Auburn WA

Since we are now at the end of June and midway through 2009, here is an update on how sales are going this year from January until now.

TOTAL CURRENTLY ON MARKET: There are currently 732 listings of residences on the Auburn, WA real estate market. This includes residential homes (487), condominiums (129), manufactured homes in parks (74 ), multi-family duplex and four-plex (24), and small commercial dwellings (18).

UNDER CONTRACT w/pending sales: Currently, out of the above listed properties on the real estate market, the following listings in Auburn have pending sales: residential homes (149), condos (18), manufactured homes in parks (3), multi family (3) and small commercial (2).

SOLD: The closed sales from January 1, 2009 through the end of June, 2009 include residential homes (191), condos (38), manufactured homes in parks,considered personal property instead of actual real estate (35), multi-family (3), and small commercial (2).

BANK OWNED AND SHORT SALES: On the market from the above active and pending listings, here is some interesting data: For the properties under $400,000 there are 53 bank owned and 129 short sales, which is 29% of the active listings in this price range. In the price range over $400,000, there are 3 bank owned and 16 short sales, which is 7.6% of the listings in the over $400,000 range. This is a total of 201 listings. There is no data available yet for the number of bank owned and/or short sales that actually close, due to the fact that the MLS (multiple listing service) has just recently incorporated this into the criteria of the listing.

Active: Quantity

$75,000 thru $159,999: 56
$160,000 thru $249,999: 148
$250,000 thru $299,999: 104
$300,000 thru $349,999: 59
$350,000 thru $399,999: 29
$400,000 thru $599,999: 53
$600,000 thru $899,999: 30
$900,000 thru $1,999,999: 18
Other: —-
Pending sales: 175
Manufactured homes under $75,000: 60

TOTAL: 732

From the beginning of the year up until now, we are seeing an increase in pending and closed sales. Also, I have counseling readily available for anyone who is interested in loan modifications, short sales, foreclosures, and great new mortgage products. Call me today to take advantage of what I have to offer. No risk, just honest advice.

First impressions are important.  Often Auburn buyers will judge a home from the outside before ever coming in.  It is important to have the outside of your Auburn home looking as spiffy as possible. As we all know, here in the Pacific Northwest and Auburn, we are fortunate to have an abundance of native evergreen plants that grow naturally and look green and nice throughout the year.  Here are some tips for making the outside look as eye-catching as possible.

1. Add splashes of color. Put a pot of bright flowers on your porch or entryway in spring and summer.  In fall, decorate with fall colors and decorations.  In winter, put a small evergreen on the porch.

2. Have the lawn well-manicured with proper edging, mow the lawn every week in the spring & summer (and right before the buyers are scheduled to come), and water consistently as necessary to produce a green lawn.  A green lawn demonstrates tender loving care.

3. Trim bushes so that they do not block windows, doors, and other architectural features on the home’s facade.  It is important to be able to see the home as clearly as possible, and nice bushes that are neatly trimmed catch the Auburn buyer’s eye.

4. Add fresh bark to border areas to enhance the “newness” of a home.  This is comparable to painting the interior of the home.   A fresh, new look is very desirable.  Of course, along with this, weed any flower beds that border the lawn and sidewalk up to the home.

5. Use decorative architectural elements.  A new mailbox, planted window boxes, a park bench, and a low fence are some ideas that can help to create emotional appeal.  An excellent additional is an arbor, if there is room to have one in either the front or back yard.

6. If you have a patio or deck, have a nice patio table and chairs to complement the outdoor living space.

7. Clean the gutters, rake any pine cones in the yard and borders, and stain any fences to look fresh and new.

8. Pressure wash the driveway, sidewalk, and decks.  Here in the Pacific Northwest and Auburn, we tend to have a green moss-like growth that loves this climate, and grows abundantly over the winter particularly in shady areas.

9. On the house, polish or replace the house numbers, install new doorknobs on the front door, and buy a new doormat for the outside of your front door.  As necessary, upgrade your outside lighting with more attractive fixtures.

10. Let them hear the water.  The sound of water appeals to buyers, and you shouldn’t reserve this for your backyard.  A small fountain accented with rocks provides a pleasant splashing sound, blocks street noise, and is affordable.

Please call me for recommendations on local Auburn landscapers and yard maintenance workers. Also call me for price recommendations and other help on preparing your Auburn home for sale. The market is picking up with sales happening in Auburn, and we do not want to miss the spring, as this is normally a very busy time of the year.  Also, with the first-time home buyer incentives available, the Auburn homes are selling, and selling fast if priced properly and are in top condition, both inside and outside.

If you purchase a principal residence in Auburn, WA on or after Jan 1, 2009, and before Dec 1, 2009, you can elect to take the first-time home buyer’s tax credit of up to $8000 on either your 2008 return or next year on your 2009 tax return.  The credit is equal to 10 percent of the home purchase price, up to $8000 limit. Here in Auburn, because home prices are higher than some parts of the country, the full credit will most likely apply.

According to the National Association of Realtors, there are a few filing options for the credit this year:

**If you purchase your home between Jan 1, 2009 and April 15, 2009, you can claim the $8000 credit on your 2008 return, due by April 15, 2009.

**If you are planning to close on your home after April 15,  but by October 15, you can file for an extension and just wait until the October 15th tax deadline to file your 2008 tax return to claim the credit.

**If you have already filed your 2008 return and qualify for the $8000 credit but want to take it this year, you can file an amended return on Form 1040X.

**You could also wait and take the credit on your 2009 tax return which is due April 15, 2010, or adjust your withholdings now to get the benefit before filing your return.  However, adjusting your withholdings now may be risky in case you cannot close the purchase before Dec 1, 2009.  Remember, closings MUST occur before Dec 1, 2009 (Not Dec 31st).

On Feb 17, 2009 President Obama signed the massive stimulus bill, the American Recovery and Reinvestment Act of 2009, thus making the $8000 buyer tax credit official.

How does this affect us here in Auburn?  One of the incentives is for first time home buyers who have not owned a home in over 3 years to receive a tax credit of up to a maximum of $8000.  Since this went into effect, I have seen an increase of the number of first time home buyers searching for their first home and showing up at realtors “open houses”.

To some potential purchasers in Auburn, $8000 may not seem like that much money, but for most first time home buyers it will help make the difference in achieving the ability to buy a home. Here is a brief overview of how it works:

1. The tax credit is not a loan and does not require repayment, except if the home is sold within 3 years.  This encourages Auburn first time home buyers to remain in their home for three years at least and hopefully longer, and discourages the practice of short-term buying/selling.

2. There are income limitations, and a phaseout begins when the modified adjusted gross income exceeds $75,000 ($150,000 if married filing jointly).  The credit is eliminated at $95,000 ($170,000 if married filing jointly).

3. The purchase must be for a primary residence, and the purchaser will not eligible for the credit if the seller is a relative of the buyer.

4. The credit is available for first time home buyers on home purchases between Jan 1, 2009 and Dec 1, 2009.

5. It is a refundable credit, meaning that if the credit exceeds the tax owed, first time home buyers get the rest refunded to them. Every dollar of a tax credit reduces Federal income taxes by a dollar.  Credits are claimed on an individual’s IRS income tax return.  See first time home buyer tax credit for more easy-to-understand and detailed information from the National Association of Realtors.

6. The funds are unfortunately not available up front to use for  closing costs.   The credit will be reflected on a new Form 5405 that will be attached to the 1040.

Note: Another important aspect of the American Recovery and Reinvestment Act of 2009 is funds for each state for infrastructure. Here is a good website for keeping track of where the stimulus money is going state by state, including Washington state.   Rebuilding America’s Infrastructure.

1. Make sure your leases are legal.  If you make a mistake on the lease, you will find it more difficult to litigate if a tenant violates the terms.

2.  Screen your tenants with credit checks, criminal/civil background checks, prior unlawful detainers (evictions), and take the time to call references. It is better to take the time to investigate these items rather than rushing to get someone to fill the vacancy.  It can cause more time, money and problems later trying to get them out.  There are companies that will do this for you, but the ultimate decision is still yours.  For example, you may be able to overlook some things if they have good explanations, for example, for poor credit.  Some prospective tenants may have had to leave their homes recently due to not being able to afford their higher prior house payment.

3.  Be available to show the property to prospective tenants. In order to rent a place quickly, you must live nearby so that you can show it at the caller’s request. Show it to them as soon as possible within a day or two at the latest, since normally they need to secure a place within a week or so, and they need to make a decision as soon as possible.  Good renters will have no problem finding another place to rent, and will move on.

4.  Utilize free advertising.  Craigslist is very popular and is free advertising.  Prospective renters search by price and location, and in you ad you should list neighboring areas and parks to which your rental is near in order to expand your number of hits on your ad.

5.  If you are unable or do not want to do the above items yourself, hire a property management company to do the work for you.

We have seen that in January, 2009 there were approx 180 single-family residential properties for sale below $250,000.  Some of these Auburn homes would be great to purchase as rental properties.  There is always a demand for reasonably priced rentals that are in good locations such as Auburn, WA.   Auburn has public transportation such as buses, and also is fortunate to have the Auburn Sounder Station and train to commute to other locations in Kent, Seattle, and Tacoma and other places along the way.  Also, there is easy freeway access to Hwy 18, Hwy 167, and I-5.  For employment, there are lots of business located right in Auburn in the industrial area of Auburn, as well as the downtown areas of Auburn, and other surrounding cities that employ many people.  All of these amenities make for a great location for owning a rental property.

However, before purchasing an Auburn rental property, an investor must do his/her homework and consult with the following professionals who can advise the potential investor on his/her specific situation.  They include the investor’s financial adviser, accountant, lawyer, Realtor and mortgage professional.  They each have areas of expertise that are crucial in making the proper decisions in purchasing a rental property in Auburn.

The advantage of rental real estate is the fact that when you own rental real estate, you own a tangible asset over which you have a great amount of control, as opposed to ownership of stocks, bonds, mutual funds, etc.  The disadvantage is that you have liability, so you must make sure that the Auburn property you are renting out meets all government standards.  Also, there will be unexpected expenses for repairs, and there will be vacancies from time to time without the desired monthly income being generated.

FHA can be a great way for first time home buyers to get into the investor market when they are buying a 2-4 unit home in Auburn.  The buyer must intend on residing in one of the units and the mortgage will be treated as an “owner occupied” transaction.  You will have upfront and monthly mortgage insurance and can buy with as little as 3.5% down payment.  Currently there are 27 properties in Auburn that are 2-4 multifamily units.

Seasoned investors know that obtaining a mortgage for a non-owner occupied property is much different than buying one in which you will reside.  For instance qualifying is tougher, down payments are larger, and mortgage interest rates are higher since it is a riskier transaction for the lender.

Once the investor has purchased the home in Auburn, obtained the loan, and then closed on the rental property, the investor now has the next challenge ahead of him/her, which is renting the property.  If you as the investor decide to manage the property, then pay yourself for being the property manager.  Property management costs need to be accounted for as operations costs.

Auburn real estate prices are down and interest rates are still at an all time low.  Renting out homes is a hot choice in today’s real estate investment market.  There are many homes and 2-4 unit residences available for purchase in the Auburn area.  Let me help you find the investment property that will work for you.  Call me today for a list of these Auburn investment properties.

While changes are occurring on a day to day basis as our lawmakers in the other Washington (D.C.) are busily working to hammer out some solutions to our economic downturn and housing market situation, I thought that I would examine our local Auburn real estate market trends and see how 2009 is beginning. In the months to come, I shall be giving a quarterly update throughout the year about the housing market in Auburn, WA.

To begin, how many property listings are there currently on the housing market in the Auburn area, and how many of them are selling so far this year?

TOTAL ON MARKET: Okay, there are currently 588 listings of residences on the Auburn, WA real estate market. This includes residential homes (378), condominiums (92), manufactured homes in parks (75), multi family duplex & 4-plex ( 27), and small commercial dwellings (16).

UNDER CONTRACT w/pending sales: Currently, out of the above listed residences on the real estate market, the following 82 listings in Auburn have pending sales: residential homes (60 - of which 24 of these went pending in January of this year), condos (10), manufactured homes (8), multi family (1), small commercial (3).

SOLD: The closed sales in Auburn, WA in January include residential homes (22), condos (2), and manufactured homes (2). Keep in mind that some of these closed sales had been ongoing on the market from the previous year.

It is currently taking anywhere from 21 days to 178 days for a home to sell here on the Auburn, WA real estate market, with 92 days being the average. Higher end homes usually have a much longer time on real estate market.

BANK OWNED & SHORT SALES: Out of curiosity, I wanted to see how many of the properties on the Auburn real estate market were bank-owned or short sales. Scrolling down the list of residential listings only, I found that in the homes priced below $400,000 approx 1/4 of them fell into this category, with 14% being bank owned, and 11% being short sales. In the price range above $400,000 there were less of these types of listings, with 6% bank owned and 4.5% short sales.

During the month of January, out of the total number of listings above, the actual listings that were put on the Auburn market were residential homes (91), condos (24), manufactured homes (20), multifamily (2), small commercial (1).

In reviewing the chart below, it is easy to see that Auburn’s real estate market boasts a varied and wonderful range of homes from which to choose, from small cozy homes, a super inventory of first time buyer homes between $160,000 and $250,000, and equestrian/ranch homes and custom/luxury homes in gated communities! The price ranges for the available homes are as follows:

Real Estate Market Trends

Real Estate Market Trends

All homes on the real estate market are available now for showing and purchasing. Also, do not let your home become a future bank owned property, see my blogs on foreclosure, short sales, loan modifications, mortgages, and why now is a great time to buy a home on the Auburn, WA housing market. Call me today for advice on pricing your home!

When a person is having trouble paying the mortgage in Auburn, WA, they have choices, one of which is to sell the home as a “Short Sale”. This is where the seller, usually with the evidence of a market analysis, realizes that they will be unable to sell the house for the same price that they had paid for, mortgaged or refinanced the home.

Auburn lenders are not naïve, nor unaware of the value of a home, and in a short sale process will insist on a comparative market analysis “CMA”, or broker price opinion “BPO”. The lender may hold out for a higher price than what the agent and owner have decided as the listing price on the Auburn short sale property. When an offer comes in on the short sale, many things happen (or don’t happen). If discussions about the short sale have not already been held between the real estate agent/seller in Auburn, WA, and the lender; the lender will require proof that the seller is in hardship and requesting a short sale. This proof includes a hardship letter that explains why the seller cannot pay the difference due upon sale, including why the seller has or will stop making the monthly mortgage payments on their Auburn short sale property. The lender will want to see a copy of the Auburn, WA, seller’s financial statements and assets. If the seller has savings or assets, the lender may not grant the Auburn short sale. It has recently come about that the Auburn lender is not likely to waive the deficiency, and will reserve the right to come after the seller in the future for the deficiency (what is owed).

None-the-less, in some cases, the seller of the Auburn, WA property will be better off to try to do the short sale, rather than wait for a foreclosure to come about, due to credit scoring reasons. It at least shows an attempt to rectify the short sale situation, rather than just walking away from the home altogether.

By definition, a “Short Sale” is a transaction whereby a Seller needs to sell the house at less than what is owed on the mortgage, and the lender agrees on the lesser amount, thus being “short” on what is owed to the lender. The reason this situation has come about in Auburn, WA is because the house was more than likely bought or refinanced during the “hot market” of mid-2005 through 2006 and early 2007. Lenders at that time were willing and eager to lend money in an appreciating market, with no awareness nor concern about when the top of the market would be reached. Unsuspecting buyers were eager to buy, out of worry that at the rate home prices were escalating in Auburn, WA and nationwide, they would soon be unable to afford a home at all! Sellers were eager to entertain the highest prices they could, and real estate agents encouraged multiple offers and a bidding war. Appraisers were willing to appraise the houses for a high value, and lenders were willing to lend on the inflated house prices. At that time in Auburn, WA and nationwide, there were loan products available that were previously never available before, some good loans that helped people get into homes, and some bad loans. There also was fraud involved in some cases with the more dishonest, sophisticated, and greedy lenders, appraisers, etc. although not with the normal everyday homeowner and buyer.

Since every lender and every seller’s and buyer’s situation is different, the time can vary from 2 weeks to 90+ days, or anywhere in between, the latter being more common. Beware of too low of a listing price, because some agents are listing the houses too low in an attempt to get a lot of “bids” on the house, resulting in a situation where maybe none will be accepted. This tactic is used to try to get the best “bid” for the house, and then to try to get the lender to counteroffer at the lender’s acceptable sales price. In my opinion, this is wasting a lot of the agent’s and buyer’s time and emotion. If you have ever been a buyer, you know what I mean by emotional time. What an exciting time it is in a person’s life, to buy a home! How disappointing, on the other hand, to find out that you have been mislead, used, strung along, and that you have possibly passed by other opportunities while waiting for this one to finalize.

Also, normally the house is being sold “as-is”, so it is important to get a home inspection. Do not waive the right to do a home inspection. Also, when submitting an offer, the lender of the “Short Sale” will want to see that you have your own loan available and that you are pre-approved. Try to give a time frame to the lender in which to respond, after which you will be free to cancel. If the lender is under no pressure to make a decision, the paperwork may sit on the lender’s desk. A good real estate agent in Auburn, WA, such as myself will make sure that the offer is submitted to the individual who is in a decision-making capacity.