REALiTY BiTESREALiTY BiTES
i turn REALTY into REALiTY
I don’t know about you, but I get excited and even a bit nervous when I’m about to make a large purchase. My heart begins to beat faster and my hands get sweaty. Your hands get sweaty too, don’t they?
When I purchased my first home, I was so excited that I didn’t bother to read the writing on the contract. I faintly remember hearing my Realtor explain the terms of the contract, but in truth, I had no idea what I was signing.
The Importance Of A Good Realtor
As excited as you may be about your home purchase, a good Realtor will take things slow and be sure to explain every paragraph in the contract. While this may seem tedious and boring (which it can be), it is definitely in your best interest to listen and make sure you fully understand your rights and obligations. When I’m writing an offer for a client, it can take a few hours to get through the paperwork. My goal is to explain everything and make sure that my client understands what he/she is signing.
Why Are Contracts So Verbose?
Lawyers… I think sometimes they get paid by the word when it comes to contract language. In all seriousness, the language is complicated as a result of previous lawsuits. When I purchased my first home back in 1988, the contract was two pages long. Now, a standard contract can easily exceed 10+ pages!
The attorneys who draft up the contracts try and make the terms so clear and concise, that sometimes it actually makes things more confusing for the average person to understand. All of which leads me into the purpose of today’s post:
Each week Annie Fitzsimmons, the hotline attorney for the Washington Association of Realtors (WAR), answers a legal question pertaining to real estate. These are questions that have been asked regarding the various parts of the real estate contracts.
Here is this week’s question:
Buyer A made an offer with $500 earnest money deposit, subject to financing. The offer was accepted. Seller notified Buyer A with form 22 AR of the sellers right to terminate the transaction if the buyer did not waive the financing contingency. Buyer A waived the financing contingency, however does not have the ability to close the transaction if the loan does not close. Seller referenced the purchase and sale verbiage, Buyer has sufficient funds to close this sale in accordance with this Agreement and is not relying on contingent source of funds, including funds from loans, etc. Seller contends that since the buyer does not have available funds to close, Seller may terminate the agreement. Buyer A contends that the contingency is removed, and that while she is in jeopardy of losing her earnest money if the contract does not close, the seller cannot terminate the contract. Who is correct?
Buyer is correct. Based on the information presented, Seller has no basis for terminating the agreement at this point and any attempt to do so would constitute a breach by Seller. Buyer is entitled to use the time allowed until closing to obtain the funds necessary to close the transaction. If Buyer is unable to do so, then at closing, Buyer will breach the agreement. If Seller’s remedies are limited to forfeiture of EM, then Buyer will lose the EM but not face any more significant risk. Seller did all that Seller could do by giving the notice of right to terminate. It is now up to the Buyer to obtain the funds necessary to close the transaction.
Clear as mud, right? That’s why it makes sense to have a trained professional on your side. Do you have a question about real estate? Give me a call!
When REALiTY BiTES, Bite Back!
Many first time buyers don’t realize how real estate agents get paid, so I created this short video to explain commission splits. DISCLAIMER: It is illegal for real estate firms to discuss their commission rates among each other (price fixing). This is JUST an example of how some agents are compensated.
Do you have specific questions about my rates? Send me an email or give me a call.
When REALiTY BiTES, Bite Back!
This is a recap of my first experience riding the public transit system here in WA state. Prior to this past Monday, I had looked down upon those poor souls who chose to ride buses. Little did I know at that time, how dramatically my life would change after the experience.
The Hypocritical Years
Before my two children learned to drive, I had the pleasure of being their personal taxi service. As they got closer to their “age of independence” as I liked to call it, I started telling them to just take the bus. They used to call me a hypocrite because in my 17 years as a resident in Woodinville, I had never ridden the local transit system here.
Growing up in San Francisco, I was an experienced rider. I took public transportation everywhere, often hopping from bus to bus, and even an occasional cable car to get to my destination. I was even one of the first passengers on BART when service began in the 70’s, so I’m not sure why it was so hard for me to take the plunge here in WA. In fact, when I first moved to WA in the mid 1990’s, I lived across the street from my office at Microsoft. Instead of walking to work like a normal person might do, I drove the one block to work and parked in the underground garage.
I Used To Talk The Talk, But Now I Walk The Walk
As a Realtor who lives and works in Woodinville, I’m constantly extolling the benefits of living here. We have great schools, an abundance of wine tasting rooms, walking trails, and lots of greenery. For some of my buyer clients, the only perceived objections are that a) We are too far from Seattle; b) It is too difficult to get to places without a car; c) Traffic congestion is bad. I used to explain that there were trade-off for living in the suburbs. In exchange for fresh air, green grass and trees, you had to put up with a longer commute. But I would always preface that with an “It’s not as bad as you might imagine”. As of today, I can personally attest that:
a) It is not too far from Seattle.
b) It is not that difficult to get around without a car.
c) Traffic congestion is indeed bad.
On A Whim…
My inaugural bus ride took place this past Monday, a warm, sunny weekday afternoon. Out of boredom and a desire to do something completely impromptu, a friend and I decided to hop a bus to Seattle. After a few false starts which included trying to board the wrong bus (twice!), we hopped on a Sound Transit, paid our fares and sat back in the air-conditioned seats headed to Seattle. The bus was clean, the ride was pleasant, and traveling in the HOV lane probably shaved off several minutes from a normal trip time to Seattle, even if you include the stops along the way.
Walking Is Healthy (Just Don’t Inhale)
Walking in Seattle on a sunny day is an experience like no other! While my friend and I were walking by Pike Place Market and the park, she turned to me and whispered in my ear “Wow, it must be 5:20 because somebody is smoking Marijuana”. I looked back at her and started cracking up! Oh, what sheltered lives we lead on the Eastside of the lake.
Bar:Bus Stop Ratios
There are at least 3 restaurants on any given block in downtown Seattle, maybe more. Bus stops average one per every two blocks. Given my fuzzy math skills, that’s a Bar:Bus Stop ratio of at least 6:1! Planning a bus trip to Seattle during happy hour is a perfect afternoon getaway. The money you save in gas, parking, and tickets more than pays for the afternoon!
If you have a smart phone, download the free app titled OneBusAway, created by UW students that give you the approximate times of bus arrivals at the nearest bus stop.
If you’re not sure about your route, ask a bus driver or a fellow passenger (but don’t wake them if they appear to be asleep or unconscious) for help . I discovered that people are generally nice and want to be helpful. Just be polite! FYI, The express bus from Woodinville to Seattle is #522.
Make sure you have EXACT change (including quarters) for the trip. For example, if it costs $2.50 each way from Woodinville to Seattle, bring $4 in bills and $1 in quarters. Don’t forget this fact halfway through happy hour when you leave your tip. Leave dollar bills, because you’ll need the quarters for the bus ride home!
Taking the bus to downtown Seattle was a fun experience. There were no parking hassles, nor exorbitant parking fees. It was only a short walk from downtown to Pike Market and the many restaurants there. After this experience, I can see how one might choose to commute via public transportation. Forgoing the 520 bridge toll ($7/day), gas, parking fees, would certainly reduce my stress level. Now if only they offered wireless internet access on the bus…
Have you ridden public transportation here? Share your experiences!
When REALiTY BiTES, Bite Back!
There are so many acronyms in the real estate world that it can be very confusing for the average consumer. You may have heard about Fannie Mae, Freddie Mac, FHA, and others, but do you really know what they stand for? This post focuses on HUD homes, and how they relate to FHA loans.
HUD – A Beginner’s Guide
HUD is short for the U.S. Department of Housing and Urban Development. Their mission statement is:
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business.
One of the most familiar programs that HUD offers is under the FHA (Federal Housing Administration). The FHA is best known for its government backed mortgage insurance program (FHA loans) whereby the federal government insures loans made by FHA-approved lenders. The primary goal is to provide easier entry into home ownership by way of lower down payment programs. For more information on the history of the FHA, click HERE.
When FHA Loans Go Bad…
In case you haven’t read the news or watched TV lately, I’m here to inform you that the real estate market (and general economy) has been in the dumps lately. Things have finally started looking up recently (at least in my housing area), but there is still quite a bit of “Shadow Inventory” out there. For an explanation of what that is, read one of my previous posts on that topic HERE.
When a homeowner can no longer afford their mortgage payments, and the home is taken back by the lending entity, it becomes an REO property (Bank-owned). You may have seen signs like the one below in your own neighborhood.
In most instances, these properties are owned by large corporate banks such as Bank Of America, Wells Fargo, etc. However, if the homeowner had an FHA loan, the home is taken back by the federal government (HUD) because they insured the loan. When this occurs, the home is placed back on the market as a HUD property. With this distinction, there are some unique rules and guidelines that interested buyers must follow.
Who Can Buy A HUD Home?
Every home that HUD sells can be found HERE. They can also be found on the local MLS site in your area. Because the mission statement for HUD is to provide affordable housing, nearly all HUD homes have what are called “eligibility” restrictions and have certain time frames in which a limited audience may bid on them.
- Good Neighbor Next Door, Non-Profits, $1 Homes-Government Sales – These homes are rare, and generally in very limited and specific areas. Homes in this category are offered to these entities FIRST on an exclusive basis. If they don’t sell by the end of the exclusive timeframe, the bidding is opened up to other parties, such as owner-occupant purchasers.
- Owner Occupants – Nearly all properties that HUD sells on this site are available to Owner Occupants exclusively for a specific time (usually 30 days). Within this exclusive time frame, investors cannot make on offer to purchase.
- Investors – If a property has not been sold to one of the above entities within 30 days, investors are permitted to bid on homes beginning on the 31st day of the listing. Sometimes this period begins sooner, based on the condition of the home.
How To Make An Offer On A HUD Home?
While anybody can purchase a HUD home, you can’t just call up HUD and say “Hey, I wanna buy one of your homes!”. All HUD homes require that purchasers use “authorized” HUD Brokers. This can be confusing, since HUD only lists “Principal” Brokers on their website. A Principal broker is the managing broker, but not necessarily an active, working real estate agent. The best way to find out is to ask your current agent if he/she is an “Authorized” HUD broker. Even better, contact me, since I AM an “Authorized” HUD Broker!
There are VERY specific instructions that must be adhered to in order to be a successful bidder on an HUD home. If you don’t follow the instructions TO THE LETTER, your bid can be discarded and you may lose out on a terrific home. But, if done correctly, you can find a great home for a very reasonable price.
What are your thoughts? Have you purchased a HUD home and want to share your personal experience here? Have I piqued your interest in HUD homes? If so, drop me a email for more information…
When REALiTY BiTES, Bite Back!
You’ve seen the headlines before. Just look in any newspaper. It’s like the whole world is on sale. But there is usually a catch. There’s only one left, or the one you want is slightly damaged. Or, the seller is just trying the old Bait & Switch tactics to get you to come in. Once you’re there, Wham!
Well, this time is no different, except that there is no bait & switch tactic (I promise).
This weekend, one of the larger home builders in the area, John Buchan Homes, is having a Model Home Furniture Sale here in Woodinville, WA. That’s right, you can now own some of the same furniture that you’ve drooled over while touring new construction homes.
The sale dates are:
Friday, June 8, 2012 9:00am – 4:00pm
Saturday, June 9, 2012 9:00am – 1:00pm
Click HERE for the link to more information on the dates and location of the sale.
P.S. This would be a great opportunity to “Stage” your home if you are planning to sell in the near future, or to furnish your new home!
When REALiTY BiTES, Bite Back!
Who said that the real estate market in the greater Seattle area is slow? In King County alone, there were 734 homes that sold for over $1 million! Of those, 135 homes were over $2 million, and 45 were priced over $3 million. Here are the top 5 most expensive homes sold in King County last year.
#5 – 9740 SE 35th Place, Mercer Island WA – $6,750,000
#4 – 9627 Lake Washington Blvd. NE, Bellevue WA – $7,030,000
#3 – 3248 78th Place NE, Medina WA – $7,250,000
#2 – 6301 NE Windermere Rd., Seattle WA – $7,999,999
#1 – Undisclosed Address in Seattle, WA – $9,000,000
Would you like to see your home on this list? If so, just give me a call and we’ll get it sold right away!
I wanted to throw in a plug for our in-house mortgage consultant who is very knowledgeable and friendly. The actual house hunting process is a bit more complicated, but at least the financing aspect is pretty easy. In REALiTY, there are fewer steps since step#8 is just Pete providing buyers with a status update! Getting a loan has never been easier!
When REALiTY BiTES, Bite back!
I often get calls from clients asking about the current value of their homes, given the state of the current housing market. This usually leads to an in-home visit and catching up on the good times (what? You didn’t have a good time with your real estate agent while searching for a home?). Eventually, the conversation turns back to real estate and I’m forced to talk about work. Read the rest of this entry »
It’s always a good feeling when a client that I’ve helped has something nice to say about my services. In the old days, my broker might get a nice letter in the mail from a client letting him know I didn’t screw anything up, and that I should be able to keep my job for at least another day. Nowadays, the web makes it easier to share those thoughts with the world, both good AND bad. Fortunately, I haven’t had any bad reviews (knock on wood).
Check out the latest review [Here] I received from a satisfied client on YELP.com!
I also happened to receive an award from Seattle Magazine for my work in 2011.
A big THANK YOU to all who I’ve helped this past year. If I can help you with a purchase or sale in 2012, give me a call. Let’s make this a great 2012!
When REALiTY BiTES, bite back!
What’s Green And Can Fit A Body Inside?
a). The Green Lantern’s body suit.
b). One of the pods from the movie “Invasion Of The Body Snatchers”.
c). The latest trend in home building.
Since this Blog is centered around real estate, you’ve probably already guessed that the appropriate answer is C (although A is technically correct and B is half correct since the movie was originally shot in B&W). Yes, I am referring to a trend that is considered “green” (not the color, but the effort to save our world by changing our lifestyles and taking our environment into consideration).
Could you be a pea in a pod?
The days of the McMansion are coming to an end. Small is big and Big is small these days. Pod housing is a growing trend, and for good reason. Not only is the footprint smaller and more energy efficient, but the manufacturing process can be streamlined, resulting in pre-fabricated kits which can be built quicker and with less waste byproduct.
The biggest hurdle for the supporters of this type of housing, is getting mass consumer acceptance. In other countries, minimalist housing is the norm (see video below).
I’m not sure if I could live in a 300 square foot apartment, but from the video above, it appears that the occupant isn’t sacrificing much!
What do you think? Could you live comfortably in a pod unit? Leave a comment!
When REALiTY BiTES, bite back!