Last week I helped one of my buyer clients put an offer in on a short sale - pre-foreclosure property. The owners had already moved away, and like many pre and post foreclosure properties, left a few projects undone. Often this is because their original hope is to improve the property, so as to sell it at a high enough value so the loan payoff is not "short". But once the market dips low enough for their hope to not be short diminishes, they leave behind half finished projects.
In this case there were wood trims removed around the door frames, but replacement of them was not complete.
I saw this handy tool at my sister's house, and borrowed it (actually she had an extra that she gave me) as I thought it would be usful for matching attached wood trims without removing one and bringing it to Home Depot to get new wood trims. Sorry I don't know what the name of this tool is, but she did get it at Home Depot. She uses it for ceramics projects.
The tool is basicly a bunch of stiff wires.
You simply push the tool against the wood trim as shown above. The wires push through in the exact pattern of the wood trim.
Then you only need to bring the handy tool to the store with you to match against the various trims available. The wires stay in place until you push the bottom against a flat surface. It works well on an irregular and even curved surface. In this case the right side of the trim is not a flat wall, so the left side is the most accurate as to the depth of the trim needed, and the center portion defines the number of grooves and size of those grooves.
Even if you are not matching existing trims in the same house, you can carefully use it to measure a piece of trim you like in most any house. Often people go to other people's homes before a remodel project in theirs. With this handy tool you can replicate a nice trim you see in someone else's home.
I'm sure I'll find many uses for it, and just wanted to pass on the info about a new tool you might find a handy use for. I'm sure it's not expensive, and you just might want to add it to your toolbox.
Nov. 25, 2008 - Don't Rely on The Appraisal as your "safety net"
Changing markets create the need to update our thinking on various segments of the home buying process. Back in March of 2006 I wrote this post on the role of the appraisal in your home purchase.
While the basic principles of where the appraisal fits in the process have not changed, the expectation of where the appraisal is going to fall, has reversed. Up market vs. Down market can affect an appraisal dramatically. That is why it is very important for you to understand how an appraiser derives a home's value.
Below is how I personally expect markets to function on a long term basis. An appraiser uses hindsightto determine the value of a property. Consequently in an up market, theoretically the appraisal should come out lower than sale price. If one values the property based on the last 3-6 sales in the last 3-6 months, clearly in an up market appreciation would be somewhat contained by the lender protecting themselves from markets advancing at too rapid a pace. We all know that is not what happened in recent history, and the Country and Banks are now suffering as a result.
But where do we go from here, and how does that affect YOU as a home buyer? Moreso than EVER in most of our lifetimes, you need to NOT depend on the appraisal as a barometer of value. In hindsight in a DOWN market, the appraiser is ALWAYS looking at higher priced sales. If the market is dropping at a faster rate than an appraiser will apply at the end of the process, the onus will be on you to know where your local market is going.
Often appraiser guidelines are national to a greater extent than they are local and micro local. The appraiser works for the bank, not for you, even though you pay the cost of the appraisal. We all know how well the appraisers covered the butts of lenders over the last few years...a great big NOT! Likewise YOU should not depend on the appraisal to cover your butt as to home price in your real estate purchase.
Understand that appraisers use hindsight...you must use all resources at your disposal to determine not only where the market IS, but where it is heading in the hyper-local market of where you are buying a home.
Earlier today I sifted through 28 short sales closed within the last 6 months and 100 Bank Owned Properties closed within the last six months.
By and large they are selling pretty close to asking prices, with those prices dropping in small intervals and frequently while the home is on market. The better and newer houses tended to sell short, while the older ones ended up in foreclosure and selling as bank owned properties.
The better values in many cases were the properties that were selling short of the original purchase financing, vs. those that were selling short of inflated appraised values at time of refinance after purchase. Those based off true market value, purchase price, were selling close to 2008 assessed values. Many were selling over asking price.
Simply being a bank owned property or a short sale did not relieve the buyer of determining current fair market value (which is pretty much at October 2005 levels per my previous post.
This article that I found on Flickr is an excellent read, though it does remind me of many I read when the world was credit heavy in the past. People spending more than saving is a result of low intererest rates and continuing inflation. People decide to spend when they believe the item they are buying will cost more in the future, and the return on saving the money instead of spending it, is low.
Everyplace I turn, someone is asking "Should I buy a house now or wait?" If you are asking the question, the likely answer is you should wait. It's like asking if you should get married or if you should have a baby. All of these things are important enough to only do when you feel compelled to do so. If there is a hint of doubt, then no...don't do it. Don't even let someone else convince you, and don't make someone else responsible for your decision in any way, shape or form.
List your pros and cons and convince yourself. On the cons, be sure to include that the value is more likely to go down than up in the next 3-5 years.
If the house you are in is dramatically curtailing your quality of life or that of your family, the answer might be yes IF you can well afford to improve your situation.
If you think you might be relocating to a new job in another area in the next 3 years, the answer might be no...stick it out where you are.
If you're not all that happy with your spouse and think to yourself "if this new house doesn't make us happy, I may just call it quits!" Then NO! Do not expect a house to resolve relationship issues. Needing to sell because of a divorce could make a messy divorce even worse.
If the purchase of a house will stretch you to the limit financially and create other problems outside of the home, then no, don't buy a house.
The key is to expect prices to be down a year from now and then ask yourself "Why NOT wait until next year?" If you have a compelling reason why not to wait until next year, then do it knowing that you are doing it for reasons that are not financially based.
If you keep asking "Should I buy a house?" in the hope of someone talking you into it, then you are"
1) Begging to be lied to
2) Trying to shift responsibility for a bad decision on someone else
May. 27, 2008 - Who do you make your Earnest Money Check Payable to?
Someone asked this question today, so I thought maybe everyone would like to know that answer.
"Who do you make the Earnest Money Check Payable TO?
The Earnest Money check is made payable to "the escrow holder". Here in the Seattle Area that is usually either the Escrow Company OR the Brokerage of the Agent for the Buyer. Rarely is it ever the listing brokerage.
The check is most often made out to the escrow chosen in the contract on the day that you make an offer and sign the contract/offer. "Closing Agent" or "Selling Broker" are the two options on line 7 of the standard contract. "Selling Broker" is the opposite of "Listing Broker".
More and more, real estate companies are closing out their "Trust Accounts" and using the "Closing Agent" as the place where your Earnest Money is held.
You, the buyer, fill out the contract first as "the offer", so you, the buyer, designate on line 11 your choice of Closing Agent, and write out the check payable to that Company.
That check is then held by your agent until there is a final agreement and contract, and escrow is opened. If the seller changes the Closing Agent, and you agree to that change, the original check is voided and a new check needs to be written to the Closing Agent as agreed to in the contract.
Over at Trulia Voices, some asked what the "average" credit score was and we Trulia Voices all started guessing at answers. Our guesses weren't half bad. But I decided to go a step further and find the actual answer. Not sure how up to date that first chart is, but it seems to be fairly recent as I found a previous one that had scores a little higher. This one has 42% of the population at less than 700. The previous one had 40% of the poplulation at less than 700. Still, I'm surprised that 60% have over 700...
Until you look at the per age group break down. While this chart is old from back in 2005, it would suggest that the average age of an area might also give a clue as to the average credit score. Also, if most of the younger people are the ones buying property and getting mortgages, than the average credit score of a person applying for a mortgage, might be less than the average score of people generally.
So it looks like old people have better scores and the average score for someone buying a house might be 620 to 660. This is important as some lenders will use a cutoff of 660 and others 680 for the best interest rates. So maybe shopping lenders as to rate is not as important as finding lenders who lower the interest rate at 660 if your score is between 660 and 680.
It's like when you go to Kinkos and want 25 copies until you find out it's cheaper to run 30 as 30 is a price break point. Same with mortgages. Different lenders have different price break points. Once you know your score, find the lender that will give you the best rate for that particular score.
That means the MEDIAN score of the three credit bureaus...not your high score. Go to MyFico.com for more detailed info on Fair Isaac and your credit score and how it impacts your interest rate.
1) Determine your price range - 3 to 4 times your annual income plus your downpayment, is a good guideline if you don't want to talk with a lender yet. Stick closer to 3 times.
2) Go to my site or any Broker's Website with a property search function
3) Put in all of the cities you might like to live in
4) Put in your price range
5) If you are using my site, you will see two types of property. Active and Offer STI. The Offer STI properties are "SOLD Subject to Inspection", but will most often better represent what your dollars will buy in a given area.
6) Narrow down the places where you would like to live and can afford, using this method
I don't often show property down in Maple Valley, but it is hard to find a more idyllic setting at such a reasonable purchase price.
When the owner told us about the coyotes that you can hear at night, I thought that would be alarming to the couple with two small children. But no. Apparently people who like to live out in a country setting, are well prepared for a coyote to stop by and visit.
The couple wasn't in hearing distance when the owner was talking about the coyotes, so I said, "You may need a dog", to which the couple responded instantly, "Oh, you mean the coyotes."
One of the reasons I look at the statistical data regarding housing sales, is to determine the odds of finding a property that matches my client's needs.
When determining a reasonable real estate commission, I need to know the odds. When we find a house and make an offer, we need to know the liklihood of the seller being able to get a higher price than the one we are offering.
I posted many pie charts in different price ranges. If I have a client looking for a property for $300,000 in an area where housing in that price range is scarce, It could take many months to find the right property. If I have a client looking for a house for $1.3 million, where only 1 out of 9 sell quickly, then the search will take a completely different working set than for the first client.
It also helps when determining whether or not to accept a client at all. If someone wants to buy a house for $450,000 with a view, some agents will take the client and wait until that client realizes that their housing criteria needs to change. Others will show them that no house has sold in the area the want to live, with a view, at $450,000 in the last three years.
Every person is different. Some people like knowing up front what the odds are of their finding a property that meets their needs. Others want to look for that needle in a haystack for as long as it takes, years even, to accomplish the seemingly impossible.
Stats and graphs help people quickly eyeball those odds.
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 :)
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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