Appraisal Difficulties

     My client's existing house was in a neighborhood that had houses built in the 1970's and early 1980' with newer houses built in the late 1990's.  They were in one of the homes built in the late 1990's and there were not a lot of comparables. When the appraisal came in, it came in much lower than the selling price we had agreed upon.  In the type of market we were experiencing we were all amazed.   We were asking a fair price for their house and tried to work it out with the original buyers but the appraiser was not from our area and would not budge.

     We were in a no win situation. I suggested we go back to the second offer.  The second buyer was thrilled to be considered for the house.  The new buyer started the loan process this time using a local appraiser.  With the new buyers using a local appraiser who was familiar with this subdivision we were able to close within two weeks.

Why buy in a HOA if you live in the Northwest Houston area

I will never forget when I found out that the Houston area did not have zoning.  We moved to the area in 1996 and I was taking the classes to get my real estate license.  One of the instructors's nonchalantly said "well you know we don't have zoning in the Houston area".  I almost fell off my chair; I though every area was zoned.  At the time I wasn't sure if I wanted someone telling me what I could and couldn't do.  The longer I have lived here however the more I appreciate HOA's for maintaining our property values.  To give you an example a few years ago my husband worked with someone who bought out in the country in a non-restricted area.  The guy loved it until the house next door was sold and the new owner decided to make it in to a salvage yard.  When that junk yard opened up his property values went down the tube.

The good news is that there is just about something for everyone as far as homeowner's associations go.  There are associations with all kinds of restrictions such as in planned communities and there are HOA's that allow you to have mobile homes.   Most country subdivisions will allow you to have horses. Typically it is 1 acre per horse but again that varies by subdivision.  The HOA's fees also vary greatly.  I have seen fees as low as $10 a year and as high as $1500.  There are even a few subdivisions that have deed restrictions but no fees.  Most of the suburb HOA's have similar restrictions.  If there is something in particular you are interested in doing it is a good idea to look the deed restrictions over before you ever put an offer on a house.  It is a fairly easy process to get the deed restrictions; usually you can get them from a local title company. It is important to decide what kind of restrictions you are looking for and find your home in a HOA that meets your needs.

For all your Northwest Houston Real Estate  needs, contact me today!
Marchel Peterson
Results Realty
Cell: 832-721-8332

What is a Title Committment?

Title insurance provides protection against title defects that were unknown to you at the time you purchased the policy.

Before writing a policy, a title company will check for defects in your title by examining public records, including deed, mortgages, wills, divorces, court judgements, tax records, liens, and encumbrances.  The company will then defend in court any claims to the property that are covered by your policy, subject to certain limitations.  If the company loses, it will pay you for covered losses up the the amount of your policy.

In Texas, the two most common types of title policies are "mortgagee policies," which protect lenders, and "owner policies," which protect buyers.

Most lending institutions won't loan you money to buy a house or other property unless you purchase a mortagee policty.  This policy will repay the balance of the mortgage if a claim against your property voids your title.  Mortgagee policies remain in effect until the loan is repaid.  Most lenders will require you to buy a new motgagee title policy if you refinance your home. 

Owner policies insure property owners against the specific kinds of claims listed in the policy.  Any owner policy remains in effect as long as you or your heirs own the property or are liable for any title warranties made when you sell the property.  You should keep your owner policy, even if you transfer your title or sell the property.

In Texas our title policy forms are standarized.  This mean the policy languae is the same, regardless of the company. Pay special attention to "Schedule B" of the policy which explains any limitations, exclusions, exceptions and special conditions.  You many want to discuss these exceptions with an attorney before you close on a real estate deal.

The premium for a title policy is paid only once, at the closing of the sale.  The buyer and seller may negotiate who pays the premium.

Title insurance premium rates are set by the Texas Department of Insurance and are based on the property's sale value using a sliding scale.

What to bring to your real estate closing

At this point you will have a clear title commitment and will have completed any inspections etc. you wish to have on the property.

You will be required to pay all fees and closing cost in the form of "guaranteed funds" such as a Cashier's Check.  Your agent or escrow officer will notify you of the exact amount.   You will receive a closing document required by HUD that outlines the settlement cost. The title company prepares this document.   For additional information on HUD statements go here.  In a perfect real estate world you would receive this the day before closing so you would have time to go over it before closing.  Unfortunately real estate is not perfect I can't tell you how many times we get this from the title company at the closing table.  Should that happen you can bring a check using the figures your lender have come up with from your good faith statement.  Should you not bring enough money you can write a personal check to the title company for up to $1500.  On the flip side if you bring too much money the title company will cut you a check for the overage.

The other item you will need to bring is a picture ID such as your driver's license.  A number of years ago I had a client who was moving to another state.  He came back to Texas for the closing and to get his furniture.  A few days before closing I found out that he had turned in his driver's license to the other state and only had a piece of paper for a drivers license.  He did not have another picture ID.  Back then I talked the title company in to letting us get a membership at Sam's Club and using it as a picture ID.  As I told you this was quite a few years ago I'm not sure if that would fly today.  Long story short I highly recommend not turning in your driver's license if you are planning on buying a house unless you have another type of picture ID like a passport.

Questions to ask your home inspector!

Most people only think of one or two questions to ask a home inspector.  The most common being "How much is your fee" and "When you can inspect the home".  Below I am including a list of additional questions you might ask.

• The State of Texas does require testing and licensing of inspectors.  Ask them about their training and what kind of license they have.  
• Ask them how long they have been licensed in the state of Texas. 
• Make sure they are a full time home inspector.  I have found there are a lot of inspectors who dabble and you want someone who is making home inspections their career.   There are lots of codes they need to stay current on.
• Ask them if they also perform repairs? (If the answer is yes this may be a conflict of interest). 
• What will the inspection include?  (It should include heating, A/C systems, electrical, interior plumbing, visible insulation, visual roof, walls, ceilings, floors, windows, doors, foundation and the visible structure of the home.
• Ask them if they charge extra based on the size of the home.  I have found that most inspectors have different price breaks according to the square footage of the home.
• Find out how much they will charge if you ask for a reinspection after the repairs are completed.
• Be sure you can attend the inspection.  This is your time to learn about your new home and ask questions.  If the inspector does not want you following him around I would suggest finding a different inspector.
• Be sure that they don't mind you calling with additional questions after the inspection. 
• Ask for references.  Get names and phone numbers of people they have recently inspected homes for.
• Make sure you are getting a written report in a timely manner. They may give you the report at the inspection or they may want to email it to you the following morning.   Either method is acceptable.  Just remember that time is of the essence.
• If you have a particular concern about the property, be sure to ask if it will be covered in the inspection.

The inspector may not inspect swimming pools, wells, septic tanks, wood destroying insects or other environmental test.  You will likely need to arrange for those inspections separately.

The primary purpose of the inspection is to educate you so you can make an informed purchasing decision.

Preparing your house to put it on the market

When you are putting your house up for sale there are certain things you can't change.  You are going to have to live with your location, the size of  your yard, your floor plan, what other homes in your neighborhood are selling for.  There are however certain things that you can do to stage your home to get top dollar. 

Several years ago I had an incident that really made me aware of how much difference clutter and odors can make in the sale of a home.   I had two homes with the same floor plan on the market at the same time.  The homes were not in the same neighborhood but were both built by the same builder and were identical floor plans.  One of the homes was in an neighborhood with a mixture of old and new homes; parts of the neighborhood being a little more run down..  The second home was in a newer neighborhood.  When I ran comparatives I found that this floor plan typically sold for about $10,00 more in the newer neighborhood. 

My client whose home was in the older neighborhood had taken immaculate care of their home.  The clutter was picked up and it was sparkling clean.  They did everything I told them to do to stage their home to show and sell.  She did this to my amazment with two smal children.  My client whose home was in the newer neighborhood was a single Dad and had his hands full so the house was not in very good shape.  It was not clean and had an odor.   

I ended up getting offers on both homes about the same time.  My immaculate clean clients, in the older neighborhood, ended up getting top dollar for their house.  My client whose home was in the newer neighborhood but not in the best condition ended up way under what the market prices were.  In theory the home in the newer neighborhood should have sold for more than the home in the older neighborhood.  In this case what ended up happening was the home in the older neighborhood sold for more than the home in the newer neighborhood.

The moral of this story is declutter and take care of any offensive odors.  You are planning on moving anyway so go ahead and start packing.  Rent a storage unit and move part of the clutter out of your home.  Take care of any offensive odors, the biggest culprit of odors are usually your pets.

Visit my website for a more complete list of things you can do to prepare your house to put it on the market.

The Houston Real Estate Market - looking back at 2007

 I have talked to many friends and family members scattered throughout the rest of the country and they have talked about a difficult market in the last year with home sale prices depreciating and homes staying on the market for long periods of time.  I have to say that several years ago talking to those same friends and family members their market was booming with incredible growth while our market was just showing moderate growth.  Having lived in some of those states that showed incredible growth living here the last 10 years I have felt a little bit of envy because our growth has always been moderate; maybe 3% to 6% per year.  To me it brings to mind the story of the tortoise and the hare.  The Houston market has plodded along year after year showing moderate gains.  I have to say I no longer feel that envy I am glad to be living in Houston and plodding along like a tortoise.

For all your Northwest Houston Real Estate  needs, contact me today!
Marchel Peterson
Results Realty
Cell: 832-721-8332