Seattle Real Estate:

I ran across an interesting article in the Puget Sound Business Journal this week.  Apparently a cottage style development on Whidbey for which second home buyers were the target market is not being purchased by second home buyers…but by downsizing seniors.

Back in November I wrote:

“It would seem to me that one segment of the market that would find the cottage idea appealing are empty-nesters.  We have an aging population of folks that are healthier for longer than ever but eventually might experience limited mobility issues or might just like the option of not having to climb stairs. We’ve worked with a number of people for whom stairs were a consideration - not necessarily at the time they were purchasing, but they were looking towards their future. Designing cottages with at least a ¾ bath on the main floor would make these an option for a wider market.”

How gratifying to have my supposition market-proved and kudos to the developer for designing a thoughtful floorplan!

As I watch the end of year numbers roll in perusing the national and local news, as well as blog posts; I am reminded of the following piece of wit from my dear Mr. Clemens:

“Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: ‘There are three kinds of lies: lies, damned lies and statistics.’”                 

- Autobiography of Mark Twain

I am not categorically opposed to statistics.  I think, in appropriate context, they can be quite helpful.  The breathless reporting on the topic over the past few years has parlayed into what I can only describe a ghoulish fascination akin to being unable to tear one’s eyes away from the scene of an accident. In keeping with mission statement of most media, being “if it bleeds, it leads”, values seem to be at any given moment either: plunging, plummeting, sliding, diving, crashing, sinking, tumbling, or tanking and let’s not forget a few years ago when they were shooting, rocketing, upsurging, soaring, and quickly appreciating. 

I realize that some of these words were used appropriately in some situations, but it seems to me that this fixation has done no favors for the viewing public.  Quite the opposite, in fact, it has simultaneously scared some folks witless and bolstered the foolish…all for no darned good reason.  As a professional in the real estate industry I’m stuck between a rock and a hard place if any statement I utter has the slightest hint of positive or negative, as being either in league with the doomsayers or as a Seattle market Pollyanna apologist.  Well, this agent doth protest.

I’m going to mangle a Regan quote:

“The trouble with real estate statistics* is not that they’re ignorant; it’s just that they know so much that isn’t so.”

*Reagan actually says, “our liberal friends” but that’s another discussion for a different time.

I find the statement to be so apt.  When you read the news that Seattle home price dropped (or should I say plunged?) 10.2% last month, it may indeed be true for many homes but it is not necessarily true for all Seattle real estate.  In fact, some homes in the Seattle market will fare better and others worse for a variety of factors. 

This is precisely why I’ve tried to stay away from blanket statements like:  “It’s a great time to buy” or “Everyone should just stay put until this all shakes out”.  Neither of those statements is universally true nor false.  Every decision (like always, I might add) should be made thoughtfully with due examination of pertinent facts like interest rates, individual situations, and yes, market trends. 

I’m more than happy to crunch numbers on a particular area or few for someone’s specific needs. However, I am unwilling to (shall we say?) use a hatchet where a scalpel is needed.

For those of us in the northern hemisphere, it all gets better from here on out.  Today is the winter solstice which means its the shortest day of the year and we can start working our way to those gloriously long summer days. For now, since we’re dreaming of a white Christmas - let it snow, let it snow, let it snow!!!

The Seattle area had our very own Polar Express last night.  It does make things look festive, our Winter Wonderland, but it shut down all the schools!

For those intending to relocate to the area, don’t let the snow scare you away if you hail from a warmer clime.  This is pretty atypical.  I understand we’re setting records this week!

These are a few shots by our home in Kirkland:

The poor little rhododendron doesn’t know what to do!  It’s leaves are curling under like it’s trying to stay warm.

Note to self: stop saying, “Ha! Sure! That will happen when it snows in Seattle!”.  Stick with, “Ha!  Sure! When pigs fly!

Next year’s edition of the Greater Seattle Area InfoGuide is out and now available.  We’re all stocked up, request a free copy of your ‘relocating to Seattle resource’ today!  But wait - there’s more (sorry, couldn’t help myself…) we’ll send you a free AAA map of the Seattle/Tacoma area too!

So you’ve made the decision - you’re ready to buy a home.  What do you do next?  Watch the video, of course!

Alex Says - Decided to Buy A Home? What’s the next step? This is just the first in the series, so stay tuned or send us your email address to be notified when the next one is posted!

I found this article in the Seattle Times “Make your home less inviting to mice.” The article offers some very good advice. There is one suggestion that I wouldn’t necessarily take unless that was all I had to work with. It says “Steel wool makes a good temporary plug.” Sadly it has been my experience that steel wool not only will rust through quickly but mice will actually chew though it. What I have found that works very well is brass mesh. You can find it at most hardware stores and use it to cover or fill holes and/or gaps that mice might try to enter.

Will I get my money back if I remodel my kitchen?  What about adding windows? 

We hear these kind of questions all the time from past clients.  We generally recommend that folks never undertake an expensive remodel just for the sake of resale value.  If you’re contemplating a upgrade that you’ll get the use and enjoyment out of for a few years and you’re looking at adding value to your home as only one of the upsides in the equation, then it starts to make sense. 

That being said, some changes make more sense than others.  Though everything depends on specific circumstances, Seattle area homeowners and others in the Pacific Northwest are apparently ahead of the curve in recouping costs, see below:

“Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects…

Seattle also made the list of cities with a cost recovery of more than 100 percent on decks and minor kitchen remodels. In fact, Pacific Coast cities recorded the best payback on remodeling by a wide margin, as they did in 2007. Although construction costs on the Pacific Coast are nearly 17 percent higher than national averages, the value of renovations at resale more than makes up for those higher prices.

The result is an average cost-recouped percentage that’s 14.8 percent higher than in the rest of the country. The toughest place to get your money back: Midwestern cities such as Chicago, Cleveland, Indianapolis, and Milwaukee.”

You can read the whole Cost vs. Value article here.  If you have a specific question about your home, please email Alex and me.  We’re happy to look the data in your area to find out sales prices of updated homes.  We’re happy to help add data to your decision making process!

Being a first time home buyer can be a bit daunting.  Owning a home is a big commitment.  Listen to Alex’s take on knowing if you’re ready.

You can find this video in its permanent home at Alex Says - How to Get the Most Out of Showings. This is just the first in the series, so stay tuned or send us your email address to be notified when the next one is posted!

I try to keep track of the searches people type into search engines to end up at our site.  From time to time, someone ends up visiting based on a question or certain search term that we touch on, but don’t necessarily cover in depth.  Recently, I noticed a new one that falls under that category.  It was,

“How many times do I have to send my loan officer documents?”

That’s a great question.  Though I, of course, don’t know the circumstances…the first time I read that,  I could just envision some poor frustrated soul pounding it out the question on their keyboard after their loan officer asked them - AGAIN - for more documentation! 

So how many times do you have to send your loan officer documents to get a mortgage?  The answer is…it depends.

Here is how it seems to typically work.  Most of the time, people seem to find a loan officer by referral.  There’s usually a brief consultation over the phone or by email that results in a pre-qualification.  To get a full blown pre-approval, the loan officer will pull your credit and ask you a series of questions.  Based on the answers to those questions and considering your credit score, the loan officer has a pretty good idea of what you can afford and for what programs you’ll qualify.  Sometimes you’ll even get put through an Automated Underwriting System (AUS).

At some point, you’ll have to make a formal application for your mortgage and it is usually at that point where your loan officer will ask you for a list of documents that help them substantiate the information you have already provided to them.  Those documents typically include:

• Consecutive pay stubs covering the last 30 days (five if paid weekly, three if paid every two weeks, two if paid twice a month, one if paid monthly).
• W-2s for the last two years.
• If you are self-employed: Copies of corporate, partnership or S-Corporation Federal Income Tax Returns with all schedules and K-1s for the last two years.
• Complete statements (all pages) for the last two months for all checking, savings, CD, money market, stocks, bonds, IRAs, 401Ks or other bank and investment accounts.
• Copy of sales contract on house you are purchasing.
• If applicable: Names, addresses and telephone numbers of your landlords for each residence you rented over the last two years.
• If applicable: Complete copies of divorce decrees and associated amendments to support alimony and child support payments.
• If applicable: Complete bankruptcy papers, including filings and discharges.
• For recent graduates (in last two years): Copies of transcripts or diploma showing the date of graduation.
• VA buyers: DD-214 and Certificate of Eligibility

Your loan officer then takes those documents and gives them to his or her loan processor.  The processor takes your application, bundles them with the documents you’ve provided, and makes any verification of employment calls, etc.  That package is sent to the underwriting department who reviews the package and makes sure that the provided information is a match for the loan program you have selected.  Once your file is approved by underwriting, it is sent to the closing department who generates the loan package, which is the bundle of paperwork sent to the escrow company for you to sign in addition to the real estate transfer documents.

You might be asked to supply more documentation when:

• The processor receives your documents from the loan officer and reviews them, if he/she has forgotten to obtain something from you or if your specific loan program requires some sort of paperwork that is outside of the norm.
• The underwriter determines that more documentation is necessary to substantiate a claim that you have made.  For example, you might have disclosed that you obtain a certain portion of your income in a bonus.  The underwriter may request a letter from your HR department in addition to a pay stub that shows the bonus.
• If the loan program documentation requirements change, as they sometimes seem to do, before your loan is finalized.
• At anytime if someone forgets to ask for something previously, or if documents provided bring up more questions.

The process can be frustrating, and frankly feel pretty invasive, but it goes with the territory if you want to get a mortgage loan.  You can help speed the process along by selecting a good loan officer, and providing all requested documents as promptly as possible.

Any questions?  Interested in a referral to a good loan officer?  Just ask - 425.677.5000 or email us.