National Real Estate Blog

As past and present bankers from Goldman Sachs, JP Morgan, Bears Sterns and Washington Mutual sit on the hot seat in front of Congress, Americans have to be collectively scratching their heads. What exactly are these guys guilty of? And, why won’t any of them own up to any wrong doing?

As the Congressional Financial Crisis Inquiry Commission continues to grill bank executives about the role each institution played in the recent economic crisis, a theme seems to be emerging: The banks did nothing illegal. Moral obligations aside, the path to the financial meltdown was paved in greed, but probably not criminal acts.

The story starts with the rise in popularity of subprime lending, which is loans to borrowers of questionable credit worthiness. Once restricted by usury laws, subprime lending began to build after government deregulation in the 1980s. According to “A Short History of Subprime” published on Allbusiness.com, subprime lending was originally the purview of mortgage lenders like The Money Store and Countrywide Home Loans. It wasn’t until the late 1990’s that more traditional lenders began to take an interest in these types of loans.

Starting in 1998, the smaller mortgage banks began to be acquired by larger banks, with Washington Mutual buying Long Beach Financial Corporation. By 2001, both Citigroup and Chase Manhattan Mortgage Corporation had acquired smaller lending components. While this was happening in the banking industry, the housing market was taking off with historically low interest rates and unprecedented increases in home prices.

The building of the economic perfect storm was rounded out by what the article referred to as “subprime securitizations by Wall Street firms and the willingness of investors to buy those securities” starting as far back as the mid-1990s. According to the Federal Reserve Bank of Dallas, banks needed to be able to back these risky non-traditional loans in non-traditional ways. Most traditional, prime rate mortgage loans are funded by bank customer deposits.

This is where it gets tricky, but not illegal. The proliferation of subprime loans began to be funded by what is called government sponsored enterprises, better known as Fannie Mae and Freddie Mac. The loans were pooled together, government guaranteed and then sold to investors. This worked well, until the loans got riskier and beyond the government sponsored enterprises.

The rise of residential mortgage backed securities grew through the mid part of the decade as banks began to be more creative in pooling and packaging these loans to investors. Credit ratings for these investment packages were irrationally rosy, giving investors a sense of security in these investments based on very risky loans, all teetering precariously at the top of an inflated housing market.

The story is all too well known now: The housing bubble burst, borrowers began to default on the risky loans, and investors opened their prettily packaged securities to find nothing inside. Americans were left holding the bag, while bankers seem to still be laughing all the way to…well, their own banks.

For the moment, the Congressional grilling seems to be doing nothing more than causing some uncomfortable moments for the Wall Street elite. As the Federal Reserve and Congress grapple with new banking regulations, Americans seem to want the bankers to share in the responsibility for the economic crisis. They may or may not have done anything illegal, but it does feel like they did something wrong.

Ki works as a broker in the Austin real estate market. His site has a map based search of the Austin MLS. It also provides general information on Austin real estate and the great hills neighborhood.

The 30 year rate fell from 5.00 to 4.93 this week. In a time where the news is filled with stories about inflation fears we are seeing mortgage rates steadily decline. This is the 5th week in a row where rates have held steady or fallen. Its also the lowest we have seen rates in 2010.

The 15 year dropped from 4.36 to 4.30. This is only slightly above the all time low of 4.27 for the 15 year fixed mortgage.

The 5 year arm dropped from 3.97 to 3.95 which is an all time low for the 5 year arm. The 1 year arm fell from 4.07 to 4.02. Oddly enough even though the 1 year arm is at an all time low this week its a pointless option because the 5 year arm is lower than the 1 year arm.

Below are rates from the weeks from Apr 15, 2010 to May 13, 2010

May 13, 2010
30-fixed 4.93 15-fixed 4.30 5 ARM 3.95 1 ARM 4.02

May 06, 2010
30-fixed 5.00 15-fixed 4.36 5 ARM 3.97 1 ARM 4.07

Apr 29, 2010
30-fixed 5.06 15-fixed 4.39 5 ARM 4.00 1 ARM 4.25

Apr 22, 2010
30-fixed 5.07 15-fixed 4.39 5 ARM 4.03 1 ARM 4.22

Apr 15, 2010
30-fixed 5.07 15-fixed 4.40 5 ARM 4.08 1 ARM 4.13

Oct 29, 2009
30-fixed 5.03 15-fixed 4.46 5 ARM 4.42 1 ARM 4.57

As we can see we are not seeing wild jumps in mortgage rates like we saw last year. But we are seeing a slow but steady decline in rates for all 4 mortgage products.

In addition to rates it also interesting to look at mortgage payments. We took today’s rates and used a mortgage calculator to determine mortgage payments for a 200k mortgage. We also did the same thing with rates from April, 29 2010 and rates from October, 29 2009 (6 months ago).

May 13
30-year $1065.1
15-year $1509.62
5-year ARM $949.07
1-year ARM $957.13

Apr 29
30-year $1080.98
15-year $1518.76
5-year ARM $954.83
1-year ARM $983.87

Oct 29
30-year $1077.31
15-year $1525.9
5-year ARM $1003.88
1-year ARM $1021.7

As we can see rates are lower but not vastly lower. Compared to two weeks ago a mortgage payment would be $15.88 lower (1.46 percent). So there is a savings but its not huge. Moving forward I still think rates have more room to move up than down. With two of the four mortgage products at all time lows there is not that much room to move farther down. While I don’t see alot of movement for the next few weeks overall I would expect rates to be substantially higher 6 months from now.

Ki works as a realtor in the Austin Tx real estate market. He writes about the mortgage industry. His site has a free mortgage calculator and a mortgage rate widget.

When considering adding value to a home, you consistently hear from the real estate industry that updated bathrooms and quality kitchens stand out in a home sale. Those are proven sale closers. There are certain other improvements you can make to your home that will beautify it or create convenience for your family. When it comes time to selling, however, those improvements may do nothing to increase the value of the property and may even turn off potential homebuyers.

Over-the-Top Renovations

Au contraire mon frère, not all renovations will raise the value of your home. Just `cause it’s bigger doesn’t mean it will be perceived as better by future homebuyers. Unless your home is located in Beverly Hills or some other very posh neighborhood, don’t install the bathroom with the supersized steam shower, imported Italian marble and several different spray heads … unless you have the money to do it for your own pleasure and enjoyment only. That kind of improvement doesn’t typically do anything to increase the value of the average home.

On the other hand, if you updated an old bathroom, you could see an increase of several thousand dollars to your home’s bottom line. Real estate professionals suggest that homeowners pour over local home listings to see what amenities are the standard in your area, then upgrade your home to meet it. If you overdo it, however, you may not recoup your investment.

Swimming Pools

If you think installing a swimming pool in the back side of your home will draw hoards of homebuyers clamoring to make offers on your home at sale time, you’d be wrong. Some may consider it a perk, but others may perceive it as a pain with all the maintenance it will require. Homeowners have even paid to have their swimming pools buried to create more yard space. If you shell out the expense to build one, don’t expect your home’s value to budge. The only exception to building a swimming pool is if you live in states where they are considered the norm.

Home Office Renovations

Although, a home office is often an amenity appreciated by those shopping for a home, it should be built with frugality in mind. Overhauling an office doesn’t pay off when it’s time to sell your home. Don’t steal usable space from another living area to create a home office. Instead, make sure the space can easily be converted back into a bedroom or other living space if needed. If you decide you just have to have the built-in Curly Maple wood shelves, know that you will only recoup around 50 percent of your cost at sale time.

Unique Builds

Home magazines are always coming up with clever and creative ways to change the look of your living space. Some are exotic and outlandish, but they can pique your interest. Tempted to put a classic disco ball with lights in your bedroom, a constellation ceiling in your family room or a peaceful Koi pond in your back yard? Avoid making outlandish changes to your home or changes that will be perceived as adding work for a future homeowner. Don’t be tempted to incorporate these ideas into your own home, unless you don’t plan on selling anytime soon. Homebuyers may not share your enthusiasm.

Roof Renovations

If your roof needs repair, don’t hesitate to have the work done. It will be one less issue you’ll have to deal with when listing your home. If in your pursuit to list your home you think replacing your roof with cedar shakes or clay tiles will increase the value, think again. Although they have the ability to make your home stand out, they probably won’t inspire homebuyers to pay more for them. So, unless you have the money to burn, keep it simple when preparing your home to be listed on the real estate market.

Ki has been an investor in the Austin real estate market for several years. The website has an Austin home search for listings in Austin, Texas. It also has general statistics covering Austin real estate along with several neighborhoods in Barton Creek.

Keep in mind that when you buy a home and don’t have 20 percent down, you may be required to pay for private mortgage insurance (PMI). PMI gives homebuyers the ability to buy a home with as little as three to five percent down. It also provides loan servicers assurance that, should your mortgage go into default and your home is foreclosed upon, the loan will be paid for. Those are the advantages, but there is a dark side to PMI.



A good example of this involves a recent bout Bank of America experienced with the Massachusetts Attorney General’s office. In November 2009, Bank of America acquired Countrywide Mortgage loans. Countrywide was already under scrutiny due to questionable mortgage tactics regarding the removal of PMI on mortgages paid below 80 percent of the original loan. Qualified homeowners were requesting that PMI be removed, but Countrywide was not complying. Bank of America settled and no further court action was initiated by the state.



Some things you may not know about PMI are that the IRS allows it as a deduction on your federal taxes if you qualify, you can legally require a mortgage company to remove the PMI and you can decide which PMI company to use. The primary requirement for deducting PMI on your federal taxes is that your adjusted gross income (AGI) fall at or under $100,000 if you are married filing jointly. To claim the full deduction, the maximum AGI for those married filing separately is $50,000. You cannot claim a deduction for your PMI if your AGI exceeds $109,000.



Congress passed a law in 1998 called the Homeowner’s Protection Act (HPA), which addresses changes regarding the lawful use of PMI. Generally, this law applies to residential property and requires lenders to remove PMI if the principle of the loan equals 80 percent of either the appraised value when the loan was obtained or the original purchase price at closing. There are some considerations to keep in mind. You must be current on your home loan in order for the PMI to be terminated, and you must have been current throughout the previous year.



Under HPA, lenders are required to automatically terminate PMI once your loan is paid down to 78 percent. Again, you must be current on your payments. Another requirement of HPA is that lenders are required to provide specific disclosures to homebuyers on closing. Some specifics include the borrower’s right to request that PMI be canceled, the date on which the request may be submitted and the lender’s responsibility to automatically terminate PMI.





Another thing most borrowers don’t know about PMI when obtaining a home loan is that you do not have to use the PMI company referred to you or suggested by your lender or real estate professional. Shop around and compare prices to get the best deal.



You will have to put forth some effort to work PMI to your greatest advantage, but if you do, you’ll come out way ahead and pay far less than if you depend solely upon your lender to do the job.

Ki is an investor and broker working in the Austin real estate market. His site provides a graphical search of homes in the Austin MLS. It also has profiles of different areas in the Austin real estate market and graphs showing historical mortgage rates.

The 30 year rate fell from 5.07 to 5.06 this week. This is the 3rd week in a row where interest rates have either fallen or stayed flat.



The 15 year rate stayed flat at 4.39. The 5 and 1 year arms were mixed with the 5 year arm falling slightly from 4.03 to 4.00 and the 1 year arm rose from 4.22 to 4.25. Below are rates from the weeks from Apr 01, 2010 to Apr 29, 2010 and rates from October 15th (6 months ago).



Apr 29, 2010

30-fixed 5.06 15-fixed 4.39 5 ARM 4.00 1 ARM 4.25



Apr 22, 2010

30-fixed 5.07 15-fixed 4.39 5 ARM 4.03 1 ARM 4.22



Apr 15, 2010

30-fixed 5.07 15-fixed 4.40 5 ARM 4.08 1 ARM 4.13



Apr 08, 2010

30-fixed 5.21 15-fixed 4.52 5 ARM 4.25 1 ARM 4.14



Apr 01, 2010

30-fixed 5.08 15-fixed 4.39 5 ARM 4.10 1 ARM 4.05



Oct 15, 2009

30-fixed 4.92 15-fixed 4.37 5 ARM 4.38 1 ARM 4.60





So the market has made me a liar. I thought we were going to see some volatility in interest rates over the month of April. Instead rates have stayed remarkably flat. Besides the week of April 8th mortgage rates stayed between 5.06 and 5.08. At 5.06 we are also near 4.93 which is the lowest mortgage rate seen thus far in 2010. This is kind of surprising since we have been expecting to see rates increase over the last month.



So rates are one thing but it’s also informative to see actual mortgage payments. We took today’s rates and using our mortgage calculator we determined the rate for a 200k mortgage. We also did the same thing with rates from April, 15 2010 and rates from October, 15 2009.



Apr 29

30-year $1080.98

15-year $1518.76

5-year ARM $954.83

1-year ARM $983.87



Apr 15

30-year $1082.21

15-year $1519.78

5-year ARM $964.07

1-year ARM $969.88



Oct 15

30-year $1063.88

15-year $1516.73

5-year ARM $999.16

1-year ARM $1025.28



So as we can a mortgage payment today is pretty similar to what we saw 2 weeks ago. In fact mortgage payments only decreased by 11/100 of one percent.



So what is going to happen moving forward? It’s hard to tell. The predications that the government not putting resources into buying mortgage backed securities could steal lead to more up and down fluctuations in mortgage rates but we have certainly not seen that this month.



Overall I think that rates are either going to stay roughly flat or rise drastically. There is simply not that much room for them to fall. Rates are currently 5.06. The lowest they have even been is 4.71 (which we saw in 2009) and the highest was above 15 percent. So what is our advice? Basically if you are planning on getting a loan I would do it sooner rather than later. Also I would lean for a 30 year rate instead of an arm because we expect rates to be higher in 1 to 5 years than they are today.

Kim is a real estate broker operating in the Austin Texas real estate market. His site is full of mortgage tools including a mortgage widget and a few free mortgage calculators.

Have home prices hit rock bottom? Probably not in some areas and maybe not as a whole. Nonetheless, now could be the best time to buy a house. Even with the homebuyer’s tax credit due to expire at the end of the month, there are compelling reasons to buy a house in the current economy.



This recession made a good case for the renting over buying argument. But as the country tentatively enters the recovery phase, buying a house makes sense in many circumstances. The rent versus buy analysis has many considerations, including home prices, how long you planning on staying, the down payment, interest rates, and the future rise or fall of home values. Some of these are easy to evaluate and for others it would be nice to own a crystal ball.



According to a recent The New York Times articles, the consideration really is how are current home prices relative to pre-bubble prices. “(T)he situation is getting more complicated because the housing bust has been playing out unevenly across the country.” Some places, like San Francisco, home prices are still higher than they were before the housing bubble. Other places, like Las Vegas, prices are comparable to those of pre-boom years.



However, the purveyors of doom are warning that house prices are still falling. According to a recent Associated Press article, the government index of home prices shows a 0.2 percent decline in February, continuing a three month trend. That coupled with a stagnant national median home sales price is cause for concern. Some economists speculate that home prices could fall as much as another 20 percent.



Even with the bad numbers, home sales nationally are up 18 percent from the lowest point during the recession (AP). Home sales across the country rose in all regions, including 6 percent in the Northeast. For sale signs are coming up like spring flowers in neighborhoods across the country, which is a reassuring sight.



Short of owning that crystal ball, timing the housing market perfectly is part luck and part research. Knowing the local market and using an experienced real estate agent are the best ways to navigate the buying versus renting conundrum. Are home prices holding steady or rising? How are prices compared to five years ago? Two years ago? Fortunately, the Internet and real estate agents have a wealth of price information to evaluate.



Then there are the personal factors: How long do you plan to stay in the area? Can you afford to own a house in the neighborhood where you are renting? Do you like the rental enough to stay awhile longer? There is no crystal ball and there is probably not a “perfect” time to buy. The best a person can do is crunch the numbers and be realistic about both the hard numbers and the softer realities.



Escapeso real estate operates in the Austin Texas real estate market. Their site also buyers to look for Austin homes online and provides average values of neighborhoods in the Austin market. They also have a blog with updated statistics covering Austin real estate.

Depending upon several factors, some of which include geographic location, credit scores, current interest rates and current income, different loans work best for different home buyers. A good example of this is West Coast borrowers who opted for different versions of an adjustable rate mortgage (ARM) for their home buying needs in recent years. At the time of many of these ARMs, the initial interest rate was significantly lower than those for traditional fixed-rate mortgages, so their payments were quite affordable at the onset of the loan.

One common theory for using an ARM is to buy a home with initial low interest and low payments. This may buy enough time for homeowners to improve their credit scores, and maybe even increase their income. The end goal is to refinance to a traditional fixed-rate mortgage by the time the ARM adjusts to a much higher interest rate and payment. There are definite risks in using an ARM for a mortgage, including the risk of interest rates climbing to the maximum allowed by your ARM contract. That could make your monthly payment unaffordable for your income level.

Other loans that present a risk, but mostly to the loan servicer, are jumbo loans and Fannie Mae (FNMA) and Freddie Mac (FHLMC) `B’, `C’ and `D’ loans, as opposed to conforming `A’ loans. A Jumbo loan is a loan that is for more than the maximum allowed by Fannie and Freddie’s set borrowing limits. Any loans other than `A’ loans indicate that the borrower has experienced some type of financial hardship - e.g., foreclosure, bankruptcy or late payments revealed by credit report. The use of `B’, `C’ or `D’ loans is to provide short-term financing to these borrowers until they can improve their credit and refinance with conforming `A’ financing.

There are many other loan types available that you will want to research before deciding on a home loan. Some conventional and government loans you may want to consider are traditional fixed rate loans and those available through the Federal Housing Administration (FHA), U.S. Department of Agriculture Rural Housing Service (RHS), Veterans Administration (VA), Ginnie Mae (GNMA), Fannie Mae and Freddie Mac. A conventional loan includes all loans other than those offered through FHA, VA or RHS.

A traditional fixed-rate loan is a mortgage where the interest rate and payments remain the same throughout the life of the loan. You typically, but not always, have to come up with 20 percent down, or you have to buy private mortgage insurance (PMI). Depending on your credit score and other factors, your interest rate is often higher with less down.

Most loans through the FHA, RHS, VA, Ginnie, Fannie and Freddie are fixed-rate loans; although, there are some exceptions. The advantage of obtaining a home loan through one of these entities is that you often have flexibility that you don’t have through banking or other financial institutions. There are income limits, however, that disqualify many borrowers.

You won’t know what’s available to you unless you contact a lender for more information. To begin the loan process, contact three different lenders. Find out what each one has available, including type of loans available, interest rate offered and all fees associated with the loan. Request everything in writing. Armed with this information you will be a formidable force in obtaining the best loan that fits your family’s needs.

Ki lives and works in the Austin real estate market. Buyers can search the Austin MLS for homes and properties on his website. The website also provides a mortgage calculator widget for visitors as well as general statistics on the Austin real estate market.

For the last few weeks the buzz in the real estate industry has been that rates are rising and that rates are going to go up even more. So it was somewhat of a surprise to see rates plummet this week. The 30 year rate dropped from 5.21 to 5.07 this week. 5.07 marks the lowest point in March.

The 15 year dropped even more falling from 4.52 to 4.40. The 5 and 1 year arms both dropped from 4.25 to 4.08 (5 year arm) and 4.14 to 4.13 (1 year arm). For the first time in several months the 1 Year arm is higher than the 5 year arm. This basically knocks out the 1 year arm as a viable product (although we have been recommending against it recently anyway). Below are rates from the weeks from Mar 18, 2010 to Apr 15, 2010

Apr 15, 2010
30-fixed 5.07 15-fixed 4.40 5 ARM 4.08 1 ARM 4.13

Apr 08, 2010
30-fixed 5.21 15-fixed 4.52 5 ARM 4.25 1 ARM 4.14

Apr 01, 2010
30-fixed 5.08 15-fixed 4.39 5 ARM 4.10 1 ARM 4.05

Mar 25, 2010
30-fixed 4.99 15-fixed 4.34 5 ARM 4.14 1 ARM 4.20

Mar 18, 2010
30-fixed 4.96 15-fixed 4.33 5 ARM 4.09 1 ARM 4.12

Oct 01, 2009
30-fixed 4.94 15-fixed 4.36 5 ARM 4.42 1 ARM 4.49

At least for now it looks like instead of rates moving into an era of higher rates we are moving into a period of volatility. It’s also a welcome relief to buyers that were thinking they missed the party last week when rates started to rise.

In addition to interest rates is always good to look at actual mortgage payments. We took rates from April 15th and translated them into a 200k loan. Then we did the same thing with rates from April 8th and September 17, 2009 (6 months ago).

Apr 15
30-year $1082.21
15-year $1519.78
5-year ARM $964.07
1-year ARM $969.88

Apr 08
30-year $1099.45
15-year $1532.03
5-year ARM $983.87
1-year ARM $971.04

Sep 17
30-year $1078.53
15-year $1526.92
5-year ARM $1014.55
1-year ARM $1022.89

So compared to last week a home buyer would save around $17 a month for a drop of 1.56 percent. While not overwhelming $17 a month adds up over time ($204 a year or $6120 over 30 years).

So what do we expect moving forward? It looks like over the short term we should continue to see volatility. Since the government stopped buying mortgage backed securities we should expect to see mortgage rates bounce around this summer. At the same time over time we expect to see mortgage rates rise over the next year. The forces that have kept rates down for so long (a weak economy, government intervention) are coming to an end so mortgage rates can’t stay below 6 forever.

Ki lives in Austin Texas and runs a website covering Austin Texas real estate. It also provides a free mortgage calculator and a mortgage rate widget.

A recent Associated Press survey on the economy by economists didn’t paint a pretty picture. Home values are stagnant, consumers are still cutting back and not enough jobs are being created. While all of this is true in Texas, too, the Lone Star state still seems to be weathering the economic “recovery” better than other states.

In fact, Austin was the featured city in a recent Time magazine cover story on jobs. At a time when other cities are still shedding jobs, Austin is actually creating new jobs. The article featured tech, construction and energy companies that are hiring in the Austin area. Innovation in these areas, particularly technology and energy, is what Time predicts will be the driving force behind future job creation across the country.

As the government offers tax incentives for companies that are hiring, Time posits that plan puts effort and money in the wrong area. According to the article, the emphasis shouldn’t be on the actual jobs that will be created, but rather on the ideas that will continue to create jobs well into the future. It’s a worthy notion, just difficult to quantify when everyone wants hard numbers on the future of the country’s economy.

Part of what Austin has done right is to foster small businesses and invite larger companies to work in the city, such as Facebook, Inc being offered incentives to open an office in Austin. The Small Business Development Program is a good example of an Austin initiative that helps entrepreneurs get businesses up and running with support services.

Texas has also benefited from not being part of the boom and bust experienced by states like Florida and Nevada. Texas certainly grew during the first part of the decade, but, for the most part, the growth was steady rather than meteoric. Home prices increased, but they didn’t soar like the home values in California.

Unemployment nationwide is predicted to rise again before the end of 2010, but the unemployment rate in Texas is below the national average and has a good chance of holding steady. Even with people moving to Texas from other states, jobs continue to be available and new jobs are being created.

Foreclosures are still on the rise across the country, and home prices are not expected to increase anytime soon. Texas has certainly seen its fair share of foreclosures, but so far the housing market has remained mostly stable, although weaker than in the mid 2000s.

Technology and green jobs are predicted to be the best path to job and economic growth in the future and Texas seems to be headed down that road already. Start-ups in wind and solar energy can be found across the state and Austin is considered a mini Silicon Valley. As Texas continues to hone its economic recovery skills, hopefully the rest of the country will follow.

Ki is a realtor working in the Austin real estate market. His website features information covering Austin Texas real estate. It also provides a graphical search of the Austin MLS along with statistics and news on their blog covering Austin real estate.

Real estate agents are great sources of information and assistance in the housing industry. Their purpose is to serve the real estate market with integrity. Under contract they have fiduciary responsibilities to their clients. Before enlisting the assistance of a real estate agent, there are 10 things to keep in mind.

1. Before a real estate agent can successfully sell your home, you need to have it in tip top shape. All colors inside and outside of the home should be in neutral colors, including wallpaper, painted walls, and the exterior. If you are a smoker or own a pet, find a way to make the home odor-free. The best option would be to smoke outside only and buy an air cleaner. Clean spotlessly and free the home of all clutter. Nothing turns a potential buyer away more quickly than dirt, clutter or odor.

2. Not all real estate agents are created equal. There is a lot of competition in the market and some real estate agents work harder than others. When you are ready to put your home up for sale, you want an agent that will work hard for you. Your best bet is to use one referred to you by someone you know.

3. The seller pays the real estate sales commission, not the buyer. There is very little exception to this rule.

4. Your real estate agent is not responsible for ensuring that your inspections are carried out appropriately. When you find your dream home and your offer is accepted by the buyer, inspections will ensure. Your real estate agent may be in attendance at your inspections, but your agent is not responsible for following around the inspector and ensuring that everything is noted.

5. If you want to live in an adult community, within a specific religious area, particular ethnic demographic, a low crime neighborhood or one that services a particular school, your real estate agent cannot help you find those areas. It is against the law according to the Fair Housing Act.

6. Until you sign a Seller’s or Buyer’s Agent Agreement, your real estate agent is not bound by law to keep anything you tell the agent private between the two of you. Once you sign, your agent is legally bound by user disclosure. It explains the legal responsibilities of the type of agent applicable to your situation.

7. Once you sign a Buyer’s Agent Agreement, only your agent should be showing you homes in which you are interested. In fact, you should only contact your agent when you find a home in which you are interested. Your agent is your point-of-contact when you have questions.

8. There are advantages and disadvantages to signing a Buyer’s Agent Agreement for more than 60 days. The advantages are that you know your agent by now and you won’t be starting on square one, redoing work already done. The disadvantages are that you and your current agent may not see eye-to-eye on the sale strategy and a different agent may work better for you.

9. Your home may not be priced at the amount you feel it is worth, and the projected price of your home may not cover what you currently owe on your house. You may have to concede on what you think your home is worth based on the agent’s best estimate of your home’s value. If it is less than you owe and you need to sell, you may want to consider a short sale.

10. Understand that when you finally enlist the assistance of an agent, if the situation becomes unmanageable, you can legally fire your agent. You’re only legally obligated to an agent if that agent fulfills his legal and contractual obligation to you. If at any time an agent violates your confidence, continually does nothing to promote your home or in any other way violates your agreement, then you can legally fire him. It is best, however, if you and your agent can jointly agree to dissolve the contract.

Selling or buying a home is a huge undertaking and you shouldn’t go into it blindly. Understand your rights and responsibilities, and your transaction will go more smoothly and be less stressful for you and your family members.

Ki is a real estate broker in the Austin real estate market. His site provides a free search for homes in the Austin MLS along with news and statistics on Austin real estate. It also provides a real estate blog with updated news and commentary.