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This is the archive for April 2009

Tuesday, April 28, 2009

Multiple Listing Service Logo
No, this post is not about Major League Soccer. Although likely in the United States not many people know what that is either! No, today I want to talk about the Multiple Listing Service, the MLS. What is it? Why is it important?

In general, most agents are members of their local MLS. There is not one BIG MLS that covers the entire country, rather there are local regional MLS's. I suppose it would even be possible to have more than one MLS in the same city. As I understand it, in the Puget sound, prior to the evolution of the Northwest Multiple Listing Service (NWMLS) there were a number of smaller metro MLS's. In our MLS, the NWMLS, basically covers most of western washington and even parts of Eastern Washington although there are other MLS's in Eastern Washington as well.

The MLS is a repository, a database of homes. As agents, when we take a listing for a home, the first thing we do in general is input that listing into the MLS. Once that listing is input into the MLS, it advertises it to other members of the MLS as available. If they have searches set up for their buyers, then your home pops into that search if it matches the criteria and that agent will forward your home to their client.

In addition, once the home is listed in the MLS, every company (John L. Scott, Windermere, Keller Williams, etc.) that is a member of the MLS has the ability to "suck down" the information from the MLS and re-post it on their web site. This is why as a buyer, if you search for homes on http://johnlscott.com/ or Windermere, or Keller Williamas, etc. you'll likely see the same homes over and over again. So when looking for a home, pick the site (Ahem, John L. Scott) that works best for you and stick with it. It'll save you time and duplication of effort.

As an added benefit, as agents, when we represent you the buyer, we can show you ANY home that's listed in the MLS. So you don't have to use a Keller Williams agent to show you a Keller Williams listing. You can use any agent (Ahem, ME!) to show you any listing you see. AND even if you want to see a For Sale By Owner listing, we can make provisions for that as well. As a buyer's agent, our services to you are 100% free.

So search away, get yourself represented by a buyers agent and get into that new home!

Monday, April 27, 2009

Short Sale Sign
This is the second of a two part series. This series will discuss the ins and outs of short sales. This second part will focus on short sales from a buyers perspective, the first part detailed them from a sellers perspective. Please note, these articles are inteded for informational purposes only and should not be construed as advice for your individual situation. If you're considering a short sale, foreclosure and/or bankruptcy you should seek the legal counsel of a real estate attorney to advise you on your individual situation.

In my last post, I talked about some of the pitfalls of dealing with a short sale as a Seller. Today, I'm going to talk about short sales from a buyer's perspective. I'm going to be a bit repetetive, so bear with me for a second.

Let's start off by defining what a short sale IS. A short sale by the most basic definition is when: The net proceeds from the sale of a home are not enough to satisfy the underlying liens (mortgages) on the property AND the seller does not have the means to pay the difference between the net and the amount owed. Take this example, a home is listed for sale for $200,000. They receive a full price offer and after selling expenses NET $182,000. The seller only has one mortgage but the mortgage on the property is $190,000. There is a difference between the net proceeds and the mortgage amount of $8,000. Is this a short sale? ONLY if the seller cannot bring the difference ($8,000) to the closing table. If the seller does not have the money to bring to closing to close the sale, they yes, we are in a short sale situation. Clear? As Mud?

As a buyer, your agent will show you many homes. Some you'll like, some you'll hate and some you'll LOVE! The ones you love typically have all or most of the things you're looking for. Number of bedrooms and bathrooms. Large enough, correct yard size, fixtures, location, location, location. Unfortunately, we're often attracted to homes we can't afford. But a phenomenon has taken place of late in that the homes we really love have started to become affordable! But there's a catch. Many of these homes are affordable because the seller is selling them "short". The price on the sticker is not necessarily the price you'll pay. WHAT?! Isn't that illegal? I thought if they advertised it at a certain price, they had to sell it for that price?! In a normal sales situation, assuming the seller has equity in their home, if they advertise it at a certain price and terms and a ready, willing and able buyer offers that price and terms, then yes, they have to sell it for that. But in a short sale situation, there is a little clause in the listing agreement that says "All terms subject to underlying lien holder's approval". Those Dirty Good For Nothin' Rotten Scoundrels! You knew there would be a catch didnt' you?

You see, in many cases with all the competing inventory out there, a short sale seller has to price the home well below market value to even attract a buyer. Because of all the pitfalls that are associated with short sales, many buyers and even a number of agents are scared to jump in worried they're not going to get the home. At the very least, a short sale home will add one month to the process (the quickest I've ever seen a bank give approval was 3 weeks) and it could add 6 months to the process. Many buyers are not willing to wait that long. In 6 months, there are too many unknowns. Will the housing market decline further? Will prices start to rise? If prices start to rise and I don't get this home, will I be able to even afford a home? If prices decline further, am I overpaying for the home? What will my interest rate be in 6 months? Will that interest rate be high enough that I don't even qualify for this home any more?

Q: So why would a buyer want to pursue a short sale?
A: If this happens to be the perfect home at the perfect price, then the buyer can get a VERY good deal on a home that they maybe couldn't afford to purchase otherwise.

Q: Will my offer even be approved and if not, then what?A: There is no guarantee your offer to the bank will be approved. And if it's not, then you're back to looking for homes again.

Q: Can anything else happen while my offer is in?
A: Believe it or not, you can put an offer on a home and the bank can still foreclose on the home before they even review your offer. Amazingly, the short sale department and the foreclosure department often don't talk with one another. So while the SS department can be negotiating a short sale and be close to approving it, the foreclosure department can go ahead and foreclose. Now the buyer is out of a home and the seller is too.

Q: So it sounds like Short Sales are all negative, what's the benefit?
A: For a buyer, the benefit can be huge. If the short sale ends up getting approved, the buyer may acquire title to a home for 10's if not 100's of thousands less than what that home would appraise for. For a seller, they may be relieved of all or a portion of their mortgage debt, creating a huge relief for them.

When you go out to look at homes, consider these questions:
  • How soon do I need to be in my new home?
  • Do I want to focus on price alone, or do I want the home of my dreams?
  • Am I patient enough to wait up to 6 months to get an answer? And am I OK if that answer is "no"?
Discuss all these questions with your Realtor. Be very specific with them as to whether or not you want to pursue short sales. They can be a great deal if you get them approved, but they can be a big headache in the mean time. Talk with your Realtor to determine the best course of action in your specific situation. And if you're looking for a GREAT Realtor, give me a call. I'm happy to help anytime.

Saturday, April 25, 2009

Short Sale Sign
This is the first of a two part series. This series will discuss the ins and outs of short sales. This first part will focus on short sales from a sellers perspective, the second and final part will detail short sales from a buyers perspective. Please note, these articles are inteded for informational purposes only and should not be construed as advice for your individual situation. If you're considering a short sale, foreclosure and/or bankruptcy you should seek the legal counsel of a real estate attorney to advise you on your individual situation.

Let's start off by defining what a short sale IS. A short sale by the most basic definition is when: The net proceeds from the sale of a home are not enough to satisfy the underlying liens (mortgages) on the property AND the seller does not have the means to pay the difference between the net and the amount owed. Take this example, a home is listed for sale for $200,000. They receive a full price offer and after selling expenses NET $182,000. The seller only has one mortgage but the mortgage on the property is $190,000. There is a difference between the net proceeds and the mortgage amount of $8,000. Is this a short sale? ONLY if the seller cannot bring the difference ($8,000) to the closing table. If the seller does not have the money to bring to closing to close the sale, they yes, we are in a short sale situation. Clear? As Mud?

Q: Why would someone sell their home "short"?
A: A number of reasons would cause someone to sell a home "short". The easiest way to explain this is that SOMETHING has changed in their lives that forces the sale of their home and they don't have enough equity in the home to profit after selling expenses. Loss of income, job transfer, mortgage payments increased beyond their affordability, etc.


Friday, April 24, 2009

Well, it looks like Spring has sprung and we're finally seeing some positive signs that we may be at or near the bottom of the market. Pending sales are up, way up . . . and new listings and active listings are down compared to the same time last year. In Pierce County, we're getting close to what the National Association of Realtors (NAR) considers a "Balanced" market.

The NAR looks at months of inventory to determine if we have a buyers market, a sellers market, or a balanced market. The barometer is 6 months worth of inventory. At 6 months worth, we have a balanced market, less than 6 months it's a Sellers market and more than 6 months, it's a buyers market.

Months of inventory is calculated by dividing the number of homes that sell in any given month into the total number of homes available. For example, in March of 2009, in Pierce County, 975 homes went pending and there were a total of 5,588 homes that were active, so based on pending sales, there is currently 5.73 months of inventory. Compare this to last year where at times we had upwards of 14 months of inventory, you can see we're in a much better position.

So, wihtout further delay, here are your March 2009 MLS statistics for Pierce, King and Thurston counties:
Total Active Residential Listings
Average Time On Market
Average Sales Price
County
03/09
03/08
03/09
03/08
03/09
03/08
Pierce
5,588
7,014
95
95
$252,295
$298,222
King
9,588
10,592
84
80
$421,315
$539,732
Thurston
1,551
1,980
106
96
$262,636
$287,825
    
Total Closed
Total Closed YTD
County
03/09
03/08
03/09
03/08
% Change 12 Mo
Pierce
577
730
11,525
8,717
-16%
King
2,358
1,697
21,548
19,266
-22%
Thurston
415
330
3,679
3,142
-9%
Data Courtesy of the Northwest Multiple Listing Service (NWMLS)

Thursday, April 23, 2009

Sonic, America's Drive In
After months of anticipation, it's finally going to happen! The first (that this blogger knows about) Sonic Drive in will open in Western Washington, RIGHT HERE ON SOUTH HILL! That's right, Monday morning at 10AM the Sonic Drive In on South Hill thrusts open it's doors, er . . . drive up ordering thingies for business!

While this is sure to be a popular destination on the hill, expect traffic to be an absolute nightmare at 136th and Meridian for quite some time as local (and some not so local) residents get their fill of Strawberry Limeade. When I visited the Sonic in Wenatchee last summer after the DAM2DAM bike ride, I made the mistake of going at Happy Hour. The line of cars was around the building for the drive-thru and EVERY SINGLE one of the drive up order thingies was full. I had to circle the block twice just to get a couple limeades and burgers. And that Sonic had been open for some time, the newness had worn off.

Look for a review of the skating servers and the Sonic burgers to follow shortly!

But on Monday, (and well probably a couple weeks after that too) you'll want to avoid 136th and Meridian like the plague. Unless of course you want that limeade . . . then by all means, step right up!

Sunday, April 19, 2009

Saving Money for a downpayment
WHAT? I need money to buy a home!? What's that all about!? What happened to all those zero down interest only 80/20 arm and a leg thingies?

Yes, it's true, in most cases today you'll actually have to put some of your hard earned money down to actually purchase your new home. But it's not as bad as you might think. There ARE a few simple strategies you can employ that are painless and will have you into your new home in no time.

First let's talk about zero down loans and get that out of the way, because I know you'd really rather NOT put money down if you don't have to.

OK, here are the few (and I mean FEW) situations where you won't have to put money down:
  • VA Loan - Available to all current and former military members. Government loan, 15 or 30 year fixed rate, competitive rates. Not available to anyone that's not current or former military.
  • USDA Loan - Available to anyone. Very similar to FHA loan in terms of home requirements, etc. BUT limited to rural areas. Income guidlines apply.
  • Pierce County Downpayment Assistance - Provides up to 6% of the purchase price of the home to be used towards down payment and closing costs. The 6% is financed as a 30 year 2nd mortgage at 1% interest rate with NO payments due until the home is sold. Income guidelines apply.
  • Tacoma & Lakewood Downpayment Assistance - Similar to program above, but no interest loans for 20 years instead of 30 years. Income guidelines apply.
Now that we have that out of the way, let's talk about actually putting money down.

You can get into an FHA loan for as little as 3.5% of the purchase price put down. So when you look at say a $300,000 home you can get in for as little as $10,500 out of pocket. Which, when you think about it is really a screaming deal. You're leveraging 96.5% of a home's value using someone else's money to get into YOUR home! AND the best part is that the 3.5% CAN be gifted from a parent, rich uncle, etc. So again, you can get in with zero down. Now keep in mind that an FHA loan with only 3.5% down will carry with it, Private Mortgage Insurance (PMI) but that's a small price to pay to get into the home you want. AND if you qualify for the first time home buyer tax credit, you get $8,000 of that down payment back when you do your 2009 taxes. It's almost like zero down.

How do you save that 3.5% when you're living paycheck to paycheck already you might ask? Well it requires discipline. As Arnold Schwarzenegger said in Kindergarten Cop "You Lack Discipline!" Buying a home will be one of the largest, if not THE largest financial commitments you'll make. If you're not disciplined before you buy your home, you'll likely not be disciplined after you buy your home, so you may find yourself in a scary situation should something drastic like a roof leak pop up.

But you didn't come here for a lecture on discipline did you? Some easy things you can do that are fairly painless to do could be:
  • Make your coffee at home, instead of hitting up Starbucks every morning.
  • Take your lunch instead of eating out.
  • Set aside 10% of your paycheck every payday into a "down payment" fund. Pay yourself first and you'll soon not even miss the money.
  • Detail all your expenses for one month, down to the penny. You'll be surprised at what you're spending (wasting) money on.
These are just a few tips to get you on the road to home ownership. I'm full of them. If you want more, simply give me a call or drop me a line. I'd be happy to review your individual situation and help you find ways to save for that downpayment. In no time, I'll be handing you the keys to your brand new home! Now isn't that worth not having your coffee come in a cup with a green woman on it?

Saturday, April 18, 2009

Fondi Pizza Now Open!

One of the great new additions to Sunrise Village is now open! Fondi Pizza continues their tradition of fine Neapolitan Pizza with the addition of their restaurant in Sunrise Village. Recently I had the opportunity to visit them for Lunch and last night Teri and I went for dinner. I can say that both experiences are very much worth repeating!

Last night when we arrived, the place was PACKED and I mean Line out the door packed! Apparently Fondi had, to inspire interest in their new restaurant, sent out coupons for free pizza. THIS blogger did not however receive said coupon. (Fondi, drop me a line, I'd love to tell you where you can mail that coupon. :-) When we walked in the line snaked around through the entrance and there must have been 30 people in line. They don't take names however and call you when they have a table ready for you. You wait in line, then order when you get to the counter. A server will then seat you and bring your food out.

While Fondi is more sit down Restaurant than not, the feel is somewhat cafeteria-ish. They have tables scattered about the floor in two and four top combinations with wicker chairs. The soda fountain is self serve, but they do have beer and wine on the menu. After we were seated, the servers were attentive and our food arrived quickly. We started out with a Gorgonzola salad shared between the two of us. We ordered a large and in hindsight, we probably should have ordered a medium because we had LOTS of salad left over. The ingredients were insanely fresh and the flavor was wonderful!

Shortly after we were through our saldas, our pizza arrived. Now there are a number of "Wood fired" pizzarias in the area, but Fondi is somehow different. Their style of Pizza is called "Neapolitan" and according to their website, Fondi is a town located between Naples and Rome, hence Neapolitan pizza. It's a very thin crust, made fresh daily with fresh ingredients. We had The Guido: Pancetta, Caramelized Onions, Artichoke Hearts, Green Sauce, Fresh Mozzarella (They make it in house every day!), Gorgonzola and Fresh Basil. Again, VERY good flavor and insanely fresh ingredients.

At Fondi, you won't find a "Family Size" pizza or any "deep dish" pizza like the other guys. This is true Italian, Neapolitan pizza. They describe their pizzas as individual, meaning for one person, but they can cerainly be shared as we did. But if I had a family of four, I'd probably want two or more pizzas to feed everyone. Besides, then you get to taste not one, but TWO amazing pizzas!

I was watching what others had ordered and the table next to us had ordered their Oven Fired Bruschetta. Wow, I wanted to reach right over and pluck a chunk of fresh mozzarella right off their table it looked so good!

I think Fondi has a hit on their hands and South Hill Puyallup has another GREAT restaurant!

Sunrise Village is really filling up and I'm excited to hang out there more and more this summer!

Visit Fondi's Website

Fondi's Sunrise Village Menu

Thursday, April 16, 2009

PI Globe, sign of the times

Did anyone notice that the Seattle PI stopped circulating a PRINT newspaper?

As social networking and "new media" become more prevalent today, we're seeing the media of yesteryear slowly disappear. As the PI was shutting it's print doors and going to an online only media outlet, I heard an interesting quip on the radio by a former employee:

"We did it to ourselves . . . our reporters wrote articles about how great Craigslist was for classified advertising and they didn't realize that a good portion of our revenue came from classified advertising revenue!"

The world is changing. I don't think anyone can deny it any longer.

In my office I'm known as "The geek". I wear that badge proudly. Having come from the Information Technology (IT) world into real estate over 6 years ago, I was uniquely poised to take advantage of online media. I was constantly baffled by the barrage of advertising execs pitching this house book or that house book. The News Tribune asking for dollars to advertise there. But I tried it. I tried it all. And the one thing that kept coming back to me is that print advertising is not immediate. You submit an ad, a proof comes back, you approve the proof and a couple weeks later, your ad appears. In the boom times, you could COUNT on your home being sold long before the presses rolled.

But online marketing is INSTANT! When I write an ad and get my digital pictures uploaded, it's there for EVERYONE to see. So while yes, I advertise all my listings on Craigslist, I advertise all my listings everywhere I think someone might look for them. There are dozens of sites that my listings appear on. And generally when you search the address of the property on Google, it shows up as the top 3 - 5 entries there as well.

To learn about all the sites your home will show up on, give me a call for your no obligation competitive market analysis.

Saturday, April 11, 2009

If 88% of homebuyers today are starting their search on the internet, doesn't it stand to reason that if your home doesn't show well there, it won't be shown in person? How many times have you been browsing listings on the internet and come across a listing with no photos? What did you do? Did you explore further to see if it "sounded" like a home you wanted to buy? Or did you just pass it on by? I'm guessing you chose the latter course of action. I've always prided myself on making sure my client's homes stand out with the photos I take. Yes occasionally my mom yells at me because I forgot to put a toilet seat down, but for the most part I've tried to take the best photos I could for my clients. I don't want my listings to be passed by. Ever.

Recently I've started exploring a technique called HDR Imaging. HDR stands for high dynamic range. I won't go into the nuts and bolts here of what HDR is, but just look at the photos below and tell me you don't want to see this house up close and personal. If your real estate agent isn't taking photos like this, can you really say your home is being properly represented to the buying public?

Front of Home

Rear of Home

Living Room

If you'd like to see the rest of the photos of this home, click here: Photos of Puyallup Highlands Model Home by John Hurlbut.

If you'd like a no obligation competitive market analysis of your home, call me at (253) 222-2626.

Monday, April 06, 2009

Shaw Road Extension Bridge Work

Originally slated for a November 2010 completion, work has cranked back up on the Shaw road extension at the base of Puyallup's South Hill. Extending Shaw road from East Pioneer to East Main Street will relieve the headache of train traffic, both cargo and passenger for hundreds if not thousands of commuters each morning and afternoon. This blogger in particular will see at least a 5 - 10 minute time savings each way to and from the office.

According to the March 5th Article in the Puyallup Herald, completion for the project is now expected in "early 2010". The way they've been going, I wouldn't be surprised to see it done before the end of the year. Looking at the photo above (shot with my trusty iPhone) you can see that the two supports over the train tracks are complete and the horizontal trusses for the center section of the new bridge are in place. This has all happened in the last two months. It's exciting to watch! OK, kind of like paint drying, but I can't wait to drive over that new bridge!

Puyallup Herald Article on Shaw Road Extension, March 5th

City of Puyallup's Shaw Road Extension Page


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