texas countryside.  They rode the many horses that housed in the huge equestrian center and enjoyed the best bass fishing in the area.   

This 1500+ acres of history is now offered to you to enjoy and live the life you have always dreamed about.  It’s like being on vacation 365 days a year.  If you are a golfer, the Bridges is home to a magnificent 18-hole Jeffrey Bruer design and Fred Couples Signature golf course.  http://www.bridgestexasgolf.com/index.html

Fred Couples Signature Golf Course with scenic views

The Bridges is great for retirement living as well as those with children.  You can feel at ease sending your children to school in The Gunter ISD, which is voted exemplary, the highest possible ranking by the Texas Education agency.  http://www.gunterisd.org/  There are so many amenities for you and your family to enjoy.  You can relax or exercise at family recreation center that includes a one-acre swimming pool, tennis and sports courts, and a fitness center.  This secluded country site also offers a play ground and park, and a huge equestrian center with miles of walking and riding trails.

 Equstrian Center

You can choose your lot and build your home at your convenience with the custom builder of your choice.  The home sites range from one third to one acre lots.  Come to the Bridges today see why the Bridges at Preston Crossing was voted one of the “Best small towns to live in” by D Magazine.  Come and see what luxurious country living is all about. 

What a great deal!  Come take a look at this Beautiful .35 acre cul-de-sac lot located in this stunning resort-caliber master-planned community.  This lot is privately owned and the price was recently reduced to $62,900  $59,900.   This lot is perfectly flat, allowing ample opportunities to build the home of your dreams with lush landscaping and even a swimming pool.  Take a drive today to see this beautiful lot available or call me for more details. 

 Lot 221 Eagle Glen Pass, Gunter, TX

Street View of Lot 221 - Looking out from the cul-de-sac

Lot 221 Eagle Glen Pass

Directions: Hwy 75 N to Exit 51, West on FM 121. 6 miles to Bridges entrance.

 
 

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Search Homes in Frisco, Texas

August 24, 2011 Leave a comment

Search Homes in Frisco, TX

$150,000 – $200,000

$201,000 – $300,000

$301,000 – $400,000

$401,000 +

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I Have Amazing Marketing Tools to SELL Your House! Check it out…

August 23, 2011 Leave a comment


What You’ll Get Working With Me:
Custom Single Property Website

I’ll create a custom single property website with a slideshow, music, maps, area info, full property description and features, and more. This allows me to display even more information than on the MLS and present your home in it’s best light. I’ll also register a unique domain name and put it on the for sale sign, so potential buyers can easily find your property online.

Syndication To Realtor.com, Trulia & Zillow

The vast majority of buyers start their search, and find their home, online. This is where I focus my efforts, by broadcasting your home to Realtor.com, Trulia, and Zillow, the three largest real estate search sites online. Buyers are then directed to your single property website, where they can learn all about your home and schedule a showing.
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Premium Craigslist Ad

Craigslist is one of the most active places out there for online real estate. I’ll post your listing to craigslist twice weekly until we get it sold. While others just use a plain text description, I use a special template that makes your home stand out and shows nearly twice as many photos.
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Facebook Integration

I post all my listings to my Facebook page with a photo to alert my network. In addition, your single property website has a like button so buyers can easily share the site with friends and family.

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Premium Print Flyer

I’ll create nice print flyers for open houses, broker tours, and for you to keep at the home for neighbors.
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Statistics And Tracking

I’ll provide you with a link where you can track in real time how many visitors are coming to your single property website.
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Professional Photography And Tons of Photos Posted

In an online world, photos are what sells the property. I make sure your home puts it’s best face forward online. I also make sure to post at least a dozen high quality photos of every home because it’s been proven that listings with multiple high quality photos get more views from buyers.

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Questions and answers on Standard & Poor’s downgrading of US federal debt

August 9, 2011 Leave a comment

http://wapo.st/ppI813

Standard & Poor’s has taken the unprecedented step of lowering the top credit rating that the U.S. has held for nearly a century. A look at this downgrade, and downgrades in general — and what they mean:

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Don’t Just Buy Energy Star Products. Look for the MOST efficient.

July 21, 2011 Leave a comment

http://bit.ly/pgmDAN

While all Energy Star-labeled products are more efficient than average, some models out-perform. Now, consumers will see which televisions, clothes washers, central air conditioners and (soon) refrigerators will save them the most on energy bills.  If only we could afford to replace them ALL :-)

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America’s ugliest homes – I bought one!

July 21, 2011 Leave a comment

 

http://bit.ly/pDcDeW

HomeVestors, which buys beat-up homes, fixes them up and resells them, is looking for the nation’s ugliest home. Here are six candidates.

If you look at these pictures, don’t be scared or overwhelmed.  You may think, I would NEVER Buy a house that  is that disgusting and needs that much work.  Well, if you ever consider investing in properties, you will learn the messier the better.  The more mess and filth in the house, the more money you get off the price.

I actually purchased a similar home from Home Vestors in 2009!  My husband and I were flipping properties and we found this 100 year old home in Fort Worth.  It was so gross we could not believe someone had actually been living in the home.  It had filth everywhere, no working toilets, no central AC and old out of code wiring.  There were cracks all over the place due to the foundation.  You would never believe how excited we were to turn the home into a beauty and get it sold. I will mention, that I did get a little nervous once we closed on the home and it was officially ours.  Oh boy!

We went through 3 dumpsters and hired crew to clean out all the junk left behind.  In the end we had to re-wire, add AC,  new plumbing, new kitchen, and fix the foundation.  I don’t think there was a part of the home that was left untouched.  We basically gutted the house and started over.  We had to repaint the exterior and add new siding to most of it.  I will see if I can locate my pictures and post them.  This was a really fun project!  My favorite part is picking out the paint, light fixtures, etc.  You know, making it pretty.

Luckily, we had a great contractor and did everything he said he would do.  We finished the house and then sold it within 30 days.  We offered seller financing and held the mortgage note to the buyer, so it wasn’t your traditional sale, but it worked!  Seller financing is a whole other ballgame so I won’t get into the details of that now…that will have to be another blog!

This slideshow requires JavaScript.

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Not just your average real estate blog.

July 19, 2011 3 Comments

I am very excited to introduce my new BLOG!    I have so many things that I would like to share with friends, family, and anyone who is interested.  While this is a real estate blog, it’s not going to be just about buying and selling homes.   When I think of real estate, I want to know about all sorts of things…Are we getting a new grocery store?  What happened to the restaurant down the street?  What about financing?  Can you still buy a house with little money down?  What if I want to start investing in Real Estate?  What if I don’t have equity in my house…Can I still sell?   I need some work done in my home…Who do I call for the best deal?   The list goes on and on.  I hope that you can check back often and take something away from my blog to help you in the future.  And of course, if you don’t find the answers here you are looking for, just ask me!

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