Team Reba Real Estate

We just put back on market an adorable little 1960’s rambler up in Edmonds with a new price point.  The house has several all new structural elements so it’s truly move-in ready!  Updates include new structural beams in the crawl space, a 2-year old roof, water heater, and an updated electrical panel.  Don’t underestimate the value of an updated panel - these usually cost upwards of a couple thousand dollars to have replaced and this one was done by a professional and the permit info is available onsite. Also offered is a 1-year home warranty through American Home Shield.  And, it a cute house to boot!  Check out our online photo series here.

Yes, I get to go through the same fun stuff that my clients go through since I’m buying a new house and selling the one that live in now.  Even more fun for us is that we may get to be on HGTV’s show House Hunters!  I heard from the contact there the other day that they’ve approved a segment with me buying this house and, believe me, the change that will happen with this house between buying it and the 3 month follow up will make for some good TV.

We’re considering keeping the boom-boom room though because it’s just too fun to get rid of… it’s not what’s pictured here.  This is the living room which will get a new floor (wide plank maple) and some other cosmetic updates.

Gotta love the electric blue carpet (not!) in the master bedroom.  Also slated to be removed immediately… and changed to a more neutral carpet and perhaps a fun color on the wall instead which is waaaayyy easier to change later on.

Do you have a broken ARM? (Adjustable Rate Mortgage)

Next year, over a Trillion dollars of Intermediate-term adjustable rate mortgage will have their initial interest rates adjust! Is now the time to cut off your arm? Maybe, but maybe not.

The key to this question is finding out exactly what your arm will do when it adjusts.

To help determine this, a few definitions are in order:

* Index: This is the basis for determining the interest rate. The most common indices are the 1-year Treasury Index, Libor Index, Cost of Funds Index and MTA (monthly treasury index).
* Margin: The margin is a percentage added to the Index to determine your interest rate. Index + Margin = Interest Rate.
* First Adjustment Cap: This cap limits the amount the interest rate can change at it’s very first adjustment.
* Annual Rate Cap: This limits how much the rate change year over year, after the first adjustment.
* Lifetime Rate Cap: This limits how much the rate can change over the life of the loan.

When your arm rate adjusts, it will be based on the index + margin, subject to the caps. For example, say you have a 5/1 arm adjusting next year. You have been locked-in at a phenomenal 4% rate over the past five years. Your loan has a Libor Index with a 2.25% margin, a 2% first-adjustment cap and a 2% annual cap. If the Libor index were around 5% at the time of adjustment, your new rate after adjustment would only be 6%! That’s lower than today’s prevailing 30 year fixed rates.

Huh? Let me explain:

Your rate is the sum of the Index + Margin, subject to caps. So a Libor index of 5% plus 2.25% = 7.25%. But in this example, your loan has a 2% first adjustment cap. So if the initial rate were 4%, the highest the rate could go at the first adjustment is 6% because it is limited by the 2% cap.

But what if your loan had a first-adjustment cap of 5% (as many do)? Then your rate would adjust to 7.25% (Index of 5% + 2.25% margin).

Should I refinance now? I would say that depends on how much your first-adjustment cap is. If you have a 2% cap, you’re probably not in any immediate danger of a whopping jump. But if your first-adjustment cap is higher, you may want to step up the process.

If I let my rate adjust, how is my payment calculated? When your rate adjusts, your new monthly payment will be calculated on the new rate, the remaining term of the loan, and the remaining balance of your loan. If you have paid down the principal balance on your loan, your payment may not jump as much as you think!

Eric’s Rate Forecast: All of the turbulence in the financial markets may have a silver lining. The slowdown in the national real estate market combined with market instability has increased the possibility of an economic slowdown or even a recession next year. Interest rate follow the economy, so there is a growing probability that we will see interest rates decrease over the next year.

If we’re lucky, rates will look very favorable at just about the time you need to decide whether to refinance or to hang on to your arm.

So take a closer look at your arm. It may not be broken after all!

Burien Considering ADUs

For any member interested, Burien is researching the potential of allowing Accessory Dwelling Units in the city.

This notice came from the Master Builder’s Association and is a precursor to what will be similar to the ADU option that the City of Seattle has begun in areas of South Seattle. While some people may not like the idea of ADU’s I personally view it as an opportunity for cities to offer additional and more affordable housing options, something that we need desperately here in the Puget Sound region. Particularly so in close in areas such as Seattle.  Affordable living options near job centers can help reduce congestion, provide much needed housing for those that are in lower wage jobs (restaurant/tourism) in the city, improve options for multi-generational housing needs, and give homeowner’s options in having supplemental income to offset the increased price of housing in these areas.

A while back I wrote this article about vFlyers (virtual flyers) where I blasted agents for clogging up my email with what I deemed to be spam.  Well, ok, now I may eat a little bit of those words because I just found a house that I think I personally want to buy.  Granted, the house came up in a town I wasn’t really considering but it’s close enough to some of the areas that I’ve been thinking about moving to that after my first “oh great, another spam” wore off I took a closer look and discovered this house met a lot of the requirements I had for my next place.

My own personal goals and some of my business goals could all be met for several years in this house.  It’s got 6 bedrooms which is double what my current home offers which means that me and my team could all have our own office in the house, rather than sharing one large bedroom converted to an office.  I’d be going up about 800 square feet in home size and doubling my lot size which will make our pets (especially the 3 dogs) very happy because they’ll finally get some yard to get their paws into.  We’d also get an extra garage space (from 1 to 2) along with an off-street parking area for Michael’s truck (which we use to transport staging equipment) and an area in the walk-out basement that could be used for storing all of our staging equipment (saving us money on storage now) and still allowing space for a workout room and a possible wine cellar.  All of this will be available to us at just under half the price of what my current home is worth because we’ll be out of the middle of one of the more expensive areas of the City of Seattle.

Will I miss my beautiful home in the city?  Absolutely!  I’ve got 3 stories of gorgeous views over Ballard, the islands, and the full Olympic Mountain Range.  But, the main impetus for my move is because it will allow me to downsize my life to allow me to help my parents out more in Kansas. My dad was disabled in the accident and I’ve always said that I would be there for my parents should they need my help as they aged. This stepped that timeline up quite a bit but I want to live up to my promises - and, in the end, my dad is waaaayyyyyy more important than just a piece of real estate.

If you know anyone looking for a home in the city here are a couple of shots of my place.  They’re looking at the house from the north side - you can see it’s a 3-story property. It will be going on the market soon.  It’s a 3 bedroom, 3.5 bath (all bedrooms have a private full bath), 2220 sqft home with a 1-car garage and space for 2 offstreet parking areas.  Anyone interested can contact me directly.

One of our other contributors, Gerald Grinter of G2 Insurance, wrote an article recently about how this is Life Insurance Awareness Month.  Besides life insurance I would suggest reviewing ALL of your insurance needs be it Long Term Care Insurance (often called LTCi by in-the-know professionals), disability, health, etc.  Insurance has been on my mind a lot since my parent’s accident back in March of this year.  If you want to see what a damaging accident looks like check out the photo of my parent’s car at the impound where they took it after taking my parents to the hospital.  We nearly lost my dad that day and both he and my mom’s lives are changed forever.

Click the link below to find out everything you need to know about this annual festival running Sept 21st - Sept 23rd.

http://www.fremontoktoberfest.com/main_about.html

It’s that time of year again and Oktoberfest will be in full swing this weekend in Fremont.  We’ve been to this several times and we have a good time each year.  This year a bunch of my volleyball friends will be gathering on Saturday afternoon and evening to begin the sampling of the 70+ beers that will be available to try and we’ll watch (and cheer LOUDLY!) for the chainsaw pumpkin carving contest.

Last year Michael ran in the Fremont fun run…  perhaps he’ll go for the Oktoberfest run this year with a beer buddy.

This recent post in the NWMLS for agents and brokers highlights one of the security issues that can come up when trying to sell a house.

Warning to King County Agents and Brokers
September 10, 2007. MESSAGE from King County Sheriff’s office: an unidentified white female stops by houses for sale asking the homeowner(s) to see the house. She has stolen wallets (sometimes right out of the victim’s purse) and/or jewelry. Recent incidents have occurred in White Center, Boulevard Park, Skyway, Burien, & SeaTac. A few incidents earlier this year occurred in unincorporated Renton & Auburn. The description: Caucasian, 30-50 years old, brown hair, 5’4” to 5’9”, thin build, sometimes wears lots of makeup. Associated with several vehicles: blue, gray, or silver American model 4-door sedans. Sometimes by herself; other times accompanied by another white female or tall black male. Detectives are working hard to identify this female & her accomplices. If you come across anyone meeting this description, please report to your local police.

Yesterday I wrote about how TEAM REBA was taking on KING/KONG. Today I am able to share with you the link to the interview that aired last night.  While I don’t agree with the seller at the beginning of the story who calls it a “buyer’s market”, my personal take, and the opinion of the local REALTOR(R) organization, is that we’ve hit a stabilizing market. I hope you enjoy the video clip.

Ok, when I did a search online to see how well we rank in search engines I did not expect to run across this online: http://www.reba.wa.gov.au/DataStore/files/Categories/CPD/REBA%20CPD%20Model_March%202007A.pdf

My first reaction when looking at the link was “Reba.wa.gov.au?”  I knew the .au was for Australia.  What is really great is that REBA stands for Real Estate & Business Agents Supervisory Board.  Since I’m always advocating for better training and higher levels of professionalism in my industry (real estate) this site had me smiling because it is almost as though my beliefs and desires in this area were transformed into another area of the world, and all without me knowing.