Is it just me, or does the majority of advice we all receive about life, business, and relationships always focus on the what we should be doing? The internet is full of Top 10 things you should do if you want to…retire by the time you’re 55, lose 10 lbs, find true love, become a better you. You name it, just fill in the blank and do a google search and you’ll have a to-do list. Don’t get me wrong – I love a good to-do list just as much as the next person. In fact, as a semi type A person, I’ve even been known to write things on my to do lists even though I’ve already done them – just so I can have the satisfaction of crossing them off.
But sometimes we need to focus on the ‘to don’ts’, and never is that more important than when you’re buying a home, or in fact borrowing money for any major purchase. So in my attempt to bring some balance to the to-do vs. to-don’t equation (I am a Libra after all!) here’s my list of things you shouldn’t be doing if you are in the process of buying a home, or even considering it in the near future.
- Change jobs, become self employed, or quit your job.
- Buy or lease a new car
- Pay off your vehicle loan
- Use credit cards excessively – or more than normal. In fact a little credit card usage is a good thing, just keep it minimal
- Stop paying bills
- Spend money you have set aside for closing
- Make any major purchases – furniture, appliances etc, or in fact do anything that will originate new inquiries into your credit
- Make any large deposits without checking with your loan officer
- Change bank accounts
- Co-sign a loan for anyone
- Change marital status
Many of these may seem counter intuitive but each of the above could jeopardize your chance of receiving your mortgage – even if, in fact especially if, you’re already pre-approved and waiting to close.
So, I leave you with two words of advice. 1) Stash your Cash, and 2) If in doubt call your loan office before doing any of the above. If you’re looking for a lender, or need any further information about the home buying process continue to poke around on my website, or better yet let’s chat directly. email@example.com or 425 753 1810.
Yesterday the stock market took a nose dive, dropping nearly 5% – one of the worst single day losses in history.
With no particular underlying reason for this volatile activity, for most of us it will have little impact, even if we have a stash of investments. The likelihood is we can ride out the losses and wait for it to regain its value. But what happens if you’re under contract to buy or sell a house, and the buyer is dependent on the sale of those assets to close on the home.? There’s a strong possibility that some the transaction could fail in such a situation.
Increasingly lenders are allowing buyers to use company shares as part of their asset/debt ratio to help increase their purchasing power. And with many Amazon and Microsoft employees who receive a healthy stock bonus every year, there are plenty of buyers in this area who do rely on those assets to fund the purchase of their house – either directly or indirectly.
Should you ever find yourself in this situation, I have two words of advice for both buyers and sellers.
- Buyers – Disclose, Disclose, Disclose! The purchase and sale agreement should specify that the closing of the transaction is dependent on the liquidation of assets and what those assets are. Also include a statement of value. Failure to do so means you don’t have a contingency in place should the value of those assets suddenly plummet overnight, even if you have a financing contingency for a loan of any sort. While some sellers may be understanding if you disclose once under contract, ultimately the seller has the right to refuse and terminate the contract. In such a hot market, where back up offers are common, is this a risk worth taking?
- Sellers –request that your buyers liquidate any such invested assets within three or five days of mutual acceptance. This should be included in the purchase and sale agreement, irrespective of how long the closing window is. Buyers, this may seem to put you at a disadvantage, but cash in the bank is always preferable to invested assets. Any appreciation you might stand to gain from those shares rising in value while you are in Escrow will be minimal compared to what you stand to lose should they drastically drop in value, and you don’t have the required cash to close on the home.
My final word of advice is for sellers working with cash buyers. While cash is great – it’s not always king. Be sure to have your realtor dig deep with the buyers agent to find out if they are really are all cash buyers, or if perhaps they are relying on the liquidation of other assets to come up with the required cash at closing. Proof of funds that reach, or better yet exceed, the value of the purchase is the best way to do this.
Buying a house can be scary – especially when you don’t know the facts.
If owning a home is one of your dreams, but you’ve convinced yourself you wouldn’t quality for financing, it could be time to think again. Here are the most common myths that prevent buyer’s from pursuing their home owning dreams.
Credit scores of 780 or above and 20% down payment are not key criteria. Here are the facts:
- 40% of millennials who purchased homes this year have put down less than 10%. FHA and VA loans require even less. And if either your or your partner have served in the military, you may qualify for a VA loan.
- 76.4% of loan applications were approved last month.
- The average credit score of approved loans was 724 in September.
I don’t know about anyone else, but following last night’s Halloween festivities, it feels like there’s not enough coffee in the world to get me going this morning. Being British, Halloween has never been a big deal for me, but as they say ‘When in Rome’. After 10 years living stateside I have to confess it’s my least favorite celebration of the year – especially as a parent. My kids are just so overexcited for so long, there’s always costume drama, it’s a late night (always fun on a week night) and then there’s the candy hangover to deal with. To say I’m feeling sluggish today is an understatement.
But here’s a little Hump Day Trivia that certainly shocked me – and made me oh so grateful for today’s low interest rates.
It was about this time in 1981 that interest rates reached their all time high – of a shocking 18.65%. Today’s buyers balk at it going above 4%, having seen lows in the high 3’s for much of the year. Can you imagine 18%!! Here’s some numbers that will force you throw down your left over Milky Ways in horror!
Based on today’s median house price of $853,000, and a 20% down payment, you’d be paying $10,646 per month for your mortgage. And that’s not including taxes and insurance. Add those in, and monthly payments would add up to $11,446. Wow – that’s a number I can’t even comprehend. To put it into even greater perspective: Lenders only like to see mortgage payments of approximately one third of your total net monthly income, so we’d all need to be bringing home the bacon to the tune of over $30,000 per month. It’s just not going to happen!
So while there’s much of the 80’s I’m grateful for (Madonna, George Michael and The Eurythmics to name just some of my musical heros), I very happy that we’ve not seen the interest rates that came with the wonderful music and equally shocking fashions.
Fast forward to today: As I said interest rates are currently hovering around 4%. Economists are predicting that to hold steady in the short term, but are expected a rise to closer to 5% in 2018. This has the potential of slowing down the current double digit price growth we are experiencing – which could be a good thing.
The perception is that the Eastside real estate market is slowing down. Having taken a look at data from the month of August, the data does support that – to a degree. Take a look at the video below for key stats and data. I’m still pretty new to this video game, so be patient with me as I perfect the art of talking to the camera. I’ve not yet tried a Facebook Live video – perhaps I’ll try that next month!
My key takeaway from this market update is that while the data seems to only support a very slight market slow down, and still predicts growth for the foreseeable future (albeit at a slower pace), perception is reality. And if buyers are suspecting a slowing of the market, no matter how small, that perception will translate in their offers. Even for hot homes, my guess is that we’ll start to see fewer multiple offers, lower escalation clauses and ultimately fewer houses selling for significantly above asking. In turn, this will of course impact the market as brokers look at recent sales to price their upcoming listings. So, while the current slow down may be small, I believe it’s real and will continue to a degree. Ultimately I think this is a good thing as hopefully, in time, it will take us closer to a balanced market. I come from, and like to follow a win-win mindset – i.e encourage situations where both parties win in a transaction. And it’s hard to find the win-win in such a strong sellers market.
In today’s real estate world there are many ways to market a property. Some people, particularly when faced with such a strong seller’s market, will argue that online is really all that counts. Put it on Zillow and Redfin, and surely the buyers will find your home? While there is a small degree of truth in that, there’s a difference between finding a buyer will ‘like’ your home, and finding buyers that will love your home, and do almost anything to make it theirs.
Here’s where video, as well as staging, come into to play. Add the two together and you’ve got a very special combination. As I tell all my sellers, you’re not just selling your home, your selling your lifestyle. You want buyers to be captivated by your home, to immediately enter it and get a taste of your life (no matter how far removed from your reality that may be!). Better yet, you want them to believe that in buying your house, their life will be infinitely better – because it will be more like yours. And you want to leave them with a sense that you could actually be good friends.
Admittedly a friendship rarely blossoms out of a sale of a home, or at least not in my experience. But my point is that if a potential buyer has an immediate love and respect for you and your home, you have a far greater chance of receiving stronger offers, from more qualified buyers.
It was because of all of these reasons that I opted to make a video of my most recent listing in Ballard. Just steps away from Market Street and the weekly Farmers market, I wanted to show off the home, and the lifestyle it provided. I hope you agree, this video captures that pretty well. We received multiple offers on the home in a matter of days, and went straight to pending. I’m not naive enough to believe that was solely because of the video, but I do strongly believe it helped.
So I’ve discovered video! And I love it so you’ll be seeing a lot more of me in the future as I move my blog to a video format.
For my debut blog series, I want to focus on why it’s now a good time to buy a home. Despite the market currently being in the sellers’ favor, there are many reasons why it’s now a good time to buy. For now I’m going to focus on just one – Interest rates. If you’ve been putting off buying a home, the numbers I mention in this video may make you think twice. Big shout out to Dietrich Miklautsch at RPM Mortgage for crunching the numbers for me. Forgive me for the goofy image below! –
As ever, you’d like more information, or a lender recommendation, please get in touch.
For families with children, a good school is often the most important criteria in a home search.
Last week, at Issaquah School District's Monthly PTSA Council Meeting, the super intendent shared some information about www.greatschools.org – a website that many realtors (myself included) recommend to those looking for more information about schools in the area. It gives each school a score out of 10, with a score above 8 generally considered to be very good.
Now it's time to shake it up a bit, and as realtors we have to reeducate ourselves and most importantly our clients. Greatschools.org has recently revamped their scoring criteria and as a result it's drastically altering the scores of many schools. Some of our best schools in the state have seen their ratings plummet, while others who have received low scores for some time, have seen their score sky rockets. Does this mean that the good schools have deteriorated and the poorer schools dramatically improved? Seemingly overnight? Of course not. Life is just not that simple.
Let's take Skyline High School in Sammamish as an example. For many years, it's enjoyed scores of 9 or 10. It's one of the most desirable high schools in the district. And deservedly so. For a long time it's seen some of the highest graduation rates, and academic scores in the state. It's a truly fantastic school. But last week its score dropped from a 9 to a 4. Just like that. Has the bottom dropped out of this school? Did all the good teachers leave and were suddenly replaced by less qualified staff? Of course not. The reality is nothing has changed, except the rating system. This in itself is not a problem. Change is good right? The issue comes arises because the metrics being employed are not necessarily the right metrics (for example Advance Placement Class Participation) and, more concerningly, they are not being applied consistently across all schools.
So, my advice to home buyers is go deeper in your research. Many of school rating websites are private companies, with little or no ties to the public education system. So it's little wonder that their ratings are only skin deep. If you really want to find out about a school, its academic success and its demographic profile, the best resource is the Washington State Report Card. Yes, it's a little (ok a lot) harder to interpret than a score out of 10, but it really is worth the extra effort.
Beyond desk research, I also encourage anyone really wanting to find out about a school to do their own research in the field. Go and tour the school for sure, but go beyond that. Speak to students, speak to parents and ask their opinions of the school. What they like, why they like it. And don't forget to research the PTA. A strong, supportive and financially generous PTA can make a huge difference to a school.
Yesterday was the annual Windermere kick off . All Windermere agents, from 17 offices, gathered at the Hyatt Regency to hear some of the industry's most renowned players give their perspective for 2016. Two of the speakers included Matthew Gardner, Windermere's chief economist and Skylar Olson, senior economist from Zillow. Here are their highlights:
- In 2015 home prices in the Seattle Metro area (King, Snohomish and Pierce Counties) rose by 9.2%. Seattle itself saw double digit growth, and Bellevue/Renton 10% growth. If you're a homeowner you certainly got a good return on your investment – likely higher than anything else in your investment portfolio.
- In 2016 they both predict a 6% rise in home values.
- In Seattle, the rent/buy break even point is just 2 years. Rents are now becoming so expensive that in just 2 years, it would be just as cost effective to buy. With rents increasingly accounting for more and more of the monthly expenditure, it's proving impossible for many to get out of the rent trap and buy. As a result they are also putting off other big ticket items in life – marriage, babies etc.
- The current unemployment rate in Seattle is below 4%, effectively meaning that we're have full employment. Good news indeed!
- Expect to see a 2% job growth in 2016. More good news!
- Wage growth is predicted to rise by 4%. This compares to 3% nationally. Even better news! So, don't be too shy about asking for that pay rise come annual review!
- They predict that Mortgage rates will rise to between 4.4 and 4.9% by the end of the year. We finished 2015 at 3.9%. While breaking above 4% will be a huge mental barrier for some, the cost of borrowing remains at an all time low. Anyone remember when they were at a staggering 18%? If you don't chances are your parents do – and not too fondly at that.
The round off the morning, the key note speaker was Ron Culberson. I'd not heard of him before but it turns out that he's a very, very, very funny man. If anyone is lucky enough to be invited to any of his his 'Do It Well, Make It Fun' events throughout the year I strongly encourage you to attend.
In a nutshell, all signs are pointing North for a very strong 2016. Here's to success in whatever you do this year.
As a woman in real estate safety is always my top priority. And with a passion for fashion, accessories are a big part of my wardrobe. Finally, I can combine the two with CUFF – a good looking line of smart jewelry that notifies your contacts when danger arises.
Here's how it works:
Set up a network of people who you'd like to be notified when you need help.
In an emergency, simply press and hold your piece of jewelry for 2-3 seconds. Your network will receive a text message indicating you need help. All they need to do is access the Cuff app to see your location on a map, and, if needed, they can simply tap to call 911. Finally, if the piece of jewelry is open at the time the alert is triggered, your emergency contacts will be able to hear live audio streaming from your phone. The Cuff will work as long as the Cuff and your phone are within 20-30 ft of each other – all through the magic of Bluetooth.
I think my favorite is the Lucky Bracelet.
To see the full collection visit https://cuff.io.
Cuff is currently compatible with iOS and Android phones only.