SHOULD YOU BUY A FIXER UPPER?

It looks so simple on TV: Find a diamond-in-the rough with "good bones," hire a few telegenic workers, perhaps squabble with your significant other about the interior paint color and presto – the home has doubled in value. The reality, of course, is not so easy. Here are a few things to consider before investing your money – and time – in a fixer upper.

1. Can you afford it?
After consulting an experienced building inspector to assess the home, a contractor for a time and money quote on the work to be done, and a Realtor to make sure the renovations are in line with what buyers want, do the math. Be sure to include materials and add an extra 10-15 percent for renovation "surprises" that may arise. Once you have the general price tag, you can calculate whether you have the funds to cover the cost of renovation or need (and are qualified) to take out a renovation loan.

2. Do you have the time?
Even if you plan on hiring contractors to do most of the work, coordinating with with them still takes a big chunk of time. If you just started a job, are expecting a baby or simply don't want to commit the necessary hours to the project, it might not be prime time for a fixer-upper.

3. Do you have skills? (Or handy friends?)
Doing the labor yourself can save you money. A lot of renovation work, especially cosmetic projects, is not rocket science. But if most encounters you've had with power tools have ended at the ER, it may be best to go with a contractor.

4. How do you feel about living in a construction zone?
Unless you're able to live elsewhere during renovations, think long and hard about whether living in an unfinished house, complete with workers and a power tool soundtrack, will drive you nuts.

Before you dive into a fixer-upper, talk with a Realtor who can help you identify promising homes and emerging neighborhoods where you might get the most bang for your building bucks.  I'm ready to help...let's nail it.

Glowing recommendations....Thanks!

I love the great recommendations I've been getting lately! Truth be told, I just have great clients!

“Betty is ,by far, the best agent we have ever worked with. Since we were relocating from out of state, Betty did a lot of the legwork for us. She is very personable, charming, and a true professional.”

Sarah Wruck

“Betty Davidson is the best realtor we have ever worked with. She is very knowledgable and easy to work with. We never had to worry about anything!!! Best Realtor in East Texas!!”

Lisa Baker

Top 10 Tips for Home Buying Success

.....and the Top 10 Tips for Home Buying Success (in addition to calling Betty Davidson) are.....

Tip #1: Research Is The Key To Discovery

Home sellers won't call you with an offer to buy a maintenance-free home with a wonderful mortgage. You have to find the gems yourself! Only by reading available materials, talking to friends and experts, and spending time looking at different homes, schools, and neighborhoods will you end up with your American dream. Avoid the nightmares by learning how best to buy and maintain a home.

Tip #2: Make A Plan And Get Pre-Qualified

Every important decision needs to be clearly thought out. Developing a home buying plan can help you focus on the important factors and organize the entire process. You may even want to use a binder with sections on house hunting, home financing, service providers, etc. Loan pre-qualifying helps you determine the home price you can afford and presents you as a genuine prospect to the seller. A lender typically uses the 28% formula (your monthly mortgage can't exceed 28% of your monthly income) in approving your loan. Planning your actions and getting pre-qualified will keep you out of the panic mode and allow you to take advantage of opportunities. A thorough plan will save both time and money!

Tip #3: Value, Value, Value

The days of 10-30% annual appreciation have passed. Homebuyers in the 1970's benefited tremendously from what seemed like ever appreciating home prices. Nowadays, you're looking at slow growth while guarding against the possibilities of falling prices, skyrocketing ARM rates and corporate layoffs that can dramatically affect your home values. The classic rule of buying the worst house in the best neighborhood still applies. If you buy with an eye towards improvement, you can customize the home to fit your needs. The saying, "make money buying a home, not selling one," should keep you focused on the long-term importance of the purchasing price.

Tip #4: Create A Top 10 List Of Amenities

When shopping for a home, list the features (fireplace, fenced-in yard, new appliances, etc.) that are most important to you in deciding on which home to buy. Establishing "your criteria" early on will save time shopping for inappropriate homes and may keep you from buying a home on a whim. As detailed in Tip #3, your top reason for buying a home should be the value you are getting. Some of your top 10 amenities should logically be sacrificed if an incredible value is available.

Tip #5: Fixed vs. Adjustable Rate Mortgages

Adjustable rate mortgages have an initial fixed rate, which is followed by a period of adjustment intervals during which the rate adjusts based on the performance of several key indexes. Typically the initial fixed rate on an ARM is slightly lower than the comparable rate of a fixed rate mortgage.

Fixed rate mortgages allow buyers to take out a long term loan without having to worry about changing interest rates or monthly payments. Most fixed rate loans are offered in either 15 or 30 year terms.

Most buyers will be well served by a fixed rate loan, but each situation is unique. While ARM loans have become less popular in recent years, they can still be a viable option for some buyers - especially those who plan on selling again in the short term. 

Whichever loan you choose; make sure that you scrutinize all the closing costs. If you are required to have a mortgage escrow account and private mortgage insurance, make sure you understand the terms and cancellation procedures (your Real Estate Agent has publications to assist you). Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. If you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.

Tip #6: Sign A Contract That Protects You

Make sure that the contract you put on a house allows you to arrange financing, inspect the home and negotiate any problems that you uncover. Ensuring that the contract you sign will minimize potential legal battles will let you swim in your new pool with your family and neighbors instead of with the sharks.

Tip #7: Put Yourself In The Seller's Shoes

You are about to make one of the most important decisions that will affect both your life and the life of the seller. If you take time to understand the reasons the seller bought the home, their reasons for selling, and the home improvements they have or have not made, you'll be in a better position to evaluate the home and negotiate a better deal. In the end, the home buying process excludes the professionals and comes down to the individuals buying and selling the home. A closer look at the seller may help you in deciding whether and for how much to buy a particular home.

Tip #8: Develop A Mortgage Shopping Chart

One of the biggest decisions to make before putting a contract on a home is how to finance the purchase. There are 10,000 lenders competing for your mortgage business. The days of simply walking into the community bank and negotiating with the loan department manager are over. Today, you can apply for a loan over the Internet or even use a mortgage broker to shop for your loan with hundreds of lenders. When choosing a lender, you want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to ARM's. Create a chart that lists different types of loans, fees, and at least five mortgage providers (including a mortgage broker).

Tip #9: Get A Quality Home Inspection

Although it is hard to believe, more people pay for inspections before buying used cars than when making the biggest investment of their lives - their homes. Paying for a qualified home inspection before you buy a home isn't just spending "a little extra" for peace of mind; it's absolutely essential for anyone who doesn't want to spend thousands of dollars for repairs.

Tip#10: Peace Of Mind: Home Protection Plans

To protect both you as a buyer, as well as the seller, it is a good idea to purchase a home protection plan.  What exactly is it? A home warranty, or home protection plan, is a service contract, normally for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. A negotiable contract between the buyers and sellers which does not overlap or replace homeowner's insurance policy, this type of warranty can save the new homeowner lots of headaches, as well as put seller's fears to rest. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage. For example: if a hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall.

"FIND ME A HOUSE WITH A POOL!"

Doesn't everybody want a "cement pond"?

Swimming pools....are they a plus or a minus when it comes to buying a home?

In my experience as a buyer's agent, I have found that buyers fall into the following 3 categories concerning swimming pools:

Home Buyers Who Won't Look at Homes WITHOUT a Pool

They have their hearts set on a home with a pool, and view it as a “must have” feature when deciding on a home purchase. Pools are particularly popular in warmer states because they can be used year round. In Texas where the summers are HOT, pools are a "hot" item for many buyers.

Home Buyers Who Won't Look at Homes WITH a Pool

Many buyers do not want to be burdened by the hassle and expense of maintaining a pool.
Another concern is the potential danger associated with a pool, especially if the family includes small children.

Home Buyers Who Never Thought About Buying a House With a Pool

They see a home they like with a pool, and then must quickly decide whether they are “pool people” or not before writing an offer.

Should You Buy a Home With a Pool?

If you enjoy swimming, or do a lot of entertaining in the summer, then a pool might be worth the upkeep. Otherwise, it can become an expensive bird bath. As you might expect, higher-end homes are more likely to have pools, and although the pool may rarely be used, it is primarily there for decoration.

Types of Swimming Pools

The cost for a new pool starts around $30,000, but can easily climb past six figures depending on what kind of pool it is.

Gunite Pools Gunite pool construction, which is achieved by spraying a mixture of concrete and sand into a pool-sized hole, is the most popular. Gunite pools can be designed in almost any shape the homeowner desires and they last for many years. As you might imagine, a Gunite pool is relatively pricey.

Vinyl Pools Vinyl in-ground pools are generally rectangular, but other configurations are available. They are less expensive than gunite because the pools are lined with vinyl; however, the liners often need replacement after 10 years. They are popular in areas where temperatures dip below freezing and the pools are drained in the winter. To prepare for a vinyl pool, the ground is excavated and support walls are constructed from a variety of materials such as wood, steel, fiberglass or aluminum.

Above-Ground Pools An above-ground pool adds no value to the home because it is portable. This is an inexpensive option for a pool. Unlike in-ground pools, which can require weeks to complete, these pools can be installed in a few days.

The Disadvantages of Owning a Home With a Pool
Expense of maintenance
Safety concerns
Pools consume valuable yard space
It might cost more to insure a home with a pool, and it can drive up utility bills.

Do Pools Add or Detract From the Value of a Home?
A home that's already attractive is often made even more valuable if it has a nice pool. Homes with pools have higher resale values in subdivisions featuring a large number of pools.
However, if a pool is in poor shape, it could decrease the appraised value of a home.

The choice is yours to make. Pools can be a lot of fun. You decide  if the amount of enjoyment is worth it.

                                DOES YOUR DOG WANT A POOL?    

So you want to buy a home? Call me!

A FEW TIPS FOR HOME BUYERS 

1. Don't buy if you can't stay put.

If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.

2. Start by cleaning up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford. Just because a lender says you will qualify for a larger mortgage doesn't mean it is a good idea.  Take into consideration your future financial goals and expenses you may have.

4. If you can't put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a small down payment.

5. Buy in a district with good schools.

In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values. Location, location, location.....

6. Get professional help.  

Even though the Internet gives buyers unprecedented access to home listings, buyers are better off enlisting a REALTOR . Look for an Accredited Buyer's Agent who knows the market and will have your interests at heart to help you with strategies during the bidding process.

7. Choose carefully between points and rate.

When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say three to five years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.

Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. Most sellers will request a copy of a pre-approval letter from your lender prior to considering your offer to purchase their property.

9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the neighborhood. Your buyer's agent will provide you with Comparative Market Analysis of the neighborhood.  Before making an offer, consider the sales price per square foot of comparable homes that have sold in the last 6 months.

10. Hire a licensed home inspector.

Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home inspections in the area where you are buying. His or her job will be to find items in need of repair or replacement, and point out potential problems that could require costly repairs down the road. Also it is wise to have a WDI (Wood Destroying Insect) inspection done by a pest control specialist.

Houses are my passion! (Shoes are a close second)



My dream playhouse when I was 8

(or how I remember it)

It's true...Houses are my passion!  As a young child playing on my family's property in the piney woods of East Texas, I spent hours designing  "houses" by gathering pine straw and forming it into large pine straw floor plans. My pine straw dream houses had a living room, bedrooms, bathrooms, a kitchen, AND the all important 1960's "rumpus room" which my family did not have in real life, but that I had seen on television.

My family moved to Shreveport, Louisiana when I was 8, and that is where I became friends with Marcy Hays. I LOVED playing at  Marcy's house because she was a fun girl, had her own cotton candy machine, a cat clock in the kitchen with eyes and a tail that moved from side to side when it ticked, and a mother who believed in letting her children try all kinds of stuff my mother would never approve of.  But the main reason I loved to go to Marcy's house was  because she had an awesome playhouse in her back yard.

Marcy wasn't a girl who enjoyed playing "house", and she had little interest in her playhouse, which in my eyes, was a total DREAM house.  The playhouse  was crammed with a jumble of child sized furniture, tea sets, dolls, leaves, balls, and miscellaneous junk.  All I wanted to do (after we'd made a batch of cotton candy, of course) was organize and decorate that play house.  Poor Marcy was constantly trying to get me to do something else with her....climb a tree, ride bikes, bake cookies....ANYTHING but decorate the play house! I was never ready to go home when my mother came to pick me up....maybe my love for decorating and selling houses stems from always having to go home before my decorating job in the play house was finished.

1982 in the throne chair from Pier One
My pride and joy...a dashing husband,
an adorable baby boy

During the early years of my marriage, my husband was in law school, we had two babies, and we were living on little money and a lot of love. I decorated our tiny apartment with painted garage sale furniture, walls covered with "flair squares"(temporary wallpaper from the 80's), a country print camel back sofa we charged on a credit card, and a big wicker throne chair from Pier One...I thought it was sooo trendy! Our dining room table and chairs  changed colors on a monthly basis. These years of penny pinching and challenging decorating conditions caused me to develop an addiction to the feeling I get when I succeed in inexpensively transforming a plain and unimaginative space into an inviting place with personality and style. I'm constantly trying to think of ways to make something look better...I even give my poor husband a makeover now and then.

With the exception of one house we built, every house we've bought has been an ugly fixer upper. Every time I view a home, I see it not only as it is at the moment, but I also imagine it as it could be. If you are willing to make a few updates and repairs, you can make some great deals on homes that have sat on the market month after month because of their lack of appeal to the majority of buyers.

My passion for houses is just part of who I am.  If I had to choose between eating and decorating/selling houses, I would choose the activity that involves houses. (I'm okay as long as I have a box of Cheese Nips and a bottle of water in my car!)  My family is used to my chronic decorating, and my oldest daughter, either by genetics or exposure, has developed into a talented artist/decorator/designer with a unique flair.  I find her talent and creativity to be a great resource, and recently we had the fun experience of partnering together to accessorize a new home for one of my clients.

I am an ASP  (Accredited Home Stager), an ABR  (Accredited Buyers Agent), and a Realtor and Associate- Broker with almost 13 years of experience selling real estate in the Tyler, Texas area.  I love houses. They are my business, my hobby, and a passion of mine........I couldn't be happier just doing my job and helping the "Marcys" of the world find a home that even they can be excited about!

Making dream homes a reality since age 8!
I  can help you find your dream home too!