Bellevue Neighborhoods – Get your home sold the first time around Tip #2

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Condition of your home to sell:

Reason #2 (If you missed the first reason you can find it here) that your home will not sell is that your home is not showing well.  Buyers don’t want to walk in the front door and be overwhelmed with STUFF…whether you collect tea-cups, love antiques, have a plane collection, etc.  Buyers shouldn’t know what your hobbies are and therefore you should remove those items before putting your home on the market.  You also don’t want to have a wall of photos showcasing Bobby’s entire 30 years of life…Now, we don’t believe that every single picture needs to be removed as it should show that a family could or does live there.  When a closet is opened your mouth shouldn’t drop to the floor when all the contents are beginning to fall out on top of you.  The more items you have stuffed away, the more a buyer is going to think that there are storage issues with the home.  Same goes for shelves, counters, etc.  The Kitchen doesn’t need to highlight all of the items you might use over a span of a month from the waffle maker to the toaster, the juicer, etc.  It’s OK to have 2 small units on the counter but that’s a max.  Fido’s dog bed is pretty important to him but when there are showings or open houses you’ll want to remove the smelly dog bed and please, don’t leave your dirty laundry out. Furniture shouldn’t be covering up the fireplace or the large living room windows (all focal points in the room). If there was a honey-do list (we all have them) it’s best to get those items buttoned up prior to putting your home on the market.  If it was obvious to you it’s going to be obvious to a buyer, an inspector and the Realtor representing the buyer.

Just remember, a home should be clean and inviting!  The buyer needs to see themselves being able to move in and live there.  Your home may work for you as it is but if you really want to sell then please remember these basic tips.

Urban Gardening…The Seattle Way

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Urban Gardening in the City of Seattle has gotten VERY creative. I’m not sure this is legal…but regardless, I think it is GREAT!!!

I’m talking about that strip of usually very ugly grass “on the street side of the pavement”. I think it technically belongs to the City and not the owner who is “gardening” there. But isn’t this awesome?

Seattle Urban Gardening

Seattle Urban Gardening

It’s supposed to(and most often does) look more like this:
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But look how creative this neighbor is! In that small space between the sidewalk and the street curb, they managed to grow cauliflower, cabbage, corn, sunflowers and even watermelon! Again…not sure it’s “legal”…but it’s super-awsome!
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Can you have a “contingent” offer without a bump clause?

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As always, this is not legal advice. For legal advice, consult an attorney, not a blog.

First, my humble apologies to the Rain City Guide community. I have been grossly delinquent in posting to the site! My excuse: I had my very first jury trial on August 9. Thankfully, the jury came back with an excellent verdict in my client’s favor. When the smoke clears, I’ll post about the experience and some of the specific issues raised.

In the meantime, I came across what I believe to be a novel theory about contingent offers. Specifically, I was informed by somebody who should know that use of the Form 22B is “optional.” As background, the Form 22B, “Buyer’s Sale of Home Contingency,” is for use in a contingent offer where the buyer must sell his house before being obligated to complete the purchase of the seller’s house. By its terms, the Form 22B allows the seller to continue marketing the property (in part by noting “contingent” in the MLS). If the buyer receives another, non-contingent offer before the buyer has sold his house, the seller can demand that the buyer either waive the contingency (i.e. commit to completing the purchase even if his own house does not sell) or the contract will be terminated. Obviously, if the contract is terminated, then the seller is free to enter a new, non-contingent contract with the new buyer.

So, the Form 22B really protects the seller. What buyer wants to get “bumped”? Nobody, of course. But what if you represent the Buyer? It’s in your client’s interests to NOT have the bump clause — so can you draft a contingent offer without using the Form 22B? I’m curious to know what others think of the issue.

My thoughts: Absent use of the Form 22B, there is real ambiguity as to whether the contract is “contingent” at all. In the transaction that brought this issue to my attention, the buyer simply checked the second, “if this sale is contingent” box in Para 1 of the Form 22A Financing Addendum. In my mind, this is simply insufficient to render the contract contingent, so if the buyer is unable to complete the purchase there will be a dispute about whether or not the buyer gets the protection of the financing contingency. If, on the other hand, the buyer’s agent drafts a comprehensive Form 34 that addresses the issue, but that does not contain a “bump” clause, then I suspect the agent will have overstepped his authority to engage in the limited practice of law. But those are just my thoughts…

Townhome Prices – Green Lake et al

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Home Prices in 98103 – There’s hardly a person in the industry, or who is thinking about buying and/or selling property in King County, who isn’t asking the question: “Where are home prices right NOW?” There’s a lot of speculation about the impact of the end of the Tax Credit on home prices. But what we need are real facts in real time.

We also need to know if there are any indicators, be that a Zillow Zestimate or a Tax Assessed Value or other valuation tool, that will help the general public know within a reasonable degree of certainty if a home is “priced well”.

This will be a series of posts in an effort to answer that question. The stats will be for closed sales within the last 30 days, so the number of properties will differ by the volume of sales in each given category.

In the Chart Below we are looking at:

Sales closed within the last 30 days – currently recorded as such in the mls
Type of Property is “Townhome”.
Area is Zip Code 98103 Specific neighborhoods per the listings are Green Lake, Fremont, Phinney, Greenwood. (Note “Green Lake” is a loose term, as the townhomes shown as Green Lake are actually further north into Licton Springs/Northgate in this sampling)

Are properties selling for closer to the Zillow Zestimate? The current Tax Assessed Value OR the previous year tax assessed value? Maybe it’s the Redfin AVM price or eappraisal? If any are close enough to be considered “right”, they are noted in blue.

We will study all info available to the public and see if we can come to any conclusions regarding accuracy, as compared to what the home actually sold for, within the last 30 days.
98103 - townhomes

This is a modest sampling, and we will need to review many more statistics in different places geographically and different styles of property to form any real conclusions.

Surprises? I was surprised that the one Bank-Owned sale was not more of a screaming deal (notes as B/O in the right margin). From my persepective, I am not necessarily looking for who is “right” as much as I am looking for a source that buyers may have decided is most credible when making an offer. I will need to do at least a dozen of these posts to form any real conclusions on that.

(required disclosure: The stats in this post and in the graph are not published, verified or compiled by The Nortwest Multiple Listing Service.)

Bellevue Neighborhoods – Get your home sold the first time around Tip #1

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FRONT1

You want to sell your  home the first time around…if you don’t follow this step then don’t be disappointed if your home doesn’t sell the first time?  We will outline below the reasons that could be hindering the sale of your property.

Pricing your home right to sell:

There are many things that could be hampering your ability to sell your home.  One main reason could be that your home is not priced accurately. Pricing your home is a strategy that unfortunately, many fall short on. One clear sign is that you haven’t had much, if any, traffic in the first week or two that your home has been listed. If you’ve had small amounts of traffic, what feedback are you receiving on your home?  You may not be aware of the feedback as many agents don’t follow up with the agents who have shown your home.  Did you know there’s a software program that will email you the feedback the same time your agent receives the feedback?

Don’t think, “I’ll just put my home on the market at this higher price to see what happens and then I’ll reduce the price if need be.”  You need to price your home with the current market NOW.  The higher the price the less likely you’ll be to have showings on your home.  Even with a price down, the additional time on market that you have on your home due to overpricing at first generally means you’ll get even less than the current market value as a buyer will wait for the price downs and will think that there’s something wrong with your home due to the time on market.

Remember, one of the main reasons your home will not sell is because of price.

Bellevue Neighborhoods – Mid-Century Modern Homes in Bellevue

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MidCenturyModern

Mid-Century Modern Homes are scattered throughout many Bellevue Neighborhoods. If you are looking for that Mid-Century Modern Home in Bellevue you have come to the right place?  Having happened back into popularity over the last few years, it is not hard to find updated homes for you to call your own. There is a lot of discussion as to what defines the “Mid-Century Modern Home

How To Begin the Home Buying Process

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Unfortunately most agents are trained to have a buyer make a list of everything they want in a home as the first step in the home buying process. Left to their own devices without this “push” in the wrong direction, RARELY does a future home buyer start by making a long list like that. It is a “sales” tool to lock you into a close-able position. Don’t buy into that logic by handing a “salesperson” a big list of what you “want”.

Three of the most common “first steps” to buying a home in my 20 years in this business have been:

#1 – Highly Ranked Schools

There is always a lot of controversy surrounding the topic of “best schools” as determined by a ranking system or online school ranking site. Still, many parents use these sites when determining where they are going to be buying a home. My clients tend to use a combination of these two sites:

GreatSchools.org ranks the schools on a scale from 1 to 10. Yes, I have actually seen a school on The Eastside ranked as “1” on a scale of 1 to 10. Makes you want to go peek in the windows and see what the heck is going on in that school. There is also a “star” system, but that seems to be generated by parents whose children already go to school there, so take that with a grain of salt and read the full comments of the parents vs the “3 star” or “5 star” ranking.

There may not be much difference between a 10 ranked school and a 9 ranked school…but clearly there must be a difference between a 10 ranked school and a 4 ranked one. If you love a house in an area serviced by a school ranked from 1 to 4, at least go to that school to try to determine why it has such a low ranking. You WILL get more home for your money if the school is ranked lower but each buyer has to decide where their priorities lie. For many…it is best school their money can buy vs best home regardless of quality of school, and the price per square foot of the home will often reflect that difference.

Another site my clients use, and they usually use both sites for comparison purposes, is:

SchoolDigger.com I like the 1 to 10 ranking system of GreatSchools.org better than the 1 to 5 ranking system of SchoolDigger.com, but I LOVE the display on a map of the schools with “balloons” showing the school ranking. Gives you a better visual of where that you can then match up to a home search map tool. I wouldn’t use these sites to look for homes though. The best real estate search tool for many, many reasons is Redfin.com, but my guess is if you are reading a real estate blog like this one…you already know that.

Even if you do not have children in school, you need to be aware of the impact of school rankings on home values so that you are using the correct “comps” when determining a fair price for a home. You don’t want to use a 10 ranked school as a comp for an offer to be made on a home in a 2 ranked school! Unfortunately, even appraisers haven’t learned that one yet. Be ahead of the curve. Do not be fooled into thinking that “School District” is the ONLY criteria to be used. There are often major variances within a school district.

Some School Districts like Lake Washington School District have a great online map of each school’s boundaries. Boundaries do change from time to time, so be sure to check with the district once you have found a home. Give them the exact address and know that if you are on the border between two schools vs dead center in the middle of the defined area…well, change happens and likely more near the edge lines. This is most important for people planning to have children or who have very young children who are not yet in school.

#2 – “Close-in”…or not “close-in”.

Wanting to buy a house that is “close-in” is more often a “move up buyer” request than a 1st Time Homebuyer request. Sometimes it is the opposite. They bought “close-in” and now want to be far away from “it all”. Unfortunately some learn the hard way how important it is for them to be close to or far away from…something. Everyone’s something is different. First Time Homebuyers tend to look at the WHAT vs the WHERE, and often end up someplace they hate being, causing them to rethink that where and move “out” if not “up”. In fact going from a bad “where” to a good “where” often means moving UP in Price but DOWN in home quality, size and amenities. The wrong where often results in more home for the money, which is why First Time Homebuyers tend to choose them more than experienced homebuyers.

You will often see “Great ‘close-in’ location!” in a real estate ad. What “close-in” means is different in each area. On the Eastside it could mean close to Microsoft, close to Redmond Town Center, close to Downtown Kirkland. On the Seattle Side it usually means you can walk to a coffee shop (and other shops). For those who don’t expect to walk to work, “close-in” could mean a reasonable bus or drive commute time. NOT “close-in” is a little easier to describe than “close-in”. If you have to drive for a half hour to get some milk…you are NOT “close-in”.

There are many variances on this “close-in” theme, and they are as different as people can be different. It’s a personal decision that you REALLY need to spend a lot of time thinking about. Some people hate the noise level of being too “close in” to shops that can also have very noisy restaurants and bars with drunk patrons very late into the night. Some people like to walk to enjoyable amenities, but be as far away from work as reasonably possible. Some people like to be very close to work, but in a private and quiet location when they get home and NOT close in to noisy businesses.

If there is ONE HUGE MAJOR MISTAKE of homebuyers that stands far and above beyond the rest of the mistakes you can make, it is to look at “a house” and make an offer on it, without adequately discovering what is around it. The MINUTE you think you may want to make an offer on a house, spend as much time as possible around that house before negotiations are complete and the home inspection “out” phase is passed. Park your car in front of the house and take long walks in every direction. Say hello to the neighbors. Don’t be afraid to do that! You don’t need to 3rd degree them with a list of questions, nor should you do that. But you should knock on the door and meet the neighbors to see if there is anything alarming to you about them. Why don’t people do that? No one wants to be “close in” to a problem neighbor…no one.

It’s very simple to get “drive times” now without having to leave your computer. Just put in the address of the home and various destination points into a service like Bing Maps and it will give you the estimated drive time. Be sure to double check that during rush hours IF you plan to be driving to and from during rush hour.

#3 Style of Home

Once you determine your suitable where(s), it is time to study the potential whats of that where that are IN YOUR PRICE RANGE.

IMPORTANT NOTE: Many homebuyers are afraid of Future Home Values. Take note that IF you buy a split entry home for too close to the max price for that style of home, you will not likely be able to get paid back for those improvements when you sell.

Yesterday I posted some rather harsh realities for people who want to be “close to Microsoft Redmond Campus” as in within a 2.5 mile radius of 148th Ave NE and 36th. Of great significance is the age of home possibilities.
microsoft age

As you can see in the chart above, a large majority of the homes available and sold in that area were built more than 20 years ago. So wanting a house not more than 10 years old within a mile or two from work at an affordable price may look great on your “WANT” list…but easier said than done. That is why it is important to study the makeup of the area you choose, before going out to look at homes.

Besides the age of home, the style of home is also an important factor. You may “like” granite counters and stainless steel appliances…but that is NOT “real estate”. Way too many people choose a home by its “finishes”. A newer 2-story home that has laminate counters and ugly carpet MAY be better than a less favorable home style with hardwood floors and granite counters, depending on your needs and price range.

BIG NOTE: IF YOUR BEDROOMS (AT LEAST 3 OF THEM) ARE NOT A FULL FLIGHT OF STAIRS ABOVE YOUR KITCHEN AND LIVING AREAS…IT IS NOT, NOT, NOT A 2-STORY HOME! I have met many a seller in a Split Entry or 1 story with basement who said “we have always called it a 2-story home”. Reverse floor plans, and I have seen several on market recently, are a little harder to define. If the view from the main level on a reverse floor plan is knock your socks off awesome…well, let’s just say it better be.

Here are 3 examples of how to look at the general range of possibilities before going out to look at homes to buy.
microsoft type

In the pie chart above you can see that the majority of homes in that area (within 2 miles of Microsoft) regardless of price, may be a home style that you simply do not care for. It is important to know that before going out to look for your “ideal home” in an area that may not have it in your price range. Do you go further out to find “it”…or do you stick to living near work? A personal decision you should make before going out to look at homes. Have a backup plan!

Besides availability, there is a matter of cost. Below I charted all of 98052 using the current YTD median home price of $540,000 as a guide. This first pie chart below breaks down the style of homes sold so far in 2010 costing $540,000 or less in Redmond 98052. Often 2 story also equals “newer home”. Not always…but often…on the Eastside vs in Seattle proper.

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Once I go over the median home price, the breakdown of home style changes dramatically, as shown in the pie chart below. This is VERY important to home buyers in the first group. IF you bought the highest priced Split Entry home UNDER the median home price…note that NO Split Entry Homes were sold above that median price YTD 2010. Future home appreciation is not simply about “the market” as a whole. There is a point at which there simply is no room for upward movement given you simply cannot compete with newer homes and newer home styles regardless of how you may improve that home.

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It is pretty simple to graph out your potential and likely choices in your price range in the area you hope to live. It’s OK to look for a needle in a haystack…you just have to know that before you begin the process. What has NEVER happened in the past, is not likely to happen in the near future. If 1% of the people were able to do what you are trying to do, that is important to know the same as it is important to know if 60% of the people were able to do that in recent history.

You clearly will be able to change what you “WANT” a lot easier than you can change the makeup of homes built in a given area. If it never was built, you likely can’t buy it. So do your homework before you step out the door and get caught up in making quick on the fly changes in your overall home buying plan. Be prepared and you will make a wiser choice.

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(required disclosure: The stats in this post and its graphs are not compiled, verified or posted by The Northwest Multiple Listing Service.) They are hand calculated by ARDELL.

30 Year Fixed Hits New Record Low

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Yesterday and so far this morning, you can lock in 4.00% for a 30 year fixed rate (apr 4.147) based on the standard criteria that I use for my Friday Rate posts at Rain City Guide:

  • Priced with 1 point total (origination/discount)
  • 740 or higher mid-credit score
  • $400,000 loan amount
  • 80% loan to value or lower
  • closing in 45 days

If any of the above variables are different, it may impact the pricing of the rate.    

This morning, mortgagae backed securities are in a position for a reprice for the worse so it’s hard to say how long this rate will be available.

I just had to share in case tomorrow’s rates appear to be the unchanged.  Remember rates are a moving target and change throughout the day….sometimes often!

Former Loan Originator Eliza Bautista Finally Arrested in Seattle

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Liza Bautista worked for a mortgage broker with a strong client base inside her Christian church in Tukwila. After successfully closing several prime loans for folk with A-paper credit, she targeted consumers who were turned down by lenders and created two sets of loan documents.  She submitted the credit history and identity of her prime, A paper clients to the lender funding the loan.  When it was time to sign papers, she forged her A paper client’s names on the loan documents and sent everything in for funding.  For the poor credit clients, she hand carried a second set of documents to be signed and then made a special offer to personally hand carry their mortgage payment to the lender each month.  (Note to consumers, don’t ever agree to this.) Of course, the payments never made it to the bank. Liza kept the money and subsequently, the lender started to foreclose on the A-paper owners, whose name appeared on title as the owners of record. When the A-paper clients were finally contacted by the lender and claimed they did not own said house, Liza started running out of places to hide.  The poor credit clients who were thrilled to be homeowners were obviously upset that their name were not on the title to the home and they were evicted after foreclosure.

From King 5 News:

Eliza Bautista landed herself in handcuffs…four years after the KING 5 Investigators exposed a scheme she orchestrated where she sold homes, loans and promises that were bogus to naïve home buyers.
Mary Pelayo of Bellevue was one of Bautista’s victims in 2006. She was astounded when KING 5 told her that her former mortgage broker had been arrested by federal agents.

“I’m shocked. I would never have thought this day would come. We gave up hope. We thought she got away with it,” said Pelayo.  “I hope she goes away for a long time and has a long time to think about all the hurt that she put our families through. Not just mine but all the other families involved in this.”

Four years ago, Pelayo was featured in a KING 5 News story which showed that the home she thought she and her family had purchased in Shoreline actually wasn’t theirs at all. Three months after moving in, the Pelayos had to move out. “We lived in this house for over three months. We thought this was our home. We started fixing it up. We put a lot of money into it (and) a lot of work. And then to find out it’s not ours!” Pelayo told us.

Unbeknownst to them, their mortgage broker, a polished Eliza Bautista, had secretly stolen another client’s social security number and good credit scores. Bautista used that information to buy a home for the Pelayos, who had shaky credit.

KING 5 found Bautista had done this several times with other unsuspecting clients. After the KING 5 Investigation aired, the FBI and the U.S. Attorney’s office took on the case.

Liza Bautista faces a maximum of 20 years in prison if convicted of the mail and wire fraud charges. Her trial is scheduled to begin in October.

Truliaboy Refinances His Short Sale Purchase

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Truliaboy PuppyBack in early October, I wrote a brief story of a young man (whom I have dubbed as “Truliaboy”) who purchased a nice home via a short sale at 15% under the then current market value. It is a beautiful home on over an acre of land purchased for less than $300,000. With his permission I am posting this follow up story for the benefit of those who purchased “awesome deals” with little down, to show how one person was able to get rid of the Mortgage Insurance Premium via a refinance, and save a lot of money on interest as well, less than one year after his original purchase.

At time of purchase, the Annual Percentage Rate (including up front loan costs) on Truliaboy’s TIL (Federal Truth-In-Lending Disclosure Statement) was 5.336%. The recent refinance that closed last week carries an APR of 4.491%…a considerable savings. On the original 30 year loan, the Total Finance Charges for the life of the loan show as $260,169.12. On the recent refinance the new charges for the life of the loan show as $221,385.09.

Total Savings = $38,784.03.

Back to the issue of the Mortgage Insurance Premium. The Mortgage Insurance Premium on the original loan was $109 a month, and the loan amortization on the TIL included this amount for the first 9 years plus 5 months on a slightly decreasing scale. $109 a month in the first year and down to $93 a month in the final payments. By eliminating the monthly mortgage insurance premium, Truliaboy saved approximately $11,300 in monthly mortgage insurance premium payments.

His original monthly payment, including MIP, was $1,536.60. His new payment is $1,363.05. Total savings in his current monthly payment $173.55 per month.

1) If you purchased a house in the last year or two at significant savings by buying a short sale or a bank owned home with less than 20% down, you should look into the possibility of getting rid of your Mortgage Insurance Premium by refinancing your loan IF the current value is likely 20% less than your new Total Mortgage Amount.

2) Be sure to re-evaluate the Total Savings vs. the Total Cost of the New Loan AFTER the new appraisal comes in. It could cost you a few hundred dollars in “wasted” appraisal fee, but you need to be ready to pull the plug IF the new appraisal does not come in at an amount that will equal a new Loan to Value that is more favorable than your original loan. Make sure the monthly savings via reduced or eliminated Mortgage Insurance Premium (and interest savings if applicable) justify the cost of the refinance. Check your “comps” in advance as much as possible, to help determine the odds of a successful outcome.

3) Be sure to make as many LOW COST improvements to the home (if you have not already done so) to help insure a successful new appraised value. Clean and stage your home for the appraiser’s visit the same as you would for a potential homebuyer.

Part of the success lies in the fact that Truliaboy made some improvements to the home in the short time that he has owned it. The cost of the home’s improvements since time of purchase was approximately $10,000 to $12,000 BUT Truliaboy used his $8,000 First Time Homebuyer Tax Credit to make a huge dent in the cost of those improvements.

That is an AWESOME example of how to spend your $8,000 Tax Credit wisely, and parlay it into additional savings over the time you will be living in the home, by using the improved value to get rid of the PMI / MIP!!!

As in the original story, Truliaboy gets all of the credit from me for a job well done…AGAIN! Though Truliaboy continues to credit St. Joseph for his HUGE success story, I think it was a combination of factors, not the least of which was Truliaboy’s efforts that caused St. Joseph to bless him with this successful outcome.

If you were wise and lucky enough to purchase a home at considerably less than the appraised value at time of purchase in the last couple of “sub-prime crisis” years, and you bought the home with less than 20% down payment, be sure to look into the possibility of turning that “instant equity” into REAL today savings by eliminating the Mortgage Insurance Premium via a refinance.