Monthly Archives: October 2017

Should I Sell My Home Now or Wait Until the Spring?

Source: RISMedia/Kyle Hiscock

There are many questions homeowners ask themselves during the selling process. “How much will my home sell for?”  “How much should I list my home for?”  “Who should I select as a real estate agent to sell my home?”  “What if the real estate agent overprices my home?”  Last but not least, “Is this a good time to be selling a home?” is also a very common question that real estate agents are asked.

As with every decision in life, there are pros and cons, and choosing when to sell a home is no different. There are many factors that need to be taken into consideration before deciding when to sell a home. Many homeowners believe selling a home during the fall or winter months is not a good idea and that the spring is the only time a house should be sold. This is the furthest from the truth. Certainly most real estate markets across the United States experience a “spring market rush” every year. There is no doubt that the “spring market” is a great time to be selling and buying real estate, however, the fall and winter seasons may be the best fit for you for many reasons.

Here are several reasons why choosing to sell your home now may be a better decision than waiting until the spring:

Less Competition
One way that you can tell the spring real estate market has arrived is by driving down a street in your local community. In all likelihood there will be For Sale signs up all over the neighborhood! One great reason to sell your home now and not wait until the spring market is there is sure to be less competition.  The fewer number of comparable homes for sale, the greater the probability that a buyer will look at your home.

Simply put, it’s the supply and demand theory. If there are less homes for sale, there are less homes that a potential buyer can choose from, therefore increasing the demand for your home. Not only will less competition increase the probability for showings, but it will also increase the probability that an offer will be received and you will get the maximum amount of money for your home.

Serious Buyers Are Out There
Homes are sold and bought 365 days a year, period!  Many homeowners believe that buyers aren’t out there during the fall and winter months. This simply is not the case. Serious buyers are always out there!  Some buyers may stop their home search because it is the fall or winter, but serious buyers will continue to look at homes, no matter what time of year it is.

The fall and winter months are also a great time for a potential buyer to see what a specific neighborhood is like.  Do your neighbors have pumpkins on their front step?  Are there lots of Trick-or-Treaters wandering the neighborhood on Halloween?  Do any of your neighbors have any light displays for the holidays?  There are buyers out there who will look at these types of things when determining whether your home is in the right neighborhood for them or not.

The Best Agents Are Always Up To The Challenge
Any real estate agent who tells you that the fall or winter months are a bad time to sell is not someone you want selling your home! A great real estate agent will know how to adapt to the current season and market their listings to reflect that.  A great real estate agent can make suggestions and give some of their tips on how to sell a home during the fall or winter seasons. If a real estate agent doesn’t have any suggestions on making your home more desirable for the current season, you should be concerned about the creativity they are going to use when marketing your home.

Staging For The Holiday Season
Many sellers believe staging a home is the main reason a home sells.  While staging certainly helps sell homes, some buyers have a difficult time envisioning themselves in a home no matter what you do. However, there are some buyers who can easily be “sold” on a home because it is staged.  Simple “seasonal” staging such as adjusting the color of the decor or having an aroma in the air that is relative to the time of year can go a long way with some potential buyers and possibly be the difference between a home selling or not.

Mortgage Rates Are Low
If you’ve read about real estate in the past year, it’s likely you’ve read that the mortgage rates are very low.  You also probably read that there is an expectation that the rates will increase very soon. Since mortgage rates are so low right now, buyers are able to afford more expensive homes.  If mortgage rates increase over the fall and winter months while you’re waiting for the spring market, it could cost you thousands of dollars as it could eliminate many buyers from the real estate marketplace!  Less demand for your home will mean less money. Bottom line: take advantage of selling your home while the rates are this low.

Quicker Transactions
Right now, there are fewer real estate transactions than there will be in the spring.  The fewer number of transactions means the mortgage lenders have less loans to process, attorneys have less closings to do, and home inspectors have fewer inspections to do.  All of these factors should lead to a quicker transaction and closing for all the parties involved.  One of the most frustrating things for a seller to deal with while selling their home is not getting answers in a reasonable amount of time. A quicker transaction is going to be less stress for you.

By considering all of the reasons above, you will be able to determine whether now is a good time to sell or if you should wait until the spring.

Existing-Home Sales Slightly Stir in September

Source: RISMedia

Existing-home sales slightly stirred in September, posting higher than in August but lower than one year prior, the National Association of REALTORS® (NAR) reports.

Existing-home sales totaled 5.39 million, a 0.7 percent increase from August but a 1.5 percent decrease from one year prior. Inventory increased 1.6 percent to 1.90 million, 6.4 percent below one year prior.

“Home sales in recent months remain at their lowest level of the year and are unable to break through, despite considerable buyer interest in most parts of the country,” says Lawrence Yun, chief economist at NAR. “REALTORS® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings—especially at the lower end of the market—and fast-rising prices that are straining the budgets of prospective buyers.”

Inventory is currently at a 4.2-month supply. Existing homes averaged 34 days on market in September, five days less than one year prior. All told, 48 percent of homes sold in September were on the market for less than one month.

“Existing-home sales picked up momentum slightly in September compared to August, but were lower on a year-over-year basis for the first time since July 2016,” says Danielle Hale, chief economist for realtor.com®. “Inventories also continue to plunge, creating challenges for buyers across the country. On the bright side, we’re starting to see home price growth slow down, with sale prices up only 4.2 percent from a year ago.”

The metropolitan areas with the fewest days on market in September, according to data from realtor.com, were San Francisco-Oakland-Hayward, Calif. (30 days); San Jose-Sunnyvale-Santa Clara, Calif. (32 days); Salt Lake City, Utah (35 days); and Seattle-Tacoma-Bellevue, Wash., and Vallejo-Fairfield, Calif. (both 36 days).

The median existing-home price for all types of houses (single-family, condo, co-op and townhome) was $245,100, a 4.2 percent increase from one year prior. The median price for a single-family existing home was $246,800, while the median price for an existing condo was $231,300.

“A continuation of last month’s alleviating price growth, which was the slowest since last December (4.5 percent), would improve affordability conditions and be good news for the would-be buyers who have been held back by higher prices this year,” Yun says.

Single-family existing-home sales came in at 4.79 million in September, a 1.1 percent increase from 4.74 million in August, but a 1.2 percent decrease from 4.85 million one year prior. Existing-condo and -co-op sales came in at 600,000, a 1.6 percent decrease from August and a 3.2 percent decrease from one year prior.

Twenty percent of existing-home sales in September were all-cash, with 15 percent by individual investors. Four percent were distressed.

The Midwest and West saw positive activity in September, with existing-home sales rising 1.6 percent to 1.30 million in the Midwest, with a median price of $195,800, and 3.3 percent to 1.24 million in the West, with a median price of $362,700. Existing-home sales in the South fell, 0.9 percent to 2.13 million, with a median price of $215,100. Existing-home sales in the Northeast were unmoved at 720,000, with a median price of $274,100.

“Home sales in the South continue to be hampered by post-hurricane weakness, while the Midwest and West regions show pretty strong pick-up in sales from August. It should be noted that the fires in California are not yet reflected in the data, so we’re likely to see more weakness on the horizon,” Hale says.

“Sales activity likely would have been somewhat stronger if not for the fact that parts of Texas and South Florida—hit by Hurricanes Harvey and Irma—saw temporary, but notable declines,” says Yun.

First-time homebuyers comprised 29 percent of existing-home sales in September, a decrease from 31 percent in August.

“Nearly two-thirds of renters currently believe now is a good time to buy a home, but weakening affordability and few choices in their price range have made it really difficult for more aspiring first-time buyers to reach the market,” Yun says.

Adds Hale, “Interestingly, the softening in prices has not yet affected home listing prices. According to realtor.com data, the number of homes for sale are down 9 percent from a year ago, while listing prices – which continue to soar – are up 10 percent.  The discrepancy between list price and sales price increases suggests that some buyers may have reached a limit on the price increases they can afford.”

NAR President Bill Brown is concerned first-time homebuyers, and homeowners in general, will be adversely impacted by proposed tax reform.

“There’s no way around the fact that any proposal that marginalizes the mortgage interest deduction and eliminates state and local tax deductions essentially disincentives homeownership and is a potential tax hike on millions of middle-class homeowners,” says Brown. “Reforming the tax code is a worthy goal, but it should not lead to the middle class, who primarily build wealth through owning a home, footing the bill. Instead, Congress should be looking at ways to ensure more creditworthy prospective buyers are able to achieve homeownership and enjoy its personal and wealth-building benefits.”

For more information, please visit www.nar.realtor.

Important Points For Care Of Your Septic System

Care of Septic System

If you are a city dweller who have moved out to the suburbs, or a rural area where you might have a septic system in your back yard, there are some things you need to know to keep it from becoming a nightmare expense. This article applies to regular, leach field type systems but there are some things common to any septic system.

First, you don’t want to flush anything down the drain that you have not eaten or drank. Things like tampons or condoms never break down and can clog up your system to the point that they may have to dig up your whole back yard and replace the pipes. A septic system usually has two tanks, one that digests the waste and passes it on to a second tank that filters out more of the solids and allows them to settle before the liquid goes out into pipes in your yard to settle into the ground. If you use too many household cleaning products, such as chlorine bleach you could kill much of your good bacteria in the septic system that digest the waste. The same goes for excessive amounts of grease. This doesn’t mean that you can’t use cleaners, just use them sparingly.

Products such as RidX contain the same kind of bacteria you system uses, in large concentrations. It is not a cure all, but will work to restore balance in your septic system if too many good bacteria have been killed by cleaners, etc.
Also, if you have a garbage disposal, use it sparingly. Composting is a much better idea. And, don’t allow trees to grow anywhere near septic fields. Tree roots clog the flows of your important leach field. You may not know exactly where your field is, but is summer it is usually where the grass in your yard grows the greenest!

Lastly, don’t build anything over this area. It is important for natural sunlight to fall the area to speed transpiration.
If you notice standing water in the field area, call a professional immediately. Fixing the problem now will invariably be much cheaper than waiting, as septic problems never fix themselves, and generally get worse with time.

Obtaining Financial Freedom Through Real Estate

Source: RISMedia

Linda McKissack and her husband were $600,000 in debt when they made a real estate decision that turned their lives around. Today, the McKissack Realty Group sells over $60 million and over 300 properties each year. McKissack says their biggest success is not their property sales; it’s how they learned to generate over $250,000 a year in passive income and achieve financial freedom through real estate.

Linda McKissack is an entrepreneur, REALTOR®, and the author of “HOLD: How to Find, Buy and Rent Houses for Wealth.” She’s also a trainer and speaker whose greatest passion is helping others achieve their maximum potential. She’s created five successful businesses and is an owner/investor in numerous residential and commercial properties.

Her message to agents everywhere: “You don’t have to live paycheck to paycheck. Learn how to obtain financial freedom through real estate.”

Using lessons from her book, McKissack explains how to start investing and earning money even when you have no money.

“If you don’t design your life, something or someone else will,” McKissack said. “Keep this question in front of you: ‘What would happen if today the financial resources of your business totally disappeared?’ It happened to us; it happened to people in Houston, in Florida, in Puerto Rico with the hurricanes. What are you going to do when it happens to you?”

Drowning in Debt
“I was 23 years old and I didn’t know what the word ‘economy’ meant,” McKissack said. “In the ’80s the economy was built around savings and loans, oil and gas and real estate, and it all crashed.”

McKissack’s husband shut down his Dallas nightclub, and four years later they were $600,000 in debt. He asked for her help digging out of debt, and said his mentor once told him the way to make a lot of money fast was in real estate.

“I’m sure he meant invest in real estate, buy real estate,” McKissack said, “not put your wife to work selling real estate, but sell is what I did.” McKissack took a job in real estate sales, and Jim went to work in her office. They restructured their debt with a simple goal: getting back into the black.

It was a good decision, but it took time to see the wisdom in it. “I made $3,000 that first year, but it cost me $15,000 to $17,000 to make that first $3,000. Fast forward to today and our team closes over 200 transactions a year and $60 million in volume. Today we run as a standalone business.”

McKissack’s first real estate investment came in 1991. They had no cash, a lot of debt to pay off and weak credit, and the only real estate they owned was the house they lived in, which had a big mortgage.

“We found a property the seller wanted to sell fast, without listing it. They asked if we knew of an investor who would purchase the home. We knew it was a good deal, even though the house needed repairs. We formed a partnership with our builder who put up money and got a loan. We located the property and put our commission into the deal. He did the repairs. We flipped the property for $15,000 profit and we were off to success.”

What investing taught McKissack was how to beat the REALTOR® dilemma. “The REALTOR® dilemma is the day you sell your last house is the day you make your last dollar. I used to think if I just sold 50 more houses, those 50 houses would solve all my problems. We keep thinking 50 or 100 or 200 houses are going to solve all our cash problems, but it’s not. Cash flow is not the answer. If you follow the statistics, if we don’t do anything different; most of us will die broke or dependent on the government, family, or friends.”

Not wanting to rely on others for their financial security is what started the couple down the road to financial freedom with HOLD.

Creating Financial Freedom With HOLD
HOLD is a long-term real estate investment strategy to which every real estate investor should aspire,” said McKissack. “Be an investor, not a speculator. We bought our first property while we were still $600,000 in debt. We now own over 100 single family properties. There are a lot of people who have money they want to invest, but they don’t have the expertise to do it.”

Going 50/50 is a definite option, especially using the HOLD strategy. The HOLD strategy is simple:

  1. Find the right property for the right terms and at the right price.
  1. Analyze – Make sure you have an offer in which the numbers and terms make sense. Do your due diligence on market values, rents, home prices and appreciations to limit your risks.
  1. Buy an investment property where you make money going in. If your numbers are right, you’ll make money on the margin and get a positive cash flow from the start. Don’t buy a property hoping it will become a good deal. Buy it because it’s a good deal to begin with.
  1. Manage a property until it’s paid for or you have a large amount of equity to leverage. Learn to run your investment properties like a business.
  1. Grow your way to wealth and financial freedom. If one investment can bring you $2,000 a month, imagine the income from 10, 20 or 100 properties.

If you’re actually flipping houses (buy and sell), you’re just creating more cash flow. What you need is an investment. Our HOLD formula for wealth-building:

  • Buy property at 10 percent or more below market value.
  • Put at least a 20 percent or more down payment on the property.
  • Be at a 70 percent loan-to-value ratio or less so you’re not over-leveraged.
  • Cash flow should be a minimum of $200 per month after PITI and management on a 15-year amortization.
  • Buy a newer home (15 years or newer) if possible.
  • Buy a 3-4-bedroom brick or stucco (if possible).
  • Buy homes in stable or appreciating neighborhoods.

7 Rules of HOLD Real Estate Investing

  1. Be an investor, not a speculator.
  2. Cash flow is king.
  3. It isn’t personal, and the numbers matter most. Don’t get attached to the house or people.
  4. Learn the magic of leverage.
  5. Cultivate relationships with other investors and people involved in real estate investing.
  6. Keep learning from others.
  7. Give to others and share your information, wealth, and knowledge.

By purchasing 20 single family rental properties that each generated $1,000 cash flow per month, and completing those purchases in five years, with each property financed on a 15-year note with at least 20 percent down payment, the McKissacks were able to keep investing in additional properties.

The HOLD strategy isn’t a get-rich-quick scheme, but a long, slow process that involves learning how to build and sustain a strong team and how to run your real estate career as a business, not a job. These and more tips and information on building passive income are in a recent webinar featuring McKissack. Learn more about the team-building cycle, including how to hire great people who can take you greater financial and business success, by listening to the entire webinar.

For more information, please visit connect.homes.com.