Real News – Article 3

In a past article I discussed where our Buyers are coming from, but in this article, I think you might like to see how our 2017 sales market stacks up against last year at this same time….

The total number of Orcas sales has increased from 42 in 2016 to 53 this year to date.  But that doesn’t tell the whole story, because the price points where the sales have occurred are significantly different year-to-year.

The 2016 and 2017 number of properties sold between $150 and $350K are very similar.  But, starting at $400K thru $550K, there have been almost twice as many sales in 2017.  Interestingly, homes priced in the $600K range sold better in 2016 with the $700K range being very similar year-to-year.

The real change is from $800K and up.  Last year there were no sales in the $800K range but there have been a number of sales this year.  2016 sales between $900K and $1,400K were stronger than 2017, but 2017 exceeded from $1,500K and above.

What can we draw from all of these statistics? Honestly, no real pattern other than the availability of inventory is our largest determinant of what sells.  We have a shortage of properties currently on the market, and yet many buyers are still coming into our offices on a daily basis, still looking for their dream home or second home.  Isn’t this just the way it always happens?

For those owners who have been hesitant to list their Land or Homes, we haven’t seen a better time than now!  And that isn’t just hyperbole.  We are approaching our prime selling season of the year.

People visit Orcas during the summer, fall in love with the Island, return home to mainland America, and start trying to figure a way to make our home their home. They return in September with money in pocket, ready to make their move.  It’s just the way this business works.

Enough of statistics….we wish everyone a wonderful fall in the Islands and hope to see many of you in the office, where the coffee is always on and the conversation interesting and friendly.

Until next time,

 

John Dunning, Designated Broker/Owner

 

Posted on September 19, 2017 at 3:39 PM
Windermere Orcas | Category: Articles, Buying, Housing Market, Selling

Real News – Article 2

A few months ago, the Wall Street Journal published an article stating that the San Juan Islands are the fastest growing luxury home market in the country. This article has created many discussions in the local real estate world all revolving around the question: “What does this statistic mean?”. It also asks the question: “Who is really buying on Orcas Island?”

It may surprise you to find out that in the past twelve months, of the 191 sales of both land and residential properties on Orcas Island, 75 of those sales were represented by Buyers already living on Orcas Island. No wonder the locals pay such close attention to the real estate market!

In addition to these 75 purchases, 48 of the sales were by Buyers from the Seattle metropolitan area, and 11 from greater Washington State. That equates to 70% of our Buyers being from Washington State.

The graph below illustrates the breakdown of where our Buyers are coming from overall.

I hope you find these statistics as interesting as I do. If you have any questions, or would like more information, stop by our office here in Eastsound to speak with any one of our highly qualified Brokers….We always love to talk real estate!

 

Sincerely,

John Dunning, Designated Broker/Owner

*Source: NWMLS & Realist

 

Posted on September 8, 2017 at 11:44 AM
Windermere Orcas | Category: Articles, Buying, Housing Market, San Juan Islands, Selling

Real News

As the owner of the Windermere agency on Orcas, I am often asked; How’s the market? The answer is that the market is continuing to improve, and we are grateful to be past the challenging times of 2009 – 2012. But, this answer warrants further comment.

We have come a long way from 2009, when four months passed without a single real estate sale occurring on Orcas Island. In contrast, during the  first six months of 2017, 45 homes sold, leaving us with only 113 active Orcas listings today.  It’s easy to understand why our Buyers are struggling to find their “perfect home.”

It is evident, however, that pricing correctly is still the key to achieving a sale.  The average number of days on the market for the homes that have sold within the past 6 months is 185 in contrast to an average of 248 days for the active listings, with many having been for sale for more than a year.

When we look at the residential market by price range, the bulk of the activity is still occurring in the $300,000 -$599,000 range, where 26 of the 45 homes sold this year were located.  The  median number of days on market for homes in this range has decreased to 52 days.* Currently 17 homes are in escrow, which means it will take 6.6 months to absorb the current listed inventory.

As you can see, there truly is a bit more to answering the “How’s the Market” question.  If you would like more information, or to inquire as to your property’s value today, please stop in to visit with one of our 22 Orcas-based brokers.  We always love to talk about the market!

 

 

John Dunning, Designated Broker/Owner

*Source: Real Market Reports.

 

Posted on August 31, 2017 at 12:28 PM
Windermere Orcas | Category: Articles, Buying, Housing Market, Selling

The Gardner Report – Q2 2017

content_17288_WWAGardnerReportQ2_Masthead

 

ECONOMIC OVERVIEW

The Washington State economy has been expanding at a rapid pace but we are seeing a slowdown as the state grows closer to full employment. Given the solid growth, I would expect to see income growth move markedly higher, though this has yet to materialize. I anticipate that we will see faster income growth in the second half of the year. I still believe that the state will add around 70,000 jobs in 2017.

Washington State, as well as the markets that make up Western Washington, continue to see unemployment fall. The latest state-wide report now shows a rate of 4.5%—the lowest rate since data started to be collected in 1976.

I believe that growth in the state will continue to outperform the U.S. as a whole and, with such robust expansion, I would not be surprised to see more people relocate here as they see Washington as a market that offers substantial opportunity.

 

HOME SALES ACTIVITY

  • There were 23,349 home sales during the second quarter of 2017. This is an increase of 1.1% from the same period in 2016.
  • Clallam County maintains its position as number one for sales growth over the past 12 months. Double-digit gains in sales were seen in just three other counties, which is a sharp drop from prior reports. I attribute this to inventory constraints rather than any tangible drop in demand. The only modest decline in sales last quarter was seen in Grays Harbor County.
  • The number of homes for sale, unfortunately, showed no improvement, with an average of just 9,279 listings in the quarter, a decline of 20.4% from the second quarter of 2016. Pending sales rose by 3.6% relative to the same quarter a year ago.
  • The key takeaway from this data is that it is unlikely we will see a significant increase in the number of homes for sale for the rest of 2017.

 

 

 

HOME PRICES

 

  • Along with the expanding economy, home prices continue to rise at very robust rates. Year-over-year, average prices rose 14.9%. The region’s average sales price is now $470,187.
  • Price growth in Western Washington continues to impress as competition for the limited number of homes for sale remains very strong. With little easing in supply, we anticipate that prices will continue to rise at above long-term averages.
  • When compared to the same period a year ago, price growth was most pronounced in San Juan County where sale prices were 29.2% higher than second quarter of 2016. Eight additional counties experienced double-digit price growth.
  • The specter of rising interest rates failed to materialize last quarter, but this actually functioned to get more would-be buyers off the fence and into the market. This led to even more demand which translated into rising home prices.

 

 

DAYS ON MARKET

  • The average number of days it took to sell a home in the quarter dropped by 18 days when compared to the same quarter of 2016.
  • King County remains the tightest market; homes, on average, sold in a remarkable 15 days. Every county in this report saw the length of time it took to sell a home drop from the same period a year ago.
  • Last quarter, it took an average of 48 days to sell a home. This is down from the 66 days it took in the second quarter of 2016.
  • Given the marked lack of inventory, I would not be surprised to see the length of time it takes to sell a home drop further before the end of the year.

 

 

CONCLUSIONS

This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors. For the second quarter of 2017, I moved the needle a little more in favor of sellers. To define the Western Washington market as “tight” is somewhat of an understatement.

Inventory is short and buyers are plentiful.

Something must give, but unless we see builders delivering substantially more units than they have been, it will remain staunchly a sellers’ market for the balance of the year.

Furthermore, increasing mortgage rates have failed to materialize and, with employment and income growth on the rise, the regional housing market will continue to be very robust.

 


Posted July 26 2017, 11:00 AM PDT by Matthew Gardner, Chief Economist, Windermere Real Estate. Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K. Find the original post here

 

 

Posted on July 27, 2017 at 8:11 AM
Alysha Sherburne | Category: Articles, Buying, Housing Market, San Juan Islands, Selling

Elevation Certificates

Elevation Certificates

One of the greatest things about owning property on Orcas Island is that you are, well, on an island. Let’s face it, who doesn’t like being surrounded by water on all sides? Okay, so maybe it’s not everyone’s cup of tea, but if you are into the whole water thing, purchasing land here can be a great investment in your future. The only thing that could be better? Your own personal piece of rocky beach, waterfront property!

Before you get too caught up in your reverie of owning a slice of heaven, keep in mind that San Juan County has been raising the bar the last several years on issues surrounding the exchange of waterfront parcels. Part of this comes from FEMA, who has been pushing their National Flood Insurance Program after taking a big hit following Hurricane Katrina. So, what does this mean for you as a buyer? Regardless of whether the property you are looking at is high or low bank, flood insurance will be required to receive approval from the Building Department for building plans and occupancy.

Now for the good news: you can get an exemption for flood insurance by providing a FEMA Elevation Certificate. The purpose of this certificate is to prove that your structure, or planned structure, is above the Base Flood Elevation. Base Flood Elevation, as defined by FEMA, is the “computed elevation to which flood waters are anticipated to rise during the base (1-percent-annual-chance) flood event”. Thankfully Elevation Certificates are not difficult to get; however, the process does take time – on average 2-4 months – so it’s important to start this as soon as possible.

To begin, you will want to contact a local survey company as they can help walk you through each stage. Initially they will probably perform a preliminary field review, which can often determine if the structure, or proposed structure, is above the base flood elevation. In San Juan County, these elevations can range anywhere between 11 and 18 feet. If the preliminary findings are not enough, the surveyor will work with you to attain the required elevation certificate.

Here is a look at what to expect from this process:

  • The Corps of Engineers will be employed to determine the base flood elevation for the specific site in question, taking into account the local ecology. Their determination generally takes 1-3 weeks.
  • An Elevation Certificate will need to be completed by a Professional Land Surveyor. If the parcel in question has been built on, the surveyor will check several things including: the structure of the building and foundation, constructed and non-constructed flood openings, square footage, will take photos of all sides of the building, and will measure the elevation of the lowest adjacent grade. Both the survey and the certificate can normally be completed in less than a week.
  • A FEMA application will need to be completed and include the findings from both the Corps of Engineers and the Professional Land Surveyor. Once this package is submitted, they have 60 days to review the findings.

 

Only after this entire review process will FEMA remove a structure or parcel segment from the flood plain, meaning as a buyer, that you will no longer be required to purchase flood insurance.

Tip: If you are purchasing waterfront land that has not been built on, talk to a survey company before beginning projects. Most will work with you prior to the design or construction phase to ensure that any buildings will be above the flood zone.

 

If you have questions and/or concerns about this topic, please contact us here.

A special thanks to Star Surveying Inc and Madrona Point Insurance for their expertise on this topic.

Posted on March 2, 2017 at 3:34 PM
Alysha Sherburne | Category: Articles, Buying, San Juan Islands

How the Neighborhood Impacts a Home’s Value

Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.

The “estimated” home prices you see posted online can be off by tens of thousands of dollars—not because they are dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.

A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:

School quality

The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.

A park within walking distance

Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.

Stores nearby

The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for eight percent less than average).

Freeway access

Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.

Vacant lots in the vicinity

Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.

Proximity to nuisances and environmental hazards

Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities—especially those that make lots of noise or produces noxious odors.

Neighborhood foreclosures

According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.

Percentage of homeowners

Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.

Public services

Some communities have a wealth of quality public services available to them—including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.

Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.

Posted July 8 2016, 11:00 AM PDT by Tara Sharp. Read the original here.

Posted on January 20, 2017 at 11:35 AM
Alysha Sherburne | Category: Articles, Buying, Lifestyle, Selling

Top 10 real estate tips for 2017

Moms and daughters on playdate in house's front porch | Sean Justice/Getty Images

High demand and low interest rates drove housing sales in 2016, and 2017 is shaping up to be another good year, albeit with a few minor caveats.

While home prices for starter-to-midrange homes are pushing upward toward pre-recession peaks, especially in secondary markets, they’re stabilizing in higher-priced areas.

Prognosticators see the robust markets of Seattle, Portland and Denver as 2017’s top performers, with 10 percent to 11 percent price growth. If mortgage rates rise modestly as expected in 2017, sales elsewhere may normalize with smaller price appreciation, especially as housing starts rise to fill the inventory breach.

But it sure looks like another seller’s market again in 2017, and likely in 2018, with a few localized exceptions such as the overwrought Atlantic City, New Jersey and Detroit urban markets.

As we march into the latter part of the decade, homeownership remains a practical long-term hold and self-enforced savings plan.

Here are 10 tips to adapt to the latest market conditions.

1. First-time homebuyers: Get that starter home now

Well, you’d best gyrate into action. And we mean now! More than half of the home sales (52 percent) in 2017 are expected to be to first-time buyers, and mostly to the millennial set (19 to 34 years old), many moving from urban rentals, research by the National Association of Realtors shows. That means competition — and bidding wars — could become fierce in the spring for such “starters” in desirable areas.

While there’ll be less inventory this winter, there’ll also be less competition per unit and a higher percent of motivated sellers.

RATE SEARCH: Check out Bankrate.com right now for your best mortgage options.

2. Sellers: Hire the right agent

Oftentimes, the best investment a seller can make is time spent researching agents. A bad hire can cost sellers tens of thousands of dollars and months of worried waiting.

First, look at an agent’s’ online marketing material and listings. Is there good photography or video? Does it “pop”? Are descriptions accurate and complimentary without seeming exaggerated?

Then, look at profiles of the agents on LinkedIn, Facebook and other social media; and be sure to read web reviews. What kind of vibe is an agent sending out?

Narrow your search to three agents and interview each, ideally in person. Ask for sales-activity reports, existing listings and time-on-the-market averages, plus the requisite local comps.

A seasoned listing agent also will know the best times for open houses and how to initiate a price war if the market allows. Never consent to a listing contract of longer than 90 days in a seller’s market. You can always extend.

3. Buyers: There’s more loan money out there

Those who couldn’t get mortgages during the downturn because they didn’t have 20 percent to put down can find affordable financing again.

Borrowers with FICO scores as low as 690 are now getting conforming mortgage loans (those under $417,000).

One telling sign: About two-thirds of mortgage refinancing were getting approved in the fourth quarter of 2016 compared to just one-half of those at the end of 2014.

However, borrowers without a 20 percent down payment will still likely pay private mortgage insurance, or PMI, until they hit the 20 percent to 25 percent equity mark.

The best rates go to those with 800-plus credit scores, though 750-plussers are getting virtually the same terms.

Unfortunately, those seductive interest-only loans are also on the menu again. Avoid them. They’re affordable at first since you’re not paying principal, but then years later, well … see the Great Recession of 2008.

4. Sellers: It may be a seller’s market but …

Home sellers can do several simple things to enhance appearance, increase buyer interest and boost their home’s profile:

  • Renew selectively: Instead of wholesale renovations from which sellers recoup maybe 60 percent on investment, do light makeovers everywhere, with an eye on the kitchen and bathrooms. They’re far more cost-effective.
  • Clean, clean and clean some more: It’s hard for buyers to picture themselves living in a dirty house. Scrub floors, baths, kitchens, windows and walls, and be sure to clean, vacuum and deodorize rugs. This is simple but effective.
  • Depersonalize, declutter: Show the space, not the contents. Box up family photos, kids’ school papers and excess art, and store bulky and worn furniture. Organize your closets to make them look half empty.
  • Illuminate: Think bright and cheery. Open drapes and add brighter light bulbs in dark areas. Repaint where needed but use neutral colors.

5. Renters: It might be time to buy

In many cases, rents are rising faster than home values, yet mortgage rates remain low. That, and the fact that renters now account for 37 percent of households (the highest level in 50 years), seem to indicate an imminent coming-out party for renters-turned-buyers, especially if they plan to stay put for five to 10 years after buying.

There are limitless buy-versus-rent calculators like Bankrate’s calculator for renters to compare affordability. But no gauge accounts for human behavior, such as reluctance of renters to re-invest what they’ve saved from not paying property tax, insurance, upkeep, etc. Homebuying basically enforces that discipline.

RATE SEARCH: Looking to stay in your house and not sell? Find the best refi rates now.

6. If you’re a buyer, don’t believe the house is yours

Don’t bank on a done deal or other verbal promises from listing agents until you sign a contract.

In heated markets across the country, sales agents are giving buyers false hope and using their offers to bid up the price for preferred buyers who they think can pay more and close faster. Have other homes in mind.

Strategies such as preapproval (versus prequalification), proof of funding, closing flexibility and the always-risky practice of waiving inspection and repair contingencies can help sway buyers.

For added clout, tell sellers you’re willing to “escalate,” or exceed all offers to a certain limit. Some agents even advise buyers to write so-called “love letters” to sellers, telling them how much the home will mean to their families.

7. Sellers: The grass is always greener …

… in yards with a “sold” sign. Major presale upgrades typically aren’t needed, but a little greening outdoors is a must.

Surveys show that strong curb appeal can increase prices by 10 percent or more. Greener grass, whether derived from new sod or fertilizer and water, is a must.

New shrubs, plantings and flowers also project a welcoming feel. Sellers typically enjoy a 100 percent return on the money they put into curb appeal.

Another form of green, sustainable landscaping has become a value-add for buyers. Native plants, native grasses and perennials that require less water and attention fill that bill.

Do some local research or ask your local home-and-garden pro for simple “greening” tips.

FREE TOOL: Looking to buy a house? First, check your credit score for free at myBankrate today.

8. Sellers and buyers: Know the state of your market

A balanced housing market is defined as one with an average inventory of 6.5 months, according to Texas A&M University Real Estate Center research. When inventory remains below equilibrium, sellers enjoy more control over prices and terms, and the area becomes a seller’s market.

When inventory lingers well above stasis, you have a buyer’s market where sellers must get more serious about price reductions, credits and throw-ins. Of course, these averages don’t necessarily reflect demand in certain desirable and undesirable submarkets.

Go to Realtor.org for such market home sales data by state or to a local agent, business journal and daily newspaper you can read online. In 2016, the U.S. housing inventory average was under five months.

9. Sellers: House going on sale in the spring?

Do some prep work now. First, grab your camera or smartphone and do an exterior autumn photo shoot, with the leaves changing colors.

It’s a much better way to showcase your home than to wait until late winter when everything is still dead and brown and mucky. Also take some landscape shots after the first snow, ideally on a sunny day, to show how cozy your place looks in winter.

Take a preliminary inventory, too. Look through your attic, closets, basement and garage to see what stored items you’ll want to keep, give away or sell in the spring. This will help you determine whether you’ll need a storage unit when your home is on the market and if there are any problem areas that need repairs or attention.

It’s also a good time to start discussing financing options with a local lender and interview prospective listing agents who also might provide additional preparation tips.

10. Buyers: Relocating near a waterfront?

You’d best consider weather and insurance realities. Major hurricanes and floods of the past dozen years, particularly Hurricane Katrina and Superstorm Sandy, have pushed the National Flood Insurance Program into a $23 billion hole, forcing flood-insurance rates to spiral.

FEMA flood-map changes are aggressively expanding flood zones, especially along the East Coast and Gulf Coast, forcing hundreds of thousands of homeowners to buy flood insurance for the first time and others to pay thousands more annually.

Parts of Florida saw 20 percent increases in 2016 and will likely see similar hikes in 2017. Insurers also are imposing coverage caps so there’s no guarantee you’ll be made whole post-catastrophe.

Some home sellers and their agents are conveniently not disclosing these realities, so buyers will have to ask pointed questions and do their own research. Go to FEMA.gov for more info.

By Steve McLinden http://ht.ly/Wm53J
Posted on December 6, 2016 at 9:08 AM
Alysha Sherburne | Category: Articles, Buying, Housing Market, Selling

Planning for the Future: Housing Options to Consider

It should come as no surprise that 75% of the senior citizens polled in the latest AARP Preferences survey strongly agreed with the statement, “What I’d like to do is stay in my current residence as long as possible.” After all, home is where the heart is; and the longer you live in a place, the stronger your attachment to it becomes.

But it’s important for those over 50 to assess potential lifestyle modifications that may be necessary down the road well in advance, because many will require significant research and preparation.

Whether you are planning for your own future or that of a loved one, analyzing new housing options before a change becomes necessary will help ensure you have the greatest number of options with the least amount of stress. Here are some considerations to help guide you or your loved one through the process.

Location and size

In planning for the future, communication with all involved parties is key to understanding where you or the senior in your life wants to be. Many seniors want to be close to family and friends.  Proximity or access to basic needs is also a critical consideration, especially for those who no longer drive.

Once an area is chosen, think about how much space is needed. Most seniors choose to downsize to a smaller home, and here are many advantages to this. A smaller home generally means less maintenance, lower mortgage or rental costs, and lower taxes. Less space can also be easier to manage. Single-level homes are a good option for those with decreased mobility and can help reduce the likelihood of falls and injuries. You’ll also want to consider whether a yard is needed, and whether you’d need someone else to maintain it.

Multi-family home

Multi-family homes, such as condominiums, cooperatives and townhomes, are well-suited for senior living, offering many options for budgets, maintenance and amenities. But most people don’t fully understand the differences between them.

Condominiums and cooperatives offer benefits of homeownership, but allow for certain expenses to be shared by all owners. Other benefits include security, shared building insurance and possible onsite amenities. Monthly fees are collected in both condominiums and cooperatives to maintain the property and any amenities, and both have elected boards of representatives who meet regularly to review operating expenses and building issues. Condominium ownership is based only on the unit, with taxes paid by the owner. In cooperatives, owners are shareholders, giving them sole rights and equity of their unit, but property taxes are shared by the building and included in your monthly fees.

Townhomes, on the other hand, allow for ownership of the structure and the land it sits on (front and back yards). Most are designed as row-houses, with one or two common walls. For those who prefer the legal rights of single-family ownership and do not want to pay monthly dues and do not want to pay monthly dues, a townhome may be the best option.

Drawbacks of multi-family homes can include noise from shared walls or floors, homeowner’s associations, monthly fees and CC&Rs (covenants, conditions and restrictions).

Renting

Renting can be a good way to avoid homeownership costs and maintenance. It may also be a more affordable way to live in a desirable area. Cons of renting can include noise through shared walls, the potential for your rent to increase over time, difficult or unreliable landlords, inattention to maintenance issues, and the possibility that you may need to move if the property is sold. It’s a good idea to talk to one or more current tenants of the rental to find out what their experience has been with the property and the landlord.

Alternative senior living options: independent and assisted

Another solution to consider for yourself or your family member is independent living communities (also called senior apartments, retirement communities, retirement communities, retirement homes and senior housing). Independent living communities provide privacy, independence, and the opportunity to connect with others without the demands of homeownership. They are usually full-service, offering meals, housekeeping, transportation and social activities.

For those who struggle with day-to-day living responsibilities, it may be time to consider assisted living arrangements. Some options include Adult Day Care, Elder Cottage Housing Opportunities (ECHO), Group Home, Special Care Unit (SCU) or Nursing Homes. Your state human resources department can usually provide more information about these options in your community and offer help with referrals, or you can opt for private referral services.

Financial factors

The costs for alternative housing can add up quickly—especially as the need for assistance increases. Medicare, unfortunately, does not pay for housing; but under strict financial restrictions, Medicaid may. To get a better feel for just how much these living arrangements can cost, visit GenWorth.com and search the cost of long term care where you live.

If the choice is made not to move, you could consider a reverse mortgage. This allows homeowners over the age of 65 to tap into their home equity in lieu of a monthly payment, with no repayment necessary as long as the property is their principal residence and they meet all the terms of the agreement. Keep in mind, however, that if the owner sells the home, dies, or does not meet the terms of the agreement, they or their family will be required to pay the remaining balance of the loan.

Some states offer assistance with property tax, or special assessments for seniors based on age, disability and household income. Check with your State Department of Revenue to see what options exist in your state and whether you qualify. Long-term care insurance is another option. An LTC policy will help pay for the costs not covered by traditional health insurance or Medicare (which can include assistance with daily-living activities, as well as the care provided in a variety of living/care facilities).

 

For more help and information

Your Windermere Real Estate agent can help you make the transition when the time is right by assessing the local property market, helping you properly price homes for sale, and finding a new home that best meets the unique needs of you or your loved ones.

Posted July 20 2016, 11:00 AM PDT by Tara Sharp. See the original article here.

 

Posted on November 29, 2016 at 12:09 PM
Alysha Sherburne | Category: Articles, Buying, Lifestyle, Selling

7 Habits of Highly Effective Home Buyers

 Habit #1 – Be Proactive: Get pre-approved For Your Bank Loan

Mr. Covey’s first point deals with getting into the ongoing practice of being on the front foot, rather than living in a passive and reactive mode; not waiting for it all to happen for you but taking the first step.

If you are looking to buy, the foremost proactive task is to get pre-approval for your mortgage. Approach your bank and find out what is the amount and terms for which you can be approved, based on your current income (and expenses).

This is going to put you in the driver’s seat for the whole process – you will have a good idea of what you can afford, which in turn informs all your house-hunting and decision-making from here on out. Make sure you understand the difference between getting pre-approved and pre-qualified. Being pre-approved vs pre-qualified for a mortgage is not the same. Home sellers will want pre-approval! This will be the first meaningful task in preparing to buy a home.

If you’ve been dreaming about that ideal living space, in being proactive you will have begun your journey toward it!

“If I really want to improve my situation, I can work on the one thing over which I have control – myself.”
― Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #2 – Begin With The End In Mind: Determine what you want and what you need

Next, readers of the book are encouraged to envision a clear destination.

Our imagination is a powerful thing, and it’s useful for more than just coming up with ways to spend this week’s Powerball, or making up pranks targeted at friends, colleagues, and loved ones. We can use it to develop a vision of our future for us to work towards.

When it comes to buying a house, you can begin to envision what you want.

Which area would you like to live in? What house style interests you? Garden or no garden?

Moreover, ask yourself what you need: how many bedrooms do you require for your current and future family size? Do you need space for the number of vehicles you own? Space for all your appliances? Maybe there are some specific desires surrounding the type of neighborhood you want?

Build a picture of the desired end towards which you can begin to move.

“Start with the end in mind.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #3 – Put First Things First: Take a reality check

Now that you have identified what your end goal is, and also what your budget will allow, you can begin to put first things first.

For house hunting, this entails getting a realistic idea of what’s out there and available.

Using technology this can be done from the comfort of your own home.

Jump online and you can quickly get an idea of how the market is looking. Some sites even offer virtual guided tours of potential homes.

At this stage, you could even begin to drive through your desired neighborhood on a Sunday open house and begin to see for yourself what’s on the market.

Nothing beats first-hand experience to get a feel for what is realistic!

Using these methods you will build a solid profile of what your ideal spot could look like.

Some buyers become disappointed or frustrated by leaving out this step, having a mentality which says “I want it all right now”, setting the bar for their purchase way too high.

They want their perfect dream home for a low, low price.

Indeed, the overarching theme of Mr. Covey’s book is how we set ourselves up for failure to reach the desired result not primarily because of external forces, but because of our own perceptions.

Taking a reality check at this stage will equip you to engage with the market.

“To change ourselves effectively, we first had to change our perceptions.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #4 – Think Win-Win: Aim high but be flexible

Most buyers have an idea in their head of “The One Home.”

This “One Home” is the home I’m supposed to encounter that will make me deliriously happy by checking all my requirements and coming in way under my budget.

“It’s out there for me and I just have to find it.”

Your reality check in the previous point will probably already have shown you that “The One Home” is a unicorn.

There’s no such thing!

However, this point right here will help you to see that even if the “One Home” does not exist, it is still possible to be effective in reaching the desired result: a home that will give you the optimum long-term benefit and satisfaction for your investment.

Thinking “Win-Win” is about finding solutions that work for all parties involved – for example, you can get a great house at the right price without fleecing the seller.

To find your “Win-Win” property, as opposed to the unicorn, will require flexibility and negotiation. You may have to compromise on some of your nice-to-haves on the property in order to secure the best possible arrangement.

Win-Win” thinking says, for example: “Ok, I wanted a house that was ready to move into right away, but here is a decent house in a good area which can be turned into a great house with some renovation, and I’ll still come in under budget.”

Or, “Look, I’m spending a fraction more than I had originally planned, but this house checks all the boxes and will give us space into which we can grow.”

Be flexible and find your Win-Win!

“Happiness, like unhappiness, is a proactive choice.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #5 – Seek First To Understand, Then To Be Understood: Understand the process of buying and selling

What a great fifth habit to have under your belt: Understand, before being understood.

What makes Mr. Covey’s philosophies so good is that they deal with improving one’s character, not just quick fixes that only scratch the surface of the issue!

When it comes to buying a house, what you need to understand is the process of buying and selling.

You don’t have to have a degree, or train to be a real estate agent yourself, but it will help to find all the vital information.

Don’t be scared to ask questions! Understanding what to do before buying a home is vital!

After all, buying a home is one of the biggest investments a person can make!

If you have a question about anything from paperwork to repayments to closing dates to mortgages, just ask!

A good person to ask is your local real estate agents – if they aren’t equipped to answer your question directly, they can put you in touch with the necessary professionals!

According to Mr Covey, when we try to offer advice, or assert our own desires, or bring a solution, without first understanding the problem, we set ourselves up to be ineffective.

“Most people do not listen with the intent to understand; they listen with the intent to reply.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #6 – Synergize: Empower yourself with the right real estate team

There are those who have more experience than us in any given area.

Rather than re-invent the wheel for ourselves, we can benefit from the learning and experience of others.

We already saw in the last point some of the advantages of being able to ask a good real estate agent for answers to some of the fundamental questions.

Sure, you could do it yourself!

You might conceivably even save some money by doing it yourself!

However, by and large, when you weigh the benefit in terms of your investment of time, and the avoidance of unexpected hassles, generally speaking, making use of these specialists in their fields can pay for itself, so to speak, by saving you time as well as headaches.

Your small team could involve a competent real estate agent, a qualified conveyancing attorney, a reputable mortgage broker and the best home inspector available.

You could also involve a trusted friend or family member who can look at the prospective property with you and point out pro’s and con’s you may have missed.

In addition, give weight to what your spouse or immediate family has to say – after all, they will be living there too!

“When the trust account is high, communication is easy, instant, and effective.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Habit #7 – Sharpen The Saw: Enjoy learning from the entire experience

Every first-time buyer can relate to the rush of making their first purchase.

When the offer is accepted, a celebratory notification is sent to family and friends, loaded with party emoticons.

When the mortgage is approved, we crack open the champagne!

Going through the process can involve ups and downs, but when you reach your goal it is worth it.

Buying shouldn’t be something to endure but something to enjoy.

And, even when there are those disappointments that might come along the way, you are learning and growing from the entire experience.

You come out on the other side of the process with broader shoulders and more life experience. When things are thought through carefully there is  rarely any home buying disappointment.

So, if you’re ready, jump in!

Be proactive, have the end in mind, stay grounded in reality, think “Win-Win”, increase your understanding, work in team, and be learning and growing.

You will be an effective home buyer!

And of course, be sure to stock up on a bottle of your favorite Champagne!

“To learn and not to do is really not to learn. To know and not to do is really not to know.”
Stephen R. Covey, The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change

Hopefully, you have enjoyed these tips for becoming a more effective home buyer. Put the advice to good use and you will be well on your way to enjoying the fruits of your labor.

Written by Bill Gassett – See the full article at:

Posted on November 21, 2016 at 10:47 AM
Alysha Sherburne | Category: Articles, Buying

How to Finance a Vacation Home That’s Also a Short-Term Rental

This was posted in the Wall Street Journal:

 

Renting out a second home is one way to pay off the mortgage while leaving time for family fun

By
Anya Martin

The rise of short-stay rental sites like Airbnb and HomeAway is tempting homeowners to purchase vacation homes that will also generate income.

For some, renting is a way to recoup some costs of a second home purchased primarily for family fun. Others do the math and find it makes sense to rent full time or close to full time.

Rental income can also defray the cost of improvements if the second home is a fixer upper, says Brian Sharples, CEO of HomeAway, which has more than 1.2 million paid listings in 190 countries. Vacation homeowners make an average of $28,000 a year in rental income, according to results of a quarterly survey released in March of 1,253 owners who list on HomeAway.com, VRBO.com and VacationRentals.com.

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In a separate annual HomeAway survey released in June, 70% of 663 respondents said rental income covered more than half of their mortgage payments. Fifty-four percent said rental income covered 75% or more of their mortgage payments. Owners also used the income to fund their everyday living expenses (23%), upgrade and renovate the property (23%), pay for a child’s education (21%) and save for retirement (11%).

Last year, the average purchase price for a vacation home in the U.S. was $192,000, according to the National Association of Realtors. Of the 920,000 vacation homes sold, 61% were financed with a mortgage. ( News Corp, which owns The Wall Street Journal, also owns Realtor.com, the listing website of the National Association of Realtors.)
Overall, home prices have been rising over the past few years in most vacation hot spots. But buyers also should consider that interest rates are low, says Don Ganguly, CEO of HomeUnion, a California-based residential investment and management firm. “It could be the perfect window to blow cheap money into an area that is doing well and rents are going up,” he adds.

Buying a property solely for rental income has its risks. And how the property is used affects the borrower’s mortgage options. Both conforming and jumbo mortgage rates for a second home usually are equal to or within a quarter of a percentage point of current market rates for a primary residence mortgage, says Norman T. Koenigsberg, president and CEO of East Brunswick, N.J.-based First Choice Loan Services. Lenders typically require a minimum down payment of 10% for conforming loans and 20% for jumbos on second home mortgages, he adds.

Also, the lender will factor in the borrower’s existing home payments as well as the new mortgage payments when calculating the debt-to-income ratio, which reflects the borrower’s monthly debt payments as a percentage of gross monthly income. Lenders prefer a ratio that is 43% or lower, but some will go up to 45% for an otherwise strong applicant, Mr. Koenigsberg says.
However, if an owner plans to rent the home most of the time, a lender will categorize the property as “investment,” making it ineligible for a second-home mortgage, says Dave Gorman, Bank of America sales executive for the Northwest region. Qualification guidelines are tighter for investment-home mortgages, including a higher minimum credit score, higher down payment (25%), and a lower DTI, he says.

On the plus side, projected rental proceeds may be included in income calculations for an investment-home loan, Mr. Gorman says. If a home hasn’t been previously rented or is a new property, the lender will consider comparable rental income for the area, he adds.

Here are a few more considerations:

• Local regulations. Some counties and municipalities consider vacation-home rentals the same as hotel stays and require owners to collect occupancy or lodging taxes from guests. Communities also sometimes limit the number of homes that can be rented on a temporary basis, so vacation-home buyers who intend to rent should check for any local restrictions before purchasing, Mr. Gorman says.

• Budget fully. While borrowers may be able to afford another mortgage payment, they should be comfortable paying for the property taxes, insurance and upkeep of any property they own and finance, Mr. Gorman says. Remember these expenses remain even if there are no renters, he adds.

• Repair and write off. If the vacation home is rented, expenses related to repairs, maintenance, cleaning and utilities may be tax deductible, either fully or prorated based on the time it’s rented. However, costs for improvements must be capitalized and then depreciated. Check with a tax expert for specific rules and restrictions.

Corrections & Amplifications:
Investment-home mortgages may require a higher down payment of 25%. An earlier version of this article incorrectly stated the down payment could be 75%. (Aug. 3, 2016)

Posted on September 8, 2016 at 9:48 AM
Alysha Sherburne | Category: Buying, Financial, Lifestyle, Vacation Rentals