Buyers Top Ten FAQ's

1. Q:  Shouldn’t I find the home I want to move to before putting my current home on the market?

A:  No.  If you have to sell your current home in order to buy another one, your offer, contingent upon the sale of a home that is not even on the market, will not be a strong one and is not likely to be accepted.  Besides, by the time you get your home listed and under contract, the home you want to move to will likely be gone.  Inventory remains strong.  With the help of a real estate agent, you will be able to find the right home for you.

2. Q:  How do I determine how much home I can comfortably afford?

A:  The best thing for you to do is to talk to a loan officer with a mortgage company.  There are so many programs available, with conditions and rates changing daily, that you need an expert who can listen to you, evaluate your financial situation and then custom design a financial strategy and plan that will best meet your needs.  In concert with your real estate agent, the three of you will achieve your goal of finding the right home for you.

3. Q:  Won’t I get a better deal is if I buy a home from a “For Sale By Owner,” eliminating the real estate agent’s commission?

 A:  Not necessarily.  About 85% of the homes on the market are listed with a real estate company.  The remaining 15% are “FSBO’s” (Fiz-bo’s, as well call them in real estate).  Which pool would you rather choose from?  The FSBO is going it on his own to increase his net, avoiding paying a commission.  Those looking to buy from FSBO’s are generally looking for a “deal.”  The two are at opposite ends.  In representing a buyer, I derive my commission from the seller.  I don’t charge my buyers anything.  Stop driving around wasting your time and let me do the legwork for you. 

4. Q:  I’m thinking about building, rather than buying an existing home.  What are the pluses and minuses?

A:  I’ve done both, so here’s my “two bits.”  The pluses to building are you get to pick your location, choose your builder, select the paint and stain colors, brick, roof, countertops, flooring, carpet, light fixtures, faucets, sinks, upgrades, built-ins, etc.  Building generally costs more than buying an existing home of the same size and with comparable features, but you get everything exactly the way you want it.  The downside is the unexpected surprises during construction if you don’t do your homework, living with other new construction after you move in if you’re in a subdivision and the additional cost of putting in a lawn, landscaping and window coverings.  One thing I discovered is even if you plan carefully in your building, after you’ve lived in the home for awhile, there will be a few things you would do differently.

5. Q:  Why do I need a real estate agent to represent me?  Won’t I get a better deal if I just talk directly with the listing agent?

A:  You can talk to the listing agent, but how many listing agents do you want to have to talk to?  Wouldn’t it be easier to let one real estate agent represent you and let him or her talk to all the listing agents?  Some buyers think (erroneously) that they will get a lower price if they deal directly with the listing agent, since he or she will be getting both sides of the commission, he or she will be likely to cut his or her commission.  Remember that the listing agent represents the seller, not you.  The listing agent has the seller’s best interests in mind, not yours.  If you get into a situation where one real estate agent is representing both the buyer and seller, it presents itself for a conflict of interest. In this situation, an intermediary should be used.

6. Q:  With so many services being offered on the internet, can’t I just do everything online?

A:  There is a wealth of information on the internet.  It’s fascinating to see what you can discover by surfing the net.  But like most businesses, real estate is still a service industry.  Your wisest choice should be to select a real estate agent, loan officer, inspector and title company who you can get face to face with.  Why take risks with the most important financial investment you will make in your life with the hopes of saving a few bucks?

7. Q:  I’ve heard that homes should sell for 20%-30% above the assessed value shown in the county tax records.  Is that true?

A:  That could be true, but in making an offer on a home, that is not the method I use to determine what would be a fair price to offer.  When you find a home on which you want to make an offer, your real estate agent should prepare a Comparative Market Analysis, based on comparable homes that have sold recently in the same area, to determine what a fair price would be to offer on the home.  This is more recent data than the last time the county assessor evaluated the property.  It is also some of the same kind of information that an appraiser will use in determining the value of the home for a lender.

8. Q:  Do most of the subdivisions on Parker County have homeowner’s associations?

A:  Most do not have mandatory homeowner’s associations with enforcement powers.  There may be some where membership is voluntary.  If you are concerned about restrictions, you need to read to the deed restrictions or subdivision covenants that were filed when the subdivision was created and check for any amendments.  Many buyers do not want to be saddled with a lot of restrictions.  Some deed restrictions may be in place on paper but there is no enforcement authority in place to enforce them.  The bottom line is to be a good neighbor.  Talk with some of the residents of a particular subdivision to find out what it’s like.

9. Q:  With all the Barnett Shale drilling activity in the area, how important is it that I purchase property with the mineral rights included?

A:  There can be many answers to this question.  With a small parcel, say 2-5 acres, even if you own 100% of the mineral estate, the royalty you receive may not be significant.  Your greater concern could be control of the use of the surface by the oil and gas companies.  In housing subdivisions, the seller may not own any mineral rights.  Those may have been severed and reserved in a previous transaction.  You will want to check the subdivision covenants and restrictions to see if drilling within the subdivision is prohibited.  If so, you are protected from disturbance of your surface, even if you don’t own any mineral rights.  The title commitment you receive from the title company will not specify whether the property you are buying has any mineral rights.  If you want to be certain you should contract with a landman or an attorney to do a title search, specifically for mineral rights. 

10. Q:  What are the benefits of the “Ag Exemption” and what do I have to do to qualify for it?

A:  Landowners want to have their land classified for “agricultural use” because it lowers the value of the land and thus lowers their taxes.  There is no minimum amount of acreage required in order to obtain this classification.  The key is the use of the property.  The land must be devoted principally to agricultural use.  Examples include production of crops, livestock, poultry, fish, cover crops, exotic animals and wildlife.  If you own land that’s been classified “agricultural” and you change its use, you will owe a rollback tax.  You can learn about all of this in greater detail by going to the Parker County Appraisal District’s website at www.parkercad.org.  Click on “Tax Payer Rights” in the left hand margin, then click on “Saving on Agricultural Land Taxes” in the box on the right.  This is a very helpful website dealing with all kinds of tax matters in Parker County.  You can also call the appraisal district and talk with someone who will explain this and any other tax related matter to you.  The phone number there is 817-596-0077.