Real Estate Advice from Seattle Broker David Warren of Metropolist

The Advantages of Buying and Selling a Home in the Off Season

December 17, 2020 By David Warren

Many people believe that buying or selling in the winter months puts them at a disadvantage. They may assume their listing will sit on the market and buyers may envision a limited selection of listings to view. However, savvy buyers and sellers know that the off season can be a great time to complete a real estate transaction!

Advantages To Buying in the Off-Season

Attentive Service From Lenders – One of the greatest perks to buying in the off season is the enhanced service you will receive from lenders. During the peak season, lenders are busy. But during the slower months you will get a timelier response from your loan officer and underwriting.

Better Rates With Moving Companies – During the peak real estate season, it can even be a struggle to find a moving company that is available. Moving during the slower months will open up your options for what moving company to move with. You will be able to shop around for the highest-rated moving companies and take advantage of lower off-season fees.

Motivated Sellers – The biggest benefit to buying in the off season is the type of sellers on the market. People who list their homes in the slower months are often very motivated. They are typically working against a deadline and want to get their house sold. This can work in the buyer’s advantage when it comes time to negotiate.

Advantages To Selling in the Off-Season

Less Competition – Selling your house in the cooler months is a great strategy for lowering your competition. Markets across the country are already experiencing low inventory and in the winter it will likely reduce even more. Buyers are still extremely motivated to take advantage of historically low interest rates.

A Quicker Process – As your real estate expert, I am committed to providing the best service to you no matter the season. However, when things are slower, the transaction can move along at a quicker clip due to all the players being less-busy – from the lender to the closing agent, inspectors, and more!

Serious Buyers – The off season typically yields more serious buyers than during the warmer months. It takes a little more effort to attend showings during the winter while contending with weather and lack of sunlight, and buyers aren’t going to go out of their way to look at a home that they aren’t really interested in. Off season buyers typically have a deadline they are up against such as relocating for a job or being settled in a home before the holidays. The cooler weather tends to weed out the buyers who are pretending to be on their own episode of House Hunters.

Now is a great time to list your house on the market or buy some real estate. Don’t let the myths of peak season keep you from accomplishing your real estate goals now. Take advantage of the benefits of a slower real estate season.

If you are thinking about selling or buying, please feel free to contact me any time to discuss your plans. I’m always happy to help in any way I can.

Source: https://cdn.nar.realtor/sites/default/files/documents/ehs-08-2020-overview-2020-09-22.pdf

Are We In A Housing Bubble?

September 29, 2020 By David Warren

The Short Answer is No

The economic landscape of 2020 has been volatile and unpredictable due to the pandemic. Record numbers are being recorded for unemployment claims and we have a portion of the workforce working from home (some balancing kids online school with work). Conversely, interest rates are at all-time historic lows. These juxtaposing factors have some Americans wondering what pandemic-induced recession is going to mean for the real estate world. Are we headed toward another housing market crash that will mimic The Great Recession 2008? The short answer is no. A close analysis of what the market factors at work should leave homeowners feeling more assured.

Housing Values

Housing values have seen dramatic increases in the last year-plus, and in some locations housing values have increased as much as 20%. This is primarily due to a lack of inventory (sellers not wanting to sell, lack of new construction over the past decade) and a large number of buyers taking advantage of historically-low interest rates. This quick increase in housing value and buying frenzy is the main reason people are afraid of the previous recession repeating itself since some of the signs look familiar. The difference is that prior to the last recession, the sharp increase in housing values took place due to a buying frenzy caused by easy access to mortgages (more on this below). One could say that this was artificial demand since a percentage of those buyers should not have been able to qualify for a mortgage.

As compared to the period just before the recession, today’s homeowners have far more equity in their homes. Before the Great Recession, many new homeowners were getting homes with little down payment, meaning they had little or nothing to fall back on when prices declined. That is not the case today.

Interest Rates

Mortgage interest rates in the early 2000’s leading up to the housing bubble averaged between 5-6% for a conventional 30-year loan. Currently, interest rates have dropped below 3% on a conventional 30-year loan for the first time ever. This difference in interest means hundreds of dollars each month in mortgage payment interest savings, especially important if homeowners need to refinance or adjust their loans.

Mortgage Lending Requirements

In addition to the difference in interest rates, there is also a chasm between the underwriting guidelines on mortgages during the housing bubble and the guidelines being enforced now. Much of what caused the housing collapse of 2008 was lenient lending guidelines and predatory lenders. In the early 2000’s loans were being granted to borrowers who were overextended and unfamiliar with their mortgage terms. Many took out adjustable rate mortgages that were a stretch to afford in the first place, and impossible to pay once the rate adjusted.

Since the housing market crash there were a series of regulatory guidelines put into place to protect the American population from predatory lending. Additionally, mortgage lenders have tightened their approval conditions, even more so since the pandemic began to mitigate the risk of mortgages going into default.

By and large, the housing market crash of 2008 was one of the key factors for the recession. The real estate market changes right now represent higher-than-normal demand for scarce inventory plus a reaction to the pandemic economy. While no one can assuredly say exactly what is in our future, real estate experts across the board do not see a looming bubble in our future.

SOURCES:

https://www.bankrate.com/mortgages/foreclosures-crisis-wont-look-like-great-recession/

http://www.freddiemac.com/pmms/pmms30.html

Warning Signs of Mold and Mildew

March 25, 2020 By David Warren

In areas with high moisture like bathrooms, kitchens, and laundry rooms, mold and mildew are common issues. If left unaddressed, these small patches can rapidly spread out of control, damaging both your home and your own health. Pay attention to the following warning signs and act quickly to keep these problems under control:

Musty smells: Your nose knows best, and a musty odor is often the first sign of a mold or mildew problem. You may notice this scent in your basement, attic, or crawl space, as well as any rooms where moisture is common.
Water leaks: Damp spots on walls or ceilings can be signs of water leaks that, if left unaddressed, can become breeding grounds for mold and mildew.
Discoloration: Any unplanned changes in color to your walls or ceiling paint jobs should be cause for concern, as it is often a sign of mold and mildew taking hold in that spot.
Dark stains: An early sign of mold and mildew, keep your eyes peeled for dark spots in your bathroom, especially on tiling.
Mold-related health issues: Sudden wheezing, coughing, itching or watery eyes, and unexplained rashes can be signs of mold nearby. Pay attention to your own health and take action as necessary.
Dampness: A damp basement can predispose your home to mold and mildew, which is a particular concern for homes that have experienced flooding in the past. Take steps to check for contamination before things spread out of control.
Standing water: Like general dampness in the home, the presence of standing water can predispose the property to mold and mildew. Research ways to improve drainage and check for puddles after heavy rain.

Like many issues, the sooner mold and mildew is addressed, the easier it will be to fix. If you suspect things are already beyond your control, call a mold remediation expert to find out what your next steps should be.

Seven Functional Updates to Increase Kitchen Efficiency

March 25, 2020 By David Warren

In many ways, kitchens are the center of the home. If your Seattle home could use some updates, consider these upgrades that will make it more efficient as a workspace while also giving it a beautiful new look.

Faucet: When it comes to one of the most-used pieces of the kitchen, it’s important to not settle for basic. Try a faucet with added conveniences like a pullout sprayer, or hands-free on/off functionality. As far as finishes, you’ll have a variety of options like bronze, chrome, or stainless steel to suit your personal aesthetic.
Pot filler: If you’re keen on cooking for groups, nothing beats having a pot-filler faucet right over your range. Consider a finish that matches your sink faucet, or mix-and-match for a bold statement (this is especially trendy right now!).
Handles and knobs: Swapping the hardware on your cabinetry will instantly give your kitchen a new look with little effort. This is another place where you can consider matching finish or go for that variety look.
Pendant lighting: Depending on the size of your kitchen, just a couple of these will give your space a chic, modern look. Consider slender pendants for small kitchens or substantial focal points for larger spaces.
Under-cabinet lighting: Highlight your countertops and give yourself some more visibility with under-cabinet lights. The soft glow these provide will make your kitchen feel warmer while making reading labels and recipes a bit easier on the eyes.
Utensil rack: Having your most-used tools within reach will make cooking substantially faster, so install a utensil rack under a cabinet or above your range to cut down on drawer-sifting.
Pot rack: Not only will hanging your pots free up precious cabinet space, it’s also pleasing on the eyes. Like utensil racks, having all your pots and pans visible will cut down on the time it would normally take to hunt down the right container.

Avoid These Home Equity Loan Risks

March 25, 2020 By David Warren

If you’re a homeowner, you may be eligible for a home equity loan, or HEL. An HEL is a special loan that allows you to borrow 80% of the value of your home, minus your current mortgage balance. In addition to these loans, banks may also offer home equity lines of credit, or HELOCs. Instead of the lump sum an HEL provides, a HELOC creates a set line of credit that homeowners may use over time. Each month, the borrower may pay the monthly minimum or more, as desired. These lines typically have interest rates that change on a monthly or yearly basis, while HELs typically have fixed interest rates.

While having an additional option for your finances is important, there are also risks that come with HELs and HELOCs. If you fail to make your HEL payments on time, you could risk losing your home while still having to pay the remaining balance. Similarly, failure to stay current on HELOC payments can result in home repossession. Unlike HELs, however, your credit limit through a HELOC can be dropped to whatever you currently owe, preventing you from using any more credit. To stay informed when debating a HEL or HELOC, consider the following:

Be Aware of Variable Rates: A low initial interest rate can be tempting at first, but variable rates are notorious for skyrocketing after the first year. Ask your lender about the worst-case scenario of interest rate changes, especially before pulling the trigger on a HELOC.
Understand Tax Breaks: HELs and HELOCs are enticing because the interest you pay may be tax deductible. In fact, if you’re using the money for home improvements, the interest is tax deductible up to $750,000.
Watch Out for Fees: Many lenders charge large initial or ongoing fees when you wish to borrow against your home equity. In some instances, however, these fees can be waived. Always understand the full scope of these fees before deciding if a HEL or HELOC makes sense for you.
Shop Around: Before deciding on a home equity lender, it’s important to know all your options so you can make the best decision for your situation. Contact me if you have any questions, and I am more than happy to help you find the best fit for your needs.

How Real Estate Professionals Can Help Sell Your Home

March 25, 2020 By David Warren

It has been statistically proven time and again that homeowners selling their houses through professional real estate agents get a higher price than if they try to sell on their own. If you’re considering listing your house, consider these five ways real estate agents can maximize your profit:

Marketing Power: Most home buyers begin their search by checking online listings. When sellers use a real estate agent, their house will be automatically listed on multiple services, casting the net wide for potential buyers. Agents also share listings with other agents, allowing your house to be marketed among clients of those agents as well.
Proper Pricing: There’s no easy way to determine the correct sale price for a home, but an experienced real estate agent will know how to find the sweet spot: not too high to dissuade buyers, but not too low to leave you without your proper profits.
Improvement Intuition: Remodeled homes appeal to broader audiences, but it can be challenging knowing how much to spend on improvements and what to focus on. An experienced agent will have the eye for detail necessary to determine what’s worth fixing up and what isn’t. Making only the essential improvements, be it a coat of paint or selective renovation, will ensure the most profit when the home eventually sells.
Informative Showings: Real estate agents will take care of all the details of showing your house, including scheduling houses and talking with potential buyers. They can also collect feedback from the buyers who decide to pass on your home but would be uncomfortable telling you, the owner, why. Taking note of these reasons will provide invaluable information that will allow you to make listing tweaks and get the house moving.
Paperwork, Paperwork, Paperwork: The actual closing of a home sale requires dozens of pages of complex documentation that the inexperienced seller may find daunting. A real estate agent can guide you through the legalities of the transaction and take care of large amounts of the paperwork, ensuring you don’t become overwhelmed in the final stages of the sale.

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