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Kansas City real estate and community news blog featuring Olathe and Overland Park, Kansas.
February 2011 - Posts
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 Did you purchase a Kansas City home in 2008 or know of someone who bought a home in 2008?
If the $7500 first time home buyer tax credit was used to purchase the home…did you know it is time to start paying back the tax credit?
For many people who purchased a home for the first time in 2008, it’s payback time.
It sounded like a great deal at the time: become a first-time home buyer and pocket up to $7,500 in a tax credit, right? But if you bought that house in 2008 and received the tax credit, you’re required to start paying it back – now. I suggested the USDA loan at the time, but I know many home buyers still eyed what they thought was free money. There were even rumors that the tax credit would be forgiven.
The tax credit in 2008 was actually an interest-free loan provided by the government to stimulate a near-dead housing market. Unlike the home buyer credits of ‘09 and ‘10, this one must be paid back over 15 years beginning with this year’s tax return.
For someone who got $7,500, that’s $500 a year.
The 2008 credit was available to qualified home buyers who purchased after April 8, 2008, through the end of that year. The IRS have started sending letters reminding folks who fall into this category. For those letters have fallen through the cracks, don’t get caught off-guard.
I’ve heard that quite a few ‘08 home buyers have either forgotten or thought the tax credit was forgiven. some believe that the loan had been forgiven as Congress subsequently passed different versions of the home buyer credit that did not require a payback. Well the ‘08 tax credit hasn’t been forgiven.
If you got the credit and have sold your house or it is no longer your primary residence, the total amount you owe is due on the return for the year those events took place, with some exceptions.
If in doubt consult a qualified Kansas City accountant or CPA. If you need a referral, maybe we should talk. RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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How the new FHA Policy Changes will affect Kansas City home buyers
The FHA will be making the following changes starting in March of 2011 for Kansas City home buyers: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. Here is more detail and how they will affect Kansas City home buyers:
Announced FHA Policy Changes: - Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
- The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge. This will increase the money needed for Kansas City home buyers to purchase a home using using FHA financing.
- Update the combination of FICO scores and down payments for new borrowers.
- New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. This new requirement will increase the money needed for a down payment for some Kansas City home buyers using FHA financing.
- Reduce allowable seller concessions from 6% to 3%
- The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions. into effect in the early summer. With some Kansas City home buyers needing seller concessions to purchase their homes, there will be less funds available. This will have more of an affect on lower priced homes where 1% is a smaller amount.
- In addition to the changes , FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.
- The new changes, along with increased enforcement of compliance issues will make the FHA buying experience for Kansas City home buyers a little more costly, a little more tougher to obtain a loan and a little bit longer to process the mortgage loan.
RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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Home discounted 85% . . . The worst housing downturn in US History continues… 
Foreclosures and short sales have become common for luxury homes. The distressed property contagion has now effected all price ranges…all socio economic classes.
The recent foreclosure sale of the Kluge Albemarle estate points the direction for the very upper end of home sales. Agents, expect more upper end homes to head for the auctions as owners choose to default…..
Kansas City home buyer, I can read your mind…I bet you are asking yourself..”How can I get a great deal on a real estate purchase? I’ve hears that I can get great deals, where do I start?”
Great questions. The answer is very few Kansas City real estate agents have access to the foreclosure and redemption sale properties like the Kansas City Real Estate Network. In fact, we were asked by an expert who has written 3 books on buying foreclosure properties and counsels experts like us, how do we have access to so many deals?
If you would like to benefit from our knowledge, lets sit down for coffee.We have seen this sort of thing before in US History. The end of the Victorian Era resulted in many mansions being recast as multifamily homes. Even our founding fathers were not immune. Thomas Jeffersons estate had to be sold after his death due to his estate having 2,000,000 in debts.
Now back to the mansion and why you should care:In 1990 self-made media billionaire, John Kluge, and his third wife, Patricia, called their marriage quits. The divorce settlement broke records, which perhaps is not all that surprising since Kluge was, with a $5 billion empire, the world’s wealthiest man that year.
Patricia Kluge walked away with alimony payments of $1.6 million per week (the interest accrued on one billion dollars per year at the time). But she also snagged some prime real estate: a hunting lodge in the Scottish Highlands valued then at $20 million and an opulent 45-room Virginia estate called Albemarle.
Last week a new owner took possession of the grand Virginia estate: Bank of America. The bank giant “bought” the eight bedroom, 13 bath, 19th century-inspired mansion Wednesday morning on the Charlottesville courthouse steps. It was the top bidder in a foreclosure auction.
The unceremonious handing off of Albemarle came about after Bank of America, Kluge’s creditor for the property, filed a foreclosure lawsuit last month alleging that the socialite – who hosted everyone from former presidents to international royalty at the estate – had defaulted on $23 million in loans.The bank took ownership for the highly discounted price of $15.26 million.While distressed sales tend to be the purchasing extravaganzas of bargain hunters’ dreams, offering foreclosed upon homes at drastically reduced prices, Albemarle’s sale takes the term discount to new extremes.
Echoing other recent foreclosure tales of the rich and famous, the 300 acre (give or take) estate, built by the Kluges in 1985, first hit the market in 2009 for $100 million. The Neo-Georgian mansion, which Sotheby’s described as both “one of the most important residences created in the United States” and “one of the best known homes,” boasts a wine cellar and grotto, a media room, outdoor kitchen, fitness room and steam room — even a helipad. The surrounding acres had everything from a guest house to riding stables and a barn. But still no buyer.
Kluge stopped making her loan payments and went into default. Bank of America began the final steps of the foreclosure process and an auction was scheduled. Albemarle’s subsequent unceremonious sale put ownership officially in the hands of Bank of America, at a discount of almost 85% off the initial market valuation.
Real estate billionaire Donald Trump has been rumored to have interest in the estate — as well as the hundreds of acres surrounding it which also once belonged to the financially devastated Kluge. His representatives bowed out of the auction, but said that The Donald holds a “right of first refusal” to consider buying the land in the future, according to The Washington Post.
Albemarle is the latest distress sale affiliated with Virgina’s society maven, who until recently was also a celebrated wine maker. (Kluge Estate Winery and Vineyard wines graced the tables of Chelsea Clinton’s wedding last year.) Last June, Sotheby’s Auction House hosted an estate sale of her jewelry, furniture and art, pulling in millions of dollars to pay off creditors. In December, Farm Credit Bank repossessed Kluge Estate Winery and Vineyard in auction, after failed business plans for the vineyard and its surrounding property, which Kluge and current husband William Moses planned to subdivide, develop and sell as a real estate venture, caused Kluge to relinquish ownership.
Lenders like Bank of America have millions of repossessed homes on their books. High end homes likes Albemarle are the types of properties banks like to avoid taking ownership of. They tend to pose more difficulties in reselling because the potential buyer pool is incredibly limited. And until resale occurs, properties like Albemarle are costly to keep since they rack up high property taxes and hefty maintenance bills.
Even so, the foreclosure crisis is trickling up into the luxury end of the market. Celebrities and high net worth home owners have not been excluded. Everyone from Nicholas Cage to Julius “Dr. J” Erving to Sergei Fedorov have faced foreclosure law suits and distressed auctions.
If you know someone who is possibly heading to foreclosure, maybe we should talk.
If you would like to purchase an incredible home at a discounted price, we may have some options. Lets sit down over coffee and discuss. Who knows, we maybe writing about the incredible deal we found you.
RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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 Yesterday The Standard and Poor’s Case-Shiller released their home price index that showed a decrease in home values…a huge decrease.
Today, the National Association of Realtors released data indicating an increase in home SALES. So, don’t be confused. Standard and Poor’s Case-
Shiller tracks home values and the NARs report tracks home sales.What can we take from this information?
Both reports agree that the homes that are selling are distressed homes and the buyers who are buying are real estate investors.
If the real estate market is so bad, why are real estate investors buying in Kansas City?
I mean investors are in the business of making money off of their investments, if the real estate market is so bad, why investors buying?
Kansas City real estate investors know the truth. You can buy some real bargains right now. Buy low, sell high, right?
In some areas 85% of the real estate sales are by investors. Does that make sense if the market is so bad?
In other areas over 50% of the sales are done with cash. Cash, who has cash? The real estate investors laughing all of the way to the bank while move-up buyers and first time home buyers keep on waiting for better deals.
In this market investors are not getting hung up on pricing and how much they can get off of list price. They’re looking at value and how much they can buy under fair market value.
If you would like to find a bargain, lets talk . . . RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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I’m out showing Overland Park homes with a husband and wife that are process improvement consultants, currently on assignment with a local telecom. I’m running my business as I always do, I have a pattern, a set of habits....and right now, I’m nervous. Every move I make is being studied, watched, rated....Will I make the grade?
“The last Realtor refused to use GPS...Said, ‘I’m too proud...to use GPS.’”, Wil tells me.
Guess I’m too darn lazy; Lupe is my friend. Yep, that’s what the Taggart gals call her; “Lupe”.
Jen goes on, “So we went in circles, made too many u-turns, searched up one street and down the other....While the last guy talks to himself.”
So how do I respond? Wit? Class? Professionalism? Nope.
I get us high-centered on a snow bank in a driveway. True story. I ask Wil to take a turn behind the wheel while I shovel front and rear to get us going again.
We head off, and coincidentally, their favorite home was...you guessed it. The “stuck in the driveway” home. Took 15 minutes plus or minus....I shovel slowly.
They were impressed cuz I jumped out and grabbed the shovel and got it done. They liked the fact that we got it done, we went about our way with little fuss.
Tomorrow I meet the general contractor who is re-designing the master bath. You want a professional? Do you prefer a Realtor that uses the tools at hand, maybe not too prideful.
Might still make a move or two worth laughing at? Should we talk?
Turns out people don’t care about your convictions unless you’re lazy or really dumb convictions....”Too proud to use GPS.” Classic.
RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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“I wonder if the self-serve shop has an attendant behind the counter?”, Wil asks, as we tour homes in Overland Park.
Jen counters, “You mean you wonder if there’s a counter to stand behind.” By this time, we’ve crossed into neighboring Olathe.
“A counter means an attendant, an attendant means labor costs....where the heck does ‘Self-serve’ enter the picture?”, er, counters Wil, as we pull into the driveway of a 2 story home.
When you’re considering selling your home, keep something in mind. All things being equal, the crew with a specific plan will usually beat the crew without a plan.
While there are always exceptions, the crew with the plan has a purpose. The have a clearly defined intent....To win, as a result of working their plan.
Listing your home starts with a thorough review of the competition. What’s selling, and why in your neighborhood or subdivision. What are the average days on market for all homes, for distressed homes, for remodelled homes. What is the saturation rate?
Contact me, I’ll fill you in on that one. Trade secret.
I don’t have the desire to list your home....My intent is to sell it, sell your home...Listing is just a box on the checklist
Our plan works. Should we talk? RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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Client asks, “Martin, when should I consider buying a home, instead of staying with my apartment?”
Loaded question. Last time I hit this topic, the hatemail spilled out of my email inbox.
Words you will hear few real estate agents, but will hear from many REALTORS: Not everybody should own a home!
Some people aren't cut out for home ownership, for a variety of reasons. Are you one of those who should rent and not buy? Here are some ways to tell.
Does your credit report tank? If your FICO score is below 620, you're not going to receive a good interest rate for a loan and, in fact, that kind of score could dump you into the hands of a predatory lender. Call me, let’s discuss.
High Debt Ratios
Lenders consider two ratios: front-end and back-end. The front-end is your mortgage payment, plus taxes and insurance divided by your monthly salary. The back-end adds your monthly debt payments to your PITI payment before dividing that total figure by your salary. A 50% debt ratio is a high ratio. A high debt ratio means you may not qualify for the loan. Even if you find a hairball lender that is willing to fund such a loan, you may not be able to afford to feed yourself, even if you eat dirt!
Is Your Job in Jeopardy or Maybe You’re Relocating Soon?
Is your company laying off? Could you be fired and, if so, how hard would it be to get another job right away? Unemployment compensation is rarely enough to cover mortgage payments. Are you thinking of relocating?
Yes, some people want to buy under these conditions, thinking the home could be rented i=n the event they move. Not a bad thought, but that may radically change the type and style of home you consider, and would definitely change its location.
Maintenance Issues
All homes require upkeep and maintenance. Not everybody has the where-with-all, much less the desire, to tackle home repair projects. In addition, many first-time home buyers can not afford to hire a professional to fix things that break. Experts suggest you set aside 5% of the purchase price to cover maintenance and repairs when you buy a home. Let’s face it DIY fans, it takes longer than the 30 minutes television segment to tile a bathroom or remodel a kitchen.
When Renting Costs Considerably Less
If your mortgage payment would be triple the amount (or more) you would pay for rent, it might not make financial sense for you to buy. For example, if it would cost you $2,000 a month to rent what would cost you $6,000 per month to own, does it make sense to pay $48,000 a year more to own a home?
If you are in a 30% tax bracket, you might not come close to recouping the difference you paid. Say your deductible expenses are $5,000 a month; 30% of that is only $1,500, which would be your true tax savings per month. Would you spend $6,000 to save $1,500? For more information, please consult a tax accountant or CPA.The smart move is to speak with an expert who is willing to tell you buying a home may be a bad idea.
Should we talk? RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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“Why consider a home in Springhill, Kansas?
Sometimes you just need to answer the question. Straight up.
“Nice value, great neighborhood, quiet, peaceful town.”
Spring Meadow at Scarborough Subdivision in Springhill, Kansas is wonderfully priced, affordable, and located just far enough away from Kansas City’s urban core to feel a little remote, with a country feel.
The subdivision sells well, with 3 homes sold in the past 6 months, 2 homes pending sale, and another 2 homes available to show. Homes routinely sell in less than 40 days, underscoring the strong buyer desires to move into these homes quickly. Great attributes if you’re a Buyer, or Seller.
Values remain stable, with modest appreciation.
Most known as the home of K and M Barbeque, recently featured on Diners, Drive-ins, and Dives, a quick look at the map shows Springhill, Kansas located on the Johnson and Miami county lines. With population slightly over 5000 residents, this slumbering bedroom community has a peaceful pace of life.
If you’re considering a move to a wonderful area that combines the best of suburban and rural living, consider the short drive to Springhill, Kansas. RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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Want the bad news now?
Most Sellers that believe their home shows better than their neighbor’s home are wrong. Sorry, not true most of the time. Your home may simply show different deficiencies.
Buyer and I are waiting outside a Leawood home, I haven’t previewed this one, and the wife is on the way. He says, “Let’s head in and wait inside.” Famous first, and last words....
He says, “Martin I was expecting to see a dead body somewhere. Check out the pantry in the kitchen....Roaches. Ugh.”
This isn’t an episode of CSI Miami. These were first impressions of Leawood, Overland Park, and Olathe Kansas homes.
So you believe you’re home is prepared to show, prepared to make the best first impression....prepared to sell. You have 37 seconds to make a good impression. What kind of impression is YOUR home making?
Better idea; let’s go look at the competitive homes, look at them with an honest eye toward condition, maintenance, and decor....general cleanliness.
Fast forward to an Overland Park home. "Victoria was scared to go pass the entry hall."
“You should have seen the look on my Larry’s children's faces. Priceless!”
Just a few of the remarks Chris and I have heard over the past few weeks. Seriously, we walk into homes with qualified Buyers. Home Buyers with money, a desire to purchase....And these are homes that appear to have little structurally wrong, and are located in good neighborhoods. Why don’t Sellers have an Agent in their ear delivering advice, helping the property sell?
Simple. All agents are not created equal. How comfortable are YOU discussing money? Most people have an aversion to discussion regarding money. Asking a Seller to adjust condition, (which costs money) or lower the price, (which costs money)....can be difficult for the majority of people, and certainly the majority of agents.
As we head into the foyer of a nicer home in Leawood, I hear, “Do you have a frat house on today’s showing schedule?”. Husband walking back down the stairs to join us as family and I look at a beautiful kitchen, yells out, “Is that gal upstairs finished with her shower yet?”.
Couple walk into a split level listed in the mid 200s in Overland Park....Upscale neighborhood, nice curb appeal. We open the front door and stroll in....Wife says, “HA HA HA wow!!!! Love the mauve paint everywhere.” She goes on. “Hey check out that refrigerator....Is that mold in there? Maybe it's kind of like wine and cheese for a less-expensive home owner?
Husband responds, “Maybe it's kind of like wine and cheese for a less-expensive home?”
Is it better to put in a little elbow grease, spend a couple of bucks up front on minor repairs and at least get that prospective Buyer interested in coming back a second time?
Or, scare Buyers off from the start? Or worse yet, get a flock of low-ball offers? Maybe slows down the sale of your home for weeks....months?.
ALL of your home is under the microscope folks. These people want to buy your home to LIVE here, and will want to look into everything. A refrigerator full of mold and expired meat smell might well reflect a lack of care for the entire home.
All three of these Buyers wrote offers on OTHER HOMES.
Look this sounds odd, but when you want the bad news BEFORE the first Buyer sets foot in your home....Should we talk? Yeah, we should talk. RE/MAX sells more homes than any other real estate company. For a reason...should we talk? Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.comBlog post written by the Dowell Taggart Team of RE/MAX Best Associates
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