House Hunting Horror Stories Volume 3.0

It’s a good thing that Kelsey and Andrew have a great sense of adventure.  Yesterday, we decided to go see a few houses in the Beacon Hill neighborhood.  Two of the houses we saw had been on the market for a very long time, and in this fast-paced, competitive market, that is often a good indicator that something is very undesirable about the house.

In the second house we went into, we couldn’t figure out exactly what was going on.  Part of the house obviously was an addition, and they hadn’t even bothered to cover up the siding.  The home was vacant yet had odd pieces of furniture scattered around, a pile of 8 old-school (big and heavy) televisions, and the most noteworthy was this flag hanging above the couch.  Andrew made the comment that it looked like the kind of place they would film menacing videos to put up on you YouTube.

2013-03-16 12.23.09

After we escaped the flag house, we headed to a renter-occupied cottage with detached mother-in-law unit.  The home was very obviously tenant occupied, and the very friendly renter greeted us at the door with her big and cheerful dog in tow.  We delicately looked around the main house, trying to be gracious and respectful of the people living in the home.  We said thank you to the tenant that so kindly let us into her house and headed to see the mother-in-law cottage in the back.  I knocked on the door then knocked again.  We entered the cottage and were greeted by quite a surprise… An indoor basketball game that took up the entire living room!  After less than 60 seconds in the home, both bedroom doors opened simultaneously and two very obviously sleepy young men came stumbling out of their respective rooms.  It was so awkward, but luckily both of the late-sleeping tenants and my cooler-than average clients quickly struck up a conversation.  Andrew shot a few baskets, we high-fived the tenants, and made our way out as quickly as possible.

As with life, it is best to have a sense of adventure (and a big helping of good manners) when looking at houses.  You never know what you may run into…


Boring Data and Graphs! February Edition

Inventory for condos under $750,000 in Seattle over the past 14 months:

Condo Inventory Feb

Inventory for single family homes under $750,000 in Seattle over the past 14 months:

SFH Inventory Feb

 

Condo trends in for sale, sold and pending over the past 14 months:

Condo Sale Sold FEb

 

Single family homes under $750,000 trends in for sale, sold and pending over the past 14 months:

SFH Sale Sold Feb

To summarize, inventory is still tight and pending sales are way up.  Combine that information with the 15% increase in price for condos and the 18% rise in price for single family homes over the past year and you have a market that is tough for home buyers.


From Offer to Keys – An Overview of the Purchase Process

I love first time home buyers.  They are excited, curious and terrified.  They ask great questions, want to be really involved in the process and are always so much fun.  As someone who has purchased four homes of my own and helps people buy and sell homes everyday, I often forget that first time home buyers have no idea what to expect from the process of buying a home.  So here is a quick guide on what to expect when you buy your first house.

Step 1: The Offer:

Once you find the home you love, it’s time for the big ol’ stack of paperwork.  Your awesome Realtor will guide you through the process.  Your offer will likely include several contingencies, the mot common being the financing contingency and the inspection contingency.  In a perfect world, you submit your well crafted offer and the seller accepts.  The tight inventory of todays market can make it a bit more complicated than that, but for the sake of brevity, we will leave it at that. 🙂

Step 2: The Contingencies:

Now that the offer has mutual acceptance (both the buyer and seller have signed and agreed upon offer), you have a very specified amount of time to do a lot of things:

1) The inspection:  If you had an inspection clause in your purchase and sale contract, you only have ten days from the date of mutual acceptance to find an inspector, schedule the inspection, have the inspection completed, review the inspection findings, and submit your inspection response to the seller.  I counsel my clients to have the inspection completed within three days of mutual acceptance to leave plenty of wiggle room for potential issues that may arise.

2) Financing:  Ideally, you would have already had a pre-approval letter from a lender prior to submitting your offer.  Once you are in mutual acceptance, you have 5 days to make your official, written loan application.  Failure to meet this deadline can cause a bunch of trouble, including losing your earnest money if you fail to get financing for the home.

3) Title review: A title that is free and clear of all liens and encumbrances is very important to the sale of the home.  The sellers will provide a copy of the title report and a copy of the title insurance policy for the buyer to review.  Once the buyer receives the preliminary title report, they have five days to review it.  After the five days, the buyer can not get out of the contract based on findings in the report without losing the earnest money.

Once you have completed all the time frames for your contingencies, there are still several steps you need to take.  During the week or two before closing, you will need to line up homeowners insurance and get the insurance information to your lender.  You are also allowed to do a final walk through of the property a few days before closing.  I highly recommend that you do so, just to eliminate any surprises after closing.

The final step:

Signing the papers!  The appointed escrow company will draft all the required documents to close the transaction.  One of the most exciting parts of the process is going to the escrow office and signing the biggest transaction of your life.  A common misconception is that the moment you sign the paperwork, the house is yours.  Not true.  The documents have to be signed by both the seller and the buyer.  Then the funds need to be appropriated to the correct parties involved.  Then the transaction has to be recorded at the court house.  In most cases, the buyer will sign documents then two to four days later, the transaction is officially recorded and the home is yours.  And that’s when my favorite part of the whole process happens.  I hand you the keys to your brand new home.  It warms my hearts every time!


Client Question – Do I Need To Sell BEFORE I Buy?

My clients are the best!  Just a few days ago, my client Laurie and I were talking about getting her out of the condo she currently lives in and into a single family home.  She assumed that she would be able to put in an offer on a home and have it be contingent upon the sale of her condo.  I hate to give bad news, but in this case, it opened up a great dialog about the current market conditions.

It is currently a sellers market.  And that is great news for Laurie considering that she will be selling her condo.  Condo prices are up 15% in Seattle over the past 12 months and there are tons of willing buyers waiting for new listings to come on the market.  But there is a flip side to that coin.  Due to the fact that there is so little inventory and such high demand, almost all homes that are on the market are getting multiple offers.  Buyers are doing things that are unheard of in a balanced market.  Buyers are offering over list price, they are waiving inspections, and cash buyers have resurfaced and are snatching up homes right and left.  Every buyer needs to put their best foot forward in order to win in a multiple offer situation.  If you, as the buyer, submit an offer that is contingent upon the sale of your current home, that makes you a whole lot less desirable than the other 5 offers that have offered over list price, and have no contingencies.

Long story short, it is a very competitive market.  Although it causes a lot more headaches, it is best to sell the current house and then start looking for your next purchase.


Mortgages – More Than Just an APR

Often times the most daunting part of buying a home is securing financing.  Buyers, especially first time home buyers, can be very naive about mortgages and can often end up paying more than they should.  This article does a great explaining how getting a good mortgage is about far more than the APR alone.  Origination fees, points and other (potentially “junk”) fees can add up quickly and end up costing you thousands over the course of the loan.

The best way to avoid getting a less-than-ideal loan is to partner with your Realtor.  I know several amazing lenders that I would be happy to put you in touch with.  You will know when you have found a quality and reliable lender when they are willing to spend the time to answer all of your questions, explain the process and go line by line with you over all the fees and other loan associated costs.  With the right lender and a little bit of knowledge on your side, getting a loan can be almost painless. 🙂