Category Archives: Uncategorized

Residential Real Estate Designations

You may have noticed all the letters after some Realtors’ names. These designations or qualifications represent specialties and training completed by the Realtors. As part of your consideration of hiring a Realtor, evaluating whether the Realtor has spent the time meeting the requirements and developed the experience necessary to obtain the designations is one of the factors to consider. Only about 20% of the Realtors in the Houston area have one or more designations. The number of Realtors with each designation is presented in parenthesis after the designation title below. With HAR.com one can search for agents that have particular designations in the “Find a Realtor” page at http://search.har.com/memberfinder/. Among the most popular designations and their backgrounds are:

ABR – Accredited Buyer Representative (1,505): Realtors with this designation have competed special training designed to improve their skills in representing buyers and have documented past experiences representing buyers.

ALHS– Accredited Luxury Home Specialist (459): Realtors with this designation have completed specialized courses in working with luxury home buyers and sellers and have documented past experiences representing such clients.

CHMS – Certified Home Marketing Specialist (508): Realtors with this designation have completed specialized training in staging a home for sale.

CLHMS – Certified Luxury Home Marketing Specialist (264): Realtors with this designation have completed advanced training in working in the luxury market and have documented performance in the top 10% of their markets.

CNE – Certified Negotiation Expert (1,166): Realtors with this designation have completed advanced training in negotiation techniques.

Meeting Neighbors

Meeting Neighbors

CRP – Certified Relocation Professional (82): Realtors with this designation have demonstrated experience working with relocation clients and have passed a certification exam.

CRS – Certified Residential Specialist (429): Realtors with this designation have completed advanced training in listing and selling, and have documented past experiences representing sellers.

ePRO – ePro Internet Professionals (570): Realtors with this designation have completed advanced training in working with the internet to assist their clients.

GREEN – Green Designation (135): Realtors with this designation have completed advanced training in green initiatives and working with green properties.

GRI – Graduate Realtors Institute (1,380): Realtors with this designation have completed considerable training in all aspects of residential real estate.

SFR – Short Sales and Foreclosure Resource Certification (771): Realtors with this designation have completed advanced training in working with buyers and sellers of distressed property.

SMP – Social Media Pro (316): Realtors with this designation have completed advanced training in utilizing social media to assist their clients.

SRES – Senior Real Estate Specialist (448): Realtors with this designation have completed advanced training in serving clients who are age 50 and over. Matters include specialized housing, reverse mortgages and tax matters.

SRS – Seller Representative Specialist (160): Realtors with this designation have completed special education in seller representation.

TAHS – Texas Affordable Housing Specialist (510): Realtors with this designation have completed specialized training to help first-time home buyers and to increase home ownership.

There are other designations to enhance the skill sets of Realtors. On HAR.com, you can hover over designations after a Realtor’s name and a description of the designation will pop-up. Designations do not guarantee qualification. However, they are useful indicators of a Realtor’s qualifications, and willingness to devote the time and effort required to obtain the training and pass the exams.

 

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Inside West Loop

The area I call Inside West Loop is the 77027 zip code. Obviously, the term could extend to other areas south of US 59. But, 77027 includes shopping, restaurants and high-rise living I most associate with the term. The zip code includes a sliver south of US 59, and a very small area just outside the Loop. It excludes an area of River Oaks and all of Greenway Plaza. But, broadly it goes from US 59 to Memorial Park and from the West Loop to Buffalo Speedway.

For shopping, Inside West Loop includes the many stores of Highland Village and the about to open upscale River Oaks District. Also, The Galleria is just outside the Loop. The excellent restaurants include Tiny Boxwood’s, Liberty Kitchen, Escalante’s, P.F. Chang’s, Ragin’ Cajun, Ouisie’s Table, and Grotto.

Neighborhoods –

But, the reasons I love the area are the neighborhoods. The following data is from two reports I have done this year relative to the area. According to the Houston Association of Realtors® (HAR), there are 38 neighborhoods in 77027. The seven neighborhoods with the most homes in 77027 from largest to smallest are Afton Oaks, Royden Oaks, West Lane Place, Lynn Park, Weslayan Plaza, Oak Estates, and Highland Village.

The neighborhoods in 77027 are in transition. Homes being sold may be a 1950s ranch with little updating or a tear down, include a new addition, be a complete remodel, or be a brand new home. As a result, while the statistics provide a useful benchmark, large variations will be seen in individual homes.

Although prices are up, there are fewer homes being sold in 2014 compared to 2013 because there are fewer homes for sale. During July 2014, there were 37 single family homes for sale for an average price of $1.45 million with 20 of these homes in the seven subdivisions. There were six town homes for sale for an average price of approximately $760,000 and seven condos for sale with an average price of approximately $150,000.

Average home sales price by subdivision during the first half of 2014 according to HAR:

Afton Oaks – $1,100,000

Highland Village – $259,000

Lynn Park and Annex – $606,000

Oak Estates – $2,106,000

Royden Oaks – $1,360,000

Weslayan Plaza – $395,000

West Lane Place – $1,179,000

High and Mid Rises –

With more being built over the next 3 years along Mid Lane and Westcreek between Westheimer and San Felipe, this area will have a significant portion of Houston’s high rises. According to HAR, there are currently six high and mid rises in 77027 that had unit sales during the first nine months of 2014. They are Briarglen, Briar Place, Highland Tower, Inwood Manor, Park Square and The Willowick.

Prices for units and buildings can be significantly impacted by the age of the building, status of updating the building and unit, size of unit, cost of amenities, view from unit and amount of maintenance fees.

Average high/mid rise two bedroom condo sales price by building during the first nine months of 2014 according to HAR:

Briarglen – $500,000

Briar Place – $512,000

Highland Tower – $763,000

Inwood Manor – $777,000

Park Square – $218,000

The Willowick – $553,000

For additional information –

Homes, town homes and condos currently for sale in 77027 can be found at www.insidewestloop.com. And, to get an automated estimate of the current value of your home, please go to www.insidewestloop.smarthomeprice.com. Or, if I can answer any questions or help you in any way, please contact me at your convenience.

Homeowners and Flood Insurance

Protecting your investment in your home is an ongoing process. Whether you are adding a new roof, painting or buying appropriate insurance; there will be a significant cost to protecting your home. With flooding, hurricanes, and high wind in the Houston area; insurance becomes even more important.

Buying a home

When you are buying a home in Texas you will normally pay for an option period during which you can back out of the contract without providing a reason for a period of what is normally 7 to 10 days. Besides inspections, you will want to obtain quotes for your homeowners and flood insurance policy. Your insurance agent has information about prior claims on the house which might alert you to an issue. In addition, your agent can confirm whether flood insurance is required (whether the home is in a flood plain) and the cost. If it is required, it is an indication that over a long period, you may have to deal with water in your home or on your property. In addition, over the coming years, the federal government will be raising rates on required flood insurance significantly in trying to match their costs with your premiums. If you are not in a flood plain, flood insurance is not expensive and premiums are not projected to substantially rise in the near term.

Renewing Homeowners Insurance

Your homeowners insurance covers your home, out buildings, and personal property. It will also provide rental and other reimbursement if you have to live at another location while your home is being repaired or replaced. And, it provides a basic level of liability insurance in case you are sued by someone who injures themselves in your home.

Amount of Coverage – Since your coverage does not cover your land, the amount will be less than the total amount for which you home would appraise. Your agent can provide building costs per square foot based on your homes features (brick or wood, custom or not, number of bathrooms, number of stories, etc.) Because your repairs or rebuilding may cost more than the standard figures (for instance, after a hurricane when builders and materials are in short supply), you may want to consider adding replacement cost coverage.

Protecting Your Home

Protecting Your Home

Other Coverages – You will want to know what the policy covers and what it does not cover.  Besides not covering for flooding, there are other matters which may not be covered, but could be added to the policy. For instance, water damage caused by leaking appliances or backups, or mold.

Scheduled Items – Different insurance companies will have different requirements for scheduled items. For instance, jewelry above a certain amount, or certain collections believed to be worth more than a certain amount; may have to be scheduled and have an additional premium. This should be discussed with your agent.

Deductible – The more risk you are willing to assume, the cheaper the policy will be. You take on more risk by increasing the deductible. And, different categories of deductible can apply to different coverages. For instance, wind and hail damage may have a different deductible than other coverages. If you have damage to your home that costs $15,000 to repair (and you are paying for a replacement cost rider), and you have a $5,000 deductible. The insurance company will pay only $10,000 of the cost.

Credits and Discounts – Some insurance companies will reduce your premium if you use the same insurance company for your home and auto (and possibly other insurance.) In addition, many companies provide discounts if your home is monitored by a security company.

Shopping Around – Periodically, you will want to compare rates at different insurance companies. Some agents are independent agents representing more than one company. In theory, these agents can do some of the comparing for you. However, many of those agents do not represent a broad enough range of companies. The State of Texas offers information about insurance and an online tool to compare policy coverages at http://www.opic.state.tx.us/residential-property/compare-policy-coverages/homeowners. And, insure.com at http://www.insure.com/home-insurance/  offers information on insurance and provides links to obtain quotes.

And, one last thing, it would be beneficial if you could document your home and its contents with photos, video and receipts for the day you do have a claim. To do this right requires you to spend some time being somewhat uncomfortable reading unfamiliar information and a having a good insurance agent. It is not the way I want to spend several hours every year. However, when the next insurance bill arrives or the next hurricane hits, you will be glad you did. Good luck.

Websites for Home Buyers and Sellers

Once you decide you want to buy or sell a home, there are many great resources available on the internet. Among my favorites are:

Freddie Mac is involved in supporting the mortgage market. Their website has many useful resources, especially for home buyers and those that want to refinance their home. The site can help you determine whether to rent or buy, how much you can afford to pay for a home, how much you can borrow, what type of mortgage to get, and has many more useful tips. My favorite page provides links to various calculators to help you with some of these decisions.

Although, your insurance agent can provide accurate information about whether a home is in the flood plain (and is the only resource on which to rely), while you are researching areas, a great resource is the Harris County Flood Education Mapping Tool. Once you are at the website, enter the address you want to search in the upper left.

While you are researching crime, Trulia provides a heat map showing high and low crime areas on a map of your area. Again, just enter the address you want to research in the upper left corner.

While searching for what schools to attend in Houston ISD, there is useful information about magnet schools, charter schools and other options at the Select A School tab and a school finder at the Find a School tab. Private schools can be found at Houston Private Schools among others. Children at Risk has a listing of school ratings for the Houston area.

Current valuations placed on homes in Harris County can be found at the Appraisal District website.

Search sites to consider while searching for a home or to list a home include Trulia.com, Zillow.com, Realtor.com and HAR.com. In the Harris County area, HAR.com will have the most accurate, and up-to-date listing information. One caution is that Texas is a non-disclosure state (meaning sales prices are not public information), so none of the national web sites have completely accurate valuation information. Consider the valuation information provided by those websites as you would the valuations provided by the appraisal district (not an accurate indicator of market price for a property.) However, each of those sites provides useful information about the home buying and selling process.

Once you buy a home, Utility Connect can help you hook up all your utilities and cable company in one stop.

Of course, my website can help you with search and information for buyers and sellers.

And, obviously Google can help you find many more sites and blogs providing information about the home buying and selling process. Please email me if you have a favorite site to pass along or leave a comment. Thank you.

HOMEOWNERS ASSOCIATIONS

In Southeast Texas, Homeowners Associations perform many important functions. Depending on the city and county, the most important roles of the Association may vary. For instance, in Houston, which has no zoning, the most important role is defining what can be built and the appearance of homes within the Association’s area. In many subdivisions, additional security patrols are also provided through the Associations. Outside Houston, but within Harris County and in other counties, substituting for city services may be the most important role. For instance, trash pickup and maintenance of common areas may be the role of the Association.

Besides these functions, the Association may be responsible for common costs, such as water in a condo or town home community, and amenities such as tennis courts or gym memberships. Perhaps the trickiest role for the Association is the architectural committee or equivalent. In many communities, changes to a home, including colors chosen, additions to the home, variances in setbacks, and other “quality of life” and appearance issues are ruled on by this committee of the Association. Clearly maintaining certain standards benefit the long-term health of the subdivision. However, many people are not happy with the limitations imposed on their private property.

The Association is generally led by a board elected from the homeowners within the related area. As a minimum, homeowners may want to attend the annual meeting of the Homeowners Association. At the meeting, the homeowners will vote on new board members and may approve the annual budget. Whether you are happy with the Board or unhappy with the Board, you may want to volunteer for one of the committees or the Board itself. Most issues with the Association arise because someone believes the Board is spending too much money in some area (e.g., landscaping), the Board is not spending enough in some area (e.g., security), their neighbors are doing something the homeowner believes is inappropriate (e.g., operating a business out of the home) or not doing something the homeowners believes should be done (e.g., not mowing the yard.) Your involvement helps ensure your opinion on these matters is heard.

Meeting Neighbors

Meeting Neighbors

Depending on the size, responsibility, and budget of the Association, it may hire a management company and delegate certain responsibilities to the management company (e.g., contract negotiations, handling complaints, preparing a budget, collecting dues, doing the accounting, etc.)

A standard addendum to the contract to purchase a home in Texas alerts the buyer a home is subject to mandatory membership in a property owners association. Beside notification, the form allows for the production of subdivision information which will, depending on negotiations, be paid for by the buyer or seller and produced within a negotiated period of time. Although the form allows for the buyers to decide not to receive the documents, the buyers should obtain and read the documents. The most important documents include bylaws, covenants, conditions, rules and restrictions which let the home buyer know exactly what rules to which the buyers and other owners are obligated. Additionally financial information is important. One does not want to buy into a neighborhood with an insolvent Association as those obligations may become the obligation of the buyer or preclude an appropriately functioning Association. And, the buyer will want to understand the budget and know the annual dues amount payable to the Association. Once, the buyers become the homeowners, they will want to also ensure the Association maintains adequate insurance.

The Association can place a lien on your property for non-payment of dues, just as a city or county can. And, the Association can foreclose against the lien. However, recent changes to Texas law have made foreclosure much more difficult. And, the Association does not really want to own your home.

In summary, a Homeowners Association provides governance for your subdivision with respect to common services, amenities and needs; manages the costs for these services; and provides a framework for the community’s appearance and quality of life. You as an owner, have the right and privilege to participate in how that is implemented.

Home Buying Process – Part III of III

POST CONTRACT TO POSSESSION

This is Part III of three parts listing the broad steps in the home buying process. Parts I and II were included in prior posts. The steps listed are generally in order of occurrence. Although, some will occur at the same time or cross other steps.

Checks  – The checks you wrote when the offer was prepared are delivered by your REALTOR to the seller’s agent (option money) and to the title company (earnest money – generally 1% or so of purchase price.)

Option period – The standard contract provides an option period in which the buyer may back out of the contract with no reason required. During this option period you and your agent will complete the steps not completed during due diligence and have inspections performed. Your REALTOR can provide you names of general inspectors and those that can review for termites, foundation issues or other specialized concerns. You will need to obtain the inspection reports and negotiate repairs to be paid by the seller prior to the end of the option period.

In addition, you will want to complete due diligence with your insurance agent by obtaining the CLUE report if you have not previously done it, and obtain an estimate of homeowner’s insurance and flood insurance.

Loan Application – As soon as the contract is executed you will start the loan application process. As part of this, the bank will request an appraisal. Your REALTOR may provide data relative to comparable homes to the appraiser. The bank will also be concerned about the status of the title and will wait on the title commitment from the title company. The buyer can back out of the transaction if the financing is not approved.

Title Company – The title company holds the earnest money until release is approved by the parties to the contract or closing, depending on whether the contract closes. They also review the title for encumbrances (issues), provide title insurance to the buyer and the buyer’s bank, ensure all conditions of the contract are met and perform closing.

They will provide the preliminary title commitment (which notes any issues) to the bank, the buyer and the seller. Each party will have a chance to review it for issues. The bank or the buyer may back out of the transaction if there are issues with the title.

Insurance and Utilities – You will want to arrange for your homeowner’s and flood insurance to commence on your closing date. If it is hurricane season, it sometimes takes 30 days after purchase for flood insurance to be effective. So, you will want to discuss this issue with your insurance agent.

Having Fun at Home

Having Fun at Home

Walkthrough – You will perform a walkthrough the day of closing but prior to closing or the day before closing. The purpose is to ensure no major issues have arisen (e.g., a fire) and that repairs to which the seller committed have been made. The buyer may want an inspector to review repairs made.

HUD-1 – Also called an allocation or settlement statement, the HUD-1, or similar document if there is no financing, sets out the sales price, down payment, fees and other financial activity associated with the transaction. The buyer and seller and their REALTORS will review the statement in detail to ensure all amounts are appropriately calculated and allocated. It cannot be prepared until the bank provides the loan commitment. So, in many cases, this is right before closing.

Closing – Prior to closing the buyer will purchase a cashier’s check or arrange a wire transfer for the “down payment” (amount shown as paid at closing on the HUD-1.) At closing (which can be an event for each party or one event for both parties), each party signs numerous documents transferring title and setting up the loan. During closing or shortly after (could be the next day), the bank funds the loan to the title company. Once closing and funding have occurred, the buyer owns the house. Unless the seller enters into a short-term lease with the buyer, the buyers are given keys and can take possession.

Congratulations. It is now your home.