Frequently Asked Questions

 

Stacy from The Woodlands asks: My mortgage lender quoted me a rate 2 weeks ago and then today when we sent the contract on the house the rate went up a full 1%. How could this happen in just 2 weeks? Are we being fooled?  The rate you quoted me in your email was way too high for the market right now. Unless you have serious credit issues you should shop around for another lender. It is never too late to change lenders, even after the contract is at the title company. Some lenders are famous for "switching" rates at the last minute thinking that you will have no choice but to stay with them anyway. For current Texas interest rates click on this link MORTGAGE RATES

Josh from Houston asks: We made an offer on another home but we have to sell our home first. Our agent put a contingency in the contract that we have to sell our home by a certain date. What happens if we don't sell our home by that date? Josh, your agent most likely included an addendum to the contract called ( Addendum For Sale Of Other Property By Buyer). This form states that the purchase of the property you want to buy is contingent on the sale of your current home by a certain date. If your home does not sell by that date then the contract is void and the earnest money is refunded to you. Keep in mind that in most cases the sellers may still show the house you want to buy and may accept another contract on it, at which time you will be asked to remove the contingency or lose the house (you will get your earnest money back). This form is common practice in deals of this nature and is included to protect both parties. Your agent will obviously be working hard to sell your home so that both deals will go through. I hope all goes well for you

Kirsten from Pearland asks: I am tired of living in an apartment. I have about $7000 saved up and my credit is OK (a few late payments). I can afford about $1000 a month for a mortgage. Is there any chance of me getting a home? Kirsten, there are plenty of people just like you who buy homes every day. You first need to apply for a loan with a bank, mortgage company, or credit union. They will tell you what you qualify for and which, if any, special programs apply to assist you. Often times there are grants to help first time home buyers or buyers in certain neighborhoods or buyers in certain income ranges. No one has perfect credit and the lenders know this too, so it is unlikely that they would turn you down. Usually they charge a higher interest rate or ask for a larger down payment to "risky" applicants. As far as the home goes, there are plenty of homes available in the Pearland area that meet your monthly price range. I suggest that you take care of your loan application, get a pre-approval letter from your lender and then call us so that we can get started finding a home for you. (713) 894-9436

Rick from Deer Park asks: There are a lot of new homes in the La Porte/Deer Park area and my wife and I are interested in buying. What can a real estate agent do to help us when buying a new home. Rick, I'm glad you asked that question, because most people don't know that real estate agents can help you with new homes just like they can with previously owned homes.  When you buy a new home, you are essentially buying the home from the builder and the contract is usually different from those used on previously owned homes. Normally the builders have there own contracts and require that they be used. As your agent we will not only review the contract with you, but will help you negotiate issues such as upgrades, price, warranty, etc. We will also point out neighborhood issues such as schools, planned future construction, taxes and fees associated with the property, etc. Using a real estate agent as your "Buyer's Agent" when purchasing a new home will cost you nothing (the builder pays the commission) and will most likely save you money in the long run. By the way, San Jacinto Properties can rebate part of our commission back to you at the closing. That will come in handy furnishing your new home, won't it?

Michael from South Houston asks: Is there a way to find out over the internet how much my home is worth? I don't feel comfortable dealing with an agent in my home just yet and I want to make some decisions myself before I talk to an agent: Yes Michael, there is a way to find out a "ballpark" value for your home over the internet. Unfortunately, the national market value generators tend to use dated information and give a broad window of value. The best way to find out how much your home is worth is to have a local agent run a CMA (Comparative Market Analysis) for your home. For a free CMA on your home click here

Janet from the inner-loop area asks: My friend and I want to buy a house together. We are not married or related. Is it possible for us to buy in both our names? Yes Janet, it is possible. This is quite common in commercial transactions but not as common in residential transactions. It is called Tenancy in Common and basically gives you and your friend an undivided interest (or share) of the property. You would both essentially have a deed to the property. There are a few differences in Tenancy in Common and what is normally seen in residential ownership. Under Tenancy in Common, there is no right of survivorship. In other words, if you were to die, your friend gets the whole property not your heirs. Also, and this is the dangerous part, either one of you could sell your share to anyone else at any time. That's not a very comforting feeling knowing that someone you live with could sell part of your home and you can't stop them. So to answer your question Janet, yes you can buy a home together, but it's probably not a good idea. You could buy the home in 1 name and avoid these problems by going to an attorney and having a separate agreement drawn up as far as equity, etc.

Kim from LaPorte asks: I am in my 20's and a single teacher. I don't like apartment life anymore and I would love to own my own home. I have pretty good credit but not very much cash to put down as a down payment. Is there any chance that I could find a home here for around $110,000 and actually be able to buy it? Kim, many of clients are exactly like you (young, fist time homebuyers, not a lot of cash). Almost anyone can afford to buy a house Kim. Mainly what it takes to get a home loan these days is job stability and a recent record of paying your bills on time. There are many loans offering $0 or very low down payments and grant money available through various entities. La Porte for example has had SETH (Southeast Texas Housing) Grants available for some time now. As a teacher Kim, HUD has a program called "The Teacher Next Door" which allows teachers to get foreclosed HUD homes for 1/2 price. Also, Bank of America offers 2 loan programs for teachers, 1 of them is a $0 down payment loan. Addressing the home issue, yes there are homes for around $110,000.  So you see Kim, you have a great chance of finding and buying that first home. And remember, if you use us as your Buyer's Agent our services are FREE to you and we can give you a rebate of our commission from the sellers as our way of saying "Thanks for choosing us, and enjoy your new home."

Jay from Sugarland asks: What is a "Home Warranty"? Jay, a Home Warranty, just like any other warranty is kind of like an insurance policy that you have on certain "covered" items. For example, most home warranties cover HVAC, plumbing, and appliances. If your oven quits working 3 months after you move in to the house, then the home warranty covers the repairs (you are usually required to pay a nominal service call fee though). Same thing applies if your heater breaks down in January or your A/C in August. The home warranty is not just for people moving into a home either. Anyone can buy a home warranty, even if you have lived in the home for years. It's kind of like buying an extended warranty on your car or computer and gives you some peace of mind. Most home warranties cost about $450 per year and cover many items in the home. You can also pay a little more and add coverage on things like your pool and spa, refrigerator, garage door opener, etc. that in most cases are not covered in the "basic" coverage. I recommend that if you are selling your home, offer a home warranty as part of the deal. It will make the new owners feel a little better knowing that most of the big items are covered. To see an example of one home warranty company go to www.firstam.com/warranty 

Charles from Shore Acres asks: We own our home and are getting ready to sell it. The deed is in my wife's name and her deceased first husband's name. Will this cause a problem when we try to sell the home, and if so, how can we fix it? Charles, yes it will cause a problem but nothing that the Title Company shouldn't be able to take care of before the closing. You could go ahead and have a real estate attorney or Title Company help obtain a new deed ahead of time, but it probably won't be necessary unless there are liens against the property or other heirs are laying claim to the property. If you think that there may be problems, maybe you should go ahead and have it changed now so that there won't be any surprises or delays at the closing. Otherwise, there shouldn't be any problem taking care of it after you get a contract on the house and it goes to the title company. The Title Company will surely fix any problems before the closing takes place.

Amanda from Virginia asks: We are re-locating to Houston in a few months and want to get information about the area schools. Can you recommend a good school district? Amanda, there are several web sites available that rate area schools and even link you to their individual web pages. There are also quite a few private schools in the Greater Houston Area too. I cannot "recommend" a school district to you but I will give you the URL's so you can review the area schools and make your own judgement. Having been a public educator in the area for over 20 years myself, I can tell you that there are many good school districts to choose from and every district has its pro's and con's. Keep in mind that STAAR scores are only 1 indicator as to the quality of education offered by a school. I recommend that you come up with a list of "qualities" that are important to you and contact each district via e-mail to see how each district rates on your list. Here is the link to the Texas Education Agency www.tea.texas.gov

James from Houston asks: My house is almost paid off and I am thinking about selling. How can I avoid paying taxes on my capital gains (profit)? I heard I had 2 years to reinvest without penalty. James, The 1997 Taxpayer Relief Act contained a big break for homeowners. If you sell your home, you may exclude up to $250,000 of your capital gain from tax. For married couples filing jointly, the exclusion is $500,000. The law applies to sales after May 6, 1997. To claim the whole exclusion, you must have owned and lived in your residence an aggregate of at least two of five years before the sale (this rule is called the "ownership" and "use" test). You can claim the exclusion once every two years. There are some rules that apply to home office deductions, divorce etc. so contact your accountant/CPA to make sure.

We get asked this question by people all of the time: Why do agencies charge so much to sell a home? What exactly are they doing to justify paying them so much? Selling a home is a big decision and involves a lot of issues such as money, laws, time, marketing, legal forms, etc. Just as you pay a lawyer to represent you in court, or a CPA to do your taxes, a real estate agent is "hired" to represent you and your interests in the home selling process and to make sure that you get the best information and the most money for your home. Here's what a typical agent does to sell your home: 1) more than likely the agent "farmed" your neighborhood with mailings, advertisements, etc. that cost him between $50-$500 a month just to let you know he's there 2) After contacting you by phone, the agent spends about 4 or 5 hours putting together a marketing plan for your home that includes a comparative market analysis of the neighborhood, a weekly plan of attack on marketing your home, MLS and tax records, a listing agreement contract designed specifically for you, research about the neighborhood and schools, etc 3) Initial home consultation, including reviewing all of the information mentioned in #2, a walk through/assessment of your property, and recommendations for a listing price and what to do to make your home look nicer. 4) The agent then goes back to the office and begins initiating the marketing plan by entering the property data into the MLS and also uploading photographs to numerous internet sites that will showcase your home. The agent will also produce and printout flyers on your home and give them to other agents he knows to stir up some initial interest. The sign and flyers will go in the yard too (maybe a Talking House transmitter too). 5) The agent then searches for interested and qualified buyers through MLS matches of buyers and through phone inquiries about the property. At the same time the agent has sent in and paid for a newspaper ad and is setting up appointments from other agents wanting to show the property. 6) An Open House is usually the next step, and the agent will pay to advertise the Open House and then go out and buy food and drinks to satisfy the curious Open House attendees 7) By this point if the house hasn't had an offer made on it yet, the agent will again run a CMA of the neighborhood to see what properties have sold and what new ones are available. He will also report to the seller any negative comments about the property so that they can be corrected (if possible). Another newspaper ad and Open House will probable be done. 8) After about 6-8 weeks if interest in the home is waning and no offers have been made it is usually time to consider lowering the price or making some type of improvement that will draw attention to the property. Another Open House is likely and the agent may send out mailers to the neighbors to see if they know of any interested buyers. 9) When a offer is finally made on the property, the agent takes the offer to the seller and they discuss the pros and cons of the offer and either accept/counteroffer/or decline. Assuming the offer is accepted, the agent must then take the contract to the title company to begin the sale. 10) During the period while the contract is at the title company, the agent will be scheduling times for inspections and appraisals and will often be present during these to see if there are any problems 11) Usually there are minor problems found during the inspections and the agent will again meet with the seller to go over what needs to be repaired or if the repairs are too extensive to do, in which case the sale falls through and you start all over again. 12) Finally, the agent spends hours on the phone making sure that the title company and mortgage company have all of the paperwork in order and a closing date is set. The agent will get a Closing Cost Statement before the closing and will go over the costs with the seller. The agent will then meet the seller at the closing and make sure that all of the paperwork is in order and that there are no surprises. And last of all, yes the agent gets paid. Now, how many hours and how much of his own money do you think that this agent spent on the sale of this home. Keep in mind also that the agent most likely had to split the commission with an agent from another agency (the Buyers Agent), and also keep in mind that most agents have to give a percentage (between 10%-50%) to their broker. After all is said in done, the agent who sells a $100,000 home typically will only "profit" about $1000 (after expenses and commission splits). Divide that by the 50 or 60 hours they have spent selling the home and you get about $15-$20 an hour. That seems like a very reasonable rate compared to an attorney or CPA, don't you think? Keep in mind also that the agent is never "guaranteed" any money even after performing his services. If the home doesn't sell before the listing agreement expires (usually 180 days) the seller can walk away and not pay a penny to the agent. Try asking any other professional to perform 50-60 hours of work for you FOR FREE and see what they say.

Tammy from SW Houston asks: I am interested in selling my own home and I think I might have actually found a buyer already (a co-worker). I want to make sure that everything is done properly but I don't want to have to pay an agent a big commission just for handling the paperwork. Will agents fill out the papers for a smaller fee? Good question Tammy. First, lets educate everyone about FSBO's (For Sale By Owner). Selling your own home can save you a lot of money. It can also cost you a lot more. How? Most homeowners do not have a clue as to all of the laws and paperwork involved in selling a home. Without writing a dissertation about the home selling process, I can tell you that you are taking a risk by selling your own home and not relying on the expertise of a qualified, licensed real estate agent who knows the laws and what paperwork must be filled out. You also run the risk of being sued by the new owner if you failed to disclose any problems with the home. Also, certain types of financing can actually cost you more money even though you're not the one borrowing it. Now, back to your question Tammy. Yes, some agencies will assist you with the paperwork part of the home selling process only. You will have to call around to see which ones will and how much they will charge you. I might point out that not not all agencies are insured for errors and omissions, so be sure to ask if they are. Yes, San Jacinto Properties is fully licensed and insured. To find out more about listing your home and discounted fees click here

Scott from Kingwood asks: How do you know if a home is in a flood zone and will require flood insurance? Well Scott, every home in the Greater Houston area is in a flood zone (just kidding). But seriously, a large portion of our area is within a 100 year flood plain and most lenders will require you to purchase flood insurance. Even if your lender doesn't require it, it is not a bad thing to have in this area. You can call a local insurance agent and he/she will have flood maps which will indicate the properties proximity to a flood zone. Some flood zones are considered higher risk zones and therefore the insurance rates will be higher on properties located within these high risk zones. You can also locate information about flood maps by going to the FEMA web site at http://www.fema.gov/national-flood-insurance-program-flood-hazard-mapping 

Sandra from Pearland asks: My taxes went way up this year and I've only lived in my home for 8 months. What can I do to lower my property taxes? Sandra, there are a couple of ways to lower your property taxes. First, and easiest, is to apply for a homestead exemption with your county tax assessor. You live in Brazoria County and the form can easily be downloaded from their web site at http://www.brazoriacad.org  . Next, you can protest your taxes by making an appointment with the appraisal district. In order to protest though, you must have evidence and information to substantiate why you feel that your home is not worth what they say it is. Typical things that can lower your valuation are cracked slab, structural faults, etc. but don't expect to get everything you ask for. Keep in mind that even if they agree to lower your valuation by $5000, that will only result in a very small reduction in taxes, maybe as little as $200 a year. So before you go through all of the trouble to protest, make sure that it's worth your time.

Steve from LaPorte asks: I am planning to sell my home in the near future but it's only worth between $90K and $100K. Should I spend money on upgrades and repairs or just not worry about it. I'm afraid if I spend too much money fixing things up, I won't get my money out of it. Steve, you are correct in thinking that too many repairs/upgrades will actually cost you more money in the long run, especially on a house in your price range. Spend your money on repairs that must be made in order to sell the home. For example, if your roof is 15 years old it may not pass the appraisal from the lender and they will require it to be replaced before they will fund on the loan. Also, if your foundation is in need of leveling, that is also a red flag to some lenders. As far as upgrades such as paint, carpet, appliances, cabinets, tile, bathrooms, etc. that is a tough call. Use your common sense, if the carpet is 1970's vintage shag then by all means spend the money and upgrade. But if the carpet is 5 years old and can look nice with a good steam cleaning then just clean it. Why spend $2000 laying new beige carpet if the potential new owners hate beige. You can always leave a carpet allowance for the new owners to have their own carpet color installed. Just think of it this way, if you walked into your home as a potential buyer right now would you buy the home in it's current condition? You can always adjust the price to allow for repairs, do some repairs yourself (paint, clean, landscape), or fix everything and hope to sell your home for top dollar. Try this web site http://www.homegain.com/client/max_splash to calculate the cost-effectiveness of repairs and upgrades.

Do you have a real estate question for the experts to answer? If so, send your question to Dave@SanJacintoProperties.com We can answer you privately or post your question and our answer on this page

 

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