Shira Mytelka's Blog

At my open house this past Sunday, I met a family that was visiting from Virginia and were considering moving to the Houston area. The wife had a few questions about the similarities and differences between homes on the East coast and homes in Texas. She posed some very valid and intelligent questions about the homes here in Houston and since most people from the East coast aren't familiar with Texas style homes, I want to address those issues in my blog.
The first question she asked was why don't Houston homes have basements?
The reason we don't have basements here is because this area is prone to heavy rains and if we had basements they would get flooded on a regular basis. So they call the attics here the "Texas Basement" since they are built larger in order to accomodate storage.
Second question: why are there cracks in the walls and floors of some Houston homes?
The reason homes develop cracks over here is because the foundation begin to shift when the clay soil over here contracts and expands depending on how much moisture it has. Our soil here is different from the soil on the East coast, its not the crumbly loose type that you can sift through your fingers. It's called clay because it is thick and it's hard to plant in it. If a home has a lot of trees around it- like mine :-( then they will soak up any excess moisture under the foundation and cause problems. It's important to maintain an even layer of moisture around the foundation to prevent cracking.
In general most Houston homes need foundation repair every 20 years. So if you purchase a home that was built before 1990 then you should make sure to have the foundation inspected for signs of damage.
In my next post I will discuss A/C units and hot water heaters. To be continued... 

The current real estate market in Houston is both unique and troubling at the same time. In the Southwest area of Houston, I have observed in the past few months that the rental market is completely saturated. Meaning that every time a home becomes available for rent it is snatched up really quickly. On the other hand, the homes listed for sale are sitting on the market for a longer period of time than they used to because people are more hesitant to buy right now.
What that means for sellers is that they have to get more aggressive if they truly want to sell their home. Tough times call for drastic measures. Simply listing your home on the market isn't good enough these days. What I reccomend is that you work with your Realtor to come up with a marketing plan in order to truly show your home in the best light and get it sold as quickly as possible. Most people think that they will simply continue to reduce the price until its cheap enough that somebody will buy it, but that's not what I'm recomending. There are other things your Realtor can do to sell your home that do not include reducing the price, such as doing more advertising for your home, and holding an open house. I've seen homes being sold for below market value simply because the seller got desperate and its sad to see that happen.

I want to discuss an important topic regarding a plague that is afflicting my neighborhood. There have been a lot of sales in my area that were done "off the record" so to speak: they did a for sale by owner and the home never entered HAR or the mls. The problem arises when those sales are above the current market value and in subsequent sales aren't included in the averages when calculating the value of other homes in the neighborhood. So when an appraiser comes in to assess the value for the mortgage company he relies on the lower numbers from HAR and the buyers are then only able to receive a mortgage for that lesser amount.
This phenomenon is unheard of in other areas. However due to the close/friendly nature and a few other factors in my area this is continuing to go on. Generally the buyer ends up having to pay the difference between the sales price and the appraisal/mortgage amount in cash out of pocket and this sometimes can be an exorbitant sum.
I think that there is a way we can resolve this issue but it would take quite a bit of work and discussion to convince people that it can be done. First and foremost the sellers have to come to the realization that we live in Houston, TX and the prices never inflated here like they did in almost every other major city across the U.S. Sure the market has fluctuated a little bit here and there but when the rest of the country was seeing increases of 50% to 100% our prices went up maybe 10%. But thats beside the point what I'm trying to get at is that Houston homes are affordable and the prices have remained stable.
When an out of towner buys a home they come in with the expectation that they are getting a good price now but eventually the prices will appreciate and they'll be able to walk away with a profit when they sell. I strongly believe that is an unrealistic expectation and even after a few years if the prices go up a little its simply because of inflation but its not a true increase. For example a home that was built in 1979 for approximately $145,000 was maintained and cared for by the original owners until they sold it in 2009 for $172,000. If you calculate inflation they did not make any profit off of their home. But thats ok! The point of owning a home is so that it belongs to you and that you know that you are paying that mortgage payment so that its yours and that you're not throwing the money down the drain by paying rent.
So now to get back to my original topic, the problem is that these for sale by owners are trying to get the most bang for their buck by not hiring a listing agent and charging prices that are over market value. The only reason they are able to do this is because their location is considered desirable by a select group of people who consider that value to be acceptable. 
There are two ways we could remedy this situation. One is by getting all of the for sale by owners to list their homes on the market so that the appraisal values will have to go up eventually. The other is for the buyers and sellers to realize that a home is only worth what it can actually sell for and its in their best interests to be more realistic about what the true value of the home really is.

There have been a lot of changes going on in the real estate market since I last wrote. The FHA has issued new guidelines, the mortgage rates are starting to go up, and the federal tax credit is about to expire! Whew- where do we start?
First of all we all know that the FHA has been vital to the housing market for the past year. They have assisted 40% of all the mortgages done in the U.S. recently which is a much larger chunk of the population than ever before. So obviously their reserves are running low and have dropped beneath the 2% benchmark that the fed set for them.
Under the new guidelines they still want to be accessible to the general public but they have to tighten their guidelines in order to keep going. So for instance if a buyer has a below 580 credit score they have to put down 10% down payment as opposed to 3.5% that everybody else pays. But the truth is thats still a good thing because if you have  below 580 credit score you can't get a mortgage with anybody else except FHA.
Regarding the mortgage rates the Fed has been planning on stopping to secure the mortgage backed securities as of April which may cause a rise in rates. The FHA's announcememnt also caused a bit of a rise as of last week.
And finally we all know that the deadline for the first time homebuyer tax credit is looming. If you are eligible and are still sitting on the fence now is defnitely the time to act! This is your window of opportunity and I'm sure you don't want to be sitting around in May or June when all of these opportunities are gone saying I wish I had done something.

I really appreciate what our government is doing for the housing economy. There are so many incentives right now to help get people off the fence. We all know about the tax credit and the low mortgage rates, but have you ever heard of HAFA? It's the Home Affordable Forclosure Alternative program which offers more opportunities for families who want to do a short sale but their loan isn't guaranteed by Fannie Mae or Freddie Mac. The way this program affects buyers is that through this program the government is setting guidelines for the mortgage servicers detailing how to get short sale deals moving. I'm sure a lot of you have been going to see some short-sales around the Houston area, because there are so many available. But did you know that it could take up to 6 months to close on a short sale after the bank has received the contract!!! It's ridiculous- they get an offer and then don't know what to do with it so it gets shuffled around for a few months while the bank decides on I don't know what.
I think these new guidelines that HAFA is setting forward are awesome because the banks need to be told what to do sometimes. If it takes an average sale 35-45 days to close I would understand if it took a little longer for a short sale but 6 months? I'm currently waiting around for a month already for Bank of America to make a move on a contract I submitted and my buyers are getting so frustrated and they might back out simply because they just want to buy a house already. So I really appreciate the effort that HAFA is making by giving the banks a set of standardized forms, procedures, and timelines, in order to get them moving in a timely fashion.

From a buyers perspective, whether you bought already in the past few months or are looking to buy in the coming months, there is a lot to be thankful for this year. The housing market is starting to stabilize and homes are affordable and within uyour reach. Mortgage rates are at an all time low, which definitely contributes to a savings in your monthly payments. Plus ther's the first time homebuyer tax credit which is now going to include current homeowners.
If people haven't realized it yet, this is definitely the most opportune time to buy a home. After June 2010, don't expect to have such favorable conditions. Why am I predicting that? Because after the tax credit ends and the country starts to pull out of the recession then the mortgage rates will begin to rise. I really want to emphasize that fact because I don't know if everybody realizes what a good time this is right now. So don't let this opportunity slip away from you!

Did you ever look up a house's description on Har.com and then look at the pictures and think, 'wow, that house looks nothing like what they said' ? When a home is in poor shape the listing agent has to do his best to sell the home so he will make the home sound as good as possible. For instance, the home might be seriously outdated and not very well cared for and they'll write that it's a cute home with great features. Sounds good huh? But in reality it looks horrible!

So make sure you take a good look at the pictures because the description is usually biased. When you see the pictures look closely to see if the home has the features you want because it might save you a trip from seeing a house that you know you won't want.

We all know that when we go to a store and we find an item we like, we look at the price tag and if its out of our range we walk away and try to forget about it. We see the price and know that its not negotiable. Unfortunately some people carry that mentality along with them when they go looking for a home.
The truth is that in the housing market the price is almost never set in stone. All it is a guideline for what they want you to pay. It's up to you to decide whether you feel its worth that price!
Let's say a seller decided to list his house for sale for $1. What would happen is that multiple buyers would come along and offer what they felt was truly the fair market value for the home. The buyer always sets the actual price that the home is worth. Most sellers are obviously too scared to do that but we all see what happens when a discount priced foreclosure comes on the market.
If you feel that you like a particular home and are interested in it, my belief is that it can't hurt to try to bargain with the seller. The worst that could happen is that they'll say no. After all it's called a market for a reason.

I just received a call from somebody interested in buying a foreclosure. They told me they used another agent previously and put in a few offers that all fell through. I asked what happened and they said that they felt like their agent wasn't on their side. I couldn't believe what I was hearing!
Your agent is supposed to be your representative! They should always do whats in your best interest! If you aren't happy then find another agent because you should receive better treatment than that. I would be happy to help my clients in any way possible and would never let a deal slip through for them because of something I had done.

Now that the summer is over, we can all look back and reflect on our electricity bills during the summer of '09. It amazes me how just in my neighborhood I have heard such a variation of prices from my friends. The lowest number I've heard was $100/month for a two bedroom apartment and the highest was $800. I know two families who pay $800/month to cool down their homes during the summer! That number just astounds me- its astronomical! One home has three units to cool down the home, which is a one story with high ceilings and a lot of windows. The other home is a two story around 3000 square feet that has two units and they keep their a/c on all day set at 73 degrees. I'm pretty sure that both these homes have older model units.
I believe that you really don't have to pay so much to cool down your home. When your unit is over 10 years old it generally isn't as efficient as a new model. I know that the cost of a new model can be quite expensive, but if you calculate the savings each month it truly adds up.
I have a listing for lease that was built in 2007 and I'm assuming that the a/c was put in that year when the house was built. The previous tenants worked from home and were home all day and they said that their bills were only in the $200 range each month this past summer. This home actually has a higher square footage than the two other homes that I mentioned above and they were paying a fraction of the price!
So when looking for a new home, whether to own or rent, please take your utility bills into consideration. It truly makes a difference!