Green Meadows Development in Celina with Pacesetter Homes

On Aug. 8, 2022, I visited the Pacesetter Homes in the Green Meadows development in Celina, Texas. If you’re looking for a newly built home in a highly rated school district like Celina, you should consider one of these!

This development has some special features for everyone:

  • HOA includes front yard mowing
  • Prices from $550,000 to $700,00
  • In the highly rated Celina ISD
  • Master planned community
  • Incredible amenities including pool with slides, trails, community garden, sports complex, and more
  • 10 minute drive (according to Google maps) to a grocery store
  • Much, much more!

Watch the video to see this great development. For extra fun, count how many times I said “great” in the video!

For more information on the Celina ISD, here is a link to their ranking information on Niche.com.

This video is just a tease of all that is available. Contact me for more information on these or any newly built homes in DFW.

Become A Victim Of Inflation Or Benefit From It

Inflation is here. How you react and what you do will make a difference in how it affects you!

In inflationary times like these, currently, the highest in 40 years, the purchasing power of your money diminishes each day; essentially, buying you less.  The biggest threat is to be without capital assets, like a home, that is benefiting from the increase in prices. 

Your money buys less gasoline now, than it did a year ago, by close to 50%. Beef prices are up about 20% since last year.  Used cars are about 35% more expensive than they were a year ago. Mortgage rates are near 5% after reaching their lowest of 2.65% in January 2021.

And then, there is the price of houses.  CoreLogic reports that home prices increased year over year by 20% in February 2022.  Their Home Price Index indicates an annual five percent increase in prices from 2014 to 2021.

For many people, the American dream of owning a home is slipping away.  Adjusting your expectations for the perfect home and when you expect to achieve it, can be a legitimate, long-term strategy for making the dream come true.  Delaying the gratification of getting everything you want in a home now and making compromises that would allow you to stair-step your way into the “forever home” could be the plan to incrementally reach your goal.

Owning a home in today’s market, even if it isn’t the ultimate home, provides a significant hedge against inflation.  Not only is the home appreciating faster than the rate of inflation, but the mortgage on the home also produces leverage that increases a homeowner’s return on their equity.

Homeowners have both the home’s appreciation and its amortization working in tandem to increase their equity.  Money in a bank account or the stock market can’t compare to the potential.

$40,000 invested in a certificate of deposit earning 1% would be worth $42,040 in five years.  If the same amount was invested in the stock market that earned 6% annually, it would be worth $53,529.  However, if the $40,000 were invested in a $400,000 home, with a mortgage at 5% for 30 years, that appreciated at 5% annually, the equity would be close to $180,000 at the end of the same five-year period.

Connect with me and let’s put together a plan to help you benefit from inflation.

McKee Smith, REALTOR®, has been selling and buying homes in Dallas and Fort Worth for many years. He knows and understands the intricacies of the DFW housing market. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

When Are Negotiations Over?

Experienced agents know negotiations continue through inspections, repairs, financing, contingencies and much more!

The primary negotiation in a home purchase takes place when the contract is agreed upon which includes the price, closing and possession.   With inventory down over 19% in the past year and multiple offers being more of the norm than the exception, the first round of negotiations can be challenging.

Buyers and sellers alike feel relieved once it has resulted in an agreement, but experienced agents know there is more to come if there are contingencies for financing, inspections, or other things.  The competition for the home may be so tough that the buyer waived their rights for what would be normal contingencies.

Financing is one of the most common contingencies in normal situations but when multiple offers are involved, the cash offers tend to have the advantage.  If you don’t have the resources to make a cash offer, the next best position is to be pre-approved with a commitment letter from the lender.  Arrange for the lender to confirm the pre-approval directly with the listing agent prior to the listing agent presenting the offer.

There have been buyers who know they don’t have the cash to close and apply for a mortgage anyway and try to reinsert the provision outside of the contract.  Experienced listing agents will advise the seller to have the buyer provide proof of funds necessary to close and verify that they do indeed exist.

The purpose of an inspection is for the buyer to receive an objective evaluation of the condition of the home and its components to identify existing defects and potential problems.  The expense for inspections can be several hundred dollars and it’s reasonable for buyers not to want to spend the money before they find out if they can come to terms with the seller.  From a different perspective, sellers want to know quickly if the buyer is going to reject the home due to the inspections because they could be losing time.   For that reason, inspection time frames are limited to a few days from acceptance of the offer.

Sometimes, buyers will expect sellers to make all the repairs listed on the report and this is where the second round of negotiations begins. If the seller refuses, the negotiations can go back and forth until the other party accepts the offer on the table.

When purchasing a new home from a builder, it is expected for everything to be in working order; after all, it is new.  However, it is reasonable to expect that existing homes, that are not new, have a different standard.  While it’s understandable that buyers would want to be aware of major items that are not in “working order”, normal wear and tear of components based on their age should be expected.

In a highly competitive seller’s market, buyers might do whatever they can to get their contract accepted, realizing that there is another place to negotiate when they’re not competing with other buyers’ offers to purchase.

The negotiations involved in a home purchase are not complete until the buyer and seller have signed the papers and the title has passed to the buyer.  Up until the closing is finished, any item that comes up could prolong the negotiations.

For this to be a WIN-WIN situation, both seller and buyer must feel good about the negotiations that led to the transaction closing.  Neither party should feel that the other party had an unfair advantage over them.

McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

You Don’t Have To Give An Arm To Get A Lower Rate

As mortgage rates rise, more homeowners are considering adjustable-rate mortgages (ARMs). Talk to your mortgage professional about the pros and cons for YOUR specific situation!

Rising interest rates compounded with increasing home prices are causing affordability issues for many buyers. To keep payments low, you won’t have to give an arm, but more buyers are considering getting an ARM, adjustable-rate mortgages.

Mortgage rates are near their highest point since 2009. “While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months,” said Sam Khater, Freddie Mac’s Chief Economist.

A $400,000 home with a 10% down payment and a 30-year term has the choice of a 5.27% fixed-rate or 3.96% for a 5/1 adjustable-rate mortgage. The principal and interest payment will be $1,992.40 for the fixed-rate and $1,710.40 for the adjustable rate saving the buyer $281.99 per month for five years.

There is an additional saving for the buyer choosing the adjustable-rate mortgage because the unpaid balance at the end of the five-year first period is $6,429 less than the fixed-rate. The total savings to the buyer on the adjustable-rate during the first period is $23,348 or $389.13 per month for sixty months.

At the end of the first period, the rate on the mortgage can adjust according to the then, current index plus the margin subject to the caps as specified in the note. These safeguards remove control from the lender or servicer from arbitrarily raising the rate.

The caps restrict the payments from going up more than a certain amount at each period or overall, for the life of the mortgage. A common cap might be that it cannot adjust more than 2%, up or down, at any given adjustment period or 6% above or below the initial note rate.

Adjustable-rate mortgages must adjust downward if the index indicates a reduction at the anniversary of the adjustment period. The overall trend has been lower rates for the past thirty years until recently.

Using an Adjustable Rate Comparison tool, you can project a breakeven point to determine at what point the ARM would be more expensive than the fixed-rate, assuming a worst case situation where the rates would increase the maximum at each period.

In the case of the previous example, the breakeven would occur at 7 years and 6 months. This means that if the buyer were to sell the home prior to that projection, the ARM would provide the cheapest cost of funds to purchase the home. On the other hand, if the buyer knew they would stay longer than that, it might be a safer option to go with the fixed-rate.

It is good to be aware of available options when financing a home. Analyzing, using the best information available, can help you make an informed decision. Make your own comparison using our ARM Comparison. Current interest rates can be found on Freddie Mac.

McKee Smith, REALTOR®, has been helping people like you sell and buy homes in the DFW area for many years. He is very knowledgeable about the housing market in Dallas and Fort Worth. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

Helping Local Educators Get New Homes!

Better than a thousand days of diligent study is one day with a great teacher.”

Japanese Proverb

Here in Texas, schools are the tendons that tie our communities together. You cannot have schools without teachers. Teachers are vital members of any community.

In today’s real estate market, it is tougher than ever for teachers to get into the homes they want and need. To help, I will give licensed teachers at public schools $500 toward their closing costs if they use me as their REALTOR® and sign a buyer representation agreement between now and August 31, 2022.

But there’s more. If a teacher uses Charles Mentesana of Service First Mortgage, Service First will offer $500 in savings toward lender fees. That is a combined savings of $1,000! Limitations apply – see the details in this flyer.

Time is limited, so let’s start looking today. Fill out the information below and I will give you a call to get started!

    When you hit “submit,” I’ll send you an email to confirm I have your contact information. Let’s get started today!

    You Don’t Have To Give An Arm To Get A Lower Rate

    As mortgage rates rise, more homeowners are considering adjustable-rate mortgages (ARMs). Talk to your mortgage professional about the pros and cons for YOUR specific situation!

    Rising interest rates compounded with increasing home prices are causing affordability issues for many buyers. To keep payments low, you won’t have to give an arm, but more buyers are considering getting an ARM, adjustable-rate mortgages.

    Mortgage rates are near their highest point since 2009. “While housing affordability and inflationary pressures pose challenges for potential buyers, house price growth will continue but is expected to decelerate in the coming months,” said Sam Khater, Freddie Mac’s Chief Economist.

    A $400,000 home with a 10% down payment and a 30-year term has the choice of a 5.27% fixed rate or 3.96% for a 5/1 adjustable-rate mortgage. The principal and interest payment will be $1,992.40 for the fixed rate and $1,710.40 for the adjustable rate saving the buyer $281.99 per month for five years.
    There is an additional saving for the buyer choosing the adjustable-rate mortgage because the unpaid balance at the end of the five-year first period is $6,429 less than the fixed rate. The total savings to the buyer on the adjustable rate during the first period is $23,348 or $389.13 per month for sixty months.

    At the end of the first period, the rate on the mortgage can adjust according to the then, current index plus the margin subject to the caps as specified in the note. These safeguards remove control from the lender or servicer from arbitrarily raising the rate.
    The caps restrict the payments from going up more than a certain amount at each period or overall, for the life of the mortgage. A common cap might be that it cannot adjust more than 2%, up or down, at any given adjustment period or 6% above or below the initial note rate.

    Adjustable-rate mortgages must adjust downward if the index indicates a reduction at the anniversary of the adjustment period. The overall trend has been lower rates for the past thirty years until recently.
    Using an Adjustable Rate Comparison tool, you can project a breakeven point to determine at what point the ARM would be more expensive than the fixed rate, assuming a worst case situation where the rates would increase the maximum at each period.

    In the case of the previous example, the breakeven would occur at 7 years and 6 months. This means that if the buyer were to sell the home prior to that projection, the ARM would provide the cheapest cost of funds to purchase the home. On the other hand, if the buyer knew they would stay longer than that, it might be a safer option to go with the fixed rate.
    It is good to be aware of available options when financing a home. Analyzing using the best information available, can help you make an informed decision. Make your own comparison using our ARM Comparison. Current interest rates can be found on Freddie Mac.

    McKee Smith, REALTOR®, has been helping people like you sell and buy homes in the DFW area for many years. He is very knowledgeable about the housing market in Dallas and Fort Worth. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified. Remember – McKee has the keys to selling your home!

    Skills Market

    The skilled and experienced negotiator understands that every transaction is different because of dealing with individuals, their families, their needs, and their emotions. 

    In today’s ultra-competitive real estate market where there is only 1.7 months supply of inventory compared to 6 months in a balanced market, and the average home is getting 4.8 offers per sale, it is more important than ever to have the right person “champion” your cause.

    In the Middle Ages, it became customary for a person of nobility to appoint a “champion” to fight for them in their stead.  Trial by combat ended in the 15th to 16th centuries but the practice of “fighting” or speaking on one’s behalf continues even to this day.

    Lawyers will take up the cause of their clients to win justice for them.  Professional athletes are recruited for their abilities to help their team become victorious.  Craftsmen of every type imaginable are in high demand because of their finished products.

    Sellers’ and buyers’ objectives are different and, in many cases opposing in nature.  Sellers, rightfully so, believe they should get the most for their home while minimizing expenses and avoiding any issues that could cause delays.  Buyers want to be treated fairly; have an opportunity to buy the home of their choice and enjoy the protections of normal contingencies for things like mortgage approval and inspections.

    In most situations, there are two real estate agents involved in a single sale. While there could be legal agency distinctions, it is commonly felt that the agent on their side of the transaction is “championing” their cause.  It is natural to want your champion to be the most capable person available.

    There are skills that agents need in today’s market not the least of which is negotiations.  Regardless of which side of the fence you’re on, your agent needs to be skilled in negotiating on your behalf.  Every part of the contract is a negotiation starting with the price, then, whether it is cash or subject to a mortgage.  What’s a reasonable amount of earnest money?  Can it be “as is” and still allow the buyer inspections so they’ll be fully aware of what they’re buying?

    The buyer wants to negotiate the best terms possible with the seller and they are depending on their agent to work for them to get them.  The home inspector has been hired by the buyer to determine the condition of the home and will most likely, ask the seller to make any necessary repairs.

    The lender hires an appraiser to determine the value of the home so that the loan will be secured by the property.  Recent sales are used as comparables, but they trail the market which becomes a challenge in rapidly appreciating markets, especially, when there are multiple offers. 

    And since multiple offers are the norm currently, what is the best way to handle them based on the seller’s or buyer’s perspective.  There could be legal and ethical procedures that must be followed but an agent’s experience may also contribute to a favorable outcome.

    The skilled and experienced negotiator understands that every transaction is different because of dealing with individuals, their families, their needs, and their emotions.  The role of the third-party negotiator can be invaluable to the success of the transaction based on not only their experience but the juxtaposition to the principals and their objectivity of trying to reach a compromise.

    McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

    Instead of a vision, show them the house!

    In some cases, buyers simply can’t imagine what the home would look like after the renovations are made.

    Sellers try to rationalize not making needed updating and repairs to their homes before marketing them by saying they are going to let the buyers make their own personal choices.  It is a convenient story to justify not going to the effort for the necessary market preparation to justify achieving the highest possible sales price.

    An agent told a story of a home that was structurally sound being on the market, but it needed significant cosmetic work, like paint, floorcovering, updated fixtures, and lots of yard work.  The house was vacant with the owner having moved out of town. 

    The agent explained to a prospective buyer what he thought it would take to bring the home up-to-date and what it would be worth.  The buyer was from out of town and was going to be teaching at the university the next semester.  He returned home without buying and came back to look again two months later.

    As they were looking at homes with the same agent, the question came up about the previously viewed home that needed work.  The agent told him that she had bought it and did all the things that she had suggested.  The buyer asked if he could look at it.  On seeing the property, now, in its pristine condition, the buyer asked the agent if she would sell the home to him at a profit.

    The agent told him that it wasn’t for sale but followed up with the buyer with a question of her own.  “I told you that you could buy it for below market and gave you an estimate of what it would take to update it which would have you in the home below market value and with all the colors and choices of your own.  Why didn’t you buy it then?

    The buyer admitted that it looked like a lot of work and that he just didn’t feel up to the challenge.  The main thing was that he just saw a lot of work and couldn’t really see the finished product.

    This story is not novel; it happens frequently.  Buyers are not experienced enough to recognize what needs to be done, how much it would cost and how long it would take.  In many cases, they don’t have connections with the different service providers.  In some cases, they simply can’t imagine what the home would look like after the renovations are made.

    There are some buyers who scout out opportunities for do-it-yourself experiences where they can earn sweat equity by buying below market and making the repairs to add value to the home.  There are many more buyers who don’t know how and/or may not want the hassle and are willing to pay a higher price and be able to “move-in” to their new home.

    The highest prices being paid for homes are the ones in the best condition with the best locations.

    The highly popular TV series Fixer Upper now, on the new Magnolia Network, uses this situation for the premise of each show.  People want to buy a home in great condition but can’t find what they want.  Chip and Joanna find a good home in a good neighborhood for them and sell the vision of what it could be.  The unique aspect of the show is that they act as agents, designers, and contractors to meet the buyers’ budget.

    In the case of Fixer Upper, the buyer is the beneficiary of the increased equity for having taken the risk to make the repairs.  For the seller to be the beneficiary, they need to do the updating and repairs before marketing the home.

    Ask your agent if they can provide suggestions of what items would most benefit from remodeling and if they have service providers that they can recommend.  The proceeds from the sale of your home belong to you and to maximize them, it needs to sell for the highest possible price.  

    McKee Smith, REALTOR®, has been helping people like you sell and buy homes in the DFW area for many years. He is very knowledgeable about the housing market in Dallas and Fort Worth. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!

    The Dynamics of Home Equity

    Having equity in a home gives the homeowner a lot of flexibility!

    Appreciation and amortization are key factors in building equity for homeowners with mortgages.  As the home goes up in value due to appreciation and the unpaid balance goes down due to amortization, the equity increases.

    Appreciation is the increase in value of a home and is usually measured year over year.  In recent years, appreciation has been robust (19% nationwide in 2021) due to high demand and low inventory.  Many times, the news will quote annual appreciation rates from a national or regional level.

    Occasionally, you may see a chart that tracks the annual appreciation over a period, but it is more interesting than it is practical.  It can be used to determine an average rate over a longer period that you can use to project future growth.

    The reality is that supply and demand determine appreciation along with location and condition.  To reflect more accurately what your individual home has appreciated, you’ll need to find local numbers which your real estate professional can provide.

    The amortization of a loan is consistent with regular monthly payments based on the term of the mortgage.  Homeowners frequently receive a monthly statement, either through the mail or online, from their lender declaring the current unpaid balance.

    If a homeowner makes additional principal contributions toward the loan, the unpaid balance will accelerate the normal amortization schedule.  Additional principal payments on fixed-rate mortgages shorten the term of the mortgage.  Additional principal payments on adjustable-rate mortgages will lower the payment on the next anniversary date.

    Equity in a home is the difference between the value of the property and what is owed on in.  If there is no mortgage on a property, the equity and value of the home are the same.

    To illustrate how equity is influenced by appreciation and amortization, let’s look at an example of a $400,000 purchased today that appreciates at 3% a year using a 90% mortgage at 4% for 30 years.  The $40,000 would grow in seven years to $182,135 in equity with $91,950 coming from appreciation and $50,186 from amortization.

    If the appreciation in the same hypothetical example is increased to 5% annually, the equity would be $253,026 with $162,840 coming from appreciation and the same $50,186 from amortization.  The same loan amount, rate and term will result in the same unpaid balance as the example with lower appreciation.

    With the considerable appreciation experienced in recent years, the values are going up fast and benefit the people who currently own a home while making it more expensive for would-be buyers.  Another factor facing buyers is rising interest rates.

    It is important to get the facts about the market and your individual situation to determine what alternatives you have to purchase a home in the near future.  Your agent can provide this objectivity and recommend a trusted mortgage professional to be pre-approved.

    For more information, download my Buyers Guide.

    McKee Smith, REALTOR®, has years of experience in the DFW area housing market. He knows the many unique features of Dallas and Fort Worth area home sales. He works out of his home in Coppell, Texas. He is a Senior Real Estate Specialist® (SRES®) and new home construction buyer representation certified.  Remember – McKee has the keys to selling your home!