Ashlar Undressed

First Time Home Buyers FTHB

First Time Home Buyers? Now is the time. I have worked with many first time home buyers (FTHB) over the last few years. There is some hesitance, confusion, fear, uncertainty, joy, happiness, and a slew of other emotions and feeling that happen during the experience. One of the most common questions I get asked, “is now a good time to buy a home?”

It is not so much the timing of the market, but the current situation of the buyer. If the buyer has a career that they like, they want to stay in the area for a given length of time, and would appreciate all the benefits of owning, then it is usually always a great time to buy. That brings me to today. Today is a great time for a fthb to buy a home. You might be asking yourself why? with all the negative news in the press?

Well, right now prices have dropped and rates are low. That combination makes for a great payment with 30 year fixed money. The rate for a 30 year FHA 97% financing (meaning you only need 3% down) is in the low 6’s%. Imagine finding a great starter home in the mid $200’s, putting less than $8,000 down, and owning a home with a 30 year fixed mortgage?

There have been very few times in our countries history that there have been a large inventory of homes available for sale and rates this low. I have even heard people talking that rates will go lower. So, if you have been thinking about owning a home (or know someone who is) introduce them to me. Now is a great time to buy your first home.

An Amazing home in Edmonds

I was invited by a friend to tour a home that is just about finished with a full remodel. We (my wife and kids) swung by yesterday and were totally impressed. The selection of fixtures, tile, granite, & flooring. Topped off with a pool and spectacular view. The pictures are below. The home will be for sale soon, let me know if you would like to see it.

Investor Alert!

I wrote an article about short sales and then a real estate friend of mine (and reader of the ashlar undressed blog) called me with a deal. A deal is something that makes sense to buy with the prospect of making a profit.

One of the things to look for when buying an investment property in a short sale situation is a large 2nd mortgage. Today mortgage companies in 2nd position are taking between $1,000 and $3,000, regardless of the amount owed on the 2nd. Really the 1st mortgage simply tells the 2nd what to do.

This morning my friend sent over a house that has a $145k 2nd with a $160k first. This means that at one time a lending institution valued the homes at a minimum of $300,000. If the 2nd mortgage were to take $3,000 and the first was paid 90% (which they would likely take) and investor could pick the house in the $150,000 range.

Please note that the entire transaction depends on the decision of the bank. Working with professional bank negotiators is critical to making this transaction work for the investor. I know the house and it would yield between $1,100 and $1,300 a month in rent.

Good Investment? What are your thoughts?

The short sale, for investors

Short sales today are on the rise and there are more coming. This creates an opportunity for investors to help a homeowner out of their situation and make some money. But, you need to be careful who you hire to work for you.

The first clue that someone is not familiar with short sales or just not being truthful is the statement “cash buyers we close in 5-7 days”. The banks have so many files there is no way to negotiate and settle in that amount of time. It takes 3-5 months, regardless of where the money is coming from. The banks need time to evaluate the situation and make the decision. This is why many experienced agents believe that a short sale purchase is not appropriate for a first time home buyer. To buy a home that is a short sale takes patience.

There are characteristics to a good short sale purchase. Many investors feel they should take every short sale that comes along. That is not true. The investor should only take the good deals that makes them money.

There are five characteristics that make a good investment deal. Any one of these should get your investor mind thinking. 1) Large 2nd mortgage, 2) an absentee owner (out of state), 3) title issues, liens, judgements, etc… 4) Million Dollar homes. These factors make for an investment that is more probable of large profit.

There are also some things to avoid. 1) no 1 or 2 bedrooms, no mobile homes, 2) Homes on the lowest end of the market, 3) The largest home in the neighborhood, overbuilt, 4) areas of mass depreciation. Avoid these things, there are too many factors that will obstruct your cash.

You also need a real estate agent that knows how to package the deal for the bank. Everything up front and in the correct stacking order. It is also a great idea to use a real estate agent that will give up some of his/her commission to work with a professional bank negotiator. These negotiators assist in the transaction helping it move faster and they usually get the buyer a better price. Negotiators know what some banks will take and what others won’t. Most importantly they know WHO to talk to at the different lending institutions.

If you would like more information about purchasing investment real estate through a short sale, give me a call (206) 391-6224 or email me at boe@ashlarrealty.com

Attention Real Estate professionals, Botext is here!

Roofing material, how boring is it?

I was asked to attend our homeowners association meeting last week because we were having a speaker come and discuss the different roofing options for our neighborhood. I don’t know about you, but I can think of a few hundred different things I would rather be doing at 7pm on a Thursday evening. I was asked to attend to not only vote on my opinion, but to also give my opinion of the impact on value.

Our neighborhood was built in 1989 - 1990, the roofs are all cedar and it is time to replace them. Some of the neighborhood wants to get away from the cedar roof and others want to keep them. The CCR’s (Covenants, Codes, and Restrictions) state that the roofs have to be “in harmony”. No one is absolutely sure what that means. Does be in harmony mean that all have to be cedar? There is a big difference in the appearance of new cedar vs old cedar.

There were many questions asked to the guest speaker (Dale from Jorve Roofing). Which has the least amount of maintenance? Which costs the less? Which has the least impact on the environment? Which is the most fire resistant? How do we change to rules? Do the rules need changes? All these questions and one of my neighbors has a blue tarp on his roof, because it needs changing now.

The group narrowed to selections down to Presidential TL (triple layer) Comp vs Cedar shake. The Presidential TL costs less, most fire resistant, least amount of maintenance, and longer life. The cedar shake is the easiest on the environment. Actually the cedar shake is carbon neutral. The speaker said that 40% is farmed and the rest is pulled out of Northern Canada. The material from Canada is fall down that are helicoptered out.

The material costs for Presidential TL is close to $195 per 100 square feet and cedar is close to $300 per 100 square feet. So, the Presidential TL even costs less.

I am still wondering why this is such a difficult decision.

Boe’s open house picks for this weekend.

The May 2008 real estate sales data for Snohomish County

The numbers are pretty bad. Sales for Snohomish county or down 46% from May of 2007 with a median price down 8%. There is plenty of homes for sale and many great deals, just very few buyers. If you know of someone looking to buy the opportunity today is great. The 30 your fixed interest rates is hovering around 6.5% and there are a lot of homes to choose from.

Forclosure map for Washington

Forclosures are on the rise… Especially in Western Washington; Pierce, King, and Snohomish County.