“Is a Contingent Offer in the Hand worth Two in the Bush?”

September 28, 2007 at 4:02 pm · Filed under Bremerton Real Estate, Silverdale Real Estate, Port Orchard Real Estate, Bainbridge Island Real Estate, Poulsbo Real Estate, Real Estate Bites, Buyers, Sellers, Sparks from Sparky, Gig Harbor Real Estate

A while back, I wrote an article entitled, “Putting the Cart before the Horse: Making a Contingent Offer.” It was written specifically to advise Buyers on the pro’s & cons of writing a contingent offer. This time, I thought I would offer up some helpful counsel for Sellers on how to respond to contingent offers.

Looking at Webster’s definition of the word, ‘Contingent,’ I’m wondering which one is most accurate/applicable? 

1 : likely but not certain to happen : POSSIBLE
2 : not logically necessary; especially : EMPIRICAL
3 a : happening by chance or unforeseen causes b : subject to chance or unseen effects : UNPREDICTABLE c : intended for use in circumstances not completely foreseen
4 : dependent on or conditioned by something else; contingent on fulfillment of certain conditions
5 : not necessitated : determined by free choice

While I know that #4 is obviously the correct answer, as being relevant to real estate, some of the other definitions could certainly apply as well. But just so we’re all on the same page here, a ‘Contingent‘ offer is when a prospective Buyer submits a contract offer on your home, but their offer is ‘contingent‘ or ‘dependent/conditional‘ upon the sale of their current residence. 

In a slowing market, such as we’re experiencing here now in Kitsap County WA, contingent offers become more commonplace. Conversely, in faster, brisk Seller’s markets, you rarely see them being employed because they are quickly bumped by other competing offers.

As the market cools, and the inventory of available homes increase, Sellers are more willing and motivated to consider ‘contingent‘ offers.

As a Seller, what are the risks associated with accepting a ‘contingent‘ offer?

Well, first and foremost, here in our market area, when you accept a contingent offer, the status of your property changes in the NWMLS (Northwest Multiple Listing Service). Your home goes from being an ‘ACTIVE‘ listing to being a ‘CONTINGENT‘ listing. As such, your home is shuffled down towards the bottom of any property searches being performed by Agents accessing the NWMLS. This will effectively reduce the amount of valued exposure your home will receive.

When submitting a Contingent Offer using NWMLS Form 22B, the default contingency period is 45 days. This is the timeframe your Buyer has to get their property under contract with a viable Buyer. If another interested Buyer for your home comes along during this period, they can ‘bump‘ the first Buyer. By default, Buyer #1 has 5 days to either remove their contingency or back out of the contract, allowing Buyer #2 to proceed forward with their offer. In some instances, Sellers may tighten up or reduce these default timeframes, just to help ensure that their property isn’t tied up for an excessive period of time. Once you have reached the end of the contingency period, you can either negotiate an extension with the Buyer, or simply allow the contract to expire, releasing both parties from their obligations.

Some questions you’ll obviously want to have answered prior to accepting a contingent offer:

• Where is the Buyer’s home located? What is the market like there?
• Is the Buyer’s Home currently up for sale? If so, how long has it been on the market?
• Is it listed by a licensed real estate professional? Is it priced aggressively, according to market value?

One word of caution here: With all of the recent challenges being faced by the mortgage industry, make sure that your Listing Agent stays in constant contact with your Buyer’s Agent during the contingency period. Loan programs can change overnight. You’ll want to ensure that once their property is under contract, that they can still qualify for the purchase of your home.

A Contingent Offer is better than NO offers, especially when there are so many other competing properties for sale on the market. Just make sure that you’re making intelligent and informed decisions, and that the potential benefits outweigh the risks.

Bookmark this article to:

Comments (13)

C-STOCK’s “Damn Yankees!” a Damn Good Musical!

September 19, 2007 at 1:00 pm · Filed under Bites of Washington, Bites of Kitsap, Sparks from Sparky, Bite Me Blogs

I figured since we can never seem to get a fair shake or a reasonable review of our shows, that I would offer up my own critique.

Last weekend saw the opening ‘homerun’ performances of C-STOCK’s “Damn Yankees!” a spirited team effort by local kids and adults alike, under the skilled direction of Chris Borer. This was Chris’s 2nd time at the theatre’s helm, having had his directorial debut with “1940’s Radio Hour” in 2005.

As usual, Chris has a really great eye for talent and did a great job of casting people in just the right parts. He is also a great visionary, and sees the BIG picture of a production. But more than anything else, Chris creates a wonderfully fun, creative, and encouraging environment for everyone involved. “1940’s” was my first show with C-STOCK, and so I was thrilled to be re-united with Chris.

If you’re not familiar with the musical comedy “Damn Yankees!” it made its Broadway run back in 1955 with over 1,000 performances. It’s based on a novel by Douglass Wallop entitled, “The Year the Yankees Lost the Pennant.” Music & Lyrics were provided by Richard Adler and Jerry Ross, the same team that brought us “The Pajama Game.” It’s an updated version of the classic Faust story, set in Washington, D.C., during a time when the New York Yankees dominated Major League Baseball.

A middle-aged real estate agent, Joe Boyd (gee, that sounds familiar!) is an avid Washington Senators fan and wants nothing more than to see his beloved team win the pennant. Unfortunately, the team is full of mis-mananaged misfits, and sits at the bottom the division. Joe privately confesses that he would sell his soul if the team could only capture the title, and naturally, the Devil shows up on cue to fulfill his wish. The rest of the show follows Joe as he propels his team to victory and enjoys all the spoils of celebrity status. Will he truly sell his soul for fame & fortune, or will he realize that his old life wasn’t so bad after all? You’ll have to come and see the show to find out!

My two younger sons, Luke and Elliot, and I auditioned back in July, and have been rehearsing diligently with the rest of the cast & crew since then. The final month was especially difficult. School started for my boys, and Luke made the starting quarterback position at CK Junior High. So, in addition to their daily homework, and football practice for Luke, both boys went to play practices every night from 6:30pm until 10-10:30pm. By time opening weekend arrived, their feet were dragging!

Both of them are involved in nearly all of the musical and dance numbers. I have several smaller walk-on roles and also play the Baseball Commissioner. Being involved in this production has been a great way for the 3 of us to connect and bond together. There are quite a few other families that are involved in the production as well. C-STOCK has a rich history and tradition of presenting quality family entertainment, and creating valued opportunities for kids and adults to develop their talents.

The show was reviewed this week by Michael Moore from the Kitsap Sun. Mr. Moore rarely has anything pleasant or encouraging to say about C-STOCK productions. And if he does, it’s usually just some obligatory remark to help make the more painful comments go down easier. Too many times, his barbs are aimed at things outside the control of the performers. We have a small, cramped theatre and not the best acoustics. The orchestra usually overpowers the vocals. We do the best we can with what we have. With such tight quarters, set changes are always challenging. It’s hard not to make noise during scenes. We simply do our best. And sorry, Mr. Moore, but we didn’t write the musical, so we can’t control the dialogue or the order of songs.

“Damn Yankees!” truly is great family entertainment, performed by families. It’s hard to find fun, enjoyable venues these days where you can take the entire family, without fear of questionable content.

From the opening number, ”Six Months,” and other notable favorites like ”Shoeless Joe,” “The Game,” and “Heart,” this show offers some really solid and endearing performances.

So grab the wife and kids, or make it a date night with your significant other, and run down to the Silverdale Community Center the next three weekends and root for the Senators!

Who: Central Stage Theatre of County Kitsap (CSTOCK)

What: “Damn Yankees!” a musical comedy by Jerry Ross, Richard Adler, George Abbot and Douglass Wallop

Where: CSTOCK playhouse, Silverdale Community Center, 9729 Silverdale Way NW, Silverdale, WA

When: Through Oct. 7; 7:30 p.m. Fridays and Saturdays, 6 p.m. Sundays

Tickets: $12 to $10 and available at the door or in advance at the Information Kiosk at Kitsap Mall.

For more information: (360) 692-9940, www.cstock.org

Bookmark this article to:

Comments (1)

More Good News For Kitsap County Borrowers (and everywhere else too)

September 19, 2007 at 11:43 am · Filed under Bites of Buckwheat, Bites of Washington, Bremerton Real Estate, Silverdale Real Estate, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Buyers, Sellers, Mortgage Bites, Gig Harbor Real Estate

Ginnie Mae announced on August 27th this year that they would be removing the limit on mortgage loans guaranteed by the Department  of Veterans Affairs (VA Mortgage Loans)! The limit previously has been capped at $417,000. The memorandum can be found here. This change became effective September 1st, 2007.

I don’t know how I missed this news when it was first published, and I am still surprised there has not been more media coverage. This is potentially big news for VA borrowers, Loan Officers and Realtors® across the nation. Right here in Kitsap County, this could easily reestablish some momentum in our real estate sales.

What this means to Kitsap County VA Homeowners

If you own a home in Kitsap County and you qualify for a VA mortgage loan, but you thought you could not take advantage of refinancing opportunities because the value of your home is too high, think again. With the loan limit removed, you may be able to take advantage of the historically low fixed rate loans VA offers. In addition, unless the lender imposes an add-on fee for exceeding the $417,000 conforming limit, Jumbo Loan borrowers will be able to acquire terrific low interest rates on very large loans. Imagine having a $750,000 mortgage at a fixed rate of 6.00% for 30 years.

What this means to Kitsap County Homebuyers

Kitsap County VA homebuyers, will no longer be limited to the $417,000 ceiling. If a homebuyer wants to exceed that limit, the borrower will need some cash down payment. VA guidelines stipulate that if the loan is above $417,000, the borrower can finance up to 75% of the difference. In other words, on a $517,000 pruchase, the veteran would need $25,000 (plus closing costs and pre-paid items). This scenario would be over the VA limit by $100,000 so the VA would allow financing to be increased by 75% of that or $75,000. The borrower is responsible for the difference. 

What this means for Kitsap County Sellers

Homes for sale above the $417,000 conforming limit, will now be able to be marketed to VA buyers! In the past, with the limitation in place, these properties could not be listed in the MLS as VA. Kitsap County has a very large population of Military families. Sellers in the upper price ranges have not been able to offer their homes to VA buyers unless the buyer was willing to switch away from VA financing.

What this means to Kitsap County Realtors®

Any Realtor® reading this article has already figured out what this could mean for their clients. Their sellers can now offer properties to a larger pool of buyers and their VA buyers can make offers on more expensive homes without the need to switch to conventional or subprime loan programs.

Overall, this is big news. Some questions remain that I have not been able to find answers to yet.

• Will lenders take advantage of this change? (Lenders can, and often do, refuse to participate in available programs)
• Will there be a maximum loan limit set? (Think jumbo and super jumbo loan sizes)
• Will the 25% veteran participation apply to the down payment parameters that lower the VA Funding Fee? (This is the question I really want an answer to)

I will add to this article as the information comes in. You may want bookmark this one and check it for updates.

Bookmark this article to:

Comments (5)

“The Real Estate Sky is Falling!!!”

September 18, 2007 at 9:07 am · Filed under Bremerton Real Estate, Silverdale Real Estate, Port Orchard Real Estate, Bainbridge Island Real Estate, Poulsbo Real Estate, Real Estate Bites, Buyers, Sellers, Sparks from Sparky, Gig Harbor Real Estate

We hear it on the news as we’re getting dressed. We read it in our morning paper. We hear it being discussed while standing in line at Starbucks, or around conversations at work. The dark clouds of Doom have been spreading across the country, hitting us from all sides….

“The Real Estate Sky is Falling!”    “The Real Estate Sky is Falling!”

You hear something over and over long enough, it’s hard not to start believing it yourself. As a licensed real estate professional, I don’t buy into the seemingly dismal market heresay and all the water cooler speculations. But there are times when I find myself being affected in small, subtle ways. The ever-positive ‘Can-Do’ attitude begins to weaken slightly and wane. Suddenly you find yourself beginning to cringe whenever one of your Sellers call. Your usual air of confidence isn’t as convincing as it usually is. Your historically effective flurry of marketing efforts bears no fruit. Your Listings languish. Days on market becomes a curse, rather than a testimony.

Welcome to a Slow Market.

“Is the Sky truly Falling?”  No, of course it isn’t. It’s the proverbial ‘Ying & Yang’ of the real estate business. The perpetual cycle of peaks and valleys. A continuum of self-correction and balancing. How long will it last? No one knows. Will it get any worse? Again, no one really knows for certain.

However, one thing IS certain. One of the most predictable constants in the wild world of real estate is that people will need to move. There will always be Buyers and Sellers. Regardless of rates, regardless of prices, regardless of market variables, people will need to move.

In the majority of residential transactions, someone will represent the Seller, and someone will represent the Buyer. Who do YOU want to represent you? Someone who is standing under a dark cloud crying “Wolf!” Or someone who is optimistic and positive? Someone who understands the dynamics of a slow market and embraces the challenge?

Success begins with the proper attitude. Don’t allow Henny Penny, Ducky Lucky, Goosey Loosey, and any other doom-sayers to negatively influence your perception of the market.

The sky ISN’T falling. It’s simply filled with opportunities!

Bookmark this article to:

Comments (6)

ActiveRain “Carnival of Content” Round 3 Winners

September 10, 2007 at 12:51 pm · Filed under Sparks from Sparky

As many of you may know, Buckwheat and I are moderators of ActiveRain, a very large and popular real estate networking platform with nearly 50,000 members nationwide.

Recently, we launched a contest to encourage quality consumer-oriented blog articles on the network. Our 1st Round yielded some really excellent writing from the Real Estate Agents/Broker members. The 2nd Round was from among our Loan Officer/Mortgage Lender members and raised the bar even higher on quality content articles for consumers. The more recent 3rd Round featured the articulate writing skills of our Staging Professional community.

As part of the spoils, we promised to publish the winning articles here on SoundBiteBlog.

And so, without any further ado or gilding of the Lily, here are the 3rd Round Winners and their respective articles:

Third Place and Winner of 500 points:       Kathleen Garvey “Exploring Shangri-La Expectations”

Second Place and Winner of 750 points:    Joelle Green ”If the MLS is the Mall“….

First Place and Winner of 1000 points:       Sue Argue “A Life Raft for Sellers“…..   

Congratulations to all of the 3rd Round Winners and to all who participated!

Bookmark this article to:

Comments

Kitsap County Real Estate Market Report for September 2007

September 10, 2007 at 12:11 pm · Filed under Bremerton Real Estate, Silverdale Real Estate, Port Orchard Real Estate, Bainbridge Island Real Estate, Poulsbo Real Estate, Real Estate Bites, Buyers, Sellers, Sparks from Sparky, Gig Harbor Real Estate

Real Estate Market Report/Conditions in Kitsap County WA for 09/02/2007

The following is a quick analysis of the combined single-family home and condo market within Kitsap County, Washington for September 2007, provided by Rich Jacobson of Windermere Real Estate, in Silverdale, WA (excludes Bainbridge Island).

• Properties currently active on the market: 2158
• Properties closed in the last 180 days: 1749
• Average Sales Price: $312,461
• Average List Price: $342,534
• Ratio of List Price to Sales Price: 96%
• Average Days on Market: 87
• Sales Pending this Week: 45

Current Market Conditions: The highest ratio of List Price vs. Sale Price was 101% for Area 141 (South Kitsap West of Hwy. 16).  The lowest ratio was 73% for Area 168 (Indianola). Shortest Days on Market (DOM) was Area 150 (E. Central Kitsap) with 59 DOM. Area 146 (Chico) was 2nd at 67. Longest DOM goes to Area 163 (Port Gamble) with 149, and 2nd longest is Area 162 (Kingston) with 105.  Overall inventory dropped slightly, and sales increased as well. Certainly a more optimistic indication that the market may be stabilizing somewhat.

For Buyers: Now is still a great time to consider purchasing a home, especially for 1st Time Home Buyers. The current rate this morning for a 30-year Fixed Rate loan is just over 6% just under 6.00%! (edited by Mark) With the number of available homes on the market, Buyers have more choices and greater negotiating room.

For Sellers: Make sure that you’re priced aggressively and that you and your Listing Agent are working closely together as a team, doing everything you can to position your home Head & Shoulders above the competition.

Two of my most recent listings are both great values! A lovingly remodeled Turn-of-the-Century Charmer by Island Lake (13110 Lakeview Avenue in Poulsbo), and a stunning Craftsman Puget Sound View home (22829 Jefferson Point Rd. in Kingston). Call (360) 440-4758 for more details or to arrange a private showing!

For additional information and resources concerning real estate and living in Kitsap County, Washington, access my comprehensive website, www.KitsapLife.com.

Bookmark this article to: