If you are alive in 2017- you know that politics invades everything today! Everything! Well- I have often stated that if you are in real estate, then you are in politics. It weaves its way through ordinances, planning and zoning, taxation, environmental regulations, land ownership rights, banking and lending rules, insurance and liability issues- and the list goes on and on…
Right now- one of the big issues that NAR and the REALTOR® community as a whole are paying attention to is the NFIP (National Flood Insurance Program) expires on September 30, 2017. The US House of Representatives has a package of seven bills that address various aspects of the NFIP. One of the main things that need to be addressed is access to private market insurance.
To give a little background- the NFIP was created to provide incentives for communities to rebuild to higher standards and steer developments away from flood zones. In exchange, communities gain access to flood maps, mitigation assistance and subsidized insurance to prepay for future damage and recover more quickly from flooding. However, the program was not designed to absorb the catastrophic losses of the last decade such as Katrina and Sandy and now Harvey and Irma. As a result of the flooding catastrophes (pre-Harvey) the NFIP has borrowed more than 25 Billion dollars from the Treasury and is making interest only payments of $400 million per year.
RPAC is working hard talking to and meeting with legislators and their staff to give feedback on the different bills and getting their ideas on the measures. Every time the NFIP lapses, this country lose 40,000 property sales PER MONTH!! The country cannot afford to allow this program to lapse.
Some of the things NFIP deals with are: updating and checking the accuracy of flood maps, reducing some of the burdens from property owners of amending these maps and distributing updated maps. Reducing the risk of flooding is also a vital part of any flood insurance program.
Private insurance has been found to be a big factor in reducing the cost of flood insurance, and in many cases, property owners have been able to lower the costs of insurance by being able to shop private insurance.
This month- with Hurricane Harvey and Irma and the vast, destructive and deadly flooding that ensued after the hurricanes came through- it is critical that careful examination of this program is a priority. This affects not only property that borders lakes, streams and oceans, but also low-lying areas prone to flooding after weather events. Currently, property owners can’t access mitigation grant money until after the property floods despite it being more cost-effective to elevate or relocate beforehand.
The bottom line is- we all have to call for Congress to address seriously the issues with NFIP and to pass the package of bills to continue this program. Realtors® understand the importance of this and other issues that come up from time to time that affect Americans’ home ownership rights. We vote, we act, we invest!
Peggy R. Smith is the Association Executive for the Old KY Home Board of REALTORS®, she holds a Broker’s License in the State of KY, GRI and E-Pro designations. The Old Kentucky Home Board of REALTORS® owns and operates the MLS for the Nelson, Washington, Marion, Larue and Hart Counties in Kentucky and is a member of Kentucky Association of REALTORS® and National Association of REALTORS® since 1965
Confidence, Inventory or Lifestyle
According to the Wall Street Journal article this past summer, the U. S. homeownership rate is at the lowest level in more than 50 years. That’s quite a shocking number and honestly very puzzling when you look at a world where the home mortgage interest rate is and has been hovering in the 3-5% range for several years now. If someone had told me when I started my career in the real estate industry back in the mid 90’s I’d say that’s crazy. And back when I bought my first home (in the early 80s) the home mortgage rate was 18%! Yes- you heard me right- 18%!!
So what is holding everyone back from jumping into the market and buying right away? I’d say Confidence, Inventory, and Lifestyle.
A lot of what we are hearing from recent college graduates, first- time home occupiers and millennials is that the jobs are not as plentiful as they thought they would be after graduation and their focus is upon landing a quality job in an area that they would want to stay in for longer than a year or two. Therefore- some first time home buyers are delaying the purchase of their first home. Here’s the good news for these buyers; since Kentucky is lucky enough to be served by KHC (Kentucky Housing Corporation) they have lots of low interest and special loan programs for first time homebuyer. Also the Rural Housing Service offers 100% financing for buyers in the rural cities and towns in Kentucky. Unfortunately, RHS loans are not available in the larger cities and counties. Check with your lender often to keep track of which loans work for you. The terms and benefits of many of these special programs should boost the confidence of the buyers just entering the market since many of them are tailored to help “home-starters”.
One of the factors contributing to the low rate of homeownership is the inventory or availability of homes for sale in the area. The availability of homes for sale has fallen drastically since the foreclosure crises either shut down or slowed the builders in the area. The flow of money into development of builders’ lots and building of new homes on speculation has slowed as a result of new lending regulations and caution in the area of new construction. At this point- something’s gotta give.
The supply and demand philosophy tells us that the inflation rate should be rising exponentially, but thankfully the moderate salaries in the area have helped keep down the inflation rate simply based on affordability. If inventory is keeping you out of the game- that’s when you find a partner! A REALTOR® whose job every day is to find the houses- shake the bushes, know the builders and their plans and have real time and accurate access to new listings as soon as they hit the market.
Finally- there is a significant block of people whose lifestyle does not include home maintenance, lawn mowing, and a car drive to the market. Maybe urban apartment living is more your style. Maybe a neighborhood of patio homes, townhouses and/or condos sound like it fits the bill for what you’re looking for. Millennials on the move and empty nesters looking to slow down or travel more and simplify their lives- listen to me! You can still use real estate to build wealth, generate income without the lifestyle compromise! Be an investor! Think outside the box. Buy a couple of small homes as rental property. Buy a commercial building for the income and an upstairs for potential living space. Commercial to residential conversions or combinations are becoming more popular and not so unusual. Find a good REALTOR® with experience with commercial dealings and connections. Check with an accountant about getting a good return on investment (ROI) and how to calculate a good deal. Once you have made some good real estate investment decisions- then you should be able to generate some “lazy income” through rent or resale of a wisely purchased property.
Whatever the reason for not being a real estate property owner yet- I hope you’ll keep the word “yet” in the conversation. Real estate remains one of the best and most reliable investments there is. Don’t miss the chance to take advantage of a good buying climate.
Peggy R. Smith is the Association Executive for the Old KY Home Board of REALTORS®. The Old Kentucky Home Board of REALTORS® owns and operates the MLS for the Nelson, Washington, Marion, Larue and Hart Counties in Kentucky and has over 50 years serving our local area.
Member of Kentucky Association of REALTORS® and National Association of REALTORS®
Bonjour mes amis – de Paris – Las Vegas – qui est
When you live in the Most Beautiful Small Town in America– and you want to plan a little getaway for a few days with a group of friends- where do you go? Well- Las Vegas, of course! Need to get that heart beating? Ruffle those feathers a little bit? Lights, sounds, shows, cuisine, cocktails, gambling and pampering! Count me in!
The Vegas crew
Don’t get me wrong- I do love my sweet hometown and would never trade it for the city life, but I have to admit I was extremely excited to flip the switch on for a few loud and rowdy days in the City of Lights! Our group of friends have been saving up Total Rewards Points to be able to get complimentary rooms for the trip and we settled on one of the Total Rewards Properties- The Paris Hotel in Las Vegas. The 4 night stay…
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Let’s Address the Big Turkey in the Room!
Well, we just finished off the last of the leftover turkey and pumpkin pie at my house and I’m squarely focused on getting my home ready for Christmas. But before I move on- I want to share some thoughts I’ve had over the last few weeks. My thoughts might be viewed as stupid, naïve, controversial or idealistic, and completely off the topic that this column is intended for. But- hear me out, and read this through, maybe you’ll agree.
Before we sat to eat our feast Thursday, we all took a moment to speak about what we were thankful for this year. Of course there was the usual thankful for God, family, good health, jobs, love, Louisville football, etc… These are all valid and honorable and all on my list of things for which I thank God.
Well, another thing to be thankful for – is being able to live freely in this great country of ours. Do you know how many people risk their very life just for the chance of living here? This is the greatest country on the planet. “ That is, the typical person in the bottom 5 percent of the American income distribution is still richer than 68 percent of the world’s inhabitants.” ~ “The Haves and the Have-Nots,” a book by the World Bank economist Branko Milanovic
Are we perfect? No. Are there bad guys who live here? Yeah. Do we work hard every day to get better and sort out the good guys from the bad guys? Every day. The job is never done, and there will always be more work to do.
Now- having said that- I’l
l get back to real estate. There is really not anyone that can’t have
a home of their own in this country. There are ways for everyone with the desire to make that move. In this country, we have 100% financing, down payment assistance, grant money, credit repair assistance, single parent subsidies, rural housing grants, disability programs, even Fannie Mae backed loans that allow buyers to pool incomes of other occupants to reach the debt- to- income ratios. One thing, though, you have to at least try to be responsible for your decisions that either set you up or block you from taking advantage of these programs.
Can you curl up in a ball and cry when things in life don’t work out the way you want them? Not if you want to live your best life. Can you protest the day away when there are employers out there begging for employees who will show up for work and pass the drug tests? Can you come to the table with nothing to offer, but everything to complain about? Can you fix things for those you consider less fortunate? Not really. Soon- and very soon, there will be fewer people taking responsibility for their own futures and more people expecting the future to waiting for them on a silver platter.
Our country needs to help people out so that they can achieve a little bit of the American Dream- and we do, in all the ways I listed above. But if we really want to help- let’s form Citizen-Realtor partnerships that will create plans to buy a home, or set people on a path that will allow them to do so in the future. There is nothing you can do about those who choose to live irresponsibly and never even try to make
their life better. And there is no President who can fix apathy, complacency and laziness. A person who would steal, kill or destroy the property of others will not wake up on the other side of the law because of the outcome of an election. But it is PROVEN that the pride of homeownership increases the sense of optimism, belonging and the satisfaction that you are investing in your future and your community.
Partnering with a REALTOR® is the same as having a coach who is on your side and helping you develop the skills and/or a plan. For starters, working steadily in a job with the patience and work ethic to achieve advancement and income increases- thereby allowing improvement in credit footing. Then targeting your first realistic goal in homeownership; establishing yourself as responsible and moving up as your income and lifestyle will allow it.
Yeah but…. No but- just try it. Find yourself a REALTOR®, meet with them, talk about what you want, listen when they advise you, and be willing to ask for specific steps to your brighter future. “Homeownership Matters” is a slogan developed years and years ago by NAR to focus on working to make the dream of homeownership attainable for all Americans!
Peggy R. Smith is the Association Executive for the Old KY Home Board of REALTORS®; Established May 11, 1965. The Old Kentucky Home Board of REALTORS® owns and operates the MLS for the Nelson, Washington, Marion, Larue and Hart Counties in Kentucky and is a member of Kentucky Association of REALTORS® and National Association of REALTORS®
Your Home and Retirement
With the volatility of the markets (money market, stock market, mutual funds, retirement accounts, 401ks and IRAs) Americans are asking themselves some hard questions these days about their preparedness for retirement. One of the main sources of equity in many households- especially older and lower income people- is their home. Can older homeowners use home equity to help finance their retirement? It all shakes down to 3 things…
1) the value of the home;
2) the amount of debt on the home and
3) other sources of retirement income.
Dealing with this question, the Urban Institute recently did a study trying to understand how home equity varies today compared to before the recession and the housing bubble. Using the study’s findings- the average elderly homeowner grew from $117,000 to $166,000 between 200- 2006. As of 2012- however, that equity has fallen to $129,000. The good news for today’s senior citizen- that value is once again on the rise. So in the next few years, a home equity line of credit (HELOC) or cash out refinance or second mortgage might be a good idea. Along those lines- with housing supply being so low and the demand being on the rise- maybe selling your home and banking the profit might be one of your options.
Once a senior homeowner has established the value of the home- look at all outstanding debt on the home and decide if there is enough equity to offset the costs of selling AND relocating or refinancing. Talk to your lender about the possibility of a reverse mortgage.
A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance.
With a reverse mortgage- instead of making payments- the home makes payments to you (through your lender) – and you can’t outlive your equity. Details are available on the HUD website http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/hecmabou
As any competent financial planner will tell you, retirement planning should be diverse, and started at an early age. The sooner the better! And don’t rely solely on Social Security- as it was never meant to be the primary source of retirement income. But one of the most overlooked sources of investment that can be converted to retirement income- real estate remains one of the best deals out there for managers and accumulators of wealth. I’m not just referring to income producing real estate- such as rental property; but what I’m specifically referring to today is your primary residence.
Retirees- and those closing in on those retirement years- keep your eyes on maintaining your home and retaining equity. It’s about being mindful and fully aware of your options for unlocking the potential for you residence to provide for you in your retirement years.
Working age Americans- real estate remains one of the most stable forms of wealth building that there is. Buying land and watching it grow, buying rental property and watching other people pay it off for you and owning your own home and providing shelter while building net worth are all good reasons to pay close attention to the real estate market and to establish a good working relationship with a working REALTOR®.
“If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much.”
– Jim Rohn
SELLING THE FAMILY HOME
In all my years of selling real estate I have had the pleasure/ responsibility of selling a home for families who have years or even generations of living , loving and memories as a family. In today’s world where families are smaller, and spread out across the country- the likelihood of passing on a family home to younger generations is not as much an option as it might have been in generations past. So when the decision is made to sell a home that has served as home base- it comes with regret, resistance and sometimes unrealistic expectations.
When a family looks lovingly at all the dents and dings and flaws that come from years of growing and living in a home like families do, they smile and chalk it up to charm and a distinguished weathering of the home. When a buyer looks at the same- they see repairs and imperfections that will need to be dealt with- and which will lower the value in their mind. Always try to get an objective opinion about what needs to be replaced, repaired or removed. A pre-sale home inspection can serve you well especially if you have lived in the same home for many years.
Some people have the tendency to lose track of how time flies as life goes on. For example- I was talking to someone about how many years I have lived in my current home. When I moved into my home- it had a new roof, new furnace and new water heater, etc. Then I realized I had actually been there for 14 years. So- if it seems like just yesterday that you replaced that roof, or that major system or appliance- realize that it might have been longer than you think and that the life of the item may be approaching its life expectancy. It is wise when selling an existing home to purchase a home warranty. There’s no way you can guarantee or predict the life expectancy of your home systems. But you can purchase (for around $400-500) a warranty that will cover the failure of certain things in a home. Make sure you read your home warranty – especially the exceptions before you purchase it. Here’s a little insider tip- if you purchase certain home warranties, they will cover losses during the listing period for no extra charge- then start the warranty after closing. Be sure and ask your REALTOR about this, and have it verified by the home warranty company.
If you’re a buyer- always be sensitive when buying a family home- emotions can run high as memories of years of happy times spent there seem to come flooding back. That “hideous” wallpaper might represent a special time for the family and although the wallpaper may indeed be the worst thing you’ve ever seen, be careful to spare the family from your observations.
One of the most touching memories I have of selling real estate was after closing on a home where the family was “parting ways” and I came into the room where the mother was sitting on the steps looking
into an empty room holding a tiny little sock and sobbing openly. “Some of my life’s happiest memories
were spent here- it just hit me that I’m leaving here forever.”
You can’t separate or eliminate the emotions- but you can prepare for it and be sensitive to what may
trigger good or bad vibes when dealing with selling or buying a family home.
Football, Real Estate and Business in general- it’s 4th Quarter- Let’s go!!
Here we are- it’s the 4th quarter, are you going to fold, or finish strong? It’s one of those checkpoints when we take stock and decide how the last quarter of the game is going to go. In business, as in sports, it takes a strong effort all four quarters to get the job done and leave the game knowing you gave it all you have.
Are you a touchdown or two behind? Do you need to up your goals for the next three months in order to meet your mark for the year? Time to take stock about where you are and what you need to do to reach your goal for the year. Break it down into # of sales per month to meet your benchmark. Go back and make a list of any unfinished business that you can pull together. Set a daily task list including # of calls, sphere of influence visits, social media posts, networking opportunities. Set goals in each of these areas and hold yourself accountable to complete these tasks EVERYDAY. Meet every contact armed with at least three reasons why now is the best time to list or sell. Study your market- know your market and be ready to answer any concern. Push yourself completely out of your comfort zone and go for the score every time you step onto the field of play!!
Are you ahead of your plan and thinking that you might want to coast through the last quarter? Listen to me- with a market as unpredictable as our market has been in the last few years, you’ve gotta “make hay while the sun shines”. Don’t do anything that doesn’t live up to your normal standard of work. Keeping the pace all the way until the end of the year is an exercise in discipline and financial ambition. Do some things that will set you up for a great start for 2016. Challenge yourself to set a whole new standard for yourself. Set a new record for yourself! Let your competitive self show-off a little. Then start to look at you next years’ game plan and ask yourself if maybe you have set the bar too low. Play all four quarters with all you’ve got and see what you’re capable of!
Ahead or behind- I always believe that the best work is sometimes in the last quarter of any game. Refocus; up the intensity; and finish the year strong!!
Myth Busters
Here I sit, after 5:00 and still at my desk trying to decide what I can bring you this week that will spark your interest and maybe give a little insight to help in your home buying or selling experience. This week I’m going to tell you what I hear from buyers and sellers about how they feel about the process and give my perspective…
“Real estate agents- you can’t believe them, they’ll say whatever they think you want to hear!” First, most of the licensees in this area are REALTORS® and subscribe to the REALTOR® Code of Ethics and make every effort to be honest and fair in their dealings with clients.
88% of sellers were assisted by a real estate agent when selling their home.
Sellers who definitely would use same agent again: 65% Source: 2014 National Association of REALTORS® Profile of Home Buyers and Sellers
Second- it’s up to YOU to meet, interview and get to know your REALTOR® and establish that trust that goes beyond having seen a name on a sign. Hiring an agent is a serious part of the process and it’s YOUR RESPONSIBILITY to make a good hire based on good information! Then, make it clear what your expectations are- if you find yourself challenging everything your agent tells you from a professional point of view- then perhaps that agent is not the right one for you, because you need to trust their expertise. A good agent can back up his suggestions and analysis with facts and they’re happy to provide that information. Ask for data or information if you deciding value in either a sale or purchase. Every now and then you’ll come across an agent whose communication style leaves you feeling unsure. Keep looking until you find that right fit! Ask for data or information if you deciding value in either a sale or purchase.
“I can save so much money if I sell my home myself. All they do is put the sign in the yard and collect the commission.” Ahhh, where do I begin on this one? The sale of your home is mostly dependent on proper pricing and marketing to the right people. Proper pricing comes from doing a thorough analysis of the recently sold properties similar to yours as well as a comparison to those similar properties currently on the market.
FSBOs accounted for 9% of home sales in 2013. The typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales. Source: 2014 National Association of REALTORS® Profile of Home Buyers and Sellers
Access to all this information is hard for the average person to obtain and sort through. And marketing to the right people- the MLS is the first tool your agent uses to advertise your property, REALTOR.com, is another and company websites, print ads, virtual tours, sign recognition, social media and referral networks are all things you just can’t provide for yourself! That doesn’t even cover what it takes to qualify your buyers, schedule and show the house, negotiate the contract, oversee the proper execution of the contract including inspections and other contingencies as well as seeing to it that everything from “contract to closing” goes smoothly. If any one of these parts is not right- you could find yourself still owning your home much longer than you wanted to, or ending up with a deal that falls apart. Is it worth it? Absolutely –YES!
“We should just low-ball every offer until we find the one that they’ll accept.” I completely understand anyone trying to get a home for the best price possible, and actually prefer someone making the low offer as opposed to not making the offer at all. My advice is different for the buyers than the sellers. For the buyers- be careful not to be so low that the offer is offensive to both the seller and their agent. If you waste too much time making offers so low that the people won’t even respond with a counter offer, then you might be creating a reputation for yourself as not being a serious buyer, and in fact, you could lose YOUR agent if your offers are too far out of range. Honestly, after 3-4 offers with no counter offers, I would probably question your strategy and sit down and rethink some of it. At least if you get a counter offer, you are still alive and the seller believes there is a chance of arriving at an agreement.
To the seller- when a low offer comes in- try, try, try not to get mad! It’s just the opening of the conversation, you have all the power to say yes, no- or make a counteroffer. Work the offer until it won’t work anymore! My advice- if you keep getting offers in about the same price range from different people- it’s time to rethink price! The market determines the value and if it keeps coming in at about the same price… well there it is. Sadly, it doesn’t matter how much you paid or how much you have put into your home- it’s all about how much the public is willing to pay.
Peggy R. Smith is the Association Executive for the Old KY Home Board of REALTORS®. The Old Kentucky Home Board of REALTORS® owns and operates the MLS for the Nelson, Washington, Marion, Larue and Hart Counties in Kentucky and is celebrating 50 years serving our local area. Member of Kentucky Association of REALTORS® and National Association of REALTORS®.
Before You Turn Out the Lights…
It’s time to wrap up another day, and you’re already looking forward to your “after work” routine to kick in! Before you leave, do at least 3 more things! Allow a maximum of 5 minutes for each thing. Think of this as your last chance to end the day on a productive note or to get a head start on tomorrow’s agenda!
- Call one of your more high maintenance clients to give an update or report, just to let them know that you are on top of things! If you can’t reach them, then leave a detailed message and invite them to follow up with you tomorrow. If you sound confident and composed, your client will feel that you are taking care of business for them and their trust in you will be strengthened.
- Compose and sendout an email to your prospect list that is designed to generate leads or referrals. It may…
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Where Do You See Yourself in Five Years?
Are you a twenty-something trying to break out into the world on your own? School, college, technical training behind you? This is the time in your life when you want to set the world on fire and you’re chomping at the bit to get started.
Set your Goals. Whether or not you’ve found that perfect job, if you’re out there working- you need to set goals and priorities. Start with the age-old question- “Where do you see yourself in five years?” Go ahead- be as idealistic and optimistic as you want! Dream big! Let me help you- just a little. Before you leave this decade- you should own your own home!
You know what a budget is, spend less than you make! Count your savings every month as part of your living expenses. Go ahead- do it now. Set up an automatic withdrawal that is manageable from your checking account to go into your home fund.
Step up your Effort. There will never be a better time than now to go “all in” toward that dream of homeownership! Work hard, take overtime, take a second job, and save hard!! There is no better feeling than to know you are on the path to something important- and you can visualize what getting there looks like!
Slow your Expectations. As in the story The Tortoise and the Hare, slow and steady wins the race. That’s true at least as far as expectations go. In this fast paced world of immediate gratification, this one might be harder to accept, but in every case, the one who makes steady and deliberate process towards their goals will exceed the normal success rate!!
Expect to Fail. What can I say? Failure is a part of life (especially if you’re challenging yourself). Nobody gets it all right- all the time. Don’t run away at the first sign of difficulty. For every question or problem- there is a solution. You just have to have the perseverance to keep looking for answers and the courage to ask the right questions. It is in the moments of setbacks and failure that we usually find the most clarity. So don’t give up!
Find a Partner. I don’t mean get married. I mean find a person that will sit down with you and help you prepare for your goal of homeownership. A REALTOR® is the person who can find out what your big dream is and someone who understands your priorities and the vision and has the patience to help you achieve that dream. Like getting married- you might have to date around a little! Meet with several Realtors until you find someone who you have a good rapport with and whom you can be honest with about your financial situation- AND you feel will be honest with you about how best to meet your goals. Your Realtor partner needs to understand clearly what your goal is- and be committed to help you get there.
Take Baby Steps. If you dream big (and I hope you do) your Realtor may end up showing you ways that you can get there in stages- stepping up to the ultimate dream. Don’t accept no for an answer! If you can’t have what you want today- at least have a plan to get it or to move a step closer. Buying your first “starter house” is a great way of inching you closer to your next home. You learn the process of buying a home, you get to assume all the responsibilities of owning a home, you get to learn more about what you want and don’t want in your next home. It may be your practice home- but you might just love it enough to stay there forever! Either way- it’s YOURS!
“A journey of a thousand miles must begin with a single step.” ~Lao Tzu
Peggy R. Smith is the Association Executive for the Old KY Home Board of REALTORS®. The Old Kentucky Home Board of REALTORS® owns and operates the MLS for the Nelson, Washington, Marion, Larue and Hart Counties in Kentucky and is a member of Kentucky Association of REALTORS® and National Association of REALTORS®
~~~~~ All About Real Estate, Kentucky Style ~~~~~~ by Peggy Smith 
