Foreclosures… and why they usually are not good deals!

By definition, Foreclosure does not mean discount or great deal.  By definition, Foreclosure means a property that an institution or lender has taken as collateral for an unpaid loan or debt.  That’s it and that’s all. 

While on some occasions, the process of foreclosure does produce homes on the market for discounted prices relative to market value, these, in the current Dallas area real estate market, are more the exception than the rule.  Many foreclosures are homes that were bought in the last five years and therefore never had any real equity.  The bank never made any money on them, so they won’t usually sell them for any less than what was owed.  Nobody has put a down-payment on a house in the last 10 years, so expect more of the same.   This does not mean that foreclosures are not great purchases, it just means that not all foreclosures are great purchases.  There is no real reason to target only foreclosures to buy as a home.  Considering any and all homes that fit a certain price and geographical target is a wiser way to search for homes. 

More on this later…

BigDBlog

First Time Home Buyer Tax Credit – Time is Running Out!

The $8,000 free tax credit for home buyers who haven’t owned a home for the previous three years is scheduled to expire on December 01,2009.  If you haven’t found a house, made an offer and started the closing process by mid October, you’re likely to miss out.  That means that Dallas area home buyers who are interested in taking advantage of the free credit should be looking for homes right now. 

 

To find out more about who qualifies for the home buyer tax credit, request this information in comment section below.

 

The home buyer tax credit is available nationwide, so this applies to Dallas, Richardson, Carrollton, Plano, Coppell, Garland, Sachse, Allen and all other DFW cities.  Don’t pass up this incredible opportunity to buy a home with record low interest rates, record high inventories and a once in a lifetime free tax credit all while the market is showing signs of recovery.  These terms won’t last long…

 

Happy hunting,

 

BigDBlog

A Real Estate Revolution

What will it take to revolutionize residential real estate in the United States?  Is there any reason to think this is necessary?

BigDBlog thinks so.  Here is what we believe it will take.

1. A legitimate barrier to entry in the industry (A Test similar to the MCAT, LSAT or CPA Exams)
2. More stringent standards for MLS usage
3. A more client centered industry focus
4. More competition.  (No one model is best for everyone.  Different pricing and service models should be welcome. (NAR has to stay out of it.)

BigDBroker looks forward to the discussion and the evolution of our industry.

People are Freaking Out

People should really stop freaking out about the current housing market if they live in our great state of Texas.  The summary below is from RECON (ATM’s real estate center in College Station) and is terrific news.

HOUSING MARKETS SEE LOW DEPRECIATION RISK

WALNUT CREEK, Calif. (PMI Group) – Mortgage insurance firm PMI Group has estimated the future state of Texas’ housing markets in its fourth quarter 2008 U.S. Market Risk Index.

The report focuses on where markets will be two years from now and calculates risk of home price depreciation.

The firm predicts that Austin–Round Rock has a risk index of 17.4, or a 17.4 percent chance of experiencing price declines in its housing market within the next two years. That is up from its 5.4 percent chance in third quarter 2008.

San Antonio has a risk index of 3.8, up from its 1 percent chance of price depreciation.

Houston–Sugar Land–Baytown has a risk index of 2.7, up from less than one in third quarter 2008.

Dallas–Fort Worth has the lowest risk index of the major Texas metros, with a 2.5 percent chance that its home prices will decline over the next two years, up from a less than 1 percent chance.

For the complete PMI U.S. Market Risk Index, see PMI’s fourth quarter statistics.

Home buyers and even sellers in Dallas, Richardson, Plano and surrounding areas should be ecstatic about this news.  If you are, and you want more good news, stay tuned or respond to BigDBlog to find out how to take advantage of this great market.

Thanks,

BigDBlog

Listen to your REALTOR… If and only if…

If and only if your real estate consultant is telling you that Internet advertising is the most powerful way to sell your home should you listen to him or her.  He or she wouldn’t be wrong if they say that signs, flyers, open houses, word of mouth and prayer work also, but the important thing is that your home is in front of buyers’ eyes. 

Where are buyers’ eyes?  On the Internet.  

Home buyers are much more savvy than they were 10 years ago.  The way that they search for a home and/or a real estate professional is both much more complicated and much more simple all at the same time.  It is more complicated in that many buyers know that they have much of the control when shopping for homes and leverage both market conditions and available resources to their advantage.  It is more simple than ever in that most home shopping is done by the buyer on the internet.  A buyer can see thousands of homes from the comfort of their living room in a matter of hours as opposed to spending weekends and evenings scouring neighborhoods and bumping in to grumpy home owners. 

On a similar note, BigDBlog is reminded that the corporate For Sale By Owner market is often misleading as far as its offerings for Internet “advertising.”  Owners selling their own homes and taking the risks associated with it need as much exposure to buyers as possible.  Many FSBO programs simply sell ad space on thier FSBO web sites.  Thes sites are almost exclusively visited by other sellers and rarely shopped by active buyers. 

Regardless of who is selling the home, remember that Internet advertising directly to active home buyers is the most important aspect of selling a home in the current market.

BigDBlog

Real Estate Questions and Answers #1

Q.  I want to buy a home to take advantage of the low prices, high level of homes on the market and extremely low interest rates, but I have to sell my current home first.  Considering the current market, should I wait until the market is better to sell and then buy?

A.  It depends.  Isn’t that the answer you wanted?  It depends on the value of the home you own now and the home you will likely purchase.  In as few words as possible, if you can sell your current home for a fair market value that is at least going to cover what you owe on it, then now is the best time to buy a home in the Dallas area.  This is especially true if you are planning to buy a larger more expensive home. 

Let’s assume that sellers are taking an average of 7% less than their asking price on well priced homes.  If you are selling your $185,000 home, you might have to accept $172,050 and take the hit for $12,950.  On the other hand, let’s say you plan to buy a home for $285,000 and you can get it for $265,050 (7% below asking) saving $19,950.  You will have a net gain of a $7,000 discount on the new house if it were a normal market. 

Clearly the math doesn’t work and the timing is not right if you owe more than your current home is worth, or if you happen to be planning to move to a less expensive home.  There are of course hundreds of variables and scenarios where it would or would not make sense to sell and buy this year, but this is a common occurance.

Looking forward to Real Estate Q&A #2?  Send us your questions…

BigDBlog

Real Estate Resolutions for 2009! You should have at least one.

Holy 2008!  There are some amazing opportunities in the Dallas residential real estate market for disciplined and stable buyers and investors.  How about a three bedroom / two bathroom home in Lake Highlands that you can get today for under $180,000 and rent for over $2,000 per month?  How about the $2.5 million homes in Highland Park that you can own tomorrow for $1.8 million?  Forget about the Cowboys, and make your own successin 2009. 

Below is a cheat sheet / fact sheet for anyone interested in looking back on this real estate market with a smile and saying, “I bought low when everyone else was frozen with fear” as opposed to “I waited until the market came back (which really means, I waited until the prices came back up.)”

• Buy before May if you want to buy this year
• Sell between March and July if you want to get maximum value this year
• Evaluate where you are investing for the short and long term – Highly Volatile Stocks or the most stable real estate market in the USA which happens to be your back yard
• Secure a 15 or 30 year fixed rate mortgage NOW!  Good credit and solid income will get you under 5.25%
• Beat the News Media to the reality that this year should be a busy one for local home sales.

Thanks for visiting,

BigDBlog

 

NOTE:  BigDBlog is happy to point you in the direction of local vendors to help with any of your residential real estate and financing needs in the Dallas area.

Foreclosure Field Day in Texas

BigDBlog has always taken the position that Foreclosure is not synonymous with “great deal,” and while I still hold that view, Foreclosures have been more and more enticing this year.  Recently I’ve spoken with several foreclosure buyers and witnessed settlement statements and closings where home buyers are getting great homes for prices well under market value.  I recently sat in on a closing where a young couple bought a home in North Dallas with three bedrooms, two baths and an attached two car garage with over 2,200 square feet for less than $140,000.  The same exact home sold just three years ago for over $180,000.  Another young couple bought in East Richardson for $35,000 under market value. 

Dallas has several opportunities to learn how to find and buy foreclosures, so contact BigDBlog to find out how you can learn.

 

Have a good one,

BigDBlog

What are you waiting for? Buy Now – Sell Later

“We’re waiting for the market to get better.”

“I’m going to hold off until the real estate market improves.”

“We don’t want to buy right now.  We think the real estate market is too unstable.”

“We want to rent for another year until prices level off.”

Shenanigans folks, this is absolute shenanigans.  BigDBlog would like to make a clear statement about the current real estate market.  If you are interested in buying a home, there is no better time than now.  Right Now!  Prices are low, inventories of available homes are high and interest rates are low but begging to go higher for the foreseeable future.  There is no logic in waiting until rates and prices go up to buy a home, especially if you plan on staying in the house for more than four years.

If you are considering selling your house, that is a different story.  The same market factors mentioned in favor of purchasing are working against selling.  Many people will need to sell regardless of the market, and for them BigDBlog says go ahead and sell, but before you do you need to follow the following steps.

Find a full time residential real estate expert in town that works like a consultant and charges a low fair fee. 

Get your home in the absolute best condition you can.

Try everything – open houses, fliers, signs, word of mouth, Internet etc.

If you don’t need to sell right now, you will want to wait until the market gets a little bit stronger.  There are no better places to be for real estate in the USA than in Dallas and Fort Worth and the surrounding suburbs like Richardson, Garland, Rockwall, Plano, McKinney, Frisco, Carrollton, Coppell etc.

Let us know if we can help,

BigDBlog

The Death of Real Estate in Dallas…

…is not even close.

You would have to be a world class buffoon to think that a market like this one is anything other than a world class “opportunity.”  While many offices close down due to overall decreased vollume in transactions, and many individual agents take part time or full time jobs to get by, the seasoned pros and the truly dedicated brokers and REALTORs are keeping pace and even experiencing growth within their businesses. 

What better time is there to gain market share and show your clients your top notch service and expertise than when your competition is sprinting away from the business?  The folks who used to stumble upon three or four residential real estate transactions each year in Dallas are no longer with us.  Hooray!  The folks that work hard, consider their clients best interest before their own and follow through on their commitments are seeing healthy returns for their efforts.  Guess who will be on top when this market returns to a growth market?  The hacks? – No!  The part timers with no systems? – Also No!  How about the guys with their glamour shot on their business cards?… and No!  It will be the experts who consistently build trust relationships with their client friends and stop at no obstacle to achieve their clients’ goals.  This has always been the case. 

Q.  Why so many agents and lenders are running themselves ragged 80 hours per week and still not producing enough business to survive while many other agents seem to never work too hard and are pulling down reliable six figure incomes year in and year out? 

A.  The wise agents invest in people and service while the foolish invest in highly personalized shotgun marketing or nothing. 

Dallas Real Estate is not dead.  The lazy way of consulting with clients is.

 

We’re back,

BigDBlog