Facebook
X
Pinterest
Copy Link
You Need More Than a Guide. You Need a Sherpa.
In a normal housing market, whether you’re buying or selling a home, you need an experienced guide to help you navigate the process. You need someone you can turn to who will tell you how to price your home correctly right from the start. You need someone who can help you determine what to offer on your dream home without paying too much or offending the seller with a low-ball offer.
We are, however, in anything but a “normal market” right now. The media is full of stories about an impending recession, a trade war with China, and constant political upheaval. Each of these potential situations could dramatically impact the real estate market. To successfully navigate the landscape today, you need more than an experienced guide. You need a ‘Real Estate Sherpa.’
A Sherpa is a “member of a Himalayan people living on the borders of Nepal and Tibet, renowned for their skill in mountaineering.” Sherpas are skilled in leading their parties through the extreme altitudes of the peaks and passes in the region – some of the most treacherous trails in the world. They take pride in their hardiness, expertise, and experience at very high altitudes.
They are much more than just guides.
This is much more than a normal real estate market.
The average guide just won’t do. You need a ‘Sherpa.’ You need an expert who understands what is happening in the market and why it is happening. You need someone who can simply and effectively explain it to you and your family. You need an expert who will guarantee you make the right decision, even in these challenging times.
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.”
Bottom Line
Hiring an agent who has a finger on the pulse of the market will make your buying or selling experience an educated one.
Should You Fix Your House Up or Sell Now?
With the fall season upon us, change is in the air. For many families, children are growing up and moving out of the house, maybe leaving for college or taking a jump into the working world. Parents are finding themselves as empty nesters for the first time. The question inevitably arises: is it finally time to downsize?
If you’re pondering that thought, you may also be wondering if you should fix-up your house before you sell it, or go straight to the market as-is, allowing a potential buyer to do the updates and remodeling. If you’re one of the many homeowners this camp, here are a few tips to help you decide which way to go.
1. Analyze Your Market
A real estate professional can help you to understand your market and the potential level of buyer interest and demand for your home. Are you in a seller’s market or a buyer’s market? This can change based on the price range of your home, too. A professional can also give you some insight on what you can change or remodel, and how to declutter your house to make it attractive to buyers in your area.
2. Get an Inspector
Right now, the average length of time a family stays in a home is between 9-10 years. That’s a little longer than the historical average, so if you’ve been living in your home for a while, it might be time to make some significant improvements. Think: electrical system, HVAC units, roof, siding, etc. An inspector can give you a better idea of the condition of your home if it is up to current code standards, and recommendations on how to have your house ready before you put it on the market.
3. Decide If You Need to Remodel
You may also be thinking about driving buyer appeal with something like a kitchen or a bathroom remodel. If so, first dig into the market value of your home, and compare it to the actual cost of the remodel. A local real estate professional can help you determine your home’s market value, and you’ll want to get a few quotes from contractors on the potential to remodel pricing as well. Once you have those two factors narrowed down, you can to decide if a remodel will give you a return on your investment when you sell. Oftentimes, it is actually more advantageous to price your house to sell, list it competitively, and then let the buyer pick the colors they want for their bathroom tiles and the type of countertop they prefer. The 2019 Cost vs. Value Report in Remodeling Magazine compares the average cost for remodeling projects with the value those projects typically retain at resale.
Bottom Line
Nationwide, inventory is low, meaning there is less than the 6-month housing supply needed for a normal market. This drives buyer demand, creating a perfect time to sell. If you’re considering selling your house, let’s get together to help you confidently determine what will be the best choice for you and your family.
Things to Avoid After Applying for a Mortgage
Congratulations! You’ve found a home to buy and have applied for a mortgage! You’re undoubtedly excited about the opportunity to decorate your new home, but before you make any large purchases, move your money around, or make any big-time life changes, consult your loan officer – someone who will be able to tell you how your decisions will impact your home loan.
Below is a list of Things You Shouldn’t Do After Applying for a Mortgage. Some may seem obvious, but some may not.
1. Don’t Change Jobs or the Way You Are Paid at Your Job. Your loan officer must be able to track the source and amount of your annual income. If possible, you’ll want to avoid changing from salary to commission or becoming self-employed during this time as well.
2. Don’t Deposit Cash into Your Bank Accounts. Lenders need to source your money, and cash is not really traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.
3. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have a higher debt to income ratios…higher ratios make for riskier loans…and sometimes qualified borrowers no longer qualify.
4. Don’t Co-Sign Other Loans for Anyone. When you co-sign, you are obligated. As we mentioned, with that obligation comes higher ratios as well. Even if you swear you will not be the one making the payments, your lender will have to count the payments against you.
5. Don’t Change Bank Accounts. Remember, lenders need to source and track assets. That task is significantly easier when there is consistency among your accounts. Before you even transfer any money, talk to your loan officer.
6. Don’t Apply for New Credit. It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be affected. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.
7. Don’t Close Any Credit Accounts. Many clients erroneously believe that having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants in your score.
Bottom Line
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. The best advice is to fully disclose and discuss your plans with your loan officer before you do anything financial in nature. They are there to guide you through the process.
Homeownership Will Always Be a Part of the American Dream
On Labor Day we celebrate the hard work that helps us achieve the American Dream.
Growing up, many of us thought about our future lives with great ambition. We drew pictures of what jobs we wanted to have and where we would live as a representation of secure life for ourselves and our families. Today we celebrate the workers that make this country a place where those dreams can become a reality.
According to Wikipedia,
“Labor Day honors the American labor movement and the contributions that workers have made to the development, growth, endurance, strength, security, prosperity, productivity, laws, sustainability, persistence, structure, and well-being of the country.”
The hard work that happens every day across this country allows so many to achieve the American Dream. The 2019 Aspiring Home Buyers Profile by the National Association of Realtors (NAR) says,
“Approximately 75% of non-homeowners believe homeownership is part of their American Dream, while 9 in 10 current homeowners said the same.”
Looking at the number of non-owners, you may wonder, ‘If they believe in homeownership, why haven’t they bought a home yet?’. Well, increasing home prices and low inventory can be part of the reason why some haven’t jumped in, but that does not mean there is a lack of interest. The same report shows the increase in the desire to buy in the last year (as shown in the graph below).
As we can see, there are more and more people each quarter who want to buy a home. The good news is, as more inventory comes to the market, more non-homeowners will be able to fulfill their dreams. Finally, they’ll be able to move into that home they drew when they were little kids!
Bottom Line
If you’re a homeowner considering selling, this fall might be the right time, as there are buyers in the market ready to buy. Let’s get together to determine how you can benefit from the pent-up housing demand.
Buying a Home: Do You Know the Lingo? [INFOGRAPHIC]
![Buying a Home? Do You Know the Lingo? [INFOGRAPHIC] | MyKCM](https://desireestanley.com/files/2019/08/20190816-MEM.jpg)
![Buying a Home? Do You Know the Lingo? [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2019/08/13124327/20190816-MEM-1046x1354.jpg)
Some Highlights:
- Buying a home can be intimidating if you’re not familiar with the terms used throughout the process.
- To point you in the right direction, here’s a list of some of the most common language you’ll hear when buying a home.
- The best way to ensure your home-buying process is a positive one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher.’
3 Powerful Reasons to Buy a Home Now
Whether you are a first-time buyer or looking to move up to the home of your dreams, now is a great time to purchase a home. Here are three major reasons to buy today.
1. Affordability
Many people focus solely on price when talking about home affordability. Since home prices have appreciated throughout the past year, they assume homes are less affordable. However, affordability is determined by three components:
- Price
- Wages
- Mortgage Interest Rate
Prices are up, but so are wages – and interest rates have recently dropped dramatically (see #2 below). As a result, the National Association of Realtors’ (NAR) latest Affordability Index report revealed that homes are MORE affordable throughout the country today than they were a year ago.
“All four regions saw an increase in affordability from a year ago. The South had the biggest gain in affordability of 6.9%, followed by the West with a gain of 6.0%. The Midwest had an increase of 5.8%, followed by the Northeast with the smallest gain of 1.8%.”
2. Mortgage Interest Rates
Mortgage rates have dropped almost a full point after heading toward 5% last fall and early winter. Currently, they are below 4%.
Additionally, Fannie Mae recently predicted the average rate for a 30-year fixed mortgage will be 3.7% in the second half of 2019. That compares to a 4.4% average rate in the first quarter and 4% in the second quarter.
With mortgage rates remaining near historic lows, Fannie Mae and others have increased their forecasts for housing appreciation for the rest of the year. If home price gains are about to re-accelerate, buying now rather than later makes financial sense.
3. Increase Family Wealth
Homeownership has always been recognized as a sensational way to build long-term family wealth. A new report by ATTOM Data Solutions reveals:
“U.S. homeowners who sold in the second quarter of 2019 realized an average home price gain since purchase of $67,500, up from an average gain of $57,706 in Q1 2019 and up from an average gain of $60,100 in Q2 2018. The average home seller gain of $67,500 in Q2 2019 represented an average 33.9 percent return as a percentage of original purchase price.”
The longer you delay purchasing a home, the longer you are waiting to put the power of home equity to work for you.
Bottom Line
With affordability increasing, mortgage rates decreasing, and home values about to re-accelerate, it may be time to make a move. Let’s get together to determine if buying now makes sense for your family.
Home Price Appreciation Forecast
Questions continue to come up about where home prices will head throughout the rest of this year, as well as where they may be going over the few years beyond.
We’ve gathered current data from the industry’s most reliable sources to help answer these questions:
The Home Price Expectation Survey – A survey of over 100 market analysts, real estate experts, and economists conducted by Pulsenomics each quarter.
Mortgage Bankers Association (MBA) – As the leading advocate for the real estate finance industry, the MBA enables members to successfully deliver fair, sustainable, and responsible real estate financing within ever-changing business environments.
Zelman & Associates – The firm leverages unparalleled housing market expertise, extensive surveys of industry executives, and rigorous financial analysis to deliver proprietary research and advice to leading global institutional investors and senior-level company executives.
Freddie Mac – An organization whose mission is to provide liquidity, stability, and affordability to the U.S. housing market in all economic conditions extending to all communities from coast to coast.
The National Association of Realtors (NAR) – The largest association of real estate professionals in the world.
Fannie Mae – A leading source of financing for mortgage lenders, providing access to affordable mortgage financing in all markets.
Here’s the home price appreciation these experts are projecting over the next few years:
Bottom Line
Every source sees home prices continuing to appreciate, which is great news for the strength of the market. The increase is steepest throughout the rest of 2019, and prices should continue to rise as we move through 2020 and beyond.
Americans Rank Real Estate Best Investment for 6 Years Running! [INFOGRAPHIC]
![Americans Rank Real Estate Best Investment For 6 Years Running! [INFOGRAPHIC] | MyKCM](https://desireestanley.com/files/2019/07/20190628-MEM.jpg)
![Americans Rank Real Estate Best Investment For 6 Years Running! [INFOGRAPHIC] | MyKCM](https://files.mykcm.com/2019/06/04055442/20190628-MEM-1046x1063.jpg)
Some Highlights:
- Real estate has outranked stocks/mutual funds, gold, savings accounts/CDs, and bonds as the best long-term investment among Americans for the last 6 years.
- Stock owners are more positive about real estate than stocks as an investment.
- Of the 4 listed, real estate is the only investment you can also live in!
Having a Professional on Your Side Makes All the Difference!
In today’s fast-paced world where answers are a Google search away, there are some who may wonder what the benefits of hiring a real estate professional to help them in their home search are. The truth is, the addition of more information causes more confusion.
Shows like Property Brothers, Fixer Upper, and dozens more on HGTV have given many a false sense of what it’s like to buy and sell a home.
Now more than ever, you need an expert on your side who is going to guide you toward your dreams and not let anything get in the way of achieving them. Buying and/or selling a home is definitely not something you want to DIY (Do It Yourself)!
Here are just some of the reasons you need a real estate professional in your corner:
There’s more to real estate than finding a house you like online!
There are over 230 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to ensure you achieve your dream?
You Need a Skilled Negotiator
In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible renegotiation of that offer after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.
What is the home you’re buying or selling worth in today’s market?
There is so much information on the news and on the Internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?
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.”
Hiring an agent who has his or her finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.
Bottom Line
Today’s real estate market is highly competitive. Having a professional who’s been there before to guide you through the process is a simple step that will give you a huge advantage!
Why Is So Much Paperwork Required to Get a Mortgage?
When buying a home today, why is there so much paperwork mandated by the lenders for a mortgage loan application? It seems like they need to know everything about you. Furthermore, it requires three separate sources to validate each and every entry on the application form. Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.
There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any other time in history.
1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.
During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.
2. The banks don’t want to be in the real estate business.
Over the last several years, banks were forced to take on the responsibility of liquidating millions of foreclosures and negotiating an additional million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they have to double (maybe even triple) check everything on the application.
However, there is some good news in this situation.
The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a low mortgage interest rate.
The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).
If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.
Bottom Line
Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.
