There seems to be a growing "changing of the guard" in our local area here in North Seattle.  More homes are being sold through the owners' estate as their families try to deal with the assets left behind by a loved one's passing.

Just in the Northgate/Maple Leaf/Pinehurst areas there have been more than 10 homes sold through estate in the last 6 months, with more currently active on the market.

A quarter of my sales in North Seattle have come about this year when someone has passed away and his/her family chose to put the home on the market.  I've learned quite a bit through these experiences and thought I'd jot a few things down.

1.)  Many people who purchased a home during the "boom" of the 50's and 60's in the Northgate/Maple Leaf/Pinehurst areas loved their neighborhood so much they never left!  One factor I use to evaluate a neighborhood is to research what I call it's "turnover factor".  Meaning how often people move in, then move out, of the neighborhood.  Maple Leaf tends to have the lowest turnover in this area, which means people really love living here.  As a fellow Maple Leafer, I can see their point!

2.)  Many times you don't realize just how much stuff an elderly person has in their home until they pass away and you are now in charge of finding a new home for their books, furniture, tools, and knick-knacks.  I've found second-hand stores and estate sales to be particularly helpful in this situation.  Sometimes the second-hand store will bring a truck and pick up a lot of items that didn't sell at the estate sale.  This can be helpful after relatives have already chosen remembrances from the home and you find there are still many belongings left that need a new home.

3.)  If you are considering buying a home through estate, take a quick look at how the individual paid the property taxes.  Most will have been paying a discounted senior tax rate and may have been paying this tax in advance for the whole year.  If they pay their taxes one year in advance, then you may have to come to the table with a little more money than you thought.  You may need to pay your taxes in advance for that first year.  Somehow the state wants to keep its records in order, so if the previous person paid their taxes in advance, you may need to as well for that first year and that can be quite a surprise when you go to your final signing.

- Jay Silver

I recently posted a little powerpoint on my website (ABODEN.com) about this, but I thought I might go into a little more detail.

My latest research shows that the Maple Leaf neighborhood in North Seattle is fairing better in the housing market than some other areas. 

Check out the diagrams and I'll explain:

• Long story short - over half the homes in Maple Leaf are selling in 30 days or less (orange area).

Here's another diagram showing how much homes actually sold for compared to how much they listed for:

• Long story short - Homes that sold in less than 30 days went for over 99% of their listed price (again, orange bar on right graph).
• After 30 days, though, sellers took a much bigger hit on the price (all other bars).

Here's my opinion on these stats:

Example:  Seller A and Seller B have the exact same home for sale on the same street.  Everything is the same except Seller A priced their home at $400,000 and Seller B priced their home at $412,000 (which was the top of the pricing scale their Realtor gave them).

Who's house will stay on the market longer?  Seller B, right?  Yep.

Seller A is part of that "30 days or less" category in the diagram.  Seller B is part of the "more than 30 days" group. 

Seller B, after 30 days has gone by, has to reduce the price of their home to be competitive. 

What price do they reduce to?  Seller A's price.  Why?  Because that price got the home sold while Seller B's home is still on the market collecting dust.

So Seller B reduces their price to $400,000 and their home gets sold for $395,000.  All together, Seller B had to wait 3 months before their home sold because they didn't price it right to begin with.  They were too greedy.

So, how much did it cost them to overprice their home?  Let's take a look:

$412,000 (original price for Seller B)

- 12,000 (perceived loss.  They didn't really lose this amount because it wouldn't have sold at this price)

- $6,000 (3 months of mortgage payments while the home was on the market)

- $5,000 (buyers took advantage of seller's desperation.  Wouldn't offer more than $395k)

- $1,500 (cost for 3 months of professional home staging)

Total Loss (perceived and otherwise) = $24,500.00

Total Actual Loss = $12,500.00

Ultimately, Seller B sold their home for about 4% less of their original price.  This is also what's indicated on the diagram.  Homes taking longer than 30 days to sell are selling at around 2 -4% less.

How can you avoid this frustration as a home seller?  Here's my advice:

If you know that the housing market in Seattle is on a mild downward turn, don't price your home at the current market price!

Price your home just ahead of the downward curve!  You'll sell your home in 30 days or less and avoid the losses accumulated by Seller B.

This is only one aspect of selling your home quickly and making the most of your time and money.  If you need more help with selling your home in North Seattle, let's talk. 

- Jay Silver

Yes, I finished the Mercer Island "Escape From the Rock" triathlon this last weekend!  Things went much better this time around.  My bike chain stayed on and my time was an hour better because of it.

The only thing that wasn't so great was my endless nausea throughout the the whole process.  I think I sucked down too much water during the swim.  Oh, and about the swim - the water was much colder than usual!  I was a bit shell-shocked for the first 5 minutes but finally got into a groove.

Mercer Island is so beautiful!  I love participating in this triathlon every year.

Here are a couple of pics from my day of pain...er, fun.  :-)

Just before the swim...

Just after the swim.  Yeah, I was a little tired and nauseated.

The bike leg was great!  They shut down the express lanes on I-90 just for us!

Yes!  Finally done!

Ooh, pretty finisher's medal!  :-)

- Jay Silver

Just another day at Carkeek Park for my wife and I. 

Don't be fooled, that water is ice cold!  I ran out soon after the pic was taken!

Juliana's a brave soul for enduring the cold water for this pic.

There were only a handful of people at the park this day.  So much fun!

- Jay Silver

Okay, so I finally got my first triathlon of this season over with last weekend!  I jumped into the season a little late, especially since Seattle's triathlon season lasts only a few months.

It was a beautiful, sunny morning and the water was perfect!  I think there were about 600 people athletes there, and their ages ranged from the early teens to the mid-60's. 

As most of you know, a torn knee ligament a couple years ago forced me to expand my athletic horizons beyond basketball and volleyball.  So I tried out a triathlon and I was soon hooked!

Now I have several triathlons lined up to do this season and the Beaver Lake Triathlon was last weekend.  I've never been to the Beaver Lake area before, but I'm glad I got to see it.  It's a very beautiful part of Sammamish.  The race course took me through Beaver Lake Park and the surrounding neighborhoods.  Sometimes I would turn a corner and see one of the neighbors outside their house offering water and encouragement.

The most grueling part of the race was the 14 mile bike ride because it felt like the entire thing was UPHILL!  There were several people who ended up walking their bikes up parts of the hill, but I made it up without even breaking a sweat!  Okay, I'm lying.  I made it up, but not without feeling like my legs were going to fall off.

Going downhill on the bike ride provided its own challenges.  My bike chain fell off twice.  The first time was the worst.  My chain notonly fell off, it also jammed around the crank and I spent about 15 minutes trying to pry it out as the other athletes I had passed earlier began to pass me.  That was lame!

The run portion was about 4 1/2 miles and I thought that would be the greatest challenge because the hilly bike ride.  I felt great throughout the run, though.  I even had enough wind to cheer on the other athletes I saw.

I'm still a little bitter about my chain coming off.  It killed my race time by at least half an hour!  So my goal is to get revenge at my next tri stop - the Escape from the Rock Triathlon on Mercer Island.

My wife, Juliana was kind enough to take some pics of me during the event.  So as soon as I get them off the camera, I'll post them here.

If you're interested in local triathlons, check out the websites http://www.envirosports.com or http://www.seatri.org and search for local events.

- Jay Silver

Tuesday, August 5th, 2008 marked the 25th anniversary of the National Night Out Against Crime.  My wife, Juliana, and I have been house-sitting for some friends in the Westminster area of Shoreline.  We got a special treat as locals from around the neighborhood gathered along the street to celebrate the Night Out.

It was so much fun meeting our new neighbors and enjoying some great food from the BBQ and beyond! 

Here are some pictures from the Night Out.

  The local fire station stopped by to greet the neighbors.

  There were about 40 or 50 people there enjoying great food.

  Kathy Marden, a driving force behind the success of this potluck celebration, also sponsored a bouncy toy for the kids.

  Kathy Marden (right) chats it up with the crowd.

  I got a picture with the local Fire Chief, Marcus Kragness.

It was a great night to be out, and I'm not just talking about the sunshine!  Everyone pitched in to make this annual tradition a big success!

Kudos to Kathy Marden and the Westminster Triangle Network for a great Night Out Against Crime!

- Jay Silver

This bill helps people in danger of foreclosure, for sure.  But there are also additions that may help you in your househunting journey.

I've just taken these highlights from the National Association of Realtors website and brought it to you here.  You can find this information at http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument.

National Association of REALTORS®
Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)

H.R. 3221, the "Housing and Economic Recovery Act of 2008," passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions:

• GSE Reform - including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  View 2009 FHA and GSE loan limit estimates (PDF)

• FHA Reform - including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
  View 2009 FHA and GSE loan limit estimates (PDF)
  FHA Reform Chart (PDF)

• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 9, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
  First-time homebuyer tax credit chart
  Frequently asked questions about the first-time homebuyer tax credit

• FHA foreclosure rescue - development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
  FHA Foreclosure Rescue Chart

• Seller-funded downpayment assistance programs - codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
  More about the seller-funded downpayment assistance provision
  Tips to finding downpayment assistance programs (PDF)

• VA loan limits - temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing - puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization - includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority - authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund - Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding - Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
  More about the CDBG funding provision

• LIHTC - Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements - Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

 - Jay Silver

Buying a home is still a smart long-term investment, regardless of what angle the media takes to sell the news.  Here are 5 reasons why:

1.)  Don't be shy.  The media loves to use the scary terms like, "national housing crisis" or "nation-wide real estate slump".  What they don't tell you is that real estate is not measured nationally, but locally!  Real estate is like the weather, it could be storms and floods in California while here in Seattle it's sunny and calm.  Just because parts of Florida are experiencing a major housing recession, that doesn't mean it's happening here in Seattle.  Did you know that 2 out of 3 of the nation's largest metropolitan markets showed home price increases in 2007?  I guess that wasn't a juicy enough story for the media. 

2.)  History is on your side.  Historically, homes have averaged over 6% appreciation in the Northwest.  And that's taking into account some rough economic times over the years.

3.)  It's a Buyer's Market.  There is always a balance of power between someone selling something and the person buying it.  Sometimes that balance is in the favor of the seller, sometimes it's with the buyer, and (rarely) sometimes both parties are equal.  From 2002 - 2006 the sellers of homes had the advantage because buyers were eager to get in on the housing boom.  Now it's the opposite.  There are so many houses on the market right now that buyers have so many more to choose from.  This puts the seller at a disadantage, leaving them to try and convince you that their house is the one you should choose.  This "convincing" comes in all kinds of forms, like low prices, "buyer bonuses" (cash back), as well as buying down the points on your loan.  You have the advantage as a buyer, and that's simply the best time to buy.

4.)  A solid long-term investment.  Historically, long-term home ownership has generated wealth.  Historically, long-term renting has not (except for the landlords that rent to you).

5.)  The tax man cometh, but he brings a smaller collection bag.  You can deduct your mortgage interest (which is the largest portion of your payment for the first 10 years), mortgage insurance, and property taxes.  You also aren't taxed on the first $250k (if you're single) to $500k (if you're married) if you sell and make more than what you bought the home for.  You may find that your after-tax mortgage payment is about the same as your rent payment!

So don't believe the "national" hype.  This is a great time to be buying a home in Seattle!

- Jay Silver

Hi All,

I'm finally back to blogging!  Lots of traveling and camping this summer got me a little distracted.  The weather has been so beautiful I had to take advantage!  Now, on to my post...

Most of you have probably heard the term "Title Insurance" if you've ever thought of buying a home.  What is it, anyway?  Well, in a nutshell, Title Insurance means you take over title after buying a home and don't have to worry about someone else's previous forgery, fraud, or incompetence with that home resulting in you losing your new home.  Lori Cantu of Fidelity Title and Escrow is part of my team here at ABODEN.com.  I always recommend Fidelity because they get it right the first time, with a smile!  Here are 20 reasons why you should get title insurance when buying a home.

20 Reasons for Title Insurance

1.)  Title Insurance will protect you against a loss on your home or land due to a title defect.

2.)  A deed or mortgage in the chain of title may be a forgery.

3.)  Claims constantly arise due to marital status and validity of divorces.

4.)  A deed or mortgage may have been made by an incompentent or under aged person.

5.)  A deed or mortgage made under an expired power of attorney may be void.

6.)  A deed or mortgage may have been made by a person with the same name as the owner.

7.)  A child born after the execution of a will may have interest in the property.

8.)  Title transferred by an heir may be subject to a federal tax lien.

9.)  An heir of other person presumed dead may appear and revover the property or an interest.

10.)  A judgment regarding the title may be voidable because of some defect in the proceeding.

11.)  By insuring title, you can eliminate delays when passing your title on to someone else.

12.)  Title Insurance helps speed negotiations when you're ready to sell or obtain a loan.

13.)  Tilte Insurance reimburses you for the amount of your covered losses.

14.)  A deed or mortgage may be voidable if signed while grantor was in bankruptcy.

15.)  Claims may have risen dramatically over the last 30 years.

16.)  Ther may be a defect in the recording of a document upon which your title is dependent.

17.)  Title Insurance covers attorney fees and court costs.

18.)  Many lawyers protect their clients as well as themselves by procuring title insurance.

19.)  A deed or mortgage may have been produced by fraud or duress.

20.)  A title policy is paid in full by the first premium for as long as you own the property.

- Jay Silver

 Owner financing has been a popular practice in previous real estate downturns. Current market conditions and upheavals in the mortgage industry have given rise to a new-found interest in this idea. If you own your property outright, have a need to sell in a soft market and are interested in converting your sold home into an investment that yields returns, owner financing may be a option worth exploring.

Successful owner financing means that you, the owner of the property, get to widen the potential pool of home buyers by offering to finance the transaction. And since private lending, where you act as the mortgage lender, tends to offer higher than standard interest rates to offset risks, you can also enjoy a nice return on the home loan.

Due diligence is the key to successful owner financing. This is not intended as a means to provide financing for those who have damaged credit, little or no income or some other "loan of last resort" characteristic.  So who is this ideal candidate and how do you, the owner, evaluate such a proposition?

Your ideal candidate is someone who has excellent credit but for some reason, lenders aren't using all or part of the buyer's income.  For instance, someone that has been an attorney for a legal firm for several years and just last year started their own practice or an experienced mechanic who ventures out on his own to open up his own shop. Lenders like to see two years' worth of self employment when evaluating a loan application. 

You'll need to check the buyer's credit and you can do so by getting written permission to pull a credit report.  Or, you can log on together to www.annualcreditreport.com and print off a current report at no charge.  Have the prospect provide you with three months most recent bank statements, personal and business, to show cash flow. To verify employment, dial "411" and ask for the phone number for that person's business and call the office. 

You can only hold a note on a property that is free and clear.  Any transaction where title changes hands will trigger the "due on sale" clause inserted in mortgage loans.

Finally, and most importantly, get a substantial down payment.  Anything that is 20 percent down indicates that the buyer is serious. Most owner financing arrangements are done on two to three year balloon notes. The idea is that your non-qualifying buyer will have time to establish a track record with their earnings and refinance with a traditional lender.

If the market is slowing down the sale of your home, discuss the possibility of adding owner financing to your listing with your agent.

- Jay Silver