Every week we track the number of homes on the market that have offers on them and those that do not and create a ratio we call Pending Ratios. This weeks numbers were great with all areas either remaining stable or up in pendings.
As of Saturday, January 7th, the pending ratio in Bellingham was 21% . Pending is the time frame between when an offer has been mutual accepted between the buyer’s and the seller’s of the home and when the title actually transfers hands. This give the buyer’s time to get the financing, do inspection, review the title reports and more.
To view a complete history of Whatcom County Pending Ratios or for other real estate statistics don’t hesitate to contact The Johnson Team at (360) 303-2734 or by email at Info@JohnsonTeamRealEstate.com
I understand sellers of a single family home in Washington State are required to disclose known defects in the house. What requires this?
Answer:
It is a matter of Washington State Law, and actually covers more than just single family residences. Different disclosures are required for different types of property, including residential, vacant land and commercial properties. There is a second disclosure required for condominium units. If the complex is new or newly converted to condos, a Public Offering Statement is required. If it is an existing complex, a Resale Certificate is required.
All these disclosures have specified time periods within which they must be given to a buyer. The buyer then has the right to withdraw from the transaction with a specified number of days after receipt. If the buyer does not receive the disclosure, they may withdraw from the transaction, without additional cause and with return of earnest money, at any time up to closing. However, if they close without receiving the disclosure, they effectively waive their right to receive it.
One more detail to keep in mind: if the disclosure is not complete when delivered, or if something changes after delivery which is covered by the disclosure, it must be delivered again, and the buyer’s right to review starts over again. If you are the seller, it pays to do it right the first time.
I am buying an estate house that is fully furnished. What happens to the furniture?
Answer:
Most purchase and sale contracts cover all real property (anything attached to the land) and certain specifics that are part of structures. These might include anything part of a basic system of the house: light & plumbing fixtures, carpet, landscaping, hardware, as well as personal property such as window coverings & drapes, etc. If an item is not specified in the contract, it does not stay.
Also typical in a purchase and sale contract for real estate is a stipulation that the owner will remove all personal property (except as otherwise stated in the contract), prior to the possession date.
A good rule of thumb is, “Never assume anything.” If you want something in that house, you should specify it in the contract. If the seller wants something to remain in the house, they should specify it in the contract. If you are already under contract, have the conversation now so you know everyone is on the same page. It can spoil the pleasure in your new home to be fighting over drapes that are gone or junk that was left as you are trying to move in.
We are shopping for our first home and it looks like we could cut our mortgage payment quite a bit if we took out an adjustable rate mortgage rather than a 30 year fixed rate loan. What would you do?
Answer:
What I would do may not be the best thing for you, because more than the rate is an issue in this decision. We have used ARM’s extensively over the years and they were very good for us, but there were conditions in which we used fixed rate loans. First, note that most ARMs now are actually a hybrid of the true ARM and a fixed rate loan. The interest rate is fixed for the first years; 3/1 means the rate is fixed for the first 3 years. At the end of that time, the rate may automatically adjust for the remainder of the loan, or you may need to refinance it. Make sure you know what is going to happen at the end of that initial period.
When we are choosing a loan, we use the following questions to make the decision.
What is the difference in the payment? This morning the lowest rates I see in our area are 3.67% for a 30 year fixed and 2.62% for a 5/1 or 3/1 ARM. Note: these are rates with 0 points – make sure you always compare rates with the same points. At these rates, your principal and interest payment for a $250,000 loan would be $134 a month lower at the adjustable rate.
What are all available adjustable rates? As of this morning, the 3/1 and 5/1 rates are the same…lock in the lowest rate as long as you can.
How long are you going to live in this house? Always add a year or two…this may be determined not only by your wants, but also by the market, so give yourself some leeway. Also, know what happens if you decide to move on and rent the house…you may not be able to adjust the loan at the end of the initial period.
What happens at the end of the initial period? Will you have to qualify for a new loan? If the rate simply adjusts, how is the new rate determined? Will there be additional loan fees? What if the value of the home has fallen? Costs to reset the loan could cut into your payment savings.
What does the trend line for interest rates look like? An upward trend line can mean you will be wishing for that earlier fixed rate when the adjustment time rolls around. If rates are falling, you won’t feel as pressured to refinance (and pay the fees), if your existing rate is already low.
Is there a prepayment penalty? If you need to change the loan (rates fall further, you want to lock in a long term fixed rate, you are changing jobs and don’t know if you will qualify at the end of the term, you want to keep the home as a rental and know you won’t be able to roll your existing loan when it adjusts) will you have to pay a lump sum for the right to pay off the loan?
As with all real estate questions, there is seldom a simple answer, but hopefully this will give you a guideline for making a decision. Good luck!
Sales were up, sales were down, some prices were up, but most ing were down…and whether they were up or down changes according to how one compares them. If you are confused already, welcome to the club…but let’s try to make some sense of it.
For the most part, the number of homes sold was less than in October, which is normal. The exceptions were Ferndale and Nooksack Valley, where almost twice as many homes sold in November, and Birch Bay/Blaine, where there was a slight uptick. If we compare sales numbers to last November, however, more homes sold this year in every area of the county except Lynden and Mt. Baker. Overall, nearly 11% more homes sold in Whatcom County this year than in November of 2010.
That’s good news. It means that people want to buy and are able to get loans.
Now let’s look at prices, which seem to be an entirely different story. Hang in here and I’ll explain the “seem to be” after we look at the numbers.
From October to November, average and median prices dropped by double digits in every area except Lynden (and the median in Sudden Valley). As a whole, average prices in Whatcom County fell by 16.7%, while the median fell by 5.7%. November 2011 to November 2010 price changes were not quite as dramatic, but almost. Bellingham, Ferndale, Nooksack Valley and Mt Baker saw double digit declines in both average and median prices. Only the Birch Bay/Blaine area saw increases in both average and median, although both Lynden & Mt Baker saw medians go up a bit. For the county as a whole, the average was down 12% and the median down a bit over 11%.
So has the housing apocalypse hit us? I don’t think so. Let me show you why. The following table shows how many Bellingham homes sold in each of 4 price ranges in November 2010 and then in November 2011. (If you wonder why I just use Bellingham numbers for this, give me a call or email and I’ll explain my reasoning.) When I look at this table, there are a couple of numbers that jump out. Look at the total units sold in 2010 in the under $300,000 range…then look at the same category in 2011. Then follow each of those lines over to the “% of Market” column. Pretty dramatic, right?
So what does this mean? Have a lot of homes dropped so much in price that they are now in the under $300,000 range rather than the $300,000 to $500,000 range? Certainly some have crossed that line, but we have actually seen fewer dollars of change in the lower price range. Remember, 1% of a large number is a lot more than 1% of a smaller number. I don’t think that explains the substantial increase in under $300,000 sales, and I will show you why.
November 2010 Price Ranges in $1000’s
Total 2010 November $ Sales
Total Units Sold
Average Sales Price
% of Market
Changes in November Year to Year Distribution of Residential Sales in Bellingham
Every week we track the number of homes on the market that have offers on them and those that do not and create a ratio we call Pending Ratios. This weeks numbers were great with all areas either remaining stable or up in pendings.
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