The Risks and Rewards of Purchasing a Bank-Owned Home

 

The process of purchasing a home directly from a lender can be long and arduous, but could very well be worth it in the end. If you have your sights on a particular home or are looking to find a deal on your first, working directly with the lender may be your only option.

Purchasing a bank-owned home is not for the faint of heart, here are some tips for negotiating the REO process:

1. Be prepared: The condition of bank-owned properties are often poor and hard to show. Past owners may have departed on bad terms, leaving the home in poor condition with foul smells, missing appliances, wires are taken from breakers, gas fireplaces gone, even bathrooms without toilets and sinks.

 

2. Understand the costs: Maintenance or repairs may be necessary since these homes have been vacant for an unknown period of time–sometimes months or years. Keep in mind, when they were occupied the owners could have been under financial hardship, preventing them from doing regular seasonal care or repairs when needed. Remember as well that the bank is trying to sell the house immediately, so you will receive a financial break in the price rather than a willingness to negotiate on the maintenance and repair issues.

 

3. Accept the unknown: In traditional real estate transactions, homeowners fill out Form 17 regarding important information about the history of the house. A bank-owned home is either exempt or marked with “I don’t know” throughout the document. Not having the accuracy of this 5-page disclosure form could leave you with a lot of unanswered questions on the history of the home.

 

4. Know what is non-negotiable: The pricing on the house may not get much lower. Some of these properties can be “a dream come true” if you get them at an amazing price, or they could be your worst nightmare. Do your due diligence researching any property, and conduct all necessary inspections to safeguard yourself. Some major repairs may be negotiable, but will likely not reduce the home price.

 

5. Make a clean offer: The higher the price you can offer, the better. Include your earnest money, keep contingencies to a minimum, and suggest a reasonable closing date. The simpler your offer is, the higher chance you have of the bank accepting your offer or countering in a reasonable time period.

 

6. Be patient: Consult with a professional who handles bank owned home purchases to help you negotiate the pathway to homeownership. The process of purchasing a bank-owned, foreclosed or short-sale home is typically longer than a typical real estate sale.

Posted on August 8, 2019 at 1:07 pm
Denni Shefrin | Category: Buying | Tagged , , , , , , , ,

Five Things to Consider When Downsizing

Downsizing is on the minds of many homeowners today. Some are ready to retire, others want to live more simply, and many want to save money and say goodbye to home maintenance.

 

If you can relate to any of those sentiments, ask yourself these five questions:

Have you done the math?

The financial savings that can be generated by downsizing can be significant – especially as they add up over time. When doing the math, make sure the move will save money, rather than spend unnecessarily.

 

Have you researched elder-care options?

Many homeowners hold on to their current home longer than they should because their parents / parents-in-law may need to come live with them in the future. While a noble gesture, there are many excellent elder care living options available today. Often, all it takes is a tour of those facilities to realize that your loved one may actually be happier, and far better served, in a place devoted to their care and happiness.

 

Have you considered off-site storage?

You don’t need to immediately discard a big chunk of your belongings in order to downsize. In fact, trying to do so in one fell swoop only creates needless stress. Most people find it works much better to move some of their belongings into off-site storage for six months. During that time, you can gradually incorporate some of those items into your new living arrangement, and slowly figure out what to do with the others.

 

How do you feel about sharing costs and decision-making?

Townhomes and condominiums are popular downsizing options. But both require that you share the decision-making and expenses associated with any maintenance and improvement projects with your neighbors and potentially an HOA. If you’re a people-person and agree that two heads are better than one, and you like the idea of sharing the cost/responsibility for expensive repairs, you’ll enjoy condo living. If not, this may not be the best option for you.

 

Have you consulted with a real estate agent?

Many homeowners don’t think to consult with a real estate agent until they’ve made the decision to downsize. This leads to guesstimating about some of the most important factors. The truth is, your real estate agent is someone you want to talk with very early in the decision-making process.

Posted on June 13, 2019 at 6:40 pm
Denni Shefrin | Category: Buying, Living, Selling | Tagged , , , , , ,

Find a New Home in Four Steps

Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).

The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.

Step 1: Talk to your agent

Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more.

Step 2: Decide how much home you can afford

It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.

Step 3: Envision your future

Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.

Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.

Step 4: Document your ideal home

When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”

For more tips, as well as advice geared specifically to your situation, contact me anytime!

Posted on April 8, 2019 at 8:09 pm
Denni Shefrin | Category: Buying | Tagged , , , ,

British chaos means interest rates will stay low for longer

FRANKFURT, Germany (AP) — Savers will suffer longer with zero returns on their accounts. Home buyers, companies and governments will keep on borrowing cheaply. And questions will grow further about whether central banks are creating bubbles in financial markets by keeping interest rates near or below zero.

The British vote to leave the European Union shook up markets and lowered growth forecasts for Britain and, to a lesser degree, the other 27 members of the European Union. Economists say that means central banks are likely to have to keep in place for even longer their massive, extraordinary stimulus efforts that have helped keep the global economy afloat in the wake of the 2008-9 financial crisis. Some central banks might even have to unveil new stimulus or rate cuts.

Posted on June 30, 2016 at 7:15 pm
Denni Shefrin | Category: Buying, Selling | Tagged , , , ,

Seattle housing: Is it a bubble?

Seattle area single-family home prices in March were up 10.8 percent from a year ago, behind only Portland, where prices have shot up 12.3 percent, according to the latest S&P/Case-Shiller data. (Greg Gilbert/The Seattle Times)

Seattle area single-family home prices in March were up 10.8 percent from a year ago, behind only Portland, where prices have shot up 12.3 percent, according to the latest S&P/Case-Shiller data. (Greg Gilbert/The Seattle Times)

Single-family house values in Seattle shot up 10.8 percent year-over-year in March, the second highest in the nation after Portland, according to the latest S&P/Case-Shiller index.

It’s a new record, surpassing the previous peak in the summer of 2007 — and we saw how that turned out. Nationally, the increase was 5.2 percent. Here, it’s especially good news for homeowners and bad for buyers.

Perhaps, but probably not.

The old bubble was a nationwide phenomenon, stoked by subprime mortgages, Wall Street hustles, high leverage, and compromised regulators. While the latter two always bear watching, the same dangerous confluence of factors from 2007 don’t apply to today. The Case-Shiller 20-city index remains below its 2007 levels.

Instead, the biggest price increases are tied to low supply, high demand and strong economies in certain very desirable cities, such as Seattle, Portland and Denver. Elsewhere, it is a natural consequence of the recovery.

Black swans do appear. So, for example, an economic meltdown in China, a trade war under President [real-estate developer], earthquake or volcano eruption could ruin your whole day. The more likely outcome is a slow moderation caused by higher interest rates, deflation of a tech bubble, slowed jobs growth or, in some places, new inventory of housing coming online.

Even then, if San Francisco is an example, prices will soon begin marching up again.

The issue of high prices doesn’t exist in a vacuum. There’s not a linear connection between housing costs and the very diverse problems lumped under the sometimes-misleading term homelessness. But economists have found that less affordable housing is a factor behind rising inequality.

House prices have been disconnected from median incomes since the early 2000s. So the issue is not merely housing affordability but stagnant or falling incomes. And bubble pops only make this worse.

This article originally appeared on The Seattle Times website.

Posted on June 9, 2016 at 1:40 pm
Denni Shefrin | Category: Buying, Selling | Tagged , , , , ,

Seattle metro-area home prices up nearly 10 percent in a year

Seattle-area home prices surged in December, posting the fourth-highest annual gain among 20 metros, according to the S&P/Case-Shiller 20-city index released Tuesday.

The average price of existing single-family homes sold in King, Snohomish and Pierce counties climbed 9.9 percent over the year in December, its fastest pace in 2015. In the 20-city index, Seattle trailed only Portland (11.4 percent), San Francisco (10.3) and Denver (10.2) in annual price increases.

Nationally, prices in the 20-city index climbed 0.8 percent over the month in December, slowing a bit from a 1 percent increase in November. The index recorded a 5.7 percent annual gain.

Home prices in all but one city are rising faster than inflation, said David Blitzer, chairman of S&P’s index committee. Some might take that as a sign of trouble, especially given the stock market’s turmoil this year and the current age of this economic expansion.

“The recovery is 6 years old, but recoveries do not typically die of old age,” Blitzer said in a statement.

Higher home prices are encouraging builders: “Housing construction, like much of the economy, got off to a slow start in 2009-2010 and is only now beginning to show some serious strength,” he said.

Average prices in the Seattle metro area in December were less than 3 percent below the peak set in summer 2007, according to Case-Shiller data. The 20-city index is still about 12 percent off its 2006 peak.

Svenja Gudell, chief economist at Seattle-based Zillow, the real-estate website, said in a statement that the nation’s housing market faces a few challenges this spring: Low housing inventory is a factor in nearly every market now. Low oil prices are a drag on job growth in the Dakotas, Alaska and Texas. And the stronger U.S. dollar will affect demand from foreign buyers, while keeping mortgage-interest rates low.

This article originally appeared in the Seattle Times.

Posted on March 3, 2016 at 9:29 pm
Denni Shefrin | Category: Buying, Market News, Selling | Tagged , , , ,

Lack of inventory “a game changer” for home buyers

Depleted inventory is contributing to "overwhelming" traffic at open houses, shifts in strategies for both buyers and sellers, and escalating prices, according to officials with the Northwest Multiple Listing Service.

Dick Beeson, a former chairman of the MLS board, said the lack of inventory in almost every county is, "without question, a 2016 game changer." He described traffic at open houses as sometimes simply overwhelming. "There haven't been any battle royals on the premises, but it could happen any day now," quipped Beeson, the principal managing broker at RE/MAX Professionals in Tacoma.

The latest figures show a drop of nearly 28 percent in the number of active listings in the MLS database compared to a year ago. Members added 6,670 new listings during the month across 23 counties in the MLS service area. That's down nearly 4.6 percent from twelve months ago. At month end, members reported 12,357 active listings, which compares to 17,082 at the end of January 2015.

Measured another way, there is just under 2.5 months of inventory which compares to 3.8 months the MLS reported for January 2015. Supply was especially tight in King County, at 1.4 months of inventory, and Snohomish County, with just under 1.6 months.

Condo inventory (excluding single family homes) fell sharply, from 1,793 active listings a year ago to last month's total of 1,145 at month end, a plunge of 36 percent. In King County, the inventory of condos dropped 42 percent. 

For the area overall, there is just 1.7 months of condo inventory, with Snohomish County reporting the tightest supply (1.1 months) followed by King County (1.2 months).  

The inventory shortage took a toll on last month's sales. The number of pending sales (mutually accepted offers) fell about 5.3 percent area-wide during January, although half the counties in the report tallied increases compared to a year ago. The 5.3 percent drop marked the first negative change in year-over-year comparisons since April 2014.

Member brokers reported 7,253 pending sales last month, down from 7,658 for the same month a year ago. Despite January's downturn, industry leaders remain upbeat.

"Only three other Januarys since 2000 had more homes go under contract in the four-county region area of King, Snohomish, Pierce and Kitsap counties," noted Mike Grady, president and COO of Coldwell Banker Bain. "This, in the face of stock market scares, shows the viability of real estate as the better investment for both homeowners and investors," he suggested.

Commenting on last month's activity in King County, MLS director Joe Deasy said sales are down nearly 15 percent compared to last January because inventory is down more than 31 percent. "Demand is still really strong based on multiple offers and high-volume open house traffic," added Deasy, the co-general manager of Windermere Real Estate/East.

Other industry leaders agreed. "We're selling virtually all new listings, many with multiple offers in all the market areas of King, Snohomish, Pierce and Kitsap counties in the price range where 90 percent of the sales activity is happening," said J. Lennox Scott, chairman and CEO of John L. Scott.

Scott also said his analysis of the number of homes selling in the first 30 days is double what a normal, healthy market would look like.

"The Greater Seattle area housing market remains out of equilibrium," stated OB Jacobi, president of Windermere Real Estate. He said sales will continue to suffer at the current pace of transactions without adding new inventory. "At the same time, prices will continue to appreciate and could outperform our expectations if inventory levels and mortgage rates remain at current levels."

MLS director Frank Wilson said the Kitsap County market is "taking off again right out of the gate," adding, "We are seeing an increase in open house activity as well as more multiple offer situations."

Wilson said Kitsap County, where there is only 2.4 months of inventory, is "deep into a seller's market." He expects the market will become more unbalanced throughout the first half of 2016. "First-time home buyers are probably being hit the hardest in this type of market," observed Wilson, the branch managing broker at John L. Scott's Poulsbo office. In general, he said financial resources are thin for this segment, their confidence is low, and the types of loans they use are often not as favorable.

A strong fourth quarter in 2015 is reflected in January's closed sales of single family homes and condos (combined), which rose 11.6 percent from a year ago. Members reported 4,985 completed transactions; a year ago, they tallied 4,467 closings. The year-over-year median price on these sales increased 7.5 percent, rising from $279,000 to $300,000. Ten counties reported double-digit gains.

Single family home prices (excluding condos) jumped 7.6 percent from a year ago for the area overall. For the four-county Puget Sound region, the median price for a single family home rose 12 percent, from $325,000 a year ago to last month's figure of $363,975. Snohomish County reported the largest increase at 16.6 percent. A comparison of prices by county shows King County tops the chart with a median sales price of $490,970, up 11.2 percent from a year ago.

Condo prices spiked 16.3 percent from a year ago, rising from $219,900 to $255,750.

Rapidly rising prices and low inventory are worrisome, according to some brokers. 

"A true conundrum exists," said George Moorhead, designated broker at Bentley Properties. "For sellers there is no better time in history, but the concern we hear is there's no place to move." He said since most sellers are looking to move up to larger homes, the ripple effect is "more like a tidal wave as it rolls back to the first-time buyers in the market who are quickly getting priced out of the possibility of purchasing a home."

Moorhead, a member of the Northwest MLS board of directors, reported doing a recent search of homes for sale in Bellevue with asking prices between $500,000 and $800,000. That search yielded only about a dozen properties in the database, a result he described as "staggering" and well below the norm.

Despite such challenges and complaints by buyers, Moorhead said buyers are still presenting offers that are very aggressive.

The increasingly competitive market is prompting hesitation among some would-be sellers, reported Bobbie Chipman, principal managing broker at John L. Scott in Puyallup. She said potential sellers are expressing reluctance to list their existing home prior to finding a home to move into due to limited inventory.

"A strong strategy is for sellers to list their home, sell and close, and move into temporary housing," suggested Chipman, one of the MLS directors. "This approach allows offers to be written that are not conditioned upon their sale closing, and it strengthens their position as a buyer," she explained.

Echoing the notion of being flexible, Frank Wilson said a seller's decision to accept an offer does not come down to sales price alone. "Type of loan, lender, closing time, amount of earnest money, and other concessions like closing costs and offer price all play into a seller's decision," he stated. "On top of that, a seller can choose any offer for any reason, even a lower price offer if other variables are favorable. Escalation clauses, back-up offers and finding funds or a bridge loan are all tools that buyers will need to employ to be successful in today's market."

Northwest Multiple Listing Service, owned by its member real estate firms, is the largest full-service MLS in the Northwest. Its membership of nearly 2,100 member offices includes more than 25,000 real estate professionals. The organization, based in Kirkland, Wash., currently serves 23 counties in Washington state.

This was a news release from the Northwest Multiple Listing Service.

Posted on February 18, 2016 at 7:18 pm
Denni Shefrin | Category: Buying, Selling | Tagged , , , ,

King County Had Almost Half of 2015’s 30 Most Competitive Neighborhoods in America

 

We probably don’t need to tell you that 2015 was a crazy year in real estate, especially in our city. Bidding wars and listings lasting mere days on the market is something we’ve all grown accustomed to. But it turns out we’re not alone. Redfin recently came out with a list of the 30 most competitive neighborhoods from all across the U.S.. What’s the most mind blowing thing about this list? Of the 30 neighborhoods listed, 13 of them are in King County.

Top30Competitive-Neighborhoods-Table2

Seattle neighborhoods that made it onto this list are Roosevelt (4th), Phinney Ridge (9th), Stevens (11th), Greenwood (12th), Victory Heights (16th),Green Lake (17th), Madrona (20th), West Woodland (22nd). I mean, we all knew it was stormy out there, but this felt like a snow storm in Waikiki. It’s hard to say exactly what 2016 has in store, but our very own Chief Economist, Matthew Gardner, has a few ideas (such as expecting that housing in Seattle will continue to appreciate in value, but at a slightly lower rate than 2015).

Read more on Seattle Curbed.

This article originally published on Windermere Seattle's blog.

Posted on February 11, 2016 at 7:59 pm
Denni Shefrin | Category: Buying, Selling | Tagged , , , ,

Buyers pay cash in a third of Seattle home sales

This story originally appeared on King5.com

The number of home-buyers paying cash rose to more than 31 percent of transactions, according to RealtyTrac, which released data for November 2015 in Seattle.

Also in December, the median sale price rose to $508,000 — that's 15 percent higher than a year earlier.

"It's a downer," said Tony Aguilar, who was touring open houses in Ballard on Saturday with his girlfriend. "We've come into a few places, thinking about putting in an offer. We found others are already putting in a cash offer. That makes it way more competitive for us."

"I think it's really frustrating for normal people who want to get financing," said Kim O. Dales, a real estate agent showing a $1.8 million home in Laurelhurst. Dales and other agents say buyers are paying cash across the price spectrum.

Cash buyers are sometimes builders or corporate buyers, but they're also wealthy individuals from the Bay Area, investors from China or younger people borrowing money from their parents to compete in a red-hot market, says Dales.

 

Posted on January 14, 2016 at 10:32 pm
Denni Shefrin | Category: Buying, Selling | Tagged , , , ,

Your Top Rated Real Estate Agent in Bellevue

I'm here for you!

It is an honor to be awarded as a top rated real estate agent in Bellevue. I always strive to be the best resource for my clients as I help them navigate the buying or selling process. Everything I do for my clients is about making your real estate dreams happen.

Denni Shefrin’s mission is to inspire and educate those around her to help them manifest their goals. She takes pride in delivering excellent service through empathetic listening to understand what her clients want to achieve. She then works tirelessly to help them reach their goals. Her business practice is founded on honest caring and ethical conduct. She has over a decade of Real Estate experience working with Windermere – the leading company in the Northwest. Her primary market area is the Eastside.

Clients hold Denni Shefrin in the highest regard. “Denni Shefrin is simply the best Real Estate professional I have ever encountered. Her attention to detail, caring attitude and professional knowledge are second to none. She was able to guide us through a difficult home preparation and sales experience with great capability. I could not imagine having gone through this experience with anybody other than Denni. I enthusiastically recommend her for any possible client.” – Maggie and Bill Blackburn

Are you thinking about making a jump into the housing market? Reach out to me and I can help you with any questions you might have.

You can read more from the original article here.

Posted on October 22, 2015 at 11:33 am
Denni Shefrin | Category: Buying, Selling