Monthly Archives: October 2018

 

Although analysts continue to publicize the notion that we are currently in a seller’s market, this does not always mean that a homeowner’s home will sell fast. Any number of factors can affect whether your home is selling, and overlooking these factors can keep your home on the market longer than anticipated. In this article, we will review what you can do if your home is not selling.

1. Re-Evaluate the Asking Price

Occasionally, listing agents and sellers will aggressively market a property, hoping that they will be able to take advantage of the seller’s market. After all, less inventory means higher prices for sellers. However, often times this can backfire, resulting in minimal offers on the property and many below the asking price. If this is the case for your home, it may be time to have the home re-evaluated so you can ensure you are asking for a fair market price.

Should you find that your home is accurately valued, you may want to consider listing the home below market value. Although this is not any seller’s favorite option, lowering the price may often drive more buyers to make an offer.

2. Change Your Real Estate Agent

Marketing a property comes down to how you sell, and if you do not have an effective real estate agent, then your property may be sitting on the market unnoticed. With the abundance of platforms now available to agents, there can often be an overwhelming number of opportunities for buyers. Therefore, it is imperative that the agent be pro-active – that includes email marketing, cold calls, and implementing other marketing tools to make your home the best available option for buyers.

To better understand whether your real estate agent is effectively marketing your property, here are a few questions you can ask them:

• Where are you marketing the property?
• What does your marketing material look like?
• What is your email marketing campaign?

Each of these questions can provide you with further insight on whether you hired the right person for the job.

3. Wait to Sell

Depending on your situation, you may have the opportunity to wait to sell. If you are listing in the fall and winter there tends to be fewer buyers. Maybe your local economy is struggling and unemployment rates are rising. If this is the case, the buying pool may just not exist. Therefore, waiting to sell may be your best option.

4. Upgrade Your Home

Many buyers are seeking upgraded homes. Especially in the Baytown area, due to increased development of homes from recent flood years, new homes are in higher supply. Therefore, your potential buyer may be ruling out your home because it does not compare to the others on the market. Renovations may cost time and money upfront, but in the long run, they can make your home more competitive on the market and even increase your home’s value.

5. Offer Seller Financing

Many buyers, especially in economically struggling markets such as Baytown, do not have adequate buyers – in other words, the buyers do not have the capital to put down, or they do not have the appropriate credit score to get a loan. In these cases, sellers have the option of offering seller financing or a rent-to-buy option. What does this mean? This means the buyer will move in under your terms, rather than those of a lender. The length of the contract will be determined by what you both agree on. Other variables in this contract can provide you benefits as well: you can make more money, gain passive income, and increase your pool of potential buyers.

Now, You Choose…

Each of these options can help boost the chance of you selling your home. Depending on the issues related to the sell, each offers both pros and cons. The time and capital you have to invest into getting the highest offer bears a major impact on how you can improve the statistics for selling your home.

However, if you are looking for a simple solution that requires NO marketing, NO real estate agent, NO seller financing, NO upgrades, and NO waiting, then look no further. We here at Gulf State Homebuyers provide clients, just like yourself, with competitive offers on the home. We also offer the ability to close in as quickly as 5 business days. If you would like more information, don’t wait – contact us today and we can get started on your free home assessment. And if the option doesn’t seem right for you, at least you will get that re-evaluation mentioned in option one!

 

Finding the perfect housing can be tricky – it requires a strategic look into your financials, an understanding of the local real estate market, and an assessment of your opportunities. In this article, we are going to review that second factor: the local real estate market. More specifically, we’ll examine the cost differences between owning and renting in the Baytown area.

Before we assess the numbers, it is important that you understand the kind of financial commitment that each option demands.

For the purpose of this article, we will pull statistics from Baytown, TX. The median home value in Baytown is $210K, while the median household income in the city is $49,930; it is recommended that your rent dominate no more than 25% of your income; therefore, we will operate under the assumption that rent costs $1,040.

The Cost to Buy

Purchasing a home is a long term financial investment that, should the opportunity arise, is the best choice for most consumers. The challenge, however, is that purchasing a home brings a heavy dose of upfront costs, which many individuals do not have the capital to handle. Let’s take a look at the costs associated with buying a home from start to finish:

• Down Payment: Depending on the loan that you qualify for, your down payment can vary, but it is necessary to earn your first home. If you qualify for an FHA loan, then you will need to put down 3.5%; however, if you need a conventional loan, you will need to put down 5% – 20%. For a home that costs $210K, an FHA loan will require a down payment of $7,350, while a conventional loan will require a down payment of $10,500+.
• Closing Costs: As the buyer of a property, you will be responsible for a portion of the closing costs, generally 2% – 5%. For a home that costs $210K, you will be responsible for a minimum of $4,200.

Just to purchase a $210K dollar home, a homebuyer will need a minimum of $11,550. Once you have purchased the home, there are additional monthly costs to consider.

• Did you qualify for an FHA loan? If the answer is yes, then you will need to pay monthly mortgage insurance – the cost of this can range. This fee is typically 0.5% – 1% of the entire loan amount. If your FHA loan is $202,650, you will be paying $2,027 annually, or $169 monthly for your mortgage insurance.
• Monthly Mortgage. You will be responsible for paying off your loan, plus interest, to your lender.
• Property Taxes. As a homeowner, you will be responsible for paying these annually. The average property tax rate in Harris County (including Baytown) is 2.259%. For a $210K home, this is equal to $4,744 annually, or $395 monthly.

When crunching the numbers on your potential home buying costs, don’t forget that there is a handful of variables that influence the values, especially when considering the loan calculations. Your credit score, debt-to-income ratio, recent payment history, housing history, investment statements, and proof of income can all affect your loan terms. For example, if you have poor credit, you should expect a higher interest rate, and therefore a higher monthly payment.

Lastly, if you are considering buying a home, don’t forget to factor in the cost of maintenance. There is no estimated amount we can provide for this – it all depends on the quality of the home. But remember: all maintenance work will be your responsibility.

The Cost to Rent

This one is much simpler than buying a home. The upfront costs to renting a home typically consist of first month’s and last month’s rent. Therefore, if you are paying $1,040/month, you will need $2,080 to move-in.

After your move in, you will only be responsible for the rent. If you move into a home managed by a responsible landlord, then your landlord should be responsible for all maintenance. The only additional fees you should expect to acquire include pet rent, parking rent, and renter’s insurance, should you choose to purchase these add-ons.

Should You Rent or Buy in Baytown?

At the end of the day, buying is always the best option. It offers individuals the chance to build equity, develop a more stable long term financial plan, and reduce tax costs. It also provides the homeowner a sense of pride. However, to really benefit, one must be in the correct financial position to own. This not only includes potential homeowners, but also current homeowners. What do we mean? If you are a homeowner, you may be overpaying on your mortgage and therefore drowning in debt. If this is the case for you, then it may be time to re-assess your position and identify alternative options so that being a homeowner is not only a benefit to your finances but also a benefit to your lifestyle! If you want a more in-depth review of this opportunity, contact us today. We may be able to help you transition into a more affordable home.