Your Journey Home – Finding Your Dream Home

OK, so you have decided on a Realtor, and you have found a Lender that you like.  It is important to get a pre-approval letter from the lender.  Your pre-approval letter will spell out the terms and the price of a property that you can afford.  This is very important information for your realtor.  Buyers should ask a lender 2 things…  what price they qualified to purchase, and what sales amount you can afford at a payment that you are comfortable with.  The difference between these two numbers is really where you need to focus your price point.   

But back to your search, start looking at that sales figure that is within your comfort level first.  If you cannot find the house you want at that amount, then have your Realtor increase the search by an agreed upon amount.  It’s all about choices. 

So now that you have a price range, the next thing to think about is your wants and needs.  Make a list of the things that you HAVE TO HAVE in a house, then make a 2^nd list and add on the things that you want – this list can be numbered with the most important want to the least important.  The HAVE TO HAVE list includes location, number of beds/baths, garage configuration etc.  Give both lists to your realtor, who then will be able to set up search criteria.  Now some of the HAVE TO HAVE items may not be searchable.  An example, you have a dog and you have to have a fence … fences may or may not be a searchable item, and maybe the house you are looking at has a fence, but that fence (all sides) could belong to neighbors.  So it’s important to talk to the realtor and ask them what items they will be searching for.  It’s best to cast a “wide net”, keeping searches down to basic’s …. You can look at photos and read descriptions to fine tune the search.

With the advent of the internet many buyers are coming in with a list of houses that they have found. Realtors very much try and honor those showing requests, but it is not unusual for these properties to be already under contract and no longer available to show, so don’t be disappointed.  

So you have your list of requirements, and now your realtor is sending you listings of houses to look at.  It’s time to get into a car and go looking.  Make sure that you have plenty of time to look at what’s available.  I wouldn’t suggest that you make a marathon day of house hunting; even the most organized person can get properties and amenities confused, so limit your house hunting trip to 6-8 houses at a time.  It is also ok for buyers to “stalk” neighborhoods.  If you really like a neighborhood, and your realtor isn’t showing you homes there find out what it is with your list of HAVE TO HAVE’S that is keeping you out of a neighborhood.  If you need to pop up the price, and it’s within that range between your comfort level and what the lender has told you your max loan amount is – then that’s one of the choices.  It may be that the neighborhood you love only has one car garages, and you are telling the realtor that you have to have a 2 car garage; again it’s the choices that have to be made.

It’s also very important that your realtor is listening to you – many buyers become dissatisfied because they feel a realtor is not showing them the houses that meet their needs. If this is the case, ask the realtor why they are not showing them properties that meet their needs, it may be a miscommunication. It may be that the needs do not meet with the reality of purchase price or location that is desired. 

House Hunting should be fun …. You will see some properties that on paper sound just wonderful, but in reality are not, and there is always that sleeper, the photos don’t show well, the description is so-so, but you walk in and it’s perfect.  So remember choices are good, embrace the adventure, and have faith in the realtor you have chosen.

Next … writing an offer and getting it accepted

Your Journey “Home” – Get good advice.

It’s time, you have decided to purchase that first home.  Excitement, Anticipation, A little anxiety. You’re probably feeling a mix of all these emotions, especially if you have started to look at houses online, but what do you need to know about the process? After years of working with buyers I get the same questions over and over …. And they are good questions.   So here goes the first in a “Road Map” to purchasing your home.

Up front there are 2 big decisions that you must make and they go hand in hand.  The choice of a Buyer’s Agent (your Realtor) and your choice of a lender.  You need to feel confident that these individuals are truly looking out for you. They should be willing to spend the time that you want and need to find you your home.  You will probably be spending several days with that your realtor looking at houses, and hours talking to them when it comes to negotiating the purchase and bringing the transaction to a close. As for your lender, you will be telling them all about your finances as they work to get you the best financing available. 

Your Buyer’s Agent should have a “counseling session” and walk you thru the process.  Purchasing a home isn’t just about looking at houses and writing an offer.  When selecting a Buyer’s agent ask about their experience and if they have any advanced real estate certification.  Now don’t get me wrong, we all had to start in this profession somewhere and being a new agent isn’t terrible, but you want your agent to be able to answer your questions and give you the right information.  If your agent is new to the business ask him or her if they have a mentor.   A good Realtor will be able to spot possible pitfalls before they even occur.   It’s about thinking “down the line”  - as I tell buyers while they are looking at the size of the closets and updates, I’m looking at a Seller’s Disclosure to see how old the mechanicals are, and was the roof replaced in the last 10 years.  No matter how good a home looks, there will be some kind of issues that come forth after an inspection.  While I’m not an inspector, it’s my job to point out that yes, there is new granite in the kitchen, and the seller (who says they’ve lived in the house for 10 years) cannot tell you how old the roof is – or when the furnace was last cleaned.  I’d much rather sell a house, that while may not be updated with the current “must haves” does have new mechanicals and other big-ticket items. 

As for a lender … this again needs to be someone that will take the time to “walk-you” through the process.  Mortgage lending has become so very complicated with changes to lending regulations (yes, there are regulations that the lenders MUST adhere to) that the process can be very intimidating.  It always seems as if there is one more document that the lender wants, and sometimes it’s not the lender that you are talking to who wants some obscure document, but the dreaded “underwriter”.  Now in 25+ years I’ve never spoken to an underwriter, but they seem to always want something and that something can derail a purchase in a heartbeat. 

So my advice is to “interview” several Realtors and Lenders.  Start first by asking for referrals - we all know someone who has just finished purchasing a home – so ask, were they happy with their realtor and or lender?  If not, why? Purchasing a home is an emotional journey and you need to understand that there may be some diversions along the way. 

It’s the role of the Realtor and the Lender to keep the transaction on track and reach a successful conclusion.  Once you have chosen a Realtor and Lender the fun begins ….  Searching for a home,  and we’ll cover that in the next post....

Buying a Home …. Credit Pitfalls That Buyers Need to be Aware of: The time has come and you are looking to purchase a home. Whether it’s your first home or if you have purchased before, you have done all the right things or so you think, but here are some pitfalls that can trip up a buyer, especially if it’s your first home.

1. You have talked to a lender and have been pre-qualified for a purchase and that’s a good step forward, but once you get pre-qualified and are looking for your house, do not make any new significant purchases during the time of the search or after you make an offer.  Lenders will recheck the credit report 24hrs before the closing and if a new installment  payment shows up on the report, the lender will not be able to do the loan

Remember:  Don’t take on new debt during the mortgage-approval process no matter what. I tell buyers not to even pull out their credit cards until the closing.

2. Don’t change your job.  Sounds pretty self-explanatory, but during the time of making an offer and a closing making a significant life change like a new job can derail you purchase.  Especially if it’s a new job in a different field from what you are currently in.  So if a great offer comes along your way, somehow put off that change until after the closing, lenders are looking for a stable “track record” of employment when it comes to mortgages.  This does not apply to people who are moving because they have been relocated by their company, a job promotion is different than a new job.  However if you are moving for a new job that is significantly different that the one you held before there could be more questions to answer and documents to provide a lender.

Remember:  Don’t switch careers or take drastically different employment paths.

3. Don’t pack away important financial documents.  Lenders will need financial documentation during the critical time between mortgage pre-approval and the closing or settlement. Lenders need copies of bank statements and pay stubs for up to 6 months, and back tax records for 2 -3 years.  They may also need proof that obligations have been paid off, and while you may have sent those documents to someone earlier, an underwriter may want those documents at the last moment. 

Remember: Keep important paperwork where you can easily access it until the transaction is completed and you’re in your new place.

4. Get a copy of your credit report as soon as possible and check for debts.  Identity theft is up, and many people have items that are on their credit report that do not belong to them.

Remember: Have your credit fully checked at the very beginning of the process.  If there are items that do not belong to you, you have time to correct any issues. 

What is the Market?

This blog is not going to be about “fluff” I’m not going to send out recipes for the latest and greatest cookie or the hottest new home decorating ideas … it’s going to be about Real Estate Knowledge. SO here goes.

Knowledge is power.  I have always believed that my job as a realtor was to give buyers and sellers the knowledge needed to make educated and informed decisions when purchasing or selling a home. 

First, what is meant when a realtor says “the market”?  The National Association of Realtors has a slogan that states “each market is different, so check with your local realtor”.  When I speak of the market I’m discussing the number of houses listed/sold thru my local multiple listing service (MLS).  I’m not overlooking for sale by owners (FSBO’s), but without knowledge of those properties – other than a sign in the yard that says “for sale” – the public, including me, has no information. You don’t even know that it’s for sale unless you happen to drive down the street.

We hear of Buyers and Sellers Markets as well as a normal or balanced market.  What does that mean, and how does that affect a consumer? A normal or balanced market is one where the average home inventory is 6 months.  Home inventory is how long the average home in an area takes to sell from the day that a sign goes in the yard to the day keys are handed over to a new buyer- sometimes also called days on market.  6 months may seem like a long time to be on the market but it isn’t considering all the steps required to close a house once it goes under contract. 

A Buyers’ Market occurs when it takes more than 6 months for an average a home to close and a Sellers’ Market happens when it takes less than 6 months.  Now I can only really talk about the market that I’m located in – that’s the Kansas City Metro Area. The metro area is defined by the US Office of Management & Budget, and actually encompasses a fifteen-county area anchored by Kansas City, Missouri, and crosses the states of Missouri and Kansas.  My MLS covers 5 counties with some overlapping of 3 other counties.  I will only discuss my local MLS coverage.

Currently (for the month of March) the average median Price in Kansas City was $ 175,375, with an average Day on Market (DOM) of 98. Year after Year the inventory of homes has been pretty much static with a total of 11,932 houses on the market – last year that number was 11,889.  However inventory was up 9% from February to March 2014, so at the moment the Kansas City Area is currently experiencing a “Seller’s Market” – in that there are buyers who want to buy and a limited number of houses available.  Boiled down this means that we are seeing an increase in multiple offers on properties and sellers that are less likely to give price or concessions.   In a Buyers’ Market the opposite happens, there are a lot of homes on the market with just a few buyers who are looking and/or qualified to purchase.  When that happens, prices of homes may drop and sellers find themselves in the position of giving  concessions to buyer’s  in order to secure offer’s and more importantly keep contracts on tract to a successful closing.

If you want to follow the Market Statistics for the Metro MLS, I’ll be posting them monthly under the Market Pulse Tab. 

Changing with the Seasons 

I notice whenever I make the transition from one season to the next it’s more than just the weather that changes. I go through an assessment of what I accomplished over the last few months, what was new that I embraced as a better way of doing things and what I’d found had become outdated and prime for change.  As a realtor for over 25 years, I look for new ways to do my job well and to reach out to my clients.  Starting a blog seemed like a smart and effective way to share my take on the market, what’s working and what may have changed, as well as how to make the most of what can be a challenging or fortuitous time for buyers and sellers.  Of course, with the link to the John Moffitt & Associates site you can receive updated information on real estate listings, sales and market information, and while I hope it’s something you’ll choose to use, I encourage you to contact me with questions and feedback. So it’s another season... and this is one of the outcomes of my most recent assessment. I hope you’ll agree that this blog can offer a friendly, fun and informative way to keep in touch, keep you up-to-date and moving forward toward what will always be ‘the next new thing’.  I encourage you to follow me along on the ever-changing journey through the real estate market here in Kansas City  - and much, much more!