Home Owner • Seller • August 25, 2023

Do I Really Need a Lockbox?

by Robin Tidwell

A real estate lockbox makes it easy to allow any interested real estate agent and buyers or real estate related professional to access the property.

Homes with lockboxes typically get more showings and sell faster than ones that don’t. If a listing agent or a seller must rearrange their schedule to unlock a house or coordinate a time to be present when the house is showing it can reduce the number of showings.

In San Angelo, we’ve taken it up a notch from the traditional combination lockbox and usually use Supra eKEY lockboxes. They are Bluetooth-enabled lockboxes that only authorized users can open. The San Angelo Board of Realtors are the ones who crown industry-related professionals as authorized users and give them access codes. Think along the lines of Realtors, inspectors, and appraisers.

This doesn’t mean that your house is a free for all for anyone with the magic key! When someone wants access to the house, I contact my clients and wait for approval of every showing before giving them permission to unlock the lockbox.

Every time the lockbox is opened, the person who unlocked it, their contact information, date, time, and even when they placed the key back into the lockbox is tracked.

The particular boxes we use can also completely lockdown during certain hours where no one has access. I usually set those from 9 pm to 8 am.

I personally prefer these lockboxes to traditional combination boxes, hiding a key, or asking the seller to leave the door unlocked. With a traditional combination lockbox, the combination could fall into the wrong hands, and sellers are essentially leaving their homes wide open to possible theft. The same goes for hiding a key or leaving the door unlocked.

Buyer • Home Owner • August 25, 2023

What is a Homestead Exemption? Homestead Exemption = Saving $$

by Robin Tidwell

If you’ve purchased a home and it as your primary residence, then you should file for a homestead exemption with the Tom Green County Appraisal District to save money on your property taxes. Within San Angelo city limits, we are taxed on 3 things that make up our overall property taxes: County tax, City tax, and SAISD tax. All of those go back to help our county, city and schools operate. When you apply for a homestead exemption on your home, instead of taxing 100% of the tax value of your home you are only taxed at 80% on county taxes, 80% on city taxes, and receive a $25,000 tax value reduction for your school taxes.

It’s a considerable amount saved annually, no matter what price range your house is in, by utilizing the homestead exemption!

You can file for the homestead tax break right after you buy your home. However some of the benefits don’t kick in until January 1, of the year AFTER you purchase. To apply for it, you must go in person to the Tom Green County Appraisal District (2302 Pulliam St.) and fill out the form showing that the home is your primary residence. Be sure to take your state-issued driver’s license or ID with you and make sure that you have renewed it with your current address you are wanting to homestead. Filing for your homestead is time-sensitive! It must be done between January 1 and April 30^th of the year after you purchased your home. They have put a copy of the homestead exemption form to fill out online, print, and take with you to the TGCAD. https://iswdataclient.azurewebsites.net/downloads/tomgreencad/Common%20Forms%20&%20Exemption%20Apps/50-114%20(Residence%20Homestead%20Exemption%20App).pdf

From the time that you purchase your home to the time you can file your exemption you will get lots of snail mail from scammers telling you that if you pay them $X they will file your homestead exemption for you. None of it is true! The only way to file and receive a homestead exemption in Tom Green County is to go in person to the tax office.

If you’ve been in your home for a while and are unsure if you ever filed for a homestead exemption go to https://iswdataclient.azurewebsites.net/webindex.aspx?dbkey=tomgreencad&time=202102241026012 and search by your name or address to find your property. Under the section where it says, “Qualified Exemptions” it should say “Homestead Exempt”. Not all qualifying exemptions are listed publicly, but homestead is. If you do not have a homesteaded exemption and the home is your primary residence, contact the Tom Green County Appraisal District 325-658-5575.

Remember, once you’ve homesteaded your home the exemption stays in place until you decide to sell your property. Filing your homestead exemption is definitely worth the trouble for the savings!

Home Owner • Seller • Technology • August 25, 2023

Video Privacy

by Robin Tidwell

Selling a home can be stressful. Typically, when you put your house on the market you’ve worked hard to make your house look better for strangers than you do for your own family. It can be frustrating when those strangers not only don’t make an offer on your home but then they don’t even give any feedback on why they didn’t make an offer. If they would only comment on a house the way they do on a San Angelo LIVE! post!

Nowadays we have some great smart home devices that can record video and audio! (No, you don’t always have Manny Diaz, video guy extraordinaire, in your house!) Think about it, the doorbell, Alexa, baby monitors, and of course cameras. So of course, while your house is showing to potential buyers you think to yourself, I could just pop in on a device and listen for my OWN feedback, right? WRONG!

Both the Federal Electronic Communications Privacy Act (ECPA) and Section 16.02 of the Texas Penal Code say that you must have the consent of at least one individual who is part of the conversation. This is commonly referred to as the one-party rule.

As tempting as it is when your house is showing to potential buyers, and you are not in the home, it is illegal to monitor their conversations. If you’re not a participant in the conversation or have permission from a person in the conversation, you can’t record or listen.

Illegal recording is a felony offense in Texas. Anyone who has been recorded in violation of the law can file a civil suit to potentially recover $10,000 for each occurrence, plus damages attorney fees, and court costs.

As a buyer how do you protect yourself? For starters, while you’re in the house or on the property, if you don’t have something nice to say, don’t say anything at all. Also, save talking about price and possible negotiations until you’re out of the house. It’s always better to assume that someone is listening and not show all of your cards!

Buyer • Seller • August 25, 2023

The Final Walk Through

by Robin Tidwell

The final walk through is done by the buyer typically right before closing to make sure that everything is as it should be in the house they are fixing to purchase. Usually, at that point, the seller is moved out or is almost moved out and the buyer can make sure the house is in its required condition.

The purpose of the walk through is to make sure everything is as it should be before signing closing documents. At this point, buyers are super excited and sometimes they get starry-eyed just walking into the house that is fixing to become their own!

Here are some of the things a buyer should be looking for during the walk through:

Any repairs to the property that the buyer asked for should be complete. If the repairs were completed by a professional a copy of the receipt should be provided to the buyer.
No major unexpected changes have been made to the property since the buyer was last there.
Nothing is removed from the property that should have been conveyed (tv mounts, fireplace screen, light fixtures, appliances, etc.).
Remotes, keys, and any “controls” to the house are left in the house or will be available at closing. “Controls” also means logins/passwords to any apps or smart devices that pertain to the property. If there is a community mailbox area then the mailbox number and key. The post office will rekey the mailbox for free for the new owner. However, it can take up to a few weeks for that to happen. It’s just a courtesy for the seller to hand over the current mailbox key to the new owner.
All personal items and debris from the seller have been removed.

As the seller, getting moved out and remaining sane while doing it is usually your first priority! The buyers’ final walk through is usually towards the end of the list.

As the seller here’s a few things to do to prepare for the buyer’s final walk through:

Keep any receipts or evidence of negotiated repairs completed on the house to give to the buyer.
Leave any users manuals that pertain to the property for the buyer.
Collect everyone’s house keys, garage door openers, and mailbox keys to either leave in the house or bring to closing.
It’s always great if a seller can leave paint cans or paint colors that are associated with the house.
Be prepared to leave/transfer any logins or apps that pertain to the property to the buyer. After closing, the seller should not have any access to the house, which includes digital connections.
Clean! Even though the contract says the house should be swept clean, you want the house to be fully ready for its new owner. Going above and beyond is always very appreciated!

Sometimes there are other things that have been negotiated in the contract that you might need to double-check. Ask your Realtor what things you should be looking for during the final walk-through, hopefully, they are an old pro at it and will refresh your memory!

Seller • August 25, 2023

Tips You Might Not Think About When Showing Your House

by Robin Tidwell

Sellers can sometimes be anxious when they are putting their house on the market. Understandably so! There will be people walking in and out of their house and looking at it critically. You know all the things to do like, declutter, deep clean, make it smell nice…but here are a few others that you might not automatically think about.

Make an extra key to your house. Realtors tend to be super thorough about locking up houses and sometimes lock doors that you aren’t used to having locked. This will save you that late-night call to your realtor asking them to come to unlock your door.

Think about what medicine you have in your cabinets. Sometimes buyers are so excited they open cabinets not thinking there might be personal items inside. You may want to consider keeping prescription medications in an easily movable tote so that you can quickly grab them and take them with you when the house is showing.

Have you ever told a kid they had to clean their room before they could do something fun and later find that everything was shoved under their bed? Sometimes as adults, we really want to do the same thing when we are pressed for time! Getting the call that your house is going to show can make you go into panic mode and want to become the kid that shoves things under their bed! Here’s another idea, consider getting a large plastic tub. When you get the call that your house is going to show, don’t stress about putting everything in 20 different places around the house. Just put everything that is out in the tub! This is especially good if you have small kids and can make it a game for them! Everyone can help fill the tub with things that are out of place. When you leave the tub goes into the car with you and when you get home you are hopefully less stressed and have more time to put everything away in its place.

Save some of your nonessential errands for when the house is showing. Sellers sometimes think they can hang close in the area, and it will all be over soon. They think the buyer doesn’t notice them circling the block or sitting a few houses down with binoculars… but they do. Don’t be the helicopter seller, give buyers some space to look and enjoy what your house has to offer them. Who knows, it could be their new home!

Showing your home can feel intrusive. Price it right in the beginning so that showings are as minimal as possible. If a house is priced right and dressed right it will sell quickly and for top dollar! Remember, it’s a house not one of your children. Ask for feedback from showings and try not to take it personally.

Buyer • Home Owner • Seller • August 25, 2023

How Do You Build Equity In Your Home?

by Robin Tidwell

You hear people talk about the amount of equity they have in a house, but what does equity really mean? When we’re talking about houses, equity is what the home is worth minus how much you owe on it.

If you purchased a $200,000 home and put 5% down ($10,000) then you start out having 5% equity in the home. Value of the home – Debt attached to the home =Equity

The goal is for your home to be worth more than what you owe and for your equity to continue to grow over time. Equity grows by paying down your mortgage loan, maintaining and/or updating your home, and the value of your home going up.

Paying down your loan – Building equity can be as simple as making your mortgage payments! If you’re looking to do a little more, consider rounding up on the amount you pay on your monthly mortgage payment. Talk to your lender about the advantages of paying ½ of the payment biweekly instead of a full payment monthly. Also, consider making one additional principal payment a year. Lots of these things can take years off of your overall loan.
Maintaining your home – By maintaining your home and keeping everything in good working condition your home value should increase naturally. This can be as simple as taking care of things like the paint on the interior and exterior of the home, having the HVAC serviced regularly, protect your home from wood-destroying insects, maintaining the plumbing and the roof.
Updating your home – You can also grow your equity by making updates to the home that will increase its value. You may not get a 100% or more return on your investment with every update, so be smart about the updates you are doing. If you’re planning on selling in the near future think about what a buyer would want to have in the home as you update.
Natural Appreciation – Home values traditionally rise on average about 5% a year. Not all homes will go up in value at the same rate. Some neighborhoods and homes appreciate faster than others. This is where you lean on your Realtor’s experience and knowledge to help you make the best purchase decision based on your needs.

Buyer • Loan • August 25, 2023

What is a Conventional Loan?

by Robin Tidwell

A Conventional loan is a non-government loan that meets requirements set by the Federal Housing Finance Agency (FHFA) and meets the funding criteria of Freddie Mac and Fannie Mae. The upside of choosing a conventional loan is they offer low-interest rates to borrowers with excellent credit scores.

With a conventional loan, homebuyers typically enjoy the largest selection of loan options at the most competitive rates. They are geared towards homebuyers who have credit scores of 620 or higher (although a score that’s above 740 will help you get the best rate,) and a qualifying debt-to-income ratio. If you have good credit, you could possibly have the option of having a down payment of as little as 3%! That’s even less than an FHA loan!

If your down payment is lower than 20%, with a conventional loan, you will be required to pay private mortgage insurance (PMI). The upside is that on a conventional loan once you reach 78-80% loan to value you can stop paying the PMI. You do not have to pay it for the life of the loan! On a Conventional Loan, the PMI amount is based on the borrower’s credit score and loan to value, it is not a standard amount. A benefit for those with great credit! There is also the option to pay a one-time upfront premium and not have to have PMI in your monthly payments.

Though 30-year fixed-rate conventional mortgages are the most common, you can find other terms like 15 or 20-year loans as well as adjustable interest rates. If you have a higher credit score and can make a down payment of 3% or more, then this may be your best option for a mortgage loan!

Buyer • Loan • August 25, 2023

What is a VA Loan?

by Robin Tidwell

The VA loan program was originated and passed by the United States Congress in 1944. It is a mortgage loan created specifically for eligible military veterans, service members, and their spouses. It’s issued through private lenders but is guaranteed by the Department of Veterans Affairs (VA). It is a great program for those who qualify!

A VA loan offers veterans loan rates that are lower than traditional mortgages. They can also allow veterans to borrow up to 100% of the property’s value. That means NO down payment! This is a huge benefit of a VA loan since most mortgage programs require 3%-5% as a down payment. Flexible income requirements and low credit score requirements are also a perk. The VA additionally does not require the buyer to pay any type of mortgage insurance upfront or within their payment. That means the buyer could afford a more expensive house (than going with another loan and paying the minimal down payment) for the same monthly payment because the MI was eliminated.

Most veterans, active military, reservists, and National Guard are eligible to apply for a VA loan. Also, spouses of military members who died while on active duty or suffer a service-connected disability can apply. Once you have earned eligibility for the VA home loan, it never goes away! People who served even decades ago are still eligible even if they have never used the benefit previously. To check your eligibility, contact a VA-approved lender (I always recommend contacting a local lender!) and they can request your certificate of eligibility, or you can do it on the VA’s eBenefits website.

Buyer • Loan • August 25, 2023

What is an FHA Loan?

by Robin Tidwell

An FHA loan is a loan backed by the Federal Housing Administration. The FHA program started in the 1930s during the Great Depression when the rate of foreclosures was quickly rising.

FHA loans are typically more popular with first-time homebuyers, but really, they are available to anyone who qualifies! You can only have one FHA loan at a time. If you have an FHA loan on your current home and are wanting to get an FHA loan on your new home, it is possible! You just have to sell your current home before closing on your new home. No, you don’t have to be homeless in between, you can close on both properties on the same day. If the loans don’t overlap, you are good!

There are several benefits to choosing an FHA loan. FHA loans allow you to have down to a 600 credit score. FHA also has a little more flexibility with the debt to income (DTI) ratio and allows you to have a higher DTI than a conventional loan. FHA also only requires a down payment of 3.5% of the property’s purchase price.

An FHA loan does require the buyer to pay a two-part mortgage insurance. There is a one-time upfront payment, that can be rolled into your loan, and monthly payments that are included in your loan payment. Since the lender is allowing a lower debt to income ratio, small down payment, and lower credit score, mortgage insurance compensates for the increased risk to the lender. Unlike a conventional loan, the amount you pay in mortgage insurance is not based on credit or DTI. If you have a 3.5% down payment your mortgage insurance is based on a standard formula across the board.

Buyer • Loan • August 25, 2023

What am I Really Paying for in my Mortgage Payment?

by Robin Tidwell

There are typically 4 main components that make up your total monthly mortgage loan payment: Principal, Interest, Taxes, and Insurance.

The main part of the loan that everyone thinks about is the principal and interest. Your monthly principal is a fraction of the amount you borrowed from a lender to buy the home. The interest is the percentage (of the principal) that you pay over the life of the loan as a fee for the lender loaning you the principal.

The other part of your payment is the taxes and insurance. If you put less than 20% down on the property your taxes and homeowner’s insurance will likely be included in your loan payment. The mortgage company makes sure to collect an amount from you that will cover your yearly taxes and homeowner’s insurance. As they collect this money from you they put it into an escrow account until the bills are due and then make the payments for you. The lender feels like this is a little extra assurance that their investment stays insured, and property taxes are up to date.

There is also another type of insurance that could be included in your payment. Depending on your loan type and your down payment there is a chance that you will also pay a mortgage insurance premium (MIP) or private mortgage insurance (PMI). Typically, a conventional or FHA loan will require this if the borrower puts less than 20% down for the down payment. Since lower down payments can be riskier for investors, they can require mortgage insurance to help cover the loan in case it goes into default. Even if the borrower puts 0% down, VA loans do not require the borrower to pay mortgage insurance. Definitely a perk of a VA loan!

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