By M.P. MCQUEEN

As buyers ease back into the battered real-estate market, they’re often hitting a stumbling block: fibbing by home sellers.

Eager to unload their abodes, some sellers exaggerate the size of their lots or their houses. Others minimize their property-tax or utility bills, conveniently forget about pests, or downplay flooding problems or noise.

Real-estate experts say that while such misrepresentations aren’t new, the tough market of the past few years has made buyers more wary, partly because they can’t expect rising home prices to bail them out of costly mistakes. As a result, deals are taking longer, and more of them are falling apart as buyers find properties sometimes aren’t all they’re supposed to be.

More than 30 states have disclosure laws requiring sellers to tell prospective buyers and agents about leaky roofs and other problems, according to the National Association of Realtors. But there’s often a gray area involving the disclosure of problems the seller may not know about, such as a long-ago flood or hidden mold.

States are also increasingly passing laws requiring homeowners to disclose environmental issues, such as the presence of radon gas, a contaminant linked to lung cancer, and underground fuel tanks. In California, the checklist of required disclosures is so long that a cottage industry has sprung up of firms that help sellers prepare the forms.

Given the complexity of disclosure laws, it’s not surprising that potential buyers don’t hear about every problem in a house. Besides the issue of fibbing, sellers may genuinely not know about problems. And even if they do, the laws generally don’t apply to bank-owned homes transferred in foreclosures, which now constitute a larger share of sales.

Buyers need to do their own due diligence and not rely exclusively on what sellers and agents say. They should hire an independent home inspector or home-inspection engineer, one not referred by the seller—and be aware that real-estate agents typically represent the seller.

Here are some of the common misrepresentations and white lies that buyers may hear as they shop for a house, according to real-estate experts and state regulators:

• “This house is on two acres.” Disputes about property dimensions—how many square feet in a house or condo, or its exact boundaries—are common. Sometimes buyers don’t learn the exact dimensions until the lender’s appraisal. 

Listing agents usually accept a seller’s word on property dimensions, says Diane Saatchi, a senior vice president at Saunders & Associates, a real-estate firm in Bridgehampton, N.Y. “We tell everyone to verify,” she says. Smaller dimensions also can cause an appraisal to come in lower than the agreed-upon purchase price. Low appraisals are a leading cause of ruined deals in today’s market. A properly worded appraisal contingency in the purchase contract would allow you to scuttle the deal or find other financing if the appraisal comes in low, says New York real-estate attorney Michael Xylas.

• “We don’t have pests.” A basic home inspection generally doesn’t include a peek inside walls or underground for termites and mold, which are among the top complaints. Inspections for mold and radon gas also generally aren’t included; usually buyers must order these inspections separately. Other inside-the-wall problems include faulty wiring and old plumbing, which also may require specialists.

James Holtzman, a financial adviser at Legend Financial Advisors Inc. in Pittsburgh, says sellers of the 1901 house he bought in August 2006 said its electrical wiring was completely upgraded, yet an electrical inspection revealed only one of three floors had been totally upgraded. The seller then knocked $6,000 off the sales price before they went to contract so Mr. Holtzman, 35 years old, could pay for the necessary work.

• “This place never floods.” Even arid states such as Arizona and New Mexico have occasional flash floods, and water and drainage problems aren’t always obvious. June Walbert, 52, a certified financial planner at USAA, a financial-services company, says her San Antonio house received a clean bill of health from a home inspector before she bought it six years ago. But 10 days after she moved in, the sewer backed up, flooding the house, and she had to fork over $2,800 for repairs. “It was a rude surprise,” says Ms. Walbert, who adds she asked her home inspector and the seller for compensation, but didn’t get it.

Bill Richardson, outgoing president of the American Society of Home Inspectors, says a general home inspection wouldn’t catch that unless the sewer line was visible from the basement or water backed up into sinks and tubs or toilets.

• “Taxes and maintenance costs are low.” Home buyers often gripe about tax and utilities bills that are higher than sellers said they were. Homeowner association and condo dues and assessments are also common complaints. Sometimes sellers simply underestimate the bills, or forget to include recent or expected increases, agents and brokers say. Taxes can also be deceptively low because of unrecorded improvements like decks and finished basements. Ask to see recent bills, and check with the tax assessor’s office for up-to-date information.

• “This is a quiet neighborhood.” Sellers may play down distractions that could drive you crazy, such as barking dogs or idling buses. A charming park by day could be a teen hangout at night. Your best bet is to view a property at different times of the day. “I can’t tell you how many times in my career buyers didn’t go there in the night time, even though I told them to. You spend more time in the house at night than during the day,” says Ms. Saatchi, the New York real-estate agent. Talk to neighbors and peruse the local newspapers and blogs to get a feel for a place, and check with police for crime.

• “There’s going to be a golf course, a pool and a party room.” Builders of many developments that broke ground during the housing boom ran out of money before the project was completed. Many homeowner and condo associations also are strapped because of delinquencies and defaults. Some states require upfront disclosures about this, but you should also ask neighbors, not just sellers, about any promised facilities. Also, check titles to be sure that specific parking spaces, storage units or other facilities are included in a property sale

Austin and San Antonio will be the first two U.S. cities to recover from the recession, according to a new national forecast from IHS Global Insight. The forecast from the Lexington, Mass. economic research firm suggests the two Texas cities will bounce back to their pre-recession job levels sometime next year.

Austin was also named one of the 20 best performing metropolitan areas in the second quarter of 2009, according to a study by the Brookings Institution. (Austin Business Journal).

No cities have totally avoided the foreclosure crisis, but some were able to sidestep the worst of it. These markets are now recovering quickly. The recovery is swiftest in those areas that didn’t have as much of a housing price run up to begin with, either because the economy in those areas has stayed healthy or the economy has been limited for decades and residents have adapted or left. Austin is ranked #2 as the city that fared best and is recovering the most quickly:

Stats from November in Austin, TX:
1. Number of Sales in the area for November 2009 are up 52% on a yearly basis.
2. Sales Volume is up 47%
3. The Average was up 4% from November 2008 to November 2009.

Respectfully,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application

Happy Hump Day!

Winter is finally here and, oh, how I love cold weather! I strolled through my neighborhood last night getting ideas for Christmas lights and picturing how big a tree I can fit in my living room. May have to move the couch but who cares about that when you’re going for a record!

With winter here many of you may be toying with the idea of a remodeling project in the spring. Maybe updating your kitchen or master bath? If that is on your agenda, you need to start lining up your financing now to get the cash out of your home you’ll need for the project. Just fyi, I’ve learned from personal experience … whatever the contractor bids you, add 20% or more to the price and the timeline. Sad, but true.

Also, keep in mind that we service not only Austin and its surrounding areas (Cedar Park, Leander, Round Rock, Buda, etc.) but all Texas metro areas, including Dallas, Houston, Fort Worth, San Antonio, El Paso and more.

Today’s Rates:
30yr fixed- 4.625% 0+1
15yr fixed- 4.125% 0+1
FHA/VA 4.875% 0+0
USDA 100% financing 4.875%

Have a great day and I look forward to receiving your loan application!

Cheers,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application

Friends,

Our mortgage market is doing us favor today and staying cool and composed even thought the stock market is up 120pts which would typically push our rates fractionally higher. Today, investors seem to be looking toward the future and possibly seeing the stock market take a dip later in the month which is why the bond market is holding steady.

My thoughts are that the DOW most likely should NOT have gained as much steam as it has the past 5 months. One of the ways this can happen is with hedge fund managers forcing the market higher so that they can post big year end earnings and a hefty bonus.(100% fact) My predictions are that we will see the DOW take a dive in January but for now, lets ride this wave!!!!

Now for the important stuff:)
Today’s Rates:
30yr fixed- 4.5% 0+1
15yr fixed- 4.00% 0+1
FHA/VA 4.75% 0+0
USDA 100% financing 4.75%

Have a great day and let me know when to expect your loan application:) Keep in mind we service all metro areas in Texas: Austin, Dallas, Houston, Fort Worth, San Antonio, El Paso, Cedar Park, Round Rock, Buda and much more.

Cheers,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application