Friday, July 20, 2018

August Lake of the Ozarks Real Estate Update



Home Warranty Plans
Frequently in the home buying or selling process, buyers encounter homes whose sellers are offering home warranties.  Both buyers and seller (and some agents) are frequently under the impression that these warranties cover most, if not all, costs to repair or replace things that fail in the home.
A home warranty is a contractual agreement provided to an owner of a house by any of a number of different types of entities. In the case of this article, I am referring to “home warranty” companies.   The home warranty industry was founded in 1971 by American Home Shield.  In the strictest legal sense a warranty of any kind must adhere to guidelines set at the states' and federal government's levels. But the word “warranty” is not always used explicitly to mean a legal warranty is being conveyed. Usually, a home warranty is not a warranty at all but rather a home service contract that covers the repair and/or replacement costs of home appliances, plumbing, heating and cooling and electrical systems, and possibly other components. Coverage and costs vary significantly across home warranty companies and home warranty contracts do not cover all home repairs.
Some home plans are more expensive and cover more items while others are more limited.  Most require that you pay a service fee, around $50 to $100 per incident and also have a maximum amount that they will pay per covered item and a limit on what they will pay in total.  Be sure that you are aware of what the coverage exclusions are and if the company pays the full cost of replacing an item or its depreciated value. 
Some common complaints that home warranty clients have about warranty companies are:            1. Deny the claim citing homeowner's maintenance negligence or “pre-existing problem”
2.  Repair the equipment even when it is in such bad shape as to be replaced (which may keep it running until your warranty ends)
3.  Utilize sub-standard service providers (the warranty company chooses the provider), this issue is often attributed to the fact that they have negotiated lower rates from these providers
Most warranty companies have a “Sample” Coverage Terms document that outlines what is included and excluded as well as some other terms.  These generally look pretty good.  Many have fine (miniscule) print that references a cover/front page that details specific coverage on the particular home.  Make sure you have all information before making a decision.
One of the best preventive measures you can take to reduce the risk of nasty equipment failure surprise after closing is to schedule a thorough home inspection (by a reputable, knowledgeable company).  Your purchase contract should allow for an inspection and have a date by which you must complete and report any issues to the seller.  If their response is that the home warranty will cover it, look over the coverage terms AND make a call to the warranty company to verify this.
A great resource for home warranty information and reviews of existing companies as well as a list of ones no longer in business (some reportedly still selling warranties) is the website;   www.HomeWarrantyReviews.com .
A home warranty can be a great asset, you just need to do a little homework to make sure you know as a seller what you are offering and as a buyer what you are receiving.  

Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you have interest in a career in real estate or would like Michael’s assistance in the sale or purchase of property, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com



Thursday, June 28, 2018

July Lake of the Ozarks Real Estate Update


Understanding Earnest Money

Make sure you fully grasp what an earnest-money deposit is—namely, proof that a buyer is committed to completing a sale by having skin in the game. The earnest-money deposit is a negotiable amount between the buyer and seller, but usually about 1% to 2% of the purchase price (although it can shoot up to 10%). This money is generally held by the seller's broker or a title company, to be used as a credit toward the down payment and closing costs.

In an aggressive seller's market, many homes receive multiple offers from anxious buyers. One of the ways to make an offer stand out is to offer a considerable earnest money deposit.  If a high earnest-money deposit scares you, remember you'll have to come up with the down payment 30 to 45 days after making an offer, anyway.  For example, on a $500,000 mortgage, a 15% down payment is $75,000.

One mistake buyers make with their earnest-money deposit is agreeing to remove contingencies   they may legitimately need.  For instance, if buyers agree to remove a loan contingency and their loan falls through, they'll lose their earnest money.  Other contingencies, such as a home that's uninsurable, inspection issues, a problematic title search, or if a house doesn't appraise—also protect a buyer by allowing the penalty-free canceling of a contract.  Make sure you are aware of all deadlines and contract requirements and stay on top of the timeline for completion or termination of the contract for valid reasons.

This may seem like a no-brainer, but it's easy to get swept away by a home's cool features when you first see it. Also, in a rapid paced market, you can become overly anxious about buying.  A buyer may put in an offer only to realize days later that granite counters and stainless appliances are incredible but the overall floor plan just doesn’t work for your needs.  Make sure that you're 100% serious about buying a home before making an offer.  If you get cold feet and back out, it's likely that you won't get your money back.

Know when to let it go.  I have worked with clients who have had major life changes during the midst of purchasing a home.  Unless you are working with an extremely understanding seller, they will most likely expect to keep the earnest money deposit.  After all, they have taken their property off the market in order for you to proceed with the purchase.  There will also be other expenses that would normally be paid at closing that your deposit will need to cover.

Personal problems may be very serious to you, but they're not a valid reason to cancel a home purchase. And if you're bailing on a deal with no legal justification, fighting for your earnest money deposit is probably a waste of time.    

Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you have interest in a career in real estate or would like Michael’s assistance in the sale or purchase of property, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com


Thursday, May 17, 2018

June Lake of the Ozarks Real Estate Update


     A Look at National Home Sales
     Existing-home sales grew for the second consecutive month in March but lagging inventory levels and affordability constraints kept sales activity below year ago levels, according to the National Association of Realtors (NAR).
     Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 1.1 percent to a seasonally adjusted annual rate of 5.60 million in March from 5.54 million in February. Despite this month's increase, sales are still 1.2 percent below a year ago.
     Closings in March eked forward despite challenging market conditions in most of the country.   Per Lawrence Yun, NAR’s Chief Economist:  "Robust gains for March in the Northeast and Midwest – a reversal from the weather-impacted declines seen in February – helped overall sales activity rise to its strongest pace since last November at 5.72 million," said Yun. "The unwelcoming news is that while the healthy economy is generating sustained interest in buying a home this spring, sales are lagging year ago levels because supply is woefully low and home prices keep climbing above what some would-be buyers can afford."
     The median existing-home price for all housing types in March was $250,400, up 5.8 percent from March 2017 ($236,600). March's price increase marks the 73rd straight month of year-over-year gains.
     Total housing inventory at the end of March climbed 5.7 percent to 1.67 million existing homes available for sale, but is still 7.2 percent lower than a year ago (1.80 million) and has fallen year-over-year for 34 consecutive months. Unsold inventory is at a 3.6-month supply at the current sales pace (3.8 months a year ago). 
     In the Midwest, existing-home sales increased 5.7 percent to an annual rate of 1.29 million in March, but are still 1.5 percent below a year ago. The median price in the Midwest was $192,200, up 5.1 percent from a year ago.
     Properties typically stayed on the market for 30 days in March, which is down from 37 days in February and 34 days a year ago. Fifty percent of homes sold in March were on the market for less than a month.  Throughout the country markets are seeing the seasonal ramp-up in buyer demand this spring but without the commensurate increase in new listings coming onto the market.  As a result, competition is swift, and homes are going under contract in roughly a month, which is four days faster than last year and 17 days faster than March 2016. 

Monday, April 16, 2018

May Lake of the Ozarks Real Estate Update


     Spring was slow in it’s arrival this year and although sales have continued to be strong I feel that the market was diminished by the late appearance.  Many of the sellers I work with were reluctant to get their homes ready for the season and on the market before the wet weather let up.  The lake real estate inventory is still tight, and this has contributed to what I feel would have been an even stronger first quarter.
     A five-year comparison of first quarter sales shows continual increase each year over year with few exceptions.  The following data shows the sales in only the first quarter of each year.
     Lakefront homes sold in 2018 totaled 267.  This is down slightly from 2017 which had 278 sales.  Sales in 2016 were 202.  Sales in 2015 were 196.  2014 sales were 181.
     Non-lakefront home sales in 2018 were 199.  This category of homes has continued to increase in sales each year.  2017 sales were 186.  2016 sales were 181.  2015 sales were 152.  2014 sales were 139.
     Condo sales have also increased each year.  2018 sales were 147.  2017 sales were 131.  2016 sales were 111. 2015 sales were 77.  2014 sales were 76.
     Lakefront lot sales are coming on strong compared to previous years.  27 lots sold in the first quarter of 2018.  Last year, in 2017 we had 18 sales.  2016 sales were 9.  2015 sales were 13.  2014 sales were 12.
     Low inventory and, finally, the strong buyer demand, is driving sales prices up as well as bringing the lakefront lot market back.  If you are intent on selling, I feel that 2018 and 2019 will continue to be a Seller’s market. 
     My advice to buyers is to be on top of the properties coming on the market either via a real estate agent or an online property database.  When a property that is well priced in conjunction with its condition becomes available, it is very common for it to be under contract within a week of coming on the market.  If you are intent on buying, you need to be positioned to know as soon as a property meeting your criteria is offered.  You will also need to be ready to view the property and make a strong offer.  Price is not the only items you need to consider when making an offer.  Earnest money, financing, inspection and other contingency times and closing date are just a few items to consider.
     Sales data obtained from the Lake of the Ozarks MLS comparing the time frame from January 1st to March 31st, 2014 – 2018.      
Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you have interest in a career in real estate or would like Michael’s assistance in the sale or purchase of property, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com


Tuesday, March 13, 2018

April Lake of the Ozarks Real Estate Update


     Lakefront lot sales are on the rise and I expect 2018 to see more sales than in any of the previous 10 years.  In 2017, waterfront lot sales were up 46% over the previous year.  This year, January and February lot closings were double and triple that of any of the previous 10 years closings in a month to month comparison.

     Over the previous 15 years, 2005 had the largest number of lakefront lots sales with 290 lot sale closings.  The low point was in 2011 with just 35 sales closed.  Since 2009, lakefront lot sales have stayed under 100 closings per year.

     The lakefront home market continues to have an inventory shortage and existing home prices keep rising.  The demand for homes will drive an increase in building and we are beginning to see this come into play. 

     Over the previous 5 years, the available lot inventory has hovered mostly in the low to mid 500s range.  The highest lot inventory was in September of 2015 with 566 lots and the lowest inventory was January of 2014 with 429 lots available.  Currently, there are 440 lakefront lots on the market.

     Nationwide building permits reported by the U.S. Department of Housing and Urban Development for privately owned housing units increased in 2017 by 4.7% above the 2016 permits issued.  The Midwest area showed building permits increased by 9.2% in 2017 compared to 2016.

        The lakefront home market continues to be a strong seller’s market.  The lakefront lot market is currently transitioning to a neutral position between buyers and sellers.  Looking at existing conditions, I believe we could very well see this shift further to a strong lot seller’s market by Spring of 2019.      

     Sales data obtained from the Lake of the Ozarks MLS comparing the time frame from January 1, 2004 to March 5, 2018 and the U.S. Department of Housing and Urban Development.
      
Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you have interest in a career in real estate or would like Michael’s assistance in the sale or purchase of property, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com


Wednesday, January 10, 2018

February Lake of the Ozarks Real Estate Update

     Following is a chart showing the breakdown of lakefront homes sold in 2017 by area.  Sales were widespread throughout the area and across a wide range of prices. 
     The total number of lakefront homes sold in 2017 was 950, this includes 10 that are not on the chart due to being located in areas outside of our main service areas.  The average square footage was 2350 and the average sales price was $335,141.  The median sales price was $260,000. 
     Currently on the market at the beginning of 2018 are 455 lakefront homes with an average square footage of 2903 and an average list price of $531,412.  The median list price is $349,350.

   
2017 LAKEFRONT HOMES SALES BY AREA
AREA #SOLD SQ FT  AVG $PRICE 
Horseshoe Bend 72 2212  $         340,963
Four Seasons 45 3833  $         743,765
Osage Beach 88 2806  $         375,822
Linn Creek 41 2255  $         297,785
Camdenton/Grnvw 61 2268  $         275,761
Climax Springs 116 2144  $         261,752
Shawn Bnd/SnrsBch 173 2300  $         321,371
Porto Cima 27 4969  $      1,057,204
Villages 6 4195  $         818,583
Stover 82 1791  $         211,062
Gravois Mills 112 2036  $         272,287
NorthShore 117 1920  $         251,227

Sales data obtained from the Lake of the Ozarks MLS covering the time frame from January 1, 2017 to December 31, 2017.
Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you would like Michael’s assistance in the sale or purchase of property,  or have interest in a career in real estate, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com


Friday, December 8, 2017

January Lake of the Ozarks Real Estate Update

     Happy New Year!  Here is a review of how the 2017 sales compared to one and two years ago.   
     Total number of property sales increased 13.9% in a 2017 year over year comparison.  Total 2017 dollar volume closed was up 22% compared to 2016.   Foreclosures decreased by one unit, there were 136 total foreclosures in 2017 which represented just 4.5% of all sales.  More than half of the foreclosure were in the off-water home market.
     2017 Lakefront home sales increased in number by 30.2% above 2016.  2016 Lakefront Homes sales had decreased by 3.3% compared to 2015 so it is good to see a turnaround from that slight decline last year.   The 2017 average sales price increased by 2.8% above 2016.  The average days on the market tightened up by 6.8%.
     Off-water home sales had an increase of 6.5% in the number of homes sold in 2017 vs. 2016.  The average sales price increased by 10.9% in a 2017 year over year comparison.  Average time on the market reduced by 6.3%.
     Condo sales also saw healthy increase in the number of units sold of 22.9% this past year.   The average sales price increased just 1.4% in 2017 but had fallen by one-half percent in 2016 compared to 2015.  Market time for resale condos declined 6.9%.
     Villas and Townhomes decreased 25.3% in the number of units sold in 2017 vs. 2016 and is even with the units sold in 2015.  The average sales price did increase by 1%, up from last year and up 11.2% in 2017 compared to 2015.  Average time on the market declined 16%.
     2017 Commercial sales decreased 28.9%.  There were at 54 units closed in 2017, 76 units closed in 2016 and 65 units closed in 2015.   2017 average sales price also decreased by 5.4%.  The average days on the market grew by 33.9%.
     The number of 2017 Lakefront lot sales increased year over year by 50.8% however the average sales price fell by 8%.  The average time on market was shortened by 19.7%.
     Non-waterfront lot sales decreased in 2017 by 19.8% and the average sales price dropped as well, 2017 average price was 3% less than 2016.  The average time on the market fell 24.6%.
     The sale of farms increased in total by 46.1% with the average sales price falling 17.4% compared to 2016.  The 2017 average sales price is 9% higher than the 2015 average.  Average time on the market for farms decreased 37.8%.
      Lake area sales data has been obtained from the Lake of the Ozarks MLS based on all property type sales over the time frame from January 1, 2015 to December 1, 2017 and all other times represented in the data.
    Michael Elliott has been selling real estate at the Lake of the Ozarks since 1981.  He is one of the most respected brokers in the area.  If you would like Michael’s assistance in the sale or purchase of property,  or have interest in a career in real estate, you can reach him at 573.365.SOLD or cme@yourlake.com  View thousands of lake area listings at www.YourLake.com $1 million plus homes at www.LakeMansions.com   You can also view each months’ article, ask questions and offer your opinion on Michael’s real estate blog, www.AsTheLakeChurns.com