The New Real Estate Bubble

For the longest time all we heard about from the national media was that there was a real estate “bubble”.  The bubble was going to pop and the market would be in a free-fall across the United States.  You wouldn’t be able to sell a home because of it, and you’d be a real idiot to buy a home because they would all be extremely overpriced.  And you know what?  This happened!  The thing is it did not happen all across The United States.  It happened in certain selective markets where people previously saw huge increases in property value.  Just like the dotcom bubble of the 90’s some stocks did fall to all time lows or completely disappear, but that was after the same stock soared to unbelievable highs!  The old, steady, slightly appreciating stocks, that only old-timers and people who didn’t understand the “new” stock market bought, kept on going and some of them still are today.  That is how the real estate market went as well.  California, Nevada, Florida, and some others were hard hit.  There are people there who are in real trouble, and who are probably having some sleepless nights!  But then there are markets that are doing just fine.  I’m in San Antonio, TX and I can tell you there aren’t many areas of town where prices are leveling off, and I can’t think of any where they are dropping!  And we aren’t the top market either!  Over in West Texas where the economy is booming thanks to high oil prices you can’t hardly buy a house without getting outbid on it!  Ask them about a bubble and they’d laugh at you!  I have said it in many blogs before, but it is always worth repeating - REAL ESTATE IS LOCAL! 

So what is the NEW REAL ESTATE BUBBLE?  I think the new bubble is a growing want and need for people in many markets of the US to buy and sell property.  The reason they are not is because they are scared.  They are scared from all the media hype about how bad the real estate market is.  Here is the thing though; they just had another child and the house is now too small, they got a raise at work and can now afford to buy, the last kid just moved out and it’s time to downsize, they want their kids in a different school district - ALL REASONS PEOPLE TYPICALLY BUY AND SELL HOMES!  Life is still going on!  A lot of them are holding off because they think the real estate market is crumbling, but they see interest rates are low, see they can still afford a house, and they know what they can afford, and you know what will happen:  THEY WILL PUT UP THE OLD HOUSE FOR SALE AND BUY A NEW ONE!  What will it take?  Probably their neighbor to put their house up for sale and sell it.  Maybe a nagging wife or a grouchy husband will have enough and just do it!  Who knows, but the anticipation is growing!  And finally when people say, “To hell with what the national media is saying.  We need a new house!”  That bubble will pop and the market will get back on track.  There are just too many good things happening in San Antonio, TX right now for the market to not be more active than it is.  The bubble is growing!  In influx of 20,000 new jobs that San Antonio has in the works, unemployment under 4%, and an average home price of $185k means that bubble is going to burst!

Above I primarily was speaking about move up buyers, but there is a whole segment of potential buyers that are causing that bubble to grow even bigger - FIRST TIME HOME BUYERS.  These folks are what will put the real estate market back in motion.  Why?  Several reasons, but what may be the biggest came from FHA.  FHA loans were almost disappearing during the days of Sub-prime loans, but with that collapse, FHA loans are making a come back, and just recently an extremely significant thing happened which could be the needle that pop the bubble!  The loan rates were raised.  In San Antonio, TX you can now get an FHA loan over $330,000.  We are one of the few markets where the FHA loan limit is considerably higher than the average or median home price!  Our average price is $187,000.  So believe me you can get a VERY nice house in San Antonio, TX for $330,000!  Here is another huge advantage for first time home buyers with an FHA loan:  ALL of the down-payment can be gifted from someone “as close as family”.   So if you’ve been out of school for just a couple years making a nice living, but don’t have all the money you need for a down payment - Mom or Dad can “gift” you the money for the purchase of a home!  If you are just out of school and are making some decent money, your parents could co-sign on the property for you and the lender would use them to get you loan.  This even works if you are still in school - commonly referred to as a “kiddy-condo” loan.  So now is a great time for first time buyers to get into the market and buy a home, but the problem is they are hearing so much negative press that makes think they can’t get a loan or that now is a bad time to buy.  Neither of which are anywhere near true!

So what can you do?  Get educated on your LOCAL market!  Talk to your Realtor about what is going on.  Maybe you are in a tough market, but maybe you are not.  Your Realtor can help you figure that out.  Then if everything checks out and the timing is right - GET THAT HOUSE ON THE MARKET, or GET OUT AND LOOK AT SOME HOUSES!  There really is no reason to wait if you educate yourself on what is going on, work with people you can trust, and feel you are in a strong market!

If you are in San Antonio, TX and would like to visit with me to get a SAN ANTONIO REAL ESTATE UPDATE, please give me a call or go to my website.

Chris Cowley

www.ChrisCowley.com

210-389-6006

Send your Kids to college AND help them build wealth!

As the school year wraps up parents are getting ready to send their kids off to college.  This is an exciting time for families, but also one of mixed emotions and parents send off their kids who will need to learn to make their own way.  Parents hope their children will make good decisions, meet new friends, possibly find the person they will marry, and work hard to complete their education.  One of the best things a parent can do for their children is put them on the road to wealth through real estate. 

As a parent you can send your kid off to live in a dorm or rent an apartment as many do, but think of the benefits your child gains if you buy them a house!  You may think this is ridiculous, but hear me out! 

HOW CAN YOU BUY YOUR KIDS A HOUSE?

FHA loans allow for 100% of the down payment on a property to be gifted from parents (about 2.24% of the price of the home), and all the income requirements can come from the parents.  So if you can find a house near the school that would make a good place for your kid to live you can buy them the home, but put them on as the purchaser.  As their parent you’ll be on the hook if they don’t make the payment, but that is the case in many instances with apartments or renting a house.  And who do you think will get the call if your kid demolishes a dorm room? 

WHY WOULD YOU BUY YOUR KID A HOUSE TO LIVE IN WHILE AT SCHOOL?

There are a ton of reasons!  You will want to discuss the benefits with your CPA, Attorney, and Mortgage Broker for specifics, but here are some things to consider:

1) You help your child build up their credit.  A problem for many kids when they get out of school is that they have no credit and cannot buy a house on their own, or have to take higher interest rates because of a lack of credit.  Your child would get out of school with quality credit built up.

2) You now have an investment in your child’s school town.  You can write off your some expenses involved with visiting the property to make sure it is being taken care of properly.  Expenses like mileage, meals, lodging, etc.

3) There are tax benefits to owning a home you can take advantage of.

4) You have some control over the expenses your child has while at school.  You won’t have to worry about them wanting a more expensive apartment because their living expense is fixed.

5) Your child will learn how real estate works.  This is a huge advantage over many kids who get out of school and have no idea how to buy a house.  This can be a huge learning lesson.

6) When you child graduates 4 years later (we hope, but it is likely it will be 5 or 6 years) you can sell the house and hopefully reap the benefit of your investment.  You could also keep the house as a rental, or have your child keep the property as their first rental. 

There are many benefits to buying a house for your child to live in while at school, but the biggest is that they learn how to accumulate wealth.  They see that homes appreciate (unlike that sports car they want you to buy them for their high school graduation gift).  They learn so much and you will be the one that teaches them!

If your child is going to attend a university in San Antonio, TX.  Whether it is UTSA (The University of Texas at San Antonio), Trinity University, St. Mary’s University, or one of the other schools in the San Antonio area, I’d love to work with you and your child to make this a reality!

Give me a call or contact me through my website:

Chris Cowley

www.ChrisCowley.com

210-389-6006

 

Recession, San Antonio, and Real Estate

Recently Forbes magazine named San Antonio Number 2 in the list of recession-proof cities, right behind Oklahoma City.  The reasons for this, as cited by Forbes, is strong employment, affordable houses, and a good number of business coming to town.  All of the above are correct!  San Antonio does have strong employment with the number of unemployed hovering around 4.5%, which many think is basically full employment as some choose not to work.  Housing is affordable with the average home price staying around $185,000 even after the nation wide real estate boom that caused prices to sky rocket in other parts of the country.  And lastly, many business are coming to San Antonio with more than 20,000 new jobs slated to come to town in the near future.  As a local San Antonio Realtor let me talk about each point from the perspective of someone living and working in San Antonio.

LOW UNEMPLOYMENT - In the past there were a good number of available jobs in San Antonio, but most of the jobs were low income positions primarily fueled by the tourism industry.  Theses jobs included restaurant workers, hotel workers, and jobs working at theme parks.  Great jobs to have and a sign that our tourism industry was strong, but many other cities in Texas look unfavorably on San Antonio because there weren’t the higher paying, more prestigious jobs that other cities like Dallas, Austin, and Houston were well known for having.  Today San Antonio is a city that is thriving!  The tourism industry is strong and the jobs that were in San Antonio mentioned above are still available, but there are jobs from other sectors that are bringing higher paying jobs to town!  Jobs in the medical, bio-medical, and technology sectors are flourishing.  BRAC (or Base Realignment and Closure) has brought a large number of jobs to San Antonio, and has made San Antonio the premiere city for military medical training in the nation.  The median income of the city is also on the rise because of these jobs.  Other jobs coming to town include jobs at the new Toyota plant and fringe jobs as suppliers and other companies work to keep the Toyota plant supplied with everything they need.  The New AT&T which merged Soutwestern Communications, AT&T Corp, and Bell South, Tesoro, Rack Space, and Valero are all companies that are contributing to the growth of the city.

AFFORDABLE HOUSING-Many markets in the United States saw home prices rise like never before.  The discrepancy between income and home prices grew to a point that “tricky” and “unconventional” loans were put in place to help people get into homes that seemed to be a great investment because a home bought today could be sold in a few months at a great profit.  We all know what happened as a result.  The sub-prime loans went away and home prices are now dropping in many of these areas (there is more to the story, but for the sake of time I obviously condensed it).   Why did this not happened to San Antonio?  Well, it did to some extent.  The reason you don’t hear about San Antonio as much is because prices did not rise like they did in other places.  That happened because of the amount of land we have in Texas.  Here is how it happened:  In many places when homes were being snatched up at sweat breaking pace prices had no option but to go up because many of these places are land-locked.  Texas, for the most part, is not.  So you don’t see prices sky rocket, you see the number of construction starts sky rocket.  What I mean by “construction starts” is the number of permits pulled to start construction on new homes.  We have land in Texas (ever see an old Western movie).  When that is the case all builders have to do is go out another couple miles and start a new neighborhood, and that is exactly what builders did.  They kept going out further and further.  This lead to excess inventory that the builders couldn’t sell.  They had to offer bigger and bigger discounts to sell that inventory so many great deals were had.  The bad thing is that there is still inventory, but the good news is a lot of it has been sold off.  Builders are still struggling, but many are seeing some light at the end of the tunnel.  Pre-owned homes are slower to sell as well.  The reason is because of the builders.  As they drop the prices and cut into profits that were pretty nice at one point sellers of pre-owned homes cannot compete.  They just don’t have the profit margins the builders do.  The good thing is that San Antonio is in better shape than most.  Because of the reason mentioned above people can still afford homes here!  As long as that is the case San Antonio will remain in better shape than other places.

OTHER REASONS-I think there are other reasons San Antonio is seen as “recession proof”.  The main reason is that San Antonio is a great place to live!  The weather is great, and the people who live here are awesome!  People from other states are realizing that they can move to San Antonio and keep the standard of living they are accustomed to without having to shovel snow!  All the great restaurants are in San Antonio.  All the great shopping people like is in San Antonio.  You can come to San Antonio and enjoy life without having to over-mortgage yourself to do so.  I have a good friend that moved here because they want to start a family, and they want his wife to stay home with the kids.  They could not do that in California.  In San Antonio they can!  That is the reason San Antonio is recession-proof!

If you want to make the move to San Antonio, I’d love to help!  Call me or visit my website:

Chris Cowley

www.ChrisCowley.com

210-389-6006

Foreclosure, Loan Crisis, and Property Taxes

Foreclosures are up nationwide.  People are afraid they are going to lose their homes.  The government thinks they can help.  The media claims we are in a recession.  Watch the news and it sounds like we are definitely headed for a time of trouble.

What is causing all of this?  There are a number of factors, but watch the news long enough and you are bound to hear how the real estate market is one cause of much of the trouble.  Greedy mortgage companies are to blame!  Or are they?

I would ask you to look at your payment next time you get it.  In San Antonio the average home price is in the $187k range.  Just to make the numbers a little easier let’s round that up to $190k. 
On a 30 year, fixed, loan with an interest rate of 6% your payment would be around $685.  Let’s assume your homeowner’s insurance costs you an additional $100, and I think we can all agree that is not excessive and we want to make sure our homes are insured.  Your total payment so far it $785 (Prinicple and interest + insurance).  So you say that is a reasonable payment, but what if you had an adjustable rate, interest only payment?  Well, my argument is that in Texas with an average price of $190k most people buying in that range would not need a goofy loan if their payment was indeed $785.  The problem is that in San Antonio, TX or more specifically the North East School District you would end up paying an additional $6080 in property taxes.  That means that you’d be paying an additional $507 in property taxes.  Did you get that?  YOU WOULD BE PAYING OVER $500 IN PROPERTY TAXES!  That means of the $1292 you pay as your total payment almost 40% is going to taxes. 

We can blame greedy mortgage companies all we want.  We can say look at the money they made off the poor people that did not know what they were getting into, but let’s not forget who is the greediest amoung the greedy.

Chris Cowley

www.ChrisCowley.com

210-389-6006

Buying your first home

There are several times in your life when you think you may be getting in over your head; going off to school, getting engaged and then married, having kids, and buying your first home.  All of those events mean you are taking the next step in life.  All of those events have an effect on other things that will happen in your life.  Obviously getting engaged and married is the biggest.  You sure want to do all you can to be certain the person you pick is the right one, and even though it is the biggest there really isn’t a professional out there that can at least help determine if you picked the right one.  Going off to school you have your high school counselor, having kids you have a doctor, and buying your first home you have your Realtor - or at least you should!

What a Realtor can or cannot do for you is based on the agent themselves.  As with any line of work you have many types of people doing the same job, but all doing it slightly (or enormously) different.  Keep in mind there are approximately 8,000 Realtors in San Antonio.  There are about 8,000,000 Realtors in Texas, which means that about 10% of all the Realtors in Texas are in San Antonio, or at least members of the “San Antonio Board of Realtors” or SABOR.  Imagine just having 8,000 people in an auditorium and getting the chance to visit with as many as you felt like visiting.  I’m sure you can see that of the 8,000 you would find some you really got along with and some you couldn’t stand being around.  So it makes sense that when choosing a Realtor to take some time and get to know the person you are entrusting with helping you make the biggest financial decision of your life (which is often the case with first-time home buyers).  How do you do that? 

1)ASK QUESTIONS!
Now-a-days we are in a buyers market which means that if you are buying a house (and especially if you do not have a house to sell) you are at a PREMIUM!  Make sure you understand that Realtors should treat you like you are one!  Now as a Realtor I’d be a bit foolish to advise you to take advantage of anyone’s time, or be unfair and expect ridiculous things from your Realtor, but you definitely shouldn’t feel like your Realtor is rushing you through the process or not listening to your needs.  So ask a lot of questions about the market conditions, parts of town that are better suited for your needs, what types of discounts should be expected, and anything that you feel you need to know to make the best decision.  If the agent seems put out by you asking questions or being a little unsure about what you are doing, then dump them!  This is your first home - IT IS A BIG DEAL!  If it is not to your agent, find a new one!  Remember there are 8,000 of us in San Antonio alone! We aren’t hard to find!

2)Find a Realtor with the heart of a teacher!
Working with people who have the heart of a teacher is something I picked up from Dave Ramsey.  What it means is that you work with people that will coach and teach you, but not people who allow you to turn off your brain and do all the work themselves.  Owning real estate is still the quickest way to wealth in America.  Don’t you want to know what you are doing?  Don’t you want to understand how it works?  Real estate works in a marketplace type atmosphere.  Learn how it works, what makes the wheels turn and you can find little nuggets of information that will go a long way to helping you make sound buying and selling decisions.

3)Make sure you get a Realtor that can plug you into a sound NETWORK
Now as a Realtor I am not going to insist you use any of the guys and gals that I commonly work with, but keep in mind what you may do every 5 or 6 years I do daily.  I know people in this business that care more about the relationship than they do the commission check.   Don’t you want to have people like that working with you?  A good Realtor has a network of people they feel comfortable recommending to make sure you are taken care of at a fair price, but with service and care that not everyone give.  I like when my clients use 2 guys in particular for the same reason.  One is mortgage guy and one is an insurance guy.  I like them because they both will sell you what you need at a fair price, but both will tell you if some (or all) of their services are not needed.  Do they do this for me?  I’d like to think so, but the truth is they do it for everyone they work with, and not because they know I’ll quit using them if they don’t treat you right.  Isn’t that a good feeling to have?  Knowing you are working with people who want to get to know you and want to treat you like they would a life-long friend?  That is the experience I want my clients to have.  Buying your first home can be a stressful time, but the right people can minimize that stress and let you enjoy the fact that you are about to achieve the American dream of owning your first home!  This is even more the case if you are new to the town you are buying your first home in!!

Those are a few things to consider when picking a Realtor to help with the purchase of your first home.  A Realtor can give a lot of good information about neighborhoods, schools, appreciation of certain areas, and many other things that go into buying your first home so take your time and find one that is right for you!

If you are buying your first home in San Antonio, TX I really hope you’ll see if I’m the right Realtor for you!  Give me a call or contact me through my website:

CHRIS COWLEY

www.ChrisCowley.com

210-389-6006

 

First Time Home Buyers - The Cure for the Common Real Estate Crisis!

There is much going on in the world of real estate!  Gone are the days of everyone loving real estate as an investment, gone are ridiculously easy loans on some properties, and gone are is the entire market of buyers that were considered sub-prime!  The real estate market is in the dumps if you listen to the national media, and people are just afraid to make a move! So who can save the real estate market, and possible buy your home that has been on the market for longer than you care to think about?  FIRST-TIME HOME BUYERS!! 

First-time home buyers typically buy for the right reasons - that is any reason that makes sense! What I mean is that first-time home buyers buy homes because they no longer want to throw money away renting.  First-time home buyers buy homes because they can no longer fit in the apartment they got when they first got married.  First-time home buyers have gotten raises and advancements in the jobs that mean they now have the money to buy.  And guess what - THEY DO NOT HAVE TO SELL A HOME TO MAKE IT HAPPEN!  Almost every other type of home buyer does, or would really like to!

So how do you take advantage of first-timers?  Well, consider how you market your house to sell.  Many times these newbies knows that they will need a down payment, but underestimate the amount needed to cover closing costs and pre-paids.  So if you offer some type of closing cost assistance when you are selling that may make it easier for them to buy your house over the guy down the street.  We want to make buying your house as easy as possible!

Another thing you could do to entice first-time home buyers is to make sure your listing agent is up on any loan programs or grants that are out there for first time buyers.  Some banks have programs that are designed to make it easier for a first-timer to buy because they are in hopes that that buyer will transfer all their accounts over to the bank at a young age, and keep them there as they get older and wealthier.  Bank of America has had GREAT programs for doctors to encourage the doctors to try to start banking with them.  Keep in mind how hard it is to move from a bank once you are there if all your pay checks go there automatically, and all your bills come out automatically.

And if you are a first-time home buyer how do you make sure you are getting all the advantages that are due to you as you are saving our real estate market?  WORK WITH AN AGENT WHO UNDERSTANDS YOU!  You are going to need a Realtor who is patient and has “the heart of a teacher” to quote Dave Ramsey!  You really need someone who will sit down with you and help you evaluate where you are, where you realistically will be in a couple years, give you both the up and downsides of home-ownership, and make sure you are working with people who will take care of you.  That sounds like what every Realtor should do, but unfortunately is not always the case. 

When you work with me you gain access to the Rolodex in my head.  If you need me to I’ll get you in touch with a loan officer who I know will tell you, “Hey folks, we need to hold off on this for about 6 month to a year,” if that is what you need to be told.  You get access to an insurance agent that will sell you what you need, but not what you don’t.  You will get access to handymen who will fix your problem without robbing you blind!  That is the kind of stuff you need when you are new to buying a home.  And especially what you need when you are both new to buying a home and new to an area.  San Antonio has 8,000 Realtors, do you really think every one of them is the same as the other?  They are not!  Make sure you get a good feeling about the agent you choose to work with.  If anything makes you feel uncomfortable, get a new one!  With 8,000 of us that shouldn’t be too hard!

So how exactly will first-time home buyers save the real estate market?  Here’s how:  They come into the market and buy the house of someone wanting to move up to some else’s house who wants to move up to someone else’s house that is downsizing.  That may not be exactly how it goes, and of course the first-timer will buy from someone moving out of Texas or buy a new home, but the point is FIRST-TIME HOME BUYERS MAKE THE MARKET MOVE!  I’ve heard for as long as I have been in real estate:  There are two buyers that the economy affects the least, first-time home buyers and the ultra wealthy.  First-timers need to buy and the wealthy don’t really care what is going on because financially they are above it.  What are there more of; potential first-time buyers or ultra wealthy people?  EXACTLY!

I love working with first-time home buyers, and if you want to buy your first home in San Antonio, TX I truly hope you will contact me so I can help make your dream of home ownership a reality!  Give me a call or contact me through my website:

CHRIS COWLEY

www.ChrisCowley.com

210-389-6006

 

Contractual Difference with New and Pre-Owned Homes

Many of you know that I got started in San Antonio real estate selling new homes for some of the nation’s largest builders.  I then transitioned into personal investment properties and house “flipping”, and currently share my experiences with clients as a residential real estate agent.

If you are considering buying a new home directly for a large production builder there are some contractual things you need to consider so you don’t get caught off guard.

1) The contracts Realtors use for pre-owned homes are typically “TREC Promulgated” and because we are not attorneys all we do is fill in the blanks.  The contracts are written to favor neither the buyer or the seller, but to make the transaction as equal as possible.  When you buy a home from a builder you typically use their contracts written by their attorneys.  This means the contracts are written almost entirely in the favor of the builder.  For example you will see paragraph after paragraph letting you know the penalties you face if you do not make selections by a certain time, or close by a certain time, but when it comes to the builder and penalties they face there is almost nothing in most contracts.  I worked for a builder that had in their contract that 180 days after the start of construction the house had to be completed or the buyer got a full refund.  That sounds pretty good right?  Well the next part of that paragraph said that the builder could go past that date if any of the following were the cause:  weather, delay in materials, manpower shortage, etc. and it ended with “any unforeseen even”.  Well if that doesn’t absolutely cover every possible event I don’t know what would! 

The bottom line is READ THE CONTRACT!  I’m not saying you can change anything in there, but you should at least know what you are getting into.

2) Money Deposits.  Writing a typically pre-owned contract in Texas usually results in some Earnest Money and some Option Money being deposited.  With the builders you typically put up Earnest Money, but then may have to give a second check to cover some or all of the upgrades you add to the house.  I have never worked with a builder that took an option check, but most give you about 2 weeks to determine all the changes you plan to make on the house and then bring the required check to cover those upgrades.  When that second check is deposited your “option time” is then up, your money goes “live”, and if you cancel after that point you risk losing all the money deposited - even if the reason for your cancellation is that the builder is incompetent!  Make sure you know what money you will have to deposit and when you can no longer get it back!

3) The builder’s contract is so important to understand fully.  Remember everything you talk to about the builder is not the responsibility of the builder to remember.  If you make any change you need to sign for that change and GET A COPY OF THE CHANGE ORDER.  I have worked with people before who went back and forth on different upgrades so many times that I couldn’t keep track of what they wanted.  I’d have to tell them to SLOW DOWN and go over everything they wanted.  Even with that they may come back and say, “WE TOLD YOU WE WANTED… AT THE TIME OF CONTRACT!!”  I would have to tell them that if they didn’t have it written down then it wasn’t my responsibility to make sure it was in the house.  This cause some big-time problems, but the builder is in the right.  If you don’t have something saying it is going in the house, don’t expect it in the house!

Those are just a couple of the biggest items to look at when buying a new home when you are used to dealing in pre-owned.  There is a lot to consider and you should work with an experienced Realtor.

If you would like to work with me on your next SAN ANTONIO REAL ESTATE transaction, please contact me!

CHRIS COWLEY

www.ChrisCowley.com

210-389-6006

Buying a Home: New Home/New Home Construction

In my last post we talked about “Production Builders” in San Antonio.  This post will talk about “Custom Builders”.  What is a “Custom Builder” since the builder is building the house specifically for you wouldn’t they all be custom to some extent?  What are the Pros and Cons of Custom Builders?  Who are “San Antonio’s Custom Builders”?

A custom builder typically works with a client once the land has been purchased by the buyer and they are ready for a home to be built on that property.  In that situation the developer sells the land/lot directly to the end user instead of selling groups of lots, or all the lots, to a production builder. 

The prospective home buyer then contracts with an architect to design the home and takes that design to a builder, or the builder may have an architect in house that the prospective buyer will work with.  According to Marc Forston of Don Craighead Homes to get a general idea of expenses look at it this way:

40% LAND, 40% STRUCTURAL COMPONENTS, 20% DESIGN AND FINISH OUT

So who are San Antonio’s Custom Home Builders?

Some of San Antonio’s Custom Builders include:  Burdick Homes, Don Craighead Homes, Toll Brothers, Specia Homes, John Michael Custom Home Designs, Man and Man, to name a few.

Those are some of the companies that are familiar to us in San Antonio, but when you get into custom builders all you really need is a cell phone and some transportation to call yourself a builder.  That is both good and bad.  Some of the builders have low overhead and can offer you a great price, but some just don’t know what they are doing (no other way to say it!).  You have to be careful and make sure you work with someone that will deliver what they promise.

So what are the PROS to Custom Builders? CHOICE!  You have picked the lot in most cases so your only limitation is what will fit on that piece of land.  Working with an architect you can design just about anything that you can afford. 

The other big PRO of using a Custom Builder is that you get a CUSTOM PRODUCT.  It is built for you.  Every room can be different, and for the discriminating buyer there really isn’t any other choice!

What are the CONS?  Price and time.  As mentioned before the benefit of PRODUCTION BUILDERS is that they allow some cost saving because they build several homes in the same proximity.  Since you have purchased the land where you see fit, the builder has to trek out there to build just your one house, and that will cost more. 

The other issue is time.  Most production builders can knock out your house in 6 months from contract to close, but most custom builders will be in the 12 months plus range.  This can be traumatic when trying to schedule moves and the selling of your current property.

There is a lot to consider when looking at building a custom home.  The biggest thing is working with someone reputable.  It’s not always the most cost effect thing to go with the cheapest guy!

If you are looking to build a custom home a Realtor can really help out during the process.  Let me put years of experience and knowledge of San Antonio’s Custom Builders to work for you! 

Chris Cowley

www.ChrisCowley.com

210-389-6006

 

 

Buying a Home - NEW HOME/NEW HOME CONSTRUCTION

In San Antonio the market has tightened some.  People are looking for big deals and discounts, but there just aren’t that many out there as most sellers are not selling because of looming foreclosure, but rather just the reasons people typically move - want a bigger house, job transfer, etc.  One area people are still able to get slightly better deals is from new home builders.  Whether it’s buying up some existing inventory the builders are still desperate to get rid of, or build the home of your dreams from the ground up here’s what you need to know about “new home builders in San Antonio, TX”.

First of all there are two types of new home builders:  PRODUCTION BUILDERS and CUSTOM BUILDERS.  Production builders typically buy lots from a developer in a given community or neighborhood.  You usually see one a several builders in one community and they typically will have a model home or a couple model homes.  These model homes are a representation of what they are building in that community.  Depending on the builder they may also build that product in other communities around town.  Production builders in San Antonio are companies like:

Pulte Homes, Wilshire Homes, Centex Homes, KB Homes, Bella Vista, Wall Homes, Highland Homes, Meritage Homes, Legacy Homes, Armadillo Homes, Imagine Homes, McMillan Homes, Sitterle Homes, Medallion Homes, Hearthside Homes, David Weekly Homes, and the list goes on and on!

These builders typically have a niche they are trying to fill, or they try to have a home for every stage of the home buyer’s life process.  This starts with the “first-time home buyer” goes to a “move-up buyer” then to a “downsizer” or “empty-nester”. 

As with any product on the earth there are different things they all do differently and some do a better job than others.  What you can expect is this:

1) If you like a floor plan in a community you will purchase that at its “base price” on a lot in that community.  If it is a choice lot you may pay extra (a lot premium) to have your home on that special lot.

2) You will then select “options” or “upgrades” for the home.  These are anything from structural changes like adding a gameroom or putting on a covered patio to designer selections like adding granite counter tops or wood floors.  Every builder will have what they call their “Standard Features” which will list what comes in the base price so don’t just look at the base price and go with the cheapest guy because in many cases the mark-up on “options” or “upgrades” is over 200%!

3) Once all the selections have been made the builder will submit that to his construction department and the process has begun.  At this point with many builders NO CHANGES are allowed.  If you make changes at this point they will be even more expensive.  The reason is because the production builders have really streamlined the building process and adding changes causes them problems.  First of all they have to make sure the changes are properly recorded in all places from the neighborhood to the accounting department so they can keep an eye on their margin.  The other reason is pretty simple - you make a change and they forget to do it, then they have to cover the expense to go back and re-do it.    They don’t like that!

Pros for ProductionBuilders:  COST and TIME.  They are usually cheaper because they have focused all they work in certain areas.  They can have a company come out and pour 6 slabs at once and get a better price on each slab.  They also have national accounts with suppliers to ensure better pricing.  They are also faster than most custom builders because their process streamlined and changes are not allowed.

Cons for Production Builders: You are limited on choices.  If you want to build with a certain production builder you have to pick and area in San Antonio where that builder is located.  You then have to find a floor plan that you like.  Then you have to make sure you can afford it and can afford to make any changes you want done.   Not getting the answer you want here could result in any of these being deal breakers!

In my next post we’ll discuss custom builders.  And in later posts we’ll get in to some of the things you need to be aware of as you get into the process with either.

If you are wanting to buy a NEW HOME in SAN ANTONIO, TX.  Please work with a good Realtor who knows the process of buying a new home.  I’d love for that Realtor to be me!  Give me a call if you’d like to work together on buying a new home!

Chris Cowley

www.ChrisCowley.com

210-389-6006

How the RECESSION will effect REAL ESTATE

There is talk daily about The “R” word on multiple media forums these days.  You can’t read too many articles, watch any news shows, or get to far into the internet before you get bombarded by news of the upcoming demise of our economy.  I heard recently that 25% of people polled think we are headed for DEPRESSION.  Depression?  We’ve only had one, and it was at a time when there was uncertainty on the future of the free market and capitalism!  I hardly think things are that bad, but if you ask people in parts of the mid-west what they think of the upcoming recession, you are probably going to open up a discussion that indicates that they are already in a recession!  I just got an email from a lady saying they sold their home for a loss in Detroit after living in it for 7 years and making substantial upgrades to it along the way!  That’s a tough market! 

I’ve said it many times before, and it is echoed by the chairman of the San Antonio Board of Realtors Chairman, Mr. Bob Leonard - REAL ESTATE IS LOCAL!  The recession, to some extent may be also.  Through my blog entries on what is happening in San Antonio’s Real Estate Market, I get comments from other agents in other states saying they are glad to hear someone say what they think is happening in their market - HOMES ARE BEING BOUGHT AND SOLD!  I spoke with a guy from Washington this past weekend who is about to sell his house, and my thought was, “Oh boy!  That’ll be tough!”  He then told me that his market is doing really well because people are leaving California and now buying where he lives.  I would have thought that with this horrible economy and the housing crisis on the West coast that he’d be terrified to sell, but that wasn’t the case at all.

The truth is that jobs are coming to Texas, and we are positioned nicely for great growth in the future.  I think the last number I heard was that 20,000 new jobs were coming to San Antonio.  It’s hard to think of that being a recession!  The listings I have on the market are getting shown, and not one of them is listed at below what the people bought the homes for.  Not one despite what is happening in other areas, or what the national media is saying. 

Now I’m not one of these guys with an agenda, or tries to get some political view across with the disguise of the blog being something else.  I’m just a Realtor in San Antonio, TX who evaluates what is going on in my local market, and what I see is that things are good!  Are they what they were in 2005? No, but nobody had ever seen anything like that before.  I was selling homes at that time for a large home builder, and there had been a time when if you averaged selling one home a month you’d be in great standing with the company.  When I was selling in 2004-2005 I sold 10-15 homes at month at times!  I spoke with a friend still in that market, and you know how many homes he is supposed to sell a month 4-5.  That is back to where we were before we had our big boom. 

So are we headed into a nation recession?  Maybe we are, but here in good ole’ San Antonio, TX both the business economy and the real estate economy are healthy.  Are they at a break-neck, record breaking pace?  They are not, but if you are in a market that is steady and sustainable, and a somewhat predictable, then I think you can do a lot of good.  You may have to dig in your heals and work at it a bit more than when things were booming, but there are many of us who are glad to see the boom come to an end!

If you are considering buying or selling a property in an area that is new to you, please contact someone who knows what is going on in that community!  Whatever money you spend in paying commissions can certainly be made up for when you work with someone who has your best interest at heart and wants to see you happy in a good investment!

If you are in San Antonio, TX and would like to work with me on your next real estate transaction, please contact me!

Chris Cowley

www.ChrisCowley.com

210-389-6006