Residential Real Estate in SW Washington State

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So … What IS a Buyer Agency Agreement?

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In a previous post, I wrote a bit about why a Buyer Agency Agreement is important and how a Buyer / Broker relationship might occur. I also indicated that, as a rule, I require a Buyer Agency Agreement to work with Buyers.

So what, exactly, does a Buyer Agency Agreement obligate a Buyer to do? Likewise, what does it obligate the Broker to do?

Here are the essentials of a typical Buyer Agency Agreement:

  • Appoints a specific Broker (agent, salesperson—ME!) to work with you, but also creates an agency association with the Firm with whom the Broker works. It helps you understand that, not only are you represented by your specific selling Broker, but also by the Firm with whom the Broker has association.
  • It asks you to acknowledge receipt of the Law of Real Estate Agency pamphlet, which specifically sets out laws by which a Broker works in the State of Washington.
  • Sets out whether or not your relationship with the Broker governs any home you purchase in a given area and time frame, or whether your relationship is only for those homes in which the Broker participates (shows) you. It also clarifies what happens if you buy a home the Broker showed you after the term of the Buyer agreement has passed?
  • Allows the Broker to work as a dual agent in a transaction where the Broker represents the seller as their listing Broker, and you as their selling Broker.
  • Specifies exactly how and how much the Broker is paid. Your Broker may agree to only accept what the Seller has agreed to pay through the listing agreement the Seller has with their listing Broker. But …
    • What happens if the Seller’s contribution to the Broker’s compensation is minimal or insufficient to pay for all of the services a Broker must perform in a transaction? … or …
    • What happens in For Sale By Owner properties? Agency law in the State says that a broker doesn’t have to show you or pursue properties for you if there’s no compensation involved – but wouldn’t you as a Buyer still want representation by a trusted advisor? (After signing a Buyer Agency Agreement with me, I’ll represent you in a For Sale by Owner transaction, unless the seller is in a distress situation.)
  • Possibly one of the most important points in the agreement clarifies what the Broker will do in a Distressed Property Conveyance – one where you wish to participate in a distressed property transaction where the Seller will remain in the home after your purchase is complete, or will somehow gain in the transaction through retention of an interest in the property or will benefit from resale of the property.

In short … as with any critically important matter, you want the assurance that you are working with a professional who understands the laws governing real estate transactions and who will fully and competently represent your interests, and your interests alone (unless you agree to work within a dual agency situation).

Working With Buyers — That Scary Buyer Agency Agreement

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I love working with Buyers. The excitement of shopping for houses, seeing homes through their eyes, and the ultimate gratification everyone has when the transaction closes and move-in day occurs! It just doesn’t get much better than that!!

But working with Buyers is a tremendous amount of work. There’s a lot of stress involved, a myriad of big and little steps, lots of time on the phone, on the computer, in the car. Sometimes several offers are written and negotiated before an offer is ever accepted by a seller. In today’s world of bank-owned homes, short sale properties, pre-foreclosures, government-owned houses, the work can be difficult, exacting, and LENGTHY!

And I LOVE it!

Sometimes one of the trickiest negotiating points when working with Buyers begins early in the relationship between the Buyer and their Broker. After all, there’s often a presumption of loyalty very early on. You trust that the Broker will work with your best interests at heart … and the Broker trusts that you’ll use them to complete your home purchase.

Often a Buyer initially contacts the Broker asking to see that perfect house – you know, the one they’ve just driven by and it’s exactly what they want. Or the house on the internet with great pictures, or a great price, or a great neighborhood, or whatever.

So the Buyer calls the Broker. Could be the listing broker, could be a broker used by their best friend, or could be a broker for whom they’ve seen some advertising, found on the Web, or whatever.

The best Brokers start by doing a bit of careful screening prior to meeting a prospective Buyer at a home. The screening has a couple of purposes: Is the Buyer qualified to buy? Have they been looking long? Who have they worked with in the past? Are they working with an agent already? And, subtly, do they sound trustworthy? Should I take another agent/hubby/wife with me?

After agreeing to meet, whether it’s at the office for a prescreening, down the street at the local coffee shop, or at a home that’s just too good to delay, it’s typically a careful and somewhat cautious first date. Sometimes the first date is a lengthy phone call where everyone asks and answers a fair amount of questions. It’s a good way to see if there’s a fit – can the Buyer work with the Broker? Can the Broker work with the Buyer? Is there a formation of trust beginning to occur?

I’ve also found that there’s usually a whole portfolio of information the Buyers should receive prior to jumping in to make an offer on a home – sample contracts, definitions of terms, how the process works, a few legal documents including a copy of the Law of Real Estate Agency and a Buyer Agency Agreement. We’ll have a frank discussion about money matters as well. It’s important to me to learn what exactly what you can afford and how we should structure any sort of an offer to purchase. It’s important to you to learn how I get paid and by whom. It’s an important step to forming a trusted relationship between a professional (the Broker) and the Buyer.

Now, I won’t necessarily ask you to sign a Buyer Agency Agreement the first time we meet. YOU need to see if you can work with me as well. But I do request official formation of an agency relationship through acceptance of the Agreement at the conclusion of either the first or second showing session, after you’ve had some time to digest whether you like my working style, whether you trust me to represent your best interests, and, as well, whether I feel we can work together well as a team. Terms are negotiable, of course, but endorsement of the Agreement as we move forward will be necessary.

Follow the link here for more information about what’s in a basic Buyer Agency Agreement.

Protect Your Privacy … Again!

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Information available on the Internet grows exponentially. I mean, truly …. the number of sites and the amount of information where personal information can be found is staggering and a bit overwhelming, frankly.

Now, I’m a public person — you can find information about my business in any number of places. Those of us in any sort of a public sales role can easily be located. And I don’t mind sharing a bit of personal information as well. After all, my phone number, Web site address, office/work affiliation are plastered all over the place.

Where I take exception, however, is when one particular site takes it upon themselves to gather all of that public … and sometimes not so public … information into a central location and then allows other folks to see it for free, pay for the privilege of seeing it, or perhaps even hack into their database to find it.

Such is the case with spokeo.com. A quick visit to their site, typing my name, located all sorts of information about me, all neatly gathered together and available for curious eyes. The same thing was available for my husband, my children … even one of my grandchildren popped up for heavens sake (and they’re all under 8!) As tightly as possible, I lock down my information on Facebook, Twitter, etc. — everywhere I subscribe. Some info is there for the sharing, but only if you ask to be my friend. I like to pick my friends carefully … but frankly even friends don’t need to know everything! A quick Google search of Spokeo brings up a rabid angry crowd of folks who are incensed that their information is this easily available.

Granted this Spokeo information is a compilation of public information that is available in other places and on other sites. But frankly if someone wants to know that sort of information, they’ll daggone better have to search for it a bit harder. Personally, I also believe that one should not need to chase down all of these public sites to remove oneself from them … seems to me that they should be asking for permission to publish rather than the other way around. I guess I’m a bit old fashioned that way. And yes, this may be a bit naive, but it’s my personal soapbox for the moment.

Here are the steps to removing yourself from Spokeo:

1. Go to www. spokeo.com

2. Type your name into the search box, then click Search or press Enter.

3. If you have a common name, you may need to locate yourself from the list on the left of the screen. Click on your name to see the “teaser” box displaying basic information about yourself. … Whatever you do, don’t pay $$$ to see anything more.

4. Copy the URL address at the top of your browser — this will include your name, usually separated by % symbols, followed by a number and /info. A simple way to copy is to highlight the entire address, then use Ctrl+C

5. Now go back to the home page of Spoke. Click the “Privacy” link at the bottom of the page (it’s in teeny tiny letters). A Remove a Link page will open.

6. Click in the URL text box and paste your personal URL address. (A quick method is to use Ctrl+V)

7. Remove the “/info” that follows the numbers of the URL. Your “ID” number to them must end the URL

8. Type your e-mail address in the email text box, and then also complete the Captcha code.

9. Click Remove Listing. A confirming message will be sent to the e-mail address you provided.

10. Once the confirming message is received, click the “Click Here” link in the phrase “To complete the removal process, please click here.” You should be returned to the Spokeo site with a confirming message that your record has been removed.

From briefly skimming some of the comments about Spokeo on other sites, it appears that it’s possible your record will be re-created should you add a new public record of some sort, e-mail address, etc. You may need to keep an eye on this one.

And .. if you haven’t done so … be sure to go back and check your privacy settings in the public or social media sites you frequent. I believe that one can be active on the Web and out there, but we really do have to be a bit cautious about the type of information that’s easily available. I mean, after all, nobody needs to see my “Wealth” information unless I offer it to them.

Flood Maps Affect Home Sales and Purchases

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One of the requirements to obtaining and maintaining a mortgage or loan on your home is that it be adequately insured against unexpected disasters. It’s important to know that damage from floods or landslides are not typically included in normal homeowner insurance policies.

Evaluation of whether a home resides within a flood plain is part of the consideration in obtaining affordable homeowner’s insurance. This can affect the ability of a buyer to fulfill the terms of their purchase contract, as expensive insurance may negatively impact that buyer’s ability to qualify for the purchase of the home.

Similarly, the requirement that flood insurance be obtained can negatively impact the Seller’s ability to sell a home. A home that’s not insurable, or one that has what appear to be excessively high premiums, can be difficult to sell to anyone that must finance their purchase, limiting prospective buyers to cash only or seller-carried contracts.

In most purchase contracts in which I participate, I recommend that the buyer include a provision that their annual homeowner insurance premium be no more than 1/2 of 1% of the purchase price. Generally that’s doable, unless the home happens to reside in an area designated as residing in a flood plain — then prices skyrocket as the prospective homeowner must also negotiate flood insurance.

As geology, improvements to land, and technology change,  flood maps are updated by FEMA (Federal Emergency Management Agency). Your home, which previously was not within a flood prone area, may be now … or, conversely, perhaps it is no longer, affecting your  insurance rates.

In incorporated and unincorporated King County, those flood maps have recently been re-drawn and can now be viewed during one of the three public meetings listed below. Additionally, you can review the new King County flood maps online, obtain more information about these public meetings, and review the flood insurance studies by visiting the King County Preliminary Flood Insurance page.

City of Auburn
Wednesday, January 26, 2011
6 – 8:00 P.M.
Dick Scobee Elementary School
1031 14th Street NE, Auburn, WA 98002
253-931-4984

City of Renton
Thursday, January 27, 2011
6 – 8:00 P.M.
Renton City Hall
Council Chambers – 7th Floor
1055 S. Grady Way, Renton, WA 98057
425-430-6400

City of Kent
Monday, February 7, 2011
6 – 8:00 P.M.
Kent Senior Activity Center
600 E. Smith Street, Kent, WA 98030
253-856-5150

Additional information about flood insurance in Washington State can be found at the Office of the Insurance Commissioner.

Finally, be sure to periodically review the terms of your homeowner insurance policy. It’s critically important that you know exactly what is … and what is not … covered on your policy. Damage from flood waters, earthquakes, or extra coverage for all that nifty personal computing equipment you own, may require extra attention in the form of insurance riders.

 

For help with your homeowner insurance needs, please let me know and I’ll be delighted to refer you to an outstanding insurance professional.

Charming Rambler on Shy Acre

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Eastern exposure for morning sunlight. This rambler sits on .93 acres and the large front yard has a circular driveway for easy access and plenty of room for all your gardening ideas.

This charming rambler, tucked away in a beautiful country setting in the Tahoma School District, is offered for the first time by the original owners.

Formal living room, dining room and separate family room with corner wood-burning stove. Vaulted ceilings add spaciousness! Large island kitchen with eat-in area includes center island, pantry and sliding glass door access to oversized deck overlooking the back of your .94 acre property. Private master suite includes tile counters and jetted corner tub!

Stay cool in the summer, warm in the winter with central air conditioning and heat pump. Home includes generator wiring, security system and is wired for speakers.

If you’ve always wanted a large yard for play and barbeque, room for gardens, and room for animals, that’s also located with easy access to major highways, this is the place! Come see it!

[srp_profile lat=”47.438753″ lng=”-122.005699″ address=”18127 252nd Ave SE” city=”Maple Valley” state=”WA” zip_code=”98092″]

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(courtesy of Cindy Lowden, RE/MAX Select R.E.)

Merry Christmas 2010!

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 I thought it might be nice to share our Christmas newsletter this way, as it’s sometimes fun to share a bit of family life as well as just business events. — Merry Christmas and may you also have a blessed New Year — full of happiness, surrounded by loved ones, and prosperity too, of course! Here’s praying that 2011 settles down economically a bit!

 

 

 

What an amazing whirlwind it’s been since Thanksgiving, starting with hosting the annual everybody come home Thanksgiving tradition, and then the very early birth of our fourth grandchild, little Clara Joy, born December 4th – nine weeks early.

At 3 pounds, 15 ounces and almost 18” long , she’s actually a pretty big “preemie,” but her development still has a ways to go before she can go home sometime in January. Her Mom and Dad (our daughter-in-law Erin and son Aaron) are both doing well, although feeling a bit overwhelmed by daily demands.

I feel incredibly fortunate to be able to periodically go to Hillsboro to be with big sisters Sophia and Madeline as they adjust to the hectic schedule of hospital visits combined with school and activities. Sophia is turning into a champion member of her swim team while Madeline is coming into her own at preschool. What a smart little cookie she is. Kindergarten can’t come too soon!

Our next newest grandchild, little Tyler, is now a busy busy! 15-month-old toddler that just wins everyone’s hearts. He’s definitely an engaging little bud, with a huge smile, never ending baby vocabulary, and feet that go just as fast as they can before they lose traction or balance, plopping him down on his little bottom.

With Jen, Steve & Tyler in Port Coquitlam, BC, and Erin, Aaron, Sophia, Madeline & Clara in Hillsboro, OR, we sure wish all the grands lived closer! Being Gramma and Grampa is FUN!

In our own household, Galen is now within reach of his AA degree in Construction at Green River Community College. It’s tough finding work in housing construction at the moment, but he’s picking up piece work now and then, while looking for something full time.

Bill’s job at Microsoft came to an abrupt end in July, so he and Galen are pounding the pavement (& keyboards) together along with challenging each other weekly to see who can put in the most job applications. We’re hoping jobs for both of them come along … SOON!

I’m still hard at work peddling houses through RE/MAX. The housing market is challenging, but I’ve been blessed with a fairly steady stream of business for the last few months. (Thank heavens!) In addition to transaction work, my days are filled with prospecting for business through blogging and Facebook, etc., along with an ever-increasing variety of community involvement.

All in all, we’re hanging in there through this blasted economic downturn — working as hard as we can and praying for jobs and business — just like most everyone else. We know that 2011 will be an easier year!

May your Christmas and onward into the New Year continue to be blessed with much happiness and laughter! We hope to see you or talk to you soon!

Sending Best Wishes to Dana Babb and Paws-Abilities!

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Over the years, we’ve taken our dogs to what I consider to be the premier dog training facility in our area: Paws-Abilities. I’ve referred literally dozens of clients to Dana Babb, the owner, whenever doggy training of any sort was needed – behavior issues, puppy manners, agility classes, companion classes, and so on. Some folks just bond with dogs and know how to get the best from them; others, like me, are loyal followers hoping to glean another nugget of technique on why my dog does what he/she does and what the heck I’m supposed to do about it.

One of my favorite techniques was learned while we had a very stubborn … and busy! … dalmation named Gateway. Oh my, Gateway was one of those training challenged dogs. Think Marley and Me, except covered with spots! Anyway, Gateway had a habit of jumping our six-foot cedar fence. And she was really really good at it. It was amazing how she could go up and over the thing with a leap, a slight catch with her back feet on one of the runners, and then over she’d go.

We were in classes with Dana and Larry at Paws-Abilities at the time and I was totally frustrated with trying to get this dog to STOP! Gateway wouldn’t stop going over the fence and the neighbors were calling because there she’d be. Running all over the neighborhood wagging her tail and just generally happy to be out of her own very lovely and large back yard.

Larry’s solution: teach her to jump. Say what??? “Teach her to jump. That way she’ll only jump on command.” The weirdest thing was … it worked! Once Gateway had mastered jumping hurdles she never again jumped the fence. These guys know dogs!

Over the years and especially after Larry’s passing, Dana and I have become trusted advisors to one another. She calls when she has a real estate need. I call when I have a doggy issue.

Yesterday I received a call from Dana explaining that the dog center needed a new location and looking for some advice and thoughts both about leasing a new facility and valuing her home. Bless her, Dana will be undertaking a challenge now as a service dog trainer in the Wounded Warrior Project and Warrior Transition Battalion at Joint Base Lewis‐McChord. I couldn’t be more delighted for her, although it means that Paws-Abilities will be moving along to new heights! She’s hoping to begin offering classes again sometime in the future, but for now will be focusing on being part of this very rewarding and needed program.

Best wishes, Dana! Visit Paws-Abilities to keep tabs on training opportunities. They’ll be open again soon!

Congratulations Margaret & Jim on Your New Home!

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Delivering keys to new homeowners today produced BIG smiles and a few hugs all around.

Congratulations Jim and Margaret!!!

Thanks again to a flawless team:

  • Marilyn Brown at First American Title & Escrow — I’m so glad we can count on you.
  • Beth Jensen at Cobalt Mortgage — Right on time and delivered as promised; the buyers and I were thrilled!
  • Dave Jagosh — Your inspection services were JUST right!

Time to Downsize?

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I must admit that this time of the year … when family is due for Thanksgiving and the Christmas holidays are looming too … I give a wee bit of thought to the idea of downsizing. Just small enough so that I don’t have to spend a day scrubbing the place down. All those rooms! Of course, three bedrooms isn’t a lot of space, but still. I’m just that lazy sometimes.

There’s been a lot of hype lately about downsizing. I see it on the news and “home” shows constantly. Give away the stuff (and I have a lot of it), learn to live with less, enjoy the freedom, etc.

This morning I got a bit sidetracked surfing the news sites. And came across this video on one of my local stations:

Now, I’ve seen some itty bitty places, but this one takes the cake! Can you imagine living in a home that’s built on a mere 300 square feet!? It’s really quite intriguing!

I’m not too sure that I could downsize to quite this level. And to think that it cost a mere $500,000 to build! Maybe I’d better think twice about cleaning all these rooms …

Hey Buyer! Motivated Seller Here! Price Reduced AGAIN!

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Quiet & Peaceful perfectly describes this idyllic property located in Ravensdale. The current owner says deer and elk come by to visit now and then, along with other forest creatures!

Of course, with 2.28 fully-fenced & gated acres, you’ll have plenty of room for your own raise critters, to garden, park your toys, or just enjoy the lovely waterfall and pond.

This 1536 sq ft home features a gigantic living room & dining room—both with bay windows, nicely appointed kitchen and laundry, plus three bedrooms. While there’s the true master bedroom, located at one end of the home featuring a private 5-piece master bath, complete with soaking tub, double sinks & shower, the 2nd bedroom opens to another five-piece bath with yet two more sinks, shower and huge oval soaking tub! Could be two master suites in this home!

All of the windows and carpeting were recently updated and the owner just installed a Gen-Tran to guard against possible power outages. In addition to the detached 2-car garage, the owner recently built a roofed and concrete based shelter that could be used as additional parking–great for a boat or RV (he uses it for an outdoor exercise space). 

Plus, there’s an outbuilding/loafing shed(?) is currently used for rough storage, with one end as a wonderful roofed and floored dog kennel, complete with dog runs. This building is a bit rough on one end, but certainly usable!

A previous owner had horses and the property has still has some cross-fencing. With just a little renovation, you’ll have great pasture areas!

Title Elimination is complete, plus the home is on a permanent foundation complete with tie downs and concrete pads. Act soon and you’ll be in your new home in 45 days!!

Drop by the virtual tour by clicking the button below, and then call for your own personal tour of this fabulous property. You’ll love it!

[srp_profile lat=”47.3579522″ lng=”-121.913761″ address=”32216 SE Kent-Kangley Road” city=”Ravensdale” state=”WA” zip_code=”98051″]

 

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We’ll Miss You, Dave

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I am incredibly saddened by the passing of Dave Niehaus, the announcer who called the Mariners’ baseball games in Seattle for over 30 years.

A game just wasn’t complete without Dave’s commentary. His occasional enthusiastic outbursts  “My Oh My” and “Fly Fly Away!” punctuated the very best games and best plays. So often we went to games with radio headphones so that we could listen to his calls. In fact, there were many a game watched from home where we turned down the TV and turned up the radio to listen to him.

My children all love baseball–partly because Dave Niehaus made it come alive for them. We celebrated so many wins and so many near impossible plays with him … and Niehaus knew just how to heighten the excitement.

Oh, we’ll greatly miss you, Dave. Baseball in Seattle will never be the same again.

Another Rewarding Closing for First Time Homebuyers!

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It’s just SO rewarding to hand the keys over to first time homebuyers! Especially one that’s been five children in the making!

Last night I had the pleasure of giving the keys to a buyer moving into their very first … very own … brand new, built-just-for-them, house. And it was really cool! Imagine having five children and never owning your own place. Raising the crowd in a two-bedroom rental. For years! Saving, saving, saving, so there was a downpayment.

And then having home prices and interest rates drop significantly enough so that you can afford a five bedroom, plus den, plus bonus room, three-and-a-half bathroom brand new home! The excitement was so thick one could have cut it with a knife!

Not that the purchase wasn’t without tremendous trials, topped off with the fact that, at the last minute the courier taking their closing documents to the County for recording had a breakdown on the side of the freeway … so recording really didn’t occur yesterday! Thankfully the builder allowed this very deserving family to begin moving in last night. And recording occurred first thing this morning!

But their calm, collected attitude of “We’ll get there if it’s to be” kept their dream alive, right down to the key exchange. Unfortunately, with all the starts and stops of yesterday’s closing, it was dark and only the wife was able to be there — flying on air!

Congratulations Reggie and Janine! You’ve earned this many many times over! We have to get together for pictures now!

Dear Bank — Can I buy my own short sale house?

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Dear Bank President:

See here’s the thing. Like much, if not MOST, of the country, the value of my house has dropped substantially. So has my income, but I’m STILL WORKING! Of course my income is now only about 2/3rds of what it was when I bought my house because I had to take a cut in pay to keep my job.

But I’m STILL WORKING and I’ve never missed a payment. I’ve now built up all of my credit cards to their limit and raided almost 100% of my 401k so that I can make my mortgage payments, yet I’ve NEVER missed a payment.

But the ratio between my mortgage and my house value is laughable. I’m so far upside down, I might just as well keep tunneling. Maybe I’ll end up in China like my Momma used to say.

And my friend, the very educated and talented REALTOR, says that the best way for me to get out from under this mess is to short sell my house because, like my income, it’s only worth about 2/3rds of what I paid for it five years ago. I even consulted with that real estate attorney who says maybe I should just let the house go back to the bank.

But, you see, I’m a responsible person. I make a commitment and I stick to it. Again, let me stress, I’ve NEVER MISSED A PAYMENT! It won’t be long now though. I just can’t continue to make payments at that fantastic 6.8% interest rate I had five years ago.

Here’s my proposal: My income supports a purchase that’s 2/3rds less than the current mortgage on my house. And interest rates have dropped below 5%. I CAN AFFORD THAT! And I can save you thousands of dollars and all of us can come out of this without egg on our faces and tons of embarrassment if you’d allow me to just buy back my own short sale property. Well, technically we shouldn’t have to go all the way through the short sale process. That’s messy, lengthy, expensive, and totally unnecessary!

So let’s do this: You process your own unbiased and fully researched Broker Price Opinion and I’ll pay for the appraisal. And then we’ll agree that the value of my house is 2/3rds of what it was. And then you’ll rewrite my mortgage/loan for that number at the current interest rate of less than 5%.

You’ll save money. You’ll not have yet another house sitting in your “bad loans” portfolio. And I’ll get to stay in my house and continue to maintain it, thus saving my neighborhood from further decline and dropping my house value even more. And my credit score will stay reasonable since we won’t have to go through all that “miss a payment or two or three so we’ll look at your short sale offer” business. My kids will continue to grow up in the same house at the same schools with the same friends in the same neighborhood, thus continuing to contribute to their sense of security. (We need these future secure workers to pay for their own houses and cars someday, thus helping to ensure your bank’s longevity.) We’ll all be winners.

How about it, Mr/Ms Bank President? Doesn’t that make loads more sense?

Sincerely,

Struggling Homeowner
i.e., Your Next Foreclosure Client

FHA Mortgage Insurance Changes & How They May Impact a Sale

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FHA loan billboard
http://www.flickr.com/photos/thetruthabout/4041556932/


You may have heard that costs surrounding FHA loans is changing in October, reducing the dollar amount needed at closing for Upfront Mortgage Insurance, while increasing the monthly portion of mortgage insurance that is added to a homeowner’s payment.

If you have previously been approved for an FHA loan but haven’t yet found a home, you’ll want to be sure to factor in the larger payment requirement into your budget, along with contacting your home loan advisor to be sure that your preapproval is still valid for the higher payment amount. You may also want to consult with your advisor to see if a different mortgage program might now be more attractive.

If you are a Seller, you may be expecting to contribute towards a Buyer’s closing costs, which are dropping considerably when the Buyer uses an FHA loan. In the past, I’ve suggested to a Seller that the buyer’s closing costs could easily total 3-4% of the purchase price. With the 1.25% drop in upfront mortgage insurance, contribution towards closing costs may be less hurtful towards your net amount at closing, thus perhaps becoming an attractive marketing tool.

Monthly Mortgage Insurance for FHA Increases October 4th:  For FHA case numbers that are assigned after October 4th, FHA will

  • decrease the Upfront Mortgage Insurance premium from 2.25% to 1.0%. 
  • increase the monthly mortgage insurance premium from .50%- .55% to .85% – .90%, depending on the combined loan to value.

My trusted Mortgage Advisor sent along this chart to help you understand how this will affect a homebuyer’s mortgage:

Sale Price

Increase in Payment

Decrease in Upfront MIP

$250,000

$54.17

$3015.63

$350,000

$75.85

$4422.03

$450,000

$97.62

$5428.48

$550,000

$118.53

$6588.87

Mama Passarelli and The Soup Ladies

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About a month ago I met Ginger Passarelli Senecal, respectfully and gratefully referred to in our area as “The Soup Lady.”

Known as “Mama” to everyone who’s ever met her, several years ago Ginger felt a compelling need to fill a desperate need by those who are “first responders” in times of need and disaster — our fire fighters, police, EMTs, military personnel, search and rescue teams, and so on.  

Several years ago, Mama decided that the folks at her church needed more connection with one another. And so she began bringing pots of soup to the church after services. It was a way to get to know one another! As happens periodically in our area, in 2003 we had a windstorm go through the area that toppled trees, cut our electricity and other essential services. For many of us, it meant that cooking and warm meals were just not available.

Typical of Mama, she helped arrange for members of the congregation to clean up the area, then set up barbeques and portable stoves in the church parking lot to serve … soup!

From that time on, Mama Passarelli began her mission to provide soup to those people who do so much to help all of us.

Mama and her dedicated crew have served soup and provided a friendly face in so many disasters — both local and nationwide. She and her volunteers respond to house fires, search-and-rescue operations, flood relief, hurricane cleanup. They were there for Katrina, they were there for Gustav. They were in Lakewood for days to serve when four police officers were killed. They were even there recently when fire crews rescued a dog that fell over the edge of a cliff in Snoqualmie.

Mama Passarelli owns a home-style restaurant in Black Diamond, Washington. She’s a talented and accomplished cook. Down home meals are definitely her specialty–YUMM!!! You may want to have soup as an appetizer.

While I can only pray that you never have a need to meet Mama because of a personal tragedy, I do encourage you to visit Mama Passerelli’s at 24306 Roberts Drive, Black Diamond.

Can You Believe Your Own Condo for $99,999!!

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Zero down and free closing costs from Preferred lender. FHA Approved! Looking for a change under $100k. Why rent when you can own. Great condo with a mountain and sound view. Kitchen boasts oak cabinets, title counters, dual sink & appl stay w/built in microwave. Fireplace w/tile mantel, huge bath w/titled counters & surround. Perfect for communters. Seconds to I-5 & 99. Guest parking & carports available. NOT a short sale!

 

 

 

 

Courtesy of Lorene Bennett, RE/MAX Select R.E.


Price Reduced! Easy Covington Location

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Updated tri level in excellent neighborhood. Hardwood floors thru entry, kitchen & dining rooms. Italian tile in family room. New carpet in all other rooms. White, 6 panel doors. New kitchen counter tops, & interior paint . Family room w/gas log fireplace and built-in decor shelving. Master suite w/walk-in closet & 5 pc bath including claw foot tub. 2 level deck in fenced back yard. Cedar siding. 9 ft garage doors. Yard needs TLC otherwise, this house is move in ready!

 

 

 

 


 


 

 



Courtesy of Dawn Rushton, RE/MAX Select R.E.


Investor Alert: FHA Financing for “Flipped” Houses

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In mid-January, 2010, the Department of Housing and Urban Development (HUD) issued a temporary waiver (good until February 1, 2011, or until extended or withdrawn) to give FHA borrowers the ability of obtaining an FHA-insured mortgage on a home that was purchased less than 90 days previous. What this means is that a Buyer can use FHA financing for a home which was bought by an investor less than 90 days before, then repaired or rehabbed.

On its surface, it would seem as though this waiver would be greatly beneficial to investors. After all, an investor needs to purchase a real bargain house, do some repairs, and then re-sell the home as quickly as possible for a profit.

In my experience, most investors look for the original purchase to be no more than 70% of its repaired value, with 50-60% (or even less) preferred. Considering that the cost of buying and then selling a home can easily run approximately 10% of its resale value, that there are costs of borrowing funds for purchase, and, of course, the necessary costs of repair, an investment home must be sold for far more than 120% of the investor’s purchase price.

It’s also important to bear in mind that many buyers (if not most) are also looking for homes that are a bargain … and are using FHA financing to secure their purchase.

So .. where this gets difficult is that there is a 20% variance to the flip rule for homes being resold within 90 days of an investor’s acquisition of the property:

* If the home is being sold for no more than 120% of its purchase price, then flipping guidelines do not apply.

* If the home is being sold for more than 20% above its purchase price, then the Buyer’s lender will require an independent home inspection, selected by the lender and likely paid for by the Buyer (OUCH!), and

* The Lender must justify the loan value by acquiring support documentation of the increased value or TWO appraisals, and

* Even if an appraiser doesn’t find the need for a repair, a lender can require that any issues revealed by a home inspection be fixed prior to closing!

A home inspection in the hands of an underwriter can be problematic. Every home requires some repair–no home is perfect. In a typical transaction, Buyers and Sellers often agree to financial adjustments rather than repair. Underwriters aren’t necessarily equipped to interpret the findings presented on a written inspection report, and an transaction otherwise acceptable to a Buyer and Seller may be stalled or cancelled.

Finally, in most transactions, the Buyer pays for the appraisal of the property they wish to purchase, used to assure their lender that the value of the home is at least equal to the amount of the loan. With the requirement that a flipped home sold for more than 120% of its investment purchase price, the Buyer may be required to pay for two appraisals, which further impacts the Buyer’s closing costs. In today’s buyer-driven market, remember also, that the Seller is very frequently asked to pay all or some of the Buyer’s closing costs.

Click to read the HUD Waiver of Requirements for FHA loans, then be sure to factor in these additional requirements that may be impactful of your desire for a quick resale of your investment property.

There is NOT a 3.8% Sales Tax on All Home Sales Starting in 2013!

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Over the last several weeks I’ve had a number of clients and contacts email me with a “Is This True?” question about the rumor of a 3.8% “sales tax” to be added to the sale of a home after 2012. With the passing of President Obama’s Health Care bill, some people are digging deep for every possible reason to cause panic and mayhem.

Last night I received yet another forwarded copy of this message. I’ve copied the message in the three bordered sections that follow. My response is below.


Subject: REAL ESTATE SALES TAX TO GO INTO EFFECT 2013 (Part of HC Bill)

 

This excerpt from the Healthcare Reform bill has been grossly misstated. There is a 3.8% tax that will be imposed beginning in 2013 (if not repealed before them … and it’s under discussion) … but it’s not on the gross amount of a sale.

In fact, this provision has  been so widely misunderstood and misquoted, that the National Association of Realtors produced a Question and Answer publication to expressly discuss the matter. Be sure to expressly study questions 8-10. Click to read the publication.

Essentially, it’s like this:

A 3.8% tax will be imposed on high income earners (single earners with Adjusted Gross Income (AGI) over $200k, couples with AGI over $250k); that sell property realizing a gain over $250k (single) or $500k (joint filers). So .. if you’re married with AGI over $250k, and you sell a piece of property with a gain over $500k, you’ll pay a 3.8% tax on the gain, not the entire sales price.

I’m not a tax expert and can’t speak to computation of AGI, but I suspect that there will be some fairly extensive calculations involved to minimize AGI.


 


Move In By The Holidays & Have GORGEOUS Land, Trees, Privacy & Easy Living!

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Quiet & Peaceful perfectly describes this idyllic property located in Ravensdale. With 2.28 fully-fenced & gated acres, you’ll have plenty of room to raise critters, garden, park your toys, or just enjoy the lovely waterfall and pond.

This 1536 sq ft home features a gigantic living room & dining room—both with bay windows, nicely appointed kitchen and laundry, plus three bedrooms. The master bedroom, located at one end of the home features a private 5-piece master bath, complete with soaking tub. And just down the hall is another huge bath, also with double sinks, soaking tub, and shower.

The owner recently updated all of the windows and carpeting, installed a Gen-Tran to guard against possible power outages, and built a roofed and concrete based shelter as additional parking (he uses it for an outdoor exercise space). In addition, the detached 2-car garage, plus another outbuilding provides yet more storage and living space. The outbuilding is currently used for rough storage, with one end as a wonderful roofed and floored dog kennel, complete with dog runs.

A previous owner had horses and the property has still has some cross-fencing. With just a little renovation, you’ll have great pasture areas!

Fall Has Fallen Around My House!

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Okay, so it’s just now coming into early Spring … but I ran across this old post from 2010 and figured I should update it before losing sight of it again. Besides, Fall seems to come around every year and the fall clean up tasks will arise again!

 

Our Pacific Northwest area has had an “almost – on again/off again” summer this year. Other than just a week or two of hot weather early in August, much of the rest of the summer has been wet, overcast, or just daggone cool! We didn’t really have much of a winter this last year either, now that I think of it. Leaves have been dropping steadily over the last week or so, although we really haven’t been hit with the onslaught from the big maple in the front yard. It’s coming soon though!

Yesterday was a gorgeous fall day — just hot enough to make you think about turning on the A/C … but not quite because “Hey! This may be the last of Summer!” Today … notsomuch. Overcast, cool, breezy, early 60-ish.

Around our house, this time of year signals frantic activity trying to get the house ready for winter. Sure enough … hubby got up this morning and said “We better get the stove cleaned before winter hits!” (We have a pellet stove that gets hauled outside, blown out, tuned up and touched up every fall.) … His first comment was quickly followed by “Shoot, I don’t have those doors re-weather stripped yet either!” Bless him — he really works hard around the house!

I know that most folks have a Fall house tune-up list, but thought I’d throw my list out there just to add a bit more to your own To-Do list! After all, I don’t want to suffer alone.

1. That pellet stove!

2. Scrub out re-caulk around the windows.

3. Winter-ize / weather strip the doors.

4. Knock off any bird nests that arrive every spring in that tantalizing overhang we have. … Oh and while we’re up there, doublecheck and repair any of the bird blocking that’s been vandalized.

5. Oh yeah. Speaking of bird blocking … we usually get under the house to repair any of the critter-screens in the foundation vents to be sure nothing’s gone awry there either. This is usually my job. It’s a lot of fun …. (not!)

6. The gutters’ll be cleaned after the leaves are finished — we can wait for a month or so for that event. It’s much more fun in the really pouring rain anyway.

7. Check all the connections for the Christmas lights. They’re definitely NOT fun to refurb when it’s pouring!

8. Touch up and seal the driveway. … Ours is asphalt. It’s a yearly thing.

9. Walk the roof to be sure that flashing looks good, shingles aren’t popping, or whatever.

10. Check the downspouts and water-runoff thingies at the bottom to be sure they’re in place and pointing the right direction … away from the house.

11. Scrub the deck and re-stain. (I think this one’s gonna have to wait this year. It’s looking like a BIG job–more like needing to replace the decking.)

13. Drain and scrub out the hot tub. (Done! Whoo hoo!)

14. Without getting too much into the garden thing … it’s time to get a weed and feed down soon so that I can still reseed those bare patches when it starts raining daily. (I’m avoiding the inevitable Fall yard work — it’s coming … but the daggone tomatoes aren’t even ripe yet! Gee whiz!)

15. Take a good hard look at the pantry … what’s still needed for my winter stock-up? I like to take an inventory this time of year and add to the staples so that I have at least a couple, two or three, month’s supply of things like rice, noodles, canned fruits, soy milk, that sort of thing.

16. Take the dogs and cat in for their yearly vaccinations. They’re due every September.

Okay, that’s enough. I’m tired just typing. What’ve I missed?

It’s ALL About ME!

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Whoo hoo! I just got notification that:

I was voted the Best Real Estate Agent in Auburn, WA by KOMO News 4!!

 and

I was a finalist in the Auburn Reporter’s “Best of” too!!

 

This is so cool! I’m so flattered and truly grateful to everyone who voted. What an honor to be recognized!

Thank you, thank you!

(and thanks for letting me puff up a bit! … My head’s now square back in place and I “think” it’ll fit through the door …)

Buy Now? … or Wait?

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I bought my first home in the mid-’70’s, and then bought again in about 1983. Even though interest rates were “obscene,” (seems like ours was somewhere around 17.5%) somehow we managed to make it work. Builders and sellers routinely bought down rates and prices were considerably lower.

I was reminded of this fact this morning when receiving a marketing piece by one of my favorite statistical companies, Estate of Mind. Simple little graphs like this one provide such a powerful visual guide of just how far interest rates have dropped and the resulting impact in purchasing power.

Now, granted, $1,500 was certainly a lot more money in the pocket in 1981 than it is now … and a home at just over $100,000 at least compared with the the $300,000 home in today’s market. (That cute little 3 bed/1.75 bath 1300 square foot house we bought at $89k is now worth about $250k.)

But what this graph does show is, on the short term, that $1,500 at today’s phenominal interest rates will buy more now than it will as interest rates rise. I wish this chart included an overlay that showed the average interest with reasonably comparable terms year by year … but the cart was free and helps get the point across — Buying at lower rates buys more house!

For a full size copy of this chart, click here.

Turtle Burgers

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This is totally off base as far as real estate goes, but just enough fun that I thought I’d share. I received this recipe this morning from a southern friend and am quoting it intact. I can tell you that as “bleagh” as this is to me, my husband thought this looked  fantastic! Must be a guy thing (sorry guys).

Cute though!!

If ya hain’t had yor furst heart attack, this’ll do it!!!

WOW!!! Only in the SOUTH!!

Here’s a new twist on how to serve burgers and if you don’t cook, give this handy little guide to someone that does and request them.

Handmade ground beef patties, topped with sharp cheddar cheese, wrapped in a bacon weave, then the next step, add hotdogs as the heads, legs with slits for toes and tail.

Next step. Place on an oven rack, covered loosely with foil and baked for 20-30 minutes at 400 degrees. A little crispy, not too crunchy…just how a turtle should be, right?

What is a Deed-in-Lieu?

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No foreclosure!

A Deed-in-Lieu of Foreclosure is a process where the lender agrees to take the deed to your home rather than pursue a foreclosure action against you for nonpayment of your loan. This option is easiest where there is only one mortgage, and where there are no other liens.

Depending on your lender, a payment might be offered to the holder of a second mortgage or home equity loan, but that lienholder must also agree. Further, if you have yet additional liens against your home, such as tax or utility liens, your bank will likely not even consider this option. Your bank wants your home with “marketable title” … i.e., a clean and clear title without other encumbrances.

While this seems as though it might be an easy and logical solution, what’s important to remember here is that a bank isn’t in the business of owning real estate. They don’t want your home, especially if there’s no equity to be gained in taking it.

While definitely a generalization, there’s certainly truth to the statement that where banks readily accept Deeds-In-Lieu is where a home has equity in the current market and can be quickly liquidated at a profit to the bank. Great if you’re behind in your payments and absolutely must leave the loan obligation and there’s equity in the house. However, if there IS equity, why not try to refinance or pursue a loan modification first?

It’s also important to know that some banks won’t even consider a Deed-In-Lieu of Foreclosure unless you’ve already been rejected for a Loan Modification and/or were also unsuccessful selling your home as a Short Sale.

The information presented on this Site should not be construed as legal or financial advice. You are advised to seek consultation with a qualified Attorney and Accountant. ©Gabrielle Nemes, 2010