Dec. 28, 2006 - Using the Internet to Find Property
Last night I ran to show a property that had come on market just before noon. When I returned home after writing the offer on it, I check it in a poplar map home search site (not Redfin) and it wasn't there! I was so HAPPY! And yes, no one else had an offer on it yet...probably didn't even know it was for sale yet!
Here is an article I wrote earlier this year that was helpful to many. I totally agree that this should not be the case, but for some reason it is. And my clients are very glad that it is true :)
When I picked my cateogories for 2007, I don't know what I was thinking when I picked First Time Home Seller. God, there is just so much to say there, and yet no one does.
Google "First Time Home..." and you will get more advice than you can filter through your brain on "1st time home BUYER". Some things on "1st time home OWNER. But not nearly as much on "First time home Seller".
Honestly, this is dangerous territory, because agents lie more to sellers than anyone else. Mostly because sellers create that "set up" by asking the wrong questions. You end up answering all of the seller's questions instead of telling them what they really need to hear. It's standard "modus operandi".
So let's start it off real simple.
Do NOT, do not, do not...tell the agent(s) you are interviewing, what you think your home is worth. We will beg, plead, coerce and generally do everyting we can to get you to spit out a number, before we give YOU a number. DO NOT DO IT!
Find an agent you trust. It seriously is that simple for a first time homebuyer. Undue Stress for a First Time Homebuyer boils down to two things. Fear of the Unknown and Fear of Commitment.
Finding the right professionals for you, and then trusting in them to make things as smooth and easy as possible sounds easier than it is. But once you do that, IF you can do that, you choose the Easy Way vs. the Hard Way. The big difference between War Stories and Success Stories is very often the agent.
I know that sounds self-serving, and anyone who reads me on a regular basis knows how hard it is for me to boil it down to that simple fact. But sorry, It's true. It just is.
The Escrow Process starts pretty much as soon as the offer is accepted, better term for that is as soon as the offer is signed around. Most often the offer goes back and forth a bit, and the "Time is of the Essence" dates start at the last initial date.
While it is true that this even begins a HUGE "to do" list, if you have the right professionals in place, most of that To Do List is not YOURS to do.
Seller: Start packing the things you are not going to need between today and when you move out.
Buyer: Order the Home Inspection and stick with your lender like glue until the lender needs nothing more from you to produce the loan docs.
Generally the agent for the buyer will open escrow for both the buyer and the seller. The agent for the seller will put the property as STI or Pending, relieving the seller from "calls to show". Many things take place in the "30 day" escrow period, but for the most part the BIG to do list is filled with things that the professionals need to do, and not things that the buyer and seller need to do until the week before closing.
How Much Should it BE?? Looking back over the year, I have used everything from $1,000 to $50,000. I haven't used less than $1,000 in over ten years, so let's call that the minimum. $50,000 means you you reall want this house and there's no chance in hell you are going to change your mind about that!
While the seller benefits little whether it is $1,000 or $50,000, the seller is still impressed by the big numbers. It tells them you are seriously committed to making it to the end. That is a very important message to send...when it is true. But if you have any reason to expect that you might change your mind, keep the number as small as possible...which is at $1,000.
If you exceed your cash needs at closing with the Earnest Money Deposit, you will get the difference back at closing, assuming of course, that you DO close.
Closing and keys should be simple if you follow these basic steps.
1) Closing generally happens in the late afternoon or evening, so sellers SHOULD take off from work and make sure the home is empty and clean by noon or so. Buyers should NOT take off from work and plan to move in the day after closing or the weekend following closing, if possible.
2) You sign your papers in advance of closing, so don't think the house is yours when you stand up from the table...that's East Coast, not West Coast stuff. West Coast is "escrow" where you sign days in advance of the actually transfer of property.
3) The key to the house is in that little blue box. If the seller's agent leaves the box on, your agent can get you in and the owner should have left all remaining keys and garage door openers, etc inside in a "pre-designated" spot. Easy...except when the agent takes the box off too soon...which is all too often. You agent can hand you the keys anytime after the call from escrow that says "property has recorded" UNLESS possession on the first page of your contract does not say "ON CLOSING".
It should come as no surprise to you that very often, the best homes sell quickly.
Sign up for two or three sites to email you listings as they come on market. I use two. I use the mls and I use searchingseattle.com I sign up AS my clients, so I can screen the homes. But my clients also sign up as most times I only email them the properties I am recommending. One thing I like about SearchingSeattle.com (my site) is that it has no "back door". I am not watching you look at homes, I am not capturing emails from there, and I am only contacted when you choose to contact me. No registration in the sense that I am adding you to some list of people to nag. The registration process is simply to provide you with emails when properties come on market. It also emails you to say 0 homes came up today.
Being the first to know is SO important, as it gives you ample time to view and consider the home. The biggest disappointments are usually when you are the 20th person to view, and the 3rd person to offer. Being first to offer often has its benefits, not always, but often.
I often receive questions like these, from people planning to purchase a property near Microsoft.
"1. I would like to buy a house in Redmond. In the past 2 years I have seen prices climb at almost record levels in Redmond. Since I am planning on buying soon, do you expect prices to fall in the next 2 years in the Redmond area? This would be key question I guess.
There were actually five questions raised by this person, four of which I answered HERE so as to isolate the value issues (except as to new vs. resale) in a separate article. To a large extent, trying to explain property value and appreciation potential to a consumer is like a person speaking Greek trying to explain something to a person who only understands Russian. Nodding yes and no being the only terms that seem to get through to the other side.
But let's begin with generalizing. I clearly would not presume to argue with the data presented by Forbes and Moody's below. However, if the prediction is that the market will go up 15% in the next two years, there is one house that will go up 3% while another goes up 25%. The 15% increase being an average or mean. Looking at the graph below to "feel good" about your decision to purchase, is not nearly as important as purchasing the house that will go up by 25% vs. the house that will only go up by 3%. Or worse yet, buying one of the few that may in fact go down in value, during the same period of time.
A Zonie by definition pretty much wants it all. They want to buy something that needs no work, looks like new, better yet IS new, is close to Microsoft and will have the most appreciation and, never go down in value. That my friends is "a bubble". That bubble will stay inflated as long as there are enough people who continue to bid out properties that match the "Zonie" description, and it will burst when those SAME people say so in unison. Zonies create the inflation and Zonies will in turn create the bubble's deflation.
According to the chart, that is not going to happen in 2007, but may happen in 2008, or more accurately AFTER the 2008 selling season. The way I read the chart, Spring and Summer of both 2007 and 2008 will bring more appreciation and on October 15th of 2008 the market will have become saturated as to appreciation for the most part, until 3/1/2012.
I added the dates...and that is my call. As with any "economic forecast", it's a prediction of what is to come. I think older as in REALLY older and not remodeled, is the safer bet. I think newer priced under $650,000 is the next safest bet. I think REALLY older but remodeled, is the LEAST safest bet and new over $930,000, in fact almost anything over $930,000 is the weakest link. I think anything less than $400,000 is a pretty safe bet, unless it is overpriced for what it is.
The question in the emails stated "I would like to buy a house in Redmond". If you are 90% sure that you will only live there for 18 months or so, you have to pick better than if you are 90% sure that you will not move for ten years. Every individuals risk factor varies on their unique circumstances and their TASTE in housing. This is a huge problem for EAL persons whose taste in interior finishes renders them more vulnerable to market fluctuations and loss in value. The best buys in any market are homes that are being past by for easy to correct reasons. The trick is knowing which ones are being past by for easy to correct reasons, vs. ones with difficult or impossible to correct reasons.
One might say 2007 and 2008 is a bad time to get into a bidding war...and yet, the houses with the bidding wars are/were the ones that best fit the "Zonie Criteria", and so are the one ones that will most likely continue to increase in value.
Bottom line...show me three houses you like, and I can tell you which of the three is the best buy, and most likely to increase in value OF THOSE THREE. Tell me you are only buying for appreciation reasons and are very likely to move out of the area in 12 months or less, and I'll probably tell you to rent unless you have 3 big dogs. In any case, anyone who is new in the area or subject to relocation issues, should hire an agent who isn't afraid to tell you when you are wrong. Being your own worst enemy is the danger when it comes to buying property, that is true for agents who buy, even more so than people in other fields of endeavor.
20% down? Expect a monthly payment of about $1,950 plus say $50 for Homeowner's Insurance and $270 for real estate taxes. Total Monthly Payment $2,270.00
10% down? Add $310 to that.
Zero Down? Double that $310
Just a rough guideline, that you can use to "qualify yourself". Just take that payment total and see what percentage that is of your GROSS Monthly Income.
ARDELL
DellaLoggia
On Seattle Real Estate including Kirkland, Bellevue, Redmond, Green Lake and most areas around Lake Washington North of Downtown Seattle.
Phone: 206-910-1000 - Mailto:Ardell@RainCityGuide.com
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