10 Sep 2013
Real Estate

How Do I Choose a Real Estate Agent?

          

How do I choose a real estate agent?  There are many things to consider when choosing a real estate agent to represent you in a home purchase.  Just a few of your criteria should be financial, structural, area and market knowledge.  Many people think they can represent themselves when buying a home, but this can be a risky strategy especially for first time home buyers.

Isn’t my lender the one that needs a financial background?  Yes, of course your lender should have a strong grasp on the different loan programs available to first time home buyers.  However, your lender isn’t in the car with you every time you view a property.  So it is imperative for your real estate agent to also understand the intricacies of the loan your utilizing.  If they don’t confirm this info before showing you property, it’s time to find a new agent.

But it’s the home inspector that assess the structural integrity of the property, right?  For sure.  No matter how much your agent knows about construction, every first time home buyer should always hire a third party inspector to assess the property.  However, if your agent at least has a basic understanding of construction, they should be able to steer you away from the really poorly constructed properties, so you don’t keep wasting money on hiring an inspector.

What’s area knowledge mean?  It’s often helpful to hire an agent that has a familiarity with the demographic that you are considering purchasing in.  The more they know about the area, the more they’ll be able to guide you in the right direction.  I.E. good school districts, etc.

So what about market knowledge?  The real estate market is forever changing.  Is this a buyers market, or sellers market?  Can I negotiate this price?  Will I have competition for this home?  These questions will be best answered by a FULL TIME real estate agent.  For an agent to have a strong understanding of the market, they have to do a consistent level of business.  We understand that everyone knows a real estate agent, but please make sure the one you hire will be able to represent you to the level that you deserve!

Don’t make the biggest financial decision of your life without getting educated!  This is just the tip of the ice berg.  If you’d like to find out more about hiring a real estate agent or the home buying process in general, please go to your Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

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20 Aug 2013
Mortgage

Is it Time to Refinance?

          

Is it time to refinance?  Many of our first time home buyers that have purchased in the last couple years have been asking us if they should refinance in order to lower their interest rate.  But lowering your interest rate is only one of the factors to consider.

What other factors are there?  Another factor for our first time home buyers to consider is the COST to refinance.  If you can lower your interest rate by .25% which in turn reduces your monthly payment by $50, but it would cost you $4000 in fees and you’re only planning on living in the home for another 3 years it probably wouldn’t make sense due to the break-even timeframe.

What’s a break-even timeframe?  In the previous example you’d be saving $50/mo or $600/yr, but you’re upfront cost would be $4000.  So for you to recoup your upfront expense you would have to live in the home for almost 7 more years! ($4000/$600=6.67yrs)  Obviously the more you can reduce your interest rate, the shorter the break-even timeframe will become.

Then I definitely wouldn’t refinance!  Wait.  Yup, you guessed it, there’s still another factor to consider.  Many of our first time home buyers only put the minimum 3.5-5% down when they purchased their first home.  This subjected them to mortgage insurance, which can add as much as a few hundred dollars to your monthly payment.  Because of the incredible amount of appreciation we’ve had recently, a new appraisal of your property could find that you’ve had enough increase in home value to completely DROP your mortgage insurance drastically lowering your payment!

Don’t make the biggest financial decision of your life without getting educated!  As you can see there are many different factors that go into calculating a monthly mortgage payment as well as considering a refinance.  If you would like to find out more about mortgage costs or the home buying process in general, please go to our Calendar/Reservations page to register for one of our FREE First Time Home Buyer workshops.

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13 Aug 2013
Real Estate

When Will We See More Listings?

          

When will we see more listings in the Greater Seattle area?  This has been a major question on many first time home buyers minds.  In the housing market decline many home owners lost enough of their equity position that they ended up under water, or owing more on their mortgage than the house was worth.  This often prevents them from selling.

Is this still the case with many home owners?  This equation is definitely changing due to all the appreciation we have seen in the Greater Seattle area.  Depending on the demographic that you’re looking at, many areas values are about where they were in 2006.  If prices continue to rise we may get to 2007 levels at the end of 2013 or early 2014.

Will this cause more home owners to list?  This definitely could be the case.  Many economists speculate that there are a lot of home owners that either bought or did a cash out refi in 2006-2007, that would really like to sell but won’t be able to until values reach these prior year levels.

Should first time home buyers wait until there’s more available inventory to buy?  That really depends on your specific situation.  If you wait for more inventory, it’s quite likely home values and interest rates will continue to rise.  However, if you currently have room to afford more house and aren’t concerned with being priced out of the market, waiting might help you find a home that better fits your needs.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to find out more about todays current housing market or the home buying process in general, please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer workshops.

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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.

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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

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