Two More Scenarios After Your Offer Is Accepted On A Home

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In our previous blog, we covered the more common scenarios that happen after your offer is accepted on a home. In this blog post, we’re covering the scenarios of what happens if you or the seller wants to back out. If a seller accepted your offer, congratulations! You are one step closer to owning a home or property. What happens now can vary, but I’ll cover the different scenarios below. 

Scenario 1: You Want to Back Out 

Contingencies will determine how easily you can withdraw. If you’ve already signed a purchase agreement, it’ll be a little harder to withdraw but it may still be doable. If a contingency in your offer isn’t satisfied, you have two options. The first is to renegotiate with the seller to reach a point of mutual agreement, or you may be able to withdraw the offer, depending on the accepted contract.

Contingencies can be a safety net for buyers, but you can lose your earnest money deposit if you don’t fulfill your buyer obligations. Obligations mean following the deadlines and timeframes outlined in the purchase agreement. 

In this competitive seller’s market, buyers have removed contingencies to make their offers more appealing to sellers. This means it will be harder to withdraw from the purchase agreement before closing. If there are no contingencies and you want to continue withdrawing from the contract, the seller has the right to retain your earnest money deposit. This is usually about 3% of the purchase price. For a $500,000 home, it could be a $15,000 loss. 

Scenario 2: The Seller Wants to Back Out

A seller could have many reasons to change their mind, whether it’s accepting a better offer or deciding to no longer sell. The key is the timing of when they want to back out. If the seller chooses to withdraw their offer acceptance before signing the purchase agreement, there’s not much you can do. Similar to scenario 3, if the seller wants contingencies, but both parties cannot agree to, the contract can be canceled. If the seller decides to back out after signing the purchase agreement, they won’t lose their deposit, but they could have a lawsuit as they have breached the contract. 

If you need help navigating this fast-paced seller’s market, contact me today! I’d love to help you find the home of your dreams this year. Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

Two Scenarios After Your Offer Is Accepted On A Home

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If a seller accepted your offer, congratulations! You are one step closer to owning a home or property. What happens now can vary, but I’ll cover the different scenarios below. In this blog, we’ll cover the two most common scenarios and in our next blog post, we’ll cover the scenarios if you or the seller wants to back out.

Scenario 1: You Sign the Purchase Agreement

This scenario is the most natural progression after an offer is accepted. Signing the purchase agreement means the property is under contract since the agreement has been accepted in writing and signed by both parties. It will include the following information:

  • Identification of participating parties (buyer and seller)
  • Legal description of the property
  • Financial details
    • Purchase price
    • Buyer financing
    • Earnest money deposit amount
    • Closing costs and how it will be split between buyer and seller
  • Condition/specifics of the sale
    • Contingencies
    • Items conveyed in the sale (appliances, fixtures, etc.)
  • Timeline
    • Contingency time frame
    • Offer expiration date
    • Closing date
  • Condition of the home
  • Property disclosures
  • Relevant seller concessions, repairs, or credits

After the purchase agreement is signed and the earnest money is deposited, you now have the legal right to purchase the property. The signing and returning of the purchase agreement with the buyer’s earnest money deposit is the process of moving the sale into escrow.

Scenario 2: The Seller Wants to Negotiate

The seller might like your offer but can still negotiate some terms, so it’s in the seller’s favor. The seller can negotiate by submitting a counteroffer. This is why having a good buying agent is crucial, as they are the key to helping you navigate the negotiation process and helping get both parties what they want. Negotiations can include:

  • Increasing the purchase price or down payment
  • Removing/editing contingencies
  • Adjusting the length of closing schedule
  • Modify seller concessions/contingencies
    • Seller repairs or credits
    • Excluding certain items from the sale
    • Property transfer deadline, also called the seller move out date

Once both parties find terms agreeable to them, a purchase agreement will be drafted for both to sign. Then the buyer can move forward with purchasing the property.

If you need help navigating this fast-paced seller’s market, contact me today! I’d love to help you find the home of your dreams this year. Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

5 Steps to Fix & Flip Houses The Right Way

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Deciding to purchase a home as an investment property is one of the most important financial decisions in a lifetime. Whether you’re a seasoned investor or a newbie, flipping houses can be a little scary. But it doesn’t have to be! With over 12 years of property management experience, we have learned a few things over the years. Here are five steps to fix and flip houses the right way. 

1. Create Your Budgets

Before even shopping for a home, you need to create your budgets. One budget should estimate how much it will cost to purchase the home and close on it. The next budget should account for the renovation. When it comes to budgeting, it’s always better to overestimate and have more money than less. If it’s your first time fixing and flipping, a professional contractor should be your first stop to get accurate pricing. When you work with TALK Property Management, we can help you find credible contractors. 

2. Find Fix & Flip Properties

Now that you’ve done the beginning research, you’ll want to continue finding outdated properties to remodel. It requires a particular skill to find these undervalued opportunities, evaluate them, and manage them, so they’re completed on time and within budget. We can handle remodeling on your behalf when you choose TALK Property Management to help you on your fix and flip journey. The secret to finding a good fix and flip property is to find off-market homes and homeowners who are highly motivated to sell. As your REALTOR®, we can help you find these covert opportunities. 

3. Make the Right Offer at the Right Price

The price you pay for your property will determine the profit you’ll make when you sell in the future. So if you overpay, it’s likely you won’t make any profit at all. If it’s in good condition, it means you’ll have to do less work. If it’s in bad shape, you can make a fair offer that’s under the market value as you’ll need to put in more time and money to fix it up. It could mean you could have a lower offer accepted. Essentially, the better the condition, the closer you’ll want to pay to market price, and the worse the state it’s in, then the less you want to offer. 

4. Hire Contractors & Begin Remodeling

After closing, the property is yours and ready to be broken down and brought back to life! Don’t make the newbie mistake of trying to tackle everything by yourself. An investor is only as successful as their team, and part of your team is your remodeling crew. 

In an ideal remodel, you’ll finish remodeling the property in five or fewer weeks. Again, timing is crucial because the longer you hold onto a property, the more it will cost. Because, as the famous saying goes, “time is money.” Make sure your time and money are going to a credible and efficient contractor, so get several quotes. 

5. Market & Sell Your Fix & Flip Property

Now that the property is remodeled, it’s ready to go live! Any good REALTOR® will tell you that marketing is essential if you want your property to sell. That’s why you can’t skimp out on marketing your newly renovated place. With TALK Property Management, we run a Comparable Market Analysis to get you a fair rent price based on the current market trends and photograph your property for advertising on social media, the Multiple Listing Service, and our website. 

Contact us today if you’re ready to buy your next investment property or need help creating a plan! Reach out to TALK Property Management–we are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

Homebuyers Want Home Offices…Again

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The home office trend didn’t stop like the homemade bread trend that started at the beginning of the pandemic. Home offices are now considered a necessity for homebuyers as many work remotely or have relocated during the pandemic. 

Why Does a Homebuyer Want a Home Office?

The “Emerging Trends in Real Estate® 2022” reports that “almost two-thirds of real estate professionals believe that fewer than 75% of workers will come to the office at least three days a week in 2022.” Additionally, a recent McKinsey survey found that nine out of 10 companies will keep their remote work arrangements even after the pandemic. 

 

A home office has become an essential part of a homebuyer’s needs. It’s as critical as other home-defining criteria like location, square footage, and price. The National Association of Home Builders found in their survey that 64% of today’s homebuyers want a home office. Almost a quarter of them call a home office essential. 

What Do Homebuyers Want in a Home Office?

After talking to several agents, Money.com found that real estate agents agree that homebuyers are very particular about the home offices they want. One agent said buyers want a closed-off space for privacy that still allows for natural light. Another REALTOR® noted the size and style of the home office are essential to most homebuyers since Zoom has become the primary form of communication, and they want a neat and professional space to make calls from. 

They also want answers to technical questions like the strength of the internet connection, download and upload speeds, internet providers, fiber connections, and cell phone carriers. This is novel since many haven’t provided such specific information before. 

KB Home, the fifth-largest builder in America, has caught onto the trend and is capitalizing on it. In August, they launched a home office package for buyers to add to homes. It ranges from $2,000 to $3,000 and will include extra-wide counter spaces, USB charging outlets, data ports, and open shelving. If homebuyers want to get technical, they can pay extra for upgrades like soundproofing, phone jacks, and custom lighting packages. 
As you can see, the home office trend is returning, and it’s staying. Contact us if you need help marketing or selling your home with a home office! We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

5 Decor Hacks To Brighten Your Home This Winter

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Winter is approaching, and you may find yourself spending more time inside with earlier sunsets and longer nights. Here are five decor hacks to help make your home brighter and cozier this winter. 

Decor Hack #1: Paint Walls Bright and Warm

For a quick change, consider repainting one of the walls in a room you tend to hang out the most in, like the living room or kitchen. A neutral color with warm undertones will create a bright and cozy atmosphere in the area, and a vibrant color will help uplift a space while also looking great year-round.

Decor Hack #2: Incorporate Live Plants

Bringing some greenery into your home will add color and life to a room. Some of the health benefits of owning plants are lower blood pressure and reduced anxiety. Start with easy-to-care-for house plants that will most likely survive all year long, like a Chinese Evergreen, ZZ Plant, Moth Orchid, and Snake Plant. 

Decor Hack #3: Change Light Bulbs

There’s no way around it–winter means less sunlight and colder weather. To counteract the lack of light and warmth, try LED lights. They’ll make your home bright and sunny, and these bulbs emit the most light while using the least amount of energy. Soft white LED lights will brighten the room without an intense contrast. 

Decor Hack #4: Let In Light 

With what sunlight we do get during the day, embrace it with a curtain change. Sheer curtains and stylish pullbacks are great alternatives for letting in light. If there is decor blocking the window, relocate them to maximize the light. 

Decor Hack #5: Add Color

Winter is known for being dark so early in the day, but it doesn’t have to be dark inside your home! Try adding pops of color with colorful throws, pillows, dish towels, or rugs. Warm colors like reds and oranges will add warmth and energy to the room. 

 

If you need help styling your investment property this winter to sell or are wanting to buy a home, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

2022 Color of the Year: Evergreen Fog

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Evergreen Fog is the 2022 Color of the Year. Next year’s color is a mid-tone grey-green. 

Why Evergreen Fog

Sherwin-Williams chooses the color of the year by researching design trends around the world. The trends they found were warm neutrals, sustainability and organic living, and organic textiles and natural materials. The color is found in the following color collections:

  • Pottery Barn – Fall/Winter 2021
  • Pottery Barn Kids – Fall/Winter 2021
  • Pottery Barn Teen – Fall/Winter 2021
  • West Elm – Fall/Winter 2021

Sherwin-Williams found that people are leaning into using more color in their homes. From Pinterest and Google searches, there’s been more interest in greens. Green varies from rich and diverse colors that can appeal to everyone. The color adds depth and interest to a space while also mimicking nature and providing a calming hue. 

Where and How to Use Evergreen Fog

Evergreen Fog works excellent when paired with natural materials like textural linen and wool. It would be a great splash of color in a home office, living room, or bathroom as a subtle statement shade. It could also be used in a bedroom, as a soothing color to promote relaxation. All in all, it’s the perfect shade of grey-green that feels elegant yet comfortable. 2022’s color of the year pairs best with other earthy neutrals like white, beige, a room with light wood tones with darker elements like matte black fixtures or bronze fixtures. It coordinates best with these Sherwin Williams colors: Neutral Ground, Dried Edamame, and Ethereal White. 

When you work with TALK Property Management, we make your investment property ready and can help you remodel. We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com. 

Photo credit to Sherwin-Williams website.

What Does A Home Seller Pay for in Closing Costs in Texas?

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Last month, we covered what a homebuyer pays in closing costs in Texas, and now we’ll cover the other side! The buyer and seller will pay different amounts when it comes to closing costs. The good news is that some of the costs are negotiable. Here is a breakdown of what a seller pays for in closing costs and if it’s negotiable. 

Title Company Fees for Homesellers in Closing Costs

These fees are specific to the title company that the seller usually pays. 

Title Insurance Premium

This is the most common seller paid expense in Texas, but it is negotiable depending on the situation. On a $450,000 home, the title insurance will cost $2,677. The state sets this fee and calculates it as a percentage of the sales price on a sliding scale. The sliding scale means it will change as the price increases. For a more in-depth understanding, visit the Texas Department of Insurance website here. 

Escrow Fee 

The buyer and seller each pay their own escrow fee. An escrow fee is the title company’s administrative fee for working on the file through closing. This fee is set by the title company and can range from $350 to $700, depending on the title company you choose. 

Document Preparation

The documents you sign at closing, like the deed, are put together by a third-party attorney. This expense is a non-negotiable seller expense. It usually ranges from $100 to $150. 

Tax Certificate

This is another non-negotiable seller expense. A tax certificate will verify the correct amount of taxes to collect in order to balance the taxes at the time of closing. The pricing varies by company or county but typically ranges from $40 to $70. 

Delivery/Courier Fees

Depending on what the title company charges, the buyer and seller can share these delivery fees. Not all title companies charge this fee, so ask the company or your REALTOR®. This fee covers any documents that need to be collected and mailed. Price will vary depending on the postage cost and how much a courier service may charge but typically ranges from $25 to $250.

Mobile Notary

Especially during the pandemic, this was a more common fee as a mobile notary allows for someone to come to you to sign instead of signing in person. This fee will range from $100 to $250 for each signing, meaning the buyer and seller sign separately and each pay this cost.  

Contractual Expenses for Home Sellers in Closing Costs

These expenses don’t go to the lender or the title company. They are expenses that go to third parties or directly to the buyer. 

Home Warranty

A one-year home warranty will cover items insurance won’t cover, like HVAC and the water heater. Typically, a buyer will ask for a credit to cover the cost of this. This expense is entirely negotiable and ranges from $500 to $700.

Home Survey

Usually, the seller furnishes the buyer with an existing survey. If one doesn’t already exist, the survey can be negotiated for who pays for it. The average cost is $400 to $550 but can easily cost thousands of dollars for larger properties. 

HOA Documents

The buyer will typically ask the seller to cover the cost of furnishing the HOA bylaws, rules, regulations, and other documents. Price will range depending on the HOA but cost around $200 to $250. 

Resale Certificate

Sometimes included in the HOA documents is the resale certificate. The HOA documents and the resale certificate together are called a resale package and can cost $400 to $500. 

If it’s not included in the HOA documents, the accounting information the title company needs in order to close will cost $200 to $250 to receive. 

Transfer Fee

The buyer usually pays for this fee. A transfer fee is an administrative fee paid to the HOA to transfer ownership to their system. It costs from $150 to $250.

Commissions

The most considerable fees the seller will pay will be the commission for the seller’s and buyer’s agent. A seller will usually pay 5% or 6% of the sales price in total commissions between the agents.

 

If you’re ready to sell this month, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

When Can You Back Out of a Real Estate Contract?

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Before buying a home or investment property this fall, here is what you need to know about your real estate contract and how to get out of it if necessary. Each real estate contract is unique and may apply to certain circumstances, so always ask your REALTOR® beforehand. 

During Due Diligence

The due diligence phase in the home buying process is the negotiation period when the buyer can review the house and ensure everything is good before deciding to move forward. We’re in a seller’s market now, so buyers are competing against each other. As a way to close quickly and appeal to sellers, some buyers are skipping this phase and the inspections tied with it. But this is the easiest time to back out of a real estate contract. 

Contingency

After the due diligence phase, the only way to get all your money back is if a contingency is not met. A contingency is a condition that must be met before the closing date. They’re called contingencies because the closing is contingent on these specific requirements. 

Contingencies are a form of protection as they will protect you if something is found during the home inspection, title process, or if the appraisal goes too high. Again, since we’re in a seller’s market, there might not be time to include these contingencies. 

Another common contingency is a financing clause. The clause will indicate that the buyer will use all good faith to obtain a loan, but if they are not able to qualify for a mortgage, then they can get out of the deal with no consequence. This is why getting pre-approved is so important in today’s market! Sellers fear this financing contingency, which is why they prefer cash offers, even if it’s lower than their original price. 

Earnest Money

If everything goes right and you’re on track to buy the property, you can still back out of the real estate contract, but it will cost you money when it’s this late in the game. Part of what’s included in a real estate contract is how much each side would be compensated if the other party backed out. This is called earnest money. It’s usually 1% to 3% of the agreed-upon sale price but can be as high as 10%, depending on the real estate market. 

Homebuyers will put this earnest money into an escrow account at the contract signing. This deposit will apply to the down payment or closing costs once the sale goes through. If the deal doesn’t go through, though, the seller keeps the earnest deposit as compensation. 

Today’s Market

There might not be time for these contingencies in today’s hot real estate market, which is why you have to be careful. Many buyers are waiving contingencies as a strategy to close on a house faster. With this route, it’s common for buyers to make up the difference if there’s a difference between the offer price and home appraisal. 

As your real estate agent, I’ll help you navigate through this hot market. Contact me! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com. 

How Texas Is a Landlord-Friendly State

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Texas consistently ranks high as a landlord-friendly state, and there’s a reason for that! The main reason is the state laws that favor the property owner/landlord, and Texas has a robust system that preserves owner rights. We’ll cover what those laws are and what it means to be a landlord-friendly state. 

What Does It Means to Be a Landlord-Friendly State?

Several factors running from laws to taxes are considered when evaluating whether a state is landlord-friendly. Texas is landlord-friendly because these factors make owning property and being a landlord easier compared to other states. 

There could be an endless discussion about what the factors should be when assessing a landlord-friendly state, but here are five universal factors found in today’s most landlord-friendly states: 

  1. Eviction Process
  2. Landlord & Tenant Rights
  3. Rent Control & Deposit
  4. Registration & Licenses
  5. Competition

Eviction Process

Evictions are the worst and most feared situation of owning property and renting it out. Luckily, Texas is one of the few states that makes the process easier. Texas takes lease violations very seriously. As long as the landlord can show that tenants are not complying with lease conditions, the eviction process is easy. Landlords seeking to evict non-paying tenants only need to issue a 3-day notice. As a landlord, they’ll receive more effortless relief, compensation, or repossession of the unit, which is reassuring to landlords.

Landlord & Tenant Rights

As mentioned above, Texas takes lease violations very seriously. Our state emphasizes the preservation of landlords’ rights in the event lease conditions are broken. This is a significant factor investors consider and what makes Texas a popular investing market for property owners. Texas is also unique because the state laws allow tenants and landlords to enter into their own agreement for repairs. This is not an option in other states. 

Rent Control & Deposit

Another unique perk to investing in Texas is the state’s no cap on rent or applicable fees like pet fees or application fees. There is also no limit on how much landlords can charge as a deposit. The last benefit is no Texas laws require landlords to provide tenants with notice of rent increases between lease terms. 

Registration and Licenses

Depending on your property, you might have to register your property with the city. Multifamily rental units need to be registered to the city, and it only costs a small annual fee of $10 to $25 per unit. Once the tenant submits a simple form identifying basic information about the property, the city will inspect it. The city does inspections once every three to five years to check for significant code violations and life-threatening conditions. If a tenant is renting a single-family property, they can usually skip this step. 

Competition

Population growth will determine how competitive the market will be for your property. Austin and the Austin area are multiplying as more businesses and companies are relocating, creating new jobs, and requiring their current employees to transfer. Texas has a high-demand rental market, so it’s wise to tap into this market as an investor. 

Are you thinking of investing in or buying an investment property? Contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.

What Does A Homebuyer Pay for in Closing Costs in Texas?

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Home prices have begun to stabilize in Austin! According to the Austin Board of REALTORS® July stats, the median home sales price is $480,000. This is $2,364 less than the previous month. If you’re ready to buy as a homeowner or an investor, read what you’re paying for in your closing costs. 

Title Company Fees for Homebuyers in Closing Costs

These are the following fees your title company will charge you and what you are responsible for paying as the homebuyer. 

Escrow Fee

The buyer and seller will pay their own escrow fee to the title company to process the sale’s closing. 

Endorsements

Endorsements are expanded coverage with a title company’s insurance policy to help cover the specific needs of the transaction. Depending on your title company and unique situation, this price can be as low as $30 or as high as hundreds or thousands of dollars. 

Recording Fees

Once the sale is finalized, documents need to be sent to the county. This can range from $120 to $160, but it will depend on the county. 

Appraisal Fee

The buyer typically pays for the appraisal, and it can range from $500 to $700. The lender you choose will most likely want an unbiased third party to appraise the property to ensure the property’s value matches the contract price. 

Credit Report

A buyer will pay the $50 to $75 fee for their credit report to be pulled.

Lender’s Document Preparation 

This $100 to $120 fee is paid to the lender for creating and organizing all the closing documents. 

Escrow Accounts for Homebuyers

If you’re putting down less than 20% for a down payment, the lender will require you to place your taxes and insurance into an escrow account at closing. As a homeowner, you will pay your taxes and monthly insurance to your lender directly using the escrow account. When the taxes and insurance are due, the lender will use the money from the escrow to pay them on your behalf.

Homeowner’s Insurance

Depending on the property and the coverage you choose, the price can range from $900 to $2000 per year. 

Property Taxes

At closing, the seller will pay the buyer a year-to-date prorated amount for taxes. For example, if the closing happens on October 1st, the seller will give the buyer credit for ten months since the seller owned the property for ten months of the year. The buyer is then responsible for paying the difference between the credit and the total tax bill at the end of the year. Your lender will require several months of taxes in the escrow account. 

If you’re ready to buy or invest in Austin area real estate, contact us today! Reach out to TALK Property Management– We are here to help: (512) 721-1094 or dbrown@talkpropertymanagement.com.