Why You Should Work with a Full Time Real Estate Agent

Posted on September 14, 2015 by Jessica

With the advent of the internet and different broker and brokerage business models, there are a number of ways you can buy or sell a home in Tri-Cities these days. The key is to find a solution that works best for you and for the level of service you want and need.

Full service agents are generally those who work full-time in real estate, are connected with other agents and real estate professionals in the Richland, Kennewick and Pasco market, and we are professionals with a full set of buying and selling systems. Operating a real estate company is expensive and many of those full service agents do charge full commission to compensate for those expenses and to earn a living wage.

That is not to say you can’t get full service from a discount brokerage. However, you need to do your due diligence to make sure that what you want is what you will receive. With that in mind, below are some of the key elements we bring to the table as full service real estate professionals:

We have 25 years of combined experience with HUNDREDS of transactions under our belt – If you are a typical buyer or seller, you may participate in around five real estate transactions in your entire lifetime. Usually there are several years between those transactions. A lot can happen in the meantime. Just think about what that last several years has seen in terms of credit availability, market changes, law and process changes and even forms. However, a full-time real estate professional will tackle dozens of real estate transactions a year. Furthermore, since no two transactions are the same, a full-time real estate professional will be subjected to a number of different buyer and seller scenarios and needs to learn about each. Everything from Homeowner Association special assessments, view rights, easement issues, liens, and more – each provides a special learning opportunity for the full-time broker.

We have extensive process knowledge – Buying or selling a home is likely one of the most complex transactions of your life – one which requires lengthy contracts, multiple forms, disclosure statements, inspections, mortgage documents, title reports, insurance, deeds, and multiple professionals are needed to implement their part of the transaction seamlessly. Most people don’t have the knowledge to handle all their tax forms each year and rely either on an accountant or a step-by-step software program to make it through. There is no step-by-step software program for buying or selling a home due to all the complexities, local rules, and changes that must be adhered.

We are very familiar with local property professionals –a typical transaction can be touched by a number of different professionals:

Listing broker
Listing managing broker
Selling broker
Lender
Underwriter
Appraiser
Inspector
Title rep
Title examiner
Homeowner association
Local utilities
Escrow agent
County recording office

Understanding the role of each one, what will be needed from them and what you need to get into their hands and when is something that brokers who complete dozens of transactions per year understand. This knowledge is critical for making sure the transaction is completed as planned and on schedule.

We get the lingo – Do you know what a CMA is? Do you need a POA if you are going out of town? Should you be concerned if you are buying a home where the HOA is MIA? We would be! A full-time real estate professional who has been around the block understands this lingo and will interpret it for you.

We are the voice of reason – There have been many times when a buyer we have been working with falls in love with a home riddled with problems or substandard building materials or times when a seller wants to list their home for a price that will be detrimental to their listing. A broker who is strong and has research and market knowledge on their side will speak up. We research market trends each and every week, and can advise a seller when their asking price is too high (or low!) and what adjustments we should make. We can advise a buyer on what to ask for in an inspection response based on current demand and current market trends with the goal of keeping the transaction together while also looking out for our buyers’ best interests. Without being in the trenches every day, we wouldn’t have that understanding and our advice might not be as timely as it could be.

We have savvy negotiation skills – Because we know the current market trends and have our finger on the pulse of supply and demand, we are equipped to negotiate powerfully for our clients. There are many negotiating factors including, but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, and even who cleans the house. We love to negotiate and find the win-win solutions that bring the deal together with both parties.

Ongoing training and education is important to us – Although each state dictates the educational licensing requirements of any licensed broker or agent in the state, a full-time real estate professional takes this a step further, participating in real estate association-sponsored education and/or coaching. We make a commitment to stay up-to-date on any legal, form, and market changes so we always have the newest information. Our designations include, Accredited Buyers Agent (ABR), Senior Real Estate Specialist (SRES), Certified New Home Sales Professional (CSP) and Certified Aging in Place Specialist (CAPS).

What Buyers Need to Know

We have local knowledge on so many levels. As real estate agents there is a lot we keep track of on a local level – zoning and development, information on rental rules, water and sewer changes, rules regarding wells and septic systems, schools and district lines, challenges with faulty building products and geological issues, and transportation issues and changes. Not staying up-to-date on this local information would be akin to a doctor not keeping up with the American Medical Association Journal! As your real estate broker, we need to be prepared to provide information on what you might expect from your property in terms of your long-term quality of life and resale value. We need all the tools available to us to provide you with the information to make an informed decision.

We have the tools and relationships to help you find the best property for your needs. Did you know that sometimes the property that best meets your needs is not on the market at all? Homes that had cancelled or expired may not be currently listed on the MLS but they might be viable candidates for your needs. If the right home isn’t on the market, we use our resources to dig deeper. That may be connecting with an agent who has a listing coming on the market that might be a good fit, taking the time to contact homeowners whose homes may have been on the market some time ago, or utilizing the services of a title company to get addresses to send letters to, indicating that we have an active buyer who is looking in their area, for their type of home. Sometimes it takes work and time to find the right place to call home and you need a full-time real estate professional utilizing their resources to find it.

We know the professionals to call. When you have an inspection, the inspector’s job is to locate potential problems with the home. But then what? Should you investigate the problem further with a specialist? Call in a structural engineer or a pest inspector? We have helped our clients buy and sell homes of many a vintage in many a neighborhood. We always advise that buyers do their due diligence and have a variety of professionals on call to meet your needs with the quick turnaround these situations usually warrant.

We know how to write an offer that will get noticed. Believe it or not, it is not always about the price that is offered. We build a relationship with the listing agent to learn what is important to the seller, and armed with that information, we can construct an offer that takes both sets of needs into account which is more likely to result in success for my buyers. You need an agent who has a large bag of tricks – something that a full-time real estate professional can deliver.

What Sellers Need to Know

We help you price your home at market. We cannot tell you how critical this is for selling your home. Although some may prefer to simply use a popular property website to determine the price, according to the National Association of REALTORS®, those estimates can be up to 35% off. This could result in a seller thinking their home is worth $500,000, but it should really be priced closer to $325,000 in order to get attention from buyers. Every day we review the available inventory of homes, what has just come on the market and what has gone under contract to get a feel for the ever-fluctuating supply and demand. If supply starts to exceed demand, sellers need to be ready to make an adjustment to meet the market. If demand is high, then let’s use that to our advantage and employ a different strategy. But an online website won’t give you that advice based on current demand. A website isn’t going to be able to evaluate your view against your neighbor’s home that might have sold last week or how the hardwood floors in your home compare to the hardwood floors in a home a half mile away that sold six months ago. But we can because we know the inventory. We have the tools. And we use them all to meet your goals and get your home sold.

We employ listing syndication on dozens of websites to get your home noticed. We don’t just rely on the MLS to get your home in front of the largest potential buyer pool. We provide our sellers that extra visibility by way of listing syndication – having your property and photographs broadcast out to dozens of different property search sites. This way we can be sure that if a potential buyer is searching in Kalamazoo or Kentucky, your home will appear on their search results. You never know where the buyer for your home will come from!

Whether you are buying a home for the first time or selling your home to relocate or right-size, trust your most valuable asset to a full-time professional chock-full of expertise. We wouldn’t buy or sell a home with anyone but an expert and neither should you.

Call us anytime; we love to discuss Tri-Cities Real Estate Market!

Jessica Johnson, 509.947.2230 Jennifer Cowgill 509.947.5670

FOR BUYERS: OVERVIEW ON LOANS AND LOAN OFFICERS

Link

I found a great article on understanding the loan process of home buying. Find out what the role of a loan officer is, how to find one, and what questions to ask them. As an Accredited Buyer’s Representative (ABR®) at Referred Real Estate, our goal is to make sure you are prepared for the home buying process. Please let us know if you have additional questions. Call myself, Jessica at 509-947-2230 or Jennifer at 509-947-5670.

http://massrealestatenews.com/10-questions-people-forget-to-ask-their-loan-officer/?om_rid=AAC4qn&om_mid=_BVJvZlB9Ai7$lQ&om_ntype=REBACHSWeekly

Tri-Cities Real Estate Market Update, December

Posted on January 21, 2014 by Jennifer

The end-of-2013 Tri-Cities real estate market information has just been released. Comparing December 2012 with December 2013 note that although median sales price decreased just a bit, the number of homes under contract and sold have seen significant gains.

2013q4update1

The numbers as a whole represent a year of modest growth. Below is the number of homes available on the market for both 2012 and 2013. As you can see, in April 2013, the number of homes available in the Tri-Cities began to decline. A smaller supply of homes with steady demand will cause home prices to increase, in this case modestly.

2013q4update2

The below graph represents median home prices in the Tri-Cities over 2012 and 2013. Note that the 2013 line is almost consistently over the 2012 line, representing a small increase over 2012.

2013q4update3

If you are interested in hearing more about our market, please give us a call: Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

Finding a Diamond in the Rough – A Guide for Home Buyers

Posted on December 17, 2013 by Jessica

The Tri-Cities real estate market is healthy with houses selling at a steady pace. The National Association of REALTORS® predicts that prices should rise about 6% next year nationally with interest rates rising to 5.8%. Those stats may have potential homebuyers who had planned on moving next year scratching their heads and wondering if the time is right to make a move now. But what if they can’t find exactly what they are looking for?

There are buyers in the market right now who are still looking for a “deal” despite the health of the market. And other buyers who are out looking but just aren’t finding that house that feels “just right.” Should they be looking at homes that have been on the market for six months, nine months, a year or more with the hopes of getting a deal and doing an extensive renovation? Or if scores of other buyers have bypassed these homes, should you stay away too?

Home improvement shows have made the idea of purchasing something unappealing and retrofitting to the buyer’s unique tastes seems appealing – even easy! As you determine if a home that has languished on the market is really a diamond in the rough awaiting polishing, consider why the home may still be on the market. Unless these problems are solved that caused the home to be on the market so long are fixed, you could run into the same problem when it is time to sell unless you make the required changes.

Homes that are on the market for a long time usually have a common list of challenges:

Overpriced property. This is the easiest obstacle to overcome in terms of fixing the problem – if the seller is willing. Even the ugliest property will sell if it is priced right. The key is to widen the buyer pool as much as possible by lowering the price to what the pool of buyers – or at least one of them – will pay. Sellers may steadfastly hold to their price, but the bottom line is if the home has been on the market for months, generally the price needs to be reduced to meet the market.

As a potential buyer, before purchasing a property, it is important for the buyer’s agent to do a comparative market analysis (CMA) so the buyer will have an estimate of market value before purchasing to make sure they are making a sound investment.

Floorplan/Flow is awkward. Is the master bedroom two floors away from the other bedrooms? Is there only one bathroom for the whole house? Is the kitchen small in proportion to the rest of the house? Are the rooms small with little closet space? Floorplan/flow challenges such as these may be easy to overcome with a remodel. It is important to do your due diligence first and determine a remodel is possible – and within your budget. Also, features such as multiple flights of stairs will keep certain buyer pools from considering the property (such as seniors or perhaps parents of young children) and may not be easily remedied by a remodel. Furthermore, there may be zoning restrictions if altering the outside of the home is required and should be investigated before finalizing the purchase.

Location location location. Are there power lines nearby? Is the home located beneath the flight path to the airport? Is the home located on or nearby a very busy street? These types of challenges are not ones that can be altered. Therefore, if the home is located near something that others might find disturbing or a nuisance, this should be reflected in the price of the property to attract the largest buyer pool – both now and down the road when it comes time to sell.

Dated, but easily updated. If the home is in a good location and everything else looks favorable, but the rust-colored linoleum and pink sink and tub in the bathroom is giving you pause, then this may indeed be the diamond in the rough you have been looking for! If the rest of the “bones” of the house are desirable such as general house layout, roof, supports, etc and the updates are mostly cosmetic or involve moving just a few non-supporting walls, then you may have found your home.

If you are not afraid to expend a little elbow grease and have a renovation budget to get the home of your dreams, you may be richly rewarded! If you have been eyeing a listing that has been on the market awhile or would like to learn about potential diamonds in the rough in our area, give us a call! Jennifer Cowgill can be reached at (509) 947-5670 or Jessica Johnson at (509) 947-2230.

Tri-Cities Real Estate Market Update, October

Posted on November 18, 2013 by Jessica

The September and October Tri-Cities real estate market information is hot off the presses! This has been another two months of modest growth over the previous year.

The below chart shows the data comparing September of 2012 and September of 2013.

sepmarketcomp01

The October data is also newly-available:

octmarketcomp01

According to the National Association of REALTORS®, the Kennewick-Richland-Pasco metro area is seeing a upward trend in new home construction with 1,661 current building permits through June 2013. This is 36.7% above the long-term average of 1,215 permits.

Did you know that the Tri-Cities is only behind Seattle and Portland for the number of building permits in Washington and Oregon? In August, 2013, Seattle issued 6300 permits, Portland issued 3970 permits and Kennewick-Richland-Pasco issued 1000 permits. New construction is strong in our area.

If you are interested in hearing more about our market, please give us a call: Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

Sources

Tri-Cities Real Estate Market Update – Second Quarter 2013

Posted on September 17, 2013 by Jessica

The second quarter (plus July) numbers are available from the MLS. Our second quarter number of homes sold is up significantly over 2012 with 893 homes sold in 2013 versus 815 in 2012. The number of homes on the market has also decreased (1392 homes on the market in July of 2013 versus 1456 homes on the market in July of 2012), meaning demand for the homes that are on the market has increased. An increase in demand results in an increase in price. Comparing July of 2012 versus 2013, average sales prices are up 2.6%.

The number of homes under contract is also up over last year significantly. Comparing July 2012 versus July 2013, the number of homes under contract have increased 26.2%. The first seven months of 2013 pendings were up an average of 13.48%.

According to the Tri-City Development Council, between the 2010 Census and 2013 estimates, the population has increased in this area about 5,000 per year. Remember, people need a place to live!

Rising Interest Rates and Homeowners – What You Need To Know

Posted on September 4, 2013 by Jessica

According to Bankrate.com, 30 year mortgage interest rates were at 4.74% week before last from 4.57% the week before) and are up 1.5% since the lows hit in December of 2012. This is also higher than one year ago when mortgage rates were 3.91%.

While this may not seem like a significant increase, it can have an impact on buying power. For example, on a $200,000 loan, the change in interest rates from 3.91% to today’s 4.74% is $98 more per month or $35,280 over the life of the loan.

Interest rates are expected to continue to rise which has caused some buyers who were previously on the fence to get into the buyer pool now to the delight of sellers. If you have been considering selling your current home and moving to something larger, in a better location, or something with higher-quality finishes, this would classify you as a “move-up buyer” and rising interest rates may affect you more than other types of seller/buyers. Here’s why:

First-time homebuyers don’t have a home to sell. Their buying power certainly ties into interest rates, but the financial impact is less when the loan amount is lower. For example, on that $200,000 loan example above, the difference was $98 more per month. However, on a loan of $140,000, that difference is lessened to $68 per month.

Downsizing buyers may be saving per month after downsizing as they may be using the equity in the more-expensive home they are selling to put a larger down payment on the home they are downsizing to. For example, let’s say a retired couple is selling their home they have lived in for 15 years. They will be selling it for $300,000 and have $100,000 in equity in it. They plan on buying a home for $209,000 and they are putting their $100,000 as a down payment, leaving them with a loan amount of only $109,000. The difference between 3.91% and 4.74% for this loan amount is $53 per month.

However, the downsizing buyer still needs to sell their home. As interest rates rise, the number of buyers who can buy their home at that price will shrink. Therefore, downsizing buyers do still need to watch rates.

The move-up buyer needs to keep a close eye on interest rates as they are considering their move. For example, let’s say the move-up buyer has a home they are going to sell for $200,000 and they want to buy a home that is listed for $300,000. In this case they have about $50,000 in equity in the first home. This means they will take out a loan of about $250,000 for their move-up property.

If interest rates go up as in the 3.91% to 4.74% example, this can affect the move-up buyer two-fold. First, the buyer pool for their home they are trying to sell will shrink, making it more difficult for them to sell (although it can be argued that the same thing will happen with the home they wish to purchase) Second, the amount they would need to pay each month for their mortgage will increase (by $122 per month!)

The bottom line? If you are thinking about buying or selling, interest rates will definitely have an impact on the home you can purchase and how many buyers are available to purchase your home if you are trying to sell. Move-up buyers should consider the number of buyers who are in the market right now, wanting to buy, as this could be a great time to sell and find a great deal at a good interest rate. But time is of the essence. Please call us to learn your options and what moving now versus moving later could look like. Please call Jessica at (509) 947-2230 or Jennifer at (509) 947-5670.

All mortgage examples are for a 30 year fixed rate mortgage and payment amounts include principal and interest only. Downpayments, homeowners insurance, property taxes, private mortgage insurance, closing costs, etc have not been factored into these examples.

Interest Rates

Posted on June 18, 2013 by Jennifer

We have been getting a lot of inquiries lately about interest rates. As you may or may not know, interest rates have been quietly creeping up since December of 2012. At that time, the rates for a 30 year fixed rate mortgage were at a record of 3.35%. The last few weeks, however, rates have been hovering around 4% or more for the first time since November of 2011. Just how much of a difference can this .65% increase make? You might be surprised!

Below is a table which illustrates the corresponding monthly payment for a home purchased at our first quarter, 2013 median home price of $181,700. This assumes a 20% down payment with principle and interest only on a 30 year fixed rate mortgage.

If you are in the market for a home and you see that mortgage interest rates have gone up a small fraction of a percent, is that cause to panic and change direction? Of course not, but if you are in the market for a home, it does make sense to establish a close relationship with a lender right away who can quickly spot interest rate trends and get you “locked in” if conditions are favorable and you are within days or hours of submitting your loan application.
Do you see how just by waiting six months can diminish a buyer’s buying power? The difference between 3.35% and 4% is $53 a month or over $19,000 over the life of the loan!

Currently, the rates are being kept artificially low due to the government buying bonds in an effort to stimulate the economy. However, with the economy growing stronger, the Federal Reserve is expected to cut back on buying bonds, causing rates to rise. Chief Economist for the National Association of REALTORS®, Lawrence Yun, predicts interest rates could go as high as 5% by the end of the year. At our median home price of $181,700, that could equate to a monthly payment of $87 more per month than where rates are right now – or $31,320 over the life of the loan.

If you think you may be on the move in the coming weeks or months, give us a call. We can provide you scenarios based on interest rates now and what your situation may look like with different interest rates in place so you can make informed decisions. Please give us a call – Jessica (509) 947-2230 or Jennifer (509) 947-5670.

Source: http://www.forbes.com/sites/morganbrennan/2013/06/05/how-rising-mortgage-rates-could-affect-the-housing-recovery/

Tri-Cities Real Estate Market Update First Quarter 2013

Posted on June 14, 2013 by Jessica

The National Association of REALTORS® has released their market statistics for the Kennewick-Richland-Pasco area first quarter 2013. Our area did see a modest increase in median home prices year over year (comparing quarter 1 of 2012 with quarter 1 of 2012) of 2.3%, putting our median home price at $181,700.

Nationally, median home prices rose 11.2% comparing quarter 1 2012 with quarter 1 2013, but remember, many areas of the country saw big declines between 2009-2011 and are still not back up to pre-recession levels. In fact, the National Association of REALTORS® also tracks “Housing Equity Gain” which reflects price appreciation over 3,7, and 9 year terms. The 7-year Housing Equity Gain for the US total is still -$40,867 although Kennewick-Richland-Pasco reports a 7 year Housing Equity Gain of +$29,700.

The below graphs indicate the snapshot of monthly inventory (number of homes on the market) for 2012 vs the first few months of 2013. Our inventory has remained fairly consistent with last year.

The below chart illustrates the year over year number of solds in the Tri-Cities comparing 2012 with 2013. The number of solds so far this year is 900, which is modestly above the 807 sold year-to-date in 2012.

Additionally, NAR tracks building permits. Compared to the previous year (which is actually a sum of the past 12 months of building permits issued), single family housing permits are up 28.4%. (as opposed to 25.6% nationally). This indicates construction is on the rise, which is an indicator that inventory levels have stabilized.

If you have questions on what these figures mean to you, please don’t hesitate to give us a call. You can reach Jennifer Cowgill at (509) 947-5670 or Jessica Johnson at (509) 947-2230.

Sources:

http://www.realtor.org/sites/default/files/reports/2013/local-market-reports-2013-q1/local-market-reports-2013-q1-WAKennewick.pdf

http://tcarmls.com/wp-content/uploads/2013/05/STATS-FOR-2010-2013-MEDIAN.pdf

Multi-Generational Housing Making a Comeback

Posted on January 4, 2013 by Jennifer

Studies have been done on it. Books have been written about it. And now homes are being built or remodeled to accommodate it. What is it? A return to the multi-generational household!

While the last few decades have seen a decline in multiple generations living under the same roof, that trend tends to be reversing as more and more adult children are moving back home and homeowners are taking in their aging parents.

Sharon Graham Niederhaus, co-author of Together Again – a book about multiple generations living under the same roof, interviewed over 100 families who are living in this manner. She noted, “The balance and proximity and privacy is the key to success,” and indicated that “independence” and “separate facilities” such as a kitchen, bathroom, and separate entrance are essential to living together in harmony.

For hundreds of years it was not uncommon for several generations to live together although the trend towards smaller family units began to take hold after WWII. According to USA Today, the number of multi-generational households in our country is currently the highest since the 1950s. The current trend is directly related to the economy, but many have noted the positive impact of having either their parents or adult children move back home.

PulteGroup Home Index (done by PulteGroup Inc, a national homebuilder) recently did a survey of homeowners with children 16-30. Fourteen percent indicated that they have one adult child who has moved back in with them and a whopping 31% expect that an adult child will return back home in the future. They also interviewed homeowners with living parents and found that 15% indicated a parent was already living with them and 32% expected that at some point they would be living with a parent.

In both cases, the number of multi-generational homes will double in the future if those numbers are correct. So how will current homeowners accommodate the additional people? Of the homeowners who were currently living with a parent or planning on it in the future, 72% planned on either renovating or purchasing a home with a floorplan that would work more effectively for the expanded family. 49% of the homeowners who were either living with adult children or planned to expected to renovate or move.

Builders across the country are beginning to see and provide floorplans which reflect this trend, and Devoted Builders is no exception. In fact, in 2011 the National Association of Homebuilders did a survey of builders and what they expected homebuyers would want in terms of new home amenities by 2015. They determined that 60% of custom new construction homes would have two master bedroom suites by 2015.

Here in the Tri-Cities, we have had several clients in the last few years who have had several generations living in the same household. We have seen adult children living with aging parents so they can help take care of them ensuring a higher quality of life and care. Also recently we have seen younger adults moving into Mom and Dad’s house to either go back to school or save money for a new house or simply due to loss of employment.

In our area most homes with multi-use spaces are in high demand, command higher prices and see a shorter time on market, especially if priced in a price range which is seeing a high turnover.

Our advice? If you are thinking you might need some extra space in the coming years, plan for it now. With interest rates and lower prices, it is a great time to either buy the home you will need in the future, begin planning for a remodel, or even begin thinking of building. We are here to help and advise. Please call Jessica a call at (509) 947-2230 or Jennifer at (509) 947-5670 – we would love to hear about your plans!

SOURCES: