Here in the Seattle area, you may have heard that the real estate market is fast with prices escalating to unheard of heights. Buyers have made offers with some creative details to win the house, and those still looking have become tired since the same house they didn’t win last year is now priced $50k-$100k more.
Sellers have loved this market enjoying multiple offers and prices they never would have paid themselves. Review dates and multiple offers have become par for the listing process.
Well, guess what? Within the last 6 weeks, A LOT more inventory has popped up. What does that mean? More choices for Buyers and, therefore, less frenzy for the one house on the market because now there are three within blocks of each other.
I am stoked for my Buyers who have been searching for months. They are finally breathing a small breath of fresh air that maybe they won’t have to offer up their first born to gain the home of their dreams.
Sellers… sorry to say, your mind-set is going to have change a bit. While it is still a Seller’s market, and some areas this shift is not being felt, pricing will be an interesting process. I have been counseling my Sellers to price at market value and at a number they will be happy to get without the hopes of multiple escalations. I have found that those people are happy to get the one good offer at list price, but that they were sort of hoping I was wrong. 😃
So, Buyers, it is time to find your new home! Interest rates have risen, so the sooner the better. And now you have more choice. Yippee! I am ready to celebrate with you when we make an offer less than list price for a change.
Are you hearing stories of crazy escalating prices for homes in the Seattle area? Is the tax reform law scaring you from fulfilling your home-owning dreams? (See How Do the Tax Reforms Affect You? for more information).
I get it. Those are both things that would give me pause in jumping in the game too, but I also know that owning real estate as a long term investment is historically a good choice… Ugh! that is such a boring reason to buy a home. While true, it is still an unsexy reason.
I think buying allows you to decorate however pleases you and not have to worry if the landlord will allow it. Want an orange pantry door? You get to have an orange pantry door! (Hot hubby was not thrilled with that choice, but put up with it for a few years.)
Do you have pets? They LOVE yards! And if you buy a condo, no pet deposits needed because you are the boss, my friend.
So are you ready to find that house with the outdoor porch where you can picture yourself reading on warm, summer afternoons? Here are 3 things to help you be prepared for the competitive Seattle buying market.
- Get yourself pre-approved by a reputable lender– (Ask your real estate broker for referrals.) Do this before you start seriously looking. You need to know exactly what your budget is so you know what types of homes and where you can search. It is a bummer when you think you can afford the most rockin’ house ever and then find out later from a lender that it is not in the cards. Also, having an approval makes your offer stronger.
- Find a Real Estate agent you trust- Since you will be spending a lot of time with your agent, find one that you feel comfortable with and who will treat you like you are their favorite client ever. In the market we are having here in Seattle, you need someone who has a tool box full of ideas to help you win the house. Ask them how they guide their buying clients when it comes to multiple offers. They should have many ideas (not all financially comfortable for the buyer) that you can use to make the strongest offer.
- Know that this may take a while– With the low inventory, there are not enough houses to go around all at the same time. For some buyers, it may take a week and others a year (and others any amount of time in between there :)). If you are prepared that it could take a while, this process may not become frustrating when it does, and if you find your house right away- BONUS!
Don’t let your orange pantry door be an idea… make it a reality and go find your new home!
Are you ready to increase your wealth? I know I am. Over the next five years, home prices are expected to appreciate 3.24% per year on average and to grow by 21.4% cumulatively, according to Pulsenomics’ most recent Home Price Expectation Survey.
So, what does this mean for homeowners and their equity position?
As an example, let’s assume a young couple purchases and closes on a $250,000 home in January. If we look at only the projected increase in the price of that home, how much equity will they earn over the next 5 years?
Since the experts predict that home prices will increase by 4.0% this year alone, the young homeowners will have gained over $10,000 in equity in just one year. Holy COW!
Over a five-year period, their equity will increase by over $43,000! Holy FREAKING COW! This figure does not even take into account their monthly principal mortgage payments. In many cases, home equity is one of the largest portions of a family’s overall net worth.
If you already own a home, you have started on a great path to future wealth, so think about an investment property to help increase stability in your financial future. This is what my husband and I are going to do this year, finally, how can we not? I know it means we may not get to remodel the house this year, but it is the financially smart thing to do. Being financially smart may not fulfill my instant gratification needs, but in five years I will be very happy!
Not only is homeownership something to be proud of, but it also offers you and your family the ability to build equity you can borrow against in the future.
Whether you are buying or selling a home, it can be quite an adventurous journey; you need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.
The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened, due to the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.
1. What do you do with all this paperwork?
Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.
2. Ok, so you found your dream house, now what?
According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you acquire your dream?
3. Are you a good negotiator?
So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.
4. What is the home you’re buying/selling really worth?
It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $185,000 compared to $245,000 among agent-assisted home sales.”
Get the most out of your transaction by hiring a professional.
5. Do you know what’s really going on in the market?
There is so much information out there on the news and the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?
Dave Ramsey, the financial guru, advises:
“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”
Hiring an agent who has their finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.
You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a Real Estate Professional?
“Why aren’t you using a real estate broker to help you make your offer?” I asked the man on the phone. I often hear of Sellers wanting to do a For Sale By Owner (FSBO), but rarely hear of a Buyer doing it on their own.
“Because I want to use the Buyer Broker’s commission to make my offer stronger.” Ah, I see.
“Did you know that the Listing Broker (in this case me) decides how the commission is disbursed to the Buyer’s Broker?” That gave him pause. I could be greedy and take all of the commission the Seller is willing to pay me if there isn’t a Buyer’s Broker, but I wouldn’t.
I am worried about this Buyer. The market is full of multiple offer situations. How is he going to know how to make his offer the strongest?
1. Does he know that the Sellers want to close earlier and rent back until the 18th?
2. Does he know what an escalation clause is?
3. Does he know that offering too high can keep the home from appraising at the value the bank is willing to give a loan?
4. Does he know that there are ways the Buyer can address a low appraisal and still keep his offer strong?
5. Does he know that he should probably waive certain contingencies to be competitive?
6. Does he know what a pre-inspection is and if the Seller has done one or how to get one done himself?
7. Does he know how to negotiate inspection items if he does an inspection?
8. Does he know what a review date is?
9. Does he know that the lender he chooses makes a difference?
10. Does he know what Earnest Money is?
11. Does he know how much Earnest Money to offer?
12. Does he know the number of days stated on the contract are counted in different ways depending if it is more than 5?
13. Does he know what would cause a default of the contract?
14. Does he know when to present the offer?
15. Does he know real estate agency law?
These are just some of the things that would be good to know when making an offer. In the market we are in (a strong Seller’s market), people who have amazing brokers don’t all win the house they want because there are too many Buyers and not enough homes at the same time. Wouldn’t you want to know everything possible to give the best offer possible and live in the house of your dreams?
Go find a real estate broker who will work their pants off to get you that home! Well, maybe they should probably keep the pants on…that would be awkward.
Sellers, it continues to be an amazing year for you folks. Buyers are begging to see your houses and can't wait to pay top dollar with the least amount of contingencies in their offers. You are also doing a great job getting your houses ready. You are making the choice for Buyers to offer easy when you change out the old carpets and put on a fresh coat of paint. The clean landscaping and the staging you are allowing me to put in your homes is giving the Buyers to get a warm, cozy feeling. The pre-inspection and fixes you did based on that inspection helps the Buyer feel better about offering without and inspection.
And for those of you Sellers not willing to do some work or put money in to get the home ready, yet pricing it at top dollar, don't be surprised when it doesn't sell in three days like your neighbor's did. Buyers are starting to understand what market value is these days, and yours is below market value!
After losing out on a couple of homes, Buyers learn what they need to do to get the house they want.
Here's the thing, Buyers, the Eastside Seattle Market is VERY competitive. At first you want a screaming deal, but nothing you like is in the price range you have set. Next you want a good deal, but everything you see is overpriced or needs $100K in upgrades to make it livable. Finally, you will realize you should have paid full price for that house you thought was overpriced a few weeks ago because a similar house nearby is now $10K more expensive with a smaller yard.
I have a client who bought a condo in September for $350K. A similar condo is on the market today at $435K. Holy cow! She is thanking her lucky stars (and me) that she didn't wait to see if something better came along.
It's a jungle out there for you, Buyers, but I can help you understand the market. Allow me to give you the stats and information so you can be the best prepared Buyers out there. Call me soon since real estate economists say prices are going to continue to climb and interest rates will most likely go up as well by the end of the year.
And Sellers, I'll explain to you how to be the best listing on the block so you can sit back, relax, and enjoy the ride!
~~It’s a tough go for Buyers right now in Seattle. The inventory is very low, and when they like a house so do 12 other Buyers. This market requires Buyers to pay for pre-inspections so they can waive it for the offer. One of my Buyers paid for 4 inspections before they finally got mutual acceptance on a home. I have heard of people doing many more than that even. People are waiving all kinds of contingencies that protect them like financing, appraisal, and title, and it’s insane when this is probably their largest investment.
Now a couple of my clients have informed me that they are tired and need to regain their strength before they attempt to tackle the market in the late Summer or early Fall. I don’t blame them, but I wonder if it will be any better at that time since everyone seems to want to take a break right now and start again when the market cools after Summer.
I also worry about interest rates that have been creeping into the low 4%’s within the last few weeks. That can make a difference for some as to whether they can afford a monthly payment.
AAAARGGHHH! It’s all so frustrating. So let’s look on the bright side of life in Seattle.
Literally, as I write this, it is so darn bright outside at 86 degrees in June. LOVE IT! Everyone is out enjoying the day in their slightly wrinkled summer clothes they just pulled out from the box under the bed.
I have lived here close to 20 years, but I grew up in Sacramento where my father wouldn’t even go bike riding until it hit 100 degrees. Luckily we had a pool to come home to or the American River a block away. I still love the heat and the sun. So why don’t I go back to my hometown? Well, let’s get back to the bright side of life here in Seattle: we actually have water. Not as much as we have had in the past but way more than California! See? Glass half full! (of a Mojito, preferably)
No place is more beautiful on a sunny day than Seattle. We can enjoy the large bodies of water all over the place or hike in the gorgeous mountains that have miles of trails to enjoy. I have an outdoor porch upstairs on my house and it is like sitting in a treehouse. In the Spring the flowers are in full bloom exploding with color. This morning, while many of the flowers have moved on, the yard is full of green, green, green. And the colors in the Fall? My favorite time around here because orange is my favorite color of all. Winter is a bit gray and naked in Seattle, but that just reminds us to bundle up on the porch with hot coffee.
So, I understand why people want to buy a house here. It is a great place to live, work, raise kids, be active, and relax all year round.
Hang in there, Buyers, the right house will come along soon and you will be glad you decided to be a homeowner in Seattle.
P.S. Seattle Sellers, call me, I have 10 Buyers for your house!
~~Dear Seattle Buyer,
Thank you for choosing me to help you find a home, but I would like to apologize for a few things in advance.
1. I am sorry that you have to pay so much this year for a house that was 24% cheaper three years ago.
2. I am sorry that we don’t have many great homes to choose from. Actually, let me edit that to I am sorry we don’t have many homes to choose from, great or crummy.
3. I am sorry that international buyers are coming in with their cash causing you to lose the last three homes you have offered on. And they’re not even going to live in the house, it’s just an investment property to them.
4. I am sorry it has been 6 months since we started looking instead of the 2 months you were hoping for.
5. I am sorry that you have to decide to waive protective contingencies in order to be a contender in the multiple-offer scenarios that we always are in.
6. I am sorry that only one person has called me for the letter I sent out to the 100 houses in your favorite neighborhood, but at least we got that one call and there is a possibility it could work out.
There are also some things I am thankful for:
1. Because it has taken so long to look for a house, I have been lucky to get to know you and your family so well. A friend once told me that strangers are just friends I haven’t met yet. I have become good friends with most of my clients and I am grateful for every one of them.
2. Thank you for having trust in me when I am giving you advice.
3. Thank you for the laughs.
4. Thank you for the referrals.
5. Thank you for being loyal.
I look forward to many years of working with you and being a part of your lives.
Open houses are a staple in the real estate business. It allows people to preview a home without a real estate broker to let them inside. For real estate professionals, it creates an opportunity to sell their listing, meet neighbors for future listings, or meet Buyers who don’t have an agent yet.
Some people love to go to open houses as a weekend activity even when they aren’t actively shopping for a home. Isn’t it fascinating to see how other people, especially neighbors, decorate their homes? Whenever I do an open house, I have my husband and kids bring me a coffee. That’s just a ruse to get him to see the house so we can get ideas for our own home: “See, honey, we can just blow out the wall between the kitchen and the dining room, add four feet off the back of the house, change the entire layout of the kitchen, and it would look just like this amazing house. Easy, right?”
I’m the type of person who doesn’t like to get bombarded by sales people at the retail store, but I also expect to be noticed so being greeted when I come in is appreciated. That is what I do when I host an open house. I welcome the people into the home and then allow them to browse at their leisure. I always offer to answer any questions they may have as they are going through the house, and asking questions is a good idea.
The broker knows a lot of details that aren’t listed on the flyer like when the roof was done, if the water heater or furnace has been replaced recently. Also, asking questions about the neighborhood is smart. Maybe the broker happens to know the next door neighbor or knows the best route for a run. Are there a lot of children on the street? Do they have neighborhood activities?
When going through the house, go ahead and open all of the doors. See inside that tiny door under the stairs or look at how much space is in the pantry. You may find some cool features you didn’t know about unless you had been curious. My kids are experts at finding the “secret doors” of a house and whenever there is one, that’s the house they want. Sorry kids, we’re staying put.
Do you like facts and figures? Some brokers will have statistics about the neighborhood real estate market at the open house: how fast homes are selling, what price range sells the best, what month was the best in sales, etc.
A good broker will make the open house worth your while with a plethora of information. And some even have treats! So, relax, be curious, ask questions… and eat.
~~My own personal style when it comes to clothes, music, cars, and home décor leans toward simple lines and classic styles. The Audrey Hepburn sheath dress, songs from the 70’s/80’s, the Ford Mustang, a retro-style home are all things that I enjoy. So, when I walk into a home that is decorated as if on the set of My Big Fat Greek Wedding, I am fascinated. It is a style I do not understand and I think it is because, as I said, I like things simple and ornate, large décor is never simple.
Today I showed a condominium with grandiose fixtures and furniture that conflicts with my own style, and as it happens, my client’s as well. The 1013 square foot condo was filled with overstuffed, ornate furniture which made the room feel smaller than it was. The small kitchen had a large chandelier dripping with plastic jewels, and every room was decorated with large, colorful (often gold-leaf) accessories. My first thought was, “Holy cow!”
When a home’s décor conflicts with the style of the client it can be a deal-killer and I need to help them see beyond the Corinthian pillars in the kitchen (or help them to see the pillars as the case may be). First off, paint. Paint is cheap and can transform a room instantly. Secondly, furniture obviously changes the look of a room and the client will be bringing their own furniture. Also, changing out fixtures is easy to do and the chandelier or wall sconces you removed can be sold on Craigslist pretty easily. Someone else out there has that same style, if you can imagine.
My clients would like their son to see the condo when he returns from out of town on Monday. I am already armed with suggestions to help him see past the King Henry the VIII bedroom set since I know he is a young, hip guy-about-town.
So, when looking at a home, attempt to see past what is in front of you if it is undesirable. Can you see a different paint color? Can you see how your furniture would be set up? Can you see your mementos displayed throughout the home? Maybe not at first, but I will definitely help you try.
And when you are ready to make your move I will help you carry the paint over to your new home in my convertible Mustang with Journey blaring out of the speakers, my classic pony tail whipping in the wind.