Claudia Hohlt Real Estate Blog

Selling Real Estate Through Photography

2012-01-08T08:52:00.001-06:00

My next door neighbors’ Maltese and Shit-Tzu dogs recently had a litter of pups. The hybrid pups, called Mal-Shi’s or Malti Tzu’s, were perhaps the cutest pups I had ever seen. Needless to say, I am now the proud owner of Brody, one of the cutest pups ever. Soon after he came home, we took a number of pictures and a video of him under the Christmas tree amidst a group of small stuffed animals titled “Where’s Brody?”. Because one of our daughters couldn’t open up the video file on her Mac laptop, I uploaded it to YouTube so she could view it. Imagine my surprise the next day when I received an email from the ABC affiliate in Phoenix requesting permission to broadcast the video on their news program. But then again, he is perhaps the cutest puppy ever.

At first I was somewhat surprised about this, but then I thought of the pictures, virtual tours and videos of homes that I upload onto the internet that are also seen all over the world immediately after I key them in. I have dealt directly with home buyers from all over the U.S., Mexico, Europe, the Mid East, South America, Canada and Australia, to name a few. Of course, it’s nothing unique to me, it’s just the nature of the real estate business today. Still, the power of the internet instantly transmitting video around the world still amazes me.

Of course, I didn’t have to do much to attract the Phoenix station to the YouTube video of Brody. Puppies pretty much sell themselves. But home photography requires a little more experience and care. To catch buyers’ interest, pictures have to depict a compelling story. Poor quality pictures or a lack of pictures can cause buyers to just pass a listing by and move on to others.

Although professional real estate photographers are available, most agents still do their own photography. Those that do should have good quality equipment along with the knowledge to effectively use it. It doesn’t take an investment of thousands of dollars in camera equipment to make good quality pictures these days. Basic equipment would include a digital camera, a wide-angle lens, external flash and tripod. All of those items can be purchased at a very reasonable cost. Training can be acquired rather easily too. There’s a plethora of books, on-line articles and classes that cover all the basics and more. And finally, expertise requires lots of experimentation and practice, practice and more practice.

A seller’s minimum expectation from a Realtor from a photography shoot is a set of pictures that are well framed, properly lit, and sharp. But the best real estate photographers go well beyond that if they possess some key attributes. First of all, a love of selling real estate is a huge advantage in being a good home photographer. The photographer needs to understand a home’s selling strengths, put together a story line and then capture that story with pictures. Patience is also a virtue as the photographer might have to wait a bit for the lighting to be right, or perhaps catch a boat sailing by. Creativity is also helpful. For example, capturing a rose bud in the foreground in a picture of a lit fireplace can make an ordinary picture appear extraordinary.

Since the real estate industry has invaded the internet, home photography has never been more important in selling real estate. Agents should acquire this skill or hire someone who is capable. I’m fortunate in that my husband has a passion for home photography. When I get a new listing, I love to see his eyes light up as he starts to envision a picture storyboard. Many agents have a similar passion or utilize someone who does.

Meanwhile, I think we’re going to try to get another video of Brody under the Christmas tree. He’s been uploading puppy chow so I had better finish his photo shoot before he executes a download.

A Thanksgiving Story

2011-11-20T08:21:00.000-06:00

Some time back I listed a home for a couple who was going through a most difficult time. Because of some financial hardships, they had reluctantly decided to pull up stakes. They had a modest home on some great property, but it needed some cleanup and repairs that the owners just didn’t have the time or money to do. Not long after listing their property, they moved out of state and quit making mortgage payments. Before the bank started foreclosure proceedings, I helped them get approved for a short sale.

The condition of the home was a significant negative for most prospective buyers who viewed the home. But eventually a very nice couple contacted me about the property and fell in love with it. The husband was a do-it-yourself type of guy and wasn’t the least bit intimidated about the needed repairs. They said that the house and acreage was the perfect fit for them. And they loved the area as it was close to their family. This property had everything on their wish list and nothing else they had seen had come close. Even the sellers were overjoyed that someone would continue to appreciate the property as they once had.

It sounds like a nice ending to a sad story, but there was a hitch. After contacting their lender, the couple learned that they were some issues that had to be resolved that could take 6 months to a year to work out. The sellers’ bank would not wait that long for them and directed that the property stay on the market in search of another buyer. I felt their pain as this nice couple saw their dream home slip away.

But there just had to be another way. What if an investor purchased the home, leased it to this couple and then sold it to them when the time came that they were able to purchase it on their own? I ran this idea past several investors that I work with and one of them agreed. Working with the sellers, the seller’s bank, the buyers, the buyer’s lender, and the investor, an agreement was reached when all parties were able to get the terms and assurances needed to go forward with this plan.

My clients signed the lease moments after the investor closed on the property. They quickly moved in and immediately began sprucing the place up. It became very obvious that they were committed to doing whatever was possible to purchase the home from the investor as quickly as possible. They worked diligently with their lender and followed her suggestions to the tee. In seven short months, they were able to purchase the home from the investor.

I’m typing this article after leaving the closing table. The joy in the room was contagious. The buyers commented that someone should make a movie about how this all happened. They were still in awe how everyone worked together to help them realize their dream. Along with the lender and the investor, I was happy that I was able to play a part in this story. Hugs abounded and I think I saw a tear or two from some of the folks in the room.

There are so many sad stories these days stemming from the prolonged economic recession we’re suffering from. But there are still some heartwarming stories taking place. As I sit down and give thanks this Thanksgiving Day, I will be thinking of this wonderful couple celebrating their first Thanksgiving Day in their new home.

Dreams still come true. Happy Thanksgiving everyone.

Ever Changing Nature of the Real Estate Industry

2011-10-16T08:10:00.000-05:00

I was watching a TV program the other night and saw something that actually made me stop and think for a minute. It was a story about the late Ruth Graham that was told by her husband Billy Graham. It seems that years earlier, they were driving home from an event and encountered a stretch of road that was under construction. When they finally worked their way past it, they saw a sign that said “End of construction. Thank you for your patience”. Mrs. Graham remarked to her husband what a marvelous epithet that would be and directed that it be put on her tombstone after she died. It was told with great admiration and was a great reminder that we should never quit our personal quest in becoming a better person as there’s always something to learn or to do.

OK, I’m a realtor and not a motivational speaker. But Reverend Graham’s story made me reflect not only on my own personal life, but also on my career choice. The real estate profession is continually under construction and has changed drastically in recent years. Like most professions, technology has advanced at breakneck speed and Realtors have had to stay abreast of the changes. This technology has enabled agents to produce a much better product, but at the same time, buyers and sellers of real estate expect much more than ever before. So Realtors have had to keep up or lag behind.

As an example, in just the past few years, smart phones and tablet computers have enabled agents to have a fully functional mobile office while on the go. They can conduct business in a parking lot and give their clients the same information that they could if they were in their office. Agents can respond to their clients more readily and don’t have to wait till they’re back in the office to address their concerns. Or they can be touring the county with clients and download information on properties of interest on the fly. Right outside of a home for sale, an agent can upload pictures and let their clients view them to determine if they want to make an impromptu appointment to tour the home. This makes the task of showing houses so much more productive for clients as well as agents.

Another recent advancement is the QR (Quick Response) code. I suspect many folks have seen the odd little square ink blots but didn’t know what they were. These QR codes have a unique imprint and serve several purposes, but most often represent a website address. Anyone with a QR reader (an app that is resident in many smart phones) can just point their phone at the QR code, and a designated website pops up on their viewer. I recently listed a home that had a number of very unique features. I simply created a QR code for each feature and incorporated it into a flyer placed next to each feature. The QR codes were linked to either a manufacturer’s website for the product, a video about the product, or a customer testimonial. It turned out to be a powerful sales tool.

So what is the next big breakthrough? Many of the things we routinely use today could not have been imagined by most of us just a few years ago. But as sure as the sun will come up tomorrow, I know there will soon be something that will make my profession more exciting and lead to a more satisfying experience for both buyers and sellers.

Obviously, Mrs. Graham was thinking in more grandiose terms that real estate when she chose her epithet and it is certainly more meaningful when thought about in a spiritual, moral, or humanitarian context. But I believe the meaning of the story is relevant in all important aspects of one’s life. Even real estate.

Separating Fact from Fiction

2011-09-19T07:30:00.000-05:00

I have always preferred going into stores where the sales staff informs rather than persuades. Most times I encounter a blend of both styles. When I sense that the information is heavy on persuasion and short on facts, I’ll usually shop elsewhere. But it’s a welcomed relief when I sense that the information is heavy on facts. It starts my relationship with the store on a most positive note.

Establishing a relationship with a Realtor can have similar challenges. Before a home seller selects a Realtor to list their home, they may speak with one or more Realtors before making a decision. A Realtor should be prepared to provide some biographical information, data on the home’s value, home selling tips and a marketing strategy. Here is some factual information to expect:

• Biographical information should include years of experience, certifications, number of transactions, verifiable references and examples of the quality of their work.
• Data on your home’s value should include recent sales of comparable homes. Comparable homes should be in the same neighborhood, similar lot, and with similar amenities. For example, a waterfront home should not be compared to an identical home on an interior lot.
• Home selling tips should be objective, proven and reasonable. Decluttering, paint touchups, and replacing rotted trim can have a positive impact on the home’s impression to potential buyers and can be done without much time or money. A suggestion to remodel the kitchen would also have a big impact, but in most cases would neither be a reasonable suggestion nor a cost-effective selling tactic.
• The marketing strategy should describe how your home will be presented and how the Realtor will get the listing in front of as many buyers and Realtors as possible.

The vast majority of Realtors are professional and stick to the facts. But Realtors are human and every agent wants listings. So here are a few tidbits of information that might be more designed to persuade than to inform:

• Stating that they already have a buyer for your home. Realistically, the odds of a buyer just waiting in the wings for you to list your home at the price you want is not very likely.
• Stating how quickly they sell homes. In 2010 in Montgomery County, the average time on the market was 132 days. A great listing presentation and marketing strategy help move a home faster, but keep in mind that some homes sell quickly simply because they are undervalued.
• Stating that they have buyers from foreign countries. That may sound impressive but in reality all MLS listings are easily accessible by anyone with an internet connection anywhere in the world. It is very common these days for Realtors to work with interested buyers from all parts of the globe.
• Stating that their website attracts more buyers than other Realtor websites. Bear in mind that once a listing is entered into MLS, it finds its way onto a vast array of both national and local real estate websites. The quality of the pictures and narrative are infinitely more important than the power of the website itself.

Montgomery County has a large number of professional, experienced Realtors with the confidence to compete for your listing with factual information and do not feel it necessary to puff up their presentation with vague claims and exaggerations. And it always pays to be a wise consumer, especially in a matter as important as selling your home.

The Sunday Drive

2011-07-31T19:53:00.001-05:00

One of the outings I enjoyed as a youngster was the Sunday drive. After church we would go home, have the customary pot roast and if there was nothing else on the agenda, we would sometimes pile in the ’59 Chevy for a drive around the county. I always enjoyed those outings as my dad would usually venture into areas we had never seen before. That made it adventurous and made me more knowledgeable about the area we lived in.

As a Realtor, outings around Montgomery County are a daily occurrence. After being in this business for over 10 years, you would think that I would have seen every nook and cranny. But on occasion, I still venture into an area I’ve never seen before. And I get those same feelings of adventurousness that I felt as a kid. And that is just another part of being a Realtor that I love.

Recently, my web master incorporated a new header to my website’s homepage that features a slide show of pictures. They asked me to provide 20 pictures to display. I already had a number of nice pictures of homes that I’ve listed over the years. But in addition to property photos, I wanted to incorporate a few photos that represented the diverse real estate market in Montgomery County. I seized on this task as an opportunity for a Sunday drive. But to avoid crowds, I chose a Wednesday instead.

So I recruited my photographer / husband and embarked on a road trip around Montgomery County. We left our home off McCaleb Road about 9AM and headed south across the new FM 2854 overpass. Taking pictures along the way, we headed toward The Woodlands. We went to the Cynthia Woods Mitchell Pavilion and strolled along the walkways and took pictures of some of the architecture and sculptures. We then went to Market Square and took a few pictures of the shops and green spaces. About this time, we realized that covering Montgomery County in a day was going to be a challenge.

We headed back north on I-45 toward Historic Downtown Conroe. We took pictures of the Crighton Theatre along with other historic buildings. It was about noon by then, so we grabbed a deli sandwich at our favorite sandwich shop and ate in their dining room situated in one of the historic buildings on the square. After lunch, we headed east on Hwy 105 and took some photos in Cut ‘n Shoot, at the airport and fairgrounds, the Lone Star Convention Center and the new Lone Star College campus. We then headed out to the treasure trove of landscape photos, Lake Conroe.

No slide show about Montgomery County would be complete without a picture of the lighthouse at Seven Coves. The Southern Empress was in dock, so we managed to get a picture of the paddleboat with the lighthouse in the background. We headed toward FM 1097 and went across the bridge to Playa Vista on Lake Conroe. We get a great photo of Playa Vista with the FM 1097 bridge in the background.

We then went to Montgomery, took a few photos downtown and then went to Memory Park in Buffalo Springs. What a relaxing and scenic park. A great place to reflect on what had become a great, enjoyable day. It was now getting late, so we headed back home down FM 2854. But we stopped several times along the way to take pictures of some of the ranches along this scenic drive.

Back home, we found that we had taken several hundred pictures. I soon found out the more difficult part of this assignment is narrowing down the photos to only 20.
With the economy still struggling and gasoline prices still high, it might be a good time for stay local and rediscover the Sunday (or any day) drive. There’s lots to do and see right in our own backyard.

Making Money the Old Fashioned Way

2011-06-19T07:57:00.002-05:00

Very seldom do I get a tidbit of wisdom from a TV commercial, especially something that is still sticking in my head several decades later. It was from a Smith Barney commercial in which the eminent actor John Houseman said of the brokerage firm “They make money the old fashioned way … they earn it.” He gave extra emphasis to the word “earn” in his distinguished accent. Those words rang true to me as the fruits of one’s labor taste so much sweeter when they have been earned through hard work.

In the real estate industry, I feel that it’s especially important to make money the old fashioned way, if you want to have some staying power. Every commission needs to be earned, not just received. So when can a Realtor walk away from the closing table, with a commission check in hand, and feel like they have “earned” their money? Here are a few items that should be on the checklist:

1. The Realtor has kept their client’s best interest in mind at all times by providing them with thorough and relevant information in a fair and objective manner.
2. The Realtor has minimized their client’s stress by being capable, responsive, communicative and proactive.
3. The Realtor has treated all parties involved with respect and professionalism.
4. The Client’s objectives have been met.

With these items checked, the Realtor should feel that the commission has been earned and should have a satisfied client that will provide future business through additional transactions and referrals.

Unfortunately, not everyone has the same concept of “earning” their commission. For example, I represented a client recently that needed to sell their home quickly in order to relocate for their job. It was a great property and after just a few days on the market a prospective buyer expressed interest. Since she hadn’t yet been pre-qualified for a loan, I gave her the names of several local lenders to get pre-qualified. After chatting a while about the property, she said she would call back after getting pre-qualified to set up an appointment to view the property. About a week later, I got a call from a Realtor in Galveston requesting information on this property for their client. Turns out he was calling on behalf of the same prospective buyer that had earlier contacted me. Instead of calling a local lender like I suggested, she contacted an internet lender based in Austin. The lender then directed her to the Galveston agent that he had an alliance with.

As it played out, I learned that the Galveston agent only handled referrals from this mortgage lender, had another full-time job, was inexperienced , and basically had very little time or ability to handle their client’s transaction. Additionally, neither the Realtor nor the lender understood or was willing to learn anything about our local market. In other words, they mostly wanted to “receive” their commission, not “earn” their commission. Unfortunately, the client’s advisors simply couldn’t get it together and were unable to close the deal. So the contract fell apart and the home was sold to the next person in line.

Unfortunately, this scenario is being played out with more and more frequency. Alliances are being formed between the various individuals in the real estate industry. Knowing that they are unlikely to ever get a referral or repeat business, they have to rely on the internet to cast a wide net to get new business. So they invest heavily in an internet website making grand promises to capture clients. But in reality are more focused on generating commissions than helping their clients successfully navigate through a major life decision.

Fortunately, there are many fine local Realtors who still feel that a successful business is built through satisfied clients. And as long as satisfied clients are the mission and the commission is not the mission, everything else will fall into place.

If you are looking for a home, I would love to have an opportunity to earn you business. I can be reached at 936-537-1656 or Claudia@ClaudiaHohlt.com.

Demystifying Short Sales

2011-05-08T08:05:00.000-05:00

There has been an increased interest in “short sales” over the past several years. In 2010, about 2% of all single family homes sold in Montgomery County was identified as short sales. But the number has been growing each year. A short sale is essentially a pre-foreclosure arrangement where a lender agrees to accept a sale’s net proceeds as full payment of the homeowner’s outstanding debt. It is a viable option when a homeowner can no longer make their mortgage payments, their home is worth less than the amount owed, and efforts in acquiring a loan modification have been exhausted.

So how is a short sale different from a foreclosure? To a lender, a short sale prevents the legal costs associated with a foreclosure, eliminates the holding costs associated with owning the foreclosed home, and minimizes the risk associated with an unoccupied dwelling. To a home seller, a short sale has the potential to be less damaging to their credit score and could indicate to future creditors that they were proactive in mitigating their lender’s losses. It is also a less traumatic process for the home seller as it allows a more orderly transfer of the home and enables the seller to make a more graceful exit. Under certain circumstances, the home seller can even qualify for relocation assistance under the Home Affordable Foreclosure Alternatives (HAFA) program administered by the U.S. government. Details of this program can be found at www.makinghomeaffordable.gov.

For someone interested in a short sale, an experienced Realtor can be helpful in navigating through the process. One of the first steps for the homeowner is to contact their lender’s loss mitigation department to discuss their situation and give permission for their Realtor to communicate with them. The bank will expect evidence from the homeowner that a hardship has been incurred, there is an inability to make ongoing mortgage payments, they are unable to qualify for a loan modification, and there are no other assets to pay all or part of the debt. After the bank is on board, a short sale is handled much the same as a traditional sale, but with the bank negotiating offers, not the homeowner. And although there are a few more steps involved, most experienced agents can easily handle a short sale.

There are some things that homeowners should be aware of when considering a short sale. A second mortgage, for example, can make a short sale more challenging. The difference between the lender’s proceeds from the sale and the amount of the outstanding mortgage may or may not be forgiven by the bank, although the merits of pursuing the remainder through a judicial action would appear fruitless considering the documented hardship of the seller. If the debt is forgiven by the lender, the amount forgiven is taxable, unless the home is a principal residence. In that case, the amount is not currently taxable under the Mortgage Forgiveness Debt Relief Act of 2007.

In recent years, short sale negotiation companies have attempted to insert themselves into the process. Their claimed expertise is to handle the negotiation with the bank on behalf of the listing agent. To compensate them for their involvement, the homeowner is typically required to sign a contract requiring any future buyer of their home to pay the negotiation firm a fee. This fee can be significant and along with its unusual nature can sometimes be offensive to potential buyers. Because of this, home buyers looking at short sales should always inquire upfront about any fees that they would have to pay to a short sale negotiation firm, so that it can be factored into their offer.

Fear of losing one’s home is something none of us ever want to experience. But unexpected hardships can happen to any of us. If you are a distressed homeowner in fear of losing your home, be sure to discuss your options with trusted advisors who have your best interest at heart. And if you conclude that you can no longer afford your home and are upside down on your mortgage, be sure to consult with an experienced Realtor who understands and has direct experience with short sales.

Girls Scout Cookies and Real Estate

2011-03-28T08:09:00.002-05:00

love the onset of spring. Birds are chirping, trees are budding, and Girl Scouts are selling cookies. Ok, I’ll be the first to admit it. I have an addiction to Thin Mints. My family has even tried an intervention, but I can’t seem to kick the habit. I think that even the Girl Scout Organization is trying to help Thin Mint addicts such as myself, as they have downsized the number of cookies in each box. Well, they can’t fool me, I’ll just buy more boxes!

All kidding aside, the marketing strategy of shrinking product sizes has been going on for years. A package of coffee now makes fewer lattes. A container of ice cream makes fewer root beer floats. A bar of soap washes fewer hands. I understand this trend is due to marketing research that has determined that consumers are less sensitive to shrinking package sizes than to increasing prices. But what is the end game? Downsizing can only be used so many times until it becomes ridiculous.

My age may show when I make this observation, but it seems that years ago manufacturers had more respect for the consumer and tried to differentiate their product through quality rather than gimmicks. Real estate is not that much different. I’ve seen developers shrink lot sizes to sell more lots per acre. I’ve seen builders use top of the line granite and bottom of the line lumber, to maximize visual appeal while minimizing cost per square foot. And I’ve seen realtors put more emphasis on production volume than quality of service delivered.

But as consumers, we can all make a difference. We have to be more discriminating in our purchases of goods and services and call out companies when they use gimmicks to capture our business. Perhaps we need to get outraged like Peter Finch in the 1976 movie “Network” when he repeatedly shouted “I’m as mad as &%$#, and I’m not going to take this anymore!”

In shopping for a realtor, I encourage everyone to be a discriminating consumer. When looking for a listing agent, review the quality of their work on other listings that appear online. Foremost, check to see if the pictures are vivid, well framed and clearly described. Additionally, see if the narrative is compelling and presents the property in a favorable light. Most people start their search for a home online and view each home just a few seconds unless the pictures or narrative interest them. So the importance of those aspects cannot be taken too lightly.

And whether you’re looking for someone to help you sell or buy a home, check out agents’ references. Every agent can provide them and most even present them on their website. You can also check out agents’ Client Experience Ratings on HAR.com. Finally, I encourage everyone to select someone who is experienced, full-time, and local.

Discriminating consumers not only make a difference in the quality of their own purchases, but they can make a difference for others. As more and more consumers become informed and use that information in their purchases, sellers of goods and services will respond accordingly.

Well, I’m still going to buy the Thin Mints. After all, it’s for a good cause so the number of cookies really isn’t a factor in my buying decision. In fact, I have only two factors that enter into my Thin Mint buying strategy … how good they taste and the size of my pantry.

A Realtor’s Trip Down Memory Lane

2011-02-20T08:23:00.000-06:00

The other day I was checking on a home for a client who had moved out of state. As I was leaving, I noticed a yellowed newspaper that had been left behind. I was very intrigued when I saw it was a complete December 2, 1954 edition of The Conroe Courier. I’ve always enjoyed learning about our local history. I find it interesting and I feel it makes me a better ambassador for Montgomery County during my real estate activities. So I just had to read through it before I put it into a safe place for my client.

It was fascinating contrasting the news and ads of 1954 with today’s news. A front page article about women soon being allowed to serve on juries in Texas highlighted how much things have changed. Other front page articles were not that different from current articles, e.g. a road expansion, school bond election, and a shooting. But much of the paper was filled with personal information such as hospital admissions, births, vehicle transfers, and lots of tidbits about local residents’ comings and goings. I suppose to some extent, that level of personal info is still published today, but instead of calling the newspaper, folks just send a Tweet!

There were lots of ads in this issue. Let’s see, Ipana toothpaste is on sale for $.53 at Thompson Food Market, Flaxman’s has a 16 oz. jar of Foreman’s Picallilli for $.33, and Penney’s has 60 gauge sheer nylon hose with slim dark seams for $.50 a pair. For entertainment we have Julius Caesar playing at the Crighton and at the Hi-Y Drive-in Theater, Ronald Reagan stars in Prisoner of War.

But being a Realtor, the most interesting to me were the real estate ads. There were 4 real estate firms with ads, none of which are still in business today. Many of the homes were described by number of rooms rather than by square footage. Some of the features mentioned in the ads were venetian blinds, in-laid linoleum, a chicken coup and a hog proof fence. But the most unusual ad by today’s standards was for an 8 room rustic log and asbestos house adjoining the Country Club.

Yes, things really have changed in the last 57 years. And I would guess that few communities have changed as much as Montgomery County because of its explosive growth. We’re almost 20 times as large as we were in 1954. The construction of I-45 and Lake Conroe probably had the most impact. I-45 made Houston much more accessible and made Conroe attractive as a commuter town. The Woodlands along with other communities along I-45 sprouted up to meet the increased demand for housing. And Lake Conroe provided another alternative for those who enjoy the many amenities of lakeside living.

All of this growth has caused the local real estate industry to change as well. First of all, there are a lot more than a handful of Realtors these days, so it has become a much more competitive market. And with so many options available, Realtors have had to become well versed in the variety of housing options, including golf course homes, waterfront homes, estate communities, planned communities, condominium complexes, to name just a few. We also have to be adept in working with the many different types of buyers, including second home buyers, retirees, investors, first-time home buyers, up-sizers and down-sizers. In my own practice, I have had increased requests from current and soon-to-be retirees from all over, wanting to live in Montgomery County because of its natural beauty, temperate climate, proximity to great health care, affordability, and its many amenities.

Montgomery County has a great history and a great future. Much credit is deserved by those involved in the preservation of that history. Our beautiful downtown Conroe and the recent restoration of the Conroe Country Club are just a few examples of how history has been honored while meeting today’s needs. It is truly a joy and privilege to be a Realtor in Montgomery County. Now if my ancestors would have had the foresight in 1954 to purchase the advertised “43 acres near Hwy 105, 12 miles west of Conroe, nice home and lake site, ½ minerals for $3,800”, I would feel even more privileged!

Profile of the 2010 Montgomery County Housing Market

2011-01-16T08:48:00.000-06:00

Many years ago George Bernard Shaw said “If all economists were laid end to end, they would not reach a conclusion”. In today’s much more complex world, his statement is more relevant than ever. While it appears that economists have differing outlooks on 2011, they seem to be slightly more upbeat than the last couple of years. And although I share cautious optimism with many of my fellow Realtors, I’ll refrain from making any of my own predictions for 2011. Instead, I’ll look back on 2010 and share a few insights. That’s a much easier task

As Montgomery County’s housing stats for 2010 are being finalized, results are shaping up to be a mixed bag. For Montgomery County as a whole, sales of single family residences were relatively flat with last year, but still around 30% below the peak year of 2006. The good news though is that the median home price rose about $3,000 in 2010 as a result of slightly larger homes sold and a slight increase in the average price per square foot.

In taking a closer look at the results, it appears that prices had to resist some heavy downward pressure from foreclosures. Foreclosures were very high as they have been for a number of years and still represent about 20% of all homes sold. The median sales price of foreclosed homes was down significantly in 2010 as banks appeared to more aggressively dispose of their inventories. The average price reduction from 2009 on foreclosures was approximately $9,000. The contrast in the average profile of a non-foreclosed home and foreclosed home in 2010 was remarkable. The average non-foreclosed home was 2,430 SF in size and sold for $89.76 / SF. The average foreclosed home was about 20% smaller and had a 35% less cost per square foot. Of course, many foreclosed homes are not in tip-top shape, but most of these foreclosed homes were great buys.

Without these large numbers of low priced foreclosures, our market would have fared much better in 2010. Since many of the systemic weaknesses in mortgage lending practices have been eliminated, I suspect that far fewer high risk mortgage loans are making their way into the banking system. And as foreclosures get back to the lower levels existing before the housing crisis, housing prices should improve. But I wasn’t going to get into any predictions, so I will let you come to your own conclusions.

Finally, from a geographic perspective, results indicate that southeast Montgomery County was the hottest housing market in 2010 with a 12% increase in sales and a 7% increase in prices. I should also note that new construction represented a third of all sales in this area compared to about a sixth of all sales in the rest of the county. With easier access to major employment centers and with The Woodlands approaching maturity, it makes sense that developers and builders are targeting this area.

In summary, I would conclude that 2010 showed slight improvement. Overall prices have picked up slightly while sales volumes have remained steady with last year. And with Montgomery County having so much to offer, I feel that the future of our local housing markets is bright.

But having said all of the above, most of my clients are not affected by housing trends and predictions. Their decisions to buy or sell property are based on personal reasons, such as a growing family, an impending empty nest, a big promotion, or wanting a change of scenery, to name just a few. But be assured that whatever is driving your decision to buy or sell, you will get maximum value when you contact an experienced Realtor.

Real Estate Marketing 101

2010-12-20T08:24:00.001-06:00

To my delight, I was recently requested to take care of my six year old granddaughter for a couple of days. Realizing that she probably wasn’t going to enjoy one of my high fiber breakfast options, our first outing was to purchase a more kid-friendly breakfast cereal. So we went to the grocery store and headed down the cereal aisle. That was probably my quickest trip ever to the grocery store, as she focused like a laser beam on a box of Cocoa Puffs. That particular cereal would not have been my first choice as a mom, but I’m the grandma. I’m here to please. So in the basket it went.

This outing reminded me that cereal marketing and real estate marketing have a lot of similarities. Eye catching packaging and optimum product placement made my granddaughter’s choice stand out among the others. In marketing real estate, we strive for the same thing. We want to “package” the listing well and place it where potential buyers can easily find it. When a Realtor enters a listing into the local multiple listing service (MLS), these two basic marketing principles should be a top priority.

Packaging a listing involves writing a compelling narrative and taking great photographs. The MLS description field allows only 500 characters, so the product description must be concise, yet comprehensive. MLS allows 32 pictures; one picture on the main page and 31 additional pictures on a secondary page. The primary picture is what most people see first when reviewing their searches on-line. A realtor typically dedicates this picture to capture a home’s curb appeal and entice the viewer to spend more time exploring the listing. If successful, there is a good possibility that the viewer will look at the other 31 photos to see the interior and other exterior views. Pictures should always be well framed, properly exposed and staged to the extent possible to portray the home at its best and to allow potential buyers to envision themselves living in the home. The narrative and number of pictures can be expanded as needed through the use of virtual tour and slide show programs as well as individual Realtor websites.

Optimum product placement involves placing the listing where potential buyers can easily find it. That means entering the listing into MLS, which is the listing’s passageway onto the internet where 90% of potential home buyers begin their search. And properly entering listing information into MLS is of upmost importance as online searches are data driven. All data must be 100% accurate. Price, number of bedrooms, and school district are just a few of the many pieces of information entered into MLS. Inaccurate information could prevent your home from being included in potential buyers’ online searches. It should also be noted that entering a listing into MLS provides a broad internet presence as the MLS data feeds into the most popular real estate websites, such as HAR.com, Realtor.com and Homes.com. And for those few buyers that do not rely on the internet for home searches, print advertising can be useful.

Yes, listing agents and cereal manufacturers have some things in common. But while cereal manufacturers have the resources of large marketing departments to help with product placement and packaging, Realtors go about their business with little or no oversight. So it is most important for home sellers to select competent Realtors that have the experience and attention to detail to get their home presented in the best light and in front of every potential buyer.

Thanksgiving, Real Estate, and the Internet

2010-11-07T12:30:00.000-06:00

Thanksgiving Day is right around the corner and I’m almost ready. I’ve purchased a nice Butterball, some yams, and all the ingredients for the expected green bean casserole. Everything seemed to be on track until I realized I was short 4 forks from my set of flatware. This was quite a disappointment as I’ve had this set since I was a teenager building my hope chest. So what should I do now? Buy a whole new set? Try to find matching forks? Or perhaps I should just serve turkey soup. Like my approach with many dilemmas these days, I enlisted the help of Google. After a minute or so of browsing, I found out that the pattern was still available from the manufacturer. A couple of keystrokes later and the forks were ordered, paid for and in the shipping department. Looks like I’m back on track for Thanksgiving dinner.

Anyone who has an internet connection probably has had similar experiences. The internet has simplified so many tasks. And searching for real estate is no exception. The real estate industry has embraced the internet for many years in order to facilitate and enhance the buying and selling experience for both Realtors and consumers. The local multiple listing service (MLS), which contains details and photos for all homes listed by Realtors, has been online since the early years of the internet, courtesy of the Houston Association of Realtors (HAR). HAR offers a free website, aptly called HAR.COM, that has the MLS detail on every listed home in a user friendly searchable format.

While many Realtors and real estate companies have their own websites, HAR.COM is the local workhorse and is the original source for most of the local real estate information seen online. In addition to over 500,000 visits a month, HAR allows its Realtor members to extract and utilize MLS data for their own personal websites. It also provides daily transmission of MLS data to other national websites like Realtor.com and Homes.com. Everyone who accesses HAR.COM soon appreciates its power. Prospective buyers can perform searches on listed homes by location, price, size of home and a number of other parameters. Real estate agents who are members of HAR have access to an even more powerful search tool to help their clients quickly hone in on their dream home.

HAR.COM has another feature that is very helpful for both prospective buyers and sellers. It’s a relatively new feature called the Client Experience Rating. After every real estate closing, the buyer and seller involved are sent a questionnaire by HAR concerning their experience with their Realtor. They are asked to rate their Realtor on a scale of 1 to 5 in several categories including competency, market knowledge and communication. Individual Realtors can elect to not participate in this program. But for those of us that do, it is a great opportunity to make our reputation more transparent to existing and potential clients.

Much like the development of the printing press, radio and TV, the internet is a major advancement in our ability to access information. And while it doesn’t come close to replacing the knowledge and experience of seasoned real estate agents, it does provide the consumer with information on both homes and Realtors to help them make better real estate decisions.

Getting back to my preparations for Thanksgiving, I should remind everyone that missing forks are the least of worries of many of our less fortunate neighbors. Having been a board member of the Montgomery County Food Bank for many years, I’m profoundly aware of the struggle that many have to feed themselves and their families. As part of your Thanksgiving preparations, please make a donation to the Montgomery County Food Bank, or a hunger-relief charity of your choice.

The Envelope Please

2010-10-03T08:45:00.000-05:00

I enjoy watching award shows for the entertainment industry, especially the Academy Awards. I must admit though that I often don’t understand how the voters distinguish between the different performances. I suppose you have to really be into movies to appreciate the subtle differences. Awards handed to Realtors on the other hand are much simpler as they are usually based on production volume statistics such as most sales. Just imagine if the Academy Awards were based on production volumes. John Wayne would have won the majority of Best Actor awards during his heyday as he was one of the most productive actors in movie history with 142 leading roles. But alas, the Academy Awards criteria for recognizing excellence is somewhat more complicated, so the Duke ended up with only one Oscar toward the end of his career. If Realtors’ work was as transparent for all to see as actors’ work is, the results might be interesting. And it certainly would be helpful to future buyers and sellers of real estate.

Well, I’ve really strayed from what I wanted to write about in this column. I actually did want to talk about awards, but not Realtor awards. I thought it would be interesting to give some awards to some of our local neighborhoods. So I asked my broker (who is also my husband) to do some statistical analysis on sales of single family residences in various neighborhoods in and around the Conroe and Lake Conroe area. I should note that this is not a complete list as the number of neighborhoods are simply too many and my broker has limited patience to satisfy my curiosity. But he did try to pick up many of the more popular neighborhoods and a mix of older and newer neighborhoods. And to get a meaningful sample, he selected data over the last 24 months and only included neighborhoods with at least 10 sales during that period.

There’s no opening song and dance number, so let’s get right to the awards. First up is the Mayflower Moving Van Award for the neighborhood with the most sales. By a landslide, it was Walden with 377 sales. April Sound and Bentwater get an honorable mention with around 200 sales each. Closer to Conroe, River Plantation and Graystone Hills came in neck and neck with 95 and 93 sales, respectively.

The Lamborghini Award is for the neighborhood in which homes sold the quickest. Pass the envelope please. The award goes to Panorama whose 58 sales had a median time on the market of only 52 days, a far cry from the worst in this category at 248 days. It shall go unnamed, but I will hand out the Yugo Award in a private ceremony.

The Porcelain Award is for the neighborhood whose sales reflect the highest median number of bathrooms. And we have a 4 way tie. Graystone Hills, Crighton Woods, Crighton Ridge and Bentwater all tied with 3 ½ baths. Now that’s a lot of porcelain.
The Yao Ming Award is for the largest home in our sample and goes to Crighton Ridge whose median sold home was 3,940 SF. It just barely overshadowed its cousin Crighton Woods by 36 SF. And as no surprise, it also won the Donald Trump Award for most expensive median home.

Finally, the Horizon Award is for the newest median home sold and is awarded to both Graystone Hills and Crighton Woods where the median home sold was built in 2008. The Heritage Award is for the oldest home sold and goes to Tanglewood whose median home sold was built in 1965.

This was all sort of silly and isn’t very meaningful. But with an abundance of real estate articles about market conditions, I just felt a need to do something different and perhaps get a chuckle or two. But what I personally gained from all this is that the Conroe and Lake Conroe area has a wide diversity of homes for sale. And like actors and Realtors, neighborhoods are all unique and have their own personality. We truly are very fortunate to live in such a wonderful and diverse area.

Reflections on the Housing Market

2010-08-29T08:43:00.000-05:00

As I’m cleaning up the mess in the kitchen that my husband’s left for me after one of his cooking endeavors, I’m wondering why he isn’t more careful while preparing meals. I’m very grateful that he has taken over much of the cooking chores over the last few years and I truly enjoy his tasty meals, but he just isn’t focused on minimizing the aftermath. Then it dawns on me that since we have an agreement that I will clean up after he cooks, he simply has no incentive to be less messy. And that brings my thoughts to our protracted recovery from the housing collapse of several years ago. Homebuyer friendly government policies combined with a mortgage lending process that increasingly disconnected loan underwriting from loan risk, many mortgage loans were approved in a manner like my husband cooks. Loan originators and underwriters did a very good job at getting loans approved but became more and more removed from the consequences of those loans defaulting since the financial risks were offloaded to someone else.
But what’s done is done. Our government has taken actions to tighten up the mortgage lending process and to increase regulation in the financial markets. Attempts have been made to ensure that appraisals are more objectively prepared and credit hurdles have been raised. While these new regulations may prevent a future housing crisis, only time will tell what the impact will be on future growth in the housing market. At the same time our government has also tried, with limited success, to ease the housing market’s transition to these new standards by providing distressed homeowners assistance in keeping their homes, 1st time buyers’ tax credits on the purchase of a home, and long time existing homeowners tax credits in buying a different home.
All of this has come at a significant cost. Bailouts of financial institutions and subsidizing the housing industry through tax credits have been very costly and have increased our national debt. At the same time, loss of confidence in our economic future has eroded the wealth of our fellow citizens as interest on savings is at an all time low and the stock market has yet to come close to regaining lost ground.
As I review my own business over the last couple of years, I’m reminded how the above events have affected the nature of my work. For example, more of my buyers have been investors in rental properties, and I’ve had an increase in clients either trying to lease out their properties or looking for properties to lease. I suppose it is only logical that massive foreclosures combined with tightened lending practices would result in a number of owner occupied properties turning into lessee occupied properties.
Analysis of historic HAR MLS statistical data for Montgomery County tells me that my experience is echoed throughout our market. As I look over the statistics, I notice that 4 years ago, about 1 in 5 closed real estate transactions on single family residences and condos was a lease contract while 4 in 5 were sales contracts. Most currently, about 1 in 3 closed transactions are leases. The significant change is due to lease transactions increasing almost 20% and sale transactions decreasing over 25%.
Of course, everyone wonders when the real estate market will recover, if ever. Unfortunately no one knows, as there are just too many moving parts. But we do know that in Montgomery County, we have a fairly good economic environment and a great quality of life, so I remain cautiously optimistic. Meanwhile, if anyone can think of a way to make my husband a tidier chef, please let me know. Perhaps more regulation?

Temporary Leases Can Help Sync Up a Real Estate Transaction

2010-08-01T11:03:00.002-05:00

If only buying a home could be as seamless as buying a car. A car buyer can walk into a dealership, trade-in an old car for a new car and never be concerned about being without transportation at any point during the process. The home buying process, however, has a few more moving parts. And syncing up a buyer’s move-in date with a seller’s move-out date can be one of the more challenging aspects of the process.

It is not unusual for a home buyer to be required to move out of their existing home before the transaction on their new home is finalized. This situation should be avoided if at all possible by extending a lease on a rent home, or delaying a closing on an existing home. But what happens if a buyer has a firm move-out date and their new home simply can’t close on time? One alternative would be for the buyer to place most of their belongings in storage and then rent temporary housing until their new home closes. Of course that adds to the costs of moving and can be inconvenient, to say the least. A more desirable alternative, if available, would be for the buyer to negotiate a short-term lease with the home seller to bridge the gap. That would eliminate the need to store belongings, and enables the buyers to promptly move into the home they are planning to move into anyway.

The Texas Real Estate Commission offers a contract form for these situations that is titled a Buyer’s Temporary Residential Lease. This contract addresses rent, pets, utilities, maintenance and deposits much like any other residential lease. This alternative can be a win-win for the buyer and seller. However, this typically will work only when the seller’s home is already vacant. And even then, some sellers’ are not willing to use this tool because of concern that the buyer loses incentive to keep pushing for a timely closing of their loan and resolution of any other issues related to the closing. The sellers may also be concerned that something could happen to prevent the buyer from closing at all or that they may change their mind about buying the home. Then the sellers may be faced with going through the eviction process and then get the property ready to sell again. But when the sellers are comfortable with the buyers, a Buyer’s Temporary Residential Lease is something that may be considered.

Another situation that occurs from time to time is when the seller does not wish to move until after their home closes. For example, a seller may be nervous about a buyer’s ability to close, and prefers not to take the risk involved with moving out of their home before the transaction is finalized. They simply want to have a done deal, and then vacate after all the risk is removed. Again, the Texas Real Estate Commission has a contract form for this situation. It is titled a Seller’s Temporary Residential Lease. Its substance is very much the same as the Buyer’s Temporary Residential Lease. This arrangement is very friendly to the seller, but the buyer may be less enthusiastic due to a concern about the property’s condition when they finally get the keys. Just prior to a home’s closing, there is usually a walk-through by the buyer to determine that the property is in the agreed upon condition. With a seller’s temporary lease in place, the buyer is doing their walk-through before the property is vacated. And obviously, a visual inspection is less effective when the house still contains furniture, wall decorations and rugs.

In most cases, experienced Realtors can avoid the need for temporary leases through their efforts in coordinating the buying and selling process. But on those occasions when the buyer’s and seller’s timing just can’t be synced up, Realtors have these tools to ensure the process keeps moving forward. At the end of the day, the real estate buying and selling process can have the appearance of being seamless, as long as experienced Realtors are in the sewing room.

If you are thinking about buying or selling a home, give me a call. I have the experience and knowledge to get the job done to your satisfaction.

A Self-Sufficient Lifestyle Can Be A Rewarding Experience

2010-07-04T08:21:00.000-05:00

Last year, my husband was given his grandfather’s financial journal from the 1930’s. At that time, his grandfather had a small farm near Brenham and owned a few cows, sheep, hogs, and chickens, grew cotton and tended to a vegetable garden. The journal was a heart breaking account of how difficult life was during our nation’s worst economic times. Work was hard, money was scarce and possessions were few. What is surprising though is that my mother-in-law has very fond memories of growing up during these times. But with life centered around church, family and friends, the most important building blocks of a happy childhood were intact.

As hard as life was for my husband’s grandparents, they still fared much better than many non-farming folks during that era. That was primarily because of their self-sufficient lifestyle. They may have been poor, but they always had food on the table. A self-sufficient lifestyle is a way of life that is still around today. In fact, I recently listed a property whose owners have embraced this concept. With a barn, chicken coops, multiple fruit trees, a small vineyard, smoke house and cold storage, this property has many of the elements needed for a self-sufficient lifestyle.

A self sufficient lifestyle can describe many different aspects. From planting a small garden to living off the electrical grid, the concept of self-sufficiency has many variations. It seems that more and more people these days are interested in having property that will allow them to pursue one or more elements of a self-sufficient lifestyle. Some are interested in water conservation techniques such as cisterns and drought tolerant landscaping. Some are interested in reducing their carbon footprint through power conservation equipment like solar panels and wind mills. Some are interested in producing their own food thru organic gardening or raising poultry and livestock. And some are interested in all of the above.

But before you purchase a home with the vision of gathering free range eggs in the backyard, you better do some homework. When shopping for a property that will allow various elements of self sufficient living, the first thing to check out is if the property has any deed restrictions against the desired activity. Of course if the property is unrestricted, most anything goes. But if it is restricted, a buyer should read the deed restrictions carefully to determine what is allowed.

Once you’ve determined that you are not prohibited from a certain activity, then check out the property’s physical characteristics. For example, if you’re interested in gardening, make sure you have sufficient sun exposure in the areas that are available for the garden. If you’re interested in solar panels, make sure the desired location of the panels has adequate sun exposure. If you’re interested in power conservation, make sure existing living spaces have good insulation, windows are double paned and appliances are energy star rated. If you’re interested in water conservation, steer away from properties with thirsty landscaping.

Whether you’re interested in saving money, enjoying the outdoors or establishing a hedge against uncertain economic times, a self-sufficient lifestyle can be a rewarding experience for individuals and their families. If you’re interested in making this type of lifestyle change, give me a call. I can help find a property that will work for you.

Timing the Sale of a Home

2010-05-30T14:11:00.000-05:00

Late last year, I was contacted by a client who wanted to sell their home. Since they wished to synchronize the sale of their home with the end of the school year, they were wondering when the best time to put their home on the market was. They were rightly concerned about setting the optimum time to introduce their home onto the market as a quick sale would force them out of their home too early and a sluggish sale would disrupt their relocation plans. In many cases, the seller’s personal circumstances necessitates an immediate listing. But when a specific relocation time frame is known well in advance, certain factors should be considered when selecting the right time to list a home. Here are some of the factors that I look at when working with my clients:

Historical Days on Market (DOM) – We all know that historical data is not always an accurate predictor of future results. But it can help define some general expectations. Since January, 2007 the median time from a home’s initial listing date to its closing date in Montgomery County has been 71 days. But within this group of over 20,000 homes sold, DOM’s have ranged from 1 day to several years. The DOM can vary significantly according to market conditions, season, price point, and location. For example, the median DOM for Montgomery County in 2007 was 61 days, but due to deteriorating market conditions, the median DOM had increased by almost 50% to 90 days in 2009. Results in 2010 indicate a slight improvement over 2009, but not yet to 2007 levels. Seasonality also affects the length of time a home stays on the market. Historically, the largest number of closings occur in May through August and, as expected, many of the homes closed during these months have been on the market the least amount of time. Price point is another factor as more expensive homes typically take longer. Finally, location is an important factor. While the impact of location varies considerably among neighborhoods, homes sold in the southwestern part of the county generally have the shortest DOM’s.

Pricing of the Home – Perhaps the most important factor affecting the length of time on the market is the pricing of the home. Setting a realistic price cannot be stressed enough. If priced too low, a home will sell the quickest, but the seller could be leaving money on the table. If priced too high, a home sells the slowest and could even eventually sell for a lower amount than if originally priced more reasonably. Local market conditions, features of a property and condition of home should all be taken into consideration when pricing a home. Unlike a commodity where the fair market value is readily assessed, all homes are unique and should be carefully analyzed to maximize its value.

Listing Product – A home’s listing should be entered into MLS and a Realtor’s personal website. It should be comprised of accurate quantitative data along with a descriptive narrative of the virtues of the home. Accompanying pictures should be well framed and vivid. Print advertising and signage should be well placed and have a professional appearance.

Listing Process – An effective listing is a process, not an event. Once a listing is initiated, data continues to develop that might warrant a change in pricing, home presentation or marketing strategy. Feedback from showings, changes in competitive listings and general economic data can dictate a change in course. Realtors should continually monitor a listing’s pulse and keep the seller well informed at all times. A listing should never be viewed by the Realtor solely as a tool to attract buyers for their business. Its overriding focus should always be to attract a buyer for the listing.

When a specific closing date is targeted, work closely with your Realtor in timing the introduction of your home onto the market. There are many factors that determine how long it will take to sell a home, but having a full-time, local, experienced Realtor will maximize your chances of meeting your objectives.

I have been a local Realtor in Montgomery County since 2000 and am the owner of HomesPlus Real Estate Services. My office is located between Conroe and Montgomery at 19755 Hwy 105W. I can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com.

Exactly Who is Your Realtor Working For?

2010-04-25T07:38:00.000-05:00

Recently I was contacted by someone from out of state who was in the process of relocating to Montgomery County. After spending some time understanding their objectives, I explained to them how real estate agency works in Texas and e-mailed them an “Information About Brokerage Services” pamphlet and a “Buyer’s Representation Agreement” for their review and signature. After a couple of days, they replied that they appreciated the information but would proceed with their home search without formal representation. So we amicably parted ways. Such is the nature of being a Realtor.

Realtors are often called Real Estate Agents. As you probably know, an agent is someone who is representing someone else in a particular activity or event. There are all kinds of agents; insurance agents, talent agents, press agents and secret agents to name just a few. The one thing all agents have in common is that they are acting on behalf of someone else, i.e. the principal. This relationship creates a fiduciary responsibility on the realtor. In other words, the interests of the principal come before the interests of the realtor, or any other person.

So is your Realtor always your agent? Not necessarily. In Texas real estate law, there is a concept called sub-agency. That means, unless an agreement is in place between the realtor and potential buyer, an agent showing a home is, by default, a sub-agent of the listing agent. In other words, the Realtor helping you find a home could technically be working for the seller, even if they are not the listing agent.

So how do you get someone to work on your behalf when you are the buyer? That is very easy to do. You enter into an agreement, typically a Buyer’s Representation Agreement, with your Realtor. This agreement enables the Realtor to put your interests first, not the seller’s. If you do not want to obligate yourself long-term to a certain agent, the Buyer’s Representation Agreement can be set for any time period, for specific houses, or for a specific area.

I should note that the Buyer’s Representation Agreement protects the agent as well. There are few experienced agents who have not been taken advantage of by a buyer with a hidden agenda. It is not unusual to spend an inordinate amount of time and travel with an unrepresented buyer, only to find out that they intend Aunt Suzy from Amarillo to write the contract and collect the commission once the right home is found. Once a Realtor has spent some time as a volunteer chauffeur and tour guide, the mutual benefit of a Buyer’s Rep Agreements becomes apparent.

What if you approach a listing agent to show you a home that they have listed? Agents can work for both parties as an intermediary. With written consent by all parties involved, an agent can essentially be the listing agent and the buyer’s agent. The agent cannot disclose confidential information of either party and must treat all parties honestly and fairly.

For anyone looking for additional information, this is all spelled out in a publication of the Texas Real Estate Commission titled Information About Brokerage Services (IABS). The IABS pamphlet should be presented to both buyers and sellers as soon as a relationship exists to ensure that there is no confusion about who’s working for whom.

Challenges Surrounding Contingency Contracts

2010-03-28T08:34:00.001-05:00

I was watching one of the Winter Olympics speed skating relay races on TV last month. I was quite impressed by the level of teamwork and coordination as the athletes passed the baton from one skater to the next. Earlier this year, I was involved in the real estate equivalent of a relay race, i.e. a home sale contingent on another sale that was contingent on still another sale.

One of the most common elements found in real estate sales contracts is the “Addendum for Sale of Other Property by Buyer”. Essentially, this makes a buyer’s purchase of a home contingent on the sale of their existing home. So, if the buyer’s home doesn’t close, he/she is not obligated to go forward on the purchase of the new home. For most buyers other than first-time home buyers, this provision is needed since they either don’t financially qualify to own two homes at the same time, or just don’t want the financial burden of owning two homes at the same time.

In my recent experience, my client had a sales contract with a buyer in place on their existing home and a contingent contract in place on a home they wished to purchase. The seller of that home had a contingent contract in place on another home owned by someone that was moving out of the country. Through much effort by three separate Realtors, all three homes were scheduled to close on the same day in a domino fashion. Moving vans were scheduled at each of the homes and everyone was excited about moving. Unfortunately, there was a last minute, unexpected glitch in the first one of these transactions, and four families, three Realtors, three title company closers and three loan officers were on pins and needles until late in the day when the glitch was finally resolved.

Because of the increased uncertainty involved in contracts contingent upon the sale of another home, they are not the most favored among home sellers. But sometimes, they are the best alternative available. When a seller is considering the acceptance of a contingent contract, it is important to ask the buyer’s agent about the likelihood of the buyer realizing a timely sale of their home. The best evidence of that would be if the buyer already had a contract in place on their existing home, but at a minimum, their home should be listed, actively marketed and appropriately priced.

After a contingent contract is executed, there are a few additional things that a home seller should do. First, the “Addendum for Sale of Other Property by Buyer” should be written in a manner that requires the buyer to remove their contingency within a few days if the seller wishes to accept another offer. So if a stronger offer comes in, the buyer has to remove their contingency or opt out of the contract. And to facilitate the receipt of a stronger offer, the status of the listing in MLS should indicate that the home can continue to be shown to other prospective buyers.

For homeowners facing a job transfer or wishing to trade up or down to a different home, a contingent offer is usually a necessity. Just be careful that you don’t skate in this relay race on thin ice. Count on the help of a seasoned real estate professional who can ease the stress and increase the odds of success.

If you are in need of a Realtor, please give me a call. I have been a Realtor in Montgomery County since 2000. I've earned a GRI designation, and have been certified by HAR as a Top Production Realtor® in 2007, 2008 and 2009. My office is located between Conroe and Montgomery at 19755 Hwy 105W. I can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com.

Hard Facts on the Housing Market

2010-02-21T10:26:00.001-06:00

I have a confession to make. I am married to somewhat of a data geek. He can spend hours slicing and dicing data. Yes, on the surface it may appear he has a boring hobby but, since he is licensed as both a Real Estate Broker and Certified Public Accountant, most of his number crunching exercises are interesting to me as they are very analytical and are related to local real estate market conditions.

Recently he downloaded statistical detail of the last 3 years of Montgomery County home sales from the local multiple listing service database. He then compared 2009 results to the prior two years to determine how market conditions have changed. There was no “Eureka!” moment since we all know we’re in a bearish housing market. But looking at the hard evidence really drove home how Montgomery County has been affected by our nation’s housing woes. Fortunately, our home prices have held up fairly well, but the demand for housing has fallen dramatically.

In looking at the data, the first thing that stood out was that the number of homes sold in Montgomery County took a drastic decline after 2007. 2008 declined by 21% and 2009 piled on another 6% decline. The two year slide translated to about 2,000 fewer homes sold in 2009 versus 2007. All areas of the county had similar experience. And although the average home price was fairly stable at a positive .5%, the increase was a result of the average home size increasing 2.6% combined with the price per square foot declining 2.1%. So, on an apples and apples basis, home prices have modestly declined. Furthermore, the average length of time on the market increased from 99 days in 2007 to 140 days in 2009. Interestingly, these results have taken place at almost every price point. The one exception is in higher end homes where prices have been discounted more deeply and homes have taken even longer to sell.

An area that really hits to the heart of our current economic recession is new construction. In isolating the data related solely to new home sales, we see that sales have fallen off even more dramatically. The Woodlands area, which consistently generates almost 60% of the new homes sales in Montgomery County, had 36% fewer sales in 2009 than in 2007. The Lake Conroe area, which generates about 20% of new home sales, had 48% fewer sales. For all of Montgomery County, new home sales dropped off an average of 38% which accounted for 632 fewer new homes sold in 2009 versus 2007. Based on the 2009 average new home price of $282,311, this drop off in new home sales translates to and estimated 178 million fewer dollars spent in Montgomery County on new homes compared to 2007. That represents a lot of lost construction jobs and lost sales of construction materials to our local economy. Those lost dollars ripple throughout our community and affect everyone.

But all is not gloom and doom. The most recent sales data supports a case for cautious optimism. New home sales as well as used home sales have increased in the last three month period when compared to the same three month period one year earlier. Although it is still well below the same three month period two years earlier, perhaps it means we’ve seen the bottom of the bear housing market and are beginning to climb our way back to better times.

While this may have been interesting info, what does it mean to potential home buyers and sellers? To home buyers, I would encourage you to consider the purchase of a home. With prices down, interest rates low, and tax credits still available, there may never be a better time to purchase a home than right now. If you’ve been thinking about selling your home, this may also be a good time. Inventory levels have come down and as buyers become more confident in the economy, demand for housing should increase. And to both potential buyers and sellers, I would recommend enlisting the help of an experienced, full-time, local realtor to help you with the process. Intimate knowledge of local market conditions has never been more important.

If you are interested in buying or selling a home, please give me a call. I have the knowledge and experience to maximize the value in your next real estate transaction.

The State of the Foreclosure Market in Montgomery County

2010-01-24T11:10:00.002-06:00

If I asked a group of people to say the first word that comes to mind when they hear the word “foreclosure”, I would probably get lots of different responses. Many would say “travesty”. Some would say “opportunity”. Any lenders present might say “backstop”. It all depends on one’s perspective.

2009 was another year in which too many homes went into foreclosure. While foreclosed homes are sold to the highest bidder on the courthouse steps, most of them have first liens (i.e. mortgages) with a remaining balance that is more than what buyers are willing to bid. Since the first lien holder is usually willing to bid their lien amount, they typically end up as the highest bidder. So the ownership of most homes in foreclosure ultimately transfer from the individual homeowners to their lender.

After the foreclosure is finalized, the majority of those properties are then listed and eventually sold by Realtors. Almost 1,100 of the 5,500 single family residences sold by Realtors in Montgomery County in 2009 were the result of a home foreclosure. That’s a disturbing 1 out of 5 homes. While this is a consistent ratio with the last several years, it is up from the 1 out of 7 homes in 2006, which is still too many.

If we dig into the 2009 numbers a little deeper, we find that Northeast Montgomery County, including Conroe, had the worst foreclosure experience. One out of three of the homes sold by Realtors in this area were foreclosures. Southeast Montgomery County had similar experience with about 1 out of 4 homes sold being foreclosures. Southwest County and Northwest County had the same experience with 1 out of 6 homes being foreclosures.

These rates are mirrored across the country and are at the core of our economic recession. The U.S. government has taken steps to help. The Home Affordable Modification Program was implemented to help homeowners facing foreclosure by reducing mortgage payments to qualified applicants. To reduce the number of future foreclosures, the House of Representatives has passed new legislation called the Consumer Financial Protection Agency. It now lies in the hands of the Senate, so its future is uncertain. If it is passed into law, it is hoped that the final bill will not only protect the consumer but will also not cripple the mortgage and housing industries.

While it is somewhat reassuring to know that our government is concerned about the high number of foreclosures, one can’t help but feel sad about the many good families who are facing, or have already gone through, a foreclosure. In the best of circumstances, it will take a long time to become eligible again to own a home. In the worst of circumstances, a family may never own their own home again.

Having said all that, without the foreclosure process, few of us would be able to get loans to purchase homes. Our housing industry depends on mortgage lenders and the mortgage industry depends on foreclosure laws to mitigate their risk and provide an effective backstop on possible losses. And finally, the buyers of foreclosures are an integral part of the foreclosure process. For without them, the lender would have no way to monetize their collateral.

Many people have found good opportunities in the purchase of foreclosed properties. Many foreclosures are attractively priced and are being bought up by first-time homebuyers, buyers trading up from existing homes, people moving to our area, and investors. As this article is being submitted, there are 200 foreclosures on the Montgomery County real estate market ranging in price from less than $50K to over $1 million. They exist in virtually every neighborhood and price range.

If you no longer are able to pay your mortgage, work with your lender, financial advisor and Realtor to understand your options. The stakes are high, so it is wise to be proactive rather than reactive. And if you are interested in exploring the foreclosure market, contact an experienced, local Realtor. There may be just the property out there that you have been waiting for.

You can contact me at 936-537-1656 or at Claudia@ClaudiaHohlt.com.

Selecting a Real Estate Agent

2009-12-28T15:10:00.002-06:00

Santa brought a great gift to the Hohlt household this year. Our daughter and her family who live in Dallas have decided to move back to Montgomery County. We’re looking forward to spending much more time with her, her husband and our three granddaughters.

Their first order of business will be to sell their home in Dallas. Over the Thanksgiving holidays, they asked for some advice on how to choose a Realtor to list their home. I had to commend them for asking, as choosing a Realtor will be the most important decision they’ll make in selling their home. Choosing the right agent will not only maximize the price they’ll get for their home, it will minimize their stress level. But with so many agents in Dallas to choose from, a little due diligence will be necessary on their part. So with 2 goals in mind, i.e. maximum price and minimum stress, here are a few of things I asked them to look out for in an agent.

To maximize the price you get for your home:

1. A Realtor should be an expert on pricing a home. That requires not only the assessment of comparable sales, but also evaluation of pricing trends as indicated by local market conditions. A home should be priced right from the onset. If priced too high, a home will languish on the market. If priced too low the home may sell quickly but the owner may also leave money on the table.

2. A Realtor should be able to put together a listing product that gives justice to the home’s true merits. A compelling narrative and high quality photographs should make a home stand out among its competition and entice potential buyers to schedule a showing. An extensive internet strategy, staging tips, print advertising, signage, brochures, and virtual tours are a few other items that, if effectively done, help attract potential buyers.

3. A Realtor should also provide ongoing feedback on buyer interest and changes in market conditions so that timely adjustments can be made to the home presentation, marketing plan or price.

To minimize the stress while selling your home:

1. Every real estate transaction has its unique challenges. An experienced Realtor should be able to anticipate potential problems and prevent them from interfering with a successful transaction and adding to the stress load of the home seller.

2. Good communication and people skills are a must in a Realtor. A home seller should always feel comfortable calling their Realtor at any time for any reason. A Realtor also needs to effectively communicate with the many others that will be involved in the process of selling your home.

Selling a home is typically one of the largest transactions a person makes in their lifetime. It is definitely worth the time to do some homework in selecting the person to whom you will entrust to represent you in this important task. Don’t hesitate to ask several Realtors to give you an in-home listing presentation. And check out the quality of their past work, e.g. other listings, and check references. A little due diligence on the front end will pay off in more ways than just dollars.

If you're in need of a Realtor in Montgomery County, please give me a call. I'm at 936-537-1656 and at Claudia@ClaudiaHohlt.com.

Suppertime

2009-11-22T07:49:00.002-06:00

While visiting a client recently, her daughter’s playmate received a cell phone call from her mother requesting her to come home for dinner. That brought up memories of when my own mom called me home to eat when I was young. Of course, cell phones hadn’t been invented yet, but she had an equally effective technique. She would simply step out the back door and yell “Suppertime!”. What a great memory.

The tendency to draw comparisons to simpler and more innocent times comes with age. But this recent visit with my client made me think that in most regards, the important things in life haven’t changed all that much. Kids still love to play and parents still love to care for their children. And from a real estate perspective, parents still want a home in an area that offers a good education and safe nurturing environment for their children.

Montgomery County is fortunate to have many fine neighborhoods that meet parents’ needs in every price range. In fact, there is a great neighborhood that will meet just about anyone’s needs, regardless of one’s stage in life or circumstances.

One’s quality of life involves many factors. And everyone has their own unique set of factors that are important to them. Quality of schools, places of worship, size of property, and proximity to work are just a few of the many factors typically considered.

One factor that is sometimes overlooked, however, is aligning the mortgage associated with a home purchase with the buyer’s desired quality of life. Too large of a mortgage can cause undue stress that is counterproductive to a desired lifestyle. Of course, the lender will put a limitation on the size of loan based on what they think the borrower can pay back. But many lenders rely on generic credit ratios that may or may not be in sync with a borrower’s comfort level. A beautiful home loses much of its luster, when the owner finds there is little money left over after the monthly mortgage and other life necessities are paid for.

For clients who would like a little help in determining how much of a mortgage fits in with their lifestyle, I offer a tool on my website called “The Mortgage Comfort Zone Calculator”. It can be downloaded anonymously and for free at www.ClaudiaHohlt.com. There’s absolutely no obligation. Just hit the “Analysis Tools” button on the home page and it will take you right there.

When beginning a search for a new home, select a Realtor that takes a “big picture” outlook with their clients. After all, a successful real estate career is not just about buying and selling homes, it’s about helping clients achieve the best possible quality of life for themselves and their families. After all, at the end of the day, when parents call their children home for supper, the most satisfying dinner occurs when the parents aren’t worrying where the next meal is coming from.

If you're thinking about buying or selling a home, please give me a call. I've been a local Realtor in Montgomery County since 2000 and am the owner of HomesPlus Real Estate Services. My office is at 19755 Hwy 105W. I can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com.

Death and Taxes

2009-10-18T08:25:00.003-05:00

Benjamin Franklin said “in this world nothing is certain but death and taxes”. Will Rogers expounded on this topic and said “the only difference between death and taxes is that death doesn’t get worse every time Congress meets”.

It seems like taxes impact every aspect of our lives. We pay income taxes on what we earn, sales and excise taxes on what we buy, and property taxes on what we own. Because the state of Texas imposes no personal income tax on its citizens, property taxes are heavily relied upon to support local services like our school districts. In fact, according to the Tax Foundation, out of all 50 states, Texans pay the highest amount of property taxes on owner-occupied housing based on median real estate taxes as a percentage of median home value. Of course, the median home value is less in Texas than many states, so the ranking could be somewhat skewed. But nevertheless, property taxes are generally higher in Texas than in many other states.

Because of the heavy reliance on property taxes here in Texas, the amount of taxes levied on a residence is always a matter of concern for home buyers. And since property taxes can vary significantly among neighborhoods, its best for home buyers to understand the tax burden on each property of interest before making a home buying decision. Understanding the basics of how property taxes are levied is a good first step. It’s a fairly simple process. The amount of tax levied on a property is the product of the home’s assessed value less exemptions, times the tax rate for each taxing entity applicable to the property.

A recent random sampling of neighborhoods in Montgomery County revealed composite 2009 tax rates from $2.01 / per hundred dollars of valuation to $3.28. The $1.27 spread amounts to $2,997 of additional tax annually on the average priced home sold in Montgomery County over the last 12 months ($236,000). It should be noted that one of the largest differences in tax rates between neighborhoods is in those that belong to one of the municipal utility districts (MUD) as MUD tax rates vary significantly. It should also be pointed out that some of the areas with lower composite tax rates have offsetting costs such as annual homeowners association dues and installation and maintenance of a water well and/or septic system.

There are many factors to consider when searching for a new home. From a financial perspective, the most emphasis is typically placed on the upfront costs of the home. But it is also important to assess the ongoing costs of owning a home. And property taxes are a major component of the total yearly costs of home ownership. There are few things as devastating as a family finding out that their dream home is costing more than they can afford.

If you are in the market for a home, I strongly recommend using an experienced, local, full-time Realtor. They can help you gather the necessary information to make an informed decision. If you don't currently have a Realtor, I would be pleased to represent you. Give me a call at your convenience on 936-537-1656 or send me an email at Claudia@ClaudiaHohlt.com.

The Window is Closing on First-Time Homebuyer Credit

2009-09-27T07:03:00.001-05:00

The American Recovery and Reinvestment Act of 2009 allows up to an $8,000 tax credit for first-time homebuyers that purchase a principal residence in 2009 before December 1, 2009. A first time buyer, for the purposes of this program, is anyone who has not owned a home in the last 3 years. The benefit is a dollar for dollar tax credit that doesn’t have to be repaid as long as the home remains the principal residence for a 3 year period. This is a great program for first time buyers, but time is running out. For a purchase to qualify, it has to close before December 1, 2009. Full details of the program can be found at IRS.gov. A link to the applicable page can be found on my website ClaudiaHohlt.com.

While some lobbying efforts are underway to have this benefit extended passed the current deadline, there’s no assurance that it will be. The good news is that there is still time to take advantage of the existing program. But considering the time needed to search for a home, secure financing and close the transaction, a sense of urgency is needed to qualify for this extraordinary government benefit. The best way to beat the clock is to have a pragmatic approach.

The first step of any major financial transaction is to meet with your financial advisor. Perhaps that’s you yourself. But whoever it is, make a determination of how much upfront cash you can spend for the down payment and closing costs and the amount of monthly home ownership costs that your budget can comfortably afford. The budget for home ownership costs should include mortgage payments, real estate taxes, home insurance, HOA fees, maintenance and utilities. To crunch some number, you can find an analytical tool on my website called “The Mortgage Comfort Zone Calculator”. It’s Excel based and can be downloaded for free.

The next step would be to meet with a mortgage company or banker to get pre-qualified for a loan. This is a relatively easy process, but one that is very necessary at the time that you submit an offer on a home. A seller will want to see evidence of your ability to purchase their home before they will consider your offer. The mortgage company will ask some questions, crunch a few numbers, and determine the loan amount and corresponding monthly payment that they feel you are able to manage. This is the amount that the lender will indicate on your pre-qualification letter. Now if their loan amount is more than what your financial advisor determined, there’s no rule that states that you have to purchase the maximum amount for which your lender tells you you’re qualified. You should stick with the lower amount you already felt comfortable with. Everyone has their own appetite for risk. But when taking into consideration the security that home ownership provides, it is always prudent to stay within your comfort level.

At this point, you can start seriously looking for a home. With the internet, you can search a myriad of websites to get a feel for home styles and prices. But after some preliminary research, I recommend that you choose a real estate agent to represent you. Picking an agent is a topic for a future column, but keep in mind that an experienced, full-time, local, service oriented real estate professional will almost always give you the best results. A knowledgeable realtor can answer questions on schools, neighborhoods, demographics, etc., to help you decide on the selection criteria of the homes you would want to view. Then, the realtor can quickly sort through the thousands of homes on the market in Montgomery County and present to you a packet with details on homes that meet your specific criteria. And then the realtor can make appointments and accompany you to view the homes and give you their professional opinion. And the best part of this is that there’s no charge to the buyer because the seller pays the realtor commission.

After you select a home, your realtor will be a key player in the negotiations by providing you with comparable home values and working with you and the seller’s agent on various contract issues. Once your offer is accepted, your realtor will prepare the contract and provide information on inspections, appraisals, walk-throughs, etc. In fact your realtor will be with you every step of the way until completion of the contract.

Buying a new home can be one of the most stressful events you will ever encounter, especially for first-timers. But I feel that following the above steps will minimize the stress and may even make it a fun, enjoyable adventure! At the end of the process, you will enjoy all the benefits of home ownership. And the icing on the cake will be getting the huge tax refund.

If you would like to take advantage of this program, please give me a call.

A Real Estate Listing is a Process … Not an Event

2009-08-30T07:56:00.003-05:00

To a property seller, a successful real estate listing means selling real estate at an optimal price in a timely manner while incurring minimal stress. To meet those expectations, a realtor needs to do more than just place a sign in the yard. A successful real estate listing involves a continuous process that begins with the listing presentation and ends with a satisfied client. This process is comprised of numerous activities including the home valuation, home preparation, advertising, ongoing assessment/feedback, negotiation, and closing. And each of these activities involves multiple tasks in order for a successful sale to occur.

1. Home Valuation – This activity has little room for error as too high of a price will not be taken seriously by buyers and too low of a price results in the seller leaving money on the table. Since every home is unique and every market is in a constant state of change, pricing a home correctly takes a good deal of analysis. A quality home valuation is based on the statistical analysis of comparable homes recently sold in the same general area. This compilation provides a general price range that is then custom fitted based on unique characteristics of the home and current local market conditions. Additional adjustments may be required for other factors, such as a shorter than normal time frame required by the seller.
2. Home Preparation – Preparing a home for sale is much like preparing oneself for a job interview. A clean well-kempt appearance is usually a prerequisite to secure a face-to-face interview. Same thing with a home. Detailing, decluttering, depersonalizing, and proper staging helps buyers envision themselves living in a home rather than viewing someone else’s home. An experienced realtor has viewed hundreds, if not thousands, of homes and has a good understanding of what appeals to most buyers. Their expertise can be invaluable in helping a seller’s home make the very best impression.
3. Advertising the Home – A reasonable price and a nicely presented home may put a home on a few buyers’ list of possibilities. But getting a home toward the top of the list takes a good advertising strategy. High quality, well framed photographs will convey the home’s best characteristics in various advertising venues. Other aspects of a good advertising program include a powerful agent website that partners with a multitude of real estate websites to provide maximum exposure on the internet. Also utilization of local advertising media, e-flyers, brochures and signage are all important.
4. Making Adjustments – In spite of an agent’s best efforts, an offer sometimes can be slow in coming, especially in a down market. But by keeping up to date on local market conditions, gathering feedback from showings and compiling internet traffic reports for the property, a real estate agent can provide periodic recommendations to increase the likelihood of a timely offer.
5. Contract Negotiation – Negotiating a home can be an emotional event for both the seller and buyer. Having a Realtor facilitate the negotiation process tempers emotions and helps keep the negotiations based on factual and relevant information. Having the appropriate analytical support for the desired price position is critical during negotiations and puts the seller in a position of strength.
6. Closing – After a contract is in hand, there are many hurdles yet to face. Every transaction is unique. Again this is where the utilization of an experienced agent puts the seller in the best position as they simply have more experience from which to draw. It is not unusual to have inspection issues, lender demands, repair requests, and title problems, to name just a few. There can be a multitude of obstacles, any one of which can cause the contract to fall out. But with an experienced agent at the helm, the seller can rest easy as most issues can be resolved with minimal stress on the seller.

As you can see, a listing is more than just a one time event. It is a continuous process with the Realtor and seller working as a team every step of the way until a successful transaction is finalized. If you are thinking about selling your home, I would welcome an opportunity to present to you the HomesPlus difference. I can be reached at 936-537-1656 or you can email me at chohlt@claudiahohlt.com.

Home Buyer’s Safety Net – The Option Period

2009-08-02T09:30:00.003-05:00

Buying real estate can be a daunting experience, especially for a first time buyer. There are so many things to take into consideration. Fortunately, in the standard Texas residential real estate sales contract, there is a “buyer-friendly” clause allowing for the buyer to purchase an option period. Utilization of this provision provides a safety net as it allows the buyer to back out of the contract for a specified number of days for any reason. The specific terms are subject to negotiation between the buyer and seller, but are typically about 7 days and cost the buyer an average of $100. But terms can vary depending upon the circumstances. The fee is non-refundable to the buyer, but can be applied to the sales price if the transaction is completed.

The buyer should always take advantage of this feature. It allows the buyer an opportunity to “kick the tires”. During this time, the buyer will want to hire a professional home inspector to look over the home and report any deficiencies. The buyer may want to hire a termite inspector as well. If there are any major issues, the buyer may elect to have a structural engineer weigh in. The buyer can also use this time to do their own research on the other items of interest such as neighborhood safety or quality of schools.

Before the option period expires, the buyer should carefully evaluate all the information gathered. There are three possible courses of action:

1. If nothing significant turned up, the buyer can let the option expire and proceed forward with the contract.

2. The buyer may back out of the contract. There is no need to justify this action to the seller. The buyer can back out for any reason. Even if there is only a change of heart. The buyer’s agent simply forwards a signed Notice of Termination and Release of Earnest Money Request to the seller’s agent, prior to the option period expiration date. While the escrow funds are returned to the buyer, the option money is forfeited to the seller.

3. The buyer could request a repair done based on the findings. For example, if the inspection discovered that the home had an A/C issue, the buyer could ask the seller to either make repairs, or reduce the price accordingly to allow the buyer to make the repairs after closing. If an agreement on the A/C repair is reached, the transaction can proceed forward. If not, the buyer would either walk away or accept the property in an as-is condition.

Occasionally, there are instances where a buyer waives the right to the option period. This is rare but most likely to occur when the buyer has extensive experience in home construction or when there are competing offers on the table. Even then, the buyer still is encouraged to have inspections performed prior to closing. But if something turns up that the buyer can’t live with, the buyer cannot walk away unscathed. The seller now can exercise remedies in the contract, such as specific performance, or retention of escrow funds. It is always much less painful to purchase an option period to allow you to walk away in case something turns up.

A seasoned real estate agent will always encourage their buyers to take advantage of the option period. Since many issues with a home are not easily detectible by the untrained eye, it is always prudent to bring in professionals to help with the needed due diligence. The proper utilization of this period could prevent the buyer from experiencing the dreaded “buyer’s remorse”.

Claudia Hohlt has been a local Realtor in Montgomery County since 2000. Claudia has earned the GRI designation, and was certified by HAR as a Top Production Realtor® in 2007 and 2008. Her office is between Conroe and Montgomery at 13080 Hwy 105W #130. Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com. Her blog can be found at ClaudiaHohlt.com.

Finding the Right Neighborhood

2009-07-12T11:57:00.003-05:00

When I first moved to Montgomery County in 1975, Lake Conroe was only a few years old and Hwy 105 between Conroe and Montgomery was just a winding two lane road through the woods. Neighborhood choices for home buyers moving to the area were somewhat limited back then. With the population explosion since that time, home buyers now have a multitude of neighborhoods from which to choose. But with choices come decisions. Montgomery County is fortunate to have many cities, subdivisions, and rural areas with much to offer. And each neighborhood has its own unique attributes. In this article, I will lay out some neighborhood characteristics that should be kept in mind when searching for a new home.

1. School District – This is the most common concern buyers have when searching for a home. Not only for their children’s benefit, but for purposes of resale. The Texas Education Agency assigns each school district and individual school a rating based on certain criteria including TAKS testing and dropout rate. Although the TEA rating is a major factor for many buyers, there are significant others who believe that a child’s home environment, parental support and other resources can compensate for a school’s less than Exemplary rating. A school’s rating can fluctuate over time also, so it is difficult to predict a school’s rating at some future point in time, such as when a child enters a particular grade or when you plan to sell your home.
2. Convenience – Proximity to employment centers, schools, places of worship, shopping, restaurants, and entertainment are important to many buyers. For someone used to living in Conroe, living in one of the more remote areas of the county can require some adjustments. And vice versa. Buyers should carefully weigh the pros and cons before making any drastic changes to what they have become accustomed.
3. Deed Restrictions – To attract buyers to a new development, developers typically have deed restrictions put in place that limits the use of real property. Deed restrictions are generally welcomed by homebuyers as they are designed to improve the quality of life of homeowners, increase harmony within a community and maintain property values. But enforcement of deed restrictions is the hands of a homeowners’ association so the level of enforcement can range from very strict to very lax. If enforcement of deed restrictions is an important concern, it is in the buyer’s best interest to do some personal investigation to assess the enforcement level before deciding on a neighborhood.
4. Unrestricted Property - Some buyer’s prefer living on property unencumbered by deed restrictions. This can be a good choice for individuals as long as they realize that their neighbors’ properties are also unrestricted. One’s property value can be significantly impacted by a change in use of surrounding properties.
5. Gated Subdivisions – There have been an increased number of gated developments in recent years. Gates provide residents a feeling of security and exclusivity. The downside of gates is the lack of county services. While emergency services still are provided, sheriff patrols and road maintenance are not. Even though these neighborhoods pay county taxes on the same basis as ungated communities, those services have to be paid with homeowners’ association dues.
6. Taxes– One of the major costs associated with home ownership is real estate taxes. Taxes can vary significantly, depending on the neighborhood. Each property has an appraised value assigned by the county appraisal district. Each governmental entity providing services to that property applies a tax rate against the property’s appraised value to generate funds for their operations. Therefore, the tax rate can vary significantly between neighborhoods, depending on which and how many taxing entities that they lie in. While tax rates can differ substantially, the disparity is often made up elsewhere. For example, the tax on a home in a one particular gated acreage community is $2.01 and the rate on a property in Conroe is $2.36, or a difference of $350 per $100,000 of valuation. But in the acreage community, property owners have to pay HOA dues of $545 annually and purchase and maintain a septic system as sewer service is not provided.

These are a few of the differences in the types of neighborhoods. When buying a home, a buyer should pay careful attention to the type of neighborhood, so it doesn’t detract from the overall home owning experience.

To get a good understanding of the neighborhoods in Montgomery County, the best place to start is with a local, full-time Realtor. They understand the unique characteristics of our many neighborhood choices and can help you weigh the pros and cons of each.

Claudia Hohlt has been a local Realtor in Montgomery County since 2000. Claudia has earned the GRI designation, and was certified by HAR as a Top Production Realtor® in 2007 and 2008. Her office is between Conroe and Montgomery at 13080 Hwy 105W #130. Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com. Her blog can be found at ClaudiaHohlt.com.

Risks and Rewards of Owning Rental Properties

2009-06-05T10:47:00.000-05:00

Investing in rental properties has been a successful strategy for many folks over the years. But it is viewed as a less attractive strategy for many others because of the additional risk involved and attention it requires. However, with the yields of so many other investments at historical lows, rental properties now merit a closer look for those willing to accept higher risk to achieve a higher return and a more diversified investment portfolio.

In general, real estate investors fall into two categories. First is the person who invests primarily for the purpose of cash flow generation. This investor has similar goals as those who invest their savings into fixed income investments such as money markets accounts, T-bills and CD’s. This individual wants to protect their principal and wants to receive interest payments or dividends to help meet their everyday cash needs. A rental property can be attractive to this type of investor as its return can offer a premium over lower risk alternatives. The second category is the person who is not necessarily focused on immediate cash flow, but instead desires to build long-term wealth. This individual might borrow funds to purchase a rental property with the objective of offsetting the mortgage payment and other rental property expenses with rental income. The long-term goal is to eventually have a rental property at an appreciated price with a paid-off mortgage. Once the mortgage is paid off, this investor falls into the first category as the net cash flow from the property increases dramatically.

But regardless of which category a person falls into, being a successful real estate investor requires a significant amount of due diligence. An attractive purchase price, minimal initial fix-up costs, low HOA fees/taxes, diligent ongoing maintenance program, a commensurate rental return, high occupancy rate, and quality tenant selections are all important criteria to maximize your return. Assistance from some professionals would be ideal during this due diligence stage. A tax advisor can help one understand the tax implications, including depreciation impacts that can be very beneficial. A realtor can help find an attractively priced house, determine real estate taxes, HOA fees and advise what the expected rent value would be for the neighborhood and type of house. An insurance professional could assess the property’s insurability and the cost of insuring the property. A certified property inspector can assess the quality of the property’s structure and mechanical systems. Contractors can provide estimates for any initial repairs. A financial advisor could help crunch the numbers to determine the expected range of returns under various scenarios and whether a rental property fits in with an overall prudent financial plan. All of this due diligence may seem somewhat daunting to the first time real estate investor. But it isn’t near as daunting as one might expect. And many people are capable of doing much of the due diligence themselves.

But one aspect of owning a rental property is especially burdensome to some folks. And that is taking on the role of landlord. Pouring over rental applications, running credit checks, checking references, collecting rent, and tending to maintenance issues are all required duties of a landlord. But don’t let these things dissuade you. There are professional property managers that can take on those responsibilities. Of course if you go that route, the return on your rental investment will diminish somewhat due to the extra cost. But you may find that the expected return will still substantially exceed more traditional fixed income investments.

One final comment is about risk. Money markets, treasury notes and bills, and FDIC insured CD’s are some of the least risky investments. That is why their returns are lower than most other investments. Rental properties carry a significant amount of risk. But you can mitigate some of the risk through a prudent exercise of due diligence and proper maintenance of the property after purchase.

If you are interested in diversifying your portfolio with a rental property, there has never been a better time. There are a number of foreclosures and other attractively priced houses on the market. If you feel this is for you, the best place to start is with a local, full-time Realtor. They understand the real estate market and the rental market and can help you weigh the pros and cons. If you don't have a realtor, give me a call. I would love to work with you and help you get started as a real estate investor.

Meeting Expectations

2009-05-26T20:12:00.000-05:00

When was the last time you were pleasantly surprised with the purchase of a product or service? If you’re like most people, you had to give it some thought. Every merchant likes to echo the phrase “our goal is to exceed your expectations”. But the actual product or service almost always fall short of reasonable expectations. Please indulge me with a few examples.

My 13 month old A/C unit quit working several weeks ago. The A/C company that I bought it from came out the same day I reported the problem. That was a very pleasant surprise. The defective part was still under warranty, so I didn’t have to pay for the replacement. That met my expectations. The A/C company charged me $110 for the 30 minute service visit. That seemed slightly excessive, but I paid on the spot with no complaint, just appreciation that my A/C was working again. Overall, I would say that the A/C company met my expectations. Didn’t exceed them, just met them.

I purchased an investment property recently and had the utilities connected. I got my first water bill and was charged two $45 connect fees. One for water and one for sewer. I called the water company and asked how they could charge me to connect the sewer. It was already connected. Sewers don’t have cutoffs or meters, so what were they connecting. They said it was to set up the account. But it is only one account. Both charges come under the same account number on the same bill. The aggressive customer service person just said that was the way it was and there was nothing I could do about it. The water company fell quite short of my expectations.

My engine light on my vehicle came on recently. I dropped it off at my mechanic for a diagnosis. He tore into it and couldn’t find anything wrong. So he reset the light. I went to the cashier to pay, expecting to pay a diagnostic fee. She said that they didn’t find anything wrong, so there was no charge. Finally, someone exceeded my expectations. They will continue to get my business and referrals.

What a joy when you feel that you are treated with respect and treated fairly. It is so rare these days that when it happens, it just sticks with you. As a real estate agent, I do my best every day to exceed my clients’ expectations. I can’t say that I have succeeded 100% of the time. But it wasn’t for lack of trying. In working with my clients, I never really know exactly what their expectations are. But I suspect that their expectations range from low to high. But the only way that I can meet my personal goal to exceed everyone’s expectations is to assume that each and every client has the very highest of expectations of me. So I set the bar for my performance on the top rung, and try to clear it consistently.

If you want a great experience on your next real estate transaction, give me a call. I will do my best to make you a satisfied client.

Local Real Estate Market Conditions

2009-05-12T07:49:00.000-05:00

The condition of the real estate market has received much publicity over the last year. As an integral part of the overall economy, real estate experts eagerly await the latest sales and listings information to gauge the market’s vital signs. Locally, the Houston Association of Realtors (HAR) issues a press release each month detailing the condition of the Houston area real estate market. They quote a myriad of statistics, including number of property sales, average sales prices, total listings, and months inventory. In general, the latest press release indicates that the median price of single family homes in the Houston area declined by 4.4% over the past year. Excluding foreclosures, prices remain flat.

One of the more interesting, but least understood market statistics is “months inventory”. It is interesting because it reflects a key economic principle, i.e. supply and demand. The months inventory statistic (MI) indicates how many months it will take for all current listings to be sold at the current rate of sales. For example, if there are 100 homes on the market and homes have been selling at a rate of 20 homes per month, there is an MI of 5. If the ratio of listings to sales increases, the MI goes up and prices tend to decline. If the ratio decreases, the MI declines and prices tend to increase. Whenever this metric falls below 9, it is considered an active or seller’s market. In a seller’s market, a buyer is more likely to be competing with other buyers and may not be successful in negotiating price concessions. An MI of 10 is considered a slow or a buyer’s market due to an increased number of homes for sale relative to the number of buyers in the market. In a buyer’s market, a buyer may have an advantage in price negotiations. An MI between 9 and 10 is presumed to be market equilibrium.

In the March, 2009 press release, HAR published an overall MI of 6.1 for single family homes in the greater Houston area, slightly down from 6.3 one year ago. In reviewing the details, the data indicates that both sales and listings are down about 19%. So while the market has slowed in the Houston area, the ratio of listing to sales is relatively unchanged. This is consistent with the finding that prices, excluding foreclosures, remain flat.

The monthly HAR press release can be helpful to home buyers and sellers in determining the strength of the market as it ultimately can have an effect on the price of a property. But since real estate markets are differentiated by types of properties, price points and location, you have to take a peek at the data behind the press release to understand the market conditions on a specific type of property, price range and location.

When slicing the Houston area by property type, the MI for single family homes was 6.1 (seller’s market), for townhouse/condo homes was 8.5 (almost market equilibrium), and for high-rises was 14.5 (buyer’s market). A more significant variation of results also occurs when slicing the market by price point. Focusing on just Montgomery County, the MI for single family homes under $100K was 3.9 (strong seller’s market) and those over $1MM was 27.7 (extremely strong buyer’s market).

Market conditions also vary significantly by location. While the entire Houston area market had a single family home stat of 6.2, Montgomery County had a slightly higher MI of 7.3. Montgomery County’s MI can be further broken down in several ways. HAR segments Montgomery County into 4 general MLS market areas; NW, NE, SW, and SE. These MLS areas had MI’s of 10.5, 6.3, 6.3, and 8.3, respectively. Data for Montgomery County can also be parsed by zip code. A sampling of MI’s by local zip code includes 10.5 in 77304 (Conroe), 11.6 in 77356 (Montgomery), 11.3 in 77365 (Porter), and 3.8 in 77381 (The Woodlands).

As you can see, market conditions in an area are all over the board. To maximize the value of a real estate transaction, it is in your best interest to get a handle on market conditions relevant to your specific property. You may be at a disadvantage if you don’t understand the market but the party you are negotiating with does.

All the numbers quoted above are released by HAR on a regular basis and are readily available. However, it is possible that none of those statistics are relevant to a specific situation. But a data savvy realtor can drill down into the statistics and determine comparable sales prices and the supply / demand condition for a specific area, price and type of property. A realtor can also make appropriate price adjustments based on the specific amenities unique to a property and neighborhood to determine a fair market value.

Pricing a home properly is a skill acquired by experienced agents who are knowledgeable about a specific market and stay in tune with market conditions. When the market conditions and the unique characteristics of a home are properly incorporated into the price, the parties involved are best equipped to negotiate a fair and equitable transaction.

If you have been delaying a decision about buying or selling a home, don’t base your decision on general information that may or may not be applicable to you. Contact an experienced, local agent and ask for information specific for your situation.

For all your real estate needs, Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com.

An Efficient Approach to Home Buying

2008-12-31T07:35:00.000-06:00

There are a lot of things to consider when searching for a new home. If you had to rank the below features from 1 to 10, how would you proceed?

1) Proximity to work
2) Quality of schools
3) Curb appeal
4) Floorplan
5) Energy efficiency
6) Quality of construction
7) Finish materials, i.e. countertops, flooring
8) Lot size
9) Price
10) Neighborhood amenities

If I asked 10 home buyers to do this exercise, I would most likely get 10 different rankings. And several would probably tell me that their most important priority is not even on the list! Or another might tell me each item is equally important. Everyone has different priorities. And an individual’s priorities can change as they go into different stages of life. So short of building a custom home on an ideal site in your preferred location, how do you get the home that has the most of what you are looking for?

Most folks these days start off with an internet search. HAR.com has the most comprehensive, up-to-date listings in our area. And almost every realtor’s website has the ability to tap into HAR.com. Even http://www.claudiahohlt.com/. An internet search can help you get started and give you a general idea of homes on the market. It can even help identify many of the features listed above. But at some point, you will want to personally visit homes that you are interested in. At that point, you have two options. You can call the listing agent for each home or call a buyer’s agent.

The listing agent would be more than happy to help you. After all, he/she wants to sell his/her client’s home. But if you end up viewing 10 homes before deciding, you will need to meet with 10 separate listing agents. That can be time-consuming and frustrating.

A more efficient approach would be to enlist the help of a buyer’s agent. You will then have only one point of contact who is working in your best interest. The buyer’s agent will make appointments for all homes that you have an interest and accompany you to each showing. The agent may even have some additional homes that match your criteria that you would want to view.

While viewing homes, an experienced buyer’s agent will offer valuable insight on your home search. He/she will have seen hundreds, if not thousands of homes over their career and can point out details, both good and bad, that you may not notice. The agent will have school information, pricing information and neighborhood information readily available. And the agent can chase down other information, such as POA info, utility info, etc. for you. And once you find your dream home, a buyer’s agent can work on your behalf to get you the best deal possible.

Another tidbit of advice would be to enlist the help of a buyer’s agent that has been in business for a long time in the area of your search. Any realtor holding a Texas license can represent you in anywhere in the state. But unless you’ve lived and practiced in the area of your interest, it will be much more difficult to find that perfect home. A local agent will have the knowledge and will be more likely to be available when you are.

Good luck on your search. And if you need assistance in my neck of the woods, i.e. Montgomery County, Texas, please give me a call. I would be pleased to help you.

Homeowner's Tips for Showing a Home

2008-06-22T14:06:00.000-05:00

I recently showed a home to a first-time buyer in search of a condo . When we first entered the condo, we were welcomed by the wonderful aroma of fresh baked cookies. They were proudly displayed by the realtor’s brochures along with an invitation to grab a drink from the fridge. The buyer not only left the appointment with a positive impression of the condo, he also left with a positive impression of the seller. The homeowner made the showing most enjoyable and helped set the stage for an offer.

Every home on the market has competition. Homebuyers typically narrow their selection down to several homes that are differentiated by only minor differences. So here are a few tips on what the seller can do to give their home an edge over the competition

· Present a neat and tidy home to prospective homebuyers. Do the major “spring cleaning” when the home goes on the market and do a quick cleaning and neatening before each showing. Keep the yard mowed and flower beds mulched. This leaves the impression that the home is in the hands of responsible caretakers.
· Have brochures of the home prominently displayed along with other pertinent information about the home.
· Leave the premises during the showing. The agent knows his/her clients wants and needs and, together, they can make an efficient assessment of the home. A homeowner’s presence can be distracting and can make homebuyers uncomfortable. If for any reason, the homeowner must be present, let the agent do their job and don’t jump in to help sell the home. Again, the agent knows what their clients are interested in and will bring the homebuyer into the conversation only if needed.
· While baking cookies is a nice touch, it’s not often practical. But a note next to the brochures inviting the guests to help themselves to some bottled water in the fridge is a nice touch. This is an opportunity to be creative and bring your personality into the room. It will also make your home more memorable.

Working with your agent to enhance the showing experience will make your home stand out and will help you achieve your goal more quickly.

How to Start Looking for a Home

2008-05-25T11:10:00.000-05:00

So you’ve outgrown or simply grown tired of the place you’ve called home the last several years. After some serious thought, you’ve finally decided to start looking for a place that is more suited to your needs. So where do you start?

The first step of any real estate transaction is to meet with your financial advisor. Perhaps that’s you yourself. But whoever it is, have a determination made of the amount of home ownership costs that your budget can comfortably afford. The budget for home ownership costs should include mortgage payments, real estate taxes, home insurance, HOA fees, maintenance and utilities.

The next step would be to meet with a mortgage company or banker to get pre-qualified for the amount of loan that corresponds with the mortgage payment you have already determined. This is a relatively easy process, but one that is very necessary at the time that you submit an offer on a home. A seller will typically want to see evidence of your ability to purchase their home before they will consider your offer. I should note that the mortgage company will calculate a couple of debt to income ratios that will determine the maximum mortgage payment / loan amount that they feel comfortable with. And that is the amount that they typically will indicate on the pre-approval letter. If it is lower than what you calculated, it is a good wake up call. Go with the lower amount. But if it is higher, you should stick with the lower amount you already feel comfortable with. Everyone has their own appetite for risk. But when taking into consideration the security that home ownership provides, it seems prudent to stay within your comfort level.

At this point, you can start seriously looking for a home. With the internet, you can search a myriad of websites to get a feel for home styles and prices. But after some preliminary research, I recommend that you choose a real estate agent to represent you. Keep in mind that an experienced, full-time, local, service oriented real estate professional can answer questions on schools, neighborhoods, demographics, etc., to help you decide on the selection criteria of the homes you would want to view. Then, the realtor can quickly sort through the thousands of homes on the market in Montgomery County and present to you a packet with details on homes that meet your specific criteria. And then the realtor can make appointments and accompany you to view the homes and give you their professional opinion. And the best part of this is that it’s free! Remember, the seller pays the realtor commission.

After you select a home, your realtor will be an integral part of the negotiations by providing you with comparable home values and working with you and the seller’s agent on various contract issues. Once your offer is accepted, your realtor will prepare the contract and provide information on inspections, appraisals, walk-throughs, etc. In fact your realtor will be with you every step of the way until completion of the contract. Buying a new home can be one of the most stressful events you will ever encounter. But it doesn't have to be. I feel that following the above steps will minimize the stress and may even make it a fun, enjoyable adventure!

For more information, please visit my website, http://www.claudiahohlt.com/, or call me at 936-537-1656.

Pros and Cons of Paying off a Mortgage Early

2008-05-05T10:53:00.000-05:00

A home is often the largest asset owned by most families. Unfortunately, the mortgage associated with that asset is often the largest debt of most families. The difference between the two of course is your home equity. Home equity will steadily increase as you make your monthly mortgage payments and decrease if you take on an additional home equity loan. It will always rise and fall along with general housing prices in your area.

One way to increase your home equity more quickly is to make additional principal payments along with your regular monthly mortgage payment. Additional principal payments can rapidly increase your home equity and dramatically advance the timing of that “mortgage burning” party. For example, on a $200,000, 30 year, 6% mortgage, $100 additional principal payments will payoff that mortgage almost 5 ½ years early and avoid $49,000 in interest payments. If you also send in half of that $10,000 bonus you receive each December, the mortgage gets paid off in about 14 ½ years and you avoid $131,000 in interest payments.

There are investment gurus out there that will advise you to not pay off your mortgage. They will tell you that they can get you a higher return than 6% in other investment products, so if you have any discretionary funds, send it to them and you will come out ahead in the long run. They may be right. Only time will tell. But it is indisputable, that paying off a 6% mortgage will yield a risk-free 6% return (before taxes). The guru may promise to get you a 10% return, but I guarantee that it is not risk free. Paying off your mortgage is risk-free!

Of course, a sound financial plan typically prioritizes where discretionary funds go. Before paying off a mortgage early, you should have 6 months or more of earnings set aside in a savings account to draw on in case of emergencies. And of course you should pay off debt with higher interest rates first, such as credit cards and car loans. And taking advantage of company sponsored 401K’s is of utmost importance, especially if your employer matches your contributions. But as soon as those things are taken care of, paying of your mortgage is a prudent wealth building strategy. Plus the peace of mind that comes with owning your home free and clear is very comforting.

Should you decide that paying off your mortgage is a tactic that you wish to pursue, the ClaudiaHohlt.com team has developed a handy little tool called “The Mortgage Terminator”. It helps track those additional principal payments and provides you with an instant readout giving you your new payoff date as well as the amount of interest savings you have avoided. It is easy to use and best of all, IT’s FREE! Just respond to this email at Claudia@ClaudiaHohlt.com and it will be forward to you ASAP. My mission is “helping people on the move”. And as I’ve said before, my business is about the mission, not the commission.

Home Appraisals

2008-04-09T16:16:00.000-05:00

If you want to sell your vehicle, you can go to a “blue book” and quickly determine its worth. But if you want to find out what your home is worth, you have to get an appraisal. Wouldn’t it be nice if there was a “blue book” for homes?

The good news is that is that it’s easy to get a home appraisal. Most real estate agents have been trained to do a Comparative Market Analyses or CMA. Just like “blue book values” for vehicles, CMA’s base a home’s fair market value on recent sales information with adjustments for a property’s individual characteristics and condition. And CMA’s prepared by most realtors are free!

There are more detailed appraisals prepared by certified appraisers that are prepared with additional precision. They also have a perceived objectivity. Certified appraisals are typically required by lenders while compiling support for a home loan approval. The cost of a certified appraisal can run into the hundreds of dollars. And most times, certified appraisals are very close to one prepared by a qualified, experienced realtor.

So what are some of the factors that make your home worth more or less that another? Here are just a few:

1. The primary difference is always size of the home. When you sell your home, you are primarily selling square footage. So the more you have, the more you’re going to get.

2. Another major difference is location. As we all know, homes in Montgomery County, TX cost less than homes in Los Angeles, Ca.
Size and type of lot. A large, shady waterfront lot is on one extreme while a small, interior, barren lot is on the other.

3. Condition of home. A rotting front porch, dated wall paper and poor curb appeal are all items that some buyers just can’t look past.

4. Neighborhood amenities. A gated community, golf course, playground, and swimming pool are just a few things that attract buyers to certain communities.

5. Energy efficiency. Especially with oil prices hovering over $100 / bbl, low-e double paned windows, thick insulation, radiant barrier decking, tankless water heaters and fluorescent lighting increase the attractiveness of a home.

6. Outbuildings. Yes, you do get credit for that 40x50 air-conditioned workshop. Might not be as much as you want, but you do get credit.

When you first contact a Realtor about an appraisal, you will be asked about many of the above items. Then, prior to touring your home, the Realtor should have done a Comparative Market Analysis that takes those relevant items into consideration. By reviewing all recent sales of similar homes, the Realtor has determined the low, average and top range of those homes. He/she will then make adjustments to put yours on a comparable basis. This will provide a framework to use prior to making final adjustments after the home is toured. After all, some homes have a certain charm or allure that is hard to define, but certainly adds value. So the realtor is hard pressed to make a final recommendation until he/she has seen the unique characteristics of your home.

But keep in mind that all appraisals, whether CMA’s or certified appraisals, are only estimates. Real estate markets are dynamic and supply/demand can change rapidly. At the end of the day, a property’s value is determined by the highest offer a qualified buyer is willing to make.

If you are interested in selling your home, please feel free to contact me at Claudia@ClaudiaHohlt.com or call me at 936-537-1656. All CMA’s are done on a confidential basis. And as I mentioned above, it’s free with no obligation. For more real estate information, logon to http://www.claudiahohlt.com.