David Warren - Metropolist

Advice from a Seattle Real Estate Agent - Managing Broker

What is a FSBO (For Sale By Owner) Home?

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During your scouring of the Seattle real estate market, you may periodically come across the phrase “for sale by owner”, or “FSBO”. The words themselves are pretty self-explanatory, but what exactly does an FSBO home entail? And, more importantly, what does it mean for you, the buyer?

In the simplest sense, the only difference between an FSBO home and anything else on the market is that the seller is not using a real estate professional to assist with the sale, usually in order to avoid paying commission. Without a hired professional on the seller’s side, it’s up to the seller and you (or your agent) to determine who takes on the duties that might otherwise be handled by the listing agent. These tasks can include holding escrow, writing up contracts, and negotiation.

While the seller is opting to avoid having a professional on their side, it isn’t to say that the seller is necessarily unqualified. While some sellers are not as well-educated as they could be on pricing or negotiation, it’s possible to find sellers who have extensive experience in the market and believe the FSBO route just makes financial sense. The most common places where the seller may stumble are the pricing of their property and the negotiation process. In the case of list price, sellers can sometimes be too emotionally-attached to their home to set a fair price, resulting in an overpriced home that often goes unsold. In the negotiation stage, some sales can be lost due to the seller not wanting to budge, but research by the National Association of Realtors indicates that most FSBO homes actually sell for less than homes sold with agents.

FSBO also doesn’t mean the seller has something to hide. All sellers, whether they have an agent or not, must still adhere to local real estate laws, including full disclosure of problems in the house. However, it’s important to trust your gut, or your own agent, when it comes to how the seller conducts business. Some sellers may not be aware of proper procedure, or want to do things their own way. In these cases, you have every right to request proper procedure, or move on if the transaction becomes questionable.

When considering a FSBO home purchase in Seattle, the important thing is to not treat the house any differently than you would if the home had an agent attached. Negotiate well, enlist help from your real estate professionals, and take the home inspection very seriously. FSBO listings can be viable homes, despite the negative buzz that can sometimes surround them. Who knows—your next Seattle home may end up having been for sale by owner

Why Do I Need A Home Inspection?

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When faced with the reality of how expensive it already is to buy a home in Seattle, or anywhere else, it’s common to want to cut corners where possible to save money. This is a natural urge, and one of the more common items to consider cutting from the list of fees is the home inspection. After all, why bother paying someone hundreds of dollars to look around a home that you’re perfectly capable of doing a walkthrough on yourself? In reality, the home inspection is one of the most valuable investments you can make during the process of buying a home, and here are a few key reasons why.

Top to Bottom: A typical inspection lasts two or three hours, and costs in the neighborhood of $500. Home inspection often begins at the roof and continues all the way down to the foundation, with several key stops in areas like plumbing, electrical, and heating. Taking in the whole house in one large sweep like this creates a comprehensive list of any and all problems that may need to be addressed before the home is purchased or moved into.

What’s Seen and What’s Not: A home inspector will take a look at many aspects of the house, but there are some things that they will not check, such as inside pipes, the interior of walls, or behind electrical panels. These areas are often best left to specialists, but a good home inspector can usually tell from the exteriors of these areas that there may be a problem in these areas, and offer suggestions on who to contact to take a closer look should that become necessary.

New or Old: Home inspections may seem like a no-brainer for old houses, but what about new constructions? Well, just because a house is new doesn’t mean it’s flawless. A professional home inspector knows not just what to look for in run-down, aged homes, but also what may have gone wrong during a brand-new construction.

Categorizing Issues: A good home inspector won’t just make a list of what’s wrong, but classify the issues as well. This means that they will point out what is an immediate safety hazard, what should be replaced immediately, and what should be monitored but does not need immediate action. Instead of overwhelming you with every issue a potential home has, you will instead come away with something closer to a plan of attack based on the priority of each issue found.

Negotiation Leverage: A full home inspection will provide you with some concrete evidence of what issues your potential purchase has, and you can use these problems in the negotiation phase. You can decide for yourself what is a deal-breaker, what you would like to see fixed before you move in, and what you’re willing to work on yourself after the purchase. The more you know about the home before you purchase, the more room you have to negotiate with the seller for a deal that seems fair on both ends.
Spend Money to Save Money: Sure, a home inspection might cost an additional few hundred dollars up front, but catching small problems before they become big ones can often save you thousands in the long run. Houses are big purchases and big investments, and it pays off to be smart with your money.

A home inspection is among the most valuable tools you have as a home buyer. With the Seattle buyer’s market as competitive as it is, some sellers may consider a buyer willing to waive the inspection as more promising than the competition. This is a risky strategy, and is ultimately your choice. However, a home inspection is far more often than not a worthwhile investment that can make the coming years of home-ownership smoother than going into a new home blind.

National Home Sales Reach Highest Pace In A Decade

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A strong stock market and high employment has resulted in a booming economy for the past few quarters, which has also led to an increase in demand for homes. According to Lawrence Yun, chief economist for the National Association of Realtors, “Move-up buyers with considerable down payments and those with cash made up a bulk of the sales activity last month.” While a greater supply of upper-end homes is great news for buyers looking to upgrade their current home, inventory issues elsewhere continue for first-time buyers.

First-Time Buyers Priced Out of the Market
More and more first-time buyers are finding themselves priced out of the market due to fewer lower-priced homes on the market and home prices appreciating rapidly in many regions of the country. Mortgage rates are expected to continue to rise next year, severely impacting home affordability. According to Yun, “The increase in homebuilder optimism must translate to significantly more new construction in 2018 to help ease these acute inventory shortages.”

Who Is Buying?
With the shortage of lower-priced homes on the market, it’s not surprising that first-time buyers accounted for only 29% of sales in November 2017, down from 32% in both October 2017 and November 2016. Over the whole of 2017, first-time buyers represented only 34% of total home purchases.

On another front, 22% of all sales in November 2017 were case, up from 20% in October 2017 and 21% in November 2016. The current percentage matches the highest market share since May 2017. Most cash sales are made by individual investors and account for 14% of total transactions, up from 13% in October 2017 (but consistent from a year ago). Yun adds, “The elevated presence of investors paying in cash continues to add a layer of frustration to the supply and affordability headwinds aspiring first-time buyers are experiencing.”

First-time buyer demand is expected to continue rising in the coming year, thanks to a healthy job market and rising wages. These buyers, however, will not be able to get their foot in the door of the market unless there is an increase in the inventory of smaller, affordable homes on the market.

Strong Sales
Existing-home sales increased for the third month in a row in November 2017, when sales reached 5.81 million. This is an increase of 5.6% from October 2016, and an increase of 3.8% from the same time in 2016. Sales haven’t been this strong in almost eleven years; according to NAR, the last time sales set a pace this rapid was December 2006, with 6.42 million existing homes sold. Every region, excluding the West, posted an increase in sales activity in November 2017.

8 Things Every Seattle Home Buyer Should Consider

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Buying a home in Seattle is mostly the same as buying a home anywhere else in the country, but there are a couple quirks that make the process in the Seattle area unique. That being said, here is a list of eight things every buyer should think about when shopping for a Seattle home:

  1. Finances First: Resist the urge to place bids before you have everything in order financially. Get your credit and loan opportunities figured out in advance, and make sure you’re looking into smart money and not just easy money. Getting pre-approved and having your financial situation under control at the start of the process will allow you to make smarter decisions and save you from money problems later on.
  2. The Inventory Issue: A 2017 report from real estate information company Trulia states inventory in the Seattle area has declined by 66% in the last five years. Demand, however, is not declining, so it’s becoming increasingly difficult to get into the Seattle market. That’s not to say it’s impossible. However, be prepared to face stiff competition in the market, and expect some surprises to come your way.
  3. Shop for the Future: When looking for your dream home, consider where you might be in five years, if not longer. Do you plan on getting married or having children? Does wanderlust keep you eager to change locations? Do you want a forever home now, or do you see yourself trading up a few times? The perfect home for today may not be the perfect home for your future life, so keep that in mind when deciding what home to buy and how much to pay for it.
  4. Location, Location, Location: You’ve heard that repetition a hundred times, but it can’t be stressed enough how valuable a good location is for a home. School districts, proximity to entertainment or necessities, and neighborhoods are all huge things to think about before making a purchase. On a smaller scale, don’t ignore the very land your potential home sits on. A great yard can make for a much more pleasant living experience, so give the greenery a good once-over before you buy.
  5. Be Serious About Inspections: It’s vital to get as much information as you can about the house you are going to purchase, and a lot of that will come from thorough inspections from reputable inspectors. Don’t be afraid to dig deeper in the inspection process. Knowing more about the flaws of the home may give you some leverage in the negotiation process, or you may uncover a deal-breaker that will save you from major headaches down the line had it gone unnoticed.
  6. Take It Slow: While the actual transaction of buying a home can feel like it’s moving at a breakneck pace, it’s important not to rush into buying a home you’re not confident in. Take your time when shopping to find something that really feels right for you, both personally and emotionally. When the time finally does come to finalize the purchase, the extra time you spent making the right choice will really pay off.
  7. Negotiate Well: Having a great real estate agent on your side will make all the difference when getting down to business in the buying phase. With the decreased inventory in the Seattle housing market causing unexpected changes and competition, expect plenty of curveballs and surprises to show up along the way to your dream home. You may need to make some creative decisions with your bidding and negotiations. Being light on your feet and willing to roll with the punches will allow you to weather the storm of the Seattle housing market and come out with a great home at a reasonable price.
  8. Don’t Forget the Fees: Buying a home isn’t as simple as just providing a down payment and paying the monthly mortgage. Be prepared for taxes, insurance, fees associated with buying, maintenance and repairs, and a whole host of other costs, both seen and unforeseen. Make no mistake—buying and owning a home is not cheap. But preparing yourself beforehand will go a long way to making home ownership feel manageable.

With these tips in mind, buying a home in Seattle should feel a lot less intimidating. There will still be plenty of challenges on the road to home ownership, but a level head filled with the right information, plus a great real estate agent and a little luck, will ensure you’ll get the house you’ve always wanted, at the right price.

If you have a question about purchasing a home please ask. I’m always happy to help in any way that I can.

David Warren
Managing Broker | Realtor
Metropolist

425-760-8285
david@metropolistgroup.com

Moving Up: Selling Your Seattle Home and Buying Another

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You’ve been through the process of buying a house as a first time home buyer, but now it’s time to move-up to a home that better suits your current needs. Maybe you need a larger home to keep up with your growing family, a home closer to a specific school or maybe you’d prefer living in a different part of the city to make commuting to work simpler? This time buying a new home becomes are little more complicated logistically as you have your current home to sell as well. Plus, you want or need to use the equity from your current home to purchase your new one.

There are several options to choose from when moving up, and the direction you choose to go in can depend on when the purchase of your new home closes in relation to the sale of your old home. Regardless of which choice you make, make sure to get your finances arranged and hire a Seattle real estate agent experienced in the process of moving up. For most people this is not a do-it-yourself project, and good negotiation skills are important. Once you’ve hired your chosen professional, choose one of the three options that best fits your situation.

  • Buy First: While this option is not possible for most financial situations, it’s ideal if you can afford two mortgages for a few months. Buy the home you want and move into it, then put your old home on the market. This method is pricey, but will provide you the most ease in moving and settling in. Carrying a temporary mortgage is doable through a bridge loan. Ask your preferred loan originator about this option and see if it is a possibility for you.
  • Sell First: This is likely the best financial option for most people, but it is less convenient than buying first and includes more work. Sell your current home and move into a temporary living space (such as a rental home or apartment) while you look for the right home to purchase. You can keep most of your non-vital belongings in storage and only unpack them once you’ve purchased the new home. Given the current Seattle market conditions this option has its risks. You may be “temporarily” displaced for a while until you can secure a new home.
  • Contingency Purchase: With this method, you find the home you want to purchase first and make an offer contingent on the sale of your current home. This is a great option on your end, but can be tricky to pull off. Many sellers don’t want to take their home off the market based solely on the possibility that the potential buyer (you) will make a sale on their home soon. In the current Seattle area seller’s market this is a risk sellers do no need to take and likely will not. This option works best in a buyer’s market.

Working closely with your real estate agent and choosing the best option for your financial situation will put you on the quick path to success and put you into your next dream home.

If you’d like to explore more about the different options of selling and buying a new home in Seattle please contact me. I’m always happy to talk with you.

David Warren
Managing Broker | Realtor
Metropolist

425-760-8285
david@metropolistgroup.com

4 Uplifting Ideas for LED Downlights in Your Kitchen

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Whether you’re starting a significant kitchen remodel in your Seattle home or just giving your current kitchen an update, LED downlights can pack a serious punch to take your kitchen to the next level. Here are some ideas to help illuminate your kitchen that can work for a variety of kitchen upgrades.

  • Under-Cabinet Lighting: Seattle residents are foodies and it’s much more enjoyable to prepare food in a well-lit work area than enduring poor lighting. Fitting LEDs to the underside of cabinets is a great way to illuminate work surfaces and provide a more localized light than just using the overhead lighting. LEDs compliment ceiling lights, providing interesting areas of light and shadow throughout the room.
  • Interior Cupboard Lighting: Enhance glass cabinets with better lighting. Placing LED lights inside glass-fronted cupboards highlights the cupboard’s contents and is great for showing off crystal, glasses, or decorations. It also softens the ambience of the light as it’s reflected off the cupboard contents, adding a warm, atmospheric glow to the area.
  • Mixing and Matching: Not every light in the kitchen suddenly needs to be LED downlights. Creatively mixing traditional lighting with LED downlights allows for a lot of flexibility. Take, for example, a dining kitchen. Use the main ceiling and spotlights for bright lighting, then use softly-lit alcove lighting and the light directly above the table to create a more relaxed, intimate atmosphere for dining.
  • Pendant Lights: Although LED downlights are mostly fitted flush with the surfaces they’re mounted to, there are other mountings available. Pendant light fixtures provide an unusual but impactful change to specific areas of your kitchen. Try hanging an LED pendant fixture over the kitchen table to improve lighting and add some perceived height to your decor.

425.760.8285

David Warren

Managing Broker

2931 1st Ave S. Suite A, Seattle, WA 98134