All About Contingencies

As you browse listings on BHHSKCRealty.com, you may find homes you like that appear to be unavailable, due to some kind of contingency. If you find the perfect home, but it’s labeled Contingent, should you pursue it or forget it?

The reality is that contracts fall through sometimes. If you have a back-up contract, you can buy the home should it come “Back on Market” or “BOM.”

Contingency
Nearly all offers-to-buy have contingencies. Typical contingencies include provisions that the home must meet the appraised value by the mortgage lender’s third-party appraiser, or it must pass a professional third-party home inspection to the buyer’s satisfaction. The buyer may make the contract contingent upon the lender funding the purchase.

Option period
Option periods give the buyer time to get financing and complete home inspections and the appraisal. Unless the buyer acts on a contingency, the home is considered out of option but it can still fall out of escrow.

To learn more, contact your Berkshire Hathaway HomeServices network professional.

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Three Things Sellers Should Never Do

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Selling your home is one of the largest transactions you’ll ever make, so you want to make sure you sell your home quickly, for the most money and for the best terms possible you don’t want to start off on the wrong foot. Here are three things sellers should never do.

  1. Sell it yourself. A real estate professional has the resources and experience to help you price, show, sell your home and safely navigate it to closing. He or she can provide numerous marketing and showing services to help sell your home quickly and with as few hurdles as possible.
  2. Pick the wrong sales professional. Interview several real estate professionals to learn how they plan to market your home, what services they provide, and what you need to do to get the highest and best offer for your home. Choose the one who is straight with you about your home’s assets and drawbacks, and who explains current market conditions so you’ll know how to price your home successfully.
  3. Ignore your sales professional’s advice. Your BHHS KC Realty agent is trained to help you present your home at its best. Staging, updates, and repairs will help, but what’s most important is the price. Your home’s price, location and condition should be supported by comparable homes in the area. You’ll attract the most interest if you price slightly below comparable homes, allowing room for buyers to bid up the price.

Remember, every market is different and can change quickly, so be prepared.

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Best Outdoor Projects for Selling Your Home

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As you look at your outdoor living spaces with an eye for upgrades, where will your time and money be best spent? Fresh landscaping? Sprinklers? A new fence? A firepit?

Fortunately, 2018 Remodeling Report: Outdoor Features, co-produced by the National Association of REALTORS® and National Association of Landscape Professionals, offers some ideas. First, there are two ways to look at your improvements:

  1. Curb appeal to make your home more attractive to buyers when you’re ready to sell.
  2. Personal enjoyment while you live in the home.

If you’re thinking strictly of return on investment, regular lawn care, landscape maintenance and tree care and trimming each restore 100 percent or more of the costs, says the survey. Regular attention to watering and drainage will prevent unsightly dead spots in your yard. Removing dead tree branches or limbs growing too close to the house prevents storm damage. Keeping bushes trimmed prevents overgrowth that obscures your home’s features.

But money isn’t everything. What about personal enjoyment, convenience and satisfaction? Tied for first place on the “Joy” Score with a perfect 10 are an irrigation system and a fire feature. The next most appealing projects were a new wood deck (Joy Score – 9.8), a water feature (9.8), statement landscaping (9.7), and an overall landscape upgrade (9.6).

The report validates what real estate professionals have been saying all along – curb appeal matters, and landscape improvement is money well spent. You’re adding beauty and convenience to your home, which future homebuyers will appreciate.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!

Portable Gardens for Curb Appeal

To make your home more attractive to homebuyers, you could plant fresh flowers or you could put plants in containers and take your garden with you when you sell your home!

Containers can accent your home’s personality – like washtubs for a farmhouse look or colorful fired pottery for a bohemian vibe. They’re the perfect solution for styling a porch, entry or walkway.

Follow these easy tips to make sure your potted gardens thrive:

Pick the right container. A confined space means substituting what the plants would get if they were in the ground. You need to have enough space for plants to grow and proper drainage holes so your plants don’t become sodden.

Use fresh potting soil. Good potting soil doesn’t clump and allows roots to spread. It contains nutrients to give plants a good head start.

Group plants according to sun and water requirements. A mix of cascading plants, tall leafy plants and various flowers make a beautiful composition. You can even mix in edibles like vegetables and herbs, but make sure all the plants in one container require the same amount of sun and water.

Water frequently. Container gardens dry out quickly, especially smaller pots. Check that the container is draining properly and you don’t have to worry about overwatering. Water daily in warm weather.

Bigger is better. Larger containers hold more soil, allow plants to grow larger, offer more room for variety and require less frequent watering.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!

Should You Wait for Lower Prices and Interest Rates?

Home prices have been rising for over seven years, and mortgage interest rates for five years. Should you wait to buy a home? The numbers say no.

According to the National Association of REALTORS®, the median existing home price is more than $250,000, the highest it’s ever been. If you wait to buy a home, you’re losing the opportunity to build equity, or ownership, in a home of your own.

If you’re worried that homes are priced too high and you’re afraid of losing money, consider this: According to the U.S. Bureau of Labor Statistics, prices for housing were 50.88% higher in 2018 versus 2000, for an average increase of 2.31 percent a year. The average inflation rate for the same period was 2.07 percent. Home ownership beat inflation by 0.24 percent.

Mortgage interest rates hit all time highs in October 1981, when a benchmark 30-year fixed rate was 18.45 percent (with 2.3 points paid by the borrower), according to Freddie Mac. The lowest took place November 2012 at 3.35 percent with 0.7 points. At about 4.5 percent for a conforming fixed-rate for those with good credit, mortgage interest rates are tantalizingly low.

The best time to buy a home is when you want to, not when you think the market timing is best. Unless you have a crystal ball, you don’t know if prices and interest rates will recede, plateau and or rise. Look at homebuying for the long term, and you’ll be glad you didn’t wait.

As always consult your financial professional for interest rate information and advice.

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Don’t Worry About Rising Interest Rates

National average 30-year fixed rate mortgage interest rates have been close to or well under four percent for nearly a decade. They should stay that low forever, right?

Don’t bet on it. Low unemployment, rising salaries, fears of inflation and an increasing federal deficit are among many reasons why interest rates are expected to rise in 2018. What happens is that the Federal Reserve raises overnight borrowing rates to banks, causing banks to pass those higher costs onto borrowers. Car loans, credit cards and mortgage loans become more expensive.

But don’t let rising rates discourage you from buying a home. While you’re going to pay more for your loan in interest, with a correspondingly higher monthly payment, you’re getting higher standard tax deductions in 2018 ($13,000 to $24,000 for couples filing jointly, $6,500 to $12,000 for single filers.) Child care credits are more generous, and your mortgage interest payments are still tax deductible, up to loans of $750,000 or more.

According to the mortgage calculator at Bankrate.com, a home purchased by a borrower with excellent credit for $400,000, with 20 percent down ($80,000) and a benchmark 30-year fixed-rate mortgage at 4%, would have a monthly payment of $1527.73. If rates hit 4.5%, the same borrower would pay $1621.39 monthly, or a difference of about $94. Roughly, every increase of an eighth of a point translates to a little less than $25 per month more in your payment. As always, consult your tax professional for specific advice.

Compared that to the tax breaks you’re getting, you’re ready to go.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!

The Tax Cuts and Jobs Act for Homeowners

While most tax costs that affect homeowners are determined by the taxing authorities in each state, The Tax Cuts and Jobs Act will affect property ownership for everyone.

Unless Congress does some tinkering with the Act after it was signed into law in December 2017, corporations will receive a massive tax cut as individuals and married couples receive higher standard income tax deductions. Taxable rates are cut in all levels of income for individuals, and the standard tax deduction will double to $12,000. Joint filers will receive a deduction of $24,000.

Homeowners are used to deducting state and local income, property and sales taxes from their federal income tax, but those deductions will be capped at $10,000 annually for homes purchased after December 15, 2017. And the mortgage interest deduction will only be available to those with new mortgages under $750,000, according to Curbed.com, and for existing loans up to $1 million. The same deduction remains in place for second homes, says the The Wall Street Journal.

This could affect homeowners in high-cost areas such as California and New York but proponents of the Tax Act say doubled individual deductions should offset some, most or all of the difference.

Experts are unsure at this point whether or not the changes will affect the housing market, but it could have a terrific impact in some areas, if homeowners decide to wait and see what happens, lowering available inventory and causing prices to rise in mid-cost, high-demand areas like Dallas, Las Vegas and others. As always, please ask your tax professional for the best advice.

For more home tips, follow us on Facebook. Looking for a new home in the Kansas City area? Visit us at BHHSKCRealty.com!