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      Blog :: 10-2016

      Do You Know the Cost of Renting vs. Buying? [INFOGRAPHIC]

      Do You Know the Cost of Renting vs. Buying? [INFOGRAPHIC] | MyKCM

      Some Highlights:

      • Historically, the choice between renting or buying a home has been a close decision.
      • Looking at the percentage of income needed to rent a median priced home today (30%) vs. the percentage needed to buy a median priced home (15%), the choice becomes obvious.
      • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

      3 Questions to Ask Before Buying Your Dream Home

      If you are debating purchasing a home right now, you are probably getting a lot of advice. Though your friends and family will have your best interest at heart, they may not be fully aware of your needs and what is currently happening in the real estate market.

      Ask yourself the following 3 questions to help determine if now is actually a good time for you to buy in today’s market.

      1. Why am I buying a home in the first place?

      This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money.

      For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”

      This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons people buy a home have nothing to do with money. They are:

      • A good place to raise children and for them to get a good education
      • A place where you and your family feel safe
      • More space for you and your family
      • Control of that space

      What does owning a home mean to you? What non-financial benefits will you and your family gain from owning a home? The answer to that question should be the biggest reason you decide to purchase or not.

      2. Where are home values headed?

      According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

      What does that mean to you?

      Simply put, if you are planning on buying a home that costs $250,000 today, that same home will cost you an additional $13,250 if you wait until next year. Your down payment will need to be higher as well to account for the higher home price.

      3. Where are mortgage interest rates headed?

      A buyer must be concerned about more than just prices. The ‘long term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates.

      The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase over the next twelve months as you can see in the chart below:

      Mortgage Rate Projections | MyKCM

      Bottom Line

      Only you and your family will know for certain if now is the right time to purchase a home. Answering these questions will help you make that decision.

      Think You Should Try to Sell Your Home By Yourself? 5 Reasons to Think Again.

             

      Think You Should FSBO? 5 Reasons to Think Again!

      Think You Should FSBO? 5 Reasons to Think Again! | MyKCM

      In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

      Here are the top five reasons:

      1. Exposure to Prospective Buyers

      Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at 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?

      • 44% on the internet
      • 33% from a Real Estate Agent
      • 9% from a yard sign
      • 1% from newspapers

      The days of selling your house by just putting up a sign and putting 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 More And More Difficult

      The paperwork involved in selling and buying a home 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 8% over the last 20+ years.

      The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

      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.

      Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

      Bottom Line

      Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

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