New homes are they the best kept secret?

FREE, the one word that most can't ignore. If you want more free when buying your next home be sure and continue reading this.

Like any business new home builders want to finish the year strong. This is why Nov-Dec may be the best time to purchase a new home. They have inventory that they need to move and they are offering lots of incentives to get it done. I recently helped a client purchase a new home that was already built in the subdivision. I was able to save her 10% on the asking price and we got her all upgraded appliances included with the purchase. I am going to list three aspects of getting a deal on a new home that you should consider. On a side note many of these concepts apply to any sales related business, i.e. car dealerships and the like.


Why does the 4th quarter matter? 

It is simple really, the builders have inventory that they will have to pay taxes on if they don't sell it. This means you are likely to get the best deal on a new at the end of the year. The market slowed down because people aren't looking to move over the holidays and the builders understandably don't want to pay taxes on inventory. You can get many incentives like large reductions in price, all closing cost paid or all appliances thrown in.

The inventory-

The only catch is that in most cases you have to purchase existing homes to get these great incentives. They need to move the properties they have already built so if you are looking to build a new custom home then you may be out of luck on getting the incentives. Assuming you are ok with an existing home then you can purchase and be in your new home by Christmas.

The Alternative-

If you are thinking about buying a new home but are not quiet ready to purchase yet you may still have options. Find out when the builders quarter ends and go in to purchase towards the end of the quarter. These builders are in business to make money and to make money they have to show a profit, sold homes = a profit in most cases. That being said they will typically be more motivated to move inventory at the end of any of the first three quarters, but they will be the most motivated to move inventory at during the fourth quarter.


You don't want to go it alone so get a REALTOR!

Many people wander into new home builders quiet by accident sometimes but when you are purchasing a home you want someone to watch you back. The sales agents at the builders subdivision is just that an agent for the Subdivision. He works for the subdivision and therefore is not going to have your best interest in mind. A realtor is dedicated to you and bound to do what is in your best interest so who do you want negotiating your next purchase?

Using a Texas Vet loan to buy a San Antonio house?

A home purchase is likely the biggest transaction you will ever make and picking the wrong lender can cost you big. If you are a Texas Veteran you are most likely eligible for a Texas Vet loan. A Texas Vet loan is a great option because the interest rate is not contingent on your credit score and you still get all the benefits of a traditional VA loan. If you are VA Eligible that you should strongly consider using Texas Vet loan to buy a San Antonio House. If you Qualify for a VA Loan and are a Texas Vet than you will almost certainly be eligible for a Texas Vet loan. Qualifying is easy, you can qualify with a short period of active duty or with six years of reserve duty. 

 

 

Not all loans are created equally, know what your VA financing options are before you commit.

 

I personally used a Tex Vet loan to purchase our home and we got an interest rate a full 1% below what we could have gotten with a VA or Conventional loan. The great thing about using a Tex Vet loan is that you get the lowest possible interest rate regardless of your credit score. All you have to do is qualify and you automatically get the lowest possible rate. You will also avoid the mortgage insurance that comes with Conventional and FHA financing. If you are planning on using a VA loan but don't have 20% down and stellar credit score than you should strongly consider trying to get a Tex Vet loan. 

 

 

If you are thinking of using a VA loan you will hear the term funding fee thrown around. This is the fee that you pay to use a VA loan however it is typically waived if you have a disability rating from the VA. A Texas Vet Loan has a slightly higher funding fee than a traditional VA loan, but in many cases it is more than made up for by the reduction in the interest rate that you receive. 

 

I had a client that wanted to use a VA loan but she went with an online lender that is based out-of-state. The out-of-state lender while licensed to do business in Texas did not offer her the option of using a Texas Vet loan. They approved her for a traditional VA loan which had an interest rate 0.75% higher than what she could have gotten with a Tex Vet loan. This is not to say that all online lenders are not going to offer state specific loans but this is where it pays to know your stuff. At the end of the day you and your real estate agent need to advocate for your interest. With Internet-based lenders you will never meet in person and most of your communication will likely be electronic. There is no personal touch with this, for me when I am making the biggest purchase of my life I want to be able to do business face to face. 

 

 

Whatever your communication preference whether face to face or electronic it pays to fact check what your’e being told. Know your options before you make a decision, at the very least if you do go with an online lender sit down with someone local and get a second opinion. It is not going to cost you anything and it could potentially save you big money in the long run. 

New cars and the true cost.

I am sure you have all heard of sticker shock in relationship to any given item. I experienced a bit of sticker shock today when I saw the statistic that Americans have over 1 Trillion dollars of car debt. You read that correctly, Trillion with a T. In a society where debt is passed out like candy, think about these two things before you take your next credit plunge: Face the reality of what we need vs what we want and face the truth of what will happen if you by a cheap used car and pay cash.

• To start with you need to face reality and consider the cost of buying things like a new car that will lose 11% of its value the moment you drive it off the lot. Ask yourself WHY, why do I really need a new car. The key word there is need, we have very few things in America that are truly a "need". We need food and water to live, we want a new car and nice things. So I ask again why do you NEED a new car and how much is it really going to cost you? 

• There are few things that depreciate faster than cars yet people continue to spend massive amounts of money on them. Now don't get me wrong, I like having a nice car as much as the next person and there is something to be said about reliable transportation. I have been there I paid $22,000 for my last car and sold it for $7,000 after I paid it off. It was the worst investment I have ever made. I now drive an 8 year old truck that I paid cash for, it is clean and reliable which is all anyone really needs in a vehicle. 

• There is a psychological side to having a nice car. Society has conditioned us that having a nice car is equated with success. Just stop and think about that for a second, you paid 20, 30 or 40 thousand dollars for a car. A car that you could not afford to buy so you financed it for five to seven years. This is a sign of a successful person in America today and one that millions of people buy into.  

Call a car what it is. Plain and simple, a car is a tool and like anything else it is there for a purpose. A car is nothing more than a method of getting us from point A to point B, nothing more nothing less. A car doesn’t better your quality of life, it doesn’t improve your health and it doesn’t make you more successful (no matter what society says). So break the cycle, if you have a car payment throw a little extra every month and pay it off. Drive it till it becomes more expensive to fix than to keep. When it does become more expensive to fix than to get rid of pay cash for your next car. It may not be the nicest car in your friend group but it will likely be one of the few paid for cars amongst you all. 

The moral of the story is Expectations are real

What kind of experience is your client expecting you to deliver? Are they expecting you to find them a home in a matter of day, weeks or months? Is your client expecting you to sell their home for over market value in a matter of a week? These are all things that the client is likely expecting whether or not you bother to find out. So do yourself a favor and find out the clients expectations from the start so you can manage them effectively. Ask yourself, what kind of experience is the client looking for me to deliver? Failing to know the answer to that question could cost you in a big way. I will share my personal experience of how I personally failed to manage my own expectations and paid the price.

• My wife and I are in the process of buying a home. We knew going into it that it was an active market but we thought our situation would be different since I was our realtor. As you can imagine we did not manage our expectations going into the house hunt. I had failed to manage the expectations of my client (my wife) and it led to unnecessary anxiety and stress. 

• Managing expectations is important with buyers but it is equally if not more important to do when working with sellers as well. I have clients in this market that regularly feel they can price their house high because there is shortage of houses out there. This is not the case, houses that are overpriced tend to sit for a while and only after dropping the price do they get serious interest. 

• At the end of the day all you can do is advise your clients what the best route to go is. What route they choose to take is up to them, but it is important to manage expectations from the get go regardless. Failing to do so could result in it negatively impacting you and your clients relationship. A seller that overprices their house with the expectation that it will sell quickly is not going to take kindly to the reality that it hasn’t sold after a month or more on the market. If you don’t clearly define the expectation the seller is likely to blame you for less than desirable result. 

The moral of the story is that you can’t control what people will or will not do. You can to some degree control how they will or will not react to a given situation. Managing expectations ensure that you and the client are on the same page. A good rule of thumb is under promise and over deliver. No one is going to get mad at you because you delivered exactly what they expected. People will quickly get upset if you under deliver though. This goes back to managing expectations, what kind if experience is your client expecting you to deliver? Answer that clearly from the outset and you will be much better of for it.