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For more information on preparing to sell your home, visit my Home Selling Guide:
Real Estate •
September 20, 2023
To Sell or to Rent? The Perks and Pitfalls of Being a Landlord
Analyzing whether to sell or rent your home is a BIG deal…and it deserves careful consideration. Ultimately, the right choice for you depends on your financial situation, goals, and personal preferences. Here is a quick run-down to help you decide:
Renting Out Your Home Might Make Sense If…
- You don’t need the funds from your current home to purchase another home
- You’re moving temporarily and planning to return to the area
- You think your home’s value will drastically increase within the next few years
- The rental market is especially hot in your area
- You have the time and know-how to screen tenants, manage rent/collections, and make home repairs (or would have enough cash flow to pay for third-party management)
- Rental income is part of your long-term investment strategy
Selling Your Home Might Make Sense If…
- You need to use the equity from your current home to purchase another home
- Rent wouldn’t generate enough cash flow to cover things like vacancies, maintenance, repairs, and landlord insurance in addition to the existing mortgage, taxes, and HOA dues
- You don’t want to take on the risks, time commitment, and challenges of being a landlord
- You’re uncomfortable with the landlord-tenant laws in your area
- A home sale would generate a large profit (and has been your primary residence for at least 2 out of the last 5 years so that you’re eligible for capital gains tax exemptions)
- You’re concerned a future recession might negatively impact your finances
Before reaching a conclusion, it’s a good idea to familiarize yourself with the landlord-tenant-law specific to your state (and in some cases, separate relevant ordinances in the city and/or county that your property lies within). You should also do some market research to get a feel for price/condition of similar homes for rent and for sale in your neighborhood.
It probably makes sense to talk with a property management professional to clearly understand what you can expect to net as a landlord. You can also reach out to me any time for an accurate estimate of your home’s value should you decide to sell.
We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.
© Copyright 2023, Windermere Real Estate / Mercer Island.
Tips, Trends & Living •
September 12, 2023
On-Trend Fall Refresh in 5 Simple Steps
Labor Day has come and gone, mornings are growing chilly, and thoughts are naturally turning back to our indoor spaces. Before you hibernate this fall, there are a few quick and simple tricks that will make your home instantly cozy and inviting. This is especially important if you’re planning to sell your home this fall. Try these 5 ideas that embrace the latest trends…
1. Add a Few Warm Accents
Incorporating some earth-tone pillows and a chunky knit throw into your existing color scheme can instantly make it feel more fall-like. Warm neutrals are still on trend, while tonal palettes are gaining in popularity. You can capture the tonal look by choosing a limited range of 1-3 colors (often tints or shades of the same color tone) and repeating them across a wide variety of textures and materials to create interest. Going warmer and/or darker with tones will add that fall feeling. For those who like a little contrast, consider pops of black or deep navy paired with warm neutrals.
Tip: Buying new covers for your existing pillows and then swapping them out each season cuts down on expense and storage needs (and makes cleaning that much easier).
2. Layer On Some Texture
Adding in a variety of textures can instantly add stylish warmth and a sense of coziness, especially in fall. Woven elements have been hot for a few years and are still trending—try a seagrass tray, woven basket, or jute rug to capture the look. In line with the Quiet Luxury trend, textured fabrics in quality cashmere, wool, boucle, or linen lend a feel of inviting elegance. Drape a woven wool throw blanket at the foot of your bed. Textured vases and natural wood, stone, earthenware, or leather accents are another easy way to transform your space.
Tip: Want to bring seasonal warmth and texture to a grey kitchen? Try woven bar stools, a wooden fruit bowl, decorative cutting board, or even just a simple jar of wooden spoons.
3. Bring a Touch of Nostalgia
The trend of incorporating vintage statement pieces into otherwise modern spaces continues…and provides great opportunities for fall. Consider an accent table or picture frame in warm, reclaimed wood; a vintage autumn print; or an antique-style rug. Heirloom quilts are also trending for fall, whether on your bed or draped over an easy chair. Vintage-style lamps and light fixtures are another fun trend to try, especially as the days grow darker.
Tip: Traditional Turkish, Asian, and Persian style rugs/runners are an easy way to add vintage charm to any room…and they’re available in many sizes, colors, and price points. Earth tones are ideal for fall, while warm neutrals go with almost any furniture or season.
4. Consider Curve Appeal
Curvy furniture, accents, and architectural details are all still popular as we head into fall. You might add a rounded stool, arched mirror, or curvy lighting fixture for a modern feel. If it’s time to replace your coffee table or dining chairs, consider going with a round option.
Tip: If you’re on the fence about curves, try small and affordable pieces like round pillows, baskets, picture frames, and wall art.
5. Finish With Seasonal Botanicals
Natural, organic elements are a surefire way to get that on-trend fall look. Keep it easy—an oversized bunch of pampas grass in a vase, some branches and flowers you found in a nearby field, or dried flowers and stems. Artificial arrangements are a good way to go if you can splurge on something with realistic quality (we won’t tell a soul). Pumpkins and gourds are another fun addition and can be found in a variety of interesting colors and textures.
Tip: White pumpkins are available at the grocery store and go with almost any decor. Put them in a wooden bowl for an easy centerpiece, line them up on the mantel, or arrange them next to a vase of foraged branches. Boom…fall.
We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.
© Copyright 2023, Windermere Real Estate / Mercer Island.
Real Estate •
August 16, 2023
5 Home Improvements That Will Boost Your Property Value
A home is the largest investment most people will make in their lifetime, so when it comes time to sell, homeowners often wonder what they can do to get the most return on their investment. Many have the misconception that remodeling is the way to go, but that isn’t always the case. Rather than going all-in on upgrading your home, you should know which home improvements are worth it, and which ones aren’t.
We’ve sifted through the research and come up with a quick list of five home improvements that’ll help buyers fall in love with your home when it comes time to sell.
1. Add a little curb appeal
Curb appeal is critical. As the name suggests, it’s the first thing buyers see when pulling up to the front of any home so it needs to be in nearly pristine condition.
Landscaping can go a long way for a minimal upfront investment. Six rounds of fertilizer and weed control will set you back about $415, but when it comes time to sell, you’ll see a return on investment (ROI) of about $900 according to a 2023 survey by the National Association of Realtors.
Other improvements you can easily make to your curb appeal include:
- Pressure wash the exterior
- Liven up your front door with a fresh coat of paint
- Replace hardware such as doorknobs and knockers
- Install updated house numbers
- Make your walkways pop with new greenery or flowers
- Plant a succulent garden
- Update your porch lights
- Add a little charm with window flower boxes
- Stage your porch
2. Convert your HVAC to an electric heat pump
According to the 2023 Cost vs. Value Remodeling Report, replacing an oil or gas furnace with an electric heat pump is one of the hottest trends (and offers an unusually high ROI of 104%). Their earth-friendly efficiency is especially appealing to younger buyers and those concerned about climate change. Additionally, they offer summertime cooling, which is a big bonus in the PNW given our recent hot and smoky summers!
3. Refresh your kitchen
While major kitchen renovations are costly and typically have low ROI, a little elbow grease and modest budget can give you big bang for your buck (see our article on simple kitchen makeover ideas).
Here are some smaller updates to boost your home’s value:
- Clean
- Organize your pantry
- Use a little Murphy Oil Soap and hot water on all of your cabinets
- Polish cabinets with Howard Feed-In-Wax
- Tighten all hinges
- Clean grout and tiles
- Shine your sinks and hardware until you can see your face in it
- Deep clean your stove
- Give your kitchen a fresh coat of neutral paint
- Update lighting fixtures, and replace light bulbs
- Add new and trendy door hardware to your cabinets
- Consider replacing your countertops with a hard surface like quartz or quartzite
- Upgrade your appliances
4. Go green
Today’s younger generations are embracing eco-friendly living, and millennials are leading the pack. According to the National Association of Realtors’ 2022 Home Buyer and Seller Generational Trends Report, millennials make up the largest segment of buyers, holding strong at 43 percent of all buyers.
When it comes to attracting buyers who are willing to pay top dollar, going green makes sense. A Nielson study found that, of more than 30,000 millennials surveyed, 66 percent are willing to shell out more cash for conservation-conscious, sustainable products. Depending on where you live, consider installing solar panels, wind turbines, and eco-friendly water systems.
No matter where you live, attic insulation replacement and weather stripping are safe bets. Attic replacement costs can vary but typically have a good ROI. Weather stripping costs about $350 if you hire a professional, but you can easily DIY for a fraction of that cost.
5. Install hardwood floors
Installing or upgrading hardwood floors is pretty failsafe as most buyers love it. Ninety-nine percent of real estate agents agree that homes with hardwood floors are easier to sell, and 90 percent of agents say that they sell for a higher sale price, according to the National Wood Flooring Association. Similarly, a survey by the National Association of Home Builders (NAHB) found that wood flooring was among the top 10 home features most desired by home buyers.
When it comes time to sell, I will help you get the highest possible ROI for your home. I can connect you with tried-and-true contractors, suggest strategic upgrades, and help you develop the right pricing plan based on up-to-the-minute market analysis. Reach out for a complimentary home value consultation.
© Copyright 2023, Windermere Real Estate/Mercer Island.
Adapted from an article that originally appeared on the Windermere blog November 12, 2018. Written by: Sarah Stilo with HomeLight.
Cost vs. Value data ©2023 Zonda Media, a Delaware corporation. Complete data from the 2023 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.
We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.
Real Estate •
June 7, 2023
7 Simple Ways to Boost Your Curb Appeal
When it comes time to sell your home, first impressions are crucial. Improving your curb appeal will catch buyers’ attention and go a long way toward selling quickly and for the best price. Here are seven affordable changes you can make that have a big impact…
1. Lush Up Your Lawn
A healthy, well-tended lawn will make your home look even more impressive when you start hosting open houses. Clean up all weeds, leaves, and debris, and consistently water to give it that fresh green look. Mow regularly, but not too short or you’ll damage the grass and invite weeds (experts recommend a minimum 3″ height for the Pacific NW). Consider a nitrate-rich fertilizer to keep the grass extra lush and green.
2. Refresh Your Door
Your front door is an opportunity to make a tasteful statement. Look at bold color choices that are within or slightly stretch your home’s exterior color palette. Take time to prepare the surface for a fresh coat of paint to make the color pop as much as possible and try stylish doorknob options that accentuate the aesthetic to give your door some added flair.
3. Update Your House Numbers
New and stylish house numbers are an easy, eye-catching addition to how your home is perceived by buyers. Look for styles that match with your exterior color palette and any exterior lighting fixtures.
4. Plant Colorfully
Adding colorful variety to your front yard will grab buyers’ attention. Align smaller plants like ground cover and flowers neatly within your flower beds, aiming for symmetry when possible. Use larger plants and trees to frame in your entryway or walkup. If your front yard doesn’t have flower beds, try adding hanging planters or window boxes. Because you’ll be competing against nearby listings, it’s landscaping projects like these that can make all the difference in your listing photos.
5. Upgrade Your Lighting
Adding landscape lighting will boost your curb appeal during nighttime, accentuate your shrubbery, and add a welcoming touch for potential buyers, lighting the way to your door.
While we’re on the subject, make sure your house lights are functional. Consider replacing dated fixtures with stylish new versions. Features like automatic dawn-to-dusk sensors will also come in handy if the home will be vacant while it’s listed.
6. Power Wash
Pressure washing your walkways and driveways can instantly improve your curb appeal. If buying a pressure washer is outside your budget, explore rental options from hardware stores in your area.
7. Add an Inviting Touch
Incorporating classic front porch elements like a porch swing, sitting bench, and other outdoor furniture gives a welcoming aura to your home’s entry and creates a sense of comfort for prospective buyers.
Adapted from an article that originally appeared on the Windermere blog April 19th, 2023. Written by: Sandy Dodge.
© Copyright 2023, Windermere Real Estate/Mercer Island.
Real Estate •
May 19, 2023
Buying a Home: A Start-to-Finish Guide
You want to buy a home.
Where do you begin?
When you’re ready to buy—or maybe just ready to start seriously thinking about it—there’s a lot you can do to prepare. Here is a checklist to help you get started…
1. Determine a Price Range
Step one is finding out your budget for your new home. The best way to do that is to meet with a mortgage professional who will review your income, assets, and credit history in order to pre-approve you for a loan. Not only does getting pre-approved allow you to narrow your home search, but it also makes your offer stronger when it comes time buy. If you don’t currently have a mortgage professional, I would be happy to recommend one.
You can also use my Home Monthly Payment Calculator to experiment with different principal amounts, interest rates, down payments, taxes, and insurance to get an idea of what you can afford. Keep in mind that these calculations are meant to be estimates—interest rates change weekly and will be determined by your credit score.
2. Make a Wish List
Imagine your ideal home. How many beds/baths does it have? How big is the backyard? How close is it to the local park? Use our Wish List to guide you in your search online and with me.
3. Start Your Searching
Once you know how much you can afford and what you’re looking for in a home, it’s time to start your search. My online search tool makes it easy to search for homes, keep track of your favorites and subscribe to property alerts when a fitting listing hits the market in your area. I can also send you potential homes and take you to tour them in person once you’re ready to get serious.
4. Know What to Avoid
As you prepare to buy, knowing what not to do can often be just as helpful as knowing what to do. By understanding the pitfalls buyers can fall into, you can identify the signs of these common buying mistakes ahead of time. Check out this article on buying homes that have been flipped, too.
You’ve found the home.
What now?
Once you’ve found the home you can see yourself living in, what’s next? There are many steps to go through before you can officially call yourself a homeowner. I will guide you through this process, but in the meantime, here’s a preview of what you can expect.
1. Negotiation
When making an offer on a home, I will negotiate on your behalf in order to attain the best terms for you. This can include negotiating the price, repair costs, timelines, and contingencies.
2. Purchase & Sale Agreement (Contract)
This is the legal contract you and the seller will enter into once your offer has been accepted by the seller. It outlines the terms and conditions of the sale and is signed by both parties.
3. Inspection
Once the Purchase and Sale Agreement is signed, a home inspector is hired to examine the home’s health, safety, and major mechanical systems. If any issues arise from an inspection, you may be able to renegotiate.
In a competitive offer situation where you wish to waive your inspection contingency in order to make your offer more appealing, I may advise you to conduct a “pre-inspection”—that is, an inspection that is conducted before you put an offer in on the house.
4. Financing
After your offer is accepted, the next step is to get final loan approval. During this process the lender will decide if they’re willing to approve your mortgage based on things like your creditworthiness and the title history and appraisal of the home you want to buy.
5. Title Report
This is a report for you and your lender detailing the history of the home you’re buying to ensure there are no legal barriers to purchasing it.
6. Escrow
Escrow is an impartial third-party process in which documents and funds are deposited by buyers, sellers, and lenders to facilitate the closing of a transaction. To learn more, read this short guide to understanding escrow.
7. Closing
During this final step of the home buying process, ownership is transferred from the seller to the buyer, closing costs are paid, and several legal documents are prepared and signed, all leading to the closing date. After closing is finalized and recorded and the funds are disbursed, the home is yours!
8. Moving Day!
Check out my printable Moving Checklist as you get ready for the big day.
© Copyright 2023, Windermere Real Estate/Mercer Island.
Real Estate •
February 17, 2023
Preparing to Sell Your Home: A Complete Checklist
Getting your home ready to sell can feel like a circus act. Without the right organization, juggling the countless moving parts involved in this stage of the selling process can take its toll. This is the perfect opportunity to create a checklist to keep yourself on track and within your budget. The following information will illuminate the key responsibilities you face as a homeowner as you prepare to hit the market.
We’ve included a comprehensive checklist below of the common tasks required to get your home ready to sell. It is also available as a downloadable pdf here:
EXTERIOR
This list of value-adding curb appeal projects will help to form buyers’ first impressions of your home and make your ever-important exterior listing photos stand out amongst the competition.
- Remove peeling and chipped paint; replace with a fresh coat
- Fix loose trim and fencing
- Clear gutters and downspouts
- Make sure there is good exterior lighting and all walkway lights and front-door lanterns work
- Clean and repair the roof as needed
- Clear garage of clutter and tidy shelves
- Inspect chimney for cracks and damage
Yard
- Mow and trim grass; re-seed and fertilize where necessary
- Prune all overgrown trees and shrubs
- Weed flower beds
- Remove or replace dead or diseased plants, shrubs, and trees
- Clean grease and oil stains from driveway
Decks/Patios
- Paint or stain worn areas on wood decks
- Remove grass growing in concrete cracks; sweep off debris from shrubs and trees
- Clean all deck rails and make sure they’re secure; replace missing slats or posts
- Clean outdoor furniture
Front Door
- Add a fresh coat of paint to get rid of nicks
- Clean the glass on the storm door; make certain the screen is secure
- Make sure the doorbell operates properly and there are no squeaks when the door opens and closes
Windows
- Clean all windows inside and out
- If needed, add a fresh coat of paint to the window trims and sills
- Make sure all windows open and close easily
- Replace cracked windowpanes and those with broken seals
- Make sure window screens are clean and secure; replace any screens with holes or tears
Front Entry
- Clean entryway floors and area rugs
- Downsize clutter in the entry and entry closet to give the appearance of spaciousness
- Double-check entry lighting to make sure it works
INTERIOR
Not only will these interior projects get your house sparkling clean, but they’re also preparatory steps for staging your home and hosting open houses.
General Interior Cleaning
- Clean all floors, carpets, walls, and trim
- Replace burned-out light bulbs
- Empty trash
- Remove family photos, valuables, and prescription drugs
- Tidy up clutter
Kitchen
- Fix dripping faucets
- Organize pantry and cupboards so they appear clean, neat, and spacious
- Make sure the refrigerator and freezer are defrosted and free of odors
- Clean the oven and cooktop thoroughly
- Set the table
Living/Family/Dining Rooms
- Give rooms a fresh coat of paint as needed
- Repair cracks and holes in ceiling and walls
- Make sure all wallpaper is secure
- Repaint any woodwork that is worn or chipped
- Clean or replace draperies and blinds; open them to maximize light
- Make sure draperies and blinds open and close
- Steam-clean carpets
- Clean rugs and wood flooring, and remove any stains or odors
- Position the furniture to showcase the size and space of the room
- Remove and replace any attached items, such as chandeliers and draperies, that you wish to move with you
- Put away toys and hobby supplies; remove extra magazines and books from tables
Bathrooms
- Make sure sinks, tubs, showers, and countertops are clean and free of stains
- Repair any leaky faucets
- Remove grout and soap stains from tile
- Replace any missing or cracked tiles or grout
- Make sure all joints are caulked
- Make sure all fixtures, including heat lamps and exhaust fans are operating
- Install a new shower curtain and buy matching towels
- Store all supplies, such as toilet paper, shampoo bottles and cleansers, out of sight
Bedrooms
- Repair cracks in ceiling and walls
- Apply a fresh coat of paint if necessary
- Make sure all wallpaper is secure
- Clean draperies and blinds; open them to maximize light
- Put away toys, clothes, and clutter
- Neatly make up the beds
Basement
- Check for water penetration or dampness; call for professional repairs if necessary
- Get rid of musty odors
- Clean furnace, hot water heater, and drains
- Make sure light fixtures work
- Arrange storage area in a neat and organized manner
- Make sure stairway handrail is secure
Tidy Extras
- Use air fresheners or bake treats to make the house smell good
- Plant flowers to brighten the walkway and enrich the entry
- Remove any indoor houseplants that are brown or losing their leaves
- Remove all “fixer” cars, campers, and boats from the property
- Tidy and declutter all closets
- Hide or get rid of worn-out throw pillows
- Store pet supplies
- At night, turn on the porch light and outdoor lighting
This article originally appeared on the Windermere blog June 29th, 2022. Written by: Sandy Dodge.
© Copyright 2023, Windermere Real Estate/Mercer Island.
Real Estate •
February 1, 2023
Q4 2022 Western Washington Economic & Real Estate Update
The following analysis of select counties of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. I hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.
Regional Economic Overview
Although the job market in Western Washington continues to grow, the pace has started to slow. The region added over 91,000 new jobs during the past year, but the 12-month growth rate is now below 100,000, a level we have not seen since the start of the post-COVID job recovery. That said, all but three counties have recovered completely from their pandemic job losses and total regional employment is up more than 52,000 jobs. The regional unemployment rate in November was 3.8%, which was marginally above the 3.7% level of a year ago. Many business owners across the country are pondering whether we are likely to enter a recession this year. As a result, it’s very possible that they will start to slow their expansion in anticipation of an economic contraction.
Western Washington Home Sales
❱ In the final quarter of 2022, 12,711 homes sold, representing a drop of 42% from the same period in 2021. Sales were 34.7% lower than in the third quarter of 2022.
❱ Listing activity rose in every market year over year but fell more than 26% compared to the third quarter, which is expected given the time of year.
❱ Home sales fell across the board relative to the fourth quarter of 2021 and the third quarter of 2022.
❱ Pending sales (demand) outpaced listings (supply) by a factor of 1:2. This was down from 1:6 in the third quarter. That ratio has been trending lower for the past year, which suggests that buyers are being more cautious and may be waiting for mortgage rates to drop.
Western Washington Home Prices
❱ Sale prices fell an average of 2% compared to the same period the year prior and were 6.1% lower than in the third quarter of 2022. The average sale price was $702,653.
❱ The median listing price in the fourth quarter of 2022 was 5% lower than in the third quarter. Only Skagit County experienced higher asking prices. Clearly, sellers are starting to be more realistic about the shift in the market.
❱ Even though the region saw aggregate prices fall, prices rose in six counties year over year.
❱ Much will be said about the drop in prices, but I am not overly concerned. Like most of the country, the Western Washington market went through a period of artificially low borrowing costs, which caused home values to soar. But now prices are trending back to more normalized levels, which I believe is a good thing.
Mortgage Rates
Rates rose dramatically in 2022, but I believe that they have now peaked. Mortgage rates are primarily based on the prices and yields of bonds, and while bonds take cues from several places, they are always impacted by inflation and the economy at large. If inflation continues to fall, as I expect it will, rates will continue to drop.
My current forecast is that mortgage rates will trend lower as we move through the year. While this may be good news for home buyers, rates will still be higher than they have become accustomed to. Even as the cost of borrowing falls, home prices in expensive markets such as Western Washington will probably fall a bit more to compensate for rates that will likely hold above 6% until early summer.
Western Washington Days on Market
❱ It took an average of 41 days for homes to sell in the fourth quarter of 2022. This was 17 more days than in the same quarter of 2021, and 16 days more than in the third quarter of 2022.
❱ King County was again the tightest market in Western Washington, with homes taking an average of 31 days to find a buyer.
❱ All counties contained in this report saw the average time on market rise from the same period a year ago.
❱ Year over year, the greatest increase in market time was Snohomish County, where it took an average of 23 more days to find a buyer. Compared to the third quarter of 2022, San Juan County saw average market time rise the most (from 34 to 74 days).
Conclusions
This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
The regional economy is still growing, but it is showing signs of slowing. Although this is not an immediate concern, if employees start to worry about job security, they may decide to wait before making the decision to buy or sell a home. As we move through the spring I believe the market will be fairly soft, but I would caution buyers who think conditions are completely shifting in their direction. Due to the large number of homeowners who have a mortgage at 3% or lower, I simply don’t believe the market will become oversupplied with inventory, which will keep home values from dropping too significantly.
Ultimately, however, the market will benefit buyers more than sellers, at least for the time being. As such, I have moved the needle as close to the balance line as we have seen in a very long time.
About Matthew Gardner
As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level. Matthew has over 30 years of professional experience both in the U.S. and U.K.
In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics.
This article originally appeared on the Windermere blog January 26th, 2023. Written by: Matthew Gardner.
© Copyright 2023, Windermere Real Estate/Mercer Island.
Real Estate •
November 17, 2022
What is an Adjustable-Rate Mortgage (ARM)?
Securing the most advantageous financing for your situation is an integral part of the success formula of buying a home. After getting pre-approved but once you’ve found the home you’d like to pursue, one of your primary tasks is exploring different loan products to see which best fits your situation. This is the fork in the road where you’ll need to decide between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). The following information will help you gain a better understanding of ARMs to help you decide whether they’re right for you.
What Is an Adjustable-Rate Mortgage (ARM)?
After your down payment, your mortgage will finance the remainder of your home purchase. Whereas fixed-rate mortgages allow you to lock in a specific interest rate and payment for the life of your loan, adjustable-rate mortgages’ interest rates will fluctuate over time, thus changing your loan payment. It’s typical for ARMs to begin with a low introductory interest rate, but once that first stage of the loan has passed, they will begin to shift up and down. ARMs generally have a cap that specifies the maximum rate that can occur for that loan.
Let’s say you secure an adjustable-rate mortgage with 30-year terms, the first five of which are at a fixed rate. When the variable interest portion of the loan kicks in, your mortgage’s fluctuations will be measured against an index. If the index is higher than when you secured the loan, your rate and loan payment will go up—and vice versa. How often your ARM rates change depends on your agreement with your lender. Talk to your mortgage broker to learn more about the characteristics of adjustable-rate mortgages.
Pros and Cons of an Adjustable-Rate Mortgage (ARM)
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Different Types of Adjustable-Rate Mortgages (ARMs)
Hybrid ARM: As outlined above, a hybrid ARM begins with a fixed-rate introductory period followed by an adjustable-rate period. Typically, a hybrid ARM’s fixed-rate period lasts anywhere between three to 10 years, and its rates adjust at an agreed-upon frequency during the adjustable-rate period, such as once every six months or once a year.
Interest-Only ARM: With an interest-only ARM, you pay just the interest on the loan for a specified introductory period, then the principal payments kick in on top. The longer the introductory period, the higher your payments will be when the delayed principal payments enter the equation.
Payment-Option ARM: Not all states allow these loan products because they can get home buyers into hot water quickly if rates increase. They include flexibility to choose your monthly payments with a payment-option ARM, including interest-only payments and minimum payments that don’t cover interest.
Home Monthly Payment Calculator
To get an idea of how your mortgage payment will fit into your budget, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price.
Adapted from an article that originally appeared on the Windermere blog September 28, 2022. Written by: Sandy Dodge.
© Copyright 2022, Windermere Real Estate/Mercer Island.
Tips, Trends & Living •
September 13, 2022
Your Fall Home Maintenance Checklist
A clever person solves a problem;
a wise person avoids it.
As the days shorten, you can mitigate many mid-winter headaches with some preemptive prep. Proper weatherizing can help protect your home from preventable damage, save money on energy costs, and, most importantly, keep you and your loved ones safe and warm throughout the winter season. Here is a useful checklist to manage your weatherization project. Setting aside some time on a couple of weekend days should be more than enough to knock this out. Scroll down for helpful tips and click here for a printable checklist!
1. Clean the Gutters
After all the leaves, pine cones, pine needles, and other autumnal debris have fallen, clear them out from your rain gutters. This will avoid gutter damage from ice or melted snow draining improperly. Even in warmer locales, gutter buildup & leakage can put undue stress on your roof and home. Make sure your downspouts are pointing away from your home’s foundation to prevent basement leaks and flooding.
2. Look at the Roof
Check for any damaged shingles, corroded flashing, or leaky vents that need to be repaired. When the first heavy rain comes after a long dry spell, check the underside of the roof for moisture on joints or insulation. Mark any spots that you find and then hire a roofing specialist to repair these leaks. If you wait until spots show up on your ceiling, insulation and sheet rock will have also been damaged and you could have a mold problem too. You can find tips on how to solve roof & gutter issues in this great article from http://FamilyHandyman.com.
3. Check the Siding
While the weather is still nice, look for any gaps or cracks and seal them with exterior caulk (here are some tips). You should also touch up any old or loose paint to ensure your home’s exterior has a weatherproof seal.
4. Trim Tree Limbs
If your property has large trees, check for loose branches and call someone to trim back any limbs that may fall in your yard, on your roof or even damage a window. Branches that touch your house and overhang your roof are convenient on-ramps for pests, so trim back branches so they’re at least four feet from the house.
5. Reverse Ceiling Fans
If you have ceilings fans in your home, there is a handy trick you can use to improve your home’s heating efficiency. By reversing the direction of your ceiling fan—running the blades in a clockwise direction—you’ll create a slight updraft, forcing warm air near the ceiling downward.
6. Weatherize Doors
If an exterior door doesn’t have a snug seal when closed, replace the weather stripping; self-adhesive foam stripping is much simpler to install than traditional vinyl stripping but has a shorter lifespan. If there is a gap under the door (which can happen over time as a house settles), you may need to realign the door and replace the vinyl door bottom and/or door sweep.
7. Service the Furnace
Preventative maintenance is crucial for your home’s heating and air-conditioning systems. Fall is a smart time to have your systems checked and tuned up. Don’t wait for extreme temperatures to arrive, when service companies are slammed with emergency calls. Replace filters if you use a furnace and clear out any vents and ducts that carry heat through them. If you have baseboard heaters, wipe them of dust and remove any debris that might catch fire.
8. Check the Chimney
Make sure to have chimneys and air vents inspected and cleaned early in the season if you are planning on warming your home with a wood-burning source. When your fireplace is not in use, make sure to close the damper—some resources estimate an open damper can increase energy consumption by as much as 30%, increasing your bill about $200.
9. Test Safety Devices
Most house fires happen in the fall and winter, with holiday cooking and heating systems both being common causes. Deadly carbon monoxide can also be released by furnaces, stoves, fireplaces, and space heaters. Protect your household by replacing any smoke detectors and carbon monoxide monitors as needed. Check the indicators on your fire extinguishers to make sure they’re still good (or install them if you don’t have them—a Class B extinguisher for the kitchen is a good place to start, but you might need more according to this guide).
10. Winterize Plumbing
Make sure any pipes in unheated spaces—such as the crawl space, basement, or garage—are properly insulated to prevent freezing and bursts. Disconnect hoses and install hose bib covers on all outdoor faucets. Winterize your in-ground sprinkler system…here’s a great wikiHow article with 3 different methods.
We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.
2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446
mercerisland@windermere.com
© Copyright 2022 Windermere Mercer Island.
Adapted from articles that originally appeared on the Windermere blog December 21, 2020, by Sandy Dodge; October 7th, 2019 by Meaghan McGlynn; and September 16, 2016 by Windermere Staff.
Real Estate •
June 6, 2022
How to Avoid Overpaying for a Home in a Transitioning Market
Look Carefully at the Home Itself
Here are four home attributes beyond the number of bedrooms and baths that you should have your eye on…
Home (building) quality: Very well-built homes are a rare find and typically worth every penny of their price. Don’t confuse them with so-so homes that just measure up to the city inspector’s threshold. Lesser quality homes will cost you more in upkeep and replacement as systems and components wear out. If you purchase a lesser quality home for less, the differential might just cover the added maintenance expense. But, if you purchase a fair quality home at the going rate of higher quality homes, you might likely be overpaying.
Deferred maintenance: Different than home quality, deferred maintenance includes the to-do list of items that need to be done to maintain a home’s integrity. A home that has been well maintained over its life typically is a better investment than one that hasn’t. The true cost of deferred maintenance often adds up to more than the cost of the repairs themselves. Don’t forget to factor in the reduced life span of other components—like replacement of damaged wood beneath peeling paint or mold remediation in a damp basement caused by a clogged foundation drain.
Setting: The saying “location, location, location” didn’t get its fame from out of nowhere. A home with an ideal setting on its lot and in the neighborhood—away from busy roads and utility poles/boxes, with adequate privacy, good topography, best positioned to capture views if available, and not adjacent to undesirable elements (poorly maintained homes, water towers or other unsightly public structures, high traffic facilities, etc.) will have more value than a less-ideally sited home. When deciding what to pay for a property it is critical that you evaluate these aspects and any others relevant to a specific neighborhood to determine the +/- effect on value.
Floor plan: How a home lives—flow from room to room, size of rooms, open/closed-off spaces, and below ground vs. above ground living are every bit as important as the total home square footage. You can change a lot of things about a home, but it is very difficult to change a bad floor plan. When you are deciding how high to make that multiple offer bid, consider factoring in the added value or take-away of the floor plan.
Beyond the Four Walls
Interest Rates: In addition to being more selective about the home itself, it pays off to understand how interest rates impact your monthly housing cost. It’s a bigger deal than you might think. Every 1% increase in interest rate equates to roughly a 10% decrease in buying power. Said differently, a 10% drop in home sale price would be wiped out by a subtle 1% increase in mortgage interest rate. This means you can obtain a much more expensive home when rates are low, whereas higher rates get you less home—even though you still pay the same monthly payment.
If you have $5,000 a month to budget for a house payment (before taxes and insurance), you could purchase a $931,000 house at a 5% mortgage rate. If rates went up to 6%, the same monthly payment would only get you an $834,000 home. Your buying power diminishes considerably with each bump up in rates.
This second chart below shows how interest rates impact monthly payments. If you’re purchasing a $950,000 house at a 5% interest rate, you’ll be paying $596 less every month than if rates were 6%. That adds up quick…$7,152 in one year alone!
Job and Location Stability: Like nearly any investment vehicle, being able to buy and sell on your own time allows you take advantage of ideal market conditions or hold until a more favorable market returns. In an uncertain market, you should plan to be able to stay put for a minimum of 5-7 years if needed. If relocation or job loss is a distinct possibility, waiting to buy might avoid loss as a result of an untimely sale.
Homeownership Lifestyle: For many, homeownership represents a life accomplishment, independence, and financial security. For others, one more thing requiring maintenance and upkeep. Knowing where you stand (at this moment in time anyway) when it comes to evaluating the pros and cons of homeownership as a lifestyle choice is a better first step than an afterthought.
Final Thoughts
Want to know how you can best protect yourself in a changing real estate market? Reach out to us for help evaluating whether it would make financial sense to buy now or wait.
We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.
2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446
mercerisland@windermere.com
© Copyright 2022, Windermere Real Estate/Mercer Island.
