The Market

The Market

There are some good trends in the market with one being that the housing is recovering even with the tight credit approval we are facing.  With still low down payment on FHA at 3.5% and a 5% down on conventional, it is a good market to buy.  If mortgage accessibility opens up (it is cyclic), we may just have a booming year in sales!

Now the downside is that Washington may change their policies and require more money down, like 20%.  They may trim or take away the mortgage interest deduction which is an advantage of owning over renting.  They also add capital gains on the home sale which we have not had for some years.  All of these would greatly halt the progress in home sales.

There will still be more unequal wealth distribution according to accondomist.  Homeowners are building wealth after buying at low prices.  Renters do not accumulate wealth and the renter population is rising simply because tighter credit hinders “good” renters from becoming homeowners.  Now we are seeing an increase share of property owners as investors and as a rule, too many investors in a neighborhood will bring the neighborhood down since properties are not usually maintained as well.  Owning a home is really down right now at a rate of 65.5% of the population which is the lowest in 15 years! Homeownership has always been the avenue in accumulating wealth for people. 

If you are renting, check out the possibility of owning a home and give us a call. 

I Want a Bigger/Nicer Home but...

There are homeowners that would like to have a larger/nicer home but are patiently waiting for the market to improve. A frequently heard objection is that they can't sell their home for what it is currently worth.

Buying up in a down market is actually advantageous because while you might get less for the home you're selling, you're also getting the larger home for less. For instance, if you had to sell a $200,000 home for a 10% discount, you might feel that you left $20,000 on the table. However, buying a $300,000 for the same 10% discount would put you $10,000 ahead on the sale and purchase.

The other obvious matter is that when the mortgage rates increase while you're waiting for the market to improve, it dramatically increases your cost of housing with higher payments. The cost of housing is affected by price and mortgage rates.

To accurately evaluate your current options, you need facts and assessment tools that will provide you the information to make an informed decision.

Targeting the Mortgage Interest Deduction

It's obviously going to be a Herculean task for Congress to balance the budget and reduce the deficit. It's sort of like the country song lyric that goes "everyone wants to go to Heaven but nobody wants to go now." It is estimated that the mortgage interest deduction cost the government $100 Billion last year which is why it is a target for cuts.

The Mortgage Interest Deduction has been part of Income Tax laws in this country since 1913. The United States of America is one of the few countries in the world that allow such a deduction. Our goverment has always supported homeownership as is evidenced in the different tax benefits it receives.

• Mortgage interest deuction up to $1,000,000 in acquisition debt on a principal residence and second home
• Deduction of interest on Home Equity debt of $100,000 over acquisition debt used for any purpose
• Capital gain exclusion on up to $500,000 for married couples filing jointly and $250,000 for single homeowners
• Favorable long-term capital gain rates if gain exceeds exclusion limits
• Property tax deduction

There is an interesting relationship between a good economy and a healthy housing market. Contrasted to profits from the stock market which tend to be plowed back into other investments, profits from home sales tend to be spent on consumer products that directly benefit the economy.

The National Association of REALTORS supports the MID and reports that one job is created for every two homes sold. It further states that $60,000 is pumped into the economy for each home sold and that homeownership accounts for over $2 Trillion of the U.S. gross domestic product.

American homeowers are currently paying 80-90% of all federal income tax collected. Some economists believe that a healthy housing market is a leading indicator for economic recovery and that tampering with a significant homeowner benefit like the mortgage interest deduction would hurt the economy.

Is This The Right Time To Buy?

We were visiting with a couple of friends of ours and the mentioned they got a great deal on a SUV that they needed for their growing family. Think about it for a moment, there might not be a better time to buy a car than now.

There might not be a better time to buy a house than now! In 2006, there was never a better time to SELL your house in most markets. There are several examples of knowing that the time is right.

Actually, buying or selling is good at any time… it all depends on your perspective. In fact this is a great time to buy since a lot of people are focused on the negatives right now. Is your perspective right to prosper? Might be a good time to get through your skull. … that ANYTIME is a good time!

Are You A Generation X

Young families and adults ages 31 to 45 are considered our Generation X and they may be the leaders in home buying as the recovery gets under way in the housing market. These buyers are most likely to think it is a good time to get off the fence and buy, but they have very strong opinions about design features. It may not be the largest population group but it is the most mobile group.

Baby Boomers used to be the leaders but they are keeping their jobs and working longer, and their next move is probably a smaller home.

The Generation X are in interested in home with green technology and would pay an extra $5,000 for a house with green features. They still want the larger lots in a suburban area and not necessary that “walkable” neighborhoods. They like dark wood cabinets and prefer a great room floor plan as well as a flexible room space.

Does this sound like you? We work with Generation X's and would like to know what interest you in a home since you are can see this is a great time to buy a house.

5 Steps in Buying A Home

We can divide the buying process into really 5 big steps for you, all of which are important. It is always best to know the process before you buy. In knowledge, there is less fear since you know what is going to happen next or what needs to be done next. It makes you a much more informed as well as a comfortable buyer in the marketplace.

1. Deciding whether this is the right time to buy. We can give you information to help you make that decision. We may think it is a great time for you to buy but your circumstances and goals may not make it that perfect time for you. We need to look at all the facts and your desires closely.

2. Getting Pre-Approved. Nothing is more disheartening than to fall in love with a home that you just must have but you can't have because you don't qualify for that house. It is best to make sure you are comfortable with a payment even if you can qualify for more.

3. Finding That House. If we are any good as your Real Estate Consultants, we have listened to your needs and desires in a house and we don't need to be showing you 50 houses to find it. If an agent is showing you that many houses, either you are not ready to buy or the agent is not listening to you.

4. Negotiations. That's what you hire us for, for our years of experience in negotiating and representing you in the process including the contract terms and the repairs. We want to treat your money just like it is ours. Like a Pit Bull, we want you to keep as much money as you can or make as much money as you can.

5. Title Work, Appraisals, Underwriting, Celebration. You don't have too much to do with the items listed above but they have to be done before you own a house and get a loan and we can go to Celebration. That is our job. Making sure these things are done according to the contract and in a timely manner.

Email us for more details on the 5 Steps in Buying that we can forward to you FREE of charge. An educated "buyer" is the best buyer. Get educated.

Do You Have Concerns About Homeownership?

According to National Association of Realtors (NAR) 2010 National Housing Pulse Survey, 7 out of 10 Americans say job layoffs and unemployment are big problems to home ownership.

Most do believe this is a good time to buy a house but there are obstacles they are concerned about: 79% surveyed said having enough money for the down payment and closing costs was a concern, and 73% stated the lack of confidence in getting approved for a mortgage was an obstacle.

Interesting that 1/4th of the renters surveyed said they are thinking more about buying a home this year than they did last year. It is still a good time to buy a home!

Are you ready to buy? Check out homes on our Home Scouting Report....a great tool for your search. Click here to visit and register.

Are Homes Shrinking?

Actually the new single-family homes are getting smaller according to research done by the National Association of Homebuilders (NAHB).

The consumer has a desire to keep the energy costs down, there is not as much equity in the existing homes to roll over into new bigger homes, there are tighter credit standards to buy bigger, and there is less interest in buying homes as an investment.

Emphasis is on an inclination to buy less stuff, opting for a simpler life and Kelton Research finds that 56% of Americans are beginning to live less materialistic lives with the economy's collapse. Huge cars and huge houses are falling out of fashion, it seems.

Buyers are tending toward a green home half the size of the big house with solar and geothermal energy and built of materials that increase heating and cooling efficiency.

I'm not sure we are there yet in the Dallas area, but think that is becoming the trend to be smaller and more efficient. What do you think?

Insurance In Case You Buy and Lose Your Job???

This new program in California (of course …every trend starts there it seems!) offers home sellers the option of funding insurance plans that will provide buyers with up to six months mortgage payments. This is to entice the buyer to buy their home! Buyers may qualify for up to $1,500.00 a month in the event they lose their job after purchasing. The program, named the "Home Payment Protection Program," was triggered by California's continued high unemployment rate. It is a creative idea to make the buyers feel more comfortable in stepping out to purchase. Remember when the car dealerships were offering similar programs that they would buy your car back from the buyer if they lost their job?

"Most people wanting to buy houses today have a fear: What happens if I lose my job?" CAR president Beth Peerce said. "This plan takes some of that stress away." The program extends to buyers who've lost their jobs within one year of close of escrow. Buyers will ask sellers to pay who may choose between payments of $200 for six mortgage payments of up to $1,000 each or $275 for six payments of $1,500.00 each. Of course buyer could pay for it too, but the sellers want the buyers to buy their homes and this is an incentive! Will it make its way to Texas?

What Buyers Want In a House!

The Top 5 Bathroom Features that consumers want:

89% stated Linen Closet

88% stated Exhaust Fan

79% stated Separate Shower Enclosure

79% stated Water Temperature Control

66% stated Whirlpool Tub

The Top 5 Kitchen Features that consumers want:

86% stated Walk-in Pantry

80% stated Kitchn Island

72% stated Built-in Microwave

69% stated Drinking Water Filtration

66% stated Special-Use Storage ( custom made for appliances)

If you were buying, would this be your same list of the top 5? If you were selling, do you have these in your current house?

Get a Realtor!

You might be very business savy, but you need a professional translator to help you through the home-buying maze! You may buy a house once every 7 years, but we are in the process daily. Why do you need a Realtor?
1. A good Realtor is conversant on real estate law and has access to contracts and disclosures.
2. A good Realtor can help buyers determine how much they can afford to spend for a house.
3. A good Realtor can help educate buyers on various neighborhoods, community information on utilities, zoning, schools, etc.
4. A good Realtor knows of other homes that are not in the system yet but would fit your needs.
5. A good Realtor can guide you in the wise investment of a home, perhaps bringing you down from the clouds when it might not be a good investment.
6. A good Realtor can really help during negotiations. There are many factors involved including terms, dates, repairs, etc. that a Realtor will explain and negotiate.
7. A good Realtor can advise you as to which inspections are recommended or required.
8. A good Realtor can oversee the evaluation of the property you are interested in buying by due diligence, making sure inspections are completed and the house is in good condition.
9. A good Realtor can help bridge the gap between your knowledge of financing with the lender since there are options that may not be understood easily.
10. A good Realtor can guide you through the closing process and make sure it goes smoothly without any “hiccups” all the way to Celebration (that's what we call closing!)

Market Report for December, 2010

December is normally a slower time in the market as is January and then we usually start our climb upward. (See attached graph for Plano) We will see when the climb starts this year. We had an OK December and have started out in January with some activity which we are pleased, but we want to see 2011 to be a better year.

We don’t think you will see prices go up this year but we don’t see them coming down either. We do see interest rates rising now even though there is not much demand. Rates bounced to 5% and not that 4.25% we have been seeing for months. Perhaps if rates do start to rise, we will see the buyers that are on the fence start making decisions.

We do feel we have a lot of buyers on the fence and they are scared about the unknown future as all of us are since we can’t see the future. From our economy here in Texas and our job market, we are really in good shape and don’t predict that anything will change our consistency here, so personally, we do not think it is a “scary” time to buy, but a very smart thing if you get the right advice. Of course we are here to guide you in your journey.

How Low Are Our Interest Rates Now?

Interest rates today are the same as when you or your parents (might need to ask them!) :

Paid twenty-two cents for a loaf of bread,

Paid forty-five cents for a pound of hamburger meat,

The average cost of a new car was $2,600,

The average salary was $5,315,

The average home sold for $12,700!

That was all in 1960! And our interest rates are the same as 1960!

There are good buys in the marketplace and "flat" prices on homes. You need good credit to go with it, and only 3.5% down payment.

If you are in the "thinking" mode, we have some other material we would be happy to share with you. Just email us at Betty@HomesByBetty.com

Is Renting A Good Idea?


Today there are more home renters than ever before. Many current renters are former owners who faced the foreclosure of their home or experienced other financial problems.

These renters are now living in what they consider to be temporary housing, waiting for the opportunity to again purchase a home of their own. Some renters are planning to remain in a rental unit indefinitely, while most are eager to move into a newly purchased home.

It might surprise you to learn that the amount of money a renter spends on rent can be about the same as or more than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant. This was revealed in a recent report from Ginnie Mae.

A renter must expect annual increases of about 5 percent in monthly rent, on average. In a few years this can bring the rent up to or beyond the level of principle and interest payments on a fixed-rate mortgage, especially in today's market where interest rates are historically low.

One big advantage of owning a home, in addition to pride of ownership, is the ongoing tax advantages. This includes the deductibility of interest payments and property taxes. Also, with each payment the balance of the amount owed declines, thus building equity in the property for the owners. Many families consider ownership of their home as their best saving program. In time their equity can grow their capital worth to the point where they can acquire a more expensive step-up home.

A lesser known benefit of home ownership relates to its effect on children. Several studies have pointed to the positive impact of ownership on the lives of kids in the household. They feel more secure and tend to be more self-confident while living in a home owned by their family as opposed to living in a rental residence.

What Does It Look Like in the Market Place?


Well, you are listening to me! So many sellers and buyers have decided this is the time to sell and buy. Congratulations to them and you! I believe this is a good decision. Why do I think that this is the perfect time?

The first reason is that interest rates are as low as you are going to see them for many years to come. We are at 4.25% and then, we drop a little below, then bounce back to 4.50%. Without the Tax Credit Programs for both first time buyers and move up or move down buyers that ceased at the end of April, the interest rates will climb again. We, as taxpayers, must pay back what we have spent and given away as incentives for the economy.

FHA is the major mortgage loan that is available and being used, but changes are coming which will knock out even more of our buyers that can qualify. The upfront MIP (Mortgage Insurance Premium) is rising from 1.75% to 2.25%. The down payment will increase from 3.5% to 5% down payment. Minimum FICO credit score will increase to 640 compared to 620 and 580 as is required now. Now, you say, I am not in that lower price range, so why should it affect me? It does because the first time buyer must buy, so that seller can buy your house and so forth in the “domino” affect.

Are you ready?
Are your ready to purchase a home in the best "buying" time that we will see for a long time to come?

HUD (Housing Urban Development) just announced changes that will occur in the spring that will require a lot more mone out of pocket for the buyer. (Remember the zero down loans?) In addition, the tax credits ends with contracts only until April 30th, 2010.

Interest rates are still historically low but we know they will increase by the end of March because of the end of the Feds artifically decreasing them through the purchase of Mortgage Backed Securities.

Right now is such a perfect time to purchase and I would hate for you to miss out on any of the benefits that we still have over the next couple of months!

Find out more by registering for our Buyer's Class offered the first Tuesday and 4th Tuesday of the month or just email or call for your free Tax Credit Guide.

Where do I get my downpayment?

Alright, you want to take advantage of these low interest rates that are back down to 5% and below. You want to receive that $8,000 before December 1st that the Government is offering first time buyers which you are. You want to take advantage of the lower prices that the media is telling you about. BUT…..how in the world are you going to be able to come up with the down payment of 3.5% of the sales price? On a $150,000 priced home, you only need $5,950 dollars.

We have some suggestions for you. Try these on and see if any will fit.

1. Have a relative give you the money as a gift.
Documentation will be required to prove that the money is actually a gift and not a loan. Any taxpayer is permitted to give up to $11,000.00 per year to another person without having to pay a gift tax. Technically, your mother could give you $11,000.00 and give another $11,000.00 to your spouse. Your father could do the same. This would give you a total of $44,000.00 towards a down payment and closing costs. This could be your “inheritance” when you need it.

2. Borrow against your 401K or insurance policy.
You can also cash out your 401K but you will be subject to withdrawal penalties and payment of taxes.

3. Sell or borrow against an asset.
Selling an asset such as a car can help increase the amount of money you have available. Borrowing against an asset is also acceptable as long as you qualify with the additional debt.

Click here to start your search for that home.

Should You Sell Now and Buy Now?

You can sell your house, and you feel you can get a wonderful buy on the other end with interest rates so low. Should you take advantage of the “flat” or lower prices and sell, taking advantage of the current market or should you wait? Personally, I see interest rates going up, prices of homes going up, and inflation increasing. And yes, you should sell and buy now.

Now, do you have a strategy for your selling and buying?

We feel we have the solution:
1. Nail down a value. You should talk to a reputable, qualified agent to give you an idea for what your house might sell for. You need to ask for proof of the suggested value, worse-case scenario, and all the costs that would be involved in closing. If the price is acceptable and you can live with the worse case, get your house on the market as it will take a minimum of 65 days to sell as an average in most of our cities.

2. Set a budget. Most of you are debt-averse! You might want to keep your mortgage very close to what you have now, so you could add funds from nonretirement savings toward that down payment. But figure out what your goal is: to get your payment down or to have your cash available (remember that money in a house is sitting there and is “dormant” equity and not working for you)

3. Shop like a shark. Have your agent review what is out there available for you and realize that our inventory is down. Very often it is wise to go look at a few homes to see if there IS something in the marketplace that you could not live without! Then start the moving process.

4. Always have a Plan B. What if the house you love is sold before you sell yours? What if your house takes longer to sell and you don’t get as much as you were told was the bottom dollar? What if you sell so quickly, you haven’t found your next “dream” house? Just have some backup plans for possibilities that might happen. You would be surprise how many times we make it all work out and work it out smoothly!

Call us to interview and see if we have a strategy that would work for you at 972-985-4747 or email us at Betty.Magee@HomesByBetty.com

Is This The Right Time To Buy?

We were visiting with a couple of friends of ours and the mentioned they got a great deal on a SUV that they needed for their growing family. Think about it for a moment, there might not be a better time to buy a car than now.

There might not be a better time to buy a house than now! In 2006, there was never a better time to SELL your house in most markets. There are several examples of knowing that the time is right.

Actually, buying or selling is good at any time… it all depends on your perspective. In fact this is a great time to buy since a lot of people are focused on the negatives right now. Is your perspective right to prosper? Might be a good time to get through your skull. … that ANYTIME is a good time!