Real Estate Blogs | Properties for Sale | Preferred Properties of Texas

What Sellers Should Know About the Risks of Recording Buyers

September 4, 2019 by chorton Leave a Comment

What Sellers Should Know About the Risks of Recording Buyers

If you have smart-home technology that can record video or audio, make sure you don’t run afoul of the law when your home is being viewed by potential buyers. Illegally recording is a felony offense in Texas, and anyone who has been recorded in violation of the law can bring a civil suit to recover $10,000 for each occurrence, actual damages in excess of $10,000, punitive damages, attorney’s fees, and court costs.

If you are putting your house on the market, here’s how to avoid trouble with your technology.

The One-Party Rule Won’t Protect You

If you think you can get away with eavesdropping on a buyer showing, think again. Although Texas law allows you to record audio of your own conversation without the consent of the person you are speaking to, this “one-party rule” does not apply when you are not present and participating in the conversation. You cannot record audio of a conversation merely because the conversation happens inside your home.

Be Careful With Video

Many homes have security cameras that record video. Silent video from security cameras is generally allowed as long as it isn’t in a private area of a home. For example, silent video from a common part of your home—such as the exterior, foyer, or garage—is likely OK. Silent video from a bathroom is not allowed. It’s never a good idea to record video and audio together during a showing.

Visitors’ Privacy is Protected by Law

Just because someone is in your home does not mean you can record whatever you want. Texas privacy laws exist to protect individuals, and courts have found in favor of visitors when a homeowner goes too far with surveillance.

Don’t risk a lawsuit just to overhear what a buyer thinks about your property. Leave feedback-gathering to your REALTOR®.

TOP TIPS FOR HOUSE HUNTING ONLINE

September 4, 2019 by chorton Leave a Comment

TOP TIPS FOR HOUSE HUNTING ONLINE

Hunting for a new home online is a great place to start your search, but it should not be your end all be all. Good listing agents are excellent at highlighting the best features of the home, but keep in mind there may be more than meets the eye. To make the most of your time and efforts and gather a well-rounded picture of home listings online, keep the following three things in mind.

Stay up to date. When you start your search, make sure you find a site that pulls up-to-date listings directly from the multiple listing service (MLS) where real estate agents actively post their most current homes for sale. Many online resources update less often or fail to remove listings that are off the market, making it more difficult to sort through the clutter.
Pictures can be deceiving. Real estate photographers are experts at showing a home in the best possible light. Many use tools and strategies to boost appeal, such as a fisheye lens to make areas look larger and creative editing to make colors and textures really pop. But, often listings will not contain photos of unappealing parts of the home, like small closets or outdated bathrooms.
See it to believe it. Once you find what appears to be your dream home online, call up your real estate agent and schedule a showing. You want to take the opportunity to vet the home in person and explore every part of it before beginning the offer process. Your real estate agent will help you cover all your bases and will ask questions you may not have thought of.

Happy Labor Day! Take Some Time to Relax This Labor Day Weekend

August 30, 2019 by chorton Leave a Comment

From our family to you and yours: wishing you a Happy Labor Day!

Labor Day was created as a way to acknowledge and pay tribute to the American workforce for all they have done to make our country prosperous and strong. Take some time this Labor Day weekend to enjoy safe, fun and relaxing moments with your loved ones. Preferred Properties looks forward to helping you the American worker accomplishing the American dream and owning your own home.

Recreational Land

August 29, 2019 by chorton Leave a Comment

Recreational land is different than other land types. Its success isn’t measured in crops, but on the quality of the time spent on the land. Whether you buy recreational land as a hideaway for generations to enjoy or to create a lucrative hunting spot, recreational land does have some unique barriers to achieving success. Since this land type isn’t talked about as much as residential land or farmland, we wanted to dedicate a blog post to commonly asked questions about recreational land.

What is recreational land?

As the name suggests, recreational land is land that is used for recreation. The types of recreation can vary – hunting, fishing, camping, ATV-ing, and more. In the industry, hunting is one of the most popular and well-recognized uses for recreational land.

What should I look for when buying land?

Knowing what zoning regulations and restrictions impact a property is one of the most important things to look for. These regulations can impact everything from build-ability to what you are allowed to hunt. Work with a land expert in your area who can help you find a property zoned right for your intended use.

If you want to use the land for hunting, keep an eye out for animals and things animals like. Food plots, a good source of water, and cover for animals to feel safe in is key for attracting game to your land.

Good neighbors can also make or break a recreational property. If the property is part of a managed neighborhood, that’s a great sign that they are dedicated to helping everyone in that community and their land to thrive. Bad neighbors (for example, poachers, people who make noises that scare animals or disturb the natural peace, or people that dump waste into the river) can ruin an otherwise perfect property.

What are the benefits of buying land for enjoyment?

How you benefit from the land is up to you. You could let other people enjoy the property and its amenities for a fee. You could improve the land and sell it for a profit down the road.

You can also use it for your friends and family as a retreat from the rest of the world. If kept in good shape, recreational land can be something passed down for generations that will only increase in value.

How can I add value to my land?

We recommend creating habitats for animals to thrive in. He says, in his guest post for the RLI Blog, about a recent property he helped to add value to “This [property] required thinning the trees back to 35-50 trees per acre. A skid steer with a grinder ate up a lot of the long-abandoned under story before Garlon (Triclopyr) was sprayed to prevent hardwood growth. These fields were burned using prescriptive fire in late February. Continuing to burn every one or two years will keep this stand clean and provide a great habitat for all wildlife.”

Recreational land is so much more than just another land type. It can be a family heirloom passed down from generation to generation, a profitable business, or just a place to get away from the rest of the world. Interested in owning a piece of your recreational land? Make sure to Find A Land Consultant that has the expertise required to conduct these types of transactions. Interested in learning more about recreational land as an agent? Contact a Realtor with Preferred Properties of Texas

https://www.rliland.com/recreational-land/

16 Types of Mortgages Explained

August 29, 2019 by chorton Leave a Comment

16 Types of Mortgages Explained

types of mortgages

Did you know there are many different types of mortgages? We list 16 of the most common mortgage options, along with the pros and cons of each.

Fixed Rate Mortgage

Fixed rate mortgages are the most popular option. A set interest rates mean predictable monthly payments. These payments are spread over the length of a term, which ranges from 15 to 30 years, typically. Currently, shorter loan terms are becoming more popular. Back in 2011, USA Today noted that 34 percent of refinancers shortened from a 30-year to a 20-year or 15-year loan.

Generally, the shorter your loan’s term, the lower the interest rate. Lenders take on less risk with a shorter loan term. This means you’ll pay much less interest over the life of a 15-year mortgage versus a 30-year mortgage.

30-Year Mortgage: Freddie Mac notes that about 90 percent of home buyers in 2016 chose the typical 30-year, fixed-rate mortgage. The longer term makes payments much more affordable, which can help home buyers get into a more comfortable payment or a more expensive home.
20-Year Mortgage: Like the 30-year mortgage, this fixed-rate option offers consistent payments. You just pay off your house sooner. Some consumers like to split the difference between the longer and shorter terms. The 20-year mortgage will typically have a slightly lower interest rate than a 30-year mortgage.
15-Year Mortgage: You’d think that payments for a 15-year mortgage would be twice as high as payments for a 30-year. But because 15-year mortgages generally have lower interest rates, this isn’t the case. That’s one reason these shorter-term mortgages are becoming more popular.

Adjustable Rate (ARM) Mortgage

As you might guess, the interest rate on an adjustable rate mortgage fluctuates. Exactly how the interest rate changes depends largely on the type of loan you get.

In many areas of the world, including Britain and Australia, adjustable rate mortgages are the norm, though they’re much less common in the U.S. If interest rates are going down, ARMs let homeowners take advantage of that without refinancing. If interest rates rise, however, ARMs can result in surprisingly sky-high payments.

Variable Rate Mortgage: This is just another name for an ARM, but a true variable rate mortgage will have adjusting rates throughout the loan term. Rates normally change to reflect a third party’s index rate, plus the lender’s margin. Mortgage rates will adjust on a set schedule, whether every six months, every year, or on a longer term, and many cap the maximum interest you’ll pay.
Hybrid ARMs: These adjustable rate mortgages come with an initial fixed rate for a particular period of time. Common hybrids are 3/1, or three years of fixed interest followed by floating interest rates, and 5/1, the same but with a five-year introductory period.
Option ARM: This type of ARM offers the borrower four monthly payment options to begin with: a set minimum payment, an interest-only payment, a 15-year amortizing payment, or a 30-year amortizing payment. Often, an Option ARM is used to get a borrower a larger loan than he would otherwise qualify for.

Balloon Mortgage

Balloon mortgages typically have a short term, often around 10 years. For most of the mortgage term, a balloon mortgage has a very low payment, sometimes interest only. But at the end of the term, the full balance is due immediately. This can be a risky proposition for most borrowers.

Interest-Only Mortgage

Interest-only mortgages give borrowers an option to pay a much lower monthly payment for a certain time, after which they’ll need to begin paying principal. Balloon mortgages are technically a type of interest-only mortgage. But most interest-only options don’t require a lump sum payment of principal.

Instead, these payments will allow the borrower to pay only interest for a set amount of time. After that, the borrower will need to make up for lost time by paying more principal than they would have had they begun with a traditional fixed rate mortgage. In the long term, interest-only mortgages are more expensive. But they can be a decent option for first-time home buyers or individuals who are starting businesses or careers with only a little money at first.

Reverse Mortgage

This type of mortgage is for seniors only. A reverse mortgage gives homeowners access to their home’s equity in a loan that can be withdrawn in a lump sum, with set monthly payments, or as a revolving line of credit. Homeowners don’t have to make payments, but the lender will have a lien on the home for the amount owed upon the death of the borrower(s).

With a reverse mortgage, you’re find until you have to move out of the house. If you move out, even if it’s before your death, you’ll need to repay the mortgage out of the proceeds of the loan. This can drain the equity many seniors depend on to fund long-term care expenses. In some situations, a reverse mortgage can be a reasonable choice. Just be sure you know what you’re getting into.

Combination Mortgage

Combination mortgages are helpful for avoiding Private Mortgage Insurance (PMI) if you can’t put 20 percent down on a home. Usually, you take out one loan for 80 percent of the home’s value and another for 20 percent of the home’s value. This is an 80/20 combination loan. Usually the first loan has a lower, fixed interest rate. The second loan has a higher rate and/or a variable rate.

This can sometimes be more expensive interest-wise. But do the math. PMI can be expensive, as well. If you can pay off the higher-rate 20 percent equity loan quickly, you may come out better off with a combination mortgage.

Government-Backed Mortgage

In an effort to encourage home-ownership, the federal government offers some loans that are backed by government entities. This means that if a borrower defaults on the loan, the government will cover the lender’s losses. Because of this guarantee, government-backed loans are often an ideal solution for first-time and low-income home buyers.

FHA Loans: These loans are backed by the Federal Housing Administration and are great for first-time home buyers or those with bad credit. FHA loans can be used for single-family homes, cooperative housing projects, some multifamily homes, and condominiums. The specialized FHA 203(k) loan can also be used to fix up a home in need of significant repairs.
USDA Loans: The United States Department of Agriculture encourages rural home ownership with specialized, low down payment loans for certain families buying homes in rural areas.
VA Loans: The Department of Veterans Affairs backs these zero down loans for active duty, reserve, national guard, and veteran members of any branch of the armed forces.
Indian Home Loan Guarantee: These HUD loans are available to lower-income Native Americans, as well as Native Alaskans and Hawaiians.
State and Local Programs: If you’re struggling to come up with a down payment or adequate credit score for a home loan, check out state and local government programs. Many programs are geared toward revitalizing areas where many homes are abandoned or in need of repair.

Second Mortgage

If you have a home and have some equity built up in it, you can take out a home equity loan, also known as a second mortgage. This is just another loan secured by the equity in your home. Another option is a home equity line of credit. This is a revolving loan based on the equity in your home.

These loans will typically have a higher interest rate than your first mortgage. But they can be a good option for funding home renovations or other necessary expenses, especially in such a low interest rate environment.

Final Thoughts

The type of mortgage is an important consideration. The good news is you have far more options than many realize. In all cases, focus on the interest rate and fees while you compare rates.

How to Prepare For a Real Estate Appraisal

August 26, 2019 by chorton 2 Comments

How to Prepare For a Real Estate Appraisal

Tips to Prepare for Your Appraisal

If you are planning on selling your home or trying to refinance your mortgage, you will need to get your property appraised as part of the process.

Over the past thirty-two years of selling real estate, lots of sellers have asked me what they need to do to prepare for their real estate appraisal.

They will specifically ask what the appraiser will be looking at. In other words, what is the appraiser appraising?

Getting an appraisal can be stressful, which is totally understandable. The value your home is appraised for will be a primary factor in how much money you can get for it.

A low appraisal tends to mean a lower selling price—not ideal when you want to make as much money as possible from your sale. Fortunately, there are things you can do to prepare for an appraisal.

Read on for valuable tips on prepping for the appraisal so you can maximize the value of your home.

1. Get it done early.

The information you will get from the appraisal is going to play a significant role in the planning process for the completion of your sale. If the appraiser finds a defect with your home, for instance, you can address the problem right away, so you are not scrambling at the last minute.

Of course, if you wait until the last minute to get the appraisal done, it is going to be much more difficult to fix problems before you try to close on the property. Do yourself a favor and get the appraisal done now so you can make informed decisions moving forward.

Ask your real estate agent to keep the mortgage approval date as tight as possible and to get the appraisal ordered.

2. Clean your home.

A clean home is not going to prevent an appraiser from identifying major problems with your property. That being said, there is still something to the idea of dressing to impress.

When your home is clean and organized, it gives off the impression that you take care of the property. The appraiser may be a little less prone to nit-picky observations and maybe a little more motivated to see the best in your home.

An appraiser is human just like the rest of us. The psychology of selling comes into play with a spotless, well cared for home. One of the ratings on an appraisal report is condition – keep this in mind.

Another advantage of cleaning your home thoroughly is that you will be able to see some potential problems that the appraiser would notice. If you find a damp area in the basement that has a bit of mold in it, you can get the problem fixed and the mold remediated before the appraiser has a chance to see it and write about the issue in his or her report.

3. Clean up your yard.

The same idea about cleaning your home applies to your yard and landscaping. You do not need a luxurious lawn and heavily landscaped areas to make the house look nice. But you do need to cut the grass, rake the leaves and tidy things up if you want to put your best foot forward.

Cleaning up the exterior of your home will also give you an opportunity to see problems that you could fix quickly and cheaply before the appraiser shows up. Look around with a keen eye for any apparent defects.

Make sure you take care of any obvious problems like rotting trim boards, leaves hanging out of your gutters, an unmaintained deck and other such issues.

Try to have an open mind and see things like you would be if you’re the one purchasing the home.

4. Make it easy to appraise your home.

Another great tip to prepare for an appraisal is to make it easy on the appraiser! Appraisers are people, and most people respond well to being treated with respect and courtesy.

They tend to have full schedules, so making it easy as possible for them to appraise your home is an easy way to get on their good side.

Keep in mind, being on the right side of a professional is not going to make him or her neglect job duties—if there are severe issues with the home being nice is not going to keep them off the report.

Making it easy to appraise your home means cleaning up, removing clutter, ensuring all areas are accessible like attics and basements, being on-time for the appraisal, etc.

5. Remember every $500 matters.

The $500 example is the idea that appraisers tend to measure the value of a home in increments of $500. If you have some minor repairs that need to be done and you leave them for the appraiser to find, he or she is likely to knock some value off of your home.

Things like broken doors, non-functional locks, faulty light switches, leaky faucets, and other minor issues are cheap enough to repair and will help you avoid lost value and increased scrutiny on the part of the appraiser.

Just think about how quickly each issue can add up when multiplied by $500, and you will find it easy to appreciate the value of making minor repairs now instead of later.

Again, this falls under the category of condition which an appraiser will be grading while visiting the property. Blatantly obvious repairs can affect the value of your home.

6. Make sure your real estate agent attends the appraisal.

The best real estate agents will attend the appraisal to help the appraiser. When I’m selling a home in the Metrowest Massachusetts area, I always try to attend the appraisal.

It is important for the agent to bring comparable sales data to support the sales price. The agent can also point out other important things if the appraiser is not aware such as recent improvements, the quality of the neighborhood, and schools, etc.

An excellent real estate agents does more than sell your house – they REPRESENT you at every phase of the sale, including the appraisal. The appraiser will appreciate being helped as well. This is a vital step in getting ready for the appraisal.

7. Make a list of all the upgrades you have done to the home.

A simple list that highlights all the improvements you have made to your home and the expense of those improvements makes it easier for the appraiser to calculate the value of your property.

While appraisers may be on the lookout for upgrades, they are not always going to notice every one you have made, and they are certainly not going to be sure of how much you spent on the upgrades.

The list you make should include the date of your upgrades, all the building permits you acquired, and any warranties that go along with the work. The more recent the improvement, the better.

For example, if you have remodeled your kitchen in the last couple of years, this is certainly something the appraiser needs to be made aware of. Not every improvement you make to your house increases the value. In fact, some can actually hurt your value.

Here are some of the best home improvements to increase value.

8. Pay attention to the area around your home.

Appraisers do their best to research each area they appraise in, but they are not always going to be thoroughly familiar with the area where your home is located.

You may have noticed a new shopping center, an upgraded school, increased access to the highway or other improvements that add to the quality of life in your neighborhood.

Since the appraiser could miss these improvements, it is up to you to make sure that all of them are understood before the appraiser finalizes his or her report. As crazy as it sounds having a Starbucks, Trader Joe’s or Whole Foods nearby could increase the value of your home.

8. Consider improving your landscaping.

While you should be careful about how you spend money on improvements before selling—because not all improvements yield positive financial returns—some improvements are a more sure bet than others.

Landscaping improvements can often be done for a reasonable price, especially if you do a lot of the work yourself. And those improvements may add noticeable value to your home.

There is a lot that you can do in a weekend, like planting flowers, shrubs, and small trees, replacing dying areas of grass with more low-maintenance plants and adding a layer of mulch to your flower beds to bring everything together. Even an afternoon of planting and cleaning up can make your home much more appealing to anyone who drives by or walks up to the door.

9. Definitely consult with a Real Estate agent.

If you are selling your house as a for sale by owner, you might want to get some tips from a Realtor. The problem with trying to do everything yourself is that you can miss important things—factors that can make a significant difference in the final value of your home.

Your local agent will be able to provide guidance specific to your home and your area that you cannot find anywhere else.

A quick tour of your home with the agent will get you valuable feedback on what aspects may need to be addressed before the appraiser walks through the door.

The agent can also help you understand what improvements are likely to yield good returns, and which ones should be avoided. The better information you have, the better you can expect to do with the appraisal.

Final Thoughts on Being Ready for A Real Estate Appraisal

Preparing for a real estate appraisal is easy when you know what the appraiser will be looking for. Here is a recap of what the appraiser will be appraising:

The condition of the exterior of your house.
The condition of the interior of your house.
The overall size of your home.
Any recent upgrades you may have done to your home.
Whether your home is modular construction or stick built.
The neighborhood in which your home is located. This would be known as neighborhood appeal.
The desirability of the lot your house is located on.
The school district you are located in.
Any unusual factors which could affect the property both positively and negatively.

These are all things that will impact the value of your home. There are also extraneous features of an area that can have a negative impact on your property value.

What Can Happen When You Are Not Prepared For an Appraiser

The downside of not being prepared for an appraisers visit is that he or she could look at your property unfavorably. Why is this a problem? The appraiser is the judge, jury, and executioner when it comes to providing the lender with a home value.

You may not like what the appraiser tells the bank about the value of your home. In other words, the house might not appraise for the value you expected – the agreed upon sale price. This is the point in time where your stress levels will rise significantly.

You will now be either reducing the sale price of your home to what the appraiser says it’s worth or trying to fight it.

Let me be blunt – getting an appraiser to change the value of a home is not easy. Unless the appraiser made a factual mistake, you’re probably going to be out of luck.

It sounds like you should take this whole appraisal process seriously right? Hopefully, knowing how to be ready for the appraiser has been helpful.