A catchy title to this blog entry....so what's the catch?

With the federal $8000 tax credit expiring in a few weeks, I wanted to talk about another program, available in Kansas City MO only, for first time buyers.  It's called the KC Dream Home Program and one of my buyers used it this summer to purchase a house in Waldo.

Here's the good news:  this program will give eligible buyers CASH for down payment and closing assistance to purchase a home in the KCMO city limits.  This money is actually a 'loan'--but you don't have to pay it back if you live in the home ten years.  More on that later.  The amount available is up to 20% of the purchase price of the house, maximum $20,000.  Other requirements are:

• You must be a first time homebuyer
• Income guidelines:  up to $39,400 for a single person, $45,050 for 2 persons.
• The home must be priced under $150,000
• You must attend a homebuyer's workshop (usually on a Saturday)
• A KCMO inspector must inspect the home before closing
• There's lots of paperwork to complete (of course)

Your lender  can ask  for the money  AFTER you have a signed contract to purchase a home.  You can fill out the paperwork BEFORE you buy a home.  Buyers are not guaranteed they will receive the funds--there is only so much money in the pot to go around.  But it's worth checking out if you are serious about buying a home. A 20% loan from the City could eliminate your monthly PMI costs and effectively lower your monthly payment. 

Now about the 'loan'.  At closing KCMO will give your lender a check for the loan amount you qualify for. 10% of the loan is 'forgiven' every year..so if you live in the house ten years, you don't owe the city any money.  If you move after 5 years, you will owe 50% of the money that was 'loaned' to you. 

Typically it takes 45-60 days to close a home purchased with the help of the KC Dream Home Program. I was actually surprised at how relatively easy the process was when my buyer used this program this summer. It's worth it if you are willing to put the time into completing the paperwork and attend the workshop.  If you would like more details about the program, email me

Thanks for reading my blog...your comments are welcome! 

"Let's look at short sale homes--I've heard there are some real bargains out there!"

How many times have I heard a variation on this statement this year??  I'm going to be very blunt and honest in this blog regarding the hassles of a short sale.  Buyers who think they can pick up a 'deal' need to be educated FIRST on what happens with a short sale transaction--and then decide if it's worth the hassle. Especially the first time buyers!

1)  Know what a 'short sale' is.  The owners of the property have spoken with their lender regarding the hardship of making the monthly payment.  The lender agrees to accept LESS than the full balance of the mortgage.

2)  Know that there can be more than one lien on the property.  That means that all banks with a stake in the property have to agree to take less than what is owed, not just the first/primary mortgage holder. All lienholders must sign off on the transaction.

3)  Know that there WILL be delays of  weeks, usually months, as the buyers wait wait wait to hear back from the lenders/investors regarding how much less they will take for their payoffs.

4)  Know that banks are overloaded with short sales and they are short staffed to deal with them...that is part of the reason it takes so long to get answers.  You are one buyer interested in one house--the bank may have hundreds of short sales to deal with at the same time.  Unlike agents, bank employees  do not work 24/7.

5)  Know that all the documents are screened by more than one party--the banks, the 2cd and 3rd lien holders, and the mortgage investors.  Quite often the second and third parties will hold up the transaction, trying to get a larger share of the proceeds from the transaction.

6)  Know that there can be more than one buyer making an offer on the same house--a bidding war may result. Offers from other parties can be considered by the bank at any time during the process.

7)  Know that although the buyer can and should have a professional inspection done on the property, it is likely that the seller will not have money for repairs or extra concessions, like seller paid closing costs.

8)  Know that it can be easier and faster to buy a foreclosed property.  Why?  Because the bank already owns it.  Foreclosures often have their own challenges--that's for another blog.

9)  Know that real estate agents often do not make a full commission on a short sale.  it takes ALOT of extra time and hassle to deal with a short sale.  Follow up calls, paperwork, little surprises that pop up all the time--for a deal that has maybe a 50/50 chance of closing. All agents work on commission--some agents feel it's not worth their time to deal with a short sale because of all the time invested for little -- or possibly no--compensation. Know that an agent only gets a portion of the  standard 3% commission from the purchase price, not the full 3%.

As a buyer, if you are mentally prepared to put up with the delays and hassles of a short sale--expect the worst!--then go for it.  For most people, finding the home you want and going through the normal sales process is stressful enough--it's such an emotional transaction.  Know the problems you'll encounter up front, be prepared to wait and quite possibly not get the house at all --and then decide if a short sale is worth it for  you.

Thanks for reading my blog.  Contact me or visit my website if you would like to talk about buying or selling a home.

Desireable Armour Hills is one of the largest subdivisions in the Brookside area, so I have decided to report each month on the home sales stats in my blog.  There are over 900 homes in Armour Hills, and as a resident myself, I like to track sales here.  Average sales prices have declined, still, there is always plenty of interest from buyers looking for homes.

In September 2009, two homes sold (that is, they 'closed') with an average price of $208,250.  By comparison, six homes closed in August 2009, with an average price of $231,671.

There are nine homes in Armour Hills that are pending (meaning, waiting to close) or on back-up status (meaning there is a contract on the home and the buyers are conducting inspections).  The average price of these homes is $287,272.

As of today, there are 27 homes for sale in Armour Hills, with an average price of $242,272. 

These stats reinforce the trend we've seen all year:  first time buyers are the majority of the market (as they buy the lower priced homes; the abundance of inventory pushes prices down; higher priced homes sit on the market longer; there are plenty of homes for buyers to chose from.

If you are a resident of Armour Hills, or are thinking of becoming one, email me for more detailed statistics of this market.  Comments welcome--thanks for reading my blog! maryhutchison.org