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.

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 …..

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.

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.

http://youtu.be/-3i4IkR9k_A

Finding the right home is not for everybody. Some want to build the dream house using their specifications. With real estate prices lower than they were five years ago, purchasing land could make sense for those who have the wherewithal.

What are the right questions to ask before signing a purchase contract? Michael Luckado’s “Buying the Land for Your Future Dream Home,” featured in HomeGain, outlines the major categories. The first step is to check out the zoning laws for the land and its surrounding areas. Is the area zoned for residential or commercial? What are the setback requirements (distance between the proposed home and lot lines) and height restrictions?

When zoning checks out, the buyer should contact the Homeowner’s Association, if one exists, and inquire about additional restrictions that may affect the building project. If the green light is still on, look into the availability of utilities. Those that are not easily connected will incur additional costs. For example, if water and sewer are not available, a private well and septic tank will need to be installed. There may also be fees to build (contact the local building and public works department for a list) and maintenance expenses even before breaking ground such as real estate taxes, insurance, sewer and water availability fees, HOA dues.

After completing due diligence on the above items, you may want to consult with an attorney to review the contract. As a rule, a title search on the land is recommended. Before you build the dream house, do the homework. It can make the difference between a poor and prudent decision.

http://youtu.be/F7GfCY2orD0

Choosing where to raise a family is one of the most important decisions for a household with children. Are there standard features a family ought to look for in a neighborhood, community, and town? Not really. The specifics are up to the values and needs of the individual household. Once you determine what you want, it’s time to put the town to the litmus test.

Real estate consultant Barbara Cocoran suggests some practical things homebuyers can and should do before purchasing a home. First and foremost, buyers need to look at the neighborhood and town where the house is located. Too often, buyers develop tunnel vision, focusing solely on the exterior and interior features of a property. Finding the dream house, however, is as much about the community as it is about square footage and floor plan. It’s critical to observe the people who live in the community in real time. Visit the house, neighborhood, and hot spots (playgrounds, local sports activities, and places families frequent) during evenings and weekends.

And if finding quality education is a top priority, Corcoran suggests that buyers check the SAT scores of the local high schools. These standardized achievement tests serve as one barometer of student success. Typically, higher scores translate to better schools and choosier buyers, who purposely seek out properties that will hold their value and increase over time. Are you looking for the ideal community? Check out the video tips at Forbes.com.

Three homes. Three generations — X, Y, and Boomer. Builder Concept Home 2012 is sponsored by Hanley Wood, a multimedia firm that develops magazines, online publications, exhibitions and conferences, and custom marketing and data services for the construction and building industry.

Homebuyers are invited to take a photo-realistic virtual tour of the Boomer house, which is online starting February 8. The home features a one-level floor plan with plenty of private, common, and outdoor spaces for the older couple who remains active. While the house was conceptualized for baby boomers in retirement, this property is potentially functional for a small family unit, no matter what the age of household members.

This Boomer house seeks to provide comfortable living spaces with the latest design features:

• A covered courtyard for entertaining gives guests direct access to the dining area and connects the two main parts of the house — the bedroom suites and the great room.
• Sliding glass panels are integrated for several of the rooms throughout, allowing easier access.
• The master bedroom suite is complete with a zero-threshold walk-in shower and an adjoining study.
• And the guest bedroom has its own kitchen. It’s perfect for the “boomerang” child, relative, or caregiver who needs a suite of their own.

Model homes for generations X, Y, and B are situated in the Eagle Creek golf course community near Lake Nona, about 30 minutes from the Orange County Convention Center in Orlando, Fla. For those who can’t make it to Orlando, the virtual tour will not disappoint.

Over the past several years, many individuals experiencing economic challenges have relied on the financial and housing help of parents, children, and other family members. According to the Pew Research Center that analyzes U.S. Census Bureau data, 51.4 million Americans lived in multi-generational households in 2009, up from 46.5 million in 2007. But what about individuals or families who provide housing and support to non-relatives? Forbes reports that in some cases, non-relatives may qualify as dependents also, thereby reaping a tax break for the head of household (”When A Housemate Is a Dependent (And A Tax Break)”).

One exemption per dependent can mean a $3700 deduction on an upcoming tax return. So who are the dependents you support? And can you legally report them as such? Here are some general guidelines:

• Parents can claim their children who are under the age of 19 and who live with them for more than half the year. Full-time college students under the age of 24 also qualify as dependents.
• Heads of households can claim a relative or non-relative who is a U.S. citizen, does not file a joint return, and earned less than $3700 in the past year (not including Social Security or disability pay).
• Relatives, such as an elderly parent in a nursing home, are not required to live in the same residence to qualify as dependents, but non-relatives must share the same address as their benefactors.

Refer to the IRS for more information on claiming dependents (”Six Important Facts about Dependents and Exemptions”). Consult with your accountant or tax preparer for additional guidelines.