JUMBO loans seem to be splitting lenders focus in 2009 market

Posted on April 13, 2009 by Reba Haas

For the last half of 2007 and all of 2008 the hardest to sell market in the Puget Sound area was homes that were in the roughly $650,000 to $1.5M range. Why? Because most of those properties required JUMBO loans for the buyers to secure the purchase and this was the first and hardest hit segment of the credit market for residential sales. Most of these loans were held in portfolio programs at banks because they weren’t easily bundled into the other securitized packages that were being sold on to Wall Street because of their perceived higher level of risk because of the dollar sizes involved.

For those uninitiated to the world of JUMBO loans these are the ones that are just above the conforming limit, which has been at $417,000. There is a temporary bump up in higher priced areas (of which the Seattle/Bellevue area qualifies) to $567.5k and $506k but those still have a slightly higher rate associated of around a half point (.5%) above the rates available at $417k.

What’s interesting right now is that there is a mixed bag of news regarding JUMBO loans and their availability. One report shows a lender that specialized in these type loans filing Chapter 11 and getting out of the market. But another report says that some of the bigger players have decided it’s an underserved market and they’ll be moving back into that realm. Two of the lenders looking to provide JUMBO loans are Bank of America and ING.

I’m hoping that if these bigger players do get into that lending niche it will help open up some of the buyer activity for homes in that price range in our area. We’ve got a client or two that could use it right now and we’d like to see that part of our market get moving in a positive direction again. Cities like Bellevue, Newcastle, Medina, Mercer Island, Redmond, and Woodinville as well as higher priced areas of Seattle could really benefit.

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Need a copy of an oil tank decommissioning report?

Posted on February 23, 2009 by Reba Haas

Since there is an abundance of older housing stock in the City of Seattle, it’s not uncommon to have the question of whether or not an oil tank is on a property. To determine if a tank has been decommissioned it is possible to contact the local Fire Department and have them look up the address to the property and see if one has been filed. In this case I called the Fire Marshall’s office for the City of Seattle.

The Seattle Fire Marshal’s Office is located at:

220 3rd Avenue South
Seattle, WA 98104-2608

Phone: 206-386-1450
fax: 206-386-1348

Business hours are:

Monday through Friday
8:00 AM to 4:30 PM.

Most decommissioning reports have only been in place for roughly the past 10 years so if it was done earlier you may not have a record available to you. I’ve found that most municipalities are similar in process to this method of investigation so depending on where you live, you’ll want to contact the fire department responsible for your area whether in city limits or in an unincorporated area.

Most reports are faxed and not emailed, so be sure you can provide a fax number to whomever you speak to. Some lenders require a copy of decommissioning reports so be prepared to give a copy to your mortgage company/broker/lender, escrow and other parties as necessary.

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Are we getting the whole story about this condo purchase gone bad?

Posted on February 21, 2009 by Reba Haas

In the Feb 20th Seattle Times edition there is a story about 6 immigrants that are suing because of what they believe to be bad behavior on the part of the preferred lender and the developer of a Bellevue condo project. Just reading the headline got me on edge. Here’s why…

We start out with being notified this immigrant buyer was attempting to purchase a $1.5M condo on a $20k a year annual salary. WHAT? You’ve got to be kidding me. Even just hearing those two numbers in the same sentence regarding a purchase already smacks of seemingly ridiculous hopes of someone thinking they won the Lotto. There is NO WAY that someone at that income level would be able to afford or qualify for a condo or home at that price point. I’m annoyed that an agent was involved in recommending (or say they say) that this person buy a condo – not because I don’t believe in people having the joy of homeownership – but because the agent most likely is aware that this person was putting in an offer on a property that they could not afford. In my initial consults with new clients we discuss their income levels and seek out pre-approval status prior to looking at any properties.

Here are some of the additional items of concern for me about how the buyer behaved:

Borrowing $75,000 for earnest money – was the lender made aware that this was his source of funds? Most lenders I know REQUIRE knowing where the funds are coming from, especially if they are borrowed, and there is usually a seasoning requirement of up to 60 days, if not longer. In this scenario it is very likely the friend is expecting an interest return when the money is repaid so this must be evaluated by the lender as well. The lender must assess all debt-to-income ratios and borrowed EM or down payment funds would qualify under this definition. They didn’t say this money was a “gift” but that it was borrowed. HUGE red flag.

There are over 400 posts of comments on this story and several of them reference publicly found information about these so called targeted and taken advantage of immigrants. Some of those items found are that the individuals in this story have been party to several purchases of property over the past 5-7 years and that they have also been the subject of at least 2 foreclosure processes on recent purchases. Hmmmmm…. smells like speculative investing to me.

My business partner and I walked away from a whole lot of these in the past several years because in many cases outright fraud was happening. Did you know that lying on a mortgage application is mortgage fraud and is a felony? Many people we spoke to in first consults would tell us that they’d be letting their lender know that they intended to purchase as owner-occupied while knowing that they had no intention of ever residing on the premises. You wouldn’t believe how many people were amazed to hear they were committing a felony by doing this. I would tell them that we weren’t interested in doing business with anyone who would be involved in this kind of practice and if they were set on this being their method of writing up contracts they’d have to find another agent to do it as I wasn’t interested in losing my business (which is what would happen because I’d lose my license permanently if involved in this kind of fraud) just to help them make an additional $5k on a single deal. Many people went and found other agents to work with, so I can sleep at night knowing I work with ethical clients. The thing is, these people who were lying were just hoping to save a 1/4 to 1/2 percentage point on the loan’s interest rate or to by-pass the investor ceiling limit put in place by the developer.

Most builders were putting in anywhere from 5-20% maximum investor purchases in their projects. Why would a builder put in these restrictions? Numerous reasons.

1. to keep from having to compete against investors in the resale of product.

2. to keep the values of the development up.

3. limit risk of the project.

4. to meet lending guidelines for the development.

In fact, some builders went so far as to start putting into their contracts language that limited the ability of purchasers to sell their properties within the first 1-3 years of ownership or they’d have to forfeit any gain on the property. Kudos to those that did and some of these developers actually had to take some sellers to court – and won. The agent’s involved in those transactions also had to give back their commissions earned as those funds came from the gain on the property value.

You see, most developments have phases built in to them and builders don’t want to see investors buying up in the lower cost early phases only to turn around and be reselling as they are continuing to try and sell their additional phases. If the investor has reasonable gain then they might be willing to sacrifice pricing to turn around the property and that hurts the overall neighborhood values. Much like what bank owned and short sale homes are doing to neighborhoods all over the country right now – depressing values.

It’s a shame that the Seattle Times didn’t do better research on the supposed “victims” in this story. My guess is that it was a strong headline grabber and it followed closely on the heels of Danny Westneat’s story of a man who lost his $14,000 earnest money to VEER Lofts. But in that case, I do feel somewhat sorry for that man as lending standards changed and he was most likely a realistic candidate for purchasing back then. VEER is one of the least expensive developments that Vulcan is building so I know that the prices aren’t that high. Most are around $250k – $400k and I’ve looked at them for clients of mine that qualify for that kind of lending amount. Follow up on his story showed many feeling sorry for the man and believing the developer should return the lost earnest money.

It seems that the comments for the $1.5M condo story are weighting much more on the side of people realizing that there is likely greed at play in this scenario and no one is feeling sorry for these folks. Many still blame the business people involved and I also believe that they’ve done a shoddy job, but when you have a buyer who is likely lying to start out with, no one is going to get it right. Methinks the couple shown in the story and their friends may want to be aware that it’s possible they will have legal action taken against them for mortgage fraud or at least that will be the defense of the developer if this goes to court.

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Burn ban expanded to King, Snohomish, and Kitsap Counties

Posted on January 18, 2009 by Reba Haas

Message from the Puget Sound Clean Air Agency

Stage 1 burn ban called for King, Kitsap, and Snohomish counties; remains in effect for Pierce County

January 18, 2009 – Due to stagnant weather conditions and increasing air pollution levels, the Puget Sound Clean Air Agency is expanding a Stage 1 burn ban to include King, Kitsap and Snohomish counties effective 12:00 PM, January 18, 2009. The ban in Pierce County issued Friday remains in effect.

Stagnant weather conditions are entrenched over the Puget Sound area and expected to persist through Wednesday night. These conditions greatly increase the potential for air pollution to reach levels considered unhealthy for sensitive population groups. The Clean Air Agency is closely monitoring these conditions and will take additional actions as necessary if conditions degrade to unacceptable levels.

During a Stage 1 burn ban:

*No burning is allowed in fireplaces or uncertified wood stoves, unless this is your only adequate source of heat. Residents should rely instead on their home’s other, cleaner source of heat (such as their furnace or electric baseboard heaters) for a few days until air quality improves, the public health risk diminishes and the ban is cancelled.

*Natural gas, propane and pellet stoves or inserts ARE allowed.

No visible smoke is allowed from any wood stove or fireplace, certified or not, beyond a 20- minute start-up period.

*All outdoor burning is prohibited, even in areas where outdoor burning is not permanently banned. This includes recreational fires such as bonfires, campfires and the use of fire pits and chimineas. Burning of storm and flood damage debris is also prohibited.

*Burn ban violations are subject to a $1,000 penalty.

(Note: The Seattle Parks Department prohibits beach fires at Alki and Golden Gardens during the burn ban.)

This ban is in effect until further notice.

Puget Sound Clean Air Agency staff will continue to monitor the situation to determine when the burn ban can be lifted. You can check conditions and forecasts at http://m1e.net/c?89487606-2LuFIG7kBpWNo%403906342-qhoH/zvQHCPCE

The Washington State Department of Health recommends that people who are sensitive to air pollution limit time spent outdoors. Air pollution can trigger asthma attacks, cause difficulty breathing, and make lung and heart problems worse. Air pollution is especially harmful to children, people with heart and lung problems, and adults over age 65.

This is the first burn ban of the season and the first since a new state law went into effect lowering the air-quality trigger for calling a burn ban. The trigger level was lowered to align with the US Environmental Protection Agency (EPA) health standard for fine particle pollution, which was tightened in 2006 to better protect public health.

For additional information visit pscleanair.org.

# # #

The Puget Sound Clean Air Agency is an air quality management agency serving King, Kitsap, Pierce and Snohomish counties. Created as a result of the 1967 Washington Clean Air Act, the agency protects public health and improves air quality by adopting and enforcing air quality regulations, educating individuals and businesses about clean-air choices and sponsoring voluntary initiatives to improve air quality.

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In today’s more competitive selling environment, does it make sense to stage?

Posted on January 12, 2009 by Reba Haas

My 2cents on that is a resounding YES! However, to provide support from a source outside of my own real estate practice I think it helps to see the stats that a local staging company has been providing on the subject. They’ve somehow been gaining access to MLS data showing sold homes in a variety of mid-to-upper end homes and this is what they’ve found in 2 recent reports they sent out.

Report released December 8th with viewing of properties sold for the prior 90 days through to December 5th:

“In our research, we found that in the Seattle Area in the past 90 days, 480 homes have sold that were listed between $500,000 and $1,200,000. Of those that sold (excluding the 20 Waterfront and Waterview listings) 79% were STAGED HOMES, 21% were unstaged or vacant. Sample locations were West Seattle, East Side/South, Mercer Island, Bellevue-East of 405, Bellevue-West of 405, Kirkland/Bridle Trails, Queen Anne/Magnolia, North Seattle, and Ballard/Greenlake. All data provided by Northwest Multiple Listing Service and based on online photos. “Pretty interesting stuff, huh?

The study they released today had the past 30 days information on homes sold through January 6, 2009:

Building on last months study, we again reviewed all sold homes in the Seattle area. From our sample, it is clear that homes that are Staged are selling at a much higher rate than those that are not. In our research, we found that in the Seattle Area in the past 30 days, 116 homes have sold that were listed between $500,000 and $1,200,000. Of those that sold (excluding Waterfront and Waterview listings) 81.5% were STAGED HOMES, 18.5% were non-Staged or vacant. For those that sold, Time on Market for Staged Homes was 79.5 days while non-Staged homes was 125 days. Purchase price for Staged Homes was $40,209 less than asking price while purchase price was $46,842 less than asking for non-Staged homes. The dollar value that Staging brought to these home sellers was $6,633 in the sale price of their home and 45.5 less days on market. Sample locations were West Seattle, East Side/South, Mercer Island, Bellevue-East of 405, Bellevue-West of 405, Kirkland/Bridle Trails, Queen Anne/Magnolia, North Seattle, and Ballard/Greenlake. All data provided by Northwest Multiple Listing Service and based on online photos. Now, what I’d really like to know is how many houses were there on the market during that period of time? Not just how many of the sold units, but to compare that to all of the properties available. Now THAT would be some awesome numbers to show although this is mighty powerful information for sellers to consider since you want to be in that top 80-ish percent of sold and for higher prices than your competitors.

For agents, like me and my team, who have been doing this kind of servicing since DAY 1 with our Concierge Services we are pleased to see someone provide hard evidence of the value that this kind of service provides. If you are considering selling your home, we’d love to be able to show you the difference that our staging provides!

Anyone else have thoughts they’d like to share on staging? Please feel free to comment! What did or did not work for you?

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Staging really does pay off in helping your home sell

Posted on December 29, 2008 by Reba Haas

A local company called Staged By Design recently sent out a newsletter (December 8th) that had the headline of, “In past 90 days, 79% of Homes Sold in Seattle Area were Staged”. These statistics were developed and researched by SBD since there is no one that really tracks this within the local MLS. How they got access to all of the property information is unknown but I’m assuming a real estate contact of theirs somehow helped them out. They broke their research into specific areas so it may not be across the board for all of Puget Sound, but I’d still say that the number is compelling and applies to areas like Bellevue and Kirkland as well.

All the Team Reba members agree with this philosophy and we have for some time having been providing these services for over 5 years for both interiors and exteriors of homes. Team Reba offers staging consultation and light staging services as part of our standard Concierge Services listing package and we can do bigger staging jobs for an additional fee if a client needs it. Because each listing is unique and different from the next, it practically requires us to have a specific approach to each client so we get into specific details during our collaborative sessions to determine what is appropriate and what fits our clients budget.

You can tell the properties that we’ve listed using our Concierge Service versus what we’ve helped our buyer clients purchase as buyer’s agents on our featured properties page of our Team Reba site, most notably by the difference in photos and how the interiors look. We like to think that we provide a superior product, not only in our services but in the properties that we help present to the marketplace. Check it out and see if you can tell the difference.

What are your thoughts on staging? Do you think it’s a valuable service and necessary in today’s real estate marketplace?

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I totally get why older condo buildings tend to have mostly younger inhabitants

Posted on September 17, 2008 by Reba Haas

No, I’m not saying “I’m old” because I just turned 40 last month. Rather, I’m feeling pretty good that I’m still in mostly good physical shape for my age and that I don’t have blown out knees or ankles like some of my friends from volleyball. The reason I’m feeling pretty good about that is due to the large number of stairs I’ve been up and down today as we de-staged a 3 story townhome and then carried the majority of the same furniture and “dressings” up to the 3rd story of a condo we are staging to go on market by Friday.

The continual up and down would be tough for anyone who’s joints are starting to get arthritis or have been damaged due to sports or other injury inducing activities. Those clients that look for elevators find themselves limited sometimes by the inventory that the Seattle/Bellevue and general King County area has available since many of the older condos and apartments (1960′s/1970′s) don’t have these built in to their, typically, lower slung buildings. Today’s high rise condos always have elevators, but they tend to have a high price tag to go with them since construction costs today have gone up, impacting the builder’s pricing structure to make a decent profit.

As a seller, you really have to think about who you are marketing your home to. So, it makes sense to stage your home in a way that will appeal to the right demographic that you think will be your end result buyer. In the case of this condo, we’re putting in some sleek styled furniture but adding in some antique-ish pieces to make it not overly “match-y, match-y” and to reflect the up and coming nature of the buyer we expect will be looking at this property as a new home.

For now though I will be happy to have a strong set of legs that get me by pretty well…. they’re getting more workout tonight too as we complete the staging work for tomorrow’s shoot…

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New Chancellor style 5+ bd/2.25 ba home in Kirkland listed

Posted on August 18, 2008 by Reba Haas

This fantastic Chancellor home has incredible space for the price. With 3220 sqft of space encompassing 5+ bedrooms, an office, bonus room, and extra finished room you’ll love it. Thoughtful built-ins help maximize the space you get and keep clutter at bay. Easy access to transit and commuting options make this a fantastic place to call home. (Metro buses 236 to downtown Kirkland and 257 to downtown Seattle come by within a half block.)

Relax in the large back yard on the deck, or shoot some hoops and then ease your muscles in the hottub. You can’t go wrong with this home! To make it even more relaxing, there is a 1-year basic American Home Shield home warranty that is available to the buyer at closing to help cover the appliances and systems in the home.

A slideshow of all the photos is available here. A total of 17 photos to be exact showing all the rooms of the house except for the garage interior and laundry room. There is an eat-in kitchen with space for a couple of barstools and/or a kitchen table for more informal dining.

The home is located near Totem Lake, where Evergreen Hospital is growing by leaps and bounds and it is also near one of the first Trader Joe’s in Washington. Lots of local amenities and there is a community pool you’ll have access to as well. Better get busy before Labor Day weekend if you want to enjoy it this year! Local park & ride nearby makes the possibilities of reducing your carbon footprint easier. Easy access to Eastside companies and employment centers(Bothell, Bellevue, Redmond) such as Microsoft, Expedia, and Overlake Hospital.

We’ve even got a great offering from Eric Aasness (one of our co-contributors) that if you use his office for the financing portion, they’ll offer 1% of the loan amount toward your closing costs! With 10% down, the loan amount will still be under the new, temporary increased level of conforming loan limits – which is $567,500.

Come swing by and take a look for yourself!

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Team Reba Real Estate

Seattle real estate and related wealth management topics

Category Archives: Bellevue

JUMBO loans seem to be splitting lenders focus in 2009 market

Need a copy of an oil tank decommissioning report?

Are we getting the whole story about this condo purchase gone bad?

Burn ban expanded to King, Snohomish, and Kitsap Counties

In today’s more competitive selling environment, does it make sense to stage?

Staging really does pay off in helping your home sell

I totally get why older condo buildings tend to have mostly younger inhabitants

New Chancellor style 5+ bd/2.25 ba home in Kirkland listed