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Jesse, John & Pickett Street on National Public Radio (NPR)
October 19, 2010 /Last week I was contacted by a reporter from KPLU, the Seattle affiliate for National Public Radio, wondering if I would sit down with her and talk about how many banks have elected to temporarily suspend their foreclosure process. So last Thursday she showed up at our offices, microphone in hand, and we spent the next 90 minutes discussing this brave new world of real estate. 90 minutes of conversation with three different agents (Dennis Pearce, John McCants and myself) was edited down to 4 minutes, and a good share of that was split with Jillayne Schlicke - real estate and mortgage educator extraordinaire, and Richard Hagar - a Seattle real estate appraiser. The piece aired nationally on the "Weekend Edition" on NPR this past Sunday. I think that the initial pitch for the story was an investigative report as to how the suspension of foreclosures from big banks like Bank of America, JP Morgan Chase, and GMAC was effecting the day-to-day operation of real estate businesses like ours. As a real estate team that services short sale, bank-owned, resale, new construction, and auction properties, the suspensions most greatly affected our auction business. John is quoted in the report discussing…Read more
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Paying the Governor’s Share: Excise Tax & Short Sales
December 23, 2009 /Here in Washington state, we are accustomed to paying an excise/state sales tax when we purchase goods. Interestingly enough, when it comes to the most significant acquisition most of us will make, the seller, rather than the purchaser, covers the taxes. Currently, the base Washington state excise tax rate is 1.28%, with each county adding on their own percentage for a total that fluctuates somewhat by area. Snohomish and King County excise taxes (in most areas) are at a .50 rate, bringing the grand total to 1.78% of the purchase price. An obvious question if you're a distressed home seller would be, "who exactly pays this tax in the event of a short sale?" In most cases, the burden falls to the bank that is carrying the mortgage to ‘eat’ that cost, along with the other costs associated with selling a home. For a brief time at the beginning of 2009, some sellers were required to pay excise tax on the amount of the shortage (the difference between what they owed, and what they were able to sell their property for in a declining market). Sellers in this category may now be eligible for a refund of excise taxes. Use…Read more
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The New, Improved, (and extended) $8,000 Tax Credit
November 22, 2009 /By now you've probably heard: The $8,000 Tax Credit has been extended! And you're thinking, "I've been wanting to buy a home... maybe there's something to this procrastination thing, after all." In this case, you'd be right; The last go-round provided up to $8,000 to homebuyers who had not owned a home in the past 3 years, and whose income was $75,000 for single taxpayers and $150,000 for married taxpayers filing joint returns. In recognition of your patience and wisdom, you are now eligible for the Sweetened Deal: For home purchases occurring after November 6, 2009, the new income limits are $125,000 for single taxpayers and $225,000 for married couples filing jointly. Be prepared to prove it! Due to the very real potential for fraud, you will be required to prove that you have not owned a home in the last 3 years, however, the credit can be allocated to the person who has not owned previously, in cases where parents are assisting with a purchase, or where one member of an unmarried couple has previously owned. Saving for a downpayment? Another element of the new version is that it allows prospective home buyers who believe they qualify for the…Read more
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Green Homes- Fad, Trend, or Future?
November 5, 2009 /Among the many contentious issues of our day, the concept of being 'environmentally conscious', certainly strikes a few hot buttons for some. This post isn't going to explore the politics of Al Gore, or Rush Limbaugh, because, controversial as that subject may be, there's just not enough space to do the topic justice, and frankly, I don't find it that interesting. My personal angle on the Green Movement tends to slant more toward the practicalities of implementation, and looking at the cost/benefit balance for long term value. Given the condition of our current economy, and the impact of rising energy prices, and prices overall, I don't think it's an overstatement to say everybody's looking for ways to save money. From that perspective, the question becomes one of whether it's more practical to save money now (which frequently means either making do with less, or doing nothing), or to take the preventive and holistic steps that provide for long term cost and resource savings through conservation, thoughtful design, and practical implementation of new home-building technologies. The Green Movement is really just a convenient handle for the overarching conversation that revolves around the management and distribution of resources within a given community, and attempts to…Read more
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Housing: swimming in info, searching for the bottom
July 14, 2009 /The US Housing market officially hit bottom on Tuesday, June 16, 2009, according to Mad Money's Jim Cramer. Based on his analysis of better than expected housing starts, increasing sales, and decreasing inventory, Cramer argues that we've seen the worst of this housing debacle, and can begin the slow climb back to sanity. And yet, a month later, we're still seeing headlines that read like footnotes to the 4 horsemen's sightseeing tour. So, how can we have this extreme swing in opinion? We're all getting the same numbers, and existing on the same planet, correct? Yet I'd swear I've never seen more schizo info. There's nothing consistent, no standards of reporting, no BIG HOUSING CHART that we're all referring to- like the digital counter ticking up the national debt ( I think they ran out of slots on that one). Shouldn't there be some agency (job security!), or body of standards keepers (bureaucrats) who sift through all the info and disseminate it into neat little bite-sized, easily digestible (And Accurate) chunks so those of us with lives to lead can get our (Useful) news and still have a life? I'm sure this was the original thinking behind the current crop of infotainment/news…Read more
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A loan we don’t need: HUD’s curious permissions for the $8,000 tax credit as down payment
June 4, 2009 /I've tried writing an opening sentence that explains the heart of this post, and the shortest I could make it was more than 50 words, which is hella long. So let me try another tact. The American Recovery and Reinvestment Act of 2009 allows residents (first-time homebuyers) the purchase a home before December 1st a tax-credit of $8,000. The Washington State Legislature recently approved a measure that allowed eligible residents to use the promise of this credit to secure a loan from the state government so that those funds could be used on the down-payment of home, thus enabling people that have not saved the minimum 3.5% down the opportunity to (1) become a homeowner and (2) take advantage of the $8,000 tax credit while it's available. Said measure sat in political purgatory as it seemed that the legislature (and other state legislatures that had approved the measure) may have overstepped their bounds - so the Department of Housing and Urban Development (HUD) has been meeting to decide if they were going to allow homebuyers that hadn't saved the minimum down payment requirement to use state funds as a short-term loan for the down payment. So the HUD has ruled:…Read more
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Maybe the sky isn’t falling.
May 11, 2009 /Maybe the “sky” isn’t falling?! A chicken and a pig walk into a grocery store…………..Nah, I’ll save that story for another time. : ) I get asked at least once every day, often multiple times: “Andy, how are things going in real estate, REALLY?! Is it as bad as it sounds?" Truthfully, in my opinion: No! I’m seeing offers being written on homes - almost every day. I’m meeting with sellers who realize 2007 prices are gone - but that they can still sell their home, and do. I’m helping investors find incredible values - on all types of properties. I’m marketing new construction homes for Builders - and receiving offers every weekend. I’m working with Banks to offer 3.75% interest rates to First Time Home Buyers – who are loving it! Yeah, I’d say things are “looking up”. Did you read the article in last week’s Seattle Times entitled: “Pending sales of single-family homes in King County surged in April”? The article mentions some of the good news: King County Pending sales were up 25% in April over March. Snohomish County Pending sales were up 28% in April over March. One factor to keep in mind, though, is that…Read more
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The $64,000 Question
April 1, 2009 /I had a client the other day ask me about the real estate market and waiting for the bottom. In this case he was hoping for real estate prices to come down so he could buy at a lower price. I told him that was a great idea, but it is really tough to time the market and that many professionals get that type of thing wrong, so I would be wary of trying. In his case he was looking for a $200,000 house, and a 5% price reduction which represented a $10,000 difference in the cost of the house. We agreed that was a lot of money. However, I told him that if the bottom of the market was already here, and we just didn’t recognize it yet, waiting longer could cost him a bunch more. I explained that once the housing market bottoms and we see the market for homes stabilize, demand will increase and we will probably see a significant amount of buyers since plenty of people have had the same thoughts about waiting for the market to bottom. Because of that we could see prices rise quickly. This would actually not be the most costly part of…Read more
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What is Mark to Market?
March 19, 2009 /Warning: if Accounting isn't your language of choice, your eyes may be about to glaze over. However, as with many things arcane, mark-to-market accounting may be having a huge impact on the world we live in right now, and according to many critics, could well be one of the root causes of the current financial crisis. Mark-to-Market accounting is a reporting rule that requires financial institutions to value their current investments at today's value, even if they have no intention of selling those assets now, or anytime in the foreseeable future. As an example, if you were to consider the current value of your own 401k, which most of us are already doing with some significant trepidation, you're likely down about 50% from the highs of 2 years ago. However, you're able to do the calculations and realize that so long as you don't sell today, you've still got a chance to recover on the long haul. Mark to Market doesn't allow banks that option, but instead forces them to report the values on their holdings at todays value, as if they were going to sell everything today. Because banks are not allowed to lend every dime they have access…Read more
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Dual Agency- Sharks that swim on the land
March 12, 2009 /"Can't you feel 'em circlin' honey? Can't you feel 'em swimmin' around? You got fins to the left, fins to the right, and you're the only bait in town." - Jimmy Buffet, 'Fins' In an economy turned topsy turvy, with which-end-is-up news coming out daily, and a seemingly endless parade of graft, corruption, greed, and new stories daily turning up parasitic relationships where there should clearly be walls of propriety, it's hard to know which way to run. As many homebuyers know, buying a home can be a baffling task- and that's assuming everything goes well. Obviously, as millions of people now know, it doesn't always end in the American Dream. With a purchase as life-altering as your first home, it's absolutely essential that you place your trust in an agent who deserves it. Unfortunately, the desire to 'get a deal' often overrides the common sense priority of 'know whom you're dealing with'. In the state of Washington, every agent is required to present to a new client, preferably at the first meeting, a pamphlet labeled, "The Law of Real Estate Agency". It is a 4 page 8.5" x 11" (double-sided) masterpiece that lays out the various options for real estate…Read more
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Keller Williams passes RE/Max
February 26, 2009 /In every industry, there are always little rivalries; the kind that keep managers, owners, and statisticians awake at night. When you're on the receiving end of the latest corporate dig, or you've paid your dues as the "New Kid on the Block", the ribbing can occasionally get a little personal. And of course some personalities just don't deal with defeat too well. Which is why it has been so amusing to watch the latest blogflares going up as Keller Williams announced at the annual "Family Reunion" in Austin, TX this week, that they've taken some of the air out of RE/Max's balloon. Surpassing RE/Max's national agent count ( to take the spot as the nation's 3rd largest real estate company) is especially gratifying to us here at Pickett Street, as we joined the Keller family in early 2008, after 3 years with a local RE/Max agency. To be fair, RE/Max was very good to us, and we cherish the relationships we made there. However, we have learned that Keller's culture is more suitable to our way of business: we love the supportive, cooperative, family & community-oriented, values-based team atmosphere. Another significant piece of the business decision puzzle for us was their progressive stance…Read more
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Top 3 Reasons why $ 8000 tax credit is better
February 15, 2009 /The National Association of REALTORS (NAR) have to be glad that this week is over. It had to be tortuous - thinking on Tuesday that Congress was on it’s way to approving a $15,000 tax credit for those that bought a home in 2009 - then watching the House of Representative strike it completely from the Economic Stimulus package on Wednesday. The NAR's response to the unexpected change was measured, saying only that nothing was yet decided, and that changes would be made before President Obama signed the bill into law. The week ended with a narrow passage of the Economic Stimulus Package on Friday, and (together now, with a sigh of relief) the NAR's efforts were rewarded with an honorary mention in the American Recovery and Reinvestment Act. I preface with all of that to say this: THANK GOD! Not because I think that the measure will be a salvation to the industry, but because their are several reasons why the act passed yesterday is better than the $7,500 tax credit passed last year and the $15,000 tax credit initially supported by the NAR. Here are the top three reasons why: (1) The same benefit for all that use…Read more
