I get this question a lot from my buyers, and my short answer is that it’s a long answer! Seriously though, there are a lot of variables to consider when addressing with this question, and the best resource for it is a mortgage professional. One of my go-to mortgage people – Kristy Osborn with Service First Mortgage – sent me an interesting email on this subject that I thought would be great to share. It helps explain the ins and outs of determining how much you’ll need to bring to the table to buy your next dream home!
Basically, there are three factors that make up a borrower’s out-of-pocket expenses at closing: 1) Downpayment, 2) Closing Costs and 3) Prepaids.
1. Downpayment – Each Mortgage Type has their own standard requirement for down payment:
- FHA– 3.5% down payment required
- VA– No down payment required
- USDA– No down payment required (this type of loan is restricted to certain zip codes)
- Conventional– Minimum 5% down payment required (there are also 3% down programs with very restrictive guidelines)
2. Closing Costs – Closing costs are comprised of the 10+ companies that are involved in the transaction. These include Appraisal, Survey (typically the sellers’ survey can be used if they have an existing one), Tax Certifications, Underwriting, Processing, Wire Transfer Fees, Title Fees, Recording Fees, Credit Check Fees, Recording Fees, Closing Attorney, Closing Docs Attorney (who draws your closing documents), etc, etc.
3. Pre-Paids – This amount of money is dedicated to setting up your escrow account with your mortgage company, so that your mortgage company can pay your taxes and insurance as part of your monthly payment. Typically this consists of 1 year of homeowners insurance +3 months in reserve in insurance + 3 months of reserve in taxes. You don’t have to have an escrow account with your mortgage company if you’re putting 20% down on your new home.
For a quick calculation of the amount you’ll need – please note this is not exact and will can vary widely – the following ballpark figures can be applied for you to know the amount that you might need.
- $100,000 sales price- use (for closing cost and prepaids) $6,000.
- For each $1000 up or down add or subtract $30 ($101,000 would be $6,030; $99,000 would be $5,970).
- Add the down payment required/ requested (see above)
So, if you’re purchasing a $200,000 home with an FHA loan, then you can estimate $6,000 + $3,000 + $7,000 Downpayment = $16,000 needed.
Another consideration to this amount is that buyers can ask sellers to cover some of their closing costs. Different types of loans allow for different amounts. It is important for me to say, however, that in this competitive sellers market that we’re currently in here in North Texas, seller contributions are becoming increasingly rare…this is especially true when there are multiple offers on a home, so don’t count on this! In a normal market though, this is how much sellers can contribute as part of negotiations of the contract to purchase their home:
- FHA -The seller is allowed to pay any or all of the closing cost and prepaids up to 6% of the sales price provided the buyer has at least 3.5% into the loan.
- VA – The seller is allowed to pay any or all of the closing cost and prepaids up to 4% of the sales price plus the VA non-allowables (costs that VA does not allow a buyer to pay so the seller has to agree to them as part of the negotiations).
- USDA -The seller is allowed to pay any or all of the closing cost and prepaids up to 6% of the sales price.
- Conventional– The seller is allowed to pay up to 3% of the sales price toward the closing cost and prepaids, but cannot pay any of the downpayment. If the buyer is putting 10% or more down, the seller is allowed to pay up to 6% of the sales price toward the closing cost and prepaids, but cannot pay any of the downpayment. For an investment property, the seller is maxed at 2% of the sales price toward buyer’s closing cost and prepaids.
I hope this has been helpful and informative! Of course it costs money to buy your new home, but considering the great investment that it is and will be for you for years to come, that money is well worth it. As always, I’m here for any questions you might have, so please don’t ever hesitate to get in touch!
Homes selling above asking price, numerous offers for the same property – it’s no secret that the North Texas housing market is booming. To help you navigate these unprecedented waters, I’ve come up with some top tips for both buyers and sellers.
* Be Qualified. Pre-plan financing with a mortgage lender and receive a pre-approval letter…this is REQUIRED in today’s market to submit an offer. For a frustration-free experience with a good lender, ask your favorite realtor (me, of course) for some great mortgage contacts.
* Act Quickly. In a hot market, acting slowly or “sleeping on it” may cost you the opportunity to buy the home of your dreams. If you’ve found a home you’d be thrilled with, don’t wait to submit an offer; other buyers will likely be doing the same.
* Offer a Compelling Price. Sellers should be pricing their homes based on historical sold data, and in a strong market where prices are rising rapidly, homes are very often selling for the listing price or higher. Study the sold comps, but also compare the house you want to other homes currently on the market, and ask yourself, “What price am I willing to pay, and at what price am I willing to lose this house?”
* Market Effectively. You have the best chance of selling your home for the highest price by marketing it in a way that will appeal to the largest number of potential buyers. When you list your home with me, you get FREE professional staging and professional photography, which makes your home look it’s absolute best it’s ever going to look and will help keep it show-ready for buyers who come to see it in person. Also, my broker, Ebby Halliday, provides you with worldwide exposure on ebby.com, which receives approximately 21,000 visits per day, far outpacing our competition.
* Respond Quickly. There is an old adage that time kills deals. A buyer’s interest is at a peak level at the time he or she submits an offer, so keep the momentum going, choose the best offer, and respond promptly in writing. Many sellers want to wait over the weekend to see if multiple offers come in, and that may be a good strategy…when you sell your home with me, we’ll look at that as an option and decide what’s best for your house price and area.
* Don’t Be Greedy. If a buyer offers an acceptable price and terms, sign the offer and be a team player by working in a positive way with your buyer. Remember that most likely, you’ll be on the buying side too getting into your next home, so it’s always best to go with the Golden Rule and treat buyers as you’d like to be treated…this will ensure a win-win for everyone involved by getting the house sold!
Interested in looking more into the buying or selling process? Let me know and let’s get together soon!
I’m asked all the time by potential home sellers what the best time of year is to sell a house. What people generally mean by that is that they want to get the highest price they can while selling their home as quickly as possible. Although I can certainly (and honestly) make the argument that any time of year is a good time to sell for various reasons, I just saw that Zillow came out with some great data to support what has always been conventional wisdom…that is, that the late Spring – which is basically here now! – is the best time to sell.
In a new housing report, Zillow states that: Backed by eight years of data, Zillow economists have identified early May, nationally, as the “magic window”to get 15 percent more agent contacts [i.e., showings and inquiries], and yield a sale 18.5 days faster and for nearly 1 percent more than national averages.
This window is varies in different areas across the country, but all fall within the April to June timeframe. The map below shows that for the Dallas-Fort Worth area, the first half of May is optimal for selling in our market. Zillow states that homes listed in their market’s magic window sell faster and for more than the average median home.
So the time to list in our area is NOW. Listing now gives us time to set a good market price, and get the house decluttered, staged, and photographed before it’s put up for sale at the best time of the year, which is just a couple weeks away. Want to know more? I’m always here to answer any questions or just to chat about the market in general, so get in touch!
Well, you have found it here! This home was just built in 2013 and it has 3,987 square feet filled with 5 gorgeous bedrooms, a kitchen with granite counter-tops and stainless steel appliances, living room down and gameroom up, and two large master suites – one downstairs and one upstairs.
This is the perfect floorplan for having family members living under one roof or having long-term guest. What else does this home offer? How about a 3-car garage and it backs up to a greenbelt area?!
There is so much to love in this home. PLUS, it is offered for $330,000, which is a great price for a beautiful home in sought-after Bozman Farms in Wylie. You cannot buy a new home in this neighborhood for anywhere near this price! And this home is currently ONLY available for private showings, and is it NOT yet in MLS, so hurry – get in touch with me or with
your realtor of choice and see it today!
To see more images of this beautiful home, click on this link.
My latest listing was featured on this blog – how great is that? Another example of how I market the homes I sell in many different ways, to get them as much exposure to the buying public as possible!
This week’s featured lake-front home in Dallas County is a beautiful old-world style home. This beauty has all of the right masculine features combined with feminine features in all of the right places. This spacious SIX-bedroom home listed by Heather Sims of Ebby Halliday sprawls 6096 SF on over half an acre! With a sparkling pool and lake views from nearly every window in the home, what’s not to love?!
Built in 1996, this home has a lot of character, updated with love and today’s accents and interior touches! This charming lake-front in Pecan Harbor Estates will leave you as the envy of the neighborhood. 4218 Running Brook Drive in Rowlett also has another sought-after feature…a tandem-style four-car garage!
Gleaming hardwoods and strong accents capture your attention from the moment you walk in.
Great for entertaining, this mahogany-wood bar just off of…
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There are celebrity lists of all kinds, from People’s Sexiest Man Alive to Time Magazine’s Person of the Year, to Forbes World’s Billionaire List. But have you ever thought which famous people you’d be ok with having as a neighbor? For me, the Ozzy Osborn family would be at the absolute bottom of that list, although I would not mind living in their house! Top of my list would probably me my favorite musician, Alanis Morrisette – she’s not the angry feminist that people make her out to be, and if I lived next to her I might get to hear her sing and pick her brain about life once in awhile.
Who would most Americans say they’d love to have live next door? Zillow.com decided to find out… in their survey, Zillow asked 1,000 Americans which celebrities they would most like to have as their neighbor as well as those they wouldn’t dare share a fence with. Turns out, the Singer-songwriter Taylor Swift is America’s favorite neighbor. Swift was voted as the top neighbor with 12 percent of the votes. She was in the top 3 last year when Zillow conducted the same survey, but she was able to nab the top spot after a third-place finish last year. Actress Jennifer Lawrence was a very close second with 11 percent, and comedian Amy Schumer rounded out the top three, with 9 percent of the votes.
Meanwhile, Republican presidential candidate and real estate mogul Donald Trump topped this year’s list for worst neighbor at a whopping 24 percent (makes me wonder about that 7 percent who said he’d be the best neighbor!). Kim Kardashian and Kanye West are also not desirable as neighbors, with 22 percent responding that they would not want to live next door to the self-described power couple.
Here’s a look at how the celebrities stacked up on this year’s survey.
Most Desirable Neighbors of 2015:
- Taylor Swift: 12%
- Jennifer Lawrence: 11%
- Amy Schumer: 9%
- Donald Trump: 7%
- Mark Zuckerberg & Priscilla Chan: 6%
- Jennifer Anniston & Justin Theroux: 6%
- Hillary Clinton: 5%
- None of the Above: 34%
Worst Neighbors of 2015
- Donald Trump: 24%
- Kim Kardashian & Kanye West: 22%
- Justin Bieber: 18%
- Hillary Clinton: 11%
- Miley Cyrus: 10%
- Taylor Swift: 2%
- Tom Brady: 2%
- None of the above: 11%
Looking to have new neighbors in 2016? I can’t guarantee they’d be celebrities but I can guarantee great real estate services in finding your new neighbors and neighborhood, just give me a shout and we’ll start our search!
Source: DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 31, 2015
Don’t we all just LOVE Christmas? It is my absolute favorite time of year. I love the cold weather (kind of – we are in Texas after all), the shopping, the twinkling lights everywhere, the kiddos’ excitement, and everything else about the holidays. One of my favorite places to go for holiday inspiration is Pinterest…there are so many great ideas for crafts, presents, decorations, that little man Elf-on-the-Shelf, and most importantly food and drinks! I thought I’d collect my top 10 picks (or “pins”) and share them with you in this quick video…enjoy and if you have a minute, look me up on Pinterest or let me know which was your favorite!
The monthly mortgage payment on a home is generally determined by two elements: the price of the house and the interest rate you pay on your mortgage. There are other factors too, like taxes, insurance, and homeowners association dues, but to keep it simple, let’s just look at price and mortgage rate.
HOME PRICE PROJECTIONS. Recently released reports are revealing that the experts expect both of those elements to increase in 2016. Nationwide, a 5.2% home value appreciation for the next twelve months has been projected. This image gives you a breakdown by state. Texas is expected to see a 2.4% increase, although I wouldn’t be surprised if that percentage is higher given what has occurred just in the past 6 to 8 months here in the Dallas-Fort Worth area.
MORTGAGE INTEREST RATES. All four of the entities that provide projections on mortgage interest rates agree: they’re going up in 2016. And if you’ve spoken to me about the market anytime within the past year, you’ve probably heard me say the same thing…rates are going to go up. They really have to, because the “frenzy” that we’ve experienced in this market really can’t continue. The financial powers that be are going to be interested in stabilizing things a bit, and stabilization in this case means an interest rate increase. Here are the predictions over the next four quarters:
BOTTOM LINE: With both home values and interest rates projected to increase over the next twelve months, buying (or moving-up), sooner rather than later, makes sense. Conventional wisdom says that the holidays aren’t a good time to list…well I can tell you that last week was Thanksgiving, I had two clients who trusted what I told them about the holiday season being a good time to sell a home because there’s less competition out there, and one of those homes is under contract and the other has an offer. If the time might be right for you, I’m looking forward to hearing from you soon!
If you’re fortunate enough to live in North Texas you’ve no doubt seen plenty of media stories about our region’s rising home values. So, it’s only natural if you’ve been wondering, “What’s my home worth now?” Well, the reality is there’s more than one answer. Your home actually has three potentially very different values…
If your home is destroyed by a disaster, like a fire or tornado, replacement cost is what it would take to remove debris and rebuild. Most experts agree that homes should be insured for 100 percent of the minimum estimated replacement cost. If your home is not, you run the risk of coming up short if the cost to rebuild is more than your coverage will pay.
Property Tax Value
This is the number taxing authorities use to calculate your property tax bill. Typically, property tax values are meant to approximate a home’s market value, though sometimes there are large discrepancies between the two because of outdated assessments or mistakes by assessors. If the property tax value of your home exceeds the market value, consider contesting the value with your taxing authority. The market is so crazy these days that I have witnessed many taxing authorities in North Texas overvaluing homes, and I have helped many clients with information to contest their property tax value. It’s very important to pay attention to that value!
This is the measure most of us think of when trying to estimate our home’s value. Determined in part by the price people have paid or are willing to pay for similar houses in your neighborhood, market value is not based on what you paid for the home or how much it cost to remodel that beautiful new kitchen or master bath.
Determining market value is a job for a properly educated real estate professional, like yours truly, of course. If you’re considering offering your home for sale, let me know. I’m happy to run some numbers for you to see if the value you have in mind is consistent with what the market says your house is worth. And really, now is the time – I ran some numbers for a client in September but she wanted to wait until she found a home she wanted to purchase before she listed her house, so a month and a half later, I ran numbers again when she was ready to list…her value had gone up about $12,000 due to 3 good sold houses (i.e., comps or comparable properties) that had closed in between. I couldn’t quite believe it myself! Bottom line, if you’re considering selling, please get in touch, I’d love to help!