Paul's Bellingham Blog

My thoughts on Bellingham, the Real Estate market, and more

Why I am still with John L Scott Real Estate after 12+ years

No Comments »

I am often asked why I don’t start my own Real Estate brokerage, or create a bigger team, or move to a larger company. I have stayed at the same office, with the same company, and kept just 1 office assistant for over 12 years. This is rare!

Most agents change companies at least once (if not multiple times). Then as they start to become highly productive, they will hire a sales team (buyers agents and/or multiple licensed assistants) or start their own real estate company. While I totally respect the agents who expand their business this way, there are several reasons I have stayed my course.

1) When you hire Paul you get Paul.
The idea of leveraging your time with a team or even a company does have its appeal. However for me I love having a direct relationship with my clients. I very much enjoy the skills involved in managing the inherent complexity of making a Real Estate choice. Buying or selling Real Estate is not a walk in the park, and I want to be there every step of the way for my clients.

2) My association with John L Scott enhances my brand, and my ability to deliver top-notch services to my clients. John L Scott Real Estate is a great company, with millions invested in marketing, the website, and even an awesome Real Estate android/iPhone app. Being a part of a large company gives me (and in turn my clients) access to the most innovative Real Estate tools available. Smaller companies cannot always provide and invest in this kind of technology.

2) My office: Not too big, not too small…
Our office in Bellingham is big enough to create a great team environment for networking, but small enough (about 40 agents) to have a boutique / big family feel. I get amazing support from the office staff and branch manager Darin, allowing me to again, focus my time on marketing & showing property.

So in sum, by not spending my time building a real estate team or a company of my own; by staying with a company like John L Scott; by not moving around to different offices looking for greener pastures; I have been able to focus ALL of my time and energy on simply working with my clients; focusing my time and talents at getting better at what I do; mastering the craft of being the best Realtor I can be for my clients.

It’s also helped me have a balanced life. Having some free time still with my family (we have 2 little kids 3 and 5!) and friends, is important to me.

This is not to say anything negative about agents who build teams or small companies. Some of the agents I have the most respect for have gone this route (even my Dad did!). It is just an explanation of why I personally choose to work the way I do.

Maybe one day I will be more interested in the building a Real Estate empire of my own. Right now I still love working with clients and helping people buy and sell houses. Keeping it simple.

2 Free Real Estate Apps for your Phone or Tablet

No Comments »

Here is 2 apps I recommend that you can find in the Android Play app store or Apple store.  Both apps are free!

HomeSnap:

HomeSnap is an innovative app that allows you to take a picture of a home when you drive by or arrive, and it will instantly provide you the listing detail information, or the tax information. It does this by taking the GPS coordinates that your camera provides, and locating the information on the home based on that. This can be extremely helpful to even just get the tax information on a home that off the market as well.  You can also add friends and family to your home search, so you can share pictures and listings with them easily. It also has categories to search, including “see expensive homes” or “see great investments”.

John L Scott Real Estate App

The John L Scott application shows ALL listings, from all Real Estate companies. And unlike Zillow, it has a direct feed from the lcal MLS, so you are getting accurate information updated multiple times a day, showing all available listings. It sounds bias coming from a John L Scott Realtor, but this application is a good one. John L Scott was the first local/regional company to come out with a Real Estate application for Washington state, almost 2 years ago.

The GPS tracking works perfect, so when driving around you see all homes for sale around you. You can also specify a search, and if your using a Realtor (like me hopefully) you can register with an account and link up with your Realtor as well.

Take Aways from Economic Forecast from Lawrence Yun

No Comments »

I was fortunate to get to attend a 2 hour economic forecast seminar with Lawrence Yun.

Yun is the chief economist for the National Association of Realtors, and he has been listed as one of the top 10 economic forecasters in the country by USA today, and one of the most influential people in Real Estate by Inman News. From nearly 2 hours of economic forecasting, here is the most important predictions:

-Iinflation could rise to 4% to as high as 6% a year in 2014 through 2015. But Yun projects inflation around 2% in 2013.

Interest rates should remain low for the short term future. The Fed will continue to borrow at zero percent through 2015 if unemployment remains above 6.5%, (which it is expected to stay above 6.5%).

Yun projects rates to rise to 4.5% by summer of 2014, and 5.5% by summer of 2015.

-Median home values projected to rise 10 to 15% total over the next 3 years (National average).

-Rental rates expected to continue rise locally, and nationally.  Home values and rent rates are expected to climb primarily based on lack of supply and a growing demand. Household formation overdue to climb up since many young people have been living with their parents and others living with roommates. As job growth continues, people will be looking to get into move into buy their own home or apartment.

Supply will stay low due to new home inventory being at a 50 year low. New home construction has been way below the historical average for 5 years. So the population is growing, and new home construction is not keeping pace. This is especially true in the Northwest.

-The forecast was very optimistic, with it a clear message from Yun that “now is the time to buy”. Below is a chart Yun presented showing that home values are still low. This is based on a long term average of 4% home appreciation.

See this link for chart. 2013+NAR+Economic+Forecast++-33


Washington State still has a First Time Buyer Tax Credit

No Comments »

 There is a little known tax credit in Washington state for first time home buyers! It is called a Mortgage Credit Certificate .It is a federal income tax credit (cash back) for the interest you are paying on your new mortgage. It can save you money monthly, with less dollars withheld from your paycheck every month. This tax credit is good for the life of the loan, which can save you thousands of dollars every year!

Here is an example:

On a $250,000 loan amount, at a 5% interest rate, that ends up being about $12,500 in interest paid in the first full year of mortgage payments. Now multiply that interest paid by 20%, and you have your tax credit ($2,500). Dividing $2,500 by 12 months, it is a savings of $208 a month in your first year!

Not all lenders are participating, so check with your lender to find out if they are participating. Or contact me for a list of local lenders I can recommend that can help.

Program guidelines include:

1-2 persons must make $70,000 or less annual income in Whatcom/Skagit County.

Family of 3 more must make less than $80,000 annual income in Whatcom/Skagit County.

$300,000 is the maximum purchase in Whatcom County.

$285,000 is the maximum purchase amount in Skagit County.

You must plan on owner occupying the home.

There is  a First Time Home Buyer class you need to take, hosted by the Washington Finance Commission. You can find dates and locations by clicking here.

Frequently Asked Questions about buying Government Owned Homes

No Comments »

Government Owned properties (HUD and Fannie Mae) have their own set of rules and contracts, and I get a lot of questions from interested buyers looking in Bellingham and through Whatcom and Skagit County. There is many similarities between buying one of these properties and other bank owned properties, but many differences as well. This blog post is also posted on my website.

Is the process of buying a government owned home take longer than a normal sale?

Not necessarily. Once you are under contract on one of these properties, you can typically finance the home and close in 30-45 days. This is the same average time it takes to close on any property. If you are paying cash, you can often times close in less than 2 weeks.

Are these properties being sold “as is”? And do I have the chance to do an inspection? 

Yes, they are being sold “as is”. But Fannie Mae and HUD homes, along with most bank owned homes allow for an inspection contingency, which can be found in the HUD and Fannie Mae contracts. In most cases, you have 7 or 10 days to hire an inspector or do your own inspection of the property. If you find more problems than expected, you can back out and get your earnest money deposit back.

In some cases, if there is a major issue that comes up (like a major leak) there is a chance the seller may consider addressing the repair. With Fannie Mae owned homes, any issue that your appraiser points out (dry rot on the siding would be an example) will often times be addressed. Fannie Mae will always consider repairing issues that are  required by your lender. HUD has a more strict “as is” policy, and will not consider fixing lender required repairs.

I always recommend negotiating your offer with the expectation that there will be some issues that will come up in the inspection, that you will need to deal with on your own.

I am an investor who plans to rent or flip the property. When can I submit my offer? 

With Fannie Mae owned properties, you need to wait 15 days. For the first 15 days, it’s listed as a “First Look” property and is available to owner occupied buyers only. Starting on day 16, investors are free to write an offer. The only exception is buyers using public funds through (a non-profit organization would be an example).

With HUD homes, the First Look period for owner occupied buyers is the first 30 days. Investors may write an offer on day 31.

What does Fannie Mae and HUD consider “owner occupied”?

You must intend to occupy the property as your primary residence within 60 days of closing, and maintain the occupancy for 1 year. You also must sign an owner occupancy certificate acknowledging this before submitting your offer.

What is HomePath financing and what are the advantages of this program? 

HomePath financing is a special program offered on most Fannie Mae properties. The advantages of HomePath financing include:

-Only 3% down and no appraisal (therefore no appraisal fee, which typically runs around $500)

-No mortgage insurance. Mortgage insurance is a fee that is included in most other programs where you are putting less than 20% down. This can be a significant savings!

-You can get qualified with less than perfect credit.

-HomePath is available for investors as well as owner occupied buyers. HomePath is also available for renovation loans.

Who offers HomePath financing?

In Whatcom County, lenders I recommend offering HomePath include Wells Fargo, Bank of the Pacific, Guild Mortgage, Neighborhood Mortgage, and Homestead Mortgage. There is other low down programs available to finance many of these properties as well. 3.5% down FHA and No-Down USDA are the two most popular programs. A loan officer will be able to help you figure out which loan is best for you.

I read with HUD homes, you need to submit an on-line bid. This sounds complicated.

These homes, acquired by the Department of Housing and Urban Development, are the result of a foreclosure on an FHA-insured mortgage

Writing an offer on a HUD home is a little more complex and I’d recommend you use a HUD certified broker (yes, I am one!). But if you have a buyers agent you are working with, your agent can also get certified, so you should check with your agent first if considering a HUD home. 

With HUD homes that are new on the market, they do not review bids until 11 days after it’s listed. So the first 10 days you can submit your bid, but you must wait until day 11 to get a response. As noted previously, HUD homes are not open to investors until day 31.

When you submit a bid on a HUD home, you often times have a response within 1-2 business days. Once you have an accepted bid, the inspection and financing process are not much different than buying any other property. It is “as is”, and the main difference is it’s up to you and your agent to deal with getting utilities turned on to inspect the home.

When considering offers, does the seller factor in the tax assessed value?

No. The tax assessment has nothing to do with how the seller is going to determine the list price or what offer price to accept.

Will the seller look at low-ball offers? What is a good strategy on negotiating? 

Before these properties are listed, they are appraised, and usually by two sources. Although they are motivated to sell these properties, they are also motivated to get as much for them as they can. Still, they are typically priced for a quick sale. If you recognize the value and want the property, I recommend you write a serious offer. Writing an extremely low offer can sometimes be counter productive. If it is a new listing and priced well, you may miss out. Many of these properties have multiple offers.

If you are only interested in the property at a much lower price than listed, you can still write an offer and try. But it might make sense to wait. These properties will reduce in price if they are not sold, and often times the best deals are on the properties that need more work,  or were listed too high initially. Then when the price is reduced, you can sometimes negotiate a price that is far below “market value” if your timing is right.

Also, don’t forget about a property if you see it pending and under contract. Many deals fall apart because of financing, or inspection. It’s important to stay alert and let your Realtor know if you want to be notified if it goes back on the market.

I work with these properties and all homes, lots, and condos for sale in Bellingham, Ferndale, Lynden, Deming, Everson, Nooksack, Custer, Blaine/Birch Bay, as well as North Skagit County homes–Sedro Woolley, Burlington, Mount Vernon, Bow, and Anacortes. You can contact me here with any further questions.

Gateway Pacific Terminal could be major boost to Whatcom County

No Comments »

The Bellingham Herald recently announced the Gateway Pacific Terminals plans to start the permitting process this month. Gateway Pacific Terminal would be a full-service dry bulk commodity export-import facility on 1,092 acres in Whatcom County, located between Cherry Point Refinery and Alcoa-Intalco Works. This is an area designated by the county for heavy industry.

The Herald article indicated the process has some major hurdles to overcome and it’s expected to take about 2 years. But it’s being endorsed by all of the major political figures in Whatcom County, including the Bellingham mayor, as well as our rep, Rick Larsen.

The terminal would be a full-service export-import facility for dry bulk commodities, such as grain, potash, and coal. The terminal is designed to handle a variety of commodities.  But the big one sounds like it will be coal.

This terminal would offer literally thousands of jobs to Whatcom County during construction, and they are estimating about 500 high paying permanent jobs for Whatcom County once the project is complete. That is incredible!

This would without question be a HUGE lift to the local economy and Real Estate market. Home values in Ferndale and Blaine,closest to the facility would benefit the most, along with Bellingham.

I would estimate that if the project gets approved, it will stimulate the market before construction even begins, simply in anticipation for the demand that will be created for local housing. Since new home construction has almost completely stopped in the last 3 years, existing supply and demand would increase dramatically.

You can find out more information here. http://www.gatewaypacificterminal.com

Bellingham makes list of 10 “happiest cities” in the west.

No Comments »

Sunset magazine has listed Bellingham among it’s 10 “happiest cities” for 2011 on the west coast. This is the towns they consider to the best places to live (and find happiness). Other cities listed included Salt Lake City, Portland, and Salt Spring Island, B.C.

Bellingham made the list with it’s 65 miles of interurban trail, and proximity to mountains and the sea.

Every year Bellingham is listed in multiple publications in a top 5 or top 10 list. The lists have included “best places to live” “best places to retire”, best small cities to do business”, “cleanest air” and the trend continues with “the happiest”.

It comes to no surprise for those of us that live here..I have honestly never heard anyone say they did NOT love living here!

I think it also bodes well for the Real Estate market when these articles pop up. The positive publicity year after year must make some (small) impact on the popularity of Bellingham as a relocation destination.

Bellingham Ranked #5 in Best Places to Retire in 2011

No Comments »

CNN/Money magazine, once again ranked Belingham in it’s Top 25 Best Places to Retire, with the #5 spot!

Money Magazine has also ranked Bellingham on there list of “Best Small Cities to Do Business” and “Best Places to Live” list as well. But the Best Places to Retire list is where Bellingham is noted most frequently in many magazines over the last 10 years.

A couple of things I thought were interesting about this years article, was noting that Washington State has no income tax, and something I was not aware of: WWU’s Academy of Lifelong Learning which offers low costs classes for Seniors.   

The New Shortsale Option: HAFA

No Comments »

The expansion of the government’s Home Affordable program now includes a program that should help many sellers in distress and need to sell. If you’re behind in you’re mortgage payments, and/or owe more than you’re property is worth–the new HAFA program gives you an excellent alternative option to the typical shortsale process.

  

To qualify under Home Affordable Foreclosure Alternatives (HAFA), you must meet the eligibility criteria for the Home Affordable Modification Program (HAMP).

Typically on a shortsale, you have your home listed, and then once you get an offer, you start on a long process to negotiate with your lender. This process has many unknowns and usually is a process that takes 3-6 months.

With the HAFA program, you’re REALTOR can help you turn everything in to your lender before you list. Then the lender will agree to a list price before it goes on the market. You then have 120 days to get an offer on you’re home once you list. Then when you receive the offer, the lender will respond with in 10 days, and then it’s done and approved! In addition, there is the $3,000 in moving help that is available as well.
Why should I consider a HAFA short sale?

  • Help you avoid foreclosure
  • Allow you to be “fully released” from any further liability on your mortgage
  • Provide financial assistance of $3,000 to help with relocation expenses
  • Once you recieve an offer, much shorter waiting period to get response and approval from you’re lender
  • Easier to plan for move and find a buyer for your home (since the approval happens before you list)

How Do I Qualify?

The eligibility criteria is based on the terms set forth under the government initiative. If you do not meet the eligibility criteria under HAFA, you may still be able to work with your lender on a short sale. 

If you are in the Bellingham, Whatcom County, or North Skagit County area, and you are interested in discussing any of this, I can help you assess your situation to see if a shortsale or HAFA program is right for you. Whether this program is right for you or not, it is important to work with a REALTOR who understands the shortsale process and is knowledgeable about this new program. If you are in a different area, I can help you locate a specialist. Contact me here.

Trade-Off’s

No Comments »

When working with buyers looking at homes or condos in Bellingham and Whatcom County, they have the luxury of incredibly low interest rates today, lower prices, and more selection.

What has happened  though, is buyers expectations have gone up at the same time.  Buyers want the $300,000 house for $275,000, or the house that was selling for $600,000 (last year) for $500,000. They want value, which makes sense, and that is what it’s all about!

But even when a buyer finds a good value, he/she still need to consider trade-offs. From the upper end to the lower end, it’s hard to get it ALL. Unless you pick a lot in your perfect location, and custom build it, buyers need to accept that there will be some trade-offs in your search, always.

The sooner the buyer separates needs from wants, the better experience they will have in there home search…And the better decision they will ultimately make.  When looking at homes, it can be very emotional, and so it is important to use rational to consider your priorities.

Example being many buyers prefer, new or newer construction. If you want a newer home, you may have to accept less square footage for your money, or a smaller yard, or moving into a development that is not totally established.

If you want a big yard, and more square footage, you may have to seriously consider how much work you are willing to put in. Many times I find solid homes that fit a buyers criteria perfectly, but they can’t get passed the cosmetics, if the finishes/colors are outdated. Many times this may be the perfect match with some updating and personal touches.  Also, deciding how important location is to you. Many buyers look at on-line classifieds and look at the houses first, and consider the location later. Often times a  better way to search is to use the map search feature, and draw out the areas you’d prefer to be in, and start your search that way.

So in summary, it is best to analyze what trade-offs your willing to accept when considering a move.