Hi. I'm Diane McNelis, Award winning Texas Realtor(R) with Coldwell Banker Southern Homes. Selling and Buying homes in Southeast Texas can be complicated. I'm here to help. When we work together I become your advocate. My goal is to get you the best deal possible and to exceed your service expectations. On my blog, I share tips and strategies for selling and buying homes in Southeast Texas.

Mortgage and Finance

Finding Homes with Owner Financing in Southeast Texas

The topic of owner financing is a popular one.  In fact, the posts on the blog that get the most responses tend to be the posts about finding homes that offer owner financing.  We all know the banks and big lenders are harder to work with than ever.  Qualifying standards haven't been this strict in years.  This has led to a group of potential home buyers that can't buy a home through the traditional lenders. 

The only hope for these buyers is Owner Financing.  From time to time, it is interesting to see just how many home owners that are trying to sell their homes are willing to offer owner financing.  Take a look at this chart.

Owner finance 

Out of the 2,700 plus homes that are for sale through the Beaumont MLS, at this time only 41 offer owner financing as an option for the buyer to purchase. 

"Just less than 2% of all homes listed offer owner financing at this time."

Here's 3 other noteworthy statistics about homes that offer owner financing in the Southeast Texas real estate market:

  1. The average price is $138,430
  2. The average days on the market is 153 which is a little higher than the overall average number of days on the market.
  3. You can buy new construction with owner financing through a few home builders.

Kelley Family Investments is building new homes in Wolf Creek.  This builder offers owner financing.  His terms are pretty reasonable.  Home prices are in the middle 100's. 

Three other things to think about before you buy a home with owner financing:

  1. Sellers are going to charge a higher interest rate than the banks.  On average expect to pay 7-10% in interest.
  2. Every seller can set their own terms.  For example, some sellers may finance for 20 years.  Others may want a payoff in 5 years with a balloon payment.
  3. As a buyer will you pay for an appraisal?  Its not a requirement with owner financing

There are a lot of things to consider when you decide to look for homes that offer owner financing.  .  With only about 2% of the homes for sale in Southeast Texas even offering owner financing, its not an easy way to find and buy a home.  It can be done but be prepared for the challenges. 

Texas Ranks Number 2 in Highest Closing Costs

Closing costs by state

Texas may be known for great home prices but we are also know for higher than normal closing costs.  Bankrate.com researched all fifty states and determined home buyers in Texas pay more in closing costs than buyers in any other state- except New York. 

The chart above shows average closing costs on a $200,000 home purchase.  The total fees don't include your prepaid items such as escrow accounts for taxes and insurance. 

For more details on closing costs in each state link on the link below "New York Number 1..."

No Real Estate Slow Down with Jefferson County Foreclosure Notices

Jefferson Co. CourthouseOn Tuesday, April 6th, one hundred and forty one homes could be auctioned off on the court house steps. 

According to the Jefferson County Clerk's Office, there have been one hundred and forty one notices of trustee sale filed in time for the April 6, 2010 auction.  These homes are in neighborhoods you know.  River Oaks Estates, Dowlen West, Glenwood, Northwest Forest, Calder Place,and Stonegate Manor are all on the list. 

The good news is not even close to one hundred and forty one homes will be auctioned off.

The bad news is if one that is auctioned is in your neighborhood watch out for falling property values.

Generally speaking, on any given month for the past two years, the clerk's office has received over 100 notices of trustee sale.  Check for yourself.  All foreclosure notices are a matter of public record.  The clerk's office website is http://jeffersontxclerk.manatron.com/.

Having attended a good number of the Tuesday auctions over the past two years, I've never seen more than thirty properties auctioned on any given Tuesday.  Keep in mind most of these homeowners are working on a plan to keep their home.  Some homes are for sale, some sellers make a payment in time, so only the worst of the worst situations actually end up being auctioned.

A few other things to know about the foreclosure sales:

  • Cash is king.  No financing allowed.
  • Do your homework.  There will be others there bidding on the homes with profit potential.
  • Be brave.  No inspections allowed.  You are buying the home "as is".
  • Eviction is not a simple process.  If the owner is still living at the home, you'll have to become knowledgeable on the ins and outs of eviction.
  • Why buy this way at all?  Sometimes a good profit stands to be had for the educated buyer.

Want to know more about buying a foreclosure in Jefferson County?  One way to start is by attending an auction.  An easier way to start is to contact me and ask for a list of the REO homes that are available. 

Filing Homestead Exemptions in Jefferson, Hardin and Orange County

Hungry birds If you settled in to a new nest last year, then its time to think about filing for your homestead exemption. 

A homestead exemption removes part of the value of your residence from taxation and lowers your taxes.  Now, that's something to chirp about.  In order to qualify you must own your home as of January 1 of the tax year and use the home as your principal residence. 

According to the Jefferson County Appraisal District there are actually four types of homestead exemptions:

  1. General Homestead- for every homeowner
  2. Over 65 Homestead
  3. Surviving Spouse Over -65 Homestead
  4. Disability Homestead

Exemption applications, other than over 65, must be filed between January 1 and May 1 of each tax year. 

To find out how much you will save by filing for homestead current rates for Jefferson County are posted on the JCAD website. 

The Window on State Government Website gives the following information for filing for homestead. 

How do I get a general $15,000 homestead exemption?

You may file an Application for Residential Homestead Exemption with your appraisal district for the $15,000 homestead exemption up to one year after the taxes on the homestead are due. Once you receive the exemption, you do not need to reapply unless the chief appraiser sends you a new application. In that case, you must file the new application. If you should move or your qualification ends, you must inform the appraisal district in writing before the next May 1st. A list of appraisal district addresses and phone numbers is available online.

If you need a copy of Hardin, Jefferson, or Orange County's Homestead Exemption form contact me and I'll email it to you.  Just make sure you remember to file before April 30, 2010.  There's no reason to pay more taxes than you have to. Share this with all your friends who found a nest to call home last year and they will be singing your praise.  Happy New Year!


Southeast Texas Home Buyers Find FHA Loans Most Appealing

Its harder to finance a home these days.  If you've been in the residential real estate market in 2009 that comes as no surprise.  You may find it surprising to know that in October in Southeast Texas more home buyers used FHA loans than any other type of financing.  See the cool chart below.

Conventional financing still comes in second for all Southeast Texas home buyers and not far behind is cash.  37 home buyers paid cash for their home in October.  What a nice problem to have. 

Here's five more noteworthy tips about the type of financing home buyers used this October:

  1. The median price for cash closings was $75,000.
  2. The median price for conventional closings was $163,000.
  3. All homes spent an average of 116 days on the market.
  4. The median price for FHA closings was $124,900.
  5. This October 155 homes closed, compared to 178 last year, and 185 in 2007. 

*Data is from the Beaumont MLS and has not been released to Texas A&M real estate center yet.  One of the big advantages of FHA financing is the 3.5% down payment.  For first-time home buyers its about the cheapest way to get into a home.  FHA loans also allow up to a 6% seller paid closing cost contribution.  Its no wonder, with the first-time home buyer tax credit still driving the market, that FHA financing is the most appealing loan type right now.  Want more information about the Southeast Texas residential housing market?  You can contact me right here on the blog.  Just click the contact Diane button in the right column. 

Three Addresses You Wouldn't Expect To Find At The Auction

Jefferson Co. Courthouse Tomorrow, at the most Northerly door to the newest addition to the Jefferson County Courthouse, there will be a sale. 

This sale takes place the first Tuesday of each month rain or shine, wind or snow, or even Hurricane as we found out last year.  Its the Notice of Accereration and Notice of Trustee's Sale.  Also, know in layman's terms as the Foreclosure Sale.

This month there were approximately one hundred Notices of Trustee Sale filed at the Jefferson County Clerk's office.  That's about average for Jefferson County in Southeast Texas.  At least it has been this year.  As you might expect you'll see some addresses in Port Arthur.  But it may come as a surprise to see a few addresses that you wouldn't expect.

Now, foreclosure is not a process to make light of.  It is bad for the homeowner.  It is bad for the neighborhood and its bad for the lender who has not been repaid on the mortgage note.  Its not just a problem in the entry level housing market either.  

Would it surprise you to learn a Notice of Trustee Sale has been filed for a home in Barrington Heights?  How about a home on Salem Circle in Dowlen West?  What about another home in Dowlen West on Shakespeare Drive? 

All three addresses can be found by searching the most recent Notice of Trustee Sale records filed with the county clerk.  Here's what it doesn't mean.  These homes may or may not be sold at auction tomorrow.  The grantor and mortgagee have probably been working very hard to work out an acceptable payment plan that will keep the home owner in the home. 

Of the one hundred or so homes that have had a notice of trustee sale filed and are scheduled to be sold at the auction tomorrow, probably less than 1/4 of those will actually be sold.  At least that seems to be the norm.  Often the only bidder willing to buy the home at the auction is the mortgage holder (the bank or lender).  Buyer's have to pay cash at the auction which knocks out a lot of interested would be buyers.  Especially for the more expensive homes. 

If you are curious about the foreclosure auctions, attending an auction is a good place to start.  Tomorrow, at the most Northerly door to the newest addition to the Jefferson County Courthouse there will be a sale.  Sale starts at 1pm or within three hours thereafter.  Bring a chair and snacks and be prepared to wait.  You might be surprised by what you learn.

Getting A Loan? Here's What You Need To Know About the Third Party Financing Addendum

Almost all of us take out a mortgage when we purchase a home.  In Texas, when you make an offer that is contingent upon financing approval to complete the purchase, you will want to sign a third party financing addendum. 

The Texas Association of Realtors addressed a few of the components of this addendum in a recent email update to Realtors.  This is information they shared with members in the recent update.

Third Party Financing Condition Addendum
I'm having difficulty understanding the terms and issues involving the Third Party Financing Condition Addendum. How does this addendum work?

Prior to the adoption of the current addendum, there was considerable uncertainty as to when and how it was to be determined if the buyer had satisfied the lender's financial requirements. Often the dispute concerning the lender's approval would arise many days after the time period for approval under the prior addendum had expired, and the argument would be whether approval had in fact been obtained within the days specified.
In order to give all parties some certainty about this approval process, the addendum was changed to put the burden on the borrower/buyer to provide written notice to the seller within the time specified if the buyer cannot obtain the necessary financial approval. This would seem to be appropriate, since the buyer is in the best position to obtain that information from the lender and, after all, it is the buyer's contingency. If the buyer is not satisfied that he has obtained financial approval relating to his assets, income, and credit history within the time provided, the buyer must give timely written notice to that effect to the seller. If the buyer gives a timely notice, the contract terminates, and the earnest money is refunded to the buyer. If the buyer does not give such written notice to seller within that time period, the contract will no longer be subject to the buyer's financial approval regarding assets, income, and credit history.
The addendum does not require that the buyer obtain financing approval within the specified time period. Rather, it provides an opt-out period for a buyer who does not believe he can obtain that approval.
As was the case before this change, the lender's approval of the property as satisfying the lender's underwriting requirements is separate from the buyer's personal qualifications.

*Quoted from The Texas Association of Realtors.

As a home buyer who's not a real estate professional, here's the top 5 things you need to know about the addendum. 

  1. It is the buyers responsibility to give written notice to the seller if they are unable to get their loan approved.
  2. If the buyer gives written notice within the time frame then they will be able to terminate the contract and the earnest money will be refunded.

  3. The buyer does not have to have loan approval within the given time period.

  4. The home must still meet the lender's underwriting requirements regardless of the time frame for financing approval.

  5. If the property does not appraise for the purchase price then the buyer has the option of proceeding with the purchase or terminating the contract.

That's a quick and simple explanation of the third party financing addendum.  As with all contracts, if you have specific legal questions when you should consult an attorney.  If you are starting a home search, you will find there is a lot of paper work that comes along with buying a home.  If you are getting a mortgage to buy your home then you will want to make sure you are signing a third party financing addendum.  Its for your protection.

Breaking Mortgage Update: Get Your $8,000 Tax Credit At Closing

Read me sign

Just in this morning.  Southeast Texas has a lender than is offering monitaziation of the $8,000 first-time buyer tax credit.  Haven't heard about the credit yet?  You must have been under a rock but here's a website with all the information on Federal Housing Tax Credit for first-time home buyers.

The Mortgage Group is our local lender who is offering the program.  Here's the announcement:  

We are very excited to announce we are now able to offer the Texas Department of Housing and Community Affairs MONITAZIATION of the $8,000 Tax Credit so the funds can be used at closing.  The borrowers are allowed to get 5% of the first lien amount up to a max of $7,000 to go for down payment or closing costs.  Here are a few bullet points to help you understand the program:
Each buyer must complete a pre-purchase homebuyer education course.
Homebuyers must be eligible to claim the Federal Tax Credit.
Homebuyer must complete the IRS Form 5405 and file an amended 2008 IRS Federal Tax Return.
This is a 90 day 0% loan with a $250 admin fee.
Homebuyers cannot have owned a home in the last 3 years.
Must meet income limits.
If funds are not paid back within 90 days, the funds are repaid over 24 months at 10% interest with monthly payments of $323 per month. 
Scott Gittinger
Senior Loan Officer
Texas License Number 49555
Michael Caballero
Marketing Director
Mortgage Group
990 IH 10 North, Ste 135
Beaumont, TX 77702

(409) 899-1800   Office
(409) 899-1808   Fax
(409) 351-2528   Cell

If you need more information about this program call today.  Its an incredible opportunity but you have to qualify and you have to close on a home before November 30, 2009.  Its taking about sixty days for most residential purchase contracts to close these days so you want to be finding a home soon.  If you wait until October or November to start looking you may be too late.  Sometimes offers like this sound to good to be true but this one is true.  First-time home buyers are able to get an $8,000 tax credit for buying a home. 

Its Time To Buy! Beaumont, Texas Mortgage Rates Under 5%.

Squirel on fenceIf you've been sitting on the fence looking for the best time to buy a home, its time to jump!  Rates have fallen below 5% on a 30 year fixed rate mortage.

Local Southeast Texas lender's rates:

Wells Fargo, Beaumont has a rate of 4.75 today!

Bank of America, Beaumont has a rate of 4.85 with a 10% down payment, 30 year fixed today!  

The Mortgage Group, Beaumont has rates right around 5% depending on your down payment. 

It's a great time to buy.  Rates won't be staying this low once the economy starts to rebound.  I guess there are some good things to come from a national recession.  Now, get off the fence and buy a home.  You'll be kicking yourself if you miss these rates.  Need help finding one?  Email me. diane.mcnelis@gmail.com.

Buy Your 1st Home, Get $7,500 Tax Credit.

Atm_machineFirst-time home buyers have 7,500 reasons to buy a home now.  The Housing and Economic Recovery Act of 2008 was signed by President George Bush on July 30th.  One of the most exciting parts of the new bill is the provision for first-time home buyers.  There is a $7,500 tax credit you can receive next year.  Owe nothing on your tax return?  You could get a check for $7,500.

How do you get the $7,500 credit?

Buy a home between April 9, 2008 and July 1, 2009 and you are eligible for the $7,500 tax credit.  You have to be a first-time home buyer or haven't owned a principal residence in the three-year period prior to the new home purchase.  Married couple?  Neither spouse can have owned a home in the past three years to qualify. 

Are there restrictions?

There is a maximum income for individuals.  It is $95,000 in yearly earnings.  There is a maximum for couples filing jointly.  If your combined income is over $170,000, you won't qualify.  (Sorry, you make too much. No tax credit for you.)  Other restrictions just to keep us all honest and using the credit for what it was intended for. You have to buy a principle residence.  It has to be located in the United States.  That's about all the restrictions. 

The tax credit is a great incentive to buy a home before next July, but the money is not completely free.  It has a payback period.  Think of it as an interest free loan.  The credit has to repaid over the course of 15 years.  You will be paying back about 6.67% per year.  If you received the full credit of $7,500, you would be paying back about $500 per year. 

This recovery act is still being deciphered by very knowledgeable people, but the $7,500 tax credit is really there.  Buy a home and next year you can get up to a $7,500 check courtesy of Uncle Sam. 

Want to learn more about the tax credit and the Housing and Economic Recovery Act?  Read More.

If you are a first-time home buyer, there is no better reason - than these $7,500- to stop waiting and buy a home now.