Denton County Magazine • May June 23 • HOME HELLOS & GOODBYES

U ntil a few months ago, limited inventory and low interest rates had housing prices in North Texas rising at a breakneck pace. Fortunately, the market has regained some of its equilibrium, making a move more feasible for folks who were hesitant to relocate.

Even so, buying or selling a home can be confusing, if not downright nerve-wracking. Here are a few tips to minimize stress and make the process easier from start to finish.

• Shop for a pro. Too many people make the mistake of signing with the first real estate agent they meet, said Chrissy Mallouf, an award-winning Realtor who has lived in the Denton area for more than 30 years. Sellers need someone creative who knows how to market, because homes aren’t moving as fast, while buyers want an agent willing to fight their battles, she said.

Mallouf recommends asking friends for referrals, reading Google reviews and interviewing at least three professionals before making a choice. She also cautions against using sites like Zillow and Redfin, noting “Realtors pay thousands of dollars to be listed as the top agent.”

• Plan ahead. Sellers should start prepping at least a month before listing their home, and buyers should plan even further out, Mallouf said. She conducts a strategy session with all her clients and puts together a schedule to help them meet their goals with less pressure. Timing is everything, especially when coordinating the purchase or sale of a home around the school calendar or a change in employment.

• Mind the details. If you’re putting your house on the market, you want it to look immaculate. Sellers should declutter as many spaces as possible and have the bare minimum on flat surfaces. Stashing items in a closet for the short-term may be inconvenient but will make the space more inviting. Mallouf also recommends cleaning air filters, touching up chipped paint and removing cobwebs off the front door, since small details can make a house look unkempt. “First impressions really matter,” she said.

If sellers can afford it, they should consider simple updates to kitchens and bathrooms, like a new backsplash or countertops, Mallouf said. “Turnkey homes always sell faster than ones that need improvement,” and you can list the home for more, she said. Buyers, on the other hand, should look for things that need to be fixed or updated. Stained carpet, damaged floors and dingy walls can be used as leverage to negotiate a lower price.

• Have realistic expectations. Overall, anyone buying or selling a house needs to be patient and remain optimistic. “Reality TV makes everything seem so simple,” Mallouf said. But even in the best market conditions, hiccups are part of the process. Planning a move is less stressful when you acknowledge from the start it may take several weeks for a house to sell or your offer to buy may not be accepted.

“I tell my clients, there’s always a speedbump,” she said. “We just have to get through it.”

When the purchase price is secured and the contract is signed, homebuyers then turn their attention to setting up a mortgage and financing their investment. While this process is at times rife with frustration or peppered with misinformation, it doesn’t always have to be that way. With a little research and some honest insight into personal finances, buyers can successfully navigate mortgage financing and come out with minimal headaches.

The first step is being aware of one’s own means. “I may be able to qualify a client for a higher mortgage payment than they would feel comfortable paying since they may have expenses that we don’t consider for mortgage-qualifying purposes,” such as utility bills, groceries and automobile insurance, said Kim O’Rourke, president and chief loan officer at Denton’s Cultivate Home Mortgage. “Because of this, clients should know their own budget. Then, I consider their monthly payment budget along with their available funds for their downpayment and closing costs to determine their target purchase price and mortgage amount.”

Being within budget is one area that demands attention, but homebuyers can encounter trouble in other ways when negotiating a mortgage. O’Rourke points specifically to clients’ tendency to simply look for the lowest interest rate. Often, these rates come with higher closing costs that will end up costing more than having a higher rate.

Furthermore, O’Rourke has noticed that some clients rush to open new lines of credit prior to closing. This can lower one’s credit score and increase debt-to-income ratio, both of which should be avoided during the closing process.

Clients also tend to fret while evaluating the length of their mortgages. Determining what life will look like decades into the future can be a troubling proposition. To combat this anxiety, O’Rourke again stresses the need to practice financial realism and accountability.

“It’s important to be aware of your plans with the home, like how long you plan on living there, whether you have any large expenses coming up in the next few years, or if you’re planning on making any major changes to your income in the future,” O’Rourke said. “It might be advisable to have a shorter term or pay off your mortgage quickly if you are expecting to retire in a few years and you want lower monthly expenses during retirement.”

Clients also should consider the community they are investing in. Is it a place where they can see themselves putting down roots?

Also, dealing with a local mortgage professional is better than working with someone who doesn’t work or live in the area. Many people tour homes and make offers on evenings and weekends, and a nearby mortgage broker is easier to reach outside of regular business hours.

“Mortgage brokers also make shopping for a mortgage easy,” O’Rourke said. “Since we work with many lenders, we can shop the rates and programs of many lenders all with one application and credit pull.”

As with any type of investing, mortgage options are available for those who are conservative with their money and for those who are comfortable with more financial risk and reward. O’Rourke explained the difference between the two most common choices.

“A fixed-rate mortgage has a principal and interest payment that never changes throughout the entire term of their mortgage,” she said. “A lot of customers appreciate not having any surprises with their mortgage payment going up.”

Adjustable-rate mortgages, also known as ARMs, have interest rates that can adjust at certain periods. This means your monthly principal and interest payment may change.

An adjustable-rate mortgage might be a good fit for a client if the ARM rate is lower than the market rate for a fixed mortgage and they are comfortable with the risk of the adjustments, O’Rourke said. Many ARMs these days have initial fixed-rate periods, even up to 10 years. As an example, if a client is planning to buy a home, but know they will be relocating in less than five years, an ARM with a five-year initial fixed-rate period and an initial rate of 5% would be a better option than a 30-year fixed-rate mortgage with a rate of 6%.

The downside of an ARM is that the rate and monthly payment can increase, which is a risk. “Clients should always know what the interest rate adjustment caps are, and what their maximum monthly mortgage payment could be,” O’Rourke said.

Here are ways to find out how much a home is really worth, whether buying or selling.

If you’re thinking of selling your home, or you’re in the market for a new one, you’ll likely find a lot of conflicting advice out there. From poring over the latest paint-color trends to figuring out whether that she-shed is worth the investment, the buying and selling process can be daunting. That’s why Denton Realtor Marla Carrico suggests sticking to the basics.

Fresh paint, updated fixtures and good flooring always are a good bet for sellers and attractive to buyers, but other extras like pools and outdoor kitchens can sometimes be a gamble.

“They can add value to a buyer that values that amenity but for somebody that may not prefer it, then it doesn’t help,” Carrico said.

Maintenance costs for investments such as pools are important considerations, and out-of-style or undermaintained extras can mean more expenditures for buyers.

Whether a home is in line with others in the neighborhood is also an important consideration in terms of price, Carrico said. A home is a significant investment, and improvements far beyond those common to other homes in your neighborhood might not be worth as much as you think.

“If every house around you is a two-bedroom, onebath, and you put on a second story and you’re putting in things like a pool and an outdoor kitchen, at that point, you’d have to really consider if that location is the best place to invest that money,” Carrico said.

Comp prices, which show homes with similar values to yours (or to the one you’re considering purchasing), can be a good starting place when thinking about price. Realtor.com tends to be more accurate than other listing sites, Carrico said, but a real estate agent will have access to more nuanced information.

Most agents will caution against selling to an investor, since you’ll get a fraction of what you could on the open market. But if you’re facing foreclosure or your home needs significant repairs that you don’t have the time or money to fix before selling, they can be a good option.

Above all, consult your real estate agent if you’re not sure an improvement -- or a home, if you’re in the market -- is worth the price tag.