YOUR #1 CHOICE FOR REAL ESTATE SERVICES IN THE GREATER HOUSTON AREA
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®.
They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again. Real estate transactions involve one of the biggest financial investments most people experience in their lifetime.
Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®. But if you're still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
Why rent when you can buy?
Are you unsure about becoming a HOMEOWNER?
Thinking that you can't afford to BUY a home?
Are you worried about whether home buying is a good INVESTMENT?
Buying a first home can be an intimidating process. But the first step is making those first decisions: I want to own my own home; I can afford to own my own home; owning my own home makes sense for me financially and emotionally. If you are still struggling with those first decisions, here are some facts that might help you make that first step towards becoming a homeowner.
You Can't Afford NOT to Buy a Home!
Over the last ten years, the cost of rental housing in the U.S. has increased an average of 3 percent per year. That means that an apartment or home renting for $750 per month will cost more than $978 a month in ten years. If you rent the same home for ten years, the total amount you would pay for rent will equal $103,000!
| Year | Monthly Rent | Total Annual Rent |
| 1 | $750.00 | $9,000 |
| 2 | 772.50 | 9,270 |
| 3 | 795.70 | 9,548 |
| 4 | 819.60 | 9,835 |
| 5 | 844.20 | 10,130 |
| 6 | 869.40 | 10,433 |
| 7 | 895.50 | 10,746 |
| 8 | 922.50 | 11,069 |
| 9 | 950.00 | 11,401 |
| 10 | 978.60 | 11,743 |
| Total Rent Paid Over Ten Years | $103,175 | |
Tax Advantages of Owning a Home Result in Savings
None of that $103,175 is returned to you, either through savings or as an investment. Homeownership, on the other hand, has tax advantages over renting a home, and those advantages can help you save money. Unlike your monthly rent, part of your monthly mortgage payment "comes back to you" in tax savings. Here's an example:
You purchase a home that costs $110,000 (plus closing costs - expenses incurred to actually process the transaction). You finance the balance with a 30-year fixed rate mortgage at 6.5 percent interest. Your monthly payments (not including utilities, maintenance, insurance, etc.) are:
Mortgage Payments
mortgage
property tax (@1.25% tax rate*)
Total Monthly Payment
tax savings per month (assuming a 30% income tax bracket)
mortgage interest tax deduction for property tax
tax deduction for property tax
Total Monthly Tax Savings
Total Monthly Cost After Tax Savings
You actually save $195 a month by owning your own home. On a yearly basis, the savings is even more dramatic:
Total Annual Costs
| Homeowner | Renter | |
|---|---|---|
| annual mortgage/rental/payment | $7,584 | $9,000 |
| real estate taxes | 1,380 | $0 |
| mortgage interest tax deduction | -1,940 | $0 |
| tax deduction for property tax | -408 | $0 |
| mortgage principal accumulation | -1,116 | $0 |
| appreciation* | -4,950 | $0 |
| Total Annual Cost | $550 | $9,000 |
| *Based on 4.5% annual appreciation rate, from the NATIONAL ASSOCIATION OF REALTORS® Median |
Homeownership is a Good Investment
For the majority of Americans, their home is their largest financial asset and a major player in their investment portfolio. It's a good thing, too, since stock market value has declined since 1998, while home price appreciation has increased. The NATIONAL ASSOCIATION OF REALTORS® estimates that home value rises, on average, by 4.5 percent a year. That's a steady return on investment; one's own home is a much less volatile asset than stocks, bonds or mutual funds.
As an example, let's look again at that $110,000 home. Unlike your rental unit, your home should appreciate over time. Assuming a 4.5 percent appreciation rate, your home will be worth $114,950 in the second year of ownership, $120,123 in the third year of you owning it, etc. After ten years, your $110,000 home will be worth $163,470. Not only do you earn a rate of return on your original purchase price, but you also get a return on any subsequent appreciation.
Appreciating" Returns
| Year | Home Value | Yearly Appreciation |
|---|---|---|
| 1 | $110,000 | $4,950 |
| 2 | 114,950 | 5,173 |
| 3 | 120,123 | 5,406 |
| 4 | 125,528 | 5,649 |
| 5 | 131,777 | 5,903 |
| 6 | 137,080 | 6,169 |
| 7 | 143,249 | 6,446 |
| 8 | 149,695 | 6,736 |
| 9 | 156,431 | 6,951 |
| 10 | 163,470 | 7,206 |
| Total Appreciation After Ten Years | $53,470 |
Homeownership Builds Wealth for Households
The Federal Tax Reserve Board estimates that homeowners have a net worth almost 36 times more than that of renters. In 2001, the median net worth for homeowners was $171,700 compared to $4,800 for renters. How do you build up your net worth? Through those "appreciating returns" on your home.
We've already seen how your $110,000 home is worth $163,470 in ten years. In addition, you are paying down the principal on your mortgage. Remember that $100,000 you borrowed at 6.5 percent over 30 years - that debt amount is decreasing every month and every year.
| Year | Home Price | Mortgage Debt | Net Worth |
|---|---|---|---|
| 1 | $110,000 | $100,000 | $10,000 |
| 2 | 114,950 | $98,786 | 16,164 |
| 3 | 120,123 | $97,586 | 22,537 |
| 4 | 125,528 | $96,307 | 29,221 |
| 5 | 131,177 | $94,942 | 36,235 |
| 6 | 137,080 | 93,486 | 43,594 |
| 7 | 143,249 | 91,932 | 51,317 |
| 8 | 149,695 | 90,274 | 59,421 |
| 9 | 156,431 | 88,505 | 67,926 |
| 10 | 163,470 | 86,617 | 76,853 |
After the first year, you now only owe $98,786 on a home that is worth $114,950. You have "netted" a $4,950 increase in the value of your home, plus $1,116 a year that previously you owed as part of your mortgage debt. As your debt decreases and the home value increases, you accumulate wealth from the value of your home. In addition, over this ten-year period, you will have a significantly lower after-tax payment for housing. Each year as your home appreciates and you continue to pay down your mortgage debt, you increase your own net worth.
Homeownership - It's NOT Just About Money
The "numbers tell the story" should ease your mind about the financial aspects of becoming a homeowner. But there are other, less monetary, benefits to homeownership. Several research studies indicate homeownership adds to the value of communities, has positive effects on children, and even contributes to increased voter participation rates.
General
House Exterior
Living, Family, Dining Rooms
Bedrooms
Bathrooms
Kitchen
Laundry
Garage
17 simple things to make your home more marketable!
- Make sure your entranceway says “Hey, look at me!”
- Prune dead limbs from trees.
- Paint (or touch up) exterior, and repair screens and windows.
- Clean your windows.
- Check A/C and heating systems.
- Fix leaky faucets, toilets, and faulty lights.
- Vacuum drapes and carpets.
- Repair wall cracks, re-caulk bathrooms and kitchen.
- Clear out closets.
- Remove excess furniture.
- Keep cats and dogs out of visitors’ way.
- Mow lawn, edge driveway and walkways
- Ensure windows, doors, and locks work smoothly.
- Weed flower beds and trim shrubs.
- Throw out junk from garage and storage areas.
- Clean lawn furniture.
- If you have a pool, make it crystal clear.
Staging your home to sell!
A few changes may decrease time on the market and increase sales price.
You know you should clean everything and get rid of clutter.
But aside from that, how do you broaden the appeal of your house?
Here are a few tips:
- Walk through the house and prioritize things that, if changed, would increase the value of your home. For example, repainting a child’s bubble-gum pink bedroom may attract more buyers than something not as apparent, such as replacing an old dishwasher.
- You can direct a potential buyer’s eye away from something negative or toward something positive. Use artwork or a room’s own features, such as a fireplace, to capture a buyer’s attention. However, there’s a fine line. You want buyers to be able to appreciate the room and not just focus on the items in the room.
- Remove any furniture that tightens spaces. If a couch or chair makes you turn your body as you walk by or just makes a passage look small, get rid of it. Everybody wants more space. Rid the house of personal effects, and don’t forget simple things like magnets on the refrigerator.
- Small distractions to the buyers’ eyes will disturb their thinking, preventing them from picturing the house as theirs. And while you want the rooms to look well-decorated and spacious, avoid turning the house into a perfect home. Try to balance the brand-new look with some of its lived-in warmth.
- Potential buyers often feel uncomfortable in bedrooms and bathrooms because they are, by definition, personal and private places. To counter this reaction, make bedrooms and bathrooms look like a model home (toss the lived-in feel out the bathroom window). Clear off all surfaces of the bathroom—remove even simple things like toothpaste and soap. Put out nice, fresh towels instead. The goal is to make these rooms comfortable for buyers. When they’re comfortable, they’ll linger and picture themselves in the house.
- Consider hiring a professional to improve your home’s visual appeal. The fee charged by a “stager” can be worth it if the changes bring a quicker offer or a higher sales price.
Why hasn’t my house sold?
Here are a few reasons and remedies
| Reason | Remedy |
| Overpriced | New market analysis, lower price |
| Price reductions too little, too late | New market analysis, significantly lower price below the next price break or two |
| New competition since property listed | New market analysis, lower price, offer incentives |
| Builder competition | New market analysis, offer upgrades competitive with builder |
| Difficult to show, not readily accessible | Use lockbox and readjust showing hours if necessary |
| Glutted or slow market | Adjust pricing and offer incentives |
| Property has become shopworn | Add new photos, offer incentive, inform area REALTORS® |
| Many showings but no offers | Reduce price |
| Offers forthcoming but not consummated | Re-examine counters and adjust to offers |
| Condition (maintenance problems) | Freshen up and review ways to improve |
| Condition (major problems) | Rehab as necessary—new carpet, paint |
| Cosmetic allowances have not enticed offer not enticed offer | Rehab as necessary—remove allowance |
| Location not desirable | Compensate with price adjustment |
| Property showcased poorly | Hire staging professional or ask REALTOR® for suggestions |
| Property not being shown | Make property more accessible with lock box |
| Pets (odor, soil, and intimidation) | Deodorize carpet, cage pets when not home |
| Neighbors or neighborhood | Counsel with neighbors regarding interference and condition of their properties |
| External influence (new highway, etc.) | Adjust price, gather accurate data, and prepare fact sheets |