Whidbey Island Real Estate Information
Updates, news and information about Whidbey Island Real Estate.
|“A house is not a home unless it contains food and fire for the mind as well as the body.” – Benjamin Franklin. Last week, the housing market received some food and fire for the mind, but not everyone was at home with the news.
First, the good news. The housing market received a serving of good news last week, as New Home Sales reportedly rose 17.5% in December to come in better than expectations. Overall, the report demonstrated that housing continues to recover – albeit slowly. Despite that good news though, the markets were keyed in on another more important event last week: the release of the Fed’s Interest Rate Decision and Monetary Policy Statement.
As expected, the Fed made no change to the Fed Funds Rate and even the Policy Statement was pretty much the same. But that didn’t stop the markets from getting a little fired up about the release. Let’s take a look at why.
It’s important to understand that the Fed has to be very careful with how bullish their economic comments are, as they don’t want to see long-term rates move higher. Well, the Fed’s comments certainly were not bullish as they said “employers remain reluctant to add to payrolls” and “the housing sector remains depressed.”
So why did Bonds initially improve nicely on the news and then crumble later in the day? The answer is, not everyone in the trading pits is buying what the Fed is saying. Instead, some people believe the Fed is talking down the true underlying strength of the economy, so that it can justify injecting the full $600 Billion of Quantitative Easing into the economy.
Speaking of comments that impacted the markets… President Obama delivered his State of the Union Address to members of Congress last week. Although the President’s call for a freeze on discretionary spending for 5 years may appear to be Bond bullish in that any reduction in the deficit would be good for Bonds, the reality is that so much more has to be done to really get our long-term debt in check. And some of last week’s weakness in Bonds was likely attributed to the feeling that the speech came and went without any real sense that the deficit is going to be reduced in a meaningful way, especially in the near term. The Bond market probably would have liked the word “cut” in spending rather than “freeze,” since a “freeze” suggests only a temporary halt in spending at current levels.
In the end, the news last week demonstrated that economic conditions are improving, but they are doing so gradually. As a result, the market remains volatile, as Bonds and home loan rates move up and down depending on what reports or speeches hit the news wires. The good news is that despite the volatility, home loan rates remain extremely low for now and present a tremendous opportunity for buyers who lock in at the opportune moment.
To learn more about the volatility and how you or someone you know can benefit from a knowledgeable advisor Coldwell Banker Koetje Real Estate, please call or email today.We would be happy to discuss the current economic climate and what it means to your unique situation.
Content courtesy of: AlaskaUSA Mortgage
1. What is a real estate short sale?
A short sale occurs when a lender agrees that it will take less than what the homeowner owes on their note. The lender usually agrees to this during the beginning stages of foreclosure when the they realize that the homeowner will not be able to meet the terms of their agreement and will be foreclosed upon if a short sale does not occur. This short sale would result in a substantially discounted purchase price for the end buyer of the home. The buyer would then proceed with the purchase of the home when the lender agrees to a price.
2. Will a lender allow a real estate short sale when the seller has some a good amount of equity?
If the home has some amount of equity, the lender may choose to continue with a traditional foreclosure proceeding to regain title to the property and dispose of it at a fair market price. Short Sales are generally discounted below fair market value, because the time value of money makes it more viable for the lender to sell it quickly rather than waiting through the redemption period, which in some states can be 6 to 12 months. Banks are not in the real estate business and generally don’t want to own the home.
3. What documents are necessary to proceed with a short sale?
The individual documents necessary to proceed with the short sale will depend on the lender. Typically, the lender will require hardship letter detailing the circumstances leading to a short sale. A signed, valid purchase and sales contract, preliminary HUD-1 settlement statement and a preliminary estimate of proceeds to the lender. There may be additional requests for more detailed information on the financial condition of the seller, ie; pay check stubs, bank statements, a personal financial statement and monthly budget assessment, amongst other things.
4. Will the seller’s credit be affected if they agree to a short sale versus a foreclosure?
While it is up to the individual lender to decide what to report, what often happens is the loan will report as “paid” on their credit report for a short sale, and sometimes with a reference that says “settled for less than originally owed”. A foreclosure will show as a default and can affect one’s credit for 3-7 years. It is absolutely less damaging to have the short sale referenced than to have a foreclosure on a credit report.
5. Will a lender allow the homeowner to make a profit on a short sale?
Absolutely not. The lender is taking a loss when they agree to a short sale and they will not agree to let the homeowner benefit financially.
6. If a seller is in bankruptcy, will that affect the short sale of the property?
Absolutely, as most lenders will not consider a short sale if the homeowner is in the middle of a bankruptcy proceeding. Negotiating a short sale between the parties is considered a collection activity and such a negotiation is prohibited during bankruptcy proceedings.
7. Will the bank or lender require an appraisal on the home in a short sale?
Most lenders will hire a broker to develop a Broker’s Price Opinion (BPO) to determine the value of the home. Some will require that a full appraisal be submitted in the short sale package. The lender will need some formal assessment of the value of the home in order to make a decision as to an acceptable offer. Settling on an agreeable price usually requires some negotiating between the end buyer and the lender and this can be an iterative process.
8. Are there tax implications for the short sale?
Much like the issue of credit reporting, the circumstances vary by lender. As a short sale represents a loss for the lender, they can report the amount lost as “debt forgiveness” to the seller. If a formal tax form 1099 is filed, the seller may be responsible for paying taxes on the amount of debt forgiveness. A CPA should be consulted by the homeowner in this situation.
9. Why would a lender agree to a short sale?
The lender doesn’t want to own the home because they are not real estate experts. Foreclosure proceedings can be very time-consuming and costly. The seller is relieved of the home they can no longer afford. The buyer is purchasing the home at an attractive price. A professionally executed short sale can benefit all parties involved in the transaction.
Courtesy of: Donna Sanford
Rick Schutte, Broker/Owner of Coldwell Banker Koetje Real Estate in Oak Harbor, Wa. interviews Lyn Bankowski, senior loan originator, from AlaskaUSA Mortgage about the need of checking your annual credit report.
In this interview, Lyn mentions the free reports can be found at https://www.annualcreditreport.com/. This central site allows you to request a free credit file disclosure once every 12 months from each of the nationwide consumer credit reporting companies. AnnualCreditReport.com is the official site to help consumers obtain their free credit report. You can also go to http://ftc.gov/freecreditreport for more information.
The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies every 12 months.
For months there has been an ever-growing fear that our economy is headed towards deflation, which is when prices on goods and services are falling lower. Deflation is the exact opposite of inflation, which of course occurs when prices climb higher. Remember, inflation is the arch-enemy of Bonds, so fears of inflation negatively impact Bond prices and home loan rates. But fears of deflation are good for Bonds and home loan rates. That’s because the fixed payment that a Bond provides to an investor goes further in a deflationary environment. So, the recent fears of deflation have helped Bond prices move higher and home loan rates move lower.
But last week, future deflation/inflation expectations changed… and investors in the Bond market started betting that the Fed will be successful in “creating inflation” via their Quantitative Easing plans, and will thus avoid continuing down a deflationary road. This was evidenced by the results of last week’s 5-Year Treasury Inflation Protected Securities (TIPS) auction, which saw investors buying TIPS at a premium since they were confident they’d be able to benefit from the increased inflation that should result from the QE2.
Of course, investors aren’t the only ones impacted by this. The media has already been chattering that the Fed has to be careful not to let inflation get out of control in the coming months and years. In fact, just last week, there was a headline explaining how another round of Quantitative Easing brings the risk of “unleashing the 1970s inflation genie.” Consumers who are looking to purchase or refinance a house should also take note of that possibility – since even talk of inflation can impact home loan rates negatively. After all, a rise in inflation would be bad for Mortgage Bonds and, as a result, for home loan rates.
The good news is that home loan rates are still near historic lows for the time being. If you or someone you know would like to see how you can benefit from the current situation, call or email us today.
Information courtesy of Alaska USA Mortgage
Most Real Estate agents say spring is the season to sell a home, but don’t rule out fall just yet. There may be fewer buyers, but they tend to be more motivated. The key is to find them fast, because you don’t have much time before the holidays kick in and real estate really slows down. Try these selling tips:
Price aggressively. You don’t have the luxury of starting high and making incremental price drops. Be competitive – price your home 5% to 15% below comparable homes on the market.
Stage it to sell. Fall is one of the most beautiful times of the year, but it can also be hard on home maintenance. Make sure the front yard is clear of leaves, clean out gutters and downspouts, and touch up paint. Incorporate tasteful fall decor. If you have a fireplace, make it the focal point of the room.
Be flexible. Bargain hunters are out in force in the fall, so don’t be discouraged by low-ball offers. See them as opportunities to negotiate. If you don’t want to come down on price, be creative, such as offering to pay for closing costs or repairs.
In a short sale, your mortgage lender agrees to let you sell your house and agrees to take the amount you get for it-not the full amount of the mortgage.
Short sales help in many ways. For one, during the process of negotiating for and holding the short sale, you can live in your house. Also, when you have a short sale on your home, you don’t walk away with as big of a black mark on your credit as you do with a foreclosure. Of course, even if you start out with a short sale, you may only be delaying the time before you end up foreclosing if your house doesn’t sell.
Now, you can’t just walk into your lender’s office and say you want to have a short sale on your house. You are going to have to prove financial distress, and you’re going to have to walk in with proof of what your house is actually worth now. You will also need to have a proposal, complete with total costs of the sale. Your Realtor will work with you to create these documents.
But even if you qualify, you may have a hard row to how with your lender at first. Many lenders are still resisting, even though the sales save them thousands of dollars on foreclosing costs, property maintenance, and sales costs. So be persistent if you have to – someone at your lender may well see reason.
Also, there’s a new federal program that is giving money to both lenders and homeowners to help the process along. This program will also help if you have more than one mortgage on your house. We have more information about the Home Affordable Foreclosures Alternatives program. Please contact us for more information.
So before you get into a panic over your situation, realize that yu do have some power here. You can come out of this with your family, your pride, and even some of your finances intact. Just take the lead and start negotiating – home short sales save lenders money, save homeowners heartaches, and save communities from the blight of foreclosed, empty houses!
Don’t worry about finding an educated, certified short sale Realtor to list your home. Just contact us and we’ll be happy to help you.
Article Source: William Bud Gragg Jr.
First-time homebuyers are contributing to an increase in demand for smaller and less expensive new homes, according to research from economists at the National Association of Home Builders (NAHB). Delving into data from the most recent biennial American Housing Survey, which was conducted by the Department of Housing and Urban Development and the Census Bureau in 2009, the study, “Characteristics of New and First-Time Home Buyers,” finds that 41 percent of the 8.4 million households who bought a home between 2007 and 2009 were first-time buyers.
The market share of first-timers was up from 35 percent in both 2005 and 2007. Although some of the demand was fueled by the initial version of the home buyer tax credit in mid-2008, which was specifically targeted to those buying a home for the first time, the upward trend is expected to continue as children of baby boomers – members of a generation that is larger than their parents’ – move into their household formation years in the period ahead.
First-time buyers for the two years of the study had an average age of 34, compared to 46 for those trading up. The average income of first-timers was over $67,000, about 30 percent below the average household income of trade-up buyers of $97,000. About half of the first-time buyers earned less than $60,000.
The household size of both first-time and trade-up buyers has been declining, while single-person households have been on the rise. First-timers bought homes with an average market value of about $184,000, compared to more than $297,000 for trade-up buyers. First-time buyers bought homes averaging 1,874 square feet, significantly below the 2,549-square-foot home purchased on average by those trading up. Forty-six percent of first-timers bought homes smaller than 1,500 square feet.
The full report is available here.
Coldwell Banker Real Estate LLC released its Home Listing Report, a snapshot survey of U.S. four-bedroom, two-bathroom home listings, which found a $1.7 million difference between America’s most expensive and most affordable housing markets. Newport Beach, Calif., led the list of most expensive real estate markets in America, with an average home listing price of approximately $1.83 million for property listings meeting the subject home criteria. By contrast, America’s most affordable housing market was Detroit, Mich., with an average home listing price of approximately $68,000.
Known for its sandy beaches and historic Balboa Pavilion (established in 1906), Newport Beach, the most expensive market, has been the backdrop to numerous television shows including “The O.C.” and “Arrested Development.” Detroit, the most affordable market, is the only major U.S. city that looks South to Canada. Residents of the Motor City take great pride in Red Wings hockey and appreciate the city’s hard-working industrial and automotive history.
Home listing prices in Oak Harbor average $264,900 making Oak Harbor one of the more affordable markets in the nation. Oak Harbor compares to the average listing price of homes in Coeur d’Alene, Idaho ($239,540) and Fairbanks, Alaska ($262,752).
The HLR is a great way for people who are curious about home listing prices to get a glimpse of various markets. By reviewing the report data, people can truly recognize the local nature of real estate. Here in Oak Harbor, we are seeing the market stabilize and with the lower interest rates, it has become a very good time to be a home buyer.
Coldwell Banker Real Estate has released national real estate market reports annually for many years to provide consumers with insight into local market conditions,” said Jim Gillespie, chief executive officer, Coldwell Banker Real Estate LLC. “Our study shows that homeownership in the United States is generally affordable, with nearly 30 percent of the studied markets averaging $200,000 or less for a four-bedroom, two-bathroom home – a size many buyers aspire to own. Today those who have the financial resources and a desire to move up to a larger home have a unique opportunity to take advantage of historically low mortgage interest rates coupled with comparatively lower prices and greater selection.”
2010 Coldwell Banker U.S. Home Listing Report – Highlights
America’s Most Affordable Markets: In addition to Detroit, America’s most affordable real estate markets are as varied in culture and trivia as they are in listing price ranges:
- Grayling, Mich., is home to many top cross-country skiing destinations.
- Sioux City, Iowa, has been recognized as a top U.S. economic community for areas between 50,000 and 200,000 people.
- Cleveland, Ohio, is home to the Rock and Roll Hall of Fame.
- Muncie, Ind., has gained notoriety for its successful prep sports programs.
- Norfolk, Neb., is home to many healthcare and manufacturing companies.
- Kansas City, Mo., is just behind Rome, Italy, for the largest number of fountains in a city (more than 200).
- Canton, Ohio, is home to the Professional Football Hall of Fame.
- Port Huron, Mich., features the School of Strings, which presents over 50 concerts a year with its Fiddle Club, Faculty and Student Ensembles.
- Topeka, Kan., was once temporarily renamed “Topikachu,” in honor of the Pokémon franchise.
Homeownership Affordability: In total, there are 85 U.S. markets in the HLR with average reported listing prices less than $200,000. There are 183 markets (out of a total of 296 surveyed) that are less than $300,000.
- Great Midwest: Michigan has three markets on the most affordable housing list (Detroit, Grayling and Port Huron), and all 10 of the most affordable markets are in the Midwest.
- Low Monthly Payments: Put in perspective, a $200,000 30-year-fixed mortgage at a 4.5% rate could cost a buyer a relatively low monthly mortgage payment of just above $1,000. The average $68,000 four-bedroom, two-bathroom home in Detroit could average less than $350 a month.
- Pacific Paradise: Out of the 10 most expensive real estate markets, six are from California: Newport Beach, Palo Alto, San Francisco, La Jolla, Pasadena and Santa Barbara.
- Above $750,000: The survey included 25 housing markets where the average listing price for the subject home was more than $750,000, including 10 markets whose average listing price exceeded $1 million.
TABLE 1 – TOP 10 LISTS
The top 10 most expensive and most affordable real estate housing markets in the 2010 Coldwell Banker U.S. Home Listing Report are:
|Rank||Most Expensive||Avg. Listing Price for Feb. – Aug. 2010
In U.S. $
|Most Affordable||Avg. Listing Price for Feb. – Aug. 2010
In U.S. $
|1||Newport Beach, Calif.||$1,826,348.00||Detroit, Mich.||$68,007.00|
|2||Palo Alto, Calif.||$1,479,227.00||Grayling, Mich.||$84,625.00|
|3||Rye, N.Y.||$1,325,500.00||Sioux City, Iowa||$85,967.00|
|4||San Francisco, Calif.||$1,325,103.00||Cleveland, Ohio||$87,240.00|
|5||La Jolla, Calif.||$1,210,300.00||Muncie, Ind.||$100,314.00|
|6||Greenwich, Conn.||$1,195,614.00||Norfolk, Neb.||$107,814.00|
|7||Wellesley, Mass.||$1,080,458.00||Kansas City, Mo.||$112,449.00|
|8||Pasadena, Calif.||$1,043,683.00||Canton, Ohio||$114,325.00|
|9||Honolulu, Hawaii||$1,026,821.00||Port Huron, Mich.||$116,267.00|
|10||Santa Barbara, Calif.||$1,024,661.00||Topeka, Kan.||$116,343.00|
TABLE 2 – U.S. HOME LISTING REPORT
For all markets included in the U.S. Home Listing Report, below are the most expensive and most affordable markets by state (as well as Puerto Rico):
|Avg. Listing Price for Feb. – Aug. 2010
In U.S. $
|Avg. Listing Price for Feb. – Aug. 2010
In U.S. $
|ARKANSAS||Fort Smith||$238,540||Little Rock||$208,438|
|IOWA||Iowa City||$247,076||Sioux City||$85,967|
|LOUISIANA||Baton Rouge||$246,106||New Orleans||$166,009|
|MISSOURI||St. Louis||$223,819||Kansas City||$112,449|
|NEW JERSEY||Basking Ridge||$820,207||Toms River||$374,883|
|NEW MEXICO||Santa Fe||$410,707||Albuquerque||$355,169|
|NORTH DAKOTA||Minot||$216,248||Grand Forks||$197,644|
|RHODE ISLAND||Providence* $144,900|
|UTAH||Salt Lake City||$401,354||Provo||$193,325|
|WISCONSIN||Madison||$299,675||Fond du Lac||$119,838|Comments
The housing market in the United States may not be thriving, but business is booming for foreclosure rescue and loan modification scammers.
The US Government Accountability Office (GAO) released a report in July 2010 entitled “Home Ownership Preservation”. It states that: “The current foreclosure crisis has provided persons who may perpetrate mortgage foreclosure rescue and loan modification schemes with unprecedented opportunities to profit from homeowners desperate to save their homes.
The GAO report says there are two main types of foreclosure rescue and loan modification scams: advance-fee loan modification schemes and sales-leaseback schemes, with advance-fee schemes being the most common.
The Federal Trade Commission (FTC) reports on a new twist on the advance-fee scam that’s showing up this year, a “forensic mortgage loan audit.” The scammer offers to find regulatory violations in your original mortgage that will help you avoid foreclosure or even cancel your loan. There’s no evidence that anyone has ever succeeded in modifying their loan using this approach.
Here are some “red flags” that at-risk homeowners should watch out for when looking for foreclosure help, courtesy of the FTC. You should avoid any business that:
• guarantees to stop the foreclosure process – no matter what your circumstances
• instructs you not to contact your lender, lawyer, or credit or housing counselor
• collects a fee before providing you with any services
• accepts payment only by cashier’s check or wire transfer
• encourages you to lease your home so you can buy it back over time
• tells you to make your mortgage payments directly to it, rather than your lender
• tells you to transfer your property deed or title to it
• offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale
• offers to fill out paperwork for you
• pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.
courtesy of MilitaryAvenue.com
Short Sales? Foreclosures? REO Properties? Bank Owned Properties? HUD Repos? What kind of houses are these? Are they good Deals? Should I buy one?
VA? FHA? Conventional Financing? ARMS? 15 Year? 30 Year? What Down payment? Points? Buy Down? Closing Costs? Yikes, what should I do???
There are many opportunities and questions in today’s real estate market. I believe because there are also so many unknowns and choices that consumers are overwhelmed and fearful of making a decision. They don’t want to make the WRONG decision.
Our responsibility is to help you make the decision that is RIGHT for you. We are passionate about this. We want what is best for you. As professionals, we have been guiding home buyers and sellers through this maze for a long time. We are continually educating ourselves on the latest laws, trends, marketing ideas, and technology so that we can answer your questions and point you in the right direction.
If you are a buyer with questions or frustrations, let us help you with some answers. If you are a seller and need some counsel or want to know our marketing strategies, give us a call or email or visit our website. We consider it an honor to be of help to our neighbors and friends. Thank you