Jul. 4, 2008 - Should I Sell My House Now or Wait?
Recently I am meeting three kinds of people who are considering selling their current home. Some are buying a bigger home, while others are buying a smaller home, and some are selling and renting.
Use the same line of thinking from my previous article, that is to expect the market to be down over the next 3-5 years. Sellers have missed the peak of the market, for sure. But really, who can pick absolute peak without hindsight?
Yes, I think if you sell this year you will sell for less than you could have sold for last year. But I also think the liklihood is that you WILL sell for less than this year, if you are already considering selling and decide to wait.
Let's say the market goes down for 3 years and not 5. It could still stay flat for two years after that. It could take 7 years for it to get back to where it is now or where it was last year. Can you see yourself waiting for 7 years? Can you hang in there without home equity loans or cash-out REFIs for 7 years? If no, then bite the bullet and sell now, and forget that you could have gotten more last year.
More importantly, know that when you sell your home you are "Paid in Full" and hopefully "Debt-Free" for a split second when you close escrow. Now think hard about what that means to you in your life at the moment.
If you are young, and your income is high, you want to talk to an accountant about what you are losing in tax write offs and seek appropriated advices about what to do next.
If you are near retirement and don't see yourself retiring where you are but still need to work where you are, consider renting where you are and buying where you will be retiring. Talk to an accountant about being able to claim your future home as your current primary residence and the requirements for doing that.
If you need a home for your family, your pets and your hobbies and cannot enjoy your life in a rental for many reasons, then buy wisely. Buy in the best area your money can buy, so that you are buying in the strongest of markets and the one that will go down the least and spring back first.
Look at selling and becoming Debt-Free as an opportunity to start over from this point forward. Shake all of the advices out of your head, yes even mine! :) Ask youself what would make you happiest rigfht now in terms of where to live and what to live in. Make yourself happy...life's too short. But when you consider "happy" don't forget to consider the financial aspects of paying the monthly cost of where you will be going.
Make yourself as happy as you can without over-extending yourself. Pick the best where and the best what...and don't forget "the sleep factor".
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 expected 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
Jun. 23, 2008 - Visual of Price Changes King County Condos
Not posted or compiled by NWMLS (required disclosure)
The last figure is the median price per square foot of those closed inthe last 30 days. Those currently in escrow have a lower median price, so I believe the uptick is a blip.
Not to single out Redmond here, just giving you a visual of how prices have changed since the 3rd quarter of 2007. The final number is the median price per square foot of closed sales in the last 30 days.
Not posted or compiled by NWMLS (required disclosure)
"As to prices, so far condos are down 6.7% from peak pricing; Residential is down 4.8% from peak and residential “in escrow” down 6.5% from peak pricing." Today I will be using similar methods to evaluate varios Zip Codes starting with Redmond 98052.
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.
Volume down 30% (Much better than Bellevue or Kirkland or the County as a whole)
Currently in escrow awaitng close 48
Currently for sale 156. By 2007 standards that would have been just over 4 months of inventory.
By 2008 standards that is over 6.6 months of inventory.
Median days on market has increased from 19 days to 56 days.
Prices are down by 3.5% from $307 per square foot to $296 per squre foot (median)
I expect to see median days on market getting better. The median price per square foot of properties for sale is more in line with what they are actually selling for than in Bellevue or Kirkland.
Currently for sale 389. By 2007 standards that would have been just over 4.5 months of inventory.
By 2008 standards that is 11.8 months of inventory.
Median days on market has increased from 27 days to 45 days.
Prices are down by 6% from $334 per square foot to $314 per squre foot (median)
Of note, properties in escrow and those on market have asking prices that are WAY up to $400+ per square foot. Must be weighted more heavily to new construction.
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
You can find many great Seattle real estate agents and loan officers on ActiveRain.com ARDELL DellaLoggia is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.
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