At Home In Dallas

Temperatures don't drop below freezing too often in Dallas, Texas compared to how many days are over 100 degrees.  But when they do, I'm still surprised at how many people operate their sprinkler systems in freezing temperatures.

While there might not be a risk to the sprinklers, you could be damaging your landscaping (not inexpensive to replace). More importantly, you could be creating a road hazard if water accumulates on the road.

Per Billy Jack Sprinkler Company, if you have a relatively new home with sprinklers or are planning to install a sprinkler system, "all cities in the state of Texas now require a rain/freeze sensor that will stop your sprinkler from running on rainy or freezing days".

The device stops the sprinkler from coming on when there is 1/8" of rain or the temperature drops below 34 degrees. As the sensor dries out or the temperature rises, the controller will automatically go back into normal operation.

It's also a great water conservation device.  Many cities -- Plano, for example -- offer rebates for installation of these devices if you don't have one already.

If you do have one installed, it's a good idea to test it at least once a year to make sure it's operating as intended. 

As always, any time you need help with home repairs or home decor, give me a call.  I'm happy to put you in touch with some of the greatest contractors in the area.

I hope you will take two minutes to view this video.  It's specifically directed at each and every client and referral partner.  In this thank you message, I share one of the reasons I continue to work in residential real estate.  It's not what you might think.  Watch now and learn the hidden reason:

In my residential real estate career, I’ve seen literally hundreds of “flipped” homes for sale.  By “flipped”, I’m referring to a house purchased with the intent to renovate and resell at a profit.  I can count on one hand the number of renovated homes that were truly amazing:  a good value to the new owner as well as profitable to the seller.   Far more seemed to be “renovated” with a coat of paint and a couple of new bath fixtures.   Some went so far as to add granite counters and travertine flooring.

Will they sell?  Of course they will if priced at the current market value.  Keep in mind though that the “market value” isn’t just a quick average of the comparable sales.   Buyers take into consideration whether the floorplan makes sense, whether it has multi-level flooring (or even multiple types of flooring!), whether the HVAC system is new or updated, when the roof was last replaced, etc.   In other words, what else has been renovated aside from the paint color and addition of nickel faucets?

If your plan is to make money by flipping houses, here are some valuable tips for you:

1.             Dismiss what happens in reality shows.  That's not reality at all.

2.             Do your homework.  Find out the latest trends in home finishes.  Go online, visit new home communities, talk to builders.

3.             Work with a reputable Realtor to help you find a property at a good price, in a good resale area, with good potential for renovation.  A seasoned Realtor knows what floor plans might be a hindrance to resale and what other home features could be “deal killers”.

4.             Have a reasonable budget but plan for the unexpected.  Before you purchase, make sure you know what your renovation budget is and add at least an additional 10% for unexpected expenses.  It’s a good idea to have a home warranty on the home (depending upon its age) just in case any structural issues arise that need attention.   If the water heater breaks or the HVAC system needs a new coil, most home warranties will cover those items.

5.             Don’t overlook a general home inspection, especially if you are just starting out.   Unless you have lots of experience, a general home inspector can point out items that not only aren’t functioning as intended, but items that don’t meet current codes.  Updating those could become important to the resale of the property.

6.             Be realistic.  Don’t expect to purchase an 1800 square foot home for $70,000 and sell it for $150,000 profit.   Again, an experienced Realtor can provide valuable guidance to resale values so that you don’t “over-renovate” and can also give you a good idea what you can expect for a post-renovation resale value.

7.             Be patient.   It takes time and effort to renovate a home.  Many inexperienced flippers underestimate how long it might take to accomplish the updates and upgrades.   And be patient about how long it might take to sell.  Depending upon the season and market absorption (ask your Realtor), it might sell quickly or it might take a few months.  You’ll need to be prepared to pay the “carrying costs” (insurance, utilities, loan payments) until it sells.

Flipping can be both fun and rewarding.   In my market (D/FW), there are some very strong areas for renovation and resale.   That’s probably true in your market as well; a Realtor can guide you to those areas.

I mentioned that a small percentage of renovations I’ve seen were top-notch.   Those few were all done by Scott Elkman of E4Properties.   He is by far one of the best I’ve encountered at selecting a good property and renovating it from “soup to nuts” beautifully.   Scott’s goal is to create a beautiful home and make a modest profit.  He pays a lot of attention to detail and there are sound and proven reasons for the choices he makes in finishes.  If you are considering getting into investing in real estate and flipping houses, take a look at his latest effort, new on the market:

7054 Freemont

If you’d like help finding investment properties, either for flipping or for additional income, give me a call or send me an email.  I’m here to help. 

This is from a previous blog post from J. Philip Faranda.  It bears repeating:

"Here's the reality: If you are multiple listed, staged well, tidy, and have been on the market for 60 or 90 days with no offers or few lookers, the market has spoken; you need to reduce your price. You aren't the McClotchkees down at the end of the cul de sac who sold in the first 30 days. They had something, or ten things, you don't have. And the only adjustment you can make to the buying public is price. A feature ad won't do it. A newspaper display ad won't get it done. Busting your agent's chops to chase down Gladys Pflarphlingston for feedback on a showing 2 weeks ago won't do it. If you are on the MLS, I can show you how many people have clicked on you online and clicked off every week since we listed. You aren't a secret. Quite the opposite: with public searches, serious prospects can tell me their opinion of your toothpaste.  

If we are in showing condition with my marketing and you aren't sold, the faster we address price the faster we'll sell. The money you are asking for is not on deposit in the bank of buyer opinion."

Sellers, wherever you live, it's most likely NOT a sellers' market.

Beware the nagging voice in your head saying, "well, we'll just TRY this higher price and see if we get any offers".

If your home isn't priced right at the beginning, it will fall to the bottom of the pond and STAGNATE, while other homes come on the market priced correctly and they sell.   If you need to know where your home fits in "the pond", let me know.  I'll provide you the market absorption information you need so that your home doesn't stagnate on the market!

"The Pond" courtesy of ZanMonroe.com

In the last month, I've lost both my father-in-law and my mother.   Both were elderly, feeble and suffering.   Their passings were, according to most opinions, a blessing since they no longer suffered.

From an intellectual perspective I would agree.  From a human, heart-rending perspective, I just feel their loss.

Through it all, business continues.

I'm a solo agent.   On the day my mom passed away, I received an offer on a property that had been on the market for an incredibly long time.  It felt like a merciful blessing bestowed upon me on a horribly emotional day.

But it didn't stop there.   There were negotiations, inspections, repairs, etc. that took place over the next several days.  I was only wishing I could stop the world for just a few days.  There were other property offers and contract terminations that took place at the same time.

I got through those days with little sleep, lots of tears and anger at not being able to find peace.

I'm still working on details of my mother's estate and probably will be for awhile.   She lives in another town, which makes it more challenging to continue working on my business while I'm tending to hers.

I know I'm not alone.  Everyone has encountered that "Jonah" experience of an interrupted life.  When I was visiting my mom's home, one of my brothers forced me to watch "Shawshank Redemption".  He thought I could handle the TV version.  (I don't watch violence -- I can't dissociate very well.)

The phrase, "get busy living or get busy dying" stuck with me.  And it moved me beyond my emotional turmoil so that I could get back to business.

I'm not through grieving.  I lost my dad 20 years ago.  I know it takes a long time; certainly since this is my "last" parent and now I'm essentially an orphan, untethered.

But I recognize that life continues.  I can still help others and I offer a very worthwhile service as a Realtor.

I'm finding my way back from grief to the business of real estate.  It's an interrupted life but I'm growing through it.

FHA commissioner David Stevens announced yesterday that FHA will increase their annual mortgage insurance premium effective April 18, 2011.  This move is designed to help strengthen their capital reserves and stabilize the housing market.

What that means to you, as a buyer, is that if you are obtaining an FHA loan, you will pay approximately $30 more per month.

This is most likely affordable by most homebuyers who qualify for a new loan.  But it comes on top of a slight increase in interest rates over the past 90 days which also affected your future payment by approximately $89 on a home of $170,000. 

So once again, take advantage of the Spring weather, obtain preapproval to purchase and start looking.  Hopefully you'll find something before April 18th!

And don't despair if your credit isn't perfect -- there are some wonderful credit resources for you -- contact me right away to get started.

I've been telling buyers and sellers for weeks now to make a move.  Sellers stand to face tough competition from a pending tsunami of foreclosures.  Buyers who think that they may want to wait to see if prices go any lower, well, guess what?  You've already waited too long.  Look at this chart from today's KCM blog:

KCM also says:

"By sitting on the sidelines for the last 90 days a purchaser lost:

• $89.44 a month
• $1,073.28 a year
• $32,198.40 over the thirty year life of the mortgage"

Further: "Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year."

Great information for anyone contemplating purchasing a home!

This graph is very telling.  Real estate in the long term is a good investment.

I love Donald Trump's quote from last week:  “I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”

Bottom line for buyers:  Stop sitting on the fence.   The numbers don't lie.

Bottom line for sellers:  If you're wanting to move up or move out, sell now.  Buyers are hearing more and more positive information about investing in real estate.

Based on current market statistics, it's becoming more and more evident that there's a 60-90 day window for sellers to get their homes listed for sale and under contract.  After that time period, foreclosures that are currently being held up by lenders who are reviewing their practices and protocols will be flooding the market.  Despite their distressed condition, foreclosures offer attractive prices, some as low as 41% of market value.  Hard to compete with that!

Here's the latest from the KCM blog:

"As we explained months ago, there is a window of opportunity to sell before a large number of discounted properties go up for sale. This opportunity will last for the next 60-90 days. By then, banks will have fixed many of their paperwork challenges and again start releasing distressed properties to the market.

Bottom Line

If you wish to sell in the next twelve months, do it now. You will get a better price today than you will later in the year."

Sellers -- wake up and smell a sale or end up languishing on the market.