Burnet Texas Homes: Why Real Estate Deals Fail – Part 1

Why Deals Fall Apart

Why Deals Fall Apart

Most buyers and sellers of Burnet Texas homes are usually surprised when their real estate deal falls through, but the reasons this happens is often predictable for an experienced agent.

Here are a few of the most common causes:

Financing Problems

If you are selling your home, you should never take your home off the market and put it to a pending status unless you a firm loan commitment from a lender. This does not mean “pre-qualified”, this means “pre-approved”.

A “pre-qualified” letter means nothing. It just says that they have an OK credit rating and according to what they told the lender, they should be able to get a loan. These letters usually contain a list of conditions that must be achieved before the lender will approve the buyers’ loan.

Inspection Items

Many times you have to negotiate twice on every real estate transaction. Once with you negotiate the initial contract to sell your home and then you have to negotiate if your home has defects that fail home inspection.

If you can’t get both parties in the transaction to agree the deal will fail.

Buyer’s Changed Their Minds

A home buyer (especially in declining markets) realizes that they offered more than they should have for the home. They could just forfeit the earnest money and walk away or try and find something wrong in home inspection, just to get out of the contract. Since there are many contingencies in real estate contracts, buyers usually have no problem getting out of the contract and getting the earnest money returned.

It is a good idea to get a high earnest money deposit with the offer if you are a seller. 1% to 1.5% or $1000 whichever is greater is usually what I recommend.

If I am representing a buyer, I usually try to offer as little earnest money as possible. I suggest my clients start at 1% or $500 whichever is lower.

Seller’s Changed Their Minds

This can be very tricky. It is very hard for a seller to get out of a deal on a real estate contract than it is for a buyer. Usually the only way is for this to be handled in a court of law or by an arbitrator.

Other People

Attorneys reviewing the contract can recommend that the buyer get out. Parents can influence their children (First Time Home Buyer) to back out of the deal for many different reasons. I once lost a transaction once because the father did not like the fact the home was more than 5 miles away from where he lived.

Horseshoe Bay Texas Market is HOT

Time to get in the Game

Great news for home sellers is that home sales look like they are heading up.  A lot of Realtors© I know are very busy.
If you are selling your home, it is time to get in the game.   The market is set for quicker sales and lower inventories of homes on the market.   What I would like to do is give you some tips on getting a higher price for your home.  Some of these tips will help you have a potential gain in your home price of tens of thousands of dollars.
Some upgrades on your home matter much more than others when you are selling.   Of course you need to work with a Realtor© to stage your home, but that alone is not going to raise the price of your property substantially.
The main things that will raise the price of your home are:

  • More Space in Your Home.
  • Lower Maintenance Cost and Utility Bills.
  • Curb Appeal – You Never Get a Second Chance at a First Impression.

Exterior Home Improvements

Curb Appeal Means Everything

Here are 4 things you can do to increase the value of your home substantially.

  1. Finish Your Basement – The finished square footage does matter.  It matters a lot.  If you have a home with an unfinished basement, you could easily sheet rock walls ceiling, add light fixtures, carpet the floors and turn it into a finished room.  A finished basement can add a serious amount of value to your home.  Adding the extra space that can be used as a home gym, bonus room, office or bedroom, will give your home an advantage of other similar home that do not have a finished basement.
  2. Turn a side office into a bedroom – If you have an office that is large enough for a bed, you should consider adding a closet and making it a bedroom.  The difference between a two and three bedroom house is substantial.  This can increase your asking price several thousand dollars.  If you are planning on turning the extra space into a bedroom, you will need to make sure it is approved by local regulatory agencies.  They may require windows that open and other things to be used as a bedroom.  You will also want to update this with the Tax Assessor, so that it is recorded with the larger number of bedrooms.  The pain of dealing with the government agency may yield many thousands to the value of your home.  I have seen a 2 bedroom home that was valued at $350,000 increase to $425,000 just by adding a bedroom.
  3. Curb Appeal – The first impression is the most important aspect.  It sets the mood for the home buyer.    Improving the exterior of your home can mean tens of thousands in the asking price of your home.   Drive around and look at houses.   Identify houses that look great from the front and try and do the same with your home.  Buyers are heavily influenced by what they see first.  If you have a great interior, buyers will feel like they are settling if the outside is not great.  Paint and landscaping can do a lot.
  4. A Good Roof – All buyers will check the roof.  If yours looks bad, then many will stop looking and move on.  No one wants a home that the roof looks like it may leak or fall in.   A new roof is a great advertising feature.

I know that you are now saying, “That will cost me a lot of money”.  What I am saying is that “you may have to spend a little to gain a lot.”

Horseshoe Bay, Marble Falls, and Burnet Texas – 1st Time Home Buyer

If you have decided living in an apartment, having roommates or renting a house is no longer working for you, and then you are ready to become a first time home buyer.   The feeling you get when you own your first home is very rewarding.  Just think, you can do the landscaping, paint or other style the way you want.

The first step in buying a house is working with a realtor and a mortgage agent to determine what you can afford.

The second step takes the most planning.  It is time to decide what kind of house you want, location you want to be in and the style of the home you like.

Deciding what type of home you want depends on your situation.  Who will be living there? Just you, spouse, partner, pets, children, etc. all have to be considered.

Young couple planning to buy a house and have happy living.

Young couple planning to buy a house and have happy living.

Do you like to do yard maintenance?  If no maybe a condo would be best.

Would you like to have an income property?  Maybe a home with a studio apartment attached or a duplex would be best.

Do you like your privacy?  Then you may want a home out in the country on a few acres of land.

Do you want something newer or older can make a difference in the purchasing price of the home?  Realtor.com recently suggested that first time home buyers should consider short sales, bank owned or quick sales.   These types of home can be purchased at a value to a first time home buyer that has a larger down payment.

If you are a busy person a home that is in newer condition and doesn’t need that much maintenance is a better choice for you.

If you would like to fix up the home to your fix your tastes then a fixer upper might be the way to go for you. Always consider all options as you might be surprised what you and your Realtor will find!

Consider the resale value of your home. There is always a chance in the future that you will sale your home. You might need something bigger, smaller or maybe moving but whatever the case may be having an idea of the resale value of your first home is necessary. This is something that your Realtor will be able to assist you with by using local reports and data.

Purchasing your first home is an exciting moment in your life! Having an experienced Realtor is going to provide you support and aid while going through the process of looking and buying your first home.

Tom Ashworth has comprehensive understanding of the current real estate market the Texas Hill Country, Burnet, Highland Lakes, Marble Falls and Horseshoe Bay.

Delivering Clear Title

Clear Title and Deed

Clear Title and Deed

Delivering a clear title can be an issue when dealing with divorced or divorcing sellers of a Hill Country home.

It is important for your real estate agent to be absolutely sure that all owners of the home have signed the Seller’s Property Disclosure.

If another legal owner of the home is found on the title, the listing agent should be contacted immediately.

In this situation, the seller does not have a clear title and may cause problems for the buyer.

Buyers should require any divorced or divorcing parties to sign a quitclaim deed before closing – this document relieves uninterested parties of their ownership.

If the deed is not signed before closing, it can allow for unhappy ex-spouses to renegotiate either the divorce or the real estate transaction – this can significantly delay the transaction process.

If you have questions or concerns about delivering or receiving a clear title for your Hill Country home, contact Tom or Debra Ashworthth

Are You Ready to Buy a Home?

Are you ready to buy this home?

Are you ready to buy this home?

Shoes, clothes, and the latest electronic gadget may be acceptable impulse purchases, but buying a home requires careful planning and informed decision-making.

Whether you’re a first-time homeowner or a repeat buyer, purchasing a new home is a personal and financial undertaking that requires the support of an experienced team of professionals: a realtor, lender, and an attorney, to name a few.

Why Do You Want to Buy?

The personal part of the buying decision comes into play when you consider why you want to move. First-time buyers typically want career stability and plan to live in the same community for up to seven years. They want to establish roots in a neighborhood and decorate their home freely, without having to take a landlord’s restrictions into account.

Buying a house is a lifestyle-related choice. You need to think about how you like to spend your time and the type of community you want to call home. Do you prefer a rural location without close neighbors, a city high-rise, or a home within a planned community that has recreational amenities? The more you understand what you really want in your future home, the easier it will be to make a decision.

Home ownership can also be a strong way to increase your personal wealth, as you’ll be building equity in the property as you pay off the mortgage.

Are You Set Up for Home Ownership Financially?

While you may not be able to afford your dream home right away, you can prepare for home ownership the moment you earn your first paycheck. When applying for a mortgage loan, you will need good credit, a record of saving money and paying your bills on time, and a maximum debt-to-income ratio (gross monthly income compared to minimum recurring debt payments) of 43 percent. A lower debt-to-income ratio increases your chances of a loan approval.

There are currently loan programs with low down payments of 3.5 to 5 percent, and some programs require zero down payment, but you will still need money to cover closing costs, moving expenses, a deposit, and post-purchase cash reserves. Saving money and keeping your credit in good shape are essential steps in future home ownership.

What Can You Afford to Buy?

Property and rental prices vary from one place to another, but rent vs. buy calculators are available to estimate the cost difference between your current rent and buying a home. Buying a house can cost even less than renting in some markets. It’s important to remember that homeowners have additional costs such as insurance, property taxes, and association dues. Home affordability calculators can help you estimate what a home will cost you. You should also consider your future plans, how you spend your money, and how comfortable you are with the concept of mortgage payments. While a lender can tell you how much you can borrow, they won’t know how much you spend on travel or hobbies or that you are considering a reduction in your working hours when you have a family.

Once you’ve carefully considered the personal and financial ramifications of owning a home, your next steps should be to find an experienced and reliable realtor to guide you through the property search and acquisition processes and to meet with a lender who can discuss your financing options.

 

Renting vs. Buying

Renting vs. Buying

Renting vs. Buying

Those looking for a Hill Country home often wonder if they should rent or buy. There are quite a few variables to consider when making a decision between buying and renting.

If you think you may be moving within the next few years, renting is probably the better option. Renting allows for more flexibility and requires the landlord to take care of the property. The landlord also is able to tell you what you can and cannot do within his home.

Buying a home is longer-term and requires more financial support but allows you the freedom to live as you please. Buying also allows you to build equity as you pay off the mortgage.

The financial obligations of renting a $200,000 home will cost you roughly $1,300 per month usually with a one-year lease. Some landlords will require a security deposit, a pet deposit, and/or the first and last months rent.

The financial obligations of buying a $200,000 home will be roughly a $20,000 down payment plus roughly a $1,050 monthly payment at an interest rate of 4.25% for thirty years.

You may also consider certain loan programs that require reduced or no down payment. Homeowners are usually able to deduct costs on tax returns as well.

If you are considering renting or buying a Hill Country home, contact Tom Ashworth at (208) 830-7991 for a consultation.