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?

Real estate teams vs. Individual Agents and what consumers need to know.

Real Estate Teams vs. Individual Agents

I had my first experience with a real estate team when I sold my first home about a year before I got into real estate myself. I had no idea what a team was and I the agent that was selling our house didn't explain it at all. I left feeling like I did not get what I signed up for.

There are two obvious differences between a team and an individual agent. As the name implies a team is composed of multiple agents and/or support staff. An agent is singular and therefore solo mostly without a team of support staff. The less obvious difference is that with a team you will rarely deal with the same person for any two portions of the process.

Team structure-

Teams are structured in various ways but the typical team has at least three components: a listing agent, a buyers agent and an assistant. The listing agent and buyers agent are pretty self explanatory however the assistant is the one varies. Most of the time the assistant handles all the paperwork, contracts, phone calls and all the behind the scenes stuff. This allows the listing agent and the buyers agent to focus on getting new buyer and sellers.

Single agent structure-

With a single agent there is only one agent therefore the agent has to handle everything on their own. This means that the agent will be the one showing the buyers houses as well as the one going on listing appointments. They will also be the one doing the paperwork and giving clients the update as the process goes along.

The difference to you the consumer- 

The difference between working with a team and working with an individual agent as a consumer can be pretty dramatic. When you are working with a team you will likely have very little contact with the lead agent that you initially spoke to/met with. They are the “face” of the operation and are most of the time hands off for the majority of the transaction once it gets started. This means that you agree to list the house with them and from that point on someone else takes over. Most if not all updates will come from one of the support staff and not the agent that you started working with. 

With an individual agent you have the same agent from the start to the finish, there is no one to delegate the tasks to. The individual agent is going to have much more of a personal touch and will be involved in every step of the transaction. They in a sense have more at stake than an agent with a team, because they are more personally invested in the deal. 

Conclusion- 

In concluding there is nothing wrong with either option you choose to use. Most teams provide great service but you will lose much of the personal feel that you get with an individual agent. Both should run equally smooth it just becomes a preference of what your’e comfortable with. 

How to avoid the real estate dead zone

The real estate market in San Antonio (and much of the country) is very active and move in ready homes are selling extremely fast. It is critical to a successful sale that you and your realtor know what the market is doing. Failure could land you in the “dead zone”.

The dead zone

The dead zone is that area where homes sit for months and months with no serious offers. To avoid the dead zone you need to make sure that your home will appeal to one of the two most common types of buyers in today's market, Investors or those looking for a primary residence.

The buyers looking for a primary residence want move in ready, while investors don't want to pay more than 70% of market value. If your home is not move in ready or priced around 70% of the market value, than you may be in for a long wait. 

Houses are flying of the market right now

I hear this a lot, but this does not mean that your house will sell quickly irregardless of condition or price. Some people assume that because the market is so active they can overprice their home or cut corners on the listing. This is simply not the case and will cost you big if you make that mistake. 

Move in ready is not the end all be all but if your home is not move in ready you will need to take the cost of updates/repairs and then some off. Todays buyers are busy and don't want to mess with repairs or updates. To make it worth the buyers time you will have to reduce the price substantially to cover the cost of repairs and the buyers time. 

Factor in the cost of repairs and subtract it from the current market value of the home. Then subtract another 10-15% off the market value (before repairs) and you will have a list price that should get peoples attention. Anything short of that and it is just not worth peoples time. They will keep looking for something that is move in ready.  

What is move in ready?  

Move in ready means just what it sounds like, someone can move in and not have to do repairs. People not only don't want to do repairs they don't want to do updates either. People want the wood floors, granite counter tops and bathrooms that are functional and current. Neutral paint color is a key as well, you are trying to appeal to the broadest group of people so keep it neutral. 

Closing

Closing is the goal of any real estate deal. In closing this post keep in mind that investors are business people and are looking at the bottom line. The most common formula most investors use calls for them to get the house at 70% of market value. They don’t need the home and aren’t going to overpay. 

The up side is that investors can pay cash and they don’t care about condition so you won’t have to make repairs. People looking for a primary residence may be willing to do some work but your going to have to make it worth their while. Take the cost of repairs/updates subtract that plus another 10% and you may catch their attention. If that is too much than I would suggest getting your home move in ready and not risking it.

What is the better deal renting or buying?

The age old debate of buying vs renting is as alive as it ever was. 

Does it make more sense to rent or buy, this is a question many have asked. As with anything there are many prevailing opinions on the subject. As a real estate agent I see both sides of it and as a consumer I have been on both sides of it. There is not going to be one right answer that fits every person but I will cover a few common things that may help you decide. The key is to think of things in the long term or big picture.

To start with you want to consider your individual situation.
What are your plans long term, do you plan on staying in the city or area you are living/moving to? If the plan is to stay long term than I believe it makes sense to put down some roots and buy a house. I have many clients that move in from out of town and want to rent for a year before buying. This is a logical step in the process, you get to try before you buy in a sense. Many people also rent because they can't qualify for a mortgage due to credit score or job situation. 

Fixed mortgage rates do not go up, rent prices do.
While there is nothing wrong with renting long term, the reality is that you have very little stability or control of the situation. With a mortgage your payment is fixed every month (assuming you got a fixed rate mortgage). If you are a long term renter your payment will almost certainly go up with on an annual or semiannual basis. This could be a small increase or if you live in a booming city like San Antonio, Texas than I have seen $50-100 increases annually. Rent works off the age old supply and demand model, the shorter the supply the more money landlords can demand. Unlike renting with a mortgage you are unaffected by the supply demand model unless you are buying or selling. 

Renting has no return on investment.
Again long term renting does not build any equity while long term home ownership does. The standard mortgage is either 15 or 30 years depending. This means that at the end of that term you own the home free and clear. If you rent for 15 or 30 years you have nothing to show for it and you don't pay your rent you don't have a place to live. 

Summery

While you don't have things like repairs and maintenance costs with a rental you also don't have the ability to make the house your own. All else aside, historically speaking property has always risen in value which makes it a wise investment. It may not always rise continually but it has always bounced back which means that the only way you lose is by selling it when the market is down. So look at it like an investment that you get to live in and build equity with every payment. 

Why many home buyers of today fear commitment

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Why should I sign with just ONE agent? 

The biggest reason that you should sign with an agent is that it provides a buffer between home sellers, other agents and you. Without an agent you are a commodity. With a signed agreement you are essentially off the market. Assuming your agent is doing what they should and properly representing you than everyone comes out a winner. Consider these points when debating to sign an agreement: there is no set or required length of time you must commit to and the selling agent represents the sellers not you. 

• The thing to remember is that you can sign the agreement for as short as one day. This serves to ensure that the agent is there to act as a buffer between you and the homeowner/listing agent. The most common complaint I hear is that people don't want to commit to one agent. This is understandable and of course many people may have had a bad experience with an agent in the past. The thing to understand is that you are still in control of the situation. You control the length of time you commit for as well as many other factors depending on the agreement. The agreement does have some specific binding terms and should be read carefully before signing. 

• The listing agent is already representing the seller and therefore is not looking out for your interest. This is something to consider when you’re driving around and calling the signs in front of houses. Calling the sign number will almost always put you in contact with the listing agent. The listing agent is representing the sellers and is bound to do what’s in the best interest of their client i.e. the home owner. The listing agent may try to talk you into letting him/her handle both sides of the transaction, a term called intermediary. This is fine if you are comfortable with the process of buying a home and don’t need particular advise as the process goes along. By doing this the realtor/agent is representing both parties and therefore can’t give specific transaction related advise to either side. 

Assuming that you do not have an agent in mind that you would like to work with, than check reviews by others online. I have found that Zillow is amongst the stricter criteria for agents getting reviews posted. If the agent has 4 stars or better, than it is probably a safe bet that they do a good job more than they don’t. This isn’t to say that bad agents don’t get good reviews, but it is a good starting place. Don’t commit for 6 months unless you're very early in the process or comfortable with your agent. Give the agent 30 days and see how they do, if you are satisfied than continue the relationship, if not than walk away.

Out with the general and in with the specific

As some of you may have noticed the name of my blog has changed from "words to a younger me" to "Life lessons from a know-it-all in 500 words or less". I am always looking to improve and this blog is no exception. I wanted something that more adequately described what the blog was all about. I want to do three things with this blog: Impart lessons that I have learned, help you save time as well as money and lastly to give you home buying, selling or renting advise from my experience as a REALTOR®. 

• I want to impart lessons learned from the mistakes that I have made throughout my life. I will share many of the lessons that I wish I had learned when I was younger. I will cover a range of topics and you may not agree with all of them. If you disagree then please comment and let us start a dialogue about it. I will be the first to admit that I don’t know it all and I would welcome the opportunity to hear a readers opinion. 

• If there is one thing that I have learned it is that time is truly a finite resource and that it is truly the most valuable thing there is. The dilemma here is that you need money to live and that often is in exchange for you time. So I want to do my best to help you gain more of both, hopefully without having to sacrifice too much of either. 

• As you have probably figured out I am a REALTOR® by trade and as buying a home is one of the biggest purchases that anyone will ever make it can cost you lots of time and money. The sad reality is that not all REALTORS® are created equally and many don’t care about their clients interest as much as they should. We live in an age of information where anything you could want to know is a click away. This is to say that while you should trust your REALTOR®, if your uneasy about something then do some fact checking on your own. 

To wrap it all up, all three of these things are tied together. It is my sincere hope that you will take something away from each post. I don’t expect for everyone to agree with or find everything I say applicable, but if it helps just a few people then it is worth it. 

As a small caveat I want to promote myself. If you or anyone you know needs help buying, selling or renting a home in or around San Antonio then give me a call. If you are moving anywhere else in the country and need help still give me a call. I work with great agents all over the country and I can get you connected with someone that I trust. For more great information check out my Facebook,  Twitter or Pintrest pages, all are updated daily.