Fall real estate cool-down gives negotiating power to the buyers

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If you’re in the market to buy a house, you could be in luck. Compared to this time last year, house hunters have a better selection — and perhaps more negotiating power.
Even with the usual fall decline in houses going up for sale, there are still 4.7 percent more houses for sale now than October 2017, according to the Northwest Multiple Listing Service’s (NWMLS) latest report.

“The increase in standing listing inventory brought more choices to buyers and the meteoric price increases of the spring market have slowed,” MLS director John Deely, principal managing broker at Coldwell Banker Bain in Seattle, said. “Sellers responded by capturing available buyers with competitive pricing or by quickly adjusting pricing.”

Home and condo prices are also the lowest they have been in months, averaging $613,509 in King County, which is down $93,741 compared to last month. Homes are also on the market longer, which can leave sellers antsy to close — and ready to strike a (relative) bargain.

“Buyers are catching on to their newfound ability to negotiate. For the first time since 2012, closed sales system-wide rose from September to October,” said Robert Wasser, a branch manager with Windermere Real Estate in Bellevue.
Don’t get too excited by that drop, though — prices are actually up $48,509 compared to October of last year. Although, that increase could be good news for both buyers hoping to invest and sellers looking to make a buck in the long run.

“Home prices in King County are up nearly 8.6 percent year over year, so we’re still experiencing significant appreciation,” Mike Grady, the president and COO of Coldwell Banker Bain, said in the NWMLS report. “And sellers can still expect to get good prices. All this without the frenzy. A win-win.”

~Natalie Guevara, SeattlePI

Was this House Remodeled? How to Spot Home Repairs When You’re House Hunting

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Searching for that perfect fixer-upper to call home can be a bit overwhelming, can’t it? As a prospective buyer you’re really forced into some heavy duty priority juggling. Neighborhood, sale price, house features, yard features, cost of improvements and as-is condition are just a few of the big ones.

What about identifying problematic old repairs? What was done? Was it done right? Is something being covered up?

Even if you have a real estate professional on your side, and you should, the decision as to when and where to make an offer falls squarely on your shoulders. Once you’ve made your offer and the seller has accepted it, chances are you’re in for some expenses. Home inspectors, termite tests, surveys and more are usually at the buyer’s expense.

What if you had a little bit of knowledge that could help you narrow the field? What if you could recognize potential problem areas before making the offer and investing in an inspection?
While certainly not a comprehensive list, there are a few things that might alert you to a previous repair.

Wall or Ceiling Texture
Wall and ceiling surfaces can be very hard to match exactly. Look closely at the texture on the walls and ceilings, both within a room and from room to room. If you see a difference, you’ll know that someone did some wall or ceiling replacement somewhere along the line.

Mismatched Floorboards
Another hard-to-match surface is hardwood floors. Pay close attention to the floors as you walk through a prospective purchase. Look for “lines of demarcation” that show a difference in flooring. Look at the color, the wood grain, width of planks, visible nails, etc. Even a perfectly repaired floor usually leaves some telltale sign.

Newer Electrical Switches and Outlets
Also take a look at components like electrical outlets and switches. Are they different from one room to the next. If so, it’s a sure sign some remodeling or repair work has been done.

New Roofing
Sometimes it pays to have a closer look at things that are seemingly “wonderful upgrades,” such as a new roof, new siding, etc. These are certainly good things in and of themselves, but not if they are merely a Band-Aid atop a more serious problem.

What You Want to Know
You may be wondering what the point of all this is. The bottom line is that these little indications just give you something to ask about. They give you a reason to learn more about the house itself and the work that has been done. The more you know before you make your offer, the less likely you’ll be to get into a contract on a house that you really don’t want.

If there’s been a new roof, ask if there were leaks. Ask to see up in the attic and look for large sections of replaced roof decking. If you see that, look closer for rotten framing or damaged ceilings below.

If a wall or ceiling looks to have been repaired, ask why. What was done? Was there damage repaired or was it a remodel? Was the contractor who performed the repairs licensed and did he or she offer any sort of warranty on the work? Is that warranty transferable to a new owner?

Avoid Putting Sellers on the Defensive
One word of caution: Be careful not to sound like you’re just looking for a problem for the purpose of beating the price down or making trouble. It’s a fine art to ask about these things without putting the seller on the defensive. Once that happens, the deal can go south very quickly.

It’s worth the risk, however, to really know what has gone on and why. So keep your eyes and ears open! Previous repairs and remodels are part of a house’s history (if it’s more than a few years old), so don’t let your newfound eye for detail turn you away. Just enjoy the process of learning the history of a house.

~Tim Layton, RealEstate.com

Buyers see some hope in cooling Seattle real estate market

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Catherine Horne and Joe Hicks rent a home in Maple Valley. And while they like it, they’d rather be homeowners.

And it’s been a frustrating couple years to be a home buyer in the Seattle market.

“It’s tough, it is,” said Horne.

“Lo and behold, it turned out it wasn’t as easy as we thought it was going to be,” said Hicks.

After losing several homes to same-day cash offers, they started to give up. They decided to spend another year renting and wait to see what the market did.

“Time and time and time again, it’d get pulled out from underneath us,” said Hicks.

They felt overwhelmed watching home prices climb.

“That was part of it, like gosh, two years ago this house was worth $400,000, now it’s $600,000,” said Hicks. “Like boy, I wish we could have got in on that.”

It’s why they’re interested to see the latest trend in the Seattle housing market – Zillow senior economist Aaron Terrazas calls it a normalization.

“Obviously, we’ve become accustomed to having the hottest housing market in the nation,” he said. “That’s rapidly shifting.”

New data from Zillow released Thursday illustrates his point. Researchers found home values appreciated 9.1 percent in the last year, down 14.2 percent from July 2017.

Terrazas noted that still above the historical average – around 5.5 percent.

“It’s still tough, yeah,” he said. “We used to be the fast housing value appreciation, now we’re number 12, so certainly things are starting to slow down.”

He predicts appreciation will continue to slow in the next year to approximately 6-7%.

Seattle has now been passed by cities like Dallas and Atlanta, he said.

“I think it’s a signal of buyers being stretched, a signal of changes in our tax laws,” he said. “Which kind of reduced those benefits to ownership, especially in inexpensive markets.”

The Zillow research also found median rent rose just .3 percent over the past year to $2,173. Last summer, rents were appreciating 5.3 percent annually. Terrazas noted that might be relieving pressure on people that might be looking to purchase homes.

There’s also more housing inventory on the market – 13.2 percent more.

~Michael Crowe, King5News

Is Seattle’s red-hot real estate market cooling down?

 

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For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

“There aren’t as many bidding wars right now,” said Beata Miklos, Managing Broker for Savvy Lane, a local online brokerage firm. “There isn’t as much urgency for buyers to place offers because they know that it’s softening up a little bit.”

Fierce competition for low-inventory of homes for sale has led to extreme bidding wars and lightning-fast sales. Now, the total number of single-family homes on the market in King County has jumped 43 percent in June from a year ago. And condo inventory has risen to an eye-opening 73 percent.

The Times reports homes already on the market are sitting unsold for longer periods of times, according to monthly data released Thursday by the Northwest Multiple Listing Service. Brokerages tell the NMLS since mid-spring, they’ve noticed fewer bidding wars and more homes selling for list price or below.

The total inventory of homes listed for sale has grown for three straight months on a year-over-year basis, reports the times, but the region still has a ways to go to make up for the past 10 years of declining numbers of homes for sale.

Robert Wasser of Prospera Real Estate said the price drop from May to June is the first price drop in King County since before the recession.

~Liza Javier, King5 News

5 tips for making an offer in a hot real estate market

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Steady demand. Limited supply. That’s what we are seeing in real estate markets across the country right now. Inventory is particularly tight within the lower price ranges. “The starter house is nearly missing in some markets,” according to Jessica Lautz, managing director of survey research and communication for the National Association of Realtors.

Of course, conditions can vary from one city to the next. But the overall trend in housing markets across the country is that supply is still falling short of demand. Given these conditions, it’s important for home buyers to make a strong, smart offer when the right house comes along. Here are five tips for doing exactly that.

1. Understand the supply and demand situation in your area.

According to housing experts, a so-called “balanced” real estate market has five to six months of supply. This means, in theory, that it would take five or six months to sell off all homes currently listed for sale, if no new properties came onto the market.

Many real estate markets across the country have less than a three-month supply right now. And some cities have less than a two-month supply.

The first step to making a strong offer is to understand the supply-and-demand situation in your area. We are still seeing sellers’ market conditions in many cities, as of spring 2018. And this could persist for some time.

2. Study recent sales prices in your area.

This is something a real estate agent can help you with, but you can do some of it for yourself. The idea here is to get a good understanding of recent sales prices in the area where you want to buy.

This will help you in a couple of ways. It will save you time during the house-hunting process, by eliminating the need for repetitive research and pricing “sanity checks.” It will also help you make a strong, realistic offer backed by recent sales trends. And speaking of offers…

3. Make a strong and timely offer, backed by comparable sales.

In a slow housing market, where sellers are ready to jump on the first offer that comes along, home buyers have the luxury of taking their time. A buyer might start off with an initial offer below the asking price, just to open negotiations. The seller would probably come back with a counteroffer, or accept the first offer.

But it doesn’t work that way in a more competitive real estate market with limited inventory. In a tight market, buyers are better off making their first offer as competitive as possible. Otherwise, the house could go to a competing buyer.

4. Consider writing a love letter to the seller.

A house love letter, that is! Recent studies have shown that buyers in competitive real estate markets can improve their chance for success by writing a heartfelt letter to the seller. Sure, real estate is a business transaction. But there’s a personal side to it as well. Writing a personal letter to tell the sellers what you love about their home might just tip the scales in your favor.

5. Get an agent on your side.

It’s always a good idea to have help from a local real estate agent. It’s even more important in a tight market with limited inventory. An agent can help you move quickly, putting together a strong offer that’s supported by recent sales data.

~Content provided by MetroDepth

It’s really tough to be a homebuyer in Seattle

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If you’re hoping to buy a home in Seattle, be prepared for rejection. A lot of it.

“For buyers, we are typically making six to 10 offers before we get a house,” said Rob McGarty, who has been a real estate agent in Seattle for 14 years. “The amount of emotional energy going into preparing these offers is huge.”

Home prices in Seattle are on fire: rising nearly 13% in February from the same time a year ago, according to the latest S&P CoreLogic Case-Shiller Indices.
Prices have risen so fast that it’s led to an affordability crisis, with no relief in site.
“Seattle seems to be defying all the laws of housing market trends,” said Daren Blomquist, senior vice president at real estate data firm ATTOM.

The problem is simple: there are more people looking to buy homes than there are homes available for sale.
Seattle’s population has been rapidly growing recently thanks in part to its large homegrown businesses like Amazon and Starbucks.

Amazon in particular has played a major role in Seattle’s economic growth and strength. The company employs more than 40,000 workers at its Seattle headquarters and pays out nearly $26 billion in compensation.
“Amazon has amassed a huge talent pool of employees that has caused other companies to open offices here,” said McGarty. “We have a ton of [San Francisco] Bay area companies that now have offices in Seattle … those transplants have driven prices up.”

Home values in King County, where Amazon is located, have appreciated twice as fast as the national average, according to Blomquist. Average annual home price appreciation from 1995 (when Amazon first launched) to 2018 was 6%, according to ATTOM. Over the same time period, the national average was just 3%.

Life as a buyer

After months of online searching, open houses and having several offers rejected, Kayela Robertson and her husband, Cody, had hit their limit. She said it was common to see the homes they lost out on go on to sell for at least $100,000 over the asking price with multiple offers. They were about to expand their search radius when they made their seventh offer.

“If we were going to be in Seattle, we had joked that we needed to get this house. This was the make it or break it offer,” she said. “If we didn’t, I would have to cave and move farther out.”
Fortunately, their seventh offer was accepted. To close the deal, they offered $140,000 more than the list price of $590,000. They also dropped all contingencies, included an escalation clause, put $100,000 in escrow and promised to close within two weeks.

The couple sold their home in Spokane in January for full asking price, and the money from the sale helped make their offer competitive. They closed on the new home a month ago.
“The house we sold was much nicer and bigger and was much less [than the Seattle home],” Robertson said. “It is still an adjustment that we are paying more than two times more for this house.”

After months of online searching, open houses and having several offers rejected, Kayela Robertson and her husband, Cody, finally snagged a home in Seattle.
Where Seattle goes from here

Despite being a seller’s market, Seattle homeowners are hesitant to sell. Last year, the city was among the best markets to sell a home, and the average home seller return on investment was 64%, according to ATTOM. But even if they get a good price, sellers are struggling to find a home to trade up to.

While the demand is clearly there, there’s only so much room to build in Seattle. It’s bounded by water and mountains. The city also has strict regulations when it comes to building apartment and condos, and 70% of the land mass in the city is zoned for single family homes, according to Matthew Gardner, chief economist at Windermere Real Estate.

“We aren’t very dense at all,” he said.

The home affordability problem could make the city less appealing to businesses. The city recently passed a new tax on big businesses that will help pay for affordable housing and fight homelessness.
At some point, the housing affordability issues and high cost of living, plus the new business tax, could cause companies to think twice about starting or expanding in Seattle.


“The two most important things when companies think about growing in a market is whether there is a suitable talent pool and how much they have to pay people, and the biggest part of salary is the local cost of living,” said Gardner.

~Kathryn Vasel, CNN Money

What First-Time Home Buyers Need To Know

My team and I regularly come in contact with first-time homebuyers looking for some guidance. The prospect of buying your first home can be an anxiety-inducing one, especially if you don’t know where to start. I’ve spent my career helping thousands of people find the perfect home, so I’m happy to shed some light on the subject for those new to the process.

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Patience is key.

Even after you spend hours searching through listings and going to showings, your journey is far from over. Getting a mortgage, having the home inspected and going through the closing process all take time. General wisdom suggests that the process could last from 30-90 days, but that depends on a lot of extenuating factors.

The neighborhood you choose is important.

We believe the neighborhood you live in is just as important as the home you live in. When you make a purchase based solely on the number of bedrooms and bathrooms or square footage, you’re missing out on the lifestyle component of your new home. Where you live will determine not only obvious factors like where your children go to school and how much you pay in taxes, but it also determines more nuanced factors, like how you spend your weekends. Spend time in an area before deciding to buy there, and see if you can really imagine yourself living there on a day-to-day basis.

Have your documentation ready.

Keeping everything digitally organized — rather than trying to keep track of a stack of papers — will help immensely. Have pay stub statements, proof of assets and any loan or credit card debt documentation readily available. Expect to present more paperwork than you might think they need to see. Like a Boy Scout, the key here is to always be prepared!

Be flexible.

One sentiment that almost all of the homeowners we asked expressed is just that: the importance of being flexible. You may have a list of features that make up your perfect home but ultimately discover that you are unable to find all of those features within your budget. Know which “must-haves” you’re willing to compromise on and which ones you really need. If a short commute is most important to you, you may be willing to sacrifice an extra bathroom or granite countertops to be closer to work.

Follow guidelines.

In other words, don’t buy beyond your means. Deferring principal payments in order to get into a bigger home is often a risky proposition that can lead to financial strain. Work out a budget that’s realistic, and then stick to it. Not sure how much house you can actually afford? NerdWallet provides a calculator to help you determine that based on location.

Shop around.

Like any other major purchase, it’s important when buying a home to weigh your mortgage options. Different banks may offer different rates, so getting a wide range of offers can save you money. Planning ahead is your friend in this scenario — as soon as you think you may be interested in buying a home, start the mortgage process. This will also help you determine how much you can feasibly afford.

Don’t let fear stop you.

There’s no doubt that the home-buying process can be daunting — and for first-time buyers, the uncertainty can lead to dread. You will experience a range of emotions in the pursuit of finding your perfect home, but it will be worthwhile when you finally settle in.

At the end of the day, buying your first home will be an intensive process, but it doesn’t need to be a scary one. If you go in with a strong plan and know your facts, you’ll avoid making the wrong choice or missing out on a great deal.

~Bill Ness, Forbes Community Voice

Some unmarried couples co-buying homes as housing prices soar

According to the Northwest MLS, between 2011 and 2016, home prices in Pierce County rose 29%.  Prices rose 38% in Snohomish County and 38% in King County.  In 2011, the median home price was $340,000, but it jumped to $548,000 in 2016.cobuy-neighborhood

Experts say those soaring prices are why we’re starting to see a growing trend of unmarried couples buying homes together.  It’s called co-buying.

This isn’t about love or romance but all about finances.  Relatives, friends, or groups of people are now deciding to buy a property together largely because they can’t afford a space on their own.

Stats from Zillow show people aren’t waiting for marriage to get a mortgage.  In Seattle, young unmarried couples buying homes together jumped to 14% in the last nine years.  At the same time, single people buying homes alone dropped three percent.

It’s dinner time at the Neufeld house in Lake City.  Their new construction homes offers top-notch amenities.  The journey there started ten years ago when the Neufelds moved to Seattle from Winnipeg with an idea for community on a budget.  Shortly after, they met the Linds.

“We were here for about a year in conversation with them and others living together with other unrelated adults,” said Jonathan Neufeld.

Back in 2008, the Linds and Neufelds in the basement with a separate entrance.

“The idea of sharing the mortgage payment was a huge asset and splitting all the utilities made for a very, very affordable footprint for those years we were living together,” said Neufeld.

Living together in a co-buying relationship and it continues to grow in popularity in Seattle as the growing housing costs soar out-of-budget for many.

“Necessity has been the main driver of the co-buying experience,” said Owner/Broker at Infiniti Real Estate and Development Eva Otto knows firsthand after co-buying with her brother years ago.

“We had a lifetime of trust built up between us and we knew that we both wanted to make a real estate investment so we did it together,” said Otto.

Otto joined a panel of experts at this informational session for website GoCoBuy.com  Co-founder Matt Holmes says you can co-buy on your own.  He started this site to streamline the process, answer common questions, and provide contacts of certified experts who know how to help co-buyers.

“People can log-on, build consensus, be connected with a lender. Eventually be connected with a real estate agent who can quarterback them through the process,” said GoCoBuy.com Co-founder Matt Holmes.

It takes you step-by-step from interested buyer to homeowner.  People at all stages were at this informational session including Microsoft Aaron Malveaux.

“I always thought two married people would buy a home together. I never thought unmarried people or just groups of friends could buy homes together,” said potential co-buyer Aaron Malveaux.

That possibility could be Malveaux’s reality as the native Texan gets used to the sticker shock in Seattle.

“Literally homes in Houston cost a fraction of what they cost in Seattle,” said Malveaux.

According to Zillow, the average home in Houston costs.  Less than half of the price of an average home in Seattle.  So the idea of co-buying…

“This is definitely a great option for me,” said Malveaux.

But Holmes insists money should be the only concern.  GoCoBuy.com poses more challenging and uncomfortable questions for potential co-buyers.

“How do you pay? Do you have a joint bank account? What happens if somebody wants to leave,” said Holmes.

On the site, potential buyers can answer all of those questions up front before they face challenges.

“What happens if you breakup, what happens if one of you decides to move, what happens if one of you dies?” asked Otto.

Those answers then turn into a legally binding contract.

“Having a written agreement in place, not so you can take your buddy to court, but so you have this understanding,” said Holmes.

Jonathan Neufeld says they didn’t discuss all the possible outcomes, but had the finances spelled out.

“We would have had the financial documents which described who had what share in the investment in the property itself,” said Neufeld.

They lived together in this home for six years before deciding to redevelop the property.

“Subdividing the original property into four separate properties so that everybody has their own house, it’s all legally titled to their own house,” said Neufeld.

Eva Otto is their realtor and says what the Neufelds and Linds did is the perfect co-buying long-term plan.  She says more problems arise when people co-buy single family homes and there’s no clear divide on space or ownership.

“Buying a duplex with your friend, living there for three to five years, and the tearing that duplex down and building two separate single family homes and subdividing that lot,” said Otto.

Neufeld says he appreciates their original co-buying agreement that helped them save money to build their dream property.

“We have a place we can afford in a community that we love,” said Neufeld.

~Nadia Romero

Scary buying a new home?

36% of Americans think they need a 20% down payment to buy a home. 44% of Millennials who purchased a home this year have put down less than 10%.

71% of loan applications were approved last month

The average credit score of approved loans was 723 in September (the lowest recorded score since Ellie Mae began tracking in August 2011).

Get the facts – contact me!