QUICK TIPS FOR THAT NEXT DIY PROJECT
So you have finished your last episode of the latest and greatest home makeover show on HGTV. You are pumped. You are overloaded with ideas. You are confident. You can build anything. Well, before you jump in and start ripping out the sheetrock or tearing out the floor, take the time to start the project off on the right foot. I know. HGTV makes it all look so easy and doable. It's as simple as running down to the Home Depot or Lowes and grabbing up the material and diving right in. Right? The truth is while there are certainly many home projects that you can do yourself, you really need to be prepared if you want the project to go right and not be a disaster in waiting. Here are some good tips for helping make sure your next home makeover project goes according to plan.
Stephen McClain is a licensed Broker and owner of Cornerstone New Home Solutions serving the greater Austin, TX metro and surrounding area. He is also a certified instructor for the Texas Real Estate Commission under contract with Champions School of Real Estate. For more information you may contact Stephen at firstname.lastname@example.org.
Home Inspections. Yey or Ney? Is there really any value?
Can the buyer ask for another inspection when the first one was over 3 hours long and did not find anything wrong except very minor maintenance? Answer; yes- the homebuyer(s) can hire and pay for as many inspections as they want right up until the very hour of closing if they wish. They can hire inspectors even after the closing if they choose. That is their legal right, their time, and their money. The REAL question is what impact does the inspection have on the transaction and the obligations on both buyer and seller under the terms of the contract? That may be a little or it may be a lot.
So let’s back up and first take a quick look at the theory behind home inspections. Why do or should homebuyers want a home inspection in the first place? The common sense answer would say, I hope, because it informs the perspective homebuyer about the overall condition of the home in a more comprehensive, educated and certified manner. The end result is a detailed report delivered to the homebuyer explaining in detail, the condition of the home from a structural and functional standpoint. What parts and pieces work or what does not. What components are outdated and or no longer to construction code? What is functionally obsolete? What may be potential problems in the near or distant future? Problems that could lead to major construction repair cost.
So it in theory provides or should provide a wealth of information. So is it worth it? That depends on how you look at it and the role you play in the transaction. There is theory and then there is legal reality. There is this other piece of the puzzle called the purchase contract. A document in writing between a buyer and a seller that spells out according to its terms, the obligations, conditions and agreements between both parties involved in the sale of real estate. That contract is legally binding on both parties. It was created to legally protect both parties. The seller’s representing agent usually wants nothing to do with the inspection for legal reasons. If there is a problem with the home they do not want to know it because of obligation to disclose. They just want the closing date to get there as fast as possible. On the other hand, the Buyer’s representing agent wants as little to do with the inspection as well but has certain duties under the terms of the contract to protect their client. Again, for legal reasons they do not want to know anything that puts an obligation on them to advise or inform (disclose) and potentially mess up a deal. Expensive repairs or problems can cause a contract to “bust out” quickly.
The seller, as the owner of the home, has no further obligations beyond the terms of the contract. They are not obligated to do anything in terms of additional repairs to the home or paying for additional repairs (allowances) and or lowering the purchase price of the home. Whether the buyer has one inspection or forty it does not matter. No matter how bad the inspection report(s). The vast majority of the time, the Seller will and should market / list the home “as is” which gives them the greatest protection. They do have the legal obligation at least in most states to disclose in a “Seller’s Disclosure” all their fair and reasonable knowledge of the home and its condition. But unless the purchaser acts under the terms of the contract, most specifically its’ deadline dates, they are bound to follow through with the purchase or risk default and the loss of their earnest money.
So the burden is on the buyer. If there is an “option period” negotiated into the contract and purchased separately, then the buyer under the terms of the option period has a certain window of opportunity to get as many inspections as they wish. Within the time frame of the option period, they can terminate the contract without reason or loss of earnest money. They can also “re-negotiate” the terms of the contract and the seller may or may not agree to the new terms. Once the option period has passed, the buyer is fully obligated to the terms of the contract. If the buyer chooses not to negotiate an option period they still have the right to have an inspection(s) done on the home but again, there is no obligation to the seller and the buyer is still bound to the terms of the contract including the closing date.
So here are 5 tips for homebuyers regarding home inspections:
FHA OPENS NEW WINDOW: LOAN APPROVAL MAY BY CLOSER THAN YOU THINK
Here is finally some good news out of the FHA Camp. Someone in FHA finally woke up to the fact that you can offer all the great financing programs there is but if homebuyers can't qualify for a mortgage then it really doesn't matter. If you were part of the last economic crash in 08 that managed to drag out until this year (that would be most everyone one of us to some degree or another) then you may be one of those who desires to buy a new home but can't find the financing. Well you may be closer to qualifying than you think. FHA has just announced new qualifying guidelines for those who have experienced derogatory credit due to the last recession. There are guidelines though. See Matthew Graham's article below on this new window of opportunity.
by Matthew Graham
FHA Throws Lifeline to Those With Damaged Credit During Recession
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Aug 19 2013, 2:05PM
The financial crisis took its toll on Wall Street and Main Street alike. Mistakes were made and bills went unpaid on both sides of the fence, but Main Street sees Wall Street bailouts and asks "where's my bailout?" Specifically with respect to the housing market, borrowers who have had bankruptcies, foreclosures, deeds-in-lieu, short-sales, or other adverse credit have heretofore been unable to quickly reestablish themselves as worthy borrowers. That's changing.
Late last week, The Department of Housing and Urban Development on Thursday unveiled a new set of guidelines under the FHA program specifically geared toward homeowners and prospective homeowners adversely impacted by the Great Recession. The "Back to Work" program, as it's called, doesn't constitute a free pass for those who would otherwise be unable to qualify for financing, but it does reopen the housing market to a great many borrowers who would otherwise have been waiting for 3-7 years to tick off the clock--depending on their initial credit issue--before being able to qualify for a mortgage. In FHA's words:
"As a result of the recent recession many borrowers who experienced unemployment or other severe reductions in income, were unable to make their monthly mortgage payments, and ultimately lost their homes to a pre-foreclosure sale, deed-in-lieu, or foreclosure. Some borrowers were forced to file for bankruptcy to discharge or restructure their debts. Because of these recent recession-related periods of financial difficulty, borrowers’ credit has been negatively affected. FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage."
The program will require prospective borrowers to thoroughly document the nature of the "Economic Event," that it resulted in derogatory credit, and that there has been a satisfactory recovery from the Event per the new guidelines.
Lenders will consider the Economic Event to have caused the derogatory credit if:
Lenders will consider borrowers to have reestablished satisfactory credit if:
For the purposes of this program, an "Economic Event" is defined as "any occurrence beyond the borrower’s control that results in loss of employment, loss of income, or a combination of both, which causes a reduction in the borrower’s household income of twenty (20) percent or more for a period of at least six (6) months. The Onset of an Economic Event is the month of loss of employment/income." Lenders will verify the reduction in income or loss of employment with at least one of the following:
Additionally, lenders have to verify a 20 percent loss of income due to the Economic Event by documenting borrowers' income prior to the event. This requirement can be satisfied either with a written "Verification of Employment" form with income details provided by the employer or signed tax returns (or W-2s). So there is hope yet. Do not give up the ship. I certainly hope that the conventional lenders catch on as well. Not everyone is a fit for FHA. This would be a smart move if handled properly and would open the door of opportunity to those who historically are very credit worthy but got caught up in something they had no control over. I suggest you contact your lender to see if you qualify for this new program. Now is a good time to buy.
Let’s face it. Buying or selling a home is an emotional driven decision and transaction. It just is. As consumers we all want the most for the least, the best deal or best value we can get for our dollar. And that will always be an underlying factor in the decision process. But it is not the driving force in our motivation to buy or to sell a home. Buyers seek and purchase a home because they need shelter that satisfies their needs, wants and desires. That is an emotional based decision. Sellers make a decision to sell because they there is a need to make a change in their current situation- a job change, relocation, financial situations (positive or negative), family situations (new additions or children leaving the nest) and desire for something different. Again these are emotional driven decisions.
As an agent who works with both buyers and sellers, I see this every day. One of the hardest tasks I face as a Broker and agent for my selling clients is to move them mentally past the emotional relationships to their home and truly understand and embrace the reality of listing and selling their home. The fact that the current market conditions and realities that exist within their present market place can sometimes be a major roadblock. As consumers, we all read the newspapers, watch the news on Television, or pick up countless amounts of information on the internet. We know the realties but we just don’t want to accept the fact that it applies to our home. I too can appreciate this as a home owner. After all we raise our children in these homes, have countless memories , have put our own time energy and money and most of the time our sweat and backs into these homes and making them nice with various home upgrading projects. We are emotionally attached to the property.
The truth is sometimes I have to tell my clients what they do not like or want to hear. The home is not presently worth what they want or think it should be. But as a licensed broker I am bound to certain duties of Fidelity, Integrity and Competency which means looking out for my clients best interest at all times and that means telling the truth and giving facts as they exist. So here’s one of those truths- Current Market Value (CMV)does not always mean Fair Market Value (FMV)or Intrinsic Market Value(IMV). CMV means simply what value the home will bring in the current market place given present demand, supply, and economic conditions. Simply put, what buyers are willing to pay for the home today. FMV or IMV means the value a home SHOULD bring in a normal market with normal conditions and normal equilibrium with no external or undue pressures on the buyer or seller. By definition these values may and usually are never exactly the same because marketplaces are rarely in perfect equilibrium.
So here in closing are 6 points that I believe Sellers should fully understand and or undertake in the preparation of selling their home:
1. Realize upfront when purchasing a home that timing is everything. Homes will fluctuate in value over time given varying market conditions. You cannot control the economics of the situation and none of us have a crystal ball to know the exact or perfect timing in our lives to buy or sell. Again, it is driven by emotion and usually a motivated need.
2. Know and understand the current market economics before you market the home for sale. This will eliminate or least minimize the shock or disappointment factor upfront so that you are past the emotional aspect and deal with the sale of the home in a business manner. After all, the goal is to get the home sold and move on with the next chapter in your life.
3. Know your competition. Look at the current competition on your street, your block, your neighborhood and your area. Visit the homes and remember to “check your emotions at the door”. Preview the homes without blind eyes and be honest with yourselves as to how they compare with your home- location, sq. footage, asking price, floor plan description, design, features, finishout and overall condition. MORE IMPORTANTLY, if at all possible, visit the homes that have just recently sold in the same area. Sometimes they may not yet be occupied or they may have new homeowners who are willing to permit you to preview the property. Just explain that you live within the neighborhood and are considering selling your home and would like to see their home as a comparison. Usually they are cooperative. Hiring a real estate professional will help you in this endeavor as well.
4. Realize the true value of a Real Estate Professional. This will greatly aid you in achieving point number 2. I emphasize the term “Professional”. Find a Real Estate Broker or agent who truly is competent and knows their business. One who can/will give you a true perspective on current market conditions and the value of your home. Not one who is just chasing business. Remember in selling the home, timing is everything. Time is money. A Real Estate Professional knows how to market and has access to a vast amount of resources to maximize the exposure of the home. Statistics clearly show a professional Realtor will achieve the sale more quickly than trying to sell the home yourself.
5. Put you best foot forward. Make sure your home is “Show Ready” before you ever put it on the market. You only have one shot to truly make a great impression. Get rid of clutter. Less is always better. Use fresh paint. Make the minor repairs and give it a detailed cleaning. Make sure the home’s exterior and yard is looking great. A home starts selling at the curb not inside the front door.
6. Be honest with yourself about the current value of the home. Remember the greatest opportunity to maximize your price objective is within the first 60 days the home is on the market. After that the value decreases the longer it sits. Establish what is the true current market value based on the current market conditions, your specific situation and your competition then market aggressively around that price. Don’t be greedy. Be smart. A quicker sale goes a long way in healing the pain of less money.
The job and population growth in Central Texas has created the demand for new homes to rise. Central Texas home starts
have surged over the past year to meet this rising demand. In the second quarter alone, builders began construction on 2,650 homes, a 32 percent increase year-over-year. More than 27,000 people are expected to move into the Austin area each year for the next three years, making housing inventory a critical issue.NOW IS A GOOD TIME TO BUY! If you are seriously considering the purchase of a new home be it an existing home or a new construction home now is a good time. Interest rates have started to tick upwards as the Fed continues to put pressure on the economy. They are predicting an even higher uptick as we move into 2014. That said, rates are still at the lowest levels in years. Let's face it. 3-4 % is still a great rate for a home loan. But as prices rise, purchasing power diminishes and mortgage qualifying becomes more difficult. So don't be the one who missed out on a great time and opportunity. Make the decision today to start the process of owning your new dream home. Every day you wait cost you money!
Stephen B. McClain is the licensed Broker Owner of Cornerstone New Home Solutions. He is also a certified instructor for the Texas Real Estate Commission under Champions School of Real Estate. He has a career spanning over 30 years in homebuilding and real estate. He can be reached at email@example.com
Here’s an article I found really interesting- America’s Snobbiest Cities. Now doesn’t that immediately peak your interest? After a complete read, there were some rankings I found surprising and some not so surprising. Regardless, It’s always fun to find out who ranks and who doesn’t on any list of who’s who. Selfishly, I was disappointed to find my own home, Austin, TX, coming in at # 19 but hey Austin is hip, modern, up and coming, and full of wealth, academians and politicians. So hey, no city is perfect. I think we should be in the top 10 but who’s counting- right? We still have the best live music scene, some of the best places to eat and more to do than one person can get to. So I’ll take it. Read on. Maybe your favorite place is listed.
America's top 10 snobbiest cities revealed...and you may be surprised
By Daily Mail Reporter
PUBLISHED: 16:22 EST, 2 July 2013 | UPDATED: 16:22 EST, 2 July 2013
It's the list that proves being cool can be both a blessing and a curse. Your neighborhood might have the best coffee, food, galleries and fashion - but people will probably hate you for it.
Travel + Leisure has revealed America's top 10 most pretentious cities, with San Francisco topping the list and New York City and Boston not far behind. In the annual survey of America’s favorite cities, readers were asked to rank 35 major destinations for their level of snobbery. 'To determine which city has the biggest nose in the air, we factored in some traditional staples of snobbery: a reputation for aloof and smarty-pants residents, along with high-end shopping and highbrow cultural offerings like classical music and theater,' Travel + Leisure posted on their website.
But 21st-century definitions of elitism were also considered, including over-the-top eco-consciousness (you threw the coffee cup where?), tech-savviness and arty coffeehouses. The most vain included cities with distinctive 'cultures' - like Charleston's quaint southern cooking scene - but weren't necessarily loathed.
WHAT'S WITH THE VELVET-ROPE ATTITUDE? ALL EGO
1. San Francisco 2. New York City 3. Boston 4. Minneapolis/St. Paul 5. TIED: Santa Fe & Seattle 7. Chicago 8. Providence, RI 9. Washington, D.C. 10. Charleston, SC
11. Portland, OR 12. Savannah, GA 13. Nashville 14. TIED: Kansas City, MO & Philadelphia 16. Los Angeles 17. Houston 18. Portland, ME 19. Austin, TX 20. San Juan, PR
Known for its vibrant gay scene and antique cable cars, now San Francisco can add 'Most Pretentious' to its list of attributes. San Fran tops the snob list because its foodie scene has resonated with readers, who gave the food hub top marks for its fine dining, ethnic restaurants, hip boutiques and galleries. But there are some curious contradictions in this result. The City by the Bay also ranked first in the survey for being gay-friendly and welcoming. Can you be snobby and welcoming? And how can a city claim to be cool when it was the backdrop for American sitcom Full House?
Coming in second was New York City - and no doubt, competitive New Yorkers would hate missing out on the top spot. From the exclusive clubs of Manhattan’s Meatpacking District to the cool underground bars of hipster Brooklyn, the diversity, action and vibrancy of New York make it a city locals are proud of - and justifiably snobby about.
Just three hours north from NYC lies the country's third most up itself city - Boston. Reeking with history and saturated with Ivy League-caliber minds, it's inevitable this town has a certain air of superiority. While the driving habits of Bostonians was ranked near the bottom of the survey, it dominates the snob list for its high-concept bookstores, old school museums and expensive universities.
Coming in at number four was Minneapolis/St Paul - the list's first Midwest entry. The City of Lakes residents were highly ranked for being fit and outdoorsy - no wonder with the number of waterways it boasts - and for being exceptionally tidy. Its indie scene pushed this city up in the rankings, with locals watching bands when they're not hiking, paddling, or even ice-surfing.
The next two cities share the fifth spot. To the consternation of many locals for whom flannel is considered formal wear, Seattle made the list. 'Of course San Francisco and New York would make Travel + Leisure’s top 20 list of “America’s snobbiest cities.” Those are definitely big-ego cities,' a Seattle Pi blogger wrote. 'But Seattle? Aren’t we a bunch of laid-back, come-as-you-are types who are maybe prone to some hipsterism, but still earthy enough?' The number five spot was shared with Santa Fe in New Mexico, considered a cultural getaway with an abundance of museums. Although their sports bars weren't a hit with readers.
Not far behind was Chicago, renowned for its theater scene, serious architecture and delicious pizza.
Clinching the eighth spot was Providence, Rhode Island, for its cafe culture and cutting edge performance art. It also ranked highly for its burgers, not traditionally considered 'snooty' food.
Predictably, Washington, D.C. also made the list because it has so many free things to do, even if readers thought the locals were unfriendly, while Charleston, in South Carolina, rounded out the list at number 10 thanks to its old-school southern fare.
Read more: http://www.dailymail.co.uk/news/article-2353534/Americas-10-snobbiest-cities-revealed--surprised.html#ixzz2a0OsgJOA
So there it is folks. The best of the best. The most uppity, the most snobbiest cities in the big ol’ US of A. Now having had the privilege of visiting several of these cities, I would have to say I take issue with some of the rankings. I find some of these cities to be great areas for living, for entertainment, for business or just hanging out in for a long weekend eating Brie and drinking a bottle of Ghost Pines Cabernet. But then, hey maybe that’s just the snob in me.
Stephen B. McClain is the licensed Broker Owner of Cornerstone New Home Solutions. He is also a certified instructor for the Texas Real Estate Commission under Champions School of Real Estate. He has a career spanning over 30 years in homebuilding and real estate. He can be reached at firstname.lastname@example.org or email@example.com.
The Millennial Trap
Future Investment or Future Flop?
I recently ran across this article by Catherine Rampell. The article focuses on the “millennial” generation and discusses the primary fact that today more individual consumers, ages 18 to 31, are still living at home with their parents. Since I very recently wrote a blog about this same generation and their plight with student loan debt and the inability to get jobs at the levels they were trained and or educated for it seemed very fitting to take the discussion further. What is most interesting to me about Catherine’s article is that she points out some very interesting and quite frankly, disturbing statistical trends that may be taking place within this generation. As always the question is why?
Point 1: 36% of people (consumers) ages 18 to 31 are living at home with their parents. This does take into account, college students living in dormitories. This compares to 32% in 2007. That’s a 4% rise in 6 years. That is also over 1/3 of consumers in this age group. So why? What does that mean? Is it just the economy?
Point 2: According to Catherine the statistics show that if you break down that age group even further: 18-24 is at about 56%. Nothing shocking here, as this age group most signifies the traditional college age. But 25-31 is almost 20% (16%). This is the consumer who should be traditionally at least renting their own place if not buying their first home.
Point 3: This is where the trend turns disturbing. According to the statistics, it is actually people without bachelor’s degrees who are still living at home- 82% (that’s 8 out of every 10 people). 40% have no college experience. 43% have some. So now I am really asking why? Are fewer people choosing to go to college period? If so, is it because of the rising cost of an education and or the return of value for that education? Is it the inability to obtain financial assistance? Are more people choosing technical schools or some other trade specific program as opposed to the traditional college institution?
Point 4: Are these statistics equal across gender. No! The survey shows that 40% are male while only 32% are female. Also noted again, is that there are fewer of males in college than females. The scary question here is what are the other 28%? Also noted is that fewer of these consumers are married. Marriage rate is down almost 4% since 2007 within this millennial age group. Uhm?
Point 5: Are any of these people working? Not according to the statistics. Only 29% are employed. 40% are unemployed. 50% are not even in the workforce. Not sure how they arrive at that figure but that would account for those younger 18-24 year olds who can’t find even part time work. No work no rent money. No house payment money. No nada! See Article below:
Millennials, in Their Parents’ Basements
By CATHERINE RAMPELL
Dollars to doughnuts.
Last year, a record 36 percent of people 18 to 31 years old — roughly the age range of the generation nicknamed the millennials — were living in their parents’ homes, according to a new Pew Research Center analysis of Census Bureau data. That compares to 32 percent of their same-aged counterparts in 2007, the year the recession began.And despite the frequent stories of recent college graduates stuck on their parents’ couches (or in their basements or above their garages), it is actually young people without bachelor’s degrees who are most likely to be living at home. The survey data, by the way, counts people who are living in college dormitories as living at home with their parents. Younger millennials (those 18 to 24) are more likely to be counted as living with their parents, partly because they are more likely to be in school.
Being unemployed is the biggest factor associated with living with one’s parents, not surprisingly. But there are other demographic traits that correlate with living with one’s parents, including being male. Young men are more likely to live at home even though they are now less likely to be in college than young women are.
One reason that both genders have become more likely to live with their parents is that marriage rates have fallen — both during the recession and in the decades before. A very tiny share of millennials live with their parents once they are married (about 3 percent in 2012). In any case, these higher rates of living with parents have contributed to the unusually low household formation seen in recent years.
Jed Kolko, the chief economist at Trulia, recently estimated that low household formation rates had led to 2.4 million “missing households.” “That’s equivalent to more than two years of normal household formation that have gone missing,” Mr. Kolko wrote. These “missing households” can hold back the economy. With new households, after all, come furniture purchases and other kinds of consumer spending. Mark Zandi, chief economist at Moody’s Analytics, has estimated that under normal circumstances, each formation of a household adds about $145,000 to output that year as the spending ripples through the economy
So let’s see. To summarize with this “millennial” age group, fewer are in school, fewer are graduating, fewer are getting married, males are worse off than females, and fewer are working. So is this really just a function of economics, the recession we have experienced over the last 6 years. Or is this a something bigger. Something more long term- a change in culture and our society.
As a Realtor Broker obviously I am with all honestly, selfishly concerned as this fundamentality effects our business industry. But more importantly what does this say about our future as a society and our country? This generation is our future. They are the next wave of leaders and decision makers. The next consumers who should be raising families, earning and spending to drive GNP, building business and our economy. So as a “tail end” member of the baby boomer generation, I say we ( our current generation, our current parents, our current leaders, our current government) better WAKE UP and take a hard look at how to turn this trend around. If we do not invest our time, energy and resources into our future generation, our greatest natural resource, what will be left? Let’s all work together to figure this out and do our part to turn “couch potatoes” into the great minds and producers for tomorrow.
Stephen B. McClain is the licensed Broker Owner of Cornerstone New Home Solutions. He is also a certified instructor for the Texas Real Estate Commission under Champions School of Real Estate. He has a career spanning over 30 years in homebuilding and real estate. He can be reached at firstname.lastname@example.org.
HOW MUCH TO BUDGET FOR YOUR CUSTOM HOMEGood day to you. I get these questions ALL the time with my building clients: What is the general cost of construction? What will I have to spend to get the house I want? What does a custom home cost? How much should I budget for building? Great questions but they are inherently hard to answer in terms of a singular $ answer. The problem is in the nature of the question. You see by its very definition Custom is not main stream or average. Every true custom building project is different. Custom is wide open and the owner is only limited by their specific budget. There are two, well maybe 3 primary driving forces with regards to cost of construction on a custom building project: 1. The simplicity or complexity of the design itself. A square box slab builds less expensive than a slab going in 6 different directions. A two story builds less expensive than a one story given equal sq. ftg. 2. The simplicity or complexity of the finish out. Again a homebuyer who is building from the ground up is only limited by their own budget. In terms of features and options the sky is the limit in today’s building world. There are more products, options, materials and material alternatives than ever before. But the basics do not change. Wood is still more expensive than carpet generally speaking. Granite is more expensive than Formica- and on and on. 3. The third is the builder themselves and more specifically the profit or margin they are willing to build the home for. That can vary greatly depending on the builder’s size, reputation within their market, their abilities and resources, need for business or their current "pipeline" and their business "bottom line". So a home bid can vary greatly based on the above mentioned factors. I can take a home plan and set of specifications and give it to 4 builders and get back 4 different prices. I see it all the time- one home one set of specs and pricing ranging from $90 per ft to $150 per ft or more. You REALLY have to be careful and thorough in the design/bid process. I say this carefully. Most of the build projects will run from $100- $160 per foot given the same specs and that excludes the lot cost. The range can be $50 - $200 depending again on design and finish out. I hope this helps . Be looking for more forthcoming blogs on home construction and home cost. If you have need of additional information or would like to further discuss your specific building situation please feel free to contact us. We have over 30 years of experience to guide you through the process. S. B. McClain Broker Owner,Cornerstone New Home Solutions Stephen B. McClain is the licensed Broker Owner of Cornerstone New Home Solutions. He is also a certified instructor for the Texas Real Estate Commission under Champions School of Real Estate. He has a career spanning over 30 years in homebuilding and real estate. He can be reached at email@example.com
I just read an article out of Builder Update, an online daily newsletter I receive. The article is via USA Today and is titled “The housing rebound’s still- unanswered question ….Y”? In short the article addresses the question why the age group of 25-34 has had the most significant drop in homeownership of any age group from 2006-2011? See the graph :
While all age groups show a decline, and that should be nothing surprising if you have paid any attention at all to our economy these last few years, a 7% drop does standout and should signal a red flag for the future of homebuilding and real estate. After all this age group is the future of stability over the next 20-30 years as they age, take on marriage, start and raise their families, need more space, grow in their careers, etc. At least that is the tradition. But with the current state of our economy and our government hard at work for the good will of the people, you have to stop and wonderThis is not rocket science. This age group is also the same age group holding the largest amount of outstanding Student Loan debt in our history. It is also the largest sector or age group of full time professionals or those with a college degree who are currently unemployed or working jobs way lower scaled than their college degrees/education qualify them for. Too much debt and not enough income mean the inability to qualify for a mortgage.
If we want to see this age group support the housing rebound and stabilize it over the next 2 decades, we need to get them working full time at the levels and jobs they were educated for and we, the government and / or public sector, need to implement programs to reduce their student loan debt so they can invest their income earned dollars in assets such as housing. I believe this generation -the Y Generation, still supports the dream of homeownership. Together we can figure this out.
S. B. McClain, Cornerstone New Home Solutions
Stephen B. McClain is the licensed Broker Owner of Cornerstone New Home Solutions. He is also a certified instructor for the Texas Real Estate Commission under Champions School of Real Estate. He has a career spanning over 30 years in homebuilding and real estate. He can be reached at firstname.lastname@example.org.
TEXAS HOMESTEAD LAW
Homestead in the state of Texas is one of the last remaining protected rights and advantages under home ownership in our state. While it is safe to say that most people have heard of the Homestead Law most consumers do not fully understand this law by definition or what it actually does including its opportunities and limitations. The most common definition given is “they cannot take my home in the event of financial trouble”. To a certain degree that is true but the law as it is written actually is much more than that. I recently read this summation written for the Texas State Historical Association, www.TSHAonline.org that really does a great job of explaining not just the definition of the Homestead Law but its history and intent.
HOMESTEAD LAW. In popular usage a homestead is a family home. In law the term refers to the special protection given to the home of a family or a single adult from the owner's creditors, the right of occupancy given to a surviving spouse, minor children, and unmarried children of a deceased owner, and favorable tax treatment accorded to the owner. These concepts, however, developed independently. The homestead exemption, as the protection from creditors is termed, is the most important aspect of homestead law. Many Americans who settled in Texas in the early nineteenth century were pursued by their creditors, and for their protection Stephen F. Austin recommended a moratorium on the collection of the colonists' foreign debts. In response to that recommendation the legislature of Coahuila and Texas enacted Decree No. 70 of 1829 to exempt from creditors' claims lands received from the sovereign as well as certain movable property. Although that act was repealed in 1831, the principle remained in alive in Texans' minds and was a model for the Texas act of 1839, which protected the home of a family from seizure by a creditor. This was the first act of this sort, and the principle of homestead exemption is therefore deemed Texas's particular contribution to jurisprudence. The homestead principle was embodied in the Constitution of 1845 and all constitutions thereafter. Under the Constitution of 1876 the homestead was defined as the family home on up to 200 acres of rural land or urban land worth up to $5,000 (at the time of homestead designation) with its improvements and used as a family home or place of business. In 1970 the maximum value of the urban land was raised to $10,000. In 1983 the urban homestead was redefined as a maximum of one acre. The legislature has defined the homestead in terms of the maximum amount allowed by the Constitution with the exception of the rural homestead for a single adult, which is limited to 100 acres. In 1973 a homestead was made available to single adults. The Constitution also provides that the homestead cannot be encumbered by a lien except for its purchase price, cost of improvements thereon, or taxes assessed against the property. A Texas homestead is not, however, secure from seizure for a debt owed to the federal government. An encumbrance existing on land prior to its dedication as a homestead is also enforceable. Designation of a homestead is achieved by actual use and no recorded claim to the right is required. Either separate or community property may constitute a homestead. A homestead owner's spouse must join in any transfer or encumbrance of a homestead, and neither spouse can effect an abandonment of the homestead without the consent of the other. In addition to the reduction of taxes made for all homesteads, the Texas Constitution authorizes local governmental units to give further reductions for the aged and disabled. A surviving spouse is entitled to the sole occupancy of a homestead for life, though the owner may have devised ownership rights in the property to someone else.
So there, you are now a Homestead Law expert. You now know more about the Law than most Realtors. So the next time a party in your conversation mentions Homesteads don’t be afraid to chime in and show your knowledge.
Stephen McClain is a licensed broker and owner of Cornerstone New Home Solutions, a general real estate services company. Mr. McClain has been active in general real estate and the home construction industry for over 25 years in the Austin and surrounding area. He is also a certified instructor for the Texas Real Estate Commission teaching under Champions School of Real Estate.