Buyers ... the time is NOW

We need to move some inventory! Out of an "average" search of homes for sale in Snohomish County, 80% or more of listed homes are either bank owned or short sales. Only 20% and less are "normal" homes for sale. It puts "Normal" Sellers in an awkward situation of having to price their homes in competition with houses listed at "sale" prices. You'll not find this "perfect storm" situation again for years ... and maybe never in my lifetime.

Yes, real estate is cyclical, but this is a really strange cycle. You have houses at unbelievably low prices PLUS interest rates for loans at an all time low. Yes, you have to have some money to put some "skin in the game". But you can still ask Sellers (banks and short sales included) for at least the closing costs in your offer. And, FHA and VA Financing (minimum down loans) are welcome ... especially on homes that have been on the market for a long time. There are even "0" down loans out there from various government entities when you buy in geographical areas and meet their qualification requirements.

We had some agents attend the auction at the Snohomish County Courthouse last Friday and they reported back that there were lots of people there and bidding was very active. A few years ago, I attended one just to check things out and there was hardly anyone there bidding on anything. So, yes, investors are in the game and are figuring out that NOW is the time to buy. You'll be noticing lots of houses that have been vacant or neglected for a long time now being remodeled and going back on the market. I've been out showing and we've seen some really cute homes that have been updated and remodeled, and their prices are still in the reasonable price range.

So the message to Buyers is Now is the Time to Buy. Dust off that 401k and take a little money out, see if Mom and Dad can't help with some gift funds, find a way to get your own piece of the real estate pie. Prices will go up, depend on it! It may take a little while, but you can bank on it. Call your Real Estate Agent today ... or give us a call and we'd love to help.

Word for the Day ... Frustration!

I know, I know, I know ... optimism is the key word in real estate. The market is always great to buy and sell real estate; but, when dealing with banks on short sales, frustration is what happens.

The largest problem every real estate agent encounters in their day to day business is the lack of control we have over all the factors and people involved in a transaction. If it's a local escrow company or mortgage company that you work with on a regular basis and you know they do their job ... and they occasionally mess up, you can yell and scream and remind them of how much work you send their way, and they'll promise to never do it again and everyone's happy. (Or at least you're happier that you were allowed to vent your frustration.)

Now comes the wonderful world of short sales and, when we thought we had a least a little control, we now have none, zip, zilch, nada. I've had short sales in contract for six months or more, and still no decisions from the underlying lenders. They have so many people and systems in the loop, I've lost track. First you submit it, it gets logged in and you wait for it to be assigned to a negotiator. That can take weeks. Then you finally get your negotiator and they have to have you update all the paperwork because by now everything is months old. So you do all that and, should they forget to mention one item they need or you didn't quite fill something out correctly ... do they call you to tell you? NO! You call them weekly to start, (it becomes daily toward the end) leave a message and wait for a return call. Or you e-mail them weekly to start and get a reply? Not very often. And, when you finally get in touch it's, oh, so sorry, we need another bank statement or hardship letter or HUD statement. Aaarrrrggggghhhh.

Now you finally get a "preliminary" approval ... if your Seller will pay a little money or if your Buyer will raise the price, etc., etc. because another agent or appraiser went out and gave them a Broker Price Opinion or appraisal that doesn't match the numbers. So, it's back to the Buyers and Sellers to see if we can meet their requirements ... more addendums to a contract that is probably so out of date now it's growing whiskers. And, now that you return the addendums to the bank, you get to stand in line again so the "Investor" can review the contract and decide if it's up to their standards.

And, what about the Buyers who have been hanging in there prior to the April 30th deadline to close by June 30th so they can get their tax credit? If you don't have Final Approval from the bank by now and already ordered an appraisal, they are no doubt out of luck. Unless, by some miracle, congress decides to take pity on the poor home buyers who are stuck in this goo and extend the closing deadline.

My heart bleeds for the Buyers and Sellers stuck in this mess. It seems to me, if the banks would streamline their approval process and make decisions sooner, maybe they wouldn't be so backed up that they can't get on top of their paperwork. Just an opinion from a lowly old Real Estate Broker that's been around a long, long, long, long time.

Short Sales ... the good, the bad and the ugly

Face it folks ... we're in the short sale market and there's little we can do about it except live with it. So, here's a short sale primer for Buyers and Sellers.

THE GOOD: For Sellers it's a chance to get out from under crushing payments on a house that is worth less than you owe on it and to move on with your lives. For Buyers it's a chance to make a good deal on a house and quit paying rent. Also, you may get $8,000 or $6,500 credit on your taxes provided you can close on this house before June 30, 2010.

THE BAD: For Sellers, you are going to be out of a house and out of the house purchasing market for a while because your credit is going to take a hit. For Buyers, it takes patience ... lots of patience. There may be several offers on this house and Banks reserve the right to look at all offers (in most instances) and yours may not be the offer accepted. This you may not find out until months down the road, precious time that is wasted on waiting for a bank to make up its collective mind.

THE UGLY: For Sellers it's all the time wasted trying to work with a bank to get this accomplished, and then they make unrealistic requirements on closing the deal. And, you may end up having to sign a note to the bank for unpaid debt or the bank may decide to go after you in court for the deficiency amount. For Buyers it's the not knowing IF and WHEN you may get this house, whether or not your Lender's appraisal agrees with the underlying lender's appraisal (which throws you back into negotiations) and the fear of not closing in time to get your tax credit.

Just a few of the ramifications I've run into recently. As always, get a professional's advice before proceeding with any type of sale on your property and I can't stress enough that, should you decide to short sale your property or buy a short sale property, get an Agent who is knowledgeable and experienced with them. Then, let the games begin.

As always, please call us if we can ever help with your real estate needs.

LOAN MODIFICATION OR SHORT SALE ... What's best for me?

And, as in most things and as I tell my children ... it Depends! What is your ultimate goal?

IF you are finding yourself in financial straits and feel the need to tighten your expenditures, these are something to consider. It is now no longer necessary for you to be behind in your mortgage payments to get some assistance, but it does depend on your long term goals. The fact of the matter is, if you purchased a home within the last 8-10 years with a minimum down loan, you are probably upside down in equity position. (Anyone who purchased a new car knows that feeling.) The good news is ... you're not alone. A huge segment of the population in general are in the same boat (or house as the case may be). So what to do?

Loan Modification IF you plan to remain in your house for the next 8-10 years or more, have no desire to move up or out and just wish to keep a roof over your head, this may be for you. And, you don't need professional assistance to get it done. Just make the phone call and the packet of information will arrive on your doorstep. But, warning, depending on your Loan Servicer, it takes patience. It may happen quickly or take months, but it does involve lots of paperwork and proving that you need help. And the end result may not be to your satisfaction either. Be aware that Lenders are not reducing the amount of the debt you owe; so, when you're finished with the process, you still owe as much on the house as your did originally and you're still upside down when it comes to equity position. What Lenders are doing is reducing the interest rate on your loan to lower your payments or extending your loan over a greater length of time. So, when it comes time to finally sell that house, you may still be in a short sale situation and/or have to come to the closing table with money to make it work.

Short Sale IF you have the need, desire or situation that requires that you sell the property, then the short sale is your answer. With this you'll need professional assistance from a knowledgeable Real Estate Agent, Lawyer and/or accountant to help you. Here you'll need to list your home for the current market value, find a patient qualified Buyer and trust your professional to assist you through the maize of paperwork required to complete the transaction. Again, this may surprise us all and only take a month to get approval, but experience has shown us it will probably take up to 6 months and often more. And, there's never any guarantee that your Lender will approve the short sale. One more caution, a short sale WILL effect your credit score negatively, so keep that in mind when making your decision.

As in all things relating to contracts, seek professional assistance to protect your rights. Please don't hesitate to call us if we can ever be of assistance.

Loan Modifications ... Your Bank May Come to You

It appears some banks may start becoming more human and humane. In an effort to stem the tide of vacant homes and struggling homeowners, a few of the banks are stepping forward to try to pre-empt the mortgage meltdown. We are seeing Asset Management Companies (companies hired by banks to manage their "at risk" mortgages and homes) hire Real Estate Agents to try to get in touch with their Borrowers. There's a whole new side of the Real Estate Business out there where agents are actually trying to assist people to stay in their homes.

Orders are sent out from these Asset Management Companies to real estate agents to get in touch with the Borrowers who have missed payments or are at risk of losing their homes. Agents are being a friendly face from the banks to give advice to Homeowners on what their options are and to deliver Loan Modification Applications, pick up and return the paperwork to the banks, or counsel and educate Homeowners on Modifications, Short Sales, Deed in Lieus and Foreclosures.

So, the next time you see a Real Estate Agent at your door, they may not be there to try to get you to list your property so they can make a sale and commission. They may be sent by your bank to help you stay in your home. Please welcome them in see if we can't work together to fix this current real estate market one house at a time.

THE SHORT SALE SAGA(S) … it’s a whole new world out there!

I’ve been handling short sales for years in this business, but never have they been more prevalent than in this market. Every listing I have now is currently scheduled for a short sale; and, with all my years in the business, I’m learning something new every day.

One short sale required a book of paperwork, both from the Seller and from me, was delivered to the Lender a couple months ago and requires “60 days for review”; and you can bet they’re not going to make a decision until the 60th day … one day away from the auction, I might add. So, Buyer is in limbo until a decision is made.

Another short sale required a purchase and sale agreement, an authorization letter and a HUD 1 Statement. That’s it! They ordered an interior Broker’s Price Opinion the next day and we received approval within 5 days! And, they’ve even offered to RAISE the commission and PAY the Seller $2,500.00 if we can meet a closing deadline. Needless to say, both agents and Seller are very cooperative to get this one done.

Third property listed just the other day and authorization letter sent off to two Lenders the next day. Two days later, received a phone call from first Lender representative wanting to “chat” with me about how it’s going and to “keep active in the process”. (NOTE: Most lenders don’t want to talk to you until you have a valid purchase and sale agreement.) This Lender even suggested a $5,000 price drop and “has worked with second Lender frequently and will work out the arrangements with second when offer received”. (NOTE: Usually it’s the agents working their little hearts out to get first and second Lender to cooperate.)

Long story short … everything in the Mortgage Market is in flux. Some have realized they are going to take a hit and just want to make it less painful. Others seem to want to drag out the misery as long as possible. As an agent working short sales … flexibility is the key.

The Numbers are Showing Good News for the Market

The Northwest Multiple Listing Service released their latest numbers and it looks like great news for the area. The reported pending sales for April was up 11.4% compared to 12 months ago and rose 21.3% over March. Brokers reported 5,372 pending sales for King, Snohomish, Pierce and Kitsap Counties which is the first time the number cracked the 5,000 level since August of 2007.

So, what do the numbers mean? Basically it looks like the inventory is shrinking ... good news ... and Buyers are finally getting off the fence because of the $8,000 First Time Buyer incentive from the Government, extremely low interest rates and bottom line prices on homes. So, if you are a Buyer waiting for the "bottom" ... the time is now to dive into the pool before the water in the pool gets shallower.

And, do you qualify for the first time Home Buyer Credit? IF you have not owned a primary residence or purchased a primary residence within the last 3 years and IF your net adjusted income is $75,000 or less ($150,000 for a couple), you may be eligible. Check with your Lenders now and it's always a good idea to check with your tax expert, too.

Average prices for a single family residence in King County is now $417,500 and in Snohomish County at $316,271 according to the NWMLS. And, the FHA insured loan limits are now at $719,000 so there's plenty of inventory for a 3.5% down payment through an FHA loan. The Feds may be taking a look at this number shortly, so get your oar in the water now.

As always, if you need a referral to a good Lender or want more information, please give us a call.

Beware of Foreclosure Scams

As if we didn't have enough to worry about ... there are now some marginal companies out there who are choosing to prey on the hapless homeowner who is facing foreclosure and wants to try to modify their mortgages. If you want to try to reduce your mortgage payment or work out some solutions with your mortgage company, help is free! There is never a fee to get assistance or information about the Federal Plans to help. You can go to MakingHomeAffordable.gov to obtain a HUD-approved housing counselor to help you navigate the bureaucratic waters.



BEWARE OF ANY PERSON OR ORGANIZATION that asks you to pay a fee in exchange for housing counseling services. Do not pay, walk away!




BEWARE OF ANYONE who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign, walk away. The only one who can help you "save" your home is your mortgage company.


NEVER SUBMIT YOUR MORTGAGE PAYMENTS to anyone other than your mortgage company without their approval.




If you have any questions or concerns about how to proceed, check the website above or you can always give us a call for our opinion or suggestions. We want everyone to be in a home they can afford and not lose it in foreclosure.