First honey bottling of the summer.

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Hi there, everyone. Fingers crossed….It looks to be a good year for our honey production.  We were able to start some bottling last weekend and we got about 25 pounds off each hive (ten frames per hive).  It’s that nice, light, early summer hue that you get from the bees foraging on clover.

As those of you that are bee hobbyists are aware, you never really know what each season will bring and you learn something all the time.  As an example…I haven’t been very good about mowing around the hive boxes this season and some of the weeds got a bit high.   Because of it, ants were easily able to get into the hive box.  I learned that cinnamon can take care of that issue.  Who knew?

We hope to get another harvest in late summer or early fall.  Where we live and keep the hives (Northeast Kansas), we are fortunate to have a great deal of clover and a good variety of wildflowers.  This keeps them foraging for quite some time.

 

Our bottling process (remember, we are hobbyists), is to simply drive out to the property with plastic containers with lids.  We open up the super (that’s the top box) and take out the full frames that are sealed with beeswax.   These are put in the plastic containers with the tops put on.  We take them back to the house and begin to remove the beeswax layer with a hot knife and then extract the honey from the frames for straining and eventually bottling.  Once done with everything, we take those same frames back to the hive boxes and put them back in.  That’s what they mean when they say “raw and unprocessed”.  It’s wonderful to give a bottle of honey to a friend on Wednesday and share with them that it was in the hive just days ago.

Tips:

  1. If you are bottling for the first time, you will learn all of this very quickly, but this might save you some headache.  When you are working with the frames where you are bottling, everything you touch will get sticky.  Bottoms of shoes, doorknobs, absolutely everything so have plenty of wet, warm hand towels around before you begin.
  2. I’ve seen those wonderful movies where the “bee whisperer” just reaches into the hive and pulls out the honeycomb.  That is a movie.  These bees have worked long days to store that honey and they are not happy about it being robbed.  You absolutely need protection — suit up with veil, full suit and gloves and have your smoker ready to go to.

 

Hope you all have a wonderful weekend and please don’t hesitate to reach out if you need anything.

Take care,

Terry Jackson — Realtor and Broker Owner at Domicile One Realty

913-488-5623

 

 

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Is an Investment Property for You? — Pt 2: Flips

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Hi there, everyone.

This is a continuation of our discussion on homes as an investment.  In Part 1, we discussed an investment property as a rental with some tips and suggestions.  Today, we cover purchasing a home to update/upgrade and then bring back to the market to sell at a profit — flipping.

There are some companies here in the metro that do this exclusively.  They purchase  20-30 homes at a time and have the resources to renovate/update efficiently and profitably.  They watch the market closely and know when to get into a purchase so that they may maximize their profit.  In the seller’s market that we have right now, many of them are sitting on that cash waiting for the market to neutralize.

You do not need to purchase 20 at a time to participate in this type of investment, however, there is much to be learned from those that do this exclusively.

#1 — Do the math.

Flippers are looking for homes that need work.  Sounds obvious, but it is worth stating that you don’t want to by a move-in ready home with upgrades already completed and think you can simply mark up the price and resell.  Even in this market, that is not a sound strategy.

You want your net proceeds at sale to cover your purchase price and any costs to renovate/upgrade/repair/finance plus some type of profit that will justify your efforts on that project.  You want to know what number that is before you go into any purchase.

#2 — Get expert advice

— Bring your contractor along with you on your showings of potential purchases.  Get their take on renovation and repair costs.  Every home will have a different set of issues.  You will want to consider padding your budget somewhat for those overages and gotchas that come up.

— If you are not paying cash, talk to several lenders about options.  If you are financing, you will have interest and fees that will work against your bottom line so shop around.  There are more and more “hard money” lenders popping up where they understand this process and offer short-term loans.  Their rates can be a bit eye popping, so you need to really know what you are doing so that you can complete your renovation and sale on time and on budget.

— Talk to your realtor about area sales prices on homes that have similar floor plan and features you intend to provide when you sell.  Ask them what the monthly sales trend is in the area you are considering.   Talk to them about how you intend to purchase the property.  If you are financing, ask them if they have concerns about appraisal based on condition of the home with your specific type of loan.  Finally, run your repair list by them.  I have seen flips that have beautiful kitchens and bathrooms, but I could stick two fingers into the cracks I saw in the basement walls.  Buyers care about the bones of a house as well.

#3 — If you are new to flipping, avoid an emotional decision.

All of the leg work described in sections 1 and 2 is necessary for you to make a good decision about the property you are considering.   It is exciting to move forward on an investment property, but remember that it is just that….an investment.  You want to make sure that the estimated return on your money is worth the time and headaches that you will inevitably encounter in any renovation project.   Don’t change your criteria just to get that specific home under contract.  If it doesn’t meet your formula, there will be others that do.

As always, please feel free to call with anything you need.

Take care,

Terry Jackson — Domicile One Realty — www.DomicileOne.com — 913-488-5623

 

 

 

 

 

 

 

 

Posted in Domicile One Realty, KC Investment Homes, KC Metro Home Buying | Tagged , ,

The Bees are Getting Busy

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Hi there, everyone.  Hope that you had a wonderful weekend.  I thought I’d add a new Spring thru Late-Summer segment on this blog on the bee hives.  There always seems to be some interest in how the hives are doing and this might be a great forum to share and provide a bit of knowledge on beekeeping.  It really is a very interesting hobby and a fun thing to do with friends.

We have three hives on some acreage south of Paola.  We would keep the hives in our backyard, but our city does not allow that.  There are numerous municipalities within the KC Metro that will let you keep hives on your property so, if you have interest, you might want to check your city’s ordinance and find out their requirements.

The clover is coming in and, with the Spring warm up, the bees are out foraging/collecting nectar.  We went out and looked at the hives yesterday and they are very strong.  This is the time of year we add a box on top of the hive called a “super”.  This box is has 10 frames of comb and is where the bees will store their nectar.  Once they fill the comb, the bees will cap it with beeswax.  These storage areas (frames) will be collected when full.  Sometimes, when the hive is very strong, we might add two of those top boxes (supers) if they are running out of space to store.

One item I’d like to note.  This time of year is what is referred to as “swarm season” for the honey bees.  Sometimes, a large section of the bee colony will take off with the queen.   Since they aren’t in the hive any longer, they will need to be looking for a new domicile so to speak.  If that turns out to be your tree limb in the backyard, or the eves in your attic, you will want them out of there.  The photo above was a swarm hive that we collected and took out to the farm.  You can see that they had begun to build out their honeycomb.  Call us and we will put you in touch with a swarm removal company (yes, that is a thing) or we will do it ourselves depending on where they are.

Looking forward to our next post and the progress over the summer!

Have a great week,

Terry Jackson — Realtor and Broker Owner of Domicile One Realty

913-488-5623      www.DomicileOne.com

 

Posted in The Buzz from our Hives, Uncategorized | Tagged , , , | 2 Comments

Is an investment property for you? Part 1: Rentals

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Hi there, everyone.  We are going to cover investment property purchases and, specifically, rental properties today.  I own investment property and I property manage it myself so what I’m sharing with you I’ve learned from professional education as well as the school of hard knocks.  There are several topics, however, that you will want to speak with other professionals such as an attorney and a CPA to get your specific questions answered.

#1 — Get clear on what you are trying to get out of this?

Investment property is not a “liquid” investment so you will want to get clear on your goals.  Are you looking for a monthly income supplement in the short term, are you simply trying to get someone else to pay off this mortgage (the tenant) so that you may supplement retirement income  or sell it at the appreciated value in 20 years?

Also consider whether you have the right temperament for being a landlord.  If you have the mentality that “someone is living and messing up my house” and you feel that you need to drive by your occupied property 3 times a day, this might not be the adventure for you.

#2 — Selecting the property.

OK, so lets say I select that I want to purchase a property and finance it for 20 years….the tenant(s) effectively pay off the loan for me and I will continue to rent it as a retirement supplement in the future and one day sell it for its appreciated value.  So the goal is clear….now what?

I like to select property that speaks to the masses.  Yes, it is great to have a 5 bedroom home that you can rent for over $3,000, but how many people are looking for that?

Consider this as an example:

1400-1600 SF/3 bedroom/2 full baths/2 car garage/ fenced backyard/good storage areas/good school district/proximity to parks and shopping.

This description checks off a lot of boxes for your prospective tenant.

Who is your customer?  Why do they want to be in a rental home and how does your home solve their problem?    Could be an apartment dweller with pets and sick of paying high pet fees (fenced back yard).  Could be a young family that has outgrown an apartment, but doesn’t have their down payment together for a home purchase (two car garage, storage,2 full bath)

Be thinking about your specific policy on the home.  What is your pet policy?  How many?   What weight?  Know that your individual rules or flexibility won’t take priority over an HOA or your city ordinances/codes so check into that beforehand.  Don’t forget to indicate whether the unit is smoking or not.  Who is going to be responsible for the yard work? Be specific and put that in your marketing materials right up front.

#3 — Financing the property?

Unless you are paying cash or have inherited the property, you will need to know a few things about financing this investment purchase.

Remember when you financed the home you now live in?  Whether it was an FHA or conventional loan, you had some minimum down payment requirement.  FHA is 3.5% and Conventional is 5%.  Well that works for owner occupied homes.  Non-owner occupied is a different animal.  If you are financing through a traditional lender, you will need 20% of the purchase price toward your down payment.

#4 — Attorneys/CPAs/Insurance Agents/Realtors

Talk to the pros to make sure that you are moving forward in a constructive way.  Some suggestions are as follows:

Attorney:  Personal liability, tenant laws, lease preparation, city licensing.

Insurance Agent:  Policy on rental home and any additional liability insurance.

CPA:  Tax time deductions,  tips on organizing accounts for expenses and rental deposits.

Realtors:  Check out 5-10 year property appreciation in the area you are contemplating.

#5 — Budgeting and Property Management

Let’s use an example of an investor purchasing a home with 20% down.  The monthly payment with principal, interest, taxes and insurance is $1000.  You see that rentals in the neighborhood for this type of floor plan go for about $1400.  So far so good.  We can’t go run out and spend that $400 bucks just yet.  You will have repairs, maintenance, some annual fees (ex. cities have rental licensing applications/fees,  if you form an LLC you will have fees for that as well).  You will also want to save some of your monthly profit toward things that you know are coming some day…new furnace/ac, roof, driveway, tree trimming.  These are just examples and I’m not trying to discourage you, but give you an awareness.

The main takeaway here is that we don’t want you to be in the negative each month right off the bat.  If your monthly payment is almost the same amount as what you can get in rent, that home is not going to be a good candidate.  You absolutely want some cushion there.

One other item to consider.  Are you going to market the property, screen the applicants and property management yourself or are you going to hire a service?  There are many property management companies throughout the KC Metro.  Some only do property management and others are real estate brokers who also offer prop management services along with their other offerings.  If you are the sort of person who does not want to deal with the day-to-day operations of managing your rental, you might prefer an arms length solution such as this.  I would recommend that you shop around on their fees and check reviews and client testimonials.  Some will do it all for you or you might just want them to market/show property/screen applicants and you handle all the maintenance calls.

Safety Note:  One item I’d like to stress.  If you decide to market the property yourself, please use caution in your showings.  You will be contacted by people you do not know to meet you at this home.  Never go alone…bring a friend or two along and make the caller aware that you will be doing just that.

#6 — Are you a good landlord?  Keep a good tenant happy.

Your tenant wants what you want in a service provider. Good quality, reasonable prices, good customer service and quiet enjoyment of the home.  It’s not just good karma we are going for here.  This is a business and we want our properties to stay occupied.   Remember that cushion between rent and monthly payment we talked about above?   There is zip cushion if the unit is empty.  Not only is an unoccupied property costly, getting it prepared to go back on market costs money too.  Tenants do move on and people don’t stay forever, but certainly don’t let your own demeanor and customer service “style” be the cause of that.

We’ve covered a lot of material here.  Please feel free to give me a ring to discuss and I’d be happy to help you house hunt to find your property.

Take care,

Terry Jackson  —  Broker Owner — Domicile One Realty — www.DomicileOne.com Terry@DomicileOne.com

 

 

 

 

 

 

 

 

 

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Tips for buyers in a hot seller’s market.

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Hi everyone.  As we have shared over and over….the seller’s market continues in the Kansas City Metro.  Great news if you are a seller….you will be getting a great price and won’t be on the market very long.  If you are a buyer trying to get under contract, you are going to have to show some hustle.

Buyers, there are things that you can still do that will prepare you and potentially put you at the top of the pile when it is selection time.  Some of these things don’t cost any money either.  So let’s review these homebuying tips:

Step #1:  Financing

A preapproval is just a given in this market.  If you can’t write an offer without possession of a preapproval letter, you won’t be a competitive candidate.  Even if your offer is strong, your ability to get financing is an unknown to the seller and a risk they don’t need to take in our current market.

Be skeptical if a lender tells you that they can close on your financed loan in an extremely short amount of time (and I’m talking about days).  Professionals in our industry understand how long the underwriting process takes and claims of a speedy turnaround are often met with raised eyebrows and concern as opposed to happiness.   Most transactions take at least 30 days from contract signing to closing…..45 days is typically a good number to shoot for.

Step #2  Do all you can to avoid being in a multiple offer situation

This is easier said than done these days because if the home is in good condition and priced competitively, it is very challenging to negotiate one on one with the seller.  Listing agents know this and don’t be surprised if you hear that they have received multiple offers and they will all be presented to the seller at a specific date and time.   Ever wonder how a home listed at $200,000 sells for $204,000?  This is how.  Multiple offer scenarios drive buyers to bring their best offers in and some of them offer higher than the original list price to be competitive.

How do you avoid being in a multiple offer scenario?  There is no way to avoid it 100%, but speed and preparation are key.  Preparation is having your financing lined up and it also includes having done some house hunting with your agent.  Showings will make you a better educated buyer….seeing what you like….noticing condition issues with other homes….noticing traffic noises or proximity to commercial areas or schools.  There is no substitute for gaining this knowledge through showings.  Once you have that experience, decisions about whether to move forward with an offer are much easier and come quickly.

Speed is next.  When your agent tells you about a new listing (or you find it yourself), do all you can to get there that very day to look at it and get your offer in as soon as you possibly can.

Step #2  Earnest Money

When you write an offer, it is standard to include a check for earnest money.  This money is deposited into an escrow account and credited back to the buyer at closing.  This signals to the seller that you are “in earnest” and your intention is to perform according to your written contract and make it all the way to the closing table.  Some legitimate items might come up that cause you leave the contract (inspection report items that you don’t like, resolution to repair requests can’t be agreed upon, appraisal doesn’t come in high enough and new pricing cannot be agreed upon) without you losing your earnest money and that is fine.  The main takeaway, however, is the seller wants to know that the buyer has some skin in the game and won’t walk away from the contract if they find a place they like better.

If you know you are in a multiple offer situation, consider a higher amount on your earnest money to make that point.

Step #3  Closing Date

I know that buyers are anxious to get into the homes as soon as possible, but being flexible on this date might go a long way with the seller.  Have your agent ask if the seller’s need some extra time or if they need an ASAP turnaround.  Try your best to be accommodating.  The fact that you even asked about what works better for them will make you stand out and it won’t cost you a dime.

Step #4  Purchase Price

When your agent pulls comparative sale data from the neighborhood, you will know if the asking price is in the ballpark based on recent sales, the home’s overall condition, age of roof/systems, etc.   This along with your own homework of house hunting will make you pretty confident on the offer price.

When the market was a bit more balanced, the back and forth of counter offers could still produce a win-win and there was time to work out a good deal.  With the market tilted toward the sellers, that time is no longer available.  Buyers need to be ready to make a fair, but strong offer right out of the gate because even if your offer is the first one in, others are not far behind.

Step #5  Be able to look back without regret…win or lose.

It never feels good to miss out on a home you felt strongly enough about to even offer on, but it certainly happens in this climate.

I always try to counsel my clients that you want to be in a position of looking back without regret on the offer.  If you your offer is not selected, at least you know that you offered as much as you could and felt comfortable with.  On the other hand,  if you did get it,  we don’t want you scared and nervous because you went too far and put yourself into a hardship.  We are wanting to find that middle ground.

I hope this helps you out and, if you have any additional questions, please feel free to reach out to me.

Take care,

Terry Jackson — Broker Owner — Domicile One Realty                                                   Specializing in First Time Homebuyers

www.DomicileOne.com            913-488-5623    Terry@DomicileOne.com

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Grandview School District Receives Employer-Assisted Housing Award.

Domicile One Realty is pleased to announce their KC Metro Employer-Assisted Housing award winner — The Grandview School District. This award recognizes area employers taking leadership roles in bringing awareness to the vital need of homebuyer education. Throughout the entire year, the district has demonstrated a strong commitment to their faculty and staff by offering homebuyer education onsite as well as making them aware of offsite events.

Education is a tremendous benefit to a first time homebuyer and area employers that actively support these endeavors should be recognized. We applaud the Grandview District for their efforts and hope that this recognition will complement their recruitment, retention and community reach efforts.shutterstock_367681889

Tens of thousands of real estate transactions are completed in the KC Metro annually. According to a National Association of Realtor’s Buyer Survey, four of every 10 real estate transactions involve a first time homebuyer.

This award will be presented to the district at the upcoming Fair Housing Forum in February, 2017.

 

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First Time Homebuyers — One question could save you thousands on your purchase.

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Hi there, everyone….Hope you’ve had a great summer and are getting ready for the back to school routine.

I know that my title is grabbing, but I’m determined to spread the word about this subject.

Today’s topic is about first-time buyers and down payment assistance programs.  Before I start, let me tell you what recently occurred.  About two weeks ago, Domicile One Realty  conducted a survey of buyer’s agents that had closed transactions in Grandview, MO within the past year.   Although pricing was the #1 motivation for the home selection and 50% of the buyers were first time buyers, only 6% of the buyers used any type of available down payment assistance program.   Now you would think that, with so many first time buyers focusing on pricing, there would be more people taking advantage of down payment assistance programs, right?

Did you know that the Missouri Housing Development Commission offers a program for eligible buyers that provides 3.5% of your down payment?  If you are getting an FHA loan, that is your entire down payment.  There is another program that allows you to get a Federal tax credit on 25% of the annual mortgage interest year over year as long as you own the home.   They have a generous household income limit to qualify as well as defining “first time buyers” as those that have not had an ownership interest in the past three years.   In addition, military veterans might be eligible for the program even if they are not first time homebuyers.

So lets take that Grandview, MO example I just wrote about.  With so many first time homebuyers, you’ve got to think that more folks were eligible than those that actually benefited from the program.   With numbers like I saw, it would be conservative to say that tens of thousands of down payment assistance money was left on the table in the small sample we polled.

Domicile One Realty goes over these items with our participants in our monthly class.  We’d love for you to join us.  If you can’t attend a class, please give us a call so we can share what we know.

OK, so what is the question you can ask your buyer’s agent and lender right up front that could save your so much money?  It’s simple…. “Are you aware of any down payment assistance programs that I might be eligible for?”  If they do not know what you’re talking about, please give us a ring.

Now it might be the case that you aren’t eligible for the program, but isn’t it at least worth a try?

Take care and please call with any questions.

Terry Jackson   —   Broker Owner  —  Domicile One Realty

913-488-5623  —   www.DomicileOne.com

 

Posted in KC Metro Home Buying | Leave a comment

KC Metro Statistics – June 2016

June Stats

Hi there, everyone.  The KC Metro statistics continue to show how strong this market is for sellers.  In fact, some of the metrics that I follow have not shown this type of strength since 2006.

These stats are metro wide so many counties are in the mix.  If you would like stats specific to your county, please click and I can get you set up on a monthly report.

  • Average Sales Price – $228,951 (up 7.9%)
  • Days on Market – 57 (down 16.2%)
  • Percentage of Original List Price – 97.7%
  • Months of Supply – 2.8 months (down 33.3%)
  • Pending Sales are up 9%
  • Closed Sales are up 4%

Sellers have been getting a higher percentage of their asking price as supply continues to struggle to meet demand.

Please don’t hesitate to give me a ring if you have any questions.

Take care,

Terry Jackson — Terry@DomicileOne.com  — 913-488-5623 — http://www.DomicileOne.com

 

 

 

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Is your Real Estate Website Keeping you Current on Inventory?

shutterstock_1958376_soldHi there, everyone.  Hope you are having a wonderful week.

Today, I’d like to spend some time on real estate property searches and how critical it is to have up to date information on listing inventory.

In the KC Metro, we are firmly in a seller’s market.  If you read these posts on any kind of regular basis, you know that I publish many tips on how to prepare yourself as a buyer in all stages of the transaction.   No matter how much you’ve prepared yourself, however, there is not much you can do with it if you don’t have quality data on listing inventory.

Homes that go under contract in 7 hours are here and gone if the website you are using does not refresh but once per day.

Here is what I recommend to stay up to date and have the most current information.  Local KC Metro agents are members of Heartland Multiple Listing Service.  Your buyer’s agent needs to be setting you up on some type of automatic notification of listing inventory in the area you are looking in.  It is a fantastic feature and you can receive instant notification on new listings, price changes and status changes as fast as the listing agent hits enter.  At Domicile One Realty, we set this up first thing.

I’m not saying to pitch your favorite website.  Some folks are very loyal to their sites because of the layout, the photos, the school/mortgage info, etc.  By all means keep using your favorite, but have this in place as well.

Best regards and feel free to contact me with any questions,

Terry Jackson — Broker Owner — Domicile One Realty

913-488-5623   —   www.DomicileOne.com —  Terry@DomicileOne.com

 

 

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Hot Seller’s Market and Appraisals

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Hi there, everyone.  Hope you are having a terrific day.

When you think back to how miserable the housing market was just 5 and 6 short years ago, a topic about appraisal issues due to high purchase prices sounds like a champagne problem, doesn’t it?  Still, anytime we swing from one end of the spectrum to the other, it ushers in a new set of issues.

My focus on this, as with all others in a real estate transaction, is “how can I best anticipate issues and prepare/protect my client”?

In the case of appraisal issues….lets use an example to hone in on the issue.  A great home (good condition/competitively priced) comes on the market Sunday and there is an open house scheduled the very day it comes on the market.  The listing agent is so confident that the buyers will come in that they tell us that offers will be presented to the seller at 5:00p.m.  Remember that the Open House is scheduled from 1:00-3:00p.m. so we already know we have to act quickly.

Now, this listing agent is not being arrogant….this is how brisk our seller’s market is right now and they know it.   More than likely, they will have several offers to present to the seller.  These multiple offer scenarios are driving purchase prices up….higher than the asking price.

This is where the appraisal issue comes in.  Once the contract is signed by all parties, inspections are completed and any repair issues agreed upon, here comes the appraiser.  Most transactions are financed so the lender will send out an appraiser to make certain that the home value is in sync with the purchase price based on condition and area sales.  If the purchase price has been pushed up due to this multiple offer scenario we might find ourselves addressing the issue of “what if the house doesn’t appraise for what I’ve committed to paying?”

Your  agent should be explaining to you — in your early consultations and throughout the transaction process — what each step will look like…including the appraisal process.  This is time well spent as you don’t want to find yourself in a rush and hearing new concepts as they are unfolding live.  At a minimum, the client should be hearing what the plan is, in the event the home will not appraise for the contract amount, when they review and sign their offer.  It should be specific and in writing.  What are the options of each party and how many days we have to get it resolved  (ex. reappraisal, renegotiation of purchase price, etc).   Lastly, what are the options of all parties if it cannot be resolved and what happens to the buyer’s earnest money?

No matter which side of the transaction you are on, your agent will be key in walking you through scenarios and making sure that you know your options if this were to happen.  You don’t have to fear this issue, you just need to have a plan in the event it occurs.

Take care everyone  and let me know if you need anything.

Terry Jackson

Broker Owner and Realtor — Domicile One Realty

www.DomicileOne.com          913-488-5623

** Don’t forget that we are offering free, home buyer classes each month.  Click here to register.  We’d love to meet you.

 

 

 

 

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