In Lehman’s Terms

We hear it over and over: Washington is broken.

The phrase is especially popular every four years, when both major political parties host their national conventions to officially nominate their candidates for president and adopt their party platforms.

It’s always interesting to see the deep divisions that characterize both parties. However, I find it intriguing that inherently both platforms and major candidates seem to always agree on one thing: the political system in Washington, D.C., needs fixing.

Regardless of a candidate's party or whether that party is in or out of power, each candidate seems to rail against “the system,” calling it broken, bloated, and bureaucratically bankrupt. 

A challenging time for legislation

Adding to the malaise, the government almost comes to a halt during this period, as Congress adjourns for the summer and lawmakers return to their districts to focus on their constituents and re-election.

So, what happens if you need to get something done in Washington, D.C., during this do-nothing period? Conventional wisdom and every legislative insider will say, “Nice try, but don’t waste your time or mine when nothing is going to pass.”

This is the situation REALTORS® found themselves in during the closing days of the 114th session of Congress.

Fighting for homebuyers this summer

Hard-fought legislation known as H.R. 3700, the Housing Opportunity through Modernization Act, was designed to make homeownership more accessible for many low-income and first-time homebuyers. The bill unanimously passed the House of Representatives in February, but was stalled in the U.S. Senate as lawmakers and special-interest groups attempted to add their less popular legislation to this bill. 

So with only a few weeks left until the Senate recess, REALTORS® took matters into their own hands to get this bill out of Congress.

In less than one month, REALTORS® generated 139,660 supportive messages to members of the Senate. This included 13,973 calls, emails, and text messages to both Texas senators. Their message was clear: H.R. 3700 was too important to local economies and housing markets that are still trying to recover from recent economic downturns to become victim of insider power plays and manipulations.

The message was received loud and clear—the U.S. Senate unanimously passed the measure as one of its final actions before adjourning on July 15.

Make the call to make a difference

In Lehman's terms, the unanimous passage of H.R. 3700 is an example of what can be accomplished when individuals make their voices heard on Capitol Hill. Lawmakers are there to serve the public, and sometimes the public just needs to remind them of that … like almost 140,000 REALTORS® did over the last few weeks.

I believe the system works when citizens are willing to make the calls.   

Mark Lehman is vice president of Governmental Affairs for the Texas Association of REALTORS®. 

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You’ve been careful with your finances, saved for a downpayment, and finally received approval for a mortgage loan. It’s time to celebrate, right?

Not yet. Your lender will recheck your credit right before closing. Don’t give him or her reason to question your creditworthiness by making these mistakes:

1. Changing jobs

Changing employers could mean delays due to employment and salary verifications for which we recommend this guide on how to generate 941 x form. Of course, you shouldn’t ignore a great career opportunity. It means only that optional moves should wait.

2. Making a big purchase

Your debt-to-income ratio is an important factor when being considered for a loan. If you add to your debt by purchasing a car or boat, you risk exceeding the ratio that your lender finds acceptable.

3. Opening credit accounts

You might apply for a credit card so you’re ready to buy furniture for your new house. But similar to taking on new debt, applying for a new credit account can harm your mortgage approval. The credit inquiry necessary for the new account will ding your credit score a few points, and the lender might wonder just how much you plan on spending with that new account.

Part of the mortgage process is a final check to ensure you can afford the loan. Neither you nor the lender wants the payments to be a struggle, so don’t give the lender any reason to doubt your creditworthiness.

There are other ways a transaction can fall apart before closing. Be sure to consult with your Texas REALTOR® about contract deadlines and other to-do items to ensure you close on your new property.

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In Lehman’s Terms

My social media accounts were on fire leading up to July 4 with people sharing messages honoring Independence Day.

You probably saw it, too: hundreds of Facebook posts and tweets from parades, picnics, and fireworks displays, alongside inspirational messages quoting our founding fathers, public servants, and the average guy next door. 

Some of my favorites posts were videos of patriotic songs ranging from radio star Kate Smith singing Irving Berlin’s “God Bless America” to a phenomenal mariachi band performing “The Star Spangled Banner” before a Major League Baseball game.

Could anything be more American?

Occasions like this serve to remind us that while our freedoms are extensive, we should never take them for granted—especially the freedom we refer to as the American Dream of homeownership.

More than 60% of Americans own their homes, according to the Census Bureau. But this dream is under attack every day at almost every level and branch of government. I believe it’s our responsibility to make sure this freedom is not compromised.

On the national level, for example, an intense public outcry in 2011 forced lawmakers to stop an effort to require prospective homebuyers to make a 20% downpayment when purchasing a home—that would’ve meant $40,000 up front for someone purchasing a modest $200,000 home. This arbitrary action would have placed the American Dream out of reach for many first-time and low-income homebuyers.  

At the state level, Texas voters went to the polls in November and overwhelmingly approved changing the state constitution to permanently ban real estate transfer taxes. Other states see how costly these taxes can be for prospective homebuyers—Texas wanted to avoid that possibility altogether.

And right now, pro-property rights groups like the Texas Association of REALTORS® are gearing up for the next session of the Texas Legislature by promoting legislation that will add more transparency to the property tax process. The goal is to ensure that people won’t be forced to sell their homes to afford the taxes on their property. Visit thehiddenpropertytax.com to learn more about this important issue.

It even continues at the local level, as many governmental entities constantly attempt to compromise homeowners’ rights by imposing self-serving eminent domain and selective annexation policies or increasing property taxes to feed an often bloated and wasteful local bureaucracy. Many of these efforts go unnoticed by homeowners because of misleading and confusing tax policies.

In Lehman’s terms, we need to remain vigilant to ensure the freedoms we enjoy remain in place.

July 4^th is a wonderful time to focus on these unique and cherished freedoms. But it’s also a time to recall the engraving on the Korean War Veterans Memorial in Washington, D.C.: “Freedom Is Not Free.”

Each generation of Americans has sacrificed much for these freedoms. It’s our shared responsibility to see that these freedoms are not compromised or discarded so we may always be known as the land of the free.

Mark Lehman is vice president of Governmental Affairs for the Texas Association of REALTORS®. 

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Before you enter the world of real estate on your own, see if a Texas REALTOR® can help you instead. Here are four reasons to reach out to one.

When you want to know how much your home is worth
While you could use a home-valuation website that tells you a number, you shouldn’t rely on it alone. These sites often don’t know the details of your property, the current market, and what buyers are looking for in your area. A Texas REALTOR® can help you determine a more accurate price for your property.

When you want help narrowing down your options
You could spend hours and hours searching for properties online, contacting owners or their agents to see the property, and figuring out whether it’s a good deal. Or, you could hire a Texas REALTOR® to cut through the clutter by determining your needs, finding properties that fit those parameters for you, and setting up tours to see them. On top of that, they can help you figure out if the price is right and what you can afford.

When you need help navigating negotiations
Not everyone is skilled at negotiations, but Texas REALTORS® are. They’re armed with the most up-to-date information about laws, the market, and more that puts them in a position to negotiate on your behalf with confidence.

When you value your time
Texas REALTORS® can save you a lot of time and hassles by handling the tasks you don’t have time to manage. For example, Texas REALTORS® have experience marketing properties, which means you don’t have to come up with a plan on your own. They also facilitate and explain the entire transaction process so you don’t have to keep track of every single detail.

Ready to find one?
Use the search tool on texasrealestate.com and find a Texas REALTOR® to contact today. 

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In Lehman's Terms

Remember “I'm Just a Bill” from the Schoolhouse Rock series in the 1970s?

The cartoon taught viewers—ideally kids, but probably some adults, too—how a bill is made into law in Washington, D.C. If you saw this animated classic, you’ll recall that to become a law, a bill has to be passed in both chambers of Congress, the House of Representatives and the Senate, and then get the president’s signature.

But sometimes a bill gets bogged down in one chamber and doesn’t see the light of day for a while. Like right now.

A bill known as HR 3700, the Housing Opportunity Through Modernization Act, unanimously passed the House in February but has stalled in the Senate. This surprises me because the bill is a common-sense measure that makes much-needed reforms to programs that will increase affordable homeownership options.

Here’s some of what this bill does:

• Changes the lending rules for people who want to use Federal Housing Administration funding to purchase condos, which are an affordable option for first-time homebuyers
• Speeds up the process for rural housing loans, saving time and reducing the burden on federal agencies
• Reforms the U.S. Department of Housing and Urban Development’s rental assistance programs to expand housing access to low-income families.

In Lehman’s terms, this bill will help more people become homeowners.

The National Association of REALTORS® has issued a call for action encouraging its 1 million members to ask their senators to bring up the bill. These elected officials need to hear from the public, too. Use these links to contact Sen. John Cornyn and Sen. Ted Cruz right now.

Send a note encouraging them to move this important bill along so it can become a law that benefits homebuyers, taxpayers, and the real estate market. 

Mark Lehman is vice president of Governmental Affairs for the Texas Association of REALTORS®. 

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A couple of friends of mine are having a year full of major life milestones: Their wedding this fall is quickly approaching. One of them just finished her first year of teaching after going back to school for a master’s degree. And, now, they’re closing on their first home this month.

They were able to make it all happen, but for many who are in similar situations, the idea of buying a home after incurring a significant amount of student debt, whether from undergraduate or graduate programs, can seem like a major challenge. A new survey from the National Association of REALTORS^® reported that 71% of non-homeowners polled believe that student debt is delaying them from buying a home.

Much is made of millennials' homeownership trends and preferences, but only recently has the effect of student debt started to garner more attention. Senator Elizabeth Warren addressed the topic specifically during the 2016 REALTORS^® Legislative Meetings in Washington, D.C., last month.

From an individual standpoint, one of the most important things to keep in mind when entering the homebuying process with student debt is your debt-to-income ratio. It’s not always calculated quite the same—sometimes student debt is included as a percentage of the current balance rather than monthly payments—but generally, it’s the percentage of monthly income that’s spent on all debts (auto loans, credit cards, etc.), not just student loans. In the case of my friends, they were lucky enough to have a lender who worked with them to lower that ratio to the point where they could qualify for the home they had in mind.

Some common ways to lower your debt-to-income ratio include paying down credit cards, getting car loans down to 10 payments or fewer (the point at which some lenders will exclude it from the ratio), finding new sources of income (can you add freelance work?), or if you have a partner, moving debt around might be an option. A debt-to-income ratio of 36% or less is ideal, but in some cases lenders will consider up to a 43% ratio. Your REALTOR® may suggest other ways that apply to your situation.

It can be hard to reduce your debt-to-income ratio while paying student loans—not to mention saving for a downpayment—but taking the long view of your finances and managing your ratio now can pay off in the future when you’re ready to start the homebuying process.

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Follow this advice to create a great outdoor space to feed your family and friends.

Understand your crowd
A family of four that rarely hosts parties will need far less firepower than a family of six with the whole soccer team on its way over. John Bonnell, chef-owner of Fort Worth restaurants Bonnell’s and Waters, says a 36-inch grill is fine if you normally host smaller gatherings, while you should get at least a 48-inch grill if you anticipate the need to feed larger groups.

Add a sink
“My first piece of advice is to add a working, fully plumbed sink,” says Bonnell. “Having access to water and a hand-washing station is a great way to be able to use an outdoor kitchen efficiently without constantly needing to run indoors.”

A sink is not only convenient, but easy access to hot water and a soap dispenser is a quick way to make sure that any surface that touched raw meat can be cleaned to avoid cross-contamination.

Think beyond the grill
Make sure you have a large workstation, as outdoor counters fill up quickly with drinks, appetizers, serving platters, and silverware. Bonnell also recommends that you think about ventilation. “If a grill is right under an eve, smoke can billow and make life unbearable for a grill master.” A simple exhaust fan that just pulls the smoke up can make a huge difference.

Landscape expert Dustin Hillman, owner of Panther City Arbor and Patio and Hillman Outdoor Designs, suggests you consider your guest list. “For smaller crowds, focus your kitchen and surrounding areas with shade in mind,” he notes. “The more, the better. If you’re expecting larger crowds, keep your ceilings and patio areas uncluttered by raising the height of your roofs.” Higher roofs will help people mingle outdoors without feeling cramped. Don’t forget the ceiling fans!

Also consider also how your outdoor kitchen flows from the interior of your house to your exterior space. “Your outdoor kitchen should be visible from the main living room and kitchen areas, blending the two spaces,” says Hillman. “The last thing you want is an outdoor kitchen off the master bedroom, sandwiching your personal space with the entertaining areas of home.”

On a budget? Plan for expansion
Design options for your outdoor kitchen aren’t limited to the rich and famous. “Keep your project simple at the beginning,” says Hillman. “Start with just a few bricks for a fire pit. If you have grand plans for a bigger design later, make sure to run conduit or sleeves now for future features such as natural gas, lighting, or plumbing.”

The biggest aspect that is forgotten during the primary stages of development is clear outdoor lighting. You should make sure the grill master can see the grill. After that, a few simple strands of string lights make for an inexpensive, easy addition to outdoor ambiance.

Bonnell says that in place of a backyard refrigerator, use a metal tub filled with ice. Just make sure you have electricity available if you want to add one later.

Whether you’re upgrading your backyard kitchen or just starting out, make sure that it fits your lifestyle and is equipped with gear that will help you cook an amazing meal. After all, the perfect backyard kitchen is one that you enjoy using over and over again.

Brian Johnston is a food enthusiast from Fort Worth who loves cooking at home for family and friends. He writes on grills and grilling for The Home Depot.

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In Lehman’s Terms

This election season is so full of jargon that you could play political bingo with terms like swing voters, independent expenditures, and super delegates. 

My goal with this column is to translate this type of political-speak into plain language—hence the double meaning of the column’s title, “In Lehman’s Terms.”

This week I’d like to highlight a term you’re probably hearing a lot these days: grassroots.

Candidates sometimes use the term to highlight their community involvement or refer to on-the-ground support they receive from campaign volunteers. But there’s another way this term is used that doesn’t come from someone seeking your support on an election day.

The best way for me to explain is with a timely example set in the Northeast Texas city of Frisco.                                    

The three-mile-long problem … and a solution
In the fall of 2013, an electric utility co-op announced its plans to construct above-ground transmission lines along two high-traffic roadways near residential neighborhoods in Frisco. The 120-foot-tall lines would have run for almost three miles.

Frisco’s city council opposed the co-op’s plan because the city already had plans to expand the two roads to accommodate increased traffic, and utility poles would prevent this much-needed expansion. Homeowners and prospective homeowners in the area were opposed because they knew the above-ground lines would negatively affect their property values. Other stakeholders who opposed the plan included the Frisco Chamber of Commerce, the Frisco Independent School District, and the Collin County Association of REALTORS®.

But these community members didn’t just talk about their concerns; they joined together to propose a solution: bury the lines. They knew it would take a combination of on-the-ground action and funds to support the effort, so Collin County REALTORS® contacted us at the Texas association. After reviewing the construction’s potential effect for private-property owners, TAR’s Issues Mobilization Political Action Committee—which is dedicated to local issues just like this—funded the campaign.

Stakeholders worked diligently with the co-op and Texas Public Utility Commission staff to draft an agreement that would ultimately require PUC approval. They had to explain the benefits of burying the lines, in part because it costs significantly more to bury the lines than to erect them above ground.

A triumph two years in the making
Just last month—after much give and take by all interested parties—the grassroots group took their proposal to the PUC and received the good news they were hoping for: the commission approved the plan to bury the majority of the lines.

The PUC is expected to sign the final order this week at its June 9 meeting, concluding a fight that began more than two years ago.

Grassroots in action
This kind of local involvement reminds me of a relevant quote from American cultural anthropologist Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

In Lehman’s terms, this local success shows that grassroots is more than a buzzword. It shows the power ordinary citizens can have when they leverage their numbers. 

Mark Lehman is vice president of governmental affairs for the Texas Association of REALTORS®. 

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My neighbors wanted to sell their house last year, no later than August. They spent most of the spring getting ready—painting the kitchen, cleaning out the cluttered garage, and updating hardware in the bathrooms.

Then they advertised it for sale in May without using a REALTOR®.

I asked the husband why they were selling the house on their own. He talked about the high demand for homes in our neighborhood; many houses were selling for close to asking price as soon as they went on the market. He figured that attracting buyers wouldn’t be difficult, and he wasn’t worried about handling the paperwork—especially if doing it on his own would save a few dollars.

By September, they took it off the market. While there was interest, arranging showings was difficult around the kids’ and parents’ schedules, and one deal fell through because of a missed deadline.

Last week, my neighbors put their house on the market again, hoping to move by August. I noticed a few differences from last year: the asking price is higher, there’s a REALTOR®’s sign in their front yard, and this morning the sign changed from for sale to sale pending.

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