What “As-Is” Means in a Home Transaction

Can you believe the year is almost over? Before it ends, I wanted to answer one more of your common questions.

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I can’t believe it’s already December. It’s been a crazy year to say the least. I wanted to take the time today to answer a question that I receive during almost every transaction, “What does an 'as-is' home sale mean?”

Anybody that is buying or thinking about buying a home should know going in that there are going to be defects in the home. Even if it’s a brand new home, they will be there. However, the option period allows you to do your due diligence, giving you a certain amount of time to investigate the property. If you want to back out of the deal for any reason at all—including defects found in the home—buyers are allowed to do that. 

Any seller can sell their home “as-is.”

As a seller, once you sign a contract with a buyer you are locked in. However, you are not required to make any repairs. You can choose to sell the home in its present condition “as-is.” Most of the time, however, this method only works in a strong, strong seller’s market. 

Whether you’re a buyer or a seller, you need to be crystal clear about what your options are before signing a deal and what the timeline is going to look like. When you know your position going in, the process will be a lot easier.

This will be my last post of the year, so I just wanted to take a moment to wish you all the best this holiday season. I hope your new year starts out great! If you have any questions for me in the meantime, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon. 

3 Smart Tech Options That Bring Value to Your Home

Today I want to talk about adding value to your home. Smart technology is a great way to achieve this in today’s market.

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As we all know, technology is becoming more and more integral to our daily lives. This is true also of home technology, which is a rapidly growing industry.

Today, I want to share three different tech options that can add value to your home:

1. Google Home or Alexa. Using either of these, you can set your lighting, thermostat, or even play music. These are all things we can demonstrate for buyers who are looking at your home.
   
   
2. Smart thermostats. Probably the best-known version of this technology is The Nest. Using this or another similar product, you can set and adjust the temperature of your home. Smart thermostats will even learn your habits and your lifestyle to better accommodate you through the temperature in your home. Ecobee is another brand of smart thermostat. This particular thermostat actually has sensors that can detect motion and adjust the temperature according to where you are in the home.
   
   
3. Video-capturing doorbells. This technology allows you to see exactly who is visiting when they ring your doorbell. This also acts as a security measure. 

All of these things are relatively inexpensive, but they add a lot of value to your home. Tech-savvy buyers will especially appreciate these items.

Tech-savvy buyers will especially appreciate these items.

As a final note, I’d like to address people whose homes have flooded recently. If you find yourself in this situation and are wondering how to recover and make repairs, remember to think about how long you plan on living there. 

If you will be there short-term, think of your home as an investment. If you are going to be there for a medium length of time, still think of it in terms of an investment but also remember you’re still going to be living there. You want to make sure you don’t hate your living situation. 

If you plan on being in your home for the long-term, make repairs in any way you want. You don’t need to worry too much about what future buyers might like. By the time you plan on selling, you’ll likely need to replace many of the features you’re adding at the moment, anyway.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What Does the Houston Market Look Like Post-Harvey?

What does the Houston real estate market look like post-Harvey? I’ll explain today.

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Instead of doing my regular monthly update, I wanted to spend some time talking about the real estate market in general here in Houston after Harvey. First, I want to send out my true sorrow for those who have lost anything (or everything) in the flood. We’ve been helping people clean out their homes for the last week and the destruction and devastation is just unbelievable.

There’s a lot of work still left to do, but I’ve been starting to get a lot of questions about how the flooding is going to affect property values. I think, at least for the time being, properties will fall into one of three buckets:

1. Those that have never flooded
2. Those that only flooded during Harvey
3. Those that have flooded multiple times

Properties will fall into one of three categories.

I’ve also been getting a lot of questions about rebuilding. While it’s still uncertain how flood insurance claims are going to work and what FEMA’s role is, I will say this. If you are planning to repair and sell, you need to look at that home as an investment. You want to fix it up and bring its value back in line with the neighborhood. You don’t want to over- or underdo it though. You want to get as much money back as possible. 

If you have any questions about the kinds of repairs you should make or any other question about the post-Harvey real estate market, don’t hesitate to give me a call or send me an email. I would love to hear from you.

How Accurate Is Zillow's Zestimate?

You may have heard of Zillow’s Zestimate feature—but is it accurate?

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If you haven’t already heard about Zillow’s Zestimate feature, there are a few things you need to know. A Zestimate is Zillow’s estimate of a home’s value. But how accurate are they really? I get questions about this all the time.

For example, many people wonder why the Zestimate is so different from what they’re seeing from their tax records or the market value.

In short, Zestimates can sometimes be inaccurate. On average, Zillow’s Zestimate is off by 5.6% from what a home will actually sell for. However, Zillow’s accuracy depends on location. In fact, on their website Zillow actually rates themselves on a scale of one to four in terms of accuracy for a given location. 

If you truly want to determine your home’s value, you’ll need professional help.

In Austin the rating is four out of four while in Houston it’s only one out of four. There are a lot of different intricacies that sometimes can’t be factored in by Zillow’s algorithm. The CEO of Zillow himself sold his Seattle home for 40% less than what the Zestimate said it was worth. 

Zillow is interesting and can give you a general idea, but if you truly want to determine your home’s value, you’ll need to get help from professionals like myself. 

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon. 

An Update on the Houston Real Estate Market

It seems like time is flying here in Houston, and the market is heating up accordingly. Here's the latest on our market.

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Time is flying—I can't believe it's already May, and my older son is heading to middle school. Both the weather and the housing market are heating up. Total property sales in Houston are up 4.2% over last April and dollar volume is up by about 8.1%. Here in Houston, the biggest gains are coming in the luxury market, or homes priced more than $750,000. That market segment took the largest hit during the energy slump, but now it's up 15.8% this year compared to last year. It's a small sliver of the total home sales, though. We see that the next biggest market was for homes priced between $250,000 and $500,000, which rose more than 11% on a year over year basis.

All in all, we see a lot of very positive and strong movement.

The average number of days it takes to sell a home stayed about the same, but the average home price continues to rise up to nearly $300,000. This makes affordability difficult for many buyers in Houston. Conversely, the market for homes under $100,000 fell 35%, but it's almost a non-existent market now. For new construction homes, costs for labor and material continue to rise, so we expect the price for new builds to rise. On the leasing side of things, we know that leases jumped by 15%, but on the flipside, average prices came down by about 5%. Many really nice, class-A apartments are still offering free rent and low moving costs, which has caused a lot of competition for homes, especially in the inner-loop area.

All in all, we see a lot of very positive and strong movement. It all comes down to what the inventory levels are in your area. If you have any questions about buying or selling a house or about the market in your specific area, don't hesitate to give me a call or send me an email. I'd be happy to help you out!

The Latest Real Estate Market News

The real estate market, both locally and nationally, is in a good place right now. Homeowners who have been thinking of selling should be excited.

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I’ve got a quick market update to share with you today that will go over what’s happening both nationally and locally here in Houston. A recent CNBC article came out talking about how strong the national spring market is. In fact, they called it the strongest spring market ever. The article stated that prices have surpassed even what we saw at the last peak of the market. The demand for entry-level homes is absolutely crazy, and sellers are in the driver’s seat. We’re seeing similar things happen here in Houston. One of our agents is working with a client right now who is in the market for a home in the sub- $200,000 market. They put in an offer, then received a reply from the seller’s agent that they had received 25 other offers as well. Situations like this are playing out in several parts of town right now. This could have a trickle-up effect, bringing these home sellers up into higher-priced homes.

Houston has a top-five millennial population.

One factor that has certainly catalyzed this activity is the fact that millennials are now entering the buyer’s market. We’ve heard for years that millennials, the group of people born between 1981 and 1997, were going to be “the renting generation.” However, the latest studies show us that is not going to be the case. There are 66 million millennials right now who will add another 20 million households on top of the 24 million we will already have. Why is this information especially important here in Houston? We’re in the top five for millennial population. With increased demand going forward, we are going to see an upward trend in the housing market and we expect to see that throughout the rest of the year. I

If you remember last year, we saw the high-end market struggle a little bit. We expect that to continue, but the definition of high-end is area specific. We’re seeing a large drive for properties in those upper price ranges in certain areas right now. If you have any questions for us or want to know about your specific area, give me a call or send me an email. I would love to hear from you.

How Should You Approach Real Estate Investing?

Real estate investing isn’t for everyone. However, it can help you build incredible wealth if you have patience.

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I’m asked by clients on almost a weekly basis about real estate investing. The questions usually boil down to, “Does buying an investment property make sense for me?”

As you may know, I invest in real estate myself and am a huge proponent of owning property. Whether it makes sense for you or not as someone who isn’t in the real estate business depends on your goal.

When buying real estate as an investment, you have to realize that you are buying a business and need to treat it as such. What are the costs involved? What will your return be? Can you get a better return by investing your money in some other way? These are all questions to consider.

Real estate is a great long-term play.

One positive that real estate investing has is the ability to use leverage. If you put $100,000 toward a piece of property, you can own an asset worth $500,000. The tax advantages are numerous as well. You can write off capital gains, property taxes, and private mortgage insurance. Properties also tend to double in value every 20 years or so.

An investment property needs to meet the standards of the area you are buying in, not your personal standards. It’s important to do your due diligence up front when it comes to anything that is wrong with the home. The same goes for finding tenants. You need to look closely for any red flags. You can hire a property management company to handle all of this if you choose.

I look at real estate investing as a great long-term play that is as close to a safe bet as you can get. Most people regret not investing in real estate sooner once they start seeing those big returns down the line.

If you have any questions for us or want to know more about investing in real estate, give me a call or send me an email. I look forward to hearing from you soon.

What’s So Important About Home Appraisals?

If you’re buying a home and getting a loan, appraisals are something you need to know about

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Today I want to go over the subject of home appraisals and what you need to know about them. First though, I want to thank you for helping our team get recognized as one of the top-20 luxury teams in Houston in 2016. Whether you’ve done business with us or referred us, we can’t thank you enough for your continued support, and we truly appreciate it. Now, how does a home appraisal happen? If you purchase a home and you get a loan, your lender will require that an appraisal is done before your loan is approved. Although the true definition of a home sale transaction is a price that a willing buyer and seller agree on, the lender will require a third party to visit the property and give it a fair market value. Typically, the lender will loan a percentage amount that’s agreed in the contract. If you’re putting 20% down on the loan, the bank will lend you the other 80% of what’s in the contract as long as the home appraises for the contract amount. The problem occurs when the home doesn’t appraise for the contract amount. When that happens, the bank will still loan the 80%, but only for the appraised amount—not the contract price.

If a home doesn't appraise for the contract price, many different things can happen.

Let’s say you’re purchasing a home for $1 million, you’re putting down $200,000, and the bank is loaning you $800,000. What happens if a $900,000 appraisal happens and results in a $100,000 difference? At that point, negotiations happen all over again, and there are four different options in which all parties can continue:

1. The buyer can bring in an additional $100,000 to the closing table.
2. The seller can reduce the price by another $100,000 to meet the lender’s needs.
3. The buyer and seller can find some common ground and make up the difference. This is typically the most common.
4. The buyer can walk away.

Is a home not appraising a common occurrence? Yes and no. A few years ago after the financial crisis, lenders were extremely cautious, so homes not appraising was a common occurrence. Fortunately, we don’t see that as much now. One thing our team does is meet the appraiser and bring documentation to justify the purchase price. We’ve found this to be a very beneficial thing to do and something that is welcomed by appraisers. As you know, there are many intricacies within this city when it comes to real estate, so this gives them additional information. If you’re buying a home and getting a loan, make sure that you bring all the information you can to get the appraiser to justify the home’s value.
If you have any questions about this topic or are thinking about buying or selling a home, feel free to give me a call or shoot me an email. I’d be glad to help you.

What's Been Happening in the March Market This Year?

What's been happening in the real estate market here in Houston? The key numbers for March are in, and I wanted to talk a little bit about our market's growth so far this year.

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What's been happening the Houston market so far in March? I've got some key stats to share today.

The market has shown considerable strength this year and since we haven't really had much of a winter, I think the buying season has been pushed up a bit.

Each price segment in our market has shown an increase in February for the number of homes sold on a year over year basis. In fact, all segments above the $250,000 mark showed double-digit increases. Homes priced above $750,000 were up almost 28%.

Each price segment in our market has grown in February.

On average, prices climbed about 7% and days on market are up just a bit to about 64. Inventory, on the other hand, crept up a little bit to about 3.5 months worth of homes on the market, but we're still pretty low in some areas. Other areas have high levels of inventory. As you can see, due to Houston's size, we live like a group of smaller cities within an area, which is why you need to look at each area on an individual basis.

If we can help you with any of your real estate needs this spring, don't hesitate to give us a call or send us an email soon. We'd love to help you out!

Protesting Your Taxes This Year? Watch This First.

If you feel your property taxes don’t reflect the actual value of your home, I’ve got a few tips for protesting them.

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February is already here and that means it’s time to prepare for tax season. Today I’ll go over a couple ways to protest your property taxes if you need to.

There are two ways to protest your property taxes: hiring a company or doing it yourself. If you hire a company, they will take a percentage, so I’m going to give you a few tips on doing it yourself.
When you get the letter in the mail, you will send it back after checking to make sure you feel your property is over market value and that it’s not equivalent to other properties. If you only check one box, you can only protest under that pretense.
You also want to get a package from the county that shows what they will use against you. Do your research and find out what properties they will use to hold up their argument that your property is worth what was stated in the letter. They may use properties that are in a better location or that you know are worth more because of the age or updates. The more you know, the better prepared you’ll be.
If there is anything wrong with your property, take pictures. Some issues may be an old A/C unit, old roof, or anything that will help you determine that your home value is a little bit less. Make sure you take film photos instead of digital photos so you can physically present the pictures.

The more you know, the better prepared you’ll be.

If you go to a formal hearing, bring five copies of your package with you. You’ll need three for the people representing the county, one to submit to the Harris County Appraisal District, and one for yourself. You also want to bring a satellite photo. If your property is on a busy street or backs up to a commercial property, the satellite photo will show that it’s in a worse location. Make sure you research the tax value of a home in your neighborhood and on your street. Are they of equal value? Are they being assessed the same? If they’re not, why not?

Additionally, wait until closer to the end of your protest time to submit your papers. If you submit your papers too early, you won’t have the chance to go and see if other properties similar to yours in your neighborhood have been reduced in value. This is a great year to protest taxes, so if you have any questions, please feel free to reach out to me. I’m always happy to help.

What Will Happen in the 2017 Houston Real Estate Market?

What will happen in the 2017 real estate market? I’ll go over my predictions today, as well as a few important numbers from the 2016 market.

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What will happen in the 2017 real estate market? First, we have to take a quick look back at 2016 to see where we’re coming from in order to understand where we’re going.

2016 was a record year, which many people find hard to believe. However, if you look at the total number of homes sold, that number jumped up from 77,595 in 2015 to 79,126 in 2016.

When you break that number down, though, 72,058 of those 79,126 home sales were in the $500,000 and under price range. That price range saw a 2.69% increase in sales from 2015.

Every other price range saw decreases in home sales. For instance, home sales in the $500,000 to $749,999 range dropped by 3.88%. Home sales in the $750,000 to $999,999 range dropped by 8.92%, and home sales over $1 million dropped by 3.95%. As a result, a lot of people don’t feel like last year was a record year, even though it technically was.

This year, I predict that we can expect even more home sales under $500,000. Experts predict that our area will see anywhere from 30,000 to 50,000 new jobs. Plus, more entry level buyers will be coming into the market, causing builders to make a push to get that product on the ground.

We are optimistic about the 2017 market.

Unfortunately, I predict that higher-end homes will continue to move a bit slower than the $500,000 and under market. Overall, our market will see a fairly steady incline.

What Houston really needs is $60 oil. That’s when building really kicks in. If you look at the last 30 years, the sweet spot for building has been between $55 and $85. When oil gets above that $85 mark, it’s counterproductive for builders. Why? If gas costs consumers $4 a gallon, they are going to be more cautious about making big purchases.

We are optimistic about 2017. There are two major factors that you should keep an eye on, though. One is that there will be a change in regulation thanks to the new administration. The other is that interest rates will go up. Last June, rates were at 3.5% and now they are at 4.125%. Rates are expected to increase three more times this year. These two factors will really drive the market.

If you have any other questions about the 2017 market, give us a call or send us an email. We would be happy to help you!

What Does the 2017 Market Look Like So Far?

2016 was a record-setting year, and we’re already seeing a lot of activity in 2017. Does this mean you should get ready to buy or sell?

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We’re more than a week into the new year, so today I wanted to provide you a quick recap of the 2016 real estate market and give you a glimpse of what to expect going forward in 2017.

You may find this hard to believe, but we sold 1,000 more homes last year than we did the year before. All in all, it was a record-setting year, despite everything that happened in the oil market. Home prices were also up about 2.5% in 2016.

Right now, we’re already starting to see an increase in activity. Interest rates have also risen considerably. As of today, they’re hovering around 4.25%, which stands in contrast to the middle of last year when they were holding steady at 3.5%.

If you’re looking to buy a home, you have to act fast.

As far as they’ve already risen, interest rates are projected to rise even further in 2017. We expect to see three separate rate hikes, which should total about 0.75%. If you’re looking to buy a home, then, you’re better off doing it sooner rather than later. Despite this uptick, rates are still historically low.

Stay tuned for our comprehensive 2017 market forecast happening at the end of this month. In the meantime, if you have any questions, please feel free to give me a call or shoot me an email. I’d be happy to help!