Hello friends,

I have been very frustrated with the FHA loan qualification set up over the last 3 months.  And I have not forgotten that the entire mortgage industry has done a back flip and landed on its back in the last few months either.  It's just, FHA is a federal program that has not had any major changes since the Regan presidency if I remember correctly. (which is one of the many reasons the mortgage industry is struggling right now).

But my point is about my poor buyers who have been pulled through the grinding mill, to be told that they need to come up with this or that, or that this property (which would have been financed with no problems 6 months ago) all of sudden has major issues that have to dealt with before funding will occur.

For instance.  I had a listing that I was selling for some out of state home owners.  The loan my sellers used to buy the home was an FHA loan only 2 years old.  But the new buyers had to deal with well issues that the current owner did not have to deal with.  This was only 2 years difference in time!  What is up with all these undisclosed requirements popping up?

I am not ignorant about the mortgage industry, believe me, but when rules are now being enforced, that I am assuming should have been enforced every year over the last 20 years, it makes you think.  Who is, and who is not doing their job correctly?  Why would FHA have one standard one year, and just because the market has changed due to the liquidity of the mortgage industry (one of many issues actually), then the next year a home can't be financed using FHA because of what rule change?  If there are major rule changes, then why did us real estate professionals not get notified?  This particular home ended up being sold, but at a much higher cost to my sellers.  All because someone 2 years ago did not do their due diligence in granting an FHA loan to my sellers, OR, is it that the entire system has gone nuts?  

Enforcing lending rules when and where you want does not work for the consumer.  Yes, I understand that the rules are finally being enforced, but why are we having this problem to begin with?  Shouldn't we have been enforcing the loans rules the entire time?

I had another client in August who showed up for a Monday closing, had doc's ready to sign, but when we got around to signing, there was some discrepancy in the documents. So we rescheduled the closing until Wednesday.  But what do you know?  On Wednesday when we showed up for signing doc's, my client no longer qualified for his FHA loan!  This is the same loan that if we could have closed on Monday, would have been just fine!   

These changes, these misrepresentations, these..., these.....  Enough to drive you nuts.

By the way, my client did end up closing on his first home, but it took another 10 days to work through all the NEW requirements put on him from the Monday to Wednesday time period.

I say this to FHA loan specialists. Please get on the same page.  If we were doing this over the last 5 years, we may not be where we are right now.  A place where first time home buyers can't buy a home.  Like my client, they can be perfect as far as credit, income, ratios, etc., but it is not enough now.  It is time for FHA to revamp their product and stop congress with any new legislation to add more rules which most, and I mean > 50% of Americans, will not be able to meet. 

Enough for today.

Greetings again everyone,

As most of you, I am struggling to get clients to believe that this is a great time to buy a home.  Although the national news has hinted at now is the time to buy a home, the best people talking about it are not making the main stream, big 3 news agencies.

I am still getting asked about the secondary loan markets and liquidity if you can believe that.  I am happy to talk about it, but the story is getting real old.  But the bottom line is that clients are still scared to move forward in buying homes.  Even the old stand-by of buying home using "Contingency" contracts has not settled potential buyers.  I know sellers are willing to accept almost any contract at this time, but the buyers do not understand that if you price your current home in the bottom 1/3 of the market, that they can sell their homes.

The national news has stated, and correctly so, that there is a 9 month inventory of homes on the market.  But this is only partially correct.  It depends on which market you live and work in.  I am fortunate that I live in an area that still has increasing home values, but the rate of sales has leveled off.  And like I said in an earlier blog, as it should.  The market was way too hot to sustain the prices or the rates of sales.  The baby boomer's have used their homes as banks and I personally believe, that is the reason for the abnormal market growth and price increases.

But we all know that the whole industry is guilty for causing this market correction.  From us agents to the appraisers. If someone needed an escalated appraisal  to sell their home, they got it.  But everyone one involved with the process of buying and selling homes has brought this correction on themselves and that is the bottom line.

So until potential home buyers get educated, and take the time to shop and negotiate lower prices, AND realize that now is a good time to buy. I think we are in for a rocky road until after the first of the year.  

I have even had clients that have moved to my area due to work transfers tell me that this is a horrible time to buy, that they are to fearful to buy, that.........   the list goes on and on.

So keep plugging away and stick with it.  This may be a very difficult winter season for those of us in the real estate industry, but it will change.  Persevere and educate your clients.  And sometimes, not even these efforts are enough.

Until next time,

Lu 

Greetings again to all,

Yesterday, for the first time I heard on the news that this is a very good market to buy homes.  This comment came from a reputable day time TV news market analysis and as she was talking, she was right on all points.   But, before I highlight the points she talked about, I want to note that yesterday evening, other TV news companies made a point of how awful the home market really is and with the "liquidity" issue with the banking system, that this is a very frightening situation.  Unfortunately, the evening news companies do not deal with the fine details of any subject.  They prey on sensationalism and shock value only.  The details of the home market actually show a different situation.  I'm not sure that the news jockys even understand "liquidity" and how it affects the market.  It is not just the home market that is affected by liquidity, but that is what they want everyone to believe.

So back to the day time TV news market analyst points of why this is a good market to buy a home. 

The first point is the inventory.  For the first time in many years, home buyers have a choice in buying homes.  Instead of bidding on homes that do not even exist yet, they can take their time and shop for a home. What a concept, having a choice!  My buyers are looking at more homes than in the past.  They get to pick neighborhoods, school districts, commute times to work, etc.. This did not exist in the previous 3 years.

The second point is the continued almost record low interest rates.  There has not been an interest rate increase for a very long time, and according to the market analysts, if the fed was to increase the interest rate, the economy most likely would grind to a halt.  If the fed decreases the interest rate charged to banks, then there is the threat of inflation, due to adding more money to the economy.  Therefore, I fully expect interest rates to remain the same for the rest of 2007, maybe even the first half of 2008.

The only drawback of the current home market is that people who are on the fine line of qualifying for a home loan, will not qualify.  The rules for qualifying for a home loan is back to where it was before the home market went insane.  That is what put us all in this situation, was giving money to people who should not have been qualified, and unfortunately for them, a good percentage of these families are going to lose their homes over the next 6 months for a couple of years.  Foreclosures are up above 10%.  This has created this misconception that the home market is a very bad place to invest your money.  

If you have good credit, and your income to debt ratios are where they should be, this is the market for you.  Take advantage of the situation and there is money to be made, as well as nice homes to be had for prices unthinkable a year or more ago.  There is still appreciation in home values here in the Pacific Northwest.  Our market is still on the rise.  Albeit, a slower rise as it should have been, but a rise none the less. 

So I recommend that potential home buyers get educated and know the truth about the market.  Make informed decisions.  Know the loan product you are applying for and make sure it is the same product you sign for at closing. Take advantage of this great buyers market.  It is there for the taking.

Have a great late summer!

L 

Greetings all to a fine fall day!  (you mean it's not October?)  

My last few listing appointments I have run across some pretty unreal expectations about home owner assessment of how much they think their home is worth.  So now, I start every listing appointment with a short education about what the "local, current" market values.  My thought is that by starting with the sales statistics of the last 2 months, maybe even the just last 30 days, it gives the home owner something to think about during the rest of my listing presentation.

Part of the problem we have is being close to King County, but we are not King Co.  On the west side of the Tacoma Narrows Bridge, most people read one of the two Seattle papers at least once during the week.  The problem with reading about King Co. real estate market is that it's effect does not spill over to our areas, and this includes north Pierce Co..  King Co. real estate is still near a boil.  The rate of price increase has slowed, but home are still selling in less than 60 days, most times if priced right, in less than 21 days.

In Gig Harbor and the Kitsap Peninsula we are a very short distance to King Co., but in reality, we are a completely different  real estate market.  The time to sell a home is nearing 120 days in these areas, mainly because the homes for sale are over priced.  This is where we come in as real estate professionals.  We must educate our potential clients to price their homes right, or the home will sit.  There are agents out there that will list any home at any price just to get the listing.  The problem with this, is it keeps the market artificially elevated and home do not move.  There needs to be a market adjustment downward in these geographic areas to lure new buyers to the area. 

Starting about 2 years ago, there were quite a few people willing to take the ferry to Seattle to get to work.  This was when there was a significant price difference between Seattle and the Kitsap Peninsula.  Now with housing prices less than $80,000 between the 2 markets, there is no incentive for people to move west and use the ferries.  The number of people I talk to about living on the Kitsap peninsula near a ferry terminal has decreased to zero over the last year. This only leaves the 2 Navy bases as a source of new residents to the area, and there are not that many transfers happening at this time.   

Therefore, we as real estate professionals need to re-educate each and every potential home owner willing to sell.  We need to show only the last 2 months of home sales for comparisons at absolutely most.  To show home sales from a longer period of time is to do your potential client a disservice.  And it helps to keep the market artificially high, and therefore, homes are sitting way too long.  Come on, let's educate our our clients.

Enough for today.

Lu 

Hey folks, isn't it about time that our industry start using email attachments for Purchase & Sale Agreements (P&SA) and Listing Agreements rather than faxes?  Everyone of us has had title &/or escrow call us for a "readable copy" of documents.  This is all due to the fax machine.  Come on, this is the 21st century and if everyone AND their brokers offices upgraded their email systems, we could scan and email all the documents we need.  No need to wait by the BizHub for a fax to come through only to see that is unreadable.  I put the fax machine up there with the 8-track tape player. Dead!

Personally, I would like to see the state of WA require documents to be in digital format.  This would guarantee readability of contracts.  The quality is proportional to the scanner used, and I have yet to see a poorly scanned document.

Yet, more times than not, when I scan and email documents, the receiving party does not have enough file space to accept even a 2 page document.  This is crazy.  We all have cell phones with cameras, computers, digital cameras for listing photos (digital format required now in WA), so why not require readable documents?  Which means that every one needs to get up to speed and get bigger email boxes so you can accept at least a 10kb file.  Up to 15kb would accept 95% of all P&SA's in one email.  Most P&SA's are about 12-13kb of information.

This morning I tried to email a scanned P&SA, and the agent that listed the home had an email system through his company that could not accept more than 1kb of information as an attachment!  Hello? Wake up and get with the technology.  You can get an email account for free that will accept up to 10kb of information, so why not?

I would like to hear from all of you technophobic's that are computer illiterate. Why? Why have you not taken classes at your local community college to learn how to attach a file to send your documents (besides, community colleges need the money).  Most likely, you can have someone at your office show you how. It's not very difficult once you have done it once.

I know all the title and escrow companies prefer this method. When documents are in a file and emailed, they can store this information in a digital format, or print it out, and have a reference file for future audits.  When real estate agents fax documents to title and escrow companies, they end up scanning the documents and putting them in an electronic file anyway, so let's start the process with readable documents from the agents.  

You can buy a scanner for under $120.00.  You spend more than that just on your cell phone bill every month.

And the email provider?  You can get an email address from MSN, Yahoo, gmail, even AOL for free, that will accept 10kb files. 

Think about it and I would love to hear some feedback as to why NOT to use email for contract documents.

Enough for today,

Lucian 

Greetings to all,

I went to the Tacoma Narrows Bridge ceremony yesterday, and what a marvel!  Not only is it the largest suspension bridge built since 1964, but it is a beauty to look at up close.  But the best part was the drive into Tacoma today.

Four lanes going East with an HOV lane?  Get out of here!  What a dream commute, and the project is not even complete.  Watch out Gig Harbor Real Estate.  It may take 6 months to a year for everyone to figure it out, but this part of the globe is now part of the modern world. 

I am excited by the changes that will happen in the real estate market as a result of the second bridge.  When you can drive 55 mph without slowing down, the area will become a bedroom community to virtually anywhere you want to work.  The toll?  Worth every penny.  With the Good To Go RFID tag, @ $1.75 to cross the bridge is a deal.  Do the math. If you were to cross the bridge everyday for 4 months, that's 120 days for the math challenged, your cost is $210.00.  Many of you will say that is $210 spent better else where.  Well, until you live here, your words are meaningless. 

I love the Key Peninsula.  Quiet, serene, and beautiful.  Plus we are getting a Costco!  Why go to Tacoma except for work.  We are also getting a new movie theater.  Both Costco and the theater will be open before the end of the year. At that point we have everything a person needs to just stay here.  

The only reason for me to go to Tacoma now is the cheaper diesel.  For some reason, people think that because they have to drive over a bridge, gas prices have to remain high.  Well once again, welcome Costco.  They will drive the price of gas and in turn, the price of diesel down in the area.

If you have not driven on the new bridge yet, I recommend it.  The $3.00 toll for those of you without the Good To Go pass, it will be worth your time.  Now get over here and look at the real estate.  Key Peninsula still has the most affordable land anywhere in Pierce Co.

Have a great day!  I am :)

Purdy, Washington. Is it the gateway to Hood Canal?  Is it the gateway to the entire Olympic Peninsula?  So many people pass through this wide spot in the road and only note that there is a very narrow bridge they have to cross in order to go west.  The Purdy bridge in a way, is the beginning to leaving the busy city life.  Those of us who choose to live here, know the most important secret.  SShhh!!!  It's not that far !   

I can leave my home and be on I-5 in 20 minutes in non-commute times.  But boy, when the commute happens, it might take you 7 minutes longer!  The secret is that just on the other side of the Purdy bridge is Key Peninsula, where the living is quiet, serene, and you feel like you are on vacation.  Yet, I would do my drive over the Tacoma Narrows Bridge any day, before I would drive from Lakewood to Tacoma.  

Although, most people remember the Purdy bridge because they have to cross over this bridge to get to Hood Canal and all the lakes, fishing, and the great recreational activities of Mason County.  Those of you that drive this route for fun know it well.  And those of you that have not ventured west to Mason County, please take the time to do so.  

Purdy is located in the most NW corner of Pierce County, and yet, feels like your a world away.  This is the next growth area for Pierce Co.  There is still land that is affordable, and this part of the county, also known as Key Peninsula, is a great area to start any journey from.  Recreation is just outside your door.  The hard drive was getting home.  Now once your home, it is time to start recreating.

Come visit Key Peninsula the next time you need to get out of town.  We have 2 State Parks just on the peninsula, or if you want to drive 20 minutes farther from the Purdy bridge, you can be in Belfair.  The true gateway to Hood Canal.

Check back for activities for the area.  I will post activities for NW Pierce Co., Mason Co. and Kitsap Co..  You can stay busy on any vacation in this area that is so close, but feels so far away from Tacoma and Seattle.

Have a great day!  Summer has officially begun.

Lucian (Lu)                                                                                 

Brio Realty                                                                    

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