ComeBuyAHouse.com

 Whether you are buying or selling a home or just want to know what the current values are in your neighborhood, you will find our Free MLS Search and email reports to be a useful tool.  
The main use of our search is for buyers who can preview the market or actively search for their next dream home.  Yet that’s not the only purpose.  If you are preparing to sell you can see what neighborhood prices are, which homes are in competition, and how they are being marketed.  This information along with your ComeBuyAHouse.com team’s current knowledge of the market will be useful as you place your home for sale.    
Homeowners who want to stay put and just want to be in the know, can simply track the current neighborhood values accurately using MLS listing data.  
Sign up on our website anytime!   ComeBuyAHouse.com

 It is a bit of a buyer’s market in many areas, and some good deals are to be had!
In general, houses for sale are spending longer times on the market than in recent years, and some areas are showing signs of prices coming down. Buyers: sellers who need to sell quickly are selling low. Sellers: Fear not, you can add value to your property and negotiate in creative and
tangible ways.  
The mortgage market and interest rates are contributing factors to this market change.  (Please see the next article for mortgage market info.)
Still the house value trend in Seattle is good news. According to the Seattle Times, in the 2nd quarter of 2007, Washington State led the nation with 5 cities in the top 20 for appreciation, with the Seattle/Bellevue/Everett areas up 9.89%,
“Washington State led the nation with the number of cities in the top 20 for appreciation with five. In order, there are: Wenatchee (up 23.54 percent), Longview (up 13.6 percent), Seattle/Bellevue/Everett (up 9.89 percent), Tacoma (up 9.34 percent) and Spokane (up 9.3 percent). And, the state had no cities in the bottom 20, which were located primarily in California and Florida.”  Seattle Times
The rest of the Seattle Times article includes national information.  If you would like to have the entire article in print or via email, please send an email request to us at ComeBuyAHouse [at] gmail.com
——-Lynette and Larry
 

• The next time you order checks, omit your first name and have only your initials and last name printed on them.  If someone takes your check book they will not know if you sign your checks with just your initials or your first name, but your bank will.
• When you are writing checks to pay for your credit card accounts, DO NOT put the complete account number on the “for” line, but only the last 4 digits.  The credit card company knows the rest of the number and anyone who might be handling your check as it passes through all the payment processing channels won’t have access to it.
• Put your work phone number on your check instead of your home phone.  If you have a P.O. box, use that address instead of your home address.
• NEVER put your social security number on your checks.  You can add it if it’s totally necessary, but if you have it printed, anyone can get it.
• Photocopy both sides of all of the contents of your wallet–credit cards and ID cards, etc. You will remember what you had in your wallet, and have all the account numbers and contact numbers to call and cancel them or order replacements. Keep the photocopies in a safe place.  Also carry a copy of your passport when you travel at home or abroad.

What to do if your purse or wallet is stolen:

• We have been told that we should cancel our credit cards immediately.  The key is having the toll free numbers and your card numbers handy so you know whom to contact. Keep that information in a safe place.
• Immediately file a police report in the jurisdiction where the theft occured. This proves to credit providers that you were diligent and is the first step toward an investigation (if there is one).
• Call the three national credit reporting organizations immediately to place a fraud alert on your name and Social Security number.  Thieves can make a credit application over the internet just like you can. The alert means that any company checking your credit knows that your information was stolen and they must contact you by phone to authorize new credit.  There will be records of all the credit checks initated by the thieves purchases.

Important numbers:

• Equifax: 1 800 525 6285
• Experian: 1 888 397 3742
• Trans Union: 1 800 680 7289
• Social Security Administration (fraud line): 1 800 269 0271

Interest and Tax Deductions

If you itemize deductions on your federal income tax returns, you may be able to deduct all the interest you pay on your mortgage loan.  (We are not tax professionals. Please consult one for your own situation.)  I have created a table that shows actual interest rates you may be paying on your mortgage and the effective interest rate based on your tax bracket.  For example, you have a 7% mortgage rate and your tax bracket is 15%, then your effective rate is actually 6% after interest deductions.

Link to Table

Here’s a way to hold title to your primary residence as a married couple.
It has more protections than holding property as joint tenants.

This isn’t a suggestion or recommendation.  Check with your lawyer, accountant, etc.

Tenants By The Entireties

Lynette

Larry and I took an interesting class today with attorney Greg Ursich covering legal issues from purchase and sale to closing.  It covered title insurance, types of deeds, essential elements of a purchase and sale agreement, and avoiding misrepresentation. 

The new thing that I learned about title insurance that more people will come up against is this:  if you place a property into a trust, an LLC, or any other ownership entity AFTER the purchase, the title insurance coverage ends.  You can provide for continued coverage by contacting your title insurance company and obtaining a rider to transfer the title to the new entity.

It was interesting to get the information about each kind of title insurance–there are three–without the marketing bent of a title insurance rep.  Greg’s a lawyer who is often hired by title companies to handle legal issues that arise in this arena, so he sees not as a salesman, but as a practicing litigator, handling claims and problems. 

Title insurance is backward looking–not forward looking like most insurance–though there are some new provisions for identity theft and future encroachment.  Title is primarily research of the marketability of the title using recorded documents for the research.  I can get lots more detailed, but for a blog, I’ll keep this brief.  Title insurance tends to be rather dry till there’s a problem.  Any time you have a question, I’d be happy to talk it over with you, and either explain it myself, or get you in contact with one of our title partners.

Regarding deeds, there are three basic ones.  Warranty deed, the most common.  Bargain and sale, usually for lender owned foreclosures or estate sales.  Quit claim deed, with no warranties or covenants attached to it.  Add a spouse, or remove a spouse from ownership on a property using a quit claim deed, and it would be good to check with your title insurer to make sure you are still covered.

Regarding the purchase and sale contract, real estate agents have a license for a limited practice of real estate law. Limited because we are licensed to fill out standardized forms that have been painstakingly created by lawyers.  We are allowed to fill in the blanks, and create simple addenda with simple instructions like extending closing dates or instructions following inspections.  Custom instructions or agreements beyond the agents expertise should be created by a lawyer.  A real estate agent that writes anything into a purchase and sale agreement will be held to the same standard as a lawyer. 

Disclose disclose disclose is the mantra for a real estate agent, and incidentally for the seller of real estate.  I’ve been told by one of the area’s top lawyers that a seller need not disclose an issue in their home that has been fixed.  But Greg advises that it’s better to tell the buyer everything–the problem, the repair, the whole history.  More comfort for the buyer, more protection for the seller. 

All in all, a great class, lots of info, even better super agents.

Big topic of talk in our office and probably across the country. I’m sure more people in Seattle per thousand were thinking about this one– I just found out today that one in eight people in Seattle are real estate agents. -Lynette

NAR Responds to 60 Minutes’ May 13, 2007 Segment
CBS News Magazine Show Misses the Mark May 14, 2007

In the world of political campaigns, it’s a standard ploy to set the stage with an empty chair when one candidate refuses to debate his opponents. The CBS show 60 Minutes gave the NATIONAL ASSOCIATION OF REALTORS® the empty chair treatment in a May 13 segment that examined the impact of online brokerages on the real estate industry. The show featured interviews with a representative from the now-defunct eRealty and the president and CEO of Redfin, but no one from NAR, even though NAR twice offered and prepared Association spokespersons for interviews with Leslie Stahl. It was CBS that made the decision it would rather interview our opponents and let them make unanswered — and inaccurate and unfair — accusations about REALTORS® and NAR policies. The one-sided journalism and egregious errors served no one well, especially the once-vaunted news magazine show.

NAR staff spent nearly a year working with CBS, briefing producers on the issues involved. The producers attended the REALTORS® Conference in New Orleans and met with NAR’s legal counsel for half a day in Chicago. Yet, still the segment was full of major errors. NAR is in communication with 60 Minutes about its unbalanced reporting and presentation of misinformation and will be sending the CBS network a letter demanding an opportunity to correct these errors and misrepresentations.

Here are some examples of the misinformation:

Error: The six percent commission is “sacrosanct.”
Fact: All commissions are negotiable. The average commission rate is not 6 percent, but 5.1 percent, according to Real Trends.

Error: NAR is the industry’s “governing body.”
Fact: NAR is a trade association. It does not govern the industry.

Error: In 2003, NAR issued new rules of its own that threatened to block Internet discounters’ access to the MLS.
Fact: The Virtual Office Website policy did not block access to MLSs for discounters or any other brokers who are members of the MLS.

Error: The MLS is the database that lists virtually every home for sale in the country.
Fact: There is no single national MLS. Rather, there are more than 900 local and regional multiple listing services. These are not simply “databases” but private exchange of offers of cooperation and compensation between real estate brokers.

Error: Eight states have “minimum service laws” that require REALTORS® to provide a level of service many Internet discounters can’t afford.
Fact: “REALTOR®” is a trademarked term and should never be used synonymously with “real estate agent.” The intent of minimum service laws is to ensure consumers receive a minimal level of service from licensees.

Error: The brokerage industry has a powerful lobby. Eleven states flatly prohibit rebates.
Fact: The intent of anti-rebate laws is to prevent kickbacks in real estate transactions, not to limit brokers’ incentives to attract customers. The brokerage industry does not lobby for anti-rebate laws.

Other key points 60 Minutes misrepresented or overlooked: NAR supports all business models and favors none. Our 1.3 million members include REALTORS® who work on a full-service basis, as well as those who consider themselves to be limited service, fee-for-service, minimum service, and discounters. We think it’s great that consumers have a choice today.

The real estate industry has harnessed technology for the benefit of consumers and will continue to do so. Real estate is both high-tech and high-touch, so can be enhanced by both electronic and personal interaction.

There is no such thing as a “standard commission.” Commissions are negotiable and prices vary. The fact is that commission rates have decreased 16 percent from 1991 to 2004 (source: Real Trends).

The real estate business is unique in that competitors must also cooperate with each other to ensure a successful transaction, and MLS systems facilitate that cooperation. The first MLS was created more than 100 years ago as way for brokers to share their listing agreements with each another in hopes of procuring buyers for their properties more quickly and efficiently than they could on their own.

The MLS is a tool to help listing brokers find cooperative buyer brokers to help sell their clients’ homes. Without the collaborative incentive of the existing MLS, brokers would create their own separate systems, fragmenting rather than consolidating property information.

Three things to consider

We’ve found that when sellers choose a price in the current market range at the beginning of the listing period that takes into account the location, condition and appeal, their homes sell faster and for more money.  So we provide you with an in-depth analysis of the market value of homes in your area to help you decide on your selling price.

Homes that the seller has moved out of sell faster because the personality of the owner has left the building. If you have watched any HGTV shows about setting up a house for sale, you know that the way you live in a house and the way you show a house for sale are two very different things!  It’s much easier to keep the house ready to show when you are not living in it.  However, we totally understand that you may not be able to afford two houses at once, so we will help you strategize the best way to market your property around your own individual situation.

In addition, staging your home by de-cluttering, de-personalizing, and doing pre-listing fix up, will sell it faster.  Staging addresses all the senses as a buyer enters a home.  Sound, scent, space, light and textures all add to the ambience that welcomes a buyer home.  Melinda Knight, owner of MAK Promotions Design & Decorating, and a member of International Association of Home Staging Professionals gives these 10 reasons for staging your home for sale:

Ten Reasons to Stage

1.  Your house will sell faster than if it hadn’t been Staged 
2.  More buyers will find your house attractive
3.  The offers you receive will bring you the most money possible for your house 
4.  The best marketing tool available is the appearance of your house
5.  More agents are happy to bring their clients to view houses that have been Staged 
6.  Buyers will know your property has been cared for 
7.  Appraisers are more likely to appraise Staged houses for more 
8.  Buyers can more easily imagine themselves in your home
9.  The process of Staging and organizing makes moving a smoother process 
10. Knowing your home looks its best reduces the overall stress of selling your house

One additional thing to remember

Choosing an agent that creatively markets your home is key to a speedy sale.  We effectively capture the broadest range of today’s buyer market with our creative marketing  including access to a stager, open house events, blogging, online ads, web tour commercials, our own network of former clientele and coworkers.  Our monthly newsletter features our listed properties as well as the coolest houses for sale.

Today I spoke with the young lady at our optometrist’s office about the real estate market.  She asked how the market is, and then wanted to know if prices are going down.  I’m sorry, but the answer is no.  I haven’t really seen a bursting bubble. Prices will increase over time in the Seattle area at a rate of at least 7% a year.  That means that homes will be twice as valuable (or more), and yes, twice as expensive (or more) in ten years.  So that begs the question, when should you buy?  You should buy as soon as you are ready.

Think about this, though:  if all you are looking at is home prices, you are looking at only part of the picture, unless you have cash for the whole purchase price.  The other part of the picture is the rate/terms of your loan, or how much your money costs. 

See, you qualify for a payment amount when you are applying for a loan.  When the interest rate is higher, more of your payment goes to pay your interest, less to cover the house price, so you get less house.  The inverse occurs when the rates are lower.  We like lower.  So when you are ready to buy, the thing to watch is interest rates.  You also want a loan officer that will quote a reasonable rate (not the teaser that can’t possibly be honored) and keep you informed about rates until you are ready to lock it in, once you are under contract. 

Our friend mentioned that she might want to get a place with more bedrooms than she needed in order to rent to roommates.  I told her that there are loans that will use the rental amounts as income to help qualify the borrower.  Not all lenders allow that income to be used, but if you can afford a place then you use the rent income to give you a financial cushion, well that can be a good conservative move. 

Though it might start out a bit more expensive, the larger (3 bedroom) property appreciates at the same rate as others around it.  I would rather have the equity growth on a $300,000 house than a $200,000 house, yes?  And if you own a three bedroom instead of a two bedroom, and the next step in your strategy is to move up into a nicer place, it will be easier to sell.  Or rent.  Hmmmm…. another avenue to take. 

Another young future client is working with me on building her credit and job history right now, and plans to own a building that houses not only a dance studio, but apartments to rent.  These are ambitious plans, and what a great idea! 

I’m here to invite your questions and stories about your adventures in Real Estate. I’ll start you off with a question: How smoothly did your last real estate closing go, and what made it smooth or rough for you?