Top Tip to buy a Dallas Foreclosure

Want to get a great deal on purchasing a foreclosure? Looking to buy an REO ( Real Estate Owned) property for a bargain? You'll need a strategy and a good agent.

But I'll let you in on something before my tip.

For the past 3 years we've been hearing that foreclosures are about to flood the market. It hasn't happened and it still isn't happening. And I don't think it will. Banks are releasing their inventory in controlled numbers. They don't want to drive prices down with too many distress sales on the market. And they still prefer to reduce their losses with a short sale. So forget about the flood of foreclosures everyone keeps waiting for.

Here is the best tip to buying a foreclosed property in Dallas:

Make an offer the bank is likely to accept. Lots of folks think that they can get a steal on a foreclosed property by making a low offer to take it off the bank's hands. Wrong. Take this advice from California Realtor Carl Medford:

"You would think this myth would be dead by now. Unfortunately, like Elvis sightings, it just won’t go away. Here’s the truth: Banks want REOs sold in 30 days or less, so they typically appear on the market priced slightly under comparable properties. If the property doesn’t sell quickly, the bank will lower the price after about 30 days.

Lowball offers are ignored and are, quite frankly, a waste of everyone’s time and effort. You might get a deal by offering a lower price on a foreclosure that’s been sitting on the market for more than 90 days, but remember that there are good reasons it’s gone unsold for so long. And even if you have cash, your lowball offer won’t be accepted - seriously."

Carl is right. Work with an agent who knows the system and can advise you if the property is really a bargain or not. If you're a real buyer, you'll need to show the bank in order to get your deal. And make an offer they are likely to accept.

A note from today's buyers

The Optimists are today's buyers and sellers.

The Pessimists are the banks.

The Realists are the appraisers looking at the comps.

The Opportunists are my smart clients.

Current North Dallas Home Inventory by Price

Here are some interesting statistics you won't find most places. This is the inventory of homes for sale in North Dallas (south of LBJ, north of Northwest Hwy, between Central and Midway) looking at April 2011 to April 2012.

Homes priced under $500,000
homes for sale: 129
homes sold in the past year: 255

Homes priced $500,000 to $750,000
homes for sale: 98
homes sold in the past year: 121

Homes priced $750,001 to $1,000,000
homes for sale: 52
homes sold in the past year: 62

Homes priced $1,000,001 to $2,000,000
homes for sale: 98
homes sold in the past year: 99

Homes priced over $2,000,000
homes for sale: 64
homes sold in the past year: 28

Go ahead and do the math yourself to figure the number of months of inventory we have for each price point. "Inventory" is figured by looking at how long it would take to sell all the homes on the market if no other properties were listed for sale. If 100 homes sold in the past year and there are currently 50 homes on the market, then you have a 6 month inventory. If 100 homes sold and you have 200 on the market, you have a 2 year inventory.

In Dallas, a 6 month or less supply of homes indicates a seller's market. A 10 to 12+ month supply of homes indicates a buyer's market. Everything in between is a balanced market.
[where: 75230]

Homes - How small can you go?

It seems that everyone wants a different amount of living space depending on many factors. The most important factor often depends on where you are in your life.

I'm in the process of helping my son purchase a condo in Austin where he is in law school. For a single student, he feels comfortable in about 500-700 square feet. Any less feels too small and any more is just more tend to. Personally, I couldn't be comfortable living in a space that small - at least right now.

Like a lot of parents looking at an empty nest, I've hit a point in my life where I seek to simplify, get rid of extra clutter and space I don't need, and be free of the responsibilities of a large home. Downsizing can be liberating. But like Goldilocks, finding just the right size can be a challenge.

Most of us accumulate too much stuff and could easily live in less space - we just don't usually want to. How much space we need isn't as important as how much space we want and feel comfortable in. Like the college student who starts off sharing a 140 square foot dorm room, we yearn for more space as we can afford it. But with more space comes higher bills, more to maintain and clean, more space to furnish and decorate, ...

I've found that most people can't comfortably cut more than about 30% to 40% of their living space. They can go from 6,000 to 4,000 square feet without much trouble. However, cutting more than half of the space you are accustomed to is difficult - no matter what size you start with. Some folks ( Hi Gary )seem to gladly do it with ease. But they are the exception. It's too hard to downsize in one giant step. It often takes a couple of moves.

If you are thinking of how much space you really want to own and maintain, consider:

• Basically you need space to sleep, cook, eat, bathe, and live. Consider how much more you need for storage, utility, work and entertaining.
• Do you need a designated work space in your home? Or could you do double duty with the living room, dining table or guest room? Think in terms of multi-function areas.
• Speaking of the dining room - if you only use it a couple of times a year, make better use of the square footage.
• Do you frequently host guests either for entertaining or overnight? The cost of buying, maintaining, air conditioning, paying taxes on, ... the space could pay for a hotel stay.
• Don't store lots of stuff that you don't really need in closets (or the attic). Display the items you really love - including household items - in a beautiful way. If they are packed away, you may not use them or need them.
• Lastly, how much private space you really need to relax and feel comfortable? Some people enjoy less indoor space if they have spacious views of the outdoors.

Remember there are starving children in China who would love to have that space. Or something like that. Consider where you are in your life and how much space you want in the next 10 or 20 years.

This may sound strange coming from someone who sells square footage, but when it comes to your living space, you should either "Use it or Loose it". [where: 75230]

Dallas spring Real Estate market is Busy, Busy, Busy

We're putting our heads together and helping our clients take advantage of the hot spring market in Dallas. Are you making today's real estate market work for you?

We are.

People are always blaming their circumstances 
for what they are.

I don't believe in circumstances.

The people who get on in this world

are the people who get up

and look for the circumstances they want,

and, if they can't find them, make them.

George Bernard Shaw

Real Estate Photos for Dummies

Lesson 1: Make sure you have several great photos of the property and you post them in MLS. 

Should I have add that you need a variety of great photos? For example:

How about a peek-a-boo shot of a nice little bathroom?

And since you can post more photos, why not take another look ...

One more time in case you couldn't see it all ...

Same tiny bathroom, three different views - sort of.

[where: 75230]

Another one bites the dust in Preston Hollow

Another old home became a pile of rubble today. This time at Douglas Avenue and Averill Way.

The original 5,336 square foot home was built in 1938, but the value of the property is in the 1.75 acre of prime land.

[where: 75230]

Best Dallas Home Warranty Company

Home Warranty Companies offer protection plans that cover systems (like plumbing, electrical, heat and ac) and appliances ( like refrigerator, dishwasher, ovens) in your home. They can be purchased at the time you buy your home and, in Dallas, they are often paid for by the seller. Typically a home warranty policy ranges from $400 to $1,200 depending on the size of your home and what options you choose.

The advantage to a home warranty is peace of mind. When your oven breaks or air conditioning conks out, just call your home warranty company and they will send out a technician to repair it. You pay the deductible (usually about $60). And they will replace equipment that can't be repaired. They can save you a lot of money and headaches.

I've been a fan of American Home Shield for years and have used them personally on my homes for the past 24 years. But not so much any more. They've raised my deductible to $75 a visit and they continually raise my renewal rate. They've rejected my recent air conditioning repair because the unit is too old (like I would need their warranty if it was new?). Even though I live in a 1930s home, it doesn't make financial sense to keep paying them more than $750 a year for minimal coverage.

Nations Home Warranty is now my favorite home warranty company for Dallas properties. Nations is a small, yet very reputable business and they are based in Dallas. While no home warranty company is perfect, they come close. And my clients are happy with them. Their coverage and customer service out performs their competitors.

Let me add, that all home warranty companies offer limited coverage. No company covers everything in every inch of your pre-owned home. Some plans don't cover certain items such as pre-existing conditions, required updates, maintenance issues like rust, etc. They only cover items due to 'normal wear and tear' and that were in previously good operating condition. Read the fine print. While your homeowner's insurance is designed to cover disasters like fires or tornadoes, your home warranty is designed to cover breakdowns.

Why get a home warranty? When you purchase a pre-owned home you may be using it differently than the previous owners. Running the dishwasher more often, flushing different toilets, etc. If something breaks down, it makes it easier to deal with.  [where: 75230]

Funny Friday in Dallas Real Estate

Check out a piece of recruitment email that I got that attempts to entice me to set up office in Walmart. No joke.
The guy in the photo is pointing to a stack of cards with the names of people who want to buy or sell a home. And it says
"The #1 Concept in America"!

Really? The number one concept in America? Who's concept of what?

Call me a real estate snob, but Walmart is not the place to hire a Dallas Realtor. This is my idea of a nightmare.[where: 75230]

Year to Date Home Sales Statistics

March 2012 home sales numbers are in from the North Texas Real Estate Information Services (NTREIS). I'm sorry to say I told you so, but ... actually I'm not. The number of sales are up significantly. Yeah!

But the prices slow to come back -just like I've been telling you. Inventory is down and demand is up as you can see reflected in the average days on market for our area.

Here is a closer look at the statistics for March 2012 across North Dallas (compared to March of 2011):

North Dallas (south of LBJ, between Midway & Central):
Number of Sales: 138 (up 27% from this time in 2011)
Average Sales Price: $675.643 (down 15% from 2011)
Average Days on Market: 109 ( down 23%)

Park Cities:
Number of Sales: 180 (up 30% from 2011)
Average Sales Price: $1,051,933 (up 2% )
Average Days on Market: 92 (down 16%)

Northeast Dallas (east of Central):
Number of Sales: 126 (up 25% from 2011)
Average Sales Price: $262,672 (up 8%)
Average Days on Market: 71 (down 9%)

Northwest Dallas (west of Midway):
Number of Sales: 126 (up 59% from 2011)
Average Sales Price: $220,692 (up 8%)
Average Days on Market: 86 (down 14%)

Far North Dallas (north of LBJ to Plano, Central to Marsh):
Number of Sales:204 (up 25% from 2011)
Average Sales Price: $316,961 ( up 6%)
Average Days on Market: 87 (down 6% )
[where: 75230]

To Keep or Not To Keep the Swimming Pool

When I ask clients what they are looking for in a house, one of the primary questions is "Pool or no pool?". Most people either really want one or really don't. There aren't too many in between.

But what happens when that pool you once wanted becomes more of a liability than an asset? That is what finally happened at the Player house. The cost to repair our leaking 25+ year old pool, pumps, filter, skimmers, etc. far exceeded the cost to fill it in. Repair estimates were over $15,000 and we had not even addressed the cracked and uneven decking.

If we used the pool regularly it might have been worth the hassle of repairing plus the weekly upkeep. But now that the kids are grown, it hasn't seen much use. It had become a swampy money pit. Scraping it was the best solution.

Filling in a pool can be expensive and messy. The cost in Dallas varies depending on both the size of the pool and the access. It also varies depending on if you break the pool up and bury most of it prior to filling in dirt or if you haul every piece of it away. There is a process. You can't just throw dirt in it or you'll end up with a big mud pit and even more problems. If you don't have easy access via the alley, plan to spend more.

We spent about $6,800 to fill in our large pool. The cost can run higher. Keep in mind you may have to take down some fencing, disconnect electrical and plumbing, and reroute sprinklers. Plan to repair some landscaping and then add a lawn.

From a Dallas resale point of view, a pool does not add value to your property. For as many homebuyers that want a pool, there are an equal number who don't want a pool. If you like a pool, then keep it in good condition, plan to spend some money on it and enjoy it. But when the cost to repair it out weighs the cost to get rid of it - call in the jackhammers and bulldozers.

[where: 75230]

Happy Easter

[where: 75230]

Gutter Importance for your Home

Let's get down in the gutter today. Because so many Dallas homeowners don't realize the importance of functioning rain gutters. And it can end up costing them a lot of money when they go to sell their house.

Gutters do more than make it easier to get in and out of your home during rain. They serve to manage water flow around your home. When rain hits your house it gathers like a river by the time it leaves your roof - unlike the way it is evenly scattered as it hits your lawn.

Poorly installed, damaged or missing gutters can cause extensive damage to your home, doors, windows, landscaping and especially to your foundation. I've seen the results or poor gutters in many home inspections and it always seems to be a shock to the homeowners.

Without properly functioning gutters and downspouts, the soil surrounding your home’s foundation becomes saturated during heavy rains and it can lead to major damage. Clogged gutters are just as bad or even worse than no gutters at all. They can cause water to flow back into the facia of the house and produce water damage, wood rot, and masonry damage. If your gutters are not allowing water to flow at the correct slope, they can be a breeding ground for mosquitoes and mold.

This is the time of year to clean your gutters and check that they are functioning properly. You can only really do this from a ladder. Check for bird nests, clogs, ... and damage. The cost of hiring someone to do it will save you money in the long run. [where: 75230]

North Dallas Weather Emergency Info

It's spring in Texas and that means chances of severe weather at any time. Your home is the best place to be during a Dallas storm. Here is some helpful information when bad weather strikes in our area:

There are emergency sirens located near Northpark, Preston Royal, Forest and the Tollway, ... about every mile in North Dallas. The city tests the warning sirens on the first Wednesay of every month at 12 noon. If you hear them at any other time, take cover. In the event of a tornado, the sirens will signal for 3 to 5 minutes.

Our area is fairly flat with a high risk of flash flooding. Stay off our roads during storms.

Reverse 911: The City of Dallas Reverse 911 Emergency Notification System is used to rapidly send telephone notifications in the event of an emergency. You must register online to be included in the system and you can register home or cell numbers. The service is offered to city of Dallas residences and businesses only (not the Park Cities).

To ensure that you are notified about emergency events, register by visiting this website: www.dallascityhall.com/oem/oem_geoCast.html.
It may be pretty weather today, but plan for the storms because they always come.