Foreclosures: When Perception Is Not Reality

Today’s blog post is brought to you by two great powers: Richard C. Oliver and Wiley Miller.

One created the inspiration, and one brought the inspiration to my attention. So let me share with you Wiley’s (he prefers being addressed as such) genius before we go on:

Now let’s talk about why this is wrong.

We’re Building the Future

Hopefully the country is following suit, but as for us here in San Antonio, Texas, we’re not building houses and waiting for people to come love them and buy them. New home development has historically been slow and thoughtful here in the Alamo City, and we like it that way. When it did boom (ahem Stone Oak area, I’m talking about you) we realized our infrastructure was lacking and began quickly taking measures to ensure that folks had access to fire, EMS, and police services, and we’re upgrading those roads to get everyone in and out quickly. It’s more than a matter of supply and demand, it’s what makes sense.

We’re putting up houses with a purpose. Shelter is a basic human need, but it seems like all people really care about is money these days. With new lending restrictions the FHA and banks in general are making sure that when people need money to buy a house, that they’re not getting in over their heads. If it works the way it should, we should see fewer foreclosures and a return to the “good ol’ days.”

2011 is Mistakenly Called the Peak

I think calling this the peak is fine if you’re plotting the foreclosure rate on a graph, but I’m going to call this the trough, and I hope I don’t come off as a pessimist. But the truth is foreclosure isn’t a good thing, and calling it “a peak” makes it seem that way.

It’s going to get worse before it gets better. This January 13 article by Janna Herron of the AP states that “about 5 million borrowers are at least two months behind on their mortgages,” and until the job market picks up and unemployment goes down, we may not see much of a change.

The Rest Can Only go up from Here, but We’ll Do What we Want

The saying goes “Once you’ve hit rock bottom, the only way is up.” San Antonio hasn’t been hit nearly as badly as the rest of the nation. Our median home sales price has stayed right around $150,000 for more than a few years now, meaning value hasn’t changed much and prices haven’t sunk like they have in Florida, Michigan, Nevada, and California.

As a matter of fact, three major San Antonio areas saw slight upticks in sales prices in 2010, and we’re hoping to keep them that way. This article by San Antonio Express-News writer Jennifer Hiller details those areas and recounts the SABOR 2011 Housing Forecast put on by the San Antonio Board of Realtors (SABOR).

Is there Good News?

There always is. I always look for silver lining, even on the darkest clouds. Unfortunately this silver lining comes at a high cost to some.

With interest rates as low as they are, and an influx of foreclosures on the market (or coming onto the market), we’ll see a spike in investor purchasing. Getting the money is just as difficult, if not more difficult, than in previous years, but please don’t think that that will stop investors from doing everything they can to get their hands on homes ripe for the picking.

A future benefit of current investor purchases: while investors are buying up houses on the cheap, they’re planning on fixing and flipping them. They may not sell these houses for top dollar in the future, but they’re sure to make money on the transaction, and hopefully the next buyer will get a house that’s been revamped and is ready for an owner-occupant to live and love it.

The way it used to be, the way it should be.

Danny Charbel is a Keller Williams Realtor in San Antonio, Texas. Please contact him with any questions, comments, concerns, keep the spam to a minimum, bring on the jokes, interesting banter, comical retorts, and insightful inquiries. You can email him at dcharbel [at] kw [dot] com, or follow him on Twitter @dannycharbel.

Third-Annual Texas ENERGY STAR® Appliance Sales Tax Holiday

This email was sent to me, just thought I’d pass it along to you. I did not write this material nor did the person who sent it to me. If you’d like to read the article straight from the Texas Comptroller’s site, click here.

Save Money on Appliances During the Third-Annual Texas ENERGY STAR® Sales Tax Holiday

If your old refrigerator eats money or your washing machine loses more energy than socks, you could be wasting hundreds of dollars in energy each year and should take advantage of the third-annual Texas ENERGY STAR Sales Tax Holiday. Texans who want to purchase a new air conditioner, refrigerator, dishwasher or certain other appliances can get big savings on energy efficient products over Memorial Day weekend. During the annual three-day tax holiday, which runs May 29 – 31 this year, Texas shoppers do not have to pay state and local sales tax on certain energy efficient products.

The tax holiday begins on Saturday, May 29, at 12:01 a.m. and ends on Monday, May 31 (Memorial Day) at 11:59 p.m. Texas shoppers get a break from sales taxes when they purchase household equipment bearing an ENERGY STAR label. Shoppers can expect to save about $3 million overall in state and local sales taxes during the event.

The ENERGY STAR Sales Tax Holiday applies only to the following appliances and household equipment, as listed in the state tax code:

Air conditioners priced at $6,000 or less
Refrigerators priced at $2,000 or less
Ceiling fans
Incandescent and fluorescent light bulbs
Clothes washers
Dishwashers
Dehumidifiers
Programmable thermostats*

* ENERGY STAR specification of programmable thermostats was suspended on December 31, 2009; however, any existing stock of ENERGY STAR labeled programmable thermostats offered for sale by retailers is still eligible for the exemption.

More information and frequently asked questions (FAQs) about the tax holiday are available at www.texaspowerfulsmart.org. For exemption information on associated fees, please see Delivery and Installation Charge FAQs.

ENERGY STAR is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy for products that meet strict energy efficiency guidelines. Qualifying products display the ENERGY STAR logo on the appliance, the packaging or the Energy Guide label. Clothes dryers are not included in the sales tax holiday because they use similar amounts of energy; therefore, the program does not label clothes dryers. For details on products, visit www.energystar.gov.

Y’all come back now, y’hear?

The Fort Worth Business Press has published an interesting article this morning detailing the reasons (one in particular) that particularly affluent people may consider moving to Texas.

The article, titled “Gone To Texas Troubled borrowers seek Lone Star relief,” examines the forgiveness Texas has toward folks looking bankruptcy in the eye.

The article quotes Jim Gaines, a research economist at Texas A & M’s Real Estate Center as saying “It may not work for everyone, but if you have a lot of money and even more debt and you are trying to beat the clock before all your troubles catch up to you, then Texas may be your Holy Land.”

An example? Well in many other states lenders can sue debtors for the price difference between what was owed on their mortgage and what the lender was able to sell the house for after foreclosure. The method of payment? They garnish your wages of course. Unless you live in Texas. Turns out we don’t like that much here, so we won’t allow it. Oh, and we won’t let them touch your alimony or your child support payments either. Do I hear a bunch of Californians hollerin’ “yee-haw?”

I strongly suggest you read the article, it lays out a few very interesting points. Including:

-How and why home lenders can’t seize your car (but your car note lender can);
-How much property can be exempt if you live within city limits;
-How much property (and a strategy to protect the rest) can be exempt if you live in a rural area;
-For those of us who still value our IRA and 401K accounts, you can thank Texas for safeguarding them;
-And of course, ways to stay out of court.

Be careful though. These exemptions and loopholes are really in place to help the cash-rich, those people with a lot of money and a lot to lose. Also, hopefully you’ve got a way to show residency in Texas for the past two years, or a way to hang on for the next two years while you establish residency here. Turns out all 50 states have a rule about claiming these exemptions: you have to be a resident of the state.

Questions? Comments? Concerns? Ready to mosey on down to the great Lone Star State? Email me at dcharbel [at] kw [dot] com. I’ll be happy to wrastle up some grub and welcome you to the Alamo City.

Seller’s Series – The sign is up, now what?

Our question today comes from Dallas, Texas where a homeowner wants to know: “What are the main things that will make it harder to sell my house? Is there anything I could easily repair that will make the process easier and faster?”

I love this question because so many people have educated themselves about this that they overlook the simple things that can really make a big difference when you’ve put your house up for sale.

So the paperwork is done, the lock-box is on the door, and the sign is in your front yard (hopefully it’s a beautiful red sign that says “Call Danny Charbel for more information“). What next?

Here are a few easy things you can do to make your house more appealing:

1. Cut the grass & trim the hedges

Your front yard is your first chance to make a great impression. Cut the grass and keep it looking good, tame those plants growing in the flowerbed, and please touch up the front of the house if it needs it. A little paint can go a long, long way.

2. Clean up the porch

Front porches sometimes get cluttered and never cleaned. If you have plants on your front porch trim them up and make them look fantastic. If they’re beyond help, move them to the backyard (or remove them altogether). Sweep the porch and clean up, replace, or get a welcome mat. It’s not a major investment and will potentially help keep your home clean during showings.

3. Keep the place tidy

Put away all your stuff and keep it away. You’re going to move anyway, so why not start packing things in boxes that you don’t use daily? The more you allow potential buyers to imagine their stuff in your house, the better your odds are of getting acceptable offers.

4. Plug it in, plug it in

You already guessed it: get an air freshener! If your house is larger than 1000 square feet, get a few air fresheners! Make sure they’re all the same scent (don’t distract people with crazy scent changes throughout the house) and make sure it’s something light and airy. You want your house to smell fresh and clean, not like a fruit salad or men’s cologne.

5. Do your dishes

Keep the kitchen clutter-free. Do the dishes, don’t leave pots and pans on the stove, and make sure the refrigerator is as picture-free as possible. I know you’re proud of your kids’ achievements, but it’s time to take their 4th place gymnastics ribbon from six years ago off the fridge and put it away.

6. Joint compound and paint go a long way

I’ve said it before and I’ll say it again: a little paint can go a long, long way. Get a small jar of joing compound at your local hardware store, a putty knife, and some paint to match your existing wall color and start filling in those holes and cracks. It’ll make a big difference to your potential buyers to see that you’ve put TLC into this house, and they’ll feel more comfortable telling their Realtor they’d like to make an offer.

Questions? Comments? Concerns? Have a few more items to add to the list? Send ‘em in! Email me at dcharbel [at] kw [dot] com.

Buyer’s Series – Debt to Income ratio (DTI)

So I talked to a mortgage broker about my desire to buy a house, she ran some numbers, did some research, and told me that my DTI is too high. What’s that mean?

DTI, or debt-to-income, is a ratio that mortgage lenders use to help them guage where you stand financially and whether or not you’re likely to be able to afford a house.

It’s fairly simple (in theory): if your monthly debts are 50% or higher than your monthly income (after taxes) then you’re probably going to be deemed too risky, that is, your DTI is too high. Your ratio says that your debts are half your income, monthly.

If your monthly debts only account for 40% of your monthly income (or less) then you’re probably in good shape to get into a house. Of course your credit rating (FICO) is going to have something to say about it, too.

To lower your DTI just try to pay down some of those cards, renegotiate your monthly payments with your lenders, or pay off that car already. Don’t close any accounts (or open any new ones), that may hurt you more than help you. When in doubt, talk to your lender.

Oh, and great job going with a broker and not a banker! Looks like you’ve been reading my blog!

Questions? Comments? Concerns? Wanna know what FICO is? Email me at dcharbel [at] kw [dot] com.

Seller’s Series – What to Expect

So I know I want to sell my house, now what? What’s going to happen?

Obviously I’m going to suggest you interview a couple of friends and find out about their Realtor®. If they have no suggestions to make, find a Realtor!

Now you’ve got someone on your side who’s ready to put your house on the market. What can you expect?

Here are a few basics:

1. Listing paperwork
Basically you’re looking at a full description of your property. Assuming you’re the legal owner of the property you will be listed, as well as the legal description of your property, the address, the commissions you’re willing to pay your agent as well as the agent who brings a buyer, and of course the price. For help with the price see this previous post about pricing your house right.

2. Measurements
Your Realtor will either pull dimensions up from a previous listing (assuming they’re correct and haven’t changed) or take measurements of each room himself. This Realtor uses a laser measuring device that will accurately measure each room to provide viewers of the listing with an idea of what each room offers.

3. Showings
The idea is to get people into your house with their agent. This is the main way you’ll sell the place. Let’s face it, Realtors account for a large majority of house sales in basically every market. Your Realtor will want to put a sign in your yard, a keybox on your door (or other non-movable fixture), and you’ll want to clean up a bit.

4. The Sale
In real estate we have a saying: everything sells. It may take time, it may be trying, but it’ll sell. And when that happens you’ll want to know exactly what you’re getting. Make sure to ask about what’s expected of you when you accept an FHA, VA, or conventional loan. Is it all Greek to you? That’s okay. That’s what your Realtor is for.

When in doubt, ask. There are no stupid questions.

Questions? Comments? Concerns? Want to talk about the different loans? Need to know what a “net sheet” is? Email me at dcharbel [at] kw [dot] com!

We take a break from our regularly scheduled program…

I’d like to say “Happy Martin Luther King, Jr. Day” to everyone. If today allows you a day away from work, I hope you get a chance to reflect on the significance of this day in history. If not, then I hope you encountered people at work who helped you realize how far our nation has come thanks to Dr. King and the legacy carried on by others in his honor.

Did you know that San Antonio hosts the largest commemorative march in the entire United States? An expected 100,000+ people were expected to be in attendance again this year.

For more information about the City of San Antonio, visit the official website at http://www.sanantonio.gov/.

Questions? Comments? Concerns? Email me at dcharbel [at] kw [dot] com.

We take a break from our regularly scheduled program…

I’d like to say “Happy Martin Luther King, Jr. Day” to everyone. If today allows you a day away from work, I hope you get a chance to reflect on the significance of this day in history. If not, then I hope you encountered people at work who helped you realize how far our nation has come thanks to Dr. King and the legacy carried on by others in his honor.

Did you know that San Antonio hosts the largest commemorative march in the entire United States? An expected 100,000+ people were expected to be in attendance again this year.

For more information about the City of San Antonio, visit the official website at http://www.sanantonio.gov/.

Questions? Comments? Concerns? Email me at dcharbel [at] kw [dot] com.

Is refinancing a good idea?

Interest rates have been increasingly low (especially this year). As a Realtor® I’m exposed to the mortgage community almost continuously, but make no mistake about it, when it comes to the ever-changing interest rates, cost of refinancing, and other things that your mortgage professionals specialize in.

Give your local mortgage broker a call. Ask questions. Make sure you make the right decision, though.

Questions? Comments? Concerns? Need a recommendation of mortgage consultants? Email me at dcharbel [at] kw [dot] com.

Buyer’s Series – The First Step

I’ve decided I need to buy a house. Everyone says this is a great time to buy, there are tons of homes to choose from, but where do I start?

Well that’s an easy one! Start by contacting your favorite (or second favorite) Realtor®. He or she can lead you down the path that is home ownership.

First timer? That’s okay. Most Realtors are well-versed in the first-time home-buyer experience and will be happy to guide you through the process.

Depending on your time frame (how soon you want to buy the house, how soon you’ll be financially able to buy the house, and whether you have leases to wait out or cancel) you may want to go ahead and get pre-qualified on a home loan. The process is fairly simple, takes about 10-15 minutes, and can be done over the phone.

When choosing a lender, be sure to go with someone reputable. If you don’t know where to go your Realtor can help guide the way or shed some light on the subject to help you choose for yourself.

Happy house hunting!

Questions? Comments? Concerns? Need a great Realtor? Want to get to know me? Email me at dcharbel [at] kw [dot] com. Talk to you soon!