Your home: Home maintenance ‘must dos’ as winter approaches

I cannot tell you how excited I am that fall is here! This is my time of year.  As a Realtor, you might think I would prefer the spring or summer when the market is really cranking. Please don’t get me wrong: I like it then, too. I am just a holiday guy at heart.  From Halloween, right on through to Thanksgiving and Christmas (and Hanukah and Kwanza).

But let’s not get too caught up in the holidays yet. As we prepare for family to visit and great memories to be made, let us also prepare our home for the changing of the seasons. So much of the repairs that I negotiate when a home sells are preventable. A little deferred maintenance goes a long way.

Before the temperatures plummet, contact a licensed HVAC company to clean and service your furnace and humidifier/humidistat. Not only will they insure that it is operating properly, they should also check to make sure that is sealed properly and not leaking any carbon dioxide into your home. CO2 can cause illness or, God forbid, death — so please service your furnace annually. Most companies will offer a package deal if you sign up for and A/C and furnace plan, FYI. Home buyers will almost always request that corroded furnaces be cleaned and repaired when called out on a property inspection.

Clogged gutters are almost always the culprit when water intrusion takes place in a home’s basement. When gutters or downspouts are clogged, the water just over flows and falls right next to the foundation wall. If proper grading or sloping of the ground cover around the home does not exist, typically the water will find its way into the home.

Gutter cleaning can be a messy job yet is much easier than cleaning water out of your basement. It only takes a few hours, a ladder and a hose — or you can hire it out. Whatever your strategy, please do not avoid this very necessary job. I speak from experience. One winter, while living in my first home, it started raining and then quickly transitioned to sleet and freezing rain. Little did I know (because I didn’t inspect them every other week like I should) that my gutters were packed with leaves. As my wife Leah and I were sitting by the fire, we started to hear water splashing on our front porch.  I looked out the window and saw water pouring over my gutters. Long story short, I stood on a ladder in the rain pouring bucket’s full of hot water into my gutters for about an hour until I got them thawed enough to pull out the leaves. Lesson learned the hard way.

I mentioned a fire earlier which brings me to my final suggestion. Regularly scheduled chimney cleanings and inspections. How often you ask? It depends on how you use your fireplace and how often. If you are a die-hard wood fire burner, you should have your chimney cleaned every year for sure and probably inspected by a licensed chimney sweep. If you live in an older home and have not had your chimney lined with a metal liner yet, you should certainly have your chimney inspected. Most of the older homes were built with a brick chimney containing an internal clay tile flue. Over the years, due to moisture, settling, and usage, these clay tiles develop gaps in between the tiles where the mortar has deteriorated. These gaps allow for gases to escape back into the home or for creosote and soot to build up which can cause a flue fire. Even if you only burn gas logs, the gases that I mentioned earlier can cause problems if allowed to re-enter your home through voids in the tiles. Kind of like forest fires, “Only you can prevent flue fires.”

We have partnered with some great service providers who are offering a discount to our clients for some of these preventative services — check out the video below for more:

NP Heating & Cooling
913-963-7194
Offering $79.95 Furnace Clean and Tune-up

Shain Carpet Cleaning
816-589-3197
Offering 10% off Carpet Cleaning

Beerman Lawn & Landspace
816-305-9651
Offering 10% off Leaf Clean-Up AND
1/2 off your first mow when you sign up for 4 consecutive mow services

Noonshine Windows
816-363-6661
Offering $99.00 for 200 lineal feet of gutter cleaning

Your home: At this point, shouldn’t we just wait to sell in the spring?

I tell you what, the Spring market isn’t what it used to be. If you think about it, how consumers finds and purchase real estate has changed dramatically just in the last 20 years or so. Heck, many of my associates who have been in the real estate business for 30-plus years remember when the MLS was a book. Yes, a book that was updated manually and to which only Realtors had access. And as a Realtor, I could only show the listings that my company held and not the listings of other brokerages. Boy, am I happy that times have changed! But back to the spring market.

Before the Internet became the top source for consumers to research and eventually find a home, the majority of consumers would do their research in person at either an open house or at a private showing. Because it meant getting out in the elements, seasonality (the weather specifically) could have a dramatic impact on the real estate market. Face it: If Mother Nature dumps a foot of snow on the ground, the market will be impacted. In the past, it could come to a screeching halt. This is not the case today.

I share with my selling clients all the time that your first showing is now online. I used to just talk about how many “hits” a property would receive and use that information as a tool to gauge our online marketing. Now I know that at the time I was highly undervaluing the power of the online buyer. Our team has seen it first-hand. For instance, when one of our buyer specialist sends a list of potential properties to one of our buyer clients, the “scrub” of the list will begin. First the buyer looks at all of the photos and the virtual tour online to assess condition and flow. Then the buyer will find the property’s exact location on Google maps, which is quickly followed by a Google street view of the home and the surrounding neighbors to look for any overall condition concerns. Finally, our client might use a program such as walk score to see what stores, parks, and other amenities are available in the area. After all of this, a buyer may elect to either view a home first hand or scrub it off of the list. This is why I say your first showing is online!

With everything now happening online, the weather conditions have lost the power to directly influence the market. Now, I still say that buyers who will go out and view a home in a foot of snow are my favorite buyers. And why is that? Motivation! You don’t get many “looky loos” out in a foot of snow. You get motivated buyers. But the weather HAS lost its power to prevent the home search process from beginning or even continuing during the winter months.

Additionally, one cannot predict what the spring market will bring. I can only present the facts of today’s market and then compare it to historical trends. For example, this past March we had approximately five months of inventory compared to today’s level of 3.1 months. So the amount of active competition is quite a bit less today. Less competition means that the beauty contest has fewer contestants and the standards of condition might be a little more pleasing to your pocket book. By that I mean a buyer cannot be as picky when they have very few options.

And now for the broken record…: It is inevitable that interest rates will be going up at some point in the near future. We have already seen over a 1 percent jump this year. What will that look like after the new year? Almost every time we see an increase in interest rates the number of active buyers decreases. So if rates go up in the spring and inventory will be higher in the spring (based on historical inventory patterns), that is a “one-two punch” for you sellers out there. Not only will you have more competition, but your buyer pool will be smaller.

So the question becomes: If moving during the winter caused you to net a higher sales price, would you consider altering your plan of waiting until spring?

Your home: Debt ceiling, government shut down, and the “taper”… oh my!

If I click my heels together and say, “There’s no place like home,” will it take me back to a normal Kansas City housing market?

Unfortunately not.

Federal Reserve

And as much as I am sick of hearing about these highly politicized (yet important) issues, we need to talk about them. Last week, I spoke of the government shut down and its effect on the housing market. You might remember that I mentioned buyer confidence and the negative impact that these issues are having on it. I just read today that it is predicted that consumer confidence will drop again this month making it the third month in a row. Not a good sign as winter quickly approaches our market.

The debt ceiling issue seems to be underscored by the shutdown, yet has the potential to have a more substantial impact on the real estate market. If our Congress does not vote to raise the debt ceiling by Oct. 17, our government will default on its current debt. If (hopefully not when) that happens, Treasury bond prices would plummet. Historically, interest rates react opposite of the bond market. So if bond prices go down…. you guessed it, interest rates will go up. Even if the government default only last a couple of days, the credit rating agencies will again downgrade the U.S. government credit rating as they did in 2011. A credit rating hit could also cause interest rates to increase due to the fact that the U.S. would then have to pay a higher rate to its bond investors. ”If Uncle Sam’s costs go up, borrowing costs go up for everybody,” says Greg McBride, senior financial analyst for Bankrate.com.

So what is the “taper”? It has become a dirty word when it comes to our government and interest rates. The United States currently purchases 85 billion dollars in government bonds each month (also known as Quantitative Easing). This bond program has kept long term interest rates at all-time lows.  You may recall a few weeks ago when Ben Bernanke, the chairman of the Federal Reserve, mentioned that the government may begin to taper its purchases in the bond market that interest rates jumped up 1 percent in a week’s time.  The next conversation about the taper is set for December of this year.  If the tapering begins, interest rates will most likely increase.  Ben Bernanke has made statements that the bond purchases should come to an end by mid-2014.

So I am a “cut to the chase” kind of guy and if I were reading this article I would be ready for some action steps if I were looking to either buy or sell in today’s market.  Well here you go_

1. If you are considering or have considered buying a home, now is the time.  We have become complacent with historically low interest rates for so many years now. We can only dodge the “taper” bullet so many times before the decision is made. Then it will be too late. Therefore, move now while low rates are certain. You may even look into a “lock and shop” option with your lender. Most major lending institutions offer some sort of lock and shop. For a slightly higher interest rate (approximately 1/8th of a percent on average), a buyer can lock in today’s interest rate. A rate lock will usually allow you 30 to 45 days to shop and then 30 days to close once you are under contract. A lock and shop may offer you the reassurance that you need to get out there today.

2. If you are considering or have considered selling a home, now is the time.  Inventory levels are still very low. As a matter of fact, in the last two weeks the number of homes that have cancelled or expired off of our MLS has increased by 46 percent. These homes have not been successful at selling and are now no longer your potential competition. In addition, the increase in home values we have seen every month this year has lessened for the last three months consecutively signaling that home values are peaking or have peaked for 2013. Now is the time to get top dollar and with very little competition in most cases.

Photo Credit: Tim Evanson on Flickr.com

Your home: How is the government shutdown affecting the real estate market?

It seems that one can banter back and forth all day and all night about the government shutdown, what caused it, and who to blame. For the purposes of this column, none of that matters. What does matter is how the shutdown is impacting our market. And it is having an impact.

Capitol

The biggest ripple is currently stemming from the IRS closure. All lenders require a copy of the 4506-T tax transcript when underwriting and verifying tax returns for a potential buyer. With the IRS closed, these forms are not available. Without a copy of the buyer’s tax transcript, do you think that the investors behind these loans are going to allow the purchase to close? Probably not. Some lenders are saying that there may be cases where the loan can close without a 4506-T, but I would not hold your breath on that one.

So if your home is currently under contract, please make sure that your buyer’s lender has already requested and received a 4506-T on your buyer. Otherwise, the closing may have to be postponed. That could cause some major problems if you have a “domino effect” taking place where one seller is waiting for their buyer to close on the seller’s home to then turn around a close on a new home. Then THAT seller will take their proceeds and make a purchase. You see how one delay could affect several families.

One of the strongest impacts could be to the more rural areas of the metro. The United States Department of Agriculture (USDA) provides funding for home loans in many rural areas and is currently closed. It is pretty sad. If you go to their website, it reads “Due to the lapse in federal government funding, this website is not available.” Therefore, any USDA loan that is currently in processing but has not been USDA approved will not be approved until federal funding is available again.

If I remember right, didn’t we just come out of a housing crash? Shouldn’t we be doing everything that we can to support home purchases?

For me, the most dangerous and intangible symptom of this shut down is the effect that it may have on buyer confidence. If the shutdown continues to slow down the home buying process, there may be buyers who throw up their hands and decide to wait until next year after the dust settles. Every time a buyer makes that choice, there is a seller somewhere who will not be accomplishing the goal of selling his/her home. What if that seller is expecting a baby and must sell to create a nursery? Or if he or she is selling because of a job change with no relocation support from an employer? Not selling a home could have a devastating effect on one’s financial stability and/or family life. This is serious business. Like most of my associates, we are in this business because we love to help people. Our job is to make a move much easier for our clients. So we take it very personally when someone or something (Congress) stands in their way.

So what do I say? The government may be closed, but we can chose to keep our market open. We may have to be a little more patient, but isn’t it worth it? Our country’s financial recovery will never be complete without a stable housing market.

Finally, I ask my fellow Realtors to help me by properly setting expectations for the speed bumps ahead with our collective clients, and ask them for their patience. For it is our charge to continue the housing recovery that they (our wonderful buyers and sellers) have begun.

Photo credit: KAZVorpal on Flickr.com