What Would You Sacrifice to Save For Your Next Home?

What Would You Sacrifice to Save For Your Next Home? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • 95% of first-time homebuyers are willing to sacrifice to make homeownership a reality.
  • The top item that buyers sacrifice is new clothes, at 54%.
  • Even repeat or experienced buyers say they sacrificed taking a vacation or buying a new car to buy their last home.
Advertisements

Working with a Local Real Estate Professional Makes All the Difference

Why Working with a Local Real Estate Professional Makes All the Difference | MyKCM

If you’ve entered the real estate market, as a buyer or a seller, you’ve inevitably heard the real estate mantra, “location, location, location” in reference to how identical homes can increase or decrease in value due to where they’re located. Well, a new survey shows that when it comes to choosing a real estate agent, the millennial generation’s mantra is, “local, local, local.”

CentSai, a financial wellness online community, recently surveyed over 2,000 millennials (ages 18-34) and found that 75% of respondents would use a local real estate agent over an online agent, and 71% would choose a local lender.

Survey respondents cited many reasons for their choice to go local, “including personal touch & handholding, longstanding relationships, local knowledge, and amount of hassle.”

Doria Lavagnino, Cofounder & President of CentSai had this to say:

“We were surprised to learn that online providers are not yet as big a disruptor in this sector as we first thought, despite purported cost savings. We found that millennials place a high value on the personal touch and knowledge of a local agent. Buying a home for the first time is daunting, and working with a local agent—particularly an agent referred by a parent or friend—could provide peace of mind.”

The findings of the CentSai survey are consistent with the Consumer Housing Trends Study, which found that millennials 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.”

When it comes to choosing an agent, millennials and other generations share their top priority: the sense that an agent is trustworthy and responsive to their needs.

That said, technology still plays a huge role in the real estate process. According to the National Association of Realtors, 95% of home buyers look for prospective homes and neighborhoods online, and 91% also said they would use an online site or mobile app to research homes they might consider purchasing.

Bottom Line

Many wondered if this tech-savvy generation would prefer to work with an online agent or lender, but more and more studies show that when it comes to real estate, millennials want someone they can trust, someone who knows the neighborhood they want to move into, leading them through the entire experience

Selling Your Home? Is Your Listing ‘Pet-Friendly’?

Selling Your Home? Is Your Listing ‘Pet-Friendly’? | MyKCM

One of the many benefits of owning your own home is the freedom to find your ‘furever’ friend. By pointing out the aspects of your home that make it ‘pet-friendly’ in your listing, you’ll attract these buyers rather than alienate the 61% of American households that have a pet!

If you are one of the many homeowners looking to list your home for sale, how do you stand out to the millions of pet parents searching for their dream homes?

Whether a dog person, a cat person, or someone who prefers the company of another pet species, 99% of pet owners say that they consider their animal to be family. When finding a home, 95% of animal owners believe it is important that a housing community allows animals.

A recent study by the National Association of Realtors (NAR) revealed that there are many aspects of the home buying, selling and owning experience that have been greatly impacted by American’s love for their pets.

This should come as no surprise as $66.75 billion was spent on pets in the U.S in 2016, with $70 billion projected for 2017. NAR’s President William E. Brown shed some light on the impact of pet owners and their home search,

“In 2016, 61 percent of U.S. households either have a pet or plan to get one in the future, so it is important to understand the unique needs and wants of animal owners when it comes to homeownership.  

REALTORS® understand that when someone buys a home, they are buying it with the needs of their whole family in mind; ask pet owners, and they will enthusiastically agree that their animals are part of their family.”

The Power of Pets When Choosing the Right Home

  • 89% of pet owners say they would not give up their pet due to a housing restriction
  • 81% of Americans say their pets play a role in their housing situation
  • 31% of animal owners have refused to put in an offer on a home because it wasn’t a good fit for their animals
  • 19% of Americans say they would consider moving for their pet
  • 12% percent have moved for their pet

New home builders have actually begun installing retractable pet gates that tuck away neatly inside door jams as a highly requested feature in new homes to attract pet-parents, according to Builder.com.

So, if you are a homeowner looking to sell in today’s pet-friendly environment, point out the features of your home that will attract pet owners:

  • Fully fenced in backyard – (91% of pet owners ranked this as the most important feature of a home to accommodate their pet)
  • Locations of dog parks/walking paths/pet-friendly beaches in the area (71% ranked this as the top feature of any neighborhood they would consider)
  • Proximity to veterinarians/groomers/pet supply stores (31%)

Bottom Line

Americans love their pets and will look for pet-friendly features in the home they wish to buy, so take advantage of this knowledge by pointing out your home’s ability to meet their needs.

Over Half of All Buyers Are Surprised by Closing Costs

Over Half of All Buyers Are Surprised by Closing Costs | MyKCM

According to a recent survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage.

After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected.

“Homebuyers reported being most surprised by mortgage insurance, followed by bank fees and points, taxes, title insurance and appraisal fees.”

Bankrate.com recently gathered closing cost data from lenders in every state and Washington, D.C. to be able to share the average costs in each state. The map below was created using the closing costs on a $200,000 mortgage with a 20% down payment.

Over Half of All Buyers Are Surprised by Closing Costs | MyKCM

Keep in mind that if you are in the market for a home above this price range. your costs could be significantly more. According to Freddie Mac,

“Closing costs are typically between 2 and 5% of your purchase price.”

Bottom Line

Speak with us and your agent early and often to determine how much you’ll be responsible for at closing. Finding out that you’ll need to come up with thousands of dollars right before closing is not a surprise anyone is ever looking forward to.  We recommend that ou take advantage of our Home Express Mortgage Plan – so that before you take your time and spend you money in this process – you know what the costs are.  Having the right expectations upfront is such an advantage to making the right decision.

Thinking of Making an Offer? 4 Tips for Success

Thinking of Making an Offer? 4 Tips for Success | MyKCM

So you’ve been searching for that perfect house to call a ‘home,’ and you finally found one! The price is right, and in such a competitive market that you want to make sure you make a good offer so that you can guarantee your dream of making this house yours comes true!

Freddie Mac covered “4 Tips for Making an Offer” in their latest Executive Perspective. Here are the 4 Tips they covered along with some additional information for your consideration:

1. Understand How Much You Can Afford

“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”

This ‘tip’ or ‘step’ really should take place before you start your home search process.

As we’ve mentioned before, getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).

2. Act Fast

“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”

According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 3.6-month supply; This is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.

3. Make a Solid Offer

Freddie Mac offers this advice to help make your offer the strongest it can be:

“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”

Consider ways of making your offer stand out! Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners. Your agent will be able to help you figure out if there are any other ways your offer could stand out above the rest.

4. Be Prepared to Negotiate

“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.

Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspection uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made, with the seller, or cancel the contract.

Bottom Line 

Whether buying your first home or your fifth, having a local professional on your side who is an expert in their market is your best bet to make sure the process goes smoothly.

Happy House Hunting!

Americans Are on The Move

Americans Are on The Move [INFOGRAPHIC] | MyKCM

Some Highlights:

  • For the 4th year in a row, the Northeast saw a concentration of High Outbound activity.
  • Oregon held on to the top stop of High Inbound states for the 3rd year in a row.
  • Much of this Outbound activity can be attributed to Boomers relocating to warmer climates after retiring.

A SHORT HISTORY OF “UNDERWRITING”

 

Lloyd's of London

If you’ve ever applied for a mortgage, an insurance policy or a car loan, your application went through an “underwriting process”.  Ever wonder why the underwriting process was so intense and detailed?  Well, here’s a short history that puts it all in context:

The word “underwriter” dates back to the story of Lloyd’s of London, which is the world’s oldest continuously operating insurance company.  Lloyd’s of London started as London coffee house in the shipping district of the city.  “Underwriters” were individuals who signed underneath the line on the bottom of insurance contracts that insured the merchant ships.  They offered their personal guarantee and took personal liability for the decisions they made…  If the ship went down, and the cargo was lost, the underwriters had to personally pay the claim on the insurance contract.  Needless to say, they took their job very seriously!  One wrong decision could completely wipe them out financially.

Today, the underwriting guidelines for home mortgages in the US, are determined by Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the Veteran’s Administration (VA), the Rural Housing Service (RHS), and the US federal government itself, through the Dodd-Frank Rules and Regulations.  Please see the mortgage money flow chart below.  Because Fannie Mae and Freddie Mac buy the mortgages, and because the FHA, VA and RHS guarantee or insure the mortgages, these are the organizations that set the underwriting guidelines in the US.  Like those “underwriters” several hundred years ago in the city of London, these folks are the ones who are on the hook if the mortgages go into default.

Now of course, the banks and mortgage companies also have some liability as well.  For example, if a mortgage goes into default due to some negligence on the part of the mortgage company, Fannie Freddie, the FHA and US government can all go after the mortgage company for damages.  They can require the mortgage company to buy back the loan or pay penalties.  THAT is why the underwriting process is so intense and detail-oriented.  Please contact me if you have any questions or for further information.