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Homeownership Will Always Be a Part of the American Dream

On Labor Day we celebrate the hard work that helps us achieve the American Dream. Growing up, many of us thought about our future lives with great ambition. We drew pictures of what jobs we wanted to have and where we would live as a representation of a secure life for ourselves and our families. Today we celebrate the workers that make this country a place where those dreams can become a reality.

According to Wikipedia,

Labor Day honors the American labor movement and the contributions that workers have made to the development, growth, endurance, strength, security, prosperity, productivity, laws, sustainability, persistence, structure, and well-being of the country.”

The hard work that happens every day across this country allows so many to achieve the American Dream. The 2019 Aspiring Home Buyers Profile by the National Association of Realtors (NAR) says,

“Approximately 75% of non-homeowners believe homeownership is part of their American Dream, while 9 in 10 current homeowners said the same.”

Looking at the number of non-owners, you may wonder, ‘If they believe in homeownership, why haven’t they bought a home yet?’. Well, increasing home prices and low inventory can be part of the reason why some haven’t jumped in, but that does not mean there is a lack of interest. The same report shows the increase in the desire to buy in the last year (as shown in the graph below):Homeownership Will Always Be a Part of the American Dream | MyKCMAs we can see, there are more and more people each quarter who want to buy a home. The good news is, as more inventory comes to the market, more non-homeowners will be able to fulfill their dreams. Finally, they’ll be able to move into that home they drew when they were little kids!

Bottom Line

If you’re a homeowner considering selling, this fall might be the right time, as there are buyers in the market ready to buy. Let’s get together to determine how you can benefit from the pent-up housing demand.

Housing Supply

Housing Supply Not Keeping Up with Population Increase

Housing Supply Not Keeping Up with Population Increase | MyKCM

Many buyers are wondering where to find houses for sale in today’s market. It’s a true dilemma. We see an increase in buyer demand, but the supply available for purchase isn’t keeping up.

The number of new housing permits issued prior to the great recession increased for 15 years until 2005 (from 1.12 million in 1990 to a pre-recession peak of 2.16 million in 2005). According to Apartment List,

From 1990 to 2005, the number of single-family permits issued more than doubled, while the number of multi-family permits grew by 49 percent.

When the housing market crashed, the number of new homes permitted decreased to its lowest level in 2009 (see below):Housing Supply Not Keeping Up with Population Increase | MyKCMSince then, supply and demand have been out of balance when it comes to new construction. According to the same report,

Construction of single-family homes has recovered much more slowly — the number of single-family housing units permitted in 2018 was barely half the number permitted in 2005.”

Why is new construction so important?

As the U.S. population increases, there is also an increase in the need for new homes. Today, new construction is not keeping up with the increase in the nation’s population. The report continues:

“The total number of residential housing units permitted in 2018 was roughly the same as the number permitted in 1994, when the country’s population was 20 percent less than it is today.”

Essentially, the dip in home building coupled with the steadily increasing U.S. population means there is now a selling opportunity for homeowners willing to list their current houses.

Bottom Line

If you’re considering selling your home to move up, now is a great time to get a positive return on your investment in a market with high demand. Let’s get together to determine the specific options available for you and your family.

Lingo of Buying a Home

Buying a Home: Do You Know the Lingo? [INFOGRAPHIC]

Buying a Home? Do You Know the Lingo? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • Buying a home can be intimidating if you’re not familiar with the terms used throughout the process.
  • To point you in the right direction, here’s a list of some of the most common language you’ll hear when buying a home.
  • The best way to ensure your home-buying process is a positive one is to find a real estate professional who will guide you through every aspect of the transaction with ‘the heart of a teacher.’

Why Now Is the Perfect Time to Sell Your House

Why Now Is the Perfect Time to Sell Your House

Why Now Is the Perfect Time to Sell Your House | MyKCM

As a homeowner, it’s always tempting to dream about the next big project you’re going to tackle. The possibilities are endless. Should I renovate? Should I refinance? Should I stay? Should I move? The list goes on and on.

In today’s housing market, it’s actually a great time to shift your thoughts toward selling your house and moving up into the home of your dreams. Here’s why:

Inventory is on the rise, but there’s still an overall shortage of houses for sale (less than a 6-month supply found in a more normal market), so homes are going under contract quickly. In fact, the National Association of Realtors (NAR) Realtors® Confidence Index Survey reports that right now homes are only staying on the market for an average of 27 days. That’s less than one month, an even more accelerated pace from the 36-day trend we saw last spring.Why Now Is the Perfect Time to Sell Your House | MyKCMThe same report also indicates there are more interested buyers than active sellers today, which is one of the big factors driving home prices higher.Why Now Is the Perfect Time to Sell Your House | MyKCMWhy Now Is the Perfect Time to Sell Your House | MyKCMThis power combination provides an ideal environment for sellers aiming to close a quick sale and earn a big return as we wrap up the summer season.

Bottom Line

There’s still time to make a move before the school year starts and the fall weather sets in. Maybe it’s time to make a change. Let’s get together to determine if selling now is the right decision for your family.

Top 5 Reasons You Should NOT FSBO

Top 5 Reasons You Should NOT FSBO

Top 5 Reasons You Should NOT FSBO | MyKCM

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.

The top 5 reasons are listed below:

1. Online Strategy for Prospective Purchasers

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 50% on the Internet
  • 7% from a yard sign
  • 28% from a Real Estate Agent
  • 1% from newspapers

The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser, if there is a question of value

4. FSBOing Has Become Increasingly Difficult

The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 7% over the last 20+ years.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance of a bidding war for the property. The study found the difference in price between comparable homes of size and location is currently at an average of 6%.

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?

Bottom Line

Before you decide to take on the challenge of selling your house on your own, let’s get together to discuss your needs.

images

Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved!

Stop Wondering What Your Budget Is & Get Pre-Approved! | MyKCM

In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show that you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.

Even if you are not in an incredibly competitive market, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

Freddie Mac lays out the advantages of pre-approval in the ‘My Home’ section of their website:

“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”

One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you through this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”

Freddie Mac describes the ‘4 Cs’ that help determine the amount you will be qualified to borrow:

  1. Capacity: Your current and future ability to make your payments
  2. Capital or cash reserves: The money, savings, and investments you have that can be sold quickly for cash
  3. Collateral: The home, or type of home, that you would like to purchase
  4. Credit: Your history of paying bills and other debts on time

Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.

Bottom Line

Many potential homebuyers overestimate the down payment and credit scores necessary to qualify for a mortgage. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so today.

Starting the Search for Your Dream Home? Here Are 5 Tips!

Starting the Search for Your Dream Home? Here Are 5 Tips!

Starting the Search for Your Dream Home? Here Are 5 Tips! | MyKCM

In today’s real estate market, low inventory dominates the conversation in many areas of the country. It can often be frustrating to be a first-time homebuyer if you aren’t prepared.

In a realtor.com article entitled, “How to Find Your Dream Home—Without Losing Your Mind,” the author highlights some steps that first-time homebuyers can take to help carry their excitement of buying a home throughout the whole process.

1. Get Pre-Approved for a Mortgage Before You Start Your Search

One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, understanding your budget will give you the confidence of knowing whether or not your dream home is within your reach.

This step will also help you narrow your search based on your budget and won’t leave you disappointed if the home you tour, and love, ends up being outside your budget!

2. Know the Difference Between Your ‘Must-Haves’ and ‘Would-Like-To-Haves’

Do you really need that farmhouse sink in the kitchen to be happy with your home choice? Would a two-car garage be a convenience or a necessity? Could the ‘man cave’ of your dreams be a future renovation project instead of a make-or-break right now?

Before you start your search, list all the features of a home you would like and then qualify them as ‘must-haves’‘should-haves’, or ‘absolute-wish list’ items. This will help keep you focused on what’s most important.

3. Research and Choose a Neighborhood You Want to Live In

Every neighborhood has its own charm. Before you commit to a home based solely on the house itself, the article suggests test-driving the area. Make sure that the area meets your needs for “amenities, commute, school district, etc. and then spend a weekend exploring before you commit.”

4. Pick a House Style You Love and Stick to It

Evaluate your family’s needs and settle on a style of home that would best serve those needs. Just because you’ve narrowed your search to a zip code, doesn’t mean that you need to tour every listing in that zip code.

An example from the article says, “if you have several younger kids and don’t want your bedroom on a different level, steer clear of Cape Cod–style homes, which typically feature two or more bedrooms on the upper level and the master on the main.”

5. Document Your Home Visits

Once you start touring homes, the features of each individual home will start to blur together. The article suggests keeping your camera handy to document what you love and don’t love about each property you visit.

Making notes on the listing sheet as you tour the property will also help you remember what the photos mean, or what you were feeling while touring the home.

Bottom Line

In a high-paced, competitive environment, any advantage you can give yourself will help you on your path to buying your dream home.

What is the Cost of Waiting Until Next Year to Buy?

What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC]

What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC] | MyKCM

Some Highlights:

  • The “cost of waiting to buy” is defined as the additional funds necessary to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac forecasts interest rates to rise to 4.5% by the Q4 2020.
  • CoreLogic predicts home prices to appreciate by 4.8% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to!

The Feeling You Get from Owning Your Own Home

The Feeling You Get from Owning Your Home

The Feeling You Get from Owning Your Home | MyKCM

We often talk about the financial reasons why buying a home makes sense. But, more often than not, the emotional reasons are the more powerful and compelling ones.

No matter what shape or size your living space is, the concept and feeling of home can mean different things to different people. Whether it’s a certain scent or a favorite chair, that feeling of safety and security you gain from owning your own home is simultaneously one of the greatest and most difficult to describe.

Frederick Peters, a contributor for Forbesrecently wrote about that feeling, and the pride that comes from owning your own home.

“As homeowners discover, living in an owned home feels different from living in a rented home. It’s not just that an owner can personalize the space; it touches a chord even more fundamental than that.

Homeownership enhances the longing for self-determination at the heart of the American Dream. First-time homeowners, young or old, radiate not only pride but also a sense of arrival, a sense of being where they belong. It cannot be duplicated by owning a 99-year lease.”

Bottom Line

Owning a home brings a sense of accomplishment and confidence that cannot be achieved through renting. If you are debating renewing your lease, let’s get together before you do to answer any questions you may have about what your next steps should be, and what is required in today’s market!

The home buying process.

imagesI realized when I was young that there are stages of freedom in our lives. You just don’t realize them until you experience them. The first one is when we get our first bicycle. No training wheels and the freedom to ride to your friends house or the park on your own. The second is when you move out and get your own place. Apartment or dorm room it doesn’t matter its your own. The third is when you get your own washer and dryer. I’m talking about under the same roof. The forth is when you own Real Estate. You are the king of your castle. My Goal is to lay out the steps involved in buying a house, and for you to have a better understanding of what takes place and why.

  • The first step in the home buying process is to speak with a mortgage lender . You want to be pre-approved before you start to look. I always recommend talking with a few lenders. You will find a difference in closing cost and interest rates. You also may find that you feel more comfortable working with one lender over the other. The lender will give you a pre-approval letter. The pre-approval process will give you the price range that you need to stay within when searching for your next home. It will also be submitted with an offer on a house.
  • Let the home search began. You have access to plenty of sites like msgulfcoasthomes.com, Zillow, Realtor.com or gulfcoastpowersearch.com/youngs/  where you can search for homes on your own. These sites all have the same information, there is no need to jump from site to site. The best advice I can give you is to talk with your Realtor. (list of great Realtors) Face to face is best. Tell them the specifics of what you are looking for, be detailed. It will make the home search go much smother for you. Remember your Realtor is on your side. They are not going to try and sell you something you don’t want or cant afford. Communication is key hereimages (1)
  • So you have found your dream home. Get insurance quotes. Your insurance agent will give a quote and let you know if flood insurance is required. I will provide you with the property tax information. Now you meet back with the lender with the insurance quote and tax information on the home you have found. Your lender will go over what your down payment will be (if any, need a loan with 0 down?), what the expected closing costs and pre-pays (taxes and insurance) will be needed at the closing.
  • Now we write the offer. The seller can accept the offer as is, counter your offer or reject the offer. If the offer is countered then we negotiate with the seller until we reach an agreement.
  • When the offer is accepted, you are under contract. The earnest deposit (normally 1% of the sales price) has to be turned in with in 24 hours of the accepted offer. It is usually held with the closing attorney’s office.  I send a copy of the contract to your lender and the closing attorney so they can began working on the loan and title work. Ones you are in a contract you cannot back out unless there is a contingency to protect you. Some contingency are built into the contract. The ability to get the loan, a home inspection that meets your satisfaction and the home appraising. We can add special contingencies if needed to the contract. I want to protect the buyer as needed for any special circumstances.
  • Home Inspection needs to be completed with in the first 10 days of an accepted contract. We can recommend Home inspectors, but it is up to you to chose, schedule and pay for the home inspecimages (2)tor. They normally cost between 350 and 550 depending on the size of the house. I always recommend to clients to try and be there for at least the last hour of the home inspection. You should get a detailed report from the inspection, but it is always best to have first hand knowledge of any issues there may be with the home.
  • Inspection contingency If you are satisfied with the inspection results then we release the home inspection contingency and move on. If there are repairs that we are requesting then we document those items with photos asking for the seller to repair or replace those items. If the seller does not agree to do the repairs then you have the option to walk away and get your earnest money back or agree to move forward with the house the way it is. If they agree to fix the items then you are still bound to the contract.
  • The appraisal is the next step in the home buying process.
  • What is an appraisal? It is an unbiased estimate of the true value of what the home is worth. Lenders order an appraisal during the mortgage process. It is an objective way to assess the home’s market value. The bank must make sure that the amount of money you are borrowing is not more than the house is worth. Your lender will order the appraisal, it normally cost around $450 your lender can give you an exact cost. This is normally and up front cost, but sometimes it is added to the loan. If the house appraises at the contract price or above then all is good and we keep moving on. If the appraisal is lower than the contract price then we ask the seller to lower the price to the appraised value. If the seller does not agree to lower the price you can pay the difference out of pocket, or walk away from the contract.
  • The termite inspection (Wood Destroying Inspect Report) WDIR is done at this point. This can be a buyer or sellers expense. It is written in the offer who pays for it. If the report shows no active termites or other wood destroying insects and there is no wood damage you will receive a clear report. If there are issues the house will have to be treated and repaired at the sellers expense. You have the opportunity to back out of the contract if active insects are found.download
  • Your loan will move to Underwriting you are almost done. The Underwriters will make sure everything is correct. (income, debt, appraisal, required repairs, WDIR). They may ask for more documents from you at this point. You will want to get them to your lender quickly. It is also very important that when you go under contract to purchase a home you don’t make any changes to your income or debt during this time. Don’t change or quite your job, buy a new car or add debt to your credit cards. They will check for these things.
  • Closing Disclosure 3 day rule. You will receive Closing Documents from your lender 72 hours before closing. They contain details of the mortgag fees and other costs to get your mortgage. You sign these and send them back.e loan you are getting, the loan terms, your projected monthly payments, and how much you will pay in
  • Final walk through (normally 24 hours before closing) I will schedule a time for us to walk through the house. We are checking to make sure the property is in the same condition it was when we entered the contract, any repairs requested have been completed and the property meets the terms of the contract.
  • The closing day is normally scheduled at this point, all people on the loan will need to be there to sign. If you are bringing money to the closing it needs to be certified funds made out to the attorney or title company. You will also need your I.D.
  • Congratulations you are done! You are a new home owner. There is a lot of steps to buying a house but it reallyimages (3) is not difficult. There are a lot of moving parts going on that your Realtor, Mortgage lender and closing attorney are taking care of or guiding you through. I would say its time to relax, but you have furniture to move.

More information for First Time Home Buyers 

Morgan Young and Kristy Young are both licensed Realtors with NextHome E-Realty on the Mississippi Gulf Coast. If you are still reading at this point you must be in the market for a new home. Give                                                                                     them a call, they will be glad to help. 228-239-0371