More and more distressed home owners in the San Antonio area are seeing their home values falling below their mortgage balances: in other words, negative equity. According to Foreclosure Listing Service, Inc., there were 7,721 foreclosures on residential properties posted in Bexar County from January to June 2010. At least 20 percent of them were on homes in which the loan amount was more than the appraised value.
In the same period last year, the percentage of upside-down homes was 13. Going from 939 to 1,552 upside-down homes is not a good sign. It's an increase of 65%. This puts the San Antonio metro, which also includes Comal County's 51 foreclosure postings, in second place among the 19 counties that Foreclosure Listing Service tracks in north and central Texas. Comal County is located to the north-northeast of San Antonio, and includes the communities of New Braunfels, Bulverde, Garden Ridge and Canyon Lake. Number one on the foreclosure list was the Austin metro, with a 121 percent jump in foreclosure filings with negative equity.
Commercial properties are doing slightly better, but nearly 7 percent of the 375 commercial foreclosure postings in Bexar County were of properties whose appraised values sank below their loan balances, compared to 4.5 percent last January to June.
These residential and commercial properties are in the beginning stages of foreclosure, so a short sale or some other deal with the lender could prevent the ax from falling.
The only positive way to spin this is as an opportunity for home buyers and investors to choose from more properties in the coming months.
A dragonfly!
What's not to love about a dragonfly?
1. It has a cute face with a happy little grin.
2. It eats mosquitoes. (That gives me a happy grin.)
3. It can throw its chin way out to catch prey.
4. It will sit on your finger, head, or knee if you are in the water and there's no "perching stick" nearby.
5. A dragonfly's wingspan used to be almost 3 feet long, but in a few hundred million years, it has shrunk a bit.
Dragonflies are always welcome in my organic garden in Cibolo, Texas.
You've looked and looked, and you've finally found a lovely home! What's the best way to go about making an offer on the home that you've chosen to buy? Here are the three methods that have been successful for my clients:
1. The best way to get the home you want is to make a full-price offer. If the home is in good condition and/or is well priced, there is no shame in offering full price. Before you make an offer, I will check on the most recent comparable sales of similar homes, the same ones that an appraiser would use.
If you are getting a VA loan and the seller will be paying non-allowables, or if you need a contribution from the seller towards your closing costs, that amount can be added back to your offer price to add up to more than the asking price. The home would still need to appraise for that amount, however.
Before I submit an offer, I try to find out from the listing agent what the seller's needs are, why they are selling, and what kind of terms they might agree to. If the home is vacant, they might want a quick closing. If they have a lot of furniture and stuff to move, they might agree to a longer closing period or even a lease-back. They might not want the hassle of moving a refrigerator, so my buyer might as well ask for it, if nothing else as a negotiable item. I want to maximize the chances of my client's offer being accepted.
2. The second-best way to get the home you want is to make an offer at less than full price, including any contributions by the seller to your closing costs, but leave the door open for a counter-offer. If the home is in good condition and/or is already well priced, the seller will need time to consider your offer.
Whenever I submit an offer, I write a cover letter explaining that my buyer really likes the home and is qualified to buy it. I don't say anything negative about the property or say the asking price is too high. I assume that my cover letter will be forwarded to the sellers. I attach an up-to-date letter from my client's loan officer and/or a bank statement as proof of funds to close. I explain to my clients that the offer is a sales document, and I try to make it as "clean" and the terms as appealing as possible. I don't impose deadlines or write redundant, unnecessary clauses into the Special Provisions. I include reasonable deadlines for obtaining disclosures, inspections, surveys, and loan approval. I make it clear to the listing agent that my clients are not trying to take the sellers to the cleaners, but are trying to stay in their budget. In San Antonio, an offer of 3% under the asking price is not considered unreasonable, unless the home is in perfect condition.
The risk you run with a lower offer is that another buyer may come in with a better offer while the seller is thinking yours over. With this method, you at least have a good chance of getting a counter-offer, even if the seller has received another offer. If not, you might get your lower offer accepted, but you may get some resistance down the road if you ask for an extension of the time to close or for non-major repairs to be done at the seller's expense.
3. The third-best way to get the home you want is to lowball it. If the home is in good condition and/or is already well priced, your chances of getting the home are slim with this method. You run the very real risk of offending the seller, and they could counter back at full price.
It may be different in other states, but in Texas, the seller is not obliged to reply to an offer in a certain time period; in fact, they do not have to respond at all. Your offer can be accepted, rejected, countered, or ignored. If there are multiple offers, the seller can just pick the best one, or go back to all the buyers and ask for their highest and best offer. Then it's basically an auction.
In general, the farther away you are from the seller's asking price, the longer it takes to come to an agreement. And in the meantime, another buyer could be submitting an offer.
If you are trying to get the bargain of the year, it will probably not be this home. If you want a screaming deal, we need to go look at fixer-uppers, foreclosures, or other distress properties, which often (but not always) need a lot of work. Sellers are more likely to consider a lowball offer on a property that isn't in good condition, unless it's already well priced to take the need for repairs into account.
Consider this: each $1,000 adds about $5.37 a month to your mortgage payment at today's interest rate of 5%. That's $64.44 a year. Is it worth it to lowball the home and risk losing it for the price of a few burgers?
Having said that, if you still want to make a lowball offer on a home, I will write it up and do my best to get it under contract. My job as your buyer's agent is to give you all the information I can, as well as my recommendations based on my experience and knowledge, and then to carry out your instructions.
So if you have found the house you want, I recommend choosing one of these three ways to make it your home.
Over the last few months, I've happened on a few more humorous descriptions of homes for sale on the MLS. Listing agents seem to have gotten better with spelling, at least.
Here are some of the gems I've uncovered recently:
I love the images that these descriptions bring to mind! Enjoy!
In the remarks by agents who belong to the San Antonio MLS, it's common to find descriptions of "parklike" back yards and "immaculant" or "emmaculate" homes for sale by the omnipresent "Mrs. Clean."
In the last few months, I've also discovered these gems written by listing agents:
This will not last long-Snooz you louse! ("won't last long" is a personal favorite; it practically guarantees the listing will stay on the market for months)
SUPPER OPPORTUNITY
GREAT PRICE CHANGE (according to the listing history, the price went from $695,000 to $795,000 one month later)
Owner: Withheld at owners expense
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I specialize in residential properties in the north San Antonio metro and northeast to Schertz, Cibolo and New Braunfels; homes on the Guadalupe River; military relocations; and rehabbing older homes
I was born in Texas and grew up in San Antonio. I came back to my hometown in 2003 after living in Hawaii for a few years and then in England. I managed a rental property in Hawaii and invested in real estate in England, so my market niche became helping home buyers and sellers with rental properties and relocations. San Antonio changed a lot in the 14 years I was away, and continues to grow and diversify--geographically and culturally. Despite its healthy economy, the cost of living here is still low compared to similar-sized cities, and real estate is very affordable.
I enjoy working with international clients who are attracted to San Antonio and the Hill Country for their excellent investment possibilities and vacation properties, especially waterfront homes. I am an Advisor for the National Association of Residential Real Estate Investment Advisors (NARREIA). I also work with military transferrees, relocations, and foreign buyers who are delighted to find out how much real estate they can buy in affordable San Antonio. I'm a Certified Residential Specialist and an Accredited Buyers Representative, and have a Transnational Referral Certification.
I work mainly in the northwest, north-central, and northeast sections of San Antonio, Bexar County. I specialize in selling homes in established neighborhoods such as Alamo Heights, Terrell Hills, Olmos Park, Northwood and Northridge, Terrell Heights, Shavano Park, Hunters Creek, Churchill Estates, and Elm Creek, as well as in the Cibolo/Schertz area, where I live. I also help buyers and sellers in Wilson, Guadalupe, and Comal counties, since I love the Guadalupe River area around New Braunfels, Lake McQueeney, and Seguin.
I specialize in buying and selling single-family homes, many for residential investment as rental properties, and helping with relocations, including military, to the San Antonio area. I also help with finding homes for rehabbing and remodeling in some of San Antonio's beautiful older neighborhoods. I often work with buyers, since I love finding the "right" property, but also like the creativity and challenges of marketing homes for sale.
I especially enjoy welcoming people to San Antonio who are relocating here in the military or with a job transfer and need to find a home in a city they may not be familiar with. San Antonio has several military installations, including Fort Sam Houston Army Base, home of the world-renowned Brooke Army Medical Center; Lackland AFB, where most of the Air Force trainees go at one time or another and Wilford Hall VA hospital is located; Randolph AFB, with its pilot training; and the former Brooks AFB, now Brooks City Base and host to a Centers for Disease Control facility.
San Antonio's diversified economy also benefits from jobs in the oil and gas industry, especially thanks to the Eagle Ford Shale play. In addition, the South Texas Medical Center employs nearly 28,000 people, and the University of Texas Health Science Center contributes biotech research while training future healthcare professionals.
For my investor clients, I take the long-term approach to invest in single-family homes for break-even or positive cash flow and/or future appreciation. Rehabs and remodeling projects can be rewarding; especially those that could be rented after, or even during, rehabbing to take advantage of lower capital gains rates after one year's ownership. All of the properties I help my clients acquire must have features that would appeal to both good-quality tenants as well as future home buyers for resale purposes.
I look for good investment properties in the northeast and northwest parts of the San Antonio metropolitan area, near major employers and the Medical Center, which is where I grew up and where I still work with a lot of my investor clients. Neighborhoods close to Fort Sam Houston and Randolph AFB are others that attract tenants. The city is growing in practically every direction now, but I still have a fondness for the older neighborhoods with lots of trees. I provide relocation guides with neighborhood information to home buyers relocating here.
For sellers, I am a convert to staging to make a vacant home more appealing and I offer this service. Most buyers--and prospective tenants--are unable to see past the cosmetic issues of a house. I'll give my recommendations for preparing a home for sale or lease, and I have assembled a terrific team of people who do excellent work for a reasonable price. I want every home I list for sale or lease to look better than the competition.
From a couple who retired to San Antonio to be near their children and grandchildren:
Robin expertly guided us through relocation from Maryland to Texas. She found us an excellent local real estate agent in Maryland who helped us sell our home during one of the worst real estate markets in recorded history. Robin then rented her Corpus Christi beachfront condo to us while our household goods were in storage and transit. When we were ready to purchase, Robin found us the retirement home of our dreams with a beautiful inground pool in a nice, quiet neighborhood in north San Antonio.
She knows San Antonio as only a native Texan can, and tackles any problem that arises with her amazingly extensive network of experienced maintenance people. As we enjoy our retirement playing in the pool with our granddaughter; we say, "Thank you, Robin!!"
And an update from them:
It's been a year since we signed the papers to buy our home. How amazingly fast time goes by! We've been blessed with a happy life and loving family, but we're happier now than we've ever been. Thank you so much, our dearest Robin, for all you've done to make our retirement dreams come true. You truly are the best!!!
From the buyer, and then later the seller, of a duplex:
I wanted to share the fantastic experience I had working with Robin Rogers buying my first investment property in Texas. I found Robin's contact information from an article, gave her a call and within a day or so we were in action over phone and e-mail looking for my investment property. Robin is a fantastic communicator, always quickly answering my questions via e-mail. She connected me with extremely helpful folks (inspector, appraiser, property manager) who all worked closely with Robin and myself to make my long distance investment process very smooth.
From a first-time buyer who was excited about moving out of an apartment, although she will miss the pool (that'll be in her next home!):
Working with you was very easy. I met with two realtors before you but really liked the fact that you asked for what was most important to me in a house (meaning bathrooms, yard, kitchen...) and did not laugh that it was "the feel" when you walk in. You did not push me to try things outside of my comfort and gave subjective opinions when some of my "feelings" were a little out there (i.e. the bank owned house needing A LOT of work, with a great yard).
It truly was a pleasant experience and I would definitely recommend you and use your knowledge in the future.
From the sellers of a home I managed and subsequently listed for sale (a couple of my many clients whom I've never had the pleasure of meeting):
We have truly enjoyed working with you and we truly appreciate all of your hard work. I know you are moving away from the property management business but if any of your clients ever ask for a business reference, don't hesitate to give them my name.
From the sellers of a home and a golf-course lot, both near the Medical Center:
Where do we begin? We will start with a huge thank you for making the real estate business simplified! You made everything seamless! From our very first interaction as buyers a few years ago to our recent transaction as sellers, you have been not only a wealth of resourceful information, but also courteous, patient, and determined. With everyone's busy schedule these days, what a client wants and needs is someone who can break down the complicated real estate jargon, set reasonable expectations, and possess good follow-through. You absolutely shined in every one of those aspects!
From the buyers of two rental homes, planning to add more to their portfolio in 2010:
If there's a Robin Rogers fan club, sign us up! When we found Robin's name through an internet search for San Antonio Realtors, we had no idea what a terrific experience was in store for us. As out-of-towners, we depended on Robin's expertise to guide us through the San Antonio real estate market. Both times we worked with Robin to buy rental properties, Robin steered us to winner houses that quickly generated income for us. Her advice was unbiased and spot on, and her commitment to us and our expectations was unsurpassed. You would be hard pressed to find a more competent and caring Realtor in San Antonio.
From first-time home buyers from California who wanted to move closer to the kids' grandparents in Schertz:
I want to say thank you so much for all of the help you have given us. You were so wonderful throughout the process and found us great lenders as well. We couldn't have made it without you, so thank you so much!
From an attorney in the military from Chicago whose wife is from San Antonio:
What was I looking for in a Realtor? I'm concerned about a few things. They have to deal with a lot of investors. I think it's a completely different thing for a buyer's Realtor to deal with someone looking to buy a house they will live in compared to a house they will rent out. They have to respond to your calls, emails, questions and concerns in a timely manner. This goes without saying, but I was surprised that I have called or emailed at least three other active Realtors and did not receive calls back from them. Obviously a Realtor needs to be familiar with the area, neighborhoods, schools, crime statistics, where appreciation is most likely to occur, and basically which neighborhoods are improving and which are declining. My other requirement is that the Realtor doesn't agree with me all the time. I would like my ideas to be thoughtfully challenged. I require someone who ultimately carries out my will, but who helps to clarify my thoughts and plans by not blindly agreeing with me on everything.
I was lucky to find Robin Rogers. I Googled San Antonio investment Realtor and found her blog as well as some articles she had written for the National Association of Residential Real Estate Investment Advisors (NARREIA). Got that? It's a mouthful. I liked her right off the bat for a few reasons: she responded to me very quickly and we opened up with a very nice conversation about my investing goals and what she was able to provide; she understands the area; she spends time blogging and connecting with other bloggers which, I think, is like a form of continuing education; she owns investment properties herself; and she independently offers her advice even when she knows it is different than my thoughts.
Robin has been great about dealing with the seller, sending me listings that I may be interested in, and having a great network to recommend to me. She recommended a great inspector, which helped me to get a new roof from the seller, as well as a mortgage broker, accountant, and handyman. These were particularly helpful since I was new to the area.
If you're looking for a Realtor that focuses on investment properties, I would recommend looking for someone that has these traits. If you're in the San Antonio area, you should contact Robin and see if she would be a good fit for you. Check out her blog at activerain, and check out her Web site for more information.
From a captain in the US Air Force:
I have moved many times in my life, and without a doubt, Robin is the best realtor I have ever worked with. She helped me purchase one home, sell another, and found long-term tenants for a rental property on two separate occasions. Robin is a gifted communicator and you couldn’t ask for a better advocate whether buying or selling. She knows the business and has always earned her keep by looking out for my best interests. She’s the first person you should call for any real estate need in the San Antonio area!
From the wife of a US Army chaplain whose family PCSed to San Antonio from Virginia:
I would recommend you to anyone, and I feel like the lucky one, because you're still the one I contact when I need help...finding a service person or information I misplaced etc. :) I only wish they made all realtors like you. I wish we could take you with us each move we make!
From a first-time home buyer who relocated from California with her husband in the Air Force:
What sets Robin apart from her peers is her ability to anticipate your needs. Robin was always one step ahead of us as she directed my husband and I through the experience of buying our first home. As a military family living on the west coast Robin's efficiently and reliability were invaluable to us. When the time comes to sell our wonderful home there will be no other realtor I even consider calling!
P.S. We are STILL very much in love with our home!
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