A few years ago I watched as the area was cleared and developed with streets, lights, and playgrounds, and then the real estate economy tanked and the property sat idle … until recently!

Unfortunately, it appears that the folks at MainVue homes have decided not to list their homes on our local MLS. Visiting both their Web and physical sites indicate that several homes have already been sold, model homes are available, and homes are for sale.

Marketing is driven specifically to consumers and Broker/Agent participation appears to be discouraged.

With registration either on the Web or in person, the builder will recognize that a particular client is represented by a Broker, but they’ve certainly not made it easy. Having worked with Quadrant, Soundbuilt, Kendall Homes, Richmond American, and Polygon in the last year, I’m a bit spoiled, apparently. Those folks welcome Brokers and encourage us to be of help to Buyers. I’m afraid that’s not the case at MainVue.

I love working with Builders. I’ve built my business offering outstanding customer service to both Buyers and Sellers. I’ve helped Buyers sell their existing home quickly so that they were able to buy a new construction home. I’ve directed them to financing that was far better than what they were offered by the Builder’s preferred lender. I’ve helped the Buyers actually get the option package that was advertised by the Builder, but then went missing in their Builder contract.

As a transaction progresses, it’s frequently necessary to indulge in a bit of professional and friendly nudging with the Builder to be sure that the Buyer ends up with the home of their dreams, while helping them with all facets of their home buying process. As a new construction homebuyer, you’ll have a lot of questions – at the time you choose your lot, your model and floor plan, and throughout the build. You need someone to look out for your interests. (By the way, Mr. Builder, I also kept Buyers happy, answering their questions, interfacing with your representatives, and keeping them out from underfoot so that you can do your job! You should want to work with me!)

When you’re ready to buy a home at The Bridges, please be sure to use a well-qualified Broker. If you choose to visit The Bridges on your own without your Broker, do so only once, and be absolutely certain those folks know you’ll use your own Broker for your purchase.

I’m delighted to be of service to you … and am happy to represent your purchase of a MainVue home – even if the Builder isn’t excited about working with Broker/Agents.

Be certain you’re well represented during this most important purchase! There’s a lot of money involved and you deserve the best!

The last couple of weekends have included a few hours helping our son decide what car to buy. We’ve been to this dealer and that, had him prequalified … and have driven a number of cars, usually with the all-chatty salesman in the backseat telling us exactly why this car is THE one to buy. We’ve driven some brand new cars and are now taking a look at a few that a just a couple of years old (Mom insisting that maybe the payment will be a bit easier on his monthly budget.)

Now that we’ve graduated to the used car market, I’ve been busy reading CarFax reports, looking over my son’s shoulder and hanging onto the passenger “Lord Help Me!” strap conveniently located just above most of the passenger windows. (Word to the wise … don’t ever go on a test drive with a 21-year old male …. )

Now that I’m safely home, I’ve been able to reflect on the disparity between buying a car and buying a house. We’re out driving around in a $18,000 car, testing the brakes, going around corners, up steep hills, accelerating on the freeway–all with a eye on making sure that the vehicle seems safe, feels good, and is worth going to the step of taking it to our trusted mechanic before going down the buying path.

However, buying a house … many times more expensive, doesn’t include that same test drive. There’s no chance to sit in the house long enough to decide if it’s drafty, cook a meal in the kitchen and see if the layout really truly works or pack the closets to see if the clothes all fit. All of those things are a bit subjective. We think it’ll work. We walk through the house–maybe a few times–then begin the purchase process. With careful thought and due diligence, we hire a trusted inspector to test and prod the house to reveal its strengths and weaknesses. We measure the rooms, sometimes draw them out on paper and hope everything fits.

But test drive? Nope. That’s reserved for much smaller purchases … like cars, trucks, and RVs.

As Agents/Brokers, it’s important to provide as many opportunities for our Buyer clients to look at a house at their own pace. To figuratively kick the tires, lay on the floor of the empty bedroom to see if the bed fits and stand in the pantry to evaluate the food storage. Because buying a home is truly the largest purchase they’ll ever make. It’s the best we can do .. their test drive begins the day they move in.

*photo courtesy of egg on stilts via Flickr

One of the very first steps in the home buying process is determining how a Buyer will pay for their new home. Not only must a Buyer determine much they can afford, but how an offer must be structured–whether closing costs must be paid by a Seller, gift funds will be used for a down payment, how much of a down payment will be paid, and so on.

Having a great lender as part of the Buying team is critical, but especially so with short sale purchases.

It can be difficult for a lender to help a Buyer determine exactly how much they might need to close the sale. A good faith estimate on the front end of a short sale might not be appropriate; interest rates, dates of closing, and other terms may change before lender approval occurs several months later.

Will the Buyer have sufficient funds to close? Will they have sufficient reserves; will they be comfortable with their payment?

A GREAT lender prepares an estimate of costs at the beginning, then meets periodically with the Buyer throughout the process, updating them on the changes and making sure they understand the numbers. They help the transaction succeed – from start to finish.

Working with an agent experienced in both listing and assisting buyers with short sales … and considering their recommendations for a great short sale lender will ensure success and confidence as a buyer proceeds through the process.

Like many, you may have been sitting impatiently on the fence for the last three years hoping for a miracle that would allow you to sell your existing home without sacrificing too much more equity … and buy at today’s price and interest rate.

At least once a week I get a call from a previous client or someone “just checking out the market,” wanting to do exactly that. And, who absolutely wouldn’t want to buy a house with the bargains out there??!!

Let me try to help you make a bit of sense out of this type of scenario.

The latest statistics from the Office of Federal Housing Economic Oversight (OFHEO) and Federal Housing Finance Agency (FHFA) indicate that home prices in Washington State, overall, lost approximately 8.67% from the end of 3rd quarter 2010 through 3rd quarter 2011, but gained 111.07% for the 20 year period ending 3rd quarter 2011. Okay .. math … 111.07% divided by 20 years = 5.55% a year appreciation!

Now, assuming that housing prices are getting to the bottom end of their free-fall, let’s also assume that housing prices will continue to appreciate overall at a safe rate of about 5% a year for the next 20 years. There’s still going to be some skidding when reviewed on the short term, but remember that real estate is a long term investment – 10-20 years.

Continuing with assumptions, let’s presume that housing prices in Washington State might fall another 7-8% over 2012 (I think that sounds like a bit much, but my crystal ball is a bit cloudy, so who knows? Note, that The Housing Predictor anticipates an approximate drop in the Seattle area of about 5.1%.)

So … your current house valued today at, say $250,000, might be worth approximately $230,000 or maybe $235,000 by year end. Yikes … another nosebleed of $15,000-$20,000. Perhaps you owe approximately $150,000-$200,000 … and you’re paying around 6% in interest on your mortgage. (Quick math … $200k at 6% = principal & interest payment is approximately $1,200 a month – but you’re paying more than that because you haven’t refinanced since 2008 and your house was worth more and your loan was bigger. I’m guessing you’re probably paying around $1,600 a month principal and interest.)

You want a bigger house, different neighborhood, lower interest rates. And you can buy that for, say, $275,000-$300,000 at today’s prices. At the end of the year (assuming you wait until next December), those houses might be priced at $255,000-$280,000.

Let’s look at what that means to your pocketbook by comparing interest rates.

Right now, rates are sitting right around 4%. They move around a bit … but let’s say 4% just for talking sake.

Analysts have been surprised that rates have stayed as low as they are, so let’s presume they go back up to 5%. If you buy in January rather than waiting until next December, your purchase might look like this:

Interesting … buying now at a higher price still saves about $45 a month over waiting until year end and paying a bit more in interest.

Now, let’s look back at that historical trend for appreciation. Conservatively, let’s say that  house gains in value 5% a year overall for 20 years.

Therefore, if you buy a house today at $275,000, twenty years from now at 5% a year (hmmmm, 100% increase), historically, that house could be worth approximately $550,000. Plan to keep the house 10 years? How about approximately $412,500?

Should you sell … and buy new in 2012?  “I” think so; personally I expect prices to start to rise in 2013. But, of course it has to make sense to you. If you plan to buy a home and believe you’ll be able to stay in it for 10 years or more, then absolutely.

If your overall payment on a replacement home is within your budget, you have the funds to close the sale of your old home and a new one, then let’s get going while rates are amazing and prices are too!

*man on fence graphic thanks to Flickr, Michael Kuhn

Five months in the making … and here it is! Congratulations, Gary! May you enjoy many many years in your new house!

And who wouldn’t – all that brand new space just for you, combined with an awesome view of Mt. Rainier and the foothills! Whoo hooo!!!

 There’s a mountain there … a BIG one. Darned clouds got in the way!

However, one thing to remember is that not only do YOU, the buyer, have to qualify for a mortgage loan, the home must also qualify under typical FHA 203(b) loans (the most common type). A home in good repair with typical maintenance generally is no problem … it’s the home that’s been neglected that can so often be problematic–those homes may need a Rehab loan FHA 203(k) where the cost of home repair is included in the home loan. FHA wants to be sure that the home they insure … the one you’re buying … has no health or safety issues that could compromise your ability to repay your mortgage.

As you tour a home with your agent, anticipating that you’ll use an FHA loan for purchase, watch for these items. The FHA appraiser that values the home for your bank loan will be watching for these items as well:

1. Roofs that are at the end of their useful life, or in tough shape. Curling and missing shingles, gutters that are missing, lots and lots of moss. In our area, moss is common, but it should be minimal at best and easily removed with a light sweeping or cleaning. Most appraisers look for roofs that have an obvious 5 years or more life left in them. That original roof from a home built in the 1980′s or earlier could be problematic.
2. Cracked or missing window panes. It’s certainly not necessary that the windows be newer — old, single pane windows can be just fine as long as they’re sound and in one piece. In a recent transaction, however, I did have an FHA appraiser insist that a window that had a broken seal (indicated by fogging between the panes) be replaced prior to closing.
3. Peeling, cracked, or checked paint. Where the house is older than 1979, that paint could be lead based. Not a problem where the paint is in good shape, but where it could possibly be ingested — that can be a problem even on outbuildings. For that matter, abestos potential in a popcorn ceiling that’s falling down could also be an issue.
4. Water issues. This is one of the biggest hot spots for an FHA appraiser, and rightly so. A quick glance under a sink to see rotting floors and moldy walls will nix a loan every time. Watch for soft floors around toilets and tubs, leaky faucets, roof leak stains in the ceiling. Water in the crawl space is a definite no-no as is significant water standing in the yard.
5. Open/exposed wiring … Not good, not good. Electrical wires must be properly terminated, secured and finished in an electrical box and covered with the appropriate plate. Even outlet plates need to be in place.
6. Missing electrical fixtures. Especially on foreclosure sales, the dining room light fixture is missing. Sometimes it’s all of the kitchen lights or bedroom center light fixtures.
7. Missing appliances. A missing free-standing refrigerator, washer or dryer aren’t problems. It’s the built-ins such as a missing dishwasher, range, cooktop, or oven that’ll cause a comment in the Appraiser’s report. I’ll include the missing hot water heater and furnace here as well. A home has to have heat and water!
8. Missing or damaged carpets, drywall, or typical finishes. Yeah, sometimes that plywood floor is a problem as are huge holes in the drywall where the previous owner got creative and cut through the sheetrock to find who knows what. Note, however, mere cosmetic issues are generally not a problem unless the carpet is so soiled with maybe pet stains that it’s not cleanable. Remember that the goal here is to have a home that is safe and healthy.
9. Add-ons that were obviously not permitted. We’ve all seen them. The deck built on stilts that isn’t properly attached to the house, the garage/bedroom conversion with sloping floors, the rented basement apartment that doesn’t have its own meter and is accessible only through the main house door.
10. Critters in the crawl space or attic. Ugh. But facts are that four-legged and/or winged creatures like to infiltrate the crawl space and attic if allowed. Evidence of lots of droppings and open foundation or attic vents can be an issue. Especially if the appraiser pokes his/her head up into the attic and is greeted by a pair of green eyes looking back at him. Not so good.
11. Concrete cracks. A small crack typically isn’t necessarily a problem, but that foundation crack extending from top to bottom and is over, say, a 1/4″ or so can be an issue. Same thing in large cracks in garage floors or even walkways leading to the doors, especially where the surface is uneven or slabs have sunk.
12. Septic or Sewer issues. A rehab loan or full repair will absolutely be needed to purchase a home with one of these problems!

A few things to remember:

• Not every FHA appraiser will note the same defects. Some appraisers will overlook moss on the roof, or a small corner crack in a window while others will insist that the item be corrected before the loan can close.
• Ideally, the Seller is able and willing to make repairs so that the home can be sold. However if that can’t be accomplished, the Buyer may need to pass on the home, change loan types, or make small repairs prior to closing (not a good idea, but it happens).
• Work with an agent that has experience with FHA transactions. He or she can often spot issues that will be problematic and can direct you to further resources as needed.
• Be absolutely certain that you are also working with an experienced FHA loan officer, especially if you decide to pursue an FHA 203(k) Rehab loan. You’ll need their help!

I was pleased in August and September to assist a few more families with new homes. A big congratulations to them and wishes for many many years of happiness, laughter, and peaceful times in their new abodes:

Diane, Mariah, and Sierra — Congratulations on your new condo purchase in Issaquah! It was so much fun to work with all you ladies. I think Mariah may have a future in real estate — keeping me on my toes and asking so many great questions during all of the house-hunting fun!

Joe and Okju — Wow! Always amazing when a home with a big yard in a wonderful neighborhood is found around the $100k mark. You two were focused, determined, and soooo excited when we found your new “place!” I was sooo impressed with your ability to look beyond the faults and into the bones, allowing you to find the perfect house — after a wee bit of updating! Congratulations again to you both! Whoo hoooo!!

Jeff and Melissa — Yes, it’s “just a rental,” but how exciting to find the perfect one for your relocation to Seattle! The rental time will go quickly while you decide where, exactly, you want to live. I loved your positive attitude, even though faced with a challenging move with three teens! Good for all of you!

Steve and Jen – Your “gonna live here forever” home took a while to find, but what fun now that you’re in and learning about country life! I’m excited to see the plans you have for remodeling and adding on and making the place all your own. Congratulations!

As usual, closing a purchase takes a whole team; there’s absolutely no way any of this would have happened with the skilled assistance and knowledge of these talented folks too. Give them a call whenever you need their services:

Marilyn Brown, LPO and Escrow Officer, at First American Title in Kent. Absolutely the best in keeping a transaction on track and getting everything filed on time.

Dave Jagosh, Home Inspector with Pacific Northwest Home Inspections. Dave, I just don’t know how we’d proceed without you. Your knowledgeable eagle eyes and calm, professional demeanor takes the “scare” out of the “what ifs” in buying a house!

Beth Jensen, Loan Officer with Cobalt Mortgage. Absolutely fantastic, as usual, you provide the best in loan representation there is. You know your products, are there for the client, and get things done correctly and on time. No lending delays when you’re involved, that’s for sure! Thank you again, for being there for my clients! You’re the best1

Thank you for allowing me to be of assistance in your home search and purchase. I was truly honored!

And to two of my favorite team members:

• Marilyn Brown at First American Title & Escrow — Thank you for coming through at the last minute. This turned into a last minute affair, didn’t it?
• Dave Jagosh — Nobody does inspections as well as you do them! 

Being a Buyer’s Agent … that broker who assists buyers find their dream house and guides them through to closing of their purchase … requires an amazing amount of knowledge in today’s market.

Just a few years ago, being a buyer’s agent essentially involved locating and assisting a buyer in writing an offer, carrying it around to all parties involved and shepherding the transaction through to closing, whereupon the golden keys were given and the buyer became the happy owner of their new house. (Yes, I know there was more, but essentially.)

While those steps are still in place with an “upgrade” to their practical application, the amount of knowledge necessary now to guide a buyer through to making the actual offer is enormous.

For example, short sales abound in most parts of the country. At the very least, the Buyer’s Agent must

• Have knowledge of the steps involved in making an offer,
• Determine whether the asking price is reasonable compared to the likelihood of the seller receiving approval,
• Research and determine how many liens might exist against the property,
• Research whether a foreclosure is imminent,
• Determine whether other offers were made on the property previously and why they might have failed,
• Consider the experience of the person/firm handling the short sale negotiations
• Determine who will pay for the short sale negotiation
• And make an educated thought about whether or not this sale is likely to close.

Now on to bank-owned or REO properties. A few pertinent considerations for the agent:

• Which Bank owns the property
• Is the property owned by Freddie Mac, Fannie Mae … is it a HUD home?
• What are the offer procedures for those types of properties?
• What’s the likelihood that the Buyer’s approved financing is appropriate for the type of ownership (for example, a VA loan isn’t particularly appropriate for a HUD-owned property)
• What bank addendums are needed to make an offer? Do they override the existing MLS forms?
• Can the normal MLS forms be used in making an offer?

And then there’s the house itself:

• Is it likely that the property will qualify for the type of financing for which the Buyer has been approved? For example, if the buyer hopes to use an FHA loan … are there obvious defects that may need repair before the purchase can be completed? (let alone those that the appraiser might note)
• Or … suppose the Buyer is looking at a property that will require a Rehab loan. Hmmmm, what type? An FHA 203(k)? Or what about HomePath Renovation or some of the other specific loans sponsored by a municipality?
• And then, roughly, will the renovations be more than the Buyer can afford? Or more than, say, an FHA 203(k) StreamLine loan might allow?
• Is that LP siding?
• Does that roof look like it’ll pass the 5-year test?



And so on …

The agent with whom a Buyer works needs an enormous amount of knowledge just to bring a appropriately written offer to the Seller. — An amazing amount of knowledge!

Selling a manufactured home on land is a bit different than selling a stick-built home. There are a few more inspections and requirements, not to mention finding a lender that will lend!

http://www.flickr.com/photos/afroswede/474602/

Here in the Auburn area of Western Washington, I’ve had the dubious pleasure of working through a few sticky manufactured home transactions over the last few months. Now, don’t get me wrong — working with the buyers and sellers was truly a pleasure! It’s just that there are so many different steps to be taken that sometimes clients can feel a bit overwhelmed by the whole process;  and it’s so necessary to be the knowledgeable hand that helps guide the sale.

With a couple of caveats that every transaction is truly different and that different jurisdictions have slightly different requirements, here are a few starter points.

1.       Not every manufactured home qualifies for traditional financing methods – only those built after June 15, 1976. Your home built on May 31, 1976 won’t qualify for traditional financing — you’ll need to appeal to a buyer that has all cash or some source of private funding.

2.       Know that in order to get any sort of financing for the purchase of a manufactured home, the home must have gone through a title elimination process. A bit of background – when a manufactured home is purchased, it’s personal property – like a car or boat. Title is maintained by the Department of Licensing just like the title to a car. This is likely a testament to the fact that a manufactured home is towed down the road on its own axles and tires, which are then typically removed when the home is placed on its foundation.

That personal property title must be eliminated and the home married to the real property (the land) on which it sits. Home loans are for real property – not for vehicles.

3.       Speaking of Foundations — this gets a bit tricky. Prior to 1996, manufactured homes were often trucked to their site and then set up on a series of concrete blocks. Those blocks often sat on poured or prefab cement slabs. Then tie downs were attached to the underlying steel beams that run the length of the home and subsequently secured to the earth or the cement slabs, or whatever. In our area, which is generally not subject to enormously high winds such as hurricanes, some homes were installed without the tie downs and just sit on the blocks.

Now then – bear with me – FHA and VA loans are often used for manufactured homes. It used to be that conventional funding was a bit more lenient with requirements, but I’ve found lately that conventional and FHA/VA requirements are similar. So here’s the thing. In 1996, HUD (Dept. of Housing and Urban Development) placed a requirement that all manufactured homes on private land must be secured to a “permanent foundation,” which they defined. These permanent foundations are designed to prevent the home from shifting or moving away from their supporting structures.

HUD guidelines state that compliance with the guidelines must be certified for all re-sales.

This means that a homeowner must ensure that the foundation system complies with the guidelines by hiring a licensed professional engineer to examine the current foundation structure and certify, in writing, that the foundation is compliant. If not, the homeowner must have the foundation retrofitted prior to sale.

http://www.flickr.com/photos/dphiffer/81910028/

4.       One additional step can also be critical, and yet is so often overlooked by an existing manufactured home homeowner. Prior to adding anything to the exterior structure of the home, such as deck, porch, awning, an extra room, etc., you should have obtained an L&I permit in addition to obtaining the appropriate jurisdictional building permit (if required). That’s right – the Dept. of Labor and Industries must also permit and inspect your addition and certify that it meets the manufactured home standards.

See, manufactured homes are designed to be dismantled from their foundation and pulled down the road. That means all exterior structures surround the house must be self-supporting. For example, that deck must have supports and beams of its own – not merely attached to the home by means of a ledger board.

Similarly, electrical modifications, replacing your hot water heater, adding a wood burning or pellet stove, etc. must be approved by L&I. You’ll likely need proof of the modification. If you did not obtain the L&I permit before altering your home, you may need to obtain an L&I inspection before your home can be sold.

Absolutely your manufactured home can be sold. Paying attention to these 4 Critical Facts when selling your manufactured home can make all the difference in an easy sale!