Right Time to Buy a Home?

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Another Indication It’s Time To BUY!

The Housing Affordability Index was developed over thirty years ago to help consumers determine when it is a good time to buy a home. It’s considered advantageous to the buyer when the index is over 100 because a median income family can qualify for a median price home.

Recent figures released by the National Association of REALTORS’ economic department show that the 2011 index of 184.5 is the highest annual average since it has been calculated. The most recent month released, December 2011, was 194.9. The index is also broken down into four regions of the country.

The two major components that contribute to the index are home prices and mortgage interest rates which are lower than they’ve been in the last five years which account for the dramatic rise in the index since 2006.

The Housing Affordability Index is another indication that this is a good time to buy a home for people who have good credit, a down payment and want a home. It may be the best time we’ll see in our lifetimes.

Ready to start looking for a home?  http://www.findkansascityrealestate.com/

Housing Supply is a DEMAND!

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Low Inventories Indicate a Trend

inventory of real estate in olathe kansas

Low inventory is a relative term depending on how you’re comparing it.  Would the comparison be to total number of homes on the market last year, homes in a certain price range or homes in a certain area?  In some situations, it’s a combination of all of those things.

In any given market, inventories will fluctuate based on area and price range.  The National Association of REALTORS® considers a balanced market to be six months’ supply of homes.  If it takes longer than six months to sell, it is thought to be a buyer’s market and less than six months, a seller’s market.  Most buyers and sellers probably feel inventory equilibrium is more like three month’s supply of homes.

Inventory has a direct impact on price.  During the housing bubble, demand decreased, supply ballooned to four million houses and prices dropped dramatically.  Increased inventories due to foreclosures, bank’ revised lending practices and builder’s lack of new housing starts each contributed to the dramatically lower prices.

As the market has recovered, economic conditions have improved, banks have loosened their requirements, interest rates have remained low, foreclosures have slowed and gradually, the inventory has been reduced to approximately two million houses.  When demand is constant but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.

Based on the low mortgage rates that have been inching up each week in 2013 and an improving consumer confidence level, most markets are experiencing some increase in demand.  With inventory decreasing, buyers in the marketplace can see that prices are increasing.

Just as signs of spring can be seen to be just around the corner, it should be recognized what direction prices will be moving.  Hindsight is 20/20 but we can’t purchase or sell in the past.  We need to make decisions today on what we think will happen in the future.

If you’re curious to know what inventory conditions are for your specific market, send an email to me at Info@Char4Homes.com with the price range and area and I’ll send you a report.

Looking to buy an Olathe or Kansas City home?  Check us out at www.findkansascityrealestate.com

Is it time to re-finance?

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Refinancing Again

At the Char MacCallum Real Estate Team, we’re constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.

There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.

The reality is that if you can refinance for a lower rate and you’ll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven’t been recaptured by monthly savings may need to be added to the costs of the new refinance.

Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lowertoday than they were in January of 2012 and for the ten years before that.

Refinancing may save you a substantial amount of money, especially if you’re going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

Would you like more information on re-financing?  Contact Char MacCallum and the Char MacCallum Real Estate Group at 913-782-8857

Looking for Olathe Homes for Sale?

www.findkansascityrealestate.com

What to do in Kansas City on President’s Day!

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Have the day off and looking for something to do?  

Here’s a few things we’ve found around Kansas City – especially if you have kids!

1.  Visit our Kansas City National Archives Center.  There is an exhibit on “From the School House to The White House”  until Feb 23rd.  It’s presidential!  It’s History!  Making President’s Day relevant for a day off of school?  Check!

2.  Need room to run and the kids acting like wild monkeys?  Visit the Kansas City Zoo

3.  Union Station has a cool line up of great programs today

4.  Visit Crown Center and check out Funville, What do you want to be?  Free!

5.  Go ice skating at Park Place!

What are we doing today?  We are out showing Olathe Homes for Sale!  It is a busy time of year and buyers are out looking at our Kansas City Real Estate!

Enjoy President’s day and let us know what you are up to today!

The Char MacCallum Real Estate Group

www.findkansascityrealestate.com

Let Your Tenants Send Your Kids to College

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Thinking about Rental Properties for Additional Income?

Most people have lots of things to save for but not always enough discretionary income after the family essentials have been met.

A relatively small investment in a rental home can control a good home that will easily rent, generate positive cash flows and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.

The strategy is simple. Find a slightly below average priced home that will rent well. It will appeal to a larger group of people while it’s rented and when it’s ready to be sold.

Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow. When your student is ready to start college, you’ll actually have several options.

You can sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education. Another option would be to refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity and under current tax laws is a non-taxable event.

Regardless of whether you’re trying to plan for your children’s education or your own retirement, rental property offers many solid investment opportunities. Contact me if you want more information.

The Char MacCallum Real Estate Group can help you with Kansas City area Rentals.

Call the office at 913-782-8857

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What’s the Point of a Point?

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Wondering what a “point” is?

Pre-paid interest, sometimes called “points”, is generally tax deductible when a person pays them in connection with buying, building or improving their principal residence. When points are paid on a refinance, they are not a current deduction but have to be taken pro-rata over the life of the mortgage.

For instance, if $3,000 in points were paid on refinancing a 30 year mortgage, deduction of $100 per year is allowed. When the loan is paid off or replaced by refinancing again or the home is sold and the mortgage paid off from the proceeds, the balance of any un-deducted points may be taken in that tax year.

Your tax professional needs to be made aware of any of these situations so that he can accurately reflect the deduction in your return. Currently, the most common situation is where homeowners may be refinancing their home for the second, third or even fourth time. If there are points that have not been completely deducted, they need to be treated in the year of refinancing.

For more information, see points in IRS Publication 936; there is a section on refinancing in this publication. For advice considering your specific situation, contact your tax professional.

Looking for a Kansas City Home?

Contact The MacCallum Real Estate Group

 

Avoiding Unexpected Expenses When Buying

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What have you heard about home warranties?

It’s common for sellers to consider offering and buyers might find it an incentive, but a growing number of homeowners are purchasing the home warranties themselves to limit the unexpected expenses of repairs and replacements. We’ve had it help quite a few of our sellers at The Char MacCallum Real Estate Group.

A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience that it organizes a qualified service provider as well as the cost of the items.

There are a variety of companies that offer home warranties and the coverage may differ but the majority of things will include heating, air conditioning most built-in and some free-standing appliances, as well as other specific items. Additional specific coverage may be available for other things like pool and spa equipment.

Some investors are even placing this coverage on their rental properties to limit the amount of maintenance repairs during the year. It is a viable alternative to managing the financial risk and the stress dealing with unexpected expenses.

If you’re interested in home warranties, contact us – we can help get you what you need!

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Get Your Offer Accepted!

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We’ve had a lot of buyers out looking for homes this past week.  The Char MaCallum Team has a couple of tips as the market shifts from a buyer’s market.  It’s good to know how to improve your chances to have the seller accept your offer!

Once you decide on a home, don’t waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you’d expect. It’s happened several times these past week to our buyers agents on The Char MacCallum Team!  Multiple offers are a seller’s advantage but here are some tips to level the playing field:

  • Realistic offer – don’t give the impression you’re trying to “steal” the property. Submit comparable sales that justify your offer.
  • Pre-approval letter – this satisfies seller’s biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
  • More earnest money – it shows you’re serious and makes the seller feel like the contract will actually close.
  • Minimize contingencies – from a seller’s standpoint, each contingency is one more reason why the sale won’t go through. They feel the home is “off the market” and they’re in limbo.
  • Shorten inspection period – your agent can help you set a reasonable date but let the seller know you’re willing to close prior to that if possible.
  • Write a personal letter to the seller telling them why you want their home – this can be the emotional connection to the seller that makes the difference in you getting the home.
A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.
Let’s get out there and buy some houses!!
Are you looking for that perfect Kansas City Home?

Don’t delay, let’s buy NOW!

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Sooner is Better than Later!

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.

For a summary of specific real estate provisions in the “Fiscal Cliff” bill, click here.

Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.

Reasons to buy now:

  • The house payment with taxes and insurance is probably cheaper than the rent.
  • Rents will continue to rise making the difference even greater in the future.
  • Lock-in the principal & interest payment with a fixed-rate mortgage.
  • 30 year mortgage terms are available to most borrowers.
  • The mortgage interest deduction is intact for the majority of taxpayers.
  • The capital gain exclusion for principal residences up to $500,000 remains in place.
  • Prices are going up due to lower inventories and several years of low housing starts.
Looking for an Olathe Home for Sale or want to Find Kansas City Homes to view?  We can help!