What’s the word on the street? It’s all over the place, actually. But it’s true, the market is shifting and no one knows what the heck is going on. Buyers are scoring, sellers are pleasantly surprised (or possibly disappointed), and we are coaching to expect the unexpected.
Front doors are one of the key indicators of a home’s personality. But not only do they have a design purpose, today’s doors are more functional than ever. From security innovations to weather-proofing, there are so many options to consider when choosing a new door to represent your home. Here are some of the different materials options available on the market today, all of which have pros and cons:
Thinking about your next project? Need a two butt kitchen or a bathroom without carpet and brass? We got you covered. Here’s how to get started.
While we have a beautiful piece of vacant land on the market on Vashon Island, we thought we would shed some light on the process of purchasing property without a home already there. Continue reading “Tips for Buying Land”
Let’s talk staging…one of our favorite parts of listing a home. It’s amazing how a few key pieces will transform a space to make it ho hum to absolutely magical.
When you list your home for sale, you already know that your living spaces need to look their best. But when prospective buyers are evaluating a home, the whole property has to shine. Here are some other areas that need your special attention that you may not have thought of:
Drawers and cabinets – When a buyer sees drawers overflowing or an unorganized cabinet, they may assume there is a storage problem. Try to remove as many extra items as possible and consider drawer and cabinet organizers to keep items separated and neat.
Refrigerator – Although you may be taking your fridge with you, buyers will snoop. You don’t want a crammed or messy fridge to cause buyers to turn away. Keep it clean, well-organized, and appealingly stocked.
Garage – You definitely want buyers to be wowed by the extra space available in a garage. Whether you are one to park a car in there, store camping equipment, or do woodworking, your garage should draw buyers in, not have them uncomfortable with the amount of stuff they have to see past. I recommend taking most everything out except what you need for the period you have it listed as well as giving it a good dusting and sweeping. And make sure you get rid of cobwebs!
Driveway – A clear driveway provides curb appeal. If you have extra tools, yard items, or vehicles, it can distract a buyer and not let them have that great first impression of your home.
Side Yard – Side yards can attract everything from extra pots and containers to bikes, lawnmowers, and even storm windows. Get rid of the clutter and let your side yard be the amazing bonus space it should be.
Laundry Room – It can be difficult to make piles of laundry look good, but when they are neatly folded and arranged by color, a laundry room can feel very calm and satisfying. Remember to also whittle down the detergent and cleaning options to only a few and keep the ironing board put away.
Fireplace – Whether yours is a wood-burning, pellet, or gas fireplace, it should be cleaned. Staging can be done by putting a few logs on the log carrier or, in the event the fireplace doesn’t work, some artfully-placed pillar candles can do the trick.
Utility Closet – Yes, you can even treat your utility closet to some tidying up! This is a great time to get rid of the extra brooms and mops and make sure the areas around the furnace and water heater is cleaned.
Pay attention to all these special details, have your home looking its very best from the moment the buyer drives up to the moment he or she leaves and you will be rewarded! These small details do take time, but this preparation will not only impress the buyers, but will also make it much easier when it is time to pack up your things to move. When you are ready to start prepping, we can strategize with you.
Now that we’ve shown you information on investing here in the Pacific Northwest, you might not know about a little (big) detail to consider….taxes. Here’s information on how to roll over your investment proceeds into another property and avoid paying them for the time being.
You might have heard the term 1031 Exchange as a real estate term bandied about by real estate investors. But what is a 1031 Exchange and what do regular would-be investors need to know?
If you have sold a home in the last several years, you may have been aware of the tax rules which indicate that as long as a seller used your home as a primary residence for two of the last five years, he or she would not be taxed on the first $250,000 of capital gains when sold ($500,000 for couples). Meaning, if you purchased a home for $100,000 ten years ago, lived in it for at least two of the last five years and sold it for $300,000 last year, you would not owe capital gains tax on the $200,000 gained.
Additionally, if someone sells inherited property the value is considered “stepped up” to reflect current market value. For example, if someone were to inherit their parent’s home and the home has a current market value of $400,000 when inherited, then capital gains is only calculated on this value, not on the value when it was original purchased by the parents. If this person who inherited the home rented it out for three years and sold it for $475,000 they would owe capital gains, but only on $75,000.
In theory, a 1031 Exchange is similar to both of these scenarios combined in that it allows the investor to defer capital gains on an investment property by reinvesting those assets. One can invest in multiple 1031 Exchanges until death, passing on those assets to their heirs who then inherit these on the afore-mentioned stepped-up basis.
Stringent 1031 Exchange rules must be met in order to avoid capital gains tax:
- Both the “Old” property and “New” property must be investment property. Rental property, bare land or vacation homes are examples of these. In most cases, one can sell any type of property (such as an apartment building) and buy any other type of property (perhaps an office building).
- From the date of closing on the sale of the old property, the investor has 45 days to determine potential properties to buy. This is called the “45 day list”. Several potential properties should be identified to allow for some properties to not be feasible investment options.
- From the date of closing, the buyer has 180 days to close the purchase of whatever he or she is buying which must have been included on the 45-day list.
- By law, the proceeds from the first property must be held by a “Qualified Intermediary” (sometimes also called an “Accommodator” or a “Facilitator”) who is also responsible for the preparation of paper work required by the IRS to document the exchange.
- Whoever held title to the old property has to be the titleholder of the new property.
- All of the proceeds must be reinvested and the new property has to be at least equal to the net sales price of the old property. If not, tax is owed on the difference.
If you have a vacation or inherited property that you are thinking of selling, consider these rules and options to keep most of your cash in your pocket. Make sure you talk about your options with a real estate agent who is familiar with investment properties. Contact us to learn more about how to invest in this booming market.
We are on an investment kick! Looking back on recent business, we noticed that a large portion of our clients are either selling their rental properties or looking for opportunities.
Investing in real estate can be one of the most lucrative investment vehicles available today. It can also turn into a financial nightmare if you do not do your investment homework first. Before you even think about investing in real estate you need to think about the following 16 points that I advise investors to follow. Real estate investing is a wonderful tool to achieve financial freedom. If you do your homework, invest wisely, take emotions out of your decisions and plan carefully, you will reap financial rewards. I hope the following points give you the confidence you need to take the leap into the lucrative world of real estate investing.
1. ZONING – Never purchase any investment property until you determine the zoning of your potential property and your neighbor’s property. Your property’s value is directly affected by the surrounding properties. When you check the zoning, be sure to check the surrounding properties as well.
2. AREA APPRECIATION – Check to make sure that the area where you are considering purchasing has had a steady and consistent appreciation growth of at least 7% per year for the last 5 years on average. You do not want to buy in an area that has already peaked.
3. POPULATION GROWTH – Is the area where you are considering purchasing an area where people are moving in? The easiest way to track this is to check population growth numbers. Where there is growth – there is opportunity.
4. DO BABY BOOMERS WANT TO LIVE HERE? The country has an incredible number of baby boomers; therefore invest in an area where baby boomers want to live. Baby boomers want a lot of recreational possibilities as well as easy access to good health care facilities.
5. OWNER OCCUPIED – Is the neighborhood where you are thinking of buying primarily owner occupied or tenant occupied? Homeowners, that live in their homes, invest more money to fix them up than do renters. Remember, your property’s value is also determined by its neighbors.
6. NEIGHBORHOOD APPRECIATION – Before you buy in any neighborhood make sure you research the sales in that neighborhood for the past 5 years. Check to see how that neighborhood has appreciated.
7. EMPLOYMENT STABILITY – Without question, one of the biggest factors that affect a local real estate market is the job market. You could be in the nicest recreational area in the world, but if there are no jobs, people leave because they have to find work. Check to make sure that employment in that area has been stable over time.
8. PROPERTY MANAGERS – Make sure that there is a property management company that can manage the property in the area where you are choosing to purchase. Many investors have gone on real estate shopping sprees only to find that there is not a property management company available in that area. This poses a huge problem for the out-of-area investor.
9. FLOORPLAN – Floorplan is more important that square footage. Of course it would be wonderful to find an investment that is both large in square footage and perfect in floorplan. However, this does not happen often. If you find a house that lacks a little in square footage but shines in floorplan, buy it. Renters look for properties by price and by bedrooms. They don’t search for square footage. Having the right numbers of bedrooms is more important than having the biggest bedrooms.
10. YARD – Often times people come with children and with pets and both of these need room to roam. Many investors that I have consulted have shared their horror stories about not being able to rent out the big beautiful house with no yard. Big beautiful houses are filled with children and pets. Even a small yard will help keep your property occupied year round.
11. INSPECTION/AGE OF THE HOUSE Never, ever, ever buy an investment property without having a thorough inspection of the house. Make sure the inspector gives you a good age range for the home and make sure you check the electrical wiring and plumbing thoroughly. Old pipes and wiring can be extremely expensive the replace. Make sure the mechanical side of your investment is not so old that you may be looking at a costly replacement in the near future.
12. THE 10% RULE – One of the easiest ways to make money on your investment is to do a cosmetic makeover. A good rule of thumb is “The 10% rule”. This means that if you purchase a house for $150,000, take 10% of that or $15,000 and you should be able to do a nice cosmetic makeover within that budget. If, however, you have to spend a good portion of that money on the mechanical side, not the cosmetic side then you may want to look at another property.
13. RENTAL STABILITY – Remember, if you buy a 1 bedroom condo you are definitely limiting the different segments of the rental market that can rent from you. If you purchase a 3 bedroom, 2 bath single family residence you have just expanded your rental possibilities. Just because the condo is $50,000 less does not mean it will be a better investment. In fact, you often have to go a little above your comfort zone to get a highly sought-after rental property. The stretch is well worth it!
14. COMPARING RENTAL RATES – It is imperative that you know what the rental market is like in your area. Before you buy a rental property, make sure that you know what similar properties are renting for and how long they are taking to rent. Call a property management company and ask if they do opinions of rental value. Many of them do in hopes of getting your business.
15. THE FINANCIAL SNAPSHOT – You must do a financial analysis of the property. What will your net operating income be? This is the total amount that you will receive from owning this property (rental payment). Also make sure you know what your total expenses will be. (Mortgage payments, principle, interest, taxes, insurance, utilities, neighborhood association dues, etc.) Your net income less your expenses equals your gross spendable income. This will tell you whether the property gives you a positive or a negative cash flow. Don’t be alarmed if it is a negative cash flow because your capital appreciation potential may be so great that having to financially feed the property for a few years would be OK.
16. SELLER FINANCING – Always, always, always ask for seller financing if you can get it. Why? Because you can often get better terms, better rates and save on loan origination fees. The best advice I can give a new investor is to put together a team of experts to help you.
You should be working with a good inspector, a good mortgage broker, a good contractor and most importantly a good real estate agent who truly understands investment real estate. (Do not just settle for a real estate agent that sells residential homes. If you are going to invest, you need an investment specialist). Don’t be afraid to ask questions and always, always do your investment homework.
Hi All! Sarah and Shelley here, with a friendly reminder that we specialize in the Greater Seattle area and south. From Downtown all the way to Federal Way, we understand what’s happening here.
When it comes to buying or selling what is likely your biggest asset, it pays to have a real estate agent who is not only a professional, but who also has the local expertise to help make sure you are investing your money wisely and that your investment will pay off when it is time to sell.
Here are just some of the items that an agent with local expertise can provide you:
- Information on possible zoning changes and how those might impact future value
- Historical market appreciation or depreciation data
- Data on local amenities and services
- School information
- Information on upcoming local improvements to streets and thoroughfares
- Information on big housing or commercial developments on the horizon
- Updates on businesses moving in or out of the area
- Information on trends such as population growth
- Data on regional economic trends as these can have a strong impact on the demand for housing
- Market information such as listings, pendings, and sold properties
- Up-to-date notifications of new listings and solds in the neighborhood, and how the updated sold information can affect the value of your property
- What your neighbors are doing to remodel their homes and how those changes can help their bottom line when it comes time to sell
- Information on how property taxes are assessed and the relationships between assessed value and sold values
- Information on developed and undeveloped land in the neighborhood, and what may be built on those.
- Traffic trends information
And so much more! A local expert truly understands the special nuances of the different neighborhoods – such as those special pockets of parks and trails, the historic homes or businesses and their significance, or important events that have occurred there. Check out our Videos to see this in action.
As much as people buy homes, they also buy areas. It is rare that one can buy a home and have it relocated, so it is important to have an appreciation for an area before one buys a home there. And when it comes time to sell, it pays to have an agent listing the home who can explain all the benefits of your home, not just what is behind your walls.
It is easy to hire a generalist in real estate, but remember, we hire medical specialists when we have a unique diagnosis and your asset should get the same specialist treatment. I would be more than happy to provide you with local information and how the changes I have seen affects your home value. Please let me know how we, YOUR local experts, can be of service. Contact us and let’s chat.
What is one thing you can do during the winter to really maximize your listing dollars with the goal of getting the most buyers interested in your property? Really amp up the impact of your outdoor spaces! Here are some photos from our latest listing that really showcase how it’s done.
Regardless of whether a home is in the balmy south or the frigid north, there are things you can do to get the focus on your home’s outdoor potential and get the buyers thinking about the warm spring and summer ahead. What’s even better? Most other sellers don’t take these extra steps, allowing your home to stand out even more!
Below is our list of the top five things you can do in any climate to maximize your outdoor space:
- Really focus on the first impression and curb appeal. This means making sure the driveway and walkways are clear, clean, and nicely edged. It means the front door and garage doors look crisp and have impact. This means that all garden beds are raked out and the landscaping is trimmed up. When a home looks great and ready for spring when the potential buyers drive up, it makes a powerful first impression.
- Make sure all your windows are clean and streak-free. This way, when the sun is low in the sky, light streams through those flawless windows, illuminating the space and providing a gateway to peeking outside at what awaits them.
- Get some green. Include pots on walkways and in the outdoor living spaces that are brimming with evergreens such as boxwoods, evergreen azaleas, or other evergreens such as small cedars. As your climate allows, look for winter-blooming plants such as heathers, hellebores, and crocus to give your beds a punch of color.
- Set the stage. Don’t think that just because it is winter that all living should be done inside. If you have a firepit and some all-weather chairs or benches, clean up the area, and when you have a showing and as weather allows, put some throw pillows out there, a few small blankets with a cohesive punch of color to match the pillows, the fixings for s’mores and all of a sudden you have expanded your living space! If you have an external gas fireplace, and it is safe to do so, turning it on may be another great way to get buyers excited and ready to sit down in front of the fire.
- Lights, lights, lights! Outdoor hardwired landscape lighting that accents trees and the home really provides punch. So do white party lights, deck lighting, and battery-powered candles in lanterns and hurricane shades. Depending on locales, solar lighting may be hit or miss, but don’t let lack of outdoor hardwiring keep you from illuminating your outdoors!
The winter can really be an advantageous time to list your property and buy another with less competition if that is your plan. Get an edge over other listings by making your outdoor spaces positively shine! We can help you make a plan when it is time to list.
Each year we take time to review what has happened during the year and to look forward to predict what is in store for real estate. Below are predictions for the 2018 real estate market, straight from Denise Lones, Real Estate Mentor for the best agents around, based on data that was available at the time this was written:
From Denise Lones:
Interest Rates – With the Tax Reform Bill and new infrastructure, I expect interest rates to rise. A climb to 4.0%-4.5% is probable but it is possible that if the economy grows at a good clip next year, we could see rates as high as 5%. I believe the average for the year will be about 4.6%. Although this rise will cause some buyers to regroup, it will not be enough to make a strong market shift and cause buyers to leave the market in droves.
Home Price Growth – With double digit percentage price increases in many markets across the country in 2017, I believe we will move back to price inclines below 10% in those busy markets. In fact, I foresee that the average for those areas that did see such strong increases in 2017 will scale back to about 4-7% gains in 2018. Nationally, I expect prices to increase about 3.2%. Although we still have significant challenges with our inventory, incomes cannot sustain the rapid price growth we have seen regionally over the last few years, and therefore, prices will not rise as quickly.
New Construction – There is still a severe shortage of new construction. Our country needs about 1.5 million new starts per year to maintain inventory, but since 2009, we have been short a cumulative almost 6 million units. This is one of the primary causes of our inventory shortage and what is driving prices up – demand outweighs supply. Local issues
in many areas such as zoning and water rights are also capping new construction opportunity. In addition, the cost of building supplies is causing problems for our builders and I expect this problem to worsen in 2018. Since the market correction, we are still not back up to the 1.5 million starts needed (2016 projection is 1,173,800 units), so our new construction inventory crisis will continue until we can replace the six million units we are short AND get back on track to 1.5 million starts per year. I don’t foresee us making gains in this category in 2018.
Housing Inventory – Although there are improvements in this category because we areadding some new housing units, it may take years or more for inventory levels to get back to a balanced level. Our inventory shortage was caused by a shortage of housing starts that began during the recession as outlined above. We will continue to see inventory challenges until new construction picks up even further. Additionally, I predict that more buyers will be entering the market for a home as our economy is strong with low unemployment, which I suspect will get even lower due to our economy. According to the Bureau of Labor Statistics, the national unemployment rate stands at 4.1% for November 2017, which is the lowest it has been since December of 2000. I predict unemployment to be in the high 3% range by the end of 2018. High demand and low amounts of new construction means a continued inventory crunch, although a rise in interest rates may relieve this demand a touch.
Furthermore, I am often asked when the bubble will burst or we will see another crash. I do not foresee this in the upcoming year. Although we are seeing prices rise quickly, the conditions that our national market is facing now are not the same as what we saw just a decade ago. There isn’t the easy access to credit as was before the last crash when banks were more de-regulated. There aren’t enough new or resale home to satiate current demand, unlike the building boom of the mid-2000s. Buyers are not overleveraged and, in many cases, have to put more cash down to compete in multiple-offer situations allowing buyers to start in a higher equity position. Based on our history and the facts that are in front of us, I don’t believe another crash is likely at all.”
We are excited for what 2018 has in store! For additional information and predictions on our local market, please contact us and we can geek out over real estate.