Are Pre-Listing Repairs Worth It in Seattle?

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People in Seattle ask me all the time, “How much has to be done to my house before I put it on the market?"

This freaks people out sometimes. Homeowners have lived in their homes for five to 20 years and they know every single thing wrong with the house, and some that they haven’t paid attention to. It can prevent some sellers from listing.

What I recommend is letting me come over and take a look at what your property is worth compared to other houses around it. Then, we can determine which repairs make sense to do, if any. In this hot market, people are pounding down my door for fixers. Your house might not be a fixer, but it may need a roof or furnace or some landscaping, and you really don’t want to do it. It’s not going to affect us putting it on the market, but it is going to affect the price.

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Which repairs will get you the
best return on investment?

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It might be worth it to accept $5,000 less for your house and let somebody else deal with the problems. On the other hand, some people don’t like to sell their home if it’s not in good shape. There are a couple of options there, starting with a pre-inspection, so we know what we’re dealing with. This can also help you get more money and sell quicker.

We can also get an appraisal, because sometimes a house is worth more than comparable homes because of quality or features. We recently had a home listed at higher than $600,000 around other homes that were worth $450,000. Why? The homeowner was a builder for 25 years, so the home was stunning. It had crown molding throughout, the best carpet and top-of-the-line appliances, and we ended up getting $660,000 for the house within 30 days. The appraisal was a big part of that.

The best thing to do is simply pick up the phone and call me. I can tell you what is and isn’t necessary to get your home sold. Now is a great time to be a seller!

An Overview of HECM Mortgages and Why You Need to Know About Them

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Tane Cabe is here with us to talk about one of the most exciting mortgage options out there for homeowners. It’s called the HECM, or Home Equity Conversion Mortgage. Most people aren’t even aware it exists, but after today you’ll be glad you heard about it.

HECM’s are an interesting animal, because they are totally different from a conventional mortgage. To use one, you must be at least 62 years old, and have the money for both the down payment and closing costs. I recently had a pair of clients who were 75 and 80 qualify for one of these mortgages. They were living in a beautiful house, but it was getting too big for them. We sold that home for $620,000 and after paying off their mortgage, they still had about $500,000 in equity left. They didn’t have a lot of income, just social security,  but we were able to get them a HECM on a home worth $450,000 with just a $260,000 down payment, allowing them to retain the rest of their money for other things.

A HECM mortgage has no mortgage payments, ever. It gives buyers cash out of their previous home, increases their income, and they can never be kicked out of the home as long as they are keeping up on insurance and tax payments.

Another way an HECM can be used effectively is if you are interested in investing in property. For example, you can buy a four-plex for approximately half of its market value, and rent out three of the units to generate an average of $2,225 a month, without having to pay a mortgage whatsoever. It’s a powerful tool. 

Finally, you can use an HECM mortgage as a “warm gift.” If you decide to give your home to your children or grandchildren when you pass away, that’s great. The HECM can be used to sell that house and buy another one, while pulling the equity out and being able to give that to your family for a down payment on a home. 

The birth of the HECM was way back in 2008, where it was buried deep in the economic stimulus package. The goal of this program was to get more seniors to buy homes and give them a good opportunity to downsize from their current home that they may have raised their family in. 

Why have a huge house and a big mortgage payment when you don’t need either? If you don’t want to have a mortgage payment, the only other way to do it besides having a HECM is paying in cash. With a HECM, you can put 50% down or less on a home, and all you’ll have to pay are taxes and insurance. The home will also be federally insured. 

Tane wrote a great book called “Double Your Retirement Dollars” and he goes into great detail about this program, as well as some others. If you’d like a free copy, just head on over to nopaymentbook.com/steve and enter your info on the page. Tane will send you a copy, and you’ll be able to look at tall the great information in there.

Will Your Offer Get Accepted in a Hot Seattle Market?

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“What do you think a seller will accept for a fair price?” I get asked this all the time. In our current market, that is a particularly interesting question. 

If the home has been listed for a while, 5% below asking price is acceptable. You won’t ruffle any feathers. I’ve done investment real estate for a long time, and if a property has been on the market for more than a month or two, most of the sellers are happy to receive any offer on their home at that point. Even if it’s a lowball offer, they’ll counter. You don’t lose anything with a lower offer.

However, if a home has only been on the market a couple days, that’s where things get challenging. Multiple offers are common, and I recently lost a home for one of my clients. This was a beautiful property in a top school district. We were up against 13 offers over asking price, and we lost to a buyer who offered all cash and waived the inspections. There’s not much you can do in that case.

Ultimately, it depends on what you’re going for. If a home has been on the market for a while, usually there’s a reason for that. If we’re smart about it, we can find out what that reason is. Maybe the seller doesn’t want to repaint the house. If that's not a deal killer for you, we can most likely negotiate something with the seller.

If you have any questions, give me a call or send me an email. I would be happy to help you!