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Welcome to the Clay & Company Blog

Clay & Company is a Houston-based commercial real estate brokerage, investment, and auction company serving the needs of governmental agencies, financial institutions, insurance companies, and individuals 
throughout the State of T
exas.

Our regularly updated blog covers local and national news, events, and happenings affecting Texas and the commercial real estate industry.

Category Archives: Property Ownership or Management

10 Reasons Why Sustainable/Energy Retrofits of CRE Will Be the Next Big Thing

From EnvironmentalLeader.com

1. New financial tools created by lenders, academics and entrepreneurs to facilitate underwriting the economic benefits of such retrofits will become mainstream, proving the value of retrofits and thus unleashing untapped capital to finance the requisite reconstruction projects. The University of California at Berkeley, the World Bank, Wells Fargo Bank, former President Clinton and New York Mayor Michael Bloomberg’s C40 planning group, Richard Branson’s Carbon War Room, green financier Ygrene, Lockheed Martin, IBM and Barclays Capital are just a few of the multi-national players leading the charge for viable solutions to the existing funding gap.

2. Existing financing structures will become more acceptable, each serving certain segments of the marketplace: (i) traditional debt (loans and bonds), (ii) shared savings with Energy Performance Contracts (EPC), (iii) Tax-Exempt Lease-Purchase Agreements, (iv) Capital Leases, (v) New Market Tax Credits, (vi) Lease or Bond Pools, (vii) On-Bill Financing, (viii) Tax Lien Financing/Property Assessed Clean Energy (PACE) bonds, (ix) Power Purchase Agreements and (x) Energy Efficient Mortgages.

3. Performance contracting will continue to be used as turn-key solutions for sustainable energy retrofit projects and assist in securing existing third-party financing. Under a typical performance contract, an energy service company (ESCO) assumes some portion of the risk over a retrofit project’s useful life by offering a guaranty of energy and operational cost savings and in certain instances bringing a lender to finance the work. Such a guaranty affords third-party lenders a financeable stream of positive cash flow (regardless of the actual performance of the retrofit) and reduces the overall risk of a borrower default.

4. Green leases and green tenant demands are on the rise, causing landlords to support these market demands through increased energy efficiency. The green lease structure, when drafted and negotiated properly, combined with the ability to measure energy consumption on an outlet-by-outlet basis, motivates tenants to reduce consumption of energy, to produce less waste, to reduce water usage, and to utilize environmentally friendly office furnishings and equipment. On the flip side, the landlords are incentivized to provide the capital outlay, on a pass-through basis, necessary for the requisite energy retrofits. Tenants ultimately incur the cost of the retrofits, but they also see the direct benefits in the lower operating expenditures.

5. According to the Rocky Mountain Institute and Johnson Controls, the ESCO industry was sized in 2011 at $4.1 billion and is currently growing at a rate of 26 percent per year. By 2020, Pike Research projects that the market for retrofits in commercial buildings will reach $152 billion worldwide.

6. In order to meet legislative greenhouse gas (carbon reduction) mandates at the federal, state and local levels, large-scale retrofit projects, in which combined technologies are utilized to optimize buildings as a whole system, will have to be utilized on a national basis. The Deep Energy Efficiency Pays (DEEP) program is one example of a proposed utility-based incentive that is applied on top of other existing rebates to push for whole building retrofits through reduced payback timelines for owners and investors.

7. Advancements in building automation technologies and the convergence of information technology and building data are forcing the commercial marketplace towards DEEP retrofits on a global basis. This collection of information and analysis of data in central databases affords building owners and operators the ability to not only track and identify where a building’s energy inefficiencies lie but also allows for the creation of specialized solutions when effectuating each applicable retrofit. Post-retrofit, these technologies monitor, adjust and synchronize a comprehensive infrastructure that reduces energy consumption on a real-time basis and interfaces with smart meters and smart grids.

8. In the United States, various federal agencies responding to President Obama’s commitment (i) to green the executive branch (requiring LEED Gold certification on all federal building projects) and (ii) in his Better Building Initiative (seeking, through tax incentives, to reduce energy consumption in commercial buildings by 20 percent, which equates to savings of over $40 billion per year), are creating and rolling out programs to incentivize building owners to engage in sustainable/energy retrofits.

9. One of the fastest-growing LEED rating systems over the past two years has been LEED for Existing Buildings Operating and Maintenance (LEED-EB: O&M). This quantifiable measurement and certification standard, and others, will continue to assist the marketplace in monetizing the value applied to sustainable/energy retrofits.

10. Performance disclosures, highlighted by new legislation in California that mandates the disclosure of building performance to all new tenants and buyers, will drive building owners to increase overall efficiency metrics of existing commercial buildings through retrofits.

Full article available here.

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Rethinking Big Box Space: Texas town converts abandoned Wal-Mart into public library

As we’ve touched on before, when a big box space is vacated often landlords or cities are left with empty commercial space too large to easily fill. But when Wal-Mart closed and abandoned a 124,500 square-foot retail store in McAllen, Texas, the city decided to reuse the inherited structure as a new main library.

Meyer, Scherer & Rockcastle, Ltd was chosen to transform the single-story building into a highly functional, flexible library.

To meet this challenge, the designers had the old store interior and new mechanical systems painted white to form a neutral shell and used form, material, color, and light to create more intimate spaces within the large space.

The new space – equivalent to the area of two and a half football fields – makes the new library the largest single-story library in the U.S. The McAllen Public Library won the 2012 Library Interior Design Competition by the International Interior Design Association and boasted a new user registration increase of 23% after being opened for just one month.

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Retail Report: May 2012

Colliers’s recent Retail Whitepaper examines what is driving retail recovery and what will make retailers successful in the days ahead. A summary of the paper follows:

Retail’s dependence on a healthy economy and a fickle consumer makes it vulnerable, but as an investment category retail real estate presents attractive opportunities. For property owners, municipalities, and investors committed to the sector, opportunistic investments can materialize by thinking differently from the herd. This type of forward-thinking analysis involves digging beneath the top-line numbers to understand the factors and conditions necessary for asset performance and values to recover further, and how those elements will favor certain retailers and markets. This white paper aims to identify and analyze successful investment and branding strategies, and the retailers ahead of their peers in executing them.

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  • Retailers’ corporate success now hinges far less on absolute price than it does on corporate strategies for reinvesting in technology, elevating the in-store experience, and redefining the service aspects of the retailer’s offering.
  • Technology investment takes the form of channel diversification: improving and integrating brick-and-mortar, online, mobile, and catalog operations.
  • Real estate investments include opening new stores, experimenting with smaller prototypes and upgrading existing locations.
  • While “Location” has always been the most important to real estate success, quality tenants are proving equally important at separating a retail project from it’s competitors.
  • Retailers “ahead of the curve” in reinventing their physical spaces elevate the shopping experience to focus on every aspect of their business that matters to their customer.
  • Retail is becoming more about service and less about “stuff.”
  • Successful landlords will be those that remain focused on maintaining a unique tenant mix and be willing, if necessary, to accept lower rents short-term to achieve the long-term payoff of owning a commercially viable property with stable (or rising!) occupancy rates and cash flows.
  • Another option is to develop tenants internally: incubating new retail concepts that will eventually take space.
  • And, landlords and owners (and their lenders) have to be willing to demolish vacant or under-utilized spaces, foregoing short-term cash flow, to create new retail zones.
  • Metro markets poised to outperform in the next decade exhibit one or more of the following attributes:
  1. An improving housing market: For May, the Five states with the highest number of improved markets are Texas (11), Florida (10), Michigan(8), and Pennsylvania/North Carolina/Iowa (6).
  2. Potential for favorable demographic shifts: The big shift will likelybe demographic, as the 78 million Millennials move into their prime household formation years and and a way to move out of their parents’ basements.
  3. Ability to cultivate job growth and a skilled labor force in energy-and knowledge-based industries: Job growth is occurring in areas dominated by industry sectors that either were more resistant to the recession or began to improve earlier in the recovery like powerhouse Texas cities of Houston and Dallas.
  4. And proximity to intermodal infrastructure: Big changes are coming for metro areas proximate to intermodal infrastructure, such as deep-water ports and rail lines, as macroeconomic dynamics shift import/export demandand the Panama Canal expansion nears its scheduled 2014 completion. Current growthtrends favor East Coast and Gulf ports.

Full report here.

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Protesting your property-tax appraisal may be easier than you think

By Marty Kramer | Consumer columnist for TexasRealEstate.com

Have you ever protested your property-tax appraisal? I have. Twice.

The first time was easy. We had bought our home six months earlier, and the appraisal district thought it had appreciated 20%!

I attended an informal meeting with an appraisal-district employee. When she looked at the copy of our closing documents, she immediately adjusted the price down to our purchase price. Simple as that. She said I could have handled the whole thing over the phone.

My second appraisal protest was only slightly more complicated. I came to the informal meeting with appraisals of comparable homes in my neighborhood and pictures of my house.

The appraisal district employee and I went back and forth over the details, and after 10 minutes, she dropped the appraisal. Not as much as I’d requested, but still a helpful amount.

So, I didn’t make it to the formal hearing with the appraisal review board either time. I hear from a friend of mine that’s a little more stressful, but still a fairly easy process if you do your homework.

Here are a few things to keep in mind if you decide to protest your appraisal.

Meet the deadline

According to the Texas comptroller, you have to file a written protest (for single-family residences) “by April 30 or no later than 30 days after the appraisal district mailed a notice of appraised value to you, whichever date is later; however, an owner may file a notice before June 1 if the ARB has not approved the appraisal records. Note that it is 30 days after mailing the notice, not its receipt.”

Depending on when your district mailed notices or approved the appraisal records, you may still have time to file.

Follow the rules

You can’t protest your appraisal on the basis that your tax bill is too high. Not successfully, anyway. You have to show that your property has been appraised higher than what it’s actually worth … or higher than other similar properties in your neighborhood.

Bring evidence

Your opinion doesn’t carry much weight. Whether at an informal hearing or in front of the appraisal review board, you should focus on factual information supported by documentation.

Be nice

Some people come to an appraisal protest ready to do battle. I’ve heard some loud, nasty folks while I was there to protest my appraisal. I don’t think that works. Just my opinion, but I bet appraisal-district employees and the appraisal review board members will probably respond better to homeowners who are polite and respectful.

You can find more specifics about how to protest your taxes from the state comptroller’s website.

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Construction cost update from Kirksey Architecture

Kirksey Architecture recently released its Annual Construction Cost Update for 2012 compiled by statistics from over 20 area construction firms.

Their findings show a slight increase in per square foot construction costs for each category including: one-story flex office buildings, low-rise office buildings, mid-rise office buildings, high-rise office buildings, medical office buildings, and parking structures. Commercial tenant improvements for a typical 25,000-square-foot, full floor office buildout are $27 to $45 per square foot, up $2 per square foot since 2011.

The report says, “construction costs have stabilized at a low point over the past year and have started to move upward while a few material costs and transportation costs have risen.”

Competitive construction costs and low interest rates make now a favorable time to build.

See the specific costs for each category and the full report here.

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Forbes Mailbag: Should I pay off my mortgage early?

By David John Marotta, Contributor

housing-up_b1Question: I would like to see your take on paying off a house faster (extra principal payments) so that overall your house hasn’t cost you all the extra interest; or investing your money, taxable or non-taxable. I’ve heard arguments on both sides, some for rental property some for personal property. I own a duplex, live in one half, rent out the other half. So I’m a little torn between arguments.

I feel like society has been brainwashed to not make extra payments, or if you do, only do a little extra.(IE…bi-weekly payments bring in your payoff date.) Mainly because the argument is “you get tax deductions!”

Owners of rental property claim: get a 30-year, make sure you have cash flow, don’t make any extra payments. The tax deductions offset your income.

Debt free “gurus” say: Why would you pay $10K in interest only to get a $2.5K deduction? The faster you pay it off, the faster you’re not paying an extra $10K each year while getting a measly deduction.

I could go on and on with all kinds of arguments. Thanks for your time,

Duplex owner

Answer: Great question! Financial advisors disagree because there are some things more important and some things less important. My advice is based on a millionaire mindset and not just a get-out-of-debt mindset.

In 2003 I wrote a column “Using a mortgage wisely” in which I listed seven rules for handling a mortgage. I started that column by saying, “Most Americans have a home mortgage. The rich often have two. Only the poor can’t take advantage of this ‘good’ debt.” Here are the seven rules:

  1. 1. Have a home mortgage
  2. Borrow a 30-year fixed rate mortgage
  3. Don’t buy down the interest rate by paying points
  4. Keep your mortgage debt under 30% of your net worth and under 80% of the value of your home
  5. Invest significantly in taxable investments each month
  6. Diversify your investments between stable fixed investments and growth stock investments
  7. After 8-11 years, pay off your mortgage or refinance depending on interest rates.

Having a mortgage at even as high as 6% means it is only costing you 4% and the government is paying the other 2% if you are in the 33% marginal tax bracket. Additionally, I don’t think you will ever see interest rates as low as they are right now. Just as the government will benefit from devaluing the buying power of the U.S. dollar because it will make it easier to pay off the national debt, so it will make it easier for you to pay off your mortgage with cheaper dollars over the next 30 years.

Bert Whitehead writes in “How to Get the Best Mortgage“, “A 30-year fixed rate mortgage is your best protection against inflation.” His article is worth reading and in it you will find much of the same advice.

Another way to look at a home mortgage which of the following is better:

  1. Having a home worth $360,000 which is appreciating with inflation
  2. Having a home worth $360,000 appreciating with inflation PLUS a $300,000 fixed 30-year mortgage on which you are paying 3% interest and the government is paying 1% interest by lowering your taxes AND $300,000 in taxable investments earning an average of 9-10% over the next 30-years.

Clearly (2) is advantageous. Any time you wanted you could slap your investments over your mortgage and be debt free. In fact, if your investments appreciate by 10% they should double in about 7 years. That means in 7 years you could pay off your mortgage and still have $300,000 in investments left over.

One more advantage, if you ever do need the money, if you have a mortgage you have a $300,000 cushion of an emergency fund. If you don’t have the mortgage and you get in financial trouble. NO ONE will loan you money once you are in financial trouble.

And this leads us to the reason for the mixed advice. If you are already living hand to mouth and unable to live within your means, you are not able to handle a mortgage well. If you can’t save money, then having $300,000 sitting around able to be spent will result in you spending it. Those with a millionaire mindset can have a mortgage. Those apt to spend and not save should work at being debt free and learning to save.

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CRE Show: Owner-Occupied Real Estate Is Growing in Appeal

In a market featuring rock-bottom building prices and record-low interest rates, now is an ideal time for businesses to consider purchasing instead of leasing their real estate.

That was the consensus of the panelists on the most recent episode of the “Commercial Real Estate Show,” which provided a look at the factors making owner-occupied real estate a more attractive option for businesses.

Show host Michael Bull, the president and founder of Bull Realty, said the possibility of rent spikes is one reason to consider buying.

“These prices are so low, it’s incredible,” he said. “With the lack of new construction [in recent years], I think we’re going to see some huge rents in about five years.”

Banks also are enthusiastic about owner-occupied real estate, noted Brant Standridge, a state president for BB&T.

“It’s very, very attractive for banks,” he said. “Financing is readily available, and banks are requiring less and less equity.”

Firms that own their own buildings have a valuable tool for acquiring the funds needed to grow their operations, panelists observed.

“Businesses that are looking to expand, particularly small businesses, often use their real estate,” said Brent Baker, a managing partner with CIB Partners LLC. “It’s an attractive way to get long-term financing and to accomplish some things: expansion of marketing programs, adding equipment, any number of things they may want to do.”

Companies also can dramatically increase their wealth by buying a distressed building, occupying it and then later doing a sale-leaseback.

“The sale-leaseback market and the single-tenant net lease market are as hot as firecrackers,” Bull said. “The value and the demand for these fully occupied properties are just huge.”

Possible changes in accounting rules provide yet another reason for firms to consider buying real estate. The Financial Accounting Standards Board has proposed changes that would classify leases as liabilities on balance sheets.

“What happens when your liabilities go up but your equity doesn’t change?” said Jeff Olson, a partner with Babush, Neiman, Kornman & Johnson. “Your leverage ratios go off the charts.”

Implementation of the changes could spur some businesses to buy instead of lease their buildings.

“They’ll say, ‘I’ll put the debt on my books but I’ll get the asset, and I’ll have an investment,’” Olson added.

He predicted that, if passed, the new rules wouldn’t be implemented until 2014 at the earliest.

Daniel Latshaw, a partner with Bull Realty, said markets such as Atlanta, Phoenix and Las Vegas could offer particularly good opportunities for purchasing buildings. “But don’t generalize,” he cautioned listeners. “Look closely at your market or submarket.”

The full show is available for download at CREShow.com. The next “Commercial Real Estate Show” will be available April 12 and will provide an update on the U.S. office market.

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Videos on Property Management

If you are  involved in property management, the below videos featuring Texas Association of REALTORS® Associate Counsel Kinski Leuffer share a few important things you should be aware of.

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Ground Control

Owners and developers unearth opportunities through creative land leases
By Philip “Fred” Himovitz, CCIM
Reprinted from From CIRE Magazine, Mar-Apr 2012

Editor’s note: Originally published in 2006, “Ground Control” is one of the most popular articles in CIRE’s archive. Author Philip “Fred” Himovitz updated the article for republication.

Commercial real estate developers and investors often favor total fee ownership of income property. The propensity to own — and the emotions attached to it — sometimes can result in misguided decisions and strategies and lost opportunities. Relinquishing ownership of income property is really a question of when, not if.

Once developers move beyond the notion of ownership as an investment goal, new opportunities that may not have been visible before, such as ground leases, become apparent. In its most basic form, a ground lease, or land lease, separates the ownership of land from the ownership of the improvements on the land, such as an office building or a shopping center. The landowner leases the land to the developer of the improvements, who pays rent for use of the land.

Typically ground leases are long-term and include set rent escalations, eviction rights should the lessee default, and a reversionary right, which means improvements on the property revert to the landowner at the end of the lease term. While such lease terms do not particularly favor developers, ground leases offer some distinct advantages to them.

The two most prevalent types of ground leases are subordinated and unsubordinated. Each provides benefits that can enhance the developer’s yield and turn dismal or modest returns into more attractive and risk-mitigated ventures. They also give developers the opportunity to involve multiple partners without negotiating formal partnership agreements.

Ground leases transfer control — not ownership — of a property and, for the landowners, they are considered one of the most secure forms of real estate investment. But landowners may be considered preferred investors and may be open to developers who offer them a stake in the improvements erected on their land, in exchange for other considerations such as rent abatement for vacancy. Such a quid pro quo can substantially reduce risk to a lender.

Lease Structures

In a subordinated ground lease, the landowner offers the land as collateral for the developer’s mortgage, giving the landowner a significant stake in the development risk. The subordinated ground lessor is considered a secondary lender with junior rights behind the primary lender, usually a bank or other financial institution.

Normally the ground lessor has a future claim on the improvements, as most ground leases require improvements to the land to revert to la

ndowners at the end of the lease. As such, ground lessors usually consider the downstream value of the improvements in establishing a rental rate. On the other hand, a ground lease that provides for the removal of any improvements at the end of the lease, such as relocatable metal buildings, modulars, portable plants, or parking lot appurtenances, would factor that eventuality into the rate as well.

The subordinated ground lease rental rate is usually a few percentage points above long-term permanent loan rates applied to the land value, which would correctly calibrate the risk-reward equation, including the risk of foreclosure, for the ground lessor.

The unsubordinated ground lease offers the landowner a more desirable role, comparable to that of the primary lender. This makes long-term permanent conventional financing more challenging for the developer, since the lender must assume the risk of lease termination and default. However, due to the senior position of the unsubordinated ground lessor, the ground lease rate can be lower and therefore much more attractive for the developer. The permanent lender recognizes the ground lease payments as an annual expense that will be factored into its loan underwriting. In total, the cash required in the deal by the developer is reduced while his yield is increased.

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In both cases, the developer’s requirement for cash in the deal is reduced because of the value that the landowner brings to the deal. The reduction in cash usually required causes the investment yield to increase when the income stream is extended into the future. The value of the future cash stream will be determined by a threshold discount rate, resource availability, and underlying assumptions — the same general market and economic model assumptions that apply to fee-simple land ownership deals.

Other considerations include the length of the remaining lease term, reversion covenants, and extension and renewal rights and options. Occasionally the ground lessor will participate in the cash flows by applying a lease rate as a percentage of the income that the rental property produces. This strategy can have the positive effect of averting a monetary default in the event of a “dark” project. It also has the positive effect of mitigating the risk that a first mortgage lender perceives if the lease is unsubordinated. For example, if prevailing long-term interest rates are 6 percent, a comparable subordinated ground rental rate might be 8 percent, whereas an unsubordinated lease might be priced at par or 6 percent.

Ground Lease Benefits

The potential to form a joint venture with a building developer can be attractive to the primary ground lessor. The yield values are enhanced by the security of the future improvements. Provisions against wasting the property, requirements to maintain the improvements, cure and notice rights, certain reasonable approval conditions, and the ubiquitous hazardous materials covenants are standard.

Clearly, an unsubordinated lease presents possibilities that offer an alternative investment vehicle that provides security to patient investors and can be traded, sold, or transferred in creative ways. For example, tax-deferred 1031 strategies are possible by trading into an income investment as a sandwich ground lessee-ground sublessor. The usual threshold is that the lease term be greater than 25 years. Since these instruments can take on the color of a security, real estate professionals who enter into these deals should carefully document all aspects of the transaction and seek advice from qualified securities professionals.

In addition, opportunities exist in some municipal ground lease situations wherein, under certain conditions, property taxes are completely or virtually eliminated. Likewise other tax benefits accrue to these sanctuaries because of the reversionary character of building improvements and the incentive-rewarding jobs creation. These areas of investment can offer a spectacular advantage over neighboring competing properties in pricing and yield.

Lease term and length influence the acceptability of ground lease deals. The current climate is cautionary because of the parochial need to own; however, institutional managers realize that it is all factored into the risk and yield and accept the challenge with appropriate lease drafting and terms that are favorable to the asset managers’ objectives. The environment is changing as the pressure for yield performance and risk mitigation goes begging. The challenge is pioneering in an area where heretofore only the creative and adventurous have explored.

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2011 Profile of Home Buyers & Sellers from the National Association of Realtors

The National Association of Realtors® annually surveys recent home buyers and sellers to gather detailed information about their experiences buying and selling a home. This report provides real estate professionals (and sellers) with insights into the needs and expectations of their clients (and buyers.)

Characteristics of Home Buyers

  • Thirty-four percent of recent home buyers in Texas were first-time buyers, compared to a national level of 37 percent – a drop from 50 percent in 2010.
  • The typical buyer in Texas was 46 years old, while nationally the typical buyer was 45-years- old, a jump from 39-years-old in 2010.
  • The 2010 median household income of buyers was $92,300 in Texas and $80,900 nationally. The median income was $65,000 among first-time buyers and $108,700 among repeat buyers, compared to $62,400 among first-time buyers and $96,600 among repeat buyers nationally.
  • Nationally, 64 percent of recent home buyers were married couples—the highest share since 2001. In Texas, the figure was 67 percent. Eighteen percent of recent home buyers were single females nationally—the lowest share since 2004; 15 percent were single females in Texas.

Characteristics of Homes Purchased

  • Only 16 percent of all recent home purchases on a national level were new home purchases. This is not-reflective of conditions in Texas, where 31 percent of homes were new.
  • Nationally, the typical home purchased was 1,900 square feet in size, was built in 1993, and had three bedrooms and two bathrooms. In Texas, the typical home purchased was 1,800 square feet, built in 2001 and had 3 bedrooms and 2 baths.
  • The quality of the neighborhood, convenience to job, and overall affordability of homes are the top three factors influencing neighborhood choice; however, neighborhood choice varies considerably among household compositions.
  • When considering the purchase of a home, heating and cooling costs were at least somewhat important to 86 percent of buyers and commuting costs were considered at least somewhat important by 73 percent of buyers nationally, compared to 91 percent and 78 percent of buyers in Texas respectively.
  • The typical home buyer in Texas searched for 10 weeks and viewed 10 homes, compared to 12 weeks and 12 homes on a national level.

Financing the Home Purchase

  • TAR2011DataOn a national level, 87 percent of home buyers financed their recent home purchase. Among those who financed their home purchase, the buyers typically financed 89 percent. In Texas, 88 percent of buyers financed their recent purchase and 91 percent of the purchase was financed.
  • The share of first-time buyers who financed their home purchase was 95 percent compared to 82 percent of repeat buyers, nationally. In Texas, that share was 92 percent of first-time buyers and 85 percent of repeat buyers.
  • Nearly half (46 percent) of home buyers nationally reported they have made some sacrifices such as reducing spending on luxury items, entertainment or clothing. This also holds true in Texas.
  • Nationally, 23 percent of buyers reported the mortgage application and approval process was somewhat more difficult than expected and 16 percent reported it was much more difficult than expected. These numbers are equivalent to the Texas numbers, where 23 percent of buyers reported the process was somewhat more difficult than expected and 16 percent reported it was much more difficult than expected. Home Sellers and Their Selling

Sellers

  • Nationally, recent sellers typically sold their homes for 95 percent of the listing price, and 61 percent reported they reduced the asking price at least once. In Texas, recent sellers sold their homes for 96 percent of the listing price and 60 percent reduced the asking price at least once.
  • Forty-one percent of sellers offered incentives to attract buyers nationally, most often assistance with home warranty policies and closing costs. In Texas, 48 percent of sellers offered incentives.

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