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Multiple Offers–In THIS Market?

October 12th, 2009 | No Comments | Posted in Around Town, Buyer's Corner, Real Estate Q&A

Multiple offers?  

In the current market houses that range from $425-500K are getting multiple offers. 

If you are pre-approved and ready to make offers, and are just waiting for the one house that tells you “I’m the one you want”, there are currently lots of houses on the market in this range, and many have been sitting there for months.  You may have been through dozens of houses, or just a few, but none of them has been quite the right thing. Today your realtor has taken you to one house that just had a dramatic price drop.  It just went from $450K to $399K or in some cases even $350K.  Why?  You may wonder why–has it finally come down to it’s real value?

This may be a marketing strategy that allows this home to stand out from the relative abundance of homes available in this price range.

So you go– and it’s a great house, in fact, it’s prettier and shinier than many of the houses you’ve been to over the last few weeks. Clean, charming, just the right layout, very cool!  But WHY is it $399k?  There’s a window of pricing that causes buyers to line up for affordable housing and these homes often receive multiple offers.

Here’s what’s happening out there now in Seattle and some other markets.  There are some listing agents who along with their sellers are willing to take a risk.  They know that the house they are selling is worth $450k, in fact they have an appraisal from the end of 2008 showing a value over $450k.  And they are gambling that if they drop the price under the $400K threshhold, that they could very well stir up a bit of a feeding frenzy, multiple offers and a sale over the asking price.  It’s happening all over Seattle.  Many of the homes priced this aggressively are bank owned homes, and we’ve seen a high percentage priced at, say $250K end up selling for $10K-$100K over the list price.

Naturally there will be some fallout, some buyers will be disgusted with this strategy and tell their agent, “Pay over list in THIS market, NO way!” But we see it every day, that this market is in flux, changing all the time. It’s a fascinating and sometimes frustrating time. You may experience it as frustrating, and while we understand your frustration, we also find it fascinating.  In this way listing agents open the door to a great or at least better-than-average deal on a home a buyer might not otherwise be able to afford.  The trick for the buyer is not to fall in love with the home and cut bait if the seller/seller’s agent are unreasonable. 

We may or may not have reached the bottom of the housing market.  Realtors as a class can be very creative in their marketing, and Realtors and sellers are getting hungry and savvy enough to find ways to pique people’s interest.

Most of this kind of multiple offer situation is in the bank-owned arena.  But sellers are catching on, realize that they are in competition with the bank owned homes too, and the ones that get tired of sitting or simply need a quick sale may want to employ this kind of strategy.  Buyers need to be aware that just because it’s priced at $225k doesn’t mean that’s where it will sell.  And if you want to be the buyer of such a property and you want to win, well, money does talk.  You need someone that can negotiate hard among an array of sometimes dozens of other agents/buyers.

Buyers need to think about the price vs. the value as they decide what to offer, and also need to understand that there may only be one chance at it.  Consider the other homes you have been looking at.  This is the one that stood out to you–is it only because of price, or is it because it’s the right house, well kept, move in ready, in a great location.  There’s value in that!  Others see the value as well, and even with lots of houses on the market, in our experience, the number of well-kept homes for sale right now is lower in proportion.  People sell in the low ebb of a market when they have to, and lots of folks are in financial stress, which means that many homes for sale at what seems to be a relative bargain have not been kept up very well.

Most of this article has been about multiple offers and buying over the list price.  There are plenty of sales where the final selling price is under list–the majority in fact.  Statistics show that homes in the greater Seattle area sell on average at 3% under list price. 

These are exciting times for real estate buyers.

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Want to look up weather info for your chosen city?

July 20th, 2009 | No Comments | Posted in Around Town, Buyer's Corner, Uncategorized

http://www.weatherreports.com/

Type in the city you want to know more about and then click go.  You get the current weather report, and if you look under the daily forecast there is a line with averages, like this:

Average temperature of July: 57°F. Average high temperature: 66°F. Average low temperature: 51°F. More Averages »

If you click on “More averages”  you can find the average rainfall, temps, snowfalls, all kinds of averages.

Know more about the town you want to live in!

Lynette Hensley
Associate Broker

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Save Money on Your Water Bill

July 18th, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A

Water saving measures you can take:

  • soaker hoses instead of sprinklers
  • don’t pre-rinse dishes
  • do laundry only with full loads
  • shower instead of taking baths
  • turn off the faucet when brushing teeth or shaving
  • change to an efficient shower head
  • check for leaks at sinks and toilets
  • Save the water that runs while waiting for hot water. Use to wash produce, cleaning, watering plants.
  • for warm water, turn hot water on first, then add cold water as needed.
  • don’t use the garbage disposal, compost.

This info compiled from SavingWater.org

Lynette Hensley
Associate Broker

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Title Shows an Unpaid Tax Balance

July 3rd, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A

Question:

Schedule B in the special exceptions section B paragraph 2, where it says General & Special Taxes there shows an unpaid balance of $1345.09.  Is that something we have to pay?  Do we have to pay for it on or before closing?

Answer:

Property taxes are paid 1/2 at a time, in April and October.  The October payment hasn’t been made yet, which is what’s showing. The taxes are prorated between the buyer and the seller as of closing day.  That’s what pre-paids are for–to have enough $ on hand for your mortgage servicer to pay your taxes when they come due.  So you will only pay for taxes during the period of time you own the house, not for the seller’s taxes.

Good question!

Lynette Hensley
Associate Broker

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Our client asked this Question: When do we get our keys?

July 2nd, 2009 | No Comments | Posted in Buyer's Corner

Question:
Will we actually get the keys on our closing day?  I have heard of people signing the closing papers, but then they didn’t get their keys until a few days later.  Would there be a chance of that happening and if so…why?

Answer:
In many  other states people sign and get possession of the property the same day.

In the State of WA, buyers and sellers sign papers a day or two ahead of the closing, and that’s what you will do in most cases. Closing day is still the day you get your keys.

Why?  Washington is an Escrow state–that means that the escrow officer will guide you through the signing and notarize your signatures.  Then all your loan documents go back to the lender for a final review, then funds are released and title releases the deed to record at the county.  Once the deed is recorded, you get your keys.  Though technically at 9PM on the day of closing is when you can have them,most often the keys are turned over to the buyer as soon as escrow says the transaction is closed.

Lynette Hensley, Associate Broker

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Other Tax Exemptions I Should Know About?

June 27th, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A

Question:
I’m about to buy my first house and all I hear about is what a good time it is to buy… I know that you can get the 8k credit or do the 0% down FHA loan, but are there any tax exemptions or any grants that I should be trying to apply for?

Just wondering if anyone has stumbled across anything? Are there any other Government handouts for first time home buyers besides FHA?

(We answered on Zillow)

Answer:
Hi, As a first time home buyer you will qualify for the $8000 credit, and could get an FHA loan. Most loans will require the borrower to have a small down payment, FHA is now 3.5%. There are programs available, state by state, that are supported by state bonds or non-profit groups that offer down payment assistance or low rates or special financing programs. Your best bet would be to look for a loan officer that specializes in first time home buyers and knows about such programs. I’m in Washington State where there is a program called the “House Key”. You attend a class for home buyers, which will fill you in on all the requirements of receiving the assistance. Often the loan program will also require you to stay in the home for a specific length of time, presumably so that you will have built some equity. Also the lender doesn’t make money as fast with the lower rate or the longer term that is offered. I put this search statement into Leapfish.com search engine, “[your state] first time home buyer programs” and came up with some good results. That will give you some programs to ask loan officers about.

Good luck!
Lynette Hensley — Associate Broker

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How can I understand the sales history of a foreclosed home?

June 26th, 2009 | No Comments | Posted in Buyer's Corner, Short Sales

Question:
I’m looking at the sales history of a foreclosed home that has been in the market for quite some time. It shows 6 different file dates –one in 2004 another in 2005, 2 in 2006 and the last one in 2008. What do the abbreviations under “Instr Type” mean–TRD, D/T, WD, and SWD? What do these all mean?

Answer:
Your Question:”Instr Type” mean–TRD, D/T, WD, and SWD?

Instrument type–the type of deed that conveys ownership

The types of deeds available and their means of conveyance vary from state to state.
TRD = Trustee Deed or Deed of Trust A trustee’s deed is often used in bankruptcy
D/T = Deed of Trust — this is the deed that allows the lender to have an interest in the property
WD = Warranty Deed — this is the deed that is most often used to convey property from seller
to buyer in a purchase transaction
SWD = Special warranty Deed — this is used in REO/bank owned/Repo or foreclosure sales where the property is held for a very short time, and not occupied by the seller. It’s warranty only warrants the period of time that the seller has owned the property.

Caveat: This is general information only, when dealing with deeds and foreclosures, it’s wise to have legal assistance beyond your real estate professional.

Lynette Hensley — Associate Broker

(Asked and answered on Zillow)

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Contingency with no Bump Clause

June 25th, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A, Seller's Forum

Question:
I am looking at a home in [state], and it is contingent with no bump clause. If I were to make a second offer how long does the contingent buyer usually have under contract to come up with the money?

Answer
Have your agent call the seller’s agent and ask how long the contingent period is. It totally depends on what the buyer and seller have agreed to.

Lynette Hensley–Associate Broker

(Asked and answered on Zillow)

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Tax Credit for 2010?

June 23rd, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A

Question:
If I don’t make the deadline for the 2009 tax credit, are there going to be tax credits for first time home buyers for 2010? (Asked and answered on Zillow)

Answer:
We haven’t heard any news about a tax credit for 2010 yet, so I would not count on it. The deadline for the current credit is that the transaction must close by December 1, 2009.

Lynette Hensley, Associate Broker

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Financing Closing Costs?

June 22nd, 2009 | No Comments | Posted in Buyer's Corner, Real Estate Q&A

Question:
I have a situation where my father was going to gift me $8000 for closing costs. We are done with attorney review and now my dad is saying he can’t help me out.

Without the 8k I don’t have the money for closing. I have two solutions. First is my state has a prefund tax credit program where they will lend 5k in an interest free loan. The last 3k I can get from my father-in-law.

The second option, and this is where I need your guidance, is to go back to the sellers to see if they will increase the price by 8k and give me a 8k seller credit. Is this even possible? Is it something that happens often? Thanks. (Asked and Answered on Zillow)

Answer:
Yes, it happens quite often. There are a few challenges to understand as you choose this path.

1. You need to get the seller to agree. Adding $8000 to the price will not increase the seller’s proceeds, as you will be asking for that back towards your closing costs. However, it will increase the seller’s costs slightly, commissions, excise tax etc, (any applicable in NJ). (I’m in WA)

2. The house must appraise for the higher amount. If your appraisal is already done and isn’t high enough to accommodate the $8000, you might be best going your other route for the $8000 in this transaction. If you haven’t yet had your appraisal, get the negotiating done first with the seller then get your appraisal with the new price.

Keep your loan officer in the loop as your loan program may or may not allow seller contributions. Most do allow that.

Best of luck!
Lynette Hensley, from the ComeBuyAHouse.com team with Larry Baumgartner.

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