One of the questions I am asked most often is, "We signed our closing documents. When can we have the keys to our new home???" 

Buyers are ALWAYS eager to take possession of the property they are purchasing. Buyers and sellers both often attempt to move the process ahead of the contract deadlines, and sometimes that can be done. But more often than not, people need to hear, more than once, the process involved in actually closing a purchase and taking possession of their new home. And in order to protect both sides, those procedures need to be followed.

Today, more than ever, home buying is a complex process. In simplified form, for a buyer the steps look something like this:

• Identify a reputable Realtor to represent you
• Obtain lender pre-approval
• Identify a suitable property
• Write an offer
• Obtain mutual acceptance
• Apply for financing
• Arrange a home inspection
• Review all contract documents and negotiate inspections, title concerns, etc.
• Meet lender requirements
• Comply with escrow requests
• Review and approve closing disclosure statements
• Arrange document signing

This is the point at which many buyers become confused. They believe, having signed documents and knowing the lender has arranged payment, the home is now theirs. However, that is not the case. The next bullet point should say:

• WAIT!

Buyers AND sellers both have to sign escrow documents, most often at different times on different days. Funding does have to be arranged and confirmed with the lender. Once both sides have signed, the final documents have to be assembled by escrow for submission to the County in which the sale is going to be recorded. The documents then have to be sent to the County and they are put in a que for recording as the County staff is able. Only after confirmation as been received that the County has processed the documents and provided recording numbers is the transaction truly complete and keys can be provided to the buyer. Recording typically takes place a day or two after signing, and that waiting can be hard!

What are the pitfalls of transferring keys prior to actual recording with the County? Just one is liability. If the buyer takes possession before ownership legally transfers and there is a break-in, or a fire, or water damage, or an earthquake. Who is responsible? Who assumes liability? Who assumes the risks of loss or a lawsuit? By withholding keys until the process is complete, a good Broker is protecting both buyers and sellers from risk. The waiting is hard, but be grateful if you have a professional on your side looking out for your best interests!

As always, if you have any questions, please feel free to ask. I'm always happy to help!

That is the question of the day, and here are some considerations that might influence your answer. 

Some Highlights:

• The Cost of Waiting to Buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
• Freddie Mac predicts interest rates to rise to 4.8% by next year.
• CoreLogic predicts home prices to appreciate by 5.3% over the next 12 months.
• If you are ready and willing to buy your dream home, find out if you are able to! There may not be a better time for you than now…

Look at the grahic above, and then calculate YOUR cost. Remember that while the national average increase in home prices is projected at 5.3%, the values of homes in North Kitsap have been rising at an even greater rate (20% in Poulsbo in the past 12 months alone!). Do you have questions? Feel free to let me know – I am always here to help!

What comes to mind when you think of homeownership? Do you think American Dream? Do you think financial security? Or perhaps being close to friends and family? Do you wonder what other people think? Read on and find out how you compare…

The National Association of Realtors (NAR) released their first issue of the Housing Opportunities & Market Experience Survey (HOME) in mid-December of 2015. In the report, NAR revealed what Americans believe to be the most appealing aspects of homeownership.

Here is a graph showing the results:

Although I often stress the financial and societal benefits of homeownership, it is interesting to see that the two most appealing aspects for most people had nothing to do with money but instead addressed non-financial benefits. 

When people think of home being a place to raise their family (36% of those polled), what are their top considerations? Not surprisingly, education for their children and safety for their family members and possessions rank highest on the list. Fortunately, technology now allows us unlimited access to online sites that provide all the data needed to make informed choices about schools, crime rates, and more. This, in turn, puts more pressure on school districts and municipalities to keep our neighborhoods safe and our schools productive. Failure to do so has negative consequences for all concerned as it also erodes that sense of community that draws people in and binds us together.

What are the personal benefits of owning a place of your own? This was important to more than 25% of those who responded. Homeownership gives people a sense of independence, privacy, and security. Apart from any existing community guidelines, the choices you make are your own. You can build your dream home from the ground up, buy new construction and personalize it, buy an older home and remodel it, or find the house that is "just right" and live in it as-is. The possibilities are almost endless. While a dollar value can be calculated for some aspects of homeownership, the satisfaction of a place you can call your own is truly priceless. And your home, and the satisfaction it brings, can be passed down to provide a sense of place as well as security for your children and grandchildren.

More and more often I see people relocating to be closer to family members. The Baby Boom generation is now heavily invested in caring for aging parents, and many are also grandparents. Retirees are moving closer to grandchildren, Millenials are moving closer to parents and grandparents.There is a significant movement of people of all generations looking for ways to become closer as they transition through the various phases of their lives, and it doesn't appear this trend will end any time soon.

Where do you fit in this survey? For me, all of the responses have been and continue to be significant. What about you?

Interested in knowing more about the pros and cons of homeownership? Find a great real estate professional near you to sit down with and talk. And, as always, if I can help in any way or answer any questions for you, let me know. I'm here to help!

The National Association of Realtors recently released a consumer survey where, although only half of surveyed households believed the economy is currently improving, nearly all young renters who are 34 years of age or younger expressed a desire to eventually buy a home (94 percent), and a convincing majorityamong all age groups (77 percent) still view homeownership as part of their American Dream. Additionally, a newly-introduced index tracking the financial outlook of households found that compared to earlier this year, an increasing share believes their personal financial situation will improve in the months ahead. 

Despite uncertainty about the economy's current performance, at least 84 percent of all households within all surveyed age groups and education levels believe owning a home is a good financial decision. When asked if they believe this strongly or moderately, 76 percent who believe it's a good decision feel strongly about it.

Additionally, at least 85 percent of surveyed households in each age category as well as across all education levels believe homeownership is part of their personal American Dream. The most appealing aspects of homeownership cited by those with this feeling include a place to raise a family (36 percent), owning their own place (26 percent) and a nest egg for retirement (14 percent).

So what does it take to own your own home? A recent study by Fannie Mae revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. The following is a  breakdown of three pertinent challenges.

Down Payment

Perceptions

Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

• 40% of all renters don’t know what down payment is required
• 15% think you need at least 20% down
• An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac, and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs. According to theNational Association of Realtors, the typical down payment for a first time buyer is just 6%.

Credit Score

Perceptions

Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Maereport:

• 54% of all renters don’t know what credit score is required
• 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.

Back End Debt-to-Income Ratio (DTI)

Perceptions

Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

• 59% of all renters don’t know what DTI is acceptable
• 25% think you need at under 25%
• 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.

Bottom Line

Don't let a lack of knowledge or misinformation keep your family from buying a home this year. Meet with a local real estate professional who can evaluate your ability to buy now and help you achieve your dreams. And, as always, if I can answer any questions or help in some way, please don't hesitate to ask. I'm here to help!

This week I am departing from my usual business updates to spend time instead thinking about the coming new year. Starting in November, I begin to work on my business plan for the months ahead, and by this time in December I am deep into planning my strategies to first improve myself, and then to improve the services I provide others. The following Navy SEAL tips are ones I intend to keep in mind as I complete my plan for 2016. I hope some of these tips spark your thinking and provide steps to increase your productivity and pleasure in the coming year!

4 Navy SEAL tips to boost mental toughness

The Navy SEALs (Sea, Air and Land Teams) are the principal special operations force of the United States Navy. These elite warriors are famed for pushing their physical limits—from dropping out of helicopters to underwater demolitions. Yet SEALs believe mental strength is far more important than physical ability. It’s mind over body—you can do anything you set your mind to. Here’s the SEAL path to mental toughness.

Focus on yourself. To build an “unbeatable mind,” SEALs start with self-awareness. This helps you avoid making the same mistakes over and over, and sets up your progress. To gain self-awareness, use a journal. Each day, take 10 minutes in a quiet place uninterrupted. Center yourself with some deep breathing, and reflect on who and where you are in life.

Discover your purpose. As you become self-aware, think about where you’re going. Ask these questions to see if you’re on the right path:

• What have I been conditioned to think I should do with my life?
• What do I really think—and feel—I should do with my life?
• Is there a tiny voice within that keeps nudging me ahead, with the sense I’m on the right road?
• Or, is there a tiny voice of doubt within that keeps suggesting I’m on the wrong road?
• What’s the ONE thing I think I’m here for?
• What’s the ONE thing I’d focus on if nothing held me back?
• What would I do if I only had a year left to live?

The answers to these questions can uncover some powerful realizations.

Find your path. Choose the path in life that feels right to you, not something others think is best. To develop the discipline, dedication, and capacity for high-performance needed to succeed, you must be tuned in to your true self.

Commit to a healthy lifestyle. Finding your purpose and path energizes your spirit and mind, but don’t forget your body. Commit to a fitness program and a healthy, energizing diet. If this is a tough area for you, find a group of other like-minded people to support you. Navy SEALs always work as a team.

Here's to our combined success in 2016—and to building the mental toughness we all need to achieve our best year ever…

Merry Christmas, everyone!!!

CoreLogic released their most current Home Price Index last week. In their report, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month and projected over the next twelve months. Because they are looking at the nation as a whole, when you view these maps think in terms of generalities instead of your personal neighborhood. The percentages will vary, sometimes considerably, depending upon your specific location. However, the information can be helpful in guiding your plans for the coming year. You can see from the maps below the trend in Washington State as a whole has been very strongly upward and will continue to rise through 2016.

Here are state maps for each category:

The Past – home appreciation over the last 12 months

The Present – home appreciation over the last month

The Future – home appreciation projected over the next 12 months

Bottom Line:

Homes across the country are appreciating at different rates. Are you thinking of buying but hesitating to take that step? Don't let value appreciation over the coming months price you out of the market! If you plan on relocating to another state and are waiting for your home to appreciate more, use the guide to help determine whether the home you plan to buy in another state may be appreciating even faster. This would be a good time to meet with a local real estate professional who can help you determine your next steps. And, as always, if I can answer any questions for you, please don't hesitate to let me know. I am here to help!

Last week, an article in the Washington Post discussed a new ‘threat’ homebuyers will soon be facing: higher mortgage rates. The article revealed:

“The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven’t been that high since the recession.”

How can this impact the housing market?

The article reported that recent analysis from Realtor.com found that –

“…as many as 7% of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.”

This doesn’t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it could mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.

I find visual information helpful to me when making a decision. Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home. (Note that this chart does not include taxes and insurance in the payments provided.)

Bottom Line

Coupled with the rise in interest rates, the prices on homes throughout our area are continuing to rise. If you are considering a home purchase (either as a first-time buyer or as a move-up buyer), purchasing sooner rather than later may make more sense from a purely financial outlook. Are you wondering whether or not now is the time to buy? Sit down with a real estate professional to discuss your options before prices increase after the holiday season. And, as always, if I can answer any questions for you I am here to help!

I woke up this morning to frost on the ground and a definite Fall chill in the air! Winter is just around the corner, one month from tomorrow…and along with many others I am already thinking past the holidays and about the future.

People all across the country are beginning to think about what their life will look like next year. It happens every Fall. We ponder whether we should relocate to a different part of the country to find better year-round weather or perhaps move across the state for better job opportunities. Many families are looking for ways to draw closer together, and for some that may include a change in location.

Homeowners in this situation must consider whether they should sell their house and make that move now, or wait. If you are one of these potential sellers, here are five important reasons to do it now versus attempting your sale in the dead of winter.

1. Demand is Strong

Foot traffic refers to the number of people out actually physically looking at home right now. The latest national foot traffic numbers show that buyers are still out in force looking for their dream home. These buyers are ready, willing and able to buy…and they are in the market right now! Our local market is a reflection of the national trend. We currently have more qualified buyers than we have great homes for sale.

As we get later into the year, many people will have other things (weather, holidays, shorter daylight hours, etc.) that distract them from searching for a home. Take advantage of the buyer activity currently in the market and make it work for you!

2. There Is Less Competition Now

The national housing supply is still well under the 6 months’ supply necessary for a normal market, and in North Kitsap we are under 3 months' supply. This means that, in many markets (Kitsap County included), there are not enough homes for sale to satisfy the number of buyers in that market. This is good news for home prices. However, it is expected additional inventory is about to come to market.

There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. Homeowners are now seeing a return to positive equity as real estate values have increased over the last two years. It is expected many of these homes will be coming to the market in the near future.

Also, new construction of single-family homes is again beginning to increase. A study by Harris Poll revealed that 41% of buyers would prefer to buy a new home while only 21% prefer an existing home (38% had no preference). We are seeing lots of new construction throughout the County.

The choices buyers have will continue to increase over the next few months, and more inventory can and will impact values. Don’t wait until all this other inventory of homes comes to market before you sell your home!

3. The Process Will Be Quicker

One of the biggest challenges of the housing market in recent times has been the length of time it takes from contract to closing. Banks are requiring more and more paperwork before approving a mortgage. Changes in lending regulations are impacting closing times. Communication can become more difficult as many people take time off or travel during the holiday season. Any delay in the process is always prolonged during the winter holiday season. Getting your house sold and closed before those delays begin will lend itself to a smoother transaction.

4. There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. While equity in your home may continue to go up, purchase prices are projected to appreciate by over 18.1% from now to 2019. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock  in your 30-year housing expense with an interest rate near or below 4% right now. Rates are projected to rise by this time next year, and we have been seeing a definite small but upward trend this year.

5. It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and ask yourself whether it is worth waiting. What do you hope to gain? Will potential gains in value achieved by waiting be lost by reduced buying power? Is the time spent waiting worth time lost with family? Does waiting impact your health? Will job opportunities available now still be there 3 or 6 months from now? Are you sacrificing the freedom to go on with your life the way you think you should? What is holding you back?

Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market when the time is right for you. Don't let uncertainty or lack of knowledge keep you and your family from moving on and living the life you desire. Sit down with a real estate professional today and ask for assistance in determining whether now is the right time for you to sell. A qualified Realtor will be happy to provide this service for free as a courtesy to you and your family. And, as always, if you have questions I am happy to help!

Several of my recent posts have focused on building wealth through homeownership. As you age, equity in your home can be translated into options – options as to where and how you will choose to live through the changes life brings after retirement. Within the next five years, Baby Boomers are projected to account for more household growth than any other generation during that same time period, according to the Joint Center for Housing Studies of Harvard. In a recent Merrill Lynch study, “Home in Retirement: More Freedom, New Choices” they surveyed nearly 6,000 adults ages 21 and older about housing. The following are some of the reasons they uncovered for the expansive growth in Baby Boomer households.

Crossing the “Freedom Threshold”

Throughout our lives, there are often responsibilities that dictate where – and how – we live. Whether being committed to the best school district for our children, being close to our jobs, or being constrained by some other factor that is preventing a move, the study found that there is a substantial shift that takes place at age 61.

The study refers to this change as “Crossing the Freedom Threshold”, when where you live is no longer determined by responsibilities but rather by the freedom to live wherever you like. (see the chart below)

As one participant in the study stated:

“In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn’t been another time in life when we’ve had that kind of freedom.”

On the Move

According to the study, “an estimated 4.2 million retirees moved into a new home last year alone.” Two-thirds of retirees say that they are likely to move at least once during retirement, and many know and plan to move more than once. 

The top reason to relocate cited was “wanting to be closer to family” (29%), a close second was “wanting to reduce home expenses”(26%). Some moves are a result of cashing out the equity in a current home in order to pursue a different lifestyle unconstrained by mortgage payments. See the chart below for the top 6 reasons broken down by category.

Not Every Baby Boomer Downsizes

There is a common misconception that as retirees find themselves with fewer children at home, they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home.

Some retirees are choosing to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them. More and more families are pooling funds and looking for homes with mother-in-law accommodations or Accessory Dwelling Units where multi-generational families can live together while allowing aging in place.

"Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations."

Bottom Line

If your housing needs have changed or are about to change, meet with a local real estate professional in your area who can help with deciding your next step. Spend time exploring the options homeownership has offered you in the past and the new choices you have in front of you. And, as always, if I can be of service in some way, please don't hesitate to let me know!