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.
Sunday, August 30, 2009
Sunday, August 2, 2009
Home Buyer’s Safety Net – The Option Period
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.
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.
Sunday, July 12, 2009
Finding the Right Neighborhood
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.
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.
Friday, June 5, 2009
Risks and Rewards of Owning Rental Properties
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.
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.
Tuesday, May 26, 2009
Meeting Expectations
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.
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.
Tuesday, May 12, 2009
Local Real Estate Market Conditions
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.
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.
Wednesday, December 31, 2008
An Efficient Approach to Home Buying
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.
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.
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