Category Archives: Kansas City Real Estate

March 5, 2007 · 10:02 am

Kansas Buyer’s Agent: Real Estate 101

One of the most confusing things for most people to understand is who exactly a real estate agent is working for when they are buying or selling a home. Each state has their own particular rules regarding real estate transactions. For instance, I am licensed in the states of Kansas and Missouri. (For those of you not intimately familiar with the area the city is split in two by a road called State Line. On one side is Kansas. The other Missouri. Kind of like Western & Eastern Avenues in Washington, DC and Maryland.) Both states have their own set of rules and I have to adapt as I move from one state to the other.

Today I want to talk about Kansas. It is my home state! And in Kansas a real estate agent can represent you in one of three ways. You can download the brochure to get your own copy of the three. (You can also be unrepresented, that’s a whole other subject.) There is Seller’s Agency, Buyer’s Agency and Transaction Broker status. Over the course of this week I will discuss all three in detail. Today we will start with what you should be getting from a Buyer’s Agent.

The State of Kansas says:

BUYER’S AGENT

The buyer’s agent represents the buyer only, so the seller may be either unrepresented or represented by another agent.

The buyer’s agent is responsible for performing the following duties:

· promoting the interests of the buyer with the utmost good faith, loyalty and fidelity
· protecting the buyer’s confidences, unless disclosure is required
· presenting all offers in a timely manner
· advising the buyer to obtain expert advice
· accounting for all money and property received
· disclosing to the buyer all adverse material facts that the agency knows
· disclosing to the seller all adverse material facts actually known by the agent, including all material facts concerning the buyer’s financial ability to perform the terms of the transaction.

The buyer’s agent has no duty to:

· conduct an independent investigation of the buyer’s financial condition for the benefit of the seller
· independently verify the accuracy or completeness of statements made by the buyer or any qualified third party.

In short, the Buyer’s Agent is looking out for the Buyer’s best interest. Let me give you an example; REALTOR A has been working with Buyer A under an Exclusive Buyer’s Agency Agreement and Buyer A decides there is a For Sale By Owner they want to check out. (Another term, more correct, for FSBO is Unrepresented Seller.) So REALTOR A gives the Unrepresented Seller a call and identifies himself, his agency and his purpose of the call which is to set up an appointment. The Unrepresented Seller then decides he/she will work with the Buyer’s Agent and they work out a commission agreement before showing the home…in writing. During the course of these conversations the Seller says to the Buyer’s Agent, after having been told the Seller will be unrepresented, that the sales price is $100,000 but that they would take $97,500 for the house.

The house is shown to Buyer A and they love it. They decided to make an offer on the home of $99,000 because they really do not want to lose the house. Should the Buyer’s Agent:

Write the offer for $99,000 because he will get a slightly higher commission?
Keep the Seller’s $97,500 number private since the Seller told him in confidence?
Advise the Buyer that the Seller confided in him that he/she would sell the home for $97,500?

I’ll await your answers… You can contact me by clicking on “comments” below or through the new feature of the IM by Meebo on the right column. The IM is already proving to be very popular.

2 Comments

Filed under Kansas City Real Estate, Misc. Real Estate

March 3, 2007 · 9:17 am

Kansas City Real Estate Links That Help: Localism

Most of you know my policy on open information regarding real estate in Kansas City. I’m completely for it. Open the MLS. Open the tax records. Open the comparable sales. The more information the consumer has to make intelligent real estate home buying decisions the better I can do my job. And that is to help them secure (or liquidate) the right home(s) for their situation and to negotiate the best deal possible and then walk them through to success closing.

To that end I have provided you with Free, no registration, Kansas City MLS searches, links to investment clubs like MAREI and KCIG, private MLS sites like Trulia and write this blog and this blog to allow you insight into what a real estate agent does and how he thinks.

So today I want to give you a new link. It is still in Beta. But Localism is a great site that you will start seeing in your real estate searches. Localism is a real estate agent driven site that allows you to learn about your state and community and your local real estate conditions. There are even homes for sale sections and great articles about the current state of the market.

Of course, there are some REALTORS that are better writers than others. Some that seem to put more effort into the posts than others. Obviously, some are just fishing for leads. Some are really trying to serve the public.

The great thing about it is you get to decide. It’s like an interview with an agent. Like what you are hearing? You can leave a comment or question. Get to know more about them without actually meeting in person or making the phone call. In short, you get open information about your next real estate agent. You learn how they think, what they specialize in, where they live, etc. You get to decide who the best agent for you will be instead of just stumbling into an open house an working with that dude.

Check out the site. You’ll find me on the Kansas side. Due to an oddity of the system,since it’s still in Beta, I cannot do both Missouri and Kansas.

Investment Clubs in Kansas City

Last night when I picked up my mail I had a flyer from MAREI (one of the two investment real estate clubs here in Kansas City, KCIG being the other) announcing a Conference that they were conducting and selling tickets for. It looks to me like most of the topics are covering issues surrounding Buy & Sell (flipping) real estate transactions and Subject To financing, foreclosures and the like.

I am not endorsing this conference but I am telling you about it because I know I have quite a few readers that Buy & Sell or would like to. I think I’ve made my feelings be known about Buy & Sell (I’m not against it…just be wary) and if you would like to go it looks like they have some speakers worth hearing from. And there is probably worth to the Buy & Hold real estate investor, as well.

Not everybody I recognize, but certainly Jerry Clevenger and Jeffrey Taylor are two that jump to the forefront. In fact, Jerry Clevenger is interviewed by Dave Jenks/Gary Keller in the Millionaire Real Estate Investor book I often speak about.

If you go, get back to me and let me know how it flies!

MAREI = Mid America Association of Real Estate Investors
KCIG = Kansas City Investment Group

4 Comments

Filed under Kansas City Real Estate, Real Estate Investing

March 1, 2007 · 11:49 am

Kansas City Real Estate Market Condition Forecast

Yesterday I was out driving in my MINI and noticed a behemoth cloud mass growing to the south. So I pulled over and grabbed my trusty little Canon Powershot A530. Not my good camera but one I throw in the bag for moments like these.

Anyway, this huge mass had with it lightning, thunder and later came massive amounts of rain and first pea sized hail, followed by dime sized hail followed by quarter sized hail right around midnight. (Can’t wait to look at my roof carefully.) The streets literally filled with hail.

But I think this photo represents the Kansas City real estate market right now. As a photo, the image is static. Oh sure, it’s easy to see what happened in retrospect. But for those of you not familiar with the weather from Kansas City to Tulsa you know that the clouds could have just built, rumbled and produced nothing. On the left side of the photo it’s blue skies and clear sailing. The right side brings an ominous forecast.

Which side of the photo do you see the real estate market from? My own feeling is we will have a 2007 that closely resembles our 2006. Nothing great. Nothing bad. Just waddling along.

Investment Real Estate In Kansas City: Don’t Stop

Chicken Little loved to say the sky was falling. And if you read all of the newspapers you will see that they like to do the same when speaking of real estate. The media loves all the fodder regarding stagnant growth, reverse growth, minimal growth, large inventories, etc. But, and you need to listen here, it really doesn’t make too much of a difference if you own investment property, especially here in the Kansas City area, and you own it for the long haul.

If you’ve read my blog for any length of time you know I’m not a big proponent of Buy & Sell strategies. Buy & Hold income property is a whole other subject. Inman News is a great portal to keep up on real estate news. And today I read an article on Inman that reported that the home-price index fell 0.7% in the fourth quarter while rising 0.4% compared to the same period of time the previous year. A mixed signal but relatively flat, none-the-less.

However, (read the article) it goes on to speak of growth since 2000. Detroit is the worst city on the index with a rise of 19.51% since 2000 and Miami had the highest rise at 180.87%!

We can assume that Detroit will not face the correction that Miami will. (We don’t know, but it’s an educated guess.) And neither will Kansas City. But lets say Kansas City appreciated somewhere along the lines of Denver at 37% and Dallas at 23%. (I’ll use the 25% number since I believe we aren’t Denver but a little nicer than Dallas…oh, I can see the angry emails now.)

Example: Paid $150,000 for duplex in 2000. Appreciated 25% over the 6 years and now has a market value of $187,500. For the sake of argument, we can say that it really appreciated 27% but over the last year dropped 1%. Doesn’t really matter. The point is your equity grew on appreciation alone by $37,500. Your remaining principal is now $111,230 (or so assuming you put 20% down at 7.0% back in February of 2000) so your tenants paid your loan down an additional $8,770 on your investment property. That’s total equity growth of $46,270.

Therefore, your initial $30,000 cash investment is now worth $76,270. A 254% increase. Are you getting that? You had 25% appreciation on the property but because of leverage you had a 254% increase in your money. How are your stocks/bonds doing?

And I have not even mentioned Cash Flow Before Taxes or Depreciation. Two more of the 4 benefits when owning investment real estate.

4 Comments

Filed under 4 Benefits of Real Estate Investing, Kansas City Real Estate, Misc. Real Estate

February 24, 2007 · 10:39 am

New Urbanism, Smart Growth, Whatever: Just Do It

Before I get started let me just say this. I am not an environmental radical. I do recycle. I drive a small car. I’m for smart growth. I’m for anything that lessens our dependence on oil. However, I also live in our real, modern America and I have a minivan to drive around my family of six, and that vehicle currently uses oil. I live in the capital of suburban sprawl right here in Olathe, Kansas and I’ve been known to leave lights on for days at a time.

New Urbanism and Smart Growth do need more attention. Especially here in the heartland where land is so plentiful and cheap that we tend to squander our natural resources without much thought. Clean up this blighted area and recycle the land with new homes, schools and businesses? Nah, just tract out another 100 acres down by Spring Hill and start building!

There are economic, sociological and governmental forces here at play that are too large for just one guy to make a difference. (And talk about a dysfunctional city family here in the metro…KC doesn’t like Overland Park, Olathe doesn’t like Lenexa, everyone fights with everyone over business…) But I would at least like to bring it to the attention of some of you out there.

On this post you will find several links to sites that I think are worth your time to check out. Building & Philosophy sites, a National Geographic site, community sites like Kentlands in Gaithersburg, Maryland, Cherry Hill Village in Michigan and Orenco Station in Oregon to name but a few. (Imagine Zona Rosa with housing right around it so that people could safely walk to the shops and dining without having to drive!) There are even many blog sites concerning urban policy and growth.

I see hope for this train of thought here in the Greater Kansas City area. After all, the condo/loft boom in downtown and the River Market areas are a direct result of people young and old wanting to live in a community that they are actually a part of. To walk to work and dining and entertainment. To not have to negotiate I-35 each and every day.

I have even seen a few builders here in the KC metro put together some neo-traditional housing neighborhoods. Yes, they lack the overall efficiency of a true smart growth neighborhood and are often built out on empty acres miles from shopping and business centers but they are a baby step in the right direction.

True, we are Kansas City and we have different lifestyle traditions than the people on either coast. No matter how nice, spacious and well put together an all brick, three level town house is people here are probably never going to be crazy about living in one. But maybe we can mix a few in along with some well designed single family homes and surround these around a business center? Maybe we can move forward on the Light Rail for Kansas City down to Waldo. (This subject is sure to bring about a comment or two!)

I don’t pretend to have all the answers to our growth problems here in the United States. Many with my political point of view believe we have no growth or environmental problems. But I think that it is short sighted of us to not look towards the kind of city and neighborhoods we are leaving for our children. To continually strive to make a better city than what was given to us and to have affordable housing, clean air, jobs and first class educational facilities is what I believe most of us want . We just have to come to agreement on how this is to be done.

So long as the discussion is civil, I welcome your emails and comments. Reasonable people can debate issues and look for places of promise even when the disagree on many points.

1 Comment

Filed under Kansas City neighborhoods, Kansas City Real Estate, Social Issues

February 24, 2007 · 8:49 am

Kansas City Real Estate: A Spring Thaw

Let’s face it. It’s been a pretty tough selling season since late November. First there was Thanksgiving followed by the Christmas season. (Yes, houses do sell during this time of year but a greatly reduced pace.) Then came about 1 month plus of snow on the ground and 4-20 degree temperatures.

This week I have noticed more traffic on my homes than I have seen in a while. The weather has broke and people are once again thinking about making a move when it comes to buying their next home and possibly selling their current one.

For sellers this is welcome news.