Archive for Real Estate

16 Jul 2013
Real Estate

What’s a Buyer Letter?

What’s a buyer letter?  A buyer letter is a short letter from the buyer written to the seller.  It simply gives a short description of the buyer(s) and explains their interest in the seller’s home.  In the recent months we’ve seen many first time home buyers utilize this tool.

Do I have to submit a buyer letter?  You definitely don’t need to submit a buyer letter.  Some buyers don’t want to disclose their personal situation.  However, especially in many first time home buyer demographics where we’re seeing multiple offers and bidding wars, buyer letters can really make a difference.

Doesn’t the seller just care about the purchase price?  Not necessarily.  To most sellers, selling their home is more than just a financial transaction, it’s also an emotional process.  Many sellers may be drawn to a specific buyer that they can relate to, may it be through their hobbies, families or career paths.  Also, many sellers may feel for first time home buyers just starting out.

Are there any down sides to writing a buyer letter?  Generally, no.  There is no cost or down side to writing a letter to the seller.  It takes five minutes of your time, and we suggest all first time home buyers utilize this strategy.  Just keep it to a couple paragraphs, as the seller doesn’t necessarily need to know your life story.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to learn more about the first time home buyer process in general, please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer workshops.

Share
| No comments | Tags: , , , , , ,
09 Jul 2013
Real Estate

King County Home Prices Up 12.5% YOY!

Are King County home prices still on the rise?  Yes, King County home prices are up 12.5% year over year.  We posted a similar blog back in Jan of this year which reflected a 20% YOY increase.  So these recent numbers are not quite as dramatic, but we’re still definitely in a quickly ascending housing market.  Especially in the first time home buyer demographic.

Why are prices rising so quickly?  The recent Seattle Times article stated several reasons including drastically low but rising interest rates, along with super low levels of inventory.  Another reason cited was a moderate level of 5% unemployment due to large companies in the area hiring such as Google, Amazon and Microsoft.

Are prices going to keep rising at this pace?  It’s hard to say for sure, but prices may start to taper off towards a more historical rate of around 5% per year.  One of the other reasons not directly mentioned in the article is that affordability, especially as it relates to rent, is still very attractive.  Once you take into consideration the tax benefits involved in owning it’s actually about the same monthly expense to own a home as it is to rent.  As long as this equation holds true, prices and the housing market will stay strong.

Is it even still worth buying if you’re a first time home buyer?  Because of the previously mentioned affordability factor, owning a home still makes a lot of sense for many first time homebuyers.  Even as prices rise and interest rates rise and the affordability of homes moves away from rent, it will still make sense for many first time home buyers.  Even if it costs a couple hundred dollars more a month to own than rent, the mortgage payment still stays fixed for 30 years until it goes away.  Rent on the other hand will always be there, and will continue to increase in the long run.

Don’t make the biggest financial decision of your life without getting educated!  Buying your first home may not be for everyone, it really just depends on your personal situation.  If you’d like to get more information on the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops

Share
| No comments | Tags: , , , , , ,
02 Jul 2013
Real Estate

What the Listing Agent Won’t Tell You

Is it ok to use the listing agent when buying a house?  No!  More and more often we’re seeing first time home buyers contacting listing agents through sign calls, internet postings, etc, to view homes and write offers.  The listing agent has a fiduciary responsibility to the SELLER, and no matter how hard they may try there will always be a conflict of interest when practicing dual agency.

What’s dual agency?  Dual agency is when a real estate agent represents both sides of a transaction.  Many agents like to do this because they get paid twice, but it is not in the best interest of either client.  First time home buyers need an agent on their side that will represent them solely and fully.

How much does it cost to hire an agent?  In the state of Washington both listing and buyer side commissions are paid by the seller, so the buyer pays NOTHING for their representation.

So why would first time home buyers choose to NOT have their own agent?  There is no reason first time home buyers shouldn’t have their own agent representing their best interest.  Some people feel like real estate agents are just salesmen.  It is true that some agents are salesmen, but there are many out there that are educated professionals and advocate for their clients.  You may just have to interview a few to find the write one.

Don’t make the biggest financial decision of your life without getting educated!  If you would like to find out more about how to interview real estate agents, or the home buying process in general please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

Share
| One comment | Tags: , , , ,
07 May 2013
Real Estate

Is Cash Really King?

Is cash really king in the Seattle real estate market?  Yes, cash has been fairly dominate in the Seattle real estate market for at least 12 months now.  We’ve especially seen a strong presence of cash buyers in the entry level first time home buyer market in the surrounding area, representing anywhere from 50-75% of the overall buyer pool depending on demographic.

How are first time home buyers paying all cash?  It’s more likely that this make up is comprised of institutional, small time and foreign investors.  Also, we have seen many situations where a first time home buyer’s parents may give them a loan to buy their first home and charge them a standard market 4% interest rate, as it gives them a much better return than say leaving the money invested in CD’s or the bond market.

How does this affect first time home buyers?  Competition is already stiff in the Seattle real estate market due to an influx of buyers and very few homes for sale on the market.  Cash buyers are generally given preference by sellers because this type of buyer can close very quickly, generally doesn’t require an appraisal or inspection, and doesn’t have to worry about meeting underwriting guidelines to receive a loan.  So it can be very difficult for first time home buyers to compete in this arena.

Is there any way first time home buyers can compete with cash buyers?  Yes, but it can be tricky.  First time home buyers can employ many different strategies including; conducting a pre-inspection, waiving their financing contingency, using an escalator clause, offering more earnest money, and much more.  However, it is important to understand before using any of these strategies, that they each come with pros and cons.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to find out more about competing with cash buyers or about the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.

Share
| No comments | Tags: , , , , ,
09 Apr 2013
Real Estate

Should First Time Home Buyers Use Zillow to Value Properties?

Should first time home buyers use Zillow to value properties?  Absolutely not!  Zillow is an imperfect system that was created with the intent to attract home buyers and sellers, so that Zillow could sell add space to Realtors.

But Zillow uses comparable properties to come to their valuations, right?  No.  Zillow simply searches for properties in the near vicinity that have sold recently with the same number of bedrooms and baths.  These characteristics alone don’t justify using a property as a comparable.

So if a home has the same number of bedrooms, why isn’t it a comparable?  There are many answers to this question.  One example is Zillow calling a 3 bedroom home WITHOUT a view, a comparable for a 3 bedroom home WITH a view!  Everyone knows that a view can be very valuable, but unfortunately Zillow nor any other automated valuation system has come up with a way to evaluate something like a view.

But I’m a first time home buyer and can’t afford a view anyways!  This may be true, but it still doesn’t make Zillow a good evaluating tool.  Another example is Zillow trying to use a 2 bedroom home on a major arterial as a comparable for a 2 bedroom on a quiet street in a residential neighborhood.  The lack of traffic makes the home on a quiet street more valuable in the eyes of buyers, but Zillow also hasn’t found a way to take this into consideration either.

What else makes Zillow an imperfect system?  We could go on about this subject for hours.  The end answer is that you should align yourself with a knowledgeable Realtor that knows the area and is familiar with values in the area you’re interested in.  And if you’re already working with an agent that uses Zillow themselves in an attempt to value a property, then it’s time to find a new agent!

Don’t make the biggest financial decision of your life without getting educated first!  If you’d like to find out more about evaluating properties or the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.

Share
| No comments | Tags: , , , ,
« Older Entries   Recent Entries »