The Real Kirkland

By Jennifer Nilssen, Realtor, CNE

Kirkland, WA-

What are happening to property taxes in Kirkland?

 I’ve gotten quite a few questions in recent weeks about 2010 tax amounts.  No doubt due to many household’s efforts to lower their monthly outlay. Many of the questions that we’ve received looked something like this:

“Hi Jen.  I see that my property taxes have not been assessed recently and are inaccurate and are still quite high.  Can you send over what my taxes are looking like for 2010?  I’m looking forward to seeing my tax bill go down this year!”   

Unfortunately the total property tax amounts won’t be available until February, so we can’t know for certain what our individual tax bills will look like until the counties make them available then.

2010 assessed values were calculated and notifications were sent out to homeowners around July of 2009.  Homeowners may be surprised to find out that while many assessments have gone down all around the Puget Sound, the individual property tax amounts probably won’t be changing too much. But it’s better than the noticeable increase that’s been taking place for the past few years.

Here is a link quick video presentation that we made available last July in response to many of these same questions.  It will guide you through the process so that you will better understand how taxes are calculated, and why your individual tax bill may be going up slightly. 

http://www.talonnw.com/flash/taxes.html

 How are my Property taxes and property value determined?
The county assessor must determine the fair market value of property using one or more of three generally accepted appraisal methods: The Market approach, Cost Approach, or Income Approach. This is the basis for what you will pay. However, there are also levies passed in the area you live in that will determine to the amount of taxes needed to be collected in your taxing district. These levies include operating costs of schools, city and county government and other taxing districts such as the Port of Seattle, library, hospital, fire and sewer districts. A large part of each property tax dollar goes to pay off bonds for such capital costs as school buildings and other public projects. The tax rate on your property is the figure resulting from dividing the dollar amount required for the taxing district by the total value of property within the district and then adding up the rates of the various districts in which your property is located. The assessed value of your property, multiplied by the combined rate, produces a tax amount which is your fair share of the total property tax levy in your area.

 Whew! That was  a major amount of thinking. My head hurts.

You can more easily estimate what your property taxes will be if you know the “assessed value” of your property and the tax levy rate.

For example, if the assessed value of your property is $200,000 and the levy rate is $13 per thousand dollars of value:

 What Happened in Kirkland? Why do we pay so much?!

Well, Kirkland property values have always been high in comparison to other areas of King County.  Not always the highest, but high. People see value in living here because we are well located, close to Seattle, Microsoft, now Google,  and major arterials, have beautiful scenery, good schools, and have general overall appeal. The price of the average home in King County in April of ’06 was $325k – it was $475k in Kirkland during that same time according to the Seattle Times. A Money Magazine online article listed Kirkland as one of the top ten places to live in the country in 2007. The average household income in Kirkland was $115,198 compared to $72,105 in the rest of King County in 2008 according to the City of Kirkland. 

When the boom hit, Kirkland home prices, particularly those in Downtown, Houghton, West of Market, and East of Market neighborhoods rose unnaturally fast, and therefore the property values increased at a rate disproportionate to those in the rest of King County.  The assessor again bases home values as an appraiser would – on homes comparable sales. We also passed a significant amount of levies in our area which added to the amount we pay.

It used to be that property taxes in Kirkland were actually low in comparison to the rest of King County. In 2004, the property tax general levy rate in Kirkland was $8.99 per $1,000 of assessed valuation, compared to $10.50 for the greater King County. For a $400,000 home in Kirkland, the average property tax paid in 2007 was $3,596. And the levy rate today is still average in comparison to the other cities in King County, it’s that our home values are still assessed pretty high.

 Good news for King County Property Owners…

 Recently, King County Assessor , Lloyd Hara addressed King County home owners stating that we shouldn’t be nervous about receiving our 2010 assessments.  This was not the case in early 2009 when then King County Assessor, Scott Noble, forecasted that property taxes will show an overall 6.16% increase over the prior year.

He went on to say that the Department of Assessments will be mailing out property value notices over the next few months. These notices indicate the appraised value of property, as of January 1, 2009, for the purpose of 2010 property tax distribution.

A light at the end of the tunnel! Hara goes on the say:

Homeowners will generally see a slight reduction in assessed value. The real estate market in King County has shifted dramatically in the past year. An additional downward adjustment was warranted to account for lack of sales and the influence of distressed sales on the housing market. Most homeowners will see a significant reduction in the assessed value of their home.

Lowering Your Property Taxes Anywhere in King County by Appealing…

What if you receive your notice and you feel your property value is still high? Property owners who believe the new assessed value of their property exceeds its fair market value have the opportunity to appeal each year following receipt of the Assessors Valuation. You can dispute the valuation by timely filing a petition to the King County Board of Equalization (BOE).

DON’T MISS YOUR FILING DEADLINE! Petitions must be received by the Board on OR before July 1st of the assessment year OR within sixty (60) calendar days after the date listed on the Assessor’s value change notice – whichever date is later.

Filing an appeal with the BOE requires the submission of  TWO sets of the BOE’s petition form. Download the real property petition form here.

MUST READ:

You MUST evidence your appeal with findings by using actual sold comparables. There are 2 ways I know of to do this reliably:

1. Sign up for the HBMR website. There is a private website (you just need a Realtor sponsor to give you a username and password) that will give you easy, direct access to MLS information, and specifically sold comps around your address. I can give any of you access and all you have to do is email me at  jen@tecrealestate.com and request HBMR access. It is absolutely FREE and there are no strings attached and you won’t be solicited the way you might be by searching other local real estate company websites. You can also choose to have the site notify you of any future sales in your neighborhood. This comes in handy for next year’s appeal or if you decide to sell. 

2. Have myself or another Realtor pull comps for you. Sure, you can do it yourself but since Metroscan and neighborhood gossip are unreliable, so I would not suggest taking the chance. This is dollars in your pocket, People!  Have a real estate professional help you out with the portion that asks you to back your claim with verifiable comps.  This is also FREE of charge and you can request comps from me by emailing me at jen@tecrealestate.com .

Kirkland, WA

Let’s Talk Short Sales 

One of the most abundant types of property listings on the market today are the ever bittersweet and mysterious  short sale homes. Love ‘em because their great deals or hate ‘em because they are lowering the property values in your neighborhood, they make up approximately 17% of all homes on the market today nationwide. They are statistically more prevalent in the outskirts of more major metro areas and more than 60% on the market in King County are priced under $350k. Short sales are essentially homes where the seller is asking to bank to agree to accept a lesser pay-off than what the seller actually owes. It may be that the bank forgives the differential of the debt owed vs, the net proceeds completely or that they issue a pay-off and then lien the seller for the remainder of what they owe. Either way, the seller’s credit will be affected for any late payments and possibly re-negotiating that debt. These homes have not gone back to the bank yet and the sellers are still on title, distinguishing them from a bank owned foreclosure.

People love them some short sales. All over the news, bookstores, radio, and at the water cooler, people all know of some unbelievable foreclosure on their street or neighborhood that is a sweet deal. Short sales that do sell actually tend to close for less than market value. They can be a fantastic way to obtain a home with upside potential and maybe a little instant equity. They are vast and many on the market today. Agents are eager to get them off of their hands. Many agents are “going with the new flow” and rather than busting in this market, they’re making lucrative careers by specializing in short sale listings and negotiations.

So what’s the catch? Because there’s always a catch, right?  Or is it natural that sellers had it so good for so long with easy multiple offers, escalation clauses, and sky-high asking prices, that it’s simply the buyers “turn” to have it so good? Short sales can be a great treasure for some very patient buyers but you have to know what you’re diving into before investing the time and and a great amount of energy. 

 What You Should Know about Short Sales:

Listing Price:

One of the most confusing things about short sale listings is this: the price it is listed for on the market is NOT the price you may always expect to buy the home for. The listed price on the market is the price the sellers are HOPING to negotiate to sell for with the bank because all short sales are subject to final lien holder approval. So for example: If I owe $250k on my home but list it on the market today for $200k because that’s what market value is, I still cannot guarantee a buyer, who wants to buy, a sale for $200k. They may offer $200k and I may agree to it, but the bank may come back and say “yes, that’s fine”, “no, but here’s our counter”, “no, we’ll take it back into our inventory and foreclose if you can’t make payments”, or give no timely response at all.  Buyers get very excited when they see the price of a short sale home dropping every few weeks, but what many don’t realize is that means absolutely nothing. That new, lower price is absolutely obsolete because it is not currently sellable at that price without bank approval.  And depending on how that home was financed and who the investor on the loan is, Fannie Mae and Freddie Mac guidelines only allow lenders to accept a certian percentage of loss before they are forced to take it into inventory rather than short sale. What is the formula? They’ll never tell. It’s a mystery.

The ONLY time that a short sale can guarantee a buyer a purchase price in line with what it’s listed for  is if the sellers have already obtained a bank approval and have it in hand.  And this can be a challenge because you cannot get a bank approval without a signed purchase and  sale agreement. So this very fact makes the entire short sale pricing and approval process a catch 22. 

Making the Offer:

Always bring your highest and best offer no matter what because most of the time you only get one shot. And in the months of waiting that it may take to get an approval, you can almost count on there being other, competing offers submitted.  And the seller may submit other offers that come in. They know that any other offers submitted may give them a better shot of getting out of their home. 

 Keep Looking and Have a Plan “B”:

Short sales are low probability transactions. Even if your offer was the only offer, there’s nothing to guarantee that the bank would accept it or counter it. In King County alone there are over 1,100  single family residence short sale properties with an accepted offer, but only about 120 short sale properties closed in September (numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.) That isn’t because the banks are ramping up. It’s because a lot simply never close. So be sure to keep an eye on your short sale home but don’t stop looking in the meantime until you receive a bank approval.

Note: Always make sure that your agent has included a clause on your offer that allows you to rescind your offer prior to receiving bank approval in case you find another home while you’re waiting.  

Sold AS-IS, WHERE-IS:

Most bank owned homes and short sales are at least cosmetic fixers. I would estimate that in the SS homes I see, most need a minimum of $5k of work done before they are in sanitary, move-in condition. It may be that your home is structurally damaged enough that you would qualify for the FHA 203K or rehab loan which would include your repairs in a buyer’s loan, but more than likely the cost of repairs will come out of the buyer’s pocket. That is because 98% of all homes sold where the bank is involved, the home will be sold as is, where is. Sure, there are some exceptions where you will get a lenient, more attentive bank that realizes making a few repairs is more lucrative than taking the home back into their inventory or they realize that no one can obtain a loan without a certain item being fixed, but for the most part, it’s all up to the buyer.        

Who You Need to Hire:

Short sales and banks in general are tricky these days even for specialists. Before you jump in, you definitely want a SS specialist in your court. An agent or third party negotiator can definitely expedite the SS approval process. But beware: many agents and third party negotiators misrepresent their abilities and so you really need to make sure to do your homework and questions their achievements. If it doesn’t look good, use the agent for your basic representation and hire a qualified negotiator for the actual short sale. It may cost about 1% more, but typically the agents will split the cost for you out of the commissions. The banking industry today is complex and ever changing and requires someone with inside expertise and tenacity. PLEASE CONTACT ME FOR REFERRALS. I have several reputable parties I would be happy to refer you to for representation with a short sale. They may cost you slightly more, or not, but a competent attorney, agent, or negotiator is always worth it.

There is no one way to do a short sale and the bank can do whatever it wants. Anything that gets them the highest price is fair game for them. Though I have seen, through the listing agent, to get first consideration if an offer is first in and accepted, but it depends how strong the relationship is between the bank and the listing agent. Easier done on a bank owned than a short sale.

Note: In some cases, it may be mandated that the buyer is responsible for paying a short sale negotiation fee at closing. Some banks require a 3rd party negotiator or attorney that will charge  .5 – 1.0 %  fee, based on the cost of the home,  at closing. This fee will be added on top of your other closing costs. Not all short sales require this fee, but approximately 25% do. You will have to double check with your agent if the short sale you are considering demands this fee because the fee is not generally disclosed up front to buyers.

Waiting Out the Approval From the Bank

To be dealing with foreclosures and short sales, you have to have the patience of a saint! Not only do different banks have different protocols in regards to reviewing and accepting offers, but EVERYTHING, even your signed agreement with the sellers, is subject to  bank approval and their own time frames. Your offer filtering through the various levels of a bank’s bureaucracy, especially if you had a sub-prime loan or your bank was recently sold, may take months to a full year, if it get s accepted or countered at all. So be very patient and continue to look at other properties in the meantime.

A short sale is a process. The first step is to submit a short sale package, including financial information, a hardship letter explaining why the owner can no longer make the mortgage payments. Usually approval of a short sale requires weeks or months because the case manager is working with perhaps 200-300 cases, so they just work on the first case that comes up. Until the lender approves the short sale in writing there is no sale.

In most cases there are two lien holders, the first, or primary mortgage, and the second, which may or may not be a Home Equity Line of Credit. BOTH need to approve of the short sale, which is a loss to their investors. We are seeing cases where the first or second mortgage agrees, but the other wants more money than they are being offered, stalling the efforts and ultimately killing the sale. 

Timing for Tax Credit:

At this moment, the ship has sailed to meet the $8,000 tax credit deadline. It typically takes about 90-180 days to receive lender approval and close on a short sale home. Sometimes longer. As of right now we have less than 60 days to guarantee a buyer can take advantage of that credit if the government chooses not to extend the deadline. You can still make offers on short sales, but you will likely not get the tax credit, unless the government extends the November 31^st,2009 deadline. 

All Things Considered…

 Short sales and foreclosures can be the way to go if you’re willing to wait it out for the perfect home, but you may want your agent to try searching for homes that are “approved short sales” or “bank/corporate owned” or just simply a regular, old fashioned sale between buyer and seller. If you’re primarily looking for a bargain, I would suggest bank owned properties, where the bank has already foreclosed and put the house on the market. Most of those are at least cosmetic fixers, but if you can handle that, you might get an even better buy than a short sale. You will, however, have more need to have an attorney review the bank documents. Some bank’s documents are surprisingly poorly drawn and contradictory.

I think a lot of people don’t realize how competitive a short sale can be. A lot of buyers are getting beat up trying to chase a bargain. I personally have seen reasonable, capable people on the level of a nuclear meltdown over the levels of frustration and angst this can cause. Crying, demanding, literally on their last thread of patience. One person told me it was more frustrating than her divorce! It’s reminiscent of the competition we had several years ago where good homes were getting multiple offers, only worse. I have seen many of my clients give up on chasing short sales for this very reason.

Nothing gets me more than when a buyers tells me they want a short sale because they have heard it’s the best way to get a deal. That can be true, but not necessarily. Have your agent familiarize you with the local short sale market to determine if it truly makes the most financial sense. And the truth is, it you just want a GOOD DEAL, no matter what it is, right?

Jennifer Nilssen with TEC Real Estate can be reached directly at 206-853-1491 or at jen@tecrealestate.com. Her website can be accessed at www.livekirklandwa.com .

This condo can be financed through a special program with Cobalt Mortgage come October.

 
Kirkland, WA –

Why wouldn’t someone, who was an ideal buyer, want to buy a home in Kirkland today? After all, Kirkland currently boasts listings of all prices ranges and styles. The government and banks are handing us tax credits and low interest rates. One only has to walk down Lake Street past Hallmark Realty to get a taste of what the city offers: Three bedroom condos for as low as $137k. A three bedroom, updated rambler listed with TEC Real Estate’s Todd Mitchell in Bridle Trails for only $310k. This home is currently tax assessed at $372,000. Right now a 2,900 square foot, updated bungalow with Lake Washington views,  only 1.5 blocks off the water and Houghton Beach Park, sits, waiting for an offer at….would you guess $1 million? $900,000.? Try just $719,000. And the agent will tell you that they’re motivated. And I have to give an honorable mention to several homes in West of Market that have lowered their prices over $200,000. since going on the market in the last year. Call it affordable luxury. An oxymoron? Not in this market.

 But it’s true that some buyers-  make that many buyers –  are not jumping in quite yet. I hear from clients that there are 2 main reasons why this happens.

1.)    Buyers are skittish. Buyers in recent years have been burned all over the country and lost equity in ways that we haven’t seen for decades. New buyers think that maybe this isn’t the bottom and the market may turn on them, too. It’s scary to make the leap when everyone knows someone who has or is losing a home to foreclosure. Many people are waiting to see if they will have a job going forward. Many are just simply waiting for someone else to make the first move.

2.)     Buyers are not sure if they can qualify. When the credit crunch of last year happened, lending came to a screeching halt. Even credit worthy buyers were having difficulties qualifying for a home mortgage if they were self-employed, retired, act.,  Zero down payment loans came to a furious end (thank goodness) and condo financing was questionable at best.

The series of unfortunate events has lead us to today. We have all braced in and most have a pretty good grip on the fact that we now need to live within our means, and begin rebuilding what we might have lost.  Time is the school from which we learn – Delmore Schwartz.  We ask the questions: What smart, conservative strategies can we use moving forward? How do I rebuild? How do I jump back in? Will it be warm waters or roaring seas ahead? Can I and should I now or in the future invest in real estate– the very vehicle that may have just chewed me up and spit me out last year? So, what is the temperature of the mortgage market today?

I believe that real estate, as a long term play, is unequivocally a good investment. These are not normal times. For many homeowners, their home will be a main source of retirement income. Done right, it can provide monthly cash flow and necessary tax benefits. I also believe that right now is an excellent time to invest in the housing and commercial real estate markets in the greater King County area. In the years that I have been a Realtor I have never seen such a conducive market to investing for those that have the means to buy. Rates are incredibly low (as we speak, rates on a 30 year fixed are at 5.16% and 4.67% on a 15 year fixed. ), our government has mandated a $8,000 tax credit for first time buyers (meaning those who have not purchased a home in the last 3 years), and home prices have fallen considerably to more balanced and affordable prices. And many sellers are negotiating down even beyond those prices. It also occurs to me that if we can close on more sales in Kirkland, we can help boost the local economy. Sales beget sales. Excise tax comes back to us. When foreclosed homes are occupied rather than vacant, neighborhood values increase.

98033, Kirkland Homes For Sale

If you look at the stats and believe the same, perhaps maybe the only thing standing between you and this market is your ability to qualify for a loan. Today, it can be a huge question mark for even typically qualified buyers. And with so many loan officers and real estate agents getting out of the business in the last year, it’s possible that your old broker isn’t even around anymore. How can one find a new, reliable broker that truly knows what’s going on, is current, and willing to tell you the truth about things?  I don’t even pretend to know all that there is on the loan side of things. I also find that the rules of the game change often and are fueled by news.

So let’s ask a local, veteran mortgage team from Kirkland, what a buyer today can expect if they want to take advantage of the current buyer’s market. What is the bank going to say to them? Scott Estes, founder and leader of the Estes Team with Cobalt Mortgage, shares his insight.

Jen: How is the lending market compared to 6 months ago – better, worse, or the same and why?

Scott: The lending market is pretty much the same however a few new rules have been implemented. A big rule is the HVCC (home valuation code of conduct). A loan officer must order an appraisal through a third party company that will then assign an appraiser to the file. The issues that can arise with this new system are that an appraisal costs more now (about $100. more) and they are taking about 2-3 weeks instead of 2-3 days. Appraisers that get assigned to a file are often out of the area so their values are much lower, and if there is a condition needed on an appraisal it again can take much longer to resolve.

Jen: If a person bought a home that was worth $500k last year and today it is worth $400k, can they still refinance?

Scott: It depends on how much they put down when they bought it and their current loan to value. FHA, Fannie Mae, and Freddie Mac all have programs that can help people with high loan to values but if you owe $500k and it is worth $400k, you cannot refinance.

Jen: How are loans for self-employed people these days?

Scott: They are still available however self-employed borrowers get the advantage of taking large deductions. In the past they could state their incomes to qualify for a specific loan. Today this can be a double edge sword because now if they deduct too much it can cost them the ability to qualify for a loan. Self employed borrowers were also able to put off filing and now they must have 2 full years of tax returns.

Jen: What should a buyer/ borrower do to help position themselves for a loan right now?

Scott: The best thing a buyer can do is pay down consumer debt and save money.

Jen: Tell me about the timeline for the $8,000 tax credit and what a borrower needs to do to meet that deadline.

Scott: The deadline for the tax credit is November 30^th, 2009, however the safest thing to do is to plan on closing by the week of November 16^th because the next week is the Thanksgiving holiday and county offices will be closed Wednesday through Friday. Closing on or before Thursday the 19^th will avoid the hassles of trying to close during peak vacation times along with all of the other buyers trying to close at the same time. It will be important to have a contract in place as soon as possible because you may not get the first offer you make, or a home inspection may uncover unacceptable conditions that keep you from moving forward.

Jen: Yes! And I also want to mention that you should plan on it taking 45 days for your transaction to close from the time of mutual acceptance. So working off the deadline you’ve recommended here, a buyer would need to obtain mutual acceptance on a contract no later than October 7^th if you want that $8,000 in your pocket. And that is basically in only a few weeks. It’s time for buyers to really hunker down because there’s no time to waste.  And it really doesn’t make sense at all for a buyer not to take advantage of this because as an agent, I can tell you that the quality of homes or the price of homes is not going to drastically change from what they are now – at least not “missing $8,000 in your pockets” worth – in the next few months. BUT rates may go up and your tax money will be GONE.

So from a lenders point of view, is it a good time to buy?

Scott: It is a GREAT time to buy! The $8,000 tax credit is very nice for those that qualify for it, but if you also look at the median family income, property values, and mortgage rates being at historic lows, home affordability has never been so good. There are two variables that will eventually go away and those would be the tax credit and interest rates will increase. We don’t know when, but we know they will.

 To contact Scott Estes directly, please call (425) 891- 8260 or email him at scott.estes@cobaltmortage.com  

My best suggestion is to get a solid consultation from a knowledgeable mortgage lender to find out where you stand today and in the future. Only then can you begin to build and maintain wealth through real estate.

Jennifer Nilssen with TEC Real Estate can be reached directly at 206.853.1491 or at  jen@tecrealestate.com. Learn more about the Kirkland real estate market at www.livekirklandwa.com

Rent vs. Buy?

Kirkland, WA -

Nationally, nearly a full third of households are still renting. It’s approximated that in King County we’re at about 38%. If you’re one of them, analysts say you could be paying a hefty price.

There are two things that are important to note before talking about leaving a rental and buying your own home. First—and this is very important—the housing market is actually localized. People often ask me, “How’s the market?” (and I’m all too happy to oblige them) but what they should be asking is “How is the market in my neighborhood?” So the outlook in your neighborhood likely differs from the town 5 miles away and across the country. Second, home prices are tied to the temperature of the economy and job security. For example, I hear quite a bit that even though people understand that there are serious advantages to buying right now, they are going to hold their money close and sit tight for now. Wait and see what happens. Wait and see what others do. So, if your local economy is feeling a pinch, the home prices in your area may be down as well.

When things were going so well in 2005, Kirkland homes prices were rising swiftly, disproportionate to the rest of the county and even the country. Kirkland home values rose 23% from 2003 to 2004. Five years later in 2009, Kirkland homes sales are down 42% and prices are down 18% from 2008 according to Fidelity Title. This presents opportunity galore for renters who want to become buyers because they are a hot commodity in sellers eyes. Any seller or listing agent will tell you that there is a shortage of qualified buyers out there. We have moved from a “desire” market to a “need” market.

In my opinion, there has never been such a “perfect storm” of opportunity to buy and I am not sure there will be this opportunity again for a long, long time. If you are an employed, first-time buyer with good credit, you are a golden child and most real estate industry professionals today would encourage you to buy vs rent.

An argument for buying vs. renting…

If you pay $1000 per month in rent and that rent is increased a modest 8% each year (which is the legal limit in WA state, however this does not include additional add-on items such as parking or storage) you would end up paying just about $65,000 over a 5-year period! Worse yet, if you are paying $1,500 per month the total amount after 5 years is closer to $100,000! After forking over $100,000, you still would have nothing to show for it. Today, the average condo rents in Kirkland for about $1600 a month and a single family residence averages about $2300 according to the MLS. That means that the average renter in Kirkland will say goodbye to $120,000 over 5 years.

And what if you have been in this rental for years and care for the place as your own? Or you simply like to have nice surroundings or want to make the place your own? It’s not uncommon for renters to throw up the paint, install new light fixtures or plant some nice flowers outside. But you know what? All of your efforts, labor and the benefit of that improvement belong to the landlord, not to you.

With low down payment options in the 3.5% range still available for qualified buyers, affordable home prices and low interest rates, the very same money could have been used towards home ownership. This is not to mention the $8,000 First Time Home Buyer Tax Credit for qualified buyers, which is not a deduction off of taxable income but rather a fully reimbursed dollar amount which new home buyers can take advantage of through the end of November. The IRS defines a qualified buyer as someone who has not purchased a home in the last three years and the credit starts to phase out for individuals who make more than $75,000 a year.

In the economic pinch, new construction seems to be one of the best ways to take advantage of the buyer’s market. Builders desperate to move inventory are offering unprecedented bonuses on new homes. Right now Quadrant Homes is matching the government and granting homebuyers an additional $8k off home prices. They, as well as many others builders, are also including high-end finishes such as stainless steel and granite, in the low purchase prices, rather than charging the buyers for them as an upgrade. It’s really the buyers turn to command the market. It’s as if after all of these years of sellers kicking back while they perused multiple offers and squeezed buyers for top dollar, the buyers are getting their revenge.

Even using a standard 30-year fixed program, a mortgage of $300,000 (approximately the average purchase price of a condo in Kirkland) could be obtained with a total monthly mortgage payment—including property taxes and insurance—of around $2,200. Assuming a 25% tax bracket, this would be equivalent to the average amount spent on rent during the same period after your tax benefit.

And the benefits of home ownership are quite considerable. In a typical market and over the long term you are building equity and presumably a retirement nest-egg. Most people count their home as their number one resource for retirement funds. Just ask the 240,000 seniors who are currently utilizing reverse mortgages in the U.S. according to HUD. After 5-years, the $300,000 mortgage could be reduced to $279,000, adding $21,000 to your net worth in addition to any gained equity.

Homeowners can also write off their paid monthly mortgage interest payments and property taxes on their federal income tax return. Check with your state income tax office to see if it allows deductions as well. Be informed and don’t believe the national headline hype. Seek the advice of a local Realtor who truly understands your local market. Try not to fall victim to nerves and make smart, sound decisions when it comes to home ownership. Many times is comes down to simple math. A qualified Realtor will consult with you on that math and any other outside considerations.

Jennifer Nilssen can be reached directly at 206.853.1491 or at  jen@tecrealestate.com. Learn more about the Kirkland real estate market at www.livekirklandwa.com

This is not meant to be legal advice in any way. Please consult your real estate or tax attorney with any further questions.

Kirkland, WA

No doubt this is a strange, new world of real estate. New appraisal regulations, tightening of the lending belt, not enough loan modifications happening, too much bureaucracy doesn’t make an immediate impact on Main Street…  All of it means that for the average seller -  short sale, foreclosure, or not – it is more difficult than ever to sell a home.  When homes don’t sell, it’s generally a matter of affordability and a need for lower priced homes.

That means that sellers are having to stomach some deep price cuts that are not always easy to come to grips with. In fact many escrow companies report seeing more sellers coming to the table with funds than ever before. The prospect of losing your nest egg vs. losing that nest egg AND gaining a foreclosure is not the predicament that many sellers ever thought they’d be in.  Even sellers that were deemed “responsible”, did all of the right things, and made their payments dutifully are now being affected due to job loss or cutbacks or loans adjusting to higher interest rates. For some the harsh economy has taken it’s toll and may mean losing their home to foreclosures.  Right now approximately 9% of all homeowners in the U.S. are late on their mortgage payments says the NAR.

For some it can be too much to handle when life intervenes in such a way. I have seen firsthand the devastation of a foreclosure. I have been to foreclosed homes already overtaken by the bank where there are still pots on the stove and clothes in the closet. I have seen sellers in the process of negotiating a potentially successful short sale just up and leave the state. I have had sellers with equity dwindle it away and effectively halt moving forward with their lives because they did not want to believe that their home had lost so much value and list at today’s real market value.   

So for the righteously dazed sellers in this vulnerable fog: What do we all need to do for them? What can we do? What can we say to help? What can we do to lift the spirits of those facing foreclosure on the American dream?  I want to believe that you can make a difference with genuine outreach and support. Suppose that as an agent, I made the decision to treat a client as a person going through a devastating event with care, dignity, and understanding, as opposed  to only a business transaction. What if I took an extra minute to sincerely ask how they were coping? I would think that it would potentially help that person to decompress and feel like someone cared to ask. Maybe it’s not the answers to their prayers, but I would hope it would help. Or would it? Could reaching out ever be hurtful or embarrassing? Would it be inappropriate for an agent, working in a professional capacity, to ask a seller about how their feeling? What can we REALLY say to friends, family, co-workers, and clients who are going through the loss of a home or retirement?

  Luckily a friend of mine, Robin Morris, MA, LMHC,is a counselor and life coach in Woodinville, WA.  She has counseled a countless number of individuals and families looking to pick up the pieces from many situations and I knew her comfortable, non-judgmental style would make her the perfect person to answer my questions.  Wondering about this topic, I asked if I could interview her to see what a concerned friend or family member could do to truly lend an ear to those going through a hard time:

Jen:  Robin, how would you rate going through a foreclosure on the stress scale?

Robin : There are many professional studies that rank stresses. As a professional, my compilation of the research puts foreclosure up there in the top five. In addition to being high on the list in general, each specific incidence of foreclosure will carry a different weight -sometimes heavier and sometimes lighter-   depending on the individuals involved & the circumstances of the foreclosure.

 Jen: What are some suggestions for coping techniques through difficult times?

Robin:  Definitely attention to basics; healthy diet, exercise, sleep. Maintaining structure to deal with chaos.  It can be comforting and also orienting during disorienting times to create a structure for your days and tasks. And Support, Support, Support. Reach out to friends, family and/or professionals. As tempting or natural as it is to isolate yourself, even small efforts to reach out to others will go a long way to mitigating stress.

Help others. Doing something for others is a great way to get a lift to your own spirits. I have a game I like to play called “Change It Up.” I look around my world for someone who is doing things for me and challenge myself to come up with something I can do for them. It can be a loved one in your home, or someone you hardly know. Once, after purchasing flowers, I handed them to the grocery clerk, and said “These are for you.” The look of pleasure and surprise on her face turned what had been a sluggish day for me into an energized one.

 Jen:  What can we say to help someone that is going through the loss of a home or loss of retirement?

Robin: We put pressure on ourselves to say something, to say the “right” thing. It’s not always about saying anything. Being willing to truly listen – without making assumptions or judgments about what the person is going through or caving into our sadness for them -  is one of the most helpful things we can do. When we stop and listen, we may be surprised by what the person is feeling and experiencing. The experience of being heard can be a tremendous relief and power-boost for someone who is suffering a loss.

 When we do need or want to say something, here are a few guidelines:

• Speak from your heart: be honest, authentic. Don’t pretend it’s comfortable trying to talk about this if it’s not.
• Avoid “it’s happening all around us” statements, because even if it is, it’s also happening to this specific person in this specific situation.
• Ask questions about how the other person is feeling, what are their plans, etc.

 Jen: As a counselor, why do you think the loss of a home is so tough?

Robin: I think the loss of a home is so tough because of everything that home means to us. Home is a sanctuary, a safe harbor, an expression of our style and values, a place where our family & friends gather, a place where we can be ourselves and relax. When you lose a home, you lose a lot more than walls & windows. You lose your doorway to the world.

 Jen:  When someone doesn’t want to open up to you about things that are going on, what can we still do to let them know that we’re here if they need us?

Robin: We can say “I want you to know that I’m here if you need me. If there is something I can do, I’d like to assist you.” Don’t be afraid of giving the simple, heartfelt, straightforward message. If the words come out sounding awkward, it can lead to both people having a good laugh – and the person you care about still knows you’re there for support.

 Jen:  As an agent, clients definitely look to you for expertise and professionalism. Do you think it would be helpful or appropriate for an agent to show a more “human” side as well?

Robin: Yes, showing our “human” side is always a good thing in my book! We all have a certain nature, ranging from being reserved to outgoing. The “trick” to showing your human side in a professional situation is to do so in a way that is natural & authentic for you.

Studies show that the most effective and respected leaders in business are all over the map in terms of personality; among the qualities they share is they roll up their sleeves and take action, and they make the people they work with feel important and empowered. Agents are in a particularly important position as they are front-and-center in helping people with some of the biggest decisions they make in life. Bringing your human side brings warmth, reassurance, and excitement to clients; helps support someone who has felt bullied by creditors, and helps clients to avoid feeling scared about future transactions.

 Jen: What’s an important message that you’d want to tell people who feel like they’ve lost hope right now?

Robin: These two suggestions are made in tandem – so they go together…. Look for the lessons your life is offering – a chance to break old habits, to follow ‘forgotten’ dreams, to take a more expansive view of life. And always remember the underdog. Individuals, families and communities do rise like the phoenix in completely amazing ways. What’s not so amazing is that it takes faith and effort. But with those two simple ingredients, every life can get back on track and can rise to better days, better things than you might have imagined before this situation.

May I share a quote? “A great revolution of character in just a single individual will help achieve a change in the destiny of a nation and, further, will cause a change in the destiny of humankind.” –Daisaku Ikeda. By having to deal with a challenging situation, people learn that they are stronger and more capable than they realized.

Jen: Even when it’s not s distressed sale, a typical sale can be pretty stressful. A huge transition. Beyond preparing them logistically, what can a life coach or counselor, help a new homeowner or seller achieve?

Robin: A counselor or life coach can help a new homeowner or seller achieve two main things:

• A toolkit of stress coping techniques tailored specifically for you
• A plan to make the most of the transition, such as how to use the change to:
  • renew your strengths
  • double check your decisions so that they match your values
  • refresh and re-dedicate to your goals in all areas of your life
  • set a strong and positive vision for your future and the future of your family

 Jen: Thank you. This is truly authentic, helpful advice.

                If you or anyone you know could benefit from speaking with Robin, she can be reached at: Robin Morris , MA, LMHC  (425)231-5413 or by visiting  http://www.robinboorman.com. Her office is located in Woodinville, WA.

Despite current economic conditions, there are happy stories and many, many lights at the end of the tunnel.  Northpoint Escrow in Kirkland has contracted with another company who has closed over 300 short sale transactions in the past year helping many families. They say that, “the key is to be mentally tough, don’t let the pressure break you or get the better of you. Let a professional who understands the banking world today, take some of that work off your plate so you can continue to work and lead a normal life.” 

This is my last thought. When it seems like the chips are down, you can always send a thought out to those who are going through the same struggles as you. It helps to remind you that you’re not the only one out there and there is power in being able to send out your own good energy.  Whether it be friends, family, or clients, we can all help each other hang in this market.

 Jennifer Nilssen can be reached directly at 206.853.1491 or at  jen@tecrealestate.com. Learn more about the Kirkland real estate market at www.livekirklandwa.com  .