Your Home: Your lender can make or break you

October 17th, 2016

In the competitive world of home lending, oftentimes the most highly discussed topic is your interest rate. Radio and TV commercials all advertise the lowest rates possible in an effort to lure you in to working with their institution.

After working through yet another strong selling season, I thought that it would be useful to share with you a few thoughts about lenders, how to choose one, and what to avoid. You see, from the listing side, I have a unique perspective. When we receive an offer on one of our listings, one of my first jobs is to scrutinize the buyer’s lending. I don’t mean that to sound negative. Really, I just want to make sure that my seller understands exactly what they might be accepting (as it pertains to financing) and the risks involved with each offer received.

So let’s get started.

Hire a local lender. This is a big one. As I mentioned earlier, buyers can be attracted to companies like Quicken because they advertise “the lowest rates” and that you can get pre-approved in the blink of an eye. As a listing agent, Quicken scares me to death. If someone can get pre-approved for a home loan in the blink of an eye, then that means that the buyer has received a pre-approval based on a statement of income and no tax returns or pay stubs have been reviewed. The pre-approval is simply based on credit history. More importantly, a local lender is exactly that: local. They, more than likely, understand our local market conditions. They also know that their reputation will help to build or destroy their business. Someone from “who knows where” working for some online pre-approval company is not nearly as concerned about how your purchase goes. If you get mad and leave them for some reason, they will just move on to the next consumer that shows up on their website. Just as “buy local” is the new buzz phrase for goods, “lend local” should be a buyer’s buzz phrase.

It is not just about the lowest rate. Yes, low interest rates are awesome. And the lower the rate, the lower your payment. That said, the lowest interest rate should not be the only reason for selecting a lender. The two lenders that our team refers on a regular basis are both brokers, meaning they work with lots of investors and can shop around to find our buyers the best rate for them based on their financial history. But the main reason that we refer them is that they both have proven systems to ensure that our buyers make it from pre-approval to closing with no problems or surprises along the way. And on the rare occasion that a problem were to arise, both of our lending partners will come to us with a solution in hand. You see, in my business the reliable and trustworthy lenders have a great reputation and the full-time agents out there in the field know it. Conversely, the lenders out there with a reputation of deals falling apart or last minute surprises at the closing table are also known for their poor track record. If you want to blow a lenders mind when you speak to them for the first time…ask them for references. References from clients and agents that they have worked with in the last 90 days will give you a clear understanding of the level of service that they will provide.

When competing, your lender matters. When a bidding war ensues on one of our listings, the lender matters. One of my first steps is to call the lender to verify that the pre-approval that I have in my hand is worth the paper it is written on. I have a list of questions I ask the lender to make sure that the financing is as rock-solid as possible. Plus, you can tell a lot by a lender’s inflection and their demeanor on the phone when you ask specific questions about a buyer’s financing. This means that you must make sure that an agent can reach your lender, even on the weekends. Some of the “big bank” lenders will only give out their office line and would scoff at the thought of being called on the weekend by an agent. Trust me, I fully support life balance and a professional’s right to have down time with their family on the weekend. Yet at the same time, a two-minute phone conversation won’t take someone’s life out of balance and could make the difference when two offers have similar financing with two different lenders and a choice has to be made. A great lender must be a great communicator with not only the buyer, but also the buyer’s agent and the listing agent. This is essential.

Your Home: Weakening demand equals opportunities for buyers

October 10th, 2016

Have you noticed more and more real estate signs lately? And have you noticed that not all of them are selling right away? You are observing first-hand one of the effects of a shifting market.

In most cases, the number of homes for sale coming on the market is not increasing. However, the rate at which they are selling is dropping. This drop in the absorption rate is in direct correlation to the lessening overall demand for homes.

As of the end of September in the Shawnee Mission area, the months of supply of housing inventory has reached a two-year high. The September numbers show that we are now at 3.5 months of housing supply (single family housing only), that is up from 1.8 months at the end of August. The two-year average is 1.9 months so we are well above that point and we are nearly double the inventory compared to September 2015 when we only had 2 months of supply available.

So how does this trend create opportunities for buyers?

When demand goes down, buyer options go up. The number one complaint for most buyers this year has been a lack of inventory. The number of available homes for sale has been frustratingly low. With demand dropping, the rate at which homes go under contract will slow which should create more options for buyers. And it should take some of the “panic” out of the market as well. Please know that certain price ranges can and will perform differently until we are fully into the market correction. Each price range can be its own little micro-market.

No more selling to the highest bidder. If you are one of those buyers who refuses to get into a bidding war, then the market may be moving in your direction. Historically low inventory levels earlier this year helped to create an auction-like environment not preferred by many, except for the sellers of course. As the inventory levels continue to shift in the opposite direction, multiple offer situations may become a thing of the past. Soon, sellers will just have to be happy with one good offer.

Price war. When inventory goes up, usually prices come down. Now this may not be a dramatic drop in pricing, but a drop nonetheless. As sellers have more competition in an environment where demand is dropping, prices must drop as well in order for a seller to sell. As I sit here today, our market has seen values this year that have surpassed the big ramp-up in 2006 and 2007 which preceded the great recession. As I have mentioned before, the current market trends do not suggest that we are headed towards another recession. It does, however, seem very clear that the market is correcting itself after being in an extreme seller’s market for three years now.

Beauty contest. “I have to pay this price for a home in this condition?” This question may also become a thing of the past soon. More seller competition means that not only does it become a price war, but the market also becomes a beauty contest. When sellers are competing for the same buyer, they have no choice but to make sure that their home is in top-market condition if they want to sell. Homes in less than top market condition must price accordingly, otherwise they will simply help other homes sell around them. An over-priced home in less than great condition is the best thing that a fairly priced home in great condition can ask for. When the two are compared, which one do you think will sell first and for a better price? You guessed it!

Your Home: Selling in the fall

October 3rd, 2016


(Photo credit: Flickr/Carl Mueller)

Those who know me well know that fall is my favorite time of the year. I grew up in Arkansas, so when I moved to KC in 1998 and experienced my first Kansas City fall, I was hooked. In Arkansas, I swear that summer lasts until November, then you have one or two weeks of fall and then straight into winter. But not in Kansas City. Our fall season can actually last for three months. Crazy right?

Oftentimes, once October arrives I start getting the questions, “Have I waited to late to sell my home this year,” or “Do homes sell very well in the fall?” To answer them in order “no” and “yes”.

Autumn can be a great time to sell a home. As noted earlier, the weather is gorgeous and in most cases, people are excited to see a new season. The changing of seasons also alerts them to the fact that if they are going to make a move before the end of the year, now is the time. The upcoming deadline of the holiday season can be a great motivating factor for buyers out there. And as I have said many times before, the most motivated buyer is one with a specific deadline. And a buyer with a deadline can be the most reasonable to work with during a sale. When there is no deadline, a buyer has the option to walk away from a sale and move on to the next.

As it stands right now, if a seller can have their home ready for the market in the next two weeks, the sale could close prior to Thanksgiving. Or if preferred, the week following. Either way, your Christmas tree or menorah could be set up in your new home with plenty of time to spare.

If you choose to sell your home in the upcoming weeks, here are a few things to keep in mind:

  • Leaves in the trees are pretty. Leaves on the lawn are work. When selling a home in the fall, you must know that you are committing to keeping the leaves raked up at all times. I would strongly suggest hiring a lawn company to visit twice a week unless you just love to rake leaves and you have all the time in the world. When buyers see leaves on the lawn, they see a chore that needs to be addressed day one. Those of us who live with mature trees currently know the work that comes with the arrival of autumn. By keeping your leaves picked up during the sale, you can save that little surprise for your future buyer until after closing. Welcome home…here is your rake.
  • Open some windows. Unless your family suffers from seasonal allergies, I would strongly suggest that you open your windows and allow the cool, crisp fall air to visit your home. All of our homes have a certain smell. You know what I am talking about. Most home smells are good. Some, not so good. And we become immune to our own home smell because we are so used to it. When the temperatures are in the 60s and low-to-mid 70s, I would suggest opening some windows. If nothing else, it is a good excuse to check all of your windows to make sure that they are opening, closing, and locking properly.
  • Seed those bald spots. As the temperatures become more mild, now is the time to over seed those troublesome spots in the yard where grass struggles to grow during the hot summer months. Just remember that new seed must stay wet constantly for the first couple of weeks. While keeping the seed wet, do your best not to create a swamp around your home as buyers will want to walk around the yard during a showing. It may be a good idea to make a sign warning of the new seed to prevent potential buyers from stomping all over it.
  • Fall smells great, but plug-ins don’t. Let me apologize right away if you are a plug-ins fan, but I won’t retract my statement. Fall smells like pumpkin spice, nutmeg, cinnamon, eucalyptus, and the like are great. However, they are too much when produced by plug- ins or any other product like them. Please remember that buyers are sensitive to smells. That is why I suggested opening windows earlier in this column. If your home is closed up and you have some device producing a holiday smell 24/7, it can get overwhelming. It can also cause the buyer to wonder, “what are they trying to cover up?” It may sound like a conspiracy theory, but it can happen. A good rule of thumb is that the quality of the scent tends to be in direct proportion to the investment made in the scent-maker. For example, a Trapp candle (even when not lit) will convey a subtle, quality scent as opposed to an over the top scent from some “buy four for $4” device.
  • Don’t be afraid to decorate. Fall decor, like little pumpkins and scarecrows, is received as cute and charming by pretty much everyone. So please don’t be afraid to “fall it up” a bit. These little reminders throughout your home keep the holiday deadline front and center in your buyer’s mind. And because a home purchase is an emotional one, it certainly does not hurt to make your home feel as homey as possible. On a side note, please avoid any life-size scarecrows sitting in rocking chairs, for example. I have seen it creep buyers out and from that point on your home will be known as “the creepy scarecrow house.”

Your Home: Real estate myths debunked

September 28th, 2016

The proliferation of real estate websites and blogs has certainly helped to educate consumers on world of real estate. It is amazing to me how readily available information is in this day and age. To this day, I still get emails and calls about a column I wrote three years ago about multiple layer roofs and how challenging they are to insure. What a trip!

Even with all of this information at our fingertips, there are still several real estate myths that exist today that need to be debunked.

So let’s get started.

1. We should price our home a little higher than fair market value to allow for negotiations. False. Pricing a home over fair market value only reduces the desirability and marketability of your home while at the same time reducing your buyer pool. On average, only 30 percent of the buyer pool is willing to consider a home that is 10 percent overpriced. That means by overpricing your home, you have eliminated 70 percent of the buyer pool. How many buyers do you think would be willing to consider a home that is priced at fair market value? Many more, right? The more demand that you have for your home typically means that you will earn top dollar when it is sold. Isn’t that the goal? The only market that allows for slight (and I mean slight) overpricing is a strong seller’s market where demand is outpacing inventory. In this case, sometimes appreciation will catch up with you and justify your over fair market price. This scenario is not present in today’s market, however.

2. We just need to find the right buyer. False. Yes, it only takes one. But if you plan your marketing and pricing around only one specific buyer, you are probably excluding someone. Usually I hear this statement when a seller would like to overprice their home or not address a condition challenge. Or it could come up after a home has been on the market for a period of time and a price adjustment is warranted. Although it only takes one, I think the goal should be to find more than one. When you only have one buyer, you have to negotiate with only them and you don’t have much leverage. When you have more than one interested party, you have a lot more options. And you have the leverage. Price and condition must be in line with one another to set yourself up for a high demand sale.

3. A Realtor’s job is to show me every home out there in my price range. I need to see them all. False. This statement could not be further from the truth. When you go to the doctor with a medical problem, would you rather the doctor ask you a couple of questions and then give you a list of possible cures based on his limited information, or would you rather he ask you lots of questions and then thoroughly diagnose the problem and provide the cure? The latter right? Of course. A Realtor’s job is to schedule a thorough buyer’s consultation with you in which they will dig deep to find your motivation and what it is you are truly looking for in a home. Then they will have the information they need to show you only the best the market has to offer. If your Realtor signs up to be a glorified tour guide and just shows you everything out there, it is going to become a frustrating endeavor for the both of you. We always say that most Realtors ask a few questions and then show you 50 homes hoping to find the right one for you. Our team would rather ask you 50 great questions to ensure that we find you the right home and only show you the best the market has to offer.

4. Once I find the right home, I will get pre-approved with a lender. False. Proper financing must be in place before you start looking for a home. The pre-approval process helps to determine what price range you are comfortable with based on an estimated mortgage payment. This gives you the confidence that you are looking in the right price range based on your budget. In addition, pre-approval positions you to compete. If you find the right home for your family and then you have to take a pause to get pre-approved, you may run the risk of someone else seeing what you see in the home and writing their own offer. Then all of a sudden you are in a competition, or you may just lose out all together if you don’t move fast enough. Finally, an offer without a pre-approval isn’t worth the paper it is written on, so please take the time to secure your financing before you step into your agent’s car.

This post originally appeared in 2015.

Your Home: Edging nearer to another rate increase

September 19th, 2016

The New York Times recently quoted Janet Yellen, the Federal Reserve Chairwoman, as saying, “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” This pretty much says it all. As with anything else in the markets, no one has a crystal ball to predict exactly when the Fed will yet again increase the federal funds rate. But the writing is on the wall.

So what are they waiting for? Here are a few key factors that the Fed has identified to justify another increase in the federal funds rate.

Unemployment below 5 percent. Well you can check this one off the box. As of August, unemployment was at 4.9 percent and has been at or below 5 percent since October 2015.

Steady job creation. The most recent jobs report, although not as strong as predicted, did show that American employers added 151,000 jobs in August. Again, although this number pales in comparison to June and July’s job growth, the overall trend is still healthy according to the Department of Labor.

Income growth. This one was evading us, that is until the US Census Bureau released numbers just this week showing that the median household income has gone up for the first time since 2007. CNN Money, in a piece called “The Middle Class Gets a Big Pay Raise…Finally!” said that according to the census numbers, median household income went up 5.2 percent in 2015 compared to the previous year. This income increase could allow families to increase spending which would help the economy to continue the current cycle of improvement and could even assist with inflation. The current inflation rate is less than 1 percent and the Fed target is 2 percent.

These are not the only factors the Fed is watching. As previously mentioned, they are also watching inflation and GDP (Gross Domestic Product). However, the aforementioned factors may be just enough to encourage the Fed to raise the funds rate.

Again, please remember that the Fed does not have direct control over interest rates. However, they do affect the federal funds rate, which is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. As the federal funds rate goes up, this increase in costs incurred by the banks is naturally passed along to the consumer through higher interest rates.

I know, I know. It seems that we have been crying wolf about interest rates going up for years now. Yet as of today, the evidence or proof that the Fed seems to be looking for has never been more evident. As with the rest of the real estate market, you usually don’t know that you have waited too long to make a move or refinance at these low rates, until it is too late. It is most likely that rates will not get any lower. Please don’t wait to capitalize on historically low interest rates that will very soon be nothing but a sweet memory.

Your Home: Fall home checklist

September 15th, 2016

Getting your chimney cleaned is a must if you plan on using your fireplace this fall and winter.

Getting your chimney cleaned is a must if you plan on using your fireplace this fall and winter.

I am surprised every year when summer quickly turns to fall, and this year is no different. We are less than two weeks away from the first day of fall and it’s time again to discuss a few proactive steps that you can take to prepare your home for the change of seasons. Our Kansas City winter weather can come quick sometimes, so starting early can make the transition much easier. Many homeowners don’t start their fall prep until the temperatures drop and the fall rains come. In some cases this can be too late.

Here are a few tips to help prepare your home for the upcoming seasons:

Clean your gutters. I talk about this one a lot, yet this one maintenance issue comes up on almost every home inspection that we see performed. Gutter cleaning is a must going into the fall when we tend to see an increase in rainfall. Mainly because the soil around your foundation has just suffered through the hottest and driest summer months causing it to pull away from your exterior foundation walls. This contraction leaves your vulnerable to water intrusion when the falls rains hit. If your gutters are full at the time, you will see the waterfall effect allowing the rain water to fall right next to your foundation walls. The gap or space around your foundation then serves as a funnel, if you will, allowing water right next to the concrete, stone, or cinder block walls. And as water does, it will find the path of least resistance into your home. If you don’t like to clean gutters, like I don’t like to clean gutters, you can certainly hire it out. Many companies offer fall discounts and you can often get the whole house done for $150 or less.

Clean your chimney. It is important to have your chimney cleaned annually if you intend to burn wood or gas logs. Not only can creosote and other debris collect in your chimney flue, but bird’s nests and other unusual things can make their way into your chimney as well. Don’t skip this step if you use your fireplace at all. You would be surprised how many homeowners have had a flue fire at some time during their ownership and were not aware of it. That is a scary thought. Flue fires burn at such a hot temperature that if it were to escape your flue, the outcome could be disastrous. And hey, gas log people out there, you need to do this too. Cleaning your chimney is not just for the die-hard wood burners. For a real life example, one of our readers stopped me one day and thanked me for writing about this topic because after reading our column, she had her chimney inspected (a level-two inspection with a camera) and they discovered that she had recently had a flue fire.

Have your roof inspected. If your roof is getting older, it is never a bad idea to have it inspected by a trusted roofing company. A few years ago when we had long periods of snow on the ground, and quite a bit of it, I remember a wave of calls received from clients and friends concerning roof leaks. Roof leaks in the winter are typically caused by ice dams. This is when snow and ice collect at certain parts of your roof and then they freeze, thaw, then refreeze again. In between stages, the melted snow and ice find their way under roofing shingles or around nail pops in your roof. The result is at the least a very annoying water stain in your ceiling. However, if the ice dam is large enough, it can cause major water problems. A little roof buttoning-up can go a long way when it comes to preventing water intrusion.

Service your furnace. Don’t wait until the first cold snap to find out that your vintage 1957 furnace has decided to finally retire. If a major repair or replacement is needed, you want to give yourself time to explore your options and shop around. When it is freezing outside and your furnace does not work, you really don’t have the luxury of time at that point. Also, as it pertains to older furnaces, it is important to have them serviced and visually inspected to insure that there are no potential health risks such as a cracked heat exchanger which can allow carbon monoxide to be pumped into your home. Air quality is certainly important when we spend so much of our time indoors during the winter. The elderly and children can be especially susceptible in these cases.

Put away your garden equipment. This last one may be obvious, but I bet I throw away a frozen water hose at lease every other year. Hoses, gardening tools, gardening pots, and even patio furniture should be cleaned and stored for winter each year to extend their useful life. The cost for replacement may not seem significant, but over time it can add up.

Your Home: Signs that the shift is here

September 15th, 2016


A few weeks ago I shared that we might be on the front end of a market shift. I have been waiting anxiously to see how August would end up. Well, the results are in and the market shift continues.

So how can anyone predict a market correction, or in this case, a downturn? I was told a long time ago that you can never time the market. Usually you don’t know that a shift is happening until it has already happened.

What we can do is examine the contributing factors to a downturn in the market. Before I go much further, by downturn I do not mean recession. Our market shifts, or corrects, itself on a pretty regular basis. A healthy market should correct itself to prevent what happened in the ramp up to the recession. During the early 2000s values continued to go up at an unsustainable rate while at the same time the lending world was changing its products to create opportunities for some people to buy who truly (in their best interest) shouldn’t have purchased a home. These same risky lending practices helped to prolong the period of rapid home appreciation, and then when values were just too high to sustain and the market corrected itself…well you know the rest. All in all, I am not predicting another recession. And at the end of the day, market corrections are necessary for long-term market health.

The goal of this column is to keep our readers aware of the current shift and to share how it will impact our real estate market.

So let’s look at indicators that signal a downturn in the market:

Days on market going up. Currently the average days on market in the Shawnee Mission area is not going up but rather it is holding steady. Since May, the average days on market has been between 25-30 days. We are keeping a close eye on this one.

Inventory going up. This one is happening for sure. We have jumped from 1.8 months of inventory to 3.5 months. This sudden increase has made August the highest level of inventory that we have seen in two years. Even higher than the previous two Decembers when inventory is historically at its highest point.

Prices are holding steady or dropping. From July to August the median sales price in the northeast Johnson County area has dropped from $213,000 to $202,500 (a 4.9 percent decrease). However, if you look at median prices since May they have been holding pretty steady with the exception of August.

Sales are dropping. The number of homes that went under contract in July was 334. So what about August? Only 202 homes went under contract in August. The last time the number of contracts was that low was December of 2015.

Construction is flat. For this indicator, I looked at Johnson County as a whole for my research. From June through August, the number of new construction homes has ranged from 604-628. This is only a 4 percent increase and at this point it is a little too early to see if long term this will hold static around this range.

So far we have confirmed three out of five indicators for a market downturn. With inventory sharply on the rise, it will not take long for the days on market to go up as well. We will continue to monitor construction trends for the last piece of the downturn pie.

Here are my takeaways:

  • If selling your home is inevitable, I would do it as soon as possible. That is unless making less on the sale of your home further down the road is an option for you.
  • Unless something very atypical happens to help absorb the additional inventory that we are seeing now, spring 2017 will not be as “hot” as spring of this year. Don’t count on an auction-like environment similar to the first and second quarter of 2016.
  • Buyers, please don’t get cocky. I don’t want the buyers out there to read this column and think, “Ok. I will just wait until next year and maybe it will be a buyer’s market again.” Maybe it will, but it is too early to tell. And regardless of whether it is a buyer’s market or a seller’s market, the gift of today’s market to a buyer is interest rates at or below 4 percent. Don’t miss the opportunity to leverage yourself with historically low rates. They won’t be around forever. Just recently, Janet Yellen, the Fed Chief, hinted in a speech (according to Bloomberg News) that a stable August jobs report may be just enough to cause the Fed to consider a rate hike at their September meeting.


Your Home: You deserve more

August 29th, 2016

Simply stated, as a selling client, you deserve more. My industry gets a bad wrap quite a bit, and a lot of it is self-inflicted in my opinion. Our job is to provide great service and great results for our clients. But what do great service and great results look like? Let’s start with what the National Association of Realtors tells us is our fiduciary obligation to our clients.

Once we have been hired by someone to be their agent, NAR states that we owe the following fiduciary duties:

  • Loyalty. This duty obligates a real estate broker to act at all times solely in the best interests of his principal to the exclusion of
    all other interests, including the broker’s own self-interest.
  • Confidentiality. An agent is obligated to safeguard his principal’s confidence and secrets. A real estate broker, therefore, must keep confidential any information that might weaken his principal’s bargaining position if it were revealed.
  • Disclosure. An agent is obligated to disclose to his principal all relevant and material information that the agent knows and that pertains to the scope of the agency. For example, an agent must disclose all offer received on a property for sale whether they are in writing or just a verbal offer.
  • Obedience. An agent is obligated to obey promptly and efficiently all lawful instructions of his principal.
  • Reasonable care and diligence. The standard of care expected of a real estate broker representing a seller or buyer is that of a competent real estate professional. By reason of his license, a real estate broker is deemed to have skill and expertise in real estate matters superior to that of the average person.
  • Accounting. An agent is obligated to account for all money or property belonging to his principal that is entrusted to him.

The aforementioned are the fiduciary duties owed to a client. Consider them a starting point. As a client, however, don’t you deserve more than the minimum standard of conduct? Of course you do. You deserve much more.

You deserve a full-time Realtor. I myself was once a part-time Realtor as I transitioned into the real estate business from the food service industry. Because I have been both part-time and now full-time, I understand the time it takes to stay fully informed of the market and to provide great service. You can’t serve two masters. They say that for a reason. You deserve a full time Realtor who is dedicated solely to serving his or her clients.

You deserve professional photographs. Holy cow! Is this one basic or what? There are even websites dedicated to making fun of bad MLS photos like We know that your first showings are online, not in person. Your first impression is everything and may determine whether or not a potential buyer chooses to schedule a showing to actually see your home in person. The cost of professional photographs is not worth the risk of loosing a potential buyer. In my opinion, it is one of the smartest investments a Realtor can make on behalf of his client.

You deserve professional staging. Although there are a select few agents who have a great eye for staging, you deserve to have professional staging services when preparing your home for sale. There is a tremendous amount of perspective provided by a third party whose sole purpose is to make the seller’s home as marketable as possible. And it takes all of the guess work out of the home staging process. Every seller’s time is valuable and, therefore, each seller should be provided with a detailed list of specific staging suggestions to help maximize their home’s value and make the best use of the seller’s time.

You deserve not to work with someone just because they are a friend, a relative, a fellow church member, etc. Please don’t take this one the wrong way. I celebrate loyalty as it pertains to our clients. However, I don’t expect them to be loyal to me, but rather to be loyal to our level of service and our results. Oftentimes sellers allow a friend or family member to guilt them into hiring them even when they would prefer not to. Here is the way I see it: Go ahead and interview your friend and also interview other Realtors as well. Then choose the one with the best proven results (i.e. lowest days on market, highest list price/sales price percentage, fewest number of price adjustments, etc). If your friend gets mad because they don’t get the job based on a factual comparison of the results, then that friend is more concerned about themselves than they are about what you deserve as a seller. What was that first duty again? Loyalty, to the exclusion of all other interests, including the Realtor’s.

An unprofessional interior photo...

An unprofessional interior photo…

...and a professional one.

…and a professional one.

Your Home: It’s time for mom and dad to sell

August 29th, 2016

Over the last five years or so we have had the privilege of assisting several clients in the sale of their parents’ homes. I, for one, have a soft spot for seniors, so I could sit and listen to them reminisce about all of their great family memories in their home for hours. It is an honor to work with a family as they close the chapter on a family home and a responsibility that I do not take lightly. In many cases, I have sat in the cozy living room of a home surrounded by family photos with tears in my eyes as the husband or wife shares with me how hard it is going to be for them to leave their family home. Yet, in most cases, I know in my heart that the family knows that the move is in the best interest of their aging parents, and our team is there to make the process as easy and stress-free as possible.

That all sounds great, but honestly it is hard. In most cases, selling a family home can be a hard change for the parents and kids alike. Even when all are confident that it is the best move for the parents. So where do you begin? I wanted to offer a few thoughts on this delicate subject that may help along the way.

  • Don’t wait until it is too late. In many cases, elderly home owners have established a set routine in their current home and the thought of a major change at this stage in life can be daunting for the entire family. This line of reasoning can cause the family to keep their family member in their home for too long. How long is too long? Too long is when the health or strength of the aging family member is such that the condition of the home is suffering. For some families, when the upkeep becomes too much for the family member, this is the catalyst for the conversation about a potential move. Too long is also after a catastrophic health event occurs that causes the family to sell the home in a rush. In this case, families may have to cut corners as it pertains to conditioning in the essence of time which will have an effect on value. Additionally, an urgent health event could affect the family’s ability to give careful consideration to pricing the home appropriately. If funds are needed quickly to offset medical costs and such, some equity may be left on the table in a rushed situation.
  • Know where your family is going. In my experience, before an elderly homeowner can conceive of selling their current home, they have to know their destination. The fear of the unknown can be paralyzing for any seller, especially a senior one. Having a clear picture of the patio/villa, retirement community, or assisted living facility that your family member will be moving to will also help the family when thinning out furniture and personal belongings. In most cases, this is a down-size move and thinning is probably an understatement. This thinning process takes time and having an end game can take a lot of the anxiety out of the move.
  • Start early. In many cases, a move for a senior family member can take months or even years. I have found that the earlier the conversation is started, the easier it is for all parties involved. Early conversations allow for careful consideration and much needed communication as to why the time for a move is now inevitable. In some cases, a sibling can be the hold-out for selling a family home and you won’t know it until the family starts to talk about it. You don’t want the hold-out in your aging parents ear without the other family weighing in. Open communication between family members is a step in the right direction especially because most seniors have to make the move psychologically before they can physically make the move.
  • Go out on a high note. This goes back to the discussion of not waiting too long. This is my personal opinion, and I don’t ever like to “should” on someone, but here I go. Nothing breaks my heart more than to see a senior seller who is embarrassed by the condition of their home and the lack of upkeep has become a daily reminder of their physical challenges. It breaks their spirit, I think. When I look back on my career, the most stress-free and I would say happy senior moves that we have helped with have been the ones when the seller leaves the home with pride knowing that their home is still in tip-top shape. It is a graceful transition for them and one, I feel, they have earned.

If your family is in the beginning stages of similar conversations, or are in the middle of the process, and you have questions about the next steps, please do not hesitate to call or email me directly. I would consider it an honor to help your family.

Your Home: 2017, it’s no 2016

August 29th, 2016

It is hard to believe that we are in full-swing back-to-school mode at my home already. New shoes have been purchased. The boys have their back-to-school haircuts and I am excited to get back to my daily walk to Prairie Elementary to drop them off in the morning. Back to school has additional significance when it comes to the real estate market. Historically each year, the housing market takes a little pause for a week or two when school gets back in session. And then it kicks right back into gear. In 2015, October was a record month for our team, so it can be a pretty significant kick.

The next few months are going to set the stage for the housing market in 2017. So let’s take a look at some national trends and then we will look a bit more closely at our local market.

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As you can see, homes sales nationally have already outpaced total sales from 2003 and are on track to potentially rival 2004. Overall home sales are still setting records for the post-recession market. However, sales are slowing in some markets due to an unsustainable increase in home values. We have seen some of this push-back in our market in certain price ranges and neighborhoods. For a while, the demand has been justifying the big jump in home prices, but as demand lessens, downward pressure on pricing is present. The number of price adjustments has increased as of late as well as average days on market.

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National home prices are projected to peak well above 2006 values by the end of 2016. Sustainable appreciation in overall home values is a good thing. As long as they are in the sustainable range of 4 to 6 percent. So far, the national numbers have stayed in that range. However, as values continue to rise and income growth does not, this will create a problem at some point. And it is important to know how your local market is competing in comparison to the entire city or the national real estate market. Kansas City, for example, is predicted to see slightly more than 6 percent appreciation this year and saw a similar gain last year. So we are just outside the sustainable range which puts us on notice of a possible shift in the market.

Now let’s take a look at our local market. For this example, I am going to use Prairie Village. I chose Prairie Village because I often hear comments like, “It is always a hot market in Prairie Village,” or, “With all of these tear downs going on, clearly the market is strong in PV.” Both comments have some truth to them, yet no city or neighborhood is completely insulated from a shift in the market.

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As you see here, in December 2015 we ended the year with only two months of housing supply available. This means that it would only take two months for all of the available homes to sell. Two months of supply is a strong seller’s market and that occurred in what is supposed to be the worst time of year to sell. This lack of inventory started 2016 off with very little housing available. The lack of inventory coupled with high demand created a vacuum, of sorts, which resulted in bidding war after bidding war. Fast forward to July 2016 and you can see that we are at 2.5 months of supply. That is higher than any point in 2015.

I am not trying to convey a doom and gloom message about the real estate market. I will say that based on current inventory levels and the fact that historically inventory will continue to increase throughout the remainder of the year, 2017 will more than likely not be as frenzied of a market as 2016. More inventory means more options for buyers which typically causes prices to get more competitive as well. Therefore, if you are waiting until Spring of next year to sell, thinking that it will be just like spring of 2016, you may want to rethink your plan. An increase in inventory caused by a drop in sales is one of the first signs of a market shift. We could be on the front end of a shift as we speak.