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Archive for the 'Buyer Info' Category
Whatcom County Short Sales
Earlier this year, the NWMLS decided it should make “short sale” a mandatory tidbit for agents to include in a listing. That is, listing agents have to check a box saying whether a home — ANY home listed in the NWMLS — is or is not a short sale. This tiny little morsel of the MLS cornucopia of information has mutliple benefits, such as:
- It allows agents representing investors (or owner-occupant buyers out for a good deal) looking specifically for short sales to easily identify those listings when searching the NWMLS.
- It allows agents and buyers who want NOTHING TO DO with short sales an easy way to exclude them from a list of potential homes.
- And it allows me to pull up oodles and oodles of short sales that are active, pending, and sold in the past six months, so I can tell you a thing or two (in this blog post, actually) about that sector of the market.
First, a brief backstory: a short sale is any listing that won’t generate adequate funds for the seller to pay off the mortage(s) on the home, and the seller therefore wants the lender to take a less-than-full payoff amount. (NOTE: If you’re a seller of an “upside down” listing (you owe more than it’s going to generate when sold) and you choose to bring a chunk of money to closing to pay off the balance due on the mortgages without asking the bank to take a hit, that’s NOT a short sale.)
Short sales are VERY popular right now because so many homeowners are in default — that is, they’ve missed one or more mortgage payments. In fact, as of this post, I’m seeing:
- 80 Active single family residential (SFR) short sale listings, priced from $70K to $837K…
- 97 SFR’s are Pending right now…(one of these was on the market for 954 days!!! Yikes! VERY unusual…)
- 53 have Closed in the past 6 months, County-wide, with an average time on market of 186 days, with an average sale-to-list-price ratio of (this is interesting) 97.26%! Wait a second…. aren’t short sales supposed to close for crazy low-ball prices? Don’t bank on it, amigo. In fact, if there’s one rule of thumb when it comes to short sales, that’s it: Don’t bank on it!
- Let’s check one last statistic: How many have cancelled without selling because either the seller’s lender said, “Nope” or the foreclosure happened, or in rare cases the sellers got some money together or did a loan modification and kep the house. And that count is: 44.
So should YOU (try to) buy a short sale? Universal real estate answer: “It depends.” If you find your dream house and it happens to be a short sale, by all means give it a crack, as long as:
1) You don’t care how long it takes to close (I’ve got one that’s been pending since MAY and we still don’t have an answer from the bank).
2) You don’t care that much if you get the house, because there’s a very good chance you won’t.
3) You aren’t set on the price you offered, because you might wait months and months only to hear from the seller’s lender that “they’ll take 20% more than your offer, thank you very much.”
Short sales CAN BE a great way to get a property at a good price. Just ask yourself those three questions above before you dive headfirst in. If you can answer “Yes” to all three, Go for it!!!
Comments: Please leave a comment.Screaming Deals Only!!!
In the spirit of Halloween, today’s post celebrates that niche in Bellingham real estate known as the “Screaming Deal!!!”
These house, priced up to $150K, are for those of you whose boss has SLASHED your income… but you’re just DYING to buy your own house… and you’d consider selling to the BLOOD bank to raise your down payment and closing costs… and your BONES ache at the thought of another year in a rental house… (are you catching my subtle Halloween references here? Sorry.)
Right now in the Bellingham real estate market, according to the NW Multiple Listing Service, the cheapest non-short-sale house (because the short sale prices are often irrelevant, in that you may NOT be able to actually buy the house for that low of a price), is priced at $135,900. It’s in Glenhaven, about 25 minutes from downtown. Check it out HERE.
If that’s too far to drive, you could always pick up THIS BEAUTY in the highly desirable Sunnyland neighborhood, priced just under $140K. But when you make the call to your lender for a pre-approval letter, make sure s/he’s qualified to do rehab loans, ’cause this one’s going to need it. (The seller might finance it for you too, with a big enough down payment.)
Now HERE’S ONE just off the I-5 with a GIANT useable shop or studio and tenants already there, out the door and into your portfolio for a cool $150,000. It’s rough, and again it may take some creative financing, but hey — if the intent is there on both sides of the transaction, anything can be accomplished!
These homes may not be the mansion you’re dreaming of… but they’re not total NIGHTMARES either! They serve the purpose of getting first time home buyers on the “real estate escalator” and starting to gain some equity.
Have a Happy, Safe Halloween, all!!!
Comments: Please leave a comment.Tax Credit Extension Looks Promising!!!
It’s on! It’s off! It’s back on! No, it’s off! O.K… now it’s ON!!!
This is how it’s been going the last month or so with predictions of whether the First Time Homebuyer’s Tax Credit will indeed expire on November 30th, 2009. That’s wha’ts currently scheduled.
But news services today were reporting some pretty promising news about an extension through the end of 2010, with some pretty specific details thrown in. Here’s what was reported:
- An announcement was made by Senator Bill Nelson of Florida that an extension could be voted on and passed by the Senate as early as the end of this week.
- Nelson made the announcement while in the company of President Barack Obama on Air Force One, and that allegedly adds weight to the comment.
- The new, extended tax credit would remain at $8000 through April 1st, 2010, then would taper by $2000 to $6000 in July, then to $4000 in October, then $2000 in December, in effect “ramping down” instead of just ripping the rug out from under buyers.
There is no question whatsoever that the first time home buyer tax credit has been boosting sales of Bellingham real estate. I personally have 3 sales pending right now involving first time home buyers that were highly motivated by the tax credit.
Of course, the sellers of those homes typically then move up to larger homes, and the sellers of those larger homes move up or across, etc. It’s a nice trickle-up/across effect and it’s WORKING! I’ll be happy to see it extended, and so will a lot of other people.
Read more, including more generous proposals in the Senate and the White House’s stance on the issue, at Reuters HERE.
Comments: Please leave a comment.Un-Licensed Home Inspectors
Picture this: Your real estate agent has shown you a dozen houses and you’ve chosen the one you want to buy. You head back to the agent’s office and take a private conference room. He pours you a cup of coffee, lays the 20-page offer on the table, hands you a pen, and says, “Oh, by the way… I’m not actually licensed!”
Is it safe to say you might pause for a moment, then likely thank the “agent” for his time, excuse yourself, and find someone who IS actually licensed to help you navigate the biggest investment of your life. Can we agree, it’s kind of a big deal!?
Well hold onto your hat, because there’s a very good chance right now that one of the other team players in your real estate transaction is indeed, currently UN-LICENSED. I’m talking about the home inspector.
Recently, Washington joined the growing list of states across the U.S. that have decided that, like real estate agents, lenders, appraisers, massage therapists and hair stylists, HOME INSPECTORS should also be tested and licensed before taking your money to perform a technical, professional service with very important implications regarding the soundness of your future home.
Some Whatcom County home inspectors are licensed, as required, and some are not. The good news is you can check before you hire one. Here’s how:
1) Log onto the DOL “License Query System” web page HERE…
2) In the top field, choose, from the drop-down menu “Licensed Home Inspector”
3) In the fields below, type in the last name of the inspector you’re wondering about, and click “Search.”
If the inspector is licensed, it’ll say “Active” on the far right. If it reads “Active” then they’re licensed and good to go. Rest assured that any inspector I refer, whether you need an inspection for a home you’re buying, or a pre-listing inspection before you put your home on the market, will be licensed and fully legit.
Comments: Please leave a comment.Bellingham REO Stats
I e-mailed a client of mine yesterday to share the news of two bank-owned (REO) listings that had just hit the market in Sudden Valley. Both looked interesting to him, so he wrote back and asked of each, “What could I buy it for?”
Not at all an uncommon question from ANY buyer, not just buyers of bank-owned real estate. Of course the answer is “It depends.” The best one could hope for is that, somehow, I happen to be best friends or even family to the particular asset manager who’s handling the liquidation of the home for the bank. I might get him to slip with a hint about the rock bottom price he KNOWS the bank will accept.
But that’s not likely. It’s not likely the asset manager is even in WA State.
What I CAN do is look at data that shows what other bank-owned properties are selling for, and give a report on the statistical odds of a sale at any given price. At the end of the day, though, the only way to tell is to put pen to paper, write an offer that utilizes every one of the Ninja Tips and Techniques for strengthening that offer, and see if the seller takes it. I’m sorry, but it’s really no more mysterious than that.
Let’s back up a second, though, and take a look at that current bank-owned-property-sales data off the NWMLS Read the rest of this entry »
Comments: Please leave a comment.Lake Padden Relay and Bellingham SUP Demo, TODAY!!!
Come down to Lake Padden this morning, Saturday, October 17th, and take part in the funnest and most spectator-friendly paddling race of the year! Teams of 3 boats have to complete 7 laps around Lake Padden, handing off the baton right in front of Swimmer’s Beach by the west parking lot. The action starts at ten a.m.
The coolest part, though, is that the race doubles as a canned food drive for Whatcom County Food Bank. Last year, Whatcom Paddlers — the local group of racers — raised 300 lbs. of food and $500 in cash for the cause. This year I predict we’ll double it!!!
Then, get into it: Bellingham SUP!
Then, starting at noon, it’s “Bring a C-A-N, Paddle a S-U-P” time. Bellingham Kiteboarding and Kialoa Paddles have arranged for a full quiver of stand up paddleboards and paddles to be on site and ready for EVERYONE to try the sport — the fastest growing sport in the U.S.!!!
If you’ve never been on a stand up paddleboard, TRY IT! It’s a sensory experience like no other paddle sport. Heather and I have been at it for two years and LOVE it. Heather’s been bitten by the SUP race bug, and she’s working on putting together a SUP-based core fitness program for local athletes next summer.
On the beach there will be loaner drysuits, wetsuits, life jackets and anything else you might need to give the sport a try. Lake Padden is the perfect venue to get your feet wet in this sport… so we’ll see you on the beach!
And don’t forget to bring a can of sumthin’ for the Whatcom County Food Bank!!!
Comments: 2 Comments »A New Level of Research
When I represent a client to buy or sell a property, I thoroughly enjoy and take great pride in finding answers. Every property has its own set of unique questions, and the learning curve of “What to ask” aims steadily upward. This week, it spiked upward sharply. My eyes are open wider now for the experience.
Here’s what happened:
I was showing a buyer client some Maple Falls real estate last Sunday. Over the course of seeing 10 houses, they found two they liked, and chose to make an offer on their favorite.
This house is in a development of several dozen homes all sharing a small waste water (sewer) treatment facility. This is typically favorable to buyers, since there won’t be an on-site septic system to maintain and occasionally pump out. Initially, we were stoked.
But a discrepancy in the listing info made us pause and wonder. Read the rest of this entry »
Comments: Please leave a comment.Fear the Face Value
Last week, I helped some buyers tie up a property that all other buyers had been scared away from. There are problems in the crawl space, and the listing agent had two bids from two different contractors. One had bid $20,000 for the repairs. The other had bid $30,000.
When the listing agent shared these numbers, I kept a straight face and slowly nodded my head. But inside I was smiling. Laughing, even.
This house was built in the mid 60s — a VERY solid era of contruction, and from my days as a builder and a Bellingham home inspector, not tpyically prone to such things as complete crawl space reconstruction. Read the rest of this entry »
Comments: 2 Comments »The Art of Calibration
Ever traveled to a foreign country in a different time zone, with a different climate, culture, currency, and language? I don’t mean “touristing” to an Americanized resort meant to mimic all the comforts of home you left behind. I mean “traveling.” Backpack, tight budget, buses and trains, youth hostels.
Think back to that first 24 hours, when your eyes are wide, you’re taking it all in, figuring out what’s safe, what speed things are moving at, what the heck people are saying.
You eventually find the “flow” and the experiences and memories are un-matchable. But in the beginning, that first day or first week or however long it took you, you were getting calibrated to your new environment. Humans are infinitely adaptable animals, but that adaptation, that “calibration”, is not immediate. It’s a process.
Buying a home is a process. For some, it gets more comfortable the more times they’ve been through it, because it’s less mysterious than that first or second time. But it never stops being a process.
Add to the process the fact that the market — any market — is always changing. Markets are dynamic. This one that we’re in now is perhaps the most dynamic in the last 75 years. Lending policies change daily, tax incentives come and go, rise and fall, foreclosures affect non-distressed properties next door… it’s all in flux, all the time.
So when you begin the process of shopping for a home and are serious about actually buying in the relatively near future, an important part of the process is getting calibrated to the market you’re shopping in.
How? By seeing a number of homes, how they’re priced, how long they’ve been listed, what’s selling and what isn’t. And as good a tool as the internet is with photos and video and satellite imagery and mapping, it’s no substitute for getting TO and INSIDE a number of homes.
You’ll “feel” the homes’ character, the size, the setting, the sounds and smells, the light. You can usually feel the pride or lack thereof of the various owners. And you match that sensory input — sent by the things that add up to create the “condition” — against the price, and you combine those to determine “value.”
Then you go on to another home, and you run the ”value” test again. And after half a dozen or a dozen homes, depending on the homes and on you, you reach a point of being calibrated, and knowing what level of “value” will ultimately inspire you to buy. Again, it’s a process, it requires seeing a certain volume of homes, and it results in your assuredness as a ready-buyer.
I’ve had first-time and repeat buyers enter the market and buy the first house they see. But we still went and looked at a handful of others to ensure they were calibrated, and then they went back fully assured that they indeed want to buy house #1.
I’ve also seen buyers repeatedly insist for months — even YEARS — that EVERY house on the market is wildly overpriced, even as those houses sell to other buyers again and again. Some people cannot be calibrated. They remind me of the travelers who never do find that state of ”flow” during a trip. It’s a constant fight against the new culture, language, food… everything. And you wonder why they ever left home in the first place.
The process will calibrate you if you just let it, and it is truly a beautiful thing.
Comments: Please leave a comment.Earnest Money: What’s the Score?
On the first page of an offer, one of the terms you’ll decide on as a buyer is the amount of earnest money you’ll deposit. Every first-time buyer I work with asks all about earnest money – what it’s for, where it goes, how much it should be, and other questions. Every time I help clients write an offer, no matter how many times they’ve bought and sold in the past, we discuss the earnest money. Let me explain it here…
Earnest money is a deposit to show a seller that you intend “in earnest” to buy the property — to close the sale. In my experience the earnest money is always in the form of a check, but it could be anything. It could be a piece of jewelry or any “widget of acceptable (to the seller) value.”
The check is written out to the escrow company handling the transaction. They cash it and deposit it in a trust account. It’s still your money — the buyer’s money — and if the transaction goes all the way to closing, the full amount of the earnest money is credited to your down payment and closing costs.
How much is it? In my experience, it’s usually between 0.5% and 1% of the purchase price. It’s one of many ”terms” in the offer that the seller can accept as-is or counter. I’ve seen earnest money checks for 10% of purchase price, mean to “Wow!” a seller into accepting an offer. That particular earnest money was also made non-refundable UPON ACCEPTANCE of the offer! (Yes, that buyer got the house.)
The seller sees the earnest money as a “score” of how seriously you, the buyer, are going to take the transaction, the deadlines, and the requirements you must meet. Most sellers figure that a buyer could very likely walk away from $500 (a low score), but wouldn’t very likely walk away from $10,000 (a great score!)
As long as you, the buyer, meets your deadlines such as:
1) applying for financing and home owner’s insurance within 5 days of mutual acceptance;
2) having the home inspection done and your response in by the inspection deadline that you’ve set;
3) completing your feasibility study (typically on land) by the deadline you’ve set, etc;
…then you keep your earnest money safe from forfeiture to the seller if you do need to rescind the offer. If you get sloppy, miss your deadline, and expect your earnest money back in full… well, you might have a rude awakening.
This is just a basic overview of earnest money. Like most terms in a real estate transaction, it is highly variable. It can change in the midst of a transaction. It can be split between parties and even their agents in certain situations. Some people talk about doing away with it altogether, but personally I like it. It gets you, the buyer, vested in the property and the process. It gets you committed, and all sorts of good things happen when one is committed.
Comments: Please leave a comment.
