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Is the housing market going to crash?!

Folks are worried about buying in this market. They fear a bubble or market crash. We do not believe it is coming. However, here are some things to help ease your mind.

According to market experts during the market crash moving the country from the roaring 20s into the great depression, inflation-adjusted home prices fell by only 7%. I know that number seems small. We are talking about the market average here. Of course, some homes at the very top of the market would have lost more and those at the bottom may have lost less. By 1940 those same homes had not only gained back that 7% but had gained an additional 8% of value.

We saw very similar things during the “Housing Bubble” rupture of 2008. Many homes in the hottest markets at that time lost significant value, like up to 75%! Those same homes by 2018 had not only gained back their losses but had put on over 10% increases over their previous high. Keep in mind that a great majority of homes in North Texas actually saw no loss during that time, rather their values seemed to hover steadily for a few years then began to build value once again.

To me, that shows tremendous stability in the housing market and its ability to rebound. The housing market is one of the heaviest regulated in the country because so many people have so much of their life’s earnings involved. If you are thinking about buying a home for your family but are fearful of what home values may do in the future we can look to the past with confidence knowing that if we do see a downturn we can expect to see a light at the end of the tunnel in just 10 years. This really doesn’t seem like that much risk given that Americans tend to stay in their homes for 7 years. It only means if there is a blip in the market some folks may have to stay in their homes an additional 3 years.

We don’t believe we are heading into a great market crash or the bursting of a housing bubble, but with inflation, on the rise, this may be the best time to make your move.

-Tracy Hammons, Associate Broker, AT Home Texas Real Estate

Is 2021 the Year to Size-Up Your Home?

Is 2021 the Year to Size-Up Your Home?

2020 was a year for change. Many lifestyle adjustments and plenty of time at home. During that time, you may have started to think about how much your current home suits your needs, even if you thought at one point that the home you’re in could be your forever home.

Last year impacted the needs of many in a variety of ways, and it’s okay to recognize that the home in which you currently live might not fit your lifestyle now. If you’ve turned a room in your home into a makeshift office or school space, you’re trying to exercise at home, or you are just spending more time in your own four walls than you ever expected to, you may be ready to move onto something bigger.

With an inventory drop of 22% over the last year and home price appreciation at 7.3% year-over-year, it has never been a better time to sell. Inventory has decreased and demand has increased, which has driven prices have been driven up. This is great news if you are a homeowner and you’re thinking about selling. Your home equity has likely risen as prices have increased and there’s a large pool of buyers searching for the perfect home.

If you can relate to all of the above and are weighing your options when it comes to selling and finding a bigger space, let’s chat today.

Preparing For Listing Photos

Preparing For Listing Photos

Listing photos are the first chance many potential buyers get to be exposed to your home. This is why being prepared for listing photos and ensuring your home looks ready to sell is a key part in the home listing process. Here are some tips to prepare your home for listing photos!

Clear Off Kitchen Counters & Sink

When the kitchen counters are completely cleared off, buyers can imagine how they might use the space for themselves. Kitchen items and decor only distract buyers can often make the kitchen feel cluttered. You will want to remove everything except a handful of decorative items from the countertops and thoroughly clean all surfaces.

Clear & Clean Bathroom Sinks, Tubs, and Showers

Take all of your bath/shower items and place them into a bin that can go underneath the sink. This can help your bathroom look bigger. Clear off the counters so that bathrooms look unused, but it is okay to leave clean hand towels and hand soap.

Replace Burned Out Light Bulbs

Make sure you check all of the ceiling lights, lamps, and exterior lights to make sure that they all work and can correctly illuminate your space. If there are dark areas in your home, feel free to add a few extra lamps to brighten them up. Additional light can make an area look more spacious so the more light, the better!

Turn On All Lights Throughout The Entire House

You want your home to be captured in the best light, and so it is essential to have as much light as possible. Before your photographer comes, turn on all of the lights in the house!

Open All Windows

Natural light from windows brings life to photos. Opening all of the window treatments in your home to let in as much light as possible. If it’s too bright, your photographer can adjust as needed. Make sure you clean the windows if they will be photographed!

Remove Unnecessary Furniture & Decorations

This is probably the hardest part, but it’s one of the most important. Removing and storing furniture that doesn’t bring value to your photos can be hard, but it opens up the floor space and helps to not distract potential buyers. Buyers want to be able to visualize their items in your home and that can be hard to do if the room is cluttered with furniture.

Turn All Ceiling Fans, TVs, and Computer Screens Off

Any moving items like ceiling fans or active TV/Computer screens can look very strange in photos. You should turn off anything that moves or can cause a motion blur.

Clear Off Appliance Surfaces

Be sure to remove photos, magnets, notes, reminders, and other personal information from the refrigerator or any other appliance you have decorated. It will not only make your home appear cleaner, but it also keeps your personal info safe.

Make All of the Beds

Be sure to make and decorate all the beds in your home with matching sheets, blankets, and pillows. Use bedding fits correctly and covers the mattress.

What Is Escrow?

What Is Escrow?

When it comes to mortgages are concerned, “escrow” and “escrow accounts” refer to two slightly different concepts. Escrow is the process by which a neutral third party mediates a real estate deal, holding money and property “in escrow” until the two sides agree that all the conditions are met for a sale to close. By contrast, an escrow account is usually an account that helps to manage a mortgage borrower’s annual tax and insurance costs.

What Does Escrow Mean?
Escrow refers to a third-party service that’s usually mandatory in a home purchase. When a buyer and seller initially arrive at a purchase agreement, they select a neutral third party to act as the escrow agent. The escrow agent collects what is known as “earnest money” from the buyer: a deposit that is equal to a small percentage of the sale price. In exchange, the seller takes the property off the market. Until the final exchange is completed, both the buyer’s deposit and the seller’s property are said to be in escrow.

Escrow “accounts” have more to do with your monthly mortgage payment than the initial home purchase. When you borrow money from a bank or a direct mortgage lender, you’ll usually be given an escrow account. This account is where the lender will deposit the part of your monthly mortgage payment that covers taxes and insurance premiums. By collecting a fraction of those annual costs each month, the escrow account reduces the risk that you’ll fall behind on your obligations to the government or your insurance provider.

How Do Escrow Accounts Work?
When you obtain a mortgage loan from a bank or direct lender, you also receive an escrow account that helps you pay your property taxes and homeowner’s insurance premiums on time. Even though these costs are paid on an annual basis, your lender will require you to pay a monthly fraction towards each cost and accumulate the balance in your escrow account. This ensures that these expenses get paid on time every year.

Mortgage lenders require borrower escrow accounts in order to minimize the risk that you fall short of your financial obligations as a homeowner. In a foreclosure, unpaid taxes or insurance can result in liens that make it harder for the mortgage lender to recover the original loan. This creates a strong incentive for lenders to keep their borrowers on track with escrow accounts that smooth out the non-mortgage costs of owning a home.

Although escrow accounts conveniently allow lenders to pay the relevant taxes and insurance premiums on your behalf, they do have some drawbacks for the borrower. Lenders often require you to keep a minimum balance in your escrow account to protect against any unexpected cost increases. The usual rule requires a minimum of two months’ expenses on your mortgage escrow account, though the limit can be higher on riskier mortgages. Lenders usually review your escrow account once a year to make sure that the calculated payments are keeping up with costs.

How Much Do Escrow Fees Cost?
Just like any other service provider involved in a real estate deal, the escrow agent will need to be paid a fee. Escrow services for a home purchase typically cost 1% to 2% of the final price. Based on national median home values, this translates to a fee of $2,000 to $4,000, which is added to your other closing costs. However, escrow fees are one of the many expenses that are negotiable between the buyer and seller. This means that you can try asking the other party to foot part or even all of the escrow fee, depending on local rules or the current market conditions.

If you’re buying, you’ll also need to deposit between 1% to 3% of the final sale price in a joint escrow account with the intended seller. This earnest money serves as proof that you’re serious about following through with the sale, and it obligates the seller to take the property off the market while the transaction gets finalized. When you complete the transaction, the earnest money you put into escrow will be applied towards your down payment on the house. Earnest money in escrow isn’t a fee, but you should be wary of the fact that it’s possible to forfeit that money if you can’t come to a final agreement with the seller.

When is Escrow Needed in a Mortgage?
Escrow plays a role in both your initial home purchase and the ongoing monthly mortgage payments that follow. In a purchase, the escrow process provides certain guarantees to both the buyer and the seller. Once the two parties agree on a sale, a neutral third party—a bank, title company, or attorney—will receive the signed purchase agreement so that it acts as the escrow agent. Escrow agents exist to monitor and help fulfill the conditions of the sale, such as the buyer’s “earnest money” deposit for a percentage of the sale price.

TYPICAL COMPONENTS OF ESCROW IN REAL ESTATE
Buyer Must Provide…

earnest money towards the down payment

proof of mortgage loan approval

Seller Must Provide…

access to the property for inspections

required repairs or renovations

inspection of title

Once a property is “in escrow”, neither the buyer nor the seller will receive anything from the escrow company until all the conditions of the purchase agreement are met. For example, you might agree to purchase an older home on the condition that the building passes a safety inspection. Other common escrow conditions include repairs and property tax audits. Meanwhile, the buyer’s earnest money proves to the seller that the buyer has both the intent and the ability to complete the purchase. Earnest money can be forfeited to the seller if the buyer backs out or fails to hold up the terms of the contract.

Escrow agents are also responsible for distributing money to parties other than the buyer and seller. These can include commissions to the real estate agent, prepaid mortgage interest to the lender, recording fees to the county office of records, and the escrow agent’s own fee. In this sense, escrow greatly simplifies the homebuying experience: without it, you’d be held responsible for sending timely and accurate payments to each and every party involved in the transaction.

10 Steps To Buying A Home

10 Steps To Buying A Home

#1 GET EDUCATED Take a home buyer education course to make sure you are ready to buy a home. TSAHC has a great program ar www.texasfinancialtoolbox.com

#2 HOW MUCH CAN YOU AFFORD? Create a budget with a mortgage payment that makes you comfortable.

#3 GET APPROVED Shop around for a reputable lender. Usually, your Real Estate Agent has several they could recommend.

#4 WHAT KIND OF HOME TO BUY? Make a list of features and must-have items you need and want in a home

#5 SHOP FOR A HOME Call one of our agents, set up some showings. Take your time, take notes and ask questions as you view the homes for sale.

#6 MAKE AN OFFER Work with your REALTOR and submit a signed proposal specifying the purchase price, terms, and conditions to the seller

#7 GET A HOME INSPECTION. Once you are under contract on a home hire a trusted inspector. A home inspector will examine the home’s condition and alert you to any issues that may be present in the home!

#8 COMMUNICATE WITH YOUR LENDER Send your lender your contract and get all items they request from you in a timely manner to not cause closing delays.

#9 GET HOMEOWNERS INSURANCE This will be required by your lender. Not all insurances are built the same, shop around and find one that suits your needs.

#10 CLOSE ON YOUR NEW HOME Closing day is when the seller receives the funds from your lender, signs the deed to the property, and hands you the keys at the title company!!

#11 MOVE IN AND ENJOY YOUR NEW HOME!!