Category: Renters

Short Term Rental Scams

When people hear Airbnb, HomeAway or VRBO, they think vacation. These services connect homeowners who want to rent out a room or their entire house or apartment with travelers who want an alternative to hotel chains.

These short term rentals are used for many other reasons. They are temporary homes between selling and buying a home. They are temporary homes for business trips. They are used as temporary housing for college students.

These types of rentals can also be found on Craig’s list, facebook market page, other social media, etc.

In the last few years there has been a rise in cases of fraud.

Let review some of the most common scams:

  • Fake Rental – One scheme known as take the money and run occurs when a fraudster creates a fake vacation rental listing or website to get money from unaware victims. The pictures are usually stollen from other sites and the property they are advertising doesn’t usually exist. The fraudster will typically ask you to pay the first and last day or sometimes the stay in full. Once they receive the funds they tend to disappear. Usually the victim will not find out they were scammed until they show up at the property (or lack of property).
  • Bait and switch – Another scam is the bait and switch. In this scam, the fraudster shows unavailable properties to lure the would-be renter to a less-desirable property. This is sometimes done in a sneaky way. You may not even know you’ve been scammed.
    • Imagine that the short-term rental owner calls you the day of check-in. You are informed that the previous guest had flushed something down the toilet, which had left the unit flooded with water. He offers you another unit in the mean time and they will let you know when the flooded unit is available (which is probably never). This other unit is usually not the same quality.
  • Price jacking – You get to the property and it’s the property you expected but you are asked to pay more at the last minute. They may push you to pay by turning on the home’s WIFI, turn off the lights, etc.

In 2019, the median loss of victims who reported rental scams to Scam Tracker was $996. The Apartment List survey found that the median loss was $400, but one in three victims lost more than $1,000.

  • Let’s share the winnings: This is typically a scam targeting the short term rental owner. They will ask the owner to charge a certain amount for a room they never plan on using. In exchange they want the owner to give them 1/2 of the amount charged. If you receive a check that’s for more than the specified amount, return it. Do not deposit it. 
  • Cancelled Booking – The victim will receive an email stating that the home or home is not longer available due to renovations or repairs. You are informed that you will get a refund (which never happens).
  • No showings but give me more info – If you ask to see the property and they either tell you no or they book a tour but end up canceling. At times they will ask you to fill out an application with tons of personal info before they allow you to see the property. They might asked to run a credit check before they show you the property—they might say the property is so popular that they are only entertaining serious inquiries or a similar excuse. Red Flag.
  • Home for Rent – Longer term rentals also experience fraud. Fraudsters will use homes that are currently up for sale (and vacant) and they will list them for rent; normally using the same pictures. Sometimes they even gain access to the home and have copies of the keys. They will collect the security deposit and 1st rent, have them sign a lease, and give the victims the keys. It all looks legit until someone shows up to tour the home and realized that there is someone already living in it!
  • Rent-to-Own – I know this is appealing to some renters but the fact is that there is a lot of fraud in this area. This can be legally done by signing a rental agreement with an option to purchase.
Sample Fraud Communication
  • You owe me money! – On occasions the fraudster (property owner) will contact you after the fact and request that you pay a certain amount for repairs. Take photos and video of a property when they arrive and when they leave.
  • Room for Rent/fraudster tenant – There are fraudsters that are renting rooms in vacant homes or homes that they might have rented legitimately but have stop making payments on their rent. Normally they will try to rent every room in the home within a short period by offering an amazing rate. They will take a deposit and the month’s rent in advance. Shortly after they disappear.
  • No Credit Check – If someone is willing to rent you a home or a room for a period of time, wouldn’t they be concerned about your credit or criminal history? Red flag.
  • You can pay the rest later – If the property owner tells you that you can pay a portion of your security deposit now and the rest later, be careful. This is a way to establish trust and they may only be seeking to steal the first part of the payment.

How can you protect yourself?

  • Reverse image search – If you search the images and you find that they are stock pictures or they belong to another listing, this should be a BIG red flag.
  • Contact number – Search for the property owner’s telephone number. If it turns out to be a google number, this might be an issue. Not to say that all google numbers belong to fraudsters but I’d be on high alert.
  • Map the address – Map the address and make sure there is a property located at that address. Does the home match those in the picture?
  • Read reviews – A lot of times just reading the reviews will cause red flags. Do the good reviews sound strange? Do they use the same wording you found in the ad?
  • Cancellation Alerts – Are there multiple cancellation alerts on a property? Red Flag.
  • Price too good to be true? – It probably is. Red Flag. A guest offering to pay extra for a week because they love your place? Scam! A single traveler renting your five-bedroom house for themselves? Scam! Trust your instinct.
  • Payments – Is the host asking you to take their business off the official site? Red flag. All communications and payments should be handled through the site. If they ask for a money order or wire, backoff and report them.
  • Website – before making a payment look at the website address. Sometimes you are sent a link to an “airbnb” like site but the web address is not correct.

airbnb.com vs. airbnb-bookings.com

  • Owner Search – Search for the property’s owner. Make sure that the person that you are dealing with is the owner.  It will not hurt to ask for documentation to prove the identity of the person you are dealing with. If you find the property is owned by a company, call the company and see what you can find out.
  • Few or no reviews – Red Flag
  • Lease – You are asked to sign a lease before you are able to see the place/room.

More info/Sources:

Information about Brokerage Services – IABS form


Texas law requires all real estate license holders to give the following information about brokerage services to prospective buyers, tenants, sellers and landlords. 

In essence, we have to disclose who we represent in a transaction upon the first contact with a party or a licensee representing another party. There are different types of representation that we will explain below.

Real Estate License Holders Explained

  • The Broker – Brokers are more experienced and qualified and can work as independent agents or have other agents work for them. A broker, on the other hand, owns a brokerage and employs real estate agents (or may not). A broker generally has more training than an agent and handles some of the more technical parts of a transaction.
  • A Real Estate Agent – Real estate agents are licensed to facilitate real estate transactions, are paid commissions for their sales, and work for brokerages. They cannot work independently. A real estate agent is an industry professional who serves as the facilitator of real estate transactions. Everything that a Real Estate Agent completes, they do so on behalf of the broker.
  • REALTOR® – Realtors are part of the National Association of Realtors, a trade organization, and can hold any position within the real estate industry.
  • Seller’s Agents, commonly called “listing brokers” or “listing agents”, are contracted by owners to assist with marketing property for sale and/or lease.
  • Buyer’s Agents are brokers or salespersons who assist buyers by helping them purchase property.
  • Dual Agents help both the buyer and the seller in the same transaction. In Texas law does not permit dual agency. A license holder may not represent both principals as a dual agent under the revisions to TRELA. Under the current law, a broker must agree to act as an intermediary in accordance with the statute if the broker agrees to represent more than one party in a transaction. 
  • Intermediary – a person who acts as a link between people in order to try to bring about an agreement or reconciliation; a mediator. When the same brokerage represents the buyer and the seller, the broker must act as an intermediary and a sales rep will be assigned for each party. The broker will be neutral.
  • Subagent – This is an agent that represents a buyer without and buyer’s representation agreement.

What is a Make-Ready Cleaning?

A Make Ready Cleaning is also known as a Move-In/Move Out cleaning. Normally this is completed when someone is selling a home and moving in or out of a home. Basically you are making the home ready for the next owner (or to market the home). The make-ready cleaning will usually include cleaning and sanitizing the following items:

  • Bathroom (toilets, tub, shower/glass enclosure, sink, counters, and faucet)
  • Kitchen (sink, counters, back splash, faucet and all appliances) 
  • All cabinets and drawers (only for move out or move in cleanings)
  • Ceiling fans
  • Shelves/bookcases
  • Dust all services
  • Baseboards
  • Windowsills
  • Doors, knobs and casings
  • Light fixtures
  • Light switches
  • Air vent covers
  • Mirrors
  • Blinds
  • Flooring (normally an extra fee to include shampooing carpet or grout cleaning)
  • Windows (normally an extra fee)

For a move in/out cleaning all furniture, debris, clutter and other trash must be removed prior to cleaning. This is a clean-only service, not a trash-out service. The house must be vacant and the utilities (water and electricity) must be turned on.

Services that are typically not covered:

  • Remove rust stains
  • Remove Paint or Stains from Flooring
  • Remove Grout from Tile or Walls
  • Wipe Down Walls
  • Remove Mold from the Silicon Caulk Around the Tub
  • Carpet shampooing
  • Removal of pet stains
  • Grout cleaning or steaming
  • Window cleaning
  • Home exterior cleaning/power washing
  • Curtain cleaning
  • Laundry

The cost for this type of service will vary based on the home’s condition and size.

New Year, New Beginnings

They say that the chance of actually achieving your goals 👩‍💼 is greatly increased when you share it with others and be very specific. 
🌟🌟🌟 Make me accountable and I will do the same back! Let’s help each other achieve our goals for 2020! 🌟🌟🌟
Let me know how I can help‼️ I can be a drill sergeant when needed. I NEED YOUR HELP ON #4‼️🏘❤️😊

 

1. Self-care. Make this priority one. 

✅ I will fuel my body with beautiful, colorful and nutritious food 🥑🍐🥥

✅ I will exercise for 30 mins every day (just move!). I will not focus on a number, just overall health. 🏃‍♀️

✅ I will complete a 5K 🏅

✅ I will meditate for 10 mins every day 🧘‍♀️

✅ I will focus and surround myself with positivity. 

2. Lifework balance

✅ I will share a meal with a friend at least once a month. 👭

✅ I will be more present 

3. Time management ⏳

✅ I will learn to say no. Many times I agree to things knowing I might be tight on time. 

✅ If I commit, I will follow through.

✅ I will use my calendar to schedule both work and personal commitments 📆

4. Professional Goals

✅ I will help 25 families find their dream home! Do you know someone that is thinking about buying or selling a home this year? Introduce us. Help me achieve this goal. 🏠🏡🏘

5. Career

✅ I will obtain my The Certified Real Estate Brokerage Manager (CRB) designation. 👩‍🎓

✅ I will mentor my agents and help them succeed.

✅ I will complete my buyer and seller automation process

✅ I will offer/complete 4 new buyer/seller classes this year

6. Give back

✅ Give back in kindness, time and experience without any expectations.

✅I will offer/complete two classes this year on how to reduce property taxes and make homeownership more affordable.

7. Travel

✅ I will visit one new location this year.✈️

✅ I will re-visit one of my favorite places.

✅ I will plan a “sister” trip and a girl’s trip

8. Declutter and organization

✅ I will clear out the clutter and donate items as needed.

✅ I will get and stay organized. 

9. Be the reason someone smiles today ☺️

✅ Offer at least one compliment a day. 

✅ I will serve and help whenever possible

10. Be grateful

✅ I will write one thing I’m grateful for every day. 

I will check back at months 3, 6, 9 and 12. Yikes! 

Hold me to this!

2020 vision boards

Joy for Kids – Toy Drive Benefiting the Children of Fallen Heroes

Thank you for joining us! Below you will find a copy of all the guides we offered during the toy drive


Home Buyers

Home Sellers

Other Documents

COMING SOON! 324 Delz St, Houston TX 77018

COMING SOON!

$250,000

Location, 🔥 Location 🔥 Location!! Property is located in an up and coming area minutes from downtown, the Galleria and, the Energy Corridor. Adorable 3 bedrooms, 2 bath home with a HUGE backyard. Enjoy the large fenced backyard with shade trees, just perfect for family BBQs. Ready For Move In! Laminate and tile floor throughout. Open floor plan. Ceiling fans throughout the home. Kitchen includes a refrigerator. Never flooded.

New construction within close proximity makes it attractive for future appreciation or new development. There is plenty of space for a single family home, or several single family homes. Buy and hold for future appreciation.

Shopping for a home? Let’s look at Needs vs. Wants

Needs vs. Wants

Housing is a need; wants are items that help you live more comfortably. Wants are not completely necessary but certainly nice. For example, can you live without a private pool? yes. Can you live without a kitchen? Probably not.

When starting your search, be flexible. Give yourself the opportunity to explore options. You will start with a list but more than likely this list will change as you are introduced to more homes.

Be prepare for the likelihood that you won’t get everything you want. There will be compromises, trade-offs and finding the best possible property for you and your family. One home might lack a game room but its in a perfect location. Another might have a great yard but will force you into a longer commute. Decisions, decisions, decisions…

The MOST important decision is location. This is something that cannot be changed. You can renovate a home, add a bedroom or bath, etc. but you cannot move the home. Explore the surrounding area. Do you like the proximity to work, shopping, school zoning, restaurants, friends and family?

Check out this worksheet that can help you through the deciding process.

 

Houston Family Fun Festival 2019


TRICK OR TREAT! I’m happy to be participating in this event on Oct 20, 2019 and Oct 27, 2019 from 12-4  It’s free and should be super fun for kids.

Enjoy face painting, rock wall, food trucks, activities under every tent, inflatables, arts and crafts, door prizes, music, onstage performances, HFM goodie bags and more!

Come by and bring your witches and goblins for some fun activities and trick or treating!

Join us!
Learn More

Special Treat!

Come by my booth and tell your kiddos to give me the secret password “boogers” for a special goodie bag.

10 Common Misconceptions People Have About Buying a Home

Welcome Home

Do you need more space?

Spend Less – Get More! Buying a home is very rewarding in many ways.

This is the number 1 reason why people buy a home. The home buying process can be daunting. It’s one of the largest purchases that you will make during your lifetime. That said, the process is easier when you have the right team on your side. A good lender, REALTOR® and home inspector will guide you through the process stress free.

Right now in most areas we are in a buyer’s market. Rates are still low so it’s really the perfect time to buy.

What’s holding you back? Let’s explore some common misconceptions.

 

1. You need 20% down to buy a home

Many buyers believe that they need 20% down to buy a home. This is a very common misconception. There are FHA loans that will permit a 3.5% down payments and some conventional loans that will go as low as 3%. If you are or were in the military, VA loans require zero down! In addition, if the home is a rural area, USDA loans will also require no down payment.

2. You need a credit score in the 700s or better

This is no longer the case. There are many different loan programs available that will qualify many different buyers. It’s important to speak to a lender and have them analyze your situation. In most cases they will be able to get you qualified. If you like a list of mortgage lenders contact me at ali@happyclientsrealtygroup.com.

3. Don’t have too many lenders check your credit because that will lower your score

You have the right to shop for a loan. FICO, the company that computes the credit scores lenders use. Allow consumers to “rate shop”. When doing to make sure that you are comparing the same types of products. Don’t focus exclusively on interest rates. Sometimes a lender will increase your closing costs by making you pay down points in order to get you a better interest rate.

4. Adjustable rate mortgages are bad

We all heard a lot of negative things about adjustable mortgage rates after the mortgage melt down in 2008. Adjustable mortgage rates are not all bad and can be a great option for someone that plans of paying off a home in 5 years or if you plan on selling the home within 5 years. This will provide you will a low interest rate for the first five years on the loan and that maybe all you need. Speak to a lender about options.

5. You just need enough money to cover your down payment in savings

There are several upfront cost when buying a home. The down payment is usually the largest but you will need to cover the following as well:

  • Earnest Funds: Once your offer for a home is accepted, you will have to deposit your earnest funds with the title company. Earnest funds are typically 1% of the sales price. For example: if the home is being sold for $200,000, your earnest funds will be $2000. These are funds that will be applied towards your down payment at closing so they are not in addition to the sales price offered.
  • Option Fee: An option fee is a fee that is offered to the seller in exchange for a set number of days for you to complete your due diligence and be able to cancel the agreement if you find something that you don’t like. This fee will also typically be credited towards the balance due at closing if you proceed with the purchase. This is money well spent because as little as approximately $200 or less you can take your time and inspect the property before you fully commit.
  • Inspection Fee: It’s always a good idea to have your home inspected. This usually will cost about $350-$450 on average. This is also money well spent. This is a large purchase and it’s important to know the condition before you commit to the sale.
  • Appraisal Fee: This is a fee that the bank will ask you to pay in advance for the appraisal of the property. This fee will run between $450-550 typically. It is part of the closing cost and will be credited at closing.
  • Reserves: The lender will usually want to see that you have around 2 months of mortgage payments in savings as reserves.
  • Closing Costs: When you first get pre-qualified by a lender they will give you wants called a loan estimate. In it, the lender will disclosure all your costs; including your down payment, loan costs and closing costs. Closing costs can add up. Most of the closing costs go to what’s call pre-paids. This is a set amount that the lender will require to start your escrow account.

6. It’s cheaper to rent than it is to buy

Rent is expensive and normally there are a lot of upfront fees when renting a home. Along with those fees there are restrictions. Explore the option to buy. I think you’d be surprised that your monthly payment can be the same or less than a rental property.

New Construction

7. You don’t need a home inspection for new construction

Whenever you are buying a home, be it new or a resale, it is always best that you have the home inspected. Even new homes have issues that come up during an inspection. A home is a major purchase. The investment in a home inspection is nothing compared to the cost of buying a home with major problems

8. It is cheaper to buy a home that needs work

It can be but in many cases you end up spending a lot more on a rehab than you do on a move-in ready home. Many people watch these HGTV shows and feel that rehabbing a loan is easy. It’s not! There are always surprises and these surprises can be costly.

In many cases buyers go in with good intentions of getting the work done but faced with the cost and time of the repairs, they are put off. Over time they let the repairs go and ultimately they are never get done.

9. I can save money by not using a REALTOR®

As a buyer, it will normally not cost you anything to have an agent on your side. In most instances the seller pays the buyer’s commission. There is not reason to not have ally on your side.

Before submitting an offer it’s important to review comparable sales in the area and overall market conditions. Every home is different and it’s important to look at all aspects of the home before submitting an offer. The surrounding area is very important. You can change things about the home but you can’t change its location.

10. I need to find a home before I speak to a mortgage lender

This would be false. It’s important to be pre-qualified before you start looking. Sometimes the bank will qualify you for more or less than expected.

When you find that perfect home, your offer is submitted with your pre-qualification letter. Don’t run the risk of losing the perfect home. By the time you get qualified the home might be gone.

Owner Finance

Note: A qualified real estate attorney should be consulted to answer any questions as well as write the sales contract and promissory note.

What is owner finance?

Owner financing is also known as seller financing. This can be an option for people that can not qualify for a conventional bank loan.

In an owner finance agreement, the owner or seller will act like the bank. They will list the finance terms they are willing to offer. Owner financed deals are recorded with the County. The buyer’s interests is protected.  An additional protection is that a trustee has the deed instead of the seller. The Deed of Trust in an owner financed deal will show that the buyer is the rightful owner.

Just like a traditional bank loan, there is usually a down payment, amortization period, a possibly balloon payment and a set or adjustable interest rate. The terms can be customized to fit the needs of the seller and buyer.

Most owner-financing deals are normally short term and a typical arrangement might involve amortizing the loan over 30 years but with a final balloon payment due after five. The idea is that after 5 years the buyer may be in a better financial position and can now get a traditional loan.

How does it work?

A contract is negotiated. The contract should include a Seller Finance Addendum that will disclose the terms of the agreement. It should cover the balance to be financed, the down payment, interest rate, balloon payments, pre-payment penalty, etc.

Part of the closing documents will include a promissory note. This is a very important document; it will include all the loan terms, the loan amount, the amount of your monthly installments, interest rate, payment schedule, late fee terms, balloon payment (if applicable) and when and how you need to pay.

Most promissory notes will have a due-on-sale clause that will make the entire balance due if the buyer decides to sell the property before the balance is paid off.

A deed of trust will also be signed and it’s usually recorded at the county’s clerks office. This legal document protects the seller in case the buyer defaults on the loan. It will allow the seller to foreclosure of the property if payments are not made.

Like any option, there are pros and cons. Let’s explore these below.

PROS

  • Buyers that can not traditionally qualify through a bank might qualify through a seller directly. Banks sometimes have a very black and white way of looking at things. A seller might evaluate the buyer’s entire potential and make a decision based many other factors.
  • The loan terms can be customized to fix the parties needs.
  • Flexible down payments.
  • The closing may be faster. With a traditional loan the closing can take 30-45 days.
  • The closing costs could potentially be less. They might not include some of the normal lending fees

CONS

  • The loans terms can be less desirable.
  • The sales price and down payment requested could be higher.
  • Interest rates can also be much higher than market rates.
  • The amortization period might be too short or too long for comfort.
  • The seller might include a balloon payment after 5-10 years.
  • There usually is no appraisal involved so you might pay more that market value (Do your research).
  • There might be pre-payment penalties
  • The interest rates might not be fixed.

Ultimately owner financing can be a good option for both buyers and sellers but there are risks.

Buyers be warned

As a buyer thinking about owner financing, do your due diligence. Research the property, the community, the seller, etc.

  • Beware of homes that are exclusively being offered as owner finance. Why? Are they selling the home for much more that market value? Is the home in poor condition? Are they trying to avoid home inspections or appraisals? Ask the questions.
  • Did the seller ask your for a credit report, financial statements, proof of income, etc? If the seller is not looking into your finances, walk away. They should care if you can afford the home. Ideally you want your monthly payment to be less than 30% of your monthly income.
  • Is the home paid off? If the seller owes a balance on the home, there is a higher risk for the buyer. You may be punctual in your payments but what happens if the seller doesn’t apply your payment to his mortgage? His mortgage company can foreclose of the home. You can end up losing all the funds you have paid towards the home plus the home itself!
  • If the seller still owes a balance make sure that their mortgage does not have a due on sale clause. If they do have a due on sale clause, the bank can his bank demand immediate payment of the debt in full if the house is sold to you. If the lender isn’t paid, the bank can foreclose. To avoid this risk, make sure the seller owns the house free and clear or that the seller’s lender agrees to owner financing.
  • Balloon payments – with many owner financing arrangements, a large balloon payment becomes due after a set number of years. If you can’t secure financing by then, you could lose all the money you’ve paid so far, plus the house.
  • Consider having the home inspected. A home inspection is always an option for a buyer. These inspections are typically completed by a third party inspection company and will typically cost $350-550. If the seller does not allow you to have the home inspected, let this be a warning sign. What is he/she hiding?
  • The seller should provide you with seller’s disclosures. All seller should disclosure issues that they know to be wrong with the property.
  • Since a bank is not involved, there might not be an appraiser. In a traditional bank loan process, the bank will send an appraiser to evaluate the property’s worth. The appraiser will issue his opinion on value and condition. An appraiser is not an inspector, but if they see something that might effect the property’s value, they will note it and possibly force the parties to make repairs before the bank approves the loan. You as a buyer can order an appraisal of the property. If you are not sure of the market value of the property, speak to an REALTOR® or hire an appraiser.
  • Research the community and schools. Even if you don’t have school aged kids, schools can make or break a property’s resale worth. Properties zoned to poor preforming schools might not resale as well as those zoned to excellent schools.
  • Traditional owner-financed transactions often close in a lawyer’s office without title insurance, although it might be wise for the buyer in such transactions to at least obtain a title report indicating what liens, lawsuits, and judgments may affect the property. There has been fraud in this area. People that are not the true owners of a property might try to sell or rent a home they know to be vacant.
  • This is one of the largest purchases you will probably make. You might want to consider hiring a real estate attorney to review the terms of the contract prior to signing an agreement.
  • The owner will normally keep title to the house until the buyer pays off the loan. If the buyer defaults, the seller keeps the down payment, any money that was paid, plus the house.

Sellers be warned

As a seller you too run risks when owner financing a home. Do your due diligence before signing a agreement.

  • SAFE Act – Sellers who engage in more than five (5) owner-finance transactions in a 12 month period must now have a Residential Mortgage Loan Originator License according to the Secure and Fair Enforcement for Mortgage Licensing Act, also known as the SAFE Act.
  • If you owe a mortgage on the property, speak to your lender to see if you have a due on sale clause. If you do, then owner finance may not be possible. Once you sell the home your mortgage balance will come due entirely. Speak to your lender and see if they will agree to owner financing.
  • Make sure to review the buyer’s income. Their financial strengths, their credit or lack of credit, their available funds, etc. Speak to the buyer’s employer if they are not self employed. If they are self employed, considering looking at a few years of tax returns. You will decide what you find acceptable or not.
  • Think about hiring a servicing company to receive the payments and establish an escrow account. This way the payment can be applied to the balance owed directly.
  • The seller must determine that the buyer has the ability to repay the loan (and this must be supported by verifications and documentation).
  • Although you won’t have to worry about insuring the property or making repairs as needed, you do run the risk of having to foreclose if the buyer stops making payments.
  • Repair cost – if you do take back the property for whatever reason, you might end up having to pay for repairs and maintenance, depending on how well the buyer took care of the property.