Why didn’t you use me as your Realtor?

I was recently approached by a family member who wanted to apologize for not using me as their Realtor when they sold their house.  I get it.  I really do.  Do you know how many real estate agents I knew before I got into the business, tons. They are everywhere and I know that.  Let me tell you a secret, working with close friends and family is extremely stressful.  I feel more pressure to sell or find a home for my brother or best friend. It’s true.

In my short 2 years as a licensed Realtor I have found a solution, referrals.  Before I went to real estate school, and yes I went to ReeceNichols Real Estate School, I didn’t even know that referrals existed in this industry.  For example:

My best friends are getting a divorce and they need to sell their family home.  Obviously I don’t want to get involved in this transaction for so many different reasons.  There is so much stress, emotions, financial issues, and personal information involved in a normal real estate transaction but would be at an all time high while doing it during a divorce.  In this case I would REFER my friends to a amazing agent that can get the job done for them.  And the bonus is, I get a referral fee from that agent without being involved in the transaction.  Everyone wins.

In my small community in Piper, there are 5,657 real estate agents.  Some good, some not so good, some full time, and some part time.  What I am saying is that there is a lot of competition but we still are all working together for our clients.  The point of this post was to let you know that yes, sometimes it hurts that a friend or member of my family goes with another agent but I understand.  If I can’t help you, at least let me find a great agent that will be a great fit.

fullsizeoutput_70a0

Questions to Ask When Buying New Construction

Buying a new home is exciting. Buying a brand new home can be even more so with the realization of being the first owner and possibly being able to choose your own layout and finishes. The prospect of owning new construction is definitely exciting, but it doesn’t come without its own set of questions. If you’re in the market for a new home, and considering new construction, make note of the questions below when you begin your property search.

fullsizeoutput_1ed0

 

WHAT ARE THE LONG TERM PLANS FOR THE COMMUNITY?

Unless you’re looking at custom homes on acreage, it’s likely new construction in your area will be located in a new development or in a master planned community. With this in mind, feel free to ask about the plans for the community. If it’s a large area, find out if any subdivisions are planned. If there are only a few houses built so far, it’s likely to mean lots of construction in the months to come – which means a lot of noise and construction traffic. Also ask about the builder – if they’re well known and respected, it’s unlikely they’ll lose funding and the community will likely continue on as planned.

WHAT ARE THE HOMEOWNERS ASSOCIATION’S RULES AND REGULATIONS?

Many new developments and master planned communities come with a set of rules and regulations set by a homeowners association. If you’ve never lived in a community with a HOA, it’s important to find out the rules before investing in it. The bylaws and the CC&Rs will let you know what is and isn’t allowed in the community (especially when it comes to the exterior of your home). You’ll also want to find out when the HOA fee begins – in some communities, it can start before the home is even finished.

DO YOU OFFER ANY BUYER OR FINANCIAL INCENTIVES?

If the community or development is still in the early stages, there might be incentives (like a buyer discount, builder upgrades or other financial incentives or freebies) for buyers. Sometimes these offers come with a catch – where something is expected from the buyer in return for the incentive – but it’s important to ask about any offers that may be available, especially if the community is still up and coming.

DO YOU PROVIDE WARRANTIES?

New homes often come with different warranties. Ask if a workmanship and structural warranty come with the home. A workmanship warranty (or builder’s warranty) is a warranty for newly constructed homes that offer limited coverage on workmanship and components of the home like windows, siding, roofs, doors, plumbing, electrical and HVAC. Traditionally a workmanship warranty will cover a one or two year period; another likely warranty is a structural warranty, which covers the structure of a home. If a warranty is provided, make sure you know exactly what is and isn’t covered and how much you’re responsible for in case of any issues.

CAN YOU CONNECT ME WITH SOME CURRENT HOMEOWNERS?

Just as you would check reviews before buying an item online or booking a service, the same can be said for a home builder. Just because the product that’s being offered is a shiny new home doesn’t mean you shouldn’t do your due diligence and check references before making a large investment. While it’s likely that the builder will provide glowing reviews, checking reference and review websites and even knocking on the doors of current homeowners will provide additional information and give you a wider understanding of the builder and its practices. Talking to current homeowners will provide information about the actual community.

New construction is exciting, but you want to make sure you have all pertinent information before you go through with a home purchase. Your real estate agent will be able to help navigate the waters of new construction. Reach out to your agent with any questions you may have about buying new construction in your area.

If I could tell you only one thing when it comes to buying new construction it would be HIRE YOUR OWN REALTOR!  The builders and their real estate agents are only looking out for themselves usually. 

fullsizeoutput_1ed1

Common Mortgage Myths

For the average person, mortgages are super confusing.  They are always changing and every lender has different programs and rates.  The best thing you can do before you start searching for a home is to have a meeting with a reputable mortgage lender in person, not a company that you apply with on a phone app.  My two recommendations would be Doreen Hansen with HomeServices Lending, soon to be Prosperity ( a Berkshire Hathaway company).  Doreen has been in the mortgage business for over 15 years here in Kansas City and is great to work with with.  The other mortgage lender I would suggest would be Katie Grimes with Fountain Mortgage.  Fountain Mortgage is a locally owned mortgage company and they take care of their clients and customers better than anyone else in the business.

Common Mortgage Myths

For most Americans, being able to buy a home or property with cash is not a reality. Because of this, banks and other lenders offer mortgage loans to those that qualify. A mortgage loan isn’t a bad thing – for millions of Americans, it’s a way for them to have their own home. As with any popular subject, there are some common myths surrounding mortgage loans. While not every buyer will need a mortgage loan, it’s important to discern the myths from the facts when it comes to mortgages in the United States.aerial-photography-architecture-building-1546168

“YOU NEED TO HAVE 20 PERCENT FOR A DOWN PAYMENT”

This is probably one of the most popular myths surrounding mortgage loans, and it’s also one of the most outdated. While it may have been a requirement generations ago, a buyer does not need to have 20 percent of a home’s purchase price in order to qualify for a mortgage loan. While it may be financially better to put down 20 percent (the total loan amount will be less with a bigger down payment amount), there are a number of different loans and options that allow potential buyers to get a mortgage with less than 20 percent down. An FHA mortgage for first-time buyers requires 3.5 percent down; VA mortgages allow for zero down; USDA home loans require nothing down; and a number of other programs allow buyers to put anything from 3 to 10 percent down. If you’re thinking of buying a home and you know you’ll need a mortgage loan, don’t be fooled by the 20 percent down myth – there are way more options out there now than there used to be.

“ONCE YOU’RE PRE-QUALIFIED YOU’RE GUARANTEED THE LOAN”

It may seem like, with the steps you go through to get pre-qualified, that a mortgage loan will be a sure thing. But that’s not the case. Pre-qualification is not pre-approval. Pre-qualification is the initial step in the mortgage process, and while it’s an important one as it can give a person an idea of a mortgage loan amount they may receive from a lender, it is not the actual approval. Pre-qualification usually does not include a credit report analysis or an in-depth look into one’s ability to buy a home. Because of this, being pre-qualified is not a sure thing and it’s not a guarantee of a mortgage loan. There have been buyers who have been pre-qualified only to be told they were not actually approved for the mortgage loan itself. All of this being said – if you’re looking at homes and know you’ll need a mortgage loan, get pre-approved before you decide to make any offers. Even pre-approval comes with certain conditions, but is much better than a pre-qualification.

“YOU NEED EXCELLENT CREDIT AND NO DEBT TO GET A LOAN”

There are a number of factors that go into mortgage approval, and while creditworthiness and debt-to-income ratio are both considered, you do not need to be ‘excellent’ in either of these areas in order to get a mortgage loan. The minimum credit score necessary for a conventional loan is 620, and an FHA loan with 3.5% down requires a score of 580. With the median FICO credit score in the U.S. at 700, a buyer doesn’t need to have excellent credit in order to qualify for a mortgage loan. As for debt-to-income (DTI) ratio: while it’s best to have as little debt as possible when looking to purchase a home, Fannie Mae and Freddie Mac (government-sponsored agencies that publish standards for conventional mortgage approval) have the maximum allowable DTI at 50 percent, meaning those with current debt are not at a loss when it comes to qualifying for a mortgage loan.

“30-YEAR FIXED-RATE MORTGAGES ARE THE BEST OPTION”

The financial and housing crisis that occurred in the U.S. in the late 2000s left a sour taste in the mouths of many Americans when it comes to non-traditional mortgage loans. Adjustable rate mortgages and mortgages other than fixed-rate were seen as bad and predatory. While some lenders took advantage of hard working Americans and many people lost their homes, non-traditional mortgage loans are not a bad thing, especially for certain buyers. A 30-year fixed-rate mortgage is a great option for someone that plans on staying in his/her home for many years, but for someone that knows they’ll likely move within five to seven years, an adjustable rate mortgage might be a better option. Fixed rate loans also come in other than 30 year terms; shorter lengths have a higher monthly payment but can save a lot of interest charges. Those buyers looking to retire soon may be better off with a shorter loan length than someone who is younger and still has many more years in the job force. If you’re in the market for a mortgage, it might be worthwhile to look at all the options available and see which one best aligns with your personal and career goals – it may not be the traditional mortgage loan.

computer-drink-iphone-586339.jpg

“EVERYONE RECEIVES THE ADVERTISED INTEREST RATE”

It’s often said if it’s too good to be true, it generally is. The same can be said for mortgage interest rates. When looking for a loan, interest rates will be listed online, in newspapers and wherever else they advertise. Those advertised rates will likely look great and will be incredibly low, but the reality is that most of the time, advertised interest rates are only reserved for those who have a perfect credit score, have an incredible debt-to-income ratio, and are likely putting down a very large down payment. Interest rates are influenced by a number of factors, which of course aren’t included in the advertisement (just in the incredibly small fine print); because of this, take all advertised interest rates with a grain of salt and go into the mortgage loan process with the understanding that you may not receive the advertised interest rate.

Mortgage loans can be confusing and intimidating, especially with the number of myths out there about them. If you still have questions, your agent can help or refer you to someone with more knowledge – they may even have a lender they’ve worked with and recommend. Buying a home with a mortgage loan is still widely popular in the U.S. – don’t let the myths fool you out of achieving the goal of home ownership.

Sell Now or Wait Until Spring?

As with every decision in life, there are pros and cons, and choosing when to sell a home is no different. There are many factors that need to be taken into consideration before deciding when to sell a home. Many homeowners believe selling a home during the fall or winter months is not a good idea and that the spring is the only time a house should be sold. This is the furthest from the truth. Certainly, most real estate markets across the United States experience a “spring market rush” every year. There is no doubt that the “spring market” is a great time to be selling and buying real estate, however, the fall and winter seasons may be the best fit for you for many reasons.

 

Here are several reasons why choosing to sell your home now may be a better decision than waiting until the spring:

 

1.    Less Competition, If Any!
One way that you can tell the spring real estate market has arrived is by driving down a street in your local community. In all likelihood there will be For Sale signs up all over the neighborhood! One great reason to sell your home now and not wait until the spring market is there is sure to be less competition.  The fewer number of comparable homes for sale, the greater the probability that a buyer will look at your home.
Simply put, it’s the supply and demand theory. If there are less homes for sale, there are less homes that a potential buyer can choose from, therefore increasing the demand for your home. Not only will less competition increase the probability for showings, but it will also increase the probability that an offer will be received, and you will get the maximum amount of money for your home.
IMG_5325.PNG
2.    Serious Buyers Are Out There
Homes are sold and bought 365 days a year, period!  Many homeowners believe that buyers aren’t out there during the fall and winter months. This simply is not the case. Serious buyers are always out there!  Some buyers may stop their home search because it is the fall or winter, but serious buyers will continue to look at homes, no matter what time of year it is.
 
3.    The Best Agents Are Always Up to The Challenge
Any real estate agent who tells you that the fall or winter months are a bad time to sell is not someone you want selling your home! A great real estate agent will know how to adapt to the current season and market their listings to reflect that.  A great real estate agent can make suggestions and give some of their tips on how to sell a home during the fall or winter seasons. If a real estate agent doesn’t have any suggestions on making your home more desirable for the current season, you should be concerned about the creativity they are going to use when marketing your home.
 
4.    Staging for The Holiday Season
Many sellers believe staging a home is the main reason a home sells.  While staging certainly helps sell homes, some buyers have a difficult time envisioning themselves in a home no matter what you do. However, there are some buyers who can easily be “sold” on a home because it is staged.  Simple “seasonal” staging such as adjusting the color of the decor or having an aroma in the air that is relative to the time of year can go a long way with some potential buyers and possibly be the difference between a home selling or not.
IMG_5328.PNG
5.    Mortgage Rates Are Low
If you’ve read about real estate in the past year, it’s likely you’ve read that the mortgage rates are very low.  You also probably read that there is an expectation that the rates will increase very soon. Since mortgage rates are so low right now, buyers are able to afford more expensive homes.  If mortgage rates increase over the fall and winter months while you’re waiting for the spring market, it could cost you thousands of dollars as it could eliminate many buyers from the real estate marketplace!  Less demand for your home will mean less money. Bottom line: take advantage of selling your home while the rates are this low.
 
6.    Quicker Transactions
Right now, there are fewer real estate transactions than there will be in the spring.  The fewer number of transactions means the mortgage lenders have less loans to process, attorneys have less closings to do, and home inspectors have fewer inspections to do.  
All of these factors should lead to a quicker transaction and closing for all the parties involved.  One of the most frustrating things for a seller to deal with while selling their home is not getting answers in a reasonable amount of time. A quicker transaction is going to be less stress for you.

 

By considering all the reasons above, you will be able to determine whether now is a good time to sell or if you should wait until the spring.

Can You Afford a House?

Mortgages.  Depending on the price of your home and/or the amount of your down payment, there may be several options that fit your needs.  They include VA (for military veterans only) which allows 100% financing for the purchase, FHA (Federal Housing Administration) which allows a purchase with as little as 3% down and Conventional, generally the best option when putting down 20%. Did you know about the USDA Home Loan?  USDA loans are one of the only home loans available today with no down payment required.  Homebuyers may finance a home for 100% of the purchase price.  No Funds For Closing, 100% financing to buyers and closing costs can be paid by the seller or rolled into the loan, provided the home appraises for more than the purchase price.  It’s not Just Farmland, properties are often near desirable metropolitan areas like Basehor, Kansas.

I am super lucky to work with one of the best lenders in Kansas City.  Although, I know there are many excellent mortgage lenders in the area, I personally prefer someone that interact with on a personal and professional level.  Erik Lorfing at Mortgage Lenders of America has down all of my personal home loans and he is the one I refer all my friends and family as well.  He is has been in the mortgage business for years and knows what he is talking about.  One of the reasons my clients love him is that he can explain the mortgage process to you in way you understand it.  You know those silly mortgage commercials that use all that fancy wording and for some homebuyers, it just confuses them more.  When you are honest and genuine I think you will relate better, in my opinion.

When you work with an Exclusive Buyer Agent with RE/MAX(that would be me) in finding your home, they unequivocally represent only you and your best interests.  I will assist you in the mortgage process and make sure you understand every little detail.   You, as a Buyer, get the benefit of The Fred Perry Team’s experience in negotiating countless contracts over the past 40+ years.

You not only get the benefit of a my team’s experience, but it doesn’t even cost you anything.  As before, when all agents represented the Seller and the Seller paid their commission, the Seller still pays!  In most real estate transactions, there are two agents involved: one represents the Seller and we represent you.  The agents spilt the commission…that’s how we get paid.

Erik Lorfing

Mortgage Lenders of America

10975 El Monte

Overland Park, KS 66211

elorfing@mloanusa.com

Office: (913) 491-4299