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I got a phone call the other day from my buddy, Josh. He’s best friends with my oldest son, Ben. Josh just recently got married (his new bride, Mallory, lived in the house right behind us) and he’s starting his own construction business here on the Kitsap Peninsula WA. Ben helps him out on weekends with various projects, mostly pouring concrete and drywalling.

As a budding builder, Josh is always curious about issues relating to real estate. This time, he wanted to know about the whole “Agent-to-Client” relationship thing, and specifically, what does a Buyer do when they realize that the Agent they’re working with is an idiot (those were his words, not mine!) Evidently, Mal’s parents have some friends who are in the market to buy their first home. From what Josh told me, it sounds like their agent probably sells snake oil in his spare time. He employs super high pressure tactics. He keeps trying to force them into buying one of his listings, even though it’s an overpriced train wreck. They’re at a point where they no longer feel comfortable with this guy, and wonder if he really is concerned with their best interests.

Money, or the allure of money, sometimes does the strangest things to people. It causes them to lose sight of their priorities and purpose. It clouds their judgment. It changes their focus from serving others to serving themselves.

In real estate, it can be an easy temptation to lose sight of our statutory or fiduciary responsibilities and obligations, especially in a slowing market. Commission checks are farther and farther apart. We’re scrambling to make ends meet. Every closing counts.

So maybe we neglect to show our Buyers those listings where the Selling Agent commission isn’t as attractive as some of the others. Or perhaps we don’t disclose some known material defect, for fear that they won’t buy the house. Or it could be that we simply aren’t as critical of an advocate as we once were, and allow certain issues to go unchecked in the process? We’re more concerned about ‘closing’ than we are about ‘caring.’

I had the good fortune of having some really excellent mentors early on in my professional career. I learned the importance of providing superlative customer service. You’ve heard the saying, “Do what you Love, and the money will follow?” Well, in real estate, it’s provide the best customer service, and the money will follow. Offer your clients the most relentless representation possible, and you will reap the financial benefits as a result.

Plus, you’ll stay out of jail and sleep better at night!

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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 | 3 Comments »

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.

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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 | 13 Comments »

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.

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Posted in Bites of Washington, Bremerton WA Real Estate, Buyers, Gig Harbor Real Estate, Miscellaneous, Mortgage Bites, Port Orchard Real Estate, Poulsbo Real Estate, Real Estate Bites, Sellers, Silverdale WA Real Estate | 5 Comments »

Tags: kitsap va loans, Real Estate Bites, va mortgage loans

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!

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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 | 6 Comments »

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.

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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 | 2 Comments »