If you read my blogs, you know that I live in Owasso, one of the growing suburbs around the larger city of Tulsa. When I have a listing in Owasso, it will usually be shown by a mixture of both local agents and Tulsa agents. Quite often, when the showing happens by agents from Tulsa, we have to educate them on the comps. This is because while we have homes that are located in traditional neighborhoods like Lake Valley or Bailey Ranch Estates, we also have homes that are located in non traditional neighborhoods.
Let me explain. Owasso is divided between two counties: Rogers and Tulsa. You can see this on my map.
Typically, homes in the Tulsa county side of Owasso are newer with amenities such as neighborhood pools and playgrounds. The houses are on city sized lots and comp easily to one another as they are about the same age and size. For an example, click on the post below.
9908 North 120th East Avenue, Owasso, Oklahoma (Bailey Ranch Estates)
Houses in Rogers county are typically a different breed. In Rogers county, many of the homes are older, having been built from the 70's and beyond. And they're typically on big one acre lots or more.
Today there are new homes being built in Rogers county and some new subdivisions as well.
Here's an example of an older home in Roger's county that has been nicely updated.
15605 East 94th Street North, Owasso, Oklahoma (Paradise Valley)
And here's a good example of a home in one the newer subdivisions in Roger's county that has been developed in the last couple of years. 10721 North 146th East Ave, Owasso, Oklahoma (Lake Valley)
When a homeowner lists their older home, it may or may not be updated. This means an updated home built in 1977 is no longer a straight comp to a similar home built in the same year, but not updated. Updates in our area are like flipping a home. It brings a home from an old, tired 1980 era to a modern, beautiful, fresh home. It makes all the difference in the world because our housing market has such a strong new home construction presence.
For an example of what I'm talking about, check out this post on updating older homes in our area. Updating your older home (to sell it sucessfully)
So when a city agent shows up and brings us a buyer on a home in Rogers county, they often have trouble comping the house correctly. This is because you cannot comp the house strictly against the neighborhood. Instead, you have to comp it against square footage, acreage and updates. I actually had a city agent try to comp a Rogers county house one time that had me rolling. The house was several years newer than the other 12 in the one street subdivision, had a finished shop, was set up to accomodate horses and was beautiful. The other homes were 1970's models badly in need of updating with no shop and no horse facilities. The only fair comps to this house were elsewhere in Owasso, Rogers county, not in the neighborhood. But the city agent was trying to do a straight neighborhood comp.
And that brings us to the reality of RD loans. Much of Owasso qualifies for Rural Development loans. An RD loans bring buyers several advantages.
1. They require zero downpayment and no private mortgage insurance. These are two costs
associated with FHA loans.
2. Rural Development loans are 100 percent financing loans.
This means that buyers do not have to come up with a 3% downpayment on top of their closing costs. It also means no pmi, which means they may be able to buy more house than if they go with a traditional FHA mortgage.
Is this important? Absolutely! I just had an offer fall apart that was based on an FHA mortgage. Had the buyers been using an RD loan, the difference in negotiation could have easily been overcome.
I don't know about your area, but if you have rural suburbs around your big city, be sure to check into RD loans. And be sure you know how to comp in areas that are not in city neighborhoods. The formula can be different!
And check this out! You can find out if an address anywhere in the US qualifies for an RD loan. Just click this link to go to the USDA address page for single family homes.
USDA Single Family Home Eligibility Page
Remember, if you're out of your area, ask someone from the office in that area about the uniqueness of the homes and loan programs the agents there typically are seeing and using. You might just help your agents get that home of their dreams.
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