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Vital information to help you purchase a home
Finding homes for sale in newspapers and magazines
Looking for homes in printed media, and even searching through the internet for homes can be as frustrating as looking through the Sunday newspaper car dealer ads for a new car. While cars are not as expensive, and they ultimately lose enough value that you never make a long term mistake by being careless in the selection process, homes are a completely different thing.
Even the purchase of a new home can be frustrating and confusing. Many more people purchase a new home without help than existing homes. Is it worth it?
Do you need an agent?
Well over 90% of all existing houses are sold through real estate brokers and agents. A large number of new homes are sold by real estate agents. In the Dallas/Fort Worth area there are about 10,000 agents who are part of the Multiple Listing Service (MLS). The MLS is has the most property available for the buyer.
Informed buyers will be working with a real estate agent because that agent is free to them; the seller (whether the home is new or existing) pays the real estate commission. Those informed buyers understand that they need someone to be on their side of the fence in the real estate transaction. These savvy buyers DO NOT want to work with the seller’s agent because they know that the seller’s fiduciary responsibility is to see that the seller comes out ahead.
An agent is important when you consider that buying a home is a very complicated and expensive process. And buying the wrong home, or in the wrong area, can be a major mistake. Buying a home is a huge economic commitment. Most buyers obtain a 30 year loan. That’s a long time to pay for mistake if you go it alone and don’t get things just right. A good agent can lead you to the purchase of a successful investment.
When is the best time to buy?
There are times of the year when there are less people looking to buy a house; you’ll have a better selection and perhaps get a discount during those times. Probably the slowest time of the year is the period between Thanksgiving and New Year’s Day. We consider that the best time to buy. Sometimes early summer can be good, when many people are thinking vacation and not homes.
Is location really that important?
There is nothing more important in real estate than location. Price and condition are very important as well, but there is no substitute for a location that gives you freedom from crime, good schools, excellent property appreciation, and numerous other characteristics that have nothing to do with price and condition.
How is a home’s value determined?
Professional real estate appraisers use the prices of recent home sales (comparables, or comps), replacement cost, and property condition to come up with the value of a particular property. Real estate agents and taxing districts typically use comps and property condition for coming up with the value of a property; it’s a quicker and simpler method of determining value. Lenders rely exclusively on the value set by professional appraisers. Builders rely on construction costs and the cost of land to set a minimum price, but are forced by comparable sales in the area to set the final selling price of their homes.
Value is NOT determined by what local sellers are asking for their property. In the end, it is buyers who set values. If a sellers’ neighbor sold a similar house as the sellers, and that house sold for $200,000 a month ago, and it’s a Buyers Market, it’s not likely that anyone will pay more money for the sellers’ house. The buyers have set a value for the time being; naturally, time is in the sellers’ favor since prices seem to eventually continue with their upward trend.
All that said, value for the buyer is not simply in price, or how many dollars it takes to purchase a particular property. As we stated above when we explained about location, value to the seller is a whole lot more. On the other hand, purchasing a house that provides many benefits but that will strain the buyer’s budget might diminish the overall value of the property to the buyer. This is where a knowledgeable agent can lead buyers to the perfect property.
Is working with an agent in a BIG company really that important?
No matter who you chose to help you purchase your next home (perhaps your first home), the most important part of selecting agents is not how big is the company they work for, but how experienced they are. It only takes a few weeks to obtain a real estate license, but it takes years to understand the process and learn a geographic market. Chose the agent well and you will end up with the right property.
What are the costs of buying a home?
The real estate market has changed considerably during the past decade. There was a time when you needed excellent credit and a good chunk of money to purchase a home. There was a time when the only people getting a zero-down loan were Veterans getting a VA loan.
Those were the old days. Welcome to the Twenty-first Century. There are almost as many loan types now as there are people. There are plenty of loans nowadays that are zero-down that are not VA loans. People with damaged credit can get loans with not a whole lot of money out of their pockets. Even people with very bad credit can get loans if they have a strong down payment.
Where are today’s best deals?
The Dallas/Fort Worth area market is still on the side of a Buyers Market. There have been a good many foreclosures and HUD (the Department of Housing and Urban Development) as well as VA (the Department of Veterans Affairs) as well as many banks have picked up many houses. We recently sold a house that was on the tax rolls for over $800,000; the purchase price was slightly over $600,000. The interesting fact is that the property had sold less than two years before for over a million dollars.
Even new home builders have been offering some exceptional deals. The best part of the current market is that interest rates are still in the neighborhood that they were back in the 1960’s. It’s a great time to buy.
Our company has sold hundreds of HUD, VA, and bank foreclosures. We know what it takes to get a good deal.
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