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Kansas City real estate and community news blog featuring Olathe and Overland Park, Kansas.
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Question: I’m a first time home buyer who is looking to buy a home in Gardner, Kansas. I know I have bad credit. What can I do to get into a house? Is there any help or hope for a bad credit first time home buyer?
–Jamie H. from Gardner, Kansas
Answer: I would contact a mortgage lender who helps people with credit problems. A good lender can help you get setup with a credit repair program. You will be a home owner in Gardner in no time!
RE/MAX sells more homes than any other real estate company.For a reason...should we talk?Another blog post written by:The Real Estate Wizards of Kansas City
Comments are appreciated! Go ahead and add your 2 cents . . .
Short sales, foreclosures, luxury homes, investor homes, first time home buyer homes, land, investment properties and move up buyers. Gardner, Olathe, Overland Park, Leawood, Lenexa, Shawnee, Mission, Merriam, Prairie Village, Basehor, Tonganoxie, Lansing, Leavenworth, Spring Hill, Eudora, De Soto, Edgerton, Platte City, Smithville, Gladstone, Liberty, Riverside, Independence, Lee's Summit, Pleasant Hill, Raymore, Belton, Grandview, Raytown, Waldo and the surrounding Kansas City communities.
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An article recently published by a nationally recognized Real Estate publication starts with, “Successful salespeople understand that making the sale has much more to do with developing trust and rapport than it does with issues of lowest price, highest quality or the largest company.”
The author goes on to talk about, “....the warm-up period....”.What the heck?Cars get warmed up, computers boot up....And people warm up at the same speed you find common ground with them, build a relationship, a friendship with them.Personally, I love the fact that “Sales is a Broadway play put on by a psychologist.”But....It isn’t “small talk” that builds relationships....Relationship building is actually the BIG stuff, the IMPORTANT stuff.
My experience is that people like to buy, but seldom like to be sold.Yep, folks seldom like to be sold....anything.
When working with Buyers, my responsibility is to help folks figure out what best fits their needs, then stand back and let them buy. Facilitate the transaction, of course, but for the most part....Let their heart lead them home.
When working with Sellers, I help folks figure out WHY they want to sell...believe me, it’s not as simple as it sounds....Then market their home....communicating to Realtors, agents, (yes, there is a difference) and consumers about the key features of the home....the neighborhood, the schools, general location, proximity to parks, largest employers, shopping....Make sense?Hey, you want someone to SELL you a home... We may not be your best choice. No hard sell, no pressure....we have fun.
Market your Kansas City home? Yep, we’re the guys for the job....Just ask our clients...Most of them are now our friends. RE/MAX sells more homes than any other real estate company.For a reason...should we talk?Blog post written by the Dowell Taggart Team of RE/MAX Premier RealtyComments are appreciated! Go ahead and add your 2 cents . . .We have 3 easy steps to find you the perfect home . Click here to get started, today!
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 Discount Kansas City Buyer's Agent?Caller says, “I want you to find me the perfect home, negotiate a great price, refer your best resources to myself and my friends....Then give me ½ of your commissions in a gift card, or cash....I don’t want a check, it could be traced back as income....”“Slow down, Slick....You want what?”, I ask....So the conversation heads down the road of Caller tells me he saw on HGTV where real estate agents can gift commissions to Buyers....A great deal on the home isn’t enough....He wants cash back. No check that could be traced back as income.Nope. No exceptions, not gonna happen.Kansas and Missouri real estate statutes are very clear on this point. Only licensees may be paid a fee to market and sell on behalf of third parties....There are limited exceptions; these exceptions do not include refunding commissions to Buyers, or paying Sellers a fee either.Check your state laws to determine the order of the day where you live.As I conclude the call, (the Buyer is now working with me to help him find a home...(for which I will retain every dollar I earn), I’m thinking to myself, “Where does HGTV get this stuff?”.Last week a Seller tells me she heard on Property Ladder that “....the Seller should paint the entire interior of the home off-white, so that potential Buyers are not confused by the personalization of the home.”What? The Buyer has to be able to project themselves into your home....Is it your opinion that most Buyers prefer the inside of a powdered sugar doughnut....Heck no.Unless it’s downright hideous, and as long as the interior design and colors are current, leave it alone.At the other end, it’s always interesting to walk into a home with Buyers, and based on price, be under the belief the home must have special features, or updates not noted in the listing.I’d believe that as the price is set at the high end of fair market value for the area.Yet the condition of the home doesn’t always bear out the Seller/Seller’s Agent opinion based on their listing price.Your local real estate resource, like the Kansas City Real Estate Network, will be more than available to answer questions like these while your on the way to successfully buying or selling your Kansas City home.
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More evidence that should convince the nonbelievers that the United States is in a housing dip ….and that so-called distressed properties like short sales and foreclosures will dominate for years to come. What does this mean to the Kansas City real estate market? More home value depreciation and an epic increase in demand for agent that know how to help underwater homeowners. That is right, short sale specialist will be in high demand for the next few years. When a homeowner who bought a home in 1999 with 5% down and has paid their mortgage on time every month is underwater, look at all the homeowners who have bought since. If they didn't buy right and put minimum down, they to could be underwater. Last year a few real estate economist predicted that 40% of all home owners with a mortgage would be underwater in 2011. If anything, that prediction was way too conservative. Currently many major US cities are experiencing negative equity numbers greater than 40%: * Chicago: 45.7% * Atlanta: 55.7% * Phoenix: 68.4% * Las Vegas: 71% If current depreciation trends continue closer to 50% of all owners with a mortgage will be underwater. For reference sake, that has never happened. As in never-ever happened…in the history of…well, modern civilization. With the current market conditions, real estate investors are jumping out and buying homes. Why not? Real Estate is on sale.
RE/MAX sells more homes than any other real estate company. For a reason...should we talk?
Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty
Comments are appreciated! Go ahead and add your 2 cents . . .We have 3 easy steps to find you the perfect home . Click here to get started, today!
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Uh, do Kansas City home sellers ever wonder., “Who cares about a wedding on an island nation?”
Nope. We generally care more about quality barbecue and cold beer than the Prince of whatever.
We care about the wedding of great home values and low interest rates...Like how I wove that in there?
Take Mike for example.
Mike’s short sale purchase for an outstanding Gardner home just got approved. Our accepted offer is $124,000....neighborhood comparables range in the high $180,000’s...Is Mike happy?
Ask Mike...“I had heard about great deals, but didn’t think I’d get one.....We’ll spring for new carpet and we’ve just bought a whole bunch of equity....The neighbor’s will hate us!”.
He just met his new neighbor, a member of the Gardner Police Department. Told Mike he stole his home....”You’re ruining the values in the neighborhood.”
Tough break, Mike’s neighbor. Should’ve had me help you with your home search.
There are outstanding real estate deals out there, but the big question isn’t, “Hey Martin, what looks hot?”
The big question is from me, to you.
What are the most important things you look for in a Kansas City home? Would you like to live nearer school, work, or family?
Would you like a larger yard, a bigger family room or a finished basement?
Do you have interest in a tiled Taj Mahal bathroom, stainless steel appliances in the kitchen or a custom screened in porch?
If you don’t know. I can help. When should we talk?
RE/MAX sells more homes than any other real estate company. For a reason...should we talk?
Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty
Comments are appreciated! Go ahead and add your 2 cents . . .We have 3 easy steps to find you the perfect home . Click here to get started, today!
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It is Multiple Offer Sudden Death, now you hear "Best and Final Offer", now what? Buying a Kansas City REO Property
If you’ve been out there trying to buy a Kansas City home lately anywhere outside of Olathe, Overland Park, Leawood, Lenexa and and Gardner, chances are pretty high that you’ve encountered more than a few bank-owned (REO) homes in your search. You may have even looked at a few.
Many of the best deals out there today can be found in REOs, especially if the buyer is willing to put in a little effort to clean up a home that needs some work. A little paint, new carpet and elbow greese can do miracles. Unfortunately, the enticingly low prices on many of the REOs being listed today also means that it’s not uncommon for Kansas City home buyers to encounter the dreaded “multiple offer situation.” Even more unfortunately, most of the banks listing homes today seem to be employing a procedure in multiple offer situations that many REALTORS like myself have taken to calling Multiple Offer Sudden Death.
In Multiple Offer Sudden Death, as soon as the seller (in this case a bank) has more than one offer on the table, they send a message to all the interested buyers instructing them to submit their “best and final offer” by some deadline a day or two in the future. No escalation clauses are permitted.
Ever wonder why REO agents and banks take their time negotating when there is only one offer? Hmm . . . I think it works to their advantage to get another offer, right?
At first everything looks great. The offer is made and negotiations seem to be going great. Then the words “Best and Final Offer” come out of the REO agents mouth.
What this means is that the each home buyer gets only one chance to beat out all of the other home buyers without knowing who their opponents are or what their bids will be. This scenario is great for the banks, but obviously quite terrible for the home buyers. Allow me to explain by way of a real-world example.- House X has been on the market for 90 days when the bank decides to drop the price from $190,000 to $170,000.
- This attracts an offer from Buyer A, who hopes to get the home for $165,000.
- After a few rounds of negotiation, the bank and Buyer A are close to an agreement at $165,000.
- Buyer B comes along and submits an offer of their own, not knowing that the bank is nearing agreement with Buyer A.
- The bank initiates Multiple Offer Sudden Death, giving both parties 24 hours to submit their “best and final offer.”
- Buyer A begrudgingly goes up to near the full list price, offering $168,000 to the bank.
- Buyer B shoots all the way up to $178,000.
- The bank accepts Buyer B’s offer.
In this scenario, Buyer B not only paid $10,000 more than Buyer A was about to pay, but they also paid $8,000 more than list price.
The more home buyers involved, the better chance that the bank will get a better than full price offer. In my last 8 Multiple Offer Sudden Death situations that have closed, all homes sold for more than list price.
Once a buyer has decided to make an offer on a home, they’re probably already emotionally attached, so when faced with Multiple Offer Sudden Death, the natural response will be to submit an offer all the way up to the maximum they are able to pay for the home. In order to avoid overpaying if you end up facing Multiple Offer Sudden Death, I suggest deciding on a hard maximum you believe the home is worth before you even make your first offer. Then stick to it.
Have you encountered Multiple Offer Sudden Death? What was your experience?
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 Nine Reasons Why to Use the Dowell Taggart Team?1) Buyers and Sellers find us online first, before any other Kansas City Real Estate Team! That might sound bold, but we’re willing to put it to the test! Don’t believe us? Search us on the web. Go ahead and search Kansas City Real Estate....www.DowellTaggart.com . 2) Contact us and you’ll find out we'll return your call more quickly than anyone else in town! Why? Because our clients tell us that’s important! We return phone calls promptly.Would you prefer a Kansas City REALTOR that has a newbie assistant answer the telephone or return your calls? Or the calls of Buyer’s who want to see your home?3) With 87% of the Kansas City home buyers starting on the Internet, doesn't it make sense to list your home for sale with the #1 online Kansas City real estate team? Wouldn't it make sense for more Buyers to find your home more quickly? Our 124+ step proven marketing plan, gets results.Don’t believe us, search us on the web www.DowellTaggart.com . Click here to get started today! 4) Do you like to save money? So do we. View the Top Kansas City Distressed Homes for sale including Foreclosures and Distressed homes with special financing options! 5) Knowing a little bit about the market in Connecticut might be interesting, but most people believe it makes sense to arm themselves with local market statistics.... There is a reason why we’ve been interviewed over 200 times by the media. View local Kansas City real estate stats. 6) At $3.50 per gallon, does it make sense to start your Kansas City home search on Kansas City’s real estate #1 online website? Why start in the car? Click here to get started, today for free!7) Learn how to buy a Kansas City home with zero down. We also have 86 steps to help Kansas City home buyers save money and time. Contact the Dowell Taggart Team today! 8) Although the Dowell Taggart Team is extremely high tech, we haven't forgotten our roots. We're geniunely nice people who like to help our clients reach their goals. 9) We’re the leaders in providing Local community information. Checkout the stats we provide: Gardner, KS., Olathe, KS., Overland Park, KS., Leawood, KS., Lenexa, KS., and Shawnee, KS.
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Kansas City home buyers and especially renters, are you aware of the fact that new lending requirements (Starting NEXT MONTH) will require 20% down payments on mortgages in Kansas City?
Yes, you read that correctly…20% down will be the new minimum requirement thanks to the new QRW Lending Rules.
Welcome to the new world of QRM: Qualified Residential Mortgage
The new QRM requirements currently exclude FHA mortgages. However, the National Association of REALTORS believes that higher down payment loan requirements will trickle down to FHA loans as well within a year. Higher interest rates and added fees will be slapped on Kansas City home buyers using non-FHA mortgages and putting less than 20% down. Bottom line Kansas City home buyers, unless something dramatic changes in the next 12 months you will see the mortgage products requiring less than 20% down disappearing.
In this housing market…the worst ever…does it make sense to require substantially higher down payments?
This will also affect Kansas City Home Sellers. There will be a smaller pool of home buyers meaning home values may go down more.
Bottom line, the new QRW rules may become the new rule April 2011 and be in full effect April 2012.
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 AssociatesNine Reasons Why to Use the Dowell Taggart Team?1) Buyers and Sellers find us online first, before any other Kansas City Real Estate Team! That might sound bold, but we’re willing to put it to the test! Don’t believe us? Search us on the web. Go ahead and search Kansas City Real Estate....www.DowellTaggart.com . 2) Contact us and you’ll find out we'll return your call more quickly than anyone else in town! Why? Because our clients tell us that’s important! We return phone calls promptly.Would you prefer a Kansas City REALTOR that has a newbie assistant answer the telephone or return your calls? Or the calls of Buyer’s who want to see your home?3) With 87% of the Kansas City home buyers starting on the Internet, doesn't it make sense to list your home for sale with the #1 online Kansas City real estate team? Wouldn't it make sense for more Buyers to find your home more quickly? Our 124+ step proven marketing plan, gets results.Don’t believe us, search us on the web www.DowellTaggart.com . Click here to get started today! 4) Do you like to save money? So do we. View the Top Kansas City Distressed Homes for sale including Foreclosures and Distressed homes with special financing options! 5) Knowing a little bit about the market in Connecticut might be interesting, but most people believe it makes sense to arm themselves with local market statistics.... There is a reason why we’ve been interviewed over 200 times by the media. View local Kansas City real estate stats. 6) At $3.50 per gallon, does it make sense to start your Kansas City home search on Kansas City’s real estate #1 online website? Why start in the car? Click here to get started, today for free!7) Learn how to buy a Kansas City home with zero down. We also have 86 steps to help Kansas City home buyers save money and time. Contact the Dowell Taggart Team today! 8) Although the Dowell Taggart Team is extremely high tech, we haven't forgotten our roots. We're geniunely nice people who like to help our clients reach their goals. 9) We’re the leaders in providing Local community information. Checkout the stats we provide: Gardner, KS., Olathe, KS., Overland Park, KS., Leawood, KS., Lenexa, KS., and Shawnee, KS.
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Billionaire Warren Buffett believes the real estate market like the one on Kansas City will rebound this year. What do current home buyers and home seller think about the real estate market?
Billionaire Warren Buffett believes that the housing market will rebound this year. Signs of the housing improvement include the existing home sale rose in January for the third straight month. Housing has never been this affordable in decades.What do current home buyers and home seller think?
Fannie-Mae Survey of actual potential real estate buyers and sellers:
* Americans think that housing prices in 2011 will remain stable.
* 78% respondents believe said they expected housing prices will hold steady or increase over the next twelve months, up from 73% in January 2010.
* 64% of Americans said they considered buying a home to be a good investment.
* Moody’s Analytics points out, the pace of sales is moving at a glacial rate. The median house price dropped 3.7% year-over-year, according to the latest data.
Looks like there is time still remaining to capture a good deal. That time is slowly diminishing though. This past week, the Dowell Taggart Team wrote 6 offers on homes. On all 6 offers our buyers faced stiff competition from other buyers. Although 4 buyers made full price or higher counter offers, all four counter offers were rejected for better offers from other buyers.
Homes priced to get multiple offers are receiving multiple offers. 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 Kansas City real estate agents, but will hear from many REALTORS: Not everybody should own a Kansas City 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 RatiosLenders 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 IssuesAll 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 LessIf 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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Smart Kansas City home buyers looking for the proverbial ‘Diamond in the rough’ now have an opportunity to buy a home and make repairs using a 30 year fixed rate home loan.
Without the HUD FHA 203K mortgage loan, many home buyers wouldn’t have the opportunity to buy a Kansas City home at a deep discount.
It’s the perfect mortgage home loan for anyone who wants to buy a distressed Kansas City home (such as a foreclosure) and doesn’t have a lot of upfront cash. With an over-abundance of foreclosure homes hitting the Kansas City real estate market, there is a huge opportunity to buy a home at a deep discount.
OK, you crossed the first hurdle and found a deeply discounted home in a great area! The next challenge for Kansas City home buyers has been how to get the home repaired. If you didn’t have much money to buy the home, where is the repair money coming from?
Her comes your baby, the HUD FHA 203k.
203(k) – How Is It Different?
Most mortgage loan financing plans provide only permanent financing. That is, the Kansas City lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property will provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made on the Kansas City home.
What? That means the repairs need to be made prior to closing. Banks will not do that.
The HUD FHA 203K loan program allows the Kansas City home buyer to buy the home with as little as 3% down, then allow the buyer to use approved contractors to complete the repairs after closing. Problem solved for the Kansas City home buyer who has very little cash.
Are All Kansas City Properties Eligible?
To be eligible, the property must be a one- to four-family dwelling that is not brand new. The number of units on the site must be acceptable according to the provisions of the local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.Kansas City homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.
In addition to typical home rehabilitation projects, this program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be decreased to a one- to four-family unit. Again as long as it is acceptable to local zoning requirements. A 203(k) mortgage may be originated on a “mixed use” residential property provided: (1) The property has no greater than 25 percent (for a one story building); 33 percent (for a three story building); and 49 percent (for a two story building) of its floor area used for commercial (storefront) purposes; (2) the commercial use will not affect the health and safety of the occupants of the residential property; and (3) the rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property.
Most single family homes under $250,000 in Kansas City are eligible for HUD’s FHA 203K mortgage loan.
Not all lenders offer this loan, and not all REALTORS understand the structure of this loan....for a reason.
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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 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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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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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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Fannie Mae...Related to Ellie Mae? Why Should Kansas City Home Buyers Care?Not a member of the famed Clampett family, Fannie Mae is a federal mortgage insurer....Shameless reference to the Beverly Hillbillies, for those of you over 40....Fannie Mae, and it’s sister/brother agency, Freddie Mac, underwrite the mortgages you and I use to purchase a home...more specifically, these organizations enforce the guidelines that allow mortgages to be sold to investors....And resold to other lending institutions.Why is that important...? If you’re an Overland Park, Kansas home seller, you’d better know if the new guidelines will hurt or help your cause....If you’re an Olathe, Kansas homebuyer, these new guidelines might make it easier to buy your new home.The Fannie Mae guidelines define the value of the mortgage every bit as much as the borrower’s capabilities, or the lender’s rules. Unless the mortgage meets Fannie Mae guidelines, the lender is required to hold the loan in-house, limiting the ability of the lender to resell the mortgage on the market as a securtized investment.If your Gardner, Kansas home loan doesn’t meet the guidelines, the bank is stuck with you as a client. Forever. Banks prefer the flexibility to sell their loan portfolios as they wish, so meeting the Fannie Mae guidelines is a smart thing for a bank to do....NEW lending guidelines being rolled out by Fannie Mae will make securing a mortgage a lot easier for some borrowers but harder for others.Why do you care? Well, myself and my clients like good news...do you?The rules, effective on Dec. 13, 2010 will allow buyers to use gifts and grants from nonprofit groups for their minimum 5 percent down payment, which is the threshold set by Fannie Mae, the government-owned company that sets lending standards and buys mortgages from lenders. (Freddie Mac is considering similar new guidelines, said Brad German, a spokesman.)Previously, borrowers had to contribute a minimum 5 percent down payment from their own funds, but additional down payment money could be from a gift (though never from a home seller). The exception was for borrowers who put 20 percent down: all that money could come as a gift.Because many lenders now require a down payment of 10 percent or more, the new rules mean that borrowers will still have to come up with extra funds — either their own or gifts. I read that passage several times to be clear ….here is our translation: 10% down payment is required by most lenders. Half of that 10% can come from a gift, grant etc. In essence this is allowing buyers to buy with 5% of their own money down. For those down payment challenged buyers the trick will be finding someone to give them 5% or being timely with the release of any grant money. Generally speaking, the grant money goes to certain buyers…in specific areas.(read teachers, firefighters, police etc. who are buying primary homes in areas deemed to need more stable homeowners.)Still, “this is definitely going to help upgrade buyers and young couples who for whatever reason don’t have enough money and are getting some (help) from their families,” said Edward Ades, the owner of Universal Mortgage, a broker in Brooklyn.The gift rules apply only to single-family principal residences, including town houses, co-ops and condominiums, and covers mortgage amounts in excess of 80 percent of the property’s value. Also, there is a limit on the loan balance — $729,000 in high-cost areas like New York City, and $417,000 in other areas.These guidelines are important, as gifting sourced down payments now make up a substantial component of home purchases....maybe yours does as well?With every ray of sunshine there can be a little rain, stay tuned for part 2.... 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.com
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