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When It Rains, It Pours
I thought I’d seen it all, but here’s a couple of firsts!
The past month has been crazy and after ten plus years in the business, I thought I had seen it all. Well, I haven’t. The great thing about this business is there’s something new every day.
First #1 – King County now has a new rule that each septic is supposed to undergo a functionality test to prove it is working correctly. I’ve had a couple where we’ve had to spend some serious cash to get the septic to work. But recently I had a first – the system was completely toast. The seller didn’t exactly love the guy that lives below him, so it was somewhat comical to think of what might be working its way downhill, until we saw the sewer connection fee. Ouch – good thing we had multiple offers that drove the price up.
First #2 – The foundation replacement credit. Yep – going to jack the place up and knock the floor out, redo the footings, etc. It isn’t the first sinking house I’ve dealt with (somewhere in Ballard is a car jack under one of the first homes I ever owned). This one was a challenge because the house wasn’t in a good part of Seattle, was a tough sell, and so we worked out a deal where money was transferred via escrow holdbacks to get the work done. The only problem is the buyer’s agent is clueless – nice gal – but on more than one occasion I had to remind her that I was not a General Contractor – and had no desire to be one on her project so she and her client needed to figure out how to pick up the phone and talk to the contractors I’d helped them line up.
First #3 – I am a General Contractor – Yep – submitted for my license. I’m going to oversee the construction of at least three homes, probably five. Pretty excited about it. All the other stuff I’ve done I’ve never actually had a contractor license…that all changed yesterday. It is my new hobby…we’ll be doing little video tours to highlight the process…should be fun…stressful but fun.
First #4 – Running with 15 in escrow. It isn’t a first – but I haven’t seen a number like that in over 5 years – scary to think it has been that long…but it has. I’m now desperate to find listings and buyers again – it has gotten fairly quiet as almost all my inventory has sold (including a couple at Snoqualmie Pass). Trust me I’m not complaining at all. Unless you’ve been in real estate, you have no idea how much I dread having to call people up and advise them to drop the price.
Have a Great Week. Don’t be a stranger, and don’t hesitate to call if I can help you or a friend, even if all you need is a contractor referral.
Your Home is Worth 30% More
Recessions make millionaires … are you ready?
The statement that “your home is worth 30% more” is intended to be a thinking point. If I told you that you could buy a $300,000 home today with $10,000 out of pocket (a bit more for investors) and sell it for 100k in profit five years later would you do it?
Many experts think our pent up demand is so high, coupled with inflation and other factors that we’ll see a 30% increase in values over the next five years. I don’t know about 30%, but think about the ROI (Return on Investment) if they are right. At 10% down – a 30k investment – you’d have tripled your money in five years. Now compare that to $30k in a bank making 1%, or in the stock market.
So what’s the downside? Is the market going down further? There are no guarantees, so I’ll play devil’s advocate – it goes down 10% – so your 300k home is now worth 270k – terrible right? Yeah, not fun if you have to sell – but renters will still be covering the rent. I don’t have a crystal ball, but I don’t see it being down 10% in 5 years…I truly believe we’re bouncing along the bottom. I’d be lying if I said I didn’t wish I had a wad of money to snap up a bunch of homes. I’d be out there grabbing them like candy. And that’s what I’m seeing right now, investors are grabbing the cheap homes, inventory is crazy tight… See the stats below.
I’m not saying you have to buy right now…but think about it. Do you want an upgrade? If so, would the house you’re in make a good rental? Do you want to diversify your investments? If you don’t want the hassle of being a landlord, I can help with that. I don’t do property management, but have a co-worker that does. It isn’t as bad as it may sound. Some of my favorite people are past tenants, in fact, a lot more of them than the opposite.
Here are some figures from the NWMLS (Northwest Multiple Listing Service) February Market Recap.
In King County (Residential and Condo)
• 32% decrease in total active listings 2012 YTD over 2011 (units)
• 22% increase in total pending unit sales 2012 YTD over 2011
• 20% increase in total sold units in 2012 YTD over 2011
• 8% decrease in median price (on Pending sales)
There were 1,574 units sold in February, 3,123 pending sales and only 2,832 new listings. Active listings are not keeping up with sales, pushing inventory low enough to move prices back up. All these data points are good news for a market recovery. Stayed tuned, it’ll be interesting to see where this trend takes us …..
From the Front Lines of Real Estate
It’s that time again …time for another quick snapshot of the latest and greatest in Real Estate.
Right now I have 24 listings. I’ve had some serious fun negotiating a couple of deals, and a few others have been a nightmare (but we got them done). As many of you know I use the analogy “I’m the pilot”; so don’t worry, we may hit turbulence, but I’ll guide us through. I’m on my forth buyer for a home Cindy and I own: honestly, that’s too much turbulence – I think Cindy’s ready to shoot the pilot.
One thing about 24 listings: I feel like I should make a sign for just about everything. I know of a couple agents with a few hundred listings, so here are a few signs that we would propose:
“Thanks for showing up two hours after your appointment time”
“Thanks for stopping by – the seller would appreciate it if you’d leave the front and back doors wide open – it helps with their heating bill.”
“Thanks for stopping by – Yes the toilet works, but only if you use the handle on the right to flush it!”
“Thanks for dropping in, we thought about baking cookies but you not flushing was much more effective, and cheaper”
“Thanks for the dyslexic lighting – turning off lights we’ve requested you leave on, and leaving lights on we wanted off was super helpful”
Then there are the signs that we see as agents. My personal favorite: “Please remove your shoes.” I have to tell you there are a few houses where I’m like – NO WAY. I’m afraid of what I might transfer from the bottom of my shoe to the floormat of my car and they want me to walk through there in my socks!
Oh yeah – while we’re at it – my favorite recent quote was from an agent that lied to me and repeatedly tried to cover up information. The quote was (in a snooty condescending tone), “Well, I was just out there yesterday.” To which I responded “I don’t care if you were out there yesterday, I’m telling you there is a tree through your roof today.” And yes, there was a tree through the roof. Not to mention the water wasn’t drinkable and the builder decided to basically build a new house without getting a permit. In his defense, he did get an electrical permit. However, we did get it closed!
Seriously – the market has picked up quite a bit of steam, this is a fun time of year. The lending has loosened up a bit. While, Freddie and Fannie still have lots of limitations, I have a couple lenders that can really do some good stuff. So, if you want to move, you can. You can keep your current home as a rental even if it is “underwater” and wait out the market recovery.
What’s your home repair IQ?
Are you literate in the world of home repairs? Or would you rather enlist the help of a pro? Take the Ultimate Home Repair Quiz and discover your do-it-yourself IQ. And while some projects should be left to the professionals, others can be tackled by the homeowners. How Stuff Works lists five that often come up and entail easy solutions. Here’s what heads of households ought to know:
- Prepping and painting interior walls
- Fixing squeaking and sticking doors
- Using caulk
- Repairing a faucet washer
- Unplugging a clogged toilet
Homeowners with shallow knowledge of the basics need not be alarmed. Online help is readily available at sites like How Stuff Works, the DIY Network, HGTV, and This Old House.
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