Have You Considered Investing In Real Estate?

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Have you ever considered buying a property as an investment? The property market is not reserved for experts and millionaires – you too could use it to make the most of your hard-earned savings.

A lot of people only buy a house as a family home and find paying off their mortgage before they reach retirement a big financial burden. Sound like you? However, buying a house as an investment (not living in it and instead renting it out) can make you a lot of money. In fact, it’s been shown that property outperforms other investments such as stocks, shares and savings accounts to bring you a nice fat profit in the long-term.

Yet somehow we’re all too cautious about hopping on the property investment train. Why? There are a few common apprehensions, questions and ‘buts’ people have when first looking at property, but there are good answers to all of them. So, before the words ‘finance’, ‘invest’ and ‘mortgage’ turn you off, have a read of the below to get clued in on what property investment can do for you and your piggy bank

But I don’t have the money to invest in property!

It’s a common misconception that you need to have all the cash up front. US banks may lend up to 75% of the property purchase price for investors, so for a $250,000 purchase (the average housing price in Lewisville according to Zillow) the total capital you need is $62,500. IRA’s and 401K’s are ways to get the down payment.

But I don’t want to take out another mortgage!

Before you panic about taking out a second mortgage, remember that the tenants who will be renting at your property will be paying off the mortgage for you, and that taking out a mortgage to pay for your investment means making more money.

But isn’t it risky?

As with all investments, there are low-risk and high-risk options.

But how can I make money from my investment if all my pennies are tied up in the property?

1) The increase in the property’s value over time. A well-chosen property and market will see the value of your investment jump up significantly over the course of five-to-ten years. You can then choose to resell at that higher price, keep it for longer to increase profits further or pass on the investment to your children.

2) The rent your tenants will pay you. This can cover the mortgage and/or provide you with an additional regular income – remember, rents will also increase over time as the area you invest in becomes more popular.

But I don’t want to be a landlord!

You don’t have to be! There are property management companies that exist to take that responsibility off of your hands. They can handle everything, from decorating and tenanting to taxes and reselling, and you’ll still be able to make a healthy profit.

When you’re ready to learn more or if you’re already clued in and want some more in-depth market advice, contact Jim Trump & Associates today! (214) 609-7123 or jtrump@kw.com

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DO NOT DELAY!! Move Up To The Home Of Your Dreams!

Now that the housing market has stabilized, more and more homeowners are considering moving up to the home they have always dreamed of. Prices are still below those of a few years ago and interest rates are still below 5%.

However, sellers should realize that waiting to make the move while mortgage rates are increasing probably doesn’t make sense. As rates increase, the price of the house you can buy will decrease.

Here is a chart detailing this point:

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Why You Should Sell Your House NOW!!

School is back in session, the holidays are right around the corner, you might not think that now is the best time to sell your house.  But with inventory below historic numbers and demand still strong, you could be missing out on a great opportunity for your family.

Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest foot traffic numbers show that there are more prospective purchasers currently looking at homes than at any other time in the last twelve months which includes the latest spring buyers’ market. These buyers are ready, willing and able to buy…and are in the market right now! As we get later into the year, many people have other things (weather, holidays, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market.

There Is Less Competition Now

Housing supply is still under the historical number of 6 months’ supply. This means that, in many markets, there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, additional inventory is about to come to market. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. Many of these homes will be coming to the market in the near future. Also, new construction of single-family homes is again beginning to increase. A recent study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). The choices buyers have will continue to increase over the next few months. Don’t wait until all this other inventory of homes comes to market before you sell.

The Process Will Be Quicker

One of the biggest challenges of the 2014 housing market has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 19% from now to 2018. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with an interest rate in the low 4’s right now. Rates are projected to be over 5% by this time next year.

It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should? Only you know the answers to the questions above. You have the power to take back control of the situation by putting your home on the market. Perhaps, the time has come for you and your family to move on and start living the life you desire.

That is what is truly important. 

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

 

10 Simple Steps to Losing Your House!

Open New Lines of Credit

Lenders must adhere to strict debt-to-income ratio requirements.  If you add a new car payment or credit card payment to the mix after you have been pre-approved, you debt-to-income ratios may now be too high to qualify for the proposed housing payment.

Run Up Balances on Current Credit Cards

Even if you don’t open new lines of credit, charging a substantial amount on a current card will raise the minimum monthly payment on that card your lender is using for financing. Again, this could throw your debt-to-income ratios completely out of whack!

Spend Down Payment Funds

Even if your lender verified down payment funds prior to your pre-approval, if your balance decreases to less than what you will need at closing and your lender requires new bank statements, this could cause a major delay in your closing date.  If you’re closing on a short sale with a hard deadline, you could end up losing the house if you cannot close in time and aren’t able to obtain an extension.

Lose or Switch Jobs 

Not much explanation needed here. If your qualifying income is no longer coming in every month, closing on your house isn’t going to happen unless you have a co-borrower who can carry the payment on his or her own.

Make a Late Payment on Your Credit Report

If your credit score is barely meeting the minimum threshold, one late payment could knock you out of the qualifying range.  If your credit score expires before closing and your lender needs to re-pull credit, then you would be in trouble if this has happened to you.

Failure to Communicate Alimony or Child Support to Your Lender

This information is important and will affect the amount for which you qualify. If it comes up too late in the process, there’s a chance you could lose the house, so please share this information with your lender, even if he or she doesn’t ask.

Failure in Communicating That You Are in the Market for a Condo

If you are purchasing a condo, the lender must factor in condo association dues, which can be very pricey. If your lender isn’t factoring a cushion for this into your pre-approval, you may find out that your debt-to-income ratios are too high once you are already under contract.

Getting a 10 Minute Pre-approval

Yes, I know you are busy, but getting a pre-approval shouldn’t be a 10 minute process with some online lender that you heard about on the radio.  Obtaining a mortgage loan is very complicated and your lender should spend time interviewing you, learning about your employment history, and reviewing the standard documents required for a mortgage pre-approval.  Just because you are supposed to receive court-ordered child support doesn’t automatically make that money qualifying income.  A lender must be able to show a history of receiving these payments on time, if not; the underwriter will not allow your lender to use the income.

Failure to Communicate an Employment Gap 

A lender should ask for your two-year work history upfront, and, if a large employment gap arises that your lender was unaware of, you could have issues if you don’t have a good letter of explanation.

Failure to Submit Lender-Required Documentation

Your lender may ask you for documentation several times throughout the process–in order to make sure he or she can submit your story to underwriting in a timely matter and close you on time. They aren’t doing this to be spiteful! You must be available via phone and email to respond to these requests in a timely manner.  If you aren’t, your loan won’t make it to final approval, and you will not be able to close on your home.

How Do You Make Sure This Doesn’t Happen To You? 

How can you be sure you won’t sabotage your own chances of closing on your dream home? Make sure you speak with a mortgage advisor who is knowledgeable, skilled, and thorough enough to make sure you’re not scaring underwriters away with your credit history, bank statements, and employment history.  A skilled loan officer will not conduct a 10 minute pre-approval or send you out to search for home without explaining closing costs and how to get to the closing table with ease. I have lenders that I work with that I trust implicitly, and will give you their information in order to streamline the lending process.

For professional real estate service, contact The North Texas Home Hunter at (214) 609-7123 or jtrump@kw.com

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You’ve Played The Housing Market Perfectly. Don’t Blow It Now!!

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Many people suffered through the housing crisis. We realize that most of the heartache was the result of a housing and mortgage market gone wild. Many consumers were swept away by the waters of a frenzied real estate market that resulted in a crisis even the experts didn’t see coming.
However, some of the suffering was caused by home buyers and home owners simply making bad decisions. NOT YOU! You didn’t buy that house that stretched your family finances past the point of sustainability. You didn’t take out a home equity loan and buy new water skis. You didn’t do a cash-out refinance for the maximum amount possible.

Instead, you bought a home your family could enjoy – and afford! You waited for interest rates to drop to historic lows and then refinanced your mortgage; not for the sake of taking cash out but instead to lower your monthly payment. You have equity in your house and a nice, low mortgage payment. You played the housing market perfectly.

Don’t Miss the Last Move

Yet, there is one more move many should consider. With interest rates still at historic lows, and prices projected to increase by almost 20% over the next four and a half years, this may be time to buy a new home.
Whether you are a growing family ready to move-up to that waterfront home you always wanted or an empty nester downsizing to a home that makes more sense, now may be the time to buy. If you have considered buying a vacation/retirement home, there may never be a better time to move forward with that plan.
You have been fiscally astute enough to navigate the treacherous waters of a housing market that sank many a homeowner. Now, that the seas have settled, don’t think there aren’t even greater opportunities on the horizon.

Contact me at (214) 609-7123 or jtrump@kw.com

 

 

What Stays And What Goes When You Sell Your Home?

When you are selling your home in Flower Mound, you should make a list of all the items that you are going to take with you, or exclude from the real estate transaction. This list should be discussed thoroughly and given to your Realtor, who can then list the exclusion, or exclusions on the MLS data sheet.  

The “Rule Of Thumb” that we go by is that anything that is attached to the house goes with the house when it is sold. But just the word, “attached” is left up to the interpretations of each person and what you consider NOT attached a buyer may consider attached. The courts are mixed on this as well so it is better to take care of all of this before you even put your house up for sale. You don’t want to go down the court road! 

Make sure you read the MLS report that is submitted by your agent to see that everything is properly listed. If there is something in the MLS report that you are taking with you but your agent is advertising you need to remove that from the MLS right away. Your agent should also add your exclusions in the MLS so that there is further evidence in trying to be upfront about what is going and what is staying.  

One court in Washington D.C in 1982 ruled that, ” … when determining whether an article is a fixture, the court may consider three factors: 

  1. Actual annexation according to the nature and use of the article
  2. Its adaptation to the use for which it is annexed and
  3. The intention that it should a permanent accession to the realty.  

Example: You have a nice chandelier in your dining room that is attached to the ceiling above the dining room table. You certainly can take that chandelier with you so long as you replace it with a substitute. You also, in this case, have to make sure that you reinstall a substitution safely with no loose wires and no damage to the ceiling.  

My suggestion is this: If you have something that you want to exclude from the transaction, it is SO much easier just to remove the item and do the substitution before you put your home up for sale. I see so many arguments over things such as lighting fixtures and, furniture items, and it really is a stressful time when you are selling your house, it really is not worth the hassle, so why not eliminate the argument in the first place?

Artwork is another area of contention and misunderstandings. Of course, nice artwork in your house helps to sell your house so making it known up front in writing that you are keeping your artwork is the easiest way to eliminate misunderstandings. Some sellers will even put little Post-It notes around the artwork that says, “Stays with the house” and “does NOT stay with the house”. Same can be said for Grandma’s hutch or dining room table that has been in the family for generations. I have been the victim of a buyer that latched onto such an item that the entire transaction went south! Both buyer and seller drew a line in the sand that neither would cross, and had the item been excluded up front, maybe the buyer would not have honed in on the table so much.

Be aware as well that you do need to fill, patch and smooth-in any holes your artwork, mirrors or pictures being removed had left behind.  

Built in shelves in closets are considered to be attached to your property. This is yet another area of contention. Please make sure the buyers know when they tour your house that you are taking the closet shelves if that is what you are planning to do. I’ve seen arguments over bedroom shelving, so if you don’t want arguments, remove these items!   

Seems silly as well, but I suggest that if you have a car that is parked in the garage, especially a classic or a restore project, make sure that it is properly labeled in order to alleviate any misunderstanding from ever surfacing in the first place. 

Remember that many times these things don’t even come up until you are in the middle of negotiations when tensions are high. I’ve seen offers go sour very quickly over misunderstandings about what is staying with the house and what is not. 

Making it clear from the get-go about the transfer of personal belongings with the sale of your property will alleviate many, many headaches that you may experience later. Keep in mind as well that just because personal items are listed as exclusions that a buyer for your home won’t ask to keep them.

As always, please don’t hesitate to contact me at (214) 609-7123 or email jtrump@kw.com

 

 

 

 

Seller Mistakes That Will Prevent Offers. Even In This Hot Market!

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You simply cannot please all of the people all of the time. 

This adage is particularly true with real estate and putting your house on the market- because homes, locations, and such are so much a matter of personal preference, some people will find something to criticize about even the most perfectly staged, perfectly priced property on the market.

As a listing agent, my job is not to try to make your listing be all things to all people- but you do want it to appeal to enough buyers that you get one great offer (and multiple offers never hurt anybody, either!). That said, you don’t want your listing to be the house that nearly every buyer and agent sees, rolls their eyes at and utters the same few, predictable, deal-killing criticisms.

Fortunately, what is predictable is avoidable. Unfortunately, many of the things that make a listing susceptible to critics are issues on the seller’s side of the preparation for getting it ready to sell. Let’s explore the most common things buyers hate about listings they see.

House Critic Complaint No. 1: Odors

You might think I’m beating a dead horse or even preaching to the choir. But as long as house hunters keep asking me why, in the name of all that is Real Estate related, they keep viewing homes that smell like all sorts of mishmash, I’m going to keep repeating this!

Viewing a home sounds like it’s all about the visual, and mind you, visuals are critical- your listing should be at its Sunday best when it’s being shown, in terms of being spruced, staged and clutter-free. But when a buyer comes to see your listing, they don’t turn off the rest of their senses. There is nothing that can turn a buyer off from a home they’d otherwise like more quickly than a powerfully bad odor, in particular, cigarette, pet odors, and food smells in a house that seems to have been well-cleaned create the concern that those smells might be permanent and that the buyer might not be able to get rid of them without dropping some serious cash on cleaning or even removing wall, window and flooring and painting the entire interior.

If I am listing a home and I know that someone has been habitually smoking in it or that the seller has had a “challenge,” let’s say, with pet accidents, I cannot ignore the problem. Do not think that because you had the carpet shampooed or the drapes cleaned, or because YOU can’t smell anything, that the problem is gone. The human sense of smell very quickly gets used to smells that it lives with or is surrounded with on a regular basis.

It’s one of my toughest jobs as an agent to point out bad smells and odors, no matter how painful the conversation, and to make sure they are eliminated by any means necessary before you place your house on the market. 

Critic Complaint No. 2: Overpricing

 

There’s the one kind of overpricing that makes a buyer say, “Hmmm, seems a bit high, but let’s go see it anyway.” Then there’s the other kind of overpricing that makes the buyer say, “I’ll wait until a price reduction,” or worse, hold their sides because they are laughing too hard!

It is common in our market for agents and sellers alike to say, “Let’s see if we can get it!”, and price a home a little above market value. However, when overpricing is glaring, many buyers and buyers’ agents are less likely to actually come out and see the place, especially if they weed it out online after comparing it’s pricing to all the other homes in the area. Often, homes this severely overpriced simply don’t sell, or at least not until after they’ve had some serious price cuts or have been on the market so long buyers begin to feel confident about making lowball offers.

The goal is the opposite- you want your listing to stand out as a property that is not priced so low as to throw up red flags but does present a good value for the money- that’s what motivates buyers to get out of their chairs and into the property for a viewing, and hopefully gets you, the seller, into a multiple offer situation! 

I don’t set the price of my listings, I can only suggest. It’s obvious that the agent-seller conflict about overpricing is one of those battles that have been fought since Moby Dick was a minnow!

Here’s how to Critic Proof your home’s listing against this issue: Fixate on the comparables. Smart sellers deactivate their emotional attachment and the very human tendency to overvalue their precious homes by poring over the sales prices (not list prices) of similar, nearby homes that have recently sold. The buyer that wants to purchase your home doesn’t see the value in the fact that Jr. took his first steps in the Great Room, and won’t want to pay for it! Walk through this data- don’t forget to note the overpriced listings that are lagging on the market, and also any value-priced listings that have sold for way more than asking.

When I get a seller that simply won’t budge off a dramatically high list price, I have to consider whether this listing even makes sense to take in the first place, or I will use my wonderful office and the combined experience of the agents in my market center in a listing tour. If the agents overwhelmingly comment that they think the home is significantly overpriced, it is my duty to communicate this feedback to the seller. It doesn’t do either party any good to have a listing that is just sitting out there, not selling.

Critic Complaint No. 3: Dirt and/or Messes

Possibly the single largest source of Critic Complaints I’ve ever heard are the dirt, messes, and personal belongings that buyers find so distracting when they walk into a home for a viewing. Obviously, homes that are filthy from floor to ceiling are ripe for the picking for critics. What is underestimated is how often even savvy homebuyers are distracted (and disgusted) by relatively clean homes that just have a few outstanding messes, like piles of dirty dishes in the sink, piles of dog poo in the yard, or even piles of papers, mail, books or clothes lying out in plain view.

Will one or two such items ruin the sale of your home? It’s doubtful, however, a few of them (or more) can certainly distract a buyer enough that they fixate on the home’s messes and, in the process, fail to see what is so great about your property. As I see it, cleaning up faithfully before leaving for work every day and before every showing is free; so it makes no sense to even run the risk of turning off a prospective buyer by letting messes get in the way of their ability to visualize themselves and their families of growing in your, hopefully their, home.

I make sure that I brief the sellers in detail on what buyers expect in every way, but more so in the way of cleanliness. I know what buyers think and what they look for when home shopping. I set up a plan for giving my sellers enough notice prior to showing appointments that they can do a quick, but thorough, house cleaning pass-through before every single viewing.

Critic Complaint No. 4: Lots Of Little Issues

 

All sellers tend to think that their homes are in fantastic condition. After all, they’ve had the furnace maintained regularly, they’ve installed granite and low-E windows, and maybe they even took your advice to have the floors refinished or the walls painted in preparation for putting the place on the market. THAT IS FANTASTIC!! 

All of the noncosmetic work that’s been done to maintain and improve your home will be trumpeted in my marketing materials, and the cosmetic items will speak for themselves. Here’s the thing though; buyers won’t be running the dishwasher or testing the furnace (at least not until inspections). 

What they will do is:

  1. Flick light and fan switches.
  2. Open or close window coverings, closet, room and entry doors.
  3. Open and close drawers, cupboards, gates and fences.
  4. Hold the handrails as they walk up and down the stairs. 

They will hear leaky faucets and point out water spots from long-ago-repaired leaks, and they will see the uneven exterior tiles. Even though these items might be vastly less expensive to fix than the roof or sewer line you’ve had replaced, they are much more visible and noticeable to a buyer. In fact, buyers don’t always even know that the little malfunctions and repairs that need doing are inexpensive, and when they notice a bunch of these sorts of things in a single property, they can jump to the conclusion that the whole place is rickety. 

Since these little fixes are inexpensive to make, have them completed before you list, if at all possible. I always ask my sellers to walk through the property with me and I pinpoint all of the little things that buyers will notice, even the necessary little fixes and offer them a handyperson reference for someone I know who works efficiently and that does a good job. 

All in all, it is about getting the most money for your home that you can get, and in the quickest manner. Having someone who has the credentials, who knows what the buyer is looking for (and at) while they tour your home, pre-approval letter in hand, is tantamount to a quick, pain free sales process. 

Contact me at 214-609-7123, or email: jtrump@kw.com, I’m happy to help.