Feb. 18, 2016

Bridge Loans: Buy First, Sell Later

So you've found your dream home and want to write an offer or maybe you are just thinking about moving. Either way, if you are like many homeowners, you can't buy without selling. You've heard about this crazy real estate market and how hard it is to buy a home due to all the competition. The idea of selling your home first and possibly being stuck without a place to live seems like a logistical nightmare. What can you do? This is where a bridge loan or a HELOC comes in handy. Most people tend to use HELOC's but they do have limitations. Today we are going to talk bridge loans.

What is a bridge loan, and how can you benefit?

Bridge loans help make it affordable to financially span the time between when you buy a new home and when you sell your current home.  There are several types of bridge loans, the first two in the list below are the most common and the third is a new product offered by one of our lending partners.

Leverage Your Equity:  You borrow against the equity in your current home and use that money as the down payment on your new home. This type of loan requires that you have sufficient income to qualify for the mortgage payments on both your current home and your new home.  The bridge loan allows interest to be deferred to the balance of the loan (so the balance grows monthly based on simple interest) but your lender will still calculate the payment into the qualifying ratios.

Leverage Your Equity with Combined Financing:  Similar to the first type but in this case you use a single loan to cover what you need to borrow to buy your new home. The equity you have in your current home is leveraged to cover the down payment requirement on your new purchase (the lender’s loan-to-value limits).  When your existing home sells, you pay down the balance of the loan and end up with a regular 30-year fixed rate mortgage.  Your lender will usually re-amortize your loan, which means they recalculate your monthly payment based on your newly reduced principal balance.  This option does not change your payment or obligation with the lender on your current home.

But wait there is more....

Cross Collateral Bridge Loan* : This is a third type of bridge loan.  It allows you to borrow against the value of your new home based on how much equity you have in your present home. You can secure a fixed-rate loan to cover the down payment on your new purchase without changing the payment or obligation to your current lender.  Being able to leverage the equity in your current home in this way means you can make an offer on the new home without contingencies.


Most people don’t have the income to qualify for two mortgage payments long term. That’s why your lender will take a look at your financial situation and may be able to exclude your current house payment when evaluating your loan application.  They will want to make sure you clearly have the ability to handle the temporarily high payment obligation until your current home sells. If you qualify, this option can work out really well – especially in the current real estate environment. It is a quick and easy calculation to determine if this option will work for your circumstances.


Bridge loans can also be used to finance the construction of a custom home, allowing you to live in your current home while your new home is being built.

If you are considering a move to a new home and don't want to sell the one you have until you have found the new one, consider some of these financing options. They can be complex, but with the help of our lending partners we can help you find the best solution for you and make your home transition as painless as possible.

The above loan information was provided by Sheila Bryan at Caliber Home Loans. Sheila.bryan@caliberhomeloans.com 425-605-3110, MLO-175890

Jan. 13, 2016

New Construction 2016

New Construction

Recently I attended a Windermere event to listen to a panel of experts from the local builder community. The three panelists were Eric Campbell of MainStreet Property Group (formerly of Camwest Development), Todd Bennett, CEO of BDR Capital Partners and Ron Boscola, GM of Murray Franklin Companies. The discussion was facilitated by Windermere's Chief Economist, Matthew Gardner. It was a great discussion and they covered a number of topics but there were a few take-aways I wanted to share.

  • This is the first time in decades that there has been no master-planned community in King County in the works. These large developments bring a lot of housing stock on the market and, although we desperately need it now, we won't have that kind of volume hitting the market all at once. This is mainly due to the price and scarcity of large tracts of build-able land and the very long length of time it takes to permit such a project. 
  • There will be no movement of the Urban Growth Boundary so any development that takes place will be on existing lots. There are areas like Shoreline, Lake Hills and Finn Hill that have large lot sizes that could be re-zoned to allow higher density housing if the political will were there. 
  • After the recession, builders are much more conservative with their money. They put more down and pay cash when possible. They also scrutinize land purchase opportunities much harder. If the numbers don't work within their business model, they will pass. The cost of land is the biggest hindrance to more new construction. 
  • Ron Boscola of Murray Franklin talked about the difference in price growing between their resale homes and their new homes. It used to be that their new construction got a 15% premium over their resale homes. That number has increased because they don't reuse the same floor plan over and over again like they did in the past (apparently they built one of their plans 200 times). He said every home built now is different and new homes have become quite innovative. They also build homes specifically for the demographic of the area they are building in. 
  • As far as trends go, they see more millennials getting into the market despite predictions that they would be forever-renters. The early millennials are starting to have kids and that changes their home ownership needs. They are looking for good schools in locations that provide the shortest commute time they can afford. They still want to be close-in to where the action is but they are looking for a suburban setting to raise a family.
  • Traffic is an issue for everyone and home buying decisions are made around that factor. People will pay more to avoid traffic.
  • They all predict we'll see more new homes this year. New growth will be in the north (Bothell) and in the south. New construction in the cities will mostly be 1 for 1 infill.

 

Posted in New Construction
Oct. 21, 2015

Market Report for September 2015

September 2015 Market Report Graphic

Lately, there has been a lot of talk about interest rates (again). Will they go up? Will they go down? Not even the Fed seems to know for sure but mixed economic data and fears about a global economic slowdown kept them from raising rates at the September meeting. More and more economists are moving into the camp that believes we won't see a raise before March of 2016.  Regardless of when it happens, a quarter point hike will still leave interest rates at historical lows. Some experts believe rates would have to rise at least 2% before buyers would have to move down from their current price range. Speaking of, we've included this very interesting chart showing how much interest rates effect the price of the home you can buy. 1985 looked pretty gruesome!

Happy Halloween!

Interest rates

September 2015 Eastside Statistics

September 2015 Eastside Statistics

Posted in Statistics
Sept. 21, 2015

Market Report for August 2015

Hopefully you are as excited as we are that school is back in session (especially those of you in the Seattle School District). Not only are the kids back in school but our offices are full again with everyone back to work after our very lovely, warm summer. Although August felt slow to many of us, sometimes what we feel and experience as individual brokers and what really happens as the numbers tell it, are two different things. Despite feeling sluggish, August sales knocked it out of the park. The Eastside had the second highest number of August sales on record with 1,303 pending sales. Only 2005 was higher by just a small margin. Seattle had the lowest number pending sales since 2011 at 915 but most likely due to low inventory, not for lack of demand.

For those of you considering selling in the near future, hearing about the lack of inventory and the escalation of prices can put dollar signs in your head. Naturally, as the market heats up sellers tend to want to push the price that they list their homes higher.  But be forewarned, we often say that you can't under-price a home in this market, it will be pulled up organically to the market value through competition, but you can definitely over price a home and this can have severe consequences on what a house finally sells for. As an example, here are the stats for Eastside closed sales (not pending) for August.

Of the 865 closed residential sales in August:

  • 32% (277) sold over list price with no change in original list price. The amount over list price averaged 4.76% and the median was 3.59%.
  • 20% (173) sold at list price
  • 20% (170) sold for less than list price with no change in original list price. The amount under averaged 2.96% and the median was 2.36%
  • 28% (242) sold with a price change.

This means that 48% of the closed sales in August sold for under their original list price and half of those had to drop their price first. Sellers should be careful of getting too crazy with their home's value. There is strategy involved in appropriately pricing your home. Buyers are well educated about value and they won't pay for an over priced home, no matter how low the inventory. On the flip side buyers should take heart that not every home is a heated battle.

Posted in Statistics
Oct. 28, 2014

How long will it take to sell my home?

There is no easy answer- some homes sell in a few days, others may take several months. Recognizing the key factors influencing a sale can give you significant control over market time.

Location

Location is the single greatest factor affecting value. Neighborhood desirability is fundamental to a property's fair market value.

Competition

Buyers compare your property against competing properties. Buyers interpret value based on available properties.

Timing

The real estate market may reflect a seller's market or a buyer's market. Market conditions cannot be manipulated; an individually tailored marketing plan must be developed accordingly.

Condition

Property condition affects price and speed of sale. Optimizing physical appearances and advance preparation for marketing maximizes value. 

Terms

The more flexible the financing, the broader the market, the quick the sale and the higher the price. Terms structured to meet your objective are important to successful marketing. 

Price

If the property is not properly priced, a sale may be delayed or even prevented. The 425 Group's comprehensive market study will assist you in determining the best possible price. 

Oct. 27, 2014

Eastside Housing Statistics for September

Our September numbers are in and show a market that still has very low inventory and high demand. It's not the white-hot spring market but it's still very active. The buyers are out looking but there aren't as many homes to buy. One key difference between fall and spring is the attitude of the buyers. There seems to be less willingness to dive in to multiple offer situations with crazy offers and pre-inspections. Pre-inspections in particular seem to be significantly reduced in number.  Many buyers have done several without a house to show for it and have decided that enough is enough.

 

A few key stats for the September market...

  • Pending sales are up 6% from a year ago
  • Highest number of pending sales since 2005
  • Pending sales are 21% higher than the 10 year average
  • Inventory shrank 8.6% from August and 4% from a year ago
  • Median sale price is up 5% from last year to $661,197
  • We currently have a 2 months supply of inventory which is half the 10 year average of 4 months

What does all this mean? With low inventory, strong buyer demand and interest rates below 4% (not what we were expecting), it couldn't be a better time to sell a home. Market activity tends to slow down around the holidays but that means less competition for sellers who put their homes on the market. For buyers, it's still going to be slim pickings and lots of competition for the best homes. As always, supply and demand will vary among the different areas and price ranges.

 

By: Kirsten Robertson

Statistics source: Windermere Real Estate
 

Posted in Statistics
Oct. 20, 2014

Fall Clean Up Tips

Fall is here!  The kids are back in school, the leaves are turning, and a chill is in the air. The Seahawks are back on the field and hopefully headed for victory. As a home owner, it’s time to start cleaning up your yard and putting it to bed for the winter.  
 
CLEAN OUT THOSE GUTTERS, but be sure and wait until all of the leaves have dropped.  Check for leaks and make any necessary repairs before the cold of winter comes along.  This will help to ensure your gutters are up to the task when the rain really starts to pick up.

RAKE THOSE LEAVES, but don’t worry about getting every leaf, especially in your garden areas.  They will help insulate plants, and become valuable nutrients as they decompose.  
 
SEED.  Fall is the best time to thatch, aerate and reseed your lawn. The fall rains will keep the seedlings moist and the grass growing. The rain and early nightfall will keep kids and pets inside rather than running over the new lawn trying to take hold.  
 
FEED.  Fertilizing in the fall is fantastic for your lawn.  Using slow-release organic fertilizer allows the grass to soak up much needed nutrients after a long and stressful summer.
 
WEED.  Weeds germinate in the fall. Put down a thick layer of organic mulch. It keeps the weeds down and makes your yard look beautiful. Cedar Grove and Pacific Top Soils both have great garden mulches.
 
MOW!  If you really want your yard to look great, make an effort to mow twice a week with the blade set at 2.5 to 3 inches through mid-October.

PLANT SHRUBS AND BULBS. Fall is the best time to plant shrubs and bulbs, the cooler weather means the plants will spend their energy putting out roots instead of top growth which means a larger, more established plant come spring and summer. The fall rain keeps them watered too.

 

Aug. 20, 2014

New Modern Listing in Snoqualmie

Formed of steel, glass and rock, a dramatic Modern home perched on the hillside overlooking 21 acres of Tate Creek and the cleared pasture beyond. Designed by Dave Thielsen Architects and constructed by Chris Paulsen, this is a home like no other with 3 bedrooms and 2 baths (3 total baths-two 3/4 and one 1/2) in 3,900 sf of light-filled space. Built-in maple cabinetry and mill work fills every room. Mt. Si and the Cascades define the view while the home, nestled in the trees, provides for an unparalleled connection to the outdoors.  Offered at $2,998,000.

Click here for listing details....

 

Posted in Modern Homes
July 15, 2014

Juanita Beach Park Friday Market

Buy local - Support your community! 

Market Season: 

Fridays, June 6 to September 26 2014 

(No market on July 4th)

 

Market Location: 

9703 NE Juanita Drive

Kirkland, WA 98034

 

Market Hours: 3pm to 7pm

Located at the Juanita Beach Park, a visit to the market is a wonderful way to start your weekend!

 

Juanita Friday Market features a wide variety of delicious fruits, beautiful flowers, fresh local produce, handmade crafts and products all grown/produced in the state of Washington.

 

                 

 

June 27, 2014

Kirkland 4th of July Celebration

Don your stars, stripes and red, white and blue to join in the fun at Kirkland’s annual Fourth of July festivities! The community Independence Day celebration features a “decorate to celebrate” event for kids at Marina Park Pavilion, followed by a parade, picnic in the park, and live music. The evening finishes off with a fantastic fireworks display over Marina Park with viewing from Kirkland’s bountiful waterfront parks.