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Monday, April 30, 2012

What Is A Short Sale?

A short sale is when a seller/owner has a larger underlying debt service against the property and they are not able to clear title. And if they do not have the cash in savings or checking to bring the title or loan payoff in full current out of their pocket.   So the seller asks their lender for forgiveness of a portion of the loan that will be "deficient" and thus the lender takes a "short" payoff.

The seller gets to negotiate the terms of the offer with a buyer, but has to ask for approval of the terms with their lender, since the lender will have to accept the "net" sale proceeds as a payoff. 

An example would be as follows on a $200,000 listing

Seller's typical closing costs on the selling side only are roughly 10%....excise tax, title insurance, escrow fee, brokerage/commission, recording fees, etc.

Sale price  $200,000.
Seller side closing costs are $20,000
Loan Payoff $240,000
Net proceeds or loss <$60,000>

Seller either has to have $60,000 of their own money, or have their lender accept a payoff by less than $60,000 as a payoff in full.

Once mutual acceptance is received between buyer and seller the purchase and sale agreement is submitted to the seller's lender for approval and blessing on the terms.  This can take up to 30-180 days for approval.   The lender will look at the "value" of the home/offer to see if it is fair or undervalued before approving the agreed purchase price.  The lender will also evaluate their "borrower"/seller for their financial "hardship" and inability to repay the loan in full, or whether the seller has the capability or resources to repay.   Then they issue the terms of approval of the short sale. 

Sometimes the lender for the seller will accept.  Sometimes they reject.  Sometimes they counter to the buyer and change the terms of the offer.

As a buyer, there is no negative impact, other than the frustration of the waiting game and not being able to initially plan on a closing date and/or a possession date.

The impact to the seller is that it will effect their credit report and their ability to borrow money for a period of 3-7 years. 
Short sales have an array of complexities.  Whether you're the seller of a short sale or the buyer, having a knowledgeable agent to best represent your interest is key.  Contact me with your questions: 360-870-5191 or

Sunday, April 29, 2012

Get Wet: The LOTT Clean Water Alliance Science Center in Olympia

On Saturday, I went on a field trip with my son's boy-scout troop to LOTT.  Now I'll be honest here, I wasn't overly excited for a field trip to LOTT.  If I could have chosen, surely I would have traded my husband to get out of this one but instead, there I was, as the trusty parent which is par for the course.

My memories of lot were years of going on a camping vacations concluded by pulling the trailer into downtown Olympia to 'dump' (no pun intended but all the while clever).  Dumping sometimes seemed to take forever, depending on the number of vehicles in front of us.  My memory recalls I never opened the vehicle door for fear of the stench.  And if memory serves, which is spotty at best, I think one time the mechanism broke and my dad ended up with a mess on his hands.  Enter latex gloves.

So on this field trip, I was extremely impressed.  The original sewage Treatment Plant for the area was built in Olympia by the City to meet its own waste water needs in 1949.  Much upgrading has happened over the past 50 years and In 2004, the first upgrade at the Budd Inlet Treatment Plant occurred, with the addition of a new Class A Reclaimed Water sand filter system. The same year, construction began on LOTT's first satellite facilities – the Martin Way Reclaimed Water Plant, constructed Wetland Ponds, and Groundwater Recharge Basins that make up the Hawks Prairie Reclaimed Water Satellite.  Our visit to LOTT's WET (Water Education and Technology) Science Center is an exhibit gallery and classroom which opened in 2010 to provide the community with a fun, hands-on opportunity for learning.

Four important details we learned on our two hour long visit included:

  1. LOTT stands for Lacey, Olympia, Tumwater, Thurston County
  2. LOTT is made up of over 100 acres total
  3. LOTT's energy bill is over $100,000 each month
  4. Can you guess when a very high usage of toilet flushing occurs each year?  During Superbowl halftime.
The heart of LOTT's system is the Budd Inlet Treatment Plant. Wastewater flowing to the plant currently comes from almost 50,000 homes, apartments, and commercial/industrial connections served by the sewer utilities of Lacey, Olympia, and Tumwater. From homes and businesses, the wastewater flows through a series of underground pipes to the plant. The treatment plant is located at the north end of Adams Street, between downtown Olympia and the Port of Olympia.

About 10-12 million gallons of wastewater flow through the Budd Inlet Treatment Plant on an average day. During the wettest months, flows have averaged as high as 22.3 million gallons per day (mgd). The quality of the water LOTT discharges is regulated by the Washington State Department of Ecology under a National Pollutant Discharge Elimination System (NPDES) permit.

For both residential and multi-family customers, the High-Efficiency Toilet Program is worth checking out.  You may be eligible to participate in one of the high-efficiency toilet (HET) programs - programs where proven, state-of-the-art HET fixtures are available to City of Olympia water customers.  HETs use an average of 1.2 gallons of water per flush.  If you currently have toilets that use 3 gallons or more per flush, you can save an average of 37 gallons per day, or over 13,500 gallons per year, by installing HET fixtures!
There are two HET Programs available to City of Olympia water customers;  one for sewer customers and one for non-sewer/septic customers.  Please note: These programs are subject to available funds;  program ends when funds are expended, or by December 31, 2012.

City of Olympia Sewer Customers:

The LOTT Clean Water Alliance is offering sewer customers FREE HETs!  LOTT offers fixtures free of charge because the installation reduces wastewater flow to the treatment facility, and can help delay the need to build new treatment capacity.  Download the forms below (PDF) for available toilet models and additional information:
        Toilet Models         

City of Olympia Non-Sewer Customers 

The City of Olympia is offering water customers who do not receive sewer service HETs at a reduced rate - splitting our cost 50/50 with our customers!  Download the forms below (PDF) for available toilet models and more information: 
         Toilet Models 
         Residential Program Application  

Contact WATER WISE Staff:

The WET Science Center is open to the public Monday through Saturday from 10am to 4pm, located in LOTT's Regional Services Center, at 500 Adams Street NE, in downtown Olympia, just two blocks northeast of the Olympia Transit Station. For directions and printable map, click here

Thursday, April 26, 2012

Survey Reveals Rising Prices, Strong Demand

The housing industry is staging a recovery with increasing sales and stabilizing prices, according to a national survey of RE/MAX agents. Four out of five agents believe U.S. home prices won’t decline further. In fact, nearly 70% predict prices will go up, led by a strong demand for homes in the low to middle price ranges.

"To active real estate agents, this market is definitely heating up," said RE/MAX CEO Margaret Kelly. "They are witnessing a recovery across the country fueled by home buyers and sellers taking advantage of a significant market opportunity."

Agent opinions are documented in the quarterly RE/MAX Market Insights, an online survey of 1,022 residential experts. The survey builds brand visibility for RE/MAX agents, and is typically picked up by more than 300 news outlets. Collectively, RE/MAX agents sell more real estate than any other real estate network in the U.S.

Key findings include:
  • Price rebound: 68% say prices will be higher by the end of 2012.
  • Today’s prices: 29% below the peak reached during the housing bubble.
  • Demand for lower-priced properties: 80% of agents say it’s good or very good.
  • Demand for homes in the middle-price ranges: 71% rate it as fair to good.
  • Demand for high-priced homes: 58% call it poor to fair.
A snapshot of today’s homebuyers served by RE/MAX agents:
  • Roughly one third are first-time buyers. Another third are homeowners looking to sell so they can move up or downsize. The remainder are mostly investors, who believe the market has hit bottom.
  • One in five buyers pays cash, receiving an average discount of 15%.
The most significant challenges facing first-time homebuyers are having an acceptable credit score, posting a down payment, and facing a shortage of homes for sale. Repeat buyers have the added burden of selling their current home. They, too, are facing a scarcity of homes to purchase in the lower and middle price ranges.
Nearly half of the agents say lower priced homes in their markets are selling for slightly less than the asking price, while 17% say buyers are paying full price and 11% say buyers are paying slightly more than the asking price.

For homes in the middle-price ranges, 49% report sale prices are slightly less than the asking price, while 8% say full-price is being paid. For the high-priced homes, 43% report that sale prices are moderately less than asking prices, with another 25% saying it is slightly less.

With bank-owned homes making up a significant portion of the current inventory, agents report that 62% of their non-investor buyers have a favorable attitude toward foreclosures, while only 27% have a favorable attitude toward short sales.

"With distressed properties still making up a sizeable portion of homes on the market, this inventory is being cleared effectively by buyers, who don’t mind investing a little to fix up a property in return for an attractive bargain," Kelly added.

Among buyers’ highest priorities were quality of schools, and condition and size of the home. The lowest priorities included public transportation, walkability and energy efficiency.

Most RE/MAX agents advise their buyers to hire a professional home inspector and to attend the inspection. Getting pre-approved for a mortgage, not merely pre-qualified, also is recommended.

Wednesday, April 11, 2012

Real Estate Market Research, And Then Some

Is buying a home a good investment?  I sell real estate, so I bet you can guess my answer!  Of course it's a good investment, it's actually the best investment.  Today, two out of every three households in the U.S. live in a home they own.  And according to a recent poll, 9 out of 10 homeowners say they would buy their house again.  Their top reason for buying a home "Having a place to raise a family."  Their next reason "building equity rather than paying rent."

Home Appreciation: With the exception of the past few years, homes in Thurston County have appreciated.  The median-priced home is now back to where it was in the summer of 2005.  A home purchased in Thurston County in 2000 and sold today would net about a 4.5 percent annual return, which is respectable for a safe fixed investment.

Tax Advantages: There are tax advantages to owning that help you keep more of what you earn.  In 2008, the federal mortgage interest deduction, a powerful housing incentive unique to our country for more than 80 years, saved the average homeowner in Washington state $3,465 in taxes.

Homeownership today remains a key element of a family's wealth-building.  Maybe even more important to those who aspire to own, it provides a family long-term social enrichment, stability and quality of life - values considered priceless over the years you live in a home.

So as promised, here's the latest in numbers:

$219,700 - Median price existing home sold in WA, 4th quarter 2011.

6.0 - Month's supply of homes on market at year-end 2011.

-1.55% - Change in mortgage rate since peak of market in 2005.

$572.6 - Value of single-family building permits issued in 4th quarter (millions, excludes land).

17.3% - Proportion of underwater mortgages in WA, 3rd quarter 2011

91,080 - Existing home sales in WA, 4th quarter 2011, Seasonally Adjusted Annual Rate.

28.1% - Increase in multifamily building permits 4th quarter 2010 to 4th quarter 2011.

*all data courtesy of WA Realtor Magazine, Spring 2012