Sep
28
One Big Mistake Agents Make When Negotiating A Texas Home Sale
Posted by garreth under Austin, For Buyers, For Sellers, Mortgage and Finance
Make sure your checks are balanced
Negotiating a home sale is a mixture of balancing risk, terms and contingencies. OK, so the title is a little bold, but would you have read the original post if it was titled Ramifications of The Third Party Financing Addendum For Credit Approval? Probably not, but the addendum is one of the most widely misunderstood forms used to buy homes in Texas.
As a seller, you want to minimize contingencies – “get out clauses” for the buyer, so that you can be more sure your home will actually sell. As a buyer you want as many escape clauses as possible. There are several major and common reasons a transaction for a home purchased with a loan will not close:
1. The lender’s appraiser values the home lower than the contract price – and won’t lend any money. There are obviously ways around this, beyond the scope of what we’re talking about here – get in touch if you want to know more.
2. The buyer doesn’t qualify for the financing – they don’t get credit approval. The lender would possibly lend on the home, but not to the buyer. That’s why it’s vital to obtain a pre-approval letter (different from a pre-qualification letter by a whole bunch) as a buyer, and for the seller’s agent to verify that the lender letter is legitimate. (As a client of mine said recently, anyone can get their brother-in-law to write a lender letter)
So the Third Party Financing Addendum only talks about the second item. It gives the buyer a time line in which to fully apply for the loan with the terms laid out in the added. This is the buyer’s credit approval, nothing to do with the home. Many agents believe that this contingency period has to include a number of days for the entire loan to be underwritten (including the home, title work, and buyer’s credit). It doesn’t. This portion just covers the buyer, and can be turned around by a competent lender in under one business week.
So as a seller, don’t accept an unwieldy amount of time in the 3rd party financing addendum – time is of the essence, and it shouldn’t take 28 days to get a buyer approved and underwritten. That’s the number of days I see many agents putting in by default.
So what about the appraisal – that’s a big contingency – when does that happen? Unless the contract specifies a date for the appraisal, then the buyer can back out of the contract due to a low appraisal at any time before closing. That’s right, the purchase contract (not the addendum) specifies that the contract is contingent on appraisal (and title etc) throughout.
So as a seller, to ensure a timely appraisal for a far off close date, you might add some additional language to the contract to demand an appraisal quickly. Otherwise you could be in contingency limbo for a long time.
Garreth Wilcock helps clients buy homes at Mueller Austin and beyond.
Jun
22
Four Reasons Not To Move To Austin Texas
Posted by garreth under Austin, For Buyers, Regional News, Relocating
I can certainly wax as lyrically as the next TREC licensed real estate agent about the boons of a large university presence, the burgeoning ecomony and the major employers and the low costs of living here in Austin, TX. But it’s June and my lyrical wax is about to melt, and I thought I’d blow off some steam. Here are some reasons that some don’t move to Austin:
Austin is hot. Not just a little toasty. Resolve-breaking hot. If you look at average temperatures in Austin, the moderate sounding 84 degrees in July and August might not seem too bad. If you look at the average high for August though, it’s 96 degrees, and the sun is pretty fierce – we’re at the same latitude as Cairo. Really.
Good news for sun-lovers, solar-power lovers, and cold blooded animals who like complaining about the weather. Bad news for pale English people like me who scurry between air-conditioned spaces and large bodies of water. Luckily Austin is replete with lakes, pools, rivers and swimming holes, and large shade trees.
Property tax is relatively high. Of course the flip side of their being no state income tax in Texas is that the property tax is a little higher than in other states. For example, my property tax rate in 2009 was around 2.2% of appraised value.
The good thing about homes in Austin are that the prices are lower than in other large US cities. If the median house price in Greater Austin in 2009 was under $190,000 it was still only around $300,000 within the city limits (equating to around $6,600 in annual property taxes before exemptions)
Pollen Sometimes referred to as the self-proclaimed Live Music Capital of the World, there’s another long-winded phrase I sometimes use: The Fall Allergy Capital of the US. While I’m in whining and griping mode, I’ll spit out that I never suffered from allergies until I moved to Austin, and then after about three years I got snookered by them. All it took was a minor change in diet and a bit of education and I don’t even notice them any more.
Too many top ten lists. OK, I’m scraping the bottom of the top of the barrel here, but Austin does get a lot of “greenest city”, “best City to get a job”, “best city for meeting smart, attractive people who will gladly lend you ten dollars” and other accolades. If you don’t believe me, check out the Austin wikipedia page.
The glorious TedXAustin unveiled its 2011 theme last night – “Right Now”, with a mention of Austin’s crowning as City of the Next Decade. Which means that there’s going to be alot going on here, and alot of other people moving here too.
If you think you can handle the pollen, greatness, property tax and heat, then you could consider a move to Austin. Lots of people do – the population doubles every 20 years.
Garreth Wilcock is an ex-patriate Austin Realtor ®. You can search Austin homes for sale at his website, and get in touch to take the heat and pollen test to relocate here. Heck, if you’ve had enough of all the new people, heat and property tax, he can even sell your home so you can leave.
Leave a Reply
Jun
7
Austin Mortgage Rates: Weekend Update
Posted by garreth under Austin, For Buyers, Regional News
Austin loan officer John Schutze runs us through his weekly mortgage rate round up.
“Mortgage rates keep inching higher as we end the week!
The same factors that lead to the large increase last week are still keeping the pressure on rates:
- Rising oil prices and gas prices
- Optimistic predictions about the end of the recession
- Concerns over the U.S. total debt load
- Fears of inflation
Given the factors above, investors desire a higher rate of return on their investment which is driving rates higher.
The Fed has spent around $600 billion of the 1.2 trillion allocated to purchase mortgages. They bought $25 billion last week but it wasn’t enough to push 30 year rates back below 5.0%. So the trend remains higher for now…”
John works at Bank of America and writes a blog about Austin mortgages.Garreth Wilcock is a Realtor ® in Austin, Texas. You can search Austin homes for sale at his website.
Leave a Reply
May
29
Austin Mortgage Rates: Weekend Update
Posted by garreth under Austin, For Buyers, Regional News
Here’s Austin loan officer John Schutze with his weekly update on the ups and downs of the mortgage market.
“Mortgage rates leaped higher this week!
On Wednesday, mortgage rates rose more than .5% in one day! The cause was the result of a confluence of factors, including:
- Rising oil prices and gas prices
- Optimistic predictions about the end of the recession
- Concerns over the U.S. total debt load
- Fears of inflation
In addition, momentum trading played a role.
As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.
Rates generally take a breather after a big movement like this week. So far that’s been the case as we end the week. The damage is done. It’s probably a good time for those “fence sitters” to get up and make a move! “
John works at Bank of America and writes an Austin mortgage blog.
Garreth Wilcock is a Realtor ® in Austin, Texas. You can search Austin homes for sale at his website.
Leave a Reply
May
22
Austin Mortgage Rates: Weekend Update
Posted by garreth under Austin, For Buyers, Regional News
Home loans in Austin Texas: here’s local lender John Schutze with his weekly update:
“Mortgage rates edged slightly higher this week.
The Fed announced they were selling $162 billion worth of Treasury Bonds next week. This is drawing some investor attention away from Mortgage Bonds and caused rates to increase yesterday.
In other news, the Fed has purchased a total of $482 billion in mortgages out of the 1.25 Trillion they have allocated to spend this year. So they have $700 billion remaining to spend throughout the rest of the year. This should keep rates near current levels for the remainder of 2009! “
John is a loan officer with Bank of America and has an Austin mortgage blog which has plenty of interesting articles on factors impacting lending rates.
Garreth Wilcock is a Realtor ® in Austin, Texas. You can search Austin homes for sale at his website.
Leave a Reply
May
16
Austin Mortgage Rates: Weekend Update
Posted by garreth under Austin, For Buyers, Regional News
Mortgage rates: here’s John Schutze™s weekly update:
“Mortgage rates edged lower this week!
The impetus for the rate rally this week may be a long-awaited stock market correction. After touching multi-year lows in mid-March, the Dow Jones added 30 percent going into last Friday. It has since lost close to 300 points and as those dollars leave the stock market, they’re finding their way toward bonds. The demand is pushing bond prices up which, in turn, causes rates to fall.
The rally in rates picked up steam on the heels of April’s Retail Sales report. With figures off a half-percent from March and roughly 7 percent from 2008, investors are concerned that consumer spending may not be as strong into the summer months as previously expected.
Consumer spending is important because it comprises two-thirds of the economy and is believed to be the way out of the current recession. If expectations of a recovery caused mortgage rates to rise recently, it makes sense that a revision of those expectations would cause rates to fall.
Markets are fickle, however, and the slightest bit of “good news” could pump cash back into stocks at the expense of bonds.
Until then, however, enjoy the low rates!”
John is a loan officer with Bank of America and has an Austin mortgage blog with more news on local lending rates.
Garreth Wilcock is a real estate agent in Austin, Tx. You can search Austin homes for sale at his website.
Leave a Reply
May
15
How to Buy a Home in Austin, TX With No Down Payment
Posted by garreth under Austin, First Time Homebuyers, For Buyers, Regional News
The Stimulus Package gave us the $8,000 tax credit for first-time homebuyers in February. It looks like now that buyers in Austin can use this tax credit for their downpayment. Is this the return of the zero-down home purchase in Austin?
Since February, home buyers have been able to claim a true tax credit of up to $8,000 when they purchase their first home (over $80,000 with income qualifications on the buyer). This credit could be applied for at the next tax filing.
For an FHA buyer looking at a $200,000 home, the minimum downpayment would be 3.5% or $7,000. Other out of pocket expenses for the buyer known as buyers’ closing costs can add another few percent to this.
So what’s changed with the tax credit? Department of Housing and Urban Development Secretary Shaun Donovan recently revealed that the FHA is going to permit its lenders to allow borrowers to use the $8,000 tax credit as the downpayment. Rather than wait for the $8,000 tax credit, buyers will get a short term loan which they can use as the downpayment.
So how would a buyer in Austin get a home for zero-down? On a home up to $228,500 in value, a buyer eligible for an $8,000 tax credit would be able to use the credit as the entire downpayment for the home.
A seller can also contribution up to 6% of the sales price towards the buyers’ closing costs, which can mean a first time homebuyer would have to bring zero cash to the closing table.
This is pretty significant for the first time homebuyers market in Austin which is already strong in areas like Mueller and Northwest Austin. The measures bring more ready willing and able buyers into the market, stimulating it even further.
Garreth Wilcock is a real estate agent in Austin, Tx. You can search Austin homes for sale at his website. Call or email for more information about buying a home with no downpayment and no closing costs.
Leave a Reply
May
8
Austin Mortgage Rates: Weekend Update
Posted by garreth under Austin, First Time Homebuyers, For Buyers, Mortgage and Finance, Regional News
Here’s John Schutze™s weekly mortgage rate update:
“Mortgage rates continued to increase this week.
The Fed’s “Stress Test” on the country’s largest banks showed that overall the banks are in good health. Some of the banks may need to raise some cash during the next couple of years assuming the economy continues to deteriorate significantly. But most of the banks have said they could raise the money if needed. The financial market’s took the news as positive in the end.
Mortgage rates are directly related to the price that mortgage bonds are selling for on Wall Street. What we’ve noticed this week is that mortgage bond prices have decreased which leads to higher rates.”
John is an Austin loan officer with Bank of America and has an Austin mortgage blog with more news on local lending rates.
Garreth Wilcock is a real estate agent in Austin, Tx. You can search Austin homes for sale at his website.
Leave a Reply
May
1
Austin Mortgage Rates
Posted by garreth under Austin, First Time Homebuyers, For Buyers, Mortgage and Finance, Regional News
Looking for mortgage news in Austin? Here’s John Schutze™s mortgage rate update:
“Mortgage rates increased about .125% across the board this week.
The Fed left the Fed Funds target rate at 0-.25%, but commented that while the economy has still contracted over the past month, “the pace of contraction appears to be somewhat slower.” Another interpretation could be “the ship is still sinking but it appears to be sinking slower than before.”
These comments were enough to cause the stock market to close higher on Wednesday. In this market, any news that’s perceived to be good for the economy will likely cause the stock market to rise. When stocks are higher mortgage rates tend to trend higher as well which is what happened this week.
Some good news for rates was the Core Personal Consumption Expenditures Index which showed a year-over-year increase of 1.8% in March. The Fed likes to see this number remain under 2.0%. The PCE measures the price changes of consumer goods and services and readings under 2.0% indicates that inflation isn’t a primary concern at least in the short term.
Many economists are concerned about inflation ticking up during the next few years. Inflation concerns tend to cause rates to increase so it’s important to keep a watch on the PCE report.”
Check out John™s Austin mortgage blog for more news on local lending rates.
Garreth Wilcock is an EcoBroker in Austin, Texas. You can search Austin homes for sale at his website.
Leave a Reply
Apr
24
Austin Mortgage Rates
Posted by garreth under Austin, First Time Homebuyers, For Buyers, Mortgage and Finance, Regional News
Here™s the scoop on mortgage rates for Austin. This is John Schutze™s mortgage rate update:
œMortgage rates didn’t change much this week.
The financial news from Wall Street was viewed as “more of the same” this week. But next week we have several events that might affect rates. The Fed meets on Wednesday to discuss policy and determine the future Fed Funds rate. The press release from this meeting is closely watched by the financial markets. Plus the Personal Consumption Expenditures index is released on Thursday. This measures the price changes of consumer goods and services and is the Fed’s favorite measure of inflation.
An interesting fact, the average gain for the S&P 500 Index during the first year after the lowest point of a bear market is 36.5%. The lowest point during the current bear market was on 3/9/09 at 677 points. In the following 6 weeks to date the S&P has gained 28.5%!
John™s Austin mortgage blog has news on factors that impact lending rates.
Garreth Wilcock is an EcoBroker in Austin, Texas. You can search Austin homes for sale at his website.
Leave a Reply
Mueller Austin Homes |
Contact Me |
Powered by REALTOR.com®
| 