Tag Archives: home

Marketing my Home on the Internet

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While my opinion that a good real estate blogger does not include their listings on their blog is well documented and much debated, there is always room for an exception… and marketing my OWN home is one of those!

[photopress:kids_at_easter.JPG,thumb,alignright]Essentially, we have about two weeks left before we put it on the market. We’re just waiting for the movers to take our stuff and then, after we refinish the wooden floors on the main floor, we’ll be ready to list!

So, here are the internet marketing items I have on my checklist (of course, we’ll do some off-line stuff like putting together fliers, but I’m more interested in exploring the online stuff!)

  • Add Our Home to the Free Directories. Craigslist and Google Base come to mind. Are there others I should consider?
  • Blog About Our Neighbors. I know that there is very limited things that a real estate agent can say about the family-friendly nature of a neighborhood, but not having a license gives me the freedom to talk in great detail about are wonderful neighbors. Things I’d like to mention are all the kids that live nearby (8 kids within a few houses!), our regular Sunday BBQs during the summer and our weekly game nights during the Winter. (And I’m sure the neighbors would love it if the new owners continued our tradition of hosting the annual neighborhood easter egg hunt!!!). When moving to a new home, one of the biggest mysteries is what are the neighbors going to be like and because the people on our street are so cool, I’d like to put together an extensive neighborhood blog post! (Honestly, the hardest part of accepting a position in LA was leaving the neighborhood!)

    • [photopress:start_easter_hunt.JPG,thumb,alignright]

  • Financing Options. Interestingly, I’m in a place where I could offer the “right” people some innovative financing options… Like a lease-to-own, or something similar (as long as it is a win-win for both parties, I’m game for any idea!). Does something like this normally happen through the usual MLS channels or is there a special market for these types of properties? (Hint: if you contact me before we list, we might even be able to cut out some obvious fees.)
  • Blog About Our House. I promise not to overdo this, but I think one blog post about all the cool features of our home that might be too “personal” for the typical MLS listing would be appropriate on Rain City Guide. I’m thinking of things like the tree house I built in the backyard and the original art deco fixtures… I’d also like to add a map of all the recently sold homes (or maybe I’ll be lazy and just link to the appropriate ShackPrices page!)
  • Unique Icon. Robbie says he’ll give our home a unique icon on the maps of listed properties… Any ideas for what the icon should look like?
  • Enhance listing on Realtor.com. Around Move, people are shocked at how often real estate agents pay to get showcase listings and then don’t spruce up their listings by adding additional photos and other extras. Considering that Anna’s broker already pays for this service, I’ll make sure we spruce up our home!

    • [photopress:eggs.JPG,thumb,alignright]

  • Get on the Redfin Blog. If I provide a direct link from my blog to my listing on Redfin (and beg people to click on the link!) maybe I can blow out their single home stats for a day and thereby get a mention in their blog!!! (hmmm…. Is there a way to get on the Zillowblog?)
  • Newspaper Coverage? Is someone at the Seattle Times, Seattle PI, Seattle Magazine and/or any other local newspaper interested in writing a story about preparing and then selling a 1920’s Crown Hill (N. Ballard) home? We’ve got lots of great photos and I could probably write most of the story for you! 🙂
    (This reminds me… I did an interview for a real estate technology story that was suppose to be in the May issue of the Seattle Magazine. I never saw or heard anything about that story… Did this story ever go live? )
  • Picture Cloud. These guys just sent me a link for a free photo cloud. Interesting technology and easy enough to put together, so I think I’ll try them out with our home. (By the way, their branded option is free, but if you type the code “raincity”, they they will give you credit for five unbranded clouds for a penny.) If you try them out before I post my cloud, let me know what you think!

Any other ideas as I prepare the marketing plan for our home? Has anyone ever had any luck marketing a home on the internet? What did you do?

Which Home Inspection Addendum to Use?

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Here in the Seattle area, the buyer of a property gets to choose which Home Inspection Addendum to use, when making an offer to purchase. The primary difference between the two, lies in who has the “unilateral” POWER to keep the contract in-force or not, after the inspection.

The seller can counter by replacing the full inspection addendum with the other variety, but that is rare. I recently had an agent ask if “we wanted” to change the inspection addendum to the one that favored the seller, under the guise that another offer was coming. We decided to call her bluff, and our offer was accepted as written, there being no other offer in hand by the time ours required a response by the seller. Though she was quite surprised that we called her bluff in that regard.

The decision regarding which inspection clause to use, often has very little, if anything, to do with the inspection. It has more to do with whether or not the buyer retains the right to cancel based on the inspection.

I currently have two contracts in escrow for the same party, one on the sale of their property and one on the purchase of their next property. On their sale we have a 35B “Seller’s Opportunity to Repair” inspection addendum, giving them the power to keep their contract in force regarding the sale of their property, at least with regard to the inspection. On their purchase, we have a 35A “Buyer’s Satisfaction” inspection addendum, giving them the right to cancel based on their inspection, to counteract the “resale certificate” out, on their sale contract, since they are buying a home and selling a condo.

To understand the difference between these two addendums, you should review both inspection forms, 35A and 35B AND ALSO the followup forms 35AR and 35BR. The striking difference between the two is more noticeable on the followup form 35BR, with regard to the seller’s power given him by the buyer. If the seller checks the box on the follow up form saying he is going to repair the items, the inspection contingency is satisfied. It becomes a unilateral decision of the seller to satisfy the inspection contingency, whereas the 35A is a unilateral decision of the buyer to cancel.

Simply put, a buyer who makes an offer using a 35A “Buyer’s Satisfaction” inspection addendum, retains the right to cancel based on the inspection. On a 35B, the seller can simply check a little box, agreeing to repair the items in the report, causing the inspection addendum to be satisfied. The buyer cannot disagree with the seller’s choice and walk from the transaction, without risking the loss of their Earnest Money Deposit.

So which should you use? If their are multiple offers, you might be able to avoid a bidding war by using a 35B, which favors the seller, so you can win on terms vs. price. 35B trumps 35A and “no inspection contingency” trumps them all. I don’t recommend no inspection contingency in a blog, though often do in “real life” where I have the opportunity to view the property and ascertain my clients true needs and sensibilities.

It would be interesting to hear from anyone out there in the Seattle area who recently completed a sale, either as a buyer or seller. Which inspection contingency did you use and why? What factors led you to the decision to use a 35B vs. a 35A, or none at all?

The Mind of a Seller

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So we’re moving…

This seems like a very appropriate place to discuss some of the things that are going through our minds as we prepare to sell our current home and buy a new home in a new city… Interestingly, my knowledge of “good” improvements to make is very limited and probably much closer to the typical home owner than an experienced real estate agent. With that in mind, I’m going to throw a bunch of ideas against the wall and see what sticks.

So where to start?

[photopress:tree_house.jpg,thumb,alignright]We have a wonderful Tudor in North Seattle that we’re going to be selling. The home is not perfect, but it has some features that make is pretty darn desirable (Good size, big backyard, a good school district, great access to Downtown, great neighbors, etc). However, it is an old home, so I’m thinking that we could add some value and make the house more “marketable” if we made a few improvements.

Here are some of the potential improvements that come to mind.

Electrical:

  • Elimination of old wiring. There are some remnants of the original knob-and-tube wiring in the house. As far as our inspector could tell when we moved into the house (two-and-a-half years ago), the old wiring only supplied power to one light in the attic. I have no idea what it would cost to simply eliminate this wiring, but I have a feeling it wouldn’t be much if combined with some additional electrical work. My guesstimate for the cost: $1000.
  • Ground the computer room. At some point, someone went through and grounded the outlets in the kitchen. I think it would be good to do something similar in the computer room (which is very close to the kitchen and directly above the electrical panel which is located in the basement). My guesstimate for the cost: $1000.

New Appliances:

  • [photopress:dishwasher.JPG,thumb,alignright]Dish Washer. There is a small dishwasher in the kitchen which as never worked. It definitely get electricity and water, so I’m thinking we simply would need to find another (small) dishwasher that fits in this space. I see this as an improvement that makes the house more “acceptable” rather than one that really adds value. My guesstimate for the cost: $500 to buy and install.

Windows:

  • New Windows. We’ve got single pane windows throughout the house. They’re really old, more than half of them are painted shut, and cold air leaks in through cracks on many of them. Would we be best off fixing these before we sell? My guesstimate for the cost: $10,000.

Floors:

  • Refinish Wooden Floors. The wooden floors through the living room and hallways have potential to really shine should we refinish them. My guesstimate of the cost: $2000.

Basement:

  • Finish Basement. Our basement (which includes a separate bathroom, kitchen, bedroom, game room and utility room) has been 95% finished. However there is one wall that needs to be finished (i.e. add drywall) and I think a few other small projects (like adding a door to the closet in the bedroom) could make a big difference in making it feel “finished”. My guesstimate for this cost: $2000

Of course there are some other things on our mind as we get ready to sell:

  • Contractors? Would it be better to hire specialists for each of these jobs (i.e. contract with a window replacement firm, an electrician, etc) or just hire one contractor?
  • List in the MLS. Of course, Anna would list the house under her name, so we will really only be paying 3% of the typical 6% fee if we listed the home in the MLS. But do we really need to even go there? I’m telling Anna that we need to put the home on the auction site I installed on the back-end of Rain City Guide, but she’s not ready to be that “innovative”. 🙂
  • Time. We’d obviously like to get everything done relatively soon. My hope is that we can complete the improvements we decide to make relatively soon, but that is probably asking too much…

Also, if you are, or know of, a contractor interested in this high visibility project, definitely feel free to contact me.

I think my next post will be “The Mind of a Buyer” where I talk about some of the things that is going through our minds as we look to buy a home in a new city. Either way, look for frequent updates on our move.

If you thought “Zestimates” were off, try RealEstateABC.com’s Value Tools

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Announced with lots of fanfare on Inman today about New home-valuation site rivals Zillow. Just went to check it out and it valued my home at $618,000 compared to Zillow’s Zestimate of $1.12 Million. Hmm..just a slight margin of difference there. Inman’s blog site covers the ABC Value tool as “Zillow is old news“.

Personaly, while neither is quite accurate (I think Zesitmates have been covered enough already), I’ll take the old news over the new player on the block. They seem to miss some major value factors like..oh about 50ft of waterfront. All-in-all I think these services make interesting discussion points for our clients but it will be some time before they are on the money.

Robert

Appraisal Question

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While the buyer is paying for the appraisal, they are paying for it as part of their loan costs. The appraiser is hired by the lender and works for the lender and his/her purpose is to inform the lender. I just saw an appraisal of a property I know would sell at about $950,000, come in at $750,000. The appraisal was for divorce purposes and it was a unique, difficult to value property. Appraising is an artform, not a science. There is no one absolute number pointing to what a home is “worth”.

The reason there is an appraisal is in case you do not make your payments and the bank has to foreclose. If you are buying a house for $500,000 and you are putting $200,000 down, frankly, the appraiser doesn’t have to agonize over the process. The bank is clearly going to be able to sell it for the $300,000 they lent you to buy it. Now if you are putting zero down, the appraiser is on the line in the event you foreclose and the bank can only sell it for $450,000.

You need to determine what the home is worth. It’s great when it appraises and everyone loves those few times when it appraises for more than the sale price (except the seller). But if it appraises “right on”, don’t take that as some great feat. Different appraisers will get different answers. Appraising for different purposes, like to value for an estate or divorce when the house is not being SOLD, will often produce different results than when the appraisal is for a home purchase.

What exactly IS a townhome?

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First, let’s all agree that a townhome usually has at least two stories, but you can have a “ranch style townhome” or “rambler style townhome”. Usually there is no one over or under you in a townhome, except sometimes, like in Sixty-01, they occasionally stuff a condo under the two story townhome. In the Seattle area a townhome usually has a garage on the first level, main living areas on the second level and bedrooms on the third level. When there is a view involved, especially a water view, it is better to but the main living areas at the top and the bedrooms on the lower levels.

But why is a townhome sometimes a condominium, and sometimes a single family dwelling? Why is it sometimes a single family dwelling when it is attached to other townhomes, and sometimes a condominium when it is not attached at all?

The phrase townhome was coined by the real estate industry to “upgrade” the term rowhome. Many major cities, like my Philadelphia, have had rowhomes for over a hundred years. As many as twenty five all attached together with no break until you get to the “end of row” or “breezeway”. When builders started building attached dwellings out in the suburbs, they didn’t want to call them “rowhomes” and so came up with the term “townhomes”. Very upscale areas started calling their rowhomes, townhomes, and so the term was created and expanded.

Very simply, if you own the land under the townhome all by yourself, meaning the lots are subdivided at every shared wall from the front of the lot to the back of the lot, then it is a single family townhome or “single family attached”, much like the original “rowhome”.

[photopress:townhomes.jpg,thumb,alignright]If the lot is not subdivided and you build two or more separately owned structures on one lot, whether they are attached or not, they are condominiums. As far as I know, condominiums are always built on land that is shared and not subdivided per each individual owner. So if you put two separate houses on one lot and sell them to two different people, they are condominium townhomes. If you attach 25 homes in a row, but subdivide the lots so that they own their front yard and back yard and the land under their house, they are single family dwellings.

I always say, when you are sitting in your house, if you own the land under your butt all by yourself, it is a single family dwelling. If the land under your butt is jointly owned with other people, then it is a condominium 🙂

Should You Leverage Your Home or Pay it Down Rapidly?

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There is a great debate within the inner-mortgage circles these days. Should we, as loan professionals, encourage clients to borrow as much money as possible? Or would consumers benefit more if we helped them to understand the advantages of 15-year amortization schedules and pre-paying principal? Let’s examine the pros and cons of both strategies.


Leveraging Your Property. In order to understand why you’d want to borrow as much as possible for your home purchase, you must first grasp the concept that equity has a zero rate of return. Here’s an example:

If Consumer “A” buys a home for $300,000, and puts 20% down, then they have $60,000 in equity. Over the next 5 years, the property appreciates $100,000 in value. Consumer “A” now has $160,000 in equity.

Consumer “B” buys a home for $300,000, and puts no money down. At the end of 5 years, that same home is now worth $400,000. Consumer “B” has $100,000 in equity, which is the same appreciation as Consumer “A”, a net $100,000.

As you can see, your down payment has nothing to do with your rate of return. What becomes important is how you choose to manage the $60,000 you didn’t use as a down payment. If you use it for frivolous activities, such as buying toys or going to Las Vegas, it would be more prudent for you to use that money as a down payment. Especially since this will enable you to obtain a lower interest rate.

However, if you were to invest the $60,000 in a vehicle that can out-earn the cost of that debt, then this could be a formula for success. This is why some lending professionals suggest putting as little down as you possibly can, maximizing your tax write-off, and investing the rest. This principle has been applied for many years in the life insurance game. The old saying goes, “Buy term and invest the rest.” The key component is taking the money you would have used as a down payment and creating an asset accumulation account. This account should earn a significant enough rate of return to enable you to pay your mortgage off entirely and achieve the ultimate goal of being debt-free.

Paying Your Home Down Rapidly. There are very few times over the course of my career that I have seen a client with zero debt and no financial difficulties. Choosing to pay off all of your debt can reduce stress and help you to gain freedom of cash flow for investment opportunities. A 15-year mortgage or a bi-weekly payment strategy provides structure. It can also put you on track to have your mortgage paid off within a set timeframe. Simply put, it contains built-in discipline.

It’s important, however, to understand that regardless of how rapidly you pay your home off, you’re not getting any greater rate of return on your investment than if you paid it off slowly.

Conclusion. So how does one determine which scenario is best? The choice depends entirely upon the individual. Savvy consumers who are disciplined, and are comfortable taking chances from an investment perspective, would do well with the first scenario. Over the course of time, it’s been proven that your rate of return over the long-haul will be far greater than the rate you’d pay for a mortgage in today’s rate environment. It’s important to seek the advice of a skilled investment advisor to ensure success with this strategy.

The second scenario is best for those who have a difficult time managing their money or who’ll sleep easier at night knowing they have a plan in place to pay their loan off more rapidly. Be sure that your budget can handle accelerated payments. When consumers “bite off more than they can chew” with a 15-year mortgage, they frequently end up having to refinance back into a 30-year schedule.

If you find this subject intriguing and would like to know more, I recommend that you read a book titled, Missed Fortune 101, by Douglas Andrew. It’s an outstanding read that is very simplistic and goes into far greater detail than I can cover in this column. Douglas is a financial planner who advises safe-structured investments such as whole life policies and tax-free fixed income instruments.

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

Getting the Best Interest Rate on Your Home Loan?

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Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.


A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime