Andrew Chong

Wanna know a secret? Many of us agents hate leasing when we're representing the tenant. When we're busy selling homes we usually refer leases to the rookies in the office.

Why? Because leases don't pay a lot and can take up a lot of time. With a $1000/month lease, split between listing agent and tenant agent, some realtors may get paid $250. It may not be worth it.

Experience (or bad experience, I should say) has taught us that people have overblown expectations for rent properties.

Recently I took out a mature couple looking for a 6-month lease to see 2 properties in the $2000/month price range. They were well qualified and wanted to move closer to the husband's new job. On top of that they needed to move within a week to accommodate visiting family for the holidays.

Both properties were in a newer community on the south side. One came with all appliances, however, the wife noticed a soggy spot in the back yard (it had rained a day or so ago). "Oh my goodness," she exclaimed. "We'll have all kinds of mosquitoes." Since this was a recently built house the slope of the lot was very much still apparent and, in my opinion, any wet spot would dry out after each rain. But here's another secret: The wife makes all the decisions.

Since the husband liked the house and the wife liked the other one, they wanted to "think about it" and would let me know. By the time they called the next afternoon, both properties had received applications and were tentatively off the market.

This couple had two overblown expectations: that a rental is going to be ‘perfect' in every way, and that they could take their time deciding.

Am I being too harsh? Did my frustration come through? What do you think?

I'll be hosting my next "Free Money: The Low Down on Downpayment Assistance Programs" workshop on Thursday evening, December 11, 6:45 p.m. to 8:45 p.m., at 1900 Bering Drive, near the Galleria. Home buyers preparing to purchase within the next 12 months are encouraged to attend. Learn about programs offering as much as $14,500 as well as programs available for teachers, police officers and firefighters.

Topics include an overview of various programs; the importance of credit; how the process works; and other financing options.

This is a free class with lots of good information. My co-host is a loan officer who can answer questions about the current opportunities available for buyers. Seating is limited. For reservations contact me at 281-496-7400, Ext. 109.

The biggest barrier to homeownership is the down payment. There are numerous down payment assistance programs available to most first-time home buyers. Millions of dollars are available on a first-come, first-served basis. If you want to buy Houston real estate this is good news.

What's a first-time home buyer? Well, besides the obvious, remember that we're dealing with the government here. If you have not owned a home in the last three years, you qualify as well.

Let's mention one program. The City of Houston's Homebuyers Assistance Program (HAP) provides from $10,000 to $14,500 in assistance. In some cases, it could be as high as $19,000. Wow! That's a lot of money. What's the catch? There are requirements. The property has to be within the incorporated boundaries of the City of Houston. You see, the City wants to receive the benefit of the property tax revenue. The program's target buyer is the low- to moderate-income buyer, so if you make a lot of money, you would not qualify. But there are other programs.

The goal of these local, state and federal programs is to increase homeownership. Some programs specifically benefit public school teachers, police officers and firefighters. HAP's maximum home price is $135,000; for other programs, homes may sell for $237,031 to $289,705.

All programs have a residency requirement of five to nine years, depending on the program. You see, these programs are not meant for the real estate investor.

To find out more look up my class through Leisure Learning Unlimited, "Free Money: the Low-Down on Down Payment Assistance Programs," scheduled about once per month. Or give me a call. Don't wait forever; funds are limited.

Andrew Chong

www.andrewchonghomes.com

Are you a homeowner who has an old, hand-drawn survey?

I recently had the experience of listing a house with a pool for sale in Houston where an old survey had been passed along to my clients. When they purchased the house twelve years ago the title company had found it acceptable.

My clients had had the property on the market with another agent for six months already when they found me through a referral. The months on the market were unexpected and had caused them to delay long-made plans for their next home. Needless to say, they were very anxious to sell.

We subsequently found a buyer, locked up a contract, and was gliding to closing. One week to go and I get a call from the title company: the survey showed the pool encroaching the utility easement and we had to get exemptions for the utility companies in order for the title to be insured. How long would that take? I shuddered at the thought. Imagine the phone call I had to make to my clients.

Shifting into crisis mode I advise my clients to immediately order a new survey, which they did with some reluctance, since they had to pay for it. Whew! We got one of those new, CAD-drawn surveys which showed no encroachment. We closed on schedule and my clients were very happy.

The big lesson I learned: the next time a client hands me one of those things I'm gonna give it back and insist they get a new one. The stress it will save is worth every penny.

Andrew Chong

www.andrewchonghomes.com

Got this question from a client today (11/13/08) via email. She attended one of my real estate classes two months ago, and wrote me to ask this question:

"Is it possible to get a monthly house payment (including insurance, mortgage, closing costs, everything) to be only around $600 (this is what I pay in rent right now), if the house costs is $145,000?"

Here's my reply: Unfortunately, the answer is no.

There is a "1% rule" in real estate which says this, whatever the price of the house, the monthly payment is going to be approximately 1% of the price. Therefore, in this case, the monthly payment would be approximately $1,450, including principal, interest, insurance, and taxes. This works primarily for Houston real estate.

What are my client's options? There are several. One is, look at town homes or condos as alternatives. These are usually priced less than single-family homes. There are many affordable town house and condos communities all over Houston. A second option is, get your credit scores up real, real high so that you get the lowest interest rate possible. A low rate translates into bigger buying power. However, note that the difference between $600, where my client wants to be, and $145,000, where she might be looking, is too great. So even if client got a great interest rate, the monthly payment of $600 for the same property would still be out of range.

Third, save, save, save for a bigger down payment. And fourth, explore down payment assistance programs for the city, state or federal governments. The usual assistance is a 5% grant, which, on a $100,000 house would mean $5,000. This could go a far way to help someone get into a house.

For all your real estate questions, email me at andrewchong@kw.com or look me up at www.andrewchonghomes.com.