Seattle and Eastside homes of this type are most often called Split Entry homes (not to be confused with split level homes). In a split "level" home, the bedrooms are not on the same floor as the kitchen, as they are in a bi-level or split entry home. It's basically a rambler or ranch home, with a basement that is partially and sometimes entirely above ground.
A newer one, which we don't see too often, would likely look like this:
My favorite that you can find in this area, but don't see too often has this window configuration in the living room:
The standard version that you see most often in the Seattle Area looks like this one that my clients recently bought for $300,000 in Bothell King County in the Northshore School District. It was a bank owned property that previously sold for $465,000. If it were not a bank owned property, it likely would have sold for about $360,000.
The top floor plan is pretty standard and usually all of the interior living space walls are easily modified, as the supports for the structure are rarely contained in those walls.
The floor plan above is the main floor plan and the house is pretty much a full rectangle, so that the basement square footage is often pretty close to identical to the main floor. They usually have 3 bedrooms up as shown. Many have a master bath, that is usually a shower bath, basically behind the hall bath and accessed from the master bedroom which would be larger than the size of the bedroom shown above.
There are usually two fireplaces, one on the outside living room wall and one on that same wall below, making a nice family room, often with sliding glass doors out to the yard. The kitchen often has a counter that makes the kitchen a U-shape, and separates the dining room from the kitchen. Some prefer to make it one big kitchen with no wall, and with kitchen flooring extending into the dining room.
This floor plan above shows the master bath option, but most often there is a shower stall there and not a tub as shown. The tub is only in the hall bath. This version also shows the kitchen with a counter between the dining room and kitchen, which is more often the way I see it.
You should never try to price this style of home using a price per square foot method. If you do, only use the main floor footprint, as the basement doesn't value out the same. Make sure you know the main floor footprint from the tax records before studying the "comps".
Pay particular attention to the main floor footprint as they generally vary from just over 1,000 square feet to about 1,300 square feet. Remember, that difference is often doubled, as the basement area is also larger. The home in the last photo that sold for $300,000 did have the extra master bath, and was 1,300 square feet on the main floor. One of the larger ones. Some have one bath with two doors, one from the hall and a separate door into the bath from the master bedroom. Most of the variations on the main floor have to do with the bathroom.
The one I note as my favorite with the big glass window is often much larger and pricier. I had clients who bought one in early 2008 (a short sale) in Tam O'Shanter near the Lake in Bellevue that was over 1,750 square feet on the main level.
A lot of people don't like them at first sight, but they clearly offer you the most house for the least price. Men tend to like them more than women because of the big garage and tons of basement space in addition to the family room. They almost always have a nice big yard, and there should be a deck behind the dining room and kitchen, with sliding glass doors and steps down to the yard. This way you can access the yard from the family room, or from the upper living space.
It's a great "starter" home in this market, because you are not likely to grow out of it, and can usually have a 4th bedroom on the lower level in addition to the family room and garage. If the lot is large enough, you can even amplify the living space by finishing the garage and building a separate detached garage or carport to the side.
A great home that often meets the needs of most any growing family. Also makes a lot of sense for people who work from home, as the basement area usually has room for an office, if that room is not used for a 4th bedroom. The lower level often has the laundry area at the bottom of the steps under the kitchen plumbing, and a 3/4 or full bath on the basement level behind the laundry area.
So the larger ones are easily 4 bedrooms, 2 3/4 baths, a living and family room both with fireplaces, plus a two car garage. A LOT of house for the money.
May. 10, 2009 - Mommy gets a house for Mother's Day!
We never have a closing on Mother's Day, since it is always on a Sunday. The next best thing is having your offer accepted on Mother's Day.
The Seller Mother would have preferred to wait for tomorrow. I was able to convince the other agent that my client, a relatively new Mommy with her first absolutely beautiful baby, would get a Mother's Day present if the offer was signed around today.
People always worry from the time they submit an offer until it is signed and the property is taken off the public sites as "Pending" vs. "Active". So whoopee! The seller signed and my new Mommy client is having a Happy Mother's Day with less stress.
Happy Mother's Day everyone! Do a little something for a mother, anyone's mother, every mother you meet today, to make their day a little brighter.
Apr. 15, 2009 - Do Homebuyers Make these 10 Mistakes?
There's an article floating around the web: "Top 10 mistakes of First Time Buyers" first seen on Smart Money. I generally don't like to regurgitate popular web articles, but would like to add my $.02 FWIW on this one.
1) The article suggests that the #1 mistake first time homebuyers make is not knowing how much home they can afford. I think that's old news, as lenders are more cautious these days about giving someone a mortgage they can't afford. My particular beef with the response to first time buyers in this article is that they should get the answer from a mortgage professional.
My advice would be to determine the monthly payment, including taxes and condo fees or home owner's insurance of the type of property you might buy. Let's say you are paying rent of $1,000 a month, and the monthly payment if your purchased would be $2,000. I would suggest that you "pretend" you are paying $2,000 a month by religiously, on the first of each month, pay your $1,000 rent and put an extra $1,000 into your savings account. If you can do this for up to a year without struggling, you have proven to yourself that you really can afford to pay the amount the "mortgage professional" told you that you could afford. Don't just take someone else's word for it. Try it before you buy it.
2) Making assumptions that foreclosures are great deals. My thoughts? Rarely, if ever, can a first time buyer purchase a true foreclosure property at the courthouse steps. I'm sure it's very rare. So they are likely really talking about bank-owned properties and short sales. More often than not those are better deals. I think more people make the mistake of thinking a huge price reduction is a great deal and getting burned that way, than who get burned overpaying for a foreclosure property.
3) Showing the seller or seller's agent how much you love the house. Actually, I see the opposite more often. Buyers "kicking tires" and trying to convince the seller he's got a crappy house, to get the price down. Often the seller will just say, "Hey! If you don't like my house, get out!" You want a balance of letting the sellers know that you do like their house, but market conditions scare you and so you are cautious about overpaying for it, even though in a different market it would have been worth more. Sellers appreciate people who like their house, and sometimes will sell it for less to a buyer who loves their house. Sellers appreciate a first time buyer's fear of losing their downpayment to declining home values. Sincere and honest responses are good. I would caution buyers looking at homes when the seller is not home, that often the seller is hanging out next door or across the street. Screaming how much you love it because you think no one is home, especially when you are outside of the house, is not recommended. But pretending you don't really like it, but are making an offer on it anyway? No one's buying that ploy.
4) Find a good buyer's agent. The article goes on to recommend finding an EBA (Exclusive Buyer's Agent). Maybe EBAs will make a comeback in this market, but generally they are too few and far between for that to be good advice. An agent with local experience is often better than an agent from another County who happens to be "an EBA". No matter how good your agent is, stay engaged in the whole process. I would say the bigger mistake buyer's make is delegating everything to the agent, period. You will be the one living there. You will be the one paying that mortgage payment. Stay engaged in the process.
5) Understanding the full costs of homeownership. I agree with this one. I especially recommend that people make sure the $8,000 First Time Homebuyer Credit in 2009 be used as a reserve against unexpected (or expected) repairs.
6) Failing to budget for property taxes. Nope - these are almost always paid by the lender for a first time buyer, and part of the monthly payment.
7) Assuming your first offer will be accepted. Nope - more often the first offer doesn't go through to closing due to inspection issues than failed negotiations.
8) Skipping the inspection. Nope - Even in the hot market, a buyer often does a pre-inspection prior to offer or an informational inspection in multiple offers. I don't think I'd let a buyer buy a house without any inspection prior to closing, unless they were going to tear it down and are buying at lot value.
9) Doing too much too fast. I give my buyer clients my Mom's advice "give it a year". By the time you are living there a year for 4 seasons, you know what you really need to add or change, including landscaping issues. You don't want to pull great flowers, thinking they are weeds, or plant over bulb you don't know are there. Give it a year and only do what you have to during that time.
10) Failing to have a mortgage contingency clause. Nope. I think they were stretching to get to 10 things in these last few. They should have quit at 5 :) I have never seen this happen. Making the contingency too short is more the mistake, vs. not having one at all. Haven't seen one in 20 years where the buyer forgot to have a mortgage contingency.
Rushed through the end there as I have an appointment. If you have any questions or disagree, I'll follow up in the comments as needed.
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.
Let's assume the purchase price is $315,000 and the loan amount is $283,500. Some costs are based on the loan amount, so we need to make some assumptions. Since the costs vary only slightly if the sale price changes, this should be a fair idea of what the costs will be. I will total all of this up at the end after I break it down from the simplest to understand to the hardest to understand. (Note: I round up so that at the end there is a little buffer for variances.)
Total cash needs at time of closing $7,600.00 less any seller credits built into the offer. Add the $900 you already paid for the Home Inspector and Appraisal, and you have $8,500 plus your downpayment of $31,500 and that equals a grand total of $40,000 less the $10,000 you put up front as an Earnest Money Deposit. Before closing $10,900 will be paid and the day of closing you bring your Driver's Licenses and a Cashiers Check Payable to Escrow in the amount of $31,100. Costs $8,500 downpayment $31,500.
Here's a breakdown.
Escrow fees are split 50/50 between the buyer and the seller. These fees are based on Legacy Escrow, and can vary from one escrow company to another. The buyer's half is $539.06 including tax and an additional $108.90 for the second mortgage. The seller pays for owners Title Insurance and the buyer pays for Lender's Title Insurance, which should be about $465.00 plus $40 to record the second mortgage.
Add about $100 for recording fees to record the new deed with the County and $50 or so for misc Delivery fees.
Actually that $1,350 total are the only real COSTS except for your lender fees, which are the largest cost item. You can lower the 1% origination fee, but that usually increases your interest rate. There are loan processing fees, underwriter fees, flood cert, tax service and lots of miscellaneous fees associated with the type of loan you will need. The lender fees alone will be about $4,000, so added to the other closing costs, let's call it $5,500.00.
At $5,500 we are still less than the $6,000 I estimated could be built into the offer, as a seller credit.
But we also have fire insurance, say $600 for a one year policy paid up front. Plus $150 for three months toward next year's insurance policy to be put into the lender escrow account. That's $750 for insurance. Then we have real estate taxes of $270 or so a month. If you closed at the end of November, you would have to pay $270 to the seller who already paid December of 2006. Then you would have to pay 3 months or so to the lender, so he can pay six months worth of taxes come April. So $270 + $270 x 4 = $1,355.00.
So if you build in $6,000 toward closing costs, less $5,500 for costs, equals $500 left. Then $750 for insurance costs equals $250 you would need at closing pus the $1,355.00 equals $1,605.00. Let's call that $1,600 as I rounded the taxes up on the monthly.
$1,350 in costs + $4,000 lender fees + $600 ins + $1500 in Prepaids (prepaid taxes and insurance)
My commission that we discussed up front is not included, as that is paid from the Seller's Net Proceeds.
Let's total that again. $1,350 costs + $4,000 lender fees + 750 ins + $1350 RE taxes + 400 for home inspector + $400 for appraisal equals $8,250 that I rounded up to $8500.00 plus 10% of the Purchase Price for a downpayment. You may be able to build in $8,000 as a seller credit. We won't know that until you find a house and make an offer.
Until we identify the house in question, I cannot firmly determine who will be paying the closing costs. But in the $300,000 give or take price range, many, if not most comparable sales, would have had $6,000 or so in closing costs paid by the seller built into the price. Consequenty, for valuation and negotiating purposes, it will likely be best for Adrianna to request $6,000 in closing costs from the seller in her eventual offer.
Before we get to "cash TO close", let's talk about cash BEFORE close needs. At time of offer, an Earnest Money deposit of $1,000 or $5,000 or $10,000 will be in order. The more you like the house, the more certain you are that "This is the ONE!", the higher the Earnest Money deposit. Since the downpayment is expected to be $30,000 to $33,000, an Earnest Money deposit is simply and advance against the downpayment.
On the one hand, if there are any doubts about the house you should maybe try to get away with $1,000. On the other hand, $1,000 sends a clear message that you may have doubts about the house. It's a catch 22.
Besides the Earnest Money Deposit at time of offer, there are two other out of pocket expenses before you close on the house. One is the Home Inspection fee which is about $400 and the other is the Appraisal Fee which is also about $400. Possibly $900 for both. These monies are gone, once spent, whether you buy the house or not.
Next we will examine how much of the total cash to close is expected to be met by the $6,000 requested of the seller in the offer. Let's see if Adrianna has any questions regarding this part before we move on to the costs at tome of close.
Jul. 16, 2006 - How is a Real Estate Transaction Like a Pregnant Woman?
The real estate transaction, like a pregnancy, breaks down into Trimesters. Also, as in a pregnancy, the first trimester is the most disruptive to the buyer's daily schedule, the second trimester becomes more relaxed and the last trimester involves a final, and sometimes (but not always) intense event, the net result of the intense event being life changing!
Just as the body goes through many changes in the first trimester of a pregnancy, that can leave a woman feeling absolutely nauseous most of the time, the first trimester of a real estate transaction can leave a buyer's head spinning. In succession, and sometimes simultaneously, many things transpire at the beginning and need to be completed about 1/3 of the way through the time frame.
The offer is made, negotiated and accepted.
The buyer applies for their mortgage, supplying all documents needed to process the loan.
The home inspector is selected, appointment made and results negotiated.
The appraiser goes out to check that the sale price represents a good value for the lender.
All parties receive, complete and return escrow instruction paperwork for the closing agent.
In a 30 day escrow, almost everything the buyer needs to do is completed in the first ten days, sometimes all at once. It can leave a buyer with their head spinning, dizzy and sometimes nauseous in that first ten days, the same as a pregnant woman in her first trimester.
Also like in a pregnancy, the second trimester should be the easiest. It's as if everything has settled in and a full 1/3 of the total time is a respite between the first trimester and the last trimester.
The third trimester starts off with a bit of worry that leaves you feeling tired and ready for all this to be OVER! Is everything done? Did I do everything I need to do so that the final event is successful? Am I packed? Am I ready for all this?
Just as a woman heads off to the hospital for the final event, at the end of the third trimester, a buyer heads off to the closing agent's office to complete the final paperwork that results in their owning a new home. Some people are in and out with no major pain, while others seem to agonize and sweat and take forever to get all of those documents signed properly.
The end result of both is a joyous event. A new baby! A new home! Three trimesters, the first the most world shaking and the second the easiest and the third the most eventful!
The good news is, unlike a pregnancy, where each trimester lasts 3 months, most trimesters of a real estate transaction last only 10 days. 3 x 10 = 30 day escrow.
May. 13, 2006 - Waiting for a response to an offer
Waiting can be excruciating for me. I have a symbiotic personality. The same traits that help me to put myself in someone else's shoes and just know somehow what type of property will make them happy, comes back to bite me at times like this. I feel the anxiety of every waiting moment, almost as if I were the one waiting to hear about my new home.
Accepting things once they happen and quickly moving to the next step comes, easy for me. Dealing with the moment given what we have to work with, is easy for me.
But once we've done everything we can and are waiting for the other side to respond, when the ball is just not in our court, I can't imagine the actual buyer feels any differently than I in this moment. Waiting.
Changing your mind in a Real Estate Transaction should FIRST be shared ONLY with the real estate agent who represents YOU and not the seller or the seller's agent. There are many ways for your agent to create a happy ending wherein you do not lose your Earnest Money. Clearly, Timing is EVERYTHING, when it comes to extricating yourself from a real estate contract. Talk it over with your agent as soon as you feel you may not want to proceed with the transaction.
When there are multiple bids, and the price of the property is bidding up over the asking price, the amount of downpayment is sometimes the reason why your offer is not accepted.
Lets say a property is put on the market at $275,000 and the highest offer is $315,000. There is an offer of $310,000 with 50% down and an offer of $315,000 with zero down. Usually the sellers agent will advise the seller not to take the $315,000 offer, because she does not expect the property to appraise. While one can buy a house with zero down, that does not mean that the seller is willing to take the risks associated with a zero down buyer.
It is the sellers agents job to know not only what they can get in the open market for a property, but also what obstacles might get in the way of the sale closing. These days, when an agent lists a property at $275,000, it is likely a price higher than the last few sales in the area and a price that will appraise, with some effort. When it bids up over that amount, the sellers agent must be ready for what will happen if and when it does not appraise. Often that means that zero down buyers will not get the house, if there are other offers with larger downpayments, even if the other offers are for less money. A common result will be that the seller will counter the 20% down buyer with the highest price offered, regardless of escalator clause considerations.
This points back to my post noting that the appraisal is done for the lender. If the property appraises at $300,000 and the sale price is $315,000, the lender does not participate in the shortage. If it is a zero down loan and the buyer has no cash, the buyer will need the seller to reduce the price down to $300,000 for the transaction to close. The lender will only give the buyer 100% of the appraised value, without regard to the agreed upon sale price. If the buyer is a cash buyer, often there is no appraisal at all, since the appraisal is ordered by the lender.
This issue has come up in the last two offers I have presented. In fact, I lost a client who did not get the property because another offer at 20% down trumped her zero down offer. When she asked me to be more aggressive in getting her offer accepted, I explained that the sellers agent made it clear that the 20% down buyer was going to get the property because they had 20% down and the agent knew the property would not appraise. There was just no way to get the seller to accept a zero down offer, with the costs included in the price, no matter what I did.
Buying your first property with zero down and the seller paying the closings costs is clearly possible, and is done every day. But often the zero down buyer, with no cash to pay their own closing costs, is excluded from purchasing the most popular house in the most popular neighborhood that has multiple offers.
Offering the highest price is of no consequence to the seller, if you can't close.
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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