Aaron Layman's Katy Texas Real Estate Forum

1031 Tax-Deferred Exchanges in Katy, Houston Texas Real Estate

1031 exchange guidelines require timely, professional execution of real estate transactions.  The penalties for not meeting the requirements can have disastrous financial consequences.  Section 1031 of the tax code allows you to avoid paying taxes on the gain of property held for productive use in a trade or business or for investment purposes.

Strict guidelines must be met to take advantage of the tax deferment.  Replacement property must be identified within 45 days of closing of any relinquished property.  The exchanger must also close the purchase of replacement property within 180 days.  A qualified intermediary must also be selected to keep the funds in escrow until the replacement property is purchased.  Any failure to meet the fore-mentioned restrictions will result in full tax liability for any realized gains.

For more information about 1031 real estate transactions you can visit www.ipx1031.com.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Newmark Homes Parent (Tousa) Files For Chapter 11 Bankruptcy Protection

Newmark Homes parent Tousa filed for bankruptcy protection Tuesday.   The nationwide housing downturn has caused Tousa to shed more than two thirds of its employees as sales fell roughly 50 percent last year.  Ironically Newmark has been a bright spot for Tousa.  Newmark Homes and Trophy Homes closed 1434 homes in the Houston area in 2007 according to Houston Chronicle's Nancy Sarnoff.

The recent fall in sales in the lower end of the market has affected Trophy's sales, but Tousa's primary problem stems from their over-weighted position in Florida which has been one of the nation's worst performing markets.  Newmark home buyers should not be affected in the short term as Tousa plans to continue building homes and maintain warranty programs.  You can view the the video press release by Houston division president Mike Moody at www.newmarkhomes.com

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Economic Stimulus Plan Contains Increase In Conforming Loan Limit

Part of the economic stimulus plan proposed by Congress and the Bush administration yesterday provides an increase in the conforming loan limit from the current $417,000 to a new higher limit of $730,000.  Fannie Mae and Freddie Mac would be able to purchase and guarantee the larger "Jumbo" loans up to the new amount.  The new cap would be for twelve months, but it will be interesting to see if there is pressure to make it permanent.

The higher loan limit would have an immediate positive impact in the real estate market, making it easier and cheaper to get loans for more expensive properties.  The new loan limit could help move inventory in stagnant markets and even provide a boost here locally for what is already a healthy market.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Home Sales in Enclave at Green Trails in Katy Texas Scheduled to Start February 2nd

The Enclave at Green Trails will be taking appointments beginning February 2nd, 2008.  Appointments will be held at the Grand Lakes sales office.  Buyers are encouraged to select two preferred lot choices along with a desired floor plan.  Buyers will also be encouraged to utilize Trendmaker's Smart Close program with any applicable purchase.  Smart Close will provide the Buyer with a 2% contribution for price reduction or closing costs as well as a tax deduction for any taxes and interest paid by Trendmaker during the construction process up to 6 months.

The tax rate for the Enclave for Green Trails should mirror that of Green Trails (Approximately 2.6% per $100 valuation).  The HOA fee for the community is expected to be $1700 per year.

The Enclave at Green trails is a small, gated Trendmaker community located near Kingsland and Baker Rd.  The neighborhood will feature only 23 home sites with a typical lot size of 80' by 130'.  Prices start in the $500s.  The Enclave at Green Trails will feature a low tax rate, easy access to I-10 and attractive Trendmaker plans featuring 3-car garages.  The Enclave is also located in the acclaimed Katy Independent School District.

For community information click on the attachment.  Download Enclave-at-Green-Trails-Inf.jpg

For information about Smart Cloose click on the link below:

http://www.trendmakerhomes.com/enclave-green-trails/smart-close.html

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Builder Kickbacks & Closing Cost Scams in Katy Texas Real Estate

The relationship between Realtors and builders is mutually beneficial to both parties.  Builders want to get homes sold, and Realtors want to get paid.  Realtors serve as a valuable tool to help move inventory and most builders recognize the importance of Realtors in their marketing efforts.  In an effort to increase business, the relationship sometimes gets tainted.  From a consumer standpoint, this is a major concern because the Realtor or builder may not be providing full disclosure about how the Realtor is being compensated.  That translates into a conflict of interest that can hurt the home buyer later on.

Some top-producing brokers have established relationships with builders to bolster sales numbers and help builders sell more homes.  The sales pitch usually goes something like this:  My company will list (sell) your home for free, and in return we will pay your closing costs on your new home.   This sounds great at first glance, but a closer look reveals that the numbers are often not in the customer's favor. 

The home seller and/or buyer would be wise to ask for written documentation as to where the money for the closing costs is actually coming from.   The funds for closing costs are likely being paid by the new home builder in the form of an inflated purchase price.  If you think the Realtor is paying your closing costs out of his/her typical commission compensation, think again!  There is likely a hefty BTSA (Bonus to Selling Agent) being offered to the Realtor as part of the transaction.  If the consumer/home buyer does not understand the relationship of the incentive being offered and it's effect on the sales price, it can have negative consequences later on when the homeowner tries to sell.

A great example of how this shell game is detrimental to the consumer is buying an automobile.  Most experts will tell you that you should approach a new car purchase as separate, independent transactions.  Negotiate the sales price or trade-in value of your old car.  Then secure the best financing for your new car purchase.  Finally, negotiate a fair price for the new car of your choice.  The same rules should apply to buying a new home.

I always encourage home buyers to look at the comparable sales in the area when buying a new home.  Resale data will provide a legitimate estimate of a home's value.  A good Realtor will do his/her best to negotiate the best price possible, within those comparable sales figures.  If the client also has a home to sell, a reputable Realtor will not try to confuse the homeowner with a bogus incentive, but rather, offer an appropriate discount on the listing fee for the dual transaction.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Avalon At Seven Meadows Homeowners Meeting Scheduled For February 27th, 2008

The annual homeowners meeting for residents of Avalon at Seven Meadows is scheduled for February 27th, 2008.  The meeting will be held at Beckendorff Junior High at 6:00 PM.  Increased HOA dues and a current deficit budget will be likely items of discussion.  While much progress has been made, there is still plenty of work to be done with the current budget expenses.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  He is also an Avalon resident.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Overlapping Appraisal Districts End In Katy, Texas

If you are a resident of Cinco Ranch, Seven Meadows or Grand Lakes, you will be happy to know that the overlapping appraisals with Fort Bend County and Waller County will no longer exist.  Recent property tax and school finance legislation has put an end to the dual appraisal notices and confusing reporting requirements.

For 2008 if you live in Fort Bend County you should only receive an appraisal notice from Fort Bend County.  Likewise for Waller County.  The new rules will make your record keeping a little easier.  That's good news for Katy area homeowners!

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Home Repair Rip-Offs In Katy, Houston Texas

As a real estate practitioner I sometimes see inaccurate inspection reports and conflicts of interest that arise among service contractors.  In an effort to cover their liability inspectors sometimes sabotage deals by misleading buyers or providing vague, yet alarming information in a report.  Likewise, some service contractors will recommend work that is not even necessary if it means more business.

As an example I had a case where the inspector apparently suggested a complete roof replacement to the buyer, claiming that the roof was near the end of its useful life.  A closer inspection by a reputable roofing contractor revealed that the roof was actually less than 10 years old and simply needed a minor repair and cleaning.  The cost differential in this case was about $7,000.   The unnamed inspector in this case also apparently told the buyer that the siding on the home might be composite siding (Masonite or Omniwood) which was part of a class-action lawsuit.  No composite siding existed in this case since the siding was actually real wood.  The cost differential was approximately $15,000!  Needless to say, the homeowner was relieved to have a second opinion clarifying the issues.

Contractors sometime have a conflict of interest when it comes to doing both inspections and the actual repair work.  It's no surprise that some termite inspectors often find some evidence of termites to justify an expensive treatment.  The treatment recommended might even call for drilling holes in the patio, slab, or driveway when the soil around the home can be easily reached without such drastic measures.   Visit www.domyownpestcontrol.com or www.doityourselftermitecontrol.com for basic, affordable pest control options.

Another huge rip-off that affected some Houston area residents is the mold scare.  Tropical Storm Allison and the more recent Katrina and Rita incidents have some contractors trying to convince unwitting homeowners that expensive testing and mold remediation are necessary to eliminate the toxic disaster in their homes.  The realities of mold are far less serious.  Healthy people usually have nothing to fear, and the CDC doesn't even recommend testing mold.  Most mold issues can be cured with a little common sense.  If you find mold in your home there is probably a leak somewhere.  Stop the leak and you stop the mold.  Mold can be cleaned with a simple solution of bleach and water.

I always encourage buyers to perform a thorough inspection when buying a home.  On the same note, I encourage sellers to look at any repair requests with a certain level of scrutiny.  I want my clients to have the opportunity to make decisions based on factual information, not scare tactics.  In most cases a little research and some common sense will make everyone happy.

For more information about home repair rip-offs read this Reader's Digest article titled "5 Biggest Home Repair Rip-Offs".

http://www.rd.com/content/5-biggest-home-repair-rip-offs/4/

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Buying Foreclosures (Foreclosed Homes) In Katy Texas

If you are looking for foreclosures in Katy, Texas head north. (As in north of I-10)  A closer look at the foreclosure picture in Katy reveals a dramatic difference in market conditions north of I-10 compared to South Katy.  The number of foreclosure by zip code and their corresponding percentage of active listings is as follows:

77449 - 138 Foreclosures - 14.9% of Active Listings

77084 - 53 Foreclosures - 9.9% of Active Listings

77493 - 13 Foreclosures - 9.4% of Active Listings

77450 - 20 Foreclosures - 6.0% of Active Listings

77494 - 12 Foreclosures - 2.6% of Active Listings

Zip code 77449 stands out as a foreclosure mecca.  A plentiful supply of newer starter homes, coupled with relatively high tax rates has resulted in a huge problem area home owners.   Builders went overboard in this area with too much affordable product, and many inexperienced first-time buyers did not realize the full carrying costs associated with home ownership.

On the opposite end of the spectrum, zip code 77494 has seen relatively few foreclosures.  Homes in this area are significantly more expensive and the people buying them have likely had previous experience as home owners, thus the lower foreclosure rates.

The good news for Katy area residents is that prices are holding up quite well even for these foreclosed homes.  Bargain prices are hard to find because of strong demand for available inventory.  A healthy supply/demand relationship means the Katy, Texas real estate market should be able to absorb the foreclosures in the system.

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.

Builders & Developers Organize PAC To Influence City Hall in Houston Texas

Houstonians For Responsible Growth is concerned with the changing regulatory climate at Houston's City Hall, and the group of builders and developers is willing to spend hundreds of thousands of dollars, maybe millions, in local or state campaigns to get what they want.  As Rick Casey pointed out in his Houston Chronicle column, this is good news because it means that the developers now have to deal with a system containing some checks and balances.

The group, backed by former mayor Bob Lanier, is concerned with a number of proposed ordinances that would alter Houston's historically hands-off approach to zoning.  The PAC is fighting the changing attitudes of more educated inner-loop residents.  This new generation of residents is younger and more sophisticated than the previous generation that was leaving the inner city.  These people want nice homes and nice views in a sensible urban environment.  They don't appreciate it when a developer erects a 23-story apartment tower like the one proposed at 1717 Bissonnet at Ashby.

As an active real estate broker I can appreciate the concerns of the builders and developers, but I can't ignore the progress that Mayor White has been able to achieve in helping to revitalize the City of Houston and bring about positive change for citizens and business alike.  I applaud the citizens of Houston who are willing to organize and stand up for what they feel is right.  Houston needs a sensible, forward-thinking plan for development and growth.  I think Mayor White is making great strides toward that goal.

When the money starts flowing into the campaign coffers, don't be fooled by the warm and fuzzy tag line "Houstonians For Responsible Growth".  Take minute to look beyond the name and see what corporate influences are behind this supposedly responsible growth.

To see Rick Casey's article visit www.chron.com

For more information about real estate and mortgage issues in Katy or West Houston contact Aaron Layman.  He is a licensed real estate broker and mortgage broker.  You can contact him directly at 281-994-5190.  You can also visit him on the web at www.AaronLayman.com.