Danny Frank

The Pearland TX real estate market is doing GREAT. In looking at the real estate market in Pearland, one can see we are following the same trend as the last 2 years. The median price is flat for Jan 07-09. So, if one where to follow the trend, the Pearland Real Estate market is set for launch. I feel Pearland will follow the last 2 years trends. Pearland's real estate market is doing fine. Now is the time to put your house on the market... You just need to price the house correctly and it will sell. For someone buying a home in the Pearland market, now is the time to buy before the prices start to climb like they do every year.

In looking at the next chart on the Pearland Real Estate Market, you can see the DOM or Days on Market are all over the chart. It took an average 94 to sell a house in Pearland in Jan 2009. In January, Pearland had 4.9 months of inventory. Which is low for this time of the year. I think this will drive the value of real estate in the Pearland area upwards. You, as a home seller can affect this average by the price you set your house at. If you price your home on the high side of the average, it will take longer to sell and if you price you house one low side of the average, it will sell faster. So what does this mean for the average family selling a home in the Pearland area, price your house right and it will sell.

Now is a GREAT time to buy real estate in the Pearland area. There are a lot of very good DEALS on real estate in the Pearland TX area and I would love to help you become a home owner. Call me and I will send you a free book, " Your First Home, The proven Path to Home Ownership".

For more information on buying or selling property in Texas, I invite you to visit http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. Danny Frank is a local Pearland Real Estate expert. I would love to help you sell your house and help you find your next home.

Before you begin the process of shopping for a new home, consider getting a preliminary loan approval. There are two options available to consumers-pre-approval and pre-qualified. Although they may sound similar, they are, in fact, quite different.

While both may place consumers in a potentially stronger buying position, getting pre-approved by the lender carries a bit more weight. Pre-qualified simply gives you an idea of how much money you might qualify to borrow. A pre-approval goes one step further than a pre-qualification. Typically pre-approval means that the lender has verified your financial situation. It lets sellers and agents know how much money you can borrow, and makes the next step-applying for a home loan-relatively fast and easy

What does it mean to get pre-qualified?

When you obtain pre-qualification for a home loan, you provide a lender approximate income, current debts and any important details from your credit history. Your lender will then calculate how much money you may be eligible to borrow prior to application for a loan. Your lender may even provide you with a Conditional Qualification Letter, which determines your likelihood of obtaining a loan. In fact, here in Texas, mortgage brokers, not bankers, are required to provide you a conditional loan letter. However, all information submitted during pre-qualification is subject to verification at the time the loan application is submitted. Because your financial situation has yet to be verified, there is no guarantee of a home loan.

In fact, the pre-qualification alone makes it difficulty to assess if you can even afford to purchase the property without stretching your budget too thin. Many times, the amount you might be eligible to borrow is often much higher than the amount you can actually borrow, so it's wise to get pre-approved so you know exactly how much home you can afford.

What does it mean to get pre-approved?

When you get pre-approved for a loan, you actually fill out a mortgage loan application. Some lenders may even ask that you pay an application fee. After an extensive examination of your financial situation, your lender will commit, in writing, to fund your loan, pending a successful appraisal of the home and a few other conditions. Your lender may also provide you with a Conditional Approval Letter. There's no commitment on your part to follow through with the loan, but getting pre-approved for a mortgage typically enables you to move quickly when you find the home of your dreams and make an offer that is not contingent upon obtaining financing. It also lets a seller know your offer is serious and could prevent you from losing out to another purchaser who already has financing arranged.

Having a pre-approved loan letter is the closest thing to buying with cash because, pending any changes, lenders are obligated to stand behind their written loan commitments. It's important to understand that there are some things that could cause your lender to withdraw from providing the loan. Many lenders will re-check a consumer's credit before funding a loan. It's important to abstain from applying for any new loans, including credit cards. An inquiry into your credit could lower your score and cause a loan to be denied. It's also wise to be as honest as possible with your financial situation.

Get your finances in order

If you don't know how much of your money you want to devote toward housing, it's difficult to know what you can and can't afford. If you haven't done so already, get a copy of your credit report. Checking your credit report regularly is the best way to spot identity theft, credit report errors or other financial missteps that very well could affect your ability to buy a home. The Fair and Accurate Credit Transactions Act of 2003 made it possible for consumers to access free copies of credit reports, which list a consumer's financial history, including total debt and whether you pay bills on time. To request your report online, visit www.annualcreditreport.com.

Be smart, take steps to secure your finances, and get pre-approved for a home loan. Soon you'll be in the home you've always dreamed about. For more information on qualifying for a mortgage loan, talk to your Realtor.

Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.

Danny Frank is a local Pearland TX Real Estate expert

My column was was also published in the 15Feb09 edition of the Galveston County Daily News

Did you know that if you are considering purchasing a home, you can actually buy yourself some time? This time is called an option period and the length of time will vary depending on the terms of the contract. The option provision allows buyers to terminate a new-home or resale contract-for any reason at all-and still receive a refund of their earnest money.

This option provision, also known as the termination option, is in all Texas Real Estate Commission (TREC) residential contracts. Many buyers will use the option period to evaluate the property with a professional inspection or to address any other concerns they may have. There may even be some buyers who simply want an opportunity to say "no thanks." The key here is that the option provision provides buyers a way out, and it doesn't matter what the grounds are.

Benefits to buyers
So let's say your Realtor helped you find the perfect house, and you submit an offer without knowing too much about the property. You do know, however, that the seller would like $2,000 in earnest money. That's a scary number when the house hasn't been professionally inspected. What's even worse is that while you're waiting for a professional inspection, another buyer could swoop down with an offer that the seller simply can't refuse. Here's where the option provision comes in.

The option period allows the buyer time to evaluate the property without the risk of losing their earnest money or the property to someone else. Here's how it works. The buyer will write two checks-one to the title company for the earnest money and one directly to the seller for the option provision. The terms of the option period are negotiable. But the seller has the right to cash that check upon receipt. The earnest money, on the other hand, is held by the title company throughout the transaction. Earnest money is not at risk during the option period.

Back to the situation above-let's say you've negotiated an option period at a price of $100 for 10 days. Now you can bring in a professional to evaluate the property and make sure its condition fits your needs. If it doesn't, you can terminate the contract. If you do so within the 10-day timeframe, the title company will return your earnest money check. You will, however, lose the option fee. You might also note that you'll be out the cost of a professional inspection as well. However, when considering how much you'll spend on a home and how long you will live there, these costs are worth the peace of mind you'll get from being sure about this purchase.

Think of the option provision as a consumer protection. As a buyer, it gives you time to figure out just exactly what you're getting for your money. This small, nonrefundable fee also prevents the seller from selling the home to anyone else during the option period.

Benefits to sellers
While the seller may not be able to terminate a contract during the option period, there are some benefits for sellers who agree to the option provision. While the option fee may not fund an early retirement, it is still paid directly to the seller. How bad can a little extra cash be?

In addition, the option provision may help to ensure a smooth transaction. According to the National Association of Realtors®, only about one in 10 transactions don't make it past the option period. This could mean that if a potential buyer terminates the contract during the option period, it's likely the transaction would have caused you some headaches-at the least. In addition, you are a key player in the fee negotiations. While the option fee should be small enough to encourage buyers, both the amount and the timeframe are in your control.

If you're a seller who has agreed to the option provision, it doesn't mean that you have to stop marketing your property. You have the right to look at offers and even accept a back-up offer, pending the outcome of the original contract. So as a seller, there's no reason to hesitate when it comes to option periods.

Whether you're a buyer or a seller, it's important to remember that the option provision is a binding agreement. If you purchased an option to give yourself some time to evaluate a seller's property, contact the professionals immediately. A professional home inspection may take longer than anticipated. Failure to terminate the contract or waive the option provision within the negotiated timeframe could cause you to lose your earnest money.

Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.

Danny Frank is a local Pearland TX Real Estate expert

My column was also published in the 08Feb09 edition of the Galveston County Daily News

If you're already a homeowner, chances are you're familiar with the components of your monthly payment to your lender. If you have yet to make the leap into homeownership, you may not understand what this monthly payment includes.

Breaking down PITI

There are generally four components that go into the computation of your monthly payment: principal, interest, taxes, and insurance; collectively referred to as PITI.

Principal

Principal is the amount you originally borrow. Payments in the first years of the majority of loans go mostly toward the interest - only a small amount per month actually goes to pay down the principal; the payments in the final years consist primarily of principal repayment.

Interest

Interest is money the lender earns by taking the risk to loan you money. The interest rate on your loan has a direct correlation to the size of your payment. That is, a higher interest rate leads to higher monthly payments. For most homebuyers, higher interest rates reduce the amount of money they can borrow, and lower interest rates increase it.

Taxes

Property taxes can account for a significant amount of your monthly payment. These taxes for local schools, city and county services, and other local entities are based on the tax rate for each of those taxing authorities and the appraised value of your property.

Instead of a large tax bill coming due at the end of the year, many people pay their property tax as part of their monthly payment. The annual amount is divided by the total number of payments in a given year. The lender collects these payments and holds them until they are due, at which point, the lender uses the money to pay the bill.

Insurance

There are two types of insurance coverage that may be included in your monthly payment. The first type, property insurance, protects your home and possessions from fire, theft and other events your policy outlines.

The second type of insurance is private mortgage insurance (PMI). When a homebuyer does not put down at least 20 percent on the home, most lenders require PMI. PMI offers the lender some protection in the event the borrower is unable to repay the loan. PMI coverage can be dropped once you attain 20 percent equity in the home.

Taking responsibility for taxes and insurance

While these four components make up a typical monthly payment, some lenders will allow homeowners to pay taxes and insurance on their own. In this scenario, you'll have a lower monthly payment, but you must make sure you have the money available to pay property taxes and insurance when those bills come due. This requires discipline.

There are other strategies and products, as well, and your situation may indeed call for something a little different. A lender can sit with you and explain your options.

Amortization breaks it out

An amortization schedule shows how much of your monthly loan payment is being applied toward interest costs and how much to reduce the outstanding balance of your loan. At first, most mortgages consist primarily of interest payments, but the percentage applied toward principal and interest reverse over time. The amortization chart details the month-by-month progression of your mortgage.

In the end

When you buy a home, it's important that you understand the components and structure of your payments. These factors determine how long it will take you to pay off the mortgage and how expensive it will be own your home. PITI makes up a significant part of those costs, but there are other financial responsibilities to consider, like maintenance and repairs.

Your Realtor can be a great resource if you have questions about mortgages and other costs of homeownership.

Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com/. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.

Danny Frank is a local Pearland TX Real Estate expert

This column was published in the 25Jan09 edition of the Galveston County Daily News

You always hear about all the advantages of homeownership, like tax breaks, accumulation of wealth and other less tangible, social benefits. But is there a downside, too? Well, that depends on your perspective. I find one the biggest adjustments for renters-turned-homeowners is that you now own the place, so if something breaks or needs some TLC, there is no longer a landlord to lean on and ignoring it doesn't make sense - as a homeowner, you are responsible.

Home maintenance is part of homeownership and can, sometimes, be expensive, frustrating and tedious. Finding a good time to perform even small, routine repairs can be challenging and Murphy's Law seems to apply with big problems - they seem to happen at the most inopportune times. For this reason, it is to your advantage to have a sum of money earmarked for home maintenance. Problems will definitely arise, even in new homes.

Maintaining your home is an ongoing project. But despite the expense and the aggravation, it's worth it to stick to a maintenance schedule and make repairs as needed.

From top to bottom

There's an extensive list of things you must do to protect your investment and keep it looking sharp and in sound condition. Here are just a few ideas:

Perform an annual visual inspection on your roof or pay a reputable company to inspect it for you, especially if there's been severe weather. Hail is particularly damaging.

Head up to your attic, or again, hire someone if you're not comfortable with the task, and check for signs of water leakage from the roof. Also look for any sign of termites or rodents. Squirrels or rats nesting in your attic are not particular about what they chew, and they sometimes gnaw electrical wiring, which can lead to damaged infrastructure or fire.

Does the exterior of your home have peeling paint? It seems cosmetic, but paint is a first line of defense against the weathering and aging of wood. You should also know that it's less expensive, less difficult, and less time-consuming to paint before the existing coat begins to peel. Brick, stucco and siding should be inspected as well.

Depending on the level of traffic, hardwood floors should be refinished every five to 10 years. If they get too worn down, you're risking permanent damage to the wood.

You'll want to check for leaks in any room that has lavatories, commodes, showers, or any other water-based amenity. Remember to feel under sinks for dampness.

In some older homes, cast iron was used for the wastewater lines. These pipes eventually corrode and leak. If the seepage is under the foundation, you'll probably never notice, but it may be worth it to have a professional plumber come check it out. If the leak gets bad enough, it can cause your foundation to dome, which can definitely lead to big problems.

Speaking of foundation issues, maybe your house isn't showing signs of problems, but are you taking steps to keep it that way? The main cause of foundation problems, whether pier and beam or slab, is fluctuations in the moisture content of the soil. If all soils beneath a foundation swells uniformly or shrinks uniformly it is unlikely to cause a problem. When only part of the foundation moves, though, you're likely to see signs of damage.

Reputable foundation repair companies will evaluate your problem and let you know your best course of action. If you don't see cracks in walls, door frames askew, ceiling separated from walls or floors that slope, you probably do not have a problem. Even so, they may recommend some preventative measures to maintain the moisture content of the ground, like gutters, downspouts, or watering around the perimeter of the home, especially if there are some large shrubs or trees growing next to the house.

This is just a partial list, and perhaps every single thing I mention doesn't necessarily apply to your house. That doesn't change the fact that all homes need maintenance. I encourage you to perform your own research on home maintenance and to come up with a list of priorities for your situation.

Your efforts pay off

One of the best things about homeownership is that your investment typically appreciates over time. In order to support that appreciation, though, the home must be well maintained.

If you plan on selling the house at any point, you need to face reality. Defer repairs and maintenance for whatever reason, and sooner or later you're going to have to deal with it - either by actually doing significant work prior to sale or by reducing your asking price to compensate for the needed work. At that point, it's better to have just kept up with the repairs - at least that way you'd have gotten some enjoyment out of the work.

My advice to you is this: Don't ignore little problems. They tend to grow bigger and get more expensive to fix due to the damages that may result. Protect your biggest asset by diligently maintaining your home.

Maintenance and repairs are like a trip to the dentist - not many of us really look forward to it, but it's necessary, it pays off, and not doing it will definitely cost you in the long run.

Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or http://www.har.com/ and for all of your Pearland TX and Northern Brazoria and Galveston County real estate needs, please visit my site at http://www.danfrankrealty.com. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.

Danny Frank is a local Pearland TX Real Estate expert

This column was published in the 18Jan09 edition of the Galveston County Daily News