Rent or Buy? A Capitol Hill Case Study
June 2, 2011
Is now the time to buy?
According to Standard & Poor’s Case Shiller Index, home prices are still dropping. And while real estate pundits rarely speak with one voice, the consensus among many experts is that smart buyers will continue to rent until the market really bottoms out.
Unfortunately, rental occupancies are on the rise, so landlords can afford to rent to the highest bidder, while slashing the little extras they once relied on to fill vacancies (parking spots, utilities, building amenities). As a result, we are living in a real estate market with dropping home prices and soaring lease payments.
So is now really the time to buy? The answer is yes… as long as you are going to be here for a little while.
We compared two properties, only three blocks apart on Capitol Hill.
| Apartment For Rent | Condo For Sale |
| $995/mo. | $238,000 |
| 700 sq. ft. | 633 sq. ft. |
| 1 bedroom, 1 bath | 1 bedroom, 1 bath |
| No dishwasher | Modern kitchen |
| Hardwood floors | Hardwood floors |
| Shared Laundry | W/D in unit |
On the surface, the apartment for rent looks like a better deal – and for under $1,000 per month with a great location, I can wash my own dishes. But our analysis proved otherwise.
Using the New York Times Buy or Rent Calculator, we plugged in current mortgage rates (4.1% for 30-yr fixed), and a 20% down payment.
In nine years, the financial benefits of buying outweigh those of renting.
After fifteen years, your mortgage payments save you $34,302. When we cut the down payment to 10% (because not everyone has $40k socked away), buying still beat renting. You could be saving $34,932 over the same fifteen years. If you have the job stability and commitment to plan beyond the terms of a 12-month lease, there is no reason to keep lining a landlord’s pockets when you could be building equity.
Take advantage of the lowest home prices since 2003. For those of us who cannot imagine living anywhere but here (especially now that the sun has started to come out again!) the moment to buy has arrived.
Ashley Just Listed a Condo at the Klee for $289,000!
May 24, 2011
5 Things to Avoid When Applying for a Home Loan
May 20, 2011You are feeling pretty happy with yourself.
You have searched for months and finally found the ideal home, you are pre-approved for the loan, and you have found the perfect sofa, wing backed chair and ottoman to accent your light-filled living room. Happy, happy, happy! But, before you get too giddy be warned – those fab furnishings may cost you your new home.
Fannie Mae has introduced “The Loan Quality Initiative” which requires lenders to pull a refreshed credit report within 10 days of closing. If there is a change in credit, it may affect your rate, point and/or loan approval. If you are depending on a mortgage to buy your home delaying major purchases is just one tip to note.
5 THINGS YOU SHOULD AVOID WHEN APPLYING FOR A HOME LOAN
1) Postpone Major Purchases
As mentioned above, it is wise to perhaps sit on your hands and even stay away from temptation (that would be outlets malls for me) while your home is nearing the final stages of closing.
Photo from Homeit.com
An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment. If you tack on a higher credit card payment, the bank might decide you can’t afford the home.
Using cash to purchase the furnishings could also create a problem, since banks
consider cash reserves when approving your mortgage. Additional credit inquires must be explained in writing and may affect your credit scores. If you must make a major purchase before closing, talk to your loan officer before you do it.
2) Don’t Change Jobs Unless It’s Necessary
Lenders like to see a consistent job history. They aren’t usually as nervous if you change jobs within the same field. However, a new job may involve a probation period or change in compensation.
Most commissions/bonuses must be averaged over a 2 year period with the same employer or they cannot be used for qualification purposes. So, it’s better to stay put in the same job until the house is yours.
You can deal with your micro-managing boss a few more weeks ….right?
3) Don’t Move Assets From One Bank Account To Another
As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets.
Photo from Armedforces-int.com
Money transfers show up as new deposits and may complicate the already complicated loan process. If a deposit is “out of the norm” given the recent history, you
must then disclose and document the source of funds for each new deposit. This practice was put in place to eliminate potential fraud as most loans require a thorough paper trail to document the source of all funds.
Changing banks or transferring money to another account (even if it’s just to consolidate funds) could make it difficult for the lender to document your funds.
4) Don’t Consolidate Your Bills
As an add on to number 3, just avoid consolidating your bills until after the closing. This process will have an affect on your credit. Your loan officer can advise you if this really needs to be done and if so, if it is possible to consolidate simultaneously with the loan closing date.
5) Don’t Pack Documents Needed for The Loan Application
While we all like to get a jump on the arduous process of packing in anticipation of our move, take note that important paperwork such as W-2 forms, divorce decrees and tax returns should not be packed or shipped with your household goods.
Your lender will need copies of these and failure to submit certain qualifying documents
Photo From FOI News
could cause you to lose the loan and the financing you need to buy your home. Sure, you may order duplicate copies of these documents but they could take weeks to obtain and this delay could be detrimental.
By educating yourself on the financing procedures and carefully following your lenders advice, the approval process should run smoothly. Then the hardest decision you will have to make will be choosing the sofa in a lush suede or stain resistant pleather.
Ashley Just Listed a Condo In Downtown for $419,500!
May 20, 2011
Location, location! Situated above Pike Place on 1st across from the Four Seasons, this building provides great access to the market, restaurants, SAM, Benaroya, bus lines & financial district- the city is at your feet! Recently updated w/bamboo floors, new carpeting, fresh paint & A/C, this overly spacious & well appointed home is perched on the SE corner of the 5th fl w/fantastic intimate city views of SAM, surrounding buildings & Elliott Bay. A true gem and urban oasis in the heart of it all!
Here’s an Update on Ryan’s 1 Bedroom, 1.5 Bath at The Parc
May 11, 2011
Sweet location near the Olympic Sculpture Park this bright & polished 1 bedroom 1.5 bath corner home on the 8th floor overlooks lush private gardens and terraces. With tons of light this home features bamboo hardwood flooring, cherry cabinetry, slab black granite and stainless steel, gas range, and appliances. Large walk-in closet, big bedroom and attached master. Half bath near the living room and plenty of space for a formal dining or den. Call Ryan at 206-261-1206 for more information!
Posted in New Listings | Leave a commentRyan Recently Listed This Charming 3 bedroom, 1.75 bath Magnolia Home!
May 11, 2011
Gorgeous updates to this classic NW contemporary single family home. Blocks from Discovery Park, meticulously landscaped corner lot with SW exposure and plenty of outdoor escapes, this detailed and spacious remodel is move-in ready. Beautiful restored Oak hardwoods, a dialed kitchen complete with Viking stainless steel, gas range and appliances, a huge theater room, tons of storage and walk-in closet space, 2 gas fireplaces and a private spa retreat to come home too after a long day.
Posted in New Listings | Leave a commentCould the Housing Market in Seattle Be Changing?
May 10, 2011The Seattle PI recently reported on the changing climate in the housing market. While the numbers are still down, the action on the market has certainly changed. Many properties are receiving multiple offers and heavy traffic.
According to Mike Skahen, president of Seattle’s Lake & Co. Real Estate, buyers are still cautious, but they are ready to move on homes that are priced correctly. Hot neighborhoods like Capitol Hill, Queen Anne, Magnolia and others continue to suffer from a lack of listings. This shortage has driven the action on good listings when they are placed on the market.
Our agents have noticed that houses are moving especially quick. The condo market is being heavily affected by a high number of short sales, making it a bit more difficult to list a condo. Houses, however, are not being affected in the same way. Many homes are getting lots of buyer attention, especially when they are priced correctly.
Not sure when the right time to buy or list is for you? Call one of our agents today, or start communicating with us through Facebook or Twitter!
Click here to read more on the PI’s website.
Posted in Real Estate News | Leave a commentHome Improvements: Which One’s Offer the Greatest (& the Least!) Return
April 25, 2011In Seattle’s current real estate market, where demand is low and supply is high, selling your home can be challenging! Many owners are choosing to postpone listing their homes in order to make improvements while they wait for the market to get stronger.
The list of things that can be improved on most houses is nearly endless, so how do you decide which items are most pressing? Which ones will offer the greatest return on your investment?
Below are the top three priorities for increasing the value of your home, as well as the bottom three items that can be avoided.
Do Improve:
- Kitchen: Remodeling the kitchen is one of the best ways to improve the value of a house. Potential buyers pay close attention to the condition of the kitchen when they are looking at a listing.
- Landscaping: Beautifying the exterior of a house is a great way to improve the value of a home. It’s the first thing a buyer sees when they view your home, so it’s a great way to make a positive first impression.
- Bathrooms: Updating the bathrooms in your home is a successful way to attract buyers. Along with the kitchen, bathrooms are one of the most carefully scrutinized elements of a home. Giving buyers something to look at (in a good way!) is a good way to draw them in.
Don’t Waste Time On:
- Installing a swimming pool: Not often considered in our often-gray climate, which is good because it protects homeowners from making a costly improvement that actually does little to increase the value of home.
- Converting an extra room: Number of rooms is a big selling point for most homes. Let the buyer decide what they want to use the rooms for, and don’t hinder their imagination by changing that spare bedroom into your work out room or home office. It’s much harder for people to picture space used in different ways when it’s serving a specific function, as opposed to being a blank canvas.
- Repaint with bold colors: Like the previous point, it’s harder for people to imagine the way they would paint the home when there are lots of bold colors, as opposed to neutral colors. If people aren’t noticing the paint colors, that’s a good thing!
There are lots of ways to improve your home to make it more marketable and these are just a few of them. For all of your real estate advice and listing needs, you can always call or email the experts here at Pointe3 Real Estate. Or use Facebook and Twitter to connect with us!
Posted in Real Estate Advice | Leave a commentOwning Could Actually Be Cheaper Than Renting!
March 10, 2011According to a recent press release, executives at Realogics Sotheby’s International Realty and Cobalt Mortgage completed an analysis that shows it’s actually cheaper to own at The Decatur than to rent a comparable unit in the area.
The Decatur published this chart last week comparing owning at the Decatur versus renting a similar First-Hill apartment through the next five years.
The Decatur offers updated interiors, roof-top terrace with barbecue and convenient location. If you’re interested in viewing on of the few remaining units at The Decatur, call today (206-217-2217) to talk with one of our licensed brokers!
Posted in Real Estate News | Leave a commentSOLD! Ryan Closed a Portage Bay Townhome Listing for $369,000!
March 3, 2011
Ryan just sold this charming townhome last week! Would you like Ryan to help you sell your property? Contact him at 206-261-1206 or ryan@pointe3.com
Posted in Property Sale | Leave a comment← Older posts Newer posts →
