Sellers Market: Tips for Multiple Offer Situations

Are you currently in a situation where everyone seems to want to buy the home you have your heart set on? Don't panic. This seller's market is causing a frenzy of multiple offer situations. Here are some tips to consider when put in a multiple offer situation.

1. Know your market.  Ask your agent to show you what other homes in the area are selling for and how quickly they have sold. This will put things into perspective for you when making an offer.

2. Know your own wants and needs. It will be easier to face a multiple offer situation if you know what you want prior to submitting an offer.  What is more important to you? Home price? Closing costs? Speed of closing?

3. Start Low. Don't start your search at your upper limit. This is a seller's market.  If you find a home you love and there are many others that want it too, be the smart buyer and offer slightly more to secure your contract and still make appraisal.  Leave enough wiggle room so that you are not throwing your budget. This seems to be harder for some than others. 

4. Show Ability to Close.  Submit offers with some credibility to make your offer more appealing.  Sellers do not only care about the price, they want to know you can close.  Attach proof of funds, approval letter, evidence of good credit, etc. 

5. Know your Timing. It can get very costly if you need to be out of your current residence because your lease is expiring or you are being relocated and you have nothing finalized on a new home. Have a Plan B in case Plan A falls through.

You MUST realize this is not a buyer's market anymore.  You do not have the negotiating power you did a year ago. How many homes will you let slip through your fingers before you make a realistic offer on a home? Be prepared to make full price offers! Get pre-approved before starting your home search. Learn about the neighborhood and the trends before the search so you are informed and prepared to make realistic offers.

Bina S Beechum

https://www.facebook.com/REwithBina

Real Estate with Bina's YouTube Debut!!!

Hey Everyone,

Check out my first YouTube video on some helpful tax tips to current home owners in Texas.

Real Estate with Bina on YouTube

Full Blog on Homestead Exemptions to follow!

Texas Homestead Exemptions

So here is a breakdown of what homestead exemptions are and what benefits they provide to homeowners in Texas.

A homestead is considered a separate structure, condominium or a manufactured home located on owned or leased land, as long as the individual living in the home owns it.  It can include up to 20 acres if the land is owned by the homeowner and used for a purpose related to the residential use of the homestead.

You can apply for an exemption on your principal residence. Homestead exemptions remove part of your home's value from taxation, so they lower your taxes!

Example:  Your home is appraised at $100,000 and you qualify for a $15,000 exemption (this is the amount mandated for school districts), you will pay school taxes on the home as if it was worth only $85,000. Taxing units have the option to offer a separate exemption of up to 20 percent of the total value.

To qualify, a home must meet the definition of a residence homestead: The home's owner must be an individual, not a business entity or trust, etc. and use the home as his or her principal residence on January 1 of the tax year.  

There are several types of exemptions you may receive:

School taxes: All residence homestead owners may receive a $15,000 homestead exemption from their home's value for school taxes.

County taxes: If a county collects a special tax for farm-to-market roads or flood control, a residence homestead owner may receive a $3,000 exemption for this tax. If the county grants an optional exemption for homeowners age 65 or older or disabled, the owners will receive only the local-option exemption.

Age 65 or older and disabled exemptions: Individuals 65 and older and/or disabled residence homestead owners may qualify for a $10,000 homestead exemption for school taxes, in addition to the $15,000 exemption for all homeowners. If the owner qualifies for both the $10,000 exemption for 65 and older homeowners and the $10,000 exemption for disabled homeowners, the owner must choose one or the other for school taxes. The owner cannot receive both exemptions.

Optional percentage exemptions: Any taxing unit-including a city, county, school, or special district-may offer an exemption of up to 20 percent of a home's value. But, no matter what the percentage is, the amount of an optional exemption cannot be less than $5,000. Each taxing unit decides if it will offer the exemption and at what percentage. This percentage exemption is added to any other home exemption for which an owner qualifies. The taxing unit must decide before July 1 of the tax year to offer this exemption.

Optional 65 or older or disabled exemptions: Any taxing unit may offer an additional exemption amount of at least $3,000 for taxpayers age 65 or older and/or disabled.

You may file for any homestead exemption up to one year after the delinquency date. The delinquency date is normally February 1st. If you are 65 or older or disabled, you qualify for the exemption on the date you become 65 or become disabled. To receive the exemption for that year, 65 or older or disabled homeowners must apply for the exemption no later than one year from the date you qualify or one year after the delinquency date, whichever is later. If you miss the deadline you may apply for the following year.

source: http://www.window.state.tx.us/taxinfo/proptax/exmptns.html

This is a ton of information on home exemptions. If you realize that you haven't filed for your exemption yet go to your county appraisal office and GET ON IT! You will have to fill out an application and bring your driver's license and vehicle registration receipt to prove that the home is your principle residence. A link to the exemption forms for the Dallas County Appraisal District is below:

DCAD Exemption Forms

If you are trying to file for a past exemption in Dallas county you can go to their main office at 

Dallas Central Appraisal District

2949 N. Stemmons Frwy

Dallas, TX 75247

Happy Savings!

Bina S Beechum

https://www.facebook.com/REwithBina

Home Inspections - Focus on the Guts!

Buying a home can be very exciting and nerve wrecking at the same time.  When you first find that house that you think will be your new home you go through the exciting negotiation and acceptance process.  This is just the beginning, the very beginning. Next comes a nerve wrecking part; the home inspection. When you submit a contract, your Realtor will probably have a 10 day option period in there so that you can back out if the inspection comes back unsatisfactory and both parties cannot agree on terms of repair. If this is the case all you will lose is the option period money and cost of inspection. Trust me, this is way better than buying a home full of problems.

My first bit of advice is NEVER buy a home without an inspection. There is only one time that I would pass on an inspection before closing and that is if you are purchasing a new home. Normally, if you purchase a new home from a builder you will have a builder's warranty on the home for the first year.  If this is the case, then I would get the inspection done in month 11 so that your builder has a list of all the things in the home that needs repair before the 1 year warranty has expired.

Now, lets set some expectations upfront. You cannot expect a seller to fix every single thing listed on an inspection report.  The inspectors job is to point out EVERY deficiency (minor or major) in a home based off CURRENT building codes. If a home was built prior to 1990 it might be fully functioning but fail a number of items on an inspection report since it is not built to the current code. This being said, lets focus on what is most important to the home buyer... the guts.

The guts of a home are comprised of the following:

1. Foundation
2. Roof
3. Plumbing
4. Electric (HVAC)

Foundation is a definite deal breaker to me. I would not let my client purchase a home that is cracking in half. There are many things to look for when reviewing an inspectors comments on foundation repairs. First off, if the foundation is marked to be deficient and NOT fulfilling its functional purpose, an engineer needs to be contacted for further review. I would not call a foundation company since they are going to be biased. Your realtor should be able to give you a few engineers to reach out to. Minor cracks in the walls or tiles are not something I would ask the seller to repair, however, if the tile is broken ask the seller if they have any spare tiles so you can replace it yourself. Finding matching tile can be very difficult, if not impossible.

The roof is a big concern because it can be very expensive to fix. More importantly, you might not be able to get the home insured if the roof is damaged. This means you can't get a loan, which means you can't buy the home, but also the seller can't sell it to anyone financing the home. More than likely the seller's have their home insured and will be able and willing to fix this to get the home sold.

Plumbing can be a nightmare and for me a major reason to back out of the contract. Leaks in a home are bad news all around. Active leaks can mean major repairs are needed and even potential mold in the home. I personally would not buy a home with active leaks without a mold inspection being done as well. Water heaters can and should be fixed but missing stoppers are not worth asking for.

Electric issues are major as well. Seller's should be willing to pay for repairs to the HVAC unit, appliances, major electric issues such as cut lines, etc. Do not expect a seller to bring the home to code with a new breaker box or adding of GFI switches. This was not required when the home was built and could hurt more than help if you change it in an older home.  I also would not ask the seller to pay for switch plates or light bulbs.

It is best to ask for repairs on anything that is material to everyday living in the home. If you can't live without it, fix it. Loose door knobs, paint work, carpet, minor cracks in wall, missing door stops or outlet covers, are not things you should expect the seller to fix. I know they are annoying but they should not make or break the deal. If two or more of the major components of the home are deficient I would consider backing away. Some homes are just not worth the headache.  

Bina S Beechum

https://www.facebook.com/REwithBina

http://www.youtube.com/channel/REwithBina

Home Loans - FHA Changes

Are you in the market for a new home?  Have you already spoken with your lender about what you can qualify for?  If not, take a step back and start there.  There are many types of loan structures you can choose from but you have mainly 4 options when buying a home:

1. FHA Loans
2. VA Loans
3. Conventional Loans
4. Cash

I wouldn't advise on option 4 unless you were purchasing investment properties.  If you have that kind of liquidity real estate is a great investment with good returns, but that is a blog for another day. 

Let's break down the other three.

FHA Loans are insured by the Federal Housing Administration and are popular because of low down payments, low closing costs, and easier credit qualifying.  You can put as little as 3.5% down towards the purchase of your new home.  FHA backed loans don't come free.  You have to pay 1% of your loan amount at closing, a mortgage insurance premium (MIP), to obtain mortgage insurance from the FHA.  You also have monthly premiums as well.  

If you haven't been paying attention to the news, on April 1, 2013, these premiums have increased and are now required to be paid beyond a 80% loan-to-value (LTV), whereas before, you only paid them until you reached a certain LTV ratio. I'm sure you can see how expensive this type of loan has now become.  The new rates are below:

• 15-year loan term, LTV greater than 78 percent, less than 90 percent: 0.45% annually
• 15-year loan term, LTV greater than 90 percent: 0.70% annually
• 30-year loan term, LTV less than, or equal to, 95 percent: 1.30% annually
• 30-year loan term, LTV greater than 95 percent: 1.35% annually

On June 3, 2013, the FHA is going to to make these additional changes:

• 15-year loan terms with a LTV less than, or equal to, 78 percent will be assessed a 0.45% annual MIP
• FHA mortgage insurance premiums will not cancel for loans with a starting LTV exceeding 90%
• FHA mortgage insurance premiums must be paid for a minimum of 11 years for loans with a starting LTV of 90% or less

This isn't the first time that changes have been made to the program but if you are curious about the underlying causes you can get more information at Biz Journals - FHA Loan Changes.

VA Loans are a benefit to active duty service members, veterans, and National Guard and Reserve members.  These loans require little to no money down and do not require a private mortgage insurance (PMI) since they are guaranteed.  There are requirements to meet to qualify for these types of loans including but not limited to: length of service, credit score, and income. There are many programs out there for the heroes who are serving and have served our nation. You can visit VA Home Loan Benefits for more details.

Finally, conventional loans.  A conventional loan is a mortgage that is not guaranteed or insured by any government agency.  They are typically made by institutional lenders such as banks, credit unions, pensions, etc. Lenders have many different programs, some which require you to put as little as 5% down and others as much as 25% down.  Depending on the guidelines, you might not have to pay any PMI on your loan as long as you put at least 20% down. This might be a larger cash requirement upfront but can save you hundreds and thousands in the long run.  The upfront cash is equity in your home so you will get it back when you sell your home or if you need to pull money out in a refi. 

Lenders have become quite annoying with all the requirements needed for getting a loan these days.  It is not as easy as it once used to be.  Money is coming cheap right now but it does not come easy.  To help make the process more seamless make sure you are working with a good lender.  Communication is the biggest factor here.  Find a lender that is easy to get a hold of, not one you are trying to chase down the day before closing.

I have closed on a few investment properties and refinanced my personal home all within the past 8 months and I can't begin to tell you how annoying the process was.  It wasn't really anyone's fault just the system.  All I can say is, make sure you provide your lender with all the information requested and be prepared for their underwriters to come back and ask you for more.  

If you are looking for a good lender or would like to shop rates, reach out to me and I can send you to a few of my close contacts.  

I'll leave you with a simple payment equation:

Total Monthly Payment = Principle + Interest + Taxes + Home Insurance + (PMI or MIP)

Cheers!

Bina S Beechum

https://www.facebook.com/REwithBina

http://www.youtube.com/channel/REwithBina

HUGE SAVINGS ALERT!!!

Sometimes we forget that saving money is just like making money or at least keeping money we weren't trying to spend. I would like everyone to take a few minutes out of their day tomorrow and look over their current home insurance policy. You might surprise yourself with how much you could be saving.

Now, I'm not trying to sound like a Geico commercial but you could be saving up to 15% on your home insurance by switching to another provider.  Every year your insurance company reassesses your coverage and takes inflation and the new index into consideration and raises your rate. Some people have very poor coverage or insane deductibles just to keep their annual premium low.  If you are in this boat, I'm sure you freak out every time you hear the sound of hard rain.

Now wouldn't you be so much more comfortable if you knew you had good coverage and you weren't breaking the bank to have it? I know I would be. Let me share a little back story with you of what happened to one of my clients. We are inching closer to closing on her home and of course the lender is requiring insurance on the property.  My client called her current car insurance provider and they came back with a quote of $158 per month on a 2,200 square foot home.  She didn't know whether that was high or low, she just thought that it was okay and would have been fine paying it. Then she contacted one of my preferred insurance agents and was quoted...wait for it...wait for it... $77 per month with way better coverage!

That is a savings of OVER 50%!!!

If this hasn't convinced you then I don't know what will.  Saving nearly $1000 a year could really come in handy. I'm not saying that you are going to save that much but I am saying that it is definitely worth checking into.  Great thing about insurance, you can switch at anytime.  There is no termination penalty. So what is there to lose other than possible savings?

Now, I'm sure you are wondering who my contact is and if I'm going to give you his information. Well, I AM!  If you think there is a possibility for some savings every month than please contact my good friend, Mark Barnes.

Mobile:  (972)742-8984

He has already been forewarned to make himself available.

Happy Savings!

Bina S Beechum

https://www.facebook.com/REwithBina

http://www.youtube.com/channel/REwithBina

How It All Began Part 1

Do you have a passion for something but feel held back from making it a reality? Maybe you want to be a chef, painter, or actor but your current circumstances make you feel like you can't risk stability for passion.  I do and I'm finally trying to pursue it.

I just gave birth to my third child, Elijah, 4 1/2 months ago.  I did not have a strong desire to go back to work for my employer since I had never experienced what it was like to stay with my babies and watch them grow. I am blessed that my husband and I started investing in real estate early and have a decent side income from it.  This definitely impacted my decision to become a full time real estate agent. 

My husband and I decided it was finally time to sell our home in North Dallas.  With the market being so hot for sellers and the shortage of homes in the area we feel confident we will get a good value for our home. So naturally, I started interviewing Realtors.

I met with three different agents that had experience in selling homes quickly in the neighborhood my property is in.  I can't stress how important it is for the client and agent to have a good relationship with one another.  I immediately ruled one of the agents out due to a difference in opinions and the other I wasn't sure I was going to enjoy working with.  So I decided to give the last one a chance.  Things could have gone very different for me if things didn't happen the way they did with her.  She was very welcoming and nice.  We took time to go to the property and browse the other homes in the neighborhood to help assess the value of my home.  I thought it was a done deal.  I was wrong.

One of my biggest requirements in any relationship is communication and doing what you say you are going to do.  After that day, we both had a to do list to get the house on the market.  I fulfilled mine but I didn't hear back from her.  Granted we had to wait almost a month to actually list the home because it was occupied by tenants.  I still expected her to get back to me with the things we discussed in the interim.  Since I didn't hear back in a timely fashion, I started to think, "Why don't I just reactivate my license and sell our home myself?" and I did just that.  I went to Champions School of Real Estate, took all my required continuing education courses and re-sat for my exam and I PASSED!  

In the process, I found a sponsoring broker that I could hang my license with.  I am now an active agent for Small World Realty.  As mentioned in my first post, my real estate experience has never been in residential sales.  I purchase single family homes for investment purposes and have sold new homes for a builder.  Dealing with all the red tape TREC puts you through to make sure you are not breaking any laws when representing someone is very different. So what could be better than learning how to list a home the right way than practicing on your own home?  Nothing!  So I am doing just that. I am fortunate to have a great sponsoring broker, Robert Meche, who is walking me through every step of the way.  My first listing is coming to the market soon!  

To be continued...

Bina S Beechum

https://www.facebook.com/REwithBina

http://www.youtube.com/channel/REwithBina