But which house is "better"?

When working with my buyer clients, we are often comparing the “top 3” list of homes. And here’s my insight for you —- it’s not necessarily about the square footage and price! It’s what’s most important to you - the buyer. So let me tell you a story.

Recently, I was helping my client find her new home and we were looking at several new builds. One build was complete and 2 others only had framing and drywall. In the process, she kept gravitating toward one of the new builds that had a very large covered patio and what appeared to be a “larger” backyard.

So, ultimately, I created this info graphic to help my client compare the things that were really important to her - the patio and greenspace! As we worked through the space comparisons, we were surprised to see that House B, with larger square footage on a smaller lot, actually has a GREATER outdoor space because the home’s footprint was smaller. Yes, the patio for House A is larger, but the net effect of a pretty good sized patio and yard space for House B made it the best choice for my client (plus a better floorplan and finish out).

So, just like we say you can’t judge a book by it’s cover, you can’t just a house simply by it’s square footage. The analysis must focus on what’s important to you!

So You Want to Buy Some Land in the "Country"?

Dreaming of your future home on acreage in the country?

With the density and population growth continuing to skyrocket in the Dallas Ft. Worth Metroplex, I often hear my friends talk of buying land in the “country.” When pressed further, what they are really saying is they want acreage where they can build a house AND they want it located outside of the existing metropolitan suburbs (lower density, lower taxes, etc). Can these dreams become a reality? Of course! BUT, it is a completely different process. So, I’ve outlined a few key things every “land” buyer should know.

Financing

Unless you’re fortunate enough to purchase land with cash, you will need to get pre-aproved for financing the land/build purchase. Yes, the pre-approval process is also used when buying a home, but that’s where the similarity ends. What’s the difference? Well, you may be surprised that most mortgage companies/banks DO NOT finance land purchases. So, when you’re beginning this process, I strongly recommend that you work with a Realtor who not only can help you find your dream acreage, but who can also direct you to a reputable land lender.

Buying Land with some structures?

Sometimes you’ll find a property that will have acreage and some existing structures like a barn, fencing, utility building and maybe an old residence. In analyzing the deal, you and your Realtor will need to determine if the value is primarily in the acreage or what, if any, value is attributable to the structures. This analysis will determine if the purchase is a “land” purchase vs a single family residential purchase that includes land. For example, I recently showed my clients a 15+ acre property that had a double wide trailer, a barndiminium, and a barn. The double wide trailer had been moved twice and it was in terrible condition. The barndiminium was currently being used as a residence, but it was “rough” inside — essentially a renovation in progress. Based on comparables in the area and the condition of the structures, the primary value was in the land. This purchase would require a land mortgage. By comparison, I showed these same clients a 2+ acre property with a single family brick home and a large utility/workshop building. Here, even though the house was not to my client’s liking, there was significant value in both structures, so this would be a “normal” single family home mortgage that happens to have acreage as part of the property.

Land and Future Home

So let’s say you find the perfect piece of property where you want to build your future dream home. How your financing will be set up will be determined by how FAST you’re going to build. For example, I work with a lender who will provide the land financing and home construction loan as long as you start construction IMMEDIATELY!! That means you have to have all your architectural plans, building permits, etc ready to go. Honestly, most people won’t have everything ready beforehand. In the latter case, the land loan will come first and then the land lender will provide the construction loan.

Land Loans Have Different Rates and Requirements

The other thing to keep in mind is that land loans do NOT have the same rates and terms as your typical single family residence (SFR) purchase. Why? Well, if for some reason you default on your land loan, the bank only has a lien on the raw land - which typically takes longer to resell.

• Down payment typically 20%

• Interest rate is higher than SFR (as of Jan 2020 rates are in the 5+% range)

There are more things to know that what I’ve listed above, but when you’re ready to take that step into buying land, feel free to reach out and we can discuss further and I can recommend a preferred lender who does land loans.

Top 10 Things to AVOID if You are a Home BUYER!

AVOID THESE STEPS IF YOU WANT YOUR HOME PURCHASE TO GO SMOOTHLY!

It’s an exciting time when you’re dreaming and planning of purchasing your new (and maybe first) home!! And in all that excitement both before and after signing the contract, buyers get caught up on the frenzy and make some big mistakes - that often impact their home purchase. As I sat across the table from one of our preferred mortgage vendors today, a few of the items below came up in our conversation. While this is certainly not an exhaustive list, these are some of my top reminders.

1. AVOID REPRESENTING YOURSELF - For one of life’s most complicated and financially significant transactions, why would you represent yourself when you can be represented by a licensed, knowledgeable and experienced Realtor (for FREE)?

2. DON’T GET EMOTIONALLY ATTACHED TO A HOUSE YOU WANT TO BUY. Let’s face it, we are human and buyers often find a home and immediately fall in love. BUT . . . to make rationale, logical, and financially sound decisions in the process, buyers must do their best to keep emotions in check. For example, my clients were considering a corner lot and a lake front lot. Of course, the lake front lot would add a tremendous amount to the overall cost of the home. Fortunately, they went home and “came to their senses” and realized that the lake front lot was not a wise choice for them.

3. FAILING TO GET A HOME INSPECTION - Yes, there is an up front cost, but wouldn’t you want to know what you’re potentially buying? For a small option fee, you can have the home inspected and then decide whether you want to proceed OR walk away and receive a refund of your earnest money (remember I’m always referring to Texas real estate law).

4. FAILING TO ASK QUESTIONS! The real estate buying process has many steps. If you haven’t purchased a home before or it’s been more than a few years, be sure to ask your Realtor questions when you don’t understand a process, document, or issue that arises. That’s part of their job and they are happy to help.

5. FAILING TO READ/UNDERSTAND THE HOA RESTRICTIONS BEFORE YOU BUY! - While I realize that the HOA documents are full of a lot of legalese and verbiage, it’s worth scanning the important sections like restrictions on parking, signs, decorations, etc. For example, I just visited a friend and commented on her beautiful circle driveway in the front of her house (I’ve always wanted a house with one). She said, “thanks, we put that in because we aren’t allow to park cars overnight in our neighborhood.” Wow!! That’s pretty significant, especially when you have a household with more cars than garage spaces, etc.

6. OPENING A NEW CREDIT CARD - Don’t open any new accounts for at least 6 months before (or longer if you are repairing your credit) or during any period before you close on your new home.

7. GOING ON A VACATION (THAT IMPACTS YOUR SAVINGS/CASH ON HAND/CREDIT CARD DEBT)

8. BUYING A CAR/TRUCK

9. BUYING FURNITURE OR APPLIANCES OR ANYTHING ELSE FOR YOUR NEW HOME

10. TRANSFERRING LARGE AMOUNT OF FUNDS