Tag Archive for 'Buying'

ShackPrices.com - a powerful new online tool for evaluating comparable prices

Published by Stuart on August 30, 2005 in Reference. Closed

Full Disclosure: ShackPrices.com was created by a friend of ours. We’d think the site was wicked cool even if it hadn’t been.

We’re pleased and honored to be among the first to let you know about a new online tool available to home buyers and sellers in Seattle and King County. ShackPrices.com uses an interactive Google Map to display historical sales data for area homes. The site is still in beta, and the authors warn that the sales data should still be considered “riddled with flaws and inaccuracies,” but the promise of ShackPrices is enormous.

When you first load up the site, you’ll see a map of King County with icons representing houses that have been sold in the area within the last three months. Using the drop-down boxes on the side of the page, you can customize the search criteria to your liking. Once the map has been refreshed, just click on a house icon to display the most recent sales date, the purchase price, and other vital statistics. Links in the dialog bubble also let you view the sales history, or send you off-site for more information about the property and surrounding area.

On the whole, ShackPrices.com’s interface is clean and intuitive, and the design is well thought-out. There are a couple kinks to work out, though. For example, the median price display on the top center of the page is confusing. It seems to reflect the median price of the houses displayed on the map, not necessarily the houses reflected in your search criteria. So if you zoom in on a house, the median price changes, a fact a casual observer might miss.

However, such glitches are to be expected in an early release of a new tool, and the main features of the site work beautifully. We hope you’ll take a few minutes to visit the site and leave the developers some feedback. We’ll be keeping an eye on how the site progresses. We’re sure that, in time, ShackPrices.com will become an indispensable tool for anyone in the market for a home.

Technorati Tags: , , , ,

Going once… Going Twice…

Published by Louise on August 17, 2005 in Buying. Closed

Another buyer beware story about buying properties at auctions, this time in today’s Seattle Times.

Remember, these properties usually end up on the auction block for a reason — they can’t sell under normal market conditions. So, before buying do your homework. If possible:

  • go see the land;
  • research the public records;
  • look for red flags such as the ones mentioned in the article; and
  • if it feels too risky, don’t play the game!

Technorati Tags: , ,

Buying Foreclosed Properties

Published by Louise on August 15, 2005 in Buying. Closed

If you’ve been thinking about buying foreclosed, or soon-to-be foreclosed houses, here’s a good overview of the topic from last Sunday’s New York Times. The process of buying a foreclosed home is not for the faint-hearted. As the article illustrates, there are varying levels of risks and rewards. For example, at foreclosure auctions buyers often cannot see the inside of the house before purchasing and usually have to pay in cash. Read on to find out more about buying strategies and how to get the most return from your investment.

Technorati Tags: ,

The secret is out: You can buy a home with very little down

Published by Joanne on July 10, 2005 in Featured Articles and Financing. 2 Comments
Contributed by:
Joanne Rocheford
Mortgage Loan Consultant
PH: (206) 242-0800 FAX: (206) 225-2017
Rocheford@msn.com

 

Editors’ Note: Seattle Real Estate Talk is pleased to welcome guest contributor, Joanne Rocheford.

I recently spoke to a senior citizen who shook her head and lamented, “The poor young people today. I don’t know how they’ll ever to be able to afford to buy a home.” I understand why she feels that way. Coming up with a 20% down payment and thousands in closing costs is a daunting proposition for most folks. With the median house price in Seattle hovering around $350,000, few buyers would be able to afford to buy a home if they had to meet those terms.

The good news is that there are ways to buy a house with no down payment these days. And there are ways to reduce your out-of-pocket expenses for purchasing a house – your closing costs – to almost nothing. Would-be homeowners watching late night TV infomercials pay thousands of dollars for audio tapes and CDs that claim to have the “secrets” for buying a home with no down payment. But you, lucky reader, can put your wallet away and go to sleep early tonight, because the secret is out.

Getting your down payment down

There are three ways to get 100% financing, or no-down-payment loans. The first way is to get a 100% loan. This means that if you buy a house for $250,000, you obtain a loan for $250,000, or 100% of the value of the home. In this instance, because you are putting less than 20% down, the lender will typically require you to purchase mortgage insurance, which protects the lender should you default on the loan. On these types of loans, the mortgage insurance can run around $200 per month.

The second way is to obtain a first and second mortgage at the same time. On that same $250,000 house, you would take out a first mortgage loan for $200,000 and a second mortgage loan for $50,000. This in known in the mortgage industry as an 80/20 loan. The interest rate on the second mortgage is a higher interest rate, but you don’t have to pay mortgage insurance with this option. Closing costs are higher on an 80/20 loan because you are actually getting two loans. Most lenders require a credit score of at least 680 to qualify for this type of financing.

The third option is an FHA loan. Although an FHA loan requires 3% down, FHA allows you to use gift money for the down payment. If you don’t have a wealthy great aunt Gertie, you can ask the seller to participate in a gifting program. (I’ll talk more about this in future articles.)

Lowering your closing costs

Now you’ve got 100% financing available to you. What about closing costs? Well, lenders require you to obtain an appraisal, to get title insurance, to use an escrow company, and so on… and they expect you to pay for all this! You can also plan to pay your first six months of property taxes and first fifteen months of homeowner’s insurance. These are known as your “prepaids,” but are often quoted as closing costs.

The easiest way to get your closing costs and prepaids taken care of without breaking your piggy bank open is to ask the seller to pay them. In today’s market if you ask a seller to pay your closing costs, he’ll say no; so here’s what you can do: If a seller is asking $250,000 for his house, you might offer him $256,000 and ask him to pay $6,000 of your closing costs. In essence, you just gave him $6,000 and asked him to give it back to you. Now you have the full amount of the price of the house in financing and all of your closing costs are being paid as well.

So it’s just that simple? Well, almost. When you find a home to call your own, you will write up a purchase and sale agreement offering to buy the property. At this time, you will need to write a check for earnest money to show you are serious about purchasing the home. You will want to have a home inspection done to make sure the house isn’t going to fall in immediately after you purchase it. Most lenders will ask for a deposit of $500 and up to get started.

Now, here’s the beauty of it all: Most lenders will allow you to get cash back at closing up to the amount you put in. In other words, we’ll give you back your earnest money and deposit on the day you close. [This policy varies by lender. Be sure to check with your loan officer or mortgage broker. -Ed.]

Here’s a real live example of a transaction I put together recently. The house was listed for $200,000. The buyer offered $207,000 and asked the seller to pay $7000 of her closing costs. The buyer wrote a check for $500 for earnest money, she paid $400 for a home inspection, and she paid me a $600 deposit. Thirty days later she got $1100 back at the closing table. How much did it cost her for closing? Just $400 for the inspection and the lender doesn’t even require it. (Although we ”definitely” recommend it.) You can see that she had to come up with some up-front costs, but but she got it all back.

Can you afford $400 to buy a home?