Tuesday, March 31, 2015

Home Too Big Now? The story of my life!

iStock_000013567449-200.jpgOnce the kids are grown, have careers, relationships and get a place of their own, parents find that they may not need their “big” home like they did before. Their lifestyle may have changed and the house just doesn’t “fit” anymore.  This is me . . . big house, no one at home!

Benefits of a smaller home:
  • Easier to maintain 
  • Lower utilities
  • Lower property taxes 
  • Lower insurance
  • More convenient location
  • Convenience of a single level
  • Possibly more energy efficient
  • Possibly lower maintenance
Moving from a larger home frees equity from the previous home that can be invested for retirement income, purchase a second home, travel, education or just to have a nest egg for unexpected expenses.  The profit on the home, in most cases, will be tax-free up to the exclusion limits set by IRS.  Watch as I do this . . . I will post further blogs about the successful outcomes!

There will be expenses involved in selling a home as well as the purchase of a new home.  These will lower the amount of net proceeds available to invest in the new home.

Like any other big change in life, it is recommended that you take your time to consider the possible alternatives and outcomes.  Your real estate professional can provide information that can be valuable in the discernment process such as what your home is worth, what you will net from a sale as well as alternative properties for your next stage in life.

If this makes sense to you, call me at 832-200-5656.  I am at "that time in life" and am beginning this process personally.  I'd love to share and learn with others in this same position!  -Sam Ferreri, President of RE/MAX Top Realty, the largest RE/MAX office in Houston, Texas!

Easter Real Estate Market in Houston and Pearland

Easter is here!  At last, "lenten" is nearly over . . . back to over-indulging in whatever you gave up! My friends gave up things such as sugar-based sodas, red meat, and the like.  So, back to eating and drinking it up again.  All because our sins are washed away!  (I love Easter!)

But Easter in real estate brings a sketchy period . . . people are slowed down and involved in the holiday, then realize it's time to pay Uncle Sam.  April 15, that magical day, follows Easter by only ten days......what then?

For some, it means a tax refund to be used as a down payment on a home!  Thus, the market goes crazy with buyers around that time.  For others, it means long hours of frustration trying to find all their deductions to reduce their tax liability and get all those complicated forms done.  Regardless which category, it all ends in a buying frenzy after tax day that runs until "vacation month."  (I'll leave that for a future blog entry . . . after all, I don't want to discuss two distinctly different real estate market timing strategies!)

So get ready to get lots of buyer/lookers real soon . . . after a brief Easter and tax-time slowdown. The interesting part this year is the lack of inventory.  There are a lot of discussions about the low numbers of sellers.  That means less to choose from for many buyers.

Case-in-point:  I opened an email this morning from a buyer who said he'd like to find a nice 3 bedroom, 2 bath home, near Hwy. 288, for around $150,000.  And I say, "good luck."  That used to be easy to find . . . now it's next-to-impossible.  If that home existed, it would have 5-7 offers in the first 3 days on the market.  Crazy.  And going to get crazier.

A challenge for many sellers is finding a move-up or scale-down home!  Financing is complicated with so many government regulations, as well as the new closing guidelines that take effect August 1 throughout the country that will add 15 days to every closing, according to some estimates.

So, Happy Easter (and it's accompanying "Good Friday").  Your sins are forgiven and buyers are a-plenty.  What else could a Realtor want?

Thinking of Buying or Selling?  Let me guide you through the complicated processes!  With over 40 years experience, my team and I have helped people just like you achieve their real estate goals.  -Sam Ferreri, 832-200-5656

Tuesday, March 24, 2015

FHA or Conventional?

FHA vs Conv 200.pngBuyers with a minimum down payment are generally faced with the decision of whether to get a FHA or a conventional loan.  With the new 3% down payment program on conventional loans, it may become more confusing which loan to pursue.

The two loan programs have mortgage fees that can differ greatly.  FHA has a 1.75% up-front mortgage insurance charge in addition to the monthly mortgage insurance charge which was recently lowered by .5%.

FHA’s mortgage insurance is a fixed amount where conventional mortgage insurance providers’ fees are determined by individual companies and according to the credit score of the borrowers.  A borrower with a good credit score will be charged less than a borrower with a marginal credit score.

Mortgage insurance on conventional loans can be cancelled when the equity in the property reaches 20%.  FHA mortgage insurance in most cases, is paid for the life of the mortgage.  Once a borrower has a 20% equity in their home, to eliminate the monthly FHA mortgage insurance, they would need to refinance the home with a conventional loan and would not be eligible for any refund of the up-front fee paid at closing or added to the mortgage.


If a borrower has a low credit score, FHA may be the better choice because conventional underwriters may have a higher minimum score.  FHA loans also tend to be more lenient than conventional loans when a borrower’s total monthly debt exceeds 45% of their monthly income.  FHA tends to allow borrowers a shorter time frame after foreclosures and bankruptcies.

The decision-making factor is which mortgage will provide the lowest cost of housing including payment and all loan fees.  A lot of information is necessary to make a good decision and typically, the borrower isn’t able to acquire it on his/her own.

A trusted mortgage professional is very valuable in not only providing the information but guiding the borrower through the entire process.  Your real estate professional is uniquely qualified to make such a recommendation.

The Spring Real Estate Market is Here . . . are you ready?

Every year, beginning about Valentine's Day, the buyer market activity begins to pick up and runs through May.  This period is oft referred to as the "Spring Buying Impetus." You know how it feels . . . the sky is blue, the air is crisp, the sun is shining, and everyone feels "frisky."  But this year has felt like Seattle weather -- cloudy, rainy, overcast, foggy, very little "peek-a-boo's" of the sun, which has produced an overwhelming feeling of malaise.  It has slowed down the market.

But beginning Sunday afternoon, the sun came out and it's starting to feel good!  Buyers are looking -- sellers are calling, despite the report from Realtor.com that the nationwide market inventory is down 11% at the start of the spring market!  Wow, what's causing that?

Basically, it is the over-regulated mortgage market, making it difficult for anyone to get a mortgage.  I read a blog that talked about how poorly designed the mortgage business really is, suffering from lack of technology and overburdened by government regulations.  In other words, when the market declined from about 2008-2012/2013, government reaction was to "tighten" credit underwriting to make it very difficult.  And beginning August 1, 2015, it will be worse.  Lenders will have to get their closing documents to the title companies 3 days before closing.  That's right, no last minute, pull-it-together closings.  Those are going away, forcing more pressure on the lenders.

It's going to frustrate buyers and sellers, as it already does waiting until the last minute for most closings.

Still, there are lots of viable options in the marketplace -- whether buying or selling.  So hook up with your REALTOR* and get in the game.  Real estate (ie your home) is still your best hedge against inflation and your best investment.

*Need a good REALTOR?  Call The Sam Team at 832-200-5656 . . . as seen on TV!  lol 

Friday, March 20, 2015

What happened to "integrity" in real estate? I guess I'm old school . . .

Maybe it's a generational thing, but why does it seem to me that many next-gen real estate agents seem to have no concept of "integrity" stemming from the Code of Ethics?  The Texas Real Estate Commission now requires every licensee to take 3 hours in ethics training every two years in order to renew their license.  This is a good first step, but it seems to go deeper than this.

You may know that I graduated from Houston Baptist University in 1980 . . . my daughter, Katie, graduated from the same school 30 years later in 2010.  Here is their answer to their perception of this growing issue:

School of Humanities Launches Center for Law & Liberty

The future Nancy & Paul Pressler Courtroom will be modeled after the Courtroom in Indpendence Hall, pictured here. 
The Center for Law & Liberty was created to promote American Founding Principles such as liberty, the rule of law, and free enterprise to HBU students as part of their educational experience.  

Dr. Chris Hammons, dean of the School of Humanities and leader of the initiative, says there are numerous studies that show recent college graduates have very little understanding of America's founding principles, and in many cases students actually leave college more confused and ambivalent about their country than when they started. "We can do better," says Hammons. "No nation is perfect, but we want our graduates to understand and appreciate the things that make America an exceptional nation."

The article goes on to say,  The Center also provides community programs, teacher workshops, and guest lectures by statesmen and political leaders. What is likely to draw the most attention, however, is where these programs will eventually be housed. Early plans have been approved to build a full-scale reconstruction of Independence Hall, where the U.S. Constitution and Declaration of Independence were debated and signed. The building will also feature the Pressler Courtroom, modeled after the existing courtroom at Independence Hall. The Courtroom will be named after Judge Paul Pressler and his wife Nancy, whose lead gift will help make these plans a reality.

The vision for the Center has attracted prominent Texas public officials, businessmen, and philanthropists to sit on the Advisory Council. 

It is interesting to me that this initiative is founded in the College of Humanities rather than in the College of Business, from whence I came.  

I guess I'm old school, because this seems like something we learned in elementary school and church.  "Respect your elders, salute the flag, honor your country, obey the law, do the right thing, don't do wrong things.  But first, you must know the difference.  So, I guess that college is now the place to learn "right from wrong?"  And those who don't have the privilege of going to college don't learn it anymore?  I pray that's not true . . . 

. . . there are some basic tenets -- good old fashioned ethics -- with which one can always prevail in business:
  • Always tell the truth -- you never have to worry about what you said;
  • Maintain Integrity -- simply do what you say you will do (if you're not going to do it, don't say that you will);
  • Always do the right thing -- you are presented with lots of choices; if you don't know right from wrong, ask someone from the baby boomer generation;
  • Respect your president, no matter which party he/she supports;
  • Always be willing to help others;
  • Always be very direct and to the point -- don't beat around the bush, don't be sneaky; people respect people who are "straight up."
And I know you're probably "ethic-ed" out by now, but these points are very important to success. My belief is that "hard work is the pathway to success" . . . but that pathway must be an ethical pathway.

If this describes how you see success in real estate, then whether buying, selling, investing, or building a business, you belong at The Top . . . RE/MAX Top Realty.  -Sam Ferreri, Director of Vision

Tuesday, March 17, 2015

Selecting a Lender

Selecting-200.jpgFinding a mortgage lender is not a problem. Selecting someone who will help you find the best loan product for your situation even if it means sending you to another lender is paramount.

There is a huge advantage to be able to sit across the table from someone you’re doing business with and look them straight in the eye. It’s difficult to make an informed decision based on a website and a phone call.

Doing business with a full-time professional who specializes in residential loans like you’re trying to get is important. You want the loan officer to be familiar with local conditions, values and practices.

It’s to your benefit to have a loan officer who has the experience to put the unusual transaction together even if yours is not. 

Here are a few questions that will be helpful in selecting the right loan officer.

  1. What percentage of your business are FHA & VA compared to conventional mortgages and how long have you been doing them?
  2. What percentage of your loans close on time according to the sales contracts?
  3. Will my credit score affect my interest rate?
  4. Will you help me select the best loan product for me regardless of your commission?
  5. Are there prepayment penalties on any of the loans we’re considering?
  6. Are there any restrictions on refinancing any of the loans we’re considering?
  7. When is my loan rate locked-in? Is there a charge for that?
  8. Is your loan underwriting in-house?

A real estate professional can be your best source of information and can recommend a trusted lender. If you have any questions as to what kind of answers you should expect, please give me a call.


Friday, March 13, 2015

Friday the 13th Houston - Pearland Real Estate Market Report

It seems appropriate that on such a day, I report what I've seen this year (2015 so far) and also reported by our MLS (a/k/a HAR.com):  real estate sales have seen their first decline in quite a while.

We made news!  But hmmm . . . 
The complete report from HAR.com can be read here.  Oh well, Realtors everywhere are saying things like, "we needed this market correction" or "we are now approaching a normalized market."  I think what they mean is that we couldn't expect what we experienced in the last year to last forever.

I remember when the Boston real estate market was climbing at an appreciation rate of 18-20% per year!  When homeowners were surveyed, an astounding 78% expected that climb to continue indefinitely!  Wow!  That would mean that home prices would double every 4 years or less . . . (who knows how to compute that compound interest problem??)  But we learned that the old truism, "what goes up, must come down" is still true.  The Boston market fell into the tank, and is now climbing back out.

Our market is quite similar and quite different.  After Hurricane Ike (remember that bastard?)...... you couldn't hardly give a home away, much less sell it.  Homeowners found themselves "upside down" in their mortgages, and were forced to lease their homes out rather than sell them when it was time to move.

The last couple of years, that's not been the case.  Homes turned around and started generating good returns again.  Then, the best ones would get multiple offers in the first 3 days on the market, and sell above list price and above appraisal price!  That continues to exist in many sub-markets around the Houston and Pearland areas!  But it's not across the board any more.

Homes must look good, be staged well, priced correctly, have updates, and need few (if any) improvements in order to sell well in today's market.

Are you thinking of selling?  Now may be the peak time . . . call me for a personal assessment of your situation.  We'll help you maximize your return based on your criteria.  We'll make the market perform for YOU!  Just expect more than 3 days marketing time . . . wow.

Meanwhile, blame the energy market . . . everyone else does!  I blame THEM!  After all, it IS Friday the 13th!

For your personal market evaluation, call Sam at 832-200-5656 or email Sam@TheSamTeam.com.  RE/MAX Top Realty, the largest RE/MAX office in Houston, Texas!

Tuesday, March 10, 2015

Invisible, Odor-free and Potentially Hazardous

iStock_Radon-200.jpgMost people’s first introduction to Radon is during the inspections of a home. It can be as much a surprise to a seller as it is a buyer. Radon is an invisible and odor-free, cancer-causing radioactive gas.

Radon can get into a home through cracks in solid floors, construction joints, cracks in walls, gaps in suspended floors, gaps around service pipes, cavities inside walls and even the water supply.

It is estimated that one out of every fifteen homes in the United States has elevated radon levels. The EPA recommends that you test your home which is the only way to find out if you and your family are at risk. If the level found is 4 picocuries per liter or higher, the EPA suggests that you make repairs or install a radon reduction system. Even lower levels can have health risks.

The EPA’s interactive map is available to find state and county information but still recommends that all homes should test for radon. More information can be found from the EPA in A Citizen’s Guide to Radon.

Test kits are inexpensive and can be purchased at stores like Lowe’s or Home Depot if you choose to do it yourself. If levels indicate a high enough level, you can contact a qualified radon service professional for another test or to mitigate your home. You can get information on identifying these professionals at www.nrpp.info and www.nrsb.org


Monday, March 9, 2015

Who wants to go fishing?

I spent half the day on Sunday (despite the rain and gloom) in San Leon, a small fishing town located on Galveston Bay wedged in between Kemah and Texas City.   The day started innocuously enough with Julian (our photographer) picking me up for a Mexican Breakfast at Taqueria Arandas (yummy)!

It turns out that Julian had been looking on HAR.com for fishing camp getaways in the Bay Area, having graduated from Dickinson High School many (many) years ago!  He found a little house on a private lake just a few blocks from the Bay.  So, we took a drive to look at it.

Driving around San Leon made me realize just how many "fishing holes" there are down there!  Not to mention the restaurants, bars, clubs, taverns, saloons, and the Boardwalk nearby for lots of entertainment.

As a child, I had some cousins who had houses right on the bay with private piers and boats, but lost their piers in Hurricane Carla.  Some were rebuilt, only to be lost again in Hurricane Ike.  Ugh, some rebuilt again, some haven't.

What's really interesting is that the bay used to be lined with little fishermen bait camps, but now, mega bucks has moved in and build huge expensive homes on the water, pushing out the poor little fishermen!  What is up with that?  Is it that people with money have been watching too much "Wicked Tuna" on the National Geographic Channel?  (Some of those tunas they catch yield $10-15,000 dollars each!  Yes, for one fish!)  That kind of return would make you want to be a professional fisherman.

Croaker Anyone?
But that's Wicked "Tuna," not Wicked "Croaker!"  (I seem to remember catching lots of croakers in that bay . . . but oh well, catching a croaker is better than catching nothing at all.)  And I doubt that croaker fishing has pushed people to build mansions on the bay.

Oh well, could I just find a little fishing camp where I could enjoy the weekends?  It's only about a 45 minute drive from my home in Pearland.  Driving around the "cheaper" areas revealed a collection of characters riding around on bicycles, golf carts, and the like.  Most seemed to be dirty old men with long white hair.  Crusty.old.fishermen.  I wonder how many had been Realtors in their former lives?

Wednesday, March 4, 2015

Politics: The more you dig, the more you find . . .

. . . and the more you find, the worse it stinks.

Boy I hate this time of year.  The republicans and the democrats battle fiercely to each find a candidate who can not only get 51% support of Americans, but who also has no skeletons or buried piles of poop that will be dug out.

Now, we even have foreign leaders trying to weigh in to sway American sentiment!  What are we coming to?

Then there are the "distractions."  If you can't find support for serious matters, focus energy on concepts that riles people's emotions.  Gay marriage and health insurance (which is a pretty serious matter, though, but being fought only for political gain).  I mean, does any American -- republican or democrat -- think that health insurance is really an option?  I was raised paying for insurance before I ate . . . do you want to "need" a kidney transplant and not be able to get one?  Or, should we just expect government to pay for it?

And we're going to vote for an American president based on whether or not they support gay marriage?

Now, it's all about personal email accounts.  So, let me understand . . . a presidential candidate should not use a personal email?  How many email accounts do you have?  Admittedly, I have 2-3 business emails, and one email (which shall remain anonymous) that I wouldn't want anyone digging into.

I could never be a politician.  I drank.  I smoked.  I participated in some things I wouldn't want exposed to the entire world for criticism.  I kind of think of myself as rather "human."  So, let's find someone who didn't do any of these things and is willing to share their entire life -- clean and dirty -- for everyone to smell.

The more you dig, the more you find.  The more you find, the worse it stinks.  Let he who is without sinful emails cast the first stone.