Your Friends Are Crazy Wrong If They’re Telling You Not to Buy

The current narrative is that home prices have risen so much so that it is no longer a smart idea to purchase a home. Your family and friends might suggest that buying a home right now (whether a first-time home or a move-up home) makes absolutely no sense from an affordability standpoint. They are wrong!

Homes are more affordable right now than at almost any time in our country’s history except for the foreclosure years (2009-2015) when homes sold at major discounts. As an example, below is a graph from the latest Black Knight Mortgage Monitor showing the percentage of median income needed to buy a medium-priced home in the country today in comparison to prior to the housing bubble and bust.

As we can see, the percentage necessary is less now than in those time periods.

The Mortgage Monitor also explains that home affordability is better today than it was in the late 1990s in 47 of 50 states.

Bottom Line

Your friends and family have your best interests at heart. However, when it comes to buying your first home or selling your current house to buy the home of your dreams, let’s get together to discuss what your best move is, now.

 

Posted by The KCM Crew

Ready to buy? Click HERE to start your home search!

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The #1 Reason to List Your House, NOW!

The National Association of Realtors (NAR) released the results of their latest Existing Home Sales Reportwhich revealed that sales rose 0.7% month-over-month, but remain 1.5% lower than they were a year ago. Some may look at these numbers and think that now is not a good time to sell their house, but in fact, the opposite is true.

The national slowdown in sales is directly tied to a lack of inventory available for the buyers who are out in the market looking for their dream homes! The inventory of homes for sale has fallen year-over-year for the last 28 months and has had an upward impact on home prices.

NAR’s Chief Economist Lawrence Yun had this to say,

“Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country.

Realtors® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers.” (emphasis added)

The houses that are on the market are selling fast, too! According to NAR’s Realtors Confidence Index, the median number of days it took for a house to go from listed to under contract over the past three months was 34.

Bottom Line

If you are one of the many homeowners who is debating listing your house for sale this year, the time is now! Let’s get together to discuss the specifics of our market!

Posted by The KCM Crew

6 Big Ways to Completely Botch Buying a Home

mevans/iStock; realtor.com

We all make careless mistakes. We accidentally undertip the waiter. We lock our keys in the car. We wear white after Labor Day. We press “send all.” It happens to the best of us.

But some little mistakes can create big problems, like when you’re buying a home.

A house, after all, is a huge purchase; the stakes are extremely high. With that kind of money on the line, you’d better be darn sure you can navigate the home-buying process without a hitch. And avoid self-sabotage!

To help you out, we’ve pinpointed six common ways home buyers botch their property-purchasing prospects so you can sidestep these snafus at all costs.

1. Flying solo

If this isn’t your first time on the home-buying merry-go-round, you might think: Why hire a real estate agent to hold your hand? Well, first, let us remind you: It’s generally free to use a buyer’s agent, because the seller typically pays the commission for both the seller’s agent and the buyer’s agent. And whether it’s your first home or your fifth, you probably want a professional to help guide you through the often-tricky process of writing an offer, negotiating with the seller, and making sure the deal is up to snuff.

Without an agent, you’ll soon be drowning in paperwork and at risk of making a whole bunch of costly mistakes, warns Jennifer Baxter, associate broker at Coldwell Banker RMR in Suwanee, GA.

To find a real estate agent in your area, use online tools such as realtor.com®’s Find a Realtor search, which will give you useful info such as the Realtor®’s number of years of job experience, number of homes sold, and the price of homes typically dealt with.

2. Saying too much—and undercutting your negotiating power

Be careful what you say when you’re viewing a property at an open house or home showing, Baxter warns. For instance, if the listing agent hears you say to your spouse, “I love this house, and it’s way under our budget,” the seller might try to play hardball when you try to negotiate on price. Keep private conversations private.

3. Waiting too long to make your earnest money deposit

The sales contract will specifically state when you need to cough up the earnest money deposit, which is cash you provide upfront to show the seller that you’re serious about buying the property (the typical amount is 3% to 5% of the sales price of the house).

How much time you have to provide the deposit can vary by state. For example, in Virginia the deposit must occur within five business banking days after ratification unless otherwise agreed to in writing by both parties.

“If you don’t turn in the EMD in accordance with the contract, the contract is void,” says Baxter.

Read: You can kiss the home goodbye if you dillydally for too long.

4. Not bothering to read property disclosures

Even if you plan on having a home inspection, you should still read the home seller’s property disclosures in full, advises Seth Lejeune, a real estate agent with Berkshire Hathaway in Collegeville, PA.

“Property disclosures can be long, but that’s where you’re going to find whether the seller knows if there are any pre-existing issues with the house,” Lejeune says.

Most home buyers will receive a property disclosure statement after their offer has been accepted, says Atlanta real estate agent Bill Golden.

Look for major issues like a faulty foundation, leaky roof, HVAC issues, or pest or mold infestations. If you spot something on a disclosure statement that you don’t understand or that raises concerns, have your real estate agent bring it up with the listing agent. The seller might have an explanation that puts you at ease (e.g., “We had bedbugs back in 2012 but hired an exterminator and have been free and clear ever since”). But if the issue makes you seriously question whether you want to move forward, this could be an opportunity to renegotiate the sales price to compensate for the added risk you’re taking on buying this home.

5. Damaging your credit score while you’re under contract

Unless you’re buying a house with all cash, you mortgage still has to go through underwriting to get approved. Since this process typically happens shortly before closing, you don’t want to do anything while you’re in contract that’s going to hurt your credit score. That includes buying a car, boat, or any other large purchase that has to be financed.

One less obvious mistake, however, is applying for a new credit card. Doing so—even for a store credit card like Target’s or Macy’s—triggers a hard inquiry on your credit report, which can ding your score by up to 5 points, says Beverly Harzog, a consumer credit expert and author of “The Debt Escape Plan.” That might sound like a small hit, but it could make a big difference if you’re on the cusp of qualifying for a mortgage.

6. Trusting a verbal agreement

“Some home buyers don’t realize the importance of putting everything in writing,” says Baxter. Unfortunately, that can come back to bite you, hard. For instance, let’s say a seller promises he’ll replace the water heater before closing. Well, if it’s not agreed upon in writing, the seller isn’t required to do it.

“I see this issue come up a lot when people buy new construction” and don’t use a buyer’s agent, says Baxter. “The builder’s agent is always looking out for the builder’s interests.”

This is another reason why you should work with a buyer’s agent rather than trying to muddle through this alone.

 

Posted by Daniel Bortz on realtor.com

Click HERE to start your search today!!

Millionaire to Millennials: Buy a Home Now!

In a CNBC article, self-made millionaire David Bach explained that “the single biggest mistake millennials are making” is not purchasing a home because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial TimesWashington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Posted by The KCM Crew

Thinking of Selling your Home? Competition is Coming

The number of building permits issued for single-family homes is the best indicator of how many newly built homes will rise over the next few months. According to the latest U.S. Census Bureau and U.S. Department of Housing & Urban Development Residential Sales Report, the number of these permits were up 7.7% over last year.

How will this impact buyers?

More inventory means more options. Danielle Hale, Realtor.com’s Chief Economistexplained this is good news for the housing market – especially for those looking to buy:

“It’s not spectacular construction growth, but it’s slow and steady in the right direction. Eventually, the pickup in single-family home construction will mean [buyers] will have more options. Especially with the limited number of sales right now, more options are really needed.”

How will this impact sellers?

More inventory means more competition. Today, because of the tremendous lack of inventory, a seller can expect:

  1. A great price on their home as buyers outbid each other for it
  2. A quick sale as buyers have so little to choose from
  3. Fewer hassles as buyers don’t want to “rock the boat” on the deal

With an increase in competition, the seller may not enjoy these same benefits. As Hale said:

“As new construction continues to increase, home shoppers will eventually have more [choices] and a bit more time to make purchase decisions compared to today’s quick-moving housing market.”

Bottom Line

If you are considering the sale of your home, it might make sense to beat this new construction competition to the market.

Posted by The KCM Crew

Ready to sell your home? Click HERE to find out how much your home is worth!

What To Look For In Your Real Estate Team

How do you select the members of your team who are going to help you make your dream of owning a home a reality? What should you be looking for? How do you know if you’ve found the right agent or lender?

The most important characteristic that you should be looking for in your agent is someone who is going to take the time to really educate you on the choices available to you and your ability to buy in today’s market.

As Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Do your research. Ask your friends and family for recommendations of professionals whom they have used in the past and have had good experiences with.

Look for members of your team who will be honest and trustworthy; after all, you will be trusting them with helping you make one of the biggest financial decisions of your life.

Whether this is your first or fifth time buying a home, you want to make sure that you have an agent who is going to have the tough conversations with you, not just the easy ones. If your offer isn’t accepted by the seller, or they think that there may be something wrong with the home that you’ve fallen in love with, you would rather know what they think than make a costly mistake.

According to a Consumer Housing Trends Study, millennials have already started to prefer a more hands-on approach to their real estate experience:

“While older generations rely on real estate agents for information and expertise, millennials expect real estate agents to become trusted advisers and strategic partners.”

Look for someone to invest in your family’s future with you. You want an agent who isn’t focused on the transaction but is instead focused on helping you understand the process while helping you find your dream home.

Bottom Line

In this world of Google searches, where it seems like all the answers are just a mouse-click away, you need an agent who is going to educate you and share the information that you need to know before you even know you need it.

Posted by The KCM Crew

More Americans Say Now is a Good Time to Sell!

Recently released data from Fannie Mae’s National Housing Survey revealed that rising home prices were the catalyst behind an eight-point jump in the net percentage of respondents who say now is a good time to sell. The index is now 21 points higher than it was this time last year.

Overall, 62% of Americans surveyed said that now is a good time to sell (up from 58%), while 26% of respondents said that now is not a good time to sell (down from 30%). The net score is the difference between the two percentages, or 36%.

According to CoreLogic, home prices are now up 6.7% over last year and 78.8% of homeowners with a mortgage in the US now have significant equity (defined as 20% or more).

As home prices have increased, more and more homeowners have realized that now is a good time to sell their homes in order to take advantage of the extra equity they now have.

At the same time, however, rising prices have had the exact opposite impact on the good-time-to-buy scale as many buyers are nervous that they will not be able to afford a home; the net score dropped 5 points to 18%.

Doug Duncan, Vice President & Chief Economist at Fannie Mae, had this to say,

“In the early stages of the economic expansion, home selling sentiment trailed home buying sentiment by a significant margin. The reverse is true today.

The net good time to sell share is now double the net good time to buy share, with record high percentages of consumers citing home prices as the primary reason for both perceptions. Such a sizable gap between selling and buying sentiment, if it persists, could weigh on the housing market through the rest of the year.”

Buyer demand continues to outpace the supply of homes for sale, which has driven prices up across the country. Until the supply starts to better match demand, there will be a gap between the sentiments surrounding buying and selling.

Bottom Line

If you are considering listing your home for sale this year, now is the time!

Posted by The KCM Crew

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