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. 

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.

Selling in the Houston area? Get a market analysis report

Purchasing in the Houston area? Get full MLS access

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

Selling in the Houston area? Get a market analysis report

Purchasing in the Houston area? Get full MLS access

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.

Does Location Really Matter for Houston Properties?

There are many great Houston area homes for sale. Click here to perform a full home search, or if you're thinking of selling your home, click here for a FREE Home Price Evaluation so you know what buyers will pay for your home in today's market. You may also call me at 832-428-6453 for a FREE home buying or selling consultation to answer any of your real estate questions.

Hey folks, I am finally back. After a month off of posts due to the flu, I'm back today with a great tip for you about something that has been happening consistently in our market over the last few months. 

Recently, the importance of location has come to the forefront. With a shortage of homes and lots available, people are willing to give up a little bit on the price to get the location they want.

What I tell my buyers is that if you get a great discount on a home, the one thing you can't change is its location. When they buy the property, they have to know that they will have to sell it at a discount as well, due to the location. 

The Houston market is setting up to be great for sellers. One thing I try to tell all my buyers is that you need to think about selling your home before you even buy it. If you can add  value to the property, you'll get the money back in the sale, guaranteed. 

If you have any questions for us, or are thinking about buying or selling in Houston in the near future, give us a call or send us an email, and we'll talk to you soon!