Category Archives: Investing

Renters Have Much to Gain by Pursuing Home Ownership

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Buying a home vs. renting is a big decision that takes careful consideration, as most mortgage consultants will agree. But the rewards of home ownership are great. For many years, purchasing real estate has been considered an extremely profitable investment. It is an achievement that offers a sense of pride, financial stability and potential tax advantages.

Yes, there are certain responsibilities associated with owning a home. Landlords will often argue the benefits of renting, and for obvious reason. If you are renting, you’re helping them make their mortgage payment.


The numbers are staggering if you look at it this way. If you are paying $1,000 per month for an apartment, and you know your rent will increase 5% every year, then over the next five years you will pay your landlord $66,309. If you are currently renting a house, you may be paying much more than that each month. Either way, you gain no equity by shelling out this monthly housing expense and you certainly won’t benefit when the property value goes up!

However, if you were to purchase your own home or condominium, you would be well on your way toward building equity within that same five-year period. By choosing a fixed-rate loan program, you can have the comfort of knowing that your monthly mortgage payment will never go up. In fact, you would have the option of refinancing to a lower interest rate at some point in the future should interest rates drop, and this would cause your monthly mortgage commitment to go down.

In addition to building equity, there are tax advantages that come into play with home ownership. Depending on your tax bracket, owning a home is often less expensive than renting after taxes. Interest payments on a mortgage below $1 million are tax-deductible, and your mortgage consultant should help you evaluate the tax advantages of various loan scenarios, and share this information with your tax consultant to glean feedback on your behalf.

To find the loan program that is right for you, your mortgage consultant will need to evaluate your monthly household income, current assets and savings, as well as any monthly obligations you may have for credit card payments, car payments, child support, etc. These prequalification factors, along with the report of your credit score, will determine how much house you can afford and what interest rate you will pay for financing. It is also important to let your mortgage consultant know what your future goals are, because this will help narrow down which loan option is the best fit for your long-term needs.

There are many different types of loan programs available, including “low

7 Reasons for Real Estate Agents to Blog

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A recent conversation on Tribe got me thinking about my experiences with being a real estate blogger. Here are my seven reasons real estate agents should consider blogging:

  1. Fun. I really enjoy the many conversations that I’ve had with real estate professionals from all over the world that would never had taken place had I not started this blog!
  2. Expertise. By simply writing about real estate and your local community in a public forum (like this!) you become an expert. Anna gets emails and calls from people on a regular basis asking for her opinion on real estate issues. I’m a transportation engineer, but even my opinion on real estate issues holds some weight! For example, someone from my wife’s corporate office recently called to get advice on how to better use technology in real estate.
  3. Trust. A client recently told my wife that he completely trusted her advice because of the honesty in her writing! That’s darn near impossible to get with a regular website.
  4. Knowledge. I follow local news, national news, local blogs, real estate blogs, tech blogs, etc, because I feel a responsibility to my readers. Maybe you won’t feel that internal pressure, but it definitely drives me to ensure that I’m up-to-date on real estate news.
  5. Ranking. Because of all the unique content, we get hits on all kinds of unusual real estate searches. In addition, because we’ve gotten some links from some high-ranked websites (mostly other blogs), her site ranks really well when compared to most real estate sites. Additionally, on typical real estate searches like “Seattle real estate”, we’re ranked very high (#7 on Google) for such a new site and I know that we’re beating out sites that are spending $1000s a year on marketing their site.
  6. Cost. Compared to most marketing techniques that agents are using, blogging might as well be free. I pay $100 a year to host this site. That’s it! The cost of blogging is measured in time, not money!

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  7. Potential. Rain City Guide is not even 10 months old yet. Give us two or three years of blogging, and we’ll easily be the most popular real estate site in Seattle. Ideally, the site will continue to grow as the web technologies evolve and more perspectives are added. I’d love to do more podcasting and videoblogging. I’d love to have someone document the building or remodeling of their home. I’d love to have some more real estate agents blogging about their local areas (Seattle, Bellevue, Redmond, etc. neighborhoods). I’d love to have someone take on some more analytical issues (Tom?). There are so many interesting ways that Rain City Guide can evolve that I feel like we’re only touching the surface of it’s potential.

When I look into my crystal ball to see the future of real estate blogging, I see one or two real estate blogs in each major city that have really captured the local market by having a group of prolific real estate professionals (agents, brokers, lawyers, etc) writing about local issues. I see people turning to these blogs to get unique and personal perspectives on issues like moving, building, buying and listing. I don’t think you’ll be surprised to hear that that is where I plan on taking Rain City Guide!

Meet a Realtor Who Doesn't Sell Houses…

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The NY Times ran an article a few weeks ago on how hard it is for new real estate agents to break into the market (I’d like to the article but it is now behind a password-protected wall, so instead I’ll just link to the Property Grunt’s excellent summary and analysis). This article got me thinking of a way that I could still be very useful to my clients without actually buying or selling any homes.

What’s that? A Realtor who doesn’t buy or sell any homes?

For the next six-months or so, I really won’t be in a position where I can dedicate a significant amount of time to helping clients. (higher priorities! ) But what I would really enjoy doing over the next few months is staying connected to the business by helping buyers and sellers find appropriate agents.

Say that again?

Mariel Kicking a Soccer BallIn my office alone, there are almost 100 real estate agents who would love to have your business (assuming you’re buying or selling a home) and while I don’t know all of these agents, I do know the successful ones . What I would like to do is use my inside knowledge of successful Seattle agents to connect individuals with the right agents.

For example:

  • Are you looking for a condo in Downtown? I know an agent who specializes there!
  • Are you looking to buy land in Woodinville? I know a different agent who specializes there!
  • How about a modern-style home in Seattle? I know a different agent who specializes in modern homes.

Regardless if you’re trying to sell a home, condo, boathouse, townhome, etc., I’ve come into contact with a highly successful agent who specializes in that field. Talk with me, and I’ll connect you with the right person.

Why would I do this?

It is really a win-win-win situation. You get the best representation possible, a successful real estate agent gets one more client, and I can continue to help people in a small but important way. (I’ll also get a small referral fee from the agent…)

By the way, my recommendations are not limited to just people moving to Seattle. I know a few listings agents who go out of their way to please, so if you are currently a Seattle-area homeowner looking to list your house, talk with me before you list. I’m confident that no matter how good your realtor is, I can get you a better one!

What's in a Name?

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[photopress:thor.jpg,thumb,alignright] I like to think that Rain City Guide is constantly growing and evolving… Along those lines, Anna has been doing some growing (and evolving?) of her own lately. (She’s going to kill me for saying that!)

For those that don’t already know, Anna is expecting to have our second child in a little over a month.

So, let’s get down to business… What should we name the child?

Some ground rules:

  1. Boy or Girl: We don’t know if it is a boy or girl, so you’ve got twice as many names to suggest…
  2. Bilingual: Like her big sister, this child will grow up to be fluent in two languages (it is a must since one set of grandparents speak only Russian and the other only speaks English!). While I encourage you to suggest all types of names, if the Russians can’t pronounce it, I’m pretty sure that it won’t end up flying with Anna
  3. Outrageous: I love unusual names. Anna hates them. While I might be able to sneak past a name like Thor or Tyr, you can be pretty sure that we wont’ be naming our child after a major corporation.

Beyond that, I just look forward to reading your suggestions!

iGenHome…

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iGenHomeAn article from the Silicon Beat says that iGenHome is attempting to add a strong technology backend to the standard real estate agency. I’d imagine that just about anyone reading this blog knows that the real estate industry is set for some major technological changes in the near future and that I enjoy watching where the different players take it. I’ll be following this site and maybe have a full review in the near future… (Thanks Venture Blog for point out this article!)

It may sound too techy, but the first thing I look for in a new tech site is their support of RSS. (Scobleizer would understand!) So, I was disappointed to see no obvious RSS feeds available on their site. Even if you don’t know what they are, I’m of the opinion that you will be using them in the near future!

Here’s one example of how RSS feeds could be useful… I’ve begun presenting the “Latest Seattle Listings” here on my sidebar (if you’re reading this via a reader software, come check it out on the site!). This is just a little test of some RSS feed technology that I’ve been working on with Robbie Paplin of Caffeinated Software. We’ve got some other things up our sleeves that I find real interesting and I look forward to presenting more in the near future! By the way, is there a feed of Seattle home-data that you’d be interested in subscribing to? Let me know and I can probably make it happen for you!

I guarantee you’re going to get this mortgage, I think.

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Why does the mortgage business seem so insane and unreliable? Well, there are a couple of reasons. One reason is there are a tremendous number of loan officers who came into the business during the boom of 2001 and have not had enough experience. A loan officer’s job is to make your loan work. When they look at a loan application, they examine all possible reasons that could be a problem. These are things like properties under construction, borrowers who are out of work, too much debt, not enough income, complex income situations, low credit scores, title problems, and much more. Loan officers with lots of experience have seen so many different situations with such complex problems, they know how to evaluate a new loan and spot potential problems. The next hurdle is with the underwriters. These folks work for the lenders and they review all of the information sent to them from the loan officer. They have guidelines and matrices which tell them what’s acceptable and what’s not. Underwriters will ask, or “condition

Real Simple Syndication (RSS) for Real Estate

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Duck Flapping WingsI can tell from some of the questions I got from my past post about RSS feeds that I was going over some people’s heads. As the resident geek here at Rain City Guide, I feel it is my responsibility to explain RSS feeds and why they are so cool… So let’s begin with the big picture…

Who cares about RSS?
Imagine that you could create a newspaper that only included content that you were interested in. Mine definitely would not include tables if yesterday’s stock quotes! But what would it include? My ideal newspaper would be completely personalized to my interests and include this type of information:

  • Current world, local, real estate, transportation, and tech news
  • Commentary from my favorite writers on world news, local news, real estate, transportation and tech issues
  • The latest photos of my friends and family
  • A photo and description of every new home that came on the market in Anna’s market area
  • Upcoming local events
  • Blog articles written by people who are moving to Seattle

But wait! I’ve already got that newspaper and it is delivered (digitally) to one place every day. Even better, it is delivered continuously throughout the day as new articles appear. My newspaper is ALWAYS up-to-date. It includes selected articles from the New York Times, the Seattle Times, the Seattle PI and 4500 other newspapers!. As a matter of fact, I’ve created such an awesome newspaper that I rarely search the web anymore for new content. Just about all the content that I could possible be interested in gets delivered to me! And best of all, this newspaper with articles, commentary, data and photos personalized to my tastes is delivered to me FREE!

How does this work?
Through the magic of RSS.

What is RSS?
RSS stands for Real Simple Syndication. The idea behind RSS is that a website (newspaper, blog, photo site, etc) publishes a text file on their site with a very specific (RSS) format so that other sites can “ping” this one text file to find the latest news, information, photos (or home listings!). The text file is pretty ugly to look at (here is Rain City Guide’s RSS feed), but that is beside the point, because users should never be looking at a raw RSS feed. Instead, users (that means you!) should get a feed reader that will parse all the ugly text and reformat it in a nice, easy-to-read package.

Have a lost you yet?
Stick with me, and I hopefully you’ll start to see what makes RSS feeds so cool (at least in a geeky sort of way!).

Ducks at LakeWhy go through all the hassle to get a site’s RSS feed when you can just go to the site whenever you’re interested in reading their content?
The beauty of the RSS feed is that updated information is brought to you! Ever since I’ve started using a feed reader, I find myself searching the web for interesting information a lot less because interesting information is brought to me! To give you an idea of the diversity of feeds available, here are some of the things that are delivered to the inbox of my feed reader every time new information is published:

I mention these items just to give you a picture of the diversity of feeds that are available. In reality, over 100 of my feeds are all from bloggers, but the options for different feeds are massive and growing every day. I’ve really enjoyed being able to read articles and see photos from all of these sources within one place (a feed reader!), which brings me to…

So where do I get one of these feed readers so that I can create my own on-line newspaper?
There are a ton of feed readers available. Some of them are desktop-based and some are web-based. Most of my experience has been on the following three web-based options, so I’m going to limit my opinion to these three, but feel free to search beyond my experience:

I began using MyYahoo years ago, and then a while back (months? years?) they added the ability to add any RSS feed to a user’s MyYahoo page. I took advantage of this and enjoyed it so much that MyYahoo page became extremely cluttered. I clearly needed a better option which is when I turned to Bloglines. Bloglines allows you to categorize your feeds into an unlimited number of folders and it does a great job of keeping track of which articles you’ve already read, making it extremely popular and easy-to-use program. Plus it is 100% web-based so that if you log into the service and read an article on one computer (let’s say at work) then when you log in from home, your home computer will know that you’ve already read that article… Bloglines is a great way to keep up on your favorite news, blogs, etc.

Ducks PlayingI’ve also been playing around with Google’s new feed reader called GoogleReader. It’s a great option as well and I really like that it has an “relevance” option that brings the things I’m most likely to be interested in to the top of my list of things to read.

What’s next?
My hope is that if you’re new to RSS feeds, then at least you are starting to see that they have a ton of potential. They are everywhere and Scobleizer (over at Microsoft) would even argue that they are essential for new web companies! Feeds are only going to become more popular, so if you want to be a web-savvy individual, it is time to hop on the band wagon and try it out!

And if you’ve made it this far, you’ll start to notice orange RSS “badges” all over the web. These badges are letting you know that you can read this site’s content from your blog reader.

For simplicity’s sake, I’m going to assume you are using GoogleReader… To add Rain City Guide to GoogleReader, here is what you need to do:

  1. Go to GoogleReader
  2. In the search box, type is “Rain City Guide” and click “Search for New Content”.
  3. Where you see “Seattle’s Rain City Real Estate Guide”, click on the Subscribe button. This will add Rain City Guide’s RSS feed to your GoogleReader.

It is that simple to add a feed. In addition, most sites offer an “+ to XYZ” buttons like this one (Add to Google) from Google. There are bunch more feed readers on the market, and I’ve tried to make it as easy as possible to add Rain City Guide, so I’ve added a button for all the ones that I’m aware of on my sidepanel.

Also, if you are interested in real estate feeds, feel free to grab the real estate feeds that I follow by downloading this file to your hard-drive and using the “import” feature within GoogleReader to add these feeds. (To do this you will need to (1) click on “Your Subscriptions” and (2) on the pull down menu that says “more actions”, click on “import”. Then (3) just follow the instructions to import the XML file.)

So why all the big fuss about RSS feeds? And what does this have to do with real estate?
I’ve been playing around with some ideas I have for an RSS feed of real estate listings and before I announce anything, I needed to have a post I could turn to where I could say “This is what an RSS feed is and why you should care!” There’s nothing I’m ready to present yet, but if you’re interested in being an alpha-tester, let me know and I’ll pass along a link soon enough!

Real Estate Search Options (with an Emphasis on Feeds)

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View from a Houseboat in SeattleAs promissed a few weeks ago, I’ve been updating my list of real estate search technologies on a regular basis.

Thanks to your emails (along with a little curiosity on my part) , I’ve been able to add more sites in the list in the past few days. If you know of any other sites, definitely let me know!

One of the more interesting options I’ve seen is CityCrybs. I really like that they’re offering RSS feeds (a topic worthy of another post!), but seeing as how all of their listings are for the East Coast, I can’t really play around with the site much and understand if the results are any good. Can anyone from the East Coast share their opinion on this site?

Along these lines, would anyone in the Seattle area be interested in an RSS feed of homes as they get listed in the MLS? It really wouldn’t be very hard to put together, but I’m not sure who it would appeal to. In other words, for most people, getting a listing of every home that comes on the market would be overkill (even for a small geographic area) unless you just wanted to use the list to “keep up” on your neighborhood. But are there some specialized feeds that would appeal to people? The first example that comes to my mind would be for an investor who would be interested in finding about each home that has a low $/s.f. ratio? Maybe a feed of homes that have been on the market for over 60 days? Hmm… How about each houseboat that comes on the market?

Do you have another idea for a real estate listing feed? I’m definitely interested in hearing about it!

Seek a Qualified Mortgage Consultant to Ensure the Best Results

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Taking the step into home ownership is one of the most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.

First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.

Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect’s future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.


If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.

It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!

Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn’t make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.

Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.

Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

Is it Time to Refinance to Cash Out?

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rubber duckThe Seattle Times posted an interesting article giving the pros and cons of refinancing homes in order to take out an cash (or a line of credit). Interestingly, the number of people doing this is extremely high with “nearly three out of four homeowners who refinanced through Freddie Mac between July and October cashing out.”

What are the downsides to “cashing out”?

  • By carrying more debt (secured by your house), you put your assets at greater risk if you lose your job, get sick or run into other financial difficulties.
  • More debt also means higher monthly payments, especially if you opt for a 15-year payback term.
  • Refinancing typically costs much more in settlement and loan-origination fees than home-equity lines, unless you have your closing charges rolled into the note rate.

With that said, there are several good reasons to strongly consider an equity line:

  • Convenience and control
  • You pay interest on only the amounts you’ve pulled out, not the approved limit.
  • Most lines allow immediate access to more money using credit cards or checks