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Jan. 12, 2022

How Buying Earlier in the Year Can Save You Money

The earlier you act this year, the more affordable your purchase will be. Mortgage rates are projected to rise as we move deeper into 2022. According to Freddie Mac, the average 30-year fixed-rate mortgage is expected to be 3.5% by year’s end, with home prices likely rising as well.

That means the longer you wait, the more it will cost you to buy a home. Not to mention, the sooner you buy, the sooner you can experience the benefits of continued home price appreciation yourself. Once you have your home, you’ll be able to watch its value rise, whether through appreciation or sweat equity (or both), giving you confidence that your investment is a sound one.

Buy Now, Move Later

Keep in mind, with high buyer demand like we’re seeing today, you’ll be competing against other potential homebuyers, which means you need to find a way to stand out. One way to accomplish this is to have your agent (hi there) negotiate with the sellers and present terms that are dialed in to meet their specific needs. Here's one way you can to entice sellers:

If you have a flexible timeline (you are in a lease, are moving to another part of the city or country later this year) offering extra time for the sellers to stay in the home after closing could be the reason your offer is accepted over others. 

In other words, if you’re decide to purchase a home now before it becomes more costly and you don’t have to move right away, you could extend the date of your closing and provide the seller with the time they need to find their next home, or move if they've been in the home for some time. That’s a deal that could benefit both parties and help you stand out from the crowd.

 

Bottom Line

Home prices and rates will increase in 2022. That means buyers who are ready should act soon and find ways to strengthen their offer to meet sellers’ needs. Let’s connect over a strategy session to see what makes sense for you to succeed sooner than later.

Jan. 3, 2022

How Much Do You Need for Your Down Payment?

 

As you set out into 2022, determined to purchase, you likely have a plan in place, and you’re working on saving for your purchase. But do you know how much you actually need for your down payment? If you think you have to put 20% down, you may have set your goal based on a common misconception. 

Freddie Mac says:

“The most damaging down payment myth—since it stops the homebuying process before it can start—is the belief that 20% is necessary.”

Unless specified by your loan type or lender (which can differ, as all lenders aren't created equally), it’s typically not required to put 20% down. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. It may sound surprising, but today, that number is only 13%. And it’s even lower for first-time homebuyers, whose median down payment is only 7% (see graph below):

How Much Do You Need for Your Down Payment? | MyKCMWhat Does This Mean for You?

While a down payment of 20% or more does have benefits, the typical buyer is putting far less down. That’s good news for you because it means you could be closer to your homebuying dream than you realize.

There are also options like VA loans and USDA loans with no down payment requirements for qualified applicants. If you’re interested in learning more about down payment assistance programs, information is available through sites like downpaymentresource.com.

To understand your options, you need to do your homework. This starts with getting in touch with me for some local lender referrals, to find the one that best fits your personality style and financial approach.  

Bottom Line

Remember: a 20% down payment isn’t always required. If you want to purchase a home this year, let’s connect to start the conversation and explore your down payment options.

Dec. 27, 2021

How to Choose the Right Agent

How do most people find their agent? 

They ask a friend.  They ask a coworker.  They use the (sometimes mediocre) agent they used before.  Why?

Simply put, it's A PAIN to find an agent, let alone a good one.  And one that suits your business and personal style, gets you and your goals, and has your best interests in mind. 

That's a lot.

Here's a cheatsheet you can download to make sure you get at least a few important questions answered.   To be clear, there are no right answers, but the agent you speak with should have a clear answer of their own for all of these questions:

[Download] Questions to Ask An Agent Before Hiring

 

More info on this topic:

Nationwide Agent Matching Service

 

Dec. 21, 2021

Montana Home Equity Grew $68K This Year



The Average U.S. Homeowner Gained $56,700 in Equity over the Past Year

Your equity is the current value of your home minus what you owe on the loan. So, as home values climb, your equity does too. Right now there aren’t enough homes on the market to meet buyer demand, so bidding wars and multiple offers are driving prices up. This is projected to continue.  

Dr. Frank Nothaft, Chief Economist at CoreLogic, explains it like this:

Home price growth is the principal driver of home equity creation. The CoreLogic Home Price Index reported home prices were up 17.7% for the past 12 months ending September, spurring the record gains in home equity wealth.

Curious how your state stacks up against those in other states? Check out the map below to find out the average equity gain for each state through the third quarter of 2021:The Average Homeowner Gained over $56,700 in Equity over the Past Year | MyKCM

How Rising Equity Impacts You

If you’re already a homeowner, equity not only builds your wealth, as part of your overal plan.  It works like this: when you sell your house, the equity you built up comes back to you in the sale. You can use those proceeds to fuel your next move, including putting a non-contingent offer in on a home.  

If you’re thinking about becoming a homeowner, understanding the importance of equity can help you realize why homeownership is a worthwhile goal. It builds your wealth, and is part of your overall lifestyle and financial goals.  

Bottom Line

Whether you’re a current homeowner or you’re ready to become one, it’s important to know how equity works and why it matters. Equity growth is never guaranteed (remember the recession?) but holding off on using your current equity is an important thing to think about, as it shrinks and expands alongside the market.  

We'll do free custom home value analysis for you so you can track  your home's value anytime.  This isn't a Zestimate (Montana is a non-disclosure state, so they don't have access to our sold pricing data).  Just contact us and we'll start working on it for you.

Dec. 6, 2021

3 Reasons To Sell Over the Holidays

If you’re trying to decide whether or not to sell your home right now, there may not be a better time than this winter. Selling this season means you can take advantage of today’s strong sellers’ market when you make a move.  Rates are projected to rise throughout 2022, which decreases buyer's purchasing power (meaning they can afford less when rates are higher):Win When You Sell (And When You Move) | MyKCMSelling Over The Holidays

If you sell now, here’s what you can expect:

  • Your House Will Stand Out – While recent data shows there are more sellers than usual getting ready to list their homes this winter, there are still more buyers in the market than there are homes for sale. If you sell your house now before more houses are listed, it will get more attention from serious buyers who are eager to find a home.
  • Your House Will Likely Get Multiple Offers – When supply is low and demand is high, buyers have to compete with each other for a limited number of homes. The latest Realtors Confidence Index from the National Association of Realtors (NAR) shows sellers are getting an average of 3.6 offers in today’s market.
  • Your House Should Sell Quickly – According to the same report from NAR, homes are selling in an average of just 18 days. As a seller, that's great news for you if you’re looking for a quick process.

Win When You Move

In addition to these great perks, you’ll also win big on your next move if you sell now. CoreLogic reports homeowners gained an average of $51,500 in equity over the past year. This wealth boost is the result of buyer competition driving home prices up. You can leverage that equity to fuel a move, before mortgage rates and home prices climb higher. To get a feel for how rates are projected to rise, see the chart below.The longer you wait to make your move, the more it will cost you down the road. As mortgage rates rise, even modestly, it will impact your monthly payment when you purchase your next home. Waiting just a few months to make that change could mean a long-term financial impact.

The good news is today’s rates are still hovering in a historically low range. According to Doug Duncan, Senior VP and Chief Economist at Fannie Mae:

“Right now, we forecast mortgage rates to average 3.3 percent in 2022, which, though slightly higher than 2020 and 2021, by historical standards remains extremely low . . .

Selling before rates climb higher means you can make your move and lock in a low rate on the mortgage for your next home. This helps you get more home for your money and keeps your payments down too.

Selling Can Be Better Than Refinancing

With equity (amount you will net) on the rise, selling often makes much more sense than refinancing.  Once you add in the origination fees, prepaids such as taxes and insurance, Title or Attorney fees and other add-ons, it can take years to recoup those costs.  If you don't love your home, why start the clock at zero again?

Bottom Line

As a homeowner, you have a great opportunity to get the best of both worlds this season. You can truly win when you sell and when you buy. If you’re thinking about making a move, let's connect so you have the information you need to get the process started.

Dec. 1, 2021

Pre-Approval: The Best First Move To Make as a Homebuyer

How To Think Strategically as a Buyer in Today’s Market



The game of chess can provide incredible lessons to apply to all aspects of life, including the homebuying process. (Hint: Finding a home online and calling any agent for a showing is not part of a successful strategy). Chess requires you to plan and think about your strategy from the very beginning of the game.

The homebuying process, like chess, requires strategy and planning. Here are a few things to keep in mind to ensure your plan is as strong as possible when you begin your home search.

 

It’s important to have a great opening play when you’re buying a home. And the best move you can make when you begin your home search is getting pre-approved by a lender. You’ve probably already heard this is an important step, but what exactly is pre-approval and what benefits does it provide you?

As Freddie Mac puts it:

“The pre-approval letter from your lender tells you the maximum amount you are qualified to borrow. Getting a pre-approval letter is not a loan guarantee, it simply states how much your lender is willing to lend you. . . .”

And while determining how much you can afford at the start of your search is critical, the pre-approval letter also serves another important purpose. Freddie Mac also notes:

“This pre-approval allows you to look for a home with greater confidence and demonstrates to the seller that you are a serious buyer.”

In the game of chess, a strong opening move signals to your opponent that you’re a serious competitor. As a homebuyer, your pre-approval letter signals to the seller and their agent that you’re a serious, interested buyer.

Bottom Line

Getting a pre-approval letter isn’t just good strategy, it can be game-changing. It allows you to get a full understanding of what you can afford, and it signals to sellers that you’re serious. Let’s connect today to ensure you’re playing chess and being strategic during the home buying process.

Nov. 29, 2021

Is Now Still A Good Time To Sell?



As we near the end of the year, most markets are still seeing strong sales, multiple offers and other signs that indicate the seller's market will continue into 2022.   Record-breaking home price appreciation, growing equity, remote work, and competitive mortgage rates are motivating sellers to make a move to sepspecifically address their desired  lifestyle needs. We'll ttalk about what a sellers market actually is later in this post.

Info from realtor.com shows a larger share of homeowners are planning to list their houses this winter. So, that means more homes are about to hit the market, which will lead to more choices for buyers too.

According to George Ratiu, Manager of Economic Research at realtor.com:

"The pandemic has delayed plans for many Americans, and homeowners looking to move on to the next stage of life are no exception. Recent survey data suggests the majority of prospective sellers are actively preparing to enter the market this winter."

If you’re thinking of waiting until the spring to sell your house, know that your neighbors may be one step ahead of you by selling this winter. A big advantage of selling now is that serious buyers are continuing to look through the holiday season.  I encourage you to run some holding numbers, which means adding up the cost of holding your home for another 6-8 months and comparing it to rising home costs in the place where you intend to purchase, whether it's here or in another area.

If you want to stand out from the crowd, this holiday season could be a good time to make sure your house is available for buyers. Here’s why:

Sellers Are Still Firmly in the Driver’s Seat

Historically, a 6-month supply of homes for sale is needed for a normal or neutral market. That level ensures there are enough homes available for active buyers (see graph below):Why Now Is a Great Time To Sell Your House | MyKCMThe latest Existing Home Sales Report from the National Association of Realtors (NAR) shows the inventory of houses for sale sits at a 2.4-month supply. This is well below a neutral market.

What Does That Mean for You?

When the supply of homes for sale is very low, it’s much harder for buyers to find a home to purchase. This drives up competition among buyers, who then submit increasingly competitive offers to win out against others in the home search process. As this happens, prices rise and your leverage as a seller rises too, putting you in the best position to negotiate a contract that meets your ideal terms.

And while the low housing supply we're facing won't be solved overnight, sellers should move quickly to maximize their potential. As the data shows, with more prospective sellers planning to list their homes this winter, selling sooner rather than later helps your house rise to the top of a holiday buyer’s wish list so you can close the best possible deal.

Bottom Line

Listing your home over the next few weeks gives you the best chance to be in front of buyers competing for homes this holiday season. Let’s connect today to discuss how you can benefit from today’s sellers’ market.

Read more about this topic:

Learn more tips in our Seller Intelligence section of the blog.

Nov. 24, 2021

How Smart Buyers Are Approaching Rising Mortgage Rates

 

How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCM

Last week, the average 30-year fixed mortgage rate from Freddie Mac inched up to 3.1%, and experts project rates will continue rising through 2022:

“The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for full year 2022.”

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

Taking Time Off Can Be Costly

Mortgage rates play a significant role in your home search. As rates go up, your monthly mortgage payment increases if you’re buying a home, directly affecting how much you can afford. And even the smallest increase can have a large impact on your monthly payment (see chart below):How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCMWith mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of waiting and hoping rates will fall, today’s rates should motivate you to purchase now before rates increase more.

Smart Buyers Can Succeed by Planning Ahead

You can use your newfound motivation to energize your search and plan your next steps accordingly so you’re prepared to act no matter what happens with mortgage rates. One way to do that: take rising rates into consideration as part of your budget.

Danielle Hale, Chief Economist at realtor.com, puts it best, saying:

“Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move. . . .”

You should also be ready to act when you find the home that meets your needs. That means getting pre-approved with a lender so there won’t be any delays when the time arrives.

The best way to prepare is to work with a trusted real estate advisor now (hey there, good looking :). We can connect you with a lender, help you adjust your search based on your budget, and be ready to act quickly when it’s time to make an offer.  Finding that home before this work is done?  Well, that's a heartbreaker when someone else goes under contract only because they did the work and area ready, but you aren't.

Bottom Line

Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.

Posted in Buyer Intelligence
Nov. 12, 2021

Should I Update My House Before I Sell It? [INFOGRAPHIC]

Should I Update My House Before I Sell It? [INFOGRAPHIC] | MyKCM

Some Highlights

If you’re deciding whether you should make updates before you sell your house, lean on your agent to be your guide (be sure your agent is experienced in understanding the topic first).  For info on how to choose an agent, go here.

If the market is flooded with similar houses for sale, or your property has been on the market for a few weeks or more, updates may be necessary for your house to get the attention it needs. In our current sellers’ market, the added expenses might not be worth it, but be sure you stay on top of this topic with your agent.

Let’s connect so you have expert advice on which updates are important in today’s market. We can help you determine what to fix and what to leave alone.

 

April 7, 2021

Don’t Sell on Your Own Just Because It’s a Sellers’ Market

 

In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with an agent. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market, and often don't pause just because the seller is unrepresented. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO.

Let’s unpack why that’s a big mistake and may actually cost you more in the long run.  I share some of this information from direct experience working as a buyer's representative for FSBO properties, and have seen firsthand what the sellers often leave on the table.

 

According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. Seems obvious, right?  Well, in reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.  I'm not simply talking about getting your price.

 

The NAR report explains:

“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000…Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”

 

When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):

That’s a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees.  We haven't even discussed the negotiating experience an agent brings to the table.  Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. We live and breathe this process for a living.  A good real estate professionals is a trained negotiators with a ton of housing market insights that average homeowners may never have, and cannot gain simply from tracking the market through third party sites. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

 

Bottom Line

If you’re ready to sell your house this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Let’s connect to discuss how a trusted advisor can help you, especially in today’s market.  That way you'll be able to evaluate your decision with facts and inside information.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Montana Good Life Properties Inc and Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.