Bainbridge Island Real Estate :: SoundBiteBlog.com

In many regions across the country, the housing market has been cooling off. Inventories are up, prices are coming down. Basic supply and demand stuff, right?

Well, as is typical amidst such conditions, real estate buyers tend to become increasingly more bold and brazen. Many property sellers are desperate to sell, and real estate buyers are only too happy to accomodate them with an equally desperate offer.

Now there’s nothing inherently wrong with a low offer. Everyone wants to feel like they got a good deal. It’s the American way! I always tell my Sellers that a low offer is better than no offer, regardless of how ridiculous and laughable it may be. It takes time and energy to draft a contract offer. Every offer should be considered as serious and worthy of consideration. If nothing else, it may simply be the starting point for further negotiations.

However, as a Buyer, there are several key priniciples/strategies to writing a successful low offer.

1. The first key is to offer an amount that doesn’t overly insult the Property Sellers, and yet still warrants their response. Your real estate agent should be able to offer you guidance with this. Consider the following questions:

• How long has the property been on the market?
• Have there been any previous offers?
• Have there been any price reductions?
• What are comparable properties in the area currently selling for?

2. The second key ingredient is to strengthen all other elements of your offer. There are many times when other aspects of the offer are nearly as important to the Sellers as price. What accomodations/exceptions can you provide to make your offer more attractive? Consider the following:

• Increase your Earnest Money Deposit amount. The more cash you are willing to provide as Earnest, the more serious your offer will be taken.
• Do the Sellers have a preference for a closing date? Do they want a quick closing, extended closing, or rent-back?
• Write your offer as clean and straight-forward as possible. Keep the amount of contingencies to a minimum.
• Make sure to enclose your Lender’s loan pre-approval letter along with your offer.
• Do the Sellers or Listing Agent have a preference regarding where to direct title & escrow?

3. The last key is to convey a positive upbeat attitude towards the Sellers and their Listing Agent. You’re behind the 8-ball to begin with by offering the Sellers less than what they’re asking. You don’t need to pour salt in the wound by telling them what a ‘dump’ their home is, and then rattling off a exhaustive laundry list of how much work it needs.

You rarely know what a Real Estate Seller’s motivation or bottom-line price may be, but by incorporating some of these suggestions, you’ll definitely come closer to achieving a mutual agreement.

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Posted in Bainbridge Island Real Estate, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Kitsap County Bites, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate | 4 Comments »

Real Estate Market Report/Conditions for Kitsap County WA for 07/10/2007

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

• Properties currently active on the market: 2097  
• Properties closed in the last 180 days: 1562
• Average Sales Price: $305,732
• Average List Price: $310,120
• Ratio of List Price to Sales Price: 99%
• Average Days on Market: 89 days
• Sales Pending this Week: 44

Current Market Conditions: Have you ever seen molasses going uphill on a cold day? Well, that would pretty much describe the real estate market here on the Kitsap Peninsula (okay, it may not actually be THAT slow, but it sures seems like it at times!) Inventory levels continue to increase, though demand has remained constant. The pendulum has not swung over completely to a Buyer’s Market, but it’s definitely past the halfway mark. If you’re a Seller, you better be prepared to pull out all the stops in order to achieve success in selling your home. Here’s a couple of quick tips:

• Conduct a pre-sale home inspection. Anticipate and correct any problem issues ahead of time.
• If you’re on a septic, go ahead and have it pumped and inspected. Place of copy of the receipt and inspection results in the Home Book.
• Depending on the age of your home, offer a Home Warranty Plan to prospective Buyers.
• Consider having your home staged or hire a staging consult to give you some suggestions.
• Price your home agressively.

One of the best values on the market right now is my listing on Franklin Street in East Bremerton. Give me a call to schedule a private showing @ 360.440.4758

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

another quality consumer article by Sparky

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Posted in Bainbridge Island Real Estate, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate | No Comments »

This is America where the Need for Speed is ingrained from childhood. As children, we want faster bikes and faster Playstations. In our teen years, it’s faster cars and faster computers. And, as adults we want faster promotions, quicker increases in our credit limits and quicker pay raises. Eventually, we all have a day when we decide what we want more than anything else is Faster Equity Accumulation in our home!

The Good

Enter Equity Acceleration Programs. These programs are a masterpiece of marketing. They target the American need for speed promising to shave years off your mortgage and saving you tens of thousands of dollars in the meantime. Both of these goals are worthwhile. And there is nothing wrong with effective advertising. This article is not meant to imply that Equity Acceleration Programs are all bad. They are not all bad. They are poorly explained and even more poorly understood. As with many of the articles on SoundBiteBlog, this article’s intent is to explain the risks (yes, there are significant risks) and expose that the average consumer can accomplish the same goals in the same amount of time, for less money by avoiding the most heavily promoted Acceleration Programs available today. In short, the goals are worthy, the sales pitch is suspect.

The Bad

Equity Acceleration Programs are often explained in a misleading fashion. Rarely is a consumer told boldly that they are trading their nice, safe fixed rate first mortgage for an Adjustable Rate Line of Credit! The reason for this deception is obvious. It’s old news that interest rates are rising. It’s old news that they are expected to continue to rise in the near future. This old news causes anxiety in many borrowers and because of that anxiety, many loan originators are glossing over the part about an Adjustable Rate, preferring to concentrate most of their explanation on the exciting prospect of paying off a loan in a shorter period of time regardless of how it is done.

Fuzzy math seems to play a big part in an Equity Acceleration presentation. I have listened to two of these presentations in the last couple of months. The more aggressive presentation spent considerable time attempting to convince me that my (imaginary) 6.125% Fixed Rate Mortgage, was actually costing me 65%! My questions about interest rates vs. A.P.R. and how RESPA regulations affect us all, were quickly bypassed and never answered. Shock tactics are normal from what I can see.

The realities of these programs are these. You are going to trade your current mortgage (often an attractive fixed rate) for a new Line of Credit (also a mortgage) with an adjustable rate. You will then “deposit” your entire pay check into this “account” each pay period. Payment of all your normal bills is made from the “account” as you would normally pay them. Presto, abracadabra and your new mortgage will pay off years earlier than it would have! This mathematical magic was explained to me as follows. When you deposit your paycheck, you are temporarily reducing your mortgage balance. This temporary reduction reduces the amount of interest that is charged thereby making a drastic change in the overall amount of interest that accumulates on the loan.

The first flaw in the sales presentation for Equity Acceleration Programs is the fact they ignore how most of us pay our bills. Like my mother taught me to years ago, I pay my bills first on payday along with making my deposit to savings. The result of paying my bills immediately is that my new mortgage is only “temporarily reduced” for a very temporary time indeed. The amount of interest saved by reducing my mortgage balance by a few thousand dollars for 2 days is pretty insignificant. AND I had to trade my fixed rate mortgage for an adjustable rate to do it! The positive effect is more than offset by that fact as soon as interest rates rise and my new mortgage rises with them.

Another flaw is that because this is not an actual depository account, you will never be able to earn interest on your deposits. Remember, it’s a line of credit (a debt) not a savings account or a checking account that pays interest. Therefore, money that you could have accumulated by using the same theory with your existing accounts will be lost.

And the final flaw in these presentations becomes apparent when you consider how long it will take to recapture the cost of the new loan itself. You didn’t think these were loans without fees did you? No, like every other mortgage you have applied for, there are fees involved. Someone will need to appraise the home. Someone will need to do a Title Search and approve Title Insurance. And the list goes on. Each service includes a fee. All the normal mortgage fees will apply and they will add up to thousands of dollars. It will take a long time to save enough with the new mortgage to simply break even after these fees.

The Ugly

The biggest advantage to many Equity Acceleration Programs is to the Lender and the Loan Officer. Let’s be pragmatic for a moment. When was the last time you saw anyone advertising anything they were not going to profit from? These programs are no different. The Lender will be make a profit on each and every one and the Loan Originator will be paid for finding another client. There is nothing inherently wrong with that. Each time I have applied for a new mortgage, I knew that Loan Officer would get paid and the Lender would make a profit. Don’t forget, this is just another mortgage and it works like all the others. Loan Originators do not work for free. Lenders work for a profit. The market has gotten very difficult for Loan Originators and many are looking for new, creative ways to generate new loans. Lenders are rolling out “new” creative loan programs and dusting off old ones.

Caveat Emptor, “let the buyer beware”, is a phrase to keep in mind if you are tempted by a good sales pitch. Remember, you are buying a product. You may have just heard about the best product, or you may have just heard the best sales presentation.

The Do-It-Yourself Equity Accelaration Program

If you spend lots of time with a calculator in your hand like I do (occupational hazard), you get in the habit of running “What If” scenarios. It can be addicting to look at how much money we can save by tweaking the numbers in our personal finances. What if I move $2500 to this credit card account over here? What if I send an additional $125 each month in on my mortgage. What if I send that same $125 in on my car payment? You get the picture. This kind of thinking will drive some people to visions of Tequila and others chase the possibilities with all the fascination of a new video game.

What you will find running “What If” scenarios is that there are ways to shave years off your mortgage and save thousand of dollars without having to create a budjet that leaves you depressed for lack of fun money.

Here’s just one idea of many. Rather than opting for an Equity Acceleration Program that will cost you money, open a savings account or a checking account that pays interest. The last time I checked, Boeing Employees Credit Union was open to anyone living in Washington State and had a savings account that paid 5.5%. Now that makes all kinds of sense! Keep your nice, low interest rate, fixed rate mortgage alone. Open a high yield savings or checking account and follow the same principals as the Equity Programs. Deposit your paycheck into it and pay your bills out of it. Make some interest for yourself.

But don’t trade your fixed rate loan for an adjustable rate line of credit without understanding the risk you are taking. Very few Equity Acceleration Programs benefit the borrower as much as they benefit the Lender and the Loan Officer.

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Posted in Bainbridge Island Real Estate, Bite Me Blogs, Bremerton WA Real Estate, Gig Harbor Real Estate, Miscellaneous, Mortgage Bites, Port Orchard Real Estate, Poulsbo Real Estate, Silverdale WA Real Estate | 10 Comments »

Tags: bremerton-mortgage, equity acceleration programs, heloc, home equity line of credit, kingston wa mortgage, kitsap-mortgage, lender-washington, port-orchard-mortgage, poulsbo-mortgage, seabeck-mortgage, seattle real estate blog, soundbiteblog.com, washington-real-estate-blog

The inspiration for beginning this on-going series of ‘Top Picks’ was the result of a recent backlink ’click-through’ experience I had while frequenting one of my favorite blogsites, “The Real Estate Tomato.” The Ketchup King himself, Jim Cronin, was plugging an article by 1st-time RET contributor, Edde Anderson, of C.F. Anderson, who posed the question, “Should MLS Brokers be Allowed to Blog about other MLS Brokers Listings.”

Many of the people who responded did so from a negative ‘fall-out’ viewpoint – one of those ‘half-empty/half-full’ kind of deals. I tended to see the brighter side of the equation. What if the Listing were one the best things to hit the market since HDTV? What if it was an amazing value amidst a sea of over-inflated inventory? Would the competiting Broker, Listing Agent, and Sellers all call to complain that I was using my blog to positively promote the sale of the home?

Now, obviously, it doesn’t take a Ben Wiseley to realize that negative ‘Listing Flaming’ would definitely NOT be appropriate. Critical commentary like that could lead to some rather costly consequences, let alone have adverse affects on one’s integrity. I can just see the agents out on the playground during recess, “My Listing’s better than Your Listing!”

But what about simply offering ’truthful’ feedback? How many agents get a phonecall from the Listing Agent after a showing, requesting feedback. What would be the difference in providing this information over the phone versus on a blog post? Does it change your opinion any? Are you any less truthful in your assessment? Would the information you provide be helpful to Sellers and Buyers in your market?

Well, at this point, I’ll err on the high side, and simply offer up my week’s ‘Top Pick’ from among homes here on the Kitsap Peninsula and surrounding areas. That’s not to say that at some point I may also include ‘honest’ and ‘undilluted’ opinions of other ‘less-than-desirable’ homes. You’ll just have to check back again later to see….

So, without any further ado, here it this week’s Homes in Kitsap ‘Top Pick!’

4995 Alpenglow NW, Bremerton, WA 98312

This was one of those homes you see on tour that leaves you speechless. Situated on 5 private acres in the highly desirable Bridle Tree gated community, this classic contemporary home fills you with awe and wonder as you roam the nearly 6,000 square feet of luxury living.

The massive Top Chef Kitchen comes complete with slab granite counters and Viking Commercial Range.

The exceptional Master Suite rivals the best room at Alderbrook Resort with dramatic vaulted ceilings, romantic gas fireplace, complimented by an equally expansive Master Bath using very generous amounts of quality marble on the floors and surrounding the soaking tub, Dual vanity with slab granite counters, and skylights.

Step through the slider to your adjacent private hot tub.

Make some popcorn and enjoy a movie night in the Media Room flooded with 6-way Stereo Surround System.

Step out onto the full length deck for Summer entertaining, and enjoy the stunning Olympic Mountain Views.

The Detached Garage has an extensive shop area and a large upper living space in progess. This home has something for every member of your family, and for all the people you invite for parties and entertaining!

Priced at $ 849,000 and marketed by Molly Ells of Windermere Real Estate/West Sound, Inc.

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Posted in Bainbridge Island Real Estate, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Kitsap County Bites, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate | 5 Comments »

Adverse Possession is one of those terms we learn early on in our real estate career. You’re guaranteed to see it as one of the multiple choice questions on your license exam, along with riparian rights and appurtenances.

It’s always interesting to me how these terms can take on a whole new meaning when, as licensed real estate professionals, we actually encounter them in the real world.

Our ever-helpful Wikipedia defines it this way:

“Adverse possession is the name given to the process by which title to another’s real property is acquired without compensation, by, as the name suggests, holding the property in a manner that conflicts with the true owner’s rights for a specified period of time.”

In other words, Adverse possession is a way that Property Owner Jones can take Property Owner Smith’s property, or a portion of Smith’s property, without paying for it.

What a deal, Lucille! Where do I sign up, right?

Well, there’s a catch. (Isn’t there always?)

Adverse possession requires that three components exist before possession/ownership of the property can occur:

1. physical (actual, visible, notorious, exclusive, open)
2. mental (hostile)
3. temporal (continuous)

Now I don’t know about you, but I’ve had a few neighbors who were ‘notorious‘ and ‘hostile,’ but that’s not really what is meant here.

From ExpertLaw.com:

Open & Notorious- You engage in acts of possession consistent with the subject property in a manner which was capable of being seen. (This does not mean that you must have been observed in your acts of ownership but, had the actual owner or members of the public been in a position to see you, your acts must have been observable). You need not use the property in a manner that exceeds that which would be expected of the actual owner – that is, it may be possible to claim adverse possession of a vacation property on the basis of use only during the vacation season, or to claim adverse possession of a vacant parcel of land by engaging in typical acts of maintenance for the parcel.

Hostile – Hostility exists where a person possesses the land of another intending to hold to a particular recognizable boundary regardless of the true boundary line. That is, possession is “hostile” to the title owner’s interest in the property. You cannot claim “adverse possession” if you are engaged in the permissive use of somebody else’s land.

Continuous & Uninterrupted – All components of adverse possession must be met at all times through the statutory period in order for a claim to be successful. It may be possible to claim adverse possession even if there is a transfer of ownership through the principle of “tacking.” For example, a previous owner’s 12 years of adverse possession can be “tacked” to the present owner’s eight years, for a cumulative twenty years of adverse possession

In basic laymen’s terms, this means that those attempting to claim the property are occupying it exclusively (keeping out others) and openly as if it were their own. Some states allow accidental adverse possession as might possibly occur with a surveying error. Generally though, the openly hostile possession must be continuous (although not necessarily constant) without challenge or permission from the lawful owner, for a fixed statutory period in order to acquire title. The possession time-frame may vary from state to state. Here in Washington, the duration of such possession is 7 years. The person claiming title by adverse possession must also pay taxes and assessments on real estate during the time of adverse possession.

 If you want to read a rather lengthy, yet absolutely amazing account of attempted Adverse possession here in the Seattle WA area, go here (opens into a separate window)

Another quality SoundBiteBlog article by Sparky

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Posted in Bainbridge Island Real Estate, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate | 10 Comments »