From time to time, I have come across home owners who have discovered the magic of Zillow.com. For those of you who do not know, you can enter your address at Zillow, and get an estimated value of your home, called a Zestimate. It sounds like a wonderful product. The site will allow you to determine what neighborhoods you might be interested in moving to. It gives you an estimate of your home's value that you can use to make decisions regarding selling it, refinancing it, or buying other homes nearby as investments. But there is a problem.

The problem is that Zestimates are not guaranteed to be accurate. They are not appraisals. They are computer generated estimates. In the words of Zillow:

"A Zestimate home valuation is Zillow's estimated market value. It is not an appraisal. Use it as a starting point to determine a home's value."

That's it. A Zestimate is a starting point.

So, you might want think that this starting point is at least SOMEWHAT accurate, or surely the company would not be successful and stay around. Well, the accuracy varies from market to market, but in my market (the Dallas/Fort Worth area), Zestimates have a median error of about 34%. So, if the Zestimate on your DFW area home shows $100,000, you can feel pretty certain that it will sell for somewhere between $66,000 and $134,000.

Only 1 out of every 4 homes in the DFW area sell for a price within 10% of their Zestimate value. Those are not good odds.

If you'd like to check the accuracy of Zestimates in your area, Zillow provides the means to do so right on their site. In fact, their own site is where I got the numbers for this blog.

http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

Zillow is a fine web site. I market my listings on Zillow. I prospect for new listings on Zillow. If you've never done so, I suggest you play around with Zillow some time.

However, when it comes time to make decisions regarding buying, selling, or refinancing, I suggest you find a qualified REALTOR® or appraiser who is familiar with your neighborhood.

All of you first time homebuyers who have been putting off the purchase of a home, you are about to lose out on an $8,000 gift from Uncle Sam.

As you may have heard, there is currently a tax credit available to most first time homebuyers. This tax credit could mean up to $8,000 in your pocket if you have not owned a home within the past 3 years.

However, that home purchase must be completed by the end of November. The timing of Thanksgiving this year means that the purchase really needs to be closed before Thanksgiving.  Since it generally takes a month or more to get from contract to close, we really need to have an executed contract by the first week or so of October.

Furthermore, there was a brief time when this tax credit could be used for down payment and closing costs, but the ability to do so has already gone away.

So, why am I telling you all of this? If you intend to buy a house and get this credit, you need to be looking at houses THIS WEEKEND.

There is something else you can do if you would like to take advantage of the tax credit, but are not yet ready to purchase a home right now. There are a few bills going through Congress right now to extend this tax credit. Some of these bills are leaving the credit as it is right now, but extending the due date to next summer. Other variations of the bill would extend the benefit to current home owners, and/or increase the amount of the tax credit. If you would like to see this happen, please contact your representatives in Congress and LET THEM KNOW.

Interest rates have been going down down down since about November. Currently, a buyer with good credit can generally get into a conventional loan for under 6%.

So, what do these low rates mean?

If you are a buyer, it means a smaller house payment. You can get the home you wanted for less money, or you can get more home than you could previously afford. The benefits to a buyer are pretty obvious. However, there are also benefits to a seller.

If you are selling your home, lower interest rates mean that there are more buyers out there, able to buy your home for more money in less time. Furthermore, most sellers are also buyers. Many of these sellers are moving into a larger home. The larger home will cost less with these lower rates than the same home would have cost just a few months ago.

To sum up, rates are low. Low rates are good for buyers and sellers of real estate. If you have been waiting for the right time to make a move, now just may be that time!

Give me a call, or stop by my web site for more info on buying and selling real estate.

GrandPrairieHomes.com

The primaries are coming to Texas sooner than you may think. Please take note of the following dates, and get out there to vote!

February 4th - Final day to register in order to vote in this year's primaries. All mail registrations must be postmarked by this date.

February 19th through February 29th - Early voting.

March 4th - Primaries.

Voter registration cards are conveniently available in all post offices, public libraries, and high schools.

Remember--every vote counts! 

I have found that many buyers and sellers—first timers as well as those with past home buying experiences – have a number of questions and misconceptions regarding the home inspection process. Buyers tend to think that the seller should take care of all issues on the inspection report. Sellers tend to fear that the buyer might back out of the contract or make numerous unnecessary and expensive demands. Neither of these should be the case. The inspection report is really just an objective 3rd party “snapshot” of the home’s condition at a given moment in time.

Buyers need to understand that the inspection report should not be treated as a “get out of contract free” card. It is also not a grocery list of items that the seller will automatically agree to repair. While it is not unreasonable to expect a seller to fix major problems that are wrong with the home, minor issues can easily be taken care of after the buyer has moved in. For example, a leaky roof is a major issue, but a faucet that drips is minor. Part of the duty of your Realtor® is to help you decide what is a major concern and what is not. Remember that you may probably do not want to lose the home of your dreams over a $100 repair. Even if there is nothing in the report worthy of bringing up to the sellers, an inspection is worth its weight in gold. This is a full “checkup” for your future home. It will help you prioritize your maintenance and improvement goals during the first few years in your new home. It will instruct you in the proper upkeep and care for your foundation, appliances, HVAC systems, roof, and more. I highly recommend that the buyers and their Realtor® should be present for the inspection. This allows the buyers to ask questions, learn about the home’s systems, and better understand the inspection report. Even on new construction, you should always get an inspection.

Sellers should realize that the inspection is not meant as an attack on the homeowner. It is generally best for the homeowner to not be present during the inspection. He or she may be offended by innocent comments and take a defensive position—killing any chance of a civilized negotiation. While the inspector will find numerous issues in your home that you have long ago learned to live with, work around, or ignore, this does not mean that you are a bad person. It also does not mean that these items HAVE to be repaired in order to sell the home. Unless it is a very major issue—one that will prevent the buyer from getting a loan or insurance—all repairs are negotiable. It is up to you and your Realtor® to go through the contract amendment and decide where you want to go from there. Keep in mind that anything that bothers this buyer would likely be a problem for any future buyers if you cannot come to an agreement. Would you rather replace that water heater for a buyer you have already agreed to terms with, or take a chance that this buyer may walk and you may never get another offer as nice as the one you already had under contract. Also remember that you are required by law to disclose any problems you are aware of in the house. The inspection process helps keep your liability lower by bringing to light issues which could come up in a lawsuit two years down the road. In fact, paying for a pre-inspection when you first place your home on the market could more than pay for itself by allowing you to take care of any items a potential buyer may be concerned with and providing written documentation of your home’s clean bill of health. When a prospective buyer is trying to choose between two relatively equal homes, that clean bill of health could be the determining factor.

I would like to provide an answer to a recent question that was posted to my blog:

how do you know when you have a realator who is signing a contract to sell your house and not in the business to sit back and watch other agencies sell it and they get some of the profit, we had this experience. House did not sell, our agency only showed

Usually, but not always, the real estate agent who ends up providing a buyer for your home is not the same agent who lists your home for sale. When you place your home on the market, the agent you hire to market your home is referred to as the Listing Agent. His or her job is to market your home, help you make the home "show ready," assist you with the related paperwork, negotiate on your behalf, advise you regarding offers on your home, otherwise represent you and assist you throughout the real estate process.

On the other end of the spectrum is the agent who is assisting buyers. This agent's job is to help a buyer determine an appropriate price range, show the buyer houses online and in person, help the buyer find financing, insurance, and other such needed real estate related products, represent the buyer in negotiations, assist the buyer with the required paperwork, and otherwise walk the buyer through the home buying process. This agent is referred to as a buyers agent or a selling agent.

Generally speaking, a Realtor is competent at representing buyers and sellers alike--just not on the same transaction. Part of the marketing of your property is placing it in the MLS--a database accessible by all members of the National Association of Realtors. This database placement is what allows other agents to know about your house. Most agents are working with 6 or 10 or more buyers at any given time. To maximize the exposure of your home to as many buyers as possible, the listing agent shows your home to as many buyer agents as possible, who then show their buyers. The only way to get those buyers' agents to show the property is for the listing agent to pay the agent who finds a buyer. While it might seem like your listing agent didn't do anything, it is through his or her efforts that the buyers agents learned of the house. Perhaps the most important part of the listing agent's marketing plan is to sell the value of your home to other agents so that those other agents will want to show the home to their buyers.

I hope this explains how the system works. Please keep the questions coming!

There has been a lot of recent news coverage about the "foreclosure crisis" that we are all experiencing. According to the news, our economy is suffering terribly due to recent foreclosures--especially in the sub-prime market. I would like to set that record straight. Have I mentioned before that real estate is local? That is still true. When the media reports the story about foreclosures, they never seem to do so on a local level. They only look at areas that are currently suffering, and then they act as if that news applies to everyone.

 Recently, Chief Economist Doug Duncan of the National Mortgage Bankers Association made an official statement regarding this ongoing "sub-prime mortgage mess." The news covered the negative aspects, but you really have to dig deep in their articles to find the following good news that was also present:

• The foreclosure problem in the U.S. is really only a problem in seven states: Michigan, Ohio, Nevada, California, Florida, Arizona, and Nevada.
• The problem in Michigan, Ohio, and Indiana is related to their recent loss of manufacturing jobs. You take jobs away from an area, and the people have to move to where jobs exist.
• In each of the other four states, investors have dramatically and artificially forced real estate prices too high, too fast. As a result, builders have also inundated these areas creating an oversupply of available housing. The home prices rose too quickly for many people to keep up.
• In these four states, 25% of the foreclosures are on properties held by investors who were speculating, and then just walked away from their investment properties.
• 35% of homes in America do not even have a mortgage. Either the mortgage has been paid off or the home was paid for with good old fashioned cash.
• 98% of the mortgages in America are performing just fine. Only 2% are having problems.
• Less than 10% of all mortgages in America are in the sub-prime category.
• Even the sub-prime loans are mostly performing. Only 25% are not performing.
• In the 47 states not listed above, foreclosure rates have actually fallen from 2006 to 2007.

In the DFW area, homes are still selling. Our inventory levels are about half of the national average. This is not the buyer's market you keep reading about in the newspapers or hearing about on the evening news. Our sales numbers are stable. Our property values have continued to rise at a moderate rate.

 According to Forbes Magazine, Dallas is the 4th most stable real estate market in the United States with 5.45% price increase over the past year. The Fort Worth market is ranked number 10 in the nation at 3.09% average price increase.

Did I mention that real estate is local?

According to recently released Census Bureau statistics, Grand Prairie ranks 6th in the nation in terms of fastest growth among cities with 100,000 or more population. With our 6.6% growth rate between July 1, 2005, and July 1, 2006, we are 2nd place in Texas, behind McKinney who had an astoundingly high growth rate of 11.1%. Factoring in Denton's 9th place and Fort Worth's 11th place national rankings, the DFW metroplex area is growing like no other metropolitan area in the United States. More people means more houses, and more houses means a strong local real estate market ahead!

For more information, please see the Dallas Morning News article linked from the city's web site:

http://www.gptx.org/documents/growingcity.pdf

Also see Kathy Goolsby's article in the July 29th Dallas Morning News:

http://www.dallasnews.com/sharedcontent/dws/news/city/grandprairie/stories/072907dnmetgpgrowth.2b8e48f.html

Natural gas drilling has come to Grand Prairie, Texas. This is generally viewed as a positive to those who own the mineral rights attached to their real estate. However, those who do not own their mineral rights are concerned about safety and noise. On each side of this issue, rumors and misunderstandings abound.

Will those who own their mineral rights be able to retire to a life of luxury? Will area families be in danger of losing everything to an underground explosion?

The truth is that nobody knows for sure what will happen, but we do have some idea based on similar situations throughout Tarrant County and beyond. As is typically the case, most of the hype is just hype.

Is it possible that a gas well might explode? Yes. Is it likely? NOT AT ALL. Media reports of natural gas explosions do exist, but they are few and far between. Most of the explosions that have been reported relate to construction workers hitting an existing gas line. My web research failed to turn up more than a small handful of explosions related to actual gas wells, and only a couple which did damage beyond the well site. Grand Prairie put a lot of thought and research into our gas drilling ordinance. Technology has improved tremendously. Gas well explosions are extremely rare. The pipes below your house will be over a mile deep. In other words, safety should not be an issue.

Will homeowners get rich? Not hardly. The initial signing bonus on a typical residential lot rarely exceeds $500, and the royalty check for a typical single family lot generally ranges from about $25 to $50 per month. While this is nothing to complain about, it is hardly getting rich. It is also probably not worth it to base the purchase or sale of a home on the mineral rights of the property. As a seller, would you really want to lose a potential buyer over a dollar per day? As a buyer, would you really want to lose the home of your dreams because you want that dollar a day income? In the big picture, mineral rights should not be a determining factor in the purchase of a typical residential lot. The only people who stand to get rich from natural gas royalty checks are large property owners (hundreds or thousands of acres) such as cities, school districts, and DFW airport. My thought is that this could mean increased funding for our schools, parks, roads, and emergency services without increased taxes on we the people. I'm certainly in favor of that!

About the noise......
As I mentioned above, technology has come a long way as it relates to the drilling of natural gas. There are now methods being utilized today which have tremendously reduced the amount of noise. Here in the International Estates subdivision of North Grand Prairie, we are already used to some noise. We are in the flight path of DFW. We are close to I-30. The worst case scenario with these natural gas drills would be the "High Impact" drilling sites. These are sites within 600 feet of any homes, churches, schools, etc. Grand Prairie's city ordinance requires a limitation on the amount of noise a well can generate. In the case of these High Impact wells, the sound level "shall not" exceed 78 dB during the drilling process, 85 dB during the frac process, and 65 dB during the ongoing operation. To put this in perspective, 85 dB is approximately the same as listening to your iPod at about 75% volume level or the noise created by heavy traffic as heard from a distance of about 30 feet. This noisiest portion of the process lasts about a week. The actual drilling is the part of the process which takes the longest. Drilling can take months to complete and it is a 24 hour/day process. The 78 dB limit for drilling is somewhere between the noise level of a hair dryer and a garbage disposal. The 65 dB limit for ongoing operation (lasting up to 30 years or so) is about the same sound level as normal conversational talking or the TV set when watching normal shows. When we crank the surround sound for action movies, it is significantly more. So, the annoyance factor of the sound will not be insignificant, but once again, I do not believe it will have a strong effect on whether or not someone would want to move into or out of a nearby neighborhood.

The next subject people want to know about is "Where will the nearest well be located?"
Since I live in International Estates, I will speak first of the closest drilling permit to my house. As of mid-June, 2007, the only site with a permit to drill is located off of Wildlife, on the site of International Wildlife Park. The only other site which has been identified for North Grand Prairie is between Shady Grove and Rock Island. That site has submitted an application to the city, but has not yet received a permit as of the posting of this blog. In South Grand Prairie, there are two sites on the peninsula and one site near the corner of Polo and Great Southwest which have applications pending in the city. All drilling sites which have received a permit in South Grand Prairie are south of Joe Pool lake, near Mansfield and Cedar Hill. For a complete and up-to-date map of permitted and pending gas well sites, see the city's web site at: http://www.gptx.org/EnvironmentalServices/GasDrilling/PermittedandPending.aspx

For more general information about drilling for natural gas, see the city's Environmental Services Department at: http://www.gptx.org/EnvironmentalServices/GasDrilling/GasDrillingIndex.aspx