Hammer Sells Homes - Puget Sound Blog

April 4, 2020

Is now a good time to refinance your home mortgage? Other financial resources

If you’re a homeowner and you’ve decided to stay put, should you refi?

Conventional wisdom says if you plan on staying put for a while and save enough to pay off the cost of refinancing within 18 months, and you can drop at least .5%, refinancing makes sense. Lisa and I just refinanced our primary residence and dropped a whole 1%! We’re going to be saving $332/mo which we will be putting back into the mortgage to pay it off 7 years sooner! If this interests you, you can get the process started AND when the time looks right, you can lock your rate. That’s what we did.


There has been so much volatility in the market and there has been a lot of confusion surrounding the Feds lowering the prime rate. The interest rates went down and mortgage lenders were getting inundated with refinance applications. So, in order to protect their workforce (and their margins), they inflated the rates so that they keep up with sales and refis. That's why you saw the yoyo effect. Behind the scenes, there are also other factors at play here as well and some unintended consequences of the Government trying to help with Mortgage Backed Securities. 

 

The bottom line is that today there are some great rates (see chart below) AND there could be better rates coming in the future. You just need to be prepared to strike/lock when/if they dip again.


To answer your next question, yesI know of some very awesome lenders that I can refer you to in order to get your some very cool reports on comparison programs, savings over the life of your loan, as well as your breakeven date. Just text me a253-227-1609. One of my lenders works in 5 states!


Today’s Weekly Mortgage Rate Sheet

 

Other Ways to Save Money
You may also want to check in with your auto loan servicers and credit card companies and see about getting lower rates across the board to save you money! Some auto lenders allow for 1-2x a year to skip a payment. Can't hurt to just ask - if you need to. If you are in need of extra financial relief, here are some additional resources:

For small businesses, it is my understanding that small businesses will possibly be eligible for unemployment benefits (solopreneurs)as well as loans. Click here for more information on the SBA site.
Great news is that not only has the Federal Government delayed the filing of income taxes, Pierce and Thurston Counties have delayed the due date for paying property taxes (IF you pay directly and not through a mortgage payment). See the Federal Government's COVID 19 Families First Resource Toolkit. 
Watch Out for Scams
Sad to say, there are some people that are taking advantage of how vulnerable we are right now. Be extra careful and vigilant about protecting yourself and your family. A list of scams to watch out for from the FCC.
 
Be safe, stay well. 
 
Shane

 

Shane Klinkhammer
REALTOR®
RE/MAX Northwest Realtors
M: 253-227-1609

www.hammersellshomes.com 
Let's connect on Facebook

Five Star Zillow Agent

2017-2020 RE/MAX Top Producer

Top 1% Producer of Pierce & Thurston Counties

2019 - RE/MAX Hall of Fame & Platinum Club
2018 - RE/MAX Platinum Club

4801 S. 19th St, Suite 200

Tacoma, WA 98405

Posted in COVID-19, Newsletter
March 31, 2020

Real Estate, COVID-19, Pierce + Thurston Counties - Let History Give Us Hope

While many of us are rightfully concerned about our personal health and safety and that of our families, we are also concerned about our financial health as well. Most reading this has lived through the financial and housing crisis of 2008 and are concerned about a repeat of that crisis. I am not an economist, and these are unprecedented times, but I have dug up some pretty encouraging news that I'd like to share with you about why this time isn't like the last time and let history will give us hope.  

------------

Economically speaking, since the current situation resembles the stock market correction in the early 2000s, let’s review what happened to home values during that time. The S&P dropped 45% between September 2000 and October 2002. Home prices, on the other hand, appreciated nicely at the same time. That stock market correction proved not to have any negative impact on home values. See chart below and Keeping Current Matters: Why the Stock Market Correction Probably Won't Have Anything to Do With Home Values.

Image preview 

 

What does this Coronacrisis mean for the economy and the value of your home? An economic recession is defined as two-quarters of negative economic decline. Most economists agree that we are certainly headed for that.

...But a recession doesn't have to mean a housing crisis!

History informs our understanding and most of our frame of reference relates to the last housing crisis of 2008 and the fallout and crawl to recovery.

How is this crisis different from 2008? According to the experts, our current market has no similarities with the 2008 housing crisis. Yes, devastatingly, people will lose jobs and unforeseen things will happen. However, the mortgage industry has indicated a willingness to help in ways they didn't before by forbearing payments for those impacted (See website for more info on forbearance options). Also, the last housing crisis created the economic crash based on a flawed mortgage and banking system. We have a more stable system today. (USA Today: Here’s How the Coronavirus Crisis is different than 2008

Also unique to this current event, an unprecedented bipartisan bill just signed into law a $2 trillion economic stimulus package — the largest economic rescue measure in U.S. history — to help businesses, employees and gig workers negatively impacted by the COVID-19 crisis. Check out Marketplace: What the $2 trillion economic stimulus package will mean for you. And student loans are able to be deferred as well (StudentAid.gov: Coronavirus and Forbearance Info for Students, Borrowers, and ParentsCoronavirus and Forbearance Info for Students, Borrowers, and Parents)

Let history speak for itself. Historically speaking, through 3 of the last 5 recessions, housing markets on average have appreciated by 5.4%. (Keeping Current Matters: Here’s 5 Simple Graphs Proving This Isn’t Like the Last Time

Supply and demand at work in Tacoma and Pierce Counties. All of these graphs and data take a more nationwide approach to data. Tacoma and surrounding areas have been the fastest growing housing market for over a year. Supply and demand have been on the side of the sellers for years. Historic inventory lows show February 2020 Housing inventory in Pierce County is yet -32% lower than it was last year this same time and Thurston is nearly -30% lower (see charts below).

There are far more buyers than there are homes for sale. That is because of many different factors: Modern healthcare is extending the life of the biggest cohort generation along with the second-largest generation cohort entering the home buying market: the Millennials. These factors are influential, taken together with the influx of people from other states, tech job creation and Seattlites moving south in order to find more affordable housing (and a myriad of other factors). This is all well and positive for home sellers, but provides challenges for home buyers. In Pierce County, there are only 1.8 months worth of inventory left for all buyers looking for homes and only 1.2 months in Thurston County. Many buyers have been locked out of the market due to competitive bidding that drives the price up beyond their reach. 

InfoSparks Graph of Pierce County Homes for Sale for the last 3 years (-32% decline in homes for sale + 1.8 months of inventory - as of two days ago). 

 

InfoSparks Graph of Thurston County Homes for Sale for the last 3 years (-29.7% decline in homes for sale + 1.2 months of inventory). 



Supply and demand at work in Tacoma and Pierce Counties.

It means that if things shift where we have more inventory, that would provide a more normalized market. A normal stable market has been historically defined as 6 months' worth of inventory. As you can see, it would take a large amount of inventory to become available in order to change the supply and demand dynamic at play in Pierce and Thurston counties. 

Interest rates still low. Another positive data point is that interest rates are still historically low, (even with the volatility), and that provides an extra incentive for buyers to buy vs. rent. Many renters are paying rents on par with mortgage payments so it makes more sense for them to buy, plus there is also a shortage of rentals. Many landlords have sold their rentals to take advantage of the seller's market. So, finding rentals is as difficult as finding a buying a house. This rapid sell-off of rentals creates renter instability, which drives people to buy so they can have greater control over their shelter.

Stronger housing market today. In 2008, many homeowners were upside down on their mortgages because they took all the equity out of their homes. Averages show that homeowners have more equity in their homes now than they did during the housing crisis (Business Insider: Fewer Americans Are Borrowing Against Homes). Leading up to the last financial crisis, as you may remember, many people used their homes as “ATMs” -- and the banks let them. A lot of loose lending practices have tightened up to protect equity from being used like ATMs. So, we have a much stronger housing market today than we did before. People are less likely to walk away from their homes with large amounts of equity in their home.  

Time heals most wounds. Let’s say the worst happens and you do lose equity in your home, it’s only an on-paper loss, like stocks, until you need to sell. If your time horizon for selling is short, that might provide a problem if you don’t have much equity built up. But that’s true whenever you buy -- as you build equity over time. If you have a longer time horizon for selling, then time always has a way of correcting these losses.

More on the economy and housing by economists...





We will get through this... we will be better for what doesn't take us down, will make us stronger. 

Stay safe, stay well.

Shane

Shane Klinkhammer
REALTOR®
RE/MAX Northwest Realtors
M: 253-227-1609
www.hammersellshomes.com 
Let's connect on Facebook
Five Star Zillow Agent
2017-2020 RE/MAX Top Producer
Top 1% Producer of Pierce & Thurston Counties
2019 - RE/MAX Hall of Fame & Platinum Club
2018 - RE/MAX Platinum Club
4801 S. 19th St, Suite 200
Tacoma, WA 98405

 

Posted in COVID-19, Newsletter
March 28, 2020

Real Estate, COVID-19 + Essential Services in Pierce and Thurston Counties

No doubt you are getting bombarded with information and emails from every corporation that you’ve ever dealt with and how they are responding to the COVID-19 situation. Funny post I saw on Facebook

Humor is a good way to cope. And, yet these are uncertain times causing people anxiety. Many people are asking me what is going on with real estate. How has it been impacted? News, just as the virus, is changing rapidly. And, just as you would expectand not I, nor anyone, has a crystal ball. Many people are worried about a repeat of the 2008 housing crash, but I have some good news on that front in my next email. 


Caveat: News is changing rapidly and this is updated as of the time of writing. More updates to follow as things change. 


But first, let’s talk about what’s going on right now in Washington State. 

As you know, on Wednesday of last week, Governor Inslee enacted an overdue two (2) week stay-home order except for essential services to help flatten the curve. Are real estate services considered essential services?  The answer is, not as of right now. For some states it is, but not right now for Washington State. (See FAQs from the Northwest MLS) While real estate services are considered non-essential, Governor Inslee has issued an updated order on what limited functions real estate brokers can accomplish. Read more.


JUST INMemorandum from Governor Inslee Dated 3/27/20 Re Real Estate and Mortgage Guidance – Stay Home, Stay Healthy Proclamation


BREAKING NEWS from Washington State Realtors Association: Daily Update 3/28/2020 Packed with Tons of Housing Updates / Reading


Pending transactions, escrow, title and banking are considered essential services. As is the support for those services - like mobile notaries, etc. 


Within the last 24 hours, Governor Inslee has loosed restrictions on allowing real estate brokers to complete some of the functions associated with buying and selling homes with very strict rules on health and safety. Here are the newly implemented rules regarding buying and selling in Washington State to be able to continue to minimally operate with the least amount of contact and with most stringent safety precautions fully and strictly honored by all:

  • Can not have homes professionally photographed but brokers can take photos. Or, the owner can take photos and video. 

  • Can not have yard post and signs installed by third party vendor.

  • Can not have stagers stage nor destage homes.

  • Home owners can list homes with real estate brokers.

  • Brokers can put Supra key boxes on homes for sale.

  • Brokers can preview and virtually tour homes for buyers AND/OR personally show homes 1-on-1 providing that social distancing and sanitizing protocols are strictly followed. (This provision allows only two (2) people on property at once as long as 6 feet apart).

  • Buyers can have homes inspected (providing there are only two (2) people in the home and within at least 6 feet apart at all times). Buyers may not attend as that would make 3 people at least and the owner must vacate the premises for the duration of inspection.

  • Brokers can take a buyer (one at a time) through a home for a final walk-through prior to closing (providing that there are only two (2) total people on the premises at all times and social distancing is honored.)

  • Brokers can provide keys for closing as long as social distancing measures are strictly observed (again only two (2) people allowed on property at the same time).


ALSO UPDATED: Appraisers can appraise homes but the occupants/owners must vacate home. 


Lastly, previewing and showings must have appointments scheduled so not to back up agents (and potential buyers) on top of each other. Forms need to be filled out as to buyer’s and agent’s health prior to showing. 


So, with everything in mind, is it a good time to list your home for sale?

With the newly revised order on limited real estate transactions, I have a new perspective on this. IF agents are able to preview and virtually tour a home or provide 1-on-1 tours with buyers, then I believe that listing now could be a good idea, depending on your urgency / need to sell. Homeowners are still listing and still going into contract here in Pierce County. I’ve been hearing that there are still multiple bid scenarios happening - as of Tuesday / Wednesday of this last week. Given pent up demand, and the inability for many buyers to actually get into contract with multiple bid situations, this might be a good time for them to get into contract while other, more cautious, buyers sit on the sidelines. Supply and demand is still at play as there are more buyers than there are homes for sale. Inventory is still at record lows (-32% from last year same time). 


Timelines could take longer to sell and longer to close. Patience is going to have to be the order of the day. 

 

 

So, with everything in mind, is it a good time to buy?

Coming up in next email. 

 



Keep your hopes and spirits up. We will get through this. We will overcome. Let me know if you need anything!

 

I’ll be sending more updated information on home values, history of housing crisis and why this time is different, and more resources - hopefully providing rays of hope and some information to help keep you ahead and informed. 


With great respect and care,

 

Shane

Shane Klinkhammer

REALTOR®
RE/MAX Northwest Realtors
M: 253-227-1609

www.hammersellshomes.com 
Let's connect on Facebook

Five Star Zillow Agent

2017-2020 RE/MAX Top Producer

Top 1% Producer of Pierce & Thurston Counties

2019 - RE/MAX Hall of Fame & Platinum Club
2018 - RE/MAX Platinum Club

4801 S. 19th St, Suite 200

Tacoma, WA 98405

Posted in COVID-19, Newsletter
Jan. 1, 2020

Hammer's Happy, Healthy, Home January 2020

Shane and Lisa KlinkhammerHappy New Year! We want to thank you for making 2018 a great year for us personally and professionally. 

Today is the first page of a 365 day book. And, today, we're writing the story of what we hope is a great love story. Love of work, love of play and love of our circle. This year, we are looking to bring you more value and on a regular basis. Every month, we're going to carefully curate some tips, tricks, design and health ideas for you and your home. Enjoy being ----------

Happy...
Being happy in the new year can be defined as a state of contentment brought on by many activities (or lack thereof). Here are a few ideas that we hope will inspire you to be content. 


Healthy...
Every year, most people include health as an item on their new year game plan. 
Here are a few ideas to get you started!

  • Meatless Monday... our daughter went vegan a little over a year ago and she's been such an inspiration regarding the way we view meat. If you're looking to do a meatless Monday, try out this tried and true yummiest black bean burger recipe. The first time around is a little time consuming, but it's easy and you can freeze the rest for even easier future dinners! We do this recipe without bread and just put avo, tomatoes, lettuce and the chipotle mayo. Delish! (Tip: when you are freezing, use two pieces of wax paper between each burger so they don't stick together!)
  • Household brands and products we've used for years we take for granted are not healthy for us, our family or pets. Shane recently found an article that highlighted some brands and products we use regularly and we were shocked to see. Here is a website that you can visit to see how the products you use rate.

Home...
Our place of safety, warmth and comfort. The tip below will not only help with your health, it will help your pocketbook by keeping your furnace well for longer and save you money on your electricity bill. 

Hope you enjoyed this bit of information and hope it brings value! If you have any questions or thoughts, feel free to reach out at any time.

Wishing you a most healthy, happy and prosperous 2020!

Lisa and Shane Klinkhammer
(Oh... and p.s. another little tid bit, Shane's company has changed from RE/MAX Professionals to RE/MAX Northwest - same company, new name/owners.)

Posted in Newsletter
July 6, 2019

12 Best Things About Living in Oakbrook - Lakewood, WA

I don't know about you, but I love Top 10 lists if they are done well. I'm starting with Oakbrook Lakewood, WA because I have lived here for 8 years. We are deeply invested in this community as we have started and maintained community beautification projects throughout those 10 years.

Oakbrook - Lakewood, WA Real Estate / Homes for Sale

Location: Oakbrook is located off of 87th & Steilacoom Blvd in Lakewood, WA. It is comprised of East side and West side. The dividing line is Onyx. Oakbrook ends at Phillips Rd. 

Population: Oakbrook is a fairly large community with over 1,200 homes. 

Well, here are the top 12 best things about living in Oakbrook, Lakewood, WA:

  1. It's natural beauty. Oakbrook is a mature neighborhood nestled around a greenbelt. It's tall trees and mature landscaping make it a very beautiful place to live. On any given day you can see deer roaming the yards, rabbits, squirrels, chipmunks, birds, raccoons, and in certain areas, bald eagles. 
  2. Nearly every house is unique. It's not like a cookie cutter development. Homes were built over decades and there are many custom homes that reside in this area. From mid-century modern, to craftsman to contemporary flat roofed homes, Cape Cod, Tudor styled homes to Asian styled and everything in between. I believe this reflects the diversity of the residents of the neighborhood - especially when the homes were being designed and built. The lot sizes are larger than newer developments as well. 
  3. The west side of Oakbrook has truly awesome views of the Puget Sound with brilliant sunsets every evening as well as the ability to watch fireworks across the sound and Steilacoom.
  4. It has two golf courses and one frisbee golf course. 
  5. It has a great restaurant in the heart of this bedroom community with close proximity to other good dining options:
    • Oakhouse Restaurant and Bar which is attached to the golf course - many of the menu items are handmade. Fabulous burgers, drinks and spectacular outdoor dining in the heart of Oakbrook off Zircon.
    • 7 min to De La Terre, Topside Bar & Grill, Behrs Drug Store in Steilacoom, WA 
    • 3 min to Kinja Terriyaki, 5 min to Mis Tres Amigos on Steilacoom Blvd. / Oakbrook
    • 12 min to Chamber's Bay Golf Course and Restaurant in University Place
    • 12 min to Long Beach Cafe Thai Food in Lakewood Towne Shopping Center
    • 10 minutes to the Lakewood Towne Shopping Center in Lakewood. 
    • 1-3 minutes to a major grocery store (Albertsons), hardware store (Ace Hardware), and auto store (AutoZone).
    • 1-3 minutes to a great dentist (Dr. Kerr and Ianelli), great eye doctor (Dr. Kim at Rainier Eye)
    • 11 minutes to Farmer's Market held at City Hall in Lakewood. Every Tuesday. 
  6. Hidden trail. Not many people know of this, but there is a trail that is within the greenbelt that is slated to be connected to University Place! It's truly a magical place to hike down to the water and across the greenbelt... and it's right in Oakbrook's backyard. 
  7. The people. Most everyone I've run into in Oakbrook is very kind and friendly. It reminds me of a bygone era of neighborly interactions. We've had a lot of community support for our beautification projects. 
  8. It's private and tucked away. We residents joke about the labyrinth of streets. But this maze and enclosed community keeps through traffic out. 
  9. It's got a swim and tennis club that residents can enjoy during the summer (membership fee applies). Oakbrook Swim and Tennis is great for kids and teenagers to spend the summer. We and our kids have great memories there. 
  10. Oakbrook Park located in the center of Oakbrook on the west side of Oakbrook on Onyx. It's a lovely place for residents to gather and play with their kids, dogs, or just sit and watch the community go by.
  11. Can't leave this article without talking about the 3 minute drive to the large and popular Ft Steilacoom Park. It has not just one but TWO dog parks (for small and large dogs). It's got a lake with a walking trail (Lake Waughop) and lots of trails in addition to the soccer fields, and lots of summer outdoor movies and festivities. Have a picnic, snap some photos, walk or run around the park. 
  12. ONE LAST THING.... It's only a short 9 minute drive to Sunnyside Beach in Steilacoom where you can take the family and have a BBQ under the gazebo, kayak in the sound (Sup Kayak Rental), layout, play in the sound or look for shells. It's an Instagram moment when its a day at the beach! Steilacoom (7 minutes) has Farmer's Markets every Wed during the summer with great food, local products and live entertainment on the grassy knoll. 

Want to live in Oakbrook, Lakewood, WA? Check out the Homes for Sale in this neighborhood!  Call or text me @ Shane Klinkhammer 253.227.1609

Oakbrook WA Real Estate / Homes for Sale

April 27, 2019

Does Staging a Home Really Help Sell Faster or For More Money?

You never have a second chance to make a first impression. 

With the gaining popularity of reality TV shows like Fixer Upper, Million Dollar Listing and Flip or Flop, many buyers have elevated expectations for their home shopping experience. A clean, well staged home can make a home more appealing and therefore more sellable. It can also help offset some unappealing areas of a home by helping the buyer see the home in its best light. This gives the appearance that the home has been well cared for and that translates into the perception of the home's value. 

What is staging? 

Different stagers have varying levels of services. If you were to see your home through a stager's eye, they would be looking for the best way to declutter your home, make it look bigger / cozier, contemporary, clean and desirable to the average buyer. That may mean that they offer those services or make recommendations. Those recommendations may also include painting suggestions, depersonalization, etc. 

Stagers can work with an empty house and do a full stage / partial stage or work with a full house and do partial staging where they take out furniture / decor and bring other furniture / decor in. 

Staging before and after photos

Staging before and after photos

Staging before and after designs

Before and after living room

Does staging really help sell a home? 

Real Estate Staging Association, homes which are staged before going on the market sell 90% faster, on average, than their non-staged counterparts.

National Association of Realtors (NAR) has the following infographic which shows strong results for staging.

Does staging really help sell a home faster and for more money?

How much does staging cost? 

While NAR claims that the average cost of staging is $675, I would love to see what that gets you. Here in the Tacoma / Olympia area, a well staged home could cost upwards of $1,500 to $2,500 and it depends on what your home is staged with (quality/quantity) and how long you rent it for.

Who pays for staging? 

Well, it's in the best interest of the home owner who is selling to stage their home and prep it for selling at the optimal price and for selling as quickly as possible. If, in fact, you could command at least 1% higher if you stage it before you list it and your home is, let's say, an average price of $300,000, then you stand to make $3,000 more if you stage. If it's 5%, then you could literally pay for your agent's commission with the $15,000 additional money you made from staging your home! You can see how the math goes up with higher priced homes. Many agents claim to only do staging for their higher priced homes - because it's an expectation. 

With such a hot seller's market, people can put on sub-par photos of a house and expect to get multiple offers, why should I stage? 

Again, staging means a bunch of different things, but the above statement isn't necessarily true. And, it's not doing home seller a service by shoddily marketing the property. Because... instead of 3 offers, perhaps you could have 5-6 and drive up the price even more or get better terms on the offers. But, at least you would have your pick. 

Poor real estate photos don't sell homes. Don't ever let a real estate agent tell you that they take pictures with their iPhones and it's good enough - "especially in this market." EXAMPLE: I had a client who wanted us to use her photos. She had good taste and a lovely home and truthfully, I don't think she wanted to get the house ready for professional photos. She provided me the photos and they were dark, didn't show off the features of the home (aka the flooring) and it looked crowded and small. Plus, the photos weren't crisp or at the right angles. 

My team and I came in and decluttered, added a few items and moved things around or out and had professional photos taken. The result was an all cash offer within 6 days. Afterwards the buyer told us that it was the hardwood floors that sold him on the house. He fell in love with them right away. Had we not removed the large rugs, moved out the furniture and taken professional photos, he wouldn't have been able to see the floors in all their true glory and we might have missed out on the best offer - which wasn't the highest (we had one $20,000 over ask)! 

Staging before and after living room

Staging before and after living room

And, remember, staging doesn't just apply to the inside! It's outside too... especially if you are selling the outdoor living aspect of the home. 

Staging before and after - patio

Before and after patio

The cost of NOT prepping / staging your home.

Lastly, I can't stress enough the cleaning/prepping part. I had a client that lost out on $4,000 during negotiations because they didn't get the carpets cleaned or have the exterior trim fixed and painted as recommended. If they would have done that in advance of listing, it would have net cost them under $2,000. Instead, it cost them $4,000.

Cost of not prepping your house for sale

In addition to the value perception and negotiations cost, as you can see in the RESA infographic above, the cost of not selling a vacant home (unless you own it outright), can be very costly. Even in this seller's market, houses do sit on the market for months. The longer your house sits on the market, the lower the price and weaker your negotiation position. All of that is a cost to you - the home owner.

If you only had enough money to either fix / clean or stage, which do you recommend?

I recommend fixing / cleaning - especially if it's an empty house. If it's an occupied house, I would go for fixing, cleaning and decluttering. 

Bottom line...

Your direct return will be a result of the effort you put into selling your home. It's a partnership between you and your agent. Your agent will be able to refer you to the appropriate resources to clean, prep and stage your home (inside and out). Pricing it right and getting as much exposure are the most important aspects of selling a home. Staging helps your agent price it and market it well. Consider selling your house with the right tools for success to begin with vs. trying to cut costs. This will save you tons of money and headaches in the long run!

Hopefully this article has been helpful to you!

Shane

Shane Klinkhammer
REALTOR®
RE/MAX NorthWest
Call or text: 253-227-1609
shane at  hammersellshomes.com

Posted in Selling Homes
March 24, 2019

18 Steps to Buying Your New Home

Buying a new home may seem simple (find it and buy it), but in reality, there are many steps and possible hurdles to overcome in the process. Making it from pre-qualification to move in requires a team effort. This article helps you know what to expect during the total buying process from the moment you talk to your lender, to the moment your offer is accepted to the day you get the keys to your new home. 

1. Get Pre-Qualified / Pre-Approved for a Mortgage

If you are needing to get a loan to buy a home (not a cash buyer), you must get pre-qualified for a mortgage before you step into the world of searching for a home. Pre-qualified is a cursory look at your credit, finances and your worthiness to obtain a mortgage loan. Pre-approval means you've gone through the underwriting process and have already obtained the loan. While getting pre-approved for a mortgage is not required to close a deal, it can help you close the deal quicker as being pre-approved signals to the seller that you have strong financial backing. In turn, being pre-approved can give you more bargaining power when negotiating with a seller. Another key advantage of being pre-approved is that certain lenders will offer you a rate lock, which means that you can secure an interest rate and not be a the mercy of the markets if interest rates rise before you close the deal. Not all houses will qualify for all loans. You need to work with your agent and lender to make sure you're only looking at homes that qualify for your type of loan (loan limits, structure, etc.)

2. Find a Real Estate Agent

Ask your friends and colleagues for referrals. Talk to the agents who have been referred to you and see if they are competent and see if you can develop a rapport. You want to make sure you feel like you can trust this person to go up and beyond for you and hold your best interest above their own.

3. Start Home Shopping

Your chosen real estate agent should have a website that is connected to the MLS that you can search and save favorites and have alerts delivered to you. Review areas first to see what areas you're most interested in and when creating searches, search within a 15%+ and - range of your price. Your lender might tell you what you're max loan limit is, but don't be allured by that amount and drive to the top of your range. Make sure that you can comfortably afford the mortgage payment, insurance, taxes, maintenance and unexpected costs that come along with owning a home. Have your agent take you on tours of your favorite homes and have him/her provide you with property reports to get to know the area (if you don't already know it). 

4. Find a Home

Once you find a home that works for you and your family that is in your comfortable price range, ask your agent to do a buyer's CMA (comparative market analysis) and research on the property to determine a pricing and offer strategy.

5. Make an Offer Through a Purchase and Sale Agreement

In this hot seller's market, your first offer should be a strong one. All of your lending docs, earnest money and finances should be buttoned up. If you come in with a low ball offer and weak financing, you could be rejected and banned from coming back to the negotiating table. Be sure your offer is not offensive. Most sellers are emotionally attached to their property and their price. Once you submit your strongest offer, you have provided your earnest money and a deadline. Many listing agents are setting a date for reviewing offers and will compare them all with their seller to determine the best offer -- which may not always be the highest priced offer. All cash, quick close offers will nearly always get picked first, even if it means a discounted price from the listed price. 

6. Enter Into Mutual Acceptance (if not, go back to Step 3)

Once your offer is accepted, this is an exciting time! Now, the following steps occur.

7. Open Escrow

Escrow is an account held by a third party on behalf of two parties in a transaction. Because there are so many things that have to happen to complete a home sale, the best way to prevent either the seller or the buyer from getting ripped off is to have a neutral third party hold all the money and documents related to the transaction until everything has been settled. This is an industry standard protocol.

8. Deposit Earnest Money

Earnest money demonstrates your "skin in the game" and is an indicator to sell. This is money you will get back unless you back out for no good reason. 

9. Do a Title Search and Obtain Title Insurance

A title search and title insurance provide peace of mind and a legal safeguard so that when you buy a property, no one else can try to claim it as theirs later, be it a spurned relative who was left out of a will or a tax collector who wasn't (or thinks he wasn't) paid. A title officer will perform a title search to make sure there are no clouds on the title (third-party claims to a property that could call into question or invalidate your ownership of it). If there are, these problems will need to be resolved before the property becomes yours. 

10. Complete the Home Inspection

A home inspection is not required, but you'd be wise to have one performed. If you find a serious problem with the home during the inspection, you'll have an opportunity to back out of the deal or ask the seller to fix it or pay for you to have it fixed (as long as your purchase offer included a home-inspection contingency).  Make sure you attend the home inspection so that you can hear and see any issues that come up for yourself straight from the home inspector. 

A pest inspection is separate from the home inspection and involves a specialist making sure that your home does not have any wood-destroying insects (termites or carpenter ants). You wouldn't want to buy a house with a termite problem, as even a small problem can spread and become very destructive and expensive to fix. Wood-destroying pests can be eliminated, but you'll want to make sure the problem can be resolved for a cost you find reasonable (or for a cost the seller is willing and able to pay) before you complete the purchase of the home. In fact, if any pest problem, even a minor one, is found, the mortgage company will require that it be fixed before you can close.

11. Renegotiate the Offer After Home Inspection

Even if your purchase offer has already been accepted, if inspections reveal any problems, you may want to renegotiate the home's purchase price to reflect the cost of any repairs you will need to make. You could also keep the purchase price the same but try to get the seller to pay for repairs. 

If the purchase contract states that you're purchasing the property "as is," you don't have much recourse to ask for repairs or a price reduction, but you can still ask. You can also still back out without penalty if a major problem is found that the seller can't or won't fix it.

12. Lock Your Interest Rate

If you haven't already, you'll need to lock your interest rate. A good lender will watch interest rates closely for you and tell you when rates are at a low point so you can lock then. 

It's important to note though that since interest rates are unpredictable and fluctuate multiple times a day, you shouldn't drive yourself crazy trying to hit rock bottom. Be satisfied with a rate that you think is reasonable given current market conditions and that you can comfortably afford it. Also, keep in mind that rates vary by credit score, geographic region and the type of loan you're getting, so you may not be able to get the best rates you hear advertised. 

13. Get the Home Appraised

Once you have satisfactorily gone through the inspection process and negotiated any issues found, then you are ready to move on to having the home appraised. Your lender sets this up and typically it isn't ordered until after the home inspection process is completed because some buyers and sellers can't agree and the house goes back onto the market. 

The home appraisal is as much for you as it is for the lending institution. They just want to make sure that the value of the home matches the purchase price. Buyers do not typically attend appraisals. This is set up with the appraiser and the listing agent. Once the appraisal is received if it comes back at value with no conditions, then you're ready to move on to closing. If it doesn't come back at value (appraised for less than purchase price), you have a couple of remedies: a) you can ask the seller to agree to the appraised price (or they can put it back on the market) or b) you can come to the table with additional down payment to shore up the difference between the appraisal price and the purchase price or c) a combination of the above - seller comes down and you pay a little more. 

If you're a VA buyer, this is a different situation if the appraisal comes in low. 

14. Remove Contingencies

If your real estate agent helped you draw up a good purchase offer, your offer should be contingent on several things:

Obtaining financing at an interest rate not to exceed a certain percent that you can afford

The home inspection not revealing any major problems with the home

The seller fully disclosing any known problems with the home

The pest inspection not revealing any major infestations or damage to the home

The seller completing any agreed-upon repairs

These contingencies often must be removed in writing by certain dates (known as active approval), which should also have been stated in your purchase offer, for your deal to close. However, in some purchase agreements, contingencies are passively approved (also known as constructive approval) if you don't protest them by their specified deadlines.

15. Funding Escrow

You most likely deposited earnest money when you signed the purchase agreement. The purpose of this money is to let the seller know that you are serious, or earnest, about your intentions to purchase the home. After all, the seller is going to take the property off the market so that you can purchase it. If you back out, the earnest money goes to the seller as compensation. If the seller backs out, the money is returned to you.

To complete your purchase, you'll have to deposit additional funds into escrow. Your original earnest money deposit is generally applied toward your down payment; you'll need to submit the rest of your down payment and pay your closing costs (unless the seller has agreed to pay them).

16. Sign the Papers

Obviously, one of the most critical steps of closing is signing the paperwork. There will probably be at least 100 pages. Although you may feel pressured by the people, who are waiting for you to sign your papers, like the notary and your mortgage lender, read each page carefully - the fine print will have a major impact on your finances and your life for years to come.

In particular, make sure the interest rate is correct and that there is no prepayment penalty. More generally, compare your closing costs to the good faith estimate you were given at the beginning of the process and throw a fit about any fees that are off by more than 10%. 

17. Final Walk-Through

One of the last steps before you sign your closing papers should be to walk through the property one last time. You want to make sure no damage has occurred, and nothing has been removed that is included in the purchase. 

18. Move in!

It may seem like the buying process is a lot of work, but perhaps the worst part is the waiting. Most of the time, you'll just be sitting and waiting for someone else involved in the transaction to come through. So find something enjoyable to occupy your time and distract you while you wait, and feel secure in the knowledge that you've selected the best agent that knows how to make your buying and closing process go smoothly.

If you are buying or selling a home and have questions, let me know how I can be of service to you.

 

 

Posted in Buying Homes
March 10, 2019

VA Loans 101 for Pierce County / Thurston County

What is a VA Loan?

 

A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry).

Who is eligible?

Most members of the military, veterans, reservists and National Guard members are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply. Active-duty members generally qualify after about six months of service.

What are the VA Loan Limits for Pierce County / Thurston County?

Pierce County VA Loan limit is $741,750 (2020)

Thurston County VA Loan limit is $510,400 (2020)

What if I want to go over the loan limits?

You can, if you qualify for those higher limits, but you have to pay 25% of the overage. However, if you have previously been foreclosed upon and the VA lost money on previous loans, the amount of the loss will be deducted from your future eligibility.

What are the costs associated with a VA Loan?

It is 100% financing with no down payment. However, in lieu of that, you will have to pay a "funding fee" UNLESS you are determined over 10% service-disabled. If you are over 10% disabled, then the funding fees are waived. 

Can you use the VA Loan benefit more than once? 

Yes, you can. It is not a one-time use benefit. 

Watch the video below for more information. Call or write me for a referral to the best VA Loan lenders in the area! 
Shane
253-227-1609
or shane@hammersellshomes.com

 

Posted in Buying Homes
Feb. 8, 2019

9 Things to Consider Before Buying Your Next Home

9 Things to Consider Before Buying a Home

It’s so easy to get swept up in the idea(l) of being a homeowner or buying a home, we don’t consider taking practical steps before we start looking at homes. Take a look at these 9 areas before diving in!

1. Consider your life stage and the future. Don't necessarily buy for the life you have today. Chances are that buying a house will be one of the bigger financial commitments you'll make in your lifetime. Before starting to look at houses, consider your next 5-10 years. Are you planning on staying at your current job? Getting married? Having kids? Will you be an empty nester soon?

2. Have enough for a down payment and closing costs? What kind of shape is your credit? To get A rates, you must have a score of 740 or more. 

3. Get pre approved by a lender. Resist the temptation to start looking at houses before you get pre-approved by a lender. It can be heartbreaking to fall in love with a home that is out of your price range.

4. Buy the house you know that you can afford. This can be different from the price that your mortgage company believes that you can afford. You may end up getting approved for a mortgage but be smart. You don't know what the future holds, so prepare for unexpected situations by being conservative. So what's the best ratio to use? Some lenders suggest that you can afford mortgage payments totaling about 1/3 of your gross income but others suggest closer to 28% for housing related costs including mortgage, insurance and taxes. There are a number of factors including your projected income, interest rates, type of mortgage and the market. Click here to ask me for a referral to an excellent mortgage lender!

5. When looking at homes, don't fixate on the purchase price. The purchase price is just one piece of owning a house: be sure to consider all of the costs associated with your potential new home. That includes the cost of insurance, homeowner association fees and real estate taxes - depending on where you live, those can quickly add up. And it's not just home improvements that can cost money: maintenance costs dollars, too. It's a good idea to ask questions about upkeep for extras like swimming pools, fancy heating and cooling systems and out buildings. Finally, make sure you're comparing apples to apples: a condo with a large fee that's priced low may be more costly than a higher priced one with lower fees while a cheap home with high taxes may cost you more per month than a more expensive one with lower taxes.

6. You don't have to buy a house. Build a spreadsheet that compares your rental costs to the cost of buying a home. Buying a home is a big decision and while it can be a sound financial investment, it’s not for everyone. There is a lot to consider, including the housing market, interest rates, timing and your future plans. You might want more flexibility or mobility, or your career and family plans may be in flux. If you're not sure about a neighborhood, consider renting as a test drive: I can help you with that, too. 

7. Once you have gone through the steps above, make a checklist of your must-haves, nice-to-haves and other essentials. Then print copies of this checklist. Every time you visit a house, take the checklist along with you; take photographs so you can cross each item off your list. If you fall in love with the house and your checklist shows that the house has none of your must-haves, it will at least make you pause and think.

8. Look at ALL the expenses when you are budgeting for the house: When budgeting for the house, don't stop with principal, interest, taxes and insurance; add in utilities, cost of commuting and upgrades. Call the utility companies that service the house you are considering and ask for an estimate of what the cost will be, whether there are any budget plans available, etc. Will the gas budget for your car go up if you are moving further away from the places you frequently visit? Budget all of these expenses and see if you can still afford the house. 

9. Research grants and other sources of funding. You may find many grants and funding sources you weren't aware of or that you thought income limits for qualifying for these types of funding would be very low. They may surprise you by the generous income limits on many of the options. There are many different options based on profession (grants for teachers, farmers, etc.) as well as the area of the potential house (whether it's in a rural area, high-poverty area, etc.) Research all the grants and funding options you are eligible for before you automatically decide you won't qualify for anything.

There are so many benefits to owning a home and buying before rates get too high, prices get out of reach and inventory reaches new lows. The stability that comes from owning a home and making it yours along with the statistics that show that children of homeowners do better in school than those who rent are all factors in choosing to buy. 

As I always say, make a list of the pros and cons to help you make a well informed and solid decision! 

Let me know if I can answer any questions for you or point you in the right direction for needed resources. If you're already qualified and want to start searching for a home, click here to search the MLS of homes in the Greater Puget Sound! I also have market reports for areas as well to provide you. 

I can also help you find rentals if that's the route you choose. Either way, call, text or email me at 253.227.1609 or shane@hammersellshomes.com.

Hammersellshomes 
   253.227.1609

Posted in Buying Homes
Jan. 23, 2019

Is Spring Really the Best Time to Sell a Home?

Is Spring Really the Best Time to Sell a Home?

With interest rates on the rise, inventory in the Puget Sound area so low and prices increasing due to the laws of supply and demand, is Spring 2019 REALLY the best time to SELL your home?

Many factors go into deciding whether to sell:

  • Can you sell and break even or make a profit? 
  • Do you have to do a 1031 exchange? 
  • Can you get a similar or better house for a good / fair price with a good interest rate? 

Consult your financial advisor as to whether or not the impact of selling makes sense for you. 

As far as the market goes, in many parts of the South Puget sound, we're in a seller's market and like anything, there's no guarantee this will last. 

Why do people say that Spring is the best time to sell? 

"Based on an analysis of supply, demand and sellers’ outcomes in “Zillow Talk: The New Rules of Real Estate,” co-authors Spencer Rascoff and Stan Humphries have revealed the magic window to list your home: mid-March to mid-April.

The data shows homes sold from mid-March to mid-April sell around 15 percent faster and for 2 percent more than the average listing. And in markets like University Place, Steilacoom and North End, that could mean at least an extra $10,000 in your pocket! - Zillow

If you have any questions about listing your home or would like a complimentary home valuation, let me know! Call or text me at 253.227.1609. 

Hammer Sells Homes

 

 

 

 

Hammer Sells Homes

Posted in Selling Homes