Our local Kansas City housing market is beginning to heat up this summer and the national economy is still showing signs of improvement. But, as a first-time buyer are you still on the fence? You could feel the pain if you don’t take action soon!!
Time is running out on the $8,000 federal government’s tax credit. Don’t be deceived by the December 1 end date. Remember, the purchase loan must be closed by December 1 in order to qualify for the tax credit. Having a signed contract or having loan approval isn’t enough for obtaining the credit.
Look at the timeline from the closing date backwards to see why you need to start NOW. The average time, from final signatures on the contract to sitting at the closing table and getting the keys to your new home, is generally 45-60 days. So, to meet the Dec. 1 deadline, you’ll need to have a home under contract by late September or very early October.
Are you thinking that it’s doable in only 2 months? Well, lots can happen during the home search and loan approval process, and two months can fly by fast. And then there are possible issues after the contract is in place which may affect the closing date. Please contact us, InSight Mortgage Group, to start your preapproval process now.
For first-time buyers the purchase process can take a bit longer than for experienced purchasers. Home buying is a complicated process, and you’ll need the guidance of a good realtor and lender.
CONSIDER:
Competition: Some neighborhoods with homes for sale (inventory) are selling fast in the greater Kansas City metro area. Certain areas are especially appealing for first-time buyers, and with the tax credit available only to first-time buyers, these areas are seeing a competitive market. Mix into that foreclosures with really low asking prices. Investors are very active in scooping up these low priced homes.
Contingencies & Disclosures: The seller must disclose any material facts about the property, including lawsuits or claims of ownership on the property, and any known property defects. If questions arise during the buyers review of the disclosure, final signatures on the contract can be delayed. Contingencies can also impact the negotiating process, causing additional delays.
Loan Approval: Right now, interest rates are at all time lows for credit-worthy buyers. But, new laws are impacting the approval process and lenders are requiring more and more detailed paperwork from buyers. Obtaining a preapproval prior to making an offer is a high priority in the purchase process.
Appraisal: The lender orders an appraisal on the property, which determines the value of the property being purchased. An appraiser looks at the interior and exterior condition of the property, and compares it to very recent sales of similar properties close by. Most appraisals are now ordered through a third party appraisal management company, adding another layer of time to the process. And, laws implemented recently also added more paperwork to the appraisal process, which impacts turnaround time for completion.
Inspections: It is generally recommended that buyers hire a professional company to conduct an inspection of the property. Depending upon the findings, if repairs are needed, negotiations are reopened and more time is required to come to some sort of resolution.
Holidays: When looking at a closing date it important to remember the upcoming holiday season. Many people are involved in the closing process for a real estate contract: the buyers and sellers real estate agents, lenders, attorneys, inspection companies, appraisers, appraisal management companies, and escrow/title company offices. A lot of people wait to the end of the year to take their vacation time, and especially near the Thanksgiving weekend. It’s not unheard of, unfortunately, to have crucial paperwork sitting in a pile on the desk of a vacationing worker.
Short Sales & Foreclosures : Offers on these properties almost always take much longer for an answer than traditional MLS marketed homes. Some agents have reported that the companies handling these homes are overwhelmed with paperwork, are understaffed, and that it can take up to 3 months before an answer to an offer is received!
With the encouraging signs in the housing market being reported recently i.e:
* Nationally there’s a 6 month supply of homes priced under $250k (CNBC)
* Existing home sales in June were up, 3rd straight month for increased sales
* Only 31% of all sales were distressed properties – indicating reduced inventory
* Median price of an existing home increased in June, to $181,800.
* Higher prices than six months ago, each month making small gains
those knowledgeable in the housing industry are predicting that average home prices may NOW be very close to fair value, and the bottom of the market is behind us.
If you, or someone you know, may still be sitting on the fence waiting for the “right time” to jump into homeownership, don’t wait any longer. Call us at 913-642-3334 or email us at michele@wantinsight.com or dickw@wantinsight.com to start your preapproval process. Be smart and invest in your future today! Blessings.
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