Should I sell my house now? When does it make sense to sell in a down real estate market?


If you’re thinking of moving up in a down real estate market it can make a lot of sense to sell rather than wait. There is never a better time to make a move up in real estate than when the market as a whole is down. Yes, you will probably not come out as well with the sale of your current home, but you will more than make up for it when it comes to buying your new home.

Let’s look at an example:

– Assume you own a $300,000 house and you’re ready for a $500,000 house. If the market is down 5% then unfortunately your current house is really only worth about $285,000 .

– Assuming that $500,000 house is also down 5%, then you’re buying that house for $475,000! You accept a $15,000 loss when you sell, but you make $25,000 when you buy!

But it gets better, every market has a “hot price range” and a “cooler price range” – or put differently, some price ranges are selling better than others.

If you are selling in a “hot price range” (in Seattle that is single family homes under $350k) and are buying in the “cooler” price ranges / higher price range (in Seattle that’s $500k+) you can take advantage of a great deal and moving up in this down market can work well for you.

If you are ready to take advantage of this down market to move up and get a great deal, contact us today.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at Remax Northwest
www.propertyinseattle.com

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Know how interest rates affect your buying power and payments


Know how interest rates affect your payment. The interest rate on a loan is used to calculate your monthly payment. The higher the interest rate, the higher your monthly payment. The lower the interest rate, the lower your monthly payment. Simple? Yes, but abstract until you see it applied to your loan.

When interest rates rise, it lessens the buying power of potential buyers because it increases monthly payments which are used to decide how much money the lender will let the buyer borrow.

Following is an example to illustrate how your buying power is reduced or how your monthly payments are affected as rates change: At a 6% fixed rate, with 30 years of payments, one would have to pay approximately $600.00/month for every $100,000 borrowed. At a 7% rate, one would have to pay about $665.00/month on every $100,000 borrowed. So, in this example, for a $350,000 home your monthly payment would increase by $227.50)/month (from $2100/month to $2327.50) if the interest rate rose 1%.

Home Price Interest Rate Monthly Payment
$300,000.00 6% $2,100.00
$300,000.00 7% $2327.50

Let’s do a second example. At a 6% fixed rate, with 30 years of payments, your monthly payments for a $500,000 would be $3000/month and at a rate of 7% would be $3325 (a $325/month increase in payments).

Home Price Interest Rate Monthly Payments
$500,000.00 6% $3,000.00
$500,000.00 7% $3,325.00

Obviously, an increase in rates can have several negative affects on the market. With less buying power, buyers may find that they can no longer afford now what they could have afforded a couple of months ago. This can decrease the number of financially qualified buyers. Less buyers in the market equals less demand for homes, causing a downward pressure on prices in some of our local Seattle communities. You may wonder than if you should wait until prices drop before you buy – the answer is no (see example below).

Let’s look at it from a slightly different perspective why waiting for prices to drop is the wrong approach. Example: You decide to wait to buy your home until prices drop 10% percent. The risk in waiting could be higher interest rates and higher mortgage payments as seen in the example above. So if the price of a home happens to drop ten percent from $500,000 to $450,000, but interest rates rise 1% point from 6% to 7%, your payments are still about $3000 a month. Only a $7.50 change in monthly payments.

Home Price Interest Rate Monthly Payments
$500,000.00 6% $3,000.00
$450,000.00 7% $2,992.50 (-$7.50)

One more tidbit of caution. When rates rise, they usually rise fast (much faster than the change of appreciation).

Disclaimer: The above rates I used are not actual rates here in Seattle — they’re just used as an example to show the effect of rate changes on monthly payments. Rates do vary depending on your credit score, how much you are borrowing, and market conditions. Please consult a mortgage professional to get a better idea of what your monthly payments would be and to see what you can afford. We would be happy to refer you to our team lender for further information.

If you have more questions, about this topic, please feel free to contact us at 206.276.5827 or at kerstinbrooks@earthlink.net.

For the folks who prefer this information in a visual/audio format, please watch a brief video summary about this on YouTube.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at RE/MAX NW Realtors
http://www.propertyinseattle.com/
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net

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How to sell a house in a slow market


So, how do you sell a house in this market where nothing seems to sell?

Well, first you should decide if you really need or want to sell:

If you need to sell because of a relocation, financial hardship, divorce, death in the family, etc. there are a few things that you need to do to get that home sold.

First select the right agent who will actively, and aggressively market your home. Interview a couple of agent. Have them explain to you how they will market your home and what they will do to get your home sold.

Do not go on the market high thinking that you can drop the price later if your home does not sell. List at a salable price. You want to be the best value on the market right now – this is not the time to price your home at the same price as competitive homes like was done during a strong market – this is the time to price your home lower than competing homes. Buyers have so many choices right now and unless you are the best value you are not even on their radar.

Your house needs to shine and make a good impression. It needs to stick out of the crowd. Don’t overspend on fancy upgrades but really make the home shine with a fresh coat of paint, clean flooring, clean windows and ‘tidy up’ every room. Bring light into your home (leave lights in your house on even during the day, and borrow some extra lamps from friends for more light). Add a little life with a few house plants.

Make showings easy. Do not restrict showing times or ask for a lot of notice before showings. If it is a pain for buyers to view your home they will go on to the next house.

If you get an offer you don’t like, do not reject it. And do not get offended no matter how far apart you think you and the buyer are. Negotiate; keep the dialogue going. Remember, your house is only worth as much as an able, willing buyer will pay for it. Do not give your home away but realize that the buyer is in the driver seat.

If you are looking to sell to move up, this is a great time to do it. Yes, you will get a little less for your current home than a few years ago but you will be able to save on your move up house.

For more detailed advice and help with selling your home in the Greater Seattle area, please contact the Brooks & Heinze Team at Remax NW Realtors.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
www.propertyinseattle.com

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Home Maintenance – or how to protect your biggest investment


Many homeowners wonder when to schedule home maintenance. Some of you, the do-it -yourselfers take great pride in doing the maintenance yourself or only calling a contractor in on the big jobs. Some of you busy moms and professionals would rather have someone else do it quickly and right the first time. Either way is fine – just do it or have it done.

Following is a brief outline of some of the most common home maintenance jobs and repairs, as well as a guide on how to select contractors should you decide to hire one.

The old adage of “an ounce of prevention is worth a pound of cure” rings true for home maintenance. Simple and relatively inexpensive regular maintenance can help avoid many extensive and expensive problems.

Home maintenance by season:

Fall Maintenance
Clean and repair gutters. Recaulk exteriors around windows and doors. Fill all other holes and gaps. Remove debris and moss from the roof. Keep debris away from the home such as leaves, plants, wood, etc. Replace your furnace filter and have your furnace serviced. Late fall/early winter freeze proof your exterior plumbing.

Winter Maintenance
Recaulk and regrout in tubs/shower and sinks. Check seals on dishwasher/washer. Check dishwasher/washer hoses for leaks. Check dryer hose and vent for lint blockage. Check for leaks in your attic, basement and your water heater.

Spring Maintenance
Clean and repair gutters. Remove debris and moss from roof. Replace damaged roof shingles. Repair torn screens and check siding. Power wash walkways and drive ways. Power wash and restain decks and check for rot/insects. Late spring/early summer cut back trees and shrubs hanging over or touching the home.

Summer Maintenance
Check exterior paint and sand/repaint as necessary.

How to select a contractor:

Get a referral from your real estate agent. One way to retain or increase property value is by doing the proper maintenance and sometimes upgrades – your real estate agent knows all about that and most likely, if she/he is a good agent, she/he knows which companies do a great job when it comes to maintenance, repair and remodel.

If you are looking for a contractor in the Seattle area, contact Kerstin G. Brooks or Krisanne Heinze of the Brooks & Heinze Team at RE/MAX NW Realtors for a referral to a roofer, electrician, plumber, handyman, power washer, cleaner, and more.

Have a great day,
Kerstin G. Brooks
The Brooks & Heinze Team
206.276.5827
Email: info@propertyinseattle.com
Web: www.propertyinseattle.com

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What’s going on in the Seattle housing market?


So, what’s going on in the Seattle market? If you live in Seattle but listen to the national news, all you hear is about how the housing market is in the toilet. Yes, the housing market has slowed in Seattle over the last year but not as much as the national average (not by a long shot).

Well, there are a couple of things going on in Seattle that make this still a healthy real estate market. Of course, our market has slowed down and the changes in the mortgage industry, high fuel and food prices, credit crisis, sub-prime delinquencies, etc. are to blame for that. But our employment market is great and it is keeping our real estate market in good shape.

The good news is that Microsoft and Boeing are doing well and are adding jobs in the information services and manufacturing sector. The unemployment rate in the Seattle-Bellevue-Everett area has remained low at 4.1% in May (lower than the national 5.5% rate). Source: Bureau of Labor Statistics: http://www.bls.gov/news.release/archives/laus_06202008.htm

The U.S. Census Bureau estimates that there will be a 8.7% change in population in the U.S. between the years 2010 – 2020 and a change of 13.6% change in Washington State during the same period. The projected change in the U.S. between 2000 – 2030 is 29.2% and 46.3% change in Washington State during the same period. Source: U.S. Census Bureau: http://www.census.gov/population/projections/PressTab7.xls

Where are all these people going to live? In apartments, houses and condos, of course. If these projections are correct, there will be an increased need for housing in Washington, which should bode well for real estate values. Some areas are showing a projected decline in population, such as D. C., North Dakota and West Virginia.

In short, Seattle is affected by the national economy and prices have dropped which is great for buyers who can take advantage of some great deals. How long will it be a buyer’s market? Who knows … for a while longer; but the great employment opportunities, good income, population growth and limited availability of buildable land (due to geography and environmental protection laws) make for a strong housing market that is good now and will be fantastic in the future.

So, buy a house in Seattle!

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/

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Retire in Mexico – enjoy the sun and a lower cost of living


The Mexican Real Estate Market is really booming; especially Baja California Sur, in and near La Paz, Todos Santos and Loreto; Playa del Carmen, Puerto Vallarta and other areas. The reason for this is because there is a limited amount of affordable and attractive beachfront left in the US, leaving folks who are looking for their own place in the sun without opportunities.

Opportunities also extend to some non-beachfront properties, f.e. in towns where there is a shortage of in-town, long-term rental properties such as in Puerto Vallarta. It’s not just the sunshine that lures people but the recreational activities, such as diving, kayaking, boating, wildlife, scenery, etc. and proximity to the U.S. and Canada .

With rising health care costs and a rapidly rising cost of living in the US and Canada and with real estate prices leveling of dropping off, many investors and retirees are looking to Mexico for a better investment and affordable way to continue or improve their lifestyle. Baby boomers and investors in the United States and Canada are looking for their second home or retirement home in Mexico. Most areas can be easily reached with many airlines competing for business.

Investors and retirees should be excited because it is still affordable. There is a lot you need to know about hot to buy real estate down there. It’s a bit like the wild west and you have to be careful who you are working with down there. The person advertising and listing a property might not be the right person to work with. I think there are great opportunities for appreciating property down there but as with any investment, do your due diligence and research; and work with professionals who know what they are doing and who will represent your best interest.

Brooks & Heinze Team
Remax NW Realtors
300 NE 97th St
Seattle, WA 98115
206.528.4471
www.propertysalesmexico.com

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Ejito land or ejidal property: Bargain or not?


Ejito land or ejidal property: what is it? is it a bargain? what you need to know before you buy!

Ejito land – what is it?:

The state has ownership of these lands. The state grants usage rights to peasants, or farmers, who have the right to use the land, to live on the land and grow their crops. The rights of usage pass from father to son, but ejidal properties cannot be sold as private property.

Ejidal land can be converted to private property through a process called procede. This is a lengthy process that may take as much as five years to accomplish.

How is ejido land converted to private property?

Following are the required steps:

– Resolution within the ejido. A two-thirds majority must decide to convert parcel lands to
private property. This does not pertain to human settlement or communal property, also a part
of ejidal land. This pertains only to the individual parcels.
– Mapping, allowing for streets, gardens, other donated lands, human settlements and
communal lands.
– Allotment of a parcel to each ejiditario (farmer).
– Application to Agrarian Reform, Mexico City.
– Approval by the Agrarian Reform.
– Transfer of parcels to the individual ejiditarios.
– After this process is completed and registered with the Agrarian Reform, the ejiditario who wishes to sell to an outsider must first notify other family members, those who have worked the property for more than one year, then other ejiditarios in the group, neighbors, and the ejidal government before completing a sale to the outsider. These parties have the right of first refusal and notifications must be made following a specific procedure.
– Only after all correct notifications have been made does the ejiditario receive a deed and can then transfer in fee simple to third parties, nationals or foreigners.

A word of caution then:

If the price of the property seems too good to be true, it probably is and it may be because someone is trying to sell you ejito land that has not been converted to private property. Buyer beware! Make sure you are working with professionals who can help you with determining if a seller can legally transfer fee simple private ownership to you or not.

This blog entry would not have been possible without the extensive knowledge of Linda Neil at the Settlement Company in LaPaz, Mexico who greatly contributed to my understanding of what ejidal property is and how it is converted to private property.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Cell: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertysalesmexico.com/

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Facing Foreclosure? Don’t know what to do?


With mortgage delinquencies rising, many homeowners find themselves faced with the threat of foreclosure. Many homeowners do not know what their options are and where to turn.

The questions for many then is what the homeowner can do if anything to protect against the bank and losing their home.

What the homeowner needs is knowledgable support from professionals who know what to do when foreclosure is knocking on the door:
– a real estate agent can provide a property analysis to find out the current market value of the property
– a mortgage broker can determine if a refinance is available
– a lawyer who specializes in foreclosures can advocate on the homeowner’s behalf with the lender and provide guidance in understanding legal options and impacts

What not to do as a homeowner:
– do not ignore the reality of delinquency and foreclose; procrastination and denial may limit your options to stave off the bank; swift action on the other hand may save your home and credit

What needs to be done:
– in some cases, a quick sale may the best option
– in some cases, negotiating for modified terms and payoff concessions with the lender may be the best option
– and in some cases, surrendering the home through foreclosure or deeding the property to the bank may be the best solution

What’s the right solution for you if you are faced with foreclosure?
– every situation is different and there is no straightforward answer without knowing all the facts (worth of you property, loan balance, income, market situation in your area, etc.).

You may be able to keep your home if you take the proper action but sometimes, it may be best to sell.

Working with individuals who know the industry can help ease the stress and confusion. The right professionals with experience and compassion can help you make the right decision for your situation.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Remax NW Realtors
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: http://www.propertyinseattle.com/

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Puerto Vallarta, Mexico – How to buy property in Puerto Vallarta


So, you have decided to buy property in Puerto Vallarta, México because you have just returned from a visit to this paradise but you have no idea how to invest or buy safely and profitably in this beautiful foreign land.

There is a lot to learn and consider before committing yourself to a purchase because buying in Mexico is different from buying in the U.S. Law, finance, taxation, title, etc. are all handled a little differently than you are used to.

We like to focus our local Seattle blog and our Mexico blog on education more so than sales. So, today’s entry might seem a little more self-serving but we are actually quite excited to offer potential buyers a great opportunity to attend an educational event in Puerto Vallarta, as well as exposure to six terrific developments.

Together with a developer in Puerto Vallarta we are adverting a three-day-discovery-seminar that will educate you on the process of buying in Mexico and also give you an opportunity to purchase property. The emphasis will be on education but if you are ready to buy, there will be great choices for you to chose from.

These educational events in Puerto Vallarta are hosted monthly. You are responsible for airfare and approximately $200/person fee. Your accomodations are provided, as well as several meals. You may extend your stay at an additional fee. It’s really a great value at a very reasonable cost.

To find out more or to register, please contact us at 206.276.5827 or at info@propertysalesmexico.com .

Not ready to get on a plane to Puerto Vallarta to learn more about how to buy in Mexico? No problem, we also offer monthly presentations in Seattle where you will learn the basics. Click here to register for the Seattle Seminar.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team
Re/max NW Realtors
http://www.propertysalesmexico.com/

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Rising Mortgage Interest Rates and Buying Power


When interest rates rise, it lessens the buying power of potential buyers because it increases monthly payments which are used to decide how much money the lender will let the buyer borrow.

Following is an example to illustrate how your buying power is reduced or how your monthly payments are affected: At a 6% fixed rate, with 30 years of payments, one would have to pay approximately $600.00/month for every $100,000 borrowed. At a 7% rate, one would have to pay about $665.00/month on every $100,000 borrowed. So, in this example, for a $350,000 home your monthly payment would increase by $227.5/month if the interest rate rose 1%.

Obviously, an increase in rates can have several negative affects on the market. With less buying power, buyers may find that they can no longer afford now what they could have afforded a couple of months ago. This can decrease the number of financially qualified buyers. Less buyers in the market equals less demand for homes, causing a downward pressure on prices in some of our local Seattle communities. You may wonder than if you should wait until prices drop before you buy – the answer is no (see example below).

Let’s look at another example to illustrate why waiting for prices to drop is the wrong approach. Example: You decide to wait to buy your home until prices drop 10% percent. The risk in waiting could be higher interest rates and higher mortgage payments as seen in the example above. So if the price of a home happens to drop ten percent from $500,000 to $450,000, but interest rates rise 1% point from 6% to 7%, your payments are still about $3000 a month. No change in monthly payments.

One more tidbit of caution. When rates rise, they usually rise fast (much faster than the change of appreciation).

If you have more questions, about this topic, please feel free to contact us at 206.276.5827 or at kerstinbrooks@earthlink.net.

Kerstin G. Brooks, ABR, Realtor
Brooks & Heinze Team at RE/MAX NW Realtors
300 NE 97th St
Seattle, WA 98115
Phone: 206.276.5827
Email: kerstinbrooks@earthlink.net
Web: www.propertyinseattle.com

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