Tuesday, March 24, 2020

The Coronavirus: Get the Latest Information

Monday, March 16, 2020

What The Fed's Emergency Rate Cut Means For Mortgage Rates

What The Fed's Emergency Rate Cut Means For Mortgage Rates


There are a lot of words here.  If you have a mortgage you might ever refinance (and especially if you think Sunday's emergency Fed news means you can now get a lower rate), read every last one of them.
It's extremely important for the sound functioning of the mortgage market that consumers read and understand the following: THE FED DID NOT JUST CUT YOUR MORTGAGE RATES!
I'm not a loan officer.  I don't play one on TV.  I don't benefit from the decision you make on locking a mortgage rate.  I'm just a guy who watches and understands the day-to-day movement in average mortgage rates better than just about anyone.  It's one of the few things in this life I will claim to be the best at.  You can take what I'm saying to the bank, literally and figuratively. 
I can't count the number of articles I've written or the variety of ways I've reported mortgage rates moving in the OPPOSITE direction as a Fed rate cut/hike, or simply staying put despite a Fed cut/hike.  Here's a recent example from March 3rd.
The extent to which consumers and especially financial news media (who should REALLY know better by now) mistakenly believe the fallacy of the Fed dictating mortgage rates is truly unfortunate.  Even now, you're reading this article and some of you will still be contacting your originators asking if you can get a lower rate.  But it doesn't work like that.  I urge you to avoid buying into misinformation.  Make an effort to elevate your level of understanding.  Start here:
Part 1: The Fed Funds Rate Itself
The Fed funds rate doesn't directly affect any mortgage rates apart from home equity credit lines.  While it often moves in the same direction as the traditional 30yr fixed mortgage rate in the long run, there are months and even years of time when they seemingly have nothing to do with each other.
This makes sense for a few key reasons. The Fed Funds Rate is a different animal than the mortgage rate.  It applies to loans with a term of up to 1 day.   That's a far cry from the average mortgage, and investors approach those loans with completely different sets of priorities.  That's why we sometimes see longer and shorter term rates move in OPPOSITE directions (which accounts for the "inverted yield curve" phenomenon that made news in 2019 when 10yr Treasury yields were lower than all of the short-term rates under 2 years, including Fed Funds).
But even if long and short term rates always moved in the same direction, there's a more important reason that mortgage rates might not follow the Fed.  The bonds that dictate mortgage rates trade thousands of times a day.  Mortgage lenders themselves update their rates at least once a day.  In contrast, the Fed only meets to consider changing its rate 8 times a year, barring emergencies (like today).  This means mortgage rates can and do move well in advance of Fed rate changes.  Indeed, the behavior of longer-term rates like mortgages can often predict the market conditions that prompt the Fed to make a move. 
Bottom line: the bond market (which includes mortgages rates) has been able to react to coronavirus implications for weeks, and the fed is just getting caught up to market realities.  They're a battleship in a river, and that river has been swift.  If you need more convincing on this particular point, here is a more detailed conversation.
Part 2: What About the New QE?
QE = Quantitative Easing (the term for the Fed's large-scale bond buying programs designed to lower interest rates and encourage free flow of lending/capital).
If you've been reading part 1 and thinking to yourself "ok smart guy, but what about the new mortgage bond buying the Fed just announced today?" Congratulations!  You understand more than 99% of the population about what matters.  The Fed did indeed announce new mortgage bond buying as a part of its QE package today.  This will help restore the correlation between 10yr Treasury yields and mortgage rates, but it WON'T immediately restore the normal space between them.

While mortgage rates definitely take cues from the broader bond market (especially when markets are relatively calmer), they move for several other reasons.  That caused a lot of head scratching this week as mortgage rates jumped at the fastest pace EVER while many savvy consumers were still waiting for them to drop as much as Treasury yields had dropped. 
One of the biggest reasons for the mortgage vs Treasury disconnect was a massive supply glut of new mortgage debt caused by rampant refinance demand recently.  After all, even if people felt like rates SHOULD BE lower, they nonetheless hit new all-time lows last Monday and successively broke 3-year lows in few weeks prior.  This flood of mortgages needed to be sold to investors in order for mortgage lenders to keep lending.  But investors were no match for the unprecedented spike in supply.  Like any marketplaces with way too many sellers and not enough buyers, prices rapidly fell, and falling prices on mortgages equate to higher rates for consumers.
Supply must also be considered from the lender's standpoint. Even in cases where lenders still had money to lend, the record surge in refinance demand forced them to raise rates simply to slow the flow of new business.
Supply may have been the biggest issue for the mortgage market this week, but it wasn't the only issue.  Mortgage investors were also spooked by the speed of the decline in rates heading into March.  When consumers pay off their old mortgages faster than expected (because they're refinancing), mortgage investors earn less interest.  That gives them another compelling reason to pay less for mortgage debt.  And again, mortgage investors paying less for mortgages = higher rates.
To add insult to injury, 10yr Treasury yields moved significantly HIGHER throughout the week.  So even if mortgage rates could have overcome all of their own specific issues, their typical guidance giver was still telling them to move higher. 
Bottom line: mortgage rates have had no reason to move lower this past week and every reason to move higher.  The Fed's QE (just announced) sounds like a lot at $200 bln, but in this market, it won't even cover 2 months' worth of new mortgage supply.  It's a token handout meant simply to ensure the mortgage market continues to function smoothly, and not nearly enough to drop us instantly back to all-time lows.  It's a tourniquet, not a panacea. 
Where rates go from here will depend on where the bond market goes. To be sure, there's a very good chance that yields will stay extremely low and move lower due to what many see as a fairly large and inevitable recession.  If that increasingly looks to be the case, mortgage rates will gradually return lower, BUT--and this is the important "but"--MORTGAGE RATES AREN'T DROPPING 0.50% TODAY AND THEY'RE NOT ANYWHERE CLOSE TO 0%.  They were a lot closer to 4% on Friday afternoon (many scenarios were pricing-out higher than that). 
By getting back into buying mortgage debt, the Fed is giving rates a fighting chance to head back toward all-time lows.  It definitely won't happen overnight and it isn't a guarantee.
So what should you do?
I get asked for advice on rates more and more as the years go by, but clairvoyance remains elusive.  I've never felt it wise or responsible to offer blanket advice to people with different scenarios and different levels of risk tolerance--especially when I can't predict the future.  Tonight is as close to an exception as we'll get.   Reason being: rates rose so much last week that it took the pressure off consumers who wanted to lock a lower rate.  All you could do was to wait for things to come back in a friendlier direction.
As such, I would give anyone the same guidance right now:
If you haven't done so already, make sure your originator has what they need in order to lock your loan when the time is right.  Make a game plan.  Talk about where rates are now and what rate you're looking to lock.  They HAVE to have what they need from you in order to lock, and they may not have a very big window in which to pull the trigger (that window was less than a few hours wide at the all-time low rates last Monday morning).  
Above all else, please don't call them and ask if you can get a lower rate now.  Don't ask them if the Fed just cut mortgage rates to 0% or if your rate is now going to be 0.50% lower (that could happen, but it didn't happen today).  I can give you the answer right here:
  • You can't get a lower rate right now just because the Fed cut rates again
  • If you didn't check on Friday afternoon, rates got a lot higher than you may have realized.  
  • You CAN, however, probably get a lower rate at some point in the coming weeks thanks to the Fed's reinvigorated mortgage bond buying efforts
  • Lower rates aren't immediate or guaranteed, so make sure your originator has what they need from you in order to lock it when and if your desired rate becomes available.
As always, if you have any questions or if you need assistance with buying or selling rural property, please give the Rural KC Team a call.   913-837-0760 or 913-837-0411.



Monday, March 9, 2020

7 Things You Need to Do To Protect Yourself from Ticks

7 Things You Need to Do to Protect Yourself from Ticks


Protect yourself from tick bites with these smart strategies

1. Stick to the middle
When you're on a hike or walking through a wooded area, avoid the edges of paths and trails, where ticks are more prevalent.
2. Wear white
Teeny-tiny ticks are easier to spot against light-colored duds. (If you spot a tick on your clothes, try this method to quickly get them off.)
3. Protect your noggin
Don't think ticks are only in the grass. "Brushing against a tree could easily leave one in your hair," says Amesh Adalja, MD, an infectious disease specialist at The University of Pittsburgh. Try donning a cap or tying hair back, and use repellent on your face. (Spray into hands and then apply with your fingers.)
4. Hike up your socks
And tuck your pant legs into them. Fashionable, it's not. But every inch of exposed skin matters.  
5. Treat your clothes
If you're heading into tick-heavy backcountry for days, consider applying the insecticide permethrin to your clothes (it can last through up to six washes), as well as spraying repellent on skin not covered by clothing. "Ticks are crafty, so you want to use multiple types of protection," says Paul Mead, MD, chief of epidemiology and surveillance for the Center for Disease Control and Prevention's (CDC) Lyme disease program.
6. Double-check your damp bits
Ticks love dark, moist areas, so when you're looking for them, focus on the groin, backs of the knees, and armpits. "Women often forget their bra line, but that's a tick's dream spot," says Andrea Gaito, MD, a rheumatologist and Lyme specialist based in Basking Ridge, N.J.
7. Hit the shower
A full-body tick check and a pair of tweezers should be your first line of defense. But you might be able to scrub away any ticks you miss—and slash your risk of tick-borne disease—when you lather up. "Water alone won't do the trick, because you need a bit of resistance to remove ticks," says Dr. Gaito. So grab a loofah!

Information provided by:
Kate Rockwood

Thursday, February 27, 2020

Top Tips For Selling Your Home With Pets

Selling a home is stressful enough, but having your furry companions along for the ride presents unique challenges for sellers. While your four-legged friends may have a special place in your heart, potential buyers may not love Fido’s fur or Fluffy’s toys as much as you do.
Don’t worry—we have some tips on getting your home ready to sell…even if you’re living with a zoo!

Before Listing Your Home

Clean, clean, and clean again!

When you’re preparing to list your home, doing a deep clean should be one of the first things you do. However, when you have a pet, it becomes even more important. As much as we love our animals, it can be easy to ignore the side effects they have on our homes.
Make sure to remove all pet hair and use a pet-specific cleaner to deodorize surfaces that tend to hold on to smells. This is also a good time to repair any damage your pet may have caused, such as scratches on the wood floor or stains on the carpet.

Create a plan for showings

Don’t wait until five minutes before a showing to wonder what you’re going to do with your pet. Make a plan ahead of time to keep your pet in a secure area when buyers come in. If you are able, you can even take your pet with you or schedule a dog walker to come before the time of the showing.
If your pet does not already have a crate or carrier, now would be a good time to invest in one. Make sure they’re comfortable with it by putting treats or familiar toys inside ahead of time so they can acclimate themselves to their new space.

Don’t neglect your yard!

Your yard is a fun spot for your pet, but it’s also a crucial selling point for buyers. Make sure it looks great by repairing any damage to your grass. Don’t forget to pick up any leftover pet waste you might have forgotten. If your pet likes to dig, fill and patch any holes.
In addition, if you have an outdoor animal, you may want to transition them to becoming an indoor pet or come up with a plan to help them adapt.

While Your Home is on the Market

Secure your pet during showings.

Before you leave for a showing, make sure your pet has everything they need in their crate or carrier. If they are disruptive, consider taking them with you so buyers are not put off. Sometimes it is best to completely remove your pet from the home during showings, as buyers may have an allergy.
As you have more showings, you’ll find out what works best for both you and your furry friend.

Keep things clean!

Living with pets means that life is an adventure. This can also come with a lot of surprises, including accidents. After you initially deep clean before you list your home, make sure to maintain it.
Don’t forget to vacuum regularly and eliminate fur and dander right before showings. If your pets make any stains, take care of them right away. Remember, any damages that occur can prevent the sale of your home, so don’t put off fixing them!

Listen to potential buyers

Buyers will often leave feedback after a showing if a home is not right for them. Don’t let your pet be the reason why things go wrong.
If buyers mention that your dog is barking or if your cat litter is leaving a less than pleasant odor, take note and make changes. It may help during your next showing and can help you sell your home.

Ready to sell your home with pets?

We hope these tips will make selling your home with pets both quick and easy. Ready to take the next steps? Call us and let’s chat—we’d love to help!

Bill Gaughan         913-837-0760             Bill@ruralkc.com
Danicia Duncan    913-837-0411             Danicia@ruralkc.com

Tuesday, February 25, 2020

How To Chose A Rural Real Estate Agent


Welcome to the Rural KC Real Estate Blog where we talk about all things country with a special eye towards the country and rural real estate. I'm Bill Gaughan, your host, the luckiest man in the world but more about that later. To keep up with us please keep tuning in to these podcasts, check out our website, ruralkc.com, see some gorgeous country property on our YouTube channel, the Rural KC channel or follow us on Facebook, YouTube, Twitter or LinkedIn.

Now for today's blog, I get a chance to talk about one of my favorite topics. That is the people that I get to work with in country real estate. We're a small group of people, the vast majority of real estate agents in the world and certainly here in the Northwest Missouri northeast Kansas area and the Kansas City area. They sell homes and subdivisions. They're outstanding at what they do. I think Real Estate Agents are like doctors, there are times you need specialists. I know I see signs every now and then that says, "Come to us for all of your real estate needs." Maybe those folks are just better than I am because I think we can be and should be specialists in real estate.

If you're thinking about getting a lease on a condo in downtown Kansas City, I'm not your guy. But if you're thinking about buying some country property, particularly if this is a new move for you, if this is your dream come true to move out of the city and into the country, you want to make sure that the person you're dealing with can help you make that move. If they don't know any more about the country than you do, well, you really don't have too much advice to accept or hope you can get from those people and we've seen some really sad things and broken dreams happen because people didn't have the right real estate agent.

Now, one of the great things about my job is because there's so few of us that sell rural property, I know most of them. I'm tickled to say that they're an outstanding group of people to work with. Some of the most outstanding men and women I've ever had the chance to work with. The kind of people that if you call up and ask for some information, you can know that they're shooting you straight and telling you the truth. Most of them like us, love the country life. They want their clients who moved to the country to love the country life as well.

If you get the chance to work in an experienced real estate agent, I think most of the time you're going to find that it's a really good one. The bigger problem isn't a bad agent, it's an inexperienced agent. The agent that used to selling property in the city and now they've got a client who decides they want to move out to the country. Sometimes the most frightening thing in the world is it isn't what you know what's wrong, it's what you don't know at all.

We're going to talk a little bit about some of the things I think you ought to expect your real estate agent who's helping you buy a country property, things that they ought to be comfortable talking about, things that they would be experienced in. For example, they certainly ought to understand the land, meaning that they ought to, if somebody talks to them about phrases like a quarter section or an inside 80 versus an outside 80, they ought to know what that means.

Now, I'm going to guess that some of you reading this blog don't understand what those terms mean. It's important that your real estate agent does understand how land is divided, understand how the land lays, understands how to read a legal description so they can find the exact piece of property. That's the first thing they ought to understand is how does the land lay? How does land work? How can they describe the property?

Another thing that's almost sure to be new to you and sometimes other real estate agents is that you are not likely going to be able to hook up to any sewer system. Now you're going to have to deal with septic systems in the country. This can really get complicated because each county has its own rules. Some counties required inspections, some don't some counties do their own inspections. Some counties require the inspections to be done by licensed or some counties don't have any requirements whatsoever.

You may hear things about a septic system or you'll hear about a lagoon or you'll want to know what's the difference between a regular septic system and an aerobic septic system. All of those are things that your real estate agent ought to be conversant with, ought to identify for you before you visit a piece of property so that you don't wind up with the wrong type of system or wind up with something that's just not going to fit your needs.

Another thing that you have to be concerned about is utilities in the country. There are some remote country sites that you might be able to get electricity to them, but it's going to cost you a lot of money to do so. You'll also find people who will look at a piece of country property and there'll be signs that a rural water system runs right down the road so no problems, right? Until you find out that that rural water system is maxed out and they can't allow any more water meters on it because it would lower the water pressure for everybody else on the line. You've bought that property, it's got a water line running right in front of it and you can't tap into it.

Those are things you want to know in advance and that an experienced rural real estate agent ought to be able to help you with. Another thing that I think is important is understanding just who are the neighbors, and by the neighbors in the country, we don't necessarily mean the folks next door. Certainly, that's important. You have to understand that folks next door run livestock, that's going to have some effect on your life, particularly when the wind blows the wrong direction. We know it gets more important than that. Anytime that we take a buyer out to buy a property, we look at the property this within a few miles of where the property is, that's under consideration.

You don't want to find out, for example, that even though it's three miles away, you are now downwind from a production hog facility, for example, or maybe you didn't notice that the train tracks were about a half a mile away because you didn't cross them when you went to the property and you might have to listen to that train whistle every night. The neighbors aren't just the folks that are next door. Again, the experienced rural real estate agent will help you identify those things so you don't have any heartbreak after the fact.

Another thing that's important is what about the internet? Is there anybody these days that can live without the internet? It seems almost all of us, for one reason or another, have come to depend upon it. We make the assumption that it's readily available to everybody. It is in one form or another but you want to know what that form is.

When you move out to the country, there's not going to be any Google Fiber, AT&T Uverse and nobody's going to be running cable by that property so you can tap into what you're used to doing at your home in the city. You might learn what a DSL line is, and that you still have to deal with the local telephone company. Or you might learn that there's a wireless capability out there for you to tap into a wireless provider. That's what I use at my house out in the country. Then you need to find out what that wireless provider are they line aside or are they operate more off of an antenna system. If none of those work well, you can still use a satellite system.

Those are things you don't want to find out after you bought the property. You want to know what your options are. If you have a need for high-speed internet, it can make a big difference. If you are trying to work from home, if you do graphics, if you do a lot with pictures and things like that, you can still live in the country and you can still have a good internet experience, but you have to be careful to make certain that you buy the property that will give you the experience that you need for your job or your needs.

You also need to consider, does this person have available the type of resources that are going to make it easy for you to get questions answered? There's a lot of folks that can help you. I think some of the best people in most of the counties we work in and we work in all the counties on both sides of the state line north and south of the river, the planning and zoning folks in most of the counties I deal with can be a good friend if you talk to them first. Your agent should be able to introduce you to those people.

On both sides, we have extension agents. We've done podcasts and blogs that you should look up with some of the extension agents that are in this area. On the Kansas side, the extension agency is run by Kansas State University. On the Missouri side, it's run by The University of Missouri. You will be stunned by all the help you can get from those extension agents on everything from planting a garden, checking your soil, taking care of pests, getting rid of wildlife. We used to have a county extension agent for example when we decided it was time for us to get Medicare. There are all types of help available.

Your real estate agent ought to be able to help you identify and know your local Extension agent is so that you can use them. Now if you're thinking about farming or if you're thinking about buying some land and renting it out from farming, you're going to want to know who's the local farm services administration and who does the National Resource Conservation Service. Are you thinking about building a pond? Well, it takes more than just a bulldozer, you'll probably have to touch base with the NRCS as well. Maybe you're going to touch base with the Department of Wildlife and Parks in Kansas or the Missouri Department of Natural Resources.

There's a whole host of people that you might want to deal with and all of those should be folks that an experienced rural real estate agent ought to be able to easily point out to you as someone who can make your life easier.

What should you expect from an agent? They obviously, as we've been talking about so far today, should be knowledgeable about rural living and we just touched on some of the highlights here. If you check our podcasts, you'll see that we go into greater depth on some of these topics and you probably want to listen to those podcasts before you invest in any rural real estate.

They ought to be local experts, meaning that they should be able to represent you in multiple locations and on both sides of the state line here in the Kansas City area. They should know what the rules and regulations are for each- the various counties you might want to look at. At a minimum, they ought to be conversant with what the local zoning laws are, I can't tell you how many times somebody will call me up and say, "All they want to do is buy an acre of land and put a house on it."
Most of the counties around here, unless you get a significant distance away from Kansas City, have rules about the size of the lots and those types of dreams just can't be done. They need to help you understand what your utilities can be used for. A lot of times people will think, "Some of these counties don't have very extensive zoning laws, I ought to be able to buy a piece of ground and do anything I want with it." Once again, a rural real estate agent that's experienced will be able to guide you that in each county, just how free you already use that land.

Frankly, most counties around here require you to get what's typically called the conditional use permit. If you intend to run a business that's not agriculture-related, if you want to change the land, if you want to build a building, some places, some counties around here won't allow you to put up an outbuilding, for example until you first build the house. Some people think, "Well, I just buy a piece of property. Will put a metal building on it of some sort and we'll just use it over the weekend." Well, then they find out the county won't let that happen.

Again, an experienced rural real estate agent can guide you through those things so that you aren't disappointed. They certainly need to be able to read the title report. We've got several blogs and podcasts available that are specific to title issues, I would encourage you to listen to those podcasts and read blogs. We do have some with local title companies as guests on our podcasts who talk about what you can anticipate when you read a title report, what you need to watch out for, things that can hurt you, if there are easements on the land, that may be for utilities, and oil and gas leases that you think don't affect your property, but actually do.  

It's one of the more critical things so I would encourage you to make sure that not only your rural real estate agent understands how to read a title report, but listen to some of the podcasts we've done on those too and make yourself comfortable. Certainly, they ought to be able to look at a survey or a plan map and tell you where the property begins and ends and that sort of thing. I didn't mean in this particular podcast to scare people, but in fact, this podcast is meant to make you feel comfortable, comfortable if you find the right real estate agents.

I've got folks that are great colleagues of mine, good friends of mine out there that can help you do it but make certain you're talking to somebody that's experienced because we deal with things every day that the real estate agents that sell homes and subdivisions in the city have no experience with. I can remember one time selling some property in the county, it was going to be a rural subdivision.
It had multiple lots on it and a lady was representing these clients and she said, "Well, I noticed you didn't say anything about that there was no natural gas." I said, "No, no, there isn't any natural gas." "What do they do for gas?" I said, "If they want gas, their choices are typically; you either go all-electric or if you have to have the raw gas, you use propane." "What's propane?" She said. I had to explain what propane was and I got to feel and kind of sad for her clients because it's obvious she wasn't asking the right questions.

Then she said, "I don't see anything about sewers out here. When will they have sewers installed?" I had to tell her my guess based upon where they were located and the distance from the current main sewer line, somewhere in the area of 50 to 75 years before sewers would get out to where this property was. Then I had to explain to her how septic systems work. It was obvious that a particular client wasn't going to be well represented and we see people get their hearts broken all the time. They make assumptions about what they can do in the city and they didn't have an agent that was able to warn them off of some things that can turn out to be heartbreakers and we certainly don't want you to do that.

The good news isn't that there are issues in rural real estate. The good news is, there are some outstanding excellent people that I get to deal with every day that can guide you through it. Just make sure you're dealing with somebody who lives and dies country property like we do here, like my colleagues in other brokerages do. We want you to have an outstanding experience. We want you to change your life.

That's what we always tell people when they move to the country, we're not just selling them real estate, we're not selling them land and buildings, most of the time when somebody moves to the country, they are completely changing their lifestyle. We want that to be an outstanding experience and we hope you find the right real estate agent that will do that.

We'd love to be that real estate agent for you.

That's our blog for today. I hope you enjoyed it. I mentioned at the start of this blog that I am the luckiest man in the world that's because I make my living helping other people's dreams come true. Whether your dream is to buy or sell country property, give us a call. We work to make it as easy and stress-free as possible. We'd like to hear from you. If you have a topic you'd like us to do a blog or podcast on or have any questions about rural real estate or the country life, get in contact with us.

Send me an email at bill@ruralkc.com or I'm so old fashioned, I actually like speaking on the phone so you can call me at 913-837-0760 but if texting is your thing, I'm cool with that as well. Remember to check out one of our three websites, ruralkc.com. for country homes and acreages. Cropland USA for production farms and ranches and kchorse.com for horse properties. Remember, you can follow us on Facebook, LinkedIn, YouTube, and Twitter. This is Rural KC real estate affiliated with Keller Williams Realty partners wishing you a blessed day until the next time.

Again, an experienced rural real estate agent can guide you through those things so that you aren't disappointed. They certainly need to be able to read the title report. We've got several blogs and podcasts available that are specific to title issues , I would encourage you to listen to those podcasts and read  those additional blogs. We do have some with local title companies as guests on our podcast who talk about what you can anticipate when you read a title report, what you need to watch out for, things that can hurt you, if there are easements on the land,   that may be for utilities, and oil and gas leases that you think don't affect your property but actually do.