Kansas City North Real Estate Blog

Looking for a Real Estate Deal in Kansas City

You know everyone is looking for a "Deal" these days, but what most real estate buyers don't understand is that sometimes the "deals" aren't so obvious at first glance. Most buyers today assume that Short Sales and Bank Foreclosures are where the deals are, but I've personally found that Relocation sales and even regular home sales can also be some fantastic deals as well.

For example, I just recently sold a home that was a Relocation sale. The original homeowner had negotiated a "buy-out" option for his home since his employer wanted him to move to California quickly. In April 2011 we got two appraisals for the home with an average suggested value of $435,000 and the company bought his home.  

After buying the home, the employer/company contacted me to sell the home. Because the company didn't want to hold this property for more than a few months, we put the home on the market at $420,000. With an appraisal price of $435,000 I thought this home would sell pretty quickly at a discounted price, but unfortunately when we put this home on the market there was a lot of competition in the area so we ultimately had to lower the price two times. We finally got a buyer several months later and negotiated a final purchase price of $365,000. A $70,000 discount!! Now that's what I call a deal.

Another buyer I was working with was willing to pay full price for a great home priced at $165,000.  This week the appraisal came in at $188,000!!! This was NOT a short sale or a bank repo.  The inspections were very clean and it's a great home.  The seller just needed to sell and had it aggressively priced. 

If you're looking for a deal in Kansas City, give me a call and let's see if we can find YOU a great deal on a home.

 

Ron Henderson, Keller Williams Northland Partners, Kansas City MO 816-651-9001

 

 

30% of Home Sales Don't Close On Time

According to a recent survey of Keller Williams agents across North America, the majority of homes close on time, but what can keep a home from closing?

Common Reasons for Delayed Closings

1. Short sale approval took longer than expected

2. Appraisal issues

3. Lender took too long

4. Loan underwriting took longer than expected

5. Additional documentation needed

6. Buyer did not provided documents to lender in a timely fashion

7. Home repairs needed to be conducted

8. Could not close with an active dispute on credit

9. Additional requirements by down payment assistance program

10. FHA loan requirements took additional time to complete

11. HOA application

12. Escrow company did not complete all required activities in a timely manner

13. Title issues

If you'll notice, 8 of these have to do with the lender. That's why it's so important for you as a consumer to go with a lender recommended by your real estate agent.

There are a ton of mortgage companies out there which give you a lot of options as far as who you'd like to work with. The fact is though, that in the end, you are only going to work with one lender. Your agent on the other hand, has had the opportunity to work with lots of lenders, because sometimes clients come to their agent with the lender already chosen. Thus the agent is forced to complete the deal with a lender they don't know. The agent quickly learns who is a good lender and who is not.

So when you're buying a home in Kansas City and your agent gives you some lenders to call, be sure to do exactly that. Your transaction is much more likely to close on time if your agent already has a relationship with your lender.

The lender wants to keep the agent happy so that the agent continues to send them business. Additionally, the agent gets absolutely no financial gain from recommending a lender to you. Lenders are prohibited by law from paying agents for referrals. The only advantage an agent gets when you choose a lender they recommend is peace of mind! And that means YOUR transaction is more likely to be a piece of cake rather than a delayed mess!

-Elizabeth Gilbert, Licensed Executive Assistant

Stop the Madness! - Kansas City Appraisals

I have a home in Northview Place in Kansas City North that was custom built by my sellers. They used a great builder and took one of his floor plans, then maxed it out with everything - granite, Wolf appliances, custom finishes, tons of trim, landscaping, security systems.  You name it; it's in this home.

Anyway, it’s been a somewhat challenging sale over the course of the last year, but we started at what they had in it around $440,000. At the time there were 2 other homes priced higher than ours in the subdivision.  The seller is a doctor and moved to St. Joseph MO to take a partnership at the hospital there. They’ve been wonderful to work with and I’ve been disappointed that we’ve had to drop the price down to $390,000 to find a buyer.  

We’re under contract at $387,000 and the seller is bringing around $20,000 to the table to get it done, but is willing to do that.  This last week we got the appraisal back and it came in at $370,000 - $17,000 UNDER our sales price!  Honestly, I wanted to be sick, but I’m the type to take 10 minutes to cool off, then dive in there and figure out a plan.

Long story, short – I think we have a worst case scenario plan in place and a best case scenario in place, but more importantly the buyers are not freaking out and still want to buy the home. I'm probably lucky there isn't another agent involved (buyers were unrepresented) because it sure makes it a lot easier to talk to them in person without another agent in there.

When I went over there to speak with the buyers at their home, as soon as we sat down at their kitchen table, the wife said, "Ron, before we get started, can I say something first"?  I thought to myself, "Oh no, they're nervous and want to back out,” but then she surprised me.  She said, "We LOVE this home and we want it bad. We've seen quite a few homes before this one and we simply do not understand how this appraisal came in so low. We don't believe the appraisal can be correct because we're 100% sure this home is a fantastic deal at our agreed price, but the bank is telling us they won't loan us the money and can't change the appraisal.  How can we make this work because we don't want to lose this home?”

Obviously I breathed a huge sigh of relief and then began to explain my plans for a best case and a worst-case scenario. I told them sometimes the lender will allow us to contest the appraisal, but in this particular case it appeared to me that their lender didn’t care to discuss it. I suggested we simply start over with another lender and that’s what they’re doing.

As I asked around my office this week, I heard other horror stories of buyers that backed out completely, sellers that took their homes off the market, and deals that were killed even though we had a buyer willing to pay what they felt was “fair market value”.

Think about how many people are involved in this and how it’s a lose-lose situation. You typically have two agents, a lender, a buyer, and a seller at minimum; that’s five people, but you may also have that many people involved again if the sellers were going to buy another home in that same area.

As I told this story to several people in my office this week, I realized that this is MADNESS and where does it stop? Believe me, I do understand how we got to this point, but it just seems like there’s got to be a better way.  Banks and appraisers will need to let up a little as we move forward. If a buyer is willing to pay a certain price and a seller is willing to sell it at that price, then that's the TRUE market value!!