206-999-1690
larryreichle@remax.net
LOGIN | REGISTER

Larry & Kathy Reichle

Issaquah Real Estate | Call: 206-999-1690

Homebuyers Encouraged,”But Still On Edge” While Sellers Face Reality Check

by Leave a Comment

 

 

KIRKLAND, Washington (August 6, 2018) – “Home sellers throughout the Seattle region are experiencing a reality check and the days of multiple offers are days of the past,” was how one director with Northwest Multiple Listing Service summarized the market upon reviewing the statistical report for July.

New figures from Northwest MLS show year-over-year improvement in inventory (up 6.5 percent), but modest drops on both pending sales (down slightly more than 7 percent) and closed sales (down 3.4 percent). Despite those drops, prices rose 8.64 percent across the MLS service area that spans 23 counties.

Several industry leaders commented on the steadily improving supply. The number of active listings system-wide totaled 16,773 at the end of July, the largest volume since September 2016. System-wide there is 1.8 months of supply, the highest level since October 2016.

“In Seattle and King County supply is at the highest level since first quarter 2015, which has me thinking about the longevity of seller luxuries like offer review dates, pre-inspections, and escalation clauses,” remarked Robert Wasser, owner of Prospera Real Estate and an officer of the Northwest MLS board of directors. “People are taking notice of the evolving real estate landscape — even my mom tells me she’s noticing more for sale signs!”

“There continues to be better news for buyers,” agreed Mike Grady, president and COO of Coldwell Banker Bain. He noted the inventory in King County has doubled since March from 0.8 months to 1.5 months of supply, but added “While this is significant, we are still well below a balanced market of 4-to-5 months of inventory.”

King County’s number of active listings surged nearly 48 percent from a year ago, rising from 3,465 active listings to 5,116. Snohomish County also had double-digit increases, up nearly 15.8 percent, but 15 counties reported less inventory than twelve months ago.

“It has been a long time coming, but we finally have some solidly good news for buyers in the Puget Sound area,” commented OB Jacobi, president of Windermere Real Estate. He noted the number of single family homes (excluding condos) for sale in King, Pierce and Snohomish counties in July was up 10.4 percent compared to June and up 20.5 percent year-over-year. “The increase in listings is clearly having a calming effect on prices while also giving buyers in the region somewhat of a reprieve from the frantic market of months past,” added Jacobi.

In his comments about sellers experiencing a reality check, broker Keith Bruce suggested Seattle is experiencing a self-corrective shift in the market. “Many sellers are reaching for their dictionaries to understand the words ‘price reduction’ and ‘increased market time.'”

“Sellers need to put away their dictionaries, take a collective deep breath and enjoy the ride. Listing brokers need to be as honest as possible with sellers and not promise multiple offers or huge price escalations,” suggested Bruce, adding “We are still a seller’s market. Much more inventory is needed to meet the overall demand for quality homes in Seattle.”

“Seller gridlock has loosened close to the job centers,” stated J. Lennox Scott, chairman and CEO of John L. Scott Real Estate. “While we are experiencing record sales activity for the higher end and luxury markets in year 2018, a record number of new listings is coming on the market in these price ranges. This has resulted in more opportunities for home buyers and lower premium pricing from the spring market.”

Northwest MLS data shows a 32.5 percent increase in the number of homes that sold for $2 million or more so far this year compared to the first seven months of 2017 (up from 477 to 632 closings of homes and condos in this price segment).

George Moorhead, designated broker at Bentley Properties, is noticing an increase in the number of price reductions for actively listed homes as inventory increases, “even in the hotspots in Seattle and the Eastside. We are seeing a continued shift from move-up and luxury home buyers to more first-time buyers, which is consistent with the flattening trends we are seeing in today’s market.”

MLS director John Deely said the change in the market “is more accentuated this year by the historically low inventory that we have been experiencing over the past several years. What now seems like a meteoric increase in inventory is in part caused by the many potential sellers who have been on the sidelines that are now coming to the market,” added Deely, the principal managing broker at Coldwell Banker Bain’s Lake Union office.

MLS statistics show pending sales declined from 11,800 a year ago to last month’s total of 10,965 for a drop of about 7.1 percent. New listings eclipsed pending sales by a margin of 1,233 units, easing some of the pressure on inventory.

“Even with an improving buyers’ market, our agents are telling us that buyers seem to have taken a bit of a break: instead of 20 buyers looking at new homes on day one, there were only 10 is the comment we’re hearing,” noted Grady. “While we may be lifting the pedal from the metal, we remain very much in the left lane, exceeding the posted speed limit by a significant amount,” he remarked.

Scott agreed, saying “For homes priced below a million dollars, the sales intensity for new listings has come off the extreme frenzy in the spring to just frenzy.”

Closed sales slipped about 3.4 percent from a year ago, declining from 9,707 completed transactions to 9,379. Nevertheless, the median selling price increased $33,000 (about 8.6 percent) from a year ago, although three counties experienced declines. The median price on last month’s completed sales of single family homes and condominiums was $415,000. Compared to June, the median price dropped $10,000.

Prices for single family homes only (excluding condos) rose about 8.4 percent, with a dozen counties reporting double-digit gains. Condo prices increased about 10.2 percent. In King County where more than half the condo sales occurred, price jumped about 12 percent from a year ago.

“It’s not such a crazy, go-go market, but it’s still a great time to be a seller,” stated Northwest MLS director Mike Larson, president of Allen Realtors in Lakewood. “The expectation of multiple offers and the ability of sellers to simply dismiss inspection repair requests is behind us,” he believes. “Sellers need to understand that and find a listing broker who also understands that,” he emphasized, adding, “The days of doing a market analysis and then pushing the envelope on the list price an extra 5 percent are gone. Ultimately, I think that’s healthy for the market,” Larson commented.

Considerable variation exists among the counties, whether measured by listings, sales or prices.

“The real estate market has cooled a bit in Kitsap County with pending sales off 10 percent in July compared to a year ago,” reported Frank Wilson, Kitsap regional manager and branch managing broker for John L. Scott Real Estate in Poulsbo.

“Yes, the Kitsap market has slowed a bit but it’s still hot due to the persistent shortage of inventory, which is down nearly 21 percent from last year. When 575 new listings come on the market and 596 listings go pending, you know inventory is not building,” explained Larson, a board member at Northwest MLS.

Wilson also reported strong open house traffic as “pent-up buyer demand rallies the pool of buyers for each new listing.” When a broker arrived for the open house he had scheduled for a new listing, six cars were waiting. “By the time the open house concluded, more than 30 people had toured it. Eight offers were made and it sold for more than list price,” he commented.

In Pierce County, inventory dropped around 3.4 percent, and brokers reported more pending sales (2,012) than new listings (1,990). Year-over-year prices in that county were up nearly 14 percent.

“Pierce County has, for a handful of years, been the affordability solution for buyers who would otherwise buy in King County. I think the craziness of the King County market has magnified that fact even more. Buyers are willing to spend two or three hours in their cars each day if it means buying twice as much house,” reported Larson.

Dick Beeson, principal managing broker at RE/MAX Professionals in Gig Harbor echoed Larson. “The market in South Sound is bolstered by the reality that our houses are cheaper. That fact alone keeps our inventory, our number of pending sales, and our number of closings similar to last year even though we’ve faced higher interest rates.”

Beeson said multiple offers continue to follow homes that are well priced at or below our median price level. “If a property stays on the market more than 14 days, you know you’ve got a price problem. It’s that simple.”

Buyers are still on edge according to Beeson. “They know they will be competing with other buyers at some level – whether on price, shorter inspection times, larger earnest money deposits or fewer repairs being done by sellers. For buyers, it’s better than before, but before was just insanity. Buyers are still insecure about prices, financing and competition.”

Moorhead described the market as still “quite strong,” but projects a continued flattening of activity, due in part to looming concern that mortgage rates will rise again this quarter. “Some buyers have thrown in the towel and have chosen to lease for the next year to save for a larger down payment.”

Most brokers believe activity will remain strong.

The volume of pending sales “at or above post-recession highs is an indicator of a healthy volume of sales still moving through the market. We are seeing investors, speculators and builders reacting to the market change by bringing excess inventory to market,” said Deely.

“Getting back to a balanced market creates a healthier and more sustainable market,” Moorhead stated. He believes there has not been a better time in the last three years for a buyer to enter this market with more options and less competition.

Scott agreed, stating “for home buyers the next three months will be the best time for selection and availability of new listings until March 2019.”

Grady and Moorhead were more cautious.

“An 8.64 percent increase in median sales price compared to last year is still much greater than inflation,” Grady noted. “In the long term this is only sustainable in a growing employment market like we have in this region. Consider that through May more than 30,000 net new jobs have been created in just the Seattle-Bellevue area.”

Moorhead detected new construction starts have “slowed proportionately with sales,” saying builders are now offering large incentives to attract buyers.

Larson noted a shift in investors in rentals. “Our firm’s inventory of rentals has decreased about 15 percent over the past few years, from around 350 to under 300. Many of those owners bought rentals in the last boom market, and then weathered the storm when the market crashed. They finally have equity again and want to get out, which isn’t surprising.”

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of around 2,200 member offices includes more than 29,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in the state.

Rising Home Values Hitting Pre-Recession Peaks

by Leave a Comment

New research from Zillow indicates that seven out of 35 of the largest U.S. housing markets have regained all value lost during the recession, and that could signal a looming turning point in those markets. Zillow considers a market to have recovered to pre-recession values when more than 95% of homes surveyed in a market are worth more than their peak value during the housing boom. In this housing cycle, that equates to those markets have a median home value of $217,300.

The seven markets to surpass pre-recession peaks join 14 others that had already reached this milestone, leaving only 14 markets still below pre-recession highs. “In markets like Las Vegas that got farthest ahead of themselves during the boom and, consequentially, fell the most, a large majority of the homes are still not worth as much today as they were a decade ago,” observed Zillow senior economist Aaron Terrazas. He added markets that were “more stable” prior to the housing crash have recovered more quickly.

Scars of the Recession

Terrazas went on to warn that even in recovered markets, “the scars of the recession still run deep for millions of longer-term U.S. homeowners.” He said it could take “years of growth” for some homeowners to regain lost value and that stabilization of rent rates may not be enough to enable buyers in competitive markets to save enough money to buy a home in the near future.

What Does Recovery Mean for a Housing Market?

While Terrazas is concerned about homebuyers in competitive markets finding prices still out of reach in many cases, other analysts say that hitting the pre-recession-peak milestone may be the first signal that a market is about to turn. For example, Nobel Prize-winning economist Robert Schiller said recently, “This could be the very beginning of a turning point,” although he emphasized he would not yet make that call.

Bloomberg contributors Prashant Gopal and Sho Chandra were not willing to make that call yet either, but they did recently marshal evidence that some regional markets might be cooling. The two wrote, “A slew of figures released this week gives ample evidence of at least a cooling,” citing:

  • Falling existing-home-sales volumes
  • The slow pace of new-home purchases
  • Rising inventory
  • The rate of price increases climbing less, year-over-year, than it has since early 2017
  • Shares of national builders declining in value

Carole VanSickle Ellis

Don’t Let Loan Conditions Worry You

by Leave a Comment

 

When you first apply for a home loan and submit your loan application, your loan officer will provide you with a list of items needed to include with your loan file. In a completed loan application, there is information provided by you and information provided by third parties. Your paperwork will include items such as your pay check stubs covering a 30 day period and your last two years of W2 forms. If you’re self-employed, you can expect to provide the last two years of both personal and business returns along with a year-to-date profit and loss statement. Once you submit all of your documentation to accompany your loan application, it can get a little quiet on your end. But that doesn’t mean nothing’s happening. Far from it.

The lender then proceeds to order necessary third party documentation. There are multiple service providers that help complete the loan application so the loan file can be submitted to the underwriter who ultimately approves the loan. A credit report will be ordered and so will an appraisal. Title insurance is needed so a title insurance policy is ordered, and so on. You will be provided an estimate of who all these other people are and what they’re going to charge for their services. Once completed, the file goes to underwriting.

The underwriter will review the application and determine whether or not the documents and the application submitted conform to the guidelines included with the selected loan program. Once the loan meets these guidelines, loan documents are prepared and sent to your settlement agent. But sometimes, in fact most times, there will be “loan conditions.”

There are two types of loan conditions, a “prior to document” condition and “prior to funding” condition. A “prior to doc” condition means the underwriter needs something else before loan documents can be ordered. This stops the loan process. But it’s not something to be afraid of. It doesn’t mean there’s something wrong and you can’t close on your home, but it’s more likely the file is missing something important. Maybe there’s an old lien on the property that hasn’t been released or maybe the underwriter wants to see one more comparable sale in the appraisal.

A prior to funding condition means the loan papers can still be delivered to the settlement agent but the lender won’t deliver the funds for the mortgage until this condition is fulfilled. For example, credit documents within a loan must be no older than 30 days. That means a pay check stub submitted might be more than 30 days old and you need to provide a copy of your latest. A prior to funding condition is typically minor. If there were anything bigger than that, documents wouldn’t have left the lender in the first place.

WRITTEN BY

Just how much more bang for your buck do you get tacking 15 minutes on your commute?

by Leave a Comment

You don’t have to get far out of Seattle to reap the reward.

Your money typically goes further outside Seattle. But is that change in commute worth the extra money?

A new report from Zillow and HERE Technologies looked at exactly how much homeowners could save by adding 15 minutes on to their commute. As it turns out, it may be worth a bit of compromise.

In the Seattle metro, the typical home becomes 11.3 percent less expensive when it’s shifted 15 minutes away from downtown, or about $54,599. For renters that number is more like a 6.2 percent drop in monthly rent, or around $125 per month.

That places Seattle as one of the top cities that see the greatest home value savings by moving at least 15 minutes further from the city core (others include Washington, D.C. and Chicago).

Of course which direction you take your 15 minutes will affect both your commute and your home: Heading north or east from downtown puts you smack in some of the priciest and most sought after neighborhoods in the city right now.

So where’s the best bang for your buck according to Zillow? If you’re a homeowner that’ll be Highline, where the current median home value is $387,700, and the median commute time in a car during rush hour is 38 minutes.

Which makes the first-time-on-the-market, Mid Century Modern above, which is listed for $599,000, on the higher end of the market.

Almost any neighborhood south of Seattle is going to see more “bang for your buck” than the neighborhoods to the north.

Then again, if you want to remain a renter you should be looking elsewhere, according to Zillow’s report: The best “bang for your buck neighborhood” for renters are South Park and Georgetown, in the 98108 zip code. There the current median rent is $2,356, while the median commute is 27.2 minutes in rush hour.

By Zosha Millman, SeattlePI

Is Seattle’s red-hot real estate market cooling down?

by Leave a Comment

A Craftsman Style house in autumn.

For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

Is Seattle’s red-hot housing market cooling down?

For the first time in 10 years since the recession, the number of homes for sale in the Seattle area has increased considerably, reports The Seattle Times.

“There aren’t as many bidding wars right now,” said Beata Miklos, Managing Broker for Savvy Lane, a local online brokerage firm. “There isn’t as much urgency for buyers to place offers because they know that it’s softening up a little bit.”

Fierce competition for low-inventory of homes for sale has led to extreme bidding wars and lightning-fast sales. Now, the total number of single-family homes on the market in King County has jumped 43 percent in June from a year ago. And condo inventory has risen to an eye-opening 73 percent.

The Times reports homes already on the market are sitting unsold for longer periods of times, according to monthly data released Thursday by the Northwest Multiple Listing Service. Brokerages tell the NMLS since mid-spring, they’ve noticed fewer bidding wars and more homes selling for list price or below.

The total inventory of homes listed for sale has grown for three straight months on a year-over-year basis, reports the times, but the region still has a ways to go to make up for the past 10 years of declining numbers of homes for sale.

Now is the time to jump!  The price drop from May to June is the first price drop in King County since before the recession.

 

 

 

How much house can I afford to buy?

by Leave a Comment

If you’re thinking of making the move from renter to homeowner, simply diving into home shopping is the wrong first step. What you need to do is first answer the question:

“How much house can I afford?”

The best way to determine your spending ability is to do a step-by-step calculation. While there are alternate rules of thumb for figuring out your housing budget — such as a ceiling of 2.5 times your annual salary or limiting your housing payments to a third of your gross monthly income — you should not take shortcuts on a financial decision as important as this.

Calculating ‘how much mortgage can I afford?’

Here are the major factors you will need to consider to determine how much house you can afford to buy:

Income. 

First, add up the income that will be used to qualify for the mortgage, including bonuses and commissions. Make sure you have the documentation to prove every source of income; otherwise it cannot be counted when you meet with a mortgage lender.

Debt. 

Add all the payments you make each month for car loans, credit cards, student loans and any other debt. Based on your income, there are limits on how much debt you’ll be allowed to carry, including your mortgage. These debts will limit how much mortgage you can borrow.

DTI ratio.

When a mortgage lender calculates your level of debt based upon how much money you make, it is known as your “debt-to-income (DTI) ratio.” Debt-to-income ratios are the province of mortgage calculators. One important ratio, referred to by mortgage professionals as your “front-end” or “top-end” ratio, is calculated by taking your proposed housing expense divided by your gross (before-tax) income. Many mortgage calculators set 28 percent as the desirable value for this ratio. The other ratio involves all of your loan payments – your housing expenses and your monthly debts (but not utilities or other living expenses) — divided by your gross monthly income. A home affordability calculator frequently set this number at 36 percent. This is called your “back-end” or “bottom-end” ratio.

Monthly obligations.

While your mortgage lender cares about your auto and credit card payments, they really don’t care whether you have cable TV, the latest iPhone or even that you eat on a regular basis. Those monthly expenses are up to you to include, and cable, smartphones and a few trips to the grocery store can easily add up to several hundred dollars each month.

Down payment. 

The minimum down payment for an FHA loan is 3.5 percent; for conventional loans, the minimum is 3 percent for certain buyers and 5 percent for most buyers.

Taxes.

Today, it’s easy to get an idea on a home’s property taxes by looking at the listing online. You can also get in contact with the county tax office or ask a local Realtor to investigate for you. Most homeowners will have their property taxes paid from an escrow account attached to their monthly mortgage payments. One percent in taxes is equal to $1,000 per year for a $100,000 home.

Insurance.

Lenders require homeowners insurance to cover your property. Contact an insurance company or ask a Realtor to estimate your homeowners insurance costs which will vary according to the type of property, cost and features of the home, and its location. To get a rough idea, you can ask a family member or friend what they pay for insurance (if their home is similar to the home you are interested in buying).

Homeowners association dues.

If the property you purchase includes monthly dues, don’t forget to include those fees in your monthly payments.

Mortgage insurance.

If you make a down payment of less than 20 percent on a conventional loan, you will need to pay mortgage insurance. You can utilize HSH.com’s mortgage insurance calculator to see how much this could cost each month. For FHA loans, there is an upfront and annual mortgage insurance premium.

Interest rate.

You can check today’s mortgage rates at HSH.com, but remember that your rate will depend on your credit score, the type of property you are buying, and the choices you make regarding fees and points. A lender will be able to give you a customized mortgage quote given your situation.

Loan term.

While many buyers opt for a 30-year home loan, if you can afford higher monthly payments, you may want to consider a shorter loan term. Shorter loans have lower interest rates and cost you less over the life of the loan.

As a homeowner, you need to have enough money set aside in an emergency fund — at least three months worth of expenses – in case you lose your job or have a medical emergency, and enough reserves set aside to pay for maintenance and unexpected repairs.

Considering all your financial goals and your monthly comfort level with your mortgage payment is the key to accurately calculating how much house you can afford. It’s smart never to borrow the maximum amount you can qualify for so that you leave yourself some financial breathing room.

Keith Gumbinger

A Bridge To Your New Home

by Leave a Comment

Question: My mother wants to buy a condominium, now that she is living alone and no longer needs the old four-bedroom family home. She prefers to buy a condominium first, and make the move from the house to the condo over a period of time. After she has completely settled into the new condominium, she will then put the house on the market for sale. Assuming the condominium will cost less than what the house sell for, what is the least expensive way to bridge the two sales? In other words, is it possible to obtain a mortgage for only three to six months?

Answer: Your question has raised a number of issues, which I will try to explore in this column.

First, in my opinion — and if you can afford it — it is always better to move into a new home before you sell the old one. This gives you an opportunity to do whatever renovation is needed, without having to immediately move all the furniture into the new place.

But, obviously, not everyone can afford the luxury of owning two houses, and sometimes having to pay two separate monthly mortgage and duplicate real estate tax bills.

In your mother’s case, the family home is free and clear of any mortgage obligation. She should be able to obtain a “bridge” loan from a responsible lender, to enable her to have sufficient funds to purchase the condomimium. The loan will be secured by a first deed of trust (a mortgage) on the family home, and will be paid off in full when that house is ultimately sold.

Second, you ask whether short term loans are available. The answer is not simple, insofar as mortgage lenders do not want to spend a lot of time — and money — processing a loan application, only to have it paid off within a couple of months. Thus, while you might find such a short-term bridge loan from a mortgage lender, the interest rate may not be competitive.

On the other hand, your mother may be able to get a regular bank loan for the amount she needs, secured by a deed of trust on either or both the family home or the condominium unit. Much would depend on your mother’s financial situation at the time of loan application.

However, there is another way that, in my opinion, makes the most sense. Your mother may be successful in selling the home immediately; it may also be on the market for a long period of time. She does not want to commit herself to repay a loan in just a few months time, when there is uncertainty as to when her house will sell.

Thus, she should consider obtaining a regular mortgage loan on the family home. If necessary, you could co-sign and guarantee payment of the loan. She should obtain an Adjustable Rate Morgtgage (ARM) for one year, and make sure there is no prepayment penalty. If she is lucky and sells the house quickly, she can then use the sales proceeds to pay off the new loan. If, for any reason, the house does not sell quickly, she will have a low rate of interest for a period of one year.

More importantly, however, your mother should carefully review her financial situation. If she uses all (or most of) the cash from the sale to purchase the new property, will she end up “house rich and cash poor”? Perhaps she should consider obtaining a mortgage on the condominium unit (again your help may be required), and then keep the cash when the house is sold.

She should also review the tax situation before she sells. Will she have a large capital gain to pay? Is she eligible for the up-to-$500,000 (or $250,000) exclusion of profits? When did your dad die?

From a tax point of view, it makes no difference whether or not she uses any or all of the sales proceeds to purchase the condominium unit. She is either eligible for the exclusion or she is not.

There are two other alternatives which should be considered.

First, can she obtain a home equity loan on her current house and use these proceeds to purchase the condominium? Even under the new tax laws, so long as the money obtained from the loan is used to buy a new home or improve your present one, your mother will be able to deduct the interest she has to pay.

Second, are you in the financial position to lend her the money to purchase the condominium? If so, your mother can borrow directly from you, at a reasonable interest rate, and the loan will be secured by the new property. She can pay you interest only on a monthly basis, and you can decide at a later date if you want to gift her back a portion of the loan on a yearly basis, tax free.

Under no circumstances, however, should you consider going on title with her on the condominium unless you have fully explored all of the legal and tax ramification of such a move. There are significant negative aspects of putting your name on the deed, and obviously you want to maximize the tax benefits as much as possible.

Children often want to do right for their parents, and this of course is commendable. However, there are serious IRS repurcussions if the wrong steps are taken (even for the right reasons), and you must explore the situation with your own tax advisors before signing any legal papers. Also, we all have to carefully analyze the impact of the new tax law.

Bottom line: your mother should first talk with a financial adviser to explore all of the options.

WRITTEN BY

 

5 Smart, Easy Ways To Add Smart Home Technology To Your Place

by Leave a Comment

Has technology passed your home by? It’s never too late to update it. Whether you just want to bring the home’s function into this century for your personal use or are looking to put it on the market, incorporating some smart home items is, well, a smart strategy.

The stock advice for homeowners putting a house on the market used to go like this:  Give the exterior, or the front door, a fresh coat of paint; tame unruly shrubs; and swap out a few light fixtures. But today’s homebuyers are expecting a little more according to Consumer Reports, most potential homebuyers want smart-home tech preinstalled.

Specifically, Seventy-seven percent want smart thermostats, 75 percent want smart smoke detectors, 66 percent want smart home security cameras, and 63 percent want smart locks, to name a few.

Smart thermostats

Not only will a smart thermostat make your air conditioner function better and make your house more comfortable, it will save you money in the process.  With a smart thermostat, easily control the temperature in your home from a central control panel, with the sound of your voice, or using your mobile device. Combined with a smart assistant that intuits and learns your preferences and behaviors, your thermostat can automatically adjust the temperature – saving you valuable time, energy, and money.

The Nest Thermostat is one of the most popular options on the market.  It currently costs $249 but projects an average savings of around $173 per year. We also love the ecobee because it has multiple sensors. The latest version, the ecobee4 ($249), also has built-in Amazon Alexa.

Smart door locks

There are lots of smart door locks out there, which eliminate the need for a key and replace it with a keypad and code that are used for entry. But, we love this August Smart Lock, which takes smart home capabilities up a notch.

The battery operated device sells for $199, and communicates with your smartphone via Bluetooth. When the Smart Lock identifies your Bluetooth signal approaching, it unlocks your door, and can lock it behind you if you choose that setting.  It also allows you to set up virtual keys for guests, with the ability to grant access for only certain dates and times for each key. The activity log keeps track of when each unique user comes and goes. Perhaps the best part about this smart home upgrade is that it goes over your existing lock, meaning that you can have strong security and an intelligent lock. If you choose, you can pair the Smart Lock with the ‘August Connect’ for $79, which lets guests in and locks the door behind them. The Connect also grants real time status of locked or unlocked, and alerts you instantly when somebody comes or goes.

The August Smart Lock Pro is also a Consumer Reports fave.  They tested the previous-generation August Smart Lock and found that it offers a wealth of smart features that potential homeowners will appreciate.

Video doorbell

The humble doorbell has come a long way in the past few years, according to Business Insider. Gone are the days when all a doorbell would do is alert you to the fact that someone’s at the door. These days, doorbells can connect to your Wi-Fi network to offer enhanced home security with built-in cameras and microphones. Of all the doorbells you can buy, the Ring Video Doorbell 2 (currently $199) is our top pick because it doesn’t have to be hard wired and it has an excellent 1080p camera.

Smart smoke detectors

If you’ve ever dealt with a smoke detector going off in the middle of the night, this product should thrill you. But, of course, knowing your family is safe is obviously your No. 1 priority. And why not save a little money at the same time, right?

Another smart technology product, the smart smoke detector, could not only save you money (approximately 5% on your insurance premiums), but could even save your life. One 2014 CBS news report cites a figure of 2/3 of all home fire fatalities occurring in residences where the smoke detectors are missing or disabled — which is something many of us have resorted to at one time or other out of sheer frustration when our typical ‘dumb’ detector insists on shrieking an alarm every time we try to fry up some bacon.  A smart detector will allow you to keep on frying without fear of interruption. Two such products, the Birdi and the Nest Protect, will not only monitor smoke but also carbon dioxide and general air quality. They can even send an alert to your smart phone or tablet if anything is amiss. These products retail for $119 and $99 respectively.

Smart irrigation system

The SkyDrop: Smart Irrigation System Controller is a next-level automatic sprinkler system that allows you to control your irrigation from anywhere by using their app, and, “The best part is the irrigation will adjust itself based on your local weather,” said Nerds on Call.  The SkyDrop can be programmed to adhere to local water restrictions in order to contribute to saving water. An amazing part about SkyDrop is that it can calculate how much water your lawn uses every day and adjust the amount of watering time to keep your lawn healthy. This device sells for $200 on Amazon, and connects to your existing irrigation system along with your WiFi network.

WRITTEN BY JAYMI NACIRI

8 Things to Do Before Applying for a Mortgage

by Leave a Comment

Know what to expect

Buying a house is one of the largest financial commitments many people make in their lifetimes. Between the down payment, principal, interest, taxes, and insurance payments, utilities, maintenance, repairs, and updates, the financial outflows can be overwhelming.

A key aspect for most homebuyers is a mortgage — a loan secured by the house that enables the buyer to pay for the cost of the house over time, instead of all at once. It’s a big deal to apply for and get a mortgage, and taking care of these eight items before you do will help you along the way.

1. Determine how much house you need

If your income is decent and your credit score is good, you might find that banks are willing to lend you more money than it takes to buy a house that meets what you really need out of a home. While it’s tempting to buy up to a larger house in a nicer neighborhood, remember that many of the costs — not just the mortgage payment — scale right along with the price of the home you’re buying. Keeping your home buying decision attuned to what you really need will help you keep your total costs in check.

Key factors to consider include:

  •          How many people will be living in the house?
  •          Is the school district a ‘must have’ of a ‘nice to have’?
  •          What does the commute look like to work/grocery stores/etc.?
  •          Is the neighborhood safe?
  •          How much work are you willing to do to update/upgrade/maintain the home?

2. Scrape together a down payment

Most lenders will give you better terms on your mortgage if you have a substantial amount of your own cash tied up in the home you’re buying. Generally speaking, you’ll need at least a 20% down payment to get the best rates and terms on your mortgage. That means that if your house costs $200,000, you’d need to cough up $40,000 of that amount yourself and be able to borrow the other $160,000.

You might be able to get a mortgage if you have a smaller down payment, but chances are that you’d pay a higher interest rate and/or be stuck paying private mortgage insurance on top of your mortgage. Those raise your cost of borrowing over time, which means you’ll end up paying more in the long run than if you had the down payment available.

3. Check your credit report — and clean up any errors

If you’re borrowing a large chunk of money, lenders want to know you’re a good risk before they offer you theirs. To see most of what the lenders see, you’ll want to check your credit report. You can get a free copy of your credit report from each of the major credit bureaus once per year by visiting AnnualCreditReport.com. From that report you can see which companies you owe money to, how much you owe, and whether or not you’re considered to be on time with your payments.

Around 20% of credit reports have errors in them, either because of things like identity theft or because of more mundane clerical errors in data entry. If you see errors in your reports, the bureaus have a process to allow you to challenge those errors to get them corrected. By correcting errors before you apply for your mortgage, you improve both your chances of getting that mortgage and getting good terms on it.

4. Pay off what you can, and get current on everything else

In addition to wanting to see that you have a good history of managing your debts, mortgage lenders want to make sure you’re not over-extending yourself by taking on that large of a debt. They will calculate ratios based on how much you currently pay towards debt service and how much in total you will pay towards debt service once you have your mortgage.

Generally speaking, you’ll need to be putting less than 36% of your income towards debt service before considering your mortgage. Once your mortgage is factored in, you’ll absolutely need to keep that ratio below 43% of your income to have a qualified mortgage.

If that sounds like a crazy high percentage of your income to be putting towards debt, you’re absolutely right. The less you owe, the easier it is for you to make your payments on time and in full, and the more flexibility you have when things go wrong. By getting your other debts under control first, the less risk you’ll pose to the lender, and the better the overall deal you’ll qualify for.

5. Document your income — and the source of your down payment

Your lender will want to see proof that you make enough money to cover your mortgage payment as well as proof that youcame up with the money for your down payment. Proof of income comes in the form of your W-2 or 1099 from work or investment income that you use to file your taxes. A recent paystub would also help showcase that you’re still earning the income you’re claiming as part of your ability to pay your mortgage.

Proof of down payment money comes from checking account, savings account, and brokerage account statements, along with explanations for any large deposits into those accounts in recent months. The lender is looking for evidence that the money you’re using to make your down payment is yours, and they prefer “seasoned” money over recent windfalls.

Seasoned money is money that you’ve saved up over time, and it’s preferable because it gives the lender confidence that you’re good with money. If the lender suspects your down payment money is a gift or loan from family members — because it’s a recent deposit of a lot of money — the lender will ask for documentation on where that money came from. If the lender isn’t satisfied with the explanation, it could jeopardize your ability to get favorable rates or the mortgage at all.

6. Figure out what mortgage terms you want

The key choices you’ll make are the length of the mortgage and the rate type of the mortgage. The most common length for a mortgage is 30 years, followed by 15 years, but several other lengths are also possible. As a general rule, the shorter the length of the mortgage, the lower the interest rate you’ll pay on it, but the higher your monthly payments will be because you’re paying the balance down that much faster.

You can also choose between fixed rate and adjustable rate mortgages. With a fixed rate mortgage, your interest rate and the principal and interest part of your payment never move throughout the life of your mortgage. With an adjustable rate mortgage, your interest rate resets every year — sometimes after a preset number of introductory years at a steady rate. With an adjustable rate mortgage, you take on the risk of rising interest rates, but the benefit is typically a lower starting rate than a fixed rate loan has.

7. Avoid taking on any new debts around the time of your mortgage

If you’re buying a house, you’ll typically have a lot of expenses above and beyond the house payment. Things like renovating, buying new furniture, moving, fixing up your old place, and so on all require money. Avoid the temptation to borrow money for any of those items — or anything else — between the time you start shopping for a house and the time you close on your mortgage.

That can be trickier than it sounds. Even if the merchant offers you deferred payments like “no payments for 90 days” or interest free financing, it still counts as a loan and shows up on your credit report. If your lender sees you taking on excessive borrowing capacity before your mortgage is issued, it will react in a way that protects its interests. That likely means either cancelling your mortgage altogether or reducing the amount you can borrow based on your credit no longer being as strong as it had been previously.

8. Research lenders before applying for your loan

The act of applying for credit — whether or not you’re approved for that credit and regardless of whether you accept that credit — causes an inquiry on your credit report. That inquiry will typically lower your credit score by a few points. If your credit is borderline, the impact to your credit score can be enough to knock you into a higher risk tier or out of contention for a mortgage altogether.

As a result, you’ll want to check around to see which select group of lenders you want to do business with before filling out the mortgage application. Banks and credit unions frequently post their current mortgage rates online, and other mortgage lenders often advertise on real estate listing or similar sites. By researching lenders in advance and limiting your applications, you reduce your credit inquiries and the cost and hassle of applying for your mortgage.

A home is a big commitment — so plan for it

Your home may very well be the largest financial commitment you’ll make in your lifetime. By planning well for the financing associated with it, you can minimize the costs of ownership and put more of your hard earned cash towards what really counts, rather than towards fees, interest, and overhead costs. And that will go a long way towards allowing you to enjoy your home — and the mortgage burning party you might want to throw once you’ve paid it off.

 

Fate of Cougar Mountain development still unknown

by Leave a Comment

The fate of a 57-unit housing complex on Cougar Mountain is still being decided by the city of Issaquah as the project makes its way through the city’s review process.

The Bergsma Development was proposed last year by Windward Real Estate Services. Its initial proposal was for 78 new homes to be built on a portion of a 45 acre lot on the side of Cougar Mountain. The City Council unanimously rejected this proposal so the developers went back to the drawing board and submitted a land-use application for a 57 house project.

This proposal has prompted a backlash in Issaquah, as documented in earlier Reporter stories, with the creation of a group called Save Cougar Mountain. Member Susan Neville said they were expecting to hear a decision from the city on March 26, but the deadline was pushed back 30 days.

Comments from the community have been submitted to the city for consideration, including a legal comment drafted by the firm Bricklin and Newman representing Save Cougar Mountain. In it, the firm outlined a list of environmental concerns the group had, which include impacts to soil and slope, air quality stemming from the removal of trees and traffic, stormwater runoff and stream protections, among others.

The firm said 100-foot buffers could be reduced by 27 percent under the proposal. Also included in the firm’s comment were concerns about the aesthetic impacts of a development on the hillside, which is currently undeveloped forest.

Save Cougar Mountain has said around 60 percent of the proposed development includes critical areas with wetlands, streams and steep slopes. For the houses to be developed two wetlands would have to be cut down and 22 acres of trees removed, the comment read.

Landslides are another concern of Save Cougar Mountain, which points to a 2015 study that identified potential landslide risks on slopes greater than 40 percent. Windward has pointed to various other studies that have found no risk of landslides.

Julie Clark, also with the conservation group, said their concerns have basis in reality following a 2015 landslide on a nearby portion of the mountain which cost the city millions of dollars to repair.

Save Cougar Mountain member Kay Haynes said she hopes the city and county will band together to purchase the land and potentially add it to the county’s Cougar Mountain Park, which abuts the property.

Windward President Jim Tosti has previously told the Reporter the development will benefit the city by providing more housing as well as making improvements on Newport Way. The development is located near Interstate 90 with views of the valley.

It is unclear how much the property is worth or how expensive the houses would be, but if real estate trends in Puget Sound are any indication, the houses would likely be near or more than $1 million each.

Tosti said in an email he couldn’t comment on any updates yet.

By 

Contact Us

Issaquah real estate

Larry & Kathy Reichle
371 NE Gilman Blvd. #160
Issaquah, WA 98027

Phone: 206-999-1690

Contact Us

Digital Millennium Copyright Act Notice (DMCA)

Eastside Real Estate Blog