Viewing a Home that is Being Rented

According to Coldwell Banker Bain's Property Management, a home owner has the right to show a rental property to prospective buyers or tenants with 24 hours notice.  Also, the tenant has a right of quiet enjoyment.  These rights may be competing.  The tenants also have the right to reasonably say no to showing.

Lauren's Real Estate Perspectives: Snapshot of Seattle's Eastside Real Estate market

Lauren's Real Estate Perspectives: Snapshot of Seattle's Eastside Real Estate market: It's been a wild ride.  This year we continue to see a lack of inventory and an influx of buyers, which pushes our housing prices up.  T...

Snapshot of Seattle's Eastside Real Estate market

It's been a wild ride.  This year we continue to see a lack of inventory and an influx of buyers, which pushes our housing prices up.  That's great if you are a seller, but not so great if you are a buyer.  At a recent Coldwell Banker Bain Bellevue agent meeting, our Principal Managing Broker, Thadine Bak shared some statistics I thought were worth repeating.

For the month of May 2014 for the Eastside area including Bellevue, Kirkland, Redmond, Mercer Island, Medina, Newcastle, Sammamish, Woodinville....

71.14% of all properties sold (closed) in the month of May, either at or above original list price.
The average percentage over original list price was 4.94%.
For properties that sold below original list price, the percentage average was 3.05%.

Days on the market for properties that sold above original list price averaged 7.4 days.
Days on the market for properties that sold at original list price averaged 14.1 days.
Days on the market for properties that sold below original list price averaged 25.0 days.
The take-away?  Price too high and you will be on the market longer.
If you have not sold after a month in this competitive market, the market has spoken!
What to do?  Change the price, condition of the property or offer better terms.

What about inventory levels?  How much supply do we really have?  A balanced market is about 5 months supply.
Overall for May 2014 we had 1.3 months supply of homes.
Typically, our 10 month average for the month of May is 3.1 months supply.

What is the hottest selling price range for the Eastside?  $500K to $750K.

The bottom line is this:  our inventory is increasing which is allowing for more pending sales.  High demand and a historically low supply has driven up May's closed sales price by 13% from May 2014 over May 2013.

The bottom line:  Eastside sales are continuing to show us that we have one hot real estate market!

Paying Taxes in the State of Washington

In the state of Washington property taxes are  paid to the county twice a year.  The County Treasurer's office sends out a bill along with your assessment mid-February.  For those new to the state, you only get one bill, though you need to remember to pay it by the due dates, April 30 and October 31.  The first bill due April 30 covers taxes for January 1 to June 30 and the October 31 bill covers from July 1 through December 31.  While some states divide these payments into county taxes and local taxes, ie, school taxes, the state of Washington combines all taxes and divides the bill accordingly. 

What if you pay late?  If you pay your April 30 bill on May 1 or later, you will have a 1% interest payment penalty.  If you wait until June, you get hit with another 1% interest payment plus, they add on a 3% penalty fee.  Wait until July and you face another 1% interest penalty, and if you wait until December to pay that bill, you will continue to accrue a 1% penalty each month plus you will incur another penalty fee, but this time it will be 8%. 

Where do you send this payment?  Your February bill will give you the address for your county, but if you have your taxes escrowed by your lender, then your lender will pay them for you directly.  If your taxes increase, you may have an escrow shortage and your lender will be contacting you at the end of the year to make up the shortage.

If you want more information on your property taxes, call your County’s Treasurer’s office.

Why Coldwell Banker Bain?

When I moved to the Pacific Northwest over four years ago, I left behind in Michigan a successful real estate practice.  Faced with the daunting task of starting over, I began the process by investigating which brokerage to associate with.  I knew there were some companies that stood out more than others as influential in the area, so decided to investigate those first.

In real estate, a broker approaches a brokerage and asks for an interview.  There is no need to wait for an ad in the newspaper or an opening posted on the web as brokerages are always "hiring."  As a broker, you are an independent contractor looking for a place to hang your hat.  Realtors are not given a salary or benefits, rather they earn a commission, and each brokerage structures their commission arrangement differently.  Sharing commission is how brokerages stay in business and how they can offer support to their agents.  With the variations, it can seem like comparing apples to oranges at times, but commissions are only one piece of the puzzle.  There are brokerages that promise the best "splits" in order to encourage agents to work for them, but they may lack in other areas, such as education and support.

When I went to my first interview, I was impressed with many of the features of the brokerage, but I came away feeling something did not quite fit.  The second brokerage I approached was Coldwell Banker Bain.  I knew that Coldwell Banker Bain was a big name in the greater Seattle area and so arranged an interview with the principal managing broker in the Bellevue Way office.  I was immediately at ease.  I learned this is one of the few offices that still has a weekly meeting and tour scheduled.  Agents that participate in the weekly new-to-market listing tours and interact with one another receive a great advantage in that they keep current with new listings, learn a great deal from other agents including what they think of the properties/neighborhoods, and generally get a fast education on market trends.  On top of that, Coldwell Banker Bain has an incredible education program with weekly opportunities to take free classes on every conceivable topic from assessments to technology trends to feng shui to international buyers and more.  Due in large part to this, I was convinced Coldwell Banker Bain was my new home and started working there the very next day.

Since then, Coldwell Banker Bain has continued to grow and evolve into an even better place to work.  They have added a technology department that helps Realtors with any and all technology issues and a marketing director to help agents maximize their marketing efforts.  The tech department can remove a virus from my computer, load new software on my laptop, advise me on storage options, remotely fix a computer problem and teach me how to use all the tools in my arsenal.  The marketing director can advise me on how to best achieve my goals and follow up with me throughout the year with creative ideas and encouragement.

Besides these great offerings, Coldwell Banker has over 800 international offices in 51 different countries and over 2300 offices in the US alone with a global sales force of 82,000 brokers, while other leading offices in the region are far more limited.  Because of the influence of our region's major employers drawing from a wide-ranging international base, I wanted to be part of a brokerage which had such extensive exposure, not only in the US, but also internationally. 

During my time at Coldwell Banker Bain I have enjoyed a wonderful environment in which to grow my business.  I am proud to say that last year I earned membership into Coldwell banker's President's Circle which represents the top 5% of agents worldwide, and I anticipate similar recognition this year.  The same resources that make Coldwell Banker Bain a great place to work make it a great place for my clients to be represented as well.  Buyers and sellers have amazing resources and support from an incredible staff that work hard to deliver the finest service.  I cannot imagine working anywhere else and I hope you share the Coldwell Banker Bain experience by contacting me with your real estate needs.  For now, have a wonderful Christmas season and a happy and prosperous New Year!

Live Like You Plan To Move

It's happened a lot this year. A homeowner calls and announces they are thinking about a move, heard that it's a seller's market and wonder if I would give them a market analysis. I spring into action and head to their home with my camera and notebook in hand, wondering what I am going to find. Sometimes I find a home that is completely updated and beautifully decorated. That's such a pleasure, but not the norm. More often than not, I find homeowners who want to buy something that sparkles, but don't have their home in optimal condition. I might suggest the homeowners replace the stained carpet, but sometimes am told, "I don't know what color the next buyer will want....let them replace it." At that point I tell them that I happen to know what color the next guy wants as I have been shopping with buyers for years and hear the same comments over and over. They want a color their red couch and green bedspread and orange futon will go with...and they want the ability to change colors and not have to change carpet. They want beige. Make sense? They also want to come into a home and even if it is "used," they want to feel like it is "new." New carpet will do that. So will fresh paint. There is something about clean, bright walls and floors that make a potential buyer smile.

In my market, I work with a lot of two-income households. Buyers are working long hours and the last thing they want to do when they buy a new home is to start writing checks and overseeing contractors. OK, there are a few buyers out there who are willing to do that, but they are more the exception than the rule in my market. Also, if they are willing to do the work the seller did not do, buyers are going to expect to be compensated for that work in the form of a lower purchase price. You can't have it both ways. If you don't pay to have the work done while you are the homeowner, someone else will. Inevitably, you pay if you do the work yourself and enjoy it while you are there, or you pay by garnering a lower price when you sell, which brings me to my point: why not live now like you are planning to move?

So what would you do if you knew you were moving in 2 years? It wouldn't be a bad idea to call a Realtor and ask them for advice. I get that call now and then. I will talk to a homeowner who is thinking about getting their home market-ready and wondering where they should focus. I really enjoy those conversations and inevitably, am able to help sellers focus on prioritizing their repairs and improvements. Sometimes I talk them out of an expensive remodel and help them see the need to work on some deferred maintenance issues. Mossy roofs, overflowing gutters, a weedy yard and garden begging for attention, a deck with rotted boards, overflowing closets, clutter and other issues can often take more elbow grease than money and these improvements go a long way. If a homeowner has a budget to do more, we prioritize so they can tackle the items that give the best return on their investment.

But what if you aren't planning to move? My suggestion would be to live like you are. Most people move more often than they think. Sometimes you don't see these moves coming. Perhaps a new job or growing family or empty nest make you think life would be better in a different home. We often get so busy with day-to-day living that we do not look ahead to plan the next chapter of our lives. It sure would help if we did.

Perhaps because I  have moved so many times and know the getting-the-home-ready-to-sell drill, I always buy with an eye to sell and start the home improvements day one. Since I chose fixer-uppers, neutral paint and landscaping were often first, then maybe some electrical improvements, new toilets, appliances, etc.: every year a project. And then when the inevitable move came, I was ready. The bonus: not only did I garner a good profit when I sold, but I enjoyed a nice home while I lived there. Spreading the repairs out over the years was a budget-friendly way to do it, rather than waiting for the Realtor to tell me I had an overwhelming number of items to address before I could list the home for sale or that I would have to take a lower price if I wanted to list it "as is."

I recently met with one woman who was in charge of selling her mother's home. Her mother was getting older and could no longer care for the home where she raised five kids. While it was hard to leave the memories that home held for her, she knew it was time for assisted living and moved out. Her daughter spent seven months preparing the home, having an estate sale, and hiring contractors to work on every area of the home. She asked me to come see the progress and evaluate what else needed attention. We had several contractors come give their advice and together we strategically decided where to focus our efforts. When all was complete, we had the home staged and professional photos taken. 50 groups of buyers toured the open house and then we reviewed three offers, all well over list price. We were confident that the money was well-invested and that our seller got back much more than she spent. Yes, she spent seven months working on the home, but that just underscores the need to stay on top of repairs. It also validates that you pay now or later, but inevitably: you pay for your home repairs.

With the average American moving every five to seven years, it might be that your time to move is closer than you think. Why not look around your home with a discerning eye and make a list of improvements that need to be made, then start tackling that list one at a time. If you aren't sure where to start, give me a call. If and when the time comes to move, you will be that much further ahead. If you end up staying in the home for an extended period, you will be enjoying much nicer surroundings. Sound like a plan?

Buying a Home with a Tenant in It

When prices on Puget Sound homes began their decline  in 2008, many homeowners decided to wait for the market to rebound before selling.  They opted to rent their homes until the values increased.  Fast forward five years and we have a seller’s market.  Homeowners are finally able to list their home for sale.  Sometimes, those homes have tenants in them who are finishing up a lease.  What is a homebuyer to do?  Are there some things they should know before moving forward with a purchase? 

According to Dorothy Ennes, Manager of our Property Manager Division for Coldwell Banker Bain, homebuyers should know that if a home for sale has a tenant in it, the home sale is subject to the terms of the lease; ie, the owner can’t increase the rent or require the tenant to vacate or otherwise change the terms of the lease.  It is a good idea, prior to closing to ask the seller for a copy of the lease , the move in inspection report,  and a tenant ledger so you can know if the tenant has consistently paid their rent on time.  Also, by Washington state law, you cannot collect a deposit unless there is a move in inspection and you can’t charge a tenant for damages, even if the property was brand new when they moved in.  Without a written move in inspection, the owner can’t charge the tenant for damages.

In our hot seller's market, we are likely going to see more homes for sale that are occupied by a tenant. It is important for a buyer to do their due diligence when purchasing such a home.

Fast and Furious....the Buyers' New Home Buying Experience

The greater Seattle area has a seller's market.  We have low housing inventory and many buyers vying for the limited number of homes that are on the market.  In recent years, buyers have been taking their time to find a home, looking at dozens of houses before determining they want to write an offer.  They would look at a home, think about it a few days, view it again and perhaps want to see it again the following week, maybe even bringing family members or friends along for advice.  Those were the "good old days" for buyers.   They would bid low, walk away and wait for the sellers to drop their price before swooping in with an even lower offer. 

Those days are gone. Our current market is fast paced.  Buyers see a home and those in the know act quickly to put in an offer, often that same day.  They may have a "pre-inspection" before even placing an offer (at a cost of $400 or more) and waive any repair requests in order to make their offer more appealing to a seller who may receive a dozen or more offers. 

Our Coldwell Banker Bain office in Bellevue has mandated that we let our sellers know we must keep a property on the market at least three days.  This allows a multitude of buyers to see the home and creates a fair playing field for buyers.  It also often encourages bidding up of the price of a home, which sellers appreciate. 

An escalation clause may be used to present an offer that will beat the high bid by a price of a pre-determined amount but will not exceed what the buyer feels comfortable offering. For example, a buyer may find a home priced at $700,000 which is in a popular area and in fine condition.  A competent agent would call the listing agent and find out if there are other offers.  If so, she advises her clients and they determine what the property is worth to them.  I tell my buyers to determine the number at which they no longer feel bad if someone else got the property.  Is that price $704K? $725K?  $748K?  I recently heard of an escalation clause stating the buyer would pay $100K over the list price! 

Many first time buyers are not accustomed to this market and find it hard to believe a home will sell for over list price.  They also may feel the market is too fast for them to make such a large financial decision that will impact their lives for years. It is not unusual for buyers to "lose" a few homes before they understand they must act quickly if they find a home they like.  I encourage my buyers to call me as soon as they see a property they like and try to find time in their work day to view the property.  This gives them more time to consider if they want to write an offer on the home. 

I have had some buyers tell me that they will not offer more than list price.  Unfortunately, they may miss out on owning the best properties which are the ones with multiple offers.  Right now, with historically low interest rates, buyers have a wonderful advantage many buyers have not had for many years.  In addition, while we have seen prices creep up in the last year, the prices have not yet returned to the highs we saw in 2007, so buyers are getting two advantages:  lower prices which are likely heading up (instant equity) and record low interest rates which means every mortgage payment reduces the principal by a significant amount.  Many buyers are even considering 15 year mortgages with low interest rates which halves the normal amount of time a buyer faces paying back a loan.

All in all, it is a great time to buy or sell a home.  Please give me a call if you need an agent who is experienced in this fast and furious market.  I would delighted to use my knowledge and experience to represent your best interests.

Mortgage Rates at Historical Lows: Will 2013 Be Your Year to Buy a Home?

We have all heard over and over again how great the interest rates are these days, but these charts found in the links below really put it all in perspective.  We really are at historic lows!! 

Thank you to lender Stephen Chow for providing this great visual reminder that now really is the best time to buy a home!  Give me a call if you want to start your search:  206.383.3119.


Click Here for the 30 Year FHLMC Rates On 30-Year Fixed-Rate Mortgage Chart

Click Here for the 200 Year Historical Rates On 30-Year Fixed-Rate Mortgage Chart

Click Here for the 20 Year FHA Interest Rate Average For 30 Year Fixed-Rate Mortgage Chart

Click Here for the Rent vs. Buy Index Chart

If I Get Preapproved Will My Credit Score Go Down?

I recently met a new client who is interested in buying a home this year.  She had a pre-approval from last year, but it expired, so she asked me if she could get pre-approved without having her credit pulled.  Good question! A pre-approval is generally good for 90 days, but after that, a buyer needs to go back to their lender and refresh their pre-approval.

I called a few mortgage lenders I work with and asked some questions which confirmed what I suspected:  You cannot be pre-approved without having your credit pulled.  You can be pre-qualified, but not pre-approved.  So what's the difference?  A pre-qualification is when the lender meets with you, asks a lot of questions about your income, debts and assets and gives you a ball park idea of what you can afford.  As one lender said, this is "useless for an offer situation" as sellers want to know that your financials have been examined closely and that you really can afford their home.  Sellers certainly do not want to take their home off the market and then discover the potential buyer is not qualified.

So why would someone be concerned about having their credit pulled?  Inquiries make up only 10% of your credit score, but if you are hovering near a 740 credit score you may have a valid reason to be concerned. Scores over 740 get the best pricing on interest rates.  A lower rate means a lower monthly payment and significant money saved over the course of the loan.  If you plan to have a FHA loan and put the minimum 3.5% down on your home, the credit score does not matter as much as if you are putting down say 20% or 30%.   First time buyers or buyers with low to moderate income generally select a FHA loan if their credit scores do not qualify them for a conventional mortgage.

So how much damage does pulling your credit score really do?  The answer:  it depends.  If you are considering buying a home and visit a few lenders within a few weeks, and they pull your credit, these multiple pulls are considered one inquiry.  As a result of this inquiry, your credit score could be hit from 3 to 15 points, according to my lenders.  However, if  at the same time you are thinking of purchasing a car and the car dealer pulls your credit, then you choose to add a new credit card to your wallet and have your credit pulled by a number of lenders over a 2 month period, your credit score will take a serious hit.

It is in your best interest to keep your credit score in mind when you are getting ready to purchase a home.  Once you apply for your mortgage, your lender will tell you not to incur any new debt.  It is best to close on the home before you start looking to finance a new car or new furniture for your home.

Securing a pre-approval is an important step that cannot be avoided when purchasing a home, but how you go about doing that, and what the impact will be on your credit scores can vary greatly.  Let me know if you need the name of a reputable lender to help you navigate the financial piece of the home buying puzzle and minimize the impact on your credit score.

2012 Greater Seattle Real Estate Sales in Review

I haven't posted in a few months as I have been busy helping clients buy and sell homes.  All of this has contributed to my best year ever in real estate.  Even though we have low inventory, the buyers and sellers in our market are serious and understand this is an ideal time to buy or sell a home. Low ball offers are a thing of the past.  Buyers understand they must be pre-approved and ready to step up with a very good offer when they find the home they want to purchase.  Sellers know they have the upper hand, but Realtors are wise to insist sellers have their homes sparkling clean and staged if they want to garner the best offers.
 
Having witnessed the purchase of homes with mortgage rates in the high teens back in the 1980's, it is wonderful to see rates as low as 2.75% for 15 year mortgages and near 3.5% for 30 year fixed mortgages.  Those low rates buy you more house for your money.  How long this golden opportunity to buy and sell will last is, of course, the million dollar question I wish we had the answer to.  With the "fiscal cliff" looming and all the talk about our economy, unemployment rates, etc. we can't begin to guess what 2013 will bring.  What we do know is that this year was a very good year for many buyers and sellers. 
 
Besides  being a good year for buyers and sellers, it's been a very good year for my office in Bellevue, Coldwell Banker Bain.  According to Coldwell Banker Bain-Bellevue's Marking Director, Christopher King, over the past 12 months, Coldwell Banker Bain-Bellevue has been the region's top-selling real estate office:

• We've sold over $850 million in homes, the most in Washington and 12% more than our closest competitor;
• In King County, our total sales are 18% more than our closest competitor;
• On the Eastside, our total sales are 21% more than our closest competitor and we've had the most units (homes sold) in Buyer Sales of any office;
• Our average List-Sold price of $845,400 is 66% higher than the Eastside average

All this is to say, I'm proud to be working for an exceptional real estate company and I am happy to share with you all our vast resources at my disposal.

As we see 2012 come to a close, we look back and see progress made in the world of real estate.  The market has unquestionably turned around and is headed in the right direction. I am looking forward to 2013 as I hope you are as well.   Whom do you know who likely will be next to buy or sell a home?  It would be my pleasure to be of assistance to them in this process; please have them give me a call.

 

Market update from my Monday morning meeting

 

Every Monday morning I attend a meeting with Realtors from Coldwell Banker Bain in Bellevue.  We discuss our new listings, talk about the market, then pile into cars and view homes that our agents have recently listed in the greater Seattle/Eastside area.  It is a highlight of my week. One of my favorite portions of our meeting is when one of the Managing Brokers explains the market statistics showing what is happening in our current market .  Here is what the board looked like this morning. 

 

 

As you can see, there is a huge difference between our market in 2008 and now, four years later. On the Eastside, September 1, 2008, there were 3322 active listings, with 581 homes pending.  If you divide the active listings by the pending listings, you get a ratio that tells us that for every active listing, how many homes are pending.  This ratio helps us understand if we have a market that is more favorable for buyers or sellers or is a balanced/neutral market. 

 

A ratio of 2.5 or less is generally thought of as a seller's market. 

A ratio of 4.5 is a neutral market.

A ratio of 6.5 or more is considered a buyer's market. 

For homes in the luxury market over $1M, add 2 to the ratios. 

 

So let's look at the Eastside market again.  In 2008 the ratio was 5.7:1, which tells us the market favored the buyers.  In 2012, we see less than half the active listings and more than double the pending sales, so we know there has been a big shift in our market.  In fact, currently, pending sales in the Eastside market are nearly equal to the active sales.  The ratio shows this with a very low score of 1.17:1.  That means for every 1.17 homes that enter the market, we see 1 home go pending.  This clearly demonstrates that we have a strong seller's market (seller's market being 2.5 or less). 

 

Remember, just four years ago, it was almost six homes active on the market for every home that went pending.  That meant five of the six homes were not selling, so according to the law of supply and demand, prices had to go down in order to move inventory. 

 

We see the converse in effect as well. Take a look at the right side of the white board above:  In the past year in King County, with low inventory, active listings averaged 21% higher price than they did a year ago.  The year to date average price of an active listing in King County is $696,436.  Now let's look at pendings: The average price of a pending home in King County, YTD is $445,617., which is 9% higher than pendings were last year.  Finally, note the trend in sales:  the average King county home, YTD sold for $455,429. which is 5% higher than last year's average.  For homeowners in King County, this is very good news.

 

If you look at the left side of the white board above, you can see that the Eastside luxury market and the Seattle market have similar stories to tell.  In fact, the current Seattle market is white hot with only 908 active listings, but 1512 pendings.  The ratio of .83:1 reveals that now is an excellent time to sell your Seattle home!

 

If you or someone you know is interested in selling a home and wondering if now really is the best time to sell, give me a call for a private and confidential consultation:  (206) 383-3119.  I would be happy to go over statistics for your area and provide a complimentary market analysis.

You call this a bedroom?

Sometimes when I am showing homes to buyers, they are surprised at what sellers will call a bedroom.  Of course if a room can be called a bedroom, it increases the value of a home, since four bedroom homes generally are more appealing to buyers than three bedroom homes.  But can any room or closet be called a bedroom?  Are there any standards?  Well, yes, it turns out there are! 

1. According to  SRC 2009 R.304-305 & R.310 and the Client Assistant Memo prepared by the Seattle Department of Planning and Development, the bedroom code requires 70 square feet as a minimum  for a bedroom.  The width of a room cannot be less than 7', so a 6'x12' room really cannot be called a bedroom.  Height of a room must also be a minimum of 7'.

2.  A bedroom must also have an egress window that fully opens and is no more than 44" off the ground with a minimum of 5.0 square feet net clear open area with 24" minimum clear opening height and 20" minimum clear opening width. 

3.  In the greater Seattle area, there is no requirement for a bedroom to have a closet, but real estate standards say there should be a closet as well as a door than can close.

In addition, Statutory law requires that all homes sold after April 1, 2012 must be equipped with carbon monoxide alarms at each floor and audible to sleeping areas, so sellers should get these installed prior to listing a home for sale.

 

 

 

 

How much should I offer?

You've finally found the home and with pre-approval in hand ask your Realtor to help you write an offer. Good for you! In the greater Seattle area, now is such a great time to buy with low interest rates and prices that are depressed from the height of the market in 2007. So what do you need to know? What comes next?

When my clients tell me they are ready to write an offer on a home, I ask the following questions:

1. What are your full legal names?

2. What is your address?

3. When would you like to close and move into this home (typically 45 days from the day we write the offer)?

4. How much will you be putting down on this home (generally we write a percentage,i.e.,  20% down)?

5. How much will you be putting into earnest money (while typical is 3%, we see from 2% to 5% with higher percentages for competitive bidding situations)?

6. How much would you like to offer for this home?

Often my buyer-clients can answer the first five questions, but they need help on the sixth. "How much do you think we should offer?" they ask. That's when a good Realtor turns to the comparative market analysis and sees what other homes of a similar style, age and location are selling for. While active listings are helpful in determining price, the most accurate information comes from sold comparables. We try to look for homes that have sold within the last few months, especially since our market changed significantly this year from a somewhat balanced market to a seller's market with rising prices. Low inventory can make it a challenge to find comparable sales. Sometimes we need to go back to sales that occurred a year or more ago, then look at how the market has changed from that point forward, using sales data from Trendgraphix or the Northwest multiple listing service. It can be challenging to pin down an exact number, but an experienced agent has the benefit of working their market for years and having looked at a multitude of homes in the area. I can suggest a range for a reasonable offer, but I always point out that we can prove the home is only worth so much, but the seller can still refuse their offer.

I am currently working with a couple who wanted to buy a unique home. They were willing to wait for just the right place, passing by the suburban cookie-cutter homes for homes that offered some architectural interest. We found just the place: hidden in the woods with a triangular shape, multiple decks and a view of Lake Washington. They couple quickly decided this was their home and asked what they should offer. A market analysis was difficult since this truly was one of a kind. After some research I came up with a range, then asked the listing agent if she would share her comparable data to combine with my research. We learned that the home had been on the market two months with no offers, so we bid below asking price and waited. The sellers came back with a price that was countered again by my buyers. The sellers verbally accepted our offer. I urged the listing agent to get the signatures and come to mutual agreement, but the sellers had a medical emergency and a 12 hour delay ensued. When the listing agent was on her way to get signatures from the owners, another offer came in for full price and now we had to compete for this home. My buyer clients were not happy to have to bid for the home they thought they had below list price, but with the uniqueness of the home, they stepped up an made one final offer. They were happy to have won the bid, but this experience underscores that "time is of the essence" in a bidding situation.

When I have clients who decide to purchase a home, I always urge them to get their questions answered, then write the offer as soon as possible, for this very reason. Even if no other person has viewed the home, you never know when someone can make an appointment and decide, just like you did, that this is the home for them and submit a bid along with yours. When you have a competitive bidding situation, the price always goes up. The days of taking a good percentage off to try to "steal" a home are over in the greater Seattle area. Sellers are back in the driver's seat and for those homes that have a great location and great condition, prices are often going over asking price. How much over? It depends on the home and how many bids. I always ask my buyers to consider how much they want the home and there comes a point at which you think "that's too much." I ask them to imagine the other buyer getting the home for a price that they could say, "that's OK...I would not pay that." With escalation clauses, we can make an offer over a competing bid, up to your comfort range. For example, a buyer could offer $700K with an escalation clause of $2500 more than all offers, up to $755K." So if your competitor bids $725K, you end up getting the home for $727,500. Of course we ask to see the competing bid, so we know there really is someone we are competing against. For privacy reasons, names will be crossed out, but confidentiality does suffer in multiple bid situations.

So circling back to the question at hand: "What do I offer for a home?" The answer is both art and science with a great number of factors coming in to play. After considering location, condition and price in comparison to other homes, one needs to consider the market, if there are other offers, and the seller's motivation. This is where Realtors can be a great asset in analyzing the data, testing the winds and giving their professional opinion so you get the home you want for a price you are comfortable with.

Mom & Dad: Do’s and Don’ts on “Helping” Your Adult Child Buy Their First Home

Buying a home for the first time can be a daunting experience.  Often young people have saved for years to get a down payment together.  After they choose their Realtor, get pre-approved for a mortgage or get a proof of funds letter in hand for a cash purchase, they define their criteria and the fun begins.

Most first time home owners cannot afford to get all the features they would like, so they quickly learn to sort through what is most important.  Is proximity to work a priority?  Making sure you have room for a growing family or your ATV collection?  Is the home’s resale value a consideration?  Many first time homeowners think they will live in this home much longer than they actually do.  People get married, divorced, have children, get new jobs across town or across the country, etc.  When that happens, they need to move. National averages show us we move about every five years, so it is good to look ahead and plan for growth, change and resale.

Often times, I show a client a couple dozen homes and then when they start to be drawn to one property over another, they want affirmation that they are picking the best home for their money.  They call in their parents and they join us to see the top two or three homes.  Here is where problems can begin.  Since the parents have not seen the dozen or more homes we have seen, they have not had the benefit of comparison in the overall market to know these really are the best buys.  They have also not worked through prioritizing the criteria…maybe deciding they can live with a carport instead of a garage if they get the fenced back yard for their dogs.

Another problem I have run into with the relatives is hearing them vent all the negatives about a home that their son or daughter has deemed the best.  They somehow feel that is their job…to point out the soiled carpet or torn wallpaper (things we saw and discussed).  What I see happening here is what I call “stealing their joy.”  Instead of being excited, now the clients are doubting their judgment and consequently want to see dozens more homes, even if they don’t  quite meet their basic criteria….just to please the parents.   When that happens, often I see the really great home they had picked out be snapped up by another buyer, and the buyers are consequently remorseful.

Sometimes I have run into parents imposing their housing desires on their children:  insisting on a 1 story home, or a home that is move in ready, but far from work, or even some superstitions they may have, but their children do not share.  Instead of helping their children, parents can actually confuse and discourage them.
 
So how would I suggest parents help their children?  First, rather than jumping into the driver’s seat, allow your adult child to tell you what they like about the home.  Let them show you around.  Watch their expressions to see where they light up and where they have concerns.  If they are going to pay for the home and live there, they should be allowed to pick what they want.  Of course, if you feel they are making a big mistake in buying a home that is unsafe or in a questionable neighborhood, it would be wise to suggest they investigate by hiring a qualified inspector or calling the local police department to ask for crime statistics.   It would also be wise to consult with the Realtor they have chosen to air your concerns and listen for their perspective in their special area of expertise.
                                                                   
Parents can be a big help in assisting their adult children with the purchase of their first home, but they need to remember that they have given their children roots and wings.  They need to trust that all those years of living with their son or daughter have caused them to pick up on their wisdom.  Now is the time to encourage and listen as they chart their course and begin the new adventure called homeownership.

Top States for Washington In-Migration

The state of Washington continues to enjoy economic growth.  Top employers such as Boeing, Microsoft, Amazon, Starbucks, Nordstroms, University of Washington, and more draw people from all over the world.  In May 2012, 10,269 adults obtained their driver's license in Washington, after leaving their home state or country.  This is 52 more than May 2011. While net migration out of Washington is not as accurate, due to incomplete reporting of surrendered licenses, we see a total of 3127 licenses surrendered.  Where are all these new arrivals coming from?  According to the Department of Licensing, drivers are migrating from all states and many countries, but the top five states are, in order:

1. California: 1832
2. Oregon: 1287
3. Texas: 598
4. Arizona: 517
5. Idaho: 415

Incidentally, California, Oregon and Texas are historically the top three in-migration states. 

Other locations outside the United States that top the in-migration list for May 2012 include:

1. British Columbia: 83
2. Korea: 70
3. India: 51
4. Mexico: 40
5. China: 25

For more information on driver migration, check out Washington's Department of Licensing statistics.

May 2012 Sales Strongest in 7 years!

Our market is constantly changing.  What we are seeing now in the greater Seattle area is a strong seller's market.  Low inventory and record low interest rates along with an increase in hiring in the Puget Sound area has caused quite a stir in our housing market.  Multiple offers are common.  Short sales and foreclosures are down.  Demand remains strong. Sales at Coldwell Banker Bain Bellevue are at levels not seen in the past 7 years.  Sellers are slowly listing homes for sale and buyers are often jockeying for best position to purchase a home.  Pre-inspections, escalation clauses and personal letters to sellers are now part and parcel of the buying process.  Those buyers who think they can find a home and negotiate on their own will soon discover the hard way that a savvy Realtor is their best strategy for finding and purchasing a great home in this competitive market.  If you want great results in buying or selling a home, give me a call:  206.383.3119.  My experience will go a long way in helping you achieve your housing goals.

Carbon Monoxide Alarms Required in Homes for Sale Starting April 1, 2012

According to the Northwest Multiple Listing Service, effective April 1, 2012, RCW 19.27.530 requires the seller of any owner-occupied single-family residence to equip the residence with carbon monoxide alarms in accordance with the state building code before a buyer or any other person may legally occupy the residence following the sale.  This requirement applies to all single family residences, including single family homes, condominiums, and manufactured/mobile homes.
The building code (WAC 51-51-0315) requires that an alarm be installed: (1) outside of each separate sleeping area in the immediate vicinity of each bedroom; (2) on each level of the dwelling; and (3) in accordance with the manufacturer's recommendations. The building code also requires that single station carbon monoxide alarms comply with UL 2034. There are no exceptions for properties that do not have fuel-fired appliances or an attached garage. The alarms may be battery operated and can be purchased for as little as $25 from a variety of sources.

The building code also requires that single station carbon monoxide alarms comply with UL 2034. There are no exceptions for properties that do not have fuel-fired appliances or an attached garage. The alarms may be battery operated and can be purchased for as little as $25 from a variety of sources.

In addition, effective April 1st, the building code requires a property owner to install carbon monoxide alarms when alterations, repairs or additions requiring a permit occur, or when one or more sleeping rooms are added or created. There has been a requirement to install carbon monoxide alarms in new construction since January 1, 2011.

Carbon monoxide (CO) is a poisonous gas that kills approximately 500 people in the United States every year. Carbon monoxide killed over 1,000 Washington residents between 1990 and 2005. You cannot hear, taste, see or smell carbon monoxide. In many cases of reported carbon monoxide poisoning, victims were aware they were not well, but became so disoriented that they were unable to save themselves by either exiting the building or calling for assistance. Young children and household pets are typically the first affected.

Carbon monoxide alarms are intended to trigger at carbon monoxide levels below those that cause a loss of ability to react to the danger of carbon monoxide exposure.

Multiple offers

Everything old is new again.  The multiple offer frenzy is back in the greater Seattle area!  I spent time with my local banker today, and we were talking about market trends.  He surprised me by saying, "well, it is  a buyer's market."  I wondered where he's been.  Certainly not following me and my buyers as we rush to a listing, only to see multiple buyers lined up to take a look inside.  What is happening?  The market is changing.  Just this last week, our Coldwell Banker Bain office in Bellevue had more than a dozen multiple offer situations.  The escalator clause is back!  One agent said she backed away from writing an offer for her interested buyers when she learned there were already 24 offers.  Buyer's market?  Not here!  Homeowners, this is the time to list your homes.  We have a buyer looking for your home. Give me a call and I'll help you determine what your home will sell for.  Buyers....beware.  If you find a home you like....be prepared to act quickly and don't be surprised if the home sells for more than asking price.  Oh yes, everything old is new again...multiple offers and bidding wars, here we go!

A Fresh Look at Our Current Market

There seems to be a misunderstanding of what is going on in our Seattle area market.  Buyers still feel in control, citing the volume of short sales and foreclosures.  What they have heard on the national news is not necessarily what is happening in our neck of the woods.  From 2010 to 2011, we have seen a decrease in the number of foreclosure filings as distressed homes have been sold off.  Less than 12% of King County homeowners are underwater on their mortgages.  Since our Eastside sales prices are down about 30% from the glory days of 2006-2007, sellers have not been eager to list their homes.  This has kept our inventories low.  In fact, King County currently is at half of the inventory we had in 2008 and the number of pending single family residences in December 2011 was at the highest level since 2006.  In short:  we are selling off the homes on the market and we are not replacing them with new listings.  The old rules of supply and demand hold true:  if the supply goes down, then prices go up.  Since we have a critical under supply of homes in Seattle and especially on the Eastside, prices should start to creep up. 
Buyers who see a home and think they will take a look at it in a week or so are likely to find they will not have the opportunity to see the inside of that home as it will likely be pending.  I recently listed a home in the Bridle Trails neighborhood in Bellevue and on the third day had three full price offers.  I'm sure many other buyers were looking forward to seeing that home the following weekend, but they missed their opportunity.

Yes folks, we now have less than a three month supply of homes to sell in King County.  A balanced market which favors neither buyers nor sellers is generally considered to be a five month supply. Sellers, this could be your year to see a turnaround.  And buyers, get ready for a fast and furious 2012....we are officially at the bottom of the market:  the bell has rung, the interest rates are fantastic and if you want to buy a home: 2012 is your year to buy!  Call me if you want to start searching for your next home: 206.383.3119.  It would be my pleasure to help you find the home of your dreams.