Property Taxes: How to Protest

There aren’t many people who love paying taxes, so it’s no surprise that one of the most common questions we get come April or May of every year is about how to protest property taxes. Well, never fear, we are here to help you assess whether or not it will be worth your time and effort to protest your property taxes.

Every year tax bills come out in October, they are due in January, and the new tax appraisal estimates are sent in April or May. That is when you as a homeowner, need to decide if the appraisal seems accurate or if it would be worth protesting your property taxes.

The good news is that the basic process of appealing may not be as complicated as you imagined. However, you definitely need to be organized and have your ducks in a row if you decide to protest.

Property taxes and the tax rate of the city you live in are two different things. Today, we are covering property taxes, which are decided upon by the Dallas County Appraisal District. Every year, the county assesses and determines the value of your home and that is the value that they tax you off of. However, often what the county assesses as the value of your home is not what you would actually be able to sell your home for on the open market.

This is because a tax appraisal and the appraisal you have done when you go to purchase a home are two different types of appraisals. Both are appraisals but serve different purposes. The county has limitations to their appraisals. They can see what you paid for the home and any permits you pulled for renovations however, they can’t physically see inside your home. So, the county is appraising the value of your home based on the limited information they have. This is helpful in the appeal process, which we will jump into here shortly.

The tax appraisal district is going to assess the value of your home annually. In Texas, there are certain limits to how much they can increase the value by. The biggest increases you will most likely see will occur when you first purchase a home and they see what you paid for it and when you’ve done extensive renovations that you’ve pulled permits for.

Because they assess the value of your home every year, you also have the opportunity and right to protest your property taxes every year. In April or May, you’ll receive the tax estimate that is taken from the tax appraisal of your home. That letter will have instructions on how to protest if you choose. Often it’s by signing and returning the letter. If you decide to protest, they will send you another letter detailing the process and date you have to appeal by.

Pro tip: don’t wait until that deadline to get your ducks in a row! There are a few things you can be doing to prepare for your hearing or appeal process before the deadline approaches.

If you think your home is worth less than the tax appraised value, you have to present a case for that. So, you start by compiling evidence. This is the very opposite of what you do when you go to put your house on the market. The evidence you are looking for includes updates that need to be done, things that came up on the inspection report that haven’t been fixed, and other reasons why your house is not up to the value of other homes in the neighborhood.

Getting prepared.

Step one. Call your real estate agent. You real estate agent can pull some comps within the neighborhood for you to hopefully help show that your home is not of the appraised value. They can help you compile some evidence for your case and help give you a better estimate on the value of your home. Make sure to give them plenty of time as this can be a time-consuming process for them.

Step two. Get estimates. As you compile a list of repairs or updates needed on your home, call around to get estimates on the cost for these repairs. These estimates are typically free, but it may be the most time-consuming step for you in the process of building your case.

Step three. Take photos. You more than likely will be presenting your case before a panel. They don’t know what your home looks like, so take clear pictures so they can see the evidence for themselves and understand the repair estimates you’ve received.

Since the pandemic, some tax districts have changed their processes on how they do appeals. Check your local tax district and see what their specific process is. If your tax district still requires an in-person hearing, listen to the full podcast linked above for detailed steps for appealing in person.

All-in-all, come prepared. It can be well worth your time and effort to protest your property taxes, but being prepared is key.  

If you have your own tips and tricks for this process, please share them below! We are always interested to learn from your first-hand experiences. When you get your property taxes come April or May, give us a call if you need help assessing whether or not it would be worth your time to protest. We are always happy to help.

Until next time,

Brianna and Keelie

Disclaimer: We cannot guarantee that if you follow all that we suggest above the value assessed of your home will in fact decrease. 

HOAs: Everything You Need to Know

Home Owners Associations (HOAs) often get a bad reputation. But, they aren’t always bad! In fact, HOAs can provide a lot of benefits to homeowners. It’s important to know how to scout out an HOA as a buyer and also how to interact with your HOA when living in a home with one. HOAs are not all bad. You just need to know about yours! So, here’s everything you need to know about HOAs.

What is an HOA?

HOAs are established when the community is planned by a builder or developer and are typically mandatory as part of the purchase of your home. The builder or developer will have bylaws already in place as they are developing the community, however HOAs will eventually have a governance structure in place that can make changes to the by-laws over time if needed.

HOAs are there to take care of community assets like neighborhood landscaping, the community pool, the guard gate or the dog park if there is one. They are there primarily to protect the aesthetics of the community. Sometimes bylaws will enforce that homes have similar paint colors or windows, have regulations about your landscaping, or even enforce when your trashcans can be put out each week. The amount of rules or details within HOA bylaws will vary from one neighborhood to the next but are always self-governed by the community members.

Mandatory vs Voluntary HOAs

There are two types of HOAs: mandatory and voluntary. Mandatory HOAs are required to be a part of while you own your home. They more than likely have monthly or annual dues that are required as well. If you choose not to pay the HOA dues, the Association has the right to foreclose on your house the same way you can be foreclosed upon if you do not pay your taxes.  You cannot opt out.

Voluntary HOAs are more like a volunteer community group for your neighborhood. They are more concerned with the culture of the neighborhood rather than enforcing bylaws for the aesthetics of the neighborhood. There’s typically a small fee to be a member of the group but again, it’s completely optional to be a part of. So, while you may benefit from not having to pay monthly or annual dues, there is also no one responsible for maintaining the aesthetics of the neighborhood.

How do HOAs affect the house buying process?

The biggest thing to take into consideration when buying a home is that HOA dues are going to affect your house buying budget. Dues are going to affect what you are required to pay out of pocket each month. Every homebuyer is going to pay the principle, interest, taxes and insurance for your home. However, if you have an HOA, then you’ll have to be paying that each month (or annually) as well. Again, it’s not optional.

HOA fees can vary widely from one community to the next based on the number of services that HOA provides. For example, if you are in a condo, the HOA may be more because they take care of a lot more since you only own from the sheetrock-in for your condo. The HOA is then responsible to take care of everything else. For townhouses, the HOA is typically in charge of roof and foundation, which can be really helpful and necessary so that you don’t have to convince your neighborhood that work needs to be done.

When starting the home buying process, you and your agent need to be considering possible HOAs in for the type of home you are looking for and the area you are looking in. Ask your agent what normal HOA dues are in this area for this type of property. This will help you to determine your budget for your home.

Once you are under contract, you will receive the bylaws for your HOA. During this time it’s important that you review each of the bylaws thoroughly to determine if there are any red flags or deal breakers before you become a homeowner with that HOA. For example, some HOAs limit the number of pets you have, the breed, or even the size of your pet. This could be a deal breaker for you, so it’s important to know before you close on this house.

Your lender will also be receiving information on the HOA, but they will be receiving information to determine the financial health of the HOA. They are doing their due diligence and have specific questions for the HOA during the approval process. Some communities will have higher HOA fees because properties or communities are in need of updates and the lender can ensure that they have the reserves needed to provide those for homeowners.

Interacting with Your HOA

Once you are a homeowner with an HOA, get involved! Go to the board meetings or even run for office. You can make a difference in the community by being involved in some way with your HOA. It also allows you to ensure that the community is being run in a way that you want it to be run. A good HOA can also make a difference in your property value.

Know the bylaws. It’s so important to read, know, and understand what is required within your HOA. Are there things that could cause you to get a fine? Know those to avoid an unwanted fines.  

Living in an HOA can be a great thing. But we know that it can also be difficult at times. We want you to be aware of the hurdles you may face when purchasing a home with an HOA as well as the unique benefits your HOA may have to offer. If you have any specific questions, please let us know! We are always available to help and want you to make the best decision when it comes to your future home.

Until next time,

Brianna and Keelie

What Do Rising Interest Rates Mean for Me?

It’s no secret that interest rates are on the rise. In fact, if you have been considering buying or selling a home for any amount of time, you’ve probably been more than aware of the steady increase in interest rates throughout the year. And we know that for many of you, you’ve been left wondering, “What do rising interest rates mean for me?” Well never fear, we are here to help!

Earlier this year, we sat down with Christiaan Scoggin with DFW Texas Mortgage to help us better understand rising interest rates and how this directly affects buyers and sellers. Christiaan is a native Texan and has been in the industry as a lender since 2005. He’s also been a go-to resource for us, so we decided to pick his brain on this pressing topic.

Lenders help people purchase a home who don’t have the cash resources to purchase it outright. In other words, a lender will front the cash needed to buy a home if you, as the buyer, are unable to pay fully in cash. Lenders are creative problem solvers, need to be well-versed in underwriting guidelines (or rules for issuing loans), and able to hold your hand through the entire process of purchasing a home. We often refer to lenders as our most important co-workers.  

As a lender, Christiaan looks at and deals with mortgage rates daily. So, we asked him to help explain how individual mortgage rates are determined and why they are not always the same from one person to the next. Many factors are taken into account when determining a mortgage rate, and some of these factors result in rate changes from one day to the next, like the market conditions. While market conditions will affect interest rates across the board, other factors will cause rates to differ from person to person. Factors such as:

• Price of the home

• Down payment amount

• An individual’s credit score

• Loan terms (such as a 10-year or 30-year mortgage)

• The option to lock in a rate for a specific amount of time

Because each person will differ in these other factors, there will be differences in mortgage rates from one person to the next.

Christiaan also shared with us some changes he has seen over the past year in how people are going about getting mortgages. During the pandemic and a time of incredibly low interest rates, lenders were having to come up with solutions on how to help their buyers be more competitive against cash buyers. It was becoming more and more difficult for buyers to get an offer accepted if they needed a mortgage. One of these solutions was getting the buyers through the full underwriting process before even making an offer on a home. This allowed the buyers to put their best foot forward when it came to making an offeer. As a result, instead of asking for 30-45 days to close, buyers were presenting more offers to close in a matter of 14 days. Lenders have been able to offer full approval up front, rushing appraisal orders, and doing everything they can to make buyers more competitive against cash offers. Lenders like Christiaan have continued to offer these types of services, and it has remained an effective strategy in today’s market.

So why are interest rates rising so quickly, and will they ever slow or even stop?

Christiaan explained that increasing interest rates are a trickle-down effect of rising federal rates. Currently, the fed has a directive to combat inflation and they do that by increasing rates. This in turn affects the economy because if the banks have to charge one another more, then they are going to charge the consumer more as well. Interest rates can also be affected by many other circumstances. World events such as war can impact rates as well as fluctuations in the stock market. None of us have any control over the federal rates, so lenders are encouraging buyers to get the upfront approval and lock in a rate before they start the home-buying process.

While no one can exactly predict the future, there are certainly indications that can give lenders a glimpse of what might come. At this time, it appears that interest rates will continue to rise through at least the remainder of the year. Now, the current interest rates may feel overwhelming. But Christiaan reminded us that while rates are high in comparison to what we have seen in recent years, they are actually not historically high rates. If you’re interested, you can check out Freddie Mac’s website to see their primary market mortgage survey to see the average interest rate from week to week and compare the data over many years.

So then comes the million-dollar question. Should you buy now or wait?

Christiaan agrees that if you are able and looking to move in the near future, you should buy now. With home values appreciating and interest rates increasing, you won’t be able to save as fast as the prices are going up. Additionally, you may not be able to qualify and get approved for the same amount of home if you were to wait another six months as opposed to buying now. Unless we see a recession, mortgage rates are not anticipated to drop significantly either. So, if you buy now, you’ll be paying less for the home and more than likely getting a lower rate than if you wait. And don’t worry. If rates do drop significantly, you always have the option to refinance.

Remember, calling a lender isn’t scary and it’s not a commitment. If you’re sitting around wondering what you can buy or afford, a lender is a perfect place to start. Your lender can give you the information you need to make the best-educated decision on what to buy. It’s a no-obligation call and will be really helpful to you to make the best decision for the home-buying process. If you’re looking for a lender, give Christiaan a call. You can find more information on his website.

If you’re thinking about buying or selling your home, we’d love to talk with you about this and answer any questions you might have. We want to help you make the best decision when it comes to this financial investment.

Until next time,

Brianna and Keelie

How the Rapidly Changing Real Estate Market Affects You: An Interview with Mark Wolfe

With what seems like an ever-changing (and drastically changing) market, buyers and sellers are left wondering how this change will affect them as they look to buy or sell their homes in the near future. Earlier this year we had the chance to interview our broker, Mark Wolfe, and hear his expert opinion on how the rapidly changing real estate market affects you. We hope our interview with Mark will help guide you to better understand what's happening in the market and what this means for you.

Mark is a native Dallasite and has been a player in the real estate industry for the last 48 years. Mark and his wife founded RE/MAX DFW Associates in 1982 and today, it is one of the largest brokerages in the country.

Q: Can you explain the role of a broker?

Mark: A broker is not only the owner of the real estate company but is also someone who mentors and guides the agents that work for the brokerage. In my brokerage, I currently have 320 agents and I am liable for these agents as well.

Q: How has the market changed this year?

Mark: Over the past year, we've seen unprecedented inflation and price increases. Some markets have leveled out while others have remained "hot" markets. We are in a unique time where we are seeing inflation along with supply chain issues and other world events that are affecting our economy. All of these together have had a tremendous effect on the housing market. We experienced a market "boom" where any home could sell at any price but that wasn't sustainable forever. Interest rates have increased to help combat inflation but we are still playing catch up.

Q: Is the 2022 market doing what you expected?

Mark: In many ways, yes. I expected to see massive inflation and interest rates rise and knew that this would affect the housing market. However, the thing that has surprised me is how the market changed overnight. I don't ever think I've seen a market change that quickly. While the market typically gradually changes, at the beginning of May this year, we saw it change drastically within days.

Q: What are buyers and sellers contending with today that prior to May they weren't?

Mark: I was doing some research in "Showing Time" where our agents book their showings and in May of this year we were averaging half of the showing appointments that we had done in May of 2021. Additionally, so many homes went on the market. We saw a 33% increase in listings in the month of May alone.

Q: Is this change leading to prices decreasing and home values declining? Do current homeowners need to be concerned about their home value declining?

Mark: It appears that in this new market the home values are maintaining. What is changing is the need to go significantly over the asking price to get a home. It's still a great market, but it's a different market.

Q: So, if I'm a buyer, what do I need to know about this change in the market?

Mark: Buy now! Interest rates are only going to continue to rise. Start looking for a home now and find a lender that will allow you to lock in the interest rate. Take the time to find the home you want, but get the rate locked in.

Q: If I'm a seller, what do I need to know about this change in the market?

Mark: There will be more homes on the market than we've seen in the past. So, as a seller, you need to have things fixed up and the home staged. Make sure your home is picture perfect and you will still get top dollar when you go to sell.

Q: Would you say that now more than a year ago it's so important to list your house appropriately and not be too aggressive with the list price?

Mark: Definitely. The market is changing. It is still going to be competitive because the need for homes in the DFW area will keep a demand, however, it is more important now to make sure your home is priced right.

You can listen to the complete interview with Mark in the podcast linked above. For more real estate news, economic predictions, and local housing market updates, subscribe to our bi-monthly email list.

If you're thinking about buying or selling your home, give us a call. We'd love to help you think through how to make the most of this ever-changing market.

Until next time,

Brianna and Keelie

2nd Time Homebuyers – How to Buy and Sell a Home Simultaneously

As a first-time home buyer, the process of purchasing a home may seem simple. You've got one goal in mind, and we are all focused on finding you the perfect first home. But what about when you are ready for a change, ready to move, and you need to sell your house and buy another at the same time? Suddenly things aren't so simple, and you've found yourself asking one of the most common questions, "Where do I start?" Never fear. We are here to help!

When it comes to buying and selling a house simultaneously, many families are ready for a change but don't know where to begin. Do you buy first? Or do you sell first? The answer to that question is dependent upon each person or family's unique situation and desires. So, we’ll look at three possible scenarios with the advantages and risks for each.

But before we consider options, it's important that you first talk to your lender. Schedule a quick 30-minute phone call to assess your financial situation and talk through the questions below:

• How much do you qualify for?

• How much of a mortgage can you realistically afford?

• Do you need to sell your current house before your buy a new home? Or can you afford to own both properties at the same time?

Once you've talked to your lender, you'll be more prepared to consider the following options for purchasing and selling simultaneously.

Option #1: The "Perfect Timing" option.

In this option, the timing works out perfectly for selling your current house and purchasing your new one. You find your dream home, go under contract, then turn around and sell your current home a day or two before closing on the new house.

Pros: There are obvious advantages to this option in that you don't own two properties at once, you can use the equity gained in your first house to put into your new home, and you only have to move once. This is ideal for families who do not have separate savings to put towards a down payment on another house. Using the equity in your first home will significantly lower the mortgage on the new house.

Risks: The greatest risk in the "Perfect Timing" option comes with the possibility of something falling through or delaying the sale of your current house. This is where you will want to be very aware of the contingencies within the contract so that you know if you are able to back out if you need to. These are questions you can talk to your realtor or lender about. Later, we also provide some options to consider if the timing isn't so perfect after all.

Option #2: The "Dream Scenario" option.

In this option, you find your perfect dream home, purchase it, and then list your house to sell it. This option is especially ideal in a seller's market. When inventory is low and it may take you some time to find exactly what you are looking for, this option gives you the most margin to do so.

Pros: The "Dream Scenario" gives you as a buyer a ton of flexibility in terms of buying a house. If you are the type of buyer with a very specific property in mind (which may take a while to find), you have as much time as you need to find what you are looking for. This option also reduces any risk on the buying side, meaning if the closing is delayed or something falls through, you don't run the risk of being without a home because you haven't sold your house yet.

This scenario is also ideal for homeowners with young children. Listing and selling a home while still living in it when you have small children can be very stressful. If you've already purchased your new home, you can fully move out before putting your home on the market.

Lastly, this option is ideal if you need to do renovations on the new property. This way, you still have a place to live so that you don't have to live through renovations which can be very invasive.

Risks: The key to this option is affordability. Can you afford to own both properties simultaneously? This is crucial to determine beforehand because, in this option, you run the risk of owning both properties for an indefinite amount of time. Before moving forward with this option, you need to have a good agent with a good strategy and make sure the house you are listing is priced appropriately. Then talk to your agent about realistic expectations on how long it may take to sell your home.

Option #3: The "Most Common" option.

The most common scenario we see with second-time home buyers is when they can't afford to own two properties at once and must sell their current house before buying another home. Within this option, there are two ways we see this play out: 1) The seller takes their time to find the right home, and once they are under contract, they work to try to get their house sold as quickly as possible. 2) The seller lists their home and once they are under contract, they try to buy a property as quickly as they can.

The two biggest questions you need to answer if choosing this option are:

1. Is it more painful to buy your new house under pressure? Or;

2. Is it more painful to have to move twice?

Pros: The greatest advantage to this option is that you won't own two properties and be paying two mortgages at once. With this option, you are also able to use the equity you've built up in your current home to invest in your new property.

Risks: Depending on the current market, if you are very particular about the home you are looking for, you need to make sure you know where you're going before you sell unless you are ok with moving twice. If you don't have realistic expectations for homes in the area you are looking for within the budget you have, then you may be left without a home. It's always our recommendation to have a plan b in place just in case. Do you have a place to go if you are not able to quickly find a home to move into? Keep in mind that rentals are still very competitive in the DFW area, so you want to make sure you have a backup plan.

Additionally, you and your realtor need to be very in tune with your contract – what the outs are and what deadlines you have. That way, if you need to get off the train, you can.

As with any situation in life, things may not always go according to plan. If the timing doesn't quite work out as you and your realtor had planned, here are a few additional tools that could possibly help you out:

• Bridge Loans: These are loans in which you pay temporarily to the loan in order to loan the equity out of your current house to put into the next house. These loans are interest-only (you only pay the interest) and they are usually short-term loans.

• Recasting Your Loan: This is another way to put the equity from your current home into the new home shortly after closing. You would take out a larger loan when first closing on the home, but once you've sold your home, you could recast the loan, invest the equity from your previous house, and decrease the mortgage in a significant way.

• Knock Home Swap: Knock Home Swap allows you to use the equity in your current house to purchase your new home before selling it.

One final consideration for all second-time home buyers. How much work does your current house need in order to sell it? Now, the amount of work it needs for you to live in it may be different than what it actually takes to sell it. When we work with sellers, we will give them our list of what we think would be worth fixing before listing the house. It's important to have that conversation early and to understand how long it would take, how much would it cost, and how invasive any updates would be.

There's no such thing as too early to start having these conversations if you're a current homeowner thinking about moving. If you're considering making a change, we'd love to help you sell your current home and find your next dream home.

Until next time,

Brianna and Keelie

Should We Buy Now or Wait?

When working with potential buyers, one of the most common questions we get asked is, “Should we buy now or wait?” And with a market like we’ve had over the past few years, it can be difficult as a buyer to answer this question. Never fear. We are here to help!

While every buyer’s situation is unique, our goal for you remains the same: to help you make a wise financial investment for you to enjoy for years to come. So, let’s talk through two primary factors to consider when answering the question of buying now or waiting.

1. What does the market look like now?

2. How is the market trending?

What does the market look like now?

Over the past couple of years, you have probably seen (or maybe experienced for yourself) that there has been an extreme seller’s market. Homes that hit the market have multiple offers within the first day and the house sells for far above asking price. Lower interest rates along with rapid growth in the DFW area has led to the demand and homes appreciating greatly in value.  

This year, we’ve seen interest rates rise as a means to combat inflation, which has also in turn slightly cooled off the previously “hot” seller’s market. While there is still not enough inventory (homes for sale) to create a balanced market here in the DFW, we are seeing that buyers have a better selection and may even be able to purchase a home at asking or without having to go as much over the asking price as we saw was necessary even earlier this year.

Why do interest rates affect buying power?

Interest rates directly affect your buying power because interest rates are one of the four things that make up your monthly mortgage payment when you purchase a home. The four components of a mortgage payment are:

1. Principle (the amount you owe on your mortgage)

2. Interest (the interest you are being charged for the loan)

3. Taxes

4. Home Insurance

So, think about your mortgage payment as a pie and each of the four components listed above is a piece of that pie. The larger the interest rate is, the less of a principle payment you can afford. On the other hand, if the interest rate is lower, you can afford a higher principle payment and therefore more house. Therefore, the interest rate directly affects the amount of house you can afford.

How is the market trending?

While we don’t have a crystal ball to perfectly predict the future, most agree that interest rates will continue to rise throughout the remainder of the year. Increasing interest rates will mean two things: (1) It will only get more expensive to purchase a home and (2) there will be less buyer demand and therefore less of a seller’s market.

The DFW area is also predicted to be the metro that sees the largest population growth for the remainder of the year. This is good for those that are on the property ladder or are looking to invest in the area, because as people continue to move to the area, there continues to be a demand for property.

Some areas across the United States that are not experiencing the growth that the DFW is seeing have become over inflated and may be seeing a price decline in the coming months. That, however, is not anticipated here in the DFW because of the population and business growth that we will continue to see. Therefore, homes will most likely continue to appreciate due to the steady demand of homes, but at a slower rate than we have seen over the past couple of years – which ultimately was unsustainable for the market.

So, now to answer the question: Should we buy now or wait?

The answer? Buy now.  

For those taking out a loan, the cost of waiting is likely going to outweigh whatever you could save while you wait. When considering the cost of waiting, you have to ask yourself, are interest rates and home cost appreciations working against your savings? In other words, are interest rates holding and home costs appreciating at a rate that you can’t outpace with what you are making and saving while you wait? Your lender can help you with this forecasting as you consider.

For cash buyers, now is a great time to invest in property to hedge against the current inflation rates. Cash buyers will also still continue to have a competitive advantage in this market.

Ready to buy now? Give us a call and we would love to help you. Still unsure? Remember that we are always here to have a conversation about your unique situation and help you make the best decision when it comes to this financial investment.

Until next time,

Brianna and Keelie

A Financial Advisor’s Guide to Real Estate Investment in an Uncertain Economy

We are living through uncertain times that seem to be getting even more uncertain with every passing month. In an environment like that it can be difficult to invest and think about your financial future. David Means from the DeNovo Advisory Group joined us on the Where We Live Podcast to discuss whether or not real estate is still a wise investment during uncertain times and how to approach investment and planning for your financial future in 2022. 

How to Invest In Uncertain Times 

There are a number of approaches you can take to investing but David favors the “Warren Buffet” approach to help his clients build a solid foundation for their financial futures. This approach focuses on long-term growth rather than worrying about the short-term rollercoaster. Real estate offers a major benefit here in comparison to other forms of investment because you can’t see the short-term price fluctuations. It is much easier to pursue long-term growth because you’re not watching the market movements like a hawk. 

Long-term growth is about building wealth for 20+ years ahead. In the future you can use these assets as leverage or liquidate them to fund future life stages like retirement. 

It Is a Mistake to Sell Assets In Uncertain Times 

Where inexperienced investors often go wrong is they sell their investments when prices drop. The gut reaction to get out when times are tough looks sound on the surface. They are worried prices will continue to fall, so they’d rather sell now rather than eat a bigger loss. Often, they would also prefer to have a little more liquidity to weather uncertain times too. 

The reason why you need to fight this gut instinct is because it goes against the most basic of financial principles, “buy low and sell high.” It is daunting to buy assets during economic uncertainty. You are tying up your money and watching prices continue to drop. What we continue to see though is that regardless of short-term economic events, the housing market and stock market continue to grow long-term. So, you should aim to buy assets in economic downturn and sell them in times of stability. 

What Makes Real Estate a Recession-Proof Investment?

Real estate is such a monster asset class and responsible for most of the wealth that everyday people will generate in their lifetime. We are seeing future generations using their real estate as a retirement nest egg. That is something that David encourages all his clients to consider when purchasing real estate. It’s not just about buying your dream home; it’s about buying something that will provide a stable financial future. 

A unique benefit that real estate offers is that you can leverage other money to invest in an asset. Instead of putting down the entire value of the property, you can use the bank’s money to leverage returns. This is completely different to say the stock market, where you need to put the entire value of the investment into the market to play. By making a smart investment, this leverage can provide a huge tailwind for investors. Working with the right professionals is key in order to leverage mortgages effectively. 

What Is the Next Step To Financial Freedom After an Emergency Fund? 

The first step to financial freedom once you have discretionary income is building an emergency fund. That is a universally accepted standard amongst all financial advisors. Where advice usually differs is what to do next. 

David advises his clients to play defense where they play offense. That means insuring your assets and insuring against future liabilities. If you have income from working, then that means life insurance and disability insurance to protect your earning ability. If you have real estate, that means insuring your real estate assets. This step builds a stable financial foundation so you can keep moving forward instead of being knocked backwards by circumstances outside of your control. It also helps protect your family in the event that you’re not around to. You know that your kids and partner are taken care of not only while they’re grieving, but also in the long-term. 

Once that has been taken care of, then it is time to talk about taxes. Financial advisors like David and the team at DeNovo Advisory Group can help you claim tax deductions short-term and look at long-term tax sheltering, so assets are only taxed once. Those are the steps that a financial advisor would suggest to ensure you are able to sustain the wealth you build. 

If you’re ready to take the next step towards financial freedom and want to contact David to talk about your options visit the DeNovo Advisory Group website to talk about your finances.  

2022 Real Estate Market Predictions

Happy New Year and welcome to 2022! We're here looking forward to all this year holds and are praying for you as you set your sights upon this brand new year. We know the last couple of years have been a wild ride and it's no surprise that we continue to get questions about what 2022 has in store for the real estate market. This will be a compilation of our thoughts, as well as those from seasoned economists, brokers and real estate experts. We're going to talk about what last year ended up looking like, where we are at this exact moment in time, and then where we think we're headed. This is jam packed with information, so buckle up!

2021 was a record year for real estate and we are certain that you've heard all of the news about the absolute frenzy that we experienced and lived day in and day out!

U.S. 2021 Real Estate Market Stats

• In 2020 5.3 million homes were sold and 2021 6 million were sold, which is a 7% increase in the volume of homes sold. 

• First time home buyers were 34% of all home buyers. That was up from 31% in 2020 where we saw a huge surge of millennials enter the market. 

• The millennial generation continues to enter the housing market with actually quite a bit of savings and cash heavy buyers ready to buy. 

• 29% of 2021 home sales were purchased above asking price. This was certainly the year of the bidding war. 

• The market was super competitive, 80% to 90% of homes went under contract in under 30 days. 

• Buyers typically searched for 8 weeks and looked at a median of 8 homes. 

• 15% buyers purchase new construction homes. New builds haven't really caught up since the Great Recession.

• 11% of homes purchased were multigenerational.

Real Estate Market Trends

• People are continuing to want more home and space so they are heading to the suburbs and exurbs. We saw a lot of this in 2021 and expect it to increase in popularity. 

• People are looking for multigenerational homes where there is a separate living space, bedroom, and kitchenette of some kind within the home. Or they are looking for homes that have a back house or room to build a back house.

• This winter is looking like it's going to be the second best for the real estate market in 15 years. The intensity of the multiple offers has lessened and days on market are a little bit longer this season.

• There are a ton of cash buyers. This is due to a lot of first-time homebuyers entering the market, but a ton of relocation buyers coming from places where they sold property and have a ton of cash.

Things to Know Going Into the 2022 Real Estate Market

Inflation

Inflation is definitely here and growing, and you may have heard that term in the news as people talk about it. What does that mean for actual home buying? It means that for lenders, they're making 15 more, typically 30 year mortgages where you're going to pay the exact same amount every month for the next 30 years. They're making a loan today that you are going to pay the exact same amount in December of 2052, you know? They have to raise rates currently because of that inflation, so it is affecting people's ability to qualify. If the lender doesn't feel like they're going to make money over that time period they need to make sure that they raise the rates now, which affects your purchasing power. 

On the flip side, as the buyer, there is no better way to hedge against inflation than to be purchasing real property. You lock in that mortgage rate and it will not change ever. Don't wait and buy in five years. Do it now and then you will own that property and you're hedging against the inflation that the whole economy is experiencing.

High-end homes are still flying off the market, because people are using them as that hedge. Instead of investing cash in the market, they would rather incest in real property, maybe even a second or third home or land just to make sure that it is secure; because it’s not going to be volatile like the market.

The Fed and Mortgage Rates

This can sound so intimidating, so we are going to do our best to make this as approachable as possible! If you're not familiar, the Fed is definitely a buzzword. It's the Federal Reserve Bank in the United States. People talk about them raising rates and what you need to know is that this governing body does not directly change mortgage rates. The reason things change as a result of the Fed's activities is because they're so closely followed. It's an indicator of what our economy is going to look like and what intervention they're going to have in our economy in the short term.

They really flooded our system with cash here in the last few years, especially in response to the pandemic, and the Fed chairman was actually up for renomination, so he was reconfirmed. Powell has said he intends to fast track the tapering, so basically to start selling off a lot of what they bought. This was initially set to happen this quarter, so Q1 of 2022 and actually started happening Q4 of 2021. I think they're seeing inflation rapidly gain momentum in a way that they didn't anticipate and it's time to take action. This is basically how I would describe the Fed's mandates and their goals as a body are to fight inflation.

If you are really sensitive when it comes to mortgage rates, it is time to buy; whether that’s this winter, spring, or early summer. We don't know exactly when the Fed will raise rates, but almost everybody that's watching these agrees that it's going to happen by November. Ok, so probably at earliest it's going to happen is September or November at the latest. 

Our 2022 Market Predictions

1. The market will remain hot with less home sales. Always when you have a higher interest rate, it's going to take down the amount of people that are going to buy. That's just how it is because of that purchasing power that we talked about earlier, the portion of your mortgage that is now interest instead of the actual price of the property. We would predict there's going to be about a 2% reduction in the amount of home sales. 

2. People will continue relocation in the U.S.. Relocation is happening and we're predicted to still be one of the hottest in the U.S., but I think these are good trends to observe overall. And then we can help you on a micro level with where you're exactly moving to.

3. Home prices will increase in 2022. We would say that we should expect maybe a 7% to 10% increase. 

4. More people are moving to the suburbs and exurbs. It's just really driven by people now having the ability and opportunity to work remotely, and they want to trade up for some extra space and maybe some higher rated schools.

5. Inventory will go from red hot to hot. We'll definitely see more inventory come to market for those people that had a forbearance program and other assistive programs winding down.

6. New construction is steadily moving higher. There will be more homes in 2022 than there was a year ago. 

7. We expect winter right now and summer to be the busiest market. Get out there and find yourself a house — this is the time to do it!

We Will Help You Navigate the 2022 Real Estate Market!

We are really curious and interested to see and experience something different than we have in the past year! Hopefully all of this information is more so enlightening and interesting than intimidating. It can feel like a lot, don’t fret though, we are here to help you navigate it all and get you into your dream home this year!

Until next time,

Brianna & Keelie

Save Money on Property Taxes with a Homestead Exemption

We are kicking off the New Year with a bang, every time a new year comes around, it's time to discuss homestead exemptions here in Texas. Saving money is one of our favorite topics! The homestead exemption can save you a lot of money on property taxes on your primary residence. If you haven't heard of this term before or aren't clear on how it applies to you, listen up! This will be especially valuable if you bought a home in 2021 or planned to buy in 2022, as there are several updates that were made to Texas homestead laws this year. Let’s get started!

What is a Homestead Exemption

Here in Texas, it's a property tax break on your designated primary residence, the house that you live in and does not apply to secondary homes or if it’s owned by a corporation. Each resident could qualify for an exemption on their home's value for school taxes. This amount depends on your city, county, and local government tax law; meaning one house in Dallas the homestead exemption could be different from a house in Plano.

When to File for Your Homestead Exemption

As soon as you buy a house, you're immediately eligible for the exemption. Your homestead exemption is going to apply to the part of the year that you owned your home. You need to get it on file with the county. There are some other qualifying rules to your homestead and the details are going to be on your county's website, but truly it is generally very simple. 

How the Homestead Exemption is Valued

Essentially, the exemption lowers your home valuation in the eyes of your taxing district, so the amount that you're being taxed on is lower. Therefore, your taxes will be lower. So, for example, if a home is valued at $100,000 and you qualify for a $25,000 exemption, you would only be charged your school taxes on an amount of $75,000.

The value of your home to the tax district has very little to do with what your home would sell for on the open market. We want the tax appraisal to be low and your appraisal for selling high. This is going to be key as we talk about homestead exemptions. We're going to talk a little bit later this year about protesting property taxes. This is going to be the same idea. The tax district has their own appraisers. They can't see the insides of your home. All they know are the permits that are being pulled and what your house has most recently sold for. Typically, your tax appraisal district has a value that is much lower than what you would sell your home for.

FAQ Homestead Exemptions

Does a low tax appraisal impact the value of my home?

No! This is entirely separate from your home's appraised value. 

What does it cost to file?

Nothing! Don’t be fooled by spam mail after you buy your home  telling you it’s $50 to file. 

What if I forget to file the first year?

Historically if you forget to file the first year, there is a two year grace period, but that is subject to change.

Do I need to file every year? 

Nope! When you move, go online to change your address and your driver's license, then go file your homestead exemption. It’s one and done as long as you're in the same house. 

Are there any additional exemptions?

Yes! There are additional exemptions if you're older than 65, if you have a disability or are a veteran.

We Won’t Let You Forget to File!

We're here to help you, and we're going to hold your hand and push you to get this done!. If you're not in Dallas, make sure you look into your local laws with your taxing authority and set yourself some reminders on what you need to do to be able to get this filed. Huge congratulations if you bought a home last year or if you're looking forward to buying one this year! Our goal is just always to equip you, so filing a homestead exemption is easy and it is worth your time to save major money on your property taxes. If you're in DFW don't forget to go to WhereWeLivePodcast.com to download our free one pager on how to file in our local counties.

We are here to help, no matter what stage of homeownership you are in!

Until Next Time,

Brianna & Keelie

Dallas Does December

We love sharing all things residential real estate, the process of buying and selling a home, design trends, entrepreneurship, faith and much more — but today we want to talk about one of our favorite things — the holidays in Dallas! We are nearing the end of 2021 and it's time to have some fun!

It's fun to think a lot has changed in the last year, I think for the better, hopefully for many of you, and we're back to normal in many ways here in North Texas; celebrating Christmas and just the festive season in general. You should know that we are both very enthusiastic about celebrating Christmas and want to share the best activities in Dallas to enjoy during the holiday season!

Best Festive December Activities in Dallas

Dallas Arboretum

The Dallas Arboretum does something called The 12 Days of Christmas and it rivals some European Christmas villages with its festive light attractions! There are gorgeous gazebos, a Christmas village market, incredible lights, and a 50ft musical Christmas tree with 42,000 lights!

Their Little Christmas Village is great if you have small children, because they can go around from house to house doing a scavenger hunt and enjoy free Christmas cookies. This attraction goes until the 31st of December, but grab your tickets in advance as it’s a Dallas favorite and can sell out!

North Park

There is a ton you can do at North Park! They have a whole little schedule of puppet shows and the different things that go on. The North Park train exhibit, though, is a long, beloved tradition. It's thirteen hundred feet of train track in this little exhibit. These trains go on a journey across America so you can see the different scenes. It's incredibly fun for children to go take a look at. You can buy tickets online and they are open until January 2nd. The park in general is gorgeous so it’s fun just to walk around and take in the lights! 

Visit Santa

We all know Santa is a busy guy and it’s understandable that in a lot of places his visits are virtual this year; which has its benefits! Number one, it's more efficient, but number two, if your child is in that stage where they want to tell Santa what they want, but they're afraid to sit on his lap then this is less intimidating and more fun for them! If you choose to visit with the North Park Santa know the proceeds benefit Children's Medical Center/

Christmas Lights

The Christmas lights in Dallas are over the top absolute, next level — people go all out!  We cannot get enough drives through Highland Park, Beverly Drive, Lakeside Drive, and Armstrong Avenue during this time of year and it feels like every year there is more to see. You could drive a different path every single day and find new beautiful homes with showstopping lights. It’s a holiday classic and there are no shortage of Christmas light displays to enjoy throughout the season.

Neiman’s Zodiac Room

An office tradition of ours that we do every year and love is the Zodiac Room at Neiman Marcus. The Zodiac Room is at the very top of the building downtown and it's absolutely beautiful. They have an unbelievable buffet of food every single year, 3 course meals, and delicious popovers. They do afternoon tea as well Also the first floor, though this year is like decked out in glitter pink Christmas Santa Wonderland! You have to go!

Watermark Community Church

The two of us are a part of this church and they do some really wonderful things around Christmas that our families enjoy. Every year they have a Shane and Shane and Phil Wickham concert, but it sells out so quickly that we suggest keeping an eye out for next year's concert! They also have real live reindeer and tubing down a great big slide — the kids love it!  They have five free services for Christmas Eve, three during the day, one of which is a Spanish only service, and then one for those of you that like to do the candlelight at 11 p.m. It’s always such a special time.

Happy Holidays from Haven Realty Group

We enjoy this season so much and encourage you to enjoy it as well! None of this is meant as pressure for you to add to your Christmas To-Do list, but those are just some of our favorite things to enjoy this time of year.  They have four services, so three during the day and then one for those of you that like to do the candlelight at 11 p.m. and welcome Christmas at midnight. We hope all of you get to enjoy the season with your loved ones!

Until next time,

Brianna & Keelie

Planning to Move in 2022?

Today we're speaking directly to those of you that are thinking about moving in 2022! Is it time to move to a new school district or finally time to get a real home office set up? Maybe you're ready to have a yard or it's time to downsize completely. Today we’ll share everything when it comes to selling your home, preparation, planning, and managing your honey-do list. We know it's the busy holiday season, but even a conversation or two with your spouse or significant other can go a long way in making sure you're on the same page and not racing to get to your next home.

4 Steps to Prepare You for Moving in 2022

Let us preface this with, start sooner rather than later. Especially if this is your first time going through this process we don't want you to feel under prepared or rushed when it comes to short term things to overcome, not to mention there are often longer term items that we want to make sure you have in a row. 

Step 1: Talk to Your Real Estate Agent

We will help you out with determining what items need to be taken care of in your house that will give you the biggest bang for your buck, the general timeline for when these things can be done, your home’s value, and when you can go on the market. Our goal is awalsy to try to decrease your stress level when doing anything related to real estate and I've found that it's better not to all of a sudden have to do a bunch of home improvement projects and move right at the same time; so earlier rather than later is good and you can start checking off the projects. 

Step 2: Determine Your Financial Readiness

The next conversation should be with your lender. We say that our lenders are our most important coworkers in the real estate process. This is going to be a very individual and circumstantial conversation to have, so we're not going to be able to tell you exactly what you qualify for and what order you need to sell your house. This is the number one thing that I think pays off in the long run if you need to get something right with your credit, paying off loans, or saving money. The worst thing that we see happen is people thought they had a certain budget, they start falling in love on Zillow, and then they find out that that's not even at all the price range that they can move up into. Check it up front and have a game plan.

Step 3: Prep Your Home to Sell

Don't spend your money in a way that is not going to be beneficial to you, especially if you're wanting to sell soon. We're going to direct you to quite a few episodes that we've gone in deep dives, resources for sellers in specifics below. In general though we want to make sure that we get the best price for your house and things such as curb appeal, little fixes, and updates can go a long way. So say it gets to January, you're really gung ho about doing some projects, we want to make sure your time and money is going to the right place. 

Step 4: Keep Refining the Vision of Your Dream House

So your price point is going to be affirmed by your lender, now it’s time to really start seeing what’s out there, monitoring the market, and understanding what you want your life to look like. Open houses are awesome for this and you can get a real feel versus just looking at beautiful pictures online. Look on a map, walk through the neighborhood, see which views you like, what direction you like the sun in your home, and get really dialed in on your location preference. We want you to know what your dream house is so that we can help you find it. You'd be surprised how detailed the dream is sometimes. 

What to Consider When Preparing to Move

We want to give you some food for thought. There are so many little pieces that go into moving and the move of those little things you consider and having conversations about on the front end the easier the process will be! Of course, during out 

• Can you stay in your current house until you find your next house?

• Do we need to get you out of your current house?

• How long will larger home improvements take to prepare my house to sell?

• Is there paperwork that I need that will take a certain amount of time?

• Did you get a new job? Will it affect your budget, location, or home needs?

• Do you want your kids to be in a certain school district or stay at a certain school until the end of the year?

• Do you need to apply or enroll to the school in the area you’re looking to buy?

Resources for Preparing to Buy/Sell

We know we’ve thrown a lot of information at you today and you have a lot to think about; don’t get overwhelmed! We want you to feel confident going into the process and have more in depth episodes on the topics we’ve touched on today that will help you with what to look for in a realtor, how to choose a lender, how-to’s during the home-buying process, ways to prepare your home, and tips for house hunting. We’ve got you covered, check out these past episodes.

• Episode 4: Top 5 Home Improvement Mistakes

• Episode 22: How to Sell Your Home with Multiple Offers

• Episode 32: How to Buy and Sell a Home Simultaneously

• Episode 39: What to look for in a Realtor when Buying a Home

• Episode 40: How to Choose a Lender

• Episode 42: First Impressions From The Curb

• Episode 48: Use Your Time Wisely: Effective House Hunting 

We Want to Help You Find Your 2022 Dream House

Hopefully today we’ve answered some of your questions and after exploring past episodes we can answer other ones as well; if not, reach out to us! We're happy to walk you through it. We can answer even further questions like should I sell my home in the spring? When should I sell if I need to be in a new school by next year? We want to have a conversation with you specific to what your situation looks like, so please reach out. If you're thinking of selling your home in 2020 we are more than happy to help guide you through the next steps. 

Let us be your guide — we'd love to join you in dreaming about where you’ll be at this time next year! 

Until next time,

Brianna & Keelie

What is Title Insurance? An Interview with Catherine Daves of Lawyers Title

If you've ever purchased a home, a title insurance policy is part of the negotiation, but it likely flew under the radar. Today, we will address this key part of the home buying process and shed some light on what the policy really does for you as a new homeowner though hearing from Catherine Daves of Lawyers Title. Catherine brings over a decade of sales and marketing experience to Lawyers Title and forges strong relationships with their clients. Catherine and her team are motivated by serving others, both homebuyers and agents—we benefit daily from their expertise, creativity and enthusiasm. We work with Catherine and her team frequently. Every single homebuyer here in Texas purchases a title policy, so we go through the title policy process on every home that we help a buyer with. Needless to say, we are in and out of their office a lot!  We’re so grateful for the work they do and we are excited to share her valuable knowledge today.

What Title Companies Do

Even if you bought a home, title insurance can feel like it's the last piece of the puzzle so it kind of blurs by. Truly though, it's a huge key component. In layman's terms we search your title, we check for defects in your title by examining title records: this includes deeds, mortgages, wills, divorce decrees, tax records, liens, etc. The title search determines who owns the property, what outstanding debts are against it, and what condition the title is in. We want to figure out who really owns the property and if there are any debts tied to that property that we want to resolve. This could even be someone as small as an unpaid water bill or as big as the seller's name not being on the title. 

When Title Insurance Starts

The title insurance search basically starts as soon as we get your signed contract. The title company is the third party and they're kind of the neutral little Switzerland between the seller and the buyer—so they hold money in escrow and things like that. This is when the due diligence process starts in the background and they're trying to make sure that they get everything before you close. For example you don’t want to move into your dream home only for the previous seller’s cousin to come knocking at the door, saying they actually own the house! 

In the home buying process you’ll receive your Schedule A and Schedule C. Schedule A is called title vesting, and it's to make sure that these people are on title and also that there's a correct legal description. Then Schedule C, called curative, is where we remove the liens and all of those things that we were mentioning earlier. All of these have to be clear to close. So sometimes we title companies have to handle sticky situations, whether it be the IRS, the city, people denying claims, or refusing to pay certain things—all of which can delay closing. 

Title Insurance and Why It’s Important 

Title insurance protects you if someone were to challenge your property title; the title company ensures the policy. If someone claims an interest in your property, the title company will actually pay for any actual loss, and it's up to the amount of coverage. Once the title company goes through everything, figures out who owns what, they insure that policy and back up that policy one hundred percent. And so there are some facts that are not included in that, and it can be forgery or liens by contractors. For the most part they ensure that property so no one can come to your door and say they own a piece of the property. This is the piece that most people don't don't know or  take for granted. Homebuyers are so focused on the inspection and the front end part—but there's a backend unseen portion going on as well. Catherine says that if you don't know anything is happening, that's probably a good sign, because that means that nothing bad is going on. 

Which Title Company Should You Choose

You should definitely use reputable professional title companies, seasoned ones that have been in the game for a long time. As far as fees go, it's all pretty much the same across the board. What you really need to look out for is if that company is outsourcing research to a third party. That can become a sticky situation, because say some was missed, the title company may not cover your policy due to it not being ‘their mistake’. Keep in mind they're also making sure that your escrow money has been recorded when it's delivered, that they're getting that policy, and getting the cures as fast as is humanly possible. They're the ones that actually send the wires to fund everything on closing day, so hiring someone with good communication skills is very important. This is probably unseen on the home buyer side, how much we as agents are actually communicating with the title company, with the escrow officers, and making sure that we're on track to where we need to be. All of that is to say that communication and competence is unbelievably important.

Things That Can Go Wrong With Your Title

Catherine shared a story with us where recently she was working on a title where the man selling the house forgot to tell anybody that had separated from his wife 20 years ago, but not been officially divorced. With it being so long ago it hadn’t even crossed his mind!  We had to inform him that his wife would have to sign the title since they were still legally married. Unfortunately he had no idea where she was or if she was even in the states still. It was an entire ordeal for her team to track this woman down. Another instance that she runs into a lot is the death of a family member where she has to find a bunch of different people to sign that didn’t even though that they had rights and an investment in that property. She expressed that her team and herself are definitely in the weeds with people's relational and family dynamics; meaning that they have to wear a counselor hat sometimes. Again, this is where a good title company and agent come in, because there are a lot of moving pieces where we have to stay calm and collected.

Other common occurrences are things like roof claims. People that took the money provided by their insurance for a new roof, but then pocketed the money instead of fixing the roof. There are so many possibilities! Catherine said Lawyers Title actually hosts a lot of education for agents, because they want us to also be an expert and have the tools to handle the kind of situations we mentioned above. 

Your Title Policy Is There to Protect You 

You never know when you may have to use your title policy to prove you own your home! We are so grateful for Catherine's taking the time to help give you a better understanding of title insurance.We hope you have the pleasure of interacting with her and her team on a home purchase sometime soon. Title insurance and their due diligence during the buying process is essential so we hope you learned something new today! 

Until Next Time,

Brianna & Keelie

Rental Income: Airbnb vs. Traditional, an interview with Katie Hill

The idea of rental income is very interesting and how to do it is pretty intimidating to a lot of people. We had a conversation with Katie Hill, an experienced Airbnb host that is now also a traditional landlord. Katie is dynamic and honest and will guide us through the pros and cons of what it means to have tenants both temporary and long term.  If you've considered buying rental property or trying to make income on a property you already own then hopefully we can pass along some valuable information to consider. Being a landlord isn't for the faint of heart, but it can make some great income—so let's get into it!

What Are the Pros and the Cons of Airbnb?

Pro: Financially you can make a lot of money.

Con: You never know how much you’re going to make month to month.

Takeaway: A great option if you are risk-tolerant, because although money isn’t guaranteed you have the potential to make a good amount of money.

Pro: Meeting new people! You get to know people coming from different places.

Takeaway: If you enjoy sharing things about your city and when you live then that will become a really joyful part of running your Airbnb business. 

Con: The initial setup can be cumbersome and costly if you need to furnish the entire place. Even if you are trying to do it cheaply it does add up; so be sure to factor that into your budgeting when setting up the business.

Takeaway: Don’t forget that you will need to set up the space for other people to feel at home! A good practice is to stay in the space yourself to see what is missing and can be added to make a stay there more enjoyable.

Is There a Way to Calculate Airbnb Occupancy

There is no magic formula when it comes to figuring out your occupancy rate, so Katie’s advice was to research similar properties in your desired neighborhood on Airbnb so see their rates and booking calendars. If you look at a rentals calendar during peak travel season and they have no bookings then that area probably isn’t the right move. A little of your own research can go a long way! Aside from that, Airbnb is also helpful when it comes to providing data for hosts. They will take information for the entire neighborhood and suggest a price range at which you should list your home based on high seasons, weekday stays, and averages. 

Long Term Airbnb Stays

Katie personally prefers longer stays, which tend to be more frequent in suburbs. In those kinds of areas people are typically staying weeks at a time due to things like renovating their own homes or visiting family. Longer stays are also nice, because you’re not having to clean the home as often or access it as much. For some people that’s a dream, but if you’re concerned about not being able to check in on the state of your property then renting in a higher turn over area would be better for you!

Another thing to consider are the regulations in the area you’re renting. If you are in a multifamily home or an apartment it’s like you’ll have less to worry about compared to a neighborhood with an HOA. They tend to be more accepting of long term rentals, but you would still probably need to have it approved by the HOA. There's also restrictions on how many places can be tenant occupied versus owner occupied, so you can run that risk even if it's super profitable. If more people want to come in and rent, they might stop allowing it; you're kind of at the mercy of the HOA versus areas without that. Regardless of where you rent you’ll need to take your neighbor's situation into consideration as far as noise level. 

Differences Between an Airbnb & a Long-Term Rental

1. An Airbnb and a long term rental is that an Airbnb needs to be fully furnished. These people are coming with just their suitcase, whether it's for a night or three months. 

2. There is a higher turnover rate with an Airbnb making it a much more time consuming rental; however a rental property is much more hands off. 

3. With a long term rental you can build a nice relationship with someone and check in on how they’re treating your property, while renting to numerous people with Airbnb can be the luck of the draw as far as how they’ll treat your space.

4. Although both provide income, a long term rental can be more consistent with lease terms being longer. The downside of that is if a tenant leaves you will have to find someone to rent the place quickly so you can keep that income coming. While in an Airbnb, although it won’t necessarily be consistent income, you are guaranteed to have some money coming in every month.

5. In a long term rental property you aren’t carrying the electricity and cable expenses like you would with an Airbnb, that responsibility would be on the tenants plate.

6. Bigger and high cost issues can go unnoticed in a long term rental. With an Airbnb it’s easy to spot issues since you’re in and out of the property so much; while in a long term rental you aren’t seeing things like leaks in the roof or plumbing issues. 

Difficulties of Being a Landlord

There are a few challenges that come with the territory of being a landlord. When it comes to running an Airbnb cleaning after every guest & finding a reliable cleaning company you like is essential to relieving the stress of the property not being prepared for the next guest. Although you can hire a cleaning company for your Airbnb, some people choose to clean it themselves out of convenience, wanting to pocket that extra profit, and to check in on the property. It can be challenging to get used to people moving things around and making messes, especially if you have an emotional attachment to the property itself.

As a landlord for a long term tenant things seemingly come in waves of having no contact for awhile then being super involved solving a property issue. The number one thing Katie recommends is finding a preferred general contractor, so when issues do arise you have a go-to person that you trust to address the problem; instead of having to scramble to find someone. It can turn a very stressful event into a quick call! She personally prefers having insight to the property, how things are handled, and who’s being used, versus handing all responsibilities to a property management company. How issues are handled really has an impact on your relationship with the tenant and how long they want to stay there. 

Choosing a Good Tenant

Keep in mind the demographic you’re trying to serve and your location. For example if you choose a property that’s in an area where a lot of bars are nearby your airbnb may serve bachelor parties that’ll leave your property more dirty than usual. A way to protect yourself in those situations is by collecting a larger deposit. If your airbnb is in a quiet neighborhood you have different expectations for the kind of person that will be staying there. As far as long term tenants go the same ideas apply, but you also have a large application pool where you can see if they have pets, if it’s a single person, or a family. A family of five would likely wear down a place more than a single person who’s at work all the time. In short, you have the option to choose when it comes to long term tenants versus Airbnbs. 

Should Your Investment Property be an Airbnb Or a Long Term Rental

We wanted Katie’s personal opinion on if you were purchasing a home for investment purposes or simply moving to another home and keeping that other property as a rental, if you should list it as an Airbnb or set it up as a long term rental. 

“I would say it'd be more based on your personality and what you envision and how much time you want to spend on this. If it's purely financial and you just want to have the option to have a property, appreciate and hold on to it, then I'd definitely say go for the long term. I like the fast paced kind of challenges that Airbnbs bring and working with people. So for me, Airbnb is appealing and I would say I'm pretty risk tolerant. If you're doing it well and you're setting yourself apart, there's obviously demand. BUT I would say, make sure you're okay with getting that phone call at midnight with an issue from an Airbnb guest whose place wasn't cleaned or they've locked themselves out, because that's a lot more likely to happen on the short terms than a long term tenant who's who's there for the long haul.

In summary, Airbnb is far more hands on, takes a lot more of your own personal time, but also can come with higher financial rewards. On the flip side with a long term rental you may not be able to capitalize on big events in town, but it is more guaranteed steady income. If you're looking to hold on to a house for a long time, because you think it's going to grow in value, then take the long term lease and let someone pay down that equity and let it appreciate. If you're looking to make a thousand dollars each month on top of your mortgage for a couple of years and then decide what to do with it, Airbnb would be the way to go; especially in a neighborhood or an area that's just not appreciating the same.”

Are You Ready to Become a Real Estate Investor? 

When embarking on any financial endeavor, it's useful to hear from someone that has seen it all. Consider taking it slow & renting out your home while on vacation, choose a smaller barrier to entry to see if you really want to rent to someone else. Many thanks to Katie Hill for her time! If you're interested in more first hand stories on how to rent out your home, go listen to Episode 3: House Hacking to Financial Freedom of the podcast. Also, head on over to WhereWeLivePodcast.com to download our free checklist on how to make money with Airbnb, continue the conversation in our Facebook group, listen to the podcast, and connect with us!

We hope today's episode gave you food for thought on your future real estate plans. If you're ready to become a real estate investor, reach out to us. We would love to help!

Until Next Time,

Brianna & Keelie

Don’t Be Surprised! Special Tax Districts

Today we want to clarify a little known tax or assessment that can be costly if you aren't informed. Have you ever considered how communities are financed and built if they don't have existing infrastructure as suburban sprawls? This question should be top of mind to a buyer that wants to get it right when it comes to budgeting your monthly payments. We’re going to break down what a MUD and PID district is and what to be on the lookout for when home shopping. Be aware these details will be specific to Texas, and the disclosure rules have just changed.  Financial surprises are not fun and with these becoming more common we want you to be educated and prepared.

What's the Purpose of These Tax Districts?

When there isn't enough commercial or residential tax activity, such as in a more rural area to support the infrastructure and creation of a brand new development, a whole lot of homes and a whole lot of people, commonly a MUD or a PID, are created here in Texas. They're to provide water, sewage, drainage, streets, sidewalks, parks, all the things we take for granted, but really love when we have and the maintenance of those things. They're essentially financing tools for improvement projects; that can be a brand new community or when we need to add something additional to the community. Both of those are income tax deductions, because they're viewed as additional property taxes. The easiest way to think about them is that they are additional property taxes that you'll need to pay off if you live in one of those districts. 

Are these Districts Common?

In the state of Texas, there are more than 1,200 MUD districts and currently 65% of those are in Huston. Huston has so many, because it does not have zoning laws so they need people to create these projects to give residential infrastructure. Now there are some instances where a MUD is within the city limit and it’s going to have a double tax burden; meaning you’ll be paying city and MUD or PID taxes on that property. Dallas has fewer of these districts and in those areas a MUD essentially replaces the city tax. For example Lake Highlands at the Lake Highlands Town Center, where Daily Wheely development is in a PID. A MUD essentially replaces the city tax in a lot of areas for Dallas. Now let’s break down the nitty gritty of these districts. 

What is a MUD District? 

Let's start with the one that is actually a tax and that is a MUD. Mud stands for Municipal Utility District. A MUD will have a varied tax rate and will show up on your tax record as an additional tax line. It's a special district within an independent governing board separate from the county or city. These tax rates can change every year based on old or new debt, and they're typically paid each month by the homeowners. Since this is not controlled by the city it’s important to have good trust in your independent governing board, their decisions, and clarity on their timelines. They could always add new things based on what they feel like the community needs or the tax rate could go down. This independent board would vote on projects that they want to do or that the tax rate needs to decrease, because they're paying off debt; all of which is assessed differently year to year. 

What is a PID District?

PID stands for Planned Improvement District and it has a fixed assessment rate. This is very different from the MUD, in that when a PID is created you know the timeline, exact assessment rate, and it will not change. It's much more clear how long and what you will be paying for. It's typically assessed yearly like an HOA fee would be and is a special district that's actually operated by your city council! These are the people that you voted into your city council. Even though it's operated by the City Council, that money is for sure coming back to that specific district, neighborhood, and community. Unlike a MUD these districts can work on a wide range of projects such as public safety, security, and affordable housing. 

Where Are We Seeing These Districts?

Typically, we'll see PIDs in rural locations on the outskirts of the metroplex. These growing towns do not have enough infrastructure for a developer to come build thousands or even hundreds of homes. That is when a tool like this will be put into place. An easy example is a huge one is going to be Salina in North Texas. It's growing exponentially and is planned to have almost 400,000 residents soon. So you may hear people talk about how taxes are crazy in that area, but it's because they are in one of those PID districts. You may live to see the day where you don't have to pay that tax anymore, but it's helpful to understand the details of this and what it is really going to mean for your budget and for your monthly payment. 

Why Does it Apply to Homeowners?

We're here to tell you that there are now new rules in the state of Texas as far as the real estate transaction is concerned on the notification of these special districts. In the past, you really needed to have an experienced agent who knew about these districts so that you didn't have any surprises when it came to payments, but as of this year sellers are now required to clarify upfront if the property is in a MUD or PID district; that way you aren’t financially surprised in the home buying process.  The seller is required to give you a specific notice if it’s a MUD and if it's in a PID  there's an actual addendum to the contract. I would expect that we'll see this evolve a little bit over the next couple of years as people actually use this, but I think just the act of disclosure and the intent is going to be major progress for buyers in this market.

Should I Buy in a MUD or PID District? 

Whole cities are being developed within these districts so it's going to be a very common tool that we're going to see in the near and probably more longer term future. If you have an option, I think a PID is more straightforward and it has more local city oversight, but you're typically not going to have a choice. All of this is to say you need to be aware of what each of these means for you financially and what that commitment is going to be. Knowledge is power! 

It’s Important to Be Informed

When it comes to these districts It’s much more about awareness than choosing at the end of the day. We do not expect you after what you’re learned today you’ll become a pro on MUDS and PIDS, because they are very confusing! In fact, we expect it to be as clear as mud. Really what you need to know is that it’s a thing your agent is going to guide you through. It’s good to be informed, ask questions, and know that it's out there. Real estate is ever evolving, and truly, we consider it an honor to keep you up to date. If you're home shopping in North Texas, don't worry, we've got you covered. As always, reach out if we can help you or your loved ones find the home of your dreams. We will take great care of them!

Until Next Time,

Brianna & Keelie

Are Zestimates Accurate? Pricing to Max Your Profits

If you're not a realtor yourself, it can be difficult to browse the market and understand how various homes arrive at their list prices. We regularly hear buyers say that homes are over or underpriced, but did you know that that may be a strategy instead of a mistake? From a buyer's perspective, the list price can indicate quite a bit about the negotiations forthcoming. Landing on your list price should be more involved than what you think your house should sell for. We will guide you through all that and more today, including why the Zestimate isn't completely accurate.

Pricing For Profitability 

Profitability really is our greatest goal for you when you sell your home, which is why pricing is so important. I always tell my clients that pricing your home correctly is absolutely one of the most important decisions that you can make in this entire home selling process. I heard it said once early on in my career, and I've seen it to be true time and time again that one hundred percent of the time when a house doesn't sell, it's because it was overpriced. You've got to understand the buyer psychology behind that. The longer that things stay on the market, the more you question what's wrong with the house instead of just seeing that they're overpriced. So I always tell buyers it's one thing or the other, either there's something drastically wrong or it's overpriced, or more likely it's both of those things. With that being said you’ve got to go into house hunting with an open mind.

Not Simply Apple to Oranges

We think about the phrase apples to oranges; we don't want apples to oranges. What we're talking about is pricing your home in the correct price bracket, and an apple is a different bracket than an orange. We want the correct bracket of buyers walking through your house. We don't want the wrong bracket of people that are not interested in your house, because they're comparing it to houses that are more expensive due to them being nicer homes. 

An easy example of that is just to use round numbers. If your house is actually worth $500,000 you price it at $600,000. Chances are, anyone whose budget is $500,000 is not looking at a $600,000 price point and vice versa, because both before expect different things from that property. We have to be firmly rooted in the data looking at relevant properties, but they also really need to know their market well, know the dynamics that are at play for you, and a good agent is going to guide you through this.

Lower Price Equals More Competition 

One thing that is obvious to us, but I think is not so obvious to a lot of consumers, is that there is a direct correlation between price and the amount of days that you are in the market. If something is a steal, there's a reason that it goes like in the first hour, right? That could be due to market dynamics, but regardless of demand there’s going to be more competition if the price is lower. That's simply the law of numbers. When things are priced less, there are more buyers for it. 

Arriving at the Correct Price

Now let's chat about how we arrive at the correct price for your house! Obviously, you're going to be handheld with your experienced agent for this, but we can talk about some of the high level points of what we walk through as agents. The first thing that we're always going to look at is what we call relevant properties. The house right next door to yours might not be relevant if yours has a much larger floor plan, so we want to find the things that we think are the most relevant. We're going to look at build quality, location, school district, pools, and desirable features. For example your house would be worth more if it backed up to a park versus a parking lot. Those are the kinds of things we’re looking at when pricing your home and you want to make sure you're actually looking at things that buyers would consider.

Secondly, when looking at those relevant properties we want to look at them from a historical viewpoint, while making sure we are still competing in today's market. We are looking to see what is your direct competition, the other inventory active on the market, and buyer’s options. How does your home line up to the rest of your neighborhood. If there's three houses right next to each other in the same neighborhood, and they're all priced the same, we’re trying to figure out which one would be the best, which one would sell the best. Sometimes that can mean that it's a premium like only one home comes on the market every few months, so maybe people are really looking to get in. We might be able to price it at a premium, and the inverse is true. Maybe someone priced it really low and the house just sold in your neighborhood for much lower than you would have sold it for. We always encourage your neighbors to have a good agent because what those homes sell for is definitely going to be looked at by the buyer and other sellers in the future. 

Factoring in Timeline and Motivation

Big factors in how people price their homes are timeline and motivation; this can go from both sides, both the seller and the buyer when we're looking at this. Usually we're looking at it from the seller's perspective. We’re asking if you’re in a rush, because if not we can wait it out a little to get this premium price. For example, we might be able to wait a few weeks if you can allow that in your schedule or maybe you fell in love with a house this weekend and we got an under contract and Monday morning, you need to get that house sold. Those are going to end up in different, different sides of the envelope of reason, right of pricing, low versus high to to get it done really quickly or to have some patience and try to get a premium price from the buyer's side.

A lot of times waiting isn't going to get you more money, which is really interesting if you go deep into the data. If everything in your market is selling in seven days or less and you've been on the market three weeks, they assume your house is a lemon. On top of that most people don't jump to thinking that the home was simply overpriced. You just need to think things through with your agent, “What do we think is going to max our profits in this market if you price it spot on or even a little bit low? People fall in love, they get emotionally attached and they bid each other up, right?” That's the strategy that we are currently deploying most often. 

The New Build Difference

New construction neighborhoods can be a little bit tricky because the builders are still building and there's not a lot of houses resale homes for sale because all of the surrounding homes were built in the past two years. We’re not supposed to compare those for pricing. Plus, it's a completely different buyer! If we have an established home around new builds in construction then we price on the higher end knowing that what we offer over new construction is move-in-ready right away. Of course knowing the market and the factors playing out is our job.

The Reality of Zestimates 

The elephant in the room is how does the Zestimate factors into pricing. We hear so many agents complaining about this estimate, but in reality it's helpful to see a number of what you think your home is worth and we understand why you love the Zestimate. However we need you to understand that the Zestimate is not the Bible, there are a lot of things to factor into that, and it is not going to be accurate at the end of the day. Hopefully, it gives you a good ballpark and I think it should; however Texas is a non-disclosure state. Where we are, when it comes to home prices, you are not obliged to disclose what you bought or sold your home for. Meaning Zillow doesn't have access to that sold data. In fact, no one but those who have access to the MLS actually have the data on what a home sold for.

At the end of the day it's only a ballpark and we need to know a whole lot more information than that when it comes to pricing. Zillow has no idea how well you've maintained your home or how incredibly you've updated and improved your home. It doesn't factor in whether the home is on a busy street or not. It just doesn't know any of that! Not to mention, the pictures don't tell the whole story. A house may look beautiful in pictures, but then you may go to see it and realize it’s nothing like what you thought it looked like. Those pictures won’t show if the house smells like cats, ugly features, or give you an accurate representation of the lighting in the space. Pictures do magic there in terms of lighting and making sure that things are nice and bright. 

Getting the Most Out of Your Investment

There's just a lot more to price than first meets the eye and there should be to make sure you get the most out of your investment. Your agent should be your key resource and they should be looking at all of these and bringing it to you so that you understand where you're headed with that pricing strategy. We want to make sure that as an agent, as a client, we have a good relationship, and we're candidly talking about everything we discussed today so you can get the most profit. If you have further questions about pricing your home or would like us to run an initial analysis on what it might sell for please reach out — we are always happy to help!

Until Next Time,

Brianna & Keelie

Appraisals: A Deep Dive

Let’s talk about appraisals! An appraisal is a term that is thrown around often in real estate transactions, but we find most buyers and sellers don't understand exactly how they work or how they will affect the process of buying or selling. In today's market, appraisals have become more important than ever, and fully understanding how they function can be the linchpin to getting the home of your dreams. Let's get started answering all of your questions when it comes to appraisals. 

Why does an appraisal even matter in residential real estate?

So appraisals matter when you're taking out a loan. If you're a cash buyer, you're welcome to do an appraisal if you'd like, but it’s not necessary. It is most important when you're taking out a loan, which is going to be the majority of home buyers. Really, your lender wants to know if you stop paying your mortgage on day one, this nice loan that they've decided to generously give you for a certain amount of money, they want to know if they can resell your house and recoup their investment right away. They want to know if they’re lending you the right amount of money. 

What is an appraisal?

Simply put, an appraisal is a third party opinion of value on a property. The only person that can do that is an appraiser, a professional that can officially assign value. Believe it or not, realtors are not actually officially allowed to assign value. We can pull comps, tell you what we think the homes are worth, give you a range, but the official arbiters of value are appraisers. They go through a lot of training actually and get a license just like we do as realtors, to be able to do and complete these appraisals. 

Who orders an appraisal?

The appraisal is technically ordered by your lender. A lot of lenders use an AMC, which means appraisal management company, so that it's an unbiased opinion. That's what we mean by a third party unrelated to the lender. In the transaction, it is your lender that will be officially initiating the appraisal and making that order.We make that distinction just because a lot of people are like, well, the appraiser works for me. I ordered the appraisal, not technically, and they're really not beholden to any of us. Their opinion is their opinion and we want to make that clear. It's an opinion of value. Different appraisers have different opinions. 

What will an appraiser do?

Generally an appraiser is going to schedule a time to come to the house and have approximately a 30 minute visit. They're going to measure the home to make sure that the square footage is accurate, they'll take photos of the house, they'll assess the build quality, etc. Then a majority of the appraisal itself is done behind a desk based on data available in the MLS, which is where all of the listings are.

Appraisers spend a lot of hours behind the desk looking at comps and the pictures online to determine how this home compares to others that have sold. They're going to make adjustments to the price based on features that add or remove value. So does it have a nice built-in kitchen outdoors? They're going to add and allocate a certain amount of value to that. They make a lot of micro adjustments that are very refined to make sure that they needle that price right where they want it to be. Using all of those adjustments they will come up with their assessed value. When that price comes in we really get into the nitty gritty of how they arrived at that.

How long does an appraisal take and how much does it cost?

As you can imagine, since the real estate market is really busy, appraisers are really busy. We're seeing them take around three weeks to come back. The average cost is around $500, but can be even more right now, depending on the availability of appraisers, who we need to get out to the property, and how quickly we don't need to order a rush appraisal. In a situation where you don't want to delay when you get the keys to your home, this is going to be the big holdup in terms of timing right now when you're under contract. With that being said, the appraisal is done after you're under contract on a property. A lot of times we don't want to order it or spend that money until we're done with the option period, but it has to be completed before closing because they need to have it to issue your loan. We're always threading the needle on timing with an appraisal.

What happens if the appraisal comes back higher than the contract price?

First of all, the contract in the state of Texas allows for a financing contingency, which most buyers use if they're getting a loan. That means that if the lender cannot issue the loan for some reason, then the buyer can walk away and is not obligated to buy the house. So we basically want to know if the house is worth what you can pay for it. There's kind of an umbrella when you think about the financing contingency, they're looking at both your ability to pay as a buyer and then this house, is it actually worth what they’re asking. So if the house isn't worth the amount of the loan that the lender was going to issue you, we have a few different options.

Option #1 Our first and favorite is that we're just going to ask the seller to lower the contract price to the appraised value. Unfortunately this is a seller’s market and more often than not the seller says no.

Option #2 The buyer comes up with cash equal to the shortfall. The lender just lowers that loan amount and you pay the rest in cash. 

Option #3 We're going to negotiate to meet somewhere in the middle. Maybe they come down a little bit, you come up a little bit, and we meet in the middle to figure out the shortfall. 

What is an Appraisal Waiver and what are you options?

As your agent we’re trying to make sure we are competitive on all terms to really get you into your dream home. There’s something called an appraisal waiver that we’re seeing much more commonly lately, which gives you some options and the seller some reassurance. It’s basically saying the offer you are giving stands regardless of the appraisal, which as you can imagine would be very appealing for a seller when there are multiple offers on the table. Not including one means you’ll most likely be going back to the negotiation table later in the contract period, making your offer much more risky. Keep in mind FHA loans technically cannot use an appraisal waiver. You have two options when using an appraisal waiver.

Option #1 Waive that appraisal contingency entirely. This essentially means you’ll figure out how to make up the difference with your lender if the appraisal comes in low and the seller doesn’t have to deal with any of that.

Option #2 Waive the appraisal contingency partially. Outlining the amount of money you can additionally put towards that loan and negotiating with the seller if the appraisal comes in lower. 

Appraisal Waivers Give Lower Offers An Edge

The most important thing that we want you to walk away with is that we have seen sellers many times accept lower offers, not the highest offer, because the lower offer has an appraisal waiver and gives them the confidence that they're not going back to the negotiating table in the case of a low appraisal. It's why the market is so competitive right now. Cash is king at the end of the day, so if you have some cash, it definitely can help you in competition. We really hope we helped you understand more about the way appraisals play into the dynamics of the real estate transaction. If you have any additional questions, please reach out. We are happy to help! Head on over to WhereWeLivePodcast.com to continue the conversation in our Facebook group, listen to more episodes, and connect with us. 

Until Next Time,

Brianna & Keelie

Should Buyers Write a Love Letter?

Today, we are covering one of our most frequently asked questions, “Should I write a love letter to the seller to include with my offer in today's market?” where you are likely competing with other buyers to get a home? We are on board with making your offer stand out when competing with other buyers, but what are the risks of submitting a letter? We will answer that question as well as highlight some issues with discrimination and fair housing in the real estate process. Residential real estate has a complex history with discrimination, and we want you to understand how the rules that are in place today came to be. Let’s get into it!

What Is a ‘Love Letter’ To a Seller

The term love letter might feel a little silly to you when we're talking about buying and selling real estate. People just simply call it a letter sometimes, but we use the term love letter most frequently, because that's what it is when a buyer writes a letter to a seller. It's a letter that a buyer would write to accompany their offer to explain a little bit about themselves, how they envision this house becoming their home, etc. and a kind of a plea to choose their offer.

We always say pull at the heartstrings of the seller to get their attention when writing that letter. 

We’re talking about this today, because we see it work all the time! We see sellers take lower offers or give your offer an edge simply because they like you. Selling is both a financial and emotional decision at the end of the day. A lot of people have a vision of the kind of person they can see living in their home. Love letters can be really helpful as a buyer to get a house! Although it is perfectly legal to submit a letter with your offer in Texas, there are some risks and it can be a touchy subject. In order why that it is it’s important to look at discrimination in real estate from the past and the rules currently set in place to protect you from discrimination.

Discrimination in Real Estate

Our broker currently recommends against submitting photos with these letters, and it's likely honestly that the letters all together will be outlawed soon. The reason being is, because it really gets into a lot of fair housing issues. We feel it’s important to discuss the history and terms you may hear being used in regards to fair housing issues.

Redlining - Meaning various services were denied to residents of a certain, often racially associated, neighborhood or community. That showed up in the banking and insurance industries, as well as many other industries where different prices were given to different neighbors or they were completely denied altogether. 

Steering -  Steering is a form of discrimination whereby a real estate professional influences someone's housing decision based on their race, religion, or another protected characteristic covered by the 1968 Fair Housing Act. Realtors in the past or other service providers were grouping groups of people together based on those protected classes and against their consent.

Blockbusting - This is the practice of persuading owners to sell their property cheaply, because of the fear of people of another race or class moving into the neighborhood. 

The Fair Housing Act and Your Love Letter

Before the Fair Housing Act came the Civil Rights Act of 1866, which prohibited all racial discrimination in the sale or rental of a property. That was the baseline for saying there would be no more redlining, steering, or blockbusting and housing needs to be available to all races equally. The Fair Housing Act is a national law and  is the one that really expanded that. You can't discriminate based on race, color, religion, sex, handicap, familial status or national origin. All of those things are covered to have an equal playing field amongst people that want to buy your home. So, you can see how this might make a love letter problematic. In that letter, you might be saying, “Hey, I am a young family of x color, practicing x religion, from x country.” The laws are a result of the past, so you can see why a letter of this nature could have a negative impact.

Upholding Fair Housing: Professionals, Sellers, and Buyers

The main responsibility lands on us as professionals first and foremost, but you as a seller or a landlord, have the responsibility not to discriminate based on race, color, religion, sex, handicap, familial status or national origin. When it comes to handicap accessibility, ADA rules don't comply with a previously built residential home and you don't have to make accommodations for a handicap; you just can't discriminate based on that. 

On the flip side, as a buyer, you have the right to expect that housing will be available to you without any kind of discrimination. If the seller indicates that they chose you, because of one of these protected classes, it could be a cause for a lawsuit against them. Other ways Fair Housing pops up is when a seller says they want to live in a “good neighborhood”. You have to specify what that means for you and we will ask very specific questions to get to the bottom of that so we aren’t assuming anything on your behalf. 

Making Sure Housing is Equally Available to Everyone

It's our job as realtors to continue to make sure that housing is equally available to everyone and as your agents, we continue to strive to be above bar on everything we do. At the end of the day, we represent all types of buyers and sellers, and we want to make sure that it's fair to each and every one of you.Thanks in advance for your understanding and your willingness to be educated on this topic. We want to hear which topics interest you most for blogs! Head on over to Where We Live Podcast to continue the conversation in our Facebook group, listen to our podcast and connect with us. 

Until Next Time,

Brianna & Keelie

Foundation Issues 101

Most people have been taught by HDTV that a problem with foundation issues is an automatic deal breaker and it's just not true! Here in North Texas, foundation issues are common. We’re here to help you navigate this issue as both a home buyer and a homeowner. While Bree and I aren't foundation contractors, we deal with foundations as part of the real estate transaction almost daily. We are going to cover the conditions in north Texas, the types of foundations, and red flags to look for and how to make sure you're properly caring for your foundation for years to come! 

How Clay Soil Impacts Your Home’s Foundation

Here in North Texas, we have clay soil, so it's going to matter a ton what your house is built on here. Clay is a highly porous soil, which affects a lot of things related to foundations. In North Texas we have periods of heavy rain and then we also have periods of droughts with very dry ground. Clay soil’s moisture will affect the way that the clay reacts and therefore moves or does not move your home. When the clay gets wet it expands and when it's dry it contracts. What this means is that it can actually raise your home if there's too much moisture and if there's not enough moisture it will actually sink a little bit. This means that controlling the flow of moisture and keeping things evenly watered around the foundation of your house is very important. We want to pay close attention to the kind of soil your home is built on, whether it’s on a slope, and how even your home is. We want you, potential buyers, and homeowners alike to be educated so that you can have the best outcome when it comes to your foundation.

Types of Foundations: Pier and Beam Foundation vs Slab Foundation

Pier Beam Foundation

Homes with pier beam foundations have piers drilled into the earth then wooden beams are slotted on top of them, and the house is built on top of that. This is much more common in older homes. The way this is structured means that there is a crawl space, sometimes it’s tall enough to stand up in and other times you could only crawl; it differs from home to home. There are also rectangular vents around the base of the foundation to venting moisture and creating airflow to help regulate the temperature and moisture. Plumbing exists in this space below the house making it very easy to access when plumbing issues arise. The real con here is the potential for rodents and pests in that area below your home. 

Slab Foundation

Slab foundations are not drilled into the ground, there is no crawl space, and the plumbing is encased in the concrete. There is a grid within the slab made of rebar that holds everything together and the home is built directly on top. There is no option for creating airflow like with the pier and beam foundation. These homes also won’t have a crawl space, which means no pests under the home to worry about! Most new builds rely on slab foundation.

Unless you’re building your home you won’t be able to choose which kind of foundation you get. Luckily one is not better than the other and we’re going to help you navigate what to look out for and precautions you can take as a homeowner. 

Foundation Red Flags

These red flags should tip you off that some movement is happening and encourage you to investigate further, but keep in mind some cracks are normal from settling. We are mainly concerned about the significant cracks and things that really stick out.

• Staircase cracks

• Doors sticking

• Large cracks off of the door frames or window frames

• Diagonal cracks from left to right corners

• Straight slope

• Bumpy floor

Investigating the Foundation

Okay so say you do spot some red flags, the first thing we need to know is has the foundation ever been repaired in the past? One way to know this is on the seller disclosure form that a buyer will get to see that tells them anything that the seller has knowledge of with the house, that that would be not correctly functioning, or major repairs like that that have been done in the past. If foundation work has been done, we have two big questions. Number one, who did the work? We want to know if it's a reputable company or not. And then number two, is there a warranty attached to that work? If a reputable foundation company makes repairs, they will attach a warranty and that says if repairs are needed in future in the same area they worked on before, they will make those repairs at little to no charge. 

Structural Engineer vs Foundation Contractor

The goal here is to find out if the foundation is functioning as intended and if not how much money will it cost. Somebody other than a general inspector will need to come take a look. There are two options that you as a buyer would have, but also as a homeowner would have. These are the exact same options in either scenario. The first is going to be you can have a foundation company come out, that will probably do it for free promptly. They come and take laser level measurements of the elevations in your home and see if things are out of tolerance. Now, pros and cons here, you need to make sure that it's a foundation company that you trust because they have an incentive to tell you that work needs to be done. It's the same way with most contractors. We don't want you to pay for work that you don't need to be done, especially when it comes to foundation, because it can be so invasive for your home. They're going to come out, do that and quote you on the work that may need to be done.

Your other option is to hire a structural engineer. A structural engineer is a licensed person that has had to go through a lot of training around foundations. They would know a lot more than us about the environment around the home drainage, all of the components that make up the structural integrity of your house, and their reports are typically going to cost between two to four hundred dollars. It’s going to take a lot more time for them to really go into detail and write the full report, but the report is much more detailed than just a basic measurement of your home and they're going to provide recommendations as well. They may be connected to a foundation company and if not you may need to provide a report to a foundation company so that company can give you a proper quote. 

Fixing Your Foundation Before Buying or Selling a Home

Everything we’ve discussed so far is what you’re going to want to find out during the option period, if possible, so that we understand what the problem is and the size of the problem. Most importantly though we need to find out who is going to pay for it. Regardless, we want to get your house back into tolerance; that is the key goal. The way they go about repairs is by digging under the home.If you have a slab foundation installing piers and lifting it up. If you have a pier and beam adjusting or adding to the piers that are already there, some type.That's called shimming in more minor instances. 

We are going to negotiate what repairs need to be made and if that word is going to be completed before closing, after closing, or if you will get credits to repair them after closing. There's two main things that you need to be aware of when negotiating and when just embarking on taking on the project. One is there are going to be some cosmetic issues. This can be minor, but just because it has shifted one way and shifts back doesn't mean the crack now perfectly lines up and looks good again. You're still going to have to have a contractor come out and tape and paint and make sure that that all looks good again. On the more major end of the spectrum we need to double check that your plumbing system is alright.

Foundation Issues Impacts Plumbing

Plumbing repairs are typically not cheap and are one of the more expensive repairs that we typically see. If you have a pier and beam house, it's going to be pretty obvious if your plumbing is leaking. There's going to be a little puddle of water typically or a drip that we can see underneath the house. In a slab foundation, because that plumbing is encapsulated in your concrete, we're not going to be able to see if there's a drip and there aren't going to be early indicators that there is an issue. You're probably only going to tell if there's a leak when there's a major problem, because it's inside the slab. Luckily there are way to prevent this problem from ever happening!

How to Maintain Your Home’s Foundation for Years to Come

Let's chat about the ways that we can care for our foundation, either after work has been done, to prevent work from being needed again in the future, or to prevent work from ever needing to happen. It's all about that moisture and there are different ways for us to manage the moisture content around your house as evenly as possible.

1. Install gutters

2. Install a french drain

3. Rent a drip house and run it along the perimeter of your home during droughts.

4. If you have pier and beam foundation, keep your vents open.

5. Take note of trees around the home that may be drawing moisture out of the ground

6. Install a root barrier to help with the aforementioned roots

Foundation Issues are Not Deal Breakers

When you are building a new home make sure you get initial measurements so you can monitor if there is any movement and mitigate issues early on! Sometimes the scariest issues are those that you just don't know much about and hopefully now you are better prepared to find a house with a solid foundation and to care of yours for years to come. We want to hear which topics interest you most for our upcoming shows. Head on over to wherewelivepodcast.com to continue the conversation head over to our Facebook group, listen to our podcast, and connect with us!

Until next time,

Brianna and Keelie

Use Your Time Wisely: Effective House Hunting

Today we’re going to be giving you tips and tricks for efficient AND effective house hunting. A common fear buyers have when entering the house hunt is that it's going to take forever. Will they ever find the right house for them? We're here to assure you that you definitely will, and it can be much more pain free with the following tips. We have the privilege of working with buyers of all sorts, but there are some that make it easier on themselves than others. Let us guide you and make this as seamless as possible.

Tip #1 Get Your Finances in Order

The first step is to get pre approved and decide which lender you are going to use. We’ve said this time and time again here on Where We Live and for good reason! You need to know how much you can afford before looking at homes so you aren’t overextending your budget or getting your hopes up. You will do yourself a disservice looking at home, before you’re able to pull the trigger on one you love when you see it!

Tip #2 Look for Homes Under Your Budget

The last thing we want is for you to be at the tippity top of your budget and end up house poor. Leaving this room in your budget also gives you room to flex up to submit a competitive offer; which is really important in the current market. Outside of purchasing the home you will also associated costs that you want money set aside for.

Tip #3 Know What Your Ideal Home Looks Like 

If you are shopping for a house with a partner make sure you two take the time to get clear on your must-haves and deal-breakers. We highly recommend having conversations about this and putting down on paper what is going to be just essential for you to enjoy living in your home. Keep in mind we're never going to find the perfect house that every single thing is going to be exactly what you wanted and expected, so you need to be flexible on what is and is not an essential item.

Tip #4 Go Look at Homes In Person, But Not Too Many

Seeing homes in person will help you get a true sense of what you want in a home and what your budget will get you in different neighborhoods. Just keep in mind that seeing too many houses at once can be a disservice to you, because you won’t be able to remember all the details of every home or be able to digest everything you saw in a productive way.

Tip #5 Explore Different Neighborhoods

Looking into neighborhoods before requesting house showings in the area is only going to help you be more confident and ready to pull your trigger when you do see a home. Look into the schools, take a walk outside, talk to neighbors, and get a feel of what your life would be like in that area. A lot of things can be adjusted when it comes to a home, but we can’t change where a house is located!

Tip #6 Factor In Your Timeline For Moving

If you are currently in a lease and you're in a very competitive buying position, meaning you are competing, then we definitely recommend having that backup plan, because it's going to reduce some stress. Talk to your realtor about pros and cons of breaking a lease a few months early or staying in a lease, they should be able to guide you on what kind of timeline you’ll realistically be looking at!

Tip #7 Take the Time to Educate Yourself On the Process as a Whole

Of course your realtor is your teammate, a wealth of knowledge, and your guide through this process; however you can really give yourselves a leg up by asking questions and learning about the process. In the current market there are a lot of things happening in a short period of time and the more understanding you have of the situation the more confident you’ll feel throughout the process. For example knowing what a competitive offer looks like will enable you to make a decision quickly.

Make Buying A Home Easier On Yourself!

Our job is to make sure your home buying experience is as seamless as it can be. Buying a home has enough potential pitfalls so do your homework, prepare, and make this easier on yourself. Hopefully after walking you through finances, budget, vision, strategy, timelines, and the confidence that knowledge brings you, you’re feeling more confident entering the house hunting process. We're rooting for you! If you want our house hunting prep checklist, visit wherewelivepodcast.com to download that for free.

Head on over to WhereWeLivePodcast.com to continue the conversation in our Facebook group, listen to our podcast, and connect with us!

Until next time,

Brianna and Keelie

Smart Home Features that are Worth the Money

While many of us grew up thinking that a smart home was only for the Jetsons, today, many of us depend on smart features in our day to day lives. Whether it's a thermostat that knows when you're home, a lock that tells you when you left the house open, or light bulbs that turn on just when you need them to. There's no question these features are becoming more prevalent and essential to homes today.

You can now go crazy adding technology and features like these to every aspect of your life. However, when it comes to real estate, the important question is how much does it matter to buyers, which features add value down the road and which are just nice to have today. So listen up. But be warned, this may cause you to want to buy some new smart home tech. 

What is a Smart Home?

The technical definition of a smart home is it is a residence equipped with devices that automate tasks that are normally handled by humans. Some are built into the structure of the house while others are added later and homeowners operate them with apps, voice command automations, or by using artificial intelligence. Our local realtor association defines a smart home as having three or more of these smart features that are tech enabled.

What smart features stay with the home when I move?

It is really anything that's going to require a tool to be removed should stay with the home. So things like cameras, a smart doorbell, thermostat, smart deadbolts, etc. Those are things that stay with the house. That also would include any appliances that are smart, with the exception of the refrigerator and washer and dryer, at least here in Texas, refrigerator washer and dryer or appliances that typically do not convey with the property. Remember that if you have gadgets you love and want to take with you before you move, take them down before listing your home!

Top 5 Smart Home Gadgets

1. Nest Thermostat

I think this is actually one of the most practical items that you can get for your house and the one that's going to tangibly save you a lot of money. You can set it to know when you're out of the house and set a temperature schedule for the day/night.

2. Nest Camera

You can add a camera to any room or space, outdoors or indoors. You can set it so a notification is sent to your phone when it detects movement or a person can speak into the microphone. It can be set to record while you're out of the house for security purposes as well.

3. Smart Light Bulbs

You can place these anywhere in your home, but one of our favorite locations is the front porch! You can set it so it goes on at dusk and shuts off at dawn. This is also great for security when you’re out of town. You can also install them throughout rooms where you can control the brightness of them via an app on your phone!

4. Smart Sprinkler System

It automatically turns the system off if it's raining or if it was raining today, it tells you the preferred time to water your lawn. You can control it remotely, which is just super handy if you're away from home and you realize you forgot to turn it back on. 

5. Smart Deadbolts

This is a feature that can make remote access to your home very easy. You can control your deadbolts with your phone. It can lock behind you when you leave the house in the morning, If you need to let a friend in while you're away on vacation, or a neighbor needs to grab something from your garage!

The Pros and Cons of Smart Home Features

Overall it reduces the amount of small tasks you need to do every day. It's so nice to get small things off your plate that don’t need to be there and have something to take care of it for you. Another bonus is it can be a huge money saver! Being able to save on things like electricity and water. Most importantly though, it can greatly increase your security and peace of mind when you’re away from home. 

Of course this all comes with some cons, one of the biggest ones being cost. Installing these things into your home can be a major investment. Not only that, but at the rate technology is advancing, what you install may be out of date within the year. Lastly, our biggest concern is the possibilities of hackers. There have been countless stories lately of people gaining access to homeowners smart cameras. With that being said, please take advantage of two factor authentication when it’s available! 

Which Smart Home Features Are Worth the Money?

When considering whether or not to invest in these features, it all really boils down to how long you will be in your home. Ultimately having these features doesn’t impact the selling value enough to offset the cost of buying them in hopes of increasing your home’s value due to how rapidly technology becomes dated. With that being said, if it will bring you peace of mind, save you some money, and make your day to day easier then it is worth considering!

Smart Home Features In Your Real Estate Contract

Before this year, there was no official policy in terms of the Texas real estate contract regarding password and app dependent features of home. Luckily the contract was updated in April! The seller signs and legally agrees to uninstall those features and pass on any relevant information to the buyers as part of the real estate process. This is really good news as a buyer and is the modern equivalent of changing the locks. Make sure that anybody who ever had access to it is logged out and then changed the password. It just needs to be part of the rhythm of buying new houses, understanding this new tech, making sure that it's secure and that it's going to really function well for your family.

What Smart Home Tech Will You Be Buying?

We hope you learn more about smart home tech and how it applies to real estate today. We're already starting our lists for Black Friday and we would love to hear from you. Let us know which features we missed that are your favorites! And if you ever have any specific question about a feature that you're considering adding to your home, please don't hesitate to reach out to us. 

We want to hear which topics interest you most for our upcoming shows. Head on over to WhereWeLivePodcast.com to continue the conversation in our Facebook group, listen to the podcast, and connect with us. 

Until next time,

Brianna and Keelie