Archive for the ‘Seattle Real Estate’ Category

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. 🙂

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.

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

Summary:

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