Residential Real Estate in SW Washington State

Residential Real Estate Services with Passion, Integrity, Knowledge

Okay, Should You Sell … and Buy in 2012?

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sitting on fence-flicker by michaelkuhn_picsLike 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:

 

   

Today’s Price

  

Price at End of 2012

Purchase Price

  

$275,000

-7%

$255,000

Down Payment

20%

($55,000)

20%

($51,000)

Amount Financed

  

$220,000

  

$204,000

Principal & Interest Payment

4%

$1,050.30

5%

$1,095.12

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

Another Truly Amazing and Unique House!

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Everyone now and then a house just captures imagination. Such is definitely the case for this unique house located in Wales, UK. This “hobbit” house was built completely by the owner, for an amazing sum of less than $5,000. It reminds me of the fairy tale houses of childhood stories.

Just imagine how much fun it would be to live in such a place!

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Now, of course, I’m totally curious about how well our local building inspectors might appreciate the framing techniques used here:

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An overview from the inside of the rafters:

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And the windows are perfect too!

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The kitchen from the overlooking bedroom balcony:

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With many thanks for posting photos and information, please visit the owner’s site at www.simondale.net. SOOO cool!

A Special Thank You to Past Clients & Associates

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I’m especially honored in 2011 to have been chosen as a Five Star Professional in their real estate category. I’m new to this one, so please forgive me as I carry on for a moment about this special award.

It’s my understanding that this award is the result of polling of both the homeowners and other professionals involved (such as escrow, title and mortgage folks) for closed transactions for 2011. I understand that they asked for specific opinions about the folks with whom they dealt, looking for the highest standards of customer service, knowledge, and professionalism.

As you know, for me, customer service is number one on my agenda. After all, a real estate transaction is all about you … my treasured clients. I want you to know that I care about your purchase or your sale more than anything else. I want you to know that I have your back … and that I’m working hard to be sure that whatever it is you strive for in your sale or purchase … I’m there too!

So thank you again. Your recommendation means the world to me and I treasure your confidence in my services.

As I understand it, the list of agents that made the cut for 2011 appears in Seattle Magazine’s December 2011 issue. There are a lot of agents featured, but these best of the best are only a fraction of the agents that practice in the greater Seattle area. (I need to get to a news stand and buy one of these copies!)

I’m honored. Thank you.

Mediation?–Yes, You’re Entitled!!

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debateYesterday I posted information about what to do as soon as you fall behind in your mortgage payments. As a second step in the foreclosure process in Washington State, the Foreclosure Fairness Act stipulates that if your loan is through one of the big banks, after receiving notice that a Notice of Default has been filed, you’re entitled to have your situation formally addressed through Mediation. The purpose of Mediation is to determine whether there is any alternative to bank foreclosure of your property.

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.

Just Open the Mail!

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reading mailIn Washington State, folks that get behind on their house payments have options as described in the Foreclosure Fairness Act. The Act prescribes a series of steps to which a homeowner is entitled prior to any auction of their home.

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!

Congratulations on Your New Home!

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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!!!

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

 

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Sold! Price Reduced — Start the New Year in a New House!

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How about starting the New Year in a New House? One that’s beautifully kept, has a fantastic floor plan, sits at the end of a culdesac in a small neighborhood with no through traffic … and that backs to a greenbelt too!? AND was just reduced in price! Good grief, this is a better value than even most of the bank-owned properties in the area! Ready to move in, this is definitely not a rehab property!

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

 

 

 

Time to Publicly be “Thankful”

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Thanksgiving is almost here .. almost! Just a few days away.

In our family, that means the kids come to our home with grandchildren in tow (“I’m” the grandma now), with special treats tucked in baskets, games to play and visiting to be done. We’ll spend 2-3 days chasing the little ones around while they decide that “gramma” and “grampa” live on a farm (NOT), have lots of good hot cocoa and whipped cream, hugs, and stories. They’ll likely ride the “tractor,” (read that as the riding lawnmower), chase the dogs, pick up the eggs from the chickens, feed the neighbor’s horses, and try to prevent the cat from bringing his latest mousing finds into the house.

Then there’re the evenings to sit with a quiet glass of wine with the grown children after the crowd of little ones go to bed. (When did my children grow up and become real people with whom a glass of wine is such a treat? They’re all adults now with families of their own.)

It’s a hectic, chaotic, blessed time.

I’m so thankful!

This upcoming 4th Thursday of November is just the accepted, public time to express thankfulness. Underneath it all, I’m thankful every day for the life we lead. It’s full of stress, but it’s full of laughter as well. It’s full of real estate clients that express hope when they have a real estate need, frustration when things go sideways, gratefulness when things get back on track, and delight when the transaction finally closes. Their trust is a huge responsibility … and I’m thankful to be someone to whom they look to lead them through the quagmire of real estate purchases and sales.

I’m tremendously thankful.

In our family, we’ll all hold hands around the dinner table for a moment on Thanksgiving afternoon and express our thankfulness to each other.

Now it’s time to virtually hold hands with all of you – clients, friends, coworkers, and acquaintances. I’m thankful to have each of you in my life.

Fix the Housing Market = Fix the Economy

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I know … I’m often considered naive in my “political” opinions. Probably rightly so most of the time. After all, I’m just a hard-workin’ self-employed real estate broker out here in south King County, home of the working folks. Most of us go to work every day doing whatever it is that needs to be done and worrying about how to make our next house payment.

Like many folks, I’ve watched my house values erode drastically over the last couple of years. Perceptually, that fall in value seems to be speeding up .. or perhaps it’s just that now we’re all aware of what buyers truly are willing to pay for things. I’ve also watched, from the sidelines, interest rates fall drastically.

More disheartening, however, … at least to those of us who are self-employed … is that we don’t qualify to refinance our home, or for any of the nifty loan modifications, and wouldn’t even if our homes hadn’t lost value. Most of us write off everything we can on our income taxes making our bottom lines pretty skinny. But that bottom line is what is used by banks to determine our income — thus one step in our eligibility for a mortgage refinance, or even a loan modification. Our W2 income simply doesn’t support our true day-to-day ability to pay the bills. (Another one of my witticisms … “gee whiz, if my income is good enough for the IRS, it oughta be good enough for the bank!”)

So … for the last few weeks, I’ve been spouting my opinion about how to fix the economy. Here it is. Have at it:

Take ALL of the mortgages that are current and unilaterally lower their interest rate to the current market rate. Okay, I’ll even go so far as to say … lower them to the current market rate plus 1%. Period. No requalifying. (Afterall, I’m talking about “current in payments.”) Without regard to the current value of the home. Just give us all a ‘buy’ and get this over with. Make it effective, say, on December 1st.

No more messing around with “loan modifications,” and all that bank nonsense. Just get it done. Drop everyone’s payments down to today’s rates. Just do it. Get it behind us. Make house payments affordable for those folks who still own them.

Heck, maybe even take a good hard look at the reason folks are behind in their payments (I’m willing to bet one major reason is because their interest rates are sky high.) And perhaps give them a ‘buy’ as well. Forget about that pending foreclosure/auction for six months and see if they can make it at a lower interest rate. Write off all the past dues and late fees. Get it over with. Yes, I know this is a whammo for the investors that bought the loans for the banks. But so is letting this housing mess go on and on and on. It’s bringing everything else down, and there’s no sign of stopping. Fix the Housing Market, Fix the Economy!

I believe that stabilizing housing is far more important than jobs creation. Home ownership will always be an American dream. Let’s stop the nonsense and keep folks in their houses.

Interestingly enough, Moody’s had a proposal published just a couple of days ago in DSNews that was surprising similar … hmmmmmm (do you think someone is actually listening to my far fetched ideas?)

Fix the Housing Market, Fix the Economy. That’s my opinion and I’m sticking to it.

Facing a Foreclosure or Short Sale?

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Image thanks to Jeff Turner/FlickerThe 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 educate the caller as to the 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.