That Feeling Of Despair

Despair - What Have I Done

Now What?

The New Year has begun. Remember over the holidays when everyone over-ate, over-spent, and generally over did it all? You woke up a day or two later and thought “What have I done?”

Despair - Overwhelmed

The House

The same thing can happen with a home purchase. It’s called buyer’s remorse. It’s not quite as easy to “return a house to the store.” You own it now. You’ve moved in and now you’re starting to rethink what you have done. Don’t worry, it’s a normal thing many people go through.

Despair - Own It

How To Combat Those Feelings

  1. Embrace what you have done. You are a homeowner now! What a great thing. It might seem like the costs are huge and there is no way you can really afford what you have done. Take heart. If you worked with a Realtor and a Lender, part of their job is to make sure you don’t overextend yourself. You actually can afford the home you are in.
  2. Make it your own. No house is perfect. Not even a new construction home. It’s quite possible there are things you will want to do to improve the property. Remember that it is your home now, not the previous owners. You can paint with whatever colors appeal to you, you can also change counters, drapes, and any other improvements you would like to make. Take it slow and start small. Paint one room. It doesn’t have to be done overnight. More than likely, you will be in the house at least seven years so plan things, save some money and be smart with the change decisions you want to make.
  3. Enjoy. You have spent a lot of time looking at properties and finding just the right thing for you and your family. Rest in the knowledge that you make an informed decision and it was what was best for your family at this time. The feelings of remorse will go away when you start making changes and making your new home more – well – homey!

If Something Changes

Job loss, illness, family dynamic changes, more family members moving in or out. All these things can affect your ability to maintain the house you had so many hopes for.

If something happens that prevents you from enjoying the tranquility of your home, don’t despair. Keep your Realtor and Lender informed of changes within you family. They are there to help you. If the need arises that you need to change things, they can help figure out alternatives or sell the property if that is the best course of action. They have spent a lot of time with you, building a relationship. It was never intended to be a “once and done” setup. Every day, there are new programs being developed that could change your outlook even if there have been dramatic changes to your family.

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If you need help with the purchase or sale of a home, reach out to me for more information about how I can help you get where you want to be.

I’m never too busy for your referrals.

Patrick O’Connor – CHMS, GRI, Realtor®

Ebby Halliday, REALTORS®

Plano, TX

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Why Get A Home Inspection?

Home inspections protect both the buyer and the seller in a real estate transaction. If you don’t think so, skip it and watch the sparks fly when something goes wrong.

Home Inspection Foundation

New Build Inspection

Why would you need to have an inspection on a new construction home? After all, the quality craftsmanship should be enough to guarantee an issue free lifestyle.

Wrong!

Just because you are buying something that is considered “new” doesn’t mean that it wasn’t built by hand, by people making a whole lot less than what the house sells for. Even if you have the best craftsmen involved in the construction of a new home, things can be missed. People can have a bad day. The materials could simply be sub-par. Whatever the reason, getting a home inspection can save you a bunch of grief.

My wife and I purchased a new construction home. Everything looked great when we purchased it. That new home smell was there and as we slowly unpacked out stuff, it became more and more ours.

About six months after moving in, I noticed some water near the driveway. I didn’t think much of it because the sprinklers had been running. The next day, I still saw water on the sidewalk and driveway. I also noticed that the grass between the sidewalk and the road was soggy.

I called the builder to have them come out and check it out since the house was under warranty. Sure enough, someone forgot the glue on the pipe connecting to the water meter at the curb.

Thankfully, that was a minor inconvenience.

My neighbor was talking to us one day and mentioned how the upstairs in their house was very hot. They had called the builder out to check it out and found that the switching mechanism for the air conditioner had not been hooked up correctly. As a matter of fact, a new device needed to be installed to make sure it worked long term. I called the A/C guy to check out unit out also and sure enough, we needed the same thing.

I’m not saying that a home inspection will catch everything. After all, we had a home inspection on the new construction home and there were still things missed. However, spending a few hundred dollars on an investment of hundreds of thousands seems to make a whole lot of sense.

What About Resale Homes?

Again, I default back to the idea that for a few hundred dollars, the inspection will help protect your investment of many thousands of dollars.

So many things go wrong with a house. How well did the previous owners care for the foundation, the plumbing, and the main systems in your house? Without an inspection, you are relying on word of mouth that everything is ok.

How would you feel if you purchased a home and found out years later that there had been a fire in one of the bedrooms and instead of replacing the studs, they coated them with a sealer and covered up the damage with drywall?

Don’t think it can happen? I encourage you to look up the horror stories that home inspectors share and see what it looks like.

If you need help with the purchase or sale of a home, email me for more information about how I can help you get where you want to be. I’ll send you a free buyer’s guide.

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I’m never too busy for your referrals.

Patrick O’Connor – CHMS, GRI, Realtor®

Ebby Halliday, REALTORS®

Plano, TX

The Option Period

In my last post, I promised to write about the option period in a contract.

Well, here it is.

The Option Period - Options

What is the Option Period?

The option period is written in the Texas One-to-Four Contract for residential real estate transactions. It is a negotiable period, typically about a week long that allows the buyer to back out of the contract for any reason. The cost to the buyer is typically about $100 for every $100,000 price of the home. It is negotiable for the price and the number of days. A Realtor® can help determine the best course of action for the market. The cost can be rolled into the cost of the house at closing if it actually gets to closing. However, it is non-refundable and goes to the seller. If the buyer decides to walk away from the contract, the seller gets the money.

What do you mean they can walk away from the contract for any reason?

Exactly that. It gives the buyers an unlimited ability to walk away. Most of the time, the option period is so that the buyer can get inspections of the property done so they can be comfortable with the house. If for whatever reason, a seller decides to not inform the buyer that there are foundation issues or if the seller does not know there are foundation issues, the buyer could find that information out during an inspection and decide not to purchase. Of course, there are those who might have buyer’s remorse and decide they want out of the contract because they no longer like the color of the paint on the wall but that is quite rare compared to other reasons.

What is the benefit to the Seller?

The benefit to the seller is that they are offering a goodwill gesture to the buyer in the hope that the sale will take place. They are also indicating confidence that the house is ready to go. Depending on the market, the seller has the option to shorten or lengthen the period of time to get the inspections done. While the house is under contract, no one else can be shown the property.

The Option Period - Choices

Much of the benefit of the option period is for the buyer.

The market itself drives what happens with the option period. Recently in North Texas, the market was extremely hot. Houses were on the market for sometimes less than one day before a contract was signed. Sometimes, that made it difficult to find a home inspector and schedule the inspection. The number of days might need to be increased so the buyer could do their due diligence. Other times, the contract might be submitted on a Thursday evening. If it was accepted, the buyer might not get an inspection setup before Monday or Tuesday.

Keep in mind the purpose of the option period. It is to give the buyer the opportunity to review the property and make sure it meets their needs.

The market has improved some since the summer so it is possible that option periods could be shorter now. Again, a Realtor® can help negotiate those terms for you.

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I’m never too busy for your referrals.

Patrick O’Connor – CHMS, GRI, Realtor

Ebby Halliday, REALTORS

Plano, TX

Two Different Approvals. Buyer and Property

Two Different Approvals

Did you know that there are actually two different approval processes in place when purchasing a home?

The first is the buyer approval. The second is the property approval.

Let’s talk about it and see why it matters.

Buyer Approval

Buyer Approval

In order to get to closing, a buyer must be approved, especially if they are taking out a loan to purchase the home. Many things can be by-passed if you are using cash but a vast majority of people get a loan to purchase a house.

The buyer approval comes in the form of credit checks, credit scores, IRS documents, Tax returns, proof of employment, and things like bank account balances. I’ve posted before about the three types of pre-approvals. There is the pre-qualification letter, the pre-approval notice, and the pre-underwritten status.

Each of these has a different meaning and a different level of comfort for the seller considering your offer. We highly recommend getting pre-underwritten so that all we are waiting on is the property.

Don’t Screw Up!

Getting approved is a great start to your home search but too many times, people get careless. Once you are approved, it is vitally important not to do certain things.

Don’t do any of the following:

  • Buy a new car
  • Buy new appliances
  • Open or close credit accounts (you can still pay it off or down)
  • Don’t open or close bank accounts
  • Co-signing a loan for someone else

You get the idea. Here’s the thing. If you were to do one of the above while you were trying to get to closing, you could run into issues.

By changing your credit status, there is the possibility that you will no longer be qualified to get the loan. Maybe your debt-to-income ratio changes and now you don’t qualify.

The thing to keep in mind is that there is an additional credit check of everything about three days before closing.

Don’t mess the whole process up by buying that refrigerator for the new house before you are actually in the house. It really doesn’t take that long to get a refrigerator delivered to your house after closing.

Think it doesn’t happen? Actually, it happens more often than you think.

Property Approval

Property Approval

You have found the house you want and you have been pre-underwritten for the purchase. However, you are not done yet. The property still needs to be approved. After all, the lender wants to protect their investment since they are on the hook for the loan amount until it is paid.

Here is where the inspections come in. As you go through the purchase process, it’s highly recommended that you have a legitimate home inspection done on the property.

Wouldn’t it be terrible if you purchased a home and found out later that it needed foundation work? A home inspection will reasonably find major issues with the house. Electrical, Plumbing, and Structural issues will be brought up so that repairs can take place prior to closing on the home. Even those who are paying cash should have a home inspection. The relatively low cost of having an inspection far outweighs the cost of repairs later. It also helps protect your investment in your home. This is why you got an option period to begin with. Don’t know what an option period is? No worries. I’ll cover that in my next post.

If you need help with the purchase or sale of a home, reach out to me for more information about how I can help you get where you want to be.

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I’m never too busy for your referrals.

Patrick O’Connor – CHMS, GRI, Realtor

Ebby Halliday, REALTORS

Plano, TX

Buyer’s Lease Back Vs. Seller’s Lease Back

Home Sale Process

Seller's Lease Back Contract

Many things can happen while in the process of buying or selling a house. This can be especially true if you need to sell a house in order to purchase a home. This is what is referred to as a contingency. The purchase of your new home is contingent on the sale of your existing home.

In order to help with this process, there are two types of leases that are possible. The first is the Seller’s Temporary Residential Lease and the second is the Buyer’s Temporary Residential Lease. These are addendums that can be added to the contract for the purchase of a home.

Seller’s Temporary Residential Lease

The Seller’s Temporary Residential Lease is ideal for the person who is selling their home but their next residence isn’t quite ready. There are pros and cons to this arrangement.

The Pros
This type of lease allows you to stay in your home after closing. At this point, you become a tenant for the new homeowners. You can specify up to 90 days to stay and you get to enjoy peaceful residence while you are there.

The Cons
As a tenant, you are responsible for obtaining renter’s insurance. The new homeowners would have their own insurance, however, the contents are your responsibility. You could be required to provide a security deposit and most likely pay an amount that would cover the mortgage payment for the new owners.

There is also a provision in the addendum that allows the new homeowners to specify a dollar amount, per day, if you over-stay your lease period. For example, you might pay $2000 for rent to stay in the home each month for two months. At the end of two months, you might be required to pay $500 or more per day. This is to discourage the idea of staying in the home longer than agreed.

Buyer’s Temporary Residential Lease

Seller's Lease Back Agreement

The Buyer’s Temporary Residential Lease is ideal for the person purchasing the home who needs to vacate their previous residence prior to closing.

The Pros
This lease allows a person to reside in the home they are planning on purchasing before they actually get to closing. It also offers the buyer to get a feel for the house before closing.

The Cons
It’s possible that if the person planning on purchasing the home may find things they do not like while they are renting before closing. If that happens, it’s possible they may find a way to get out of the contract to purchase. Since it is a lease, if, for whatever reason, they do not pay, then the owner must go through regular channels to evict them from the property. They can’t simply change the locks while the tenants are gone.

With this lease, people who plan on purchasing the home are living in it before closing. That opens the door to the tenant deciding they are unhappy with the house after two weeks and backing out of the contract. This can put the seller back at square one since their home has now been off the market since there is a contract.

For insight into how dangerous this type of lease can be, check out a recent story in the DFW area.

Work Arounds

One simple way to work around a situation like this if you are uncomfortable having someone living in the house either before or after closing is to change the closing date to match the need.

If you need help with the purchase or sale of a home, reach out to me for more information about how I can help you get where you want to be.

Patrick O’Connor – CHSM, GRI, Realtor
Ebby Halliday, REALTORS
Plano, TX

Renter’s Insurance. What’s if for?

Congratulations! You have just completed your journey as a renter and have a lease in hand for a property right where you want to be.

Everything is great but people have been asking if you have renter’s insurance. You’re thinking – why do I need to get insurance? I don’t own the property. If something happens, it’s the owner’s responsibility.

Are You Covered?

Renters Insurance - House Fire

Well? Yes and no.

It’s true that the owner will be covering things that happen to the property but have you thought about what happens to all of your stuff inside if something happens? Without renter’s insurance, you could not only be out on the street but all your stuff could be lost. Here’s an example.

You’ve rented an apartment near downtown. It’s within walking distance of all the great restaurants, shops, and shows. One evening, you go out to a movie and dinner. You get back to your place only to find fire trucks all around and huge billows of smoke coming from your building. Sure enough, a fire started on the ground floor and worked its way up the building.

When everything has settled, it’s a total loss. Everyone in the building is scrambling to find new places to live. You talk to the owner’s who are upset because their building is gone but they are confident that they will be able to rebuild and even better apartment building.

Why Insurance Is Important

Renters Insurance - House Fire

You, on the other hand, are starting with nothing.

You see, the owner’s insurance covers the structure and all the fixtures like lights, appliances, and the water heater. BUT – it doesn’t cover any of your stuff. That’s your responsibility. Since you didn’t go out and get your own policy to protect your stuff in the event things happen, all your possessions went up in smoke.

That would be a harsh reality for anyone. It’s one that can be avoided easily simply by having an insurance policy for your stuff. Even when you own a house, there are actually two parts to the insurance policy. The first part covers the structure. The second part covers the contents.

In order to get the most out of your insurance, it’s also best to have all your possessions documented. This includes photos, serial numbers, makes, and models. Without that information, you are likely to have issues with the amount the insurance company will settle with you. With no insurance, you typically get nothing. If you have some insurance, you will at least get something. With documentation, you will get the maximum from your claim.

Keep your documentation in a different location such as at your work location or in a safety deposit box.

For more information, talk to an insurance agent. If you need an insurance agent, email me and I’d be happy to give you a few options.

Patrick O’Connor – CHMS, GRI, Realtor®

Ebby Halliday, REALTORS®

Plano, TX

3 Things Before Calling A Realtor®

It might seem strange that I would write a blog post telling people not to call a Realtor® when I am a Realtor®. Maybe, but I think it is important to educate my clients. If this helps, then I’m ok with it. If nothing else, it gives you a headstart on things you can look at when getting ready to sell.

What A Realtor® Should Be Telling You To Do

If they’re decent at what they do, a Realtor® is going to tell you these things anyway. Might as well do what they are going to suggest before they ever get there. It saves time. After all, if you’re calling a Realtor®, it’s because you want some help getting your house sold.

Selling your house can be a stressful thing. Will you get the price you want? What happens if it doesn’t sell in the time frame you want it to?

Here are three things you can do with your house before ever signing a contract with a Realtor®.

The First Thing

Before Calling - Get Packing

Get To Packing!

It’s a good idea to remove at least half of what you have in your house before it goes on the market. You may love your collections and sentimental items throughout your house but the people coming to buy it don’t care. Make sure all horizontal surfaces are bare so people can see the “house” instead of your stuff. Buyers need to be able to see themselves living there, picturing their stuff in the kitchen, living room and bedrooms. If your stuff is there, they won’t be able to see it.

The Second Thing

Before Calling - Make Minor Repairs

Fix the small, inexpensive stuff. Whether it is replacing a cracked outlet cover, light bulbs, or cleaning and painting, the idea is to make your house look cared for. Do you need to paint some rooms to get rid of those blaring colors? People generally want to see neutral colors throughout the house. If you aren’t painting, go through and clean around doorknobs, handrails, and any place the kids have been playing.

This goes for the outside too. Make sure the yard is kept. There are usually outlets on the outside too so make sure the covers are in one piece. The garage is an area that can be cleaned and organized. Many garages end up being a disorganized pile. If you have it organized, with proper storage arrangements, it not only looks cared for but shows how well things will fit, even with cars there.

The Third Thing

Before Calling - Appliances Work

Make sure everything is in working order. Appliances, fixtures, switches, outlets, etc. It may require having someone come in to fix some things but it is a small price if you want to get the maximum money for your house.

Keep this in mind. If a buyer comes in to look at your house and sees that there is work to be done, even if it is minor, they might go after the house down the street that has those things fixed already. Not only can it affect the price, but it doesn’t take long for the word to get out that the house hasn’t been cared for.

A Few Examples To Ponder

As a Realtor®, I hold open houses for various properties. Of course, I won’t indicate which houses however, I can describe some conditions that I have seen.

  1. A house that has been painted, however, they did not paint behind the place where the flat screen TV hung on the wall.
  2. The kitchen cabinet doors weren’t hanging straight and the kitchen sink was dripping.
  3. The bedroom that included a rather strange mural on the walls.
  4. Light bulbs burned out in the living room and bathroom.
  5. Not a clear spot on the kitchen counter and the beds were not made.

It’s amazing how the little things can make a big difference.  

Comment below with things you see in your home and what you did to correct them.

Patrick O’Connor – CHMS, GRI, Realtor®

Ebby Halliday, REALTORS®

Plano, TX