Advantages to Buying a Home with Cash

Buying a home with cash has definite advantages in today’s market. National Association of Realtors® research on cash sales shows that about 30 percent of residential sales are cash transactions. Among investors and international buyers, more than 70 percent of properties are bought outright. If you can afford to buy up front, the advantages are many:

§  Sellers are likely to favor buyers who can pay in cash.

§  The home price may be reduced for those who pay in full up front.

§  All-cash purchases streamline the home-buying process: No loans means less paperwork and no delays for mortgage approval.

§  Cash buyers can save money on closing costs, bank appraisals, mortgage applications and fees, title insurance, and so on.

§  Cash purchases eliminate the risk of loan denial.

§  Cash buyers pay much less for their homes in the long run: No loans means no interest.

§  Cash buyers never have to worry about losing their homes because they can’t afford to repay their mortgage loans.

§  Cash buyers gain full, immediate equity in their home.

Financially and emotionally, paying with cash benefits the home buyer.

Sellers prefer cash buyers
Home sellers generally prefer quick, smooth sales. They know that even buyers who have been preapproved for mortgages might be denied by the lender later on. For example, a buyer who is an independent contractor might have difficulty proving two years of regular employment, or a buyer depending on a family member for a personal loan might later opt out (or the relative might). Therefore, when possible, sellers prefer to steer clear of buyers who have to apply for a mortgage. If you are buying with all cash, you have greater negotiating power on price, closing time, repairs, and more. Sellers are often willing to reduce the house’s price for cash buyers.

Cash purchases avoid the risk of low appraisals
Home appraisals are notoriously fickle. Lenders determine a home’s worth by weighing it against comparable sales — other homes in the neighborhood that may have sold at low prices for unknown reasons. A low appraisal could lead the lender to reduce the amount of the loan offer, even after seller and buyer have agreed on a price. If the loan amount comes up short, the buyer often cannot afford to buy the home. All-cash buyers sidestep mortgage applications, avoiding the need for a potentially deal-breaking home appraisal.

Cash purchases save money and time
Indisputably, cash purchases carry lower costs. Mortgage interest on a 30-year loan can double or triple the original purchase price. Additionally, closing costs are significantly lower when purchases are made with cash. Cash purchases also save buyers valuable time, eliminating the need to gather elusive documents and search for the optimal lender.

Peace of mind is priceless
Most importantly, all-cash purchases bring an inviolable sense of security. Owning your home outright means never having to worry about covering your mortgage. In the face of disaster, such as job loss or injury, full ownership eliminates the risk of losing your home to foreclosure. Moreover, if you have paid cash, you will have excellent equity in the house. In case of financial emergency, you can draw on that equity for quick cash.

Figure out how to pay in cash 
Buying your house with cash might seem like an impossible dream. Here are some tips to help you achieve it:

§  Set aside unexpected windfalls, such as work bonuses or inheritances.

§  Lock money in a long-term CD to earn interest.

§  Once you have accrued cash, look for a house you can afford without borrowing extra money.

§  Consider moving to a less populated area, further from a big city, where home prices are likely to be lower.

§  Avoid the temptation to waste money. Tell your friends and family about your goal of buying a home; they will help keep your spending on track.

 

Gilan Gertz wrote this article as a contributing journalist for the Texas Association of REALTORS®

For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

Home Building & Rehabilitation Trends/Ideas

Last weekend, I attended the Texas Home and Garden Show at Reliant Center in Houston to pick up new trends and ideas, as I dive into residential custom home building and continue home rehabilitations.  These shows are allows filled with vendors who have the latest in technology and energy saving ideas; which  is the direction  I am headed  as I start to build.  Building a highly efficient low maintenance home with a livable (functional) floor plan are my main objectives; as well as making existing homes more energy efficient wherever and whenever possible.

 

I would like to share a few of the things I picked up, and recognize a few vendors & individuals who were more than willing to share their products, services, and knowledge with me.

Probably the most fascinating feature I saw was the “Solar Air Conditioning Systems” offered by Brazos Valley Services.  This unit requires a relatively small solar panel that helps increase the efficiency of your unit when you need it most – during the sunniest times of the day!  I wished I would have gotten the name of the gentleman that explained this system in great detail to me, because he was very knowledgeable and courteous.  You can find out more about these systems at: http://brazosvalleyservices.reachlocal.net/solar-ac-systems/

Speaking of HVAC Systems – I would like to recognize Henry Newsom with One-Hour Air Conditioning & Heating.  Henry listened to my HVAC questions regarding tonnage, zoning, etc. and spent a good 30-45 minutes explaining, educating, and  demonstrating how a system works and how to make  it the most efficient.  Henry also spent time to tell me about the gadgets that are not really necessary, but will generally be “up-sold” to uninformed customers.  Integrity and honesty go a long way in my book, and Henry represented himself and One-Hour Air in both of these areas.  Learn more about One-Hour Air Conditioning & Heating at http://www.onehourhoustonac.com/

Attics are obvious where most of our homes hold heat that make our HVAC systems work hard.  I spent some time talking with Greg Pruitt’s wife with www.rock-cretefoam.com  about the advantages and disadvantages of completely sealing your home with foam insulation; primarily under the roof decking versus radiant barrier.  Although I am still not 100% convinced to go the complete sealed envelope route, I am convinced foam in the walls and ceiling are the only way to go in new construction.

I spent some time with Jim Decker  with  Attic Innovations www.atticinnovations.com speaking about the application of a radiant barrier to preexisting homes – a must if your home does not have a radiant barrier decking, or if you don’t choose to retrofit with foam (my opinion, only use foam  in new construction).  Jim also demonstrated their solar powered attic fans – and speaking of honesty and integrity – he admitted that the fans will most likely need to be replaced every 7-10 years.  Not bad when  you consider the savings, though.

Lastly, I would like to recognize Doc Greene with Pet Floors of Houston www.petfloors.com.  You have seen these floors in many places, but just didn’t know it!  They look like real wood, and are just as beautiful – however, they are much more durable and virtually maintenance free with a lifespan that will outlive any other flooring I have seen.  I plan on using these floors in most of my rehabilitation projects, whether there are pets in the house, or not!

I hope you take the time to go through these vendors’ web sites and learn more about their products.  I don't get any referral fees or kickbacks from them – in fact, they didn’t even know I was going to mention them in my blog!  I just enjoy sharing information about individuals and companies that appear to be upfront and  honest – they  were all out at the home show just trying to earn a living – rather than sitting at home waiting for the government to give them food, clothes, or healthcare.  Any chance I get to recognize hard working honest Americans, I love to do so.

 

For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

Franchises vs. Independents

There will always be discussions and comparisons of agents that belong to large franchised firms and agents that belong to independent firms.  As an independent broker that formally managed a Coldwell Banker branch office and owned two RE/MAX franchises during my first 10 years in the industry, I feel I am qualified to debate the topic with clarity and competency.

In years past, prior to the internet, it was important for agents to belong to large franchised firms so that their listings would get the most exposure.  Listings were kept in large MLS books that may or may not have been updated, regularly, and firms always tried to show potential buyers their own listings. 

After the internet, it was still important for agents to belong to large franchised firms because basically the firm’s web sites simply replaced the listing books; but updating and other office listings were still few, if any, and the large firms had the most listings. 

However, a few years ago, many MLS’s such as HAR and most real estate firms became a part of IDX (Internet Data Exchange) which changed everything!  Now, when an agent enters a listing in HAR, regardless of what firm they belong to, it is automatically seen on thousands of web sites – like REALTOR.com, Zillow, Trulia, Homes.com, etc.!  For example: as an independent broker, when I enter a property in HAR; it can be seen on the same thousands of web sites as a large franchised firm’s listings – AND, it is also  seen on most of the large firms web sites,  as well; such as Coldwell  Banker, RE/MAX,  Keller Williams, Better Homes & Gardens, etc.  As long as the firm, and most do, participates in IDX technology.

Therefore, no longer is belonging to a franchise a highly important criteria when a potential buyer or seller is looking for an agent or broker to represent them; what is more important is competency, character, trustworthiness, and capability.

For agents however, there are some definite times in their career when they should seek to join a large franchised firm; especially if they have been in the business for less than five years.  Large firms can offer valuable training and guidance that I feel our industry should manage more closely.  Another area I feel extremely confident in discussing; mainly because I mentored, coached, and trained a large portion of the successful agents in the Southwest Fort Bend County area.

 

For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

Selecting your Real Estate Agent - What most Agents don't want you to know!

When selecting a real estate professional, there are several questions you should ask yourself and several you should ask the agents you interview.  Much like retaining an attorney, a CPA, or Financial Advisor; retaining a real estate professional should be approached with caution and with great care.  The real estate professional you select is going to assist you with one of your largest financial purchases or sells, if not your largest, so this step should not be taken lightly.

According to the NAR Members surveyed by NAR in 2013:

Ø  Only 77% stated real estate is their only occupation

Ø  56% are affiliated with an Independent firm, and 44% are members of a franchised subsidiary of a national or regional corporation

 

Ø  The average years of experience of sales agents is 13, and brokers average 20 or more years

 

Ø  The average residential specialist averaged just 12 transactions in past 12 months

 

Ø  8% did not have single transaction in 2012

 

Ø  83% did not have more than 20 transactions in 2012

 

Ø  Primary Specialty: 79% Residential, 7 % Commercial, 2% Land/Development, 1% Relocation

 

Ø  In the past 12 months, 51% had a transaction involving a foreclosure and 44% had a short sale transaction, but only 21% have received certification in either of these areas

Five Critical Questions to ask a real estate professional:

1.       Are you familiar with this area?  If so, how many transactions have you closed in the past 36 months in this area and can I get a list of these transactions?

2.       Do you specialize in (residential, commercial, farm & ranch, etc.) transactions?  If so, how many (residential, commercial, farm & ranch, etc.) transactions have you closed in the past 36 months and can I get a list of these transactions?

3.       How many years (not months, weeks, or hours) have you been in the real estate business, full-time?  Or, how many years has real estate been your only full-time career?

4.       Is real estate your primary job?

5.       Is real estate your only job?

Summary

·         Choose your agent wisely – one that is familiar, very familiar, with the area

·         Choose an agent that specializes in the type of real estate you plan to sell or acquire.

·         Choose an agent that has closed at least 24 transactions in the past 12 months and has been in business for at least 3 years.

·         Choose an agent whose primary occupation is real estate. 

This was an excerpt from Chapter 2 of Julius' book entitled “The Truths and Myths of Real Estate”  - For the complete commentary pick up a copy of his book available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

 

Townhomes needed in Sugar Land, Richmond, Rosenberg area

There is a critical shortage of townhomes in Southwest Fort Bend County, especially one-story units.  As the baby boomers continue to retire, stay active, and live longer; many are looking to for a lifestyle change from their older & larger suburban or inner loop homes.  They want smaller homes to maintain with smaller yards, and less headaches.  They are still very active and  want to be involved in their grandchildren’s activities, but don’t want to drive to far to attend baseball games, swimming & gymnastics meets, tennis matches, football games, etc.  And although they don’t want to admit it, they also need to be closer to their adult children in the event of a medical emergency.

Greatwood has a few of these ideal townhomes, as well as Sugar Land off of Grants Lake and in the Sweetwater & Riverstone areas.  However, there are several problems with these developments, mainly the lack of one-stories and the lack of inventory.

The ideal buyer for a townhome in the suburban areas is typically empty nesters who have no desire to walk up and down stairs, any longer.  Hence the reason one-stories are in high demand.  The ideal buyer I have encountered recently wants at least 2 bedrooms and 2 full baths, a Study, Formal Dining, updated kitchen with a breakfast area, and a Master Suite with a large walk-in closet.  They prefer a small yard with a covered patio that backs to some type of natural habitat that presents a nice view of nature.  And of course, they are willing to pay for some optional luxuries, but would prefer a nice livable unit that comes standard with granite, tile, updated appliances, and nice light fixtures; with a base price below $200K.

Currently, I have three clients waiting for a one-story townhome to become available; and I’m almost certain I’m not alone.  I have talked to several Realtors that are in the same position with clients who have been waiting months for something to become available in the areas I mentioned above.

Maybe we can convince a builder to purchase a few acres in the area and develop a 55-older one-story townhome community in our immediate area that fits the criteria for the typical buyer mentioned above.

For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

Lease Procedures - Initial Payments

Did you recently lease a property and were asked to make one check (typically the security deposit or first month's rent) payable to the listing broker?  If so, you may want to consult an attorney.

 

All lease payments made by a tenant should be made payable to the landlord (or Property Manager) – then landlord should pay the listing broker, per the lease listing agreement – and then the listing broker should pay the other broker, per the Agreement between Brokers form. See the flow chart below for further understanding.

Some real estate offices have the tenant make a check payable to the listing broker, in lieu of a security deposit or rent. Nothing could be more incorrect. If this is done, there is no record of a security deposit or rent ever being made to the landlord –there is no contractual agreement stating that a tenant pays the listing broker –and the listing broker could be accused of commingling of funds.

 

The only exception would be if the property is being managed  by a property management company.  In this case, it may be acceptable to make all payments payable to the property management company - but you would definitely want to verify to make sure.  And, you should request a copy of the property management's companies declaration page of their Errors & Omissions Insurance to ensure they are insured to manage property.

Please feel free to share this information and the flow chart below with real estate brokers who do not understand the incorrectness of having tenants pay them directly. I have reviewed the correct procedure stated above in italics and outlined in the flow chart with the Texas Association of Realtors attorneys, and they agreed.

 
For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html

Proposed Mobility Plans for our Area

By: Julius F Zatopek III – Broker/Owner – Zatopek Properties

Mobility has always been a hot topic in our area, and it always will be.  This is just one of the things counties must deal with when they are one of the fastest growing counties in Texas, and in the nation.  In the November 2013 elections, we will most likely be asked to vote on a bond for approximately $185 Million, which will help fund the completion of the proposed projects – projects that are estimated to cost well over $300 Million, according to our County Commissioner, Richard Morrison.  However, with the assistance of businesses, cities, counties, etc. – the cost will be offset to help cover the overall expense, without having to raise taxes!

Some of the projects in our immediate area on the proposal are:

·         the extension of Sansbury Blvd to FM 762

·         the extension of Williams Way Blvd from I-69 (Hwy 59) to FM 762

·         the extension of AJ Meyers (Bridlewood area) to Royal Lakes Blvd

Below are a few links regarding the projects.  I really like to Major Thoroughfare Map – it gives a very detailed plan of future proposed mobility projects – some are quite eye opening, and exciting!

Press Release: http://www.fortbendcountynews.info/go/doc/1529/1864721/Updated-list-with-Precinct-information-FORT-BEND-COUNTY-COMMISSIONERS-COURT-TO-CONSIDER-MOBILITY-BOND-AUGUST-13

Fort Bend County Proposed Mobility Projects (list): http://www.fortbendcountynews.info/external/content/document/1529/1864805/1/2013%20Fort%20Bend%20County%20Mobility%20Project%20List%20with%20precinct.pdf

Fort Bend County Major Thoroughfares 2007 Approved Plan Map: http://www.fortbendcountytx.gov/modules/showdocument.aspx?documentid=1337

Questions regarding the proposed projects may be directed to the Commissioner in whose precinct a project is located, or to the County Engineering office.

 For more commentary from Julius, pick up a copy of his book entitled “The Truths and Myths of Real Estate” – available at LuLu.com at:  http://www.lulu.com/shop/julius-zatopek/the-truths-myths-of-real-estate/paperback/product-21118216.html