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Real Estate Tips | 25 Posts
August
15

Are you planning to make some home improvements this year? Well, the Inflation Reduction Act just passed by Congress is making your plans less expensive!

Baked into the legislation are certain tax credits that will ease your cost burden when you choose "green renovations" (energy-efficient alternatives) to improve your home. This includes things like installing solar panels, or replacing windows and doors.

We've seen tax incentives for making your home more energy-efficient in the past, but this bill expands those incentives profoundly— offering a $1,200 credit available for ten years. Additionally, for smaller projects like replacing your HVAC system or water heater, you can receive a $600 tax credit. That's stackable, by the way, meaning to could replace multiple appliances and receive the credit for each.

No matter what, when it comes to taxes, you definitely want to speak with a tax specialist to see how these incentives will work for you. It's especially important to understand what makes a tax credit different from a tax return. In order to receive the credit, you have to have tax liability (i.e. owe taxes). Essentially, the credit is applied to lower your liability dollar for dollar.

That's really good news, especially for those already planning to make improvements to their home in order to lower their burden of energy costs and promote cleaner energy. These kinds of improvements might also add value to your property in the future, as this legislation reflects a growing commitment to clean energy nation-wide.

If you have questions about how to add value to your home with energy-efficient improvements that save you money, please feel free to reach out!

Til next time,

Cassie Johnson

Key Realty - John Yoder Team

March
9

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

February
23

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

February
9

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

January
19

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

January
5

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

December
22

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.

Not only is it important to be pre-approved, it's important to be pre-approved before you start to look at homes. Here's why:
  • 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

December
8

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.

There's another team member in this equation that will help give you an edge– your lender! While your agent will be able to get you in the home, your lender will get you in the right loan. We'll talk about that more next week!
Until then,
Cassie Johnson
Key Realty - John Yoder Team
If you would like to discuss your real estate goals today, feel free to contact us at johnyoderteam.com/contact
November
3

August 2021 Showed High Home Price Gains Again!


The S&P CoreLogic Case-Schiller Indices show that home prices increased 19.8% nationally, year over year for the month of August. While this rate makes August another consecutive, record-breaking month, it does indicated a deceleration in month over month rates.

So what does that mean for your home's value?

Well, it's important to understand that deceleration is not the same as decline. Home prices are still increasing, they just appear to be increasing at a lower rate. And keep in mind that 19.8% is a remarkable gain in value!

Inventory is still low in Knox County as well. The Mount Vernon News recently reported that the county has about 8 week's worth of listing inventory currently. Demand is still high, and we are still seeing competitive buying situations, especially with move-in-ready properties. So it is still a great time to consider selling a property in order to leverage the profit opportunity that this market offers homeowners.

It's difficult to project what will happen in coming months. If you're looking to purchase a home right now, I would really consider how long you plan to own that property. There is absolutely nothing indicating that this market is a bubble that's about to burst, but there also isn't anything indicating that these rates are sustainable. So if you're looking to purchase a home with a plan to stay for 3-5 years or more, your investment is likely going to be solid because home prices are still increasing.

On the other hand, I would caution buyers who (like myself) have used real estate in the past five years as a way to make quick cash; that might not be the best plan closing out 2021, as I'm not sure that the gains experienced this year will replicate themselves next year in the same way.

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

If you'd like to look at the data for yourself, visit: https://press.spglobal.com/2021-10-26-Annual-Home-Price-Gains-Remained-High-In-August-According-To-S-P-CoreLogic-Case-Shiller-Index

To read the article from the Mount Vernon News, visit: https://mountvernonnews.com/stories/610376665-knox-land-bank-to-sell-cooper-guest-house-on-north-main-in-mount-vernon

September
15

Assessment Value vs. Market Value & Why Understanding The Difference Matters


We have been receiving questions about assessment value on properties, particularly as homes are selling for higher and higher values. It can certainly be confusing, but there is a difference between market value and assessment value, and we're here to help clear it up!

First, let's define assessment value and market value. Assessment value is the amount that a home is assigned for property tax purposes. We reached out to the Knox County Auditor's office to learn more about the process of assigning this value to a property, and they were very helpful! Every three years in Knox County, a property's assessment value is evaluated and updated. But what does that look like?

Well, every six years, properties are evaluated and updated on an individual basis. Every three years, the market itself is evaluated, and values are updated. So, the assessment value of a property gets updated every three years.

It's important to understand that an auditor does not enter the property being evaluated. They rely on MLS data that has been published in the past, including published photos. This information is especially helpful for them to get an idea of added finished living space— think finishing a basement or an attic, as that would certainly add value to the home.

Per Ohio revised code, the assessment value cannot exceed 90% of its actual market value. With market conditions as they are currently, the Knox County Auditor's office believes that percentage looks more like 70% in the county, and there is a lot variation between individual properties.

You're probably getting the idea by now that assessment value and market value are not the same thing. In fact, assessment value doesn't really matter much in the market, it really only matters for property tax purposes. Market value, however, matters a great deal because it is what an individual is willing to pay for the property. For this reason, when you're evaluating a listing, market value of comparable listings is much more relevant data than assessment value. So, why is there confusion?

The assessment value of a property is public knowledge— it can be found on the Auditor's website. For some buyers, this can feel like helpful information when evaluating whether or not they would like to pursue an offer on a property, as well as how much to offer for it. And it is helpful information, just not in the way you might think. It's helpful because it gives you the ability to forecast your future tax payment, it's not helpful as evidence that a property is over-priced. The reality is that this market is still competitive, and buyers are willing to pay much more than the assessment value for a property (and remember, that value is often only up to 90% of the property's actual market value).

Might other buyers be overpaying for properties? Possibly. If they are, though, it's for an entirely different reason than the fact that the assessment value and the asking price don't match up.

So when you see the assessment value of a property you might be interested in, remember that this value might be somewhere around 70-80% of the market value (if you're in Knox County). If you're questioning the value of the property, the best way to find clarity is to ask your agent to perform a Comparitive Market Analysis (CMA) to see what other individuals are paying for similar homes in the area.

I hope you find this information helpful! We would love to hear from you, so don't hesitate to reach out with any questions you may be having about the current market!

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

September
1

What to do if Your Appraisal is Short!


We have seen this happen more often than we'd like: Buyers are competing for a listing, and the contract price escalated only for the appraisal to come in low half way through the process. This can be a complex and stressful event for both buyers and sellers, and we have tips that can save the deal!

First, it's important to understand why this happens. The primary data that appraisers use when evaluating a property is past comparable sales. They will look at what similar properties in the neighborhood have sold for. While this process has worked generally over the years, there are two weaknesses that rise to the surface in an imbalanced market:
  1. Home appreciation rates are vastly different from month to month. Last week, we showed the data from S&P's CoreLogic Case-Schiller Indices for May, June, and June. Consecutively, rates have been record-breaking each month from 14.8% in May, to 16.4 in June, and potentially 17.2% in July. Because of this, data that is even a month old can be out of date.
  2. More and more homes are being sold off market. This means that there is additional data that would be considered relevant sales comparison data that likely gets missed because it's not listing in the Multiple Listing Service, where appraisers access information. So it's difficult to get the full picture in neighborhoods where homes are being sold by owner.

So what can be done if an appraisal comes in short? Well, there is an appeal process, during which your agent can find comparable sales data that the appraiser did not have while writing the initial report. It's fairly easy to find sales prices and residential data for homes that transferred off market from your county auditor's website. The key to this process is to find new and helpful data that justifies a higher valuation for the subject property.

If the appeal process fails (or fails to close the full gap between the appraisal value and the purchase price), there are three options: price renegotiation, gap coverage by the buyer in cash at closing, or contract termination.

Sounds like added stress during an already stressful situation, right? For sure. That's why we really recommend finding strong data and comparable sales (including off market sales!) prior to listing. It's critical that the data inform the asking price of a property. Further, if you have all of those comps prior to listing, you can leave them on the counter for the appraiser to review at the time of their inspection. Some appraisers will reference those, and some won't, but it's worth a shot!

If you're a buyer who is considering making an offer on a hot listing, we recommend considering appraisal gap coverage in your offer. Just be sure to only offer what you're willing to pay over appraisal, and be aware that it might not be enough once the appraisal comes back (in other words, you might have to bring additional cash to close the deal).

We hope you found this information helpful! It's crucial to the buying and selling experience that you hire an agent who is savvy and informed. To discuss your real estate goals with us, fill out a contact form at johnyoderteam.com/contact today!

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

August
25

Is the Hot Market Starting to Cool Off?


The short answer? Possibly!

In Knox County, specifically, we are experiencing a slight cooling off compared to the chaos of the spring market. In the second quarter (April-June, 2021), home buyers were paying 2% over asking price on average. That's a significant jump from 0.4% that we saw in the first quarter of 2021.

In the third quarter, however, that number has dropped to .06%. The quarter is not over, but that drop is a huge relief for the buyers who are competing for listings currently.

So what is contributing to this decrease? Well, we think there are 3 big factors:

  1. Buyer fatigue after the spring market caused a lot of buyers to call it quits on their home search. Many would-be buyers wrote on multiple properties without securing their next home. Without an inventory shift, many have decided to wait until the market is less competitive.
  2. Buyers went on vacation. A lot of Americans vacationed in July, after being pent up in their homes for 18 months. This means less showings, less offers, less bidding wars, etc.
  3. School is starting. It is very normal to see seasonality in the real estate market. With the chaos of the back-to-school weeks, many families are not prioritizing their home search as highly as they were in spring or early summer.

You might be asking, does this drop affect home values? The answer is no. Homes are still appreciating. According to the S&P CoreLogic Case-Schiller Indices, appreciation rates skyrocketed this spring, and the data shows that home value appreciation hit a record high in both April (14.8%) and in June (16.4%). Further, the nation is on track for a third, consecutive record-breaking month in July with an appreciation rate of 17.2%.

So what we're potentially seeing in this early third quarter is not a decrease in home values, but likely appreciation at a slower rate.

What's the bottom line here? Well, for buyers, it's important to remember that you will still likely need to pay over asking price to compete. While you may not experience the extraordinary bidding wars that we grew accustomed to in the spring, any positive rate is an indicator of bidding wars.

For sellers, if you're still wanting higher profits, it's time to shift perspective. Because the market is cooling off a bit, presentation is really going to matter. In order to protect your position to receive multiple, strong offers, you will want to make sure your home is one that many buyers have to have. A few months back, a sign in the yard was all it took to get multiple offers. But now, you really want to focus on things like staging.

Of course, the most important advice we can give is that you find an agent who is in tune with what is happening in your local market!

If you have any questions, please feel free to reach out to our team at johnyoderteam@gmail.com.

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

August
18

Tips for Staging a Mantle


Please watch this video for helpful tips on how to style your mantle.

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

August
11

Why You Should Always Stage Beds!


Staging the bed is an often-overlooked but simple way to elevate your listing. Sellers usually don't think about how this one simple task can transform a prospective buyer's perspective on the home overall. Here is what can happen in the mind of buyer when they see it:

  1. A styled bed seems intentional. This is important because you want to establish a pattern of thought a prospective buyer's mind that the home has been well maintained and that it functions effortlessly.
  2. There is a psychological element at play in showings, if they pick up on a few details that show you've "gone the extra mile," they will pick up on more throughout the home.
  3. All of this will lead to a higher level of confidence in the buyer's mind, increasing the likelihood of an offer.

That's a lot of benefit for such a simple task, right? So, if you're looking to style a bed, here's an important concept that will help you know what to do. A well-styled bed has a lot of dimension. That means varying heights, textures, and colors that all complement each other but add their own unique accent to the overall style. You can accomplish this three ways:

  1. Personally, I like to have three "tiers" for pillows. I'll start with large pillows in a light, accent color that matches the sheets. I like these pillows to be a bit firmer, because they will be supporting the next few layers. Next, I add a contrasting, darker color (preferably one that matches the duvet or comforter), but I make sure these pillows are shorter and fluffier than the back pillows. Finally, I add one or two throw pillows that really pop and give the bed some more pizzaz.
  2. You can also add dimension through textures. I love to use silky sheets, in light or pleasant colors, paired with a fluffy duvet or comforter in a contrasting color. This also works with throw pillows and blankets! For this example, in my video, I've chosen a fuzzy throw pillow and a velvet throw blanket. All of these different textures work together to create interest.
  3. Finally, you can add dimension with color. I've mentioned this multiple times already, so you probably get the idea that I like to use contrasting colors that are pleasant (or not too loud) but are very different from one another. For example, using a light beige sheet set with a dark grey duvet or comforter, and topping the bed with a black velvet throw.

I hope this was helpful! Remember, this is a very simple task that can lead to better results for your listing. If you would like any more staging tips, feel free to contact our team!

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

July
1

Tips For Controlling Pet Odor


Do you have pets like me? I have three dogs and a cat, and I love them so much! They have pretty much been given free rein of the house, for better or worse, because I want them involved in everything I do. But with pets comes pet odor, and this can be especially problematic when you're showing your property for sale. 

So I have a few quick tips to help reduce these pet odors so that prospective buyers aren't unnecessarily turned off during showings.

Before I get into the three tips, I want to stress that keeping an odor free home is of extreme importance during the listing process! Why? Well, we want buyers to establish an emotional connection during the showing process, and nothing is more distracting than pet odor.

So if you use these tips to maintain a fresh-smelling home, buyers will have an easier time imagining themselves living in the property, and this means the potential for more, for better, and for higher offers. That's what we want, right?

So, my first tip has to do with floors.

Whether you have carpet, hardwood, or laminate— whatever kind of flooring you have— it's important to keep them clean. That means vacuum, mop, steam, all of it. If you need recommendations for professionals to handle deeper cleaning of carpets, your agent should be able to point you in the right direction.

Second, you want to make sure all of your linens are washed often. 

My dogs sleep in bed with me, and I've found that washing the sheets and spraying freshener on the mattress and pillows once a week really helps keep pet odor controlled. This also applies to throw blankets and pillows, even plush toys and dog beds that are especially prone to absorbing and release stink.

Finally, you also want to make sure you regularly vacuum and maintain couch cushions. 

Once a week, I make sure my couches get a good vacuum, and once a month, I machine wash the cushion covers while I spray pet odor eliminators on the cushions themselves. This process has been a life saver for me. You definitely want to check tags on your cushion covers and make sure they are machine washable!

One thing I never want to do when I'm selling is disrupt the life of my pets by trying to keep them off furniture that they're used to lounging on. The entire listing process can be confusing and stressful to them already, but proper maintenance will allow for you and your pets to live comfortably in the home without risking your potential profits during the selling process.

I hope you found this information helpful!Until next time,
Cassie Johnson
Key Realty - John Yoder Team

June
23

Get Ahead of the 30 Minute Showing


Back in the days of abundant inventory, buyer used showings as a way to explore whether or not the property was a fit for their needs and goals, and they usually had an hour to do it. Those days are no longer here. In this market, you'll rarely have the opportunity to spend an hour touring a property. Rather, you might receive half an hour, and you may not be the only buyer touring!

Given that you're making such a big decision, and half an hour seems like so little time, I have advice for you.

Consider the showing as a way to confirm, rather than a way to explore. Use the resources available online to determine whether or not a listing is likely to be a fit for you prior to the showing. If the answer is yes, schedule! If the answer is no, don't. I mean it.

This perspective shift could be a breakthrough in your home search, and it ties into previous advice I've given that buyers need to be picky when scheduling showings. To briefly recap, you should determine what the most important goals are for your home search, and stay true to those. This means that if location is most important, and you want to be in a walkable community near downtown Mount Vernon, you don't look at properties in say, Howard. If you're really needing a home with more than 1,500 square feet because your family is expanding, then it's important that you don't spend precious time looking at homes with 1,000 square feet.

So, how can you determine whether or not a listing is likely to be a fit without walking through it?

Well, agents got creative during the pandemic, and starting offering more information about their listings online. This includes more detailed photos (sometimes, even basement and garage photos, or photos of the mechanicals!), and 360 tours where you can essentially walk through the home from the comfort of your couch. It's important that you use these resources, look through all of the photos, watch the video tours, and open the property disclosures if they are available to you. All of these resources are often included in the multiple listing service or agent websites.

Another thing you want to do is look at the location on a map. Figure out how far the property is from your place of work, from shopping and restaurants, etc. Again, your time is precious in this process, and it will just discourage you to drive to a showing only to discover that the location is inconvenient for you.

I promise, all of this work on the front end will be worth it because it will save you time and hassle.
This process will put you a step ahead of other buyers.
It will also provide you the clarity you need in order to do what it takes to win it. That is, if the showing confirms it's a fit!

Isn't this empowering? If I'm getting a sense of one thing from my buyers right now, it's that they feel like they have little control, but that's not always the case. This shift places you back in the driver's seat. These complex market conditions do not have to control your home search if you don't let them.

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

June
16

Buyers, Be Picky!


This week, the team has some advice for buyers that may seem counterintuitive, but I promise that I am not messing with you!

In this ultra competitive market with very low inventory, it's easy to want to look at every listing that comes up. It's very natural for buyers to want to take a look at homes that don't really meet their criteria "to see" if they can make it work.

We have been recommending a different approach, encouraging buyer to be picky. Hear me out…

If you're considering buying right now, it's extremely important that you decide which criteria is highest priority, and then stay committed to those criteria. Don't know what those criteria may be? 

Start by asking yourself what the biggest pain point is for you in your current living situation. Maybe it's location, or the amount of space. Maybe you're very concerned with the age of the home or need more land. Whatever it may be, your goal should be to solve that pain point.

With that goal in mind, you should evaluate each listing that comes up in terms of whether it will help you meet your goal. Luckily, homes that are listed have loads of information available. Recently, listing agents have also included helpful resources like virtual tours and floor plans so that prospective buyers can have a clearer picture of the property's flow and layout.

All of this information will help you determine whether the home is a fit before you even schedule the showing. If it looks like this property will help you meet your goals, then scheduling a showing will help confirm that.

Why is this perspective shift beneficial to you? It will help you avoid buyer fatigue. In this market, buyers are extremely vulnerable to disillusionment and frustration. It's not helpful for you to look at everything that comes up, rather, this strategy will wear you out and make an already emotionally taxing process even more overwhelming.

Being picky in terms of which properties you look at will help you maintain clarity throughout the process, and alleviate much of the frustration that other buyers are dealing with.

If you find the home that fits your goals, you will likely be in the right frame of mind to make a competitive offer, increasing your chances of winning.

Now, don't hear what I'm not saying. I'm not encouraging you to pick a house apart! There will likely be factors that you will need to compromise on, but those factors should be of lesser importance to you or things that can be changed or improved easily.

I hope you found this information helpful! The team would love to hear from you. If you would like to discuss your goals, please feel free to contact us here on our website.

Until next time,

Cassie Johnson
Key Realty - John Yoder Team

June
9

How Do Agents Price Listings?

Have you ever been looking at listings online, wondering how the agent and their client came up with the asking price? Well, the process usually involves research and some strategy, and it's rarely arbitrary.

The most common way to chose a list price is to compare the property to be listed with similar properties that have sold recently. Agents will look at the sold price of homes that are similar in square footage, condition, bedrooms and bathrooms, and in the same neighborhood. They'll use those sold prices, often in terms of price per square foot as a base point.

When it comes to sales comparison, there are other relevant factors to look at as well. Days on market will give a glimpse of the market reaction to a listing. If the property sold quickly, that tells you it was priced at or below market value. In other words, prospective buyers thought the price was right and wasted no time moving forward on a purchase. If the days on market is high, or if never closed, that might signal that the property was overpriced, unappealing in terms of condition, or marketed ineffectively. Your agent can compare the initial list price to the actual sold price, and any price drops in between by taking a look at the listing history.

Additionally, your agent might be aware of appreciation rates in your area. Between 2019-2020, home values appreciated at a rate of 10.4% in Knox County. It's possible that your agent will use an appreciation factor to narrow in on an appropriate list price. Using this factor, if your property appraised for $200,000 in 2019, it was likely worth around $220,000 in 2020. We don't have enough data to know the current appreciation rate, but agents who have a pulse on the market will be able to estimate based on the trends they are seeing in neighborhoods like yours. This strategy is more speculative than using comparable sales, but it is helpful!

Of course, there are unique homes out there that do not fit the mold of their neighborhood, making it difficult to price according to comparable sales. In this case, your agent will do their best to find the closest comparables possible. If you have a truly unique home, your agent may recommend a pre-listing appraisal in order to have a clear picture of your property's value. This can be a powerful tool for you when it comes time to list, because you and prospective buyers can enter into contract much more confident that the value will hold up.

I hope you found this information helpful! If you are interested in knowing your home's value, please feel free to reach out to us. We would be happy to offer you a free home valuation with no pressure to list. We want to equip you with the information you need in order to take the next step— whether that is listing or staying put!

Talk soon,
Cassie Johnson
Key Realty - John Yoder Team

June
7

Buy-Then-Sell Strategies That Can Make Your Life Easier in This Market

Has anyone taken the time to tell you that you may not need to sell before you buy your next home? Our team has had this discussion with our friends and clients, and we've found that many homeowners are delaying their plans to sell because they are afraid of being homeless. This makes complete sense— I wouldn't want to face homelessness either. This market is ultra-competitive, and while drastic home appreciation creates a major opportunity for homeowners, current market conditions present challenges as well.

But what if I told you that you could purchase your next home before you sell your current one— and do it without a home sale contingency? Wouldn't that be a game changer?
The roadblock that many homeowners face when purchasing their next home is their downpayment. Not everyone has 20% saved in cash. Most of the time, people leverage their equity for their downpayment, and this is the right idea! In fact, a lot of people have been doing this through simultaneous closings over the years. In past and less competitive market seasons, the process usually looks something like this: 1. List current home and get it in contract, 2. Find next home and get it in contract with a home sale contingency, 3. Work out timeframes for a simultaneous closing, where you close on both homes within a very short timeframe. But can you see how this process is problematic in this market?
One tweak in this order of operations can make your life so much easier. I recommend looking into loan products that will leverage your equity first, before you sell your current home. Let's take a closer look at these products:
A home equity line of credit can be particularly useful to homeowners that have paid their loan down significantly and have a lot of equity in the home. A line of credit will be a loan that borrows against that equity so that you can use it as a downpayment on your purchase— possibly even for repairs, if those are necessary. Once you sell your current home, you can pay off both the mortgage and the line of credit with the proceeds.
A bridge loan will be loan that covers both your current home and your next home for a short period of time. Often, these loans are principal and interest only, which can make this option surprisingly affordable in the meantime. This product allows you to secure your next home, then sell your current one. Once you sell, the loan will get refinanced to cover only your new home.
A float down loan is similar to a bridge loan, but it does not involve refinancing. You'll apply for a fully amortized loan that covers both your current property and your next one, and usually these payments are higher because they include both properties, taxes and insurance. Once you sell your current property, the proceeds are applied to the loan and the payment "floats down" without being refinanced.
These loan products benefit you in three major ways:
  1. All of these strategies increase your negotiating leverage because they eliminate the need for a home sale contingency. You'll likely be competing with buyers who do not need to sell a property, and now you can be one of them!
  2. The timeframes will work better for you. Wouldn't it be wonderful to move into your next home before listing so that you don't have to be inconvenienced with the flood of showings?
  3. It alleviates the pressure by giving you time to find a home that fits your criteria. Believe me, this is a major benefit. When I listed my first home four years ago, it went into contract within 48 hours. Market conditions weren't quite as hot as they are now, but things were already trending up and getting competitive. My husband and I had about a week to find our next house in order to work within the contract deadlines, and the pressure was overwhelming. We ended up purchasing a home we didn't love. It needed work, and we had to live in a home we were renovating. We made it work, but it wasn't ideal! These loan products, however, have been borne out of this market as an alternative so that you don't have to go through what I went through.

Slam dunk, right? Of course, I am not a lender. You will definitely want to discuss these products with a lender directly to make sure they are a good fit for your situation.

Our team would love to hear from you! If you would like to learn more about buy-then-sell strategies like these, please contact us right here, on our website. One of our agents would be happy to discuss your real estate goals.

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

May
27

Is the Current Housing Market a Bubble?


We've been getting a lot of questions recently about whether or not the current housing market is a bubble and if there's a "Great Recession" type crash around the corner.  Our team leader, John Yoder, would like to weigh in on this because some of the messaging out there doesn't really add up. In his opinion, the market is not a bubble, though it is problematic. Keep reading to hear why!

Hi everyone! This is John Yoder with Key Realty – John Yoder Team. I'm excited to discuss this topic because I've experienced some different market cycles in the real estate industry. Like so many Americans, I clearly remember the effects of the 2008 recession in terms of property value. I was an investor during this crisis, and learned a lot through the process. I can say from experience and my research on current market conditions, that this market is different than the market in, say, 2007. Though this market presents many challenges, I don't believe it's a bubble.

For starters, let's talk about why today's market feels like 2007.  Some of the similarities are striking.  We have dramatic price appreciation.  The Case-Schiller home price index released on April 27 this year reported a 12% annual price jump in home values nationally for February 2021 compared with February 2020.  Knox County is reporting similar numbers with a 10.4% increase in home values in 2020 as compared with 2019.  

Homes are selling over appraised value, at times by tens of thousands of dollars and even more in some markets.  We have bidding wars and inventory shortages.  

This chart shows how inventory has declined over the last year to levels not seen since the early 2000's:

However, the differences are also striking and that is what we want to focus on today.

While we are seeing inventory shortages similar to the early 2000s a key difference is interest rates.  

As you can see from this chart, interest rates in '06 and '07 were in the 5-7% range for a 30 year, fixed rate loan.  However, today, those rates are right around 3%.  That's a huge difference and makes purchasing extremely attractive right now.  

This next chart is one of my favorites and helps to show exactly how we got here in terms of housing inventory:  

This chart shows home starts, or new construction, from 1959 to present.  You can see that from 1959 through 2007 the US averaged over 1.5 million home starts per year.  But from 2008 to present, we averaged less than 1 million home starts per year.  That's 13 years of under building.  

It took some time to absorb the excess inventory coming out of the recession, but now we're faced with a severe housing shortage that probably won't go away any time soon.  

Just how bad is our national housing shortage?  Sam Khater, Chief Economist for Freddie Mac wrote in an April 15 article that by their estimates, the US is 3.8 million single family homes short of the inventory needed for a balanced market.  That number is up 52% from 2018 when Freddie Mac estimated that the national housing shortage was at 2.5 million units.  

This increase is surprising in the context of the pandemic and related economic challenges.  According to Khater, "A continued increase in housing shortage is extremely unusual; typically, in a recession, housing demand declines and supply rises."*

So what is driving this shortage?  Khater says "The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes."As we noted in the home starts chart earlier, building has not fully recovered since the 2008 recession.  Commonly cited factors that contribute to underbuilding are lack of available construction labor, land use regulations, zoning restrictions, NIMBYism (not in my back yard), lack of developers and lack of land to develop.

We have seen that both inventory and interest rates are substantially lower than they were in 2007.  What other indicators do we have that today's market is structurally sound?

Let's look at loan underwriting.  One of the key factors that led to the 2008 recession was easy credit or "no doc loans."  Borrowers were able to purchase with little or no money down and very inadequate underwriting.  This was combined with predatory loan products.  Payments were affordable at first, but jumped significantly after a few years.  Many buyers thought it would be easy to refinance when the time came.  But market and economic conditions changed and that wasn't possible for many.  

Today, we have much stricter underwriting standards and 30-year fixed-rate loans are the norm.  Taylor Marr, leading Economist for real estate website Redfin says it well:  

"The key difference now versus during the housing bubble before the Great Recession is that back then it was easy credit that fueled speculation, not cheap credit.  It wasn't uncommon for buyers to put nothing down and speculate on real estate because all they had to do was fill out a few pieces of paper and no one cared about the actual numbers.  This time around the demand that's fueling appreciating prices is real – from families, newly remote workers, and companies relocating employees to lower tax, lower regulation states."**

So if today's housing market is not a bubble, what is the primary cause for concern? 

From my perspective, it's affordability, especially for first time home buyers.  The Wall Street Journal reported in a May 19 article that the Federal Reserve is starting to signal an eventual move away from easy money policies which would trigger higher interest rates.  Higher rates combined with continued price appreciation will start to price some buyers out of the market.  

What should you do if you're looking to buy a home and/or to make a difference in the current market imbalance?  

First, talk to a lender early in the process.  Be prepared to save for a larger down payment than what you originally anticipated.  

Second, consider building if you are in a financial position to do so. Our office keeps an updated list of builders with short waiting time.  

Third, support responsible, local development across all price points.  We all need to do our part to advocate for a more balanced market.  A healthy, balanced market helps everyone and provides housing and financial stability to more individuals and families. 

  

We'd love to hear from you, so please leave your thoughts in a comment below!

John Yoder
Key Realty - John Yoder Team

*Source Freddie Mac, freddiemac.com/perspectives/sam_khater/20210415_single_family_shortage.page?
freddiemac.com/research/insight/20210507_housing_supply.page?

**Source:  Wall Street Journal, wsj.com/articles/fed-officials-say-they-are-closely-watching-for-right-moment-to-make-policy-shift-11621445379 

Additional information for this video provided by Forbes Magazine, April 2021.forbes.com/sites/petertaylor/2021/04/18/yes-americas-housing-market-is-officially-over-heating-everywhere-how-long-can-it-last/?sh=85b2a0244378

May
24

How to Know if It's a Good Time for YOU to Sell


Buying and selling in the same market cycle, in the same region, can be tricky and overwhelming. I have this conversation almost daily with my clients, and I've found that the majority of people who are considering selling their home share a common concern: that they don't want to deal with the pressure of buying in a hot seller's market.

First of all, this is completely understandable. It's reasonable -- smart even! -- to wonder what the advantage is to selling in an ultra-competitive market, when it will turn you into one of the many buyers competing for your next home.

Our team has devoted a three-part series to tackle this conversation. What you're currently reading is Part One, and our goal is to lift the fog that is caused by all of the pressure and panic in the messaging you're hearing about the market right now. With that fog lifted, and with that pressure alleviated, it's possible you'll be able to make a sound decision about the right next step for you.

Before we discuss whether or not it's a good time for you to sell, let's establish the circumstances that are making this sellers market so hot:
Low interest rates have increased buyer demand. Interest rates continue to be (and will likely be for the next few years) historically low. Many first-time homebuyers are taking advantage of this opportunity, as well as individuals who want more and better house for the same money.

Appreciation potential is much greater on homes that are valued higher. Our market saw about 10% average appreciation between 2019 and 2020. If you own a home that was worth $150,000 in early 2019, this means the value appreciated $15,000 by early 2020. However, if you owned a home valued at $250,000, its value appreciated $25,000 in one year. That's a powerful thing, especially as low interest rates mean lower monthly payments.

My husband and I recognized this last summer. While we could have stayed in our Apple Valley home, we knew that we could leverage a lower interest rate to purchase a home with a higher value for the same money. Our monthly payment is almost identical, but the home we purchased was valued $40,000 higher than our home in AV, and this asset will perform better over time. Not to mention the lifestyle benefits of being in a home that has more style, better finishes, and in town-- we're very pleased.

Low inventory creates competition and stronger offers. We've talked about this a lot, but it's a powerful opportunity for sellers. Because demand is so high, and the number of homes available are so low, you have the opportunity to hand pick the contract with terms that work best for you. This leads to higher profits and faster sales.

But of course, you're savvy, and you already know all of this. And just because the market is hot, it doesn't necessarily mean that it's the right time for everyone to sell. If you're wanting to determine whether it's the right time for you to sell, here are some things to consider. This is important because there are good reasons and there are bad reasons to sell. Let's start with the good!

(Spoiler alert: They have everything to do with the three topics discussed above)
  1. You need to ask yourself if you enjoy the home you're in. If you're in the wrong location for your lifestyle, you should consider changing your location. Another great example of this is whether or not you need a home office (as many of us found ourselves without suitable spaces to work during the pandemic). Or, maybe you need more or less space. Whatever the reason, if the home you're in doesn't work, it doesn't work, and it's absolutely worth looking at a change.
  2. You want to upgrade your living situation. If you're inspired by my story, I want you to know this is absolutely possible for you. Especially if you purchased 3+ years ago, you should look at getting more and better house for the same monthly payment.
  3. You want to leverage the appreciation that the market is experiencing. This might feel a little risky, but can be a good decision based on your situation. I recommend discussing this thoroughly with your agent.

Now, for the bad reason...

Do not let anyone tell you that you should sell because you'll miss out on the strong seller's market. Making decisions out of panic will perpetuate more panic, and this kind of pressure will only serve to weaken your position. I am finding too many people in my community who are only considering selling because they feel like the housing bubble is about to burst at any moment. This just isn't the case, and we'll dive into why in part two!

For more valuable real estate content, check out our YouTube channel!

-Cassie Johnson, Key Realty - John Yoder Team

May
12

3 Tips to Help Buyers Emotionally Connect with Your Listing

Just because buyer demand is high and buyer's have become more flexible in their search for a home, doesn't necessarily mean you should list your home as it is. In our team's experience, there are three very basic tips that will help take your listing to the next level to the people who matter most - your prospective buyer.Here's why this is important: If your listing has that wow factor and a buyer can emotionally connect with the property, your listing goes from "we can make this one work" to "we cannot miss out on this one." And the more buyers you can get to think this way about your listing, the stronger the offers will be, and you can hand pick the buyer with the best terms for you.Basically, the staging process is still turning out higher profits and faster sales for our clients.So, what are the most basic things you can do to make your home a "can't miss" in the eye of a buyer?

First, you want to make sure it is immaculately clean — sparkling, even. If the home feels, looks, and smells fresh, buyers will feel comfortable as they walk through the home. This includes pet odor. The biggest distraction for a buyer is a space that smells or feels dirty. This also happens to be one of the cheapest ways to bring your listing to the next level. If you're concerned about maintenance or about pet odor, you should speak with your agent about professionals who can help you along the way.

Second, you should replace family photos with neutral decor throughout the entire home. Why? Well, the entire idea of showings is getting the buyer to picture themselves in the property. If there are photos of you and your family everywhere, they will be distracted from this process. Let's make it easy for them and pack away everything that has your family's names or faces on it.I know this subject in particular can be a sensitive one. I understand this can be difficult because, for many of us, things like family photos are sentimental, treasured items that can bring comfort to us in our home. But remember, the marketing of the property is to make the home appealing to its next occupant. Still, if you're concerned about this, a simple compromise could be placing treasured family photos in a scrapbook that you can keep close by and peruse at your convenience.

Third, fresh paint can bring a major return on your sale. Picking neutral and calming colors throughout the home will make it more appealing to a wider pool of buyers without costing you an arm and a leg.Now, I've had countless conversations with clients in my staging experience, and the perspective of sellers often is "I want my home to feel lived in." And I get it. Most people aren't looking to walk through a home that's sterile and devoid of character. But again, if there's one perspective I would like to see shift in your mind through this video it's this:You're not necessarily trying to sell your home. You're trying to sell a buyer their future home. This is the approach that will pay off big time, every time.

If you're interested in learning more about the listing process, feel free to contact us today! For more helpful real estate content, visit our YouTube channel and subscribe!
-Cassie Johnson, Key Realty - John Yoder Team

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