Tuesday, December 22, 2020



                    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.
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


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?

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.