Thursday, April 30, 2015

Q: As you suggested, we have interviewed a few lenders to see who we want to work with to get pre-approved for a loan to buy a home.

There isn’t too much difference in rates and fees and we’re having trouble choosing. I know it sounds funny but we really like one woman we’ve talked to and feel we can trust her. Is it foolish to make such an important decision based on personality?

A: Not at all. One additional step I would suggest is to ask for references. See what others think of her work. There are also online reviews that might be available. Keep in mind that the loan officer is the “front” person for the process. There are underwriters and processors as well as assistants who may be the ones doing the bulk of the work on your loan.  Like most Realtors, I’ve had good and bad experiences with lenders. Recently I had two transactions with two different loan officers through the same bank. It’s a regional bank I’ve worked with in the past. One transaction went very smoothly. The loan officer kept my clients and me informed at all times and was clear about what she needed. Her assistant was professional and helpful and the underwriting process didn’t come up with any last minute surprises.  The other transaction was a nightmare. The loan officer in that case didn’t communicate well and we had a last minute rush to come up with documents the buyers had not been asked to provide during the six weeks of the transaction. Documents were lost by the bank and there were last minute requirements from the underwriter due to errors on the part of the loan officer. Same bank!  I’d be happy to share the names of the folks in the lending community that I’ve worked with that have done a great job. It isn’t that they don’t have good days and bad, like everyone else. It’s that they stay focused on the job at hand and communicate effectively so that we don’t all end up with stressful last minute hassles.

Thursday, April 16, 2015

Q: We’re getting ready to put our house on the market and we have a question.

Last year the septic system backed up and we had to have a new drainfield put in.  We didn’t get any permits but we think it was all done right and it’s working fine.  Do we have to disclose that?  What if the County finds out we did it without a permit?  Can they come after us?

A:  You will have to disclose that you had a septic repair.  I would recommend you contact our local septic certification technician and have the system tested.  You will be required to do that as a part of any sale anyway.  If all is well you will have that report to show to prospective buyers.  You should also have the tank pumped and cleaned while you’re at it.  That certification should be good for six months, so if you price your home well it should sell and close well within that time.
The issue of what the County will do is more difficult to answer.  Most, if not all, issues that come up with code enforcement and the health department are the result of a complaint.  The staff of the code enforcement office has told me that they don’t have the personnel or time to check every property out to see if it’s in compliance.

It’s rare that King County code enforcement gets involved in a real estate transaction.  Sometimes a potential buyer will call the County to see if they can do certain things on a property they intend to buy.  That can sometimes trigger an investigation.  In my experience, that’s rare. We have so many properties that have had unpermitted repairs and additions that I can’t see the County ever trying to get everyone properly permitted.
I would also recommend that you have a home inspection done ahead of putting the house on the market.  You can get a real head start on issues that may come up when a buyer does their inspection.  Anything serious can be taken care of ahead of time.

Wednesday, April 01, 2015

Q: I’m upset that we missed the chance to make an offer on that house we saw online last week.

It was sold before we could get out to Vashon to see it.  We can’t just drop everything and run out there on a moment’s notice.  I don’t think I want to try to buy this year if it’s going to be a dog eats dog market!

A:  That may be a good descision for you.  This spring has already shown us that it will be a year of multiple offers, with some folks paying over asking price, and many hard feelings.  I hate this kind of market but we have to work with what we have.  I believe that you and all potential buyers have three choices.
First, if you even think you are a serious buyer this year you must have your preapproval from a lender (or proof of funds for cash buyers) in your hot little hand at all times.  You must have your check book with you to write an earnest money check.  You’ll have to be able and willing to make a fast decision.  There will be no time to bring your folks out to look or your best friend who isn’t available until next week.  I’m serious.

Second choice: you can sit out the market and just wait until it calms down.  Don’t actively look for awhile.  By next winter it could be relatively quiet again.  However, we will probably have higher interest rates, less inventory and prices could also be higher.
Third, you can try to find a home that isn’t going to sell fast.  Maybe a fixer or just ugly.  Ugly can be fixed. Really!  Those homes may not sell as fast.  Just remember that your lender won’t go for a home that can’t appraise for the sale price.  A rehab loan may be an option. 

I wish our lack of inventory and high demand were not pushing prices up and creating bidding wars.  But thousands of people move into the Seattle area every day.  Many of them find our beautiful Island.