Is Seattle’s Housing Market Slowing Down?

by rbeckner on in Industry News

To say it’s a tough buyer’s market is putting it mildly. The last few years we’ve seen bidding wars and all-cash offers push many potential home buyers out of the market. Luckily, this trend appears to be changing.

Recently, Sam DeBord reported on Market Watch that the number of homes available in the Seattle area only shrunk by 13%. While this number may seem staggering, it’s a trend worth celebrating in comparison to the 20% drops the market’s inventory had been seeing.

Yes, some potential sellers remain timid. They’re concerned they won’t be able to buy a home once they’ve sold their current home. However, sellers are also beginning to respond to buyers. The rate at which inspections are being waived has dropped. Escalators (a buyer’s pre-determined bidding war maximum) have decreased. And, foreign investors have lost some of their all-cash purchasing power.

(The decrease in foreign investor’s all-cash purchasing power is linked to a change in China’s laws concerning overseas withdrawal maximums. In 2015, they began restricting overseas withdrawals to a maximum of $50,000 per individual.)

 

Is Another Housing Market Bubble Forming?

DeBord says no. More than 10,000 new technology workers have come to the Seattle area in 2016 alone. These techies are making good money. And, they are buying homes with large down payments.

The previous bubble was built on false credit. Unqualified buyers were being extended an immense amount of credit they had no hope of repaying. Today’s buyers now face stringent evaluations of their income, employment, assets, and credit history.

 

What Does This Mean For You as a Buyer?

The slow down is good news. While inventory is beginning to even out, the interest rates currently remain near historic lows. As a buyer, this gives you more opportunities.

Additionally, the mad dash to make an offer isn’t quite as extreme. There isn’t the same necessity to waive inspections, promise a large percentage of earnest money or engage in a massive bidding war.

Ready to see what sort of interest rate you qualify for? Contact me today.

How to Compete Against All-Cash Buyers

by rbeckner on in Home Buying Process

In the real estate world, money rules. Sellers want to get paid. Following the recession, all-cash offers ruled. They often still do. But, buying a house outright takes a fair bit of coin. Most folks simply don’t have that much cash on hand.

Luckily, this doesn’t mean all hope is lost. These four tactics can help you compete against all-cash offers:

Be First

Don’t wait to submit your offer. Submit it immediately. And, assume you won’t have the ability to negotiate. Make your best offer first. If you’re afraid of overpaying, take a close look at the current market rate.

Be a Bit Larger

Submitting the biggest offer doesn’t automatically mean you’ll win, but it often helps. Typically all-cash offers are made by investors. Because investors are looking to make the biggest profit possible, they often aren’t submitting the biggest purchase price. If you can pay more, this can give you negotiating power.

Be Flexible

While a seller wants to get out of their house, they might not want to get out right away. This is especially true if they are buying a new house on contingency. Make sure to emphasize your flexibility. Allow the seller to set the timeline and some of the specifics. The more flexible you are, the more attractive you are as a buyer.

Be Personable

Write a sincere letter to the seller. Explain why you want the home and the future you imagine having there. Maybe you’re getting ready to start a family. Maybe your family is getting ready to expand. Tug at the seller’s emotional heartstrings. While this won’t always help, it will in some cases. There are a lot of homeowners who become very attached to their home. When they are ready to sell, they often want to leave their home in the hands of someone who will love it.

Before you go house hunting, make sure to get pre-approved. Give me a call today.

Home Buying Tips for Veterans

by rbeckner on in Mortgage 101

We are incredibly humbled by the men and women who have served and are serving our country. Here at Fairway Kirkland, your sacrifice is not without notice.

This is why we take great pride in helping those eligible for a VA loan secure the dream of home ownership. It’s just one small way we can give back. Our loan officers are well versed in VA loans and are available to answer any questions you may have. To help you get started, we’ve outlined the five essential steps you need to take:

 

Shore Up Your Finances

Check your credit report and, if needed, correct any mistakes. You can still qualify for a VA loan with a low credit score. However the higher your score, the more money for which you can qualify and the more favorable your interest rate.

 

Get Pre-Approved

In Seattle’s competitive housing market, deals happen quickly. If you are not pre-approved, you will miss out. Before you go house hunting, work with a loan officer to get pre-approved.

 

Understand Your Loan Options

Just because you can qualify for a VA loan, doesn’t always mean it is your best option. Be sure to speak with your loan officer about your long-term goals and current financial status to determine the right loan product for you.

 

Work with a Military-Friendly Real Estate Agent

While a VA loan is similar to a traditional mortgage, it still has some nuances. It is best to work with a military-friendly real estate agent who understands how VA loans work. This will help ensure you close quickly and efficiently.

 

Work with a Loan Officer Who Processes Loans Quickly

Another side effect of Seattle’s hot market is that deals move fast. If your loan takes too long to close, you could lose out on your new home. This is why it is important to work with a loan officer who pays close attention to detail and closes loans quickly.

Ready to get pre-approved? Need help finding a military-friendly real estate agent? I’m here to help. Give me a call today.

How To Help Mom & Dad Buy A Home

by rbeckner on in Home Buying Process

From the first Band-Aid to phone calls home, mom and dad have supported you through thick-and-thin. Now that you’re financially stable, helping them buy a new home might seem like a dream come true.

It’s also a step that is more complicated (and risky) than you might realize. From cosigning to down payment support, there are a number of ways you can help. But before you jump in feet first, it’s important to carefully consider the pros and cons of each.

Cosign

This can be one of the simplest ways to help your parents secure a new home, especially if they have a limited income. Getting approved for a mortgage is heavily dependant on not only the loan-to-value ratio, but the overall debt-to-income ratio of the borrowers. This means cosigning could improve your parent’s debt-to-income ratio (DTI). This could help them get approved for a bigger mortgage than they might otherwise.

What’s the catch? Cosigning their mortgage means you remain financially responsible throughout the lifespan of the mortgage. This is true whether you live with them or not. If your parents fall behind on their payments, the debt will also affect your credit score.

Down Payment Assistance

Alternatively, down payment assistance allows you to help your parents without putting your credit in jeopardy. To avoid the pricey gift tax, it’s best to plan ahead. (The maximum gift allowed is $14,000. You can gift each of your parents the full sum and so can your spouse without being parent’s being taxed.)

What’s the catch? Giving your parents enough for a down payment is a hefty sum! This is money that could go in your own retirement fund, be used for college tuition payments or simply make life a bit easier.

Renting

Renting to your parents is another way to help them move into a new home without attaching your credit future to theirs. Buying a second home has the added perk of tax deductions. You could qualify for everything from mortgage interest and property tax deductions to maintenance costs and depreciation expenses.

What’s the catch? Second homes are considered investment properties. Typically, the mortgage rates attached to them are a bit higher than you’ll be charged for your primary residence.

Ready to start exploring your options? Contact a loan officer today.

Should You Buy a Vacation Home?

by rbeckner on in Mortgage 101

Summer is going to officially be here before we know it. Heck, with the amazing weather we’ve been having, you might have even convinced yourself it’s already here.

As you dive headfirst into summer vacations and weekend getaways, you could find yourself toying with the idea of a more permanent destination. A vacation home. A place out of town that’s all yours.

However, the real questions are: Should you buy a vacation home? Is now the right time?

To help you decide, we’ve outlined three key questions to consider:

Can your budget handle it?

While not all vacation homes are as expensive as a primary residence, purchasing one will always mean introducing an additional drain on your monthly budget. It’s not simply a question of whether of not you can make the mortgage payments. You’ll also need to budget for routine maintenance, utility bills, taxes, and the unexpected major repairs.

How will you finance the purchase?

While you may have used a VA or FHA loan to purchase your primary residence, these loan assistance programs are not an option when it comes to buying a vacation home. If you have the financial means for an all-cash purchase, the entire process will be much simpler.

However, if like most of us, you don’t have a few hundred thousand dollars just waiting to be used, you’ll need to look into other avenues. You might consider:

A Home Equity Loan – A home equity loan allows you to leverage the equity in your primary residence to secure a second mortgage for your vacation home.

A Conventional Loan – You’re probably already familiar with conventional loans. They can be a great option for purchasing a vacation home. However you’ll need to be prepared to make a substantial down payment – in most cases 20 percent of the purchase price.

Will you really use it?

Assuming you can afford to buy a vacation home, you’ll ultimately need to decide if you will really use it. If you are the kind of vacationer who constantly wants to go some place new, becoming financially invested in one destination might not be for you. However, if you love going to some particular place and rent a house there every chance you get, then a vacation home could be right up your alley.

Ready to explore your options? Give me a call today.

3 Lessons to Teach Your Kids How to be Money Savvy

by rbeckner on in Home Ownership

Do you dream of your children becoming strong and independent adults? Do you imagine them as secure and financially stable?

Most parents do. Fortunately, you have the power to help them. With a few strategic lessons, you can teach them to be financially savvy.

Help them learn that patience is a virtue.

In a society focused on immediate gratification, it can be hard for children to understand the power of waiting. As a young tot, getting an ice cream cone or doll right away might not seem like a huge deal. Unfortunately, down the line this same mentality can lead your adult child to want (and buy) a new pair of shoes, fancy hat or luxury vacation right now.

Buying without being prepared for the expense often leads to debt. However, if you teach your child the virtue of patience, they’ll learn to take joy in having saved for their extras.

Consider giving a monthly allowance for “special purchases.” Once your daughter has saved enough for her new doll or your son his new baseball glove, they will each value that item much more.

Loan money with interest.

When your children leave the coop, borrowing money won’t be free. Loans will come with an interest payment. Teach them the principle now. If you loan them money – charge them interest.

Explain to them that the money they’ll spend in interest is like a rent payment. For example, if they borrow $10 at 10 percent interest, they’ll need to pay you back $11.00. The extra $1 is the cost of renting the $10.

Let them earn some dough. 

Nothing teaches children the value of money more quickly than having to earn it. Predetermine how much each chore around the house is worth. Maybe it’s $10 to mow the yard, $15 to clean the bathroom, and $12 to wash the car.

They’ll suddenly discover a new appreciation for going to the movies on Friday night.

2 Solutions for Bad at Home Cell Service

by rbeckner on in Home Maintenance, Home Ownership

“Unplugging” is nice – when it is your choice. Unplugging because you have poor reception is an entirely different story.

It you are constantly on the hunt for a better signal while at home, you are not alone. The struggle is real. And, it is more than a little bit frustrating.

Fortunately, you don’t have to simply accept spotty cell phone service. With a little ingenuity, it is a problem you can solve. These are two of the easiest solutions:

Solution 1 – Cell Phone Booster

As the name would suggest, cell phone boosters are designed to boost cell service in a very specific area. They do so by taking an existing cell signal (typically found outside your home), amplifying it, and then broadcasting it within your home.

For a cell phone booster to work, your carrier must provide some service in your area. Additionally, your cell phone booster will need to be registered with your individual carrier. Each company can withhold its consent for usage. (They will typically only do so if you live in a highly populated area.)

Solution 2 – Enable Wi-Fi Calling

Wi-Fi calling allows your cell phone to make calls over your home’s Wi-Fi (aka wireless Internet). Currently, not all carriers offer this service. And, it is only available for compatible devices, such as the iPhone 6 series and some Android phones.

Think About a New Carrier

Finally, some carriers simply don’t provide coverage in all areas. This is particularly true of remote locations. If you have moved beyond the city limits and suddenly lost your coverage, talk to your neighbors. Ask them what carrier they use. It might be time to consider switching providers.

Have you found an additional way to fix your cell phone service woes that didn’t involve standing on your head? Give me a call today.

4 Questions Homebuyers Need to Answer

by rbeckner on in Home Buying Process, Mortgage 101

Buying a home can be overwhelming and confusing. To help simplify the process, make sure you can answer these questions:

How Much Do You Prequalify For?
It’s all too common to see first-time homebuyers house hunting without getting preapproved. This can cause some serious issues. First, if you’re looking at houses outside of your price range, it can easily lead to dissatisfaction. Second, it wastes your time. Most sellers won’t even look at bids from prospective buyers who aren’t preapproved.

What is Your Credit Score?
Your credit score is one of the crucial factors a lender will use to determine if you are eligible for a mortgage loan. Your credit score also affects the interest rate you can secure. If you don’t know your credit score, you’ll want to find it out ASAP. Make sure to take a close look at your credit report to identify any mistakes or discrepancies that might be affecting it. By addressing these, you may raise your credit score and improve your interest rate.

How Much Will Your Closing Costs Be?
It’s not uncommon for closing costs to stun borrowers. At three to five percent of the total home price, closing costs can be a substantial chunk of change. If you’re not prepared, finding the necessary cash can be difficult.

The key is to discuss closings costs with your loan officer from the very beginning. The final dollar amount of your closing costs can fluctuate by no more than 10 percent. However, knowing the estimated cost up-front can allow you to prepare for it or discuss alternatives, such as including your closing costs in your monthly payment.

Who is Responsible for Paying Your Closing Costs?
As the buyer, you don’t automatically have to pay closing costs. Sometimes the seller will agree to assume some or all of the closing costs in order to close the deal. Be sure to communicate with the buyer from the very beginning about who will assume responsibility.

Ready to learn more? Give me a call today.

Pick Your Perfect Neighborhood

by rbeckner on in Home Buying Process

Location. Location. Location. When it comes to real estate values, it is the number one attribute. It is also one of the primary factors when it comes to your happiness. This is why, when it comes to finding your perfect home, you must first find your perfect neighborhood.

Why is the right neighborhood so important? Because the community that surrounds you plays a huge role in your environment. For example, if you are deeply religious, being surrounded by members of your faith can be a source of support. Alternatively, if you love to host potentially noisy parties, living in a quiet cul-de-sac might not fit the bill. The key is to find a location where your neighbors’ lifestyles mirror your own.

In many ways, finding the right neighborhood is like finding the right partner. It is ideal to find a place where others share your same values. Additionally, the perfect neighborhood will introduce enough spice into your life to keep things interesting – as a good partner does.

As you begin considering what neighborhood is right, ask yourself what is important to you on a daily basis. Do you want to live in a place that’s kid-friendly? Would you like it to be walkable and have cultural offerings? Is easy access to the freeway important? Or maybe you want access to hiking trails?

Then, visit neighborhoods you think fit the bill. Take the time to visit them at varying times during the day. Walk around. Talk to neighbors. Find out what’s close.

It is also essential you consider the day-to-day life of the place. Often people want to buy a home in a location because it is where they enjoy vacationing. That is great if this home is going to be your vacation home. However, vacation isn’t real life. It is vacation. Your perfect neighborhood is one you can enjoy everyday.

Ready to start house hunting? Give me a call today.

5 Not So Well-Known Loans

by rbeckner on in Mortgage 101

Did you know that there are different kinds of loans? As a Loan Officer, I constantly educate home buyers on the wide verity of loans available. There is no one size fits all approach when it comes to home loans. There a countless types of loans and structures available to you, so you can get a loan that fits your situation. Loans from from different lenders, have different rules, payment options, and time frames.

To help you brush-up on your borrowing know-how, we’ve compiled five types of loans you might not know about.

Cash Advances (aka Costly Borrowing)

A cash advance loan is a loan typically extended by your credit card provider. These loans are often smaller in size, such as a few hundred dollars. They generally have high interest payments and fees, meaning they can be extremely expensive.

Equity Loans (aka Borrowing From Yourself)

With an equity loan, you leverage your personal equity. This could include your home’s equity, your retirement fund, and even your life insurance. Essentially, you’re liquefying these assets with a clearly defined repayment plan.

Reverse Mortgages (aka Leveraging Your House)

A reverse mortgage is similar to an equity loan, in that you are leveraging the equity in your house. The difference is, with a reverse mortgage there is no repayment plan. As you recoup the equity in your home in liquid assets, the lender takes ownership of your home. Traditionally, reverse mortgages are used by retirees.

Personal Loans (aka the Friends & Family Loan)

Personal loans can be extended to you by friends, family or an institution. With the advent of crowdfunding, you can even get a personal loan from complete strangers. The size and term length of the loan can vary widely. As with most loans, the higher your credit score, the lower your interest rate will likely be. Before you take on a personal loan, make sure to read the fine print. You and the party from which you are borrowing should create a legal document outlining the terms. These terms should include (but are not limited to): the total sum you’re borrowing, your interest rate, your payment schedule, and the specific terms for how the lender can recoup their losses in the event you default.

Debt Consolidation Loans (aka Repaying Old Debts with a New Loan)

Debt consolidation is exactly what it sounds like. It allows you to pay off your debt with a new loan. For those who find themselves in serious financial trouble, debt consolidation can offer a way out. It can allow you to lower your interest rate and simplify your monthly payment plan. However, debt consolidation will also seriously harm your credit report for some time. It isn’t a decision to make lightly.

Have additional questions about loan types or simply ready to explore traditional mortgages? Give me a call today.

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