Dallas Fort Worth Area Homes and Real Estate: February 2010

Over the last few months, a new scam involving bogus rental listings has surfaced on Craigslist in the Dallas / Fort Worth area.  Recently, I had a client who forwarded me an ad she found on Craigslist that seemed a little too good to be true.  The ad featured a very nice home in the Park Cities area, walking distance to Bradfield elementary, complete with three bedrooms and two baths and well over 2000 square feet. 

According to the ad, the owner was only asking a mere $900 per month for rent!  Anyone who knows the Park Cities area will tell you that would be the deal of the century!

Well, you know the saying.  If it sounds too good to be true, than it probably isn't true.

Luckily I had already heard about this scam while attending a class at Keller Williams Elite in Park Cities.  There had been a recent incident involving an agent with another broker that had received an angry phone call from a person who had fallen victim to a scammer via a fake Craigslist ad.  The scammer had stolen pics of one of her listings and had used them to post a bogus rental ad on Craigslist. 

Unfortunately, the renter had wired money to the scammer's overseas account to secure the property and learned the hard way that she should have had a Realtor® looking out for her interests.  She was trying to take her frustrations out on the listing agent, but should have consulted with a Realtor® long before wiring money overseas.  A Realtor® would have easily been able to figure out that it was a scam by checking MLS, verifying tax records and market rental comparables in the area.

Here's how it works: The scammer scans various real estate listings on the internet for homes that are listed for sale or rent in the Dallas area.  They will often find a really nice home and then place a fake ad on Craigslist for a ridiculously low price. 

In this case, the market rent for this home advertised at $900 per month should have been in the range of $3,500 to $4,000 per month.  That's not to say that there are not occasionally some great deals on rentals available below market, but this was desperately low.

So I instructed my client to not call or email on this ad and then I proceeded to do a little research.  After checking with varous sources, I quickly concluded that this was definitely a scam. 

But I went ahead and emailed the scammer just to see what kind of response I would get.  Here's the reply I received to my email inquiry: (Scammer's reply is in italics.  My notes are in parenthesis.  Bold and underline emphasis added by me.)

Good day Applicant,
 
Thanks for your email and interest in renting my house. I am Brian XXXXXX, the owner of the house you are making enquiry of. Actually I did reside in the house with my family, my wife and my only daughter before and presently we have moved out due to my official job transfer or posting, whatever you may call it, which has now found me in Warsaw, Poland. Presently my house is still available for rent for $900 USD per month (which includes utilities), though i intended selling it off but on a later thought changed my mind and have decided putting it on rent. More so now, I’m currently in Lagos, Nigeria for an international Christian follower's crusade taking place at the Nigeria national stadium, by one Pastor Chris of the Christ Embassy Ministry.

(Hmmmm.)
 
I want you to understand that I spent a lot on my property that you have requested to rent, so I will solicit for your absolute maintenance of this house and would want you to treat it as your own because cleanliness they say is next to Godliness. It is not all about the money to be paid on rent or spent; it is all about a good maintenance culture which I want you to adopt on the property. I want you to keep it tidy all the time so that I would be full of smiles whenever I come and above all, a good, strong and tight relationship between us when I come for a check up. Please one more thing, I wouldn’t like to have any benefit of trust in you because I want to stand in your words that the property would be well taken care of all the time.

(He's playing the trust card like the ace of spades...)
 
I believe you have see how lovely it is if from only the pictures you saw in my posting compare to the 100% comfort to be derived from it as an occupant. Please note than you will only be able to drive by the house for now but can't have a look at the interior until i have sent the keys and documents of the house to you. Reason because, i couldnt find someone trust worthy to drop the keys with as my call down here was so sudden. I do hope you understand.

(If the terrible grammar and spelling hasn't already sounded off an alarm, the fact that he's not allowing anyone to view the home prior to sending money should have the alarm bells rattling your eardrums.)
 
It has a dramatic entry foyer with ceramic floor. Extremely spacious rooms throughout with lots of big windows...nice and light! New neutral paint and some newer carpet. Very quiet, low traffic area. New fridge (7/07)...I believe it’s absolutely a perfect home for you and your family. Utilities include Water, Trash, Sewer, Gas etc. Please note that, a deposit payment would be required if accepted to have the property rented.
 
SO IF YOU ARE REALLY INTERESTED I WILL WANT YOU TO FILL THE RENT APPLICATION FORM BELOW.
RENT APPLICATION FORM.
FIRST NAME:__________
MIDDLE NAME:__________
LAST NAME:__________
PROFESSION:__________
PHONE: _______________
(CELL)PHONE__________
(WORK)PHONE__________
(HOME)PHONE__________
ARE YOU MARRIED: __________
KIDS _____ (YES/NO), HOW MANY ________
PRESENT ADDRESS: _____________________
CITY: _______________
STATE:______________
ZIP CODE: ____________
HOW LONG ___________IF RENTING
WHY ARE YOU LEAVING__________
IF THIS HOUSE IS BEING GIVEN TO YOU,HOW LONG DO YOU INTEND STAYING ____________
WHEN DO YOU INTEND MOVING IN ______________
IF YOU HAVE A PET: _________
NAME OF PET: _____________
KIND OF PETS: _____________
HABITS: ___________
DO YOU SMOKE ______________
DO YOU DRINK ______________
DO YOU WORK LATE NIGHT ____
HOW SOON CAN YOU MAKE THE MOVE IN DEPOSIT ($900) REQUIRED: ____________
WHEN AND WHERE DO YOU WISH TO RECEIVE THE KEYS AND DOCUMENTS OF THE HOUSE: _______________

(I really contemplated filling this out with fake info just to mess with the guy, but figured my time would be better spent informing the public about this scam.)

Looking forward to hearing from you with all this details so that I can present it to my family, pray over it (because I consult the Almighty God before making any decision) and if accepted, and then have them stored in my file in case of issuing the receipt for you and contacting you. Await your urgent reply so that we can discuss on how to get the document and the keys to you, please we are giving you all this based on trust and again I will want you to stick to your words, you know that we are very far apart now and only putting everything into God's hands and hope that you will not let us down.

(Again, he's playing the trust and religion cards like pocket rockets in a poker tourney.  Gotta love it...)
 
The house will be available for rent for a period of five and a half years so you have a choice of deciding how long you intend staying there.. Here is my number 011-234-XXXX-XXXX or  011-234-XXXX-XXXX, I will be expecting to hear from you.
 
Feel free to call me for more information and arrangements.
 
God Bless,
Brian.

Ok folks, there you have it.  There are several dead giveaways that this is a scam:

• The name shown as the owner of record on the Dallas county tax rolls is a different name than the person in this email.  I deleted the address to protect the owner's identity, but it was listed in the Craigslist ad. 
• The rent of $900 that he is asking for this home is thousands of dollars below market for the area.  Since I have full access to the MLS system, it was easy to look at market rent for this area.  Plus the price supposedly included all utilities.  The utilities alone could actually top what he's asking for rent.  Again, if it sounds too good to be true.....
  
• He's not allowing anyone to see the home prior to wiring him $900.  Big, BIG problem.  Don't walk.  RUN!
  
• The home was listed FOR SALE in MLS, but was not also listed for rent.  The scammer obviously stole the pictures and description from the listing on another website and then published this fake rental ad on Craigslist.

Luckily for my client, she had me to check all of this out for her ahead of time.  And since the Realtor® commission is generally paid by the landlord, my services did not cost her one penny. 

So the moral of the story is...Use common sense when dealing with people on Craigslist (Craigslist even had a prominent warning about wiring money overseas and/or dealing with landlords that cannot meet in person), and it's well worth it to have a licensed Realtor® working for you when searching for rental properties!  Watch out for scammers on Craigslist!!!

Crime reports and statistics are important to Dallas home buyers searching for new homes.  While Realtors can provide a wealth of information about schools, recreational facilities and home price trends in neighborhoods, we cannot refer to an area as "safe" or "low crime" because of liability issues and the subjective nature of such labels.  Referring to an area as "safe" or "low crime" could be considered steering and/or redlining, which is a practice that is forbidden by Federal law and can result in serious consequences. 

However, we can provide information about where to obtain reliable data related to crime statistics.     

Dallas home buyers curious about crime statistics have many options available online that provide helpful information about incidents of crime that have occured in various cities and neighborhoods. 

The methodology for how law enforcement agencies compile and report crime statistics is managed by the FBI via their Uniform Crime Reporting program.  This program dictates how crime data are compiled and reported by law enforcement agencies across the country.

LINKS TO AND INSTRUCTIONS FOR SITES WITH INFO ABOUT CRIME STATISTICS AND SEXUAL OFFENDERS:

* www.crimereports.com - Information from over 700 law enforcement agencies and sexual offender data for all 50 states. 

• Type in the property address on the home page to see results.
• Results page allows sorting by crime, date or distance. 
• Selectable time period of three, seven, 14 or 30 days. 
• Results shown on a Google map with detailed information provided to the left of the map. 

* www.localcrimenews.com - Updated crime news and arrest records for local cities, including crime graphs, newsletters, RSS feeds for city crime news and many charts and graphs showing crime statistics for cities all over the United States. 

• Click letters A-Z to show statistics by city.
• Smaller cities may not be covered by this site.  Works best for larger metro areas and suburbs.
• Links to crime maps, RSS feeds, graphs and statistics are located on city pages.

* http://www.fbi.gov/ucr/ucr.htm - Information about the FBI Uniform Crime Reporting Statistics and Crime Data Reporting Methodology.  The FBI created the Uniform Crime Reporting Program in 1930 as a means of collecting and reporting crime statistics in a uniform manner throughout the United States.   A good site to read if you're curious about regional, state and federal crime data, as well as how the data are compiled. 

Home buyers should consider researching crime statistics in their current neighborhood so they can compare them to neighborhoods they are interested in viewing.  Virtually all neighborhoods in the United States have some level of crime.   Often times, buyers may be surprised to see that their own neighborhood has a higher level of crime than they might have expected, despite the fact that they may have considered it a "safe neighborhood".  This helps to put things in perspective when comparing neighborhoods. 

Home buyers concerned about the safety of a particular neighborhood should also consider speaking with neighbors, neighborhood associations, the police department, as well as other law enforcement agencies.  Driving a neighborhood at night is also sometimes a good idea.

For the first time since 1986, Dallas Fort Worth will host the NBA All Star Game and all the parties and festivities that come along with it. 

The All Star Game will actually be held not in the American Airlines Arena that is home to the Dallas Mavericks, but instead will be in the newly completed Cowboy's Stadium in Arlington (aka "The Jerry Dome"). 

The seating capacity at Cowboy's Stadium is around 80,000 but can be expanded to over 100,000, which is exactly what some people would likely love to see happen.

Cowboy's owner Jerry Jones and Maverick's owner Mark Cuban are anxiously awaiting to see if attendance at this year's game will shatter the current record of 44,735 fans set at the 1989 NBA All Star game held at the Houston Astrodome.  This years game attendance may have a shot of doubling this old record.

And I expect this will likely be one of the busiest, if not THE busiest, weekend of events in Dallas Fort Worth history. 

In addition to the game itself, there are dozens of events happening throughout the Dallas Fort Worth area starting tomorrow (Thursday).   

If you live in the Dallas area and have driven past downtown lately, you probably couldn't help but notice the larger than life image of Dirk Nowitzki plastered on the side of Bank of America Plaza (the neon green building). 

Dirk is a pretty tall guy, but this really does him justice!

Check out the Hyatt Regency close to Reunion Tower for more larger than life images of some NBA All Star players. 

The downtown Dallas area is expected to have hundreds of thousands of visitors over the weekend.  The only events in recent times that have attracted crowds this large to Dallas were the World Cup in 1994 and the Republican National Convention in 1984.  Police have warned motorists and partygoers in the Dallas area to expect traffic delays and problems with parking. 

Speaking from experience, I can tell you that Dallas is not nice to drivers that park in no parking zones, so don't expect your car to be there when you get back if it wasn't supposed to be there in the first place. Taking cab or hopping on the DART rail may be a much smarter option than risking the traffic and parking nightmare that will likely envelop the city for the rest of the week.  Add to that the two inches of snow expected to fall in Dallas tomorrow night and it might not be a pretty sight for those who are unprepared.

Below is a list of the events planned around the Dallas area for this coming weekend.  Tomorrow night (Thursday) is "opening night" and will likely be the busiest night of the week for events.  Expect security to be extra-tight and dress codes at many of these events to be strictly enforced.  Call the numbers below for full details.

{{{{{{{{{{ THURSDAY DALLAS NBA ALL STAR EVENTS }}}}}}}}}}

• ALL STAR OPENING NIGHT CONCERT - 7PM at the Majestic Theater on Elm Street in downtown Dallas.  Featuring Mary J. Blige, comedian Mark Curry and hosted by actor Mario Lopez.  For tickets, call Ticketmaster at 800-745-3000.  Ticket prices $150-$2,500. 
• ALL STAR WEEKEND TIP-OFF PARTY - 9PM at the Palladium Ballroom on South Lamar just south of downtown Dallas.  Call 800-960-4560 for ticket info.  Hosted by rapper Ludacris and basketball great Allen Iverson.
• ZO AND MAGIC'S 8 BALL CHALLENGE - 9PM at Centennial Hall at Dallas Fair Park.  Featuring Magic Johnson, Alonzo Mourning and Mark Cuban.  $50 donation required to attend - Proceeds benefitting the Magic Johnson Foundation.  www.8ballchallenge.com
• EVERYTHING'S BIGGER IN TEXAS- 9PM at TePheJez night club in Dallas.  Benefit for "Laptops for the Wounded" $50 general admission or $125 VIP.  Call 214-744-JAZZ. 
• ALL STAR COMEDY JAM- 8PM at Nokia Theater in Grand Prairie.  Hosted by Shaquille O'Neal.  214-373-8000. 
• ALL STAR HOLLYWOOD CELEBRITY SOIREE - 9PM at Union Station in downtown Dallas.  Tyler Perry, Terence Howard and Kerry Washington will be there.  Call 800-960-4560 for ticket info. 

{{{{{{{{{{ FRIDAY DALLAS NBA ALL STAR EVENTS }}}}}}}}}}

• 944 MAGAZINE'S FRIDAY-SATURDAY-SUNDAY PARTY AT THE BOARD ROOM - Begins Friday at 5PM.  Continues Saturday and Sunday.  The Board Room in Victory Park on Houston street.  Guests will include Russell Simmons and rapper Snoop Dogg.  www.944allstar.com 
• THE VIBE MAGAZINE ALL STARS OF COMEDY EXPLOSION - 7PM at the Majestic Theater.  Featuring Aries Spears, Jay Lamont and Chris Spencer.  Tickets 800-745-3000. 
• P DIDDY DOES DALLAS - 9PM at the Palladium on South Lamar south of downtown.  Pretty obvious who's going to be there.  Tickets - 800-745-3000.   
• CLASH OF THE TITANS - NFL VS NBA ALL STARS - 9PM at Union Station in downtown Dallas.  Tickets 800-960-4560. 
• VIBE MAGAZINE'S COMEDY SHOW AFTER PARTY - 10PM at the Tower Club in Thanksgiving Tower in downtown Dallas.  Hosted by Rickey Smiley.  800-960-4560. 

{{{{{{{{{{ SATURDAY DALLAS NBA ALL STAR EVENTS }}}}}}}}}}

• THE KATT WILLIAMS EXPERIENCE - LIVE IN CONCERT - 7PM at the Majestic Theater on Elm in downtown Dallas.  800-745-3000. 
• PARTY FOR CHAMPIONS - 9PM at the Tower Club at Thanksgiving Tower.  A Red Carpet Event with multiple rooms of entertainment and a cigar bar.  Tickets 800-960-4560.

{{{{{{{{{{ SUNDAY DALLAS NBA ALL STAR EVENTS }}}}}}}}}}

• ALL STAR APPRECIATION DAY - Noon at Union Station.  Featuring complimentary mimosas and massage stations.  Call 800-960-4560. 
• ALL STAR GAME WATCHING PARTY - 6PM at Union Station.  800-960-4560. 
• AND OF COURSE, THE NBA ALL STAR GAME WILL BEGIN AT 7PM CST at COWBOY'S STADIUM IN ARLINGTON.  Ticket prices range from $25 up to more than you and I together can probably afford.  Call 800-745-3000. 

And if you feel like checking out multiple events, consider purchasing an NBA All Star Passport.  Get tickets to 10 events for $399 or VIP access for $899.  Visit www.dallasallstarpassport.com for details. 

Or sit at home and watch it on TV.  That's always fun too....In fact, that may prove to be a smart strategy for Thursday night if it does happen to snow two inches.

In addition to these headline events, many other restaurants, bars and venues will host smaller events that will attract crowds from all over.  Check www.quickdfw.com for more info on smaller local events planned for the weekend.

Effective on all case numbers issued on or after April 5, 2010, HUD will increase the upfront mortgage insurance premium for FHA loans from the current rate of 1.75% to 2.25%.  Dallas area home buyers that want to take advantage of the lower upfront MIP premiums must have a property under contract prior to April 5 and their mortgage lender must request an FHA case number on the property in order to secure the current lower premium of 1.75%. 

The increase in upfront MIP premiums is due to FHA falling below the required 2% level of reserves in order to operate.  When reserves fall, the deficit has to be made up in some way. 

The increase in premiums will equate to a $500 increase for every $100,000 in loan amount.  A $200,000 loan will see an increase of $1,000 in upfront premium. 

WILL MONTHLY FHA MIP PREMIUMS ALSO INCREASE?

NO, not at this time.  The following premiums will remain in force for FHA loans:

LOAN TERMS GREATER THAN 15 YEARS (20, 25 and 30 year terms):

For loans with a loan to value ratio LESS THAN OR EQUAL TO 95%, the monthly premium is .5% of the initial loan amount, divided by 12.    For a $100,000 loan, this works out to be $41.66 per month. 

For loans with a loan to value ratio GREATER THAN 95%, the monthly premium is .55% of the initial loan amount, divided by 12.  For a $100,000 loan, this works out to be $45.83 per month. 

LOAN TERMS OF 15 YEARS OR LESS:

For loans with a loan to value ratio GREATER THAN 90%, the monthly premium is .25% of the initial loan amount, divided by 12.  For a $100,000 loan, this works out to be $20.83 per month.

For loans with a loan to value ratio of LESS THAN OR EQUAL TO 90%, FHA does not require monthly mortgage insurance. 

Buyers who secure a purchase contract prior to the April 5, 2010 deadline should consult with their lender to ensure that an FHA case number is issued on the property to secure the lower premium. 

The complete information regarding this change can be found here. 

If all goes as planned, the Federal Reserve will cease its program of purchasing mortgage-backed securities on March 31.  This program, which was created under the Bush Administration and then expanded under the Obama Administration, has served to keep mortgage rates at or near 50 year lows for the last several months.  The program has certainly achieved its objective of keeping rates low, but many fear the potential liability this program has created for the American public by effectively socializing the mortgage market. 

The end of this program will effectively mean the government will remove the mortgage market from "life support".  Nobody knows exactly what will happen when this occurs, but simply looking at the numbers suggests that rates will increase if the large demand of mortgage-backed securities is not offset by an increase in demand from institutional investors. 

Many economists have estimated that Fed purchases under this program have accounted for as much as 80% of the agency mortgage bonds that have been sold since the creation of this program.  From a supply and demand standpoint, one has to wonder just how much slack will be picked up by institutional investors once the government assistance ends. 

In a "normal" economy, the government does not directly intervine in the mortgage market; rates are determined by the supply and demand of mortgage-backed securities, which is a function of the open markets.  Government purchases of these bonds effectively means they are keeping rates "artificially low" by buying up a large portion of the supply of mortgage bonds. 

HOW MIGHT THE END OF THE FEDERAL RESERVE PROGRAM TO PURCHASE MORTGAGE-BACKED SECURITIES AFFECT HOME BUYERS AND HOME OWNERS LOOKING TO REFINANCE THEIR MORTGAGE?

• MORTGAGE RATES MAY INCREASE, PERHAPS RAPIDLY - If the decrease in government demand for mortgage-backed securities is not offset by an increase in demand from institutional investors, mortgage rates will almost certainly increase.  Again, nobody knows by how much, but just knowing that the government is purchasing as much as 80% of the securities in the market, the increase could potentially be substantial.   
• PURCHASING POWER MAY DECLINE - When and if rates increase, home buyers who qualified with a lender at lower interest rates may find their purchasing power has declined.  For example, the principal and interest payment on a $150,000, 30 year fixed rate mortgage at a rate of 5% is $805.23.  At a rate of 6%, the payment jumps to over $899.  The same payment of $805.23 will only purchase $134,305 at 6%.  So a 1% increase in mortgage rates can reduce purchasing power by over 10%! 
• SOME HOME BUYERS WHO QUALIFIED UNDER THE LOW RATES PRIOR TO THE END OF THE PROGRAM MAY DISCOVER THEY QUALIFY FOR MUCH LESS IF RATES INCREASE - A home buyer who qualifies for a $150,000 home mortgage at 5% might be startled to hear from their lender that they only qualify for $135,000 if rates go to 6%.  Mortgage qualifications are based on several factors, so not all home buyers may be affected in this way.  But it's certainly a possibility. 
• HOME OWNERS LOOKING TO REFINANCE THEIR MORTGAGE MAY LOSE ANY BENEFIT OF REFINANCING IF RATES INCREASE.  There are costs associated with refinancing.  Those costs generally need to be offset by the monthly savings a home owner will receive in order to justify refinancing their mortgage.  The higher the rate, the longer it will take to justify this cost savings.  And in some cases, the payment may not even decrease even with a lower rate because of the increase in the loan balance due to rolling closing costs into the loan. 

WILL THE FED EXTEND THIS PROGRAM?

It is always possible that the Fed could decide to extend this program; it was already expanded in March of last year.  However, public and government support of socialist programs like this one has certainly waned over the last several months.  Additionally, many inside the government and the Fed have expressed a desire to fundamentally change how the mortgage market works, even going as far as to suggest Fannie and Freddie should be dissolved in favor of another system.  What that system will look like is anyone's guess at this point.

Many Dallas home buyers, especially those that are first time home buyers, often have to use their imagination to picture how furniture will fit within the dimensions of a room.  First time home buyers often move into their first home from an apartment or a smaller home and then will buy furniture after closing.  It is always important to consider bedroom sizes when choosing a home to ensure there is enough room to fit the bed as well as any other bedroom furniture that will be in the room. 

While mattress size is always important to consider, always add a little extra to account for the size of the bedframe as well.  Bed frames come in a variety of different sizes and shapes and can have a huge impact on the total dimensions of the bed. 

HERE IS A LIST OF MATTRESS SIZES:

TWIN SIZE:

Dimensions - 39" wide by 75" long.  That's 3.25' X 6.25'.  In a 10X10 bedroom, which is a common size bedroom in smaller, production built homes, that leaves almost four feet of room in between the foot of the bed and the wall.  It also leaves about 6.75 feet of space in between the bed, depending on whether it's up against a wall or put in the middle of the room to allow for space on both sides. 

EXTRA LONG TWIN SIZE:

Dimensions - 39" wide by 80" long.  That's 3.25' X 6.67'.  The width is the same as a regular twin but it's five inches longer. 

FULL SIZE:

Dimensions - 54" wide by 75" long.  That's 4.5' X 6.25'.  So a full size mattress is the same length as a twin size but is 15 inches wider. 

QUEEN SIZE:

Dimensions - 60" wide by 80" long.  That's 5' X 6.67'.  At this point, it is especially important to take note of the size of the bed frame because many headboards and baseboards on queens are often substantially longer than full size and twin beds. 

KING SIZE:

Dimensions - 76" wide by 80" long.  That's 6.34' X 6.67'.  So a king size bed is the same length as a queen size, but is a full 16 inches wider. 

CALIFORNIA KING SIZE:

Dimensions - 72" wide by 84" long.  That's 6' X 7'.  A California King Size mattress is a little less wide than a regular king size but is four inches longer.