Tuesday, January 12, 2021

TIPS AND TRICKS FOR PERSISTENT DRAFTS

 



Oh, baby, it’s cold outside… and inside, too, if you’re standing close to a drafty window, door, or mysterious source of outside air. Persistent drafts are funny things. They can be massive pains when the wind blows just right, and almost unnoticeable when it’s still, making it both difficult to locate the problem, and hard to keep front of mind as you go about the rest of your week. But if you’ve got a persistent draft, transient or not, this can be the year you solve it. You’ll also save yourself a bundle of in-home heating and cooling costs throughout the year, so bonus.

Locating a Persistent Draft

Generally, people think to look at windows and doors when a draft is noticed, but what happens when the window doesn’t seem leaky and the door seals tight? Try:

  • Running your hand along with the trim where it meets the wall. Sometimes windows aren’t properly weatherproofed when they’re installed, leaving the trim around the window unit to leak and leak and leak. Check that you’ve got a solid caulk bead all along with your trim, even on the bottom of the window. An alarming number of air leaks result from skipping this step.
  • Examining outlets. Did you know cold air can come in through outlets on your exterior walls? It sure can. Sometimes it’s easier to find these by taking the cover off (turn your breaker off first, please).
  • Checking your chimney. If your damper isn’t closing properly, you may have a big-time draft coming down through the chimney like Santa on Christmas Eve. It’s not always obvious when a chimney is leaking cold air unless you’re right below it, so make sure to check inside the fireplace.

If you can’t find a leak with your bare hands, try using a candle. Turn your ceiling fans and furnace off and run the candle slowly along with ceilings, windows, doors, trim work, outlets, fireplaces, and other potential sources of air loss. If you notice a flicker, mark the spot with a sticky note or another easily removable method. Go room by room, checking carefully in every possible spot.

Fixing Air Leaks

Once you know where your leaks are, the real work begins. It’s not just enough to know where the leak is; you need to know what to do about it. There are temporary fixes that will help eliminate drafts while you wait for a professional energy audit and weatherproofing, or you can try your hand at sealing common sources of air leaks.

Temporary solutions would include items like:

  • Gaskets for your windows. Some types of gaskets are meant to fill gaps at the bottom of the window frame. These are often only effective if you close the window on top of them and lock it for the winter.
  • Layers of window treatments. Windows are often a huge source of energy loss, so it would make sense that installing better window treatments can help slow the flow. This goes for both summer and winter. Install blinds hung on the inside of the window frame and an insulating curtain on the outside of it to slow those leaks coming from windows that have seen better days.
  • Door draft stoppers. Also known as “door snakes,” door draft stoppers can help keep the cold air outside if your door sweeps aren’t up to par. Choose a door draft stopper that’s slightly longer than the door in question, so the whole bottom is covered and the trim is overlapped.

More permanent solutions include removing trim and installing gap-filling foam, replacing door sweeps, installing gaskets in electrical outlets and junction boxes, taping the gaps in light fixtures, caulking trim work, and repairing fireplace doors and dampers.

We hope you have enjoyed the Rural KC Blog.  Please feel free to contact us at Bill-913-837-0760/Bill@ruralkc.com or Danicia-913-837-0411/Danicia@ruralk.com.  Have a great day!  If it’s cold inside and you can’t find the source of the problem, you may need an energy audit. These detailed examinations of homes help homeowners better understand the airflow of their homes and learn where improvements can be made to weatherproofing efforts. Some companies will offer both an audit and weatherproofing, making them great places to get more done.


Tuesday, January 5, 2021

STEPS FOR OBTAINING FINANCING FOR RURAL PROPERTY

 


Welcome to the Rural KC blog, where we talk about all things country and living the country life. I'm your host Bill Gaughan, the luckiest man in the world, but a little more about that later. You can keep up with this, not only on this blog but also on our website, ruralkc.com, our podcast, our YouTube channel, the Rural KC channel, and find us on Facebook as well too. 

Today, we're going to talk about a topic that I think sometimes catches people by surprise when you're thinking about buying a rural property. I can't tell you how many people in the 20 or so years I've been doing this just assume that well, the fellow that gave me the loan in my home in Overland Park or Lees Summit, I'll just go to him and I'll buy 40 acres and a house, but it doesn't work that way. Today, we've got a special guest, a lady I've had the opportunity and blessings to have worked with for several years, Trisha Goodale of Landmark Bank.

Trisha is going to talk with us a little bit today about what are some of the issues when you are buying a rural property, particularly from a lender's perspective. Tricia, why don't you tell us a little bit about how you wound up in the business of making loans on rural property?

Trisha Goodale: Well, thanks for having me today, Bill. I appreciate the opportunity and I have been in the lending world for homes specifically for about 19 years and happened by happenstance. I was working at a bank opening up new accounts and there was a position open in the mortgage department and I jumped on the opportunity there. I grew up in Louisburg, Kansas, so very familiar with the farming communities and acreage, and that was just a way of life with how I grew up. Worked seamlessly and love helping people in those rural communities.

Bill: Now, tell me a little bit about Landmark Bank because my understanding is that Landmark Bank does maybe a bigger volume of business and rural loans than your traditional bank. Is that true?

Trisha: Yes. We are a Kansas bank. We are in a lot of the Western Kansas small towns, Dodge City, our headquarters are in Manhattan and so we are very versed with acreage and those rural communities and love serving those people.

Bill: Why don't you tell our readers, why is it that the fellow that you made a loan for him in a home in Overland Park is reluctant or refuses or is unable, maybe that's a fair way to say it, of making loans on rural property?

Trisha: Rural properties are just a little different. Typically, there is quite a bit of value in the land itself versus the house and that can be tricky for lenders who aren't used to doing it every day. What we find with our underwriters and the things we have available here at Landmark, because those are the communities we serve is that it's simple because we do it every day. There's a lot of gotchas that can happen with a traditional lender and we pride ourselves on being the expert and helping people with buying homes on acreage.

Bill: Now, are the loan terms similar or different to what people are used to buying a home in a subdivision for?

Trisha: They can be, but with the right property and the right borrower, we can do a 30-year fixed loan on a property with acreage.

Bill: Now, does the amount of land make a difference in how you would approach alone because you do make loans on homes and subdivisions? You're a full-service lender, am I correct?

Trisha: Correct, yes. Those are some of the questions we have when I'm first talking with a borrower about what their interests are before they even maybe even go out looking with you is what their goals are. Are they looking for something with 40 acres? Are they looking for something with three acres? Really anything in the smaller acreage, I would say 10 and under, not really a huge deal typically. Anything over that, you start to get into value issues because there's nothing that sold like it in the area or like I mentioned earlier, the value of the land versus the actual structure that can cause hiccups if you don't know what goes into it.

Bill: Even though the properties out in the country, if the value of the house is pretty significant and it's a smaller lot, three to five acres, am I right, you could probably make a traditional loan?

Trisha: Absolutely.

Bill: It's just when the value of the land starts to go up in value that it becomes a non-traditional loan. Is that fair to say?

Trisha: Correct.

Bill: Now, are there any special programs for people who want to buy rural property particularly that has a house on it?

Trisha: Yes. USDA has a great program that is available for little to nothing down and that works perfectly in the perimeter of the KC Metro area and I can get into details with that with borrower specifically, but there are definitely programs that help to encourage people to live in those smaller communities.

Bill: Now, if a person wants to buy a 20, 30, 40-acre lot and build a home on it, is that something you can deal with?

Trisha: We can. I would not deal with it personally, but we do have lenders here at the bank that would handle the construction loan piece of it.

Bill: Whatever it is that they needed, it sounds like you'd probably be able to help them with, is that correct?

Trisha: Yes, of course.

Bill: When people are trying to get a loan to buy rural property, what's the thing that probably surprises them the most or what's the most unusual thing to them?

Trisha: From a lending perspective, it's typically a down payment. When you get the acreage, lenders that are like I said, not used to dealing with it, typically want more money down because in the event that something would go awry down the road and they would have to foreclose on properties with a lot of acreages or typically take a little bit longer to market and so that goes into the risk evaluation of the property itself. Typically, the lender will want an additional down payment to mitigate some of that risk.

Bill: I see. Are the interest rates typically comparable?

Trisha: Depending on the program, yes, but there are two schools of thought in mortgage lending. You have just the traditional Fannie Freddie loan that you can get and then you have bank loans or portfolio loans. Depending on which track the borrower and the property would fit in, it can have a variance between rate and term.

Bill: Well, it strikes me that if somebody is thinking about getting a loan on a rural property, as you said earlier, they might want to talk to you before they even begin their search because you'd hate to see somebody go too far down the road with an assumption about what they could do on a loan basis and then be disappointed. Is that fair to say?

Trisha: Absolutely. We always encourage people to talk to a lender prior to falling in love with something and then having to figure out the hard way that it may be a little bit harder than they expected.

Bill: Now, do you ever run into situations where it's just too difficult to make a loan, I'm thinking now of a situation where somebody wants to buy a huge acreage, 80, 160 acres, and a house? Is that outside your purview or is it still doable?

Trisha: Outside my personal purview, yes, but like I said, Landmark would always be willing to look at that from an in-house portfolio standpoint with one of our other lenders.

Bill: Excellent. If a person were interested in doing that, probably what they ought to do is to call you first and you could help direct them depending upon what it is that they're trying to accomplish. Is that fair to say?

Trisha: Definitely.

Bill: Does Landmark make loans on just vacant land, where their intent isn't to build the house? I think you call them portfolio loans.

Trisha: Yes, we can. Especially, if you aren't going to build right away or don't have the intent of building, you're looking at a substantial down payment, probably 25 to 35%, depending on location and borrower qualifications and things of that nature, but yes, it can be done.

Bill: All right. Let's say, I'm thinking about I'm tired of living in the city. I want my kids out where they can run in the country and fish in the pond rather than spend all their time looking at screens, what should I prepare for from a financial point of view? Or if I was going to come talk to you, what type of information would you like me to have available so that you could help me?

Trisha: Typically, start most of those initial conversations over the phone, and then we can set up a time to meet face to face if they have time or want to but basic personal information names, social security numbers, date of birth, employment information, pay stubs. I will have you either drop those off to me or scan and e-mail them to me and try to make it easier on everybody's fast-paced lifestyles. That's typically what we use to get started and then we'll follow up with tax returns and more financial information as we get further in the process.

Bill: Could you tell us what's the best way to get in contact with you?

Trisha: My cell phone is usually the best way to catch me. That number is 913-220-6091.

Bill: Why don't you give us that number again?

Trisha: 913-220-6091.

Bill: Can they do this online or they have to come in?

Trisha: Absolutely. You can apply online at www.trishagoodale.com. It's T-R-I-S-H-A, Goodale, G-O-O-D-A-L-E.com and there's an "apply now" link. You can do that at midnight after you got the kids in bed and I can get to it the next morning and get back to you right away.

Bill: Now, that makes it pretty easy. To our readers, if you haven't picked it up by now, I'm a big fan of Trisha's. She has helped some of my clients through some really tricky situations. There are always surprises. When you do non-traditional loans like Trisha does, you have to be creative and you have to be very client-centric. One of the reasons I always ask-- can say that half of my clients use Trisha's because she's creative and she helps my clients do things well. Is there anything else that somebody thinking about getting a loan in rural land I don't know about Trisha?

Trisha Just feel free to give me a call anytime. Even if it's six months to a year or two years out, we'd love to just have those conversations and make sure we get the questions answered ahead of time. I love to plan. I love to help people reach for their dreams and be a part of that process. That's part of the reward for me. I would love to have the opportunity to talk about that.

Bill: That sounds like a perfect way to do it, and that'll be our blog for today. The reason I say today that I'm one of the luckiest guys in the world is that when you sell the kind of real estate that I do, it's not a matter of selling somebody a new home. When people move to the country, when they leave the city as most of my buyer clients do, they're really wanting to change their lifestyle. There are a lot of things that are about that change that is different. Lending is one of them. When I have the opportunity to work with people like Trisha that can take some of the anxiety and the surprise out of that, it gives me a pretty good feeling too.

That's our blog for today. We hope you enjoyed it and maybe learned something and had a little fun. If you have any questions about anything we have discussed, or maybe if you're just looking for someone to help you buy or sell your country property, give us a call at 913-837-0760, or send me an e-mail, bill@ruralkc.com. That's bill@ruralkc.com.

If you just want to keep up with what's going on in the country and especially country property and country real estate, you can follow us on our website, ruralkc.com, or you can go to our horse property website, kchorse.com.

As always, you can follow us on Facebook, LinkedIn, or maybe my favorite, YouTube. I say our YouTube channel might be my favorite because boy, you get a chance to look at some beautiful country properties, great scenery, wildlife. It's just a fun experience. We are affiliated with Keller Williams Realty Partners. We hope that you have a great day.

 

Tuesday, December 22, 2020

CONSIDERING PURCHASING RAW LAND?

 

                    Considering Purchasing Raw Land?        

Choosing to build your home on raw land allows you to find a location with views and scenery that appeals to you and gives you a range of choices for the design of your home. However, with the freedom you're afforded by raw land, there also come challenges with it. Here are four things you need to know about buying raw land.
 
Finding the Site
 
Consulting a real estate agent is the best option for identifying sites, especially if your search covers a widespread area. Before purchasing raw land, you will want to actually visit the location and walk over the property. You will also want to investigate adjoining properties because you will want to know whether there are large-scale farming operations that may affect the potential value or your quality of life. 
 
Sewer and Water
 
Before you can build a home, a health inspector has to visit the site to conduct a "perc test" to establish the land's rate of drainage for a septic system. This will determine where you can place your primary and repair drainage fields, or determine if you will need to install a custom system, which can raise sewer septic costs by up to five times. 

Without hiring someone to evaluate the land, there are things you can do to get a sense of the type of system the property can accommodate: Ask neighbors about their water and sewer and check to see what their living conditions are like in terms of water and flooding.
 
Electricity
 
The electrical connection is generally more costly than water and septic considerations. You may be able to connect lines to an adjoining property with your neighbors' permission. Utility companies can send an engineer to a site to calculate the installation expenses based on the distance and number of poles.
 
Road Access
 
Not only do you need to have the title analyzed to be sure your property isn't landlocked, you'll also need to do research in terms of road access. You may need a special road to be built to bring in equipment to dig a well, or you may need a forklift to be brought in to lift heavy materials. 

You will need to factor in these costs for this access road for the building process, which can be pricey. Look into the potential expansion of public roads on or near your desired home site by contacting the state department of transportation's engineering department.
 
Environmental Problems
 
Another potential issue you may face is an environmental regulation on where or how you can build. Ask your real estate agent, lawyer, neighbors, and regulatory agencies about these environmental concerns.

If you're serious about investing in raw land, give me a call so that we may discuss the particulars of the area you're interested in and your specific needs.  Our website is a great place to start your search for rural property.  Ruralkc.com   913-837-0760 or 913-837-0411.

 

 

Tuesday, December 15, 2020


DO I NEED AN APPRAISAL BEFORE I LIST MY HOME?


For today's topic, we're going to talk about something that, oh, I don't want to say I get emotional about, but I certainly get intense about, and that is the appraisals and pricing your property properly. That's a little hard to say real quickly. Now if you're listening to this podcast and you happen to own a home that's in a subdivision, and there are six-floor plans and 100 homes, and there have been 30 home sales in the past year, well, you can tune out on this unless you've got a friend or a neighbor that might be in this situation because frankly, those appraisals are pretty easy for anybody to do. Any experienced realtor could give you a real good idea based upon similar homes nearby to you and what they would sell. 

Now what I'm talking about today is appraising rural or country property, because the reality of it is there are almost no two country properties that are the same. One guy might have a home on five acres, another on 10, 20, or 40. One person might have a pond in a stream, the other has nothing but dry pasture. One might have no outbuildings whatsoever, but the other one has two or three outbuildings. One may have facilities for horses, and the other one has outbuildings but doesn't have facilities for horses and so forth and so on. Not to even mention the fact that country homes, typically, aren't in a subdivision and there aren't typical floor plans, and the distance you are from a paved road, they make a difference, if you live on gravel, and a whole host of things that make it really difficult, certainly far more challenging to appraise country property than homes in subdivisions. 

Now let me say this, there are some outstanding rural appraisers out there that really know how to appraise the country property and know the differences and can do an outstanding job. If you're ever in a situation where you want to get an appraisal, why let us know. We'll give you the names of some people that we've had nothing but great experiences with them and you can rely on the information you get from them. Now, we're talking about the situation where you're thinking about selling, and of course, you don't want to get anything less than what you need for your property. Now you can do what most people do, you can talk to a few realtors and you can probably get a good idea from them what your property might be worth. But for the things I've just talked about, it's difficult to really have anything you can count on. Since it's a realtors', typically called the broker price opinion, it's not going to carry near as much weight as an appraisal. 

One of the things I want you to consider that if you are planning on selling some property, a rural property in the future is that you consider getting an appraisal from a really good experienced rural property appraiser. Now I'm going to talk about the pluses and minuses and how you can use that. The reality of it is when that appraisal is done and you get it back, you're either going to be thinking, "Well, I was right on the money," which typically isn't the case. You're going to find that it came in a little bit lower, maybe too much lower than you wanted, or it came in exceedingly higher than what you anticipated it would. Well, if it came in higher than what you thought it would, well, that makes everybody feel good, right? That makes you more comfortable that you're going to get out of your property when you finally sell it more than you had thought you would. Even if it comes back in lower than you thought, it could still be a value to you because if nothing else, it gives you a realistic expectation of what your property is worth. Meaning you won't set a target out there for selling it that is unrealistic and the market won't bear it. It also gives you a ground floor for negotiations. You're certainly not going to sell it for anything less than what that property goes for. Your realtor can also utilize that information to help them in selling your property. For example, if, when it comes time to negotiate, if it's the lower one, you've got the bottom line dollar that you can use in negotiation, say, "Look, we've got a recent professional appraisal. We're not going to take less than it's worth." If it turned out to be more than you thought, well, you can make hay with that too. You can share it with potential buyers who are a little bit reluctant to pay the price, and you can show them that the property is worth more than they thought it was. It certainly takes the wind out of their sails if they're trying to negotiate a lower price than they probably should have. It puts you in just so much a stronger position to know what your property is worth. It can also help you if you've got an appraisal when you're talking with realtors because some of the things I hear people say are things like, "Well, why can't I just use, oh, say Zillow or Trulia or realist?" or some of those other services out there that are able or try to tell you that they know what your property is worth and you can just look it up on a website. Well, again, those properties are probably okay if you've got a home in a subdivision, but they are radically inaccurate once you get out in the country. Frankly, even for those of us who are in here in the greater Kansas city area, they're not even really that good for homes in subdivisions. The reason is that the states of Kansas and Missouri do not make results of a sale of real estate property available to the general public. It's only available to someone who has an appraiser's license. 

When you are getting an appraisal or a guesstimate, a price, for example, from a realtor, they're taking it from the only source they have, which is typically the local MLS. That's typically where Zillow is getting their information from. In fact, if you go to Zillow's website and you search for it, you will find an area there where they talk about how accurate do they think their estimates are for your given area. As you look down through the list of cities, you'll see that, well, they think they're 90% accurate in Los Angeles or 80% accurate in Cleveland. But when they get to Kansas City, you'll see two lines across there indicating they don't guarantee the accuracy of their estimates at all in this area because they know they've only got a limited amount of information. They only know what's in the MLS, so they don't know about properties that are sold for sale by owners, they don't know about properties that are sold from one friend to another. They don't get listed on the MLS. They don't know about interfamily sales when the father sells to one of his sons or daughters, for example. All that information is missing. Zillow doesn't claim to be very accurate when it comes to pricing homes in the Kansas City area. Then when you add to that, how difficult it is to price property in rural areas, it really makes it almost impossible to put any faith in the estimates you get from companies like that. 

Having a professional appraisal makes all of that doubt go out of your mind. Having it will also help you understand if the realtors are giving you the right price when you sit down to talk with them about selling the property because sometimes it's really easy to-- How shall I say this? Accept what you want to hear. If you've got two or three realtors you've chatted with about what your property is worth, it's hard not to say yes to the guy who says I can sell it for more, even if he or she knows that they've overestimate just in order to get the listing. Having a realistic price from the realtor who thinks that they can and legitimately will sell it for that price, as opposed to just dangling a price in front of you in hopes that they'll get the listing and then you'll have to adjust it later when the property doesn't sell, should also make you feel much more comfortable. 

These situations where you get a professional appraiser will put you in a good situation because I have had some horrible situations. The other advantage of doing this is that you can help the eventual appraiser that will come out from the lender because remember, things have changed a lot in the 12 years since the crash of 2008. It used to be that a lender got to pick and choose exactly who they wanted to do their appraisal most of the time. That was because they had confidence in them and they did good work and they turn things around on a quick basis so they could move their closings along properly and quickly for their clients. Sometimes you got a little bit too cozy, and so you had situations where realtors and lenders were too close and they would talk too often. Well, now, there's a firewall between lenders and appraisers. The lenders can't pick the exact person that does the appraisal and they're limited in the conversation they can have with them. All of this is a plus. It's to help us keep falling back into the situation we had prior to 2008 where properties were overvalued. It allows rather appraisers to be objective without fearing losing future opportunities to do appraisal work. The problem with that then is if the lender can't guarantee that the appraiser he sends out to you, is going to be experienced in rural property? 

Now I think most appraisal companies try to match up the right people with the right property, but I have seen some stunningly poor appraisals. I've seen appraisals come back from somebody who is probably extremely confident in doing homes in subdivisions trying to do a rural property. When I looked at the map, for example, they didn't have the property even in the right location. They didn't know how to give value to such things as a property that was fully fenced or that a property that was on a gravel road. I had a situation a while back where this property was a beautiful home, had a gorgeous pond, about 14 acres, a stunningly beautiful house, and they had an outstanding outbuilding. This outbuilding was almost 3,600 square feet. It was set aside or part of it was an office, it had its own septic system, it had its own heating and cooling system and then it had the normal garage space that you see in outbuildings. The appraiser had no idea how to properly appraise that particular outbuilding, and so the appraisal came back way low. Both the buyer and the seller recognize that the appraisal was way low. I'm always fearful, concerned about appraisals being done on the country property for that reason. 

Now if you already have in your hand an appraisal from another professional certified appraiser who did that when there was no contract involved when you got that appraisal taken care of prior to putting your home on the market, it makes it a lot easier to justify your position. In some cases, you can make that appraisal available to the appraiser that is assigned by the lender. It helps them and everybody gets a much cleaner, better, more accurate appraisal of your property. Other than the cost, a proper appraisal is probably going to cost you a little bit south of $1,000, but given the price of homes and property in the country these days, it's a pretty small amount to spend. It gives you an amazing amount of confidence in how you price it, and it gives you a tool to use both in negotiations and if you run into an appraisal problem after the fact. If you were thinking about selling your property and you've got a unique property, particularly one that's a rural property, give us a call. 

We'll be glad to help you find and identify some rural property appraisers that you can talk with that we'll be glad to give you an appraisal that will serve you well. Well, that's our podcast for today. I hope you enjoyed it. I mentioned at the start of this podcast that I am the luckiest man in the world. That's because I make my living helping other people's dreams come true, so whether your dream is to buy or sell a country property, give us a call. 

We work to make it as easy and stress-free as possible. We'd like to hear from you, so if you have a topic you'd like us to do a podcast on or have any questions about rural real estate or country life, get in contact with us. Send me an email at bill@ruralkc.com, or I'm so old-fashioned and I actually like speaking on the phone so you can call me at 913-837-0760. But if texting is your thing, I'm cool with that as well. Remember to check out our website, ruralkc.com.

We believe that's the best rural property website in the country. You can always follow us on Facebook, LinkedIn, YouTube, Instagram, and Twitter. This is Rural KC Real Estate affiliated with Keller Williams Realty Partners, wishing you a blessed day until next time.

Tuesday, December 1, 2020

IS BUYING A HOME TODAY A GOOD FINANCIAL MOVE?

 

Is Buying a Home Today a Good Financial Move?



There’s no doubt 2020 has been a challenging year. A global pandemic coupled with an economic recession has caused heartache for many. However, it has also prompted more Americans to reconsider the meaning of “home.” This quest for a place better equipped to fulfill our needs, along with record-low mortgage rates, has skyrocketed the demand for home purchases.

This increase in demand, on top of the severe shortage of homes for sale, has also caused more bidding wars and thus has home prices appreciating rather dramatically. Some, therefore, have become cautious about buying a home right now.

The truth of the matter is, even though homes have appreciated by a whopping 6.7% over the last twelve months, the cost to buy a home has actually dropped. This is largely due to mortgage rates falling by a full percentage point.

Let’s take a look at the monthly mortgage payment on a $300,000 house one year ago, and then compare it with that same home today after it has appreciated by 6.7% to $320,100.



Compared to this time last year, you’ll actually save $87 dollars a month by purchasing that home today, which equates to over one thousand dollars a year.

But isn’t the economy still in a recession?

Yes, it is. That, however, may make it the perfect time to buy your first home or move up to a larger one. Tom Gil, a Harvard trained negotiator and real estate investor, recently explained:

“When volatile assets are facing recessions, hard assets, such as gold and real estate, thrive. Historically speaking, residential real estate has done better compared to other markets during and after recessions.”

That thought is substantiated by the fact that homeowners have 40 times the net worth of renters. Odeta Kushi, Deputy Chief Economist for First American Financial Corporation recently said:

“Despite the risk of volatility in the housing market, numerous studies have demonstrated that homeownership leads to greater wealth accumulation when compared with renting. Renters don’t capture the wealth generated by house price appreciation, nor do they benefit from the equity gains generated by monthly mortgage payments, which become a form of forced savings for homeowners.

Bottom Line

With home prices still increasing and mortgage rates perhaps poised to begin rising as well, buying your first home, or moving up to a home that better fits your current needs likely make a ton of sense.

As always, please feel free to contact the Rural KC Team with any questions you may have.  913-837-0760 or 913-837-0411.  Bill@RuralKC.com or Danicia@Ruralkc.com.  If you are looking for a great website for rural properties, please visit Ruralkc.com. 

 

Tuesday, November 24, 2020

 

Don’t Let Buyer Competition Keep You from Purchasing a Home




This year’s record-low mortgage rates sparked high demand among homebuyers. Current homeowners, however, haven’t put their houses on the market so quickly. This makes finding a home to buy today challenging for many potential buyers. With an obstacle like this, those searching for their dream homes may be pressing pause on their searches as we approach the end of the year, but that could be a big mistake for many hopeful house hunters. Here’s why. 

According to the most recent Housing Trends Report from the National Association of Home Builders (NAHB):

“The length of time spent searching for a home continues to grow.”

The report indicates that 62% of buyers now spend 3 months or more looking for a home, an increase from 58% one year ago. A primary cause for the delay is the heavy competition today’s buyers face when making an offer on a home. Based on recent data from the National Association of Realtors (NAR), the average house in today’s market receives 3.4 offers before it’s sold. This means for every buyer who purchases a home, there are on average two or three buyers who have to begin their search all over again.

Compared to this time last year, the NAHB report shows that buyers are having more success finding homes in their price range. However, it also notes the percentage of buyers saying they’re getting outbid when they make an offer has jumped from 15% to 27%. Buyers are indicating that bidding wars are a major obstacle to finding their dream home (See graph below) 




If this is a challenge you’re up against in your home search, you’re not alone. Feeling stuck in the process can be frustrating, but if there’s ever been a year to power through, this is the one. NAHB noted:

“Difficulties finding a home to buy will likely lead 20% of active buyers to give up until next year or later. That share is up from 15% a year earlier.”

Experts anticipate home prices will continue to rise into 2021, and the incredibly low-interest rates we’ve seen this year are also forecasted to increase as the economy strengthens. Hopeful home buyers who decide to hold off on their search until there’s less competition run the risk of finding a more expensive housing market when they start looking again. If affordability is a key motivator behind your decision to buy a home, this winter is still the best time to make it happen.

Bottom Line

Bidding wars may be one of the greatest challenges buyers face in today’s housing market, but they shouldn’t be a deal-breaker. Having the right expert on your side throughout the buying process will give you the advantage you need when it comes to finding the right home and making a competitive offer. If you’re ready to buy this winter, contact a local real estate professional to discuss how to position yourself for success.

As always, if you have any questions about this blog post, please feel free to contact us at Bill-913-837-0760 or Danicia 913-837-0411.  We would love to hear from you!

 

Tuesday, November 17, 2020

 

WHY DO I NEED EARNEST MONEY?

When you’re shopping for a home, it can feel like you’re hemorrhaging money. You’ve got all sorts of things to pay for, from loan application fees to home inspections, so when the issue of earnest money comes up unexpectedly, it can be a “slam on the brakes” moment. Now that the days of low to no down payments are largely past and markets everywhere seem to be running thin on inventory, earnest money may well be the most important negotiating tool you’ve never heard of.

What Is Earnest Money?

When you make an offer on a home, part of that offer can include a little show of good faith on your part, in the form of cold, hard cash. Generally, one to three percent of the offer price is pretty normal for an earnest money deposit, but this can vary pretty widely based on market conditions. And the more you put up, the better. But what happens to that money?

Earnest money is literally just a show of faith. When you go to the closing table, it becomes part of your cash to close equation, which includes other line items like your down payment, your closing costs, and your prepaid items. It’s not a bribe or an extra fee to convince a seller to sell to you. It will simply be applied in full as a credit in your closing documents, reducing the amount of money you need to bring with you on the big day.

Here’s the one kicker. If you were to decide to back out of the contract with no real cause, the seller may be entitled to some or all of that earnest money. However, plenty of situations exist where you may not be able to close, but your earnest money will be refunded, such as:

  • An unacceptable home inspection. This all has to be stipulated in your contract; there are no givens in a real estate transaction, but there are things that are pretty standard. Having an unacceptable home inspection, if the seller is not willing to make reasonable repairs, can be a cause for terminating the contract and getting your earnest money back.
  • Your financing falls through. Again, you’ll need a financing clause or addendum to ensure you’re covered in this event, but because financing is so important to real estate transactions in general, they are pretty standard. If your financing falls through due to no fault of your own (you’ve been laid off, your bank closes, a co-borrower dies), you should generally be able to reclaim your earnest money. The specifics will be in your real estate sales contract, so pay close attention.
  • The seller can’t close. There are a few rare situations where a seller can’t close the transaction. These are incredibly uncommon, but they do happen once in a while. For example, you might find out that the seller only believed they were the owners of the home. This can occur when a parent dies without a will, forcing the property into probate court even when it’s clear an only child will be the sole heir. And in the case that the seller can close, but chooses not to for whatever reason, you would also get your money back.

Bottom of Form

What Is an Earnest Money Note?

In some markets, you may have an additional option for earnest money, known as an earnest money promissory note. This is essentially an IOU that accompanies the offer. On the note, you’ll specify exactly when you’ll either turn the paper into actual cash or forfeit the offer entirely. Though these were once very common, they’re far less so today. If you choose to use an earnest money promissory note, be sure to describe in great detail why you’re not able to provide earnest money on the spot and how you will remedy this.

For example, if you have some stocks you were going to cash out for your down payment but didn’t want to touch until you were really ready, you may need time to sell enough to cover the earnest money. In that case, specify this as the reason and say that you’ll initiate a sale on a certain day, then convert the note on that day. Make sure to leave yourself a little leeway, because if you fail to perform, you can suffer serious consequences.

Generally speaking, earnest money promissory notes can be considered a sign of a weak offer, but this varies from offer to offer and market to market and you should inquire before taking that leap.

As always, if you have any questions or comments, please feel free to email either one of us at Bill@ruralkc.com or Danicia@ruralkc.com, or call us at Bill-913-837-0760 or Danicia-913-837-0411.  You can also check out our website at ruralkc.com.  We would love to help you with any of your real estate needs. 

 

Tuesday, November 10, 2020


Why does my realtor ask me for a pre-approval letter?


 Make sure you get a pre-approval for a mortgage, not a pre-qualification. A pre-qualification is where you give a mortgage broker a hypothetical set of credit scores, income, etc., and they give you back an interest rate and terms that the hypothetical borrower you've described would qualify for. A pre-approval is where the mortgage pro reviews your credit, income, and assets and conditionally offers you a particular mortgage (or several), putting that offer in writing in letter form. You must be pre-approved -- not pre-qualified -- before you get in the car to go house hunting with your Realtor because:

  • You can make an offer as soon as you see "the one" - Most sellers won't even look at an offer to purchase their home that is not accompanied by a pre-approval letter. If you see it, then have to wait a day to get a pre-approval letter, you could very well end up losing your new home or wind up in a bidding war over it.
  • You won't see homes way above your price range - Once you are pre-approved, your mortgage pro will give you a purchase price limit. DO NOT go looking at homes that are outside of your limit. I promise you that after you see the million-dollar house, the one that costs $300,000 doesn't look too good.
  • You won't see homes that are way below your price range - People who erroneously assume they can only afford a $150,000 house might get really depressed, disgusted, and frustrated with what they can find in some markets.

Understand Your Big Number

Your pre-approval outcome will be a letter that states Your Big Number -- your maximum purchase price. You should make sure you are clear on your monthly payment at Your Big Number and on what sort of mortgage program (rate and terms) that monthly payment is based on. That number will drive your house hunt and subsequent decision making, so make sure you understand the underlying details -- you don't want to find a home priced at Your Big Number and then realize that the payment you were quoted was the minimum payment on an Option ARM with a five-year prepayment penalty, and not an interest-only payment on a hybrid 7/1 ARM with no prepay penalty.

If you are looking for a home in the country, please feel free to call the Rural KC Team at 913-837-0760 or 913-837-0411.  We can help you find a property, and we also have several lenders ready to help.

Monday, July 27, 2020

FINDING THE RIGHT SPACE FOR A HOME-BASED BUSINESS



3 Tips on Finding the Right Space
for a Home-Based Business

 By:  Tina Martin

Whether you’re starting a business from home for the first time or your small business is growing and you need a dedicated space in your home to meet your personal and professional needs, there are three options you’ll want to consider: converting unused space into an office, remodeling your home or buying a new house altogether. For some tips on choosing the best solution for your home-based business needs, read on!

1. Remodel Your Home

If you’ll need more room and privacy for your home-based business, you could renovate a basement or garage to create space for an office — or you could build an addition. The cost of building an office addition will depend on the size of the space and the specific types of renovations that need to be completed — such as adding or removing walls, installing new lighting, building cabinets, and upgrading electrical wiring. You may also need to obtain building permits from your local authorities, which would add to the cost of your home addition.

2. Buy a New House

If a home renovation isn’t feasible and you don’t have the space you need to convert a spare room or living area into an office, you could also choose to buy a new house that fits your personal and professional needs. To find a new house that can be used to operate your home-based business, you’ll want to consider the following:

     The home’s proximity to your target audience, customers, and employees (if applicable)

     How much you can afford to spend on the home purchase

     How much space you’ll need to live comfortably while doing business from home

     Whether the home and location will fit your industry and profession

If you’d like to buy a larger house in an in-demand location, you may want to consider purchasing a foreclosed home in your desired area. This will help you to find an appropriately sized house in the best possible location, while saving on your purchase and having some money leftover to invest in your business.

When buying a foreclosure, there are a few things you’ll need to consider. Real estate experts recommend getting pre-approved for financing before making an offer on a foreclosed home, taking the time to understand the benefits and limitations of purchasing a foreclosure, and getting a thorough home inspection so you know exactly what you’re getting into. Additionally, it’s important to work with an experienced real estate agent who specializes in buying foreclosed homes.

3. Convert an Unused Space

If you have a spare bedroom or another unused space in your house, you may be able to convert the area into an office for your home-based business. Forbes has some great tips on its website to help you find the right space for your business needs, whether you’re hoping to convert a bedroom, guest room, living room, playroom, or part of your kitchen into an office for your home-based business. If you’re short on space, however, you could even remove the doors from a spare closet and convert the space into a cozy office nook.

After you’ve created a space for your home-based business, decorate the office area with air-purifying plants such as a spider plant, snake plant, and philodendron. If you plant these great office plants yourself, you might even find that you feel happier and less stressed as you get your home-based business going. Candles, artwork, picture frames, and table lamps are other great accessories that can be used to decorate your office and boost productivity.

A Final Word

Whether you convert a spare room into an office for your home-based business, build an addition or buy a new house altogether, these three tips will help you to find the perfect space for your personal and professional needs. In most cases, the right office space for you and your business will depend on your occupation, how much room you need to live and work in, and whether you’ll need added privacy for seeing customers, clients, or patients in your home.


Author:  Tina Martin


Tuesday, May 19, 2020

How Dirt Makes You Happy


HOW DIRT MAKES YOU HAPPY


Prozac may not be the only way to get rid of your serious blues. Soil microbes have been found to have similar effects on the brain and are without side effects and chemical dependency potential. Learn how to harness the natural antidepressant in soil and make yourself happier and healthier. Read on to see how dirt makes you happy.
Natural remedies have been around for untold centuries. These natural remedies included cures for almost any physical ailment as well as mental and emotional afflictions. Ancient healers may not have known why something worked but simply that it did. Modern scientists have unraveled the why of many medicinal plants and practices but only recently are they finding remedies that were previously unknown and yet, still a part of the natural life cycle. Soil microbes and human health now have a positive link that has been studied and found to be verifiable.

SOIL MICROBES AND HUMAN HEALTH
Did you know that there’s a natural antidepressant in soil? It’s true. Mycobacterium vaccae is the substance under study and has indeed been found to mirror the effect on neurons that drugs like Prozac provide. The bacterium is found in soil and may stimulate serotonin production, which makes you relaxed and happier. Studies were conducted on cancer patients and they reported a better quality of life and less stress.
Lack of serotonin has been linked to depression, anxiety, obsessive-compulsive disorder and bipolar problems. The bacterium appears to be a natural antidepressant in soil and has no adverse health effects. These antidepressant microbes in soil may be as easy to use as just playing in the dirt.
Most avid gardeners will tell you that their landscape is their “happy place” and the actual physical act of gardening is a stress reducer and mood lifter. The fact that there is some science behind it adds additional credibility to these garden addicts’ claims. The presence of a soil bacteria antidepressant is not a surprise to many of us who have experienced the phenomenon ourselves. Backing it up with science is fascinating, but not shocking, to the happy gardener. Mycobacterium antidepressant microbes in the soil are also being investigated for improving cognitive function, Crohn’s disease, and even rheumatoid arthritis.

HOW DIRT MAKES YOU HAPPY
Antidepressant microbes in soil cause cytokine levels to rise, which results in the production of higher levels of serotonin. The bacterium was tested both by injection and ingestion on rats, and the results were increased cognitive ability, lower stress, and better concentration on tasks than a control group. Gardeners inhale the bacteria, have topical contact with it, and get it into their bloodstreams when there is a cut or other pathway for infection. The natural effects of the soil bacteria antidepressant can be felt for up to 3 weeks if the experiments with rats are any indication. So, get out and play in the dirt and improve your mood and your life.

THE RURAL KC TEAM

If you are ready to move to the country, we are ready to help.  Please give us a call at 913-837-0769 or 913-837-0411 for any questions you might have or help you might need.  



Resources: “Identification of an Immune-Responsive Mesolimbocortical Serotonergic System: Potential Role in Regulation of Emotional Behavior,” by Christopher Lowry et al., published online on March 28, 2007, in Neuroscience. http://www.sage.edu/newsevents/news/?story_id=240785 Mind & Brain/Depression and Happiness – Raw Data “Is Dirt the New Prozac?” by Josie Glausiusz, Discover Magazine, July 2007 Issue. https://discovermagazine.com/2007/jul/raw-data-is-dirt-the-new-prozac

Read more at Gardening Know How: Antidepressant Microbes In Soil: How Dirt Makes You Happy 
https://www.gardeningknowhow.com/garden-how-to/soil-fertilizers/antidepressant-microbes-soil.htm

Read more at Gardening Know How: Antidepressant Microbes In Soil: How Dirt Makes You Happy 
https://www.gardeningknowhow.com/garden-how-to/soil-fertilizers/antidepressant-microbes-soil.htm
 By:  Bonnie L. Grant