If you’re selling your home, being upfront with your buyers about problems with your property, such as prior flooding or a defective roof, is required by law and can help lead to smoother negotiations. That’s why full disclosure—a seller’s obligation to disclose known material facts about properties for sale—is critical when it comes to a successful real estate transaction.

Disclosure laws were created to protect buyers, but they also protect sellers. If all of the information about a property is revealed upfront, you’re less likely to be involved in disputes and lawsuits after the sale. Your REALTOR® can answer your questions about disclosure, but here’s some information that can help.

What’s on a disclosure form?

A disclosure form is a notice sellers are required to give would-be buyers on or before the effective date of a real estate contract for sale that addresses the seller’s awareness of defects in the property before the sale.

For example, if you’ve had termite treatment or damage in the past, that’s something that prospective buyers must know. Or, if the roof has a leak, buyers need to know that, too. There are also federal laws about disclosure. For example, someone selling a home built before 1978 must disclose any known lead-based paint problems.

Intentionally withholding information about a property when you sell can have serious legal ramifications. Talk to your REALTOR® and make sure you understand your responsibilities. You don’t want to inadvertently leave something out and have to deal with expense, hassles and possible legal consequences later. Also, if you’ve had previous inspections done in the last few years, it might be in your best interest to share a copy of the report with the next prospective buyer.

What to expect from buyers

When you bought your home, you wanted to make a sound decision by gathering as much information as possible about your investment. Your potential buyers will want to do the same thing. Most buyers will hire an inspector to look at your property. The inspector will provide a report to the buyers detailing deficiencies or potential problems.

An inspector might suggest to the buyer to hire a specialist to look into specific elements of your property, such as a structural engineer to examine a potential foundation problem. The buyer and seller can negotiate who pays for these inspections.

A buyer does not have to provide his inspection report to you to negotiate repairs. And even when a buyer shares his inspection report, the buyer cannot force you to make repairs. However, when the buyer provides his inspection report to you, you now have knowledge of information in the report and will have to disclose any material defects to other buyers.

For everyone’s protection

Disclosure is a necessary facet of the real estate transaction, helping to protect both buyers and sellers. If you have questions about disclosure, ask your REALTOR® for advice.

For more information about buying and selling property in the Bryan College Station area,  visit www.BCSRealtor.com.

 

Patty Spiller, REALTOR®

2016 Association President

The holidays have arrived and so has the time of year when home sellers wonder whether they should keep their properties on the market or take them off. Or if owners haven’t listed their home yet, they may be asking themselves if they should wait until spring or brave the winter real estate market?

Trying to sell your home during the holidays can be daunting to many homeowners. The season can be extremely busy for families, and the idea of taking on the additional stress of selling a house could be a turnoff to some people.

“Many people consider the holiday season the worst time to sell your home; it’s the time of year when homeowners are hosting family members, putting up favorite decorations and planning vacations,” said Patty Spiller, President of the BCSRAOR “However, listing a home during the holidays can be extremely advantageous to homeowners, and it doesn’t have to ruin any holiday cheer.”

Here are a few reasons why homeowners should consider listing their homes this winter:

Less Inventory. For many homeowners, selling their home during the winter holidays seems like too much of a hassle, and they will either take their home off the market or wait until the warmer months to list.  “This creates an inventory shortage, which is good news for a seller,” said  Spiller. “And since there are limited choices for buyers, the homeowner could have a higher asking price.”

Control Your Showings. Homeowners do not need to let their homes be constantly available for showing. “Let your real estate agent know if there are certain days and times that won’t work for your schedule,” said  Spiller. “You can have blackout dates where there are absolutely no showings, or create a daily schedule outlining when exactly potential buyers can come through the home.” Your agent is there to help make the process go smoothly.

Staging. “Staging your home during winter can be as easy as decorating for the holidays,” said Spiller “Just be careful not to overdo it, as décor that is too large or over the top can distract buyers.” Sellers can also avoid offending potential buyers by using general fall and winter decorations rather than using religious themes.

Motivated Buyers. People hunting for homes during the holidays often have a reason for doing so, meaning that they are more motivated buyers. “Most buyers who aren’t incredibly motivated will put off a home search during the holidays and pick things up again in the spring,” said  Spiller “If someone is touring homes instead of celebrating the season with friends and family they likely need to buy a home quickly and could be willing to pay more.”

And of course, the most important thing that you can do to give yourself an advantage is to hire a REALTOR®, a member of the National Association of REALTORS®. “REALTORS® have real insights and unparalleled knowledge of your local market and can help you sell your home this winter so that you and your family can get back to celebrating the holidays,” said Spiller

Visit www.BCSRealtor.com for more information about selling or buying a home in your area.

 

Patty Spiller, REALTOR®

2016 Association President

Most people can relate to the complications and complexities involved with moving.  Whether you’re relocating to a recently purchased apartment or a starter home, resettling takes time, effort and planning.

Moving with kids requires even more planning and research. Finding a home with the appropriate amount of space, in your preferred school district, and convenient to a job or school location are often priorities for buyers with families.

According to the National Association of REALTORS® Profile on Home Buyers and Sellers, eight in 10 home buyers worked with an agent to purchase a home in 2015. Agent use is even higher among buyers ages 36 to 50 (87 percent) and 35 and younger (89 percent) – the demographics most likely to have school-aged children.

“Fifty-three percent of families with children under the age of 18 reported that the hardest task in the home search process was finding the right property in the right location,” said Patty Spiller, President of the BCSRAOR. “Families find themselves needing a real estate professional with a wealth of local market knowledge, hands on attention and a broad range of resources to help find the right home.”

Families with children under the age of 18 often times have a greater urgency to sell their home too. Twenty-four percent of sellers had to sell their home urgently while 46 percent had to sell their home in a somewhat urgent or reasonable timeframe. This is mainly due to a fast moving market and the fact that most families prefer to get settled in before the new school season starts.

In many cases, families are looking to move because their home is too small. Twenty-nine percent of families with children under the age of 18 cited upsizing as the main reason for selling. “Neighborhood choice is another factor: 50 percent of families cited the quality of the school district as a reason for buying their home, and 43 percent decided upon their home because of  its convenience to schools,” said Spiller

The type of home purchased by families tends to differ from those without kids at home as well. The typical home of families with children under the age of 18 is a 2,100-square-foot, 4 bedroom and 2 full bathroom detached single-family house.

In citing the characteristics of families with children who are buying or selling a home, it is no surprise that they find themselves in need of a real estate professional to help with the buying and selling process.

If you are interested in selling or buying a home, contact visit www.BCSRealtor.com to  find a REALTOR®, a member of the National Association of REALTORS®.

 

Patty Spiller, REALTOR®

2016 Association President

In September, the National Association of REALTORS® released the 2016 Member Safety Report, which surveyed over 3,000 REALTOR® members about how safe they feel while on the job, their personal safety experiences, and the safety procedures and materials provided by their real estate brokerage.

“Thirty-nine percent of respondents reported they experienced a situation that made them fear for their personal safety or the safety of their personal information. REALTORS® understand better than anyone the safety risks associated with real estate transactions, so it is imperative to create and share safety protocols with home buyers so they can learn about what they may encounter when working with a REALTOR®,” said Patty Spiller, BCSRAOR President. “The Bryan-College Station Regional Association of REALTORS®” is committed to protecting home buyers and sellers and their personal items by making sure they have the resources and education to stay safe and secure.”

Here are some safety protocols and guidelines from Patty Spiller, BCSRAOR President you should expect and keep in mind when working with a REALTOR®, which ensure a safe experience for all parties involved.

Meet your agent at their office. Instead of meeting for the first time at a property, a REALTOR® may set-up the initial meeting at their office. “Most people agree that meeting at a real estate professional’s office is much more comfortable and appropriate for the first meeting,” said Mrs. Spiller. “Generally speaking, meeting a stranger at an unknown location can be an uneasy notion, and this is no different for that initial real estate transaction.”

Secure your personal information. Your agent may make copies of your driver’s license and mortgage preapproval letter for their records. This allows the agent to keep a record of your information at their office to be stored in a secure place.  So be sure to have these items on hand for your initial meeting. “According to the 2016 Member Safety Report, 69 percent of real estate offices have standard procedures for safeguarding client data and information. Keeping this information safe and secure is a crucial step in maintaining a safe agent and client relationship,” said Mrs. Spiller.

Stay away from carpooling. When viewing a property, your agent may ask you to drive separately. This is a safety precaution for you and your agent – so do not feel offended. Most people don’t pick up hitchhikers so you can understand the importance of not transporting strangers to a property showing. Driving separately is also important, as many times, you or the agent will have an appointment to go to afterward.

Your agent might walk behind you. Agents typically let potential buyers take the lead when exploring a home. This is a common safety protocol and also allows you to view each room on the property first and make your own impressions.

View a vacant property by day. Your agent may only show vacant properties by day, so you can see what safety hazards exist, such as loose floorboards or any other defects. So when viewing a vacant – or even an occupied – property, expect to view it during daylight hours.

For more information on REALTOR® and consumer safety, visit www.realtor.org/safety.

If you are interested in selling or buying a home, visit www.BCSRealtor.com website, for a list of REALTOR® members, also members of the National Association of REALTORS®.

 

Patty Spiller, REALTOR®

2016 Association President

At some point during your homebuying process, the topic of title insurance is likely to come up. Like most types of insurance, title insurance is better to have and not use than need it and not have it available. But what is it, why do you need it, and how does it work?

What is title insurance?

Title insurance is a specialized insurance policy that protects you and your mortgage lender against mistakes made in a title search. If you find a home and there’s not a clear title to it, title insurance protects the bank—and you—if there’s a problem. A clear title means you’ll be able to occupy and use the property the way you want, and that you’re able to sell or pledge your property as security for a loan.

There are generally two types of title insurance: lender’s and owner’s title insurance. The lender’s policy is usually based on the dollar amount of your loan and protects the lender’s interests in the property against a problem with the title. The policy coverage decreases each year and goes away as the loan is paid off.

As its name suggests, the homeowner buys owner’s title insurance, which is in the amount of the real estate purchase, for a one-time fee at closing. It lasts as long as you own or have an interest in the property. Owner’s title insurance fully protects the homeowner in the event that there’s a problem with the title that wasn’t discovered during the title search. This type of insurance also pays for any legal fees involved in defending a claim to your title. Think of owner’s title insurance as helping to protect your equity, or your investment, in a home.

Its better to be safe

Title insurance is a safeguard against loss arising from hazards and defects already existing in the title. While claims on title insurance are rare compared to other types of insurance, they still happen and can be complicated legal issues to fix.

For example, one of the most common title-insurance claims is for the cost of back property taxes that the title company missed in researching a sale. Another example is when there’s not a clear title to the house, especially in cases of divorce. These scenarios might sound minor, but they can cost thousands in fees without title insurance.

Are you buying a newly built home and think there’s a clear title? Many consumers think they’re the first owner if they’re building a home on a lot, but it’s just as likely there were prior owners of the land. A title search will uncover any existing liens, and a survey can determine the boundaries of the property you’re buying for your new house.

Maximizing the return on your title insurance

The cost of title insurance depends on the value of your property. In Texas, title-insurance rates are set by the Texas Department of Insurance. Even so, there are a few considerations to take into account that could affect how much you pay and what type of coverage you receive:

Take advantage of being a buyer. If you’re purchasing a property in a buyer’s market or buying a previously owned home, you can negotiate with the seller to purchase your coverage.

Ask about inflation coverage. In the case of owner’s coverage, adding inflation coverage means that as the value of your home increases, the value of your title coverage increases as well.

Ask about extended coverage. Title-insurance policies may exclude coverage in the event of lot-line debates, unrecorded mechanics liens, and easement problems. Extended coverage can provide protection against such claims.

Your Bryan-College Station REALTOR® can help you understand title insurance and guide you through how to obtain it. Don’t be afraid to ask questions so you can protect yourself from potential problems.

For more information on buying, selling, or insuring property in the Bryan-College Station area, visit BCSRealtor.com.

 

Patty Spiller, REALTOR®

2016 Association President

When you decide to buy a new home, a good first step is to determine how much mortgage you can afford. After talking to a mortgage broker or using a mortgage calculator, you may find a payment amount that’s well within your monthly budget.

But keep in mind that the mortgage payment is only one of the monthly expenses you are responsible for with a new house. So, what else are you paying for?

Where the money goes

Your monthly payment is typically made of four components: principal, interest, taxes, and insurance—often referred to as PITI.

  • Principal. Principal is the amount you originally borrow. Early in your mortgage’s term, your payments will be applied mostly to the loan’s interest. As the loan progresses, you’ll pay off more principal.
  • Interest. Interest is money the lender charges to take the risk on your loan. The interest rate on your loan has a direct correlation to the size of your payment. That is, a higher interest rate leads to higher monthly payments. For most homebuyers, higher interest rates reduce the amount of money they can borrow, and lower interest rates increase it.
  • Taxes. Property taxes can account for a significant amount of your monthly payment. These taxes for local schools, city and county services, and other local entities are based on the tax rate for each of those taxing authorities and the appraised value of your property. Instead of a large tax bill coming due at the end of the year, many property owners pay their property tax as part of their monthly payment. The annual amount is divided by the total number of payments in a given year. The lender collects these payments and holds them in escrow until they are due, and then the lender uses the money to pay the bill.
  • Insurance. There are two types of insurance coverage that may be included in your monthly payment. The first type, property insurance, protects your home and possessions from fire, theft, and other events your policy outlines. The second type of insurance is private mortgage insurance (PMI). When a homebuyer does not put down at least 20% on the home, most lenders require PMI. This insurance offers the lender some protection in the event the borrower is unable to repay the loan. PMI coverage can be dropped once you attain 20% equity in the home.

Taking responsibility for taxes and insurance

While these four components make up a typical monthly payment, some lenders allow homeowners to pay taxes and insurance on their own. In this scenario, you’ll have a lower monthly payment, but you must make sure you have the money available to pay property taxes and insurance when those bills come due.

Amortization breaks it down

An amortization schedule shows how much of your monthly loan payment is being applied toward interest costs and how much to reduce the outstanding balance of your loan. The amortization chart details the month-by-month progression of your mortgage payments from mostly covering interest to mostly covering principal. Many lenders allow you to pay extra each month to pay off principal early and pay less interest over the length of the mortgage.

Add it all up

So, how much mortgage can you afford? Factor in the principal, interest, taxes and insurance to get a true picture of the cost of a home. Your REALTOR® can be a great resource to help you understand these components plus other costs of homeownership.

To find a Bryan-College Station  REALTOR® or to learn more about buying real estate in the B-CS area visit BCSRealtor.com.

 

Patty Spiller, REALTOR®

2016 Association President

We make small decisions every day, like what to wear to work. Bigger decisions usually take more time to sort through, like when it’s the right time for you to buy a home. While you probably don’t need help choosing an outfit every day, you can get help with your homebuying decision. A Bryan-College Station REALTOR® can explain what it takes to buy your first home, but answer these five questions to get started:

Am I staying put? If you think you might move somewhere else soon, it’s probably a better bet to rent for now. Buying and selling a home in such a short period can be time consuming and often doesn’t make financial sense. But if you are ready to put down roots, buying a home might be a smart investment.

Where do I want to live? Do you like the neighborhood that you currently live in? Or are there other areas of town that you could explore? Now is a good time to visit different neighborhoods and get to know them. Keeping an open mind and expanding your search to several places means more choices when you start looking.

 What kind of property do I want? It’s possible that you’ve lived in several kinds of properties like apartments, townhomes or single-family homes. Consider what you liked or disliked about each. Do you take advantage of the amenities offered by a condominium? Are you looking for a big backyard for your pets or kids? Even if you don’t have experience living in different kinds of properties, you can ask your REALTOR® for more information on what each may have to offer.

Do I have enough money for a downpayment? Most conventional loans require a downpayment. Many homebuyers place a downpayment of 10% to 20% of the purchase price. For a $150,000 home, that’s $15,000 to $30,000 in cash. Having enough money for a downpayment usually means better loan terms and a lower interest rate on your mortgage loan. That adds up to long-term savings.

Government-backed loans, insured by the Federal Housing Administration (FHA) and the Veterans Administration (VA), are great for first-time buyers and often require 5% or less as a downpayment. Your REALTOR® can recommend how much you might want for a downpayment and let you know if there are homebuyer-assistance programs you might qualify for.

Can I afford the cost of owning a home? There’s more to owning a home than paying a mortgage. You’ll want to consider property taxes, maintenance costs, renovations, and possibly even new furnishings. The cost of home maintenance and repairs is usually one of the biggest surprises for new homeowners who may be used to a landlord fixing issues.

When you’re creating your homebuying budget, include the cost of regular home maintenance and unanticipated problems. Your REALTOR® can help you estimate those figures. One way you can become acclimated with these costs is to test out a homeowner’s budget while you’re still renting. To do so, calculate your potential monthly mortgage payment plus extra costs. If it’s more than what you currently pay in rent, you could put the extra money in savings. Then, assess how those potential costs affect your budget. And at the end of your experiment, you might have extra cash to use as a downpayment or in your real maintenance fund. Plus, you’ll have a better sense of the costs associated with being a homeowner.

There are many steps you must take to buy your first home. A Bryan-College Station REALTOR® can help you determine if you’re ready and make sure you get to the closing table.

For more information on buying or selling a home in the B-CS area, visit BCSRealtor.com.

 

Patty Spiller, REALTOR®

2016 Association President

Looking forward to retirement? It can be an exciting transition. Unfortunately, some people find themselves in tough circumstances due to unwise real estate moves. Here are some mistakes to avoid.

Don’t make impulsive decisions

If you’ve been planning to sell your current home to downsize or move to a new location, you’ve likely done research and given some thought to the idea. If not, though, a quick decision right after you retire could lead to disappointment or financial difficulty. Take time to explore all the factors that go into any move you’re considering. You can also discuss your ideas with a REALTOR®. He or she has experience helping many others who have made the same kinds of moves you’re now contemplating.

Remember that retirement isn’t the same as a vacation

You may have loved going to your favorite vacation spot each year and dreamed about one day retiring there. But vacationing in a place is not the same as living there. Before you make that move, spend time in the area and imagine it as your permanent home. Does it have the year-round amenities, weather, and lifestyle that work well for you? Also, can you afford the kind of home you want and the ongoing cost of living there?

 Don’t forget your health and mobility

Whether you want to remain in your current home or sell it and buy something else, think about how your life could change as you age. Does your location provide access to the medical care you may need? Is the home itself navigable if you become less mobile? Planning for these possibilities now may save you from having to move again if your health declines.

Keep the costs in mind

Whether you’re thinking about buying a second home or selling your current house and buying something nicer, be sure to carefully run the numbers. It’s easy to underestimate all the costs of homeownership. Can you really afford the homeowners association fees, insurance, maintenance, and taxes without depleting your retirement money too quickly?

Have a plan for your sale proceeds

If you make a sizeable profit from downsizing, what will you do with that money? A new car and lavish vacations may be tempting, but soundly investing your proceeds may be just what you need to shore up your retirement nest egg.

Learn more about real estate transactions and search for a Bryan-College Station  REALTOR® at bcsrealtor.com.

 

Patty Spiller, REALTOR®

2016 Association President

The Texas housing market is hot, which is great news for sellers. However, just because there is a high demand for homes doesn’t mean that a seller is guaranteed to make a large profit. In fact, there are several ways sellers can make a misstep and leave money on the table.

The good news is that Bryan-College Station REALTORS® help their sellers avoid big mistakes, and a recent poll of members of the Texas Association of REALTORS® revealed three of the most common ones sellers should avoid.

Mistake #1: Overvaluing upgrades and improvements

As a homeowner, you know exactly what you paid to have your deck redone, your kitchen upgraded and your new floors installed, and it’s tempting to take the prices and simply tack them onto the value of your home. However, that approach could backfire, primarily because you likely made those upgrades based on your personal preferences, which buyers might not share (so they may not be willing to pay a premium for them), and because those were prices paid when those upgrades were brand new, which is probably no longer the case by the time you sell your home. More important, a buyer will place a value on your home as a whole, not based on an individual assessment of each feature, so it’s most effective to look at your home that same way when working with your REALTOR® to decide the right list price.

Mistake #2: Failing to fully disclose

One of the most expensive mistakes that sellers can make is not fully disclosing required information about a property. If a seller does not disclose known material defects about a property, there can be financial and legal consequences that create a mess for everyone involved. REALTOR® advise clients to save themselves the time and headache that can come from incomplete disclosures.

Mistake #3: Evaluating offers based on when they came in, instead of what they offer

Every seller has different expectations about how quickly their home should sell and when they’ll receive the best offer. However, REALTORS® caution buyers against putting too much emphasis on when offers are submitted rather than the actual terms of the offer. Some buyers reject offers because they only received one or because it came “too quickly.” However, it’s an expensive mistake for a seller to reject an offer that meets their expectations only because it came in the first day or so.

As you can see, there are many ways you can make a mistake when selling your home. Hiring a Bryan-College Station REALTOR® will ensure you maximize any benefit of the current Texas real estate market while enjoying a smoother sale.

Learn more about buying, selling, and leasing property in the B-CS area on bcsrealtor.com

 

Patty Spiller, REALTOR®

2016 Association President

For many homeowners, the monthly mortgage payment is a sizable chunk of monthly bills. You may have thought about the benefits to paying off your mortgage early. Who hasn’t? To be sure, making extra payments on your mortgage will save you thousands of dollars. For example, making just one extra payment a year on a $200,000 mortgage could save you more than $65,000.

That’s not small change – after all, what better investment is there than your home? But the fact is that most of us don’t stay in our homes long enough to pay off a 30-year mortgage. And, with interest rates still at historically low levels, the benefits of paying off your mortgage early aren’t as good as they used to be. Even if you have the means to pay off your mortgage early, many financial planners believe there are better ways to invest your extra cash.

But how do you decide what’s best? First, make sure you don’t need to use the money anywhere else. Experts advise paying off any high-interest (and non-deductible) credit card debt and any other higher-interest loans first.

Second, consider where you are with your retirement. Before you put extra money toward your mortgage, make sure you’ve taken full advantage of tax-advantaged retirement savings plans, such as your 401(k) and individual retirement account (IRA).

What about insurance? If you have dependents, you need life insurance. Make sure your policy provides enough money to cover your mortgage, living expenses and education costs. Disability insurance, while generally more expensive, is also a good idea. Your family will be protected if you can’t work.

How’s your emergency fund? Most financial advisers will tell you it’s wise to have enough in savings to cover your expenses for six months to a year.

Who should pay off early?

After you make sure your financial house is in order, it’s time to consider whether you should pay off the house you live in. Paying off a mortgage early benefits some homeowners more than others, including:

Homeowners who don’t deduct mortgage interest. Without the tax break, the actual cost of your mortgage is higher. Paying it off early makes sense.

Homeowners who pay PMI. Lenders charge PMI to borrowers with less than 20 percent equity in their homes. If you’re close to 20 percent, making extra payments could put you over the top. Eliminating PMI will reduce your monthly payments, so you’ll get an immediate return on your investment.

If you’ve decided to do it, simply make an extra mortgage payment at the end of the year – and make sure you specify that the extra payment should be applied to the principal on your mortgage.

But before you do, make sure your mortgage agreement doesn’t have penalties for early payment. Most conventional mortgages don’t, but others – such as adjustable-rate mortgages (ARMs) – do.

What if I have an ARM?

What if you have an adjustable-rate mortgage? Will that affect your desire to pay down a mortgage loan? It will – and quite significantly. In fact, adding a fixed amount to your payment every month won’t reduce the term by more than a few months.

Here’s why: Every time the interest rate changes on an ARM, the mortgage payment is recalculated so that the loan will pay off in the period remaining of the original term. This means that your extra principal payments will reduce the monthly payment at the rate adjustment, relative to what it would have been if you had not made those payments.

It’s an important difference between fixed-rate and adjustable-rate mortgages that borrowers need to consider very carefully when deciding what to do. When borrowers make fixed extra payments to principal on a fixed-rate mortgage, they shorten the term but don’t affect the payment. When they make fixed extra payments to principal on an ARM, they reduce the payment on rate adjustment dates, but don’t change the term.

The only way to shorten the term of an ARM mortgage using partial prepayments is to increase the extra payment at every rate adjustment date.

For fixed-rate homeowners who still want to pay off their home early, consider refinancing. If you have enough money to make the larger payments – and if your current interest rate will save you at least two percentage points if you refinance (a common rule of thumb) – see if you can lower your rate further by going to a 15-year mortgage. It’s just another way to pay your home off early while still getting the deduction on your taxes.

As you can see, paying down your mortgage isn’t always the right answer. Talk to your financial planner, or ask your REALTOR® for recommendations. It’s good to get their expert advice. Ultimately, you will decide which option makes sense for you. If you need help finding a REALTOR® be sure to visit BCSRealtor.com

 

Patty Spiller, REALTOR®

2016 Association of REALTORS® President