Allen Brothers Houston Real Estate

Real estate transactions are complicated. A Texas REALTOR® will help you with the following steps and much more. In 1986 Allen Brothers Realtors pioneered Buyer Agency.
Decide What You Want
Before you start looking, make a list of what you want and assign each item a priority. Some areas to consider are the location,type of home, and age of the home.
Know What You Can Afford
• Most loans require a down payment. The amount varies(3%+), but 20% of the purchase price is typical. If you’re a first-time buyer or fall below certain income thresholds, you may qualify for affordable-housing programs. Generally, a higher down payment means better loan terms and a lower interest expense on the mortgage.
• Qualifying for a loan: A lender will determine how much he thinks you can afford based on your income, employment history, education, assets (e.g., bank account balances, other property, insurance policies, pension funds), and debt. Check your credit report before the lender does to clear up any problems.
• Your comfort level: You don’t have to spend $200,000 on a home just because the lender says you can afford a $200,000 home. Do some math and determine what you’re comfortable spending.
Make an Offer
You’ve figured out your home-search criteria and what you can afford. Now find a house and make an offer. Your REALTOR® is an invaluable part of this process. He or she will help you prepare a contract, negotiate, juggle inspections and option periods, and more.
Secure Financing Unless you’re paying cash for the home, you’ll need a loan. Keep in mind the true price of financing goes beyond the interest rate alone. Consider items such as points, total lender fees, term of the loan, and penalties for early payment. The lender will likely require an appraisal to verify that the home is worth the cost of the loan as well as a physical survey. Repairs may be required. Insurance must be purchased. All these conditions and others must be satisfied before a transaction can close.
Close the Deal
After weeks or even months of research and decision-making, you close the transaction, usually at the title company’s office. The title agent ask you to sign many, many documents and will explain each one. You’ll present a cashier’s check to the seller, sign another document that itemizes closing costs (the lender will have given you an estimate in advance), and pay your share of the closing costs. In return, you will receive a deed, transferring ownership rights to you.
Posted in:Home Purchase and tagged: Home Buyers
Posted by AllenBrothers Realtors on March 20th, 2019 4:28 PM

So many people these days are seeking a home inside the loop, near Houston’s downtown district. Young professionals in particular are eschewing the old pattern of inhabiting the suburbs/commuting into town, and are instead moving into the inner loop section of Houston in greater numbers than ever. In recent years, possibly due to the global financial crisis of 2008-09 and partly due to a generational change of preference, a great many young professional people have elected to rent something in the Montrose, Midtown and Heights areas instead of buy a big house in the suburbs. Banks changed their lending practices at this time, lowering interest rates and making mortgages more difficult to obtain. The pattern of increased renting in Houston probably reflects both these factors along with the fact that property inside the loop is extremely expensive compared to property in the suburbs. People looking to live near downtown want a place quick, and they want something within their budget. They know their budget won’t come close to the houses and bungalows for sale near downtown, so they rent an apartment or condo and consider themselves happy. The number of people doing this is a huge figure – thousands of people weekly move to Houston in the current thriving economy and begin searching for rental properties near the center of town. They all go out and look at the same duplexes, apartments, condos and small townhouses, and these all quickly disappear off the already tight rental market. Many people are forced to seek rental units elsewhere at the end of the day – units in areas that were their second or third choices, because they simply couldn’t locate anything in the highly coveted areas inside the loop. They begin taking units in areas like the Galleria and much further west around Westheimer and out toward the energy corridor.

What many of them don’t realize is that there are always a few units inside the Houston loop for sale that are just as nice as the ones they were seeking to rent. There are 1 bed/1 bath condo units located right in the center of Montrose, in the 670 square foot range, selling for $218,000. With a $44K down payment at 20% down, the monthly mortgage payment on such a unit would come to around $1087 with a 3.73% interest rate, which is better than with the current market rental rate for such units. Similar 2 bed/1 bath units are around 900 square feet and selling for around $295,000, which could be secured for a $1600/month mortgage at the same interest rate and a $44K down payment at 15% down. Once again, this is cheaper per month than renting a similar unit in a prime location. The bigger difference, of course, is that every payment you make on a mortgage is partial payment toward the equity of your own purchase, whereas a rental payment is more or less money that goes into the landlord’s pockets and is never seen again. If anything, this is a reason for any young professional who has money saved for a down payment to buy instead of rent. If you find yourself high and dry after searching Montrose and the Heights for a good rental unit, have good credit and $20-40K to spare for a down payment, you can afford any number of units for sale in the same area. After a few years, they will probably have appreciated in value and can be sold for a profit as well, something a rental unit won’t give you. You can also lease your unit out when you aren’t living there and enjoy an extra stream of monthly income based on the difference between your mortgage payment/expenses and the amount you are charging the tenant for rent.

 

 

 

Posted by AllenBrothers Realtors on February 19th, 2015 5:40 PM

The recent drop in oil prices to below $50/bbl has most of the nation in a state of jubilation. Here in Houston, TX, the nation’s energy capital, however, there is a sense of uncertainty about what has been a booming and unstoppable real estate market. This market will probably calm down in the coming year, but by no means will it crash. Inventory remains extremely low, mortgage rates are spectacular and local home builders all report a demand for new construction that is as strong as ever. All of this is according to real estate experts in the area such as Mark Dotzour, a chief economist and director of research at Texas A&M University’s Real Estate Center.

The psychological factor alone may have an effect on the local market, but young Houstonians will also be more empowered to purchase a first home with the money they save at the pumps, another unexpected factor going into 2015. There are currently many new lending programs in place to help such people put themselves into a home-buying position.

Dotzour, at an economic forecast presentation at the Greater Houston Builder’s Association, says he expects builders to pull back on their rate of output in 2015 for the first time in several years, starting construction on between 20,000 and 30,000 homes. Will this resemble the aftermath of other seismic economic downturns of recent decades, such as 9/11, or the 2008 collapse? I don’t think so, said Dotzour.

Builders started 30,100 homes in 2014, as given in an estimate from Metrostudy. That is up 7% from 2013.

Dotzour said home prices will continue to rise in Houston as inventory stays at such record low levels. This will happen despite any potential slowdown in Houston construction.

The psychological factor of oil prices falling to below $50-a-barrel may have an effect on many Houstonians who would otherwise have purchased a home this year, and who may now decide to postpone that purchase. This sentiment was echoed by another economist, retired housing analyst Mike Inselmann, who was also at the forecast presentation.

He was even more confident in local builders, expecting them to start at least 30,000 new homes in the coming year.

The previous fervor and intensity of the market - with two buyers for every one house - will no longer persist, according to Inselmann.

Major building firms at the presentation have not changed any of their building plans for 2015, and have not noticed any slowdown in the demand for housing. They do not see any panic among their competitors and they aren’t panicking either.

Dotzour said that even if home sales were to fall in 2015, the prices would go up, due to the low housing supply.

If oil stays below $50/bbl for the rest of the year, another economist expects employers to add 50,000 to 60,000 jobs and builders to start between 20,000 to 25,000 houses. Prices should be up 5%. This will not resemble the oil bust of the 1980s.

Posted by AllenBrothers Realtors on January 13th, 2015 6:40 PM

Over the past 120 days oil prices have dropped considerably to well under $100/bbl, their lowest prices since 2011. Will this affect Houston’s robust housing market, which is in so many ways tied to the energy industry? Some speculate that the price drop may be a strategic move on the part of Saudi Arabia as it tries to put pressure on other members of OPEC and Russia. Most of these countries require oil to be above $100/bbl to make a profit. True or not, US production of oil is up by half since 2011, and there is evidence of less demand from China and India. The cause is likely a combination of these variables.

What about the Houston market? With a study of charts plotting quarterly local statistics versus oil prices1, it appears that oil prices must be within a certain ideal range between $55 and $93 a barrel in order to facilitate economic growth. Going outside this range would be suppressing either transportation and home-buying budgets on the high end, or job growth and home demand on the low end. At the current pace of prices, it would appear that job growth may slow and place pressure on rising housing prices. The declines that follow may discourage some newer developments by adding a degree of pressure financially. But the overall effect of the fall in oil prices will be beneficial to the Houston housing market.

Less employment in the energy sector will lower pressure on labor in the construction industry, which has been one of the housing market’s primary cost sparks.

Lower gas prices will make development in more remote markets more cost efficient, making cheaper sources of land available and encouraging development of lots at a lower spectrum of the market. A large portion of first time home buyers in Houston are budgeting under $200K, which is not an easy budget to find within the loop.

Lower energy prices may help the overall economy in other markets that are improving, which should help the share of Houston’s economy connected to the national economy.

Houston’s energy economy consists of several forms of energy, which can be referred to as upstream, midstream and downstream. Downstream energy, which is exploration and production, will feel the effects of a lower price in oil. However, the other two energy sectors, midstream (pipelines) and upstream (petrochemical manufacturing) will probably improve as lower prices drive the nationwide market into a higher level of energy consumption requiring more oil/refined products to be moved (midstream) or manufacturing sees decreased costs for feedstock (upstream).

The Houston economy is tightly bound to the energy industry. What is important to keep in mind is that the energy projects that keep the Houston energy economy afloat are typically significant, long-term investments that are not particularly affected by daily or weekly price changes. The long-term worldwide trend for oil consumption is still on a long upward curve. In the short to midterm perspective, the recent drops in energy prices should actually prove beneficial to Houston’s economy, not detrimental.

Posted by AllenBrothers Realtors on December 17th, 2014 4:06 PM

Texas Housing Prices Opposite From National Curve

The Texas housing market has done nothing but exceed expectations in 2014. In Dallas, September home prices rose 7.4% compared to the same period last year and 0.3% from the previous month, according to the latest S&P Case-Shiller Home Price Indices.

For some reason S&P does not keep record of Houston home prices, but Dallas numbers are very similar to its rival coastal city to the south. Dallas and Texas home prices are very different from the rest of the country, where the price of homes slowed down almost everywhere else as fall arrived. Elsewhere only Charlotte, NC saw an increase in home prices.

The Houston market has performed in a manner opposite to that of the rest of the country, which is typical. In the rest of the nation, the 10- and 20-City Composites are up 4.8 and 4.9 percent compared to the same period last year respectively, which is down from August, in which the yearly gains were 5.5 and 5.6 percent respectively. This is the smallest annual increase in a couple of years. Also, the National Case-Shiller Index went down 0.1% from August to September, which was the first monthly decrease for the index since November 2013. Eighteen of the 20 cities tracked by Standard and Poor’s had slower annual housing increases from August to September.  2014 housing prices as of September are averaging 5% below what they were in September 2013, but still well above what they were in 2010 and 2011, according to the Wall Street Journal.

Posted by AllenBrothers Realtors on December 2nd, 2014 4:41 PM

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