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Should I hire a Home Inspector?

by Lorna Calder

I was recently asked by a reporter to answer the following question...

Q: How important is it for a prospective buyer to hire a professional to inspect a home before they make an offer on it?

 A: In a word…. VERY. 

I encourage all of my buyers to have a home inspection. This is a process that falls under the buyers ‘due diligence’. As REALTORS®, we are not experts in inspection matters and cannot advise or work outside of our area of expertise – this would include inspections, therefore I always recommend a home inspection. There are several different types of home inspections. There is the standard home inspection that inspects systems like structural including foundations, grading, drainage, roof structure and covering; electrical systems; heating ventilation and air conditioning (HVAC); plumbing; appliances and optional systems like pools, and sprinklers. There are also pest, wood destroying insect, and in depth HVAC inspections. Specialized inspections available for Structural components that are performed by structural engineers for concerns about foundation and settling issues. 

I am sometimes asked ‘What if it turns out that the house has too many repairs’ will I get my money back for the inspections? The answer is no, but the inspection fee is money well spent to avoid a potentially bad buying decision… and it will cost a whole lot more to try and sell a bad house afterwards. At a cost of approximately $250 - $400 for a standard home inspection in the Houston and Kingwood Texas market area, an inspection is a smart choice.  

The inspection process is a time of disclosure about any material defect on the home that the seller was unaware of, or any system in the house that is not performing it’s intended function. The inspection process usually takes about 4 hours and is a great time for the buyer to learn more about the home. Many inspectors will utilize the time spent with a buyer to educate them on regular and routine maintenance items, which is why I urge all buyers to attend their inspections. Most inspectors prefer this as they can explain deficiencies found during the inspection directly to the buyer at the time of inspection. In Texas, Home Inspectors are licensed by the state (TREC – Texas Real Estate Commission) and follow a format for their inspections. They too cannot inspect outside their area of expertise for example HVAC (Heating, Ventilation and Air Conditioning), or Pool - but they can suggest based on their initial findings when it may be a good time to have a specialized inspector come in to inspect further.

Once the inspection is completed the inspector will send a report with the findings to the buyer. The buyer should review the report with their REALTOR® to determine what repair requests if any will be made to the seller. Many buyers falsely believe that the seller is responsible to bring the house up to code as a result of deficiencies found during the inspection. I caution my buyers and sellers that this belief usually results in the contract falling apart and the buyer backing out, thus not getting the house they really want. On the other hand sellers that refuse to make repairs can also turn things sour very quickly. The key here is for REALTORS® to educate their clients on what to expect during and after the inspection process. The buyer and seller with the help of their REALTORS® need to have a meeting of the minds as to what constitutes a reasonable request for repairs. Some sellers will agree to repair certain items, while others may not want to deal with any repairs and offer the buyer a lender approved seller concession towards closing costs in lieu of repairs. This allows the buyer to be able to choose who performs the work and to what standard the work is performed and also allows the seller to move forward. 

When considering hiring a home inspector, buyers are urged to hire only licensed inspectors, check references, shop around and most importantly ask a lot of questions before you engage their services. Buying a home is one of the most important financial decisions we make and taking the time to have a home inspection can result in years of worry free homeownership.

October 2010 Houston and National Housing Trends

by Lorna Calder

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and REALTOR.com local community reports.

As 2010 property tax bills are being sent out, homeowner's find themselves asking how can I reduce my property taxes? the time to start thinking about this is now...

Chief economist with Stewart Title, Ted Jones shares information with us in this video:  

 

If you have not reviewed my monthly Housing Trends Newsletter - you could be missing out. Everywhere I go, people are asking me about the housing market conditions - it's on everyone's mind. Staying abreast of local and national market conditions and factors that can affect the future sale or purchase of your home can make the decision process less daunting. I always tell my clients that in order to make the best decsion they need to have all the information they can upfont. My Housing Trends Newsletter is just one of the tools in my arsenal to make sure you keep informed. 

The October 2010 Local and National Housing Trends has just been released. This month's newsletter is packed full of local and national housing market statitics and news you need to know to stay current with today's changing housing market.

This month's issue features:    

Pending Home Sales Show Another Gain

The Greater Houston Area Market Trends Report for October 2010 

10 Reasons Homeownership is a "Good Thing"

You can view the newsletter here.       

If you wish to receive FREE Housing Trends eNewsletter e-mailed to you monthly, click here to Subscribe.   

If you are considering selling your house or buying a home and need more information, I am never too busy to help, please contact me for more information.

 

Houston MLS Market Update for September 2010

by Lorna Calder
While Home sales are Soft, prices hold...Houston is still the Bright Spot
 
The Houston MLS showed property sales slip for a third consecutive month, but the average and median prices achieve the highest levels for a September in Houston. 

HOUSTON — (October 19, 2010) — September brought the Houston housing market its third straight month of declining sales volume following the expiration of the homebuyer tax credit. However, despite the drop, pricing continued to demonstrate strength with a boost in the average price and a slight uptick in the median price of single-family homes.

According to the latest monthly data compiled by the Houston Association of REALTORS® (HAR), September sales of single-family homes throughout the Houston market fell 18.6 percent compared to September 2009. Declines were recorded in three of the five pricing segments.

The average price of a single-family home rose 5.0 percent from September 2009 to $215,250, primarily due to continued strength in the upper end of the market The September single-family home median price—the figure at which half of the homes sold for more and half sold for less—edged up 0.2 percent from one year earlier to $156,250. Both average and median pricing achieved the highest levels for a September in Houston.

Foreclosure property sales reported in the Multiple Listing Service (MLS) declined 6.9 percent in September compared to one year earlier. The median price of September foreclosure sales slid 5.2 percent to $82,500 on a year-over-year basis. These figures were collected before the national controversy arose over alleged improprieties in preparation and review of foreclosure paperwork and therefore does not reflect any potential freeze on such transactions.

Sales of all property types in Houston for September totaled 4,648, down 18.0 percent compared to September 2009. Total dollar volume for properties sold during the month was $958 million versus $1.1 billion one year earlier, representing a 12.9 percent drop.

"The Houston real estate market continues to experience slower sales coupled with strong pricing, and that combination still puts us in an enviable position compared to many other markets around the country," said Margie Dorrance, HAR chair and principal at Keller Williams Realty Metropolitan. "With interest rates at all-time lows, we look to the fourth quarter of 2010 with hopeful eyes provided the local job market is healthy."

September Monthly Market Comparison

The month of September brought Houston's overall housing market largely negative results when all listing categories are compared to September of 2009. Total property sales and total dollar volume fell on a year-over-year basis while the average single-family home sales price rose and the median price was flat.

Month-end pending sales for September totaled 3,023, down 17.2 percent from last year, suggesting the probability of another sluggish month for sales in October. The number of available properties, or active listings, at the end of September rose 18.7 percent from September 2009 to 54,027. The increase in available inventory coupled with slow sales volume has pushed the inventory of single-family homes for September to 7.7 months compared to 6.2 months one year earlier. This figure still remains healthier than the national inventory of single-family homes of 11.6 months, reported by the National Association of REALTORS® (NAR).

CATEGORIES SEPTEMBER 2009 SEPTEMBER 2010 PERCENT CHANGE
Total property sales 5,671 4,648 -18.0%
Total dollar volume $1,100,317,722 $958,308,113 -12.9%
Total active listings 45,520 54,027 18.7%
Total pending sales 3,650 3,023 -17.2%
Single-family home sales 4,797 3,903 -18.6%
Single-family average sales price $204,922 $215,250 5.0%
Single-family median sales price $156,000 $156,250 0.2%
Months inventory* 6.2 7.7 24.1%
* Months inventory estimates the number of months it will take to deplete current active inventory based on the prior 12 months sales activity. This figure is representative of the single-family homes market.

Single-Family Homes Update

September sales of single-family homes in Houston totaled 3,903, down 18.6 percent from September 2009. This marks the third monthly decline in sales volume after four consecutive months of accelerated sales activity that was largely driven by the tax credit. Broken out by segment, September sales of homes in the $80K-$150K range dropped 26.1 percent; sales of homes between $150K and $250K were off 25.4 percent; and sales of homes ranging from $250K-$500K slid 18.0 percent. Sales of homes priced from $80K and below climbed 6.3 percent while those that make up the luxury market—priced from $500K and up—rose 6.6 percent. Sales of all property types combined declined 18.0 percent in September on a year-over-year basis. However, on a year-to-date basis, single-family home sales are off 1.8 percent from 2009 levels.

Single Family Home Sales

The average price of single-family homes in September was $215,250, up 5.0 percent compared to one year earlier. That's the highest level recorded for a September in Houston. At $156,250, the median sales price for single-family homes edged up 0.2 percent versus September 2009, achieving its highest level for a September in Houston. The national single-family median price reported by NAR is $179,300, illustrating the continued higher value and lower cost of living that consumers enjoy in the Houston market.

Single Family Average Home Price

HAR also breaks out the sales performance of existing single-family homes throughout the Houston market. In September 2010, existing home sales totaled 3,281, an 18.2 percent decline from September 2009. The average sales price edged up 6.0 percent to $202,388 compared to last year while the median sales price of $143,500 represents a decline of 2.4 percent from its September 2009 level.

Townhouse/Condominium Update

The number of townhouses and condominiums that sold in September fell 28.5 percent compared to one year earlier. In the greater Houston area, 338 units were sold last month versus 473 properties in September 2009.

The average price dipped 1.1 percent to $155,397 from September 2009 to September 2010. The median price of a townhouse/condominium dropped 8.4 percent $114,500.

Townhouse/Condominium Sales

Lease Property Update

Demand for single-family home rentals rose 25.3 percent in September compared to one year earlier. Year-over-year townhouse/condominium rentals increased 26.0 percent.

Houston Real Estate Milestones in September
  • At $215,250, the average price of a single-family home reached the highest level recorded for a September in Houston;
  • At $156,250, the median price of a single-family home also reached the highest level recorded for a September in Houston;
  • 7.7 months inventory of single-family homes compares favorably to the national average of 11.6 months.

  • The computerized Multiple Listing Service of the Houston Association of REALTORS® includes residential properties and new homes listed by 25,000 REALTORS® throughout Harris, Fort Bend and Montgomery counties, as well as parts of Brazoria, Galveston, Waller and Wharton counties. Residential home sales statistics as well as listing information for more than 50,000 properties may be found on the Internet at http://www.har.com.

    The information published and disseminated to the HAR Multiple Listing Services is communicated verbatim, without change by Multiple Listing Services, as filed by MLS participants.

    The MLS does not verify the information provided and disclaims any responsibility for its accuracy. All data is preliminary and subject to change. Monthly sales figures reported since November 1998 includes a statistical estimation to account for late entries. Twelve-month totals may vary from actual end-of-year figures. (Single-family detached homes were broken out separately in monthly figures beginning February 1988.)

    Founded in 1918, the Houston Association of REALTORS® (HAR) is a 25,000-member organization of real estate professionals engaged in every aspect of the industry, including residential and commercial sales and leasing, appraisal, property management and counseling. It is the largest individual dues-paying membership trade association in Houston as well as the second largest local association/board of REALTORS® in the United States.

    SOURCE: HOUSTON ASSSOCIATION OF REALTORS® September 2010 Monthly Press Release

     

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