The High Cost of Buying a Home & Selling a Home

Even if you are a First Time Homebuyer, you should be keenly aware of the cost of selling a home. Often people think they can just sell their home if they pick the wrong one, or if they get a new job out of town. But the cost of selling is usually many Xs the cost of buying.

It is good to be mindful of the cost of leaving…the home you are buying…before you buy one.

The Closing Costs/Expenses associated with Selling a home are fairly simple, but in $ much more costly than a Buyer’s Closing Costs. Also a buyer can pay ALL of their costs without “hard dollars” in most cases. A Seller is not afforded that “convenience”. Sometimes homebuyers call financing their closing costs “seller paid them”…but in reality the seller is not paying them…you are financing them in whole or in part, unless you are a cash buyer.

The three BIG costs for sellers are”

1) Paying off your existing mortgage(s) and other lienable utilities (Usually water sewer and trash) Not a “Closing Cost”, but likely the largest expense nonetheless. Be sure to add one month’s interest to your principal when estimating your payoffs, which you should do before you list your house to avoid surprises at closing.

2) Paying the Real Estate Agents, both your agent and the buyer’s agent, will be deducted on the seller side of the Closing Statement from the Sale Price and Net Proceeds.

3) State Excise Tax at the rate of 1.78% of the sold price.

RE Commissions & Excise Tax = the big bulk of true “costs” associated with selling a house. These on a combined basis usually range from 6% to 8% of the Sold Price depending on what services you use.

Note: The buyer determines what service and/or representation they will use when purchasing a home, and who will provide them with that representation/service. But the cost of the Buyer’s representation will still be deducted from the Seller’s Net Proceeds IN FULL, even if the cost is less than the Seller anticipated. Generally the rule is the Seller can negotiate the cost for the Seller Services, but any savings on the Buyer side commission goes to the Buyer…even though that commission shows and is deducted on the Seller side.

Other Seller Costs:

Owner’s Title Insurance – price dependent, but not a %. The Agent for the Seller usually orders Preliminary Title before listing the house. So you can get a quote. About $1,000 give or take? Depends on price of home within a few ranges of price. The cost doesn’t go up by each $ of price. Here’s a Title Cost Calculator but you have to sign in. Maybe a Title Rep will pop in the comments and give more info on that. I’m seeing a range from $850 to $1200, even though the price difference on the two houses is HUGE! So plan on $1,000 or so, and get a quote as soon as you pick a listing agent/service.

Seller’s “half” of the Escrow Fees – usually quoted as half…so don’t take the quote and half it again. About the same as Title Insurance, give or take, with the same method of calculation. DO NOT take the election for the $50 discount if YOU use the same place for Title and Escrow! You pick Title and let the BUYER choose escrow. (my soapbox…buyer should choose escrow!)

A couple of misc fees like notary or courier and what not. Throw $500 in misc and that should be more than enough.

Summary of Seller costs =
RE commissions for BOTH agents/services. Usually 4% to 6% +
Excise Tax 1.78% +
Title Insurance , Escrow Service and Misc – total $2,500 or so
…and paying off your mortgages and lienable utilities and any other liens needed to be cleared from the property. Usually there aren’t others, but there could be unrelated liens like Income Tax, or Judgments. That is why the Agent for the Seller runs Title before the home is listed, to avoid surprises at closing.

Add to that your prorated Real Estate Taxes for the time you live in the house since the last tax bill was paid. That varies depending on the month you close. Conversely you will get a credit from the buyer if you paid those taxes in advance.

HOME INSPECTION REPAIR COSTS – DO NOT list your house without setting aside an amount for the Home Inspection Negotiation. How much you should set aside differs from one house to the next, and your agent should be able to give you a rough estimate. It depends on the age of your roof, heater, hot water tank, etc. It does NOT depend on whether or not those things function well!

AGE! Age of item is now the issue…not merely it’s condition. I do not recommend that the seller do an inspection before listing the home. But that’s another topic.

In a nutshell…if a seller is selling a home for $400,000 and has NO mortgage to pay off, their total costs will be about $30,000 – $40,000! Lots of costs for the seller.



If you are paying cash for your house…the only real costs are:

Escrow Closing Fee plus some misc charges like Recording Fee. $1,000 give or take. You still have to or should get Insurance (fire insurance, etc)…but escrow will not be requiring that in order for you to close, and may not handle it for you if you are a cash buyer. You will HAVE Owner’s Title Insurance…but that is paid for by the seller.

The closing costs jump up from $1,000 CONSIDERABLY when you are using financing to purchase…and many if not most people are.

The largest cost for a Homebuyer, potentially, are the Lender Fees. That said, more and more people are electing to NOT have Lender Fees. That creates a “higher” rate…but when that higher rate is 3.875%…it doesn’t seem high. So negating the lender costs is more common during a period of low rates than it is during a period of higher rates. No good reason for that, as the increase to rate as a % is the same…just is what it is.

Lender Fees can be anywhere from almost nothing to 1.50% or so. So shopping for costs AND rate is a big job for the homebuyer.

I’ll let the lenders jump in the comments and explain that better. Often you will see lender costs of $4,500 and then a Lender Credit against those costs of $4,200 reducing the actual cost to $300. That is a means to the almost no lender cost solution. You still have to sign disclosures for the actual costs, even though the net impact will be much lower. Again…I’ll leave that to lenders to explain, I can only tell you that is what I see, but not the why of it.

You need Lender’s Title Insurance. The Seller paid for Owner’s Title, which is all you need if you pay cash for a house. But if you have financing you need to purchase Lender’s Title which is based on the Loan Amount vs the Purchase Price. About $1,000 give or take.

Home Inspection and Appraisal Fees ($450 or so) and other misc loan associated costs I include in “lender fees” above. Though if you don’t buy the house…you still have to pay the Appraiser. So Home Inspection Fee and Appraisal Fee of $1000 or so usually have to be paid even if you don’t end up closing, after those are completed.

NOTE: You may need MORE than “a home inspector” depending on the house. Sewer Scope by a different contractor…Structural Engineer Evaluation depending on the house…drain inspection if there are cement drain systems, which many have. I’m not going to run the gamut of extra inspections that may be needed, as this is a house to house issue. But DO KNOW that most Home Inspections do not do all of the inspections you may need for a particular home. It depends on the home.

Half the Escrow Fee…same as Seller…again what you are quoted IS half…so don’t half it again.

One Year Paid up Fire Insurance Policy = paid at closing. I am calling it Fire Insurance so you don’t get it confused with Owner’s Title Insurance. It covers more than fire, but in my experience if I don’t call it Fire Insurance, people do not totally “get” what I mean when I say Hazard Insurance or Homeowner’s Insurance. Fire Insurance everyone understands…even though that insurance covers more than damage from a fire.

Note: Cost of Homeowner’s/Hazard/Fire Insurance is whacky right now. Be sure to get a few quotes and make sure they are running your history of previous claims. People with previous claims on the homes they have owned in the past are paying through the nose lately. So don’t only go by the house itself…get a REAL quote and early. Usually right after the Home Inspection.

Recording Fees about $150 to $200 depending on how many loan instruments you are recording. Just throw in $500 for misc, same as the seller.


Lender Fees+ Home Inspection and Appraisal Fees + Fire Insurance (one year paid in advance) + Lender’s Title Insurance + Escrow Closing Fee + Recording Fees + $500 misc. I can’t even give you a total number, as these vary greatly due to the Lender Fee issue. But let’s say it’s usually around $7,500 or so, depending on the Price of the Home. I’m only putting a number so you know it’s not a few bucks, and something you need to prepare for with your Agent before you make an offer.

Notice I said prepare for with your AGENT and not your LENDER! I know it is customary around these parts for The Lender to “do that”. But why? Really? The biggest buyer side closing cost on the HUD 1 to evaluate is the Lender’s Fees. Your agent needs to help you with that…not your lender, because you need to do that BEFORE choosing a lender, and as part of the basis for choosing a lender.

A note about Real Estate Commissions…it’s a tough issue on the buyer side because it was already negotiated with the seller and often not discussed with the buyer. MAKE your agent talk to you about what they will being paid to represent you. You must have that talk…and often you need to initiate that discussion.

CLUE: “The seller pays it” is NOT the answer to How much is your agent charging for the service to YOU. “I don’t know yet” could be the answer to the question, as what the seller is offering to pay your agent varies from one house to the next. You and YOUR agent should determine the cost…and then later compare that to what the seller is offering, so you can “settle up” if there is a difference.

FREE is NOT the answer…in fact if the agent says FREE…go find another agent and fast.

That is usually done via an Agent Credit toward closing costs and absolutely needs to be addressed at time of Offer, to avoid your losing any “excess” credits to the Agent or to the Seller of the home.

No one wants to hear that the answer to Total Buyer’s Closing Costs is “it varies greatly” depending on which agent…which lender, etc. So here are some real numbers.

On a $250,000 VA purchase, $11,500 dollars reduced to zero paid…Up Front VA funding fee financed and the balance of about $6,000 paid with seller and Agent Credits. The Seller credit is the buyer financing it. The Agent Credit = a “true” reduction of cost…kind of. 🙂

On a $400,000 house purchase with Conventional Loan $9,000 with low Lender Fees.

OK…time to talk about why that one is $9,000…as a $400,000 home with low lender fees should not COST $9,000.

PREPAIDS! Prepaids vary a LOT depending on when you close. This time of year the amount you have to pay to your lender in Real Estate Tax Impounds is HUGE because the taxes are due in April and if you close in Jan your first mortgage payment is not until March. So they have to pay 6 months of Taxes in April and will only have one payment from you to do that with. So they will collect 5 or 6 months of RE taxes from you at closing…even though they are not due until April. They may pay them in March for an early payment discount. Not sure. But the impounds for RE Taxes can be a Big Chunk of Change, for sure.

You pay your one year policy for Fire Insurance up front. You are “Pre-paying” that. The cost of that is going up, from what I can see. YOUR insurance can vary greatly from your friend’s and neighbors based on previous claims, how much jewelry or expensive artwork or very expensive furniture you have in your home. Even the value of your cars, as some mishaps that damage your car are covered, like a tree falling on it or your roof shingles blowing down on your car and scratching the paint.

OK…enough talk about costs. The Seller’s costs are many times more than the Buyer’s costs, and there are many ways to reduce the costs from the “max”.

My best advice…Do not DECIDE to buy or sell a home…until you get a real estimate of your costs to do so, in advance. You may just decide the cost isn’t worth it. 🙂

Are Buyers Getting Ripped Off with REO Escrow Fees?

[Warning: rant ahead].

Recently I’ve closed a couple of REO transactions lately where I’ve been dismayed at what the escrow companies are charging the buyers. They claim it’s is warranted because of the extra work that goes into processing a bank owned property…I could almost buy this EXCEPT it’s not the buyer who has created any additional work.

Adding to my frustration is that this exorbitantly higher escrow fee tends to not be split equally between the buyer and  seller (the bank or lender). I’ve heard of builders receiving discounted escrow fees, however the buyer pays what would have been the normal half.  With the REO’s I’ve seen lately, the fees have been almost double what I would consider “normal”.  Some of the fees have been so high, it can jeopardize a smaller transaction becoming a “high cost loan”.

On a recent closing, on a $70,000 condo in West Seattle, I called to obtain a quote from an escrow company where Freddie Mac was the seller. The quote I received was for $848. I asked the assistant if this was the full fee or the buyers half, since the quote I was using from my preferred provider was $438. She replied “full” (meaning the $848 would be split 50/50 between seller and buyer). When we received our estimated HUD, the buyer’s escrow fee was jacked back up to $848 and to make matters worse, the escrow company was trying to not honor their written quote to me. After dealing with several managers, the escrow company agreed to meet my quote of $438…it’s not half of $848 but it’s definitely closer to what would be a fair escrow fee for the buyer in this price range.

To add insult to injury, it seems the service from these escrow companies is lack-luster to say the least. It’s as if the company “won” a big bid and therefore service to the buyer, the consumer, just isn’t important since there will be plenty of gravy business to continue.

Home buyers can shop for their escrow provider, however when it’s an REO situation, 9 times out of 10 (if not all of the time), the escrow company has already been dictated.

I understanding charging more when there is more work that is actually being done with a transaction – as long as it’s fair and reflects the actual level of work that’s being done on that transaction.

It really frustrates me.

SIDE NOTE: I’ve only had excellent service from Legacy Escrow – my rant has NOTHING to do with them.

Rant over…for now!  🙂

Toll Brothers Comes to Seattle

CamWest announced, via email to its clients and prospective clients, that they have been purchased by Toll Brothers.camwest The CamWest logo now says “A Toll Brothers Company”. I’ve long been a huge fan of Toll Brothers since my early days in Real Estate back in Bucks County, PA.

Toll Brothers made the announcement back on November 21st, and I found the comments made by Toll Brothers CEO to be interesting, spot on and less “fluffy”.

CEO Douglas Yearley Jr. said the CamWest acquisition does not represent the start of a broader expansion push by Toll, which operates in 20 states.

“We have been looking at Seattle for a decade, so this was a bit of a long time coming, and we found the right opportunity,

Starter Home Styles in Seattle – Part 1

If you are planning to buy a home in Seattle for about $350,000, it may be of some help for you to know how to generally evaluate the floor plan, before entering the home. This should make choosing homes to see from the internet photos, and other information available on the internet, a little easier and more productive.

We’ll start with the basic 1-Story w/basement, often referred to as a “bungalow”.

1-story with basement

When you see a house for sale like this one in an Internet Listing, you first note the “Style” as “One Story with Basement”. This is a required data field, so it should not be missing from the listing detail. This cross gabled style was most common from around 1917 to 1922 or so. There are several other styles of one story with basement homes, but the below information should be fairly common to all.

I happen to be looking at one of these right now in Seattle. The mls Listing says 1,550 sf. 1,550 sf sounds like a decent sized house…until you go to the house and say “too small”. In fact, let’s look at the actual comments from a client who viewed it at an open house.

(Note: In accordance with mls rules, the picture of the home is a “reasonable facsimile” from somewhere else in the Country. The rest of the detail is the actual info of a home viewed by my clients in Seattle. Mls rules prohibit identifying the actual home that is currently for sale, in a blog post.)

Actual Client Comments:

Hi Ardell,
We went to the Open House and here is what we liked:

– Beautiful kitchen, good size
– Nice modern upgrades
– nice backyard and outside area
– Neighborhood feel and street was nice and quiet

Things we didn’t like:

– two small bedrooms on main floor, master in basement.

-The setup doesn’t seem conducive to a young family. The rooms were VERY small on the main floor. Living room was small, but if we had to deal with this we could…just not ideal. No dining area or even any room for a table

– House runs on oil. Not sure we like the idea of that

Now that the client has identified some likes and dislikes…we look at the dislikes and check that info against the home’s “main floor footprint”. Not all “1,550” sf homes are alike. You need to break that down to save yourself a lot of time and trouble in your home search process.

An oddity in the Seattle Area as to how we identify square footage in the mls, requires that your FIRST step be to go to the King County Parcel Viewer to identify the square footage of the house (main floor footprint) vs the basement level.

What this client is actually saying, and not surprisingly, is that “a bungalow” may be too small for a family planning to have children.

The Breakdown of the house from the King County Parcel Viewer tells us that while the mls allows the description of “1,550 sf” for “the house”, this is really a 775 sf house with a basement.

That is how using this process for subsequent home selections can save you a ton of time and disappointment.

Let’s look at the home details and learn from both the data and the feedback from the client.

The County Record for this house, plus the mls system data, tells us:

Bungalow Description

You can use the above format as a general template. If you are lucky, you will find a little hand drawn sketch of the original main floor footprint from the County Records site, as I did here.

A few notes:

– Lot size of 4,450 sf is acceptable…but smaller than current zoning requirements
Oil heat…but forced air vs baseboard system. Forced air can be converted to gas and even have air conditioning, as long as gas is “available” in the street. A quick search of the area for neighbors with gas heat and or cooking tells me it is available, and in fact the majority of homes in the area use gas vs oil at present. Note- where is this oil TANK?
– Main floor foorprints of 800 sf are likely too small (I generally like to see at least 1,000 sf)
– Three bedrooms on one level likely preferred, but master on main and two up may work. (Note: There was no such thing as “a master bedroom” at the time this home was built. Master Bedrooms came out sometime after I was born 🙂 which would be 1954. Not common until the 70s or early 80s. “Where is the master bedroom?” may be an odd question if you are looking at a small home built in 1915.
– “dishwasher” included is often a strong indication of a kitchen upgrade, since dishwashers did not exist in 1915. However that upgrade may have been anytime since the 70s when dishwashers became more commonplace.
– an EXTRA 500 sf detached garage is a considerable feature, especially with alley access, as long as it doesn’t take up the whole yard.

Looking at the sketch, the home “as built” was likely 22 feet across and 33 to 35 feet “deep”. Assuming you need 3′ to “pass” into the rest of the home, that leaves only (22-3) 19 feet for the width of both the bedroom and living room on a combined basis. Hence the “bedroom is small” and “living room is small”.

Once you have the basics covered by seeing a few homes, you can save yourself, and the homeowner, a lot of time and trouble by checking some of these things in advance. Master in the basement is noted in this case in the mls detail. The main floor being less than 800 sf is noted in the County Record.

By checking both the mls data AND the County Record data, you can better set your expectations before going to view a home.

If the seller left their home with the baby and drove around the block for a half hour and the feedback is “I don’t like the master bedroom being in the basement”, the seller will often get a little ticked off (or a LOT) given that information was available prior to viewing the home.

Coming up with some general parameters based on viewing homes at Open Houses or viewing vacant homes for sale, can save you and the seller a lot of time, trouble and frustration.
“A House is a Box you LIVE in”.

There are really not a lot of variations as to how that “box” can be constructed, as noted in that linked post. You really shouldn’t have to visit 100 homes to find the one that is best for you.

Making some general observations, and charting them out as you go
(or having your agent do that for you)
may help to keep you from “settling” for a house that you really don’t want,

just because you are tired of “the process”.

I will cover the other “basic” home styles in subsequent posts, and link them below. This multi-part series should help make your home search process a lot more productive, and enjoyable.

National Coming Out Day; We’ve come a long way in real estate and lending

October 11th is National Coming Out Day.  As an educator in the real estate and mortgage lending sector, I enjoy hearing stories from students about what it was like to sell real estate and originate loans in the 1950s and 1960s, before the Fair Housing Act of 1968 and the Equal Credit Opportunity Act of 1974.  The young-youngsters in the room are a bit taken aback to hear real-life stories about neighborhood segregation, discrimination against Jews or African Americans, and denying credit to women.  Blockbusting, redlining, and racial discrimination as well as mortgage lending discrimination happened to people who are still around to tell those stories because it really wasn’t that long ago.

Today’s Homebuyers Like Hardwood Floors

Whether it’s a new house or an old house, people like hardwood floors better than carpet, especially on the main floor.

Looking at the stats for North King County, a home without hardwood floors is about 2X as likely not to sell, especially at a price point of $400,000 or more for the home. About 24% to 26% of homes that “expire”, or homes still on market and not sold, do not have hardwood floors. Compare that to only 14% of SOLD homes without hardwood floors and you see that 86% of recent home buyers chose a home that had hardwood floors.

Wide plank, narrow plank, light oak, dark finish…lots of variances as to preference of TYPE of hardwood floor. But hands down, even if the new buyer refinishes the floors to a different color, they choose homes with hardwood floors that they can refinish over homes that would need hardwood floors installed.

While “What type of carpet to use to sell your home?” has not changed much…the better answer for the main living areas is hardwood…hands down.

The “new” preferred color of hardwood is less red than the once popular Brazilian Cherry, darker than the blonde tones of yesteryear, but not quite as dark as the short lived chocolate brown craze that lasted about a millisecond.

A warm chestnut brown is the color of the day.

It’s great for the floors…but a little dull for the kitchen or bathroom cabinetry. The new warm chestnut brown hardwoods are best used when the kitchen and main floor baths are a light colored ceramic tile or a laminate floor that blends the color.

Armstrong calls the color “gunstock”. It’s darker than light…lighter than dark…and solidly BROWN vs orange or red tones. Much easier to decorate a room without clashing with the tone of the hardwoods when using this color in many and varied rooms in the house. As a matching cabinet color choice though…I don’t think that trend will last. It’s just too darned dull to have as a kitchen cabinet color.

If after reading this you have any questions as to the color I am talking about…just visit any new model homes…it’s all the rage…and they are pretty much ALL using it in their model homes.

(Stats in this post not compiled, verified or published by The Northwest Multiple Listing Service.)

It’s time for a ban on all third party short sale negotiators.

Not a day goes by that I do not hear a story from a Realtor, loan originator or consumer about a questionable if downright bad experience with a third party short sale negotiator. We’ve reached a point in time where we ought to consider eliminating all third party short sale negotiators. At the end of this article I will provide suggestions for home sellers, home buyers, real estate brokers/Realtors, attorneys, and regulators in order to maximize good consequences and minimize bad consequences for all parties.

Yesterday I received a frantic call from a homebuyer we’ll call Maggie, who found me online via this blog post. Maggie fell in love with a short sale house but after her offer was accepted and moving toward the close of escrow, the third party short sale negotiator announced that since the lender would not pay his full fee (short sale negotiator was already being paid $3000), as the buyer, she would have to come up with an additional $7,000 at the close of escrow.  Maggie was in love with the house but didn’t have the extra 7K so the third party short sale negotiator suggested she get a loan and pay him after the close of escrow.

There are so many things wrong with the above scenario I don’t even know where to begin.  So let’s begin at the beginning. The growth of fee-based, third party short sale negotiators was fueled by a perfect storm:

1) Collapse of the real estate bubble and resulting growth of over-mortgaged homeowners.
2) Rapid growth in the need for real estate listing brokers who know how to negotiate a short sale.
3) Decimation of the subprime industry and resulting out-of-work loan originators and Realtors.
4) “Get rich quick

Is King County at 2001 or 2005 price levels?

Was reading the questions in the comments over on The_Tim’s post about “The Bottom Falling Out on the Low Tier”. That prompted me to run some numbers on two cities in King County. One of which is moving more solidly back into the low tier…and quickly. Another that has been in the high tier since before prices started increasing dramatically in the credit boom years.

Before I post the data, I think we should strike the tiers of 2001 and 2011 based on all Single Family Home sales in King County only, since Case-Shiller tiers are based on a different set of criteria. For this purpose I remove single and double wides, houseboats and townhomes and deal only with detached single family homes. I am using the first 5,000- homes sold in each of those years to set the tier values, since my home calculator stops at 5,000 homes. For 2001 that is the 1st quarter sales. For 2011 that is through the end of April.


Low Tier – < $216,000
Mid Tier – $217,000 – $310,000
High Tier – $311,000+

with median of high tier at $400,000


Low Tier – < $274,000
Mid Tier – $274,000 – $447,000
High Tier – $447,000+

with median of high tier at $614,000

For those wondering why these Tier Pricings are so very different from Case-Shiller numbers, it’s because Case-Shiller combines King, Pierce and Snohomish Counties. These are for King County only. ALSO, I’m pretty sure Case-Shiller uses resale (matched pairs) and pretty much excludes New Construction entirely, and a lot of Redmond’s story and the high price tier story is in that New Construction.

The dramatic change in the median price of the high tier tells us A LOT!

Obviously based on median prices, King County is no where near 2001 levels, BUT the following data is a bit startling.

graph (16)

Redmond running a hair under 2005 median home price, but no where near 2004 median pricing. Federal Way on the other hand quickly degenerating toward 2001-2002 pricing.

Of course once you have some more information…you have to keep going to determine the why of it. “Why” never has ONE standout answer…but the mix of foreclosures is clearly a BIG part of the story.

2011 fwr

I remember reading a question on a general forum asking why a person can’t find a foreclosure home to buy in their area of preference, when all the news stories are pointing to the DELUGE of foreclosures? Well, ZOMG! that snapshot of the market above “tells a story…don’t it?” to quote Rod Stewart.

Now compare that to 2010 and you will quickly see why the Bottom Tier is pulling away…and getting HAMMERED!


The % of Foreclosures and Pre-Foreclosures (short-sales) in Redmond has barely changed. Federal Way? Well…maybe they have no place to go but up? Certainly hope so.

Now let’s look at the HUGE decline in Price of Bank Owned Property 2010 to 2011. This is going to knock your socks off.

Sorry…have to throw this in as a link over. The chart won’t load.

The short of it for people who don’t like to click on links is that the Bank Owned Solds in Federal Way not only jumped UP from 28% of total sales to 47% of total sales, but the median price of those Bank Owned sales declined from $191,000 to $156,000. WAY below 2001 pricing, and with the volume of them, they dragged the median overall sold price down from $246,000 in 2010 to $199,000 YTD 2011. Maybe it will swing back a bit by year end. But Holy Caboley!

As you will also see in that link, Redmond Bank Owned solds did not change much at all as a % of total sales, BUT the median price of those dropped from $475,000 to $330,000. Still…not enough of them to impact the overall median sold price much in Redmond.

Redmond is easier for me to explain, since I don’t work in Federal Way. Let’s see if I can get another graph to load up. WordPress is liking graphs better than Raw Data Charts.


I combined these two so you can see the dramatic difference. Homes Sales in Redmond are being bolstered by the fact that a LOT of new and newer homes are being sold. You may see that change dramatically in 2012 as the builders seem to be shifting over to Sammamish due to the fact that they have used up a lot of the available land in Redmond.

To some extent the shift will move from 98052 to 98053, 98074 and 98075. But will the buyers shift with them? Probably yes, unless there are a lot more newer homes on resale in 98052 to compete with the travelling builders. You may say there are still plenty of newer resale homes in 98052, but track that against school rankings, and you will see what is happening there with regard to Elementary Schools.

So the drastic decline in Redmond Bank Owned Sold Price from 2010 to 2011 has a lot to do with the % of homes that are, or more aptly said WERE, newer homes. It looks like the glut of spec home leftovers here and there were pretty much sucked up in 2010 when 80% of the Bank Owned Sales were NEW…built since 2005…and most never lived in. Those empty new homes, some completely finished…some not so much especially as to landscaping, are pretty much gone.

Scanning at my notes here (my desk looks like the whacky professor after doing all of these stats on scribbles before processing them into charts and graphs) I’m seeing that the total # of foreclosed properties in Redmond 2011 that were built prior to 1980 are equal to the total # of foreclosures in 2010 of which 80% were built after 2005.

So the decline in price of foreclosed homes in Redmond (as noted in the link above) has more to do with the AGE of those homes, than a drop in prices.

Why the big drop in price in Federal Way? Age of homes does not seem to account for that. I don’t work in Federal Way…so it’s not as easy for me to read reality into the data there, as it is for me in Redmond. My best guess is that it is a degenerating market…like a cancer growing…each new set of foreclosures running off a discount of the current median price. Each new wave of foreclosures dragging that median price down due to sheer volume…and the downward spiral is feeding on itself.

Will be interesting to see if any of this swings back into place by year end. My gut tells me 2012 is going to be a wild ride. Looks like Federal Way has no place to go but up, let’s hope so.

Redmond on the other hand is likely going to lose a lot of that huge support from the new construction homes over to Sammamish, unless we start seeing a whole lot more newer home resales coming on market. That may also be good news for people in Redmond who have been trying to sell their built prior to 2000 homes. I have a feeling it will.

I just don’t see all of the Redmond buyers running over to 98074. Some, yes. Relocation Buyers, yes. But for the most part, either sales volume is going to plummet…or people are going to starting getting a whole lot more interested in some of those older homes that have been languishing on market during the new construction surge up on Education Hill. Probably a little of each.

More graphs and data on the above HERE, HERE and HERE. The last one helps you track the median price for these two cities in each year since 2001, so you can see the rise and fall to and from peak.

(Required Disclosure – Stats in this post and it’s graphs and charts are not compiled, verified or published by The Northwest Multiple Listing Service.)

Should the Washer, Dryer and Refrigerator go with the house?

french door frigThe Washer, Dryer and Refrigerator are generally NOT Real Estate items that go with a house. They are considered to be Personal Property. That is why sometimes you will see a spot where these things go…but no appliance there. That will pretty much NEVER happen with a stove or oven or dishwasher.

A house comes with a stove and oven…pretty much always. It either comes with a dishwasher or it doesn’t, but if it doesn’t have one, it’s not because the seller took it with him. It’s because he never had one. More typical in very old homes, of course, than newer ones.

Because they are personal property, even when the washer, dryer and refrigerator ARE included, they are not usually inspected by the home inspector, nor are they covered appliances in a normal home warranty basic package. Yes-Stove. No-Refrigerator. Yes-Dishwasher. No-clothes washer.

Now let’s look at the odds of your getting a washer, dryer and/or refrigerator in your home or condo purchase.

72% of the sellers of homes sold that were not bank owned or short sales, offered the refrigerator as included in the asking price.

47% of the sellers of homes sold that were not bank owned or short sales, offered the washer and dryer as included in the asking price.

90% of the sellers of condos sold that were not bank owned or short sales, offered the refrigerator as included in the asking price.

70% of the sellers of condos sold that were not bank owned or short sales, offered the washer and dryer as included in the asking price.

52% of the short sale sellers of homes offered the refrigerator as included in the asking price.

29% of the short sale sellers of homes offered the washer & dryer as included in the asking price.

Before I post the stats for Bank Owned Property Sales, note that a bank generally makes “no representations” or guarantees. So there may BE a refrigerator or washer and dryer in that bank sold home, but they are not warranting that it will still be there at closing. If it’s there; it’s there. If it’s not; it’s not. In other words, you can’t refuse to close because the refrigerator took a walk during escrow. Nor can you demand that the bank seller buy you a new washer, dryer or refrigerator if that happens. It’s treated like any other Personal Property left in the home by the previous owner before it foreclosed. It just may happen to be there.

That said, some REO property listing agents did note the following as included.

Only 4% of REO homes sold noted the washer, dryer AND refrigerator as included.

17% noted the Refrigerator as included.

6% noted the washer and dryer as included.

So you are more likely to get a refrigerator in that home purchase

than a washer and dryer

by all accounts.

By no means is it a “given” that the washer, dryer and refrigerator will be included. On the other hand if there is a stove, an oven, a dishwasher and a garbage disposal, it would be rare indeed if any of those appliances were not included and those are usually all covered in the home warranty basic plan.

Microwaves? Most always yes if they are built in like a range hood…and not if they are sitting on the kitchen counter like the toaster and the coffee pot.


(Required Disclosure) Stats are not compiled, verified or published by The Northwest Multiple Listing Service.) Seems odd to have to disclose that, given I’ve never seen an mls do stats about appliances…but just to be safe, including the required disclosure.

Should you buy a New home or an Old one?

Education Hill RedmondLots of people want a NEW Construction home, the same way they want a new car vs a used car. However starting the home buying process at “I want NEW” is just as wrong as starting the home buying process at “I want a foreclosure”.

As I have said many times, in my experience more people HATE their “home”, and want to move to a different one, because of WHERE it is vs WHAT it is.

“…and underneath all is the land…” and land is a limited commodity. So where is that NEW home going to be built? Maybe…just maybe…on the wrong piece of land. The lot no one built on prior to 2011…for good reason. Even NEW(er) home will raise this issue. So if you have your heart set on a NEW home…the number one question you need to ask is:


So many people limit their looking to the obvious and the house itself. If you are looking at new or newer construction…begin your investigations at the land that home is sitting on. Looked at one yesterday…without going to it…via Google Maps and the Stormwater Management Comprehensive Plan for that area, and the house was built on a lot IN “The Wetlands”.

Think about that for a minute. What are the various reasons a lot might be available for someone to build homes on today…that is close in to work and good schools and shopping? It’s common sense really. Especially today…after a huge building surge from 2004 to 2008…was there really a piece of land the builders didn’t find and build on during that time? Yes…a few…but not many.

IF wanting a NEW house is your goalyou would be wise to first examine the land of it…and why no one built on it before (unless it is a tear-down lot). Oddly, the one I checked that was “in the wetlands”, well…really, you have to ask yourself. How DID it get built there? Basically one is not allowed to build a house in Wetlands. Why does it not require flood insurance with drainage basins to the north, east AND south of the house?

Think you can “see” all that? Well what about too close to underground gas pipelines? Can’t see that.

My point is you are better off listing all the things you want from a neighborhood, a location and a home, without regard to AGE of home. Then…if none that have the best location are new…well, maybe NEW Construction should not be the FIRST item on your “wish list”.

Prioritize that wish list by the where…before the what in that where. It’s common sense really, isn’t it?

If it has been a Best Place to Live for 10 to 100 years…it was likely built on before yesterday.