Saturday, June 6, 2009

First Steps to Home Ownership

Wondering how to get started on your quest to buy a home? Here are some pointers:

10 Steps to Home Ownership

1. Consider advantages & disadvantages:
Do you really want to own a home?

2. Consider the market conditions:
Is this the right time for you?

3. Assess your credit standing:
Do you need to repair or improve?

4. Assess your finances:
Do you have cash for a downpayment, closing costs, etc?

5. Create a budget:
What monthly payment can you afford?

6. Contact a lender:
What amount of loan do you qualify for?

7. Compile your wish list of home features:
Prioritize wants vs. needs

8. Interview & choose an agent
How do you find the right agent for you?

9. Search for a home
How do you find the right home for you?

10. Make an offer and close the sale

Current loan rates

Rates are up again this week. The days of loan rates in the 4% range are likely gone for a long, long time, if not for good. Here's a table of recent rates and loan programs.

Thursday, June 4, 2009

Home prices + Interest rates = Best deal

If you've been watching home prices in West Seattle, you've probably noticed that prices on the desirable homes (i.e. not Short Sales and/or foreclosures) have stabilized in recent weeks. In fact, we are once again starting to see homes sell in the first two weeks on the market and sometimes with multiple offers. I predict that home prices will remain fairly steady until at least the end of the year, and then start to slowly increase again. So if you've been waiting for the market to hit bottom, I'm going to go out on a limb and say, don't wait much longer; we are probably there. Only time will tell if I'm right.

But the price you pay for a home is only one source of potential savings. The other is the interest rate you pay for your home loan. Again, if you've been paying attention, you know that the mortgage loan interest rates have started to sneak back up. For months now, they have been just under 5%, and it's been easy to get complacent, thinking they would stay there. Now they are inching toward 5.5%. Doesn't sound like much of a difference, but here's an example to put it in perspective.

$300,000 home (purchase price)
$10,500 downpayment (3.5%)
30 yr/fixed rate
$1,510 Monthly mortgage payment at 4.75%
$1,643 Monthly mortgage payment at 5.5%

Now take that difference of $133/mo. and multiply it by 12 months. That's a difference of $1,596 a year. Multiply that by 30 years, and you see that the three-quarter point difference in interest rate costs you $47,880 over the life of the loan!!

So the trick to reaping the most financial advantage when buying a home is to strike when BOTH home prices AND interest rates are at their lowest points.

Questions or comments? Give me a call at 206-708-9800, or comment on this post.

Tax Assessed Value vs. Market Value

Providing an accurate estimate of your home’s current market value is one of the most valuable services a Realtor® can provide for you, but have you ever wondered why it differs from the tax assessed value of your home? The primary reason for the difference between the two figures is explained by the word “current.”

Although the Washington State constitution requires property to be assessed at 100% of its “true and fair” value, that assessment typically lags about 18 months behind current market value. A Realtor®, on the other hand, uses the most current sales data to compare and contrast the value of your property with others around it.

The Assessor performs the function of an appraiser in placing a dollar value on your home or other property, and your property taxes are based on the figures provided by the Assessor. The Assessor does not, however, establish the dollar amount of taxes required, nor does the Assessor collect taxes. That function is performed by the County Treasurer.

Each February, you (or your mortgage company) will be mailed a tax bill, showing the amount of taxes owed for that year. A “Value Change Notice” is mailed each time your property is revalued for tax purposes. If you wish to question the amount of the assessment, first contact the Assessor’s Office, (206) 296-7300, to determine if there is an error. If you wish to appeal the assessed value of your property, contact the King County Board of Equalization at (206) 296-3496.

To learn more, including information on exemptions and deferrals for senior citizens and disabled persons, start with this website: www.metrokc.gov/Assessor/FAQ.htm or consult the King County Property Tax Advisor at (206) 296-5202.

Next up: Tax Assessment vs. Bank Appraisal

Tax Assessment vs. Bank Appraisal

In a recent post, I talked about the difference between the tax assessed value of your home and the market value of your home. There is a third important estimation of value when you are selling your home or refinancing a mortgage, which is an appraisal.

An appraisal is typically called for by a lender in order to determine the true and current market value of your home. Banks need to determine this value in order to assess the level of risk in granting you a loan. I.e., the bank wants to know if your home is worth at least as much as they are loaning you, to ensure that they can recover their money if you should default on the loan.

A licensed appraiser uses methods similar to those used by tax assessors and real estate agents to determine value. Typically they will look for sales of comparable properties in the area within the past 3 months (that time frame may vary, depending on the strength of the local market). They will also visit the property in question to determine its condition in relationship to other properties in the neighborhood. If the appraiser concludes that the price being offered for the home exceeds its true value, the bank will not approve the loan. In this case, either the seller must reduce the price or the buyer must agree to reduce the amount of their loan and finance the difference some other way. An appraiser can also site specific work orders that need to be performed to bring the value up.

Questions or comments? Give me a call at 206-708-9800 or leave a comment here.

Wednesday, June 3, 2009

Showing Your Home in the Best Light

In this buyer's market, staging your home for sale is more important than ever as a tactic for attracting an offer. Furniture is only one aspect of staging. Lighting is another.

Following is a article written and provided by the folks at CSN Lighting with tips on how to light your home to give it the maximum visual appeal. I have permission to reprint the article here, in exchange for including a link to their website. This should not be construed as an endorsement of CSN products or services, as I have not yet purchased from them myself. If you have, or plan to, please let me know of your experience.

Showing Your Home in the Best Light
Making a good first impression is key when it comes to selling your home - especially in the current housing market. As you're preparing to put your home on the market, make sure that you leave some room in your budget for some well-placed lights.

Good lighting makes a huge difference how your home comes across to prospective buyers. Here are some illuminating tips on how best to light your home while trying to fetch the best price.

• The Foyer & Entryway:
You want the tone to be warm and inviting, not too bright or too dark. If you don't have one already, install a pendant light or mini chandelier, depending on the height of your ceiling. An attractive table lamp on top of a console table would work just fine as well.

• The Living Room:
The living room will likely be used for entertaining and relaxing, therefore it needs to be warm, homey without being too bright. If you have any extra table or floor lamps lying around in your basement, drag them out and dust them off. Lamps with dimmer switches work wonders in the living room, as they allow you to create a really nice, cozy atmosphere. Take down any heavy drapery while you're at it and let the natural light in.

• The Dining Room:
Like the living room, the dining room would benefit from a light with dimming capabilities - either a chandelier or a horizontal pendant light centered over the dining room table. The dining room is a gathering room so the lighting needs to be both stylish and functional. If you have a larger dining room, a couple of wall sconces might be a nice addition to your space.

• The Bathroom:
The bathroom needs to be brighter than other rooms in your home. In addition to some lights over or around your mirror, some kind of overhead light would be a good idea. You can install a combination light and ventilation fan for added value and benefit.

• The Kitchen:
The kitchen needs a good amount of work light, especially over the countertops and eating areas. Under cabinet lighting is a relatively easy and inexpensive option to consider. Not only does it provide ample work lighting but it also makes your granite countertops sparkle. A couple of pendant lights over the bar or island looks great and showcases the versatility of your space. A simple pendant or mini chandelier over the kitchen table also works wonders.

• The Bedroom:
The bedroom doesn't need too much in the way of supplemental lighting, perhaps a couple of floor fixtures or table lamps for your end tables. If you have curtains or blinds, open them up and let as much natural light in as you possibly can.

In terms of placement of your lamps, keep it natural. Don't cluster groups of lamps around your living room as this looks staged. Also, don't think that you need to spend crazy amounts of money on lighting. Just a couple of chic, stylish lamps placed in prominent locations around the home give your space the "it" factor it needs.

Sunday, May 31, 2009

Sound View Townhome Open today 1-4

Need a short break from the sun? Pop into my Open House today, 1-4, at 4439 44th Av SW #C long enough to tour this wonderful 985 sq. ft., 2 bedroom/1.5 bath townhome. Listed at $308,500 by my Prudential colleague, Shari Kruse, it has a Sound view and is conveniently located just blocks from Alaska Junction. When you stop by, remember to ask for your coupon for a free ice cream cone from West Seattle's own Husky Deli.