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.

With the number of real estate transactions on the upswing here in the Auburn, WA, south King County, and Pierce County areas, it only makes sense that we’ll also see more short sale transactions.

Around the water cooler, I’m hearing that some real estate brokers are fed up with the lengthy and time consuming process of working with short sale clients and have decided not to work with short sales any longer.

I can sure understand that attitude! Short sales are difficult, at best, and so many short sale listings never manage to close, whether due to unrealistic price expectations on the part of lenders, the physical condition of so many homes, buyers that get tired of waiting and walk away, or lenders that refuse to even look at offers (let alone counteroffer) thus letting a house ultimately go to auction.

Working short sales requires a team of experts that know what they’re doing and can address objections and legal issues as they arise. Agents must know the various programs involved, what the various banks require as far as what and when paperwork must be obtained, and how to counsel their clients. My team of experts, including lawyers, title reps, and escrow officers, know what they’re doing. We’ll be here during this upcoming 2012 year to answer your questions about short selling, listing your home at a price attractive to short sale buyers and to the banks involved in the process.

Call me when you have questions. I’ll do my best to answer them so that you can develop a strategic plan for moving forward – whether that involves short selling your house, keeping it, or allowing it to go through foreclosure.

*photo credit Jeff Turner via Flickr

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

In some respects, of course, he’s absolutely right. But in others, it’s amazing how little prices have gone up.

Today he sent me a list of a few things and their prices in 1955. Of note, of course, are prices like gasoline – 23 cents a gallon; milk – 85 cents a gallon; eggs – 61 cents a dozen.

A bit of checking around and I see this list, thanks to www.fiftiesweb.com: 

House: $22,000
Average income: $4,137
Ford car: $1606-$2944
Milk: $.92
Gas: $.23
Bread $.18
Postage stamp: $.03
Sirloin chops: $ .69 lb.
Pot Roast: $.43 lb.
Eggs, doz.: $.61
Coffee: $.93 lb.
Milk, ½ gal. $.43
Potatoes, 10 lb. bag: $.53
Starkist Tuna, 6 ½ oz. can: $.25 lb.
Oreo cookies, 11¾ .oz pkg: $.39
Potato Salad, pint: $.29
Cracker Jack, 24 pac: $1.49
Apple cider,½ gal.: $.49
Gum Drops, 1½ lb. pkg: $.29
Ivory Soap, 2 bars: $.29
Mickey Mouse lunchbox: $.88
Slinky: $.88
Nylons, pair: $1.00
Home permanent: $1.50
Baseball Glove: $9.95

As I reviewed this list, I’m thinking … wow, some of these haven’t gone up much at all. I mean, last week’s ad for potatoes was something like $1.48 for a ten pound bag (about 3 times more than 1955); milk – $2.59 a gallon (oof, that’s a big price increase: about 6 times, although I’m pretty sure I see milk for $1.99 a gallon now and then) eggs were something like $1.50 a dozen or so (can’t find an ad anywhere) – up about 2.5 times.

Gas in my area (just south of Seattle) is right around $3.30 a gallon – up 14.3 times (that’s a gotcha!)

Anyway, then I decided to look at the price of housing. According to this chart, the price of a home in 1955 was about 5.3 times the average income.

Hmmmmmmmmmmm

Looking at local statistics, Washington state reports that the 2011 median income for King County (basically the greater Seattle area) is projected to be $66,294. Median house price for sold homes in King County right now? The Northwest Multiple Listing Service (NWMLS) says: $343,700 as of end of November. 5.18 times the median income. Pretty close to 1955.

Now, 1955 is just slightly before my memory (I was two in 1955) … I have memories of some of these though! I wonder what my grandchildren born in 2010 will think when looking back at prices when they’re 55.

Enough analysis this time of the morning!

Yesterday I posted information about

Ideally, the outcome of mediation might allow you to restructure your loan, save your home, or agree to sell it as a short sale. In fact, a decision maker for the bank is required to be present at the Mediation meeting – at least by phone. Of course, if no agreement is reached, the ultimate outcome might be to allow your home to proceed through Foreclosure.

This mediation step is a bit more complex than the informal meeting to which you are entitled right away (see yesterday’s post). Mediation must be requested by an attorney or housing counselor within 30 days of the bank or Trustee filing of the Notice of Default and must be held within 45 days of the referral to Mediation by the attorney. You’ll also be required to pay your half ($200) of the cost of Mediation hearing ($400).

Prior to Mediation meeting, both you, as the owner-occupant, and the bank will need to assemble a list of documents – yours will include financial documents such as tax returns, pay stubs, and so on. It’s an extensive list, but not difficult. Since you will be working with an attorney or counselor, they’ll assist you in determining exactly what documents you’ll need.

Note that the Foreclosure Fairness Act took place on July 22, 2011. If you received a Notice of Default prior to that date and foreclosure of your home has not yet been completed by the bank, you are also entitled to Mediation. You’ll want to contact an attorney experienced in the Foreclosure Fairness Act as soon as possible! Doing so can delay a scheduled auction!

As usual, you should also contact your Realtor© so that you are fully aware of your options and for the name of an attorney that is experienced in Foreclosure work.

In Washington State, folks that get behind on their house payments have options as described in the

One of the first steps a lender must take for a home in Washington is to send a letter to the homeowner describing their options – the first of which is the right to request an informal meeting with the lender before a Notice of Default is filed.

But here’s the thing … the homeowner has to make the request within 30 days from the date of the options letter.

• So … open every piece of mail that comes from your lender.
• Read it carefully and then  exercise your option to meet with the lender to discuss the situation.
• Do it by phone and ask insist that they confirm your request in writing.
• Follow up with a letter to them in writing — maybe even registered mail so that you have a record of your request.
• Keep copies of anything and everything you send and notes about every conversation you have with them.
• Get the names of the people with whom you talk … and write down the phone numbers and dates you make any calls.

and finally …

Engage an attorney to represent you at the meeting. Talk everything through with him/her … and with your real estate agent so that you know what your options truly are.

But first … Just Open the Mail!

How about starting the New Year in a New House? 

All of the rooms are generous in size in this home. In fact, the homeowner says that the large kitchen was one of the primary reasons she bought the house in 2004! Now updated with gorgeous slab granite counters and sparkly white cabinets, there’s plenty of efficient storage, not just in the kitchen, but throughout the house.

You’ll love pulling up a stool at the center island–one of the perfect homework or breakfast spaces! Add in a kitchen table to keep everyone part of the action, plus enjoy the activities in the attached family room with its gas fireplace.

Love to entertain? How about a barbeque on the stamped concrete patio … or bask in the cool air conditioned atmosphere on a hot summer day?

Keeping with that entertaining theme … In addition to the really large family room (which, by the way, would also be a great theater room), the formal living room has high high ceilings and both the formal living and dining rooms are accented with bay windows. Nice!

With four generous bedrooms, plus the requisite 2 1/2 bathrooms, there are private spaces for everyone. The master ensuite includes an pretty oval soaking tub, double-size walk-in shower, two sinks, plus a very generous walk-in closet — complete with double-hung rods to give you plenty of clothes storage. The other three bedrooms are big enough for beds, desks, dressers — perfect for the family member that wants his or her own space!

This is the moment to buy a new home. Interest rates continue to be phenomenal, and the price on this house is amazing. Start your New Year in Puyallup in a new house! You know you deserve it!

• 15309 88th Ave Ct E, Puyallup
• 2218 Sq feet
• 4 bedrooms, 2 1/2 baths
• 2 car garage (w/hanging storage racks)
• Natural Gas Heat/Hot Water/Kitchen/Laundry/Fireplace
• All appliances stay (except fridge)
• Built in 1999
• FHA, VA, Conventional Financing — all okay
• MLS# 252044

The Washington State attorney general’s office recently released three videos that explain your rights and options should you be facing a foreclosure or short sale of your home.

As an active Realtor®, I frequently receive phone calls from people that are already behind on their payments, or feel as though they will soon be in trouble with their mortgage. Sometimes, the call is from someone that is trying to get out from under a home that has lost significant value and is now worth far less than what they owe. Each of these types of calls requires a knowledgeable response and action. Sometimes the best response is to refer the person to an attorney. Most often, however, it’s a chance to help education the caller as to their possible options based on their personal situation.

The three videos provided by Rob McKenna (Washington State Attorney General) and his staff explain some of the options available and the impact of these options on the consumer who may be facing a foreclosure or short sale of their home.

Each of the videos is moderated by Annie Fitzsimmons, the legal counsel for Washington Realtors. They are easy to understand and just a few minutes long. If you are facing a foreclosure or short sale, I urge you to take the time to view these videos, then give me a call if you have any questions or if you would like to discuss them.

In Part One, Mr. McKenna provides an overview of the options that are available:

In Part Two, Marc Cote, a Certified HUD Housing Counselor, discussses what will happen when you meet with a HUD Housing Counselor, what you need to be prepared for the meeting, and the options available when working with a HUD Counselor:

Part Three, presented by Rob Dickson, Lawyer and Short Sale Negotiator, discusses the short sale process, along with some of the difficulties that are faced when negotiating a short sale.

Obviously, at this moment many of us that are homeowners are facing significant loss of value in our homes and sometimes it takes just the smallest event to trigger an inability to make mortgage payments. Should that happen to you, please contact me at 206.300.8421 or gabrielle@gabriellenemes.com just to talk … and take advantage of the resources outlined in these videos.

Sellers are too! They want to see their home in all of its beauty up on the Web. Every feature. Every room. With flowers in bloom and counters gleaming. They’ve already looked at lots of houses on the internet and know that their house looks at least as good as all of the ones they see, and probably better.

And then there’s us Agents/Brokers. We do a quick MLS search for a home for a particular feature trying to find the perfect house for our clients, or in an attempt to begin evaluating the competition.

When working with clients, it’s so important to listen to what they want and/or why they bought the house they did. Perhaps it’s a great back yard. Or they want “this” kitchen. Or that master bathroom is amazing. That sort of thing. And, as agents, we tend to write all that down and include it in the description.

But sadly, so much of that glorious description isn’t borne out in the photos.

Case in point: Today I began searching for a Buyer who wants a mountain view. My MLS search pointed out 17 listings in his area and price range. Of those 17 listings, only three (3!!) actually gave some attempt at showing the mountain view they described or had included as a feature in the listing itself.

Now that’s a bit of a problem. The client wants to see photos and I’m left to question just how much of a view there actually is. One listing described an “amazing Mt. Rainier view.” Not a picture anywhere. Not even a mention that “The Mountain” really IS out there on a clear day. Of course I’ll drive out and take a look myself, but really? Is the mountain really visible?

Good photos are immensely valuable, especially to the Seller. This “amazing Mt. Rainier view” is intriguing enough to call the Buyer to go take a look. But just imagine how many folks would like to see that view and dream a little … perhaps just enough … to buy the house.

It doesn’t take an expensive camera to get good photos, but it does take paying attention. Both to the descriptions from the seller and to what we actually write. As agents, those are the things we need to emphasize in our photos. Rhapsodizing about the granite counters is one thing — showing a photo of a clean, decluttered, gleaming counter says it all. The potential buyer should say ”Wow, Look at That!”

There’s value in that photo and it’s good seller representation.

Kind of like keeping real estate transactions on course. Sometimes it takes a lot of arm waiving and shirt flapping to keep everyone moving in the same direction from start to finish. But persistence does pay off. Sometimes you have to pick one chicken up and carry it to the final destination. Seems like I’ve done that in my real estate career just a few times! Well, I guess I haven’t actually picked up any clients and carried them around, although sometimes it felt like it!

The business of real estate is hard work. It takes perserverance, tenacity, professionalism, exacting and timely actions, smiling personality, and a  lot of arm waiving and shirt flapping as well.

Maybe my career in real estate has trained me well for chicken-keeping! Or maybe it’s the other way around. Give me a call if you ever need someone to herd your real estate transaction through from start to finish.