Are Zestimates Really a Good Way to Value Your Home?

Even though a lot of people think that the value Zestimates place on their home is accurate, the truth is that this is one area that computers can’t replace people.

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What exactly is Zillow’s Zestimate? A lot of clients have called me with questions about them, so I thought I’d relay my overall feelings about them.

Zestimates are what we call an AVM, an automated valuation model. They use algorithms to pull data from the county public tax records and they look at legacy MLS sold, pending, active, expired, and cancelled data. They take that data and apply to each one of our homes.

The problem with the methods that Zestimates use to value your home is that a computer algorithm has never walked inside of your home. Zillow doesn’t know if your home smells like a pet, if your carpet needs replaced, if the roof needs to be replaced, or if your backyard is steep or gentle graded. The website can’t take into account various factors about your home’s upgrades, the neighborhood, the general traffic, or public events that may take place near the property.

Zestimates can be off when they value your home by as much as 20%. This is problematic because a lot of the public thinks that these are accurate, and they end up leaving a lot of money on the table or potentially overpaying for a home in certain situations.

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A Zestimate cannot walk into your home and check out the condition of the property.

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This is what I recommend: If you’re thinking very seriously about the value of your home or what a potential house might be worth, call Glennon Real Estate Experts and get a trusted professional who can do a real, thorough market analysis to make sure that you’re not leaving any money on the table.

I’ve found often that, oftentimes, the fees for our services more than compensate for the amount of money that people sometimes leave on the table when they sell their home as For Sale By Owner (FSBO). Most real estate agents sell fewer than seven homes a year. They really aren’t getting enough experience and practice selling homes to really know how to advise you on the 50-page contracts we have to deal with or to get you through the inspection process and make sure that the lender is properly doing their job, along with supplying the appraiser with the information they need to properly value a property.

I’ve found often that, oftentimes, the fees for our services more than compensate for the amount of money that people sometimes leave on the table when they sell their home as For Sale By Owner (FSBO). Most real estate agents sell fewer than seven homes a year. They really aren’t getting enough experience and practice selling homes to really know how to advise you on the 50-page contracts we have to deal with or to get you through the inspection process and make sure that the lender is properly doing their job, along with supplying the appraiser with the information they need to properly value a property.

If you want expert advice and solid legal protection, you wouldn’t go to sites like WebMd or LegalZoom, and it’s the same thing with real estate—to really know where you stand, you’d need to contact a professional who’s trained and experienced in these matters to give you their take. If you have further questions or are in need of expert advice on real estate topics, give us a shout. Feel free to give us a call or send us an email. There’s no obligation or cost, and we’d love to help you figure out what the actual market value of your home is.

4 Reasons Winter Is the Prime Time to Buy

Even though it’s not the peak of the market, it's still a great time to sell your home.

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Often when I meet with clients, we talk about the timing and seasonality of the year to buy and sell a home. Though it’s a fact that maybe upwards of 80% of homes are purchased and sold from the time school gets out til the time school starts in late summer, there are plenty of homes that sell during the non-peak season of the year—fall, winter, and early spring.

One of the things that I think is important to keep in mind is that there’s always a real estate market. There are always people looking to move and buy, and there are always people looking to move and sell.

The velocity in the market, though it may not be quite as strong during the non-peak season, doesn’t really have the effect on pricing that you might think it does. When you’re thinking about selling a home—if you position it correctly through pricing, marketing, and location—that home can demand just as high a price, sometimes higher.

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When buyers are out shopping during the holiday season, they have a strong motivation to move if they’re moving that time of year.

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Here’s the reason: When buyers are out shopping during the holiday season, they have a strong motivation to move if they’re moving that time of year. Their house has sold and they must find something, because no one wants to be out and about and working; if they’re shopping during the holiday season, then they’re pretty doggone serious about it. The same could be said of those who are looking to sell.

I don’t worry much about the season affecting the price of your home. Unlike things like boats, a house is a high-value investment that doesn’t really fluctuate because of seasonality.

If you’re thinking about selling your home, click on the free home market valuation link, and it will get you instant information about the potential price of your home in today’s market. We’ll come out there and do one of two things: we can get you exact pricing by coming to look at your home, or we can give you a free, no-obligation internet market evaluation.

If you’re thinking about buying a home, click on the link that indicates you’re interested in buying, and we’ll give you a backstage pass to the MLS. You’ll be able to search for information on homes just like Realtors do. It will give you current pricing information that’s updated every five minutes.

If you have other topics or questions you’d like to discuss, please email, call, or text us. I’d be happy to talk with you.

Is Kansas City Really Headed for a Bubble?

Is Kansas City in a bubble? To give you a short answer: I don’t think so.

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Is Kansas City in a real estate bubble right now? The short answer is no. This time last year we had about 25% more inventory than there currently is on the market.

Though this statistic varies by price point, prices are up between 5% and 7% across the metro area and buyer demand is strong. In fact, there are between five and six times more buyers in the market than there are sellers.

Baby boomers have been deciding to stay in their homes a little longer and millennials are starting to come on the market, so appreciation is likely going to slow over the next three or four years.

Assuming geopolitical influences stay calm and no major events occur, I believe our market will continue to stay in good shape. I also believe that inventory will start to balance out eventually.

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Inventory is scarce, but it is still a great time to buy.

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With between two to three months of inventory available in recent times, our market heavily favors sellers. It’s a tough time to be a buyer, but waiting out the market isn’t the answer.

If appreciation continues, there isn’t going to be a better time to buy than now. If rates go up even as much as 1%, you’ll really struggle to find as good a deal on monthly payments as is available right now.

Inventory is scarce, but it is still a great time to buy. A lot of the responsibility falls on builders right now, who need to make sure that there is plenty of new construction on the market.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

What Essential Things Do You Need to Buy a Home?

Buying a home involves having a smart home buying strategy and a few other crucial components that need to be handled with planning and care.

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What do you need to purchase a home?

Remember, buying a home is a process—not an event. Very few purchases in life take as long as buying a home. Most people think about their home purchase for many months before they actually do it, and you may spend some time searching before you find the right home.

This is why the first thing you need is a smart home buying strategy. This is something we develop with all of our buyer clients. There are several reasons this benefits you because there are some important things along the way you need to know about buying a home.

Sit down, develop a plan, and put a dream team together of people who will be involved in this transaction. This team should involve a buyer specialist, a great lender (of which we have many we can refer you to), a great title company, and a great inspector.

Make sure you hire a firm that represents you and your interests in this process. In many cases, buyers simply call the number listed on the ‘For Sale’ sign and whoever picks up gets their business. It’s important you don’t do this, because that listing agent has a legal fiduciary responsibility to tell the seller everything they find out about you, including how much you qualify to buy, how much down payment money you have, and what your current housing situation is. A buyer specialist, on the other hand, represents you and keeps all your information confidential.

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Buying a home is a process—not an event.

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After that, you’ll need a loan approval letter. For our clients, always secure their loan approval letters through one of our preferred lenders.   

Once these things are in place, the home search begins. Your agent and their team should help you make sure the home you fall in love with matches the type of mortgage loan you have and all your finances look right. After you’ve found your home, you’ll write an offer for it and enter a period of negotiation. Once the property is under contract, you’re about halfway done.

At this point, you’ll need an earnest deposit check and enough money saved for a down payment and for your closing costs.

Finally, you’ll need the services of a great title company. In Kansas City, there’s not a better title company that I know of than Thompson Affinity Title. They close many of our clients’ transactions and they’re extremely competitive on their rates.

If you have any questions about the home buying process or you’re thinking about buying or selling a home in the Kansas City area, don’t hesitate to reach out to us. We’d be happy to help you.

How Overpricing Could Cost You Offers

How can you be sure you’re pricing your home correctly?
There are four key items you should consider. 

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Some of the questions I most often receive are about sale prices.

Specifically, people tend to wonder if and when they should raise their sale price. The truth is, it depends.

For a listing in an average price point, 400 views online will typically translate to one buyer physically coming through your door. If this isn’t the case, there may be an issue with the listing’s price.

Also, if no offer has been placed within eight to 10 showings, this could also point to a potential pricing problem.

Ultimately, there are four key areas we should focus on. Each of the 181 steps in our full marketing plan revolves around these things.

The first significant factor is location. The better the location, the more valuable the property. Condition, too, is critical. Buyer’s will always pay more for a well-tended home.

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In today’s seller’s market, there’s no such thing as under-pricing.

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Of course, these first two items can only go so far without our third point: marketing. Today, there are many ways to market a home. Excellent marketing will be essential to attracting the most buyers and the most offers possible.

Once you have generated interest, it all comes down to price. If a home is overpriced, even by just 5%, it may not sell.

If each of these four things are up-to-par, your home should attract at least one offer after eight to 10 showings or after it has had 400 views online.

When a listing is priced just below or right at the “sweet spot” in the market, it will likely receive multiple offers. In fact, in today’s seller’s market there’s no such thing as under-pricing. With the amount of competition between buyers, buyer demand will drive up the price without you having to overprice your listing in the first place.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you.

3 Major Home Buying Mistakes & How You Can Avoid Them

There are three major mistakes that you must avoid when buying a new home.

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If you plan on buying a home soon, there are three major mistakes that you must avoid.

The first is refusing to confide in a trusted advisor. Experienced real estate professionals handle a large number of transactions with different types of people and different personalities. There is very little they haven’t heard before, and your advisor represents your best interests and has a fiduciary legal obligation to get you the best price, terms, and conditions available for your home, depending on the agency that you pick. In our office, we don’t practice dual agency—we only represent one party per designated agent.

A trusted advisor can help you make smart decisions by giving you a lot of options and providing you all the information you need regarding the outcomes of each possible decision. This way, you can think through what will happen in the negotiation process, the closing and possession process, the inspections, etc. When your agent has a pulse on what the market’s doing, they can present you with different scenarios so you can explore whichever one will help you achieve your real estate goals.

The second major mistake is altering your financial situation prior to closing. You don’t want to buy anything on credit once you’ve completed a loan application. For example, a major purchase like a new car can change your debt-to-income ratio and push you out of being able to qualify for a home. Large appliances (washers, dryers, refrigerators), outdoor and gardening equipment, electronics or computers, or furniture for your new home are also purchases you should avoid.

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A trusted advisor can help you make smart decisions.

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The third and final major mistake is buying the wrong house. The very first thing all homebuyers should do is make a list of priorities to define their home purchase objectives. Figure out what features and benefits will be most important to you in this process and what you can and can’t live without. Before you close escrow, review that list. It’s easy to overlook a major factor that can come back to haunt you later on.

It’s also easy to fall in love with a house and feel a sense of urgency to buy it as soon as possible. A house is a big purchase, though, and the cost of acquiring and liquidating real estate is so high that you must be absolutely certain that this is the house you want to live in for an extended period of time. I always tell first-time homebuyers that they should plan on living in their house for a minimum of five years to get the real benefits of homeownership and equity. We’re in a market that’s producing 3% to 5% equity growth per year, so if you can meet that five-year standard, you should come out pretty well.

If you have any questions about this topic or have a topic in mind you’d like to see us cover in a future video, just shoot me a text or send me an email and I’d be glad to help. I look forward to hearing from you!

Navigating Your Housing Situation Following a Divorce

Figuring out your housing situation after a divorce can be overwhelming. We have a few tips to help you get through it as smoothly as possible.

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If you're buying a home after a divorce, you'll want to go through the process a bit differently. Your financial situation might be very different, so we have some tips to buy a home as a single person as painlessly as possible. First, check your budget and check it again. A loan pre-approval or pre-qualification gives you the maximum amount you can spend on monthly house payments and includes a good faith estimate which includes property taxes and insurance. You don't need to spend the maximum amount you qualify for, and as a newly single person, you don't want to end up house poor. Secondly, you need to consider what's really important. Moving down because of new financial realities might not sound like a picnic, but overextending your finances just to stay in one area or a similarly sized house can be worse. You'll probably have less buying power, which will limit your options, so you have to be realistic about what you can have. Be realistic with yourself about what you want and what you need, like being in a certain school district or living a certain distance from your work.

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Removing your name from your current mortgage drastically improves your creditworthiness.

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If you're in the divorce situation, consider getting your name off of your current mortgage. This helps improve creditworthiness because in a mortgage lender's eyes, you're still liable for that mortgage unless you sell the house or refinance. This helps provide stability when you go to purchase another home. Being newly divorced, you might not be ready from a savings standpoint and you might have financial obligations like credit cards or investments. These things can keep you from rushing into a new home, even if you want to. Many lenders also won't let a divorced person receiving alimony as evidence of income until there's a solid history of those alimony payments being made on time. Remember to keep in mind that buying a home is a big maintenance undertaking, which is amplified when you're the only owner. Feeling an urgent need to move can be very real, but you don't want to bite off more than you can chew, especially after the emotional turmoil of divorce. I hope you find this information helpful if you're going through a rough spot in life. If you'd like to have a further conversation about your unique situation or you need some guidance, don't hesitate to reach out to me. I'm here to help.

No-Nos to Avoid During Your Home Sale: Part 2

Today I’m going over part two of “Home Sale No-Nos.” I’ll explain what the final three things you should avoid are when selling your home.

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Today I’m back with part two of “Home Sale No-Nos.” Last time, we went over the first four things that could sink your home sale, and today we’ll finish up with the final three:

5. Don’t follow buyers around your home. In fact, during showings it’s best to make yourself scarce. Give the buyer at least an hour-long window to make sure they have plenty of time to get there and view the home.

6. Don’t refuse to negotiate. Even if you and a buyer agree on a price, an issue with the home inspection, or a disagreement on the move-in date might come up, among other things. The more flexible you are, the smoother the road to closing will be.

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Your inability to negotiate could spook buyers away.

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7. Don’t ignore your agent’s request to fix up or clean your home. Staged and updated houses sell for more money. However, you don’t need to break the bank. A good deep cleaning and some decluttering will go a long way in making your home shine. The best thing to do is trust your agent’s pre-listing checklist to see exactly what needs to be done to net you the most money.

If you have any more questions or if you’d like me to answer one of your questions in a video, don’t hesitate to give me a call or send me an email. I look forward to hearing from you!

No-Nos to Avoid During Your Home Sale: Part 1

When you sell your house, there are a few big no-nos you need to avoid that could end up sinking your sale. Today we're uncovering the first four.

Want to sell your Kansas City Home? Get a home value report here 

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When you sell your house, there are a number of no-nos that you need to avoid. Today, we'll discuss the first four.

1. Don't take your own photos. You want to use a professional real estate photographer who has the right equipment and is specifically trained on how to use lighting and place furniture in a way to get the most out of the photos to sell your house. Remember, the Internet is the first place buyers will see your home, so you want that photography to be as good as it can get.

2. Don't try to sell your house by yourself. According to the National Association of Realtors, 87% of people purchased their home through an agent or broker and that number has risen consistently since 2001 when it was just 69%. Homes sold by owners sold for an average of $210,000 compared to the average of $249,000 for homes sold by people working with an agent. They also sell weeks faster.

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Sellers who work with an agent make more money and sell faster.

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3. Don't argue with your agent about your home's price. It's important for an agent to explain the value of your home in today's market to you. One of the biggest mistakes I see is people hiring someone who's brand new in real estate who isn't very plugged into the market. If you hire someone to sell your biggest asset, they should have a great track record. You want to ask them how many homes they sell per year, what their average list-to-sales price ratio is, what their marketing strategy is, and what they'll do if your house doesn't sell.

4. Don't trust Zillow as the word of God. Zillow's Zestimates can be off by as much as 61% depending on the house and its location, according to an article in the LA Times. A recent study found that the average Zestimate is off by about $14,000. Zillow can't discern whether a home smells like pet urine or has a finished basement, among many other things. Zillow also can't tell you about absorption rates or give you a market analysis. Only a real estate expert advisor can do that for you.

Stay tuned for the rest of our tips on things to avoid when selling your house. In the meantime, if you have any questions or you're thinking about buying or selling a home in the Kansas City area, give me a call or send me an email. I'd be glad to help!