Congress is considering a proposal that would create a tax on all potential homeowners and consumers looking to purchase or refinance a mortgage. This proposal, scheduled for consideration on October 22 by the House Transportation and Infrastructure Committee, would use Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund the re-authorization of federal surface transportation (highway) programs.
By increasing Fannie Mae and Freddie Mac’s credit risk guarantee fees (g-fees) to fund transportation programs, Congress would disturb the housing recovery. Now is not the time to raise the cost to purchase or refinance a home.
NAR strongly believes that taxing homeowners to pay for transportation programs places an unnecessary long-term burden on consumers and this action will disproportionately impact low and moderate income borrowers, as well as first-time homebuyers.
Tell Congress to stop taxing homeowners to fund transportation projects.
Please click here to visit the REALTOR Action Center and help us take action!
Do you know the difference between Appraised Value and Market Value of a home?
Appraisals are designed to protect buyers, sellers, and lending institutions. They provide a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper. Below, you will find information about the appraisal process, what goes into them, and their benefits.
The appraised value of a property is what the bank thinks it’s worth, and that amount is determined by a professional, third-party appraiser. The appraiser’s valuation is based on a combination of comparative market sales (I'm happy to complete a complimentary analysis of your home!) and inspection of the property.
Market value, on the other hand, is what a buyer is willing to pay for a home or what homes of comparable value are selling for. A home’s appraised value and its market value are typically not the same. In fact, sometimes the appraised value is very different. An appraisal provides you with an invaluable reality check.
If you are in the process of setting the price of your home, you can gain some peace-of-mind by consulting an independent appraiser. Show him comparative values for your neighborhood, relevant documents, and give him a tour of your home, just as you would show it to a prospective buyer.
What information goes into an appraisal?
Professional appraisers consult a range of information sources, including multiple listing services, county tax assessor records, county courthouse records, and appraisal data records, in addition to talking to a local real estate professional, like myself.
They also conduct an inspection. Typically an appraiser’s inspection focuses on:
- The condition of the property and home, inside and out
- The home’s layout and features
- Home updates
- Overall quality of construction
- Estimate of the home’s square footage (the gross living area “GLA”; garages and unfinished basements are estimated separately)
- Permanent fixtures (for example, in-ground pools, as opposed to above-ground pools)
After considering all such information, the appraiser arrives at three different dollar amounts – one for the value of the land, one for the value of the structure, and one for their combined value. In many cases, the land will be worth more than the structure.
One thing to bear in mind is that an appraisal is not a substitute for a home inspection.
Who pays and how long does it take?
In a traditional transaction, the buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $400-$600, but this can vary from region to region.
An inspection usually takes anywhere from 15 minutes to several hours, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for values of the houses around you. A full report comes to your lender in about a week.
If you are the seller, you won’t get a copy of an appraisal ordered by a buyer. Under the Equal Credit Opportunity Act, however, the buyer has the right to get a copy of the appraisal, but they must request it. Typically the requested appraisal is provided at closing.
What if the appraisal is too low?
If your appraisal comes in too low it can be a problem. Usually the seller’s and the buyer’s real estate agents respond by looking for recent and pending sales of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can renegotiate the contract or cancel it.
Where do you find a qualified appraiser?
Your bank or lending institution will find and hire an appraiser; Federal regulatory guidelines do not allow borrowers to order and provide an appraisal to a bank for lending purposes. If you want an appraisal for your own personal reasons, and not to secure a mortgage or buy a homeowner’s insurance policy, you can do the hiring yourself. You can contact your lending institution and they can recommend qualified appraisers, you can choose one yourself, or you can call me so I can provide a recommendation for you.
Interest rates remained historically low for the month of November and 53% of the homes available for sale on Seattle's Eastside received a mutually accepted offer. On average, the median home price was $652,366 (10% above last year's median price of $592,041!) and the average days a home was available on the market was 57 days — a slight change from this Spring's 35 days.
While the real estate market may feel slower, it's only seasonal. The demand for homes in our area stays strong. The month of November was the best November since 2005 for pending home and condominium sales! Not surpringly, many buyers have complained that there is still not enough home inventory to choose from; the numbers prove their frustrations: home inventory is down 12% year over year.
December slowdown is expected as many buyers and sellers focus on the holidays and year end. As we move forward into the new year, interest rates should stay low to keep the buyers motivated. I've been busily viewing new developments on the Eastiside, including Bothell, Redmond, Sammamish and Issaquah, and with the release of several new construction communities, these homes will help alleviate some of the demand. If you are waiting for the Spring market but have the ability to act now, I would recommend it! Take advantage of this healthy, neutral market while it's still quiet from the holidays.
Your referral is my highest compliment! Please pass my name along to anyone that may need my advice and expertise.
The Windermere Real Estate Company has been featured in many social media avenues over the past few weeks! Here are a few articles that I'd love to share with you. I'm proud to work for such a driven, creative, professional company that cares about our clients and community. Plus, our real estate market is healthy!
Probably one of the most beautiful, expansive condos on the Eastside. And available for sale for $6 Million.
One of Lake Washington's most unusual houses:
A new wave of Asian buyers are coming to the Eastside!
We are blessed to live in Seattle. Surrounded by big business like Amazon, Microsoft, Costco, REI and Google. As Kemper Freeman continues to develop in Downtown Bellevue, Canadian Developer Nat Bosa continues his two tower condo project "Insignia" in Belltown, and South Lake Union gets developed to accomate the new Amazon campus, it's important (and enlightening!) to keep tabs on our Seattle/Eastside Real Estate market — and the National market, too. The Seattle Times just released the following article:
Americans bought homes in October at the briskest pace this year, a sign that the sluggish housing market is turning around. Sales of existing homes rose 1.5 percent to a seasonally adjusted annual rate of 5.26 million last month, the National Association of Realtors said Thursday. That's up from a revised pace of 5.18 million in September. October marked the first month in 2014 when sales increased compared to a year ago, registering a 2.5 percent gain.
Still, the Realtors project that 2014 sales will fall below 2013 levels. "Continued gains in existing home sales are going to be difficult," said Ted Wieseman, an analyst at Morgan Stanley.
Home sales slumped through much of 2014 after a three-year rally in the wake of the recession and the implosion of the housing market. Harsh winter weather crippled sales at the beginning of 2014, just as tight credit, rising home prices and essentially flat incomes increasingly limited the number of buyers who could afford a home.
At the same time, investors are backing off properties to either rent out or renovate and resell.
Over the past 12 months, the share of homes being bought by investors has slipped to 15 percent from 19 percent, according to the Realtors. As the real estate market has mended from the recession, the opportunity has eroded for investors to profit from buying homes at steep discounts.
Just 4 percent of the single-family houses sold in the third-quarter were flipped by investors, who frequently bought distressed properties on the cheap, fixed them up and put them back on the market, according to a report released Thursday by housing data firm RealtyTrac.
Flipping accounted for 5.6 percent of sales during the same period in 2013. Its share nearly reached 10 percent in 2012.
Not counting renovation costs and other expenses, investors made on average a 36 percent return $75,900 on each home they flipped. That profit margin fell from 37 percent last year. But unlike recent years when flippers bought at a discount and sold the homes at a discount compared with the broader market, sales are now at a 6 percent premium, suggesting that their repairs are more extensive than in the past.
"The flippers aren't just slapping on a fresh coat of paint and rolling out new carpets," said Daren Blomquist, vice president at RealtyTrac.
Median home prices rose 5.5 percent over the past 12 months to $208,300, according to the October sales report.
First-time buyers have yet to return to the market, representing just 29 percent of sales last month. This group historically accounts for 40 percent of sales.
The time on the market is also steadily increasing. It took 63 days on average to sell a home last month versus 44 days in June during the height of the summer buying season.
The Realtors estimate that 4.94 million existing homes will be sold this year, down 3 percent from 5.09 million in 2013. Analysts say sales of roughly 5.5 million existing homes are common in a healthy real estate market.
October sales improved in the Northeast, Midwest and South compared to the previous month, but purchases declined in the West.
The uptick in activity caused the inventory of homes on the market to slip to 5.1 months. When the supply of homes for sale falls beneath 5 months, it usually signals accelerating price growth.
Home prices have been increasing at a much faster clip than incomes, hurting affordability and causing sales to drag. Prices increased 5.6 percent in September compared with a year ago, real estate data provider CoreLogic reported. While the pace of appreciation has slowed this year, it still is almost three times greater than the approximately two percent increase in average wages tracked by the Labor Department.
Lower mortgage rates in recent weeks have improved affordability, though sales have yet to rise substantially. Average 30-year mortgage rates have been hovering around 4 percent, down nearly half a percentage point since January.
Still, other reports suggest that home sales could improve in 2015.
The National Association of Home Builders/Wells Fargo index rose to 58 this month, up from 54 in October, a sign that sales of newly-built homes should continue to improve over the next six months. Readings above 50 indicate more builders view sales conditions as good rather than poor.
Separately, the Commerce Department reported Wednesday that applications for building permits rose 4.8 percent in October to 1.08 million, evidence that construction activity could increase next year.
It's no surprise that as our days get shorter, our Seattle Real Estate market slows down a bit. Many buyers are exhausted from the hectic Spring & Summer months! Between October and February, our attention is focused on tackling the holiday season, devoting our Sunday's to Seahawks games and family time, and snuggling by the fireplace on these blustery Northwest nights.
With that said, if you and your family are in the market to purchase a home, I would recommend buying sooner, rather than later. Here are four reasons to buy this Winter:
1. Prices Will Continue To Rise. On the Eastside, home prices are up 9% year over year; The Seattle prices are up 9.1% YOY. The KCM crew just released a market report that explained, "The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report released projects appreciation in home values over the next five years to be between 11.2% (most pessimistic) and 27.8% (most optimistic)." Home values will continue to appreciate for years. If you buy now, you start earning now.
2. Mortgage Interest Rates Will Increase. This weekend, our 30 year Conventional rates were hovering at 4.0%. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of REALTORS are in unison projecting that rates will be up almost a full percentage point by the end of next year. Even the smallest increase in the rate affects your buying power.
3. Whether you Rent or Buy, You Are Still Paying a Mortgage: As human beings, we must consume housing whether we rent or buy. Rents have continued to increase nationally, so it's time to stop paying a landlord and a rate of return. Owning makes more financial sense.
4. It's Time To Live The Life of a Homeowner: When someone makes the decision to buy, they discuss two important factors — the price of the home and the current mortgage rates. If both are increasing, it may be best to start placing your focus on homeownership. Essentially, you could pick your schools, your neighborhood, the type of privacy surrounding you, and have the ability to make your own renovations.
If you or someone you know is looking to buy (or sell) real estate, please don't hesitate to reach out to me.
Fall is an ideal time to tackle maintenance projects both inside and outside. Here are a few ideas to get you started:
1) Gutters top to bottom: Water in the wrong spots can do a lot of damage. Start by ensuring that gutters and downspouts are doing their job. (Don’t attempt this task yourself if you have a two-story house with a steep roof; hire a professional instead.) If your home is surrounded by deciduous trees you may need to clean out your gutters a few times a year, especially in the fall. Check to make sure your gutters are flush with the roof and attached securely, repairing any areas that sag or where the water collects and overflows. Clean out the gutters and downspouts, checking that outlet strainers are in good shape, and are firmly in place. Finally, check that your downspouts direct water away from your house, not straight along the foundation.
If you haven’t already, you may want to consider installing gutter guards. Gutter guards create a barrier so water can get through to your gutters, but debris cannot, limiting gutter buildup (and the time you spend cleaning out your gutters). There are DIY installation kits available or you can always hire a professional to install a gutter guard system.
If you have a sump pump under your house, now is a good time to test it. Run a hose to be sure draining water travels directly to the pump (dig small trenches if needed), and that the pump removes the water efficiently and expels it well away from the foundation.
Check for leaks: The best opportunity to catch leaks is the first heavy rain after a long dry spell, when roofing materials are contracted. Check the underside of the roof, looking for moisture on joints or insulation. Mark any spots that you find and then hire a roofing specialist to repair these leaks. What you don’t want to do is wait for leaks to show up on your ceiling. By then, insulation and sheet rock have been damaged and you could have a mold problem too.
Don’t forget the basement. Check your foundation for cracks, erosion, plants growing inside, broken windows, and gaps in window and door weathering. Make sure to properly seal any leaks while the weather is nice. This will ensure materials dry properly.
Pest Prevention: Rodents are determined and opportunistic, and they can do tremendous amounts of property damage (and endanger your family’s health). As temperatures cool, take measures to prevent roof rats and other critters from moving in. Branches that touch your house and overhang your roof are convenient on-ramps for invaders, so trip back branches so they’re at least four feet from the house. If you do hear scuttling overhead or discover rodent droppings in your attic, crawl space or basement, take immediate action.
Maintain your heating and cooling systems: Preventative maintenance is especially crucial for your home’s heating and air-conditioning systems. Fall is a smart time to have your systems checked and tuned up if necessary. Don’t wait for extreme temperatures to arrive, when service companies are slammed with emergency calls. Between tune-ups, keeps your system performing optimally by cleaning and/or replacing air filters as needed.
If you have a wood-burning fireplace, a professional inspection and cleaning will help prevent potentially lethal chimney fires and carbon monoxide poisoning. Even if you don’t use your fireplace often, always keep a supply of dry firewood or sawdust-composite logs so you have a backup heat source in an emergency.
Insulate and seal: Insulating your home is a cost-efficient investment, whether you’re trying to keep the interior warm in the winter or cool in the summer. Aside from more major improvements like energy-efficient windows and insulation, there are some quick fixes that do-it-yourselfers can tackle. If an exterior door doesn’t have a snug seal when closed, replace the weather stripping; self-adhesive foam stripping is much simpler to install than traditional vinyl stripping. If there is a gap under the door (which can happen over time as a house settles), you may need to realign the door and replace the vinyl door bottom and/or door sweep. Air also sneaks inside through electrical outlets and light switches on exterior walls. Dye-cut foam outlet seals placed behind the wall plates are a quick and inexpensive solution.
**I have a referral list of professionals in/around the Seattle area that I know and trust. Please give me a call if you need a recommendation to help with your Fall Maintenance Checklist.
As a buyer, seller or market watcher, how many hours do you spend on Zillow or Realtor.com doing research or looking at "Zestimates"? I'm excited to announce a new feature on my website called NEIGHBORHOOD UPDATE that gives you the ability to receive a monthly newsletter for your specific neighborhood/area. In just one click (by entering your Name, Email Address and Zip Code) you will be automatically signed up to receive this beneficial market report that contains information such as homes for sale, homes sold, market trends and market pricing. All the data is collected from our Northwest Multiple Listing Service data and organized in an easy-to-read, detailed report. What's better than free and informative?
Step 1: Visit www.TrishEnglund.com and click on Neighborhood News on the top right.
Step 2: Enter your Name, Email Address and Zip Code (of the area you'd like to keep a market watch on)
Step 3: An email from me will arrive to your Inbox!
Spring cleaning is such a bore. With the summer months approaching, why not add some appeal…and value to your home! The National Association of Realtors just released a fun article with 7 top bathroom remodeling tips and ideas. I've seen many extraordinary bathrooms in my real estate career, but I'm especially loving #3.