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5 Reasons to Sell This Fall

10 Tuesday Sep 2019

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5 Reasons to Sell This Fall | MyKCM

Below are 5 reasons to sell this fall.

1. Demand Is Strong

The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains strong throughout the vast majority of the country. These buyers are ready, willing, and able to purchase…and are in the market right now. More often than not, in many areas of the country, multiple buyers are competing with each other to buy the same home.

Take advantage of the buyer activity currently in the market.

2. There Is Less Competition Now

Housing inventory is still under the 6-month supply that is needed for a normal market. This means that in the majority of the country, there are not enough homes for sale to satisfy the number of buyers.

Historically, a homeowner would stay an average of six years in his or her home. Since 2011, that number has hovered between nine and ten years. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years due to a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.

Many homeowners were reluctant to list their homes over the last couple years, for fear that they would not find a home to move to. That is all changing now as more homes come to market at the higher end. The choices buyers have will continue to increase. Don’t wait until additional inventory comes to market before you decide to sell.

3. The Process Will Be Quicker

Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and simpler, as buyers know exactly what they can afford before shopping for a home. According to Ellie Mae’s latest Origination Insights Report, the time needed to close a loan is 43 days.

4. There Will Never Be a Better Time to Move Up

If your next move will be into a premium or luxury home, now is the time to move up. There is currently ample inventory for sale at higher price ranges. This means if you’re planning on selling a starter or trade-up home and moving into your dream home, you’ll be able to do that in the luxury or premium market.

According to CoreLogic, prices are projected to appreciate by 5.2% over the next year. If you’re moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage) if you wait.

5. It’s Time to Move on with Your Life

Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than having the freedom to go on with your life the way you think you should?

Only you know the answers to these questions. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.

That is what is truly important.

Everybody Calm Down! This Is NOT 2008

05 Thursday Sep 2019

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Everybody Calm Down! This Is NOT 2008 | MyKCM

Last week realtor.com released the results of a survey that produced three major revelations:

  1. 53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur this year or next.
  2. 57% believe the next recession will be as bad or worse than 2008.
  3. 55% said they would cancel plans to move if a recession occurred.

Since we are currently experiencing the longest-ever economic expansion in American history, there is reason to believe a recession could occur in the not-too-distant future. And, it does make sense that buyers and sellers remember the horrors of 2008 when they hear the word “recession.”

Everybody Calm Down! This Is NOT 2008

Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

Most experts, however, believe if there is a recession, it will not resemble 2008. This housing market is in no way the same as it was just over a decade ago.

Zillow Economist, Jeff Tucker, explained the difference in a recent article, Recessions Typically Have Limited Effect on the Housing Market:

 “As we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what’s different about the housing market today. Rather than abundant homes, we have a shortage of new home supply. Rather than risky borrowers taking on adjustable-rate mortgages, we have buyers with sterling credit scores taking out predictable 30-year fixed-rate mortgages. The housing market is simply much less risky than it was 15 years ago.”

George Ratiu, Senior Economist at realtor.com, also weighed in on the subject:

“This is going to be a much shorter recession than the last one, I don’t think the next recession will be a repeat of 2008…The housing market is in a better position.”

In the past 23 years, there have been two national recessions – the dot-com crash in 2001 and the Great Recession in 2008. It is true that home values fell 19.7% during the 2008 recession, which was caused by a mortgage meltdown that heavily impacted the housing market. However, while stock prices fell almost 25% in 2001, home values appreciated 6.6%. The triggers of the next recession will more closely mirror those from 2001 – not those from 2008.

Bottom Line

No one can accurately predict when the next recession will occur, but expecting one could possibly take place in the next 18-24 months is understandable. It is, however, important to realize that the impact of a recession on the housing market will in no way resemble 2008.

iBuyers: What Is the “Cost of Convenience” When Selling Your Home?

03 Tuesday Sep 2019

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iBuyers: What Is the “Cost of Convenience” When Selling Your Home? | MyKCM

When thinking about selling their house, homeowners have many options. A relatively new option is using an “iBuyer.” What is an iBuyer?

iBuyers: What Is the “Cost of Convenience” When Selling Your Home?

According to Jovio, the definition is:

“A company or investor that uses Automated Valuation Models (AVMs) to make instant offers on homes. It allows sellers to close on a property quickly. Once sold, the company then turns around and resells the home for a profit.”

Today, there are many iBuyer companies such as OfferPad, Zillow Offers, Knock, Opendoor, and Perch. Even some more traditional companies offer the same or similar services (ex. Keller Williams, Redfin, Realogy). Ivy Zelman reported in her ‘Z’ Report that some traditional brokers are partnering with some of the larger iBuyers too:

“Keller Williams announced a partnership with Offerpad, aligning the largest franchise-based brokerage brand in the U.S. with the five-year-old iBuyer. The move follows Realogy’s partnership with Home Partners of America last year as an established brokerage player more directly providing an iBuyer alternative…

Likewise, in early July, Redfin and Opendoor announced a partnership, starting in Phoenix and Atlanta – aligning interests of the 13-year old, tech-enabled and value-focused brokerage with the largest and longest-standing iBuyer. Outside of these larger scale alliances, Zillow’s strategy has been to work with local brokerages as partners on a market-by-market basis.”

Does it make sense to sell your home to an iBuyer?

It depends. Collateral Analytics recently released a study which revealed the advantages and disadvantages of using an iBuyer. According to the study, if the homeowner is looking for the convenience of a quick sale with less uncertainty, using an iBuyer may make sense.

“iBuyers offer quicker closings for sellers who would like to avoid the uncertainty of knowing when and if their home will sell. For motivated sellers who want a predictable sale date and need to move, perhaps a long distance from the current location, there is no question that iBuyers have provided a welcome alternative to traditional brokerage.”

The study, however, also showed there is a cost for that convenience. Collateral Analytics explained:

“Traditional brokers fees generally range from 5% to 7% of the sales price…In addition to this cost, buyers typically pay some closing costs including lender related charges in the range of 1% to 3%.”

In contrast:

“iBuyers charge sellers a ‘convenience fee’ of 6% to 9.5%, some also charge the seller for fees typically paid by buyers at closing adding another 1% or more. Most iBuyers will inspect the home, assess a generous home repair allowance and negotiate a (an additional) credit to handle such repairs…Overall the total direct costs, ignoring repair credits, will run 7% to 10% for an iBuyer, versus the typical 5% to 9% combined seller and buyer costs with a traditional broker. Yet, that is not the end of the story or comparison.”

The study went on to explain how iBuyers need to charge even more because they have additional expenses beyond that of the traditional broker. They include:

  1. Carrying costs involving significant amounts of capital – The iBuyer must pay the expenses of the house between the time they purchase it and the time they sell it to a new buyer.
  2. Safeguarding the home risks – A home with an iBuyer ‘For Sale Sign’ alerts anyone passing that the house is vacant. The study suggests that these homes could become targets for vagrants and criminals.
  3. Adverse selection risks – The study explains that since iBuyers use computer models to determine their offer, they may be unaware of certain challenges in the neighborhood that could adversely impact the value.
  4. Potential home price declines – As the survey states:

“A downturn in home prices, not forecast by the iBuyer market analysts could be devastating as they ramp up their business platforms, particularly if the cost of capital increases. At the same time, downturns are precisely when the most sellers would want this option.”

Bottom Line

After taking a thorough look at the iBuyer platform, the study concludes that using an iBuyer is more expensive for the homeowner than the traditional brokerage model, but for some sellers, it may still make sense:

“These preliminary empirical results suggest that sellers are paying not just the difference in fees of 2% to 5% more than with traditional agencies, and a generous repair allowance, but another 3% to 5% or more to compensate the iBuyer for liquidity risks and carrying costs. In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor. For some sellers, needing to move or requiring quick extraction of equity, this is certainly worthwhile, but what percentage of the market will want this service remains to be seen.”

Beat the Heat While You DIY

29 Thursday Aug 2019

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When you’re a DIYer, it’s not unusual to have a variety of projects to work on over the summer. Some projects require warm temperatures and long days to get everything done, while others just happen to pop up during the summer months. Regardless of the reason you’re working on things during the summer, there’s one inevitable truth that you’ll have to face: Living in South Carolina It can get really hot, working on things around the house during the summer months and into early fall.

Obviously, every summer in South Carolina sees higher temperatures than other seasons. In recent years, though, we’ve experienced some of the hottest summers on record. Too much heat and sun exposure can cause a variety of serious health issues including heat stroke and heat exhaustion, so it’s important to play it safe when you’re working out in the sun. Here are just a few things that you can do to avoid heat-related problems.

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Stay Hydrated

This one should be obvious, but you’d be surprised at how many people don’t drink enough during the hot summer months. Increase your water intake before, during and after any periods where you’ll be out in the heat and sun. As hard as it is to hear, you should also try and avoid coffee, tea and other drinks with caffeine before going out in the sun as well, because the caffeine content can actually make you lose more water. Avoid sugary carbonated drinks and alcohol, though the occasional sports drink or other beverage with electrolytes won’t hurt, since your body needs electrolytes for proper functioning, as well.

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Take Your Time

Depending on the conditions you’re used to, it can take anywhere from 7 to 14 days for your body to get used to high temperatures. If you’re going to be working outside a lot in the South Carolina heat, then you should increase your heat exposure gradually. If you’re used to air conditioning, trying to take on a full workload outdoors can significantly increase your risk of heat-related health problems. Instead, try tackling smaller tasks with big breaks between until your body gets accustomed to being out in the sun.

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Dress for the Weather

When it’s hot, it’s tempting to wear as little as possible. This can be a bad idea when you’re working outdoors, though. Not only does less fabric increase your risk of sunburn but it can also make you more likely to experience some sort of injury when you’re working. Contrary to what might seem logical, you should cover up more when working out in the heat. Cover as much of your skin as possible with light-colored, lightweight material that’s loose enough that it doesn’t cling to your body. Choose a fabric that breathes, or clothes made of wicking material designed to help keep you cool. Don’t forget a hat and sunglasses or other eye protection, either. Not only will this keep you from getting burned, but it will also slow down the rate at which your sweat evaporates (which is a good thing, as it will keep your body cooler than sweat that evaporates quickly.)

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Watch for Warning Signs

Common signs of heat-related illness include greater-than-expected amounts of sweat, confusion, lightheadedness, slurred speech, dry skin, increased body temperature and loss of consciousness. If you start to notice any of these issues, get out of the heat immediately and seek medical assistance, if necessary. Since some of these symptoms can be hard to identify in yourself, it’s also not a bad idea to have a friend or family member come check on you at least once an hour to make sure that you aren’t starting to show signs of overexposure.

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A Great Way to Increase Your Family’s Net Worth

27 Tuesday Aug 2019

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A Great Way to Increase Your Family’s Net Worth | MyKCM

Every three years, the Federal Reserve conducts its Survey of Consumer Finances. Data is collected across all economic and social groups. The latest survey data covers 2013-2016.

The study revealed that the median net worth of a homeowner is $231,400 – a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).

Revealing that owning your own home is a great way to increase your family’s net worth.

These numbers reveal that the net worth of a homeowner is over 44 times greater than that of a renter.

Owning a home is a great way to build family wealth.

As we’ve said before, simply put, homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you are contributing to your net worth by increasing the equity in your home.

That is why Gallup reported Americans picked real estate as the best long-term investment for the sixth year in a row. According to this year’s results, 35% of Americans chose real estate. Stocks followed at 27%, then savings accounts and gold.

Bottom Line

If you want to find out how you can use your monthly housing cost to increase your family’s wealth, let’s get together to help you through the process.

Caring For Your Brick Siding

26 Monday Aug 2019

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Caring For Your Brick Siding

Having brick siding installed on your house gives it a classic look. Unfortunately, a lot of people view brick as an install-it-and-forget-it option and allow that look to deteriorate over time. Brick homes require basic maintenance and care just like vinyl and wood siding do, though the specifics of maintenance may be a little bit different. It’s just like with anything: If you want the look, you have to put in the work to keep it up.

Fortunately, maintaining your brick isn’t that difficult. Even better, the maintenance you do now can help prevent your brick siding needing major repairs in the future. So long as you’re willing to put forth a little effort, you should be able to keep your home looking great for years to come.

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Keeping The Family Home In A Divorce

22 Thursday Aug 2019

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Many divorcing couples with small children often decide to allow one spouse to remain in the house to avoid disrupting the children’s routines.  This can be done with written agreement between the spouses. Equitably mutually agreeing on delegation of financial responsibility will allow your family to focus on what matters most: the children

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A signed agreement drawn up by a mediator will help avoid questions surrounding responsibility for the maintenance, expenses, and future sale of the family home, whether it be to the spouse who remains in the home or an outside buyer. This reason alone is why it is important to know your financial position and how much each spouse can contribute. If one spouse fails to make their share of payments, it can negatively affect both parties credit rating and complicate the later sale of the home.

Be aware, some spouses are tied to the home, not only by their children, but by their own emotional investment. The house represents stability, a happier time and provides shelter from the trauma of divorce. In keeping it, they feel more in control of their situation. Some may think that keeping the home makes them the “Winner” despite the financial hardship it can bring. It is difficult enough to deal with divorce without later learning that unforeseen or UN-budgeted expenses have crept in and taken a big bite of an already tight budget. Be realistic about what is affordable.

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Preparing the House For Sale In A Divorce

22 Thursday Aug 2019

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Preparing the House For Sale In A Divorce

The first step in successfully handling the disposition of the family home in a divorce is to have a clear understanding of your financial standing. Knowing your precise financial situation throughout the emotional turmoil of divorce will keep you from making snap decisions that could severely impact your financial position.

It is crucial to know who bears the financial responsibility for making the mortgage payments. If both spouses are listed on the mortgage agreement, they are equally obligated to the lender, whether or not their name is listed on the property title. Removing a party from property title does not relieve the financial obligation of that party. Two signatures on the mortgage means two responsible parties. This also includes the homeowner’s insurance policy. It is important to know who is the beneficiary and if both parties are insured.

For previously stated reasons, it is critical that you collect and immediately provide all information regarding your home, such as  insurance,property taxes, liens, mortgages, marital debts, and marital assets to your lawyer. The more prepared you are to face your financial future, the more secure you will be in moving forward. Knowing where every dollar has to go will help you make better decisions and avoid adding undue stress to the already uncertain future that accompanies divorce.

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Knowing where you stand financially greatly influences your decision to keep, sell, or buy out the family home. There are many considerations for each option and they all require a significant amount of due diligence, financial planning, and difficult decisions.

Affordability and objective forethought are the keys to your decision-making process. poor decisions can affect you and your former spouse long after the divorce is final.

House Selling Options During A Divorce

21 Wednesday Aug 2019

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House Selling Options During A Divorce

Many questions arise when trying to sell a home during a divorce. What needs to be done to ensure a quick and profitable sale? Who will choose the Realtor? When is the best time to list a home? Who bears the financial responsibilities of the sale? You can proactively allay your fears and clear up misconceptions by doing your due diligence and researching what to expect throughout the selling process.

The court determines who receives what based upon a variety of factors, such as the relative earning contributions of the spouses. In addition there are mutual court orders that automatically protect marital properties. An automatic temporary restraining order prohibits spouses from selling, transferring, or borrowing against the property when a divorce is filed. This should be discussed with your attorney, as this protection varies from state to state.

The family home is typically a couples most valuable joint asset and must often be sold in order to equally distribute its value between the two spouses. Therefore, it is vital for you to understand the relationship and difference between a mortgage deed and a property title. Mortgages are conditional legal agreements made for the purpose of buying a property/home. The lenders security interest is on record when the title is registered and  lien is placed on the property. . Allowing the mortgage (lender) the right to obtain a foreclosure order to take possession if payments of the debt are in default.

A property title refers to ownership of the property and the right to use it. A person on the title can transfer ownership to another party but cannot transfer more than what he or she owns. Some divorcing couples utilize a quitclaim deed, which transfers ownership from one spouse to another, but it does not transfer financial responsibility. One spouse may transfer title of the home to the other and consider him or herself free from the financial responsibility of the mortgage payments, but this is not the case. The loan payments are are the responsibility of the parties on the mortgage. In order to change the names on the mortgage, one spouse must obtain financing with which to buy out the other.

Taking ownership in title is needed when one spouse is awarded the home, but buying the other spouse out and having the mortgage in the title parties name is what is needed for full ownership. This removes all financial ties of that spouse from the property.

Before being awarded the family home and having one spouse sign over their title rights, both parties should obtain a true value. Having a real estate professional go over a detail market analysis  for value is a recommend first start. Both parties should also consult a professional mortgage lender to be approved for a mortgage. Knowing how much the home is worth and how much house you can afford will help determine if the family home should be sold or if either party can afford the financial responsibility alone.

All discussions regarding mortgages, quitclaim deeds, and title of property should be conducted with your legal adviser.

Seniors Are on the Move in the Real Estate Market

21 Wednesday Aug 2019

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Seniors Are on the Move in the Real Estate Market | MyKCM

Did you know August 21st is National Senior Citizens Day? According to the United States Census, we honor senior citizens today because,

 “Throughout our history, older people have achieved much for our families, our communities, and our country. That remains true today and gives us ample reason…to reserve a special day in honor of the senior citizens who mean so much to our land.”

To give proper recognition, we’re going to look at some senior-related data in the housing industry.

According to the Population Reference Bureau,

“The number of Americans ages 65 and older is projected to nearly double from 52 million in 2018 to 95 million by 2060, and the 65-and-older age group’s share of the total population will rise from 16 percent to 23 percent.”

Seniors Believe in Homeownership

In a recent report, Freddie Mac compared the homeownership rates of two groups of seniors: the Good Times Cohort (born from 1931-1941) and the Previous Generations (born in the 1930s). The data shows an increase in the homeownership rate for the Good Times Cohort because seniors are now aging in place, living longer, and maintaining a high quality of life into their later years.Seniors Are on the Move in the Real Estate Market | MyKCMThis, however, does not mean all seniors are staying in place. Some are actively buying and selling homes. In the 2019 Home Buyers and Sellers Generational Trends Report, the National Association of Realtors® (NAR) showed the percentage of seniors buying and selling:Seniors Are on the Move in the Real Estate Market | MyKCM

Here are some highlights from NAR’s report:

  • Buyers ages 54 to 63 had higher median household incomes and were more likely to be married couples.
  • 12% of buyers ages 54 to 63 are first-time homebuyers, 5% (64 to 72), and 4% (73 to 93).
  • Buyers ages 54 to 63 purchased because of an interest in being closer to friends and families, job relocation, and the desire to own a home of their own.
  • Sellers 54 years and older often downsized and purchased a smaller, less expensive home than the one they sold.
  • Sellers ages 64 to 72 lived in their homes for 21 years or more.

Bottom Line

According to NAR’s report, 58% of buyers ages 64 to 72 said they need help from an agent to find the right home. The transition from a current home to a new one is significant to undertake, especially for anyone who has lived in the same house for many years. If you’re a senior thinking about the process, let’s get together to help you make the move as smoothly as possible.