Kim Koenig - North Dallas Family Realtor

Celebrating Our Vets by Making Homeownership Easier

2010-05-31T15:02:00.001-05:00

It seems more than appropriate that today - Memorial Day - I remind everyone of one of the best and longest-lasting veteran benefits available to those who have done the highest duty our country can ask of them - to protect us with their lives.

Since 1944 the VA home loan guaranty program has enabled young veterans the ability to buy a home with $0 down. This was originally conceived in recognition that young men and women serving in the military have not had the opportunity to establish a strong line of credit and gainful income while they have been on active duty. By allowing servicemen and women the opportunity to buy a home with low closing costs and no money down, millions of veterans have been able to purchase homes for their families that they otherwise could not.

In a time when we have seen veteran benefits be stripped down rather than strengthened, I am heartened to know that such a tremendous program still exists, and I am proud to say that I not only have family members who have benefited from this program, but I have had the privilege of putting several clients into a home through this program.

Thank you to our troops, and God bless America!

To learn more about the VA program, please visit: http://www.homeloans.va.gov/.

Kim Koenig is a REALTOR® serving the greater North Dallas area.

The Truth About the Shadow Inventory

2010-05-18T17:17:00.001-05:00

If you aren't yet familiar with the term "shadow inventory", try to think of it as 2010's "subprime mortgage". Before 2006/07, the average person probably wasn't too familiar with what a subprime mortgage was, but what started as a whisper about this previously unfamiliar term soon became common vernacular when a surge of foreclosures began to hit the market, and of course the rest is history.

The shadow inventory is an important housing issue which has been whispered about for about a year now, and that whisper is quickly swelling to what soon will be a loud bellow emanating from your television screens, computer monitors, and sooner than later, as commonly tossed around in casual conversation as "subprime mortgage". But what is the shadow inventory?

Interestingly, it began as what many considered a conspiracy theory: Banks were holding onto millions of distressed properties in order to not overwhelm the market, as well as create the appearance that there were not as many foreclosures as there actually were. But what began as only a theory has turned out to be, at least in part, true. While some banks may have been withholding a certain percentage of their inventories, the reality is that everything from court delays to an overwhelming backlog of paperwork caused a massive slowdown in foreclosures hitting the market. Further complicating the issue is that we don't know with any certainty just how many homes are part of the shadow inventory. These foreclosures, or REOs, plus delinquent borrowers may total anywhere from 1.7 million to over 7 million homes. That's quite a wide disparity when you're trying to determine how the inventory may affect the market.

According to the credit rating agency Standard & Poors, which deals in the total value of these properties rather than the individual numbers, believes that total inventory value (at nearly $500B) is the equivalent of a 33-month supply, a conservative estimate by their own account. In other words, we should expect that it will take at least 3 years to burn off the shadow inventory.

Further, another reliable credit ratings agency, Moody's, suggests that the underwhelming performance of the Treasury Department's attempts to incentivize mortgagors to modify troubled loans may push home values down as much as 8% by the end of 2010 because banks have increasingly opted to liquidate loans, rather than modify them.

So what does all of this mean for Dallas sellers? First, you can expect that the strong majority of this shadow inventory will be concentrated in the same troubled states that have already been taking the brunt of the housing collapse (ie, California, Nevada, Florida, etc.). So let's take the worst case scenario and say that there are 7 million homes which have yet to hit the market. During the height of the collapse, the top 5 states held over 50% of all foreclosures in the US, so let's automatically cut that 7 million in half to 3.5 million. Then let's split that among the other 45 states - approximately 78,000 homes. Let's further split that into the four major metropolitan areas of Texas. That knocks it down to just over 19,000 homes over a 3 year period, or at worst, approximately 6,500 additional homes per year in DFW. This represents only a fraction of our overall sold inventory, so in a very practical sense, Dallas sellers should not expect their home values to change significantly based on these numbers.

However, if the effect of this shadow inventory continues to take a toll on housing at a national level, which it most certainly will (though to what degree is as yet unknown), then this may significantly affect mortgage rates and the availability of financing, which most certainly will make a significant difference to those trying to sell.

Bottom line: Take a look around. No matter what's happening in the rest of the country, the best gauge you can use for how well and how quickly your house will sell is by what's happening in your neighborhood right now.

Kim Koenig is a REALTOR® serving the greater North Dallas area.

www.kimkoenig.com
kim@kimkoenig.com
214.415.9221

Good news for ONCOR metered homes

2010-03-17T12:40:00.002-05:00

Oncor, the primary provider of electric meters in DFW, has come under fire recently for their new "smart meters," which thousands of customers have blamed for their huge spikes in electric bills. While Oncor conceded that a small handful of customers experienced spikes in their bills due to human error (meter readers were having trouble reading the new meters), they defended the meters themselves, suggesting that the placement of the new meters is simply bad timing, falling right in line with the record low temperatures we've experienced over the last couple of months.

In an effort to appease its customers, Oncor has been conducting tests to ensure that its meters are running correctly. "So far, we haven't been able to find any meters that are measuring inaccurately," says Oncor spokesman Chris Schein.

While the official results are not due out until tomorrow, the preliminary results suggest that the meters are working correctly, for the most part. Approximately 8% of the meters tested showed a variation of no more than two killowat hours over the course of one week. This variation only affects a bill around $.20, suggesting that Oncor's position is correct. However, state regulators at the Public Utility Commission have stepped in and will be conducting independent tests in response to the public's clear discomfort with the new meters. Chris Schein of Oncor welcomes the study and suggests that there may be a bigger issue at fault, "This is really responding to the feedback that we've gotten so that we can get this confidence and so we can get past the question as to whether or not these are accurate, and we can focus on the real problem of what's causing people's bills to be too high."

So for those with newly metered homes, keep an eye on your bill. If it does seem unusually high and you're convinced that it isn't weather-related, certainly give your provider a call. But otherwise, let's keep an eye out for the state's study. After all, if you don't have the smart meter yet, you will. Oncor intends on replacing all meters by 2012.

http://www.nbcdfw.com/topics/?topic=Oncor+Electric

Kim Koenig is a REALTOR® serving the greater North Dallas area.

www.kimkoenig.com

kim@kimkoenig.com
214.415.9221

New Texas Social Studies Standards May Mean More Involvement for Parents

2010-03-14T12:28:00.001-05:00

http://www.google.com/hostednews/ap/article/ALeqM5gPQ3ktQNqImWyQ23yXKoCFXWrN1QD9EDB7T80

After a particularly controversial fight over what will be the new standard for social studies education in Texas classrooms for the next 10 years, a preliminary curriculum has been passed.

What's particularly alarming is how both politics and religion came to play such a vital role in a fight over history lessons. What is unfortunate is, despite the increasing diversity of our state, that same acknowledgement of diversity will be played down in our children's education.

My parents (both educators) always taught me, and studies have overwhelmingly shown, that the key to ensuring a good education for a child is parental involvement. I encourage all parents to look over these new standards, and if you feel that there are certain aspects of American History which are either being ignored or manipulated, get invovled. Sit down with your kids, as I certainly will, and make sure that they are receiving the well-rounded education that the Texas Board of Education is, it seems, trying to rob our children of.

Dual Agency is a Dupe on Buyers

2010-03-10T23:27:00.001-06:00

Dual agency is the process by which one agent represents both the buyer and the seller in a real estate transaction. This is a practice which is illegal in many states, but is legal here in Texas, so I want to address this practice because I believe that it is a dupe on buyers who believe that their best interests are being represented under the scope of the law. In reality, this is a serious consumer rights issue which has flown under Texas's ethics radar for far too long.

Years before "my time", the standard in real estate representation was that one REALTOR® oversaw the entire transaction, and despite the fact that the REALTOR® handled both sides, they were the seller's agent. Bear in mind that the term "agency", within the scope of a real estate transaction, holds several implications. When I am acting as someone's "agent", I'm not simply representing them. I become bound to a very strict series of guidelines all of which are designed to ensure that I'm protecting the client's best interests. Generally, all real estate licencees are required to act, in a word, ethically. Real estate agent ethics cover such things as reasonable skill and care, dealing honestly and in good faith, disclosing known defects, etc. However, there are additional, more specific requirements for REALTOR®s who are acting as an "agent" for a client. These cover such duties as loyalty, timely disclosure, seeking expert advice, and not to disclose confidential information. It is this final duty - not to disclose confidential information - that I want to focus on in regards to dual agency.

In the early1990s, it became very clear to consumer rights advocacy groups that there was a significant tilt in favor of sellers in real estate transactions. Not only did they not have representation of their own, but the person guiding them through the sale actually represented the seller. Imagine the implications of this. What if you, the buyer, were to share an important detail with the agent which would give the seller leverage in the sale? By the Law of Real Estate Agency, the agent is actually required to share that information with the seller, and what's worse, thanks to the same law, which, among other things, requires confidentiality, the agent could not do the same for you. In other words, not only is the seller's confidentiality protected, but the buyer's confidential information must actually be disclosed to the seller!

In order to remove this unfair balance, The Law of Real Estate Agency was expanded to include rules for Buyer's Agents to encourage buyers to hire their own represenation, and allow buyers' interests to finally be represented in real estate transactions. Yet despite this sweeping change, several states, including Texas, still allow for dual representation in real estate transactions. While they can only do this with written permission from both the buyer and the seller, the reality is that one of two things is going to happen.

1) In a best-case scenario, the agent will appropriately represent both sides. In order to do so, he/she must remain neutral in order to protect the interests of both parties. The agent becomes a mediator rather than a negotiator.

2) In all liklihood a dual agency would occur when a listing agent is approached by an interested buyer. With permission, the agent could then act dually; however, the agent is also human and represented the seller first. While the expectation is that they should act appropriately, their original loyalties lie with the seller. If the balance were to tip within the transaction, the agent is more likely to favor the seller.

In the best-case scenario, no one's interests are being represented. In the likliest scenario, the seller is once again being favored. This is the exact scenario that consumer advocacy groups fought to eliminate nearly 20 years ago, and yet here in Texas, it's a problem that persists. In fact, Texas law indicates that Buyer's Agents represent the seller until 1) a Buyer's Agency contract has been signed, or 2) a Purchase and Sale agreement has been signed. These are outdated practices which put local buyers at risk.

It's worth noting that I do not perform dual agency, and I encourage all buyers to educate themselves on this outdated practice and to avoid it. The purchase of your home is too important to be left to someone who may not have your best interest in mind.

If you're interested in speaking with me about North Dallas real estate, I'm available 7 days a week, 8am-8pm. Please don't hesitate to email me at kim@kimkoenig.com or give me a call at (214) 415-9221.

What Makes a Great Realtor? Part 1 - Knowledge

2010-02-23T12:41:00.004-06:00

I imagine that "tips for finding a great REALTOR®" is a fairly common Google search, but I think that the more pertinent question (and one which is asked significantly less often) is, what is a great REALTOR®?

PART 1 - KNOWLEDGE
There are two aspects to address here. First, you want your REALTOR® to be knowledgeable about real estate. It may seem ridiculous to think that any REALTOR® is not knowledgeable about real estate, but the reality is that real estate is a finely nuanced process which requires a broad breadth of expertise ranging from sales and marketing, to your legal rights and responsibilities. Many REALTOR®s are knowledgable in some of these fields but few are appropriately knowledgeable in all of them, and a singular misstep in any of these areas can mean a loss for you. In addition to asking lots of questions about how the REALTOR® approaches the sales and marketing process, ask them questions about the purchase and sale agreement. Specifically, ask for details on how they use the agreement to give you greater leverage and more protections within the transaction. Answers to these questions should be specific, not general, and should immediately indicate just how much (or how little) the REALTOR® truly understands about the purchase or sale process.

The second aspect to address regarding the REALTOR®'s knowledge is their familiarity with your neighborhood. Chances are they're going to bring you information about recent sales in the neighborhood, but beyond sales, what else do they know? Can they articulate the specifics of what makes your neighborhood unique? Do they know what the common upgrades are within the neighborhood that seem to be appealing to recent buyers? A very common misconception is that a REALTOR® must have previously worked in a specific neighborhood in order to sell effectively there. The reality is that while it's unnecessary to have previously sold a home in your neighborhood, details about that neighborhood are pertinent knowledge. A REALTOR® should be able to demonstrate their knowledge about your neighborhood, and this knowledge should go beyond recent sales information.

If you're interested in speaking with me about North Dallas real estate, I'm available 7 days a week, 8am-8pm. Please don't hesitate to email me at kim@kimkoenig.com or give me a call at (214) 415-9221.

If you're moving here from out-of-state, temper your expectations...

2010-02-14T22:36:00.010-06:00

Although I have spent the majority of my life living in North Texas, I spent the last several years living in Seattle. When I moved back to Texas in November 2008, I realized very quickly that - at least in terms of real estate - I was still in a "Seattle State of Mind". Much like most of the larger markets in the U.S. (the last couple of years strongly excepted), Seattle generally enjoys a steady and healthy rise in real estate values year to year. But of course as I became reacclimated to Dallas life, I remembered that it's not quite the same for us here.

However, the other day I got to talking with the mother of one of my daughter's classmates, who as it turns out, had recently moved here from California, and it occured to me that she probably had no idea what to expect if she were to buy here. As both a real estate expert and one well-versed in local trends going back nearly 30 years, my expectations as to the very slow rise in Dallas home values have been essentially second nature to me. But if you did not grow up in this environment, and especially if you're coming from a market in which a teeny tiny townhouse is a great deal at $600K, then let me be the first to tell you - temper your expectations.

Through the years - and most especially during the boom years of the mid-2000s - out-of-state investors flocked to Dallas, drawn by our low home prices and great economy. However, most discovered the painful truth - this isn't the market to flip. We don't take $100K dumps and turn them into $500K windfalls by installing hardwoods and granite. Sure, there are some definite exceptions. The "M" Streets neighborhood in the shadow of Downtown Dallas is proof of this. But that area is an extremely rare exception.

Conventional wisdom has always told us that in order to sell without the risk of a loss, you must remain in your home for a minimum of 5 to 7 years, and that timing would generally yield a break-even sale. However, in high-dollar, high-turnover markets, one could realistically expect to be able to make money on a home purchase after owning for just 2-3 years. And it's these buyers which are overwhelmingly starting to flood our own market. For sellers, of course, this is great news. As job and housing markets falter in other cities, the job and housing markets here continue to grow, and that means a larger buyer pool, and higher real estate prices, right?

Not necesserily.

The two reasons why Dallas real estate prices stay painfully steady are 1) property taxes, and 2) sprawl. What many Texans may not realize is that we have the unique distinction of having the highest property taxes in the U.S., on average around 2.5%. A secondary issue to taxes is insurance, which is also extraordinarily high here. For example, our property taxes are 2X higher than those in my former market, Seattle, and insurance is a whopping 5x higher. Since most of us buy based on what we can afford monthly, this means that I could afford approximately $100K more in Seattle than I could in Dallas. And while I might be buying a larger mortgage, the rate of return on my investment there is going to yield me more in return.

Then of course there's the issue of sprawl. As we all know, everything's bigger in Texas, and that includes space. We have seemingly endless land to build on, and that isn't going anywhere anytime soon. Most major cities do not have the excess of land that Dallas has to offer; in fact, it's worth noting that our highest valued cities, places like New York, San Francisco, and Boston, are rarely dealing in new construction. Rather, they're recycling homes and condos which are decades old, but space is a commodity, and therefore, that commodity keeps rising. Here in Dallas, however, when the population rises, we simply spread out further. There is no incentive - from a market perspective - to raise home prices significantly. The market simply would not tolerate it.

This is not to say that buying in Dallas is not advisable. This could not be further from the truth. Buying in this market is not only significantly less expensive than renting, but it acts as a healthy hedge against inflation, which is about the amount of increase you should expect to see in your value from year to year.

Further, there are some significant benefits for those who choose to establish roots and buy in this area. Square footage is one of those tradeoffs. Because of both space and age issues, higher dollar markets tend to offer smaller homes, whereas in Dallas it is possible to find a nicely appointed 3,000 SF home in a brand new community for under $300K. The under $200K market is our largest here, and for that price you can get anything from a condo near Downtown to a 4-bedroom home just 30 minutes outside of the city. There's also the schools - our public schools are some of the best in the country. Dallas also offers strong job growth, a solid infrastructure, a diverse population, and a world-class arts scene.

So for those unfamiliar with our local market, while you should certainly temper your expectations about your home's value growth potential, expect to also be surprised by how different Dallas is from the stereotype - this is a vibrant city with lots to offer. There's a reason why the Dallas real estate market is one of the strongest in the country, and why here real estate is still a safe way to invest for the long-term.

If you're interested in speaking with me about North Dallas real estate, I'm available 7 days a week, 8am-8pm. Please don't hesitate to email me at kim@kimkoenig.com or give me a call at (214) 415-9221.