John Yoder Team Blog

With interest rate hikes, we will likely see a correction in the housing market. For most, that's good news— we love a balanced market that takes the pressure off of both buyers and sellers. But in the mean time, it kind of leaves everybody wondering what to do in order to make a reasonable real estate move.

Sellers may be concerned about their listing's profit potential as more and more buyers are priced out of the market by higher home prices and higher interest rates.

Buyers, of course, are concerned about more expensive loans and whether or not they can make something happen before interest rates increase again.

And while interest rates are still low historically, we are absolutely in the midst of an affordable housing crisis because of inflation.

So, what can be done to help ensure successful real estate transactions, protect profitability, and ease the burden on today's home buyers? We have a solution that might be able to help you!

Consider an assumable loan option. 

With an assumable loan, the buyer takes over the seller's mortgage, and the seller is released from further liability for the loan. 

This is powerful because it allows the buyer to finance the majority of the purchase at a lower interest rate and make up the difference between the remainder of the seller's mortgage and the purchase price through a higher down payment or a second mortgage. While the second mortgage will have a higher interest rate, the principal payment will be much lower.

We highly recommend that if you're considering selling your property and your loan is assumable, that you advertise your willingness to re-assign the loan at your interest rate. This will increase your property's appeal in the marketplace, which mean stronger offers.

If you're a buyer, we highly recommend that you seek out properties that might offer an assumable option so that your loan is less expensive. If the mortgage payment is less than you qualify for, you can potentially be more competitive on price, securing a better chance at scoring a great property without breaking the bank.

So what loans are assumable?

You definitely want to check with your loan servicer, but most loans that are backed by the government (i.e. FHA, USDA, and VA loans), or loans that are kept in-house (portfolio and some conventional loans), could be eligible.

Also, it's important to understand that the buyer is going to have to qualify for the terms of the loan. If they are ineligible through the servicer, then they will not be able to assume the mortgage.

We hope this advice helps, and we would be happy to discuss this further with you! If you have any questions, don't hesitate to reach out.

Til next time,

Cassie Johnson

Key Realty - John Yoder Team

How to Increase Your Chances of Success With Negotiating Remedies

So, you've gathered all of your inspection reports for the house you plan to purchase, and you've found that you're not comfortable with the current condition of the home. What can you do?

First of all, no one can force you to buy a home you're not comfortable with. In Ohio, the inspection contingency allows you to terminate a contract based on inspections. But you also have the opportunity, through an agreement to remedy that might allow you to purchase the home with the repairs you need in order to feel comfortable.

This is another round of negotiations and, at times, it can be more tough than the initial contract negotiations. So I have three tips to help increase your chances of success!

1. Be reasonable. There is no such thing as a "perfectly conditioned home." Even new builds can have flags on an inspection report. Make sure you are negotiating repairs of things that are truly concerning to you. Nickel and dime-ing a seller is a great way to insure a break down and bad blood during negotiations. Make sure you have an in-depth conversation with you inspector about which condition items should be addressed prior to closing.
2. Gather estimates to provide with your documentation. You'll need to provide the sections of the inspection report that are relevant to the request to remedy, but it's also helpful to provide a quote for the work. This requires a little more coordination on your part, but it provides so much clarity for you and the seller, which might prompt and easier and faster negotiation process. Further, if the seller chooses to deny your request, you also have clarity on the cost of repairs should you choose to move forward anyhow.
3. Consider a credit from the seller for the cost of future repair. If you're comfortable closing with the property in its present condition, but concerned about repairs for items on the report, consider asking the seller to cover a portion of your closing costs in lieu of repairs. This gives you some extra cash on hand to do the work yourself. If the seller is looking for an easy path forward, this is a great solution. If they would rather control the cost, they may opt to have the work done prior to closing.

I hope these tips are helpful! If you have any questions, feel free to reach out to us at johnyoderteam.com/contact and speak with an agent today!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

What You Should Know About Ordering Inspections on Your Next Home!

When you enter into contract on a property, the first two weeks or so can feel overwhelming. This time frame is where you're doing your due diligence to learn as much about the property as possible through inspections. Most buyers, though, don't know exactly what inspections they should be ordering or how to prepare. So, I'm going to break everything down and discuss the types of inspections that are beneficial to most home buyers.  

Before I do that, I want to mention budgeting. The buyer is likely going to responsible for all of the costs associated with generating reports on the condition of the property. I always tell my clients to budget between 600 to 700 dollars for this process, but if the situation arises that additional inspections are required, you could spend over 1,000 to get a clear picture of the condition of the property. 

Your agent should be able to point you in the direction of reputable inspection contractors that can be hired for reasonable fees, but the inspections you have performed and who you choose to perform them is entirely your decision. We generally suggest between four and five companies that we've worked with for your to research and make a decision.

Let's dive in to the types of inspections you should be considering. 

-First is going to be the general home inspection. This inspection will generate a report that will give you an overview of the condition of the home in general, including the roof and mechanicals. Your inspector will likely make comments on things that need repaired or replaced for the home to be safe. 

-Next is a gas line inspection to determine if there are any gas leaks on the property. 

-You should also consider a wood destroying insect inspection to examine whether or not there is any past or current activity that needs addressed. 

-If the property is not on city water and sewer, you're also going to want the well and septic system inspected so that you can make sure those systems are functioning properly. 

-Another inspection that has become common recently are the radon inspection, which will tell you whether or not the home meets the standards for the hazardous gas of radon. Radon is a carcinogen that can increase your likelihood of developing lung cancer when exposed to high amounts over decades of time.  It's common, especially in Knox County, to have radon levels that are higher than recommended, so you want to get an idea of what the level is at the property you're purchasing. 

-Finally, if you're purchasing a home that is on city water and sewer, and that home has been around for a century or longer, your sewer line might be made of clay tile. These systems, over time, might crack, so you want to consider having the sewer line camera'd. This will give you an idea of whether or not there is damage to account for repairing. 

It is possible that the property you're buying will require additional inspections. Your inspector will be able to direct you to more specialized reports that should be gathered, should the need arise. A common example is if there are noted structural concerns, your inspector will likely recommend that a structural engineer examine the property's integrity. This is also common with mold found in a home. While mold is likely to be found in any home, a mold mitigation company can identify whether or not there are toxic molds present.

You will have a specific period of time written in your contract for inspections. By that deadline, it's important that you have all of your reports on hand so that you can have the clarity necessary in order to move into the Agreement to Remedy phase. We'll cover that next in our Buyer Education Series.

We hope you're finding this information helpful! If you would like to speak with an agent about your real estate goals, don't hesitate to reach out to us at johnyoderteam.com/contact.

Till next time,
Cassie Johnson
Key Realty - John Yoder Team

How to Structure a Competitive Offer

So you've gone on showings and you feel like you've found a property that meets your needs. What's next?

Well, you're going to need to offer to purchase with hope that the seller accepts your offer— we call this entering into contract. If you've followed our advice so far, you have your pre-approval letter, you've looked over the disclosures on the home, and your stellar agent has answered your questions about the property. So, you've done everything you need in order to prepare to make an offer.

But if you know anything about the market right now, there are more buyers than there are homes available. That means you need more than just an offer. You need to make a competitive offer. So how do you do that?

Hopefully, you and your agent discussed competitive strategies in the buyer consultation. If not, you'll want to have that conversation. They will likely have advice for you, but it should include some combination of the following:

1. Your agent should be reaching out to the listing agent right away to see if the sellers are looking for anything in particular in an offer. Often, sellers are appreciative of extended possession after closing, earnest money, or shorter inspection periods, etc.
2. Escalation clauses are a good way to be competitive on price that still protects you. With this clause, you can offer to pay a certain dollar amount over the highest offer, so long as it does not exceed the cap amount that you determine for yourself. The purchase price can land anywhere in between your offer price (likely the asking price) and your cap.
3. Appraisal gap clauses also help make your offer more competitive, and they add a lot of meat to your offer if you use the escalation clause or offer over asking. If you have more cash that you can use to close the deal, you can offer to cover any gap that may occur between the contract price and a low appraisal. This will give the seller more confidence that the deal will close at the price agreed upon.
4. It's also important that you have a pre-approval with a reputable and local lender that the sellers will feel confident in. Find someone who has the reputation of closing deals, and closing them on time.

Last year, many buyers were waiving home inspections all-together in order to be more competitive. We strongly discourage waiving inspections unless you have extensive experience as a home inspector yourself, or as a contractor. As an alternative to waiving inspections, discuss shortening your inspection window or limiting the types of inspections you perform with your agent. Just make sure this is an appropriate strategy for you. If the home is older, or has a lot of signs of disrepair, it is likely not a bad idea to waive any inspections.

We'll talk more in depth about inspections in our next Buyer Education Series module. We hope you're finding this information helpful! If you would like to speak with an agent about your real estate goals, don't hesitate to reach out! Contact Us

Until then,
Cassie Johnson
Key Realty - John Yoder Team

The Showing Process Explained: Tips to Help You Decide Whether or Not the Property Is a Fit!

For many buyers, stepping into that first house is when the home buying process starts to feel real and it can be a very exciting! 

The way the showing process will likely go is that you or your agent will identify a home or series of homes that are advertised online and meet your criteria. If you're interested in seeing the home in person, you'll reach out to your agent and they will schedule the showing with the listing agent. 

This is likely going to be your only opportunity to see the home before you decide whether or not you want to make an offer, so you want to be as thorough as possible while examining the home as a potential fit for you. This means that you'll want to be prepared. Here are a few tips to make sure you have the information you need:

1. You should ask your agent to provide the listing sheet on the property that details important specs on the home, as well the disclosures completed by the sellers discussing condition, and an aerial photo that shows the property lines. 
2. You'll want to mindful of the mechanicals, verifying heat and cooling sources, keeping an eye out for damage that is visible, and really taking the time to picture yourself in the home. Does the lay out work for you? If the house isn't a perfect fit, could a few changes here and there to make it work? 
3. You'll want to take this opportunity to ask your agent any questions you may have about the property, and express any concerns. Your agent should be able to walk you through different options that can address or alleviate the concerns you may be having. 

Here's the bottom line: this step in the process is about clarity. It's hard to know whether or not a home might be a fit for you without touring it in person. So be open, and ask questions! 

I hope you've found this information helpful!

Til next time,
Cassie Johnson
Key Realty - John Yoder Team

How You Search For Homes Matters! The Power of the MLS Explained

Look, we all use the big name, online platforms to look at homes online. They work fine for casual browsing or sharing properties with other people. But using them exclusively to search for your next home is holding you back. Why?

1. The information is often outdated. These platforms, many times, do not update when a property goes into contract. So you might be falling in love with a home that is no longer available.
2. The notification systems are unreliable. They are often not immediately notifying you of listings that meet your criteria.

This is why you need to ask your agent to set up a property search through the Multiple Listing Service (MLS). The MLS is a database of every property being marketed to the public by real estate professionals, and it is far superior to other platforms for two big reasons:

1. The information is more detailed and more accurate. Agents themselves keep the listings updated, so you never have to wonder if the property you're seeing is still available. Also, there is more information available through the MLS like property disclosures and utility details. The more (and better) information you can receive upfront, the clearer and easier your decision becomes!
2. The notifications are immediate. As soon as a new listing that meets your criteria is posted (or a listing drops down into your price range), you'll receive an email or a text. We all know that in the 2022 market, time is of the essence. So the MLS-based property search will give you an edge over other buyers and get those properties in front of you immediately!

So we highly recommend that you discuss MLS-based property searches with your agent. The property search should work for you, not the other way around!

Feel free to contact us today to get your search started the right way. Our team would be happy to discuss your real estate goals!

Until next time,
Cassie Johnson
Key Realty - John Yoder Team

Sellers Prioritize Offers From Pre-approved Buyers. Here Are Our Tips to Help You Get to the Top of the Pile.

We expect inventory to stay low in 2022. While the buying demand may not be as high as 2021, it is still likely that prospective buyers will be writing in multiple offer situations. We're providing buyer education series to help you understand what it will take to win in those situations, and being pre-approved for a loan is a major part of the strategy.

• You'll save time - understanding your budget will help you narrow your focus on the homes you can afford. Additionally, knowing the type of loan you qualify for will affect your options. For example, government loans (FHA, USDA, VA) have certain requirements for the property, and you can filter out the homes that will not meet those criteria.
• Having the pre-approval letter adds meat to your offer - Once you find the right house, you can submit your offer right away and show the Seller that you are a strong buyer.

The ability to save time and to prove your strength in a competitive market is powerful. Being pre-approved with a reputable lender is going to help the Seller feel more confident in signing your offer. You want to do everything you can do to make your offer easy for them to sign.

We also highly recommend that you consider local, reputable lenders. That means you should find a lender that has a reputation for closing in a smooth and timely manner; one who gets deals done and is creative under pressure. Why? Because sellers are also concerned about the transaction going smoothly. If you're not sure who has the best reputation in your area, a great place to start is asking your real estate agent. They will be able to provide you with at least three options that will help you achieve your goals.

We hope you find this information helpful! Keep joining us as we journey through the home buying process. Next up, the actual home search!

Til then,
Cassie Johnson
Key Realty - John Yoder Team

Having a Dedicated Buyers Agent Will Help You Win in Competitive Situations

I want to change the order of business when it comes to the home-buying process because the natural order of things, more often than not, hurts buyers.

The most common question that I receive first from prospective buyers is usually "where do I start?" The second most common is "will this home still be available once I have my documents together?" I get it! It's very normal for an interesting property to prompt the home buying process for a lot of people. And to be honest, some of my clients are able to pull it off. They get lucky. But you're not here to learn how to be lucky— you're here to learn how to best position yourself to win.

So before you start looking at homes online, I want you to start building your team, and I recommend that your first call be to a realtor that you want representing you! Sure, you can just call the listing agent for properties that you're interested in. A lot of people understand that the listing agent is the most familiar with the property, and that's a valid line of thinking. But wouldn't it be so much better to have an agent that is loyal to your interests and yours alone?

The best way to establish an agency relationship is to sit down at the very beginning and discuss your goals with them. In the business, we call this a buyer consultation. The power of the buyer consultation is that, from the get go, there is an understanding of your priorities. In other words, if you and your agent are on the same page, you will save time in your search. This clarity goes a long way in a competitive market, and it will give you an edge.

The second thing the buyer consultation establishes is trust. This is really important because you're likely going to be taking some risks in the 2022 market. During the consultation, make sure you ask the agent about their experience and strategies for winning in competitive situations. Explain what you are or are not comfortable doing. It's just as important to be on the same page with your game plan as it is to be on the same page with the type of property you're looking to buy.