AliceLand isn’t a place, so much as it is my state of mind, and this blog is akin to my own personal road map. Unfortunately, geography was given short shrift in my grade school classroom, and I’ve never taken a class in topography. On the other hand, I’m not afraid to meander. (“The Road Not Taken,” by Robert Frost, is my favorite poem.) Fellow meanderers are invited to come along for the ride. Just don’t get preoccupied with a destination. It’s all about the journey.
Keeping up with routine home maintenance can be challenging, both in terms of time and money. Whether you intend to stay in your house for years to come or sell it soon, deferred maintenance – upkeep and repairs left unattended until they become critical – will always cost you more in the long run.
Following is a list of suggested tasks for Spring that will help you stay ahead of the game. Special thanks to Amy Ecklund, of AmyWorks for this helpful list.
¨ Fertilize the lawn.
¨ Service the heating and cooling systems.
¨ Inspect foundation, basement, or crawl space for cracks and water damage.
¨ Clean gutters & downspouts; ensure that water drains away from the house.
¨ Check roof for damaged shingles. Trim branches that extend over the roof.
¨ Inspect all electrical cords, wall plates and outlets for damage and wear.
¨ Check alarm systems to ensure they are functioning. Replace batteries.
Best Places to Buy New Appliances
Are new appliances on your wish list? A recent study by Consumer Reports determined the top-rated stores for small and major appliances. Here are the top 4 in our area, for each category.
Best Prices: Amazon.com, Costco, Kohl’s, Sam’s Club
Best Overall for Major Appliances: Lowe’s, Home Depot, Sears, Best Buy
Best Overall for Small Appliances: Amazon, Costco, Kohl’s, Bed Bath & Beyond
The biggest problem facing the real estate industry right now is low housing inventory. Too many buyers chasing too few properties.
Why aren’t there more homes on the market? There are several reasons.
First, many homeowners are still underwater on their mortgages, so unless a life-changing event occurs, they are likely to delay selling. Loss of a job, relocation due to a job and divorce are the most common reasons for homeowners to consider selling. When this happens, it can be helpful to contact a broker to help assess the current market value of the home.
Second, even if a homeowner is not underwater, they may not have enough equity to leave them with money for a downpayment on a new home. Breaking even is not the goal of most homeowners. In the past, homeowners were able to use the equity created by increasing home values to finance a “move-up” purchase. Those plans may be delayed as they wait to regain lost value.
Third, savvy investors — particularly those with lots of cash — have been snapping up inexpensive properties since the bubble burst. Rather than flipping them right away, many are turning them into rentals until they gain more value. That means fewer properties are available for sale.
Fifth, the amount of new construction slowed considerably during the recession because builders couldn’t get financing. Speculative building is risky even in the best of times, so it’s not surprising that it nearly came to a standstill for a while. Once new construction starts up again, there is generally a lag of 18 months to 2 years before the new supply hits the market.
Buyers, on the other hand, have been spurred on by low interest rates and — in the Seattle area — improving economic conditions. The Law of Supply and Demand always, always, always wins out. As a result, we are seeing multiple offers again, with many properties selling within the first week they come on the market. (Note: this is only true for appropriately priced properties. Over-priced properties never sell quickly.)
You may be surprised to hear that real estate brokers dislike multiple offers as much as you do.
If we are representing a buyer, the chance they will be disappointed increases — sometimes, dramatically. It can be quite expensive in terms of time, emotion and money (e.g paying for pre-inspections). Buyers who make unsuccessful offers on several properties become understandably discouraged and may even drop out of the market. It’s no fun for a broker to have to tell their buyer that they didn’t get the house they wanted.
You might think that sellers (and their agents) love getting multiple offers, but it can create problems for them, too. Evaluating the offers and deciding which one to take isn’t as easy as just accepting the one with the highest offer price. Among other things, the broker needs to verify that the would-be buyer actually qualifies for a loan in the amount of their offer. There is also the potential for the offer price to exceed the eventual appraisal price, which usually causes the transaction to fall apart. If the seller, guided by their agent, chooses an offer that doesn’t come together, the seller can lose precious market time and a second offer will often net a lesser price.
Keep in mind that “the real estate market” is always local. It differs from state-to-state, county-to-county, city-to-city and even neighborhood-to-neighborhood. This is why it is important to hire an agent who knows the current market conditions in the area where you want to buy.
What I’ve described here should tell you that most of Metropolitan Seattle is experiencing a seller’s market right now (again, this can change by neighborhood). If you are thinking of making a move, I will be happy to help you assess your options during a no-cost, no-pressure consultation.
Contact me today to help you plan for tomorrow.
Cabernet and cream will replace Prudential’s trademark colors of blue and white, a change that I personally will welcome.
Aside from the cosmetic changes, Berkshire Hathaway HomeServices promises to be a major player in the resurgence of the housing market in the United States. Exactly how this will manifest is still somewhat unclear to those of us at the bottom of the ladder, but our excitement is building and the anticipation is invigorating!
What do you think of the new name? Are you already familiar with the Berkshire Hathaway name? What associations does it have for you? Were you already aware of Berkshire Hathaway’s connection to Warren Buffett?
I’d love to hear your thoughts.
Once upon a time, Short Sales were a little-known phenomenon. Now, they are a staple in the diet of the real estate industry.
Circa 2007, agents and the general public were all forced to climb a very steep learning curve in relation to Short Sales. Now, in 2013, that they have become so common, do we know everything there is to know about them? If only that were so.
For those readers who may not be familiar with the term, a Short Sales refers to the sale of a property that is no longer worth as much as the homeowner owes on the mortgage. This is not necessarily a problem unless the owners are forced to sell for one reason or another. Perhaps they got a new job in another city; perhaps there was a divorce; or maybe they simply can’t afford the payments any longer.
In these situations, the owners may approach the bank that holds their mortgage and propose a Short Sale rather than a foreclosure since it is often less harmful to the homeowner’s credit rating. If the bank agrees, the homeowner puts their house up for sale at current market value. The bank accepts that amount and usually (but not always) forgives the remainder of the debt because it may lose less money selling short than foreclosing. Since the bank is taking a significant loss, it takes control of the sale, including approval of the final purchase price and the buyers. The sellers sign the Purchase and Sale Agreement, but do not receive any monetary benefit from the sale, so their motivation can be pretty low.
In theory, the buyer benefits by paying a purchase price that is less than comparable non-Short-Sale homes. The “catch” for buyers is that the average Short Sale takes several months to close, and a large percentage never close at all. There is very little, if any, room for negotiation with the bank. It is typically a “take it or leave it” situation for the buyer. The property is generally sold “As Is”, and it is seldom in great condition. Buyers are allowed to conduct a home inspection before buying, but it is for informational purposes only. The bank will not (except on rare occasion) complete any repairs or consider any price reduction based on the findings of the inspection. In other words, the bank makes all the rules, and therein lies the biggest problem. Since the banks make the rules, it also gets to change the rules whenever it feels like it. The procedures an agent followed to successfully close a Short Sale last week, can change without notice this week. When this happens, the timeline gets even longer. Sometimes, time for a Short Sale option runs out and the bank forecloses anyway, even if there is a buyer with an active offer on the property. When that happens, the buyer’s offer is terminated. If they still want to buy the property, they must either buy it at auction or wait until it comes back on the market as a bank-owned property. This can mean a delay of several more months since there is a 3-month (or more) redemption period providing the former owner an opportunity to buy back the property.
A client recently asked me if I have much experience as a buyer’s agent, closing Short Sales. I freely admitted that I don’t. There are several reasons why I don’t feel bad about that.
First, I encourage my buyers to look at Short Sales only as a last resort. In most cases, the monetary savings pale in comparison to the additional time and trouble involved in purchasing a Short Sale. It is not unusual for a buyer to make an offer on a Short Sale, wait 3 months for an unsatisfactory response from the bank, then repeat the process again and again. Before you know it, a year has gone by, home prices have increased, interest rates may or may not have increased (they can’t stay this low forever) and the buyer’s still don’t own a home.
Second, I believe it is the experience level of the listing agent that is more critical than the experience of the buyer’s agent when purchasing a Short Sale property. The buyer’s agent simply needs to follow instructions and do whatever the bank requires. The listing agent, on the other hand, has to navigate those ever-changing rules. If s/he doesn’t keep up with the bank’s changes and new requirements, the process gets lengthier, and the buyer usually won’t know why.
It’s probably worth noting that bank employees are typically paid an hourly wage. They earn the same amount of money whether or not your Short Sale closes. They have very little incentive to shorten or simplify the process. (If you are a bank employee and I’m wrong, please tell me!).
Lastly, the percentage of Short Sales that actually close, hovers around the 50% mark. This is due, in part, to the fact that so many buyers withdraw their offers before they even get a response from the bank. A lot of life happens in 90 days; it leaves a lot of time and opportunity for monkey wrenches to get thrown in the works.
Have you bought a Short Sale property? If so, I’d love to hear about your experience. Would you do it again? Would you recommend it to others?
Here’s your chance to share your wisdom using the comment box below.
The White Center Food Bank needs our help, so I am joining with some of my Prudential Northwest Realty colleagues to sponsor a food drive benefitting White Center Food Bank on Saturday, May 18th. While it is common for most of us to think of helping the hungry during the holidays, the food banks typically experience a slow down in donations during the summer months. Not surprisingly, demand for assistance is still high. Hunger doesn’t know from holidays.
Volunteers from Prudential Northwest Realty will be on hand from 11A-3P on the 18th, at the QFC in Westwood Village and the Albertson’s at 12725 1st Ave S in Burien. Your favorite Realtors will be there in person to collect your food and/or monetary donations, so please come say hi and introduce yourself!
Bonus opportunity! Mention that you read about the food drive here (on my blog) and I will give you a coupon good for a free ice cream cone from West Seattle’s own Husky Deli!
Canned food, other non-perishables and cash are all welcome donations. High protein items such as peanut butter and tuna fish are especially appreciated.
And don’t forget the West Seattle Food Bank at 3419 SW Morgan St.! Both these worthy facilities depend upon the generosity of folks like you and me.
Hope to see you on May 18th.
Now that homesellers are back in the driver’s seat, pre-inspections are re-emerging as a tactic for strengthening a buyer’s offer. This time around, however, some homeowners are refusing to allow them.
What is a pre-inspection? It’s a general structural inspection of a home (usually by a professional home inspector) that takes place before the seller has accepted an offer. This generally only happens in multi-offer situations, but those, too, are becoming commonplace again as a result of low inventory.
Since nearly every offer these days is conditioned upon the results of a structural inspection, real estate brokers will sometimes suggest that their clients invest in a pre-inspection as a way of making their offer more attractive to the homeowner.
Few homeowners pay for an inspection of their property before putting it on the market, so they can be justifiably nervous about hearing the results of an inspection performed by a professional hired by a buyer. Having already negotiated a purchase price, the inspection results often trigger another round of negotiations involving requests for repairs which will further reduce the net proceeds to the seller. To eliminate this concern for the seller, a buyer can pay for a pre-inspection and then submit an offer for a purchase price that will not (theoretically) be further reduced because they already know the condition of the house.
This strategy was common practice a few short years ago when Seattle last experienced a seller’s market. Like the song says, “Everything old is new again.”
This time around, however, some sellers are saying “No” to pre-inspections. Why? Mostly because it is a major inconvenience for owners to open their home to strangers multiple times for several hours at a time (inspections usually take 2-3 hours). Occasionally, some minor damage can result from the inspector’s poking and prodding as well.
One alternative to allowing pre-inspections is for the seller to pay for an inspection (an average of $400) and then make the results available to all buyers who write an offer. Most buyers, however, will not be satisfied to accept the results of an inspection performed by someone who has been hired by the seller.
It’s worth mentioning that a buyer who pays for a pre-inspection and then either decides against making an offer or submits an offer that is not accepted by the seller, is out the $400. That can get pretty costly if you are a buyer making offers on several multi-offer properties.
What’s a buyer to do?
Are you a frustrated buyer? This is a great place to vent.
Is it still a buyers’ market? Not so much.
Sometimes the local real estate market changes so quickly it can make your head spin! Now is one of those times.
You may think I’ve been sounding like a broken record the last 6 months or so, telling you that our biggest problem in West Seattle real estate is a lack of inventory. I wasn’t kidding, and it’s still true.
In January of 2012 there were 352 Active listings in West Seattle and 84 homes sold. In January of this year, there were 184 Active listings and 98 sold. That translates into 24% sold in 2012 vs. 53% in 2013! That doesn’t leave much inventory to choose from. Try as you might, there is no way around the law of supply and demand. It will always be true that when supply is low and demand is high, prices will go up. How much and how quickly they will go up is difficult to predict. Until recently (just the past month), buyers were being fairly conservative, refusing to repeat the feeding frenzy of just a few years ago, so price increases have been moderate. Brokers often heard their buyers say, “We won’t be part of a bidding war.” Believe me, brokers don’t like to participate in bidding wars any more than buyers do; everyone emerges with a bad taste in their mouth.
For better or for worse, however, buyers have taken off their gloves and gone back to offering well over the asking price, paying for pre-inspections and anything else they can think of to give themselves an advantage over competitors’ offers. In the past 4-6 weeks, multiple offers on new (and some old) listings have become the norm again. The only saving grace for buyers is that interest rates remain low, which helps keep mortgage payments more manageable.
The good news for homeowners is that you are regaining some of the equity you lost during the downturn. And, of course, if you decide to sell now/soon, you stand a much better chance of getting a reasonable price for your home. Keep in mind, however, that appraisals can be a stumbling block to financing. E.g. a house that goes on the market listed at $300,000 might get bid up to $350,000 but if the bank’s appraiser can’t find other comparable sales to justify that price, the buyers won’t be able to obtain financing and the whole deal will fall apart. This is a very real danger since appraisers are under a much more watchful eye now than they were before the downturn.
Wondering how much your house is worth today? Call me for a free market analysis.
Know some buyers who have been waiting to buy? You might want to give them a nudge. The bottom of the market is waaaaaay behind us.
(Reprinted from my monthly newsletter. Statistics are from the Northwest Multiple Listing Service.)
Is there a small-town-USA that holds a special place in your heart? Wouldn’t it be fun to see it featured in a best selling novel? Here’s your chance.
The main character in my novel-in-progress (working title Thanksgivings) takes a year-long road trip across America to track down old friends. The identities of these cities are up for grabs.
Rather than feature well-known cities, I’d like to put the focus on small or smallish towns. I will feature 8-12 cities scattered between the coasts. There is no other criteria since the plot has nothing to do with the characteristics of the towns.
So send in your nominations! If you want to tell me personal stories about the town, that would be great. Otherwise, I can get the background I need via a web search.
Send your entries by commenting on this post or e-mail them directly to me:
Alice(at)telltalescribe.com (Writing my e-mail address in this way evades web spiders.)
What is your definition of a small home? How much living space do you need and/or want?
As a Realtor, I always have this discussion with my buyers before we start looking for homes. One person’s cubicle is another person’s mansion.
Aside from personal preference, affordability figures into the equation prominently. Whether renting or buying, once we move out of mom and dad’s home, most of us face a reality check concerning how much space we would like vs. how much we can afford. The calculations becomes even more complex when you fold in factors such as location and condition. Again, when starting to look for a home — especially a first home — I ask my clients to prioritize A) location B) price C) condition, and D) size (sq. footage). It’s usually not an easy task.
Most couples tell me that they can’t imagine living in a house that is less than 1000 sq. ft. Interestingly, many single individuals feel they need about that same minimum just for themselves.
Many of the houses that were built in the first half of the 20th Century (at least, in this part of the country; I don’t know about other areas) were very simple and plain-looking 2 bedroom/1 bathroom homes averaging about 750 sq. ft. Brokers often refer to such homes, built in the mid 1940′s, as “war boxes.” They were intended as affordable housing for all the men (and women) returning from WWII. Presumably, most would get jobs, get married, start families and then move into bigger houses. Thus these houses were dubbed “starter homes.”
Of course, much of the time, the amount of space we think we “need” is influenced by the amount of space we are used to. I worked with one couple who moved here from Hawaii. They were amazed by how much more square footage they could get here in Seattle for what they paid in Hawaii. Europeans, I’m told, are also used to living in much smaller spaces than Americans are. It’s hard to argue that we are not spoiled.
So, back to my original question. What is your definition of a small home?
I am about to list a property that is host to perhaps the smallest free-standing (as opposed to a condominium, co-op or townhouse) house in West Seattle… just 380 square feet! That’s about the size of many RV’s and studio apartments! The house is situated on a large 7,560 square foot lot, however, so the potential for building a bigger home is there.
Originally built in 1920, the house was rebuilt from the studs out in 2004. It’s in great condition, move-in ready and absolutely adorable. The challenge for me, as the broker, will be to find a buyer who is comfortable in such small living quarters. Who do you know who might fit that description?
Just out of curiosity, what is the smallest space you have ever lived in?
In mid-November, 2012, I began writing my current novel in progress, tentatively titled Thanksgivings.
I’m thrilled to report that I’ve been making great strides, having written more than 60 pages so far. That exceeds my goal of writing a page every day and puts me on track for a completion date of October 15, 2013.
In addition to my writing goal, I’m also researching and developing a marketing plan for the book. You might think that publishers take charge of marketing the books they print, but that is not the case (unless, perhaps, you are a big name author such as my favorites, Barbara Kingsolver and Maya Angelou). Authors are expected to present a workable promotion strategy to encourage and maximize sales of their book. This might include appearances on talk shows such as Late Show With David Letterman, radio interviews on stations carrying NPR, book signings at stores such as Barnes and Noble, Social Media ads, etc. Current wisdom from marketing “experts” is that the time to start promoting your book is BEFORE it is finished and published. In other words, I need to start creating interest and buzz about Thanksgivings, now, and I’m asking for your help. Here’s what I have in mind.
I am going to give you the opportunity to influence some of the content of my current novel.
In the next few weeks and months, I am going to run a contest. I will describe a character in my book and let you help me name him or her. You can propose made-up names, your own name, the names of current or past loved ones, etc. Think how cool it would be to have (for example) your great grandparents names used for characters in a best-selling novel! (Of course, it’s going to be a best seller.)
In addition to suggesting names, you will get to propose travel destinations and work places for my characters. I will give you the parameters such as “a small city in the continental United States” and you can take it from there. Maybe you want to promote the city where you grew up or a place you’d like to live?
If you choose to join me, we will be wandering together in AliceLand… a truly magical place created in our imaginations.
Are you ready? Here is your first opportunity.
The main character in Thanksgivings is a 43 year old woman who hails from Mt. Vernon, Washington, and is of Italian descent. What should I name her?
Send me your suggestion(s) via the comment box below, or if you don’t want your suggestion made public just yet, send me an e-mail via the “Contact Me” tab above.