The last 4 words you do not want to hear from your Realtor is “The Contract Fell Through”.  Especially if it is a day or two just before the closing at the title company.  What are the causes of this situation and what can your Realtor do to prevent this?

Here is one of the worst stories that I have heard about a deal falling through.  Picture this.  You have agreed on all the terms and conditions, successfully completed the option period but due to some extensive time  requiring repairs, the buyer insisted upon an amendment to extend the closing date for an additional 2 weeks.  You agree and two weeks elapse.  But the dreaded phone call comes one day before closing because the lender upon a final credit check for the buyer discovers the buyer had  purchased $40,000 worth of furniture(on his Master Card) resulting in a last minute  denial of his loan!

This is a  horrible situation for both the buyer and seller.  No transaction takes place; the buyer is stuck with $40,000 worth of furniture and you the seller wasted a precious 6 weeks with your home off the market.   Needless to say, this could have been prevented if the buyers Realtor had told his clients not to make any significant purchases until after the closing.  Ben Franklin said “common sense ain’t so common.”

Upon scrutiny of this contract, we note that there were also several warning signs that your agent should have identified, discussed with you and negotiated.  The sales price for this home was $300,000 but the amount of earnest money put up by the buyer was too low to qualify the contract as a “solid” offer.  In this case, it was only $750 which is way below the more acceptable amount of 1% or $3,000. Moreover,  the option check was a paltry $100.  Understand that the only money the buyer risks is the option money.  That is all he loses if the deal dies.  He almost always will  get his earnest money back.  Would  you take your home off the market for 6 weeks knowing the buyer only has $100 to lose?

We also notice on page 1 of the contract that the buyer is only putting down 2% of the purchase price or $6000. And, financing 98%!  This is another red flag.   We also note that the buyer successfully negotiated an additional $3000 from the seller for closing costs.  This means that the buyer only really needs to bring a check for $3000 to the closing.  Bottom line is the buyer is trying to purchase a $300,000 home with way too small an amount of money.  This is the kind of smoke and mirrors that has contributed to our present economic mess…that is the proliferation of foreclosures.

We can see from this story that the  purchase price is not the only thing that counts in a contract.  Yeah, the “devil is almost always in the details.”In this story, both Realtors failed to do their job according to the National Association of Realtors Code of Ethics Article 1 which states Realtors pledge themselves to protect and promote the interests of their client.  Fortunately,  most Realtors are well qualified to handle contracts better than this.

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 In case you don’t read the Dallas Morning News, I have scanned it into this blog for you to read.  I am amazed at these rankings considering that Texas in general and DFW in particular have been given some of the best real estate ratings among the major cities and states.   But…read on…

“Dallas-area residents are deep in debt, and their credit scores show it.

A new survey by the credit bureau Experian shows Dallas ranks just behind Seattle in terms of average debt per consumer among the nation’s 20 biggest metro areas.

What’s more, Dallas is tied for the lowest average credit score among the 20 cities. And the number of missed loan payments exceeds the national average.

According to Experian, Dallas had an average debt per consumer of $26,599 in March, just behind Seattle’s $26,646. The average for all consumers nationally was $24,775.

“It’s not a good thing that it’s No. 2,” said Maxine Sweet, vice president of public education at Experian.

Experian analyzed a sample of all its credit reports nationwide to calculate national averages and then isolated data from consumers living in the top metro areas to discern local trends. The figures include consumer debt, such as credit cards and car loans, but exclude mortgage debt.

The Dallas-Fort Worth area has an average credit score of 719, tied with the Miami-Fort Lauderdale area for the lowest score among the top 20 metropolitan areas, according to Experian.

The score used is the VantageScore, which was developed by Experian and the other two credit bureaus, Equifax and TransUnion, and ranges from 501 to 990. The national average is 749.

The average debt of Dallas-Fort Worth consumers has been falling in the last two years, but their credit scores are slightly lower, Sweet said.

“That likely means more missed payments and higher utilization,” she said.

The average number of missed loan payments among Dallas-Fort Worth consumers is 0.67.

However, the national average is 0.5, Sweet said, adding that the difference is significant.

Late payments are the biggest factor in knocking down credit scores.

Also critical is the “credit utilization” ratio, meaning what percentage of a consumer’s available credit is being used. The higher the number, the riskier the consumer looks to creditors.

Dallas-Fort Worth consumers are using an average of 29.54 percent of their available credit, compared with an average of 28.47 percent nationally, Sweet said.

“It’s important to look at the whole picture when evaluating how consumers are actually managing their credit,” she said.

“Seattle ranks the highest in terms of average debt per consumer. However, additional data shows that Seattle’s consumers have very few late payments and are not maxing out their credit cards, so they are using their credit wisely and maintaining higher credit scores.”

Plano TX Homes for Sale

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According to the North Central Texas Council of Governments( COG), Prosper grew by 31% last year to a population of 9350 leading all other Collin County cities.  So, 2250  was our net  gain for 2009.  This net gain surpassed Prosper’s total population in 2000 when it was 2097!

The same  report shows Collin County gaining 19,350 averaging 53 new  residents a day.  Frisco and McKinney led the growth with 7,000 and 5,000 respectively.  “Like last year, three of the top ten fastest growing cities in the region are in Collin County.  COG estimates that by 2030 Collin County’s population will be about 1.2 million citizens.  This means that over the next 20 years another 413,750 people will be moving to Collin county which will result in a 52% increase in our population.   Collin  County is still ranked the 13th fastest growing county in the nation.

Prosper TX Homes for Sale

These projections bode well for Prosper.  More homes will need to be built.  The early 2000’s averaged about 200 building permits per year while the mid 2000’s peaked around 300.  The low was 2008 with only 226 while last year  increased to 249.  This year is off to a great start with 75 permits issued in the first quarter.  However, now that the tax credit for new home owners has  expired it is anyone’s guess as to what happens for the remainder of this year.

Can we reasonably project this same kind of growth in the next few years?  We know that the Metroplex adds about 150,000 people to its population each year.  We know that Dallas historically expands northward.  Prosper already has the toll road and toward the end of next year, we will have Preston Rd. completed.  Won’t that be nice?  And, since Texas continues to be in better economic shape than most other parts of the nation, we should continue to see migration here.

On the other hand, we can not absorb more population unless we provide new jobs according to Dale Clark at Whitley Place.  “There must be job growth in order to support any significant growth in home construction.”  Whitley Place now has a critical  mass of 30 completed  homes and is currently developing 25 more lots on its north perimeter.   Most other Prosper subdivisions are not experiencing the level of growth that Whitley is.  Matter of fact, some are empty.

Ending on a positive note, we now have the roads, the lots, the builders, a great Town of Prosper development team and many, many anxious Realtors.

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In an effort to improve the underwriting quality of home loans delivered to mortgage financier Fannie Mae, lenders will be required to take a closer look at your debt obligations beginning next month.

Come June 1, lenders will be directed to “review and evaluate the “inquiries” section of the borrower’s credit report to determine if the borrower has received additional credit that is not reflected in the credit report or disclosed on the loan application.”   “If additional credit was obtained, a verification of that debt must be provided and the borrower must be qualified with the monthly payment.”

In other words, if you applied for a mortgage and barely met the debt-to-income ratio requirements, a subsequent purchase could prove disastrous for your loan.

For example, if your DTI ratio was 44 percent and the max was 45 percent, a significant purchase made sometime during the loan process could mean you were longer qualified.

“Fannie Mae its guidelines to require lenders to determine that all debts of the borrower incurred or closed up to and concurrent with the closing of the subject mortgage are disclosed on the final loan application and included in the qualification for the subject mortgage loan,” explain Certified Mortgage Planner Todd Baker.

“If Fannie Mae determines that any debts were not adequately disclosed on the application nor included in the debt-to-income ratio such that the loan would not have met Fannie Mae eligibility requirements, the mortgage loan will be subject to repurchase by the lender.”

Whether or not they really this enforce this rule, it’s wise to avoid any major credit purchases or new credit requests during the loan process in case anything goes wrong with your application.

If for any reason you have to re-apply elsewhere, your credit score may be lower as a result, which could prove detrimental to receiving financing.   For expert advice on planning mortgages, click on this link.  

http://www.imortgageplanner.net/

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McKinney TX Homes for Sale                       Prosper TX Homes for Sale

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Texas Voters,

Tomorrow, Saturday, May 8th, is the final and Last Day to Vote in your Municipal Elections.

Please, Go Vote!

If you want to know what’s on your ballot, go to your city website or contact your local Tea Party leader.

Don’t just talk about making a difference….Do it by voting!

And….Happy Mother’s Day to all you Moms!

You received this message as a member of the The Dallas, Texas Tea Party Group
To edit your membership in this group, go to The Dallas, Texas Tea Party and login.

_____

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hen in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefit of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.

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The average sales price of homes sold for the first quarter was $237,831 down 12% from last year.  The median home price came in at $201,079 down 22.4% from last year’s $259,000.

Celina home sellers can expect  about 94.4% of list prices on average.

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The best news for the first ninety days in the Prosper area real estate scene is 75 residential building permits were issued verses 28 in 2009.

And for  home sellers the best news is that home prices went up in the first quarter by 9.6% over last year.  The median home price in Prosper as of March 31 is $306,970.  This compares to $201,079 in Celina, $227,000 in Frisco, $175,000  in McKinney and $204,000 in Plano.

Other good news is that the home inventory continues to gradually decline.  Presently, there are 193  homes listed in Prosper compared to 246 at this time last year.  New listings are down 14% from last year and closed sales were down 18% to only 58 for the quarter.  The average number of days on market for homes listed came  down from 184 to 127 which is an encouraging sign for home sellers.  Sellers received 94% on average of listed prices verses 92% for the first quarter of 2009.

The Glenbrooke Estates subdivision received 13 building permits in March compared to 6 in Lakes of La Cima, 6 in Cedar Ridge and the remaining 6 were spread out among other subdivisions.

Prosper TX Homes for Sale                                     Frisco TX Homes for Sale

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