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.
Wednesday, January 18, 2012
Saturday, December 24, 2011
Bank of American's Unpopular Requirement for Foreclosures
I have been corresponding with Realtors across the country who are sounding off about Bank of America's requirement to present a pre-approval from Bank of America when you submit an offer on one of their foreclosed homes. Buyers and agents are not happy with this extra step when buyers already have a valid pre-approval in hand. Some agents have even said they will not show BoA listings because of this requirement. Why do you think BoA is doing this? Is it to try to force buyers to take their business to BoA? I don't think so.
Back in the day when "liar loans" were made, buyers who were not qualified to purchase homes were encouraged to look into creative financing. The result: they financed a home and many later lost that same home when the economy had it's downturn. People lost jobs, had a health crisis, divorced or discovered their interest rate was not fixed, as they thought, but carried an adjustable rate that had skyrocketed so the buyer could no longer afford their home. As a result, we faced a flood of short sales and foreclosures.
Lenders reacted by tightening up the requirements needed to qualify for a loan. Since BoA has had such huge losses from their bad loans, they are working hard to make sure more bad loans don't enter their pipeline. This new requirement to have a pre-approval from them when submitting an offer on one of their foreclosed homes is their way of scrutinizing a buyer right up front to determine if this loan will be a good financial risk for them. If not, they can move on to another buyer. This does not mean that the buyer cannot stick with their original lender. It just means another group of lenders will be looking over the buyer's financial information to make certain this will be a good loan.
The pendulum has swung from no-doc loans to lenders imposing multiple layers of investigation into buyers' finances. While it requires more time and effort, I think the requirement is fair and reasonable. I encourage my clients to comply and remind them they just may find a better rate with BoA, so why not go along? Hopefully all will go well and they will find themselves being approved by a second lender and ultimately purchasing and living in a home of their dreams.
Back in the day when "liar loans" were made, buyers who were not qualified to purchase homes were encouraged to look into creative financing. The result: they financed a home and many later lost that same home when the economy had it's downturn. People lost jobs, had a health crisis, divorced or discovered their interest rate was not fixed, as they thought, but carried an adjustable rate that had skyrocketed so the buyer could no longer afford their home. As a result, we faced a flood of short sales and foreclosures.
Lenders reacted by tightening up the requirements needed to qualify for a loan. Since BoA has had such huge losses from their bad loans, they are working hard to make sure more bad loans don't enter their pipeline. This new requirement to have a pre-approval from them when submitting an offer on one of their foreclosed homes is their way of scrutinizing a buyer right up front to determine if this loan will be a good financial risk for them. If not, they can move on to another buyer. This does not mean that the buyer cannot stick with their original lender. It just means another group of lenders will be looking over the buyer's financial information to make certain this will be a good loan.
The pendulum has swung from no-doc loans to lenders imposing multiple layers of investigation into buyers' finances. While it requires more time and effort, I think the requirement is fair and reasonable. I encourage my clients to comply and remind them they just may find a better rate with BoA, so why not go along? Hopefully all will go well and they will find themselves being approved by a second lender and ultimately purchasing and living in a home of their dreams.
Friday, December 2, 2011
Who me? Sell during the holidays? Are you kidding?
No, actually I'm not! Selling during the last 2 months of the year can be a very strategic move. Often other listings will come off the market during this time, so you could end up being the fresh new listing the buyers have been waiting for. Supply is down and demand is often up during November and December as buyers try to find a new home before the end of the year. Often people who are relocating have a deadline to buy if they want to take advantage of their company's generous relocation assistance. I've met more than one buyer who is anxiously combing the listings looking for something new.
Besides the supply and demand aspect, there is also the fact that many sellers will decorate for the holidays and this "staging" makes your home look better than ever. Add some smells of cookies in the oven and some holiday music and buyers are picturing themselves in front of the fireplace with a mug of cocoa and a good book.
At the end of November I had the opportunity to list a lovely home for sale. I did an extensive market analysis and then noted how low the inventory was and priced the home accordingly. My open house on day two was swamped and on day three I had not one, but three buyers writing offers. The inspection is behind us and we are moving towards closing. I wish I could clone that home and the sellers. They listened to my suggestions to remove wallpaper, paint and stage. Viola...the home sold just as I said it would! The lucky buyers are so excited to be moving in and hope for a closing before the end of December. A new year in a new home...what could be nicer?
Besides the supply and demand aspect, there is also the fact that many sellers will decorate for the holidays and this "staging" makes your home look better than ever. Add some smells of cookies in the oven and some holiday music and buyers are picturing themselves in front of the fireplace with a mug of cocoa and a good book.
At the end of November I had the opportunity to list a lovely home for sale. I did an extensive market analysis and then noted how low the inventory was and priced the home accordingly. My open house on day two was swamped and on day three I had not one, but three buyers writing offers. The inspection is behind us and we are moving towards closing. I wish I could clone that home and the sellers. They listened to my suggestions to remove wallpaper, paint and stage. Viola...the home sold just as I said it would! The lucky buyers are so excited to be moving in and hope for a closing before the end of December. A new year in a new home...what could be nicer?
Tuesday, November 22, 2011
Thankful for our changing market!
Our market is changing! That's a good thing. When examining the market in 2008 and compare it to today's 2011 market, consider the following:
1. Mortgage rates were 6.75% in 2008 for a 30 year fixed rate mortgage. Now that same mortgage is going for 4.125% . The same payment that bought $500k then buys $669k now.
2. Does it seem like there are fewer homes with FOR SALE signs on them? That's because there are! On the Eastside, we had 3023 listings on the market. We now have 1957, which is about 1/3 fewer.
3. Pending sales are up. In 2008, there were 412 homes in queue to close. Today, we have 931, which is a 126% increase.
4. How about foreclosures? In 2008, we had 10,375 foreclosures. That is about 1 in every 264 homes going back to the bank. Today we have 2,684 which is 1 in 1,049.
Sure, we have a long way to go, but look how far we've come in 3 years. For this, we can all give thanks.
1. Mortgage rates were 6.75% in 2008 for a 30 year fixed rate mortgage. Now that same mortgage is going for 4.125% . The same payment that bought $500k then buys $669k now.
2. Does it seem like there are fewer homes with FOR SALE signs on them? That's because there are! On the Eastside, we had 3023 listings on the market. We now have 1957, which is about 1/3 fewer.
3. Pending sales are up. In 2008, there were 412 homes in queue to close. Today, we have 931, which is a 126% increase.
4. How about foreclosures? In 2008, we had 10,375 foreclosures. That is about 1 in every 264 homes going back to the bank. Today we have 2,684 which is 1 in 1,049.
Sure, we have a long way to go, but look how far we've come in 3 years. For this, we can all give thanks.
Tuesday, October 25, 2011
Earnest Money Reminders
The state of Washington has laws governing earnest money deposits. If earnest money is in the form of a peronal check, it requires 10 business days before being considered available funds. If the transaction close date is 10 days or less from deposit, then funds must be in the form of a wire or a cashier's check drawn by a Washington financial institution. An out-of-state cashier's check requires 10 business days before being cosidered available funds. Buyers, make sure your Realtor gives you a receipt of your earnest money deposit.
Wednesday, September 28, 2011
Seller's Closing Costs
When a homeowner decides it's time to move, they often talk to several Realtors to find out how much their home is worth. Agents will then prepare a market analysis, comparing your property to other similar homes in your area that are active, pending and sold within the last six months.
Another part of the equation when calculating how much they will garner from a sale are the closing costs. Closing costs are roughly equal to about 8-9% of the sales price in the state of Washington. So if you sell your home for $500,000, expect to pay out approximately $40,000 to $45,000. Your Realtor should provide a net proceeds sheet along with a market analysis so there are no surprises when you sell your home.
What goes into that 8-9% cost of selling? Buyers and sellers equally share the escrow fees, Realtor fees are generally 6% of this with half going to the listing agent and half to the selling agent, excise sales taxes must be collected, there is a title policy and document prep fees, as well as recording fees. The escrow company will prepare a HUD statement and list all the charges so you know exactly what the seller's obligations are.
Should you be considering selling your home, give me a call and I would gladly provide a complimentary comparative market analysis along with a net proceeds sheet. That way you will know roughly what you can expect to receive from the sale of your home.
Another part of the equation when calculating how much they will garner from a sale are the closing costs. Closing costs are roughly equal to about 8-9% of the sales price in the state of Washington. So if you sell your home for $500,000, expect to pay out approximately $40,000 to $45,000. Your Realtor should provide a net proceeds sheet along with a market analysis so there are no surprises when you sell your home.
What goes into that 8-9% cost of selling? Buyers and sellers equally share the escrow fees, Realtor fees are generally 6% of this with half going to the listing agent and half to the selling agent, excise sales taxes must be collected, there is a title policy and document prep fees, as well as recording fees. The escrow company will prepare a HUD statement and list all the charges so you know exactly what the seller's obligations are.
Should you be considering selling your home, give me a call and I would gladly provide a complimentary comparative market analysis along with a net proceeds sheet. That way you will know roughly what you can expect to receive from the sale of your home.
Saturday, September 17, 2011
Coldwell Banker Bain leads the way on the Eastside!
I'm so glad to be working for Coldwell Banker Bain in Bellevue! Once again, CB Bain Bellevue branch is leading the Eastside in the number of closed units and listings sold on Seattle's Eastside. In terms of volume, CB Bain Bellevue Way has closed $425 Million year to date. Our next closest competitor has closed less than $300 Million, which is more than 25% less volume. Our 130+ active Real Estate agents are leading the way in sales once again. Now why would you call any other branch on the Eastside to help you buy or sell real estate?
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