It seems like every day we hear about more and more DFW real estate agents going out of business, sometimes, whole offices. It must be a terrible time to think about becoming a real estate agent, or is it? It may be a great time to become an agent. These tough times are squeezing out all of the so-so agents and so-so brokerage companies. This opens the doors for new, aggressive agents that embrace technology and are willing to learn the best strategies of selling real estate in this market environment. This crop of new agents will understand that it is no longer about transactions, it is about helping people, many of them with limited resources and serious personal and financial challenges.

In this real estate market there are many Dallas homeowners who have very little equity in their homes. If they find themselves in a position where they have to sell their home every dollar counts especially when it come to sales commissions. But can you really save sales commission dollars and get the market exposure that your property needs and the proper representation you need to ensure that you aren’t being taken advantage of? Is someone watching out for you to make sure all the local, state and federal laws are being complied with? Is selling Plano real estate the same as selling a Dallas foreclosure property? Do the rewards outweigh the risk of using a discount Dallas Real Estate Company?

Dallas Short Sale

 Dallas short-sale vs. foreclosure:  Many sellers wonder if a short sale will affect their credit less a foreclosure will and what the other advantages and disadvantages between the two. A homeowner in foreclosure, depending on state laws, could possibly stay in their property, rent free, for three to four months and sometimes up to a year before they are forced forced to vacate. But this fact alone does not mean a Dallas foreclosure is better for them than a short-sale.   A short-sale involves offering the property for sale, generally listed through the Dallas MLS. Potential home buyers will take a look at the property, some of them will make lowball offers.   

Basics of a Short Sale

A Dallas short sale  happen when a bank agrees to accept less than the amount owed on the mortgage because there is not enough equity to sell and pay the costs of sale. Not all lenders will agree to a short sale, and that is why a Dallas Realtor can be a tremendous help by contacting the lender’s loss mitigation department to find out.  You can’t just unilaterally decide that you are going to sell your home at a loss and list it as a short sale. It used to be that lenders wouldn’t even consider a short sale if your payments are not behind on your payments, but that has changed. However, lenders will be more agreeable to negotiating if your payments are in arrears.

How is a Seller’s Credit Affected?

• Dallas Foreclosures  or Deed-in-Lieu of Foreclosure:  Both of these choices affect credit ratings poorly.   A foreclosure can lower your credit score by 200 points and take up to seven years to recover.
• Short Sale:  A short sale can lower your credit score by as little as 50 points and only take two years to recover from.

Waiting Period Before Buying Another Home

• Foreclosure or Deed-in-Lieu of Foreclosure
  A seller who wants to buy another home after foreclosure will need to wait about up to 72 months before they can qualify for another mortgage.
• Short Sale
  The good news is a short sale will allow you to obtain a mortgage in about two years.  Unlike with a foreclosure, always negotiate with your lender a release of liability when doing a short sale.  This means that the lender will take the money it receives from the short sale as payment in full.  This means they won’t be able to come after you for a deficiency judgment and lien you bank accounts and salary.   

FHA adopted guidelines in 2010 that say a seller who is current and does a short sale may qualify to immediately buy another home. Lenders aren’t so quick to follow those guidelines. Fannie Mae guidelines allow a seller to immediately apply for a new loan to buy another home if that seller kept the payments current, had no delinquencies exceeding 30 days and did not agree to repay the debt relief. Moreover, it’s the late payments that dramatically affect your credit report, not the short sale.

Foreclosure or Short Sale – The Decision

If you are trying to decide whether to let your home go through foreclosure or selling it via short sale due your due diligence, speak with a professional Realtor how specializes and seek legal and account advice.  There are other advantages to a Dallas short sale over a foreclosure.

Dallas Foreclosures

 Dallas home buyers who want a great deal in real estate invariably think about buying a foreclosure home. Buyers always seem to have a picture in their mind of a nice little house, with a white picket fence that has been owned by a little old lady who has fallen on hard times, but this usually is far from the reality of it all.

Why Do Dallas Homeowners End Up in Foreclosure?

Home owners stop making their payments for a many reasons. Some to go into foreclosure voluntarily which is often caused by one of the following:

• Not being able o work due to medical conditions
• Laid-off, fired or quit job
• Uncontrollable excessive debt and mounting bill obligations
• Divorce or death of owners of DFW homes.
• Job transfer relocation to another state

Negotiating Directly with Sellers in Foreclosure

People who buy foreclosure homes many times prefer to purchase these homes before the foreclosure auction is final. Before approaching a seller in distress, consider this:

1. Almost every state allows for some period of redemption after a Dallas foreclosure. This means that the seller has a right during a certain prescribed period of time to cure the default, including paying all foreclosure costs, all of the back interest and principal payments, to regain ownership of the home. 
2. Foreclosure proceedings vary in different states. In the states where mortgages are used, home owners can end up staying in the property for almost a year; whereas, in states where deeds of trust are used, a seller generally has less than three months before the trustee’s sale.
3. Many states also require that DFW real estate buyers give sellers certain disclosures regarding the purchase. Failure to provide such notices can result in fines, lawsuits or even revocation of sale.
4. Determine whether you’re the type of person who can take advantage of a homeowners misfortune under these types of circumstances and possible put a family out on the street. Others will feel compassion and make themselves into believing they are helping the home owners avoid further embarrassment.

Buying a Home at the Trustee’s / Foreclosures Sale

Check with your local county government office to find out how foreclosure sales in your area are handled, but common among many of these types of auctions are:

• Sealed/Closed bids
• No loan contingencies
• Proof of financial qualifications, Approved mortgage letter or proof of funds.
• Sizeable earnest money deposits at the time of the auction.
• Purchase property “as is”, no repairs to be made by the seller.

Many times buyers are not allowed to inspect the house before they make an offer. The challenge with buying a house sight unseen is you can’t determine how much it will cost to make repairs t0 bring it up to living standards. You also don’t know if the occupants will retaliate and destroy the property.  You may find yourself in the position of evicting the tenant or owner from the property after you get the title, and eviction processes can be timely and costly.

Collin County Homes

 When selling Collin County homes writing contingencies into the counter offers more frequent in a seller’s market than when in a buyer’s market.  It’s not uncommon to see a seller ask a buyer for the right to find another home before fully committing to the sales contract.  A lot of sellers worry that if they sell their current home without finding another one, they may end up their putting their belongings into storage and renting for a while.  Selling a home is an emotional time, separating themselves from the past and looking into an unknown future.

Contingent on Seller Finding “Home of Choice”

Some purchase and sale agreements contain a single line making the transaction contingent on the seller finding a replacement home. The problem with that is, from the buyer’s point of view, does this clause allow the seller to cancel the transaction at any time, even on the day it is scheduled to close? Few Collin County home buyers would accept those terms if they knew what the clause meant.

I have seen Plano home contracts that specified: “This offer is contingent upon closing concurrently with the purchase of the seller’s new home.” This type of verbiage is very vague and open ended.  It is hard to believe that buyers agreed to this clause.  Home buyers are also entitled to some protections. What happens if the seller can’t find a suitable new home? Here are some terms that will help to protect both parties in the purchase and sale agreement:

Make it Clear that the Contract is Contingent

Make sure that your Plano Realtor states in the contract that the offer is contingent upon the seller signing a purchase agreement to buy a replacement home, usually referred to as a Home Sale Contingency. Sellers should receive a fair amount of time, usually about 30 days to find a new home, at which time, the seller is expected to remove the contingency or terminate the contract.  If the parties cannot agree on a contingent contract, the best options for the seller’s are to either reject the offer or ask for a longer closing period such as 60 to 90 days.

Specify Time Period for Contingencies

Determine the day the clock starts ticking on all of the contingencies in the contract such as pest inspections, home inspections, lead based paint inspections and the approval of Home Owners Association documents and so forth.  If written correctly the clock should not start on these contingencies until the seller has removed the home sale contingency to buy another home. The time clock for contingencies start the day after the sales contract is signed. 

Per federal law, real estate contracts regarding lead-based paint, give the buyer 10 days to inspect the home. Some inspection periods are longer. The specified day that an inspection period begins can be, for example, the day after the seller removes the contingency or any other mutually agreed upon day.

Is Extending the Closing Date an Option?

Get an agreement on the right of the seller to extend the closing, if necessary. Both parties could sign a contract with a 30-day closing, but if it takes the seller 15 days to find a new home, the seller may want the right to extend the closing allowing additional time to prepare for the closing of their new home. The primary reason for a closing extension is because it may take a full 30 days for the seller’s new mortgage to be funded.  Discussing these things upfront, and reaching a mutual agreement that is expressed terms in writing in the sales contract, will save everyone involved a major headache.

New Homes Dallas

 Some home buyers don’t want a used house.  They don’t want to inherit somebody else’s dirty worn carpeting, personal taste in kitchen appliances or look at some kid’s initials scrawled into once-wet cement that they didn’t put there. They want a home that is brand new, never lived in.

Hire Your Own Realtor

• Your own DFW Realtor will represent you, be your fiduciary and is required to disclose the positive things as well as the negative ones about the transaction.
• The builder’s sales agents are paid to represent the builder, regardless of what they may tell you. Many of these sales people will use high pressure tactics to get you to sign their one sided contract. Due to the high volume of new DFW Homes, many builder’s agents are paid less than a traditional commission; some earn a salary plus incentives.
• Hire your own buyer’s agent to represent you. Most of the time, your agent will be paid by the seller, but even so they can represent your interest 100%. If your contract contains a home sale contingency to sell your existing home before buying, hire your own sellers agent to list and sell your home. Beware, that buying new DFW real estate before selling your current home is not always in your best interest because you will be at a disadvantage when it is negotiating time.

Don’t Automatically Agree to Use the Builder’s Lender

• Compare alternate sources to find a mortgage company. Your own bank or credit union might offer you very attractive rates and terms, based on your banking history with that institution. Your agent may refer you to their own list of preferred lenders.
• Builders often prefer their own lender because the builder will be kept fully informed of your personal progress. But a builder’s lender might not offer you the best fees and terms. The builder may even own the lending company and make additional profit on your transaction.
• Shop around and interview a few lenders. Find a mortgage banker or mortgage broker whom you can trust and with whom you feel comfortable doing business.
• Ask to see a copy of your credit report with your FICO scores. You can order your own credit report for free before shopping for a new home.
• Insist that your lender guarantee its good faith estimate that it is required to proved to you.  If the lender balks or makes excuses, go somewhere else, because reputable lenders will honor that request, even though it’s not required by the law.

Obtain Competent Legal Advice Before Signing up for a New Home

• Before you sign a sales contract on a new home, talk to a real estate attorney. Standard builder purchase contracts are designed to keep everybody out of court, but they don’t necessarily contain language that protects the buyer.
• Ask questions about removal or expiration of contingencies and your right to cancel. Make sure you understand your liability and commitments ahead of time.
• Find out if the materials used by the builder contain chemicals that may be hazardous to your health. If your contract contains a warning about health issues, it’s probably because it’s a valid concern and other buyers have gone to court over it.

Verify Option and Upgrade Pricing

• Determine which options and upgrades you want in your new home. Keep in mind that for many builders, the profit margin is highest in options and upgrades. Some builders can sell a home for almost the basic construction cost because they make much of their profit in the upgrades/options.
• Find out whether your lender will lend on all the options / upgrades you have chosen. If your lender will not finance 100% of your selections, you will be required to pay for it in cash, many times in advance.
• Ask about cancellations of specific options and whether you will be held liable for items the builder cannot return to a vendor.
• Some contracts give the builder the right to choose your upgrades if you do not submit your request within a certain period of time.  Make sure this does not happen to you.
• To save money, consider which upgrades you could purchase and install yourself after you close on the home. However, realize that some upgrades such as wiring inside the walls are easier to do during construction.

Learn About the Builder’s Reputation

• If a buyer has a bad experience with a builder, and some will, the word spreads rapidly throughout a community. But you won’t know if a bad report is an isolated incident or if the builder repeatedly brings bad publicity to itself without checking the public records for complaints and lawsuits.
• Talk to the neighbors and pay attention to the construction quality of surrounding homes. Is the builder consistently building more and more homes in the area or is construction lagging and homes sitting have way completed?
• Find out whether the builder sells to investors or not. Some builders require that all their homes to be owner occupied. Others builders will eagerly sell as much inventory to investors it their profit margins will allow. If the market takes a dip, investors are typically the first to bail out.  Part of the reason you are buying in a new subdivision is to be surrounded by other buyers just like you, not renters.

Hire a Home Inspector – Always

• Always, always, always get a home inspection when you buy, even for a new home. Also, hire a licensed and accredited individual to perform the inspection — not your cousin or your buddy contractor. Be there for the inspection and ask a lot of questions because a new home can, and often does contain defects. The HVAC system might be too small or the plumbing could be installed in reverse. Construction workers make mistakes.
• If the home inspector calls for further inspection by another professional specialist, find out if the inspector is telling you there could be a serious issue or if the inspector isn’t licensed to address that particular issue.

Dallas Short Sale

 By now most of us know what a short sale is; when a home owner owes more on their home than it is worth.  For example, a Dallas home seller bought a home in 2006 for $285,000 with a mortgage of $270,000.  Now that homeowner needs to sell to take a job in Arizona.  When the homeowner contacts a local Dallas Realtor to determine the value of his home he learns that comparable homes are only selling for $250,000.  With the value at $250,000 and the mortgage at $270,000 the homeowner is considered “upside-down” on the property.  For the owner to be able to sell his home he would have to bring $20,000 to the closing table.  But what if he doesn’t have $20,000 to bring to the table?  The amount he can sell the home for is $20,000 “short” or what he owes to the bank on his mortgage.  Will his home be added to the growing list of Dallas Foreclosures?

If you aren’t in a Dallas short sale situation yourself you probably know a friend, neighbor, family member or co-worker that is.  Short sales are the fastest growing segment in the real estate market today and they will be with us for many years to come.  A short sale is a viable option for many homeowners that either can’t afford the payments on their home or if they are forced to sell to relocate or for any other reason.  In most cases a seller will fare better short selling their home than just walking away from it and allowing it to go to foreclosure. 

What will all of these short sales do to the values of Dallas real estate?  Certainly, they will add to the home inventory levels putting some downward pressure on real estate values but for the most part they will not have a major negative impact on values.  How can this be the case, you say.  Many banks that use to accept drive by BOP (broker price opinions) are now ordering a full fledged appraisal to determine the value of a home before agreeing to short sale it.   These profession appraisals will help keep Dallas real estate values firm as we work through these challenging times.  If you need to sell your home, take your time and to investigate all of the options that are available to you and choose the best one and get started.

Hire a Buyer’s Agent

It is best to hire a buyer’s agent first but if you prefer start looking for Plano homes online or visit open houses first.  If
you retain a Plano Realtor first it will save you a lot of time andfrustration.   Your buyer’s agent willknow and do the following:

• Agents many times know of new listings coming up that are not
  yet in the MLS.
• An agent can send you listings directly from the Realtors MLS
  that meet all of your search criteria, and you won’t waste time looking at
  listings that are already under contract.
• You can save your gas and go to view home in your Realtors car
  and not your own.
• Some agents will preview homes for you to ensure the homes that
  they show you meet all of your needs.
• An agent can usually spot over priced listings and advise you
  accordingly.

Find the Right Home to Buy

Plano Real Estate

Buying a home can be an overwhelming process and emotionally draining. Finding the right home is not an easy or fast
task. Buyers are advised to look at a maximum of 7 homes at a time because any more than that will make your head spin and all of the homes will start blending together.  Most buyers do a lot of online research before ever stepping foot in a home.  According to the National Association of REALTORS, buyers spend an average of 6 to 8 weeks, trying to figure out where
they want to live. But once the community is chosen, most buyers end up buying a home after 2 or 3 home tours.

Get a Mortgage

It’s not always necessary to have a approved loan in your back pocket before looking at homes, but it is paramount to
get a mortgage pre-approval letter in advance. This way you know for certain how much home to you can afford and it shows the seller that you are a serious, qualified buyer.  Many sellers won’t look at an offer if the seller doesn’t have assurance that the buyer can get a mortgage to buy their home.

FHA financing is becoming more and more prevalent because the minimum down payment requirement is much less than a
conventional loan. However, if you are thinking about buying a Plano foreclosures home, for example, buyers with cash or conventional mortgage tend to get priority with REO banks. You can ask your agent for a referral to a mortgage broker or
check with your own bank/credit union.

Negotiate Your Home Offer

Plano real estate buyers sometimes make the mistake of comparing the sales price of a home they are interested in to other homes they have seen, active listings. It’s a mistake to compare sales prices among homes for sale that have not sold
yet. That’s because sellers can ask any price they want but it doesn’t mean the home will ever sell at that price. An agent can provide comparable sale information and look at pending sales. Comparable sales are similar type homes in the same condition and location that have sold within the past 3 months. Pending sales will become the comparable sales by the time your home closes. In some markets you may have to pay over list price especially if many buyers are going after the same homes. Your agent can give you a price range and help to manage your expectations. A good buyer’s agent knows there is always more to an offer than its price, but price is the main factor.

Do a Home Inspection

A home inspection is a contingency in the sales contract.  A contingency means that a buyer has the right to cancel the contract for different reason like a low appraisal, financing falling through, etc.  You might not want to be locked in to buying a home that has a faulty foundation or other structural problems, for example. When repair items turn up it opens up the door for more negotiations.   Maybe you can get the seller to pay for, or give you a credit for, certain repairs.  If a home inspection uncovers a major defect you will have the right to back out of the sales contract.

Dallas Foreclosures

Dallas foreclosures, short sales and REOs are all dangerous animals but they are different from each other. However, they are also similar because without knowledge about how each of them work you could find yourself in dangerous territory and in trouble. As an example, while most short sales are foreclosures, not all foreclosures are short sales. To further complicate things,
REOs are not short sales either, but some intended DFW Real Estate short sales can end up as an REO property.  Retain the services of a professional Dallas Realtors with experience in these areas to advise you.

What is a Foreclosure Home?

A foreclosure home is when a notice of default has been filed in the public records by the mortgage company. It means the
owner has stopped making their mortgage payments and the lender has given notice that unless the payments are brought up to date, it will sell the home at auction to the highest bidder. Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is two or more payments in arrears.  If the home owner does not bring the mortgage current, the lender will file to take the property away from them.

Not all homes that fall into foreclosure go to public auction because owners have the right to make up back payments up to a certain point; this time varies from state to state. Real estate investors and home buyers see profit in buying foreclosed homes because they can often buy the property for the amount owed on the mortgage, picking up the home owner’s equity for free.  Even high end areas like Highland Park homes are not exempt from foreclosures, short sales and REO’s.

What is a Dallas Short Sale Property?

A short sale generally occurs when a home owner is in foreclosure but before the property goes to public auction. With a
short sale, a lender must agree to accept less than the amount that is owed on the mortgage balance.  Unlike with a
foreclosure, investors generally buy the home for even less because investors are not paying off the existing mortgage and they aren’t making up the back payments. Investors attempting to make a deal with the existing mortgage company to take less than what the lender was originally due in order to avoid dealing with the time and expense of a foreclosure.

It’s a myth that mortgage companies are not going to accept an offer from an investor unless the seller has fallen behind
on their obligation to make timely mortgage payments. Sellers don’t need to be in default for a short sale to occur. For a buyer who wants to live in the home, buying a short sale makes financial sense but the short sale time line may pose a challenge for some.

What are REO Propertied – Real Estate Owned?

Buying an REO is similar to buying a short sale except the property is already owned by the mortgage company.

• The property was acquired by the lender through a foreclosure
  action where no one bid higher than the amount owed on the mortgage.
• Many time lenders will sell repossessed homes for less than the
  past mortgage balance to get them off their books.
• Bank-owned properties are called REOs, meaning “real estate owned”
  by the lender.

Mortgage companies end up owning the property when no one at the foreclosure auction bid high enough to cover the amount owed against the property. REO homes are often considered one of the best ways to buy a distressed property.  This is because the seller is already out of the home and of the picture. It’s just the investor or person wanting to live in the home, the real estate agent, the bank and the bank’s asset manager who are negotiating the transaction.

Plano Homes

Plano home price reductions, price adjustments, price improvements, it doesn’t matter what you call it, sellers don’t wants to hear that they may need to lower their price. In slow markets it’s not unusual for sellers to put the blame on the real estate agent for their home not selling.  They real culprit is that the seller has unrealistic expectations for the price of their Plano real estate. Many times sellers will say, “Why don’t do you do more to sell my house?”

Before Reducing Your Listing Price

• Review Your Marketing and Answer The Following Questions

How many ads have been are running for your home in the Collin County real estate section?

1. What kind of direct mail campaign has been launched, if any?
2. How many open houses have there been?
3. Does the house show well online, are there a lots of pictures?
4. Is your for sale signage in a good visible location?
5. Do you have a virtual tour?
6. What kind of feedback have you received from DFW Realtors and
   prospective buyers?
7. Are you offering enough commission to selling agent to make
   showing your home worth their while?
8. How many showings have you had so far?

Are You Selling in a Buyer’s Market?

When the market is slow, inventory is high and demand falls. If that’s the case, and you don’t have to move, maybe you can take your home off the market.

1. It doesn’t make sense to put an overpriced home on the market
   that is not going to receive any showings.
2. If you’re not motivated to sell, you may be better off renting
   your house or staying put until the market corrects.

Choose the Right Price from the Start

If you’re price is too high, you’ll need to continually reduce it until your price hits the magic number, and by then
buyers will begin wondering:
What is wrong with your house?

1. Are you hard to deal with?
2. Are you in a distress situation?
3. How much lower will you go?

The reality of it is that you will end up with less money than you would have if you priced the home properly from the beginning. Ideally, you want one price reduction. Here are guidelines to consider:

Realize your agent is not your adversary but is on your side; enlist his help.

• Review the pending sales and examine the market history. How many days on market were the homes before the price was reduced and how much of a price reduction was made? You won’t know the sold price, but you can determine average price reduction percentages.
• Compare the sold prices with active listings. Are sold prices higher or lower?
• Compare the history on the active listings to determine how many days on market before they were before the prices were reduced.
• Run a side-by-side comparison with active listings near the price point you are considering. Price yours so it falls in the bottom two to five listings or, if you’re really motivated, price it less than anything else on the market.

Is Your Plano Home Price Too Low?

Even in distressed markets, as home prices are declining, homes that are priced below the average sold prices will receive multiple offers and sell quickly.

• With multiple offers it’s common to have price wars among competing
  buyers, which will generally result in an accepted offer for more than list
  price.

The Final Word – Every House Will Sell if the Price is Right!