Archive for August, 2007|Monthly archive page

Please don’t call me a “salesman”

You won’t see my fancy new luxury car waiting in the drive-through line-up at your local coffee stand…because I don’t have one. You also won’t see a tacky magnetic door sign with my cell number on the side of the car I do drive, nor will you catch me wearing my name badge at the grocery store. I’m not a salesman, and I don’t expect people to ask me to help buy or sell their home simply because they see I’m in real estate. If I wouldn’t approach a complete stranger and ask them to coordinate the purchase or sale of my biggest asset, why should I expect anyone else to?

I drive a domestic sedan. It’s comfortable, economical, and unpretentious. In the past 6 months, I’ve heard two different clients and one acquaintance, all fellow Gen-X’ers, express discomfort at being chauffeured around in luxury sedans by other agents. When asked why they felt that way, each responded with something similar to, “How many of their car payments would I be making if I bought through them?” I’ve often wondered if one reason many of my colleagues drive higher-end cars is related to the old-school fallacy that professional competence (hence “success”) can be judged by the kind of car one drives.

Whether or not someone agrees with my perspective, one thing is certain – times are changing!

We’re entering an era where modesty, conservation, and access to information have begun to trump decadence and status quo. Prospective buyers and sellers have greater access to real estate information today than ever before. And while not all available information can be considered “good” by professional standards, many consumers are learning that buying or selling a home is not rocket science. As a result, the commissions paid to real estate agents and their brokers have come into question. For this reason especially, it’s important that my clients see me for what I am – a young professional working hard to help them meet their goals – not a slick overpaid salesman looking for the source of his next $800 car payment. (“Hey, it’s a tax write-off!” Congratulations.)

generational study completed in 2005 by Fairleigh Dickinson University‘s Silberman College of Business shows that my values and those of the clients I mentioned above are shared by most in our generation. According to the study, those born between 1965 and 1980 (commonly referred to as “Generation X”) tend to be much more skeptical and financially conservative than their parents.

It’s nice to know I’m in the majority for once in my life. 🙂


Out-of-pocket costs when buying a home

The Costs of Homebuying

In the process of buying a house or condo, there are generally three times you can count on getting out your checkbook.

  1. Making the Offer/Earnest Money – You’ve found what you hope will be your new home and have decided to submit an offer. To show the seller you’re serious about purchasing the home, you’ll need to make an earnest money deposit. This amount is typically 1-3% of the purchase price, and is usually submitted to your agent when the offer is made or (at the latest) 2 days after the seller accepts your offer. If the offer isn’t accepted, the earnest money is returned to you. If the seller accepts, the money is deposited in a trust account where it’s safely held until closing, at which point it’s applied to your closing costs or refunded to you (the latter if you finance your closing costs as part of the mortgage or if they’re paid by the seller). And if along the way you decide the home isn’t right for you, there are several ways you can legally terminate the offer and get your earnest money back. (I feel another post coming on…in the meantime, contact me or ask your agent for details.)
  2. The Inspection – I would never buy a home without first having it inspected, and I counsel my clients to do the same. Inspectors look for problems with the home’s major systems including plumbing, electrical, roof, foundation, siding, etc. and recommend remedies for any issues they find. The cost depends on the home’s total square footage – approximately $200-250 for a small studio condo up to $350-400 for a 3,000 sq. ft. house. Get referrals for good inspectors from family, friends, and your agent. Increase your chances of getting the seller to fix what’s really important by prioritizing what you ask for. (Don’t expect a seller to fix every item in the inspector’s report, especially when buying an older home. If you do, you may find they won’t agree to fix anything.) Issues like water in the crawl space, a leaky roof, presence of rodents or other pests are major issues that should definitely be addressed.
  3. Closing costs – “Closing” is when the ownership of your new home is officially transferred from the seller to you. Sellers will sometimes agree to pay these costs (usually 2-3% of the purchase price), especially in a buyer’s market. These costs can be generalized into three categories:  
  • what you’re charged by your lender for borrowing the mortgage money (approximately 1-3% of the loan amount);
  • what you’re charged by your lender for establishing the loan (this includes appraisal fees, mortgage insurance premiums, prepaid property taxes and loan interest);
  • and what you’re charged for title insurance, deed transfer and recording. (Title insurance costs pay for the search of public records to determine if the property is free from any other ownership or liens. Transfer and recording fees cover the transfer of taxes and the legal recording of the deed with the appropriate governmental agencies.) 

If the seller is not paying your costs and you’re not financing them as part of your loan, your earnest money deposit will be applied toward them at closing. The difference between your earnest money deposit and total closing costs will represent either additional money you’ll need to bring to the closing table or a refund you’ll receive after.

Questions to ask before buying a condo

You’ve found a condo that you could call home. You like the layout, can live with the square footage, and have already started placing furniture in your mind.

However before writing up an offer, there are a few important questions you should ask your agent.

  1. What is the level of owner occupancy in the building, and what level does my lender require? An owner occupant lives in the unit they own, rather than renting it to a tenant. Many lenders require a certain percentage of owner-occupants before they’ll agree to finance you. The exact percentage required will vary by lender, but I’ve seen this range from 50% to 80%. Why do lenders care? Pride of ownership. Owners are more likely to maintain their homes and the building as a whole better than renters would. If you default on your loan, the lender wants some assurance they’ll be able to sell your unit – a task made easier if the complex is well-maintained.
  2. Is there any pending litigation? It isn’t uncommon for condo associations (particularly in newer buildings) to have lawsuits pending with contractors. The lawsuits typically involve alleged errors made during construction or renovation. Many lenders will not agree to finance your purchase if litigation is in process. Why do lenders care? If the condo association doesn’t win the lawsuit and doesn’t have sufficient money in reserve, a special assessment may need to be levied. Each unit owner will then be required to contribute a certain amount of money (above and beyond mortgage payment and standard homeowner’s dues) to fix whatever issue the lawsuit attempted to address (defects with the building’s roof, siding, structure, etc.). As this scenario can significantly impact your ability to make the mortgage payment, your lender would prefer to avoid it.
  3. And finally, have any other written offers been received? Before having your agent write and submit an offer, make sure she/he has been in touch with the seller’s agent to find out if any other offers are currently on the table. Inexperienced agents sometimes forget to get this question answered before taking the time to draft an offer.

Buyers: What to avoid once you’re pre-approved for a mortgage

Here’s an account of interactions I had with three different first-time buyers this summer. The advice I gave these clients may be useful to other buyers as well.

Clients A: Happy couple with newborn

Shortly after they were pre-approved for their mortgage, I got an e-mail asking if they should buy a car (apparently the back seat in one of their vehicles wasn’t set up to accommodate the new baby seat they needed).

I responded with a resounding NO.

Some first-time buyers don’t realize that getting a pre-approval doesn’t guarantee they’ll be approved for the actual loan. “Pre-approval” simply means that the lender has taken a snapshot of credit, income, debt, and assets at that particular point in time. If this “snapshot” changes significantly between the pre-approval and when the buyer(s) attempt to close on the loan (i.e. house is found, offer is accepted, and application is finalized), the lender may decide to loan less than originally quoted (or may even withdraw the loan offer completely).

If my clients had purchased a car, their debt would’ve increased significantly though their incomes remained the same. This would very likely result in the lender reducing the amount they were willing to finance – if my clients had been pre-approved for $350k they might actually only have received $300-325k. (As debt increases and income remains the same, lender risk also increases because the borrower is now responsible for paying out more each month from the same pool of income. To mitigate their risk, lenders will lend less.)

Client B: Happy single guy

We found the condo he wanted and got his offer accepted. He had already scoped out where his big new LCD high-definition TV would go. Luckily he waited until after closing to buy it, for the reasons I gave above. One might think a lender wouldn’t notice a couple thousand dollars recently added to a credit card when finalizing a loan. This may be – but with mortgage credit standards tightening by the day, is it worth risking it? Wait until after the home is actually yours before you start decorating it.

Clients C: Happy newlyweds

These clients were tempted to do something many do when trying to clean up their credit: payoff and close credit cards. So why did I stop them?

Paying off balances (or even just reducing them below 1/2 of the total credit available) is great. Closing the cards is not. If cards are closed, your payment history will eventually fall off your credit report. When applying for a loan, you want as much of your credit history to show as possible.

To really clean up your credit, you need to understand how it works. Your score is influenced by two things: frequency of use and balance carried. If you use credit frequently and carry a balance greater than 50% of your available credit, your score will suffer. If you use credit frequently and carry a balance less than 50% of your available credit, your score will improve (especially if you pay off this balance every month).

Spotlight on Bothell Business: Tru*Health, Inc.

Tru*Health Inc. in Bothell

I first came in contact with Tru*Health owners Kasara D’Elene and Jeff Foster about two years ago when I was preparing Thanksgiving dinner for a few friends with food allergies. I needed a natural non-sugar sweetener to bake a few pies, and wasn’t sure where to find it. One day while driving home I spotted a sign for natural health products at the intersection of Bothell-Everett Highway and 180th St SE, and decided to pull in and see if they had what I needed. As I stepped inside I was greeted by friendly faces and a plethora of organic herbs, supplements, and food items. They had all I needed and more – I left with some agave nectar (a natural sweetener), a whole organic turkey, and a tub of non-hydrogenated vegetable shortening. 

Tru*Health Bothell - Front Entry          Tru*Health offers a variety of quality nutritional products          People, Animal, and Environment-Friendly Beauty Products

I was surprised to find many of the same products at similar or lower prices than those at larger retailers. Apparently general manager Jeff has a knack for finding high quality products at low prices. And he and Kasara take product quality very seriously – they don’t sell any products they wouldn’t use themselves. They also won’t sell any supplements without first being able to visit the lab they’re produced in.

Tru*Health doesn’t sell any herbs or supplements the owners wouldn’t take themselves

Founder Kasara has extensive knowledge of and passion for natural health, and answers questions on the topic with enthusiasm. She has a long list of credentials including Licensed Traditional Naturopath (N.D.), Master Herbalist, Certified Natural Health Professional (C.N.H.P.), and a Bachelor’s of Science in medical technology. When I learned what brought her to the natural health field I began to understand her great enthusiasm for learning.

In 1993 Kasara became very ill. Despite following the instructions given by practitioners of conventional medicine to the letter, her illness and pain persisted. She had slightly better luck when visiting a chiropractor and an acupuncturist, but after a short time found that their methods treated the symptoms of her illness but not its cause. At the end of her rope and unsure what to do next, she received a referral to nationally-known herbalist Lawanda Stauffer. By the end of the first week in Lawanda’s care, Kasara’s pain was gone. Within one year, her symptoms had completely disappeared. There was no longer any question in Kasara’s mind about the power of herbs to heal. She wanted to learn what Lawanda knew, both to ensure her own future well-being as well as to help others achieve the results she had.

From the trunk of a car to a storefront in Sunnyvale, California to its current location in Bothell, Tru*Health is now in its third incarnation.

In addition to high quality organic herbs and supplements, Tru*Health also offers organic food items and professional holistic health consultations. You can find out more at Tru*Health’s website or by clicking here to view their online brochure.

Mention and receive $5.00 off your first purchase of $30.00 or more! (May not be combined with other offers.)

Tru*Health is located at 18001 Bothell-Everett Hwy Suite L, Bothell, WA 98012. Click here to view a map.

Summer hours are Mon-Fri 10:00 AM to 6:00 PM and Sat 11:00 AM to 4:00 PM. 

Phone: (425) 415-8410 or (800) 242-7165


E-Mail: truhealth (at) truhealth (dot) com

Bothell Real Estate Recap – July 2007

Here’s a recap of what happened in the Bothell, Washington real estate market in July 2007. The area this information pertains to is shown on the map to the below (provided courtesy of the NWMLS). Though slightly cut-off, this area’s southwestern border is Hwy 522 (east to west) and 68th Ave NE in Kenmore (north to south). Click on the map to enlarge.

Bothell, Washington Real Estate Market Area, according to the NWMLS


Single-family resale homes  Slightly fewer houses sold for negligibly less money in July, but took about three weeks longer to sell than those in June. Though there are slightly more buyers buying this year, there are many more sellers selling. The results are longer market times/cooling prices for sellers and greater selection/ability to negotiate for buyers.

If you’re planning to sell your home, it’s crucial to allow no less than 90 days. The average market time our area was 83 days last month, but (to echo what I said on last month’s recap) in order to sell within this timeframe your home has to be priced very competitively (i.e. 5-10% less than any brand new homes in your neighborhood, and lower than 80% or more of the homes that are direct competition to yours). With a few exceptions, no experienced agent will agree to market your home for less than 90 days given current market conditions (doing so would be a disservice to you). And while selling your home without professional representation (“For Sale By Owner”) has always been possible, it is much less likely at this time given the swell in housing inventory. Understand that buyers are still buying (the sky is by no means falling) – the Seattle market is just returning to a level of “normality” that we haven’t seen in several years.

The buyer’s market continues for this market segment.

Resale condos – Sales were down slightly vs. June but up significantly vs. last year. Condos sold about 2.5 weeks quicker last month than in June, and prices increased between 10-13%. Even more than last month it’s a good time to sell your condo and upgrade to a detached home, or roll it into another investment property via a 1031 tax-deferred exchange. Like I’ve mentioned before, the current buyer’s market means your condo’s equity may get you more home than it would have in the past. For investors, low vacancy rates all around the Sound bode well for rental demand and income. Seller’s market in this segment.

Newly-built single-family homes – Sales were up vs. both June and last year. Prices dipped very slightly, and more homes sold on the lower end of the price spectrum than the upper. Seller’s market continues in this segment.

New condos –  Sales are down vs. June but up vs. last year. With fewer units sold in July, the median price decreased and the average increased compared to June. 

Resale single-family and condominium homes: (“Resale” means pre-owned/not newly built.)

  • A total of 301 resale homes were listed for sale last month – 51 of these were condos. This brought the total number available to 963 in July.
  • 188 of these homes sold – 28 were condos.

The median selling price* of resale single-family homes was $466,592 in July, down less than 1% ($3,408) from June’s $470,000 median. The average sale price was $509,011, down negligibly ($246) from June’s $509,257 average.

The median selling price* of resale condos was $261,475 in July, up 10.5% ($24,745) from June’s $236,730 median. The average price was $276,188, up 12.7 % ($31,041) from June’s $245,147 average.

* “Median” means half the homes sold for more than this amount and half sold for less than this amount.

  • Resale single-family homes sold in July were on the market an average of 83 days – three weeks longer than in June and nearly twice as long as in July 2006.
  • Year-to-date, resale single-family home sales (in terms of total sold) are nearly exactly what they were at this time last year. (From Jan. 1 through the end of July 2006, 1,035 homes had sold; as of the same time last month, 1,034 sold.) 
  • Resale condos sold in July were on the market an average of 46 days – 17 days shorter than in June and 32 days longer than in July 2006.
  • Year-to-date, resale condo sales are 65% greater than last year at this time.

Newly built single-family and condominium homes: 

  • A total of 87 new homes were listed for sale last month – 26 of these were new condos. This brought the total number available to 495 in July.
  • 58 of these homes sold – 1 was a condo.

The median selling price of new single-family homes was $509,950 in July, down less than 1% ($1,750) from June’s $511,700 median. The average price was $548,891, down 2.5% ($14,297) from June’s $563,188 average.

The median selling price of new condos was $272,950 in July, down 7.6% ($19,173) from June’s $253,777 median. The average price was $272,950, up 7.1% ($18,107) from June’s $254,843 average.

  • New single-family homes sold in July were on the market an average of 129 days – 28 days longer than in June and 57 days longer than during July 2006.
  • Year-to-date, new single-family home sales are up 16.9% compared to the same time last year.
  • New condos sold in July were on the market an average of 48 days – 6 days shorter than in June and 6 days longer than in July 2006.
  • Year-to-date, new condo sales are up 5.9% compared to last year.

Could this data be presented in a way that’s more visually appealing and/or understandable? Do you have questions about how to interpret what’s been presented? Please let me know by leaving a response below, giving me a call at (206) 465-3698, and/or sending an e-mail to jay (dot) matthews (at) century21 (dot) com.  I’m also happy to provide the same data for specific neighborhoods outside the Bothell area by request.  

This data was taken from reports published by the NWMLS.

Fed leaves interest rates unchanged

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At its meeting today, the Federal Reserve board voted unanimously to leave short-term interest rates unchanged despite the choppy waters some financial markets are moving through. The Fed has left the federal funds rate, currently 5.25 percent, unchanged for over a year.

This is good news for well-qualified buyers currently searching for a home, as it means the cost of financing will not likely increase in the immediate future. However as time goes by and the sub-prime meltdown continues, lenders may raise rates to maintain profit margins. If you’re shopping for a house, get a rate lock and move quickly to get your offer accepted.

Yes, we’re in a buyer’s market – but think carefully whether haggling with the sellers over a new hot water heater is really worth paying a higher interest rate over the life of your mortgage. In the worn and tired words of Larry the Cable Guy, “Git ‘er done!”

Source: Associated Press

Bothell Places: The Ananda Meditation Temple

Ananda Meditation Temple (front entry)On several occasions while driving home along the Bothell-Everett highway, I’ve noticed a unique building with a cobalt blue roof and a single clear spire. At first I thought it might be an Eastern Orthodox Church, the spire reminiscent of the architecture in Moscow’s Red Square. On a sunny day toward the end of last week, I decided to pull in and find out exactly what it was. As I got out of my car I saw a sign directing me to the reception area. Camera in hand, I went inside and introduced myself.

At the desk I met a very nice lady named Jacqueline Snitkin, who in turn introduced me to Institute Director Hriman McGilloway. Both were very agreeable to having me tour the Temple and take photos. Because I forgot to make notes as Jacqueline explained what Ananda is, I did some supplemental research at Ananda Online. According to this site:

Ananda is a worldwide group of individuals who share the search for higher consciousness and the ideal of service to others. Ananda, which means “joy” in Sanskrit, was founded in 1968 by J. Donald Walters (Swami Kriyananda) to support others in their quest for spiritual growth.

Ananda is based on the teachings of Paramhansa Yogananda, author of Autobiography of a Yogi. I’d heard of this book prior to my visit to the Temple, but didn’t know it was named one of the top 100 spiritual books of the 20th century. Apparently Yogananda was the first yoga master to permanently relocate to the West from India. He emphasized the “direct inner experience of God” in his teachings, which he referred to as self-realization

Bothell’s Ananda Meditation Temple (front view)

As I followed her into the temple itself, Jacqueline explained its design was conceived by a Swiss architect and was patterned after the Ananda Temple of Light in Assisi, Italy. According to her, “The dome represents the upward moving energy of spirit, the aspiration of the soul. I believe we respond to that shape and the space it creates from a deep place within ourselves. The blue cobalt is as well a color of higher consciousness. The cupola on the top of the dome represents the sharing of the light of wisdom with all.”

Within the Temple (looking toward entry)          Looking inside the Temple from the entry          The Five Masters of the Ananda Tradition         

She went on to say that the space is used for meditation and yoga classes as well as a regular Sunday service. I could see immediately how the serenity of the large, circular, well-lit room would be very conducive to these activities. The dome roof, with ethereal lighting and paint effects designed by Ananda’s Willow Kushler, looks like an upside down flower in bloom with the light from the spire as its stamen. To reinforce Ananda’s assertion that “All Are Welcome,” religious symbols from the Buddhist, Hindu, Christian, Judaic, and Islamic traditions appear alongside the Ananda symbol (shown below) in small recessed shrines all around the room. 

The Ananda Symbol

The Ananda Meditation Temple is located at 23305 Bothell-Everett Highway, Bothell WA 98021, and can be reached at (425) 806-3700. Reception, the book and gift shop, and the temple’s administrative offices are open Tuesday through Friday from 10:00 AM to 6:00 PM and Sunday from 11:30 AM to 12:30 PM. Sunday service begins at 10:00 AM. For information on current meditation and yoga classes and other services/activities, visit the temple’s website at