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Selling Your Home in the Winter

Many prospective sellers feel they should wait for spring to sell their home. They feel this way because of the seasonal downturn in the market and because homes don’t look as good without exterior flowers and plants and the general grayness of our part of the country. However, there are several good reasons to list your home during the winter. The most serious buyers will still be out there – those that need to buy because of job relocation or need different space. And inventory is at it’s lowest, giving buyers fewer choices, so your home will stand out more. Mortgage rates are expected to increase in 2015, so buyers may have greater buying power earlier in the year.

Real estate company Redfin analyzed homes listed from March 22, 2011 through March 21, 2013. They found that those listed in the winter have a 9% greater likelihood of selling, sell a week faster, and sell for 1.2% more relative to list price than homes listed other times of the year.

To sell your home in the winter, there are some key things to do. Keep your home warm and cozy – buyers need to be comfortable when they come in the house and the warmer it is, the more likely they’ll stay longer. Leave lights on and shades open to keep the home bright. Make sure the yard stays neat and the roof is clean. Stage the home and have professional photographs that show off the home at its best.

Thinking about listing your home this winter or spring. Give me a call or email to discuss a complimentary market analysis and marketing plan for your home.

Either Way, You’re Still Paying a Mortgage

Either Way You're Paying a Mortgage | Simplifying The Market

There are some people that have not purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent free, you are paying a mortgage – either your mortgage or your landlord’s.

As a paper from the Joint Center for Housing Studies at Harvard University explains: 

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

Also, if you purchase with a 30-year fixed rate mortgage, your ‘housing expense’ is locked in over the thirty years for the most part. If you rent, the one guarantee you will have is that your rent will increase over that same thirty year time period.

As an owner, the mortgage payment is a ‘forced savings’ which will allow you to have equity in your home you can tap into later in your life. As a renter, you guarantee the landlord is the person with that equity.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, owning might make more sense than renting since home values and interest rates are still at bargain prices.

Does it Matter Which Lender I Use?

Yes, and it matters more than you think. Buying a home will likely be the largest financial transaction of your life. Do you want to trust a random person on a website or at an 800 number, or someone you can call anytime (including evenings/weekends on their cell phone) or even meet with in person?

I am representing 2 buyers on transactions that close in the next few weeks. One is using a local mortgage broker and the other a large national lender. I also just had a transaction close with one of the big banks.

Here’s the main difference I have experienced with these different lenders – how well they communicate what’s going on with the loan. The local lender sends a weekly update on the loan; she also calls or emails relevant information as they come up. I was notified immediately when the appraisal came in (whereas the national lender never told us it was in or approved, we had to call repeatedly to learn that). With the national lender and the big bank, I had to reach out to both of them if I wanted any information. And it was hit and miss if a phone call or email was returned.

The most important question, of course, has to do with whether the lender can close the loan on time. While the big bank did close on time, it wasn’t because of their efforts. The bank wanted to extend closing; however, the buyer was adamant about the loan closing on time and between her and the escrow officer, they made it happen.

While I’m fairly confident the national lender will close on time, they are saying they wish they had more time (they already have 35 days). Local lenders are closing loans in as short a period as 10 days; 35 days should not be necessary.

You know the phrase “buy local,” let’s expand that to “mortgage local.” With the connection you make with the local mortgage officer (and with national lenders, there may be many different people you work with), you are more likely to have a smooth transaction. Plus, our local economy benefits when you mortgage local.

For a list of recommended lenders, contact me at jamie@jamieflaxman.com or 206-790-0081.

10 Home Selling Tips for the Fall

When listing your home during the fall, there are a fewthings to keep in mind to keep your home looking fresh regardless of the weather outside.

  1. As faldownloadl weather descends, leaves fall and plants turn in for the winter. I recommend a weekly landscaping tidy-up of the yard and plant beds, removing any dead foliage and raking the ground. In the event of a windstorm, additional yard tidying may be necessary.
  2. A clean roof is imperative for making the buyer feel comfortable in the stability of the home. Therefore, I also recommend that leaves and other debris are regularly cleared off.
  3. Since it is getting darker earlier, lighting is even more important. Outdoor lighting can be a great way to enhance the curb appeal of your home. Home improvement stores usually have outdoor lighting on sale or clearance this time of year and a small investment in a hard-wired system can provide quite an impact.
  4. Unless you will be setting the stage for each showing, I recommend keeping the lights on throughout the day. Although this may add a few dollars to your electric bill, in my experience this pays off in a quicker sale.
  5. Although you may keep more heat in your house by closing blinds and curtains, resist the urge to do so during the day. Buyers need to feel that a home is open and bright.
  6. In order to keep your house smelling fresh and clean, opening the windows once a week on a sunny day can help circulate the air. Changing the filters in the furnace or using a carpet freshener may also help although avoid strong-smelling air fresheners as many buyers are sensitive to these strong smells.
  7. Put out a welcome mat that actually catches dirt and rainwater before it enters your house. Even if we have a “please remove your shoes” policy, dirt and excess rainwater quickly can leave mud by the front door – not a great way to welcome buyers who come later!
  8. Resist the urge to turn the thermostat down during the day. Adjusting to below 68 degrees can make the home viewing experience uncomfortable which is not conducive to a home sale.
  9. If one of your heat sources is a non-wood-burning fireplace that comes on automatically if the temperature drops, make sure this is in operation as it provides wonderful ambience.
  10. If bringing out your winter clothes has your closet looking packed, consider removing some of the bulkier items to provide some breathing room. An overstuffed closet sends the message that it is not big enough to hold a household’s belongings, so you are better to store lesser-used items offsite while the home is listed.

There are many advantages to selling during the fall and winter months – with less inventory buyers are more serious about finding the right home and homes that stand out and look fresh will get attention. If you are considering selling your home, please give me a call: (206) 790-0081 or send an email: jamie@jamieflaxman.com.

Market Update

I have been so busy over the past week that I barely have time to write this post. Any question about how hot the market is? Here’s a story for you. Yesterday I submitted an offer on behalf of a client for a wonderful Phinney/Greenwood home. There were 9 offers including ours, and I believe all but one conducted pre-inspections. As one of the other brokers submitting an offer said, it was going to be a “blood bath.” Many of the offers had escalation clauses – and boy did it escalate. I can’t disclose how high it went until after the transaction closes, but my buyer did not have the highest – we came in 3rd. The offer that had the highest dollar amount had weak financing and wasn’t willing to do anything to change the financing situation; the next offer was only a few thousand more than ours but also had weak financing. MY CLIENT GOT THE HOUSE because she had strong financing (30% down and the lender talked with the listing agent) and my buyer was willing to come up a few thousand dollars more.

The bottom line. Financing is as important as price. And who the lender is may make a difference. My client’s lender was willing to go above and beyond to advocate for the client. On-line lenders and big banks often won’t do this. With them, you’re just one of hundreds of mortgages – personal relationships make a difference.

The bottom line. The market is still hot. A colleague had 11 offers on another listing. Inventory is low demand is still high.

Contact me at jamie@jamieflaxman.com or 206-790-0081 to discuss putting your home on the market or buying a home.

 

FICO Credit Score Changes and Mortgages

If you are considering a move and will be applying for a mortgage, you may be biting your nails wondering what your FICO (Fair Isaac Corp.) score means for your ability to borrow. Your credit score determines if you are given preferred interest rates, will have to pay more due to missed payments or a high debt to income ratio, or are able to qualify for a loan at all. The FICO credit score ranges between 300-850 and weighs payment history, amounts owed, length of credit history, new credit, and types of credit used according to myFICO.com.

Shockingly, one-third of Americans struggle to pay their medical bills each month and medical is the number one leading cause of bankruptcy in this country according to Forbes. Medical bills have affected the credit scores of millions. In fact, Forbes indicates 64 million Experian credit bureau consumers have medical collection on their credit report which impacts their credit score and their ability to get a loan. According to Anthony Sprauve, FICO’s director of public relations, 50% of all unpaid collection debt is medical debt.

Under the new FICO 9 credit scoring formula which is set to be implemented this fall, the impact of medical debt will be reduced and the average credit score will increase a median 25 points per person with medical debt but who are otherwise financially responsible with their bills. Additionally, medical debt that has been paid in full will not affect the credit score negatively at all.

The rationale for this change is that having one-time medical debt is much different than chronic credit card debt. However, more than 11 million Americans use credit cards to take care of medical debt each year. Under the new FICO rules, doing that would hurt their credit more than if they made a payment plan directly with the medical facility or medical collection agency.

Another change in the FICO scoring model is that past, closed debt associated with collection companies will also have a lesser-impact.

Steve Brown, President of the National Association of REALTORS®, welcomed the change, indicating it will “make a real difference in the lives of millions of Americans, who have been shut out of the housing market or forced to pay higher mortgage interest rates…since the housing crash, overly restrictive lending has been the greatest obstacle to homeownership.”

FICO 9 will change the credit scores of many.  While these changes seem like a step in the right direction, Fannie Mae, Freddie Mac, and a host of other lenders are still using older FICO scoring methods and have been slow to adopt changes in credit-scoring conventions. Therefore, although you may benefit from a better credit score under the new FICO 9 formula, your lender may or may not take the new formula into consideration when you apply for a loan. Additionally, some lenders already discount medical debt when determining someone’s creditworthiness.

If you have questions or concerns about your credit score, the time to talk with a financial professional who can get you on the right track to homeownership is now. I have lenders I can refer you to. Please give me a call: (206) 790-0081 or send an email to jamie@jamieflaxman.com.

Sources:

http://www.realtor.org/news-releases/2014/08/new-credit-scoring-calculation-will-improve-access-to-homeownership-say-realtors

http://www.forbes.com/sites/christinalamontagne/2014/08/26/medical-debts-will-soon-weigh-less-on-your-credit-score-but-theyre-still-a-problem/

http://www.housingwire.com/blogs/1-rewired/post/31236-adopting-fico-9-could-increase-first-time-homeownership

http://www.foxbusiness.com/personal-finance/2014/09/10/what-fico-new-credit-score-formula-means-for-home-buyers/

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

 

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Increasing Your Net Worth Through Real Estate

The majority of American households own a primary residence, but did you know that homeowners have, in general, more net worth than their renter counterparts?

The National Association of REALTORS® tracks the relationship between renting, homeownership, and net worth. Every three years the Federal Reserve conducts their Survey of Consumer Finances to collect the data which is then analyzed.  In the most recent survey completed in 2013, the data showed that the median homeowners ‘net worth ($200,000) was more than 36 times that of the median renter ($5,000).

Equity in a home (the difference between what is owed on the mortgage and what the home may sell for in today’s market) is one of the biggest drivers of net worth.  When a renter pays rent, no equity is created for the renter – that goes straight to the landlord’s pocket! But when someone has purchased a home that monthly payment usually goes to paying down the loan, creating equity. The homeowner also receives the benefit of property appreciation – and if they don’t refinance, the principle and interest payment stays the same* whereas a renter may be faced with annual rent increases.

Of course, there are pros and cons to either renting or purchasing a home and should be considered before jumping into a home purchase. Appreciation rates and rent rates change from area to area and even neighborhood to neighborhood! I would be happy to show you the possibilities. Please give me a call: (206) 790-0081 or send an email.

*Assuming a fixed rate loan. This does not constitute an offer for a loan nor is a guarantee that reader will qualify for such.

Giving Back

Anyone who knows me knows that I spent 25 years working for non-profit and community service organizations, primarily those focused on the needs of children, women, and families. Even though I’m no longer working in the non-profit sector, I still contribute a lot of time to organizations I care about, such as the Pancreatic Cancer Action Network, FamilyWorks, and Ingraham High School Auction. I also contribute financially to many groups, and am fortunate that Coldwell Banker Bain has a Community Partnership program that allows both Coldwell Banker Bain and I to provide additional financial support.

Through the Community Partnership program,Coldwell Banker Bain and I will donate 10% our share of the sales commission to the following organizations with which I have formal partnerships. All a client has to do is tell me they were referred by the organization.

Do you have a non-profit you’d like me to partner with? Give me a call or email and we can discuss it.

In addition, for any closing before December 31, 2014, I will donate $500 to your choice of the Fred Hutchinson Cancer Research Center or the Phinney Neighborhood Association. (This donation does not apply if there is a community partnership donation.)

Rental Registration and Inspections – Do They Impact You?

The City of Seattle has passed new regulations regarding rental property that are now in effect. The goal of the regulations is to improve and maintain the quality of Seattle’s rental housing over time. The program will benefit Seattle residents by:

  • Preserving neighborhoods and quality of life
  • Educating property owners, inspectors, and renters about the RRIO standards and encouraging proper maintenance of rental housing
  • Ensuring all rental properties meet the same minimum standards through periodic inspections
  • Creating clear communication methods between rental property owners and the City in the event of emergencies

The ordinance requires landlords to register all rental housing units, including single family homes.  The stated purpose is to ensure that all rental housing is safe and meets basic housing maintenance requirements.

Landlords must register their property according to the following schedule:

  • All properties with 10 or more rental housing units – By September 30, 2014
  • All properties with 5 to 9 rental housing units – By March 31, 2015
  • All properties with 1 to 4 rental housing units – Due date determined by zip code

The ordinance requires all registered rental properties to be inspected at least once every 10 years, starting in 2015.

The city website has more information about RROI, including fees and inspectors: http://www.seattle.gov/DPD/codesrules/licensingregistration/RRIO/aboutrrio/

What does this mean for buyers?

If you’re thinking of buying an investment property, a home with a legal ADU, or even a home with a non-comforing ADU, this impacts you. You will need to register your rental and adhere to the regulations and requirements for the conditions of this property. Here’s the link to the checklist.

What does this mean for property owners?

If you own a rental property, you will be required to register your property by the date listed above and meet the criteria as listed in the checklist. This includes legal and non-conforming ADUs, condos you’re renting, prior homes, and any other rental property. If you don’t want to do all this, maybe it’s time to sell.

Please give me a call at 206-790-0081 or email for more information or to discuss your situation and your buying or selling options.

All About Easements

You might have heard of an easement before or have one on your property. Basically, an “easement” grants someone else perpetual access to your property or through it without transferring ownership. Easement language in a title report (the report that defines the property’s boundaries, legal description, owners and any other pertinent information about the property) will define what individuals or entities have access and what part of the property has that access – usually defined on a property map submitted with the county or city, although in some cases, this is not defined.

But what exactly does it mean to have an easement? Below are some common questions I get about them:

I am looking at a property that has a driveway-type easement through it to the property behind mine. Since the easement is wide (10 feet), can I use it for excess parking? The neighbor can just let me know if he needs me to move my car.

No. An easement grants designated parties perpetual access. If your neighbor has to ask you to move your car, that is not granting perpetual access.

I have owned my home for five years which has an easement along the west side for the energy company. This easement is 10 feet wide. I would really like to put a fence up, but I don’t want to lose those ten feet of yard on the west side. Since they have never accessed it and there are no wires or underground cables, I can’t see why this easement exists. Can I put up my fence?

Although easements usually are permanent, they can be terminated in court if deemed to no longer be necessary. This may include access to wells which have long been capped or access for mining companies which have long since boarded up shop. However, you should assume an easement is permanent unless you take the action to have it removed and are successful. Otherwise you may spend thousands putting up a fence only to be told it must be removed.

I have a driveway easement running through my property that serves my property and the three homes behind me. There is no language on title regarding who maintains the easement, nor do we have a roads maintenance agreement. I have one neighbor who chips in for gravel but the other neighbors don’t, even when asked. How can I get my neighbors to chip in?

Generally speaking, if you don’t have a maintenance agreement and assuming their properties start where yours ends, you should each be responsible for 25% of the fees to maintain the road. However, this may or may not be enforceable in your area and you should check with an attorney.  There are court cases that have established the practice of maintenance sharing, but again, an attorney will be able to help you determine your next steps.

Easements can be tricky and when I am working with a buyer I always point out the easements that show up on the title report so he or she understands how the property can be used. Have an easement question? Please send it to me at jamie@jamieflaxman.com or give me a call at (206) 790-0081.