Ok guys…. I’ve been talking about the changing market recently, but this is something that has come up quite a bit recently, so let’s talk about it.
 How do you find a Realtor?  Now, obviously I AM a Realtor, so locally… that is an easy answer!  I am a very good one one too.  However, one of my clients is selling their home in a different state, and I have a few clients moving out of the area, and I can’t be everywhere.  After this long in real estate I know a lot of people, so I refer out Realtors in other areas as often as I can because I know that my clients will be taken care of, but what if I don’t know someone there?  I am getting calls from my clients regarding their Realtors, and the issues they are having.  So, let’s start with the #1 thing about real estate…… What many people fail to realize is that, as a home buyer, or a home seller, YOU are the boss.  You are hiring someone to help you with one of the most important stages of your life.  YOU ARE HIRING SOMEONE…. this is an interview.  What questions should you be asking?  Why is this important?  Especially in this changing market…. who you hire with the most important financial decision you make… it is a different real estate world than it has been the past 5 or so years… 
When you are talking with a Realtor, you need to ask yourself these questions… 
What are you looking for in a Realtor?
What are your expectations in communication?  with your purchase?  sell? 
What questions (& answers) are important to you?
…and no matter what you ask, or what their resume says (or doesn’t say), sometimes you just have to go with your gut and hire the person who you connect with. 
Some questions you could (or should) be asking….. 

HOW long have you been in the real estate business?     Do they have experience, a network of people that they can contact to help?  Nothing wrong with a newbie, but do you know everything about a job when you first start out?  How do you learn?  In real estate, we are always learning, but do you want to be the transaction that an agent ‘cuts their teeth’ on?   Especially with the changing market, has this realtor been through any other market?  What is their ‘plan’?  Talk to them about this market and what they are seeing.  How are they going to use their experience, skills, etc to use their knowledge of this market, and what they are seeing, to help you?
HOW long have you been licensed?     This ties into the last question.  Sometimes an agent worked with another licensed agent as an unlicensed assistant so they could have a couple of years in the real estate industry, but very few (or none) as a licensed agent.  Again, nothing wrong with a ‘newbie’ agent….often times they have more time to help you vs an experienced agent who has other clients we are working with as well.  An experienced agent usually has a pipeline of clients and closings so we’re not as concerned with ‘pushing’ a sale because we don’t need to.  Newer agents usually don’t have that pipeline so may be more concerned about getting you into (or out of) a home as fast as possible.  For some Realtors, they have never seen other markets, and it is going to get harder for some of these Realtors who have been ‘floating’ through, and not having to really work.  
WHAT did you do prior to real estate?  What was your other careers?   Why is this important?  Buying, or selling a home is one of the largest financial decisions you will ever make.  You are hiring someone to assist you with this decision.  What qualifications does this person have to help you do so?  Did they working in marketing?  Office management?  Accounting?  Did they wait tables?  Work in a factory?  Were they a car salesperson?   How does this help you?
DO you have any college education or degrees?   Again, see above…this is your largest financial decision….how is this person qualified to help you with that?  What background do they have that will assist you?
WILL I be working with you, or an assistant?   Sometimes you hire an agent to help you, but then you never see them….you’ve been handed off to an assistant who may not have the qualifications you had asked about to that other agent that you ‘thought’ you had hired.  Sometimes you hired the assistant because they had the qualities and the qualifications you were looking for, and you are surprised that they are actually part of a team.  I know Realtors who are just the name, but don’t really have much to do with the real day-to-day, or the paperwork. WHAT days/times are you available?   This is pretty important as you need to know if the times you are available are going to work with the times that your agent is available.  Are they there for you when you need them?  Or can you never get a hold of him/her?HOW many homes to you sell (on average) per year?   Why does this matter?  Most people think that a ‘full time’ agent sells about 12 homes a year…but really that is a part time agent.  It’s a ‘gross’ check vs ‘net’ check kind of thing…and in real estate there are a lot of expenses, dues, fees, and taxes.  Being self employed has some great things, but they come with expensive costs and overheads, like marketing & health insurance (oh boy! Health Insurance…).  When you are self-employed, this IS my job.  This is ALL I do.  I don’t have a ‘side hustle’, or something I am peddling on the side.  All I do is help people with their home adventures.  I am the main source of income, and to ‘break even’ I have to sell, at least, 2 homes a month.  Of course, a lot of that depends on the types/values of the homes an agent sells.  I work a lot with first time and move up buyers/sellers vs some agent friends of mine who sell luxury homes.  They don’t help as many people as I do, but make more.  You know… like that supervisor at work who makes more than you, but does less work? 
WHAT is the average price of the homes you help people buy/sell?   This does tie into the last question….  If someone works mainly with luxury homes, do they understand the market for the type of home you are buying or selling?  Not too long ago, I had a call from someone who wanted to sell their 4000 sq ft home in a very swanky Portland neighborhood.  I actually referred them to a different agent for 2 reasons…one reason being that I don’t work in the Portland area and I believe that agents should stick to the areas they know.  Not all markets are the same, and I am not helping someone if I am taking on an unfamiliar market, am I?  …and that’s also kind of the second reason…they have a luxury home and that is a different selling, and buying market.  Honestly, they are better serviced by the agent I referred them to as that agent specializes in Portland, and in that high price range.  I’m always too busy wondering how long it would take to clean it!!  Another question would be what type of homes are you knowledgeable with?  I recently helped a client sell a home on a very large land parcel, but I do understand land as I grew up on acreage, and I have assisted other clients with their agriculture property adventures.  I mean… after 17 years in real estate, I feel like a real estate grandparent….sigh…  where is my walker???
DO you have another job besides real estate?     This kind of ties into the question about how many homes does an agent sell per year as many part time agents have other jobs to supplement their income.  This also ties into when that agent is going to be available to help you.  Real estate isn’t just about showing homes…there is SO much more to it.  Phone calls, marketing, searching for homes on the internet, calling about that home, calling other agents, other vendors, paperwork, more paperwork, talking, phone calls, texting, emails, title companies, inspections, appraisals, lenders, etc… it’s an 80 hour a week job some weeks.  There are no ‘real’ vacations as you are always ‘on duty’.  HOW do you feel about Dual Agency?  This is an interesting question as you don’t know what I’m talking about…so let me explain as quickly as I can…  When a seller hires an agent that ‘sellers agent’ should be working for THAT seller.  They will be marketing the home, and ‘selling’ that home to buyers, and buyer agents…in a nut shell the sellers agent is selling that home for the seller for the highest possible price and lowest amount of money out of the sellers pocket book (ie buyer closing costs and repairs).  A buyer hires an agent to help them find that ‘perfect’ home.  To work with them with the lender, to negotiate the offer trying to get that home for them in a multiple offer situation (and maybe for less?), to negotiate closing costs, repairs, to be with the buyers for the home inspection, to help understand appraisal, paperwork, the process…and to support the buyers from contract to keys…and beyond.  Real estate is a relationship business, and we LIVE for referrals.  You should always feel comfortable talking to, and contacting your agent ANYTIME with ANY questions…before, during, and even years after you get keys.  As you can see, the sellers agent and the buyers agent kind of have two different agendas.  So, if you call the sellers agent to help you buy the home, and that agent works for the sellers, and the buyers on the SAME home…that is a dual agent.  Who is that agent really representing?  Dual agency isn’t illegal in the state of Washington, it’s just my opinion that each side should always have their own representation.  
So, let’s play a game… I’ve been married for a long time… a very long time… if my husband and I were to divorce, I would hire a really good attorney (I have a client who is a really good attorney), would he hire the same attorney to represent him as well?  Well, most likely not (unless he was an idiot, and he’s not … which is why we have been married a long time), because that would be a pretty big conflict of interest…what do you think??  Real estate is about contracts, about legal contracts, so there is some similarity there.Builders agents are dual agents which is why you should always bring your buyers agent with you when looking at have a new home built.  Teams are dual agents.  Who is working for, and looking out for you?
For sellers:  Some further questions that are important for you to ask in this market… ask about marketing, you can’t just stick a sign in the yard now and expect multiple offers.  Ask the Realtors about their marketing.  Who do they think is your most likely buyer?  How are they going to reach them?  What is their pricing strategy?  Ask that the agent go over the comps with you so that you can ‘see’ how the agent came up with their suggested sales price range.  What about photos?  Flyers? Cleaning?  What is their commission rate?  What does that include? 
DO I have to sign a contract to work with you?   If you are selling a home, there is a sellers contract that you will need to sign.  This contract gives your agent the right to represent you for marketing, offers, and negotiations.  But what about if you are buying a home?  There is a form called a Buyers Agency Form, that is a contract between the buyer and the buyers agent.  As a buyer you do not have to sign this form.  As a buyer, I probably wouldn’t sign this paper, no matter how good an agent makes it sound.  Real estate and lending is all about verbiage and there are a ton of ‘scripts’ that can make any form sound reasonable….and good for you, when it may not actually be so.  In real estate, the buyers agency form is a pretty hotly contested piece of paper…there are agents who won’t work with you if you don’t sign it, and there are others (like me) who think it’s awful.  Customer loyalty is built with good customer service…not a piece of paper…but this is only MY opinion.  If you, as a buyer, choose to sign a buyers agency form, you are now legally in contract with that agent to buy a home with them.  Technically you always have the right to fire someone, but that is a legal contract for a period of time for a specific purpose.  The first question that, as an agent, I always ask a potential client is if they have signed a contract with a previous agent.  This protects everyone involved….it protects the other agent as I don’t want to step on another agents toes, it protects the potentials clients since if they are in a contract with a previous agent then they need to either let that contract expire, or deal with it in another way before hand, and it protects me because getting that call from another agent that they have a contract with one of your clients is not a good one.  So what happens if one of my clients then talks to another agent and signs a contract with that other agent?  Well, then they’re not my client anymore….they’re now they other agents client.  No matter what an agents says, or which ‘script’ they’re following…. you do NOT have to sign a Buyers Agency agreement to hire a Realtor to help you buy a home. 
I’m not going to lie to you…. I know that this blog is going to ruffle some feathers, and while I debated actually sending it out…  I decided to do it anyway.  I want to say that I am not knocking anyone in my industry here.  Everyone has to choose to work the way that their ethics and morals dictate.  As a buyer, or seller, YOU need to ask the questions that mean most to you when hiring an agent.  What questions, and qualifications mean most to you?  Are you looking for someone professional looking, or someone more laid back?  Someone with a warped sense of humor, or someone more ‘traditional’?  There are a LOT of great agents out there, and some…well…  like any industry we have our share of crappy.  Sometimes you just have to go with your gut when talking with an agent, and hire the person that you are most comfortable with.  Always ask questions!  This is your adventure, and you are driving the bus…. we are just gps. Informationis power,  and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.  If you have any questions, or comments please get a hold of me anytime.  You can call, text, email, or even facebook me.  Please remember that while I mean these emails/blogs to be helpful, and educational, I am still hoping that you will call, or email me as I would be honored to help you with your home buying, or home selling adventure!  🙂

Next home buyer & home seller classes (in person & online) are available at:
www.learningtobuyahome.comwww.freesellerclasses.com
Don’t want to go to the website?  (Hey!  it has other awesome blogs & videos on there too!), you can always email me at traciedemars@aol.com and I will email you the schedule.  

Hello, Hello!  

Schools back in session, and fall is coming fast!  So, remember early last year when I talked about closing costs?  I even did a video on it as so many buyers were struggling with closing costs even if they had a down payment.  Well, my friends, how the times have changed.  If you remember that video, please forget it now because nothing I said about closing costs from early last year apply right now at all.  It is a different market, so let’s hash closing costs out again.  
Even if you don’t remember that video, let me remind you about what closing costs are to begin.  Let’s start with the other fund facts first…
Every buyer has fees to get into a home.  I don’t care what the radio tells you, you can not buy a home without some skin in the game.  —First, you need earnest money.  Earnest money shows to the seller that you are a serious buyer.  Earnest money will be deposited to the title company.  When you close, your earnest money goes toward your down payment, or your closing costs, and sometimes (only sometimes) you can actually get your earnest money back after closing.  If you do not close, and if you back out WITHOUT a legal reason, then the seller has a right to all, or partial, of your earnest money.  We will talk more about legal reasons later. —Second, you need money for inspections.  We talked about this recently… home inspections, and sewer scope inspections.  You can also do a radon test, & a well test…depending on the property you are wanting to purchase.  Inspections are done by 3rd parties, and they will want to be paid for their time, and expertise to come out and perform the inspections.  I know… crazy talk…  these are out of pocket funds you need upfront.  —Third, you need to pay for the appraiser.  Remember that the inspections are for YOUR information.  The appraiser is for the bank’s information.  The bank wants to make sure it isn’t lending you more than the house is worth… you know… just in case you don’t pay your mortgage and they end up taking it back.  The bank will only lend you either the purchase price OR the appraisal amount… WHICHEVER IS LESS.  So no, you can not take out ‘extra money’ as part of your purchase…even if it is for something you want to do to the house.  They don’t do that anymore because people didn’t use it for the house.  It’s like your mom said, “it only takes one person to ruin it for everybody”, or in this case … thousands of people.  
You can go to the website to read the blog we did on these in more depth.
Down payment…  This is the amount required for the buyer to bring in depending upon the loan the buyer is using.  Every loan has different requirements…FHA – 3.5% of the purchase priceConventional – 5% of the purchase price (there was also a 3% version)
USDA (Rural Development aka RD) – 0%  as this is a 100% loan, but there are some location/home requirements on this one)
Down payment assistance – 0%, this is a 2nd loan. This is a loan program that assists buyers with the down payment requirement on their loan.  It is a GREAT program especially for folks who have some money, but not enough for a down payment. It is a loan that has higher fees. 
Most people are aware of the down payment portion, but they forget about closing costs.  There are 28 people that are involved in the purchase & sale of a home, and because no one pays anyone for our good looks, or sparkling conversations, every one of those 28 people want to be paid.  

For the buyer, Closing Costs are the costs associated with the buyers loan and legal transfer of the property to the new owner.  Closing Costs for the buyer can also include ‘Buying Down Points’.  This will increase the buyers closing cost amount that they will need for closing. 
Today we are just talking about the Buyers side of closing costs.  Give me a holler for the information on the sellers side of closing costs.

Every buyer is going to have a different amount of closing costs depending on their loan, how much their lender origination fee is, if there are any lender ‘junk’ fees, etc.  For buyers the majority of their closing costs are going to be for the amount that they are being charged FOR their loan.  Closing costs are really to pay for everyone who touches their file to help them get the loan to buy the home, and for the buyers portion of costs for the legal transfer of the homes ownership. 
When the government was buying down interest rates, and rates were in the 2%-4%, closing costs were about 2%-2.5% of the purchase price of the home.  However, the government has stopped buying down rates, and so they’ve gone up, and up, and up.  To be honest, I’ve felt a bit like Chicken Little the past few years as this should have happened back in 2018….at least… but that is water under the bridge and none of us have a life jacket.  So let’s deal with what we have …right now…

Closing costs for many buyers are going to be higher now than they were because your lender is going to want to use some, if not all, of those costs to ‘Buy Down The Rate’.  These are called, Points.  Each point is about 1% of the purchase price.  
We have a client buying a home at $450,000.  They are buying down the rate to 5%, but it is going to cost them an additional $9,000 in closing costs to get the lower rate.  At $450,000, we got the seller to ‘pay up to 2.5% of the closing costs’, and yes, this sounds great.  However, because there is no sugarcoating at my bakery, I’m going to tell you the truth…  the seller never actually pays your closing costs.  WHAT?!  Yes, you read that correctly, but let me explain…
Purchase Price $450,000  (the amount your loan is based off of minus your down payment)Closing Costs $11,250  (these are contributed by the seller off of their net)
Seller net — $438,750.  
Seller paid closing costs means that the sellers are agreeing to a lesser net so that the buyer CAN FINANCE their closing costs into their loan.  Yes, again, you read that correct.  The seller does not actually pay your closing costs.  The sellers are agreeing to net a lesser amount than the purchase price so that the buyer can finance those costs into their loan.  The last couple of years of multiple offers and bidding wars above & beyond the listing price are pretty much behind us….at this time.  The Bright side of rising rates is that buyers can get into a home without offering 20k over purchase price.  Sellers are also willing to negotiate closing costs as part of the purchase/sale contract that the buyers can use to cover all, or a portion of their closings costs…..or to buy down points for a lower interest rate.  Rising interest rates have been like a cold shower for the superheated market we have had, and let’s be honest… no one actually likes a cold shower. A lukewarm one?  Absolutely, but a cold shower?  Nope!
If you are a buyer, it’s a better time for you to get into the market now than it was the last few years.  A lot of good people got burned with the way that the market was, and there was no salve or spray to help with those types of burns.  We saw people offering WAY over listed price, waiving inspections, giving months of free rent back, offering their first born child, free tacos for life, etc… While all of this sounded great for sellers, most people who were selling their homes still needed to buy a new home, so it was just as bad for them when they were trying to get into a new home so a market like we had just caused a lot of bad feelings.  
Our current market is a more balanced market which helps both buyers and sellers.  We have had a lot of new Realtors jump in the market the previous couple of years, and they’ve never seen, or experienced a changing market like this.  This market changed so quickly, it was like dealing with a teenagers mood swings!  Many Realtors are still pricing homes based off of home sale prices from earlier this year, and that isn’t accurate.  Realtors need to look at what homes are going pending at.  What is the percentage of price drops?  What is the average time on the market? (no more fast weekend sales!)  From about May of this year to current… home prices have gone down on an average of about 10%… with some a bit less, and some a bit more.  If you weren’t asking questions before, you should definitely be asking now!  See my last blog.  

   It’s not all gloom & doom here though… a balanced market is better for everyone.  There are pros for sellers as well as most of them want to buy a home.  Other sellers are totally looking at, and accepting contingent offers again!  I had one seller complain about the money he was ‘losing’ on the sale of his home, but forgot about everything he was gaining on the purchase of his new home.  Once he looked at both sides, he was actually much happier that he waited.  Sometimes we can project out what we think the market is going to do, and sometimes we really can’t.  This current market is so volatile that we are on a quarter by quarter basis. It’s like petting a kitten who wants you to rub its belly… do you, or don’t you?  There is no magic 8 ball for this crazy…. just me…  and my family likes to stick my crazy on the porch with a drink.  So, that’s where you will find me, and I am always happy to help with your next home adventure!

Have a great day, and I will talk to you soon,
;-D
Tracie DeMars
Real Estate broker 
Re/Max – Van Mall
360/ 903-3504 cell
360/ 882-3600 fax
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.learningtobuyahome.com or www.freesellerclasses.com for local upcoming home BUYER and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”
“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.” 
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Next home buyer & home seller classes (in person & online) are available at:
www.learningtobuyahome.comwww.freesellerclasses.com
Don’t want to go to the website?  (Hey!  it has other awesome blogs & videos on there too!), you can always email me at traciedemars@aol.com and I will email you the schedule.  
Hello, hello, hello!
  Ahhh…  a ‘normal’ spring/early summer!  After a few years off her meds, it looks like Mother Nature is getting back to ‘normal’.  Yes, there is a lot of rain, but that is ok.  Rain is good for the 4th of July!  We have been so dry the past few years…we really need this.  

   Talking about ‘normal’…..yeah, I can’t quite apply that to the real estate market…..yet.  Well, maybe a little.  Unless you have been molding under a rock in a backwoods somewhere, or have no access to TV, or the internet (you lucky duck), you by now know that interest rates have been steadily climbing the past 6 months.  In fact… I already did a post on this.  I do get questions on how this affects buyers & sellers, so let’s talk about it…
   One thing the rising interest rates have done, is put the white hot housing market in an ice bath, and everything has shriveled and pulled back faster than a teen caught skinny dipping.  We look to be getting over the multiple, multiple offers of the past 2 years, and (gratefully) getting over the buyers offering over what an appraisal might come in at with those 22AD addendums.  If you are not sure what the 22AD, Low Appraisal Addendum, was…please refer back to one of my previous posts in which I really dug into it.  You can always call and ask me too.     We are seeing some homes last longer on the market, and housing inventory has gone up. When I say that the housing inventory has gone up, I mean that we have about a months worth of inventory … which is better than 2 weeks worth where we were at not too long ago.  Buyers have a chance now to buy a home without promising their first born child, their kidney, and a lifetime supply of tacos to the sellers.    
   Let’s be honest, the last few years have been brutal to buyers.  Even buyers with money for large down payments, and their own closing costs were struggling.  The rising interest rates are balancing the scales with buyers and sellers.  This is good.  The bad?  Well, you know there is never good with out some bad…
   Rising interest rates means that, as a buyer, you are preapproved for less money to buy a home with….for the same payment.  For example…  someone who purchased a home last summer for $700,000 has the same payment as someone who purchases a home for $550,000 right now.  That is the bad. Of course, the buyer who purchased their $700,000 home last summer probably offered way more than the home was listed for. 
  The good is that a buyer has more homes to look at, has less buyers to compete with on offers, won’t need to promise $$$ over a low appraisal or list price, & won’t need to waive their inspections (which, as a buyer you should never do), and in fact, a buyer in today’s market can request reasonable repairs for health & safety and have the seller be willing to negotiate them.  Not to get crazy, or anything, but my last 2 buyers even were able to finance some of their closing costs into their loan (aka seller paid closing costs…subject of our next blog).  This is just huge and something that I haven’t been able to do in the last few years!!  I felt like dancing the samba… that is, if I could hold a beat and dance.  If you are a buyer, now is a great time to be one.  Rents are seriously higher than Johnny Depp on a bender, and unlike dear Johnny, they are probably not going to come down anytime soon due to inflation.  Yeah… I said it.. Inflation.  I know it is a dirty word…it’s like saying the ‘F’ word in a daycare, or the “L” word on accident to your crush on your first date.  

The market … it is a-changing… 
   Whether you are thinking about buying, or selling, you have seen a lot of BOM (Back on the Market) homes.  There are legal reasons for a buyer to back out like home inspection, appraisal, financing, HOA review period, and a few more.  Buyers are using these contingencies to back out of the contract.  I’ve seen a few buyers back out of contracts recently because the buyers didn’t get their rates locked, and they jumped.  I’ve seen a few buyers recently back out because they felt they could get a ‘better deal’ elsewhere.  As a sellers agent & as a buyers agent, as soon as the contract is signed around, I am sending that signed around contract immediately over to the lender.  As a buyer (& buyers agent) you want to make sure you get that interest rate locked in.  Buyers should not be backing out because they feel they could get a ‘better deal’ elsewhere….because with interest rates… they are not.  
   We are also seeing a LOT of ‘price corrections’, and price reductions. These are sellers who listed too high for our current market.  I’ve been telling sellers for awhile that we need to list for what comparable homes are listing for…not selling for.  With the market changing, and so quickly, this is the time to get AHEAD of that change.. not behind it with price ‘corrections’ (aka REDUCTIONS).  As a seller, we need to be realistic about the market as it currently IS….not as it was 4 months ago, or a year ago.  
Heads up my friends… We are in a different market.  When you are thinking about buying, or selling… in this market, you need to be asking the right questions. Ask the realtor you are talking with those all important questions to make sure they are equipped to help you with this changing market.  Those of us who have been licensed awhile have seen this before.  It is time to go back to basics…. so make sure your Realtor has those basic skills to fall back on. 
Is it a good time to sell?  Yes, it is still a good time to sell.  I know many people were holding off because they were not sure they could find a home to buy, well, now there are homes to buy, and sellers are looking at contingent offers again!  For folks who want to sell, & are looking to buy their next home, this is a big thing.  When selling your home talk to your Realtor about their marketing plan.  These last few years, marketing plans were like parsley … pretty to look at on the plate, but pretty pointless.  Now though?  In our changing market, a Realtor’s marketing plan is going to be the juicy steak (or juicy tofu if you are into that).   Is it a good time to buy? Yes, it is still a good time to buy.  Owning your own home means you are not at the mercy of rising rent costs, and landlords looking to sell investment properties.  If interest rates drop.. you can always refinance later for the lower rate.  Remember that real estate is not supposed to be a sprint where you sell & move every few years…. real estate is like nice jog (for those of you who like that sort of thing) or a nice meal with friends that you linger over.  There is a pro & con to every market.  Nothing is ever all good, or all bad.  In the meantime, I will continue to stare at my crystal ball & shake the magic 8-ball relentlessly… 

Have a great day, and I will talk to you soon,
;-D
Tracie DeMars
Real Estate broker 
Re/Max – Van Mall
360/ 903-3504 cell
360/ 882-3600 fax
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.learningtobuyahome.com or www.freesellerclasses.com for local upcoming home BUYER and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”
“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.” 
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Hello!

Upcoming home buyer classes & home seller classes (both virtual & in person) are available on the http://www.LearningToBuyAHome.com & http://www.FreeSellerClasses.com websites!  
Once upon a time in the home buyer classes, I would talk about my first mortgage payment being at a 6.875% interest rate, and everyone in the class would gasp.  Then I would get questions about why it was so high.  I would laugh a bit, and say that in a more normal market… 6.875% is a great rate, and that in fact, my husband & I had been so very excited to get a loan under 7%!  The class attendees would shake their head and just say that rates like that were crazy….   I would then pull my Chicken Little act, and tell them to prepare because the government wouldn’t be buying down rates forever.  Ah….the good ole days…. for awhile there I felt a bit like Cassandra because no one believed me.  

…and here we are…  Yes, interest rates have gone back up.  Home prices are slowly adjusting.  However, now we have something else that people haven’t heard of in almost 2 decades…  Assumable Loans.  

I have a client with a 2.99% assumable loan, and as soon as I put it out there I have received daily phone calls from realtors (and lenders) who have no idea what it is.  Honestly though…why would they?  The vast majority of Realtors and Lenders have been licensed for 10 years or less, and it simply wasn’t a thing.  When interest rates were at an all time, historical, once in a lifetime, low… who cares if you could take over someone else’s loan at their interest rate?  …especially if you could get a lower rate???

Well, again, how times have changed.  Now, my interest rate of 6.875% on my first home sounds pretty good again, and assumable loans are back in fashion.  So, what is an Assumable Loan?  Let’s start with an example…

Let’s say I have a client who is selling their home for $500,000.  They a current loan (that they’re making payments on) with an interest rate of 2.99%.  Their loan balance is $375,000 and their current payment is $2,300 a month.  They have owned their current home for 5 years, and have 25 years left on their loan.  
For the right buyer, this is a deal of a lifetime!  The buyer can ‘assume’ the sellers current loan of $375,000 owed, 2.99% interest rate, $2,300 a month payment, and only 25 years left on the loan…. so what is the catch, right?   Well, the home is being sold for $500,000, so the remaining amount of $00,000 minus $375,000 ($125,000 for those of you without a calculator handy) would need to be made up with either cash at closing, or with a 2nd loan.  
Heads up…. 
** The buyer isn’t just buying the home for the current mortgage owed on the assumable loan (Sorry Peter who called me and yelled at me for 45 minutes that I was wrong and he just wanted to buy the home for the current amount owed on the assumable loan…. because obviously who wouldn’t?)  That is not the way it works…. 
** When you assume the loan, you assume all terms of the current loan. You don’t get to assume the loan, and then change it to a different loan because there is mortgage insurance on this one.  You can assume the current loan with the current terms, but if you want to change the loan type/terms…that would be refinancing…and you would lose the 2.99% interest rate.(Sorry Linda who wanted to make an offer, but didn’t want to pay mortgage insurance, and couldn’t understand why she just couldn’t drop the mortgage insurance on the current loan, or assume the current loan … but with a different loan type) 

So, if you are interested in a home with an assumable loan, there are questions your Realtor needs to ask…
1 – What type of loan is it currently?   2 – How many years are left on the loan?3 – What is the current amount owed on the loan?
4 – What is the current interest rate?
5 – What is the current payment?
6 – Does that payment include mortgage insurance?  Taxes? Homeowners Insurance?
If you decide to make an offer on the home, you and your Realtor make an offer just like on any home, and it is contingent still on the financing of assuming the current loan.  There will be additional papers to fill out from the lender/servicer of the current loan.  .
** Yes, you have to go through their pre-approval process, and be approved to assume the loan.  Just like any pre-approval process when buying a home, they want to make sure you have a current job, acceptable credit score showing that you pay your debts, that you have acceptable debt to income balance for the loan you are trying to assume, etc.  It is just like getting pre-approved for a normal loan.  (Sorry Wendy who was positive that an assumable loan was like a rent to own and couldn’t understand why she should have to go through a preapproval process when she just wants to take over the loan payments and rent to own the home until she can buy it.  I let her know that my clients want to sell to pay bills and buy another home.  She was shocked that the sellers would really want the money from the sell to pay off the other bills, and then who got nasty with me when I explained the process and told me that it was people like me keeping people like her down with my boot on her neck.  I don’t wear boots?)

** If you do not have the cash to bring to closing to cover the difference between the assumable loan and the purchase amount (because, yeah…it is a lot of money and most people don’t have that in their couch cushions), the other option is to get a 2nd loan to cover the difference.  This may not be the best option for many people because when the market crashed, a lot of people had 2nd loans, and walked away from them.  The banks took a hit on this….  The 2nd loan will most definitely be at a higher interest rate than current market rate.  How much?  It depends on the buyer, the lender/bank that they are getting the 2nd loan from, and how much of a 2nd loan they are getting.  Maybe you have some of the difference buried in a coffee can in the backyard, but not all of it.  A 2nd loan may be able to help cover the difference.  That is definitely something to talk with your lender about, and ask what other options they may have for you.  

**No, the seller will not carry the difference so you can make payments on it.  (Sorry Jerry, who for an hour tried to explain to me why it would be a good idea for him to assume the loan at the amount owed, and for my client to carry the difference.  He is good for it… he swore it to me.  When I told him that the seller wouldn’t be able to purchase a new home without a down payment and that they would still be on the title for this home… he was so surprised that the sellers would still be on title.  Sorry Jerry… you haven’t purchased the home if the seller is carrying the remaining amount.  It’s ok though… Jerry didn’t want the sellers to be on title if they couldn’t take his word that he would make the payments…. sounds legit, right?)

Oh my friends.. the assumable loan is a great option for a lot of people, and you will be seeing so much more of them as interest rates continue to go up.  Just like clothes and music, what goes around, comes around. If mullets can come back in fashion, it was only a matter of time before assumable loans did too.  Pretty soon, Aqua Net & shoulder pads will be everywhere as well. 
As great as an assumable loan is, it will not work for everyone.  I think for people who are selling their current homes, using their down payment and assuming the loan of their next home might be a  good option.  
We will, I think, see other assumable loan options for even first time home buyers.  If you are thinking about selling, ask your lender/loan servicer if you have an assumable loan.  If you are buying a home, have your Realtor ask the sellers if maybe they have an assumable loan.  Maybe the difference won’t be so great, but the rewards could definitely be worth it!  

In the meantime, yes, I will be adding this information in to the home buyer & home seller classes.  ….and Yes, my phone is always on, just please don’t yell at me anymore.  Have a fantastic Thanksgiving!!  
Have a great day, and I will talk to you soon,
;-D
Tracie DeMars
Real Estate broker 
Re/Max – Van Mall
360/ 903-3504 cell
360/ 882-3600 fax
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.learningtobuyahome.com or www.freesellerclasses.com for local upcoming home BUYER and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”
“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.” 
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Upcoming Free (& non-promotional) Home Buyer Classes:

Please remember that, currently, ALL classes are being held virtually.  We look forward to teaching at the community centers again, once they open. 

 For the virtual classes, they are TWO hours long, and will start at the scheduled starting time.  Please email traciedemars@aol.com for link & password

Saturday, July 4th from 10am-12pm … VIRTUAL CLASS

Saturday, July 11th, from 9am-12pm (ish) 
       Marshall Community Center, conference room
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Monday, July 13th, from 5pm – 8pm (ish)
        Marshall Community Center, Conference room
       1009 E McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, July 18th, from 11am-1pm … VIRTUAL CLASS

Saturday, July 25th, from 11am-2pm (ish)  
​       Vancouver YMCA, conference room
       11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave)..

Home Seller Classes are also virtual right now, and again TWO hours long.  Classes will start at scheduled time.  Please email TracieDeMars@aol.com for link & Password
Saturday, June 27th, from 9:30am-11:30am
Thursday, July 9th, from 5:30pm-8pm
Saturday, July 25th, from 9am-11:30am
Monday, July 27th, from 5:30pm-8pm                     

~~~~~~~~~
Happy Summer Day!
It definitely feels like summer today, and that is ok.  I love the rain…I really do, but something about a summer morning… it’s pretty awesome.  I know that there is a lot going on in our world right now, and I do want to take a moment to acknowledge one thing… love…  Love for your neighbors, your friends, your family, YOURSELF, & others… ALL OTHERS.  I was always taught to show the same respect to the janitor, as I would to a CEO.  The same respect & care to someone different from me as I would to someone same as me.  ‘A mind is a like a parachute..it functions best when it is open’.  A heart is the same way…   Just my two cents, for what it is worth…  

Quick reminder… be on the look out in the next week or so for the CLIENT APPRECIATION cards!!  They are coming!!!  Thank you to everyone who refers us to their friends, family, and co-workers.  You mean so much to us, and we love when you call … to talk, to ask questions, to ask us with your next home buying (& selling) adventure.  

This week we are going to talk about buying a home…and how much money is needed to do so.  All the time people call or email me about this, or come to the class and are surprised that yes, you do need ‘some’ money to buy a home.  They are told by someone, or hear on the radio, that you can buy a home with zero money out of your pocket.  I am so sorry….but this simply isn’t true.  You CAN buy a home with zero down payment, but there are fees during the home buying adventure that you, as the buyer, will have to cover.  So….let’s talk about those a bit…, and then later we will talk about the loans, and grants, that are out there to help you buy a home with ZERO down payment.  
So, what do you NEED to buy home? There are three fees associated with buying a home, and you need those.  There is no such thing as buying a home with no money out of your pocket.  So, what do you need???  

Earnest Money   This is the first fee associated with buying a home. The earnest money is a good faith deposit. It isn’t your down payment and shouldn’t be confused with it. Once an offer is accepted and signed around the earnest money check is due. This can be a cashier’s check in some cases, as with most bank owned properties, or a personal check. The earnest money should be made out to the title company, and is due for deposit within 3 business days of the accepted offer. The purchase/sale will specify how much the buyer is putting up to secure the contract, to show ‘good faith’. An earnest money deposit says to the seller: “Yes, I am serious enough about buying your house that I’m willing to put my money where my mouth is.” Earnest money is refundable as long as the buyer backs out with a legal reason. If you back out of the accepted contract, without a legal reason, the earnest money is forfeit. In the coming weeks I will talk about the legal reasons for backing out of your offer and getting your earnest money refunded.  Your buyers agent is here to help you with that.  As YOUR real estate agent, we want to protect you, your investment, and your earnest money.   Depending upon your loan, the earnest money CAN go towards your down payment amount, or be refunded to you after closing. The average earnest money in our area is $1,000 – $2,000, or more.. and some banks can/are requesting anywhere around 1%-3% of the purchase amount for earnest money.  A builder can, and usually does, require more money for an earnest money since, for the builder, there is more risk involved.  With a builder it is pretty common to want anywhere from 1%-3% of the purchase price for earnest money.  Again though….this is money that would go towards your down payment when you close.

Inspection   The inspection should be completed within 9 days of the accepted contract. Legally your inspection period is 10 calendar days, but you never want to wait until the last minute as something could always come up, that you might want . The average inspection cost is about $400 – $450. The inspection is done by a licensed inspector who can provide a dry rot & pest report. The inspector is paid at time of service. The inspector will provide a written report and receipt for the service. This is a non-refundable fee as you are paying for a service that the inspector is rendering to you. If you chose to back out of the contract due to the inspection, this is a legal reason and you will NOT forfeit your earnest money. Inspections are non-invasive, but refer back to the inspection blog for questions to ask your inspector.  The inspection is a visual inspection of the homes current condition at the time of the inspection.  It is not an invasive inspection… this is not ‘Holmes on Homes’.  A home inspection is a lot like having a used car checked out by a mechanic prior to buying it.  The mechanic (or Home Inspector) is going to take the car (or home) for a ‘quick spin’, and check out its current condition.  A buyer & seller can negotiate repairs, or a different remedy, to move forward to closing.  If the buyer/seller can not come to an agreement, then the deal dies.  Earnest money will be refunded as this is a legal reason to back out. Inspection fee is not refunded as the buyer is paying an inspector for their time & service…at time of service.  Remember that you, as the buyer, and your Realtor should both attend the inspection….and that you get what you pay for. **this fee can is not typically refunded back to you after closing.There are other inspections that you, as the buyer, might want to consider.  A sewer scope is one of these, and cost is about $150-$200.  A sewer scope is done by a sewer professional, and they will stick a camera down the sewer line to inspect the condition of these to make sure there are no underlying issues there. Even if the home is on a septic tank, and the seller has had the septic inspected, or I should say, ESPECIALLY with a septic tank… get a sewer scope.  The tank is being inspected but not the lines going to the tank.  This has led to some pretty nasty surprises in the past.  
Another inspection that a buyer may want to consider…especially if any part of the living space is in the ground (split levels, daylight ranches, basement homes are a good example of a few), or if the home is near a body of water, is a radon inspection.  Radon is a ground occurring gas that can lead to health complications.  Most inspectors can offer these inspections, and there a few companies that offer these specifically.  It takes a few days and requires the home to be pretty much closed up.  In some cases, and with some homes, this can be difficult.  

Appraisal   The last fee that can be expected prior to closing is the appraisal fee. After the inspection (and any repairs) is negotiated, and agreed upon, you, as the buyer, will contact your lender to give the go-ahead to order the appraisal. The average appraisal fee is anywhere from $600 – $800. This fee is paid to the lender.  An appraiser is hired by the lender to confirm the market value of the property. You can be willing to pay whatever you want for the home, but the bank will only loan as much as the appraiser says it’s worth. The laws that came out after the market crash prevent buyers, buyer’s agents, and seller’s agents from having contact with the appraiser so we won’t know it is done until the paperwork comes in. The appraisal is typically done within a week of ordering, and can take up to two weeks to have the paperwork to your lender AFTER the appraiser has come out.  Sometimes the appraiser comes out relatively quickly, but how quick, or slow the appraisal comes back depends on how busy the appraisers are.   The appraisal is a non-refundable fee. If the appraisal comes in lower than purchase price then the seller has the right to either lower the price of the home or back out of the agreement. If the seller was to pay any of the buyers closing costs then this can also affect those numbers as well, as the seller may choose to negotiate those.  If the home purchase was with a VA or FHA loan then that appraisal sticks to the home for six months.  If the seller & buyer can’t come to agreement because of the low appraisal, then the earnest money will be returned to the buyer, but the inspection and appraisal fee is lost. The seller only receives a copy of the appraisal IF the appraisal comes in under the previously agreed upon purchase price.  If the appraisal comes in at the previously agreed upon purchase price, or above that price, the seller does not receive a copy of the appraisal.  If you are purchasing a property from an investor you may be required to have TWO appraisals done…remember to talk with your lender as s/he is here to help you!   Depending upon your loan type, the appraisal fee coud be returned to you after closing like the earnest money.  Some of the zero down payment loans that will refund all, or part of your earnest money to you (and maybe your appraisal fee as well) is USDA (rural development) loans, VA loans (awesome programs for our veterans!!), the state down payment assistance loan, and the chenoa grant.  The appraiser can call out repairs as well.  Most of the time, these have to do with paint peeling, missing visquean under the home, roof condition, missing carbon monoxide detectors, or missing earthquake straps. The appraiser does not do a home inspection on the home, so they are just looking for those items required by the loan type of the buyer.  If the appraiser calls out a repair, this is now a lender required item and has to be fixed to be financed.  The appraiser does not receive a copy of the home inspection.  The home inspection is strictly for the buyer & buyers agent.  The buyers inspector is hired to inspect condition of the home.  The appraiser is hired to inspect value of the home for the bank/loan. 
I hope all of this helps, but don’t forget to holler at me with any questions….

What is the timeline?
**Offer accepted (inspection period begins)- home is pending sale
**Earnest money is due (refundable, based on 5 legal reasons –homeowners insurance/title, inspection, appraisal, financing– to back out of the agreement)- due within 3 days
**Inspection– within 10 calendar days- Approximately $400-$450 (non-refundable)
**Appraisal– within 7 days of agreed upon inspection response- $600-$800 (non-refundable)

These are the 3 fees you can expect as you are starting the process to purchase a home. These 3 fees have nothing to do with closing costs, or down payment.  We talked about Closing Costs last month. If you need to see that one again, go to the blog page on www.learningtobuyahome.com.  

Information is power, and I hope that I am able to help you.  Good luck, and as always…May the odds be ever in your favor out there….  AND If you are looking for a real estate agent, I would love to be able to help you.               

                       As always….this is just a quick overview…. again…and I can’t say this enough…please remember that your agent is NOT a salesperson, and should not be acting like one.  Real Estate is not really about houses, it is about relationships.  Your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.  

If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email,  text, or facebook me anytime.  I am, as always, happy to help! Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers.   .   

…disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…  

Upcoming Topics: 
What other fees may be a part of buying a home?  
What if I don’t have a Down Payment? 
How do I get a Realtor, and do I have to sign anything??

Last Month:  What are Closing Costs?

Have a great day, and I will talk to you soon,   
;-D   
Tracie DeMars   
Real Estate broker 
Re/Max – Van Mall   
360/ 903-3504 cell   
360/ 882-3600 fax   
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.learningtobuyahome.com, or www.freesellerclasses.com for local upcoming home buyer and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”

“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”    
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Let’s talk about CLOSING COSTS (& client appreciation)

Upcoming Free (& non-promotional) Home Buyer & Seller Classes:

Until further notice, all classes are going to be held virtually due to the Coronavirus.
Please email traciedemars@aol.com, or cberglender@gmail.com for a link & password to the classes.
Thank you!
Home Buyer Classes:
Saturday, May 9th, from 9am-11am
Saturday, May 16th, from 12pm-2pm
Tuesday, May 19th, from 5pm-7pm
Saturday, May 30th, from 11am-1pm

Seller Classes:
Saturday, May 16th, from 9am-11am
Thursday May 21st, from 5pm-7pm

If these class dates and/or times don’t work for you, please let us know. We understand that you have lives, and families, and work. We will work something out that works better with your schedule. Just let us know….

Good morning… or afternoon?
I have lost all sense of time, and dates. It’s a weird time in our lives right now. A few weeks ago when I wrote up the ‘Forbearance and what it really means’ blog, I thought that we would all be back to ‘normal’ by now…whatever ‘normal’ is… However, I think we can all agree that 2020 is the year that time forgot, and here we were all excited about holidays falling on weekend days…
Chris & I are getting used to the virtual classes, and people seem to like them. It is a shorter time frame though so there are things we simply do not have time to cover, and that’s why I need to step these up again to at least every other week instead of just once a month as I’ve been doing. Please, if you have any questions, send them over to me, and I will be happy to help! Chris and I are both still working. I am still showing homes, and writing up offers, but showing homes is a bit trickier right now as we do want everyone to be safe, and we have to work within the guidelines that we have been given. Who says an old dog can’t learn new tricks???

Just a quick message… usually about now we would be having our Client Appreciation Event where we THANK YOU for your friendship, your referrals, your continued business & support…and well, just for being part of our lives! We LOVE YOU. Let’s be honest…that’s not happening this year, so be on the lookout for a little something-something from me and Chris Berg in your mailbox in the next few weeks. When you get it you just have to tag us on the social media of your choice…Facebook? Instagram? …and maybe leave us a glowing review somewhere?? We miss you!!

I want to go over Closing costs this time, and ‘hopefully’ I will be able to get a short video out on this too. I am working on that one… Let me know what you think!
Closing costs are an important part of the home buying (or selling) process, but no one really knows what they are, are often how much they’re going to be….and why is that? Well, first you need to know that there are 28 people involved in the purchase/sale of a home. You will most likely only ever see four of them…. your lender, your agent, your inspector, and your title officer at the end. You’ll hear a lot about appraisers, and underwriters, but that is a different blog. Everyone has a job to do in the transfer of the property from the seller to the buyer….and everyone needs to get paid. Your buyers agent is FREE (don’t get caught by ‘buyers agency fees’ as those are not common), but that may be the only free thing you get. Seriously… you don’t have to pay for a buyers agent! There is your good news. 😀 So what the heck is closing costs then? Lots of people talk about closing costs, but most people don’t understand what they are…or how they’re paid.

Closing costs have two separate parts really…1….the part associated with your loan, and 2…the part associated with the title company and changing the ownership of the home to you.. One thing you need to know is that closing costs are not set…in other words…one persons closing costs will not be the same as another persons closing costs. Why? Because …1….every person has a different loan based on their credit scores, type of loan, amount of home buying, amount (if any) of downpayment, what day they’re closing (keys) on, interest rate, APR rate, lender they’re using (some have more fees than others), etc… See how complicated that can get? So what about the second part? Well, that can differ as well based on the title company since not every title company charges exactly the same for their individual costs. Then there is also the costs for the property taxes of the home, time of year you are buying based on when the taxes are due/have been paid, cost of your home owners insurance, amount of loan interest, and more. Even more confusing, yes?
Ok…now I know you are thinking that this weeks post is pointless then, but really, I have a point! 🙂 My point is that closing costs are variable based on you, your loan, your lender, your (soon to be) new home, and on the title company. So how do you figure that out? Well, really no one can figure out HOW much your closing costs are going to be until you have an accepted offer on a home…then we can figure out what your closing costs will be because you will have a home to base numbers off of, a loan chosen, a lender, and the title company picked out. Most numbers in real estate are a guesstimate until you have all the pieces in place…all the ducks in order…so to speak. When you are getting pre-approved, your lender will base all your numbers on a guesstimate…what we think your costs are going to be. Most times lenders, etc will guess high so that the numbers will come in smaller and more affordable for you. It is always better to look like a hero than a zero! 🙂 I know, I know…still not very helpful is it? I am sorry.

Closing costs are as individual as you are. However, 98% of buyers will request the seller to pay for 2%-3% of their closing costs. Where does that number come from though as even this number changes depending on the person, their loan, the home involved, etc. Well, to start… a FHA loan requires 3.5% downpayment. FHA is the most common loan type for buyers as it is very forgiving, and easier for the majority of folks to get pre-approved for. There are some loans, and yes, grants too, that can take care of that down payment for you….meaning a ZERO down loan for you, the buyer. There are some additional fees to using these down payment assistance programs that is part of your closing costs. There is also a zero down USDA loan that has other fees associated with it. On average, the costs between title, loan, lender, taxes, interest, insurance, etc….run about 2%-3% of the homes purchase price….rarely does it run more. When listing a home, I (and many other agents) include at least some seller paid closing costs to the sales price of the home. This is done because so many buyers request those from the seller, and this way it isn’t a surprise to the seller. So, yes, some sellers will pay for your closing costs when buying a home…of course, that depends on if there are other offers involved. In a multiple offer situation the seller may not pay any closing costs. One thing you need to know though is that if you ask for 3% in closing costs, and the lender only needs 2%, you don’t get that other 1%….it goes back to the seller. You can’t get cash back from buying a home….unless you are having your earnest money &/or appraisal fee returned to you…this happens if you are using a loan that covers your costs and fees. Usually your appraisal is part of your closing costs (but paid for at time of appraisal), and your earnest money is applied toward your down payment, or your closing costs. Again, 85% of the time a buyer will request some of the closing costs to be paid for by the seller. The other 15% of the time a buyer will pay their own closing costs so they don’t have to finance them. Right there is the REALITY of closing costs. The seller never actually ‘pays’ for your closing costs… the buyer is financing them into the purchase price of the home…adding the closing costs to their loan. The seller is merely accepting less than the purchase price so that the buyer can do this. If you remember ANYTHING about this email…that is what you should remember.
So, if a buyer has their own down payment, the lender can also help pay closing costs, and this can be done a couple of different ways. If a buyer is using one of the down payment assistance loans or grants, or the USDA loan, the lender can’t help pay those closing costs. The buyer can use their earnest money towards these though. Not asking a seller for help with closing costs does make for a ‘stronger’ offer, but let’s be honest…that isn’t always an option for a lot of people. However, if able to do so, sometimes people will use the zero down loan or the down payment assistance loans, and use the money they have for their own closing costs, but asking the seller for help with closing costs is quite common. Really it depends on many things.
In short….buyers responsibility for closing costs are:
* Lender’s Title Insurance Policy
* Half of the escrow fee
* Home Inspection (paid for at time of inspection)
* Recording fees
* First year Homeowners Insurance Premium
* First year Flood Insurance (if applies)
* Pro-rated property taxes
* Appraisal fee (paid for when appraisal is ordered)
* Survey fee (if required)
* HOA fees (if applies)
* Pro-rated HOA fees (if applies)
* Lender fees; appraisal fee (see above), credit report, loan origination fee, pre-paid interest, private mortgage insurance

All of these fees can change depending on the title company, the lender you’ve hired (closing costs can differ between lenders as some charge more & some charge less), the home insurance company you are using, the home inspector you’ve hired, the appraisers and what they’re charging (and if you need a rush), etc..

Let me see if I can’t make that part a bit easier…
I am going to give you 2 loans to choose from, and we are going to PRETEND that I am loaning you $1,000 for a year
First loan is 0% interest. Second loan is 5% interest.

What loan do you want? The 0% one, right? Most people (in the class) always choose this one, but frankly, there’s not enough detail here for you choose a loan, so let’s take it a step further…. I have to charge you (the buyer) closing costs. Closing costs is to pay for all those 28 people that are involved in the purchase/sale of a home. The seller has their own portion of closing costs to pay as well. On ‘average’, the closing costs for the seller are going to be about 8%-9% of the purchase price. Yep… there’s a cost to buy a home, and a cost to sell a home too. First loan at 0% Second loan at 5% Remember…closing costs….
Bank one charges $200 Bank two charges $100

So, what happens a year from now? How much of your money do I have a year from now when you come back and pay me back my $1,000 that I loaned to you? Well….let’s break that down… Remember that the original $1,000 doesn’t count because it was already my money. I loaned it to you, and now you are paying it back to me….
First loan at 0% Second loan at 5%
Closing costs….
Bank one charges $200 Bank two charges $100
Interest…
Bank one 0% Bank two $50
———- ————
How much of your money do I have?
Bank one = $200 Bank two = $150
So with bank one it’s going to cost you 20% to borrow that money for a year, & with bank two it’s going to be 15%…
Which one do you want now?

Of course, this is a very simplified example, but you get it. There is a lot more to closing costs & buying a home than just interest rate. You could have an amazing, unheard of interest rate, but the costs to get that rate could end up being astronomical, and not worth it over the length of your ownership. Remember that interest rates are NOT controlled or governed by the lenders….it is by the GOVERNMENT. All lenders are very close to each other because the interest rate is not in their control. Realistically speaking it is how much they are going to CHARGE you for the loan and the interest rate that is going to matter.

as always….I am available for questions…as is Chris Berg with Cardinal Financial (cberg@gmail.com or chris.berg@cardinalfinancial.com & 503-320-0925 cell)
One last thing you need to remember is that a real estate agent is not a sales person. It is not our job to ‘sell’ you anything. We are assistants, advisers, guidance, and help. You should not feel as if your agent is trying to sell you a home, or anything else, our job should be to help you in getting the home you want. This being said remember that you do not get T-Bone steaks for the price of hamburger…Look ONLY at homes within your budget. ALWAYS ask questions, and expect answers without a lot of lingo. I was always told that if you can’t explain something in a way that the other person can understand clearly, it is because you don’t understand it yourself. 🙂

Information is power, and I hope that I am able to help you. Good luck, and as always…May the odds be ever in your favor out there…. AND If you are looking for a real estate agent, I would love to be able to help you.

As always….this is just a quick overview…. again…and I can’t say this enough…please remember that your agent is NOT a salesperson, and should not be acting like one. Real Estate is not really about houses, it is about relationships. Your agent, and your lender work for YOU. You drive the bus…we are merely GPS to help you get to your goals. Like the classes, this weekly blog email is to help you with your home adventure. The goal is to be informative and non-promotional. 🙂 We are, however, hoping you will call and want us to help with your adventure.
If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email, text, or facebook me anytime. I am, as always, happy to help!

Thank you again for your business and your referrals!! …and thank you for referring these classes to your friends, family, and co-workers.

..disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…
Upcoming Topics:
Can you buy a home with ZERO out of pocket??
What are the costs of buying a home? ALL of them??
Buyers Agency…what are they really, and do you have to sign one?

Last Month:
What does forbearance (rent or mortgage) really mean?

Have a great day, and I will talk to you soon,
;-D
Tracie DeMars
Real Estate broker Re/Max – Van Mall
360/ 903-3504 cell
www.traciedemars.com
traciedemars@aol.com
“Interested in free and non promotional home education classes? Go to www.learningtobuyahome.com or www.freesellerclasses.com, for local upcoming home buyer and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”

“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.” – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Upcoming Free (& non-promotional) Home Buyer Classes: Thursday, March 12th, from 5pm – 8pm (ish)
     Marshall Community Center, Conference room
    1009 E McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)Saturday, March 21st, from 11am-2pm (ish)
​       Vancouver YMCA, conference room
       11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave).         Monday, April 6th, from 5pm – 8pm (ish)
Marshall Community Center, Conference room
       1009 E McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, April 11th, from 9am-12pm (ish)
       Marshall Community Center, conference room
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)                                                                   
If these class dates and/or times don’t work for you, please let us know.  We understand that you have lives, and families, and work.  We will work something out that works better with your schedule.  Just let us know….
….we also have home seller classes available too…look for link on top of website

Happy March & Daylight Savings Time!
  Spring!  It’s coming!  I can feel it… and so an the plants, and the trees.  My daffy’s are blooming, and the market is absolutely crazy.  The real estate market runs on a pretty basic pattern…unless something out of the normal happens.  The best time of year to be a seller is February through early June.  The best time of the year to be a buyer is June – August, and again, October – January.  So, why is this?  Well, the majority of potential buyers use their tax refunds for down payments and/or closing costs, and most people get their tax returns starting in February.  Most people who are thinking about selling don’t put their homes on the market though until after spring break.  This is why the market is so brutal right now. There are more buyers than there are homes for sale.  It will ease up a bit about mid-April, but still be pretty crazy.  Once kids start getting out of school in June, the market changes again.  The summer has more homes for sale, and less buyers so it’s a good time to be a buyer, but not too bad of a time to be a seller either as the market picks up again when kids go back to school in September.  In September & October we see folks buying hoping to get in before the holidays.  After Halloween the market dies because of the holidays & the weather, but that is a great time to be a buyer.   This is the most common cycle we see in real estate but things like the teacher strike we saw a few years ago can disrupt the cycle.  
    Now, honestly, the best time to buy or sell a home is when it is the BEST time for your family.   I can give you all the information, but ultimately, you need to decide when it is the best time for your family to make THAT move.  So, what’s your first step?  
Talking to a lender about how much you are pre-approved for.  There’s nothing a realtor can do for you until we know what price range you are looking at.  This can also determine when is a good time for you to be out there on the house hunt.  
What if you are selling & buying?  Well, then you want to start with your Realtor to see what your current home is worth, and what you would be looking at after selling.  Then you would go to your lender to get pre-approved…just like we had just talked about.  
  So, one of the questions we get a LOT is how long is the home buying process?  Of course, what people really want to know is when do they get keys?  So…when does this all happen?  The home buying process is sometimes super short, and sometimes takes a long time.  On average, most people write an offer on one of the first 6 homes they see.  Weird?  Not really if you think about it….  when you get pre-approved you have an idea of the home you are looking for.  Your Realtor is going to do everything they can to help you find that home.  First, we are going to hope that the home you are hoping to find is in your price range, but if it is… we’re going to find it.  Now, sometimes, it can take longer….especially depending on the time of year.  The real estate market ebbs and flows and runs on a pretty cyclical nature.  There are times of the year where it’s better to be a seller, and times of the year when it is better to be a buyer.  How long it takes to get a home under contract really depends on these factors.  However, what happens after the home is under contract….

Once we have a home under contract with an accepted offer, that home goes PENDING (Congratulations!).  This is when things really start moving.  A copy of the signed around purchase & sale agreement goes to your lender and to the escrow/title company.  The escrow company opens escrow on the home, and does a title search.  The lender will call you to come in and sign your lending documents.  Now that you have a home under contract, the loan application, and process can begin.  On your end, we need to schedule the home inspection.  We have 10 days to have the home inspection completed and to request any repairs.  Once the inspection process is complete, the appraisal process begins.  Remember that the home inspection is for your information, and the appraisal is for the banks information.  Once the appraisal is in, the file goes to the underwriters again for their approval.  Once we have the underwriters approval, closing documents are ordered.  You will receive an email asking you to acknowledge receipt of the closing documents.  From receipt of the closing documents you have 3 days before you can sign at title.  Everyone always ask, “when is my signing appointment?”  We don’t know…yet…  You see, once the title company receives the documents from the lender, they have to balance those papers, and numbers, and information with the lender to verify that all the information is correct.  Until they are ‘balanced’ with the lender, they can not set up the signing appointment.  Once this is all done, the title officer will call you for a signing appointment.  Yay!  Signing appointments are often same, or next, day.  The title officer will also let you know how much (if anything) you need to bring into signing with you. Signing & closing gets mixed up quite often, but they are totally different steps.  Signing is when you meet with the title officer at the escrow office to sign acceptance of the loan, and of the property you are purchasing.  You will receive copies of everything you have signed and get sent home….to wait….  Why?  Because now we move on to the last step in your home buying process, the closing.  
Once you, and the seller have signed, all the paperwork goes back to the underwriters to sign off on, and then to the lenders to fund.  After funding happens, you will probably get a call from your lender letting you know it’s all done.  Ok, well, they are all done.  We, however, are not… Once funding happens (and this is when the banks get their monies), all the information goes back to the title company.  The title company then sends the necessary information to the courthouse to record your sale.  Recording is closing…this is when the home becomes yours.  Recording happens during business days from 10am-12pm & from 3pm-5pm.  Once the home records in your name, the title officer calls your Realtor to let me know that you are recorded.  Congratulations!!  NOW I can call you to meet up for those magical KEYS!!   
One thing to mention…your lender, and your Realtor….we do NOT give out your information.  We value your privacy.  Recording on a home purchase, or sale, is matter of public record though.  You WILL start getting tons of crap mail, and calls because it is public record.  If you are not sure about anything you are receiving, please call your lender, or Realtor, we can let you know if it is spam, or something you need, or help you get information on where to ask.  
So, how long does this take?  Depending on your loan type, and the speed that you can get your information to your lender, and the speed we can get inspectors and appraisers out, anywhere from 3 weeks to 6 weeks to get from accepted contract to keys.  Average is about 40 days.  I’ve got one right now that we are closing in 2 weeks!!!  I’ve got another one that just received keys that went into 6 weeks because the appraiser called out a repair.  Wait, hold the phone!!!  That can happen????  Why, yes, it can…but that is an email for a different day.  😀  

Thank you, as always, for reading this. 
I hope this helps you this week!  Please, if you have any questions, please feel free to call, email, text, or even facebook me anytime.  I am always here to help!   
Informationis power, and I hope that I am help you!  Good luck, and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.I hope that explains this a bit, but if you have any questions, or comments please call or email me anytime!  Please remember that while I mean these emails/blogs to be helpful, and educational, I am still hoping that you will call, or email me.  I would love to help you with your home buying, or home selling adventure!  🙂
    As always….this is just a quick overview…. again…and I can’t say this enough…please remember that your agent is NOT a salesperson, and should not be acting like one.  Real Estate is not really about houses, it is about relationships.  Your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.   Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers.   ….disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…  Upcoming Topics:What’s the difference between Inspection & Appraisal?  

Last Month:  Showings…what you need to know 
Have a great day, and I will talk to you soon,   
;-D   
Tracie DeMars   
Real Estate broker 
Re/Max – Van Mall   
360/ 903-3504 cell   
360/ 882-3600 fax   
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.learningtobuyahome.com, or www.freehomebuyerclasses.com for local upcoming home buyer and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”    
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

home buyer & seller education… www.traciedemars.com

Upcoming Free (& non-promotional) Home Buyer Classes: 

Saturday, February 8th, from 9am-12pm (ish)
       Marshall Community Center, conference room
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Tuesday, February 11th, from 5pm – 8pm (ish)
        Marshall Community Center, Conference room
       1009 E McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, February 22nd, from 12pm-3pm (ish)
​       Vancouver YMCA, conference room
      11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave).                                                                                     

If these class dates and/or times don’t work for you, please let us know.  We understand that you have lives, and families, and work.  We will work something out that works better with your schedule.  Just let us know….
….we also have home seller classes available too…look for link on top of website

Happy February!   

Finally….January is over…not that it was the longest month ever, or anything like that…  The beginning of the year is a good time to sell your home (if you’ve been thinking about it), and it’s a time where a lot of folks who have been thinking about buying a home start the pre-approval process.  This months blog is going to address something that is important for both sellers, and buyers….showing homes.  Let’s talk about this…the funnest, and the scariest part…

As we’ve talked about in the past, there’s a process to buying (and even selling) a home…. first,  you take a home buyer (or home seller) class, second, you move on to getting pre-approved.  Yes, even if you are selling a home, you want to get pre-approved before you go looking for your next home.  For a seller (who is going to be a homebuyer when their home sells) part of the information you will be giving to your lender is the guesstimated amount that you’ll receive from the sale of your current home…your Realtor will help with this.  When you are buying a home, your Realtor is here to help you with your home adventure, and while yes, this is kind of scary…it is a lot of fun.  Whether this is your first home, or your 3rd, or 5th, or whatever…with a pre-approval & your Realtor,  you are ready for the ‘fun’ part…..LOOKING AT HOMES!  🙂  This is always an exciting time for buyers, and it should be!  Every home you pull up to has the possibility to be ‘the one’….The one you make an offer on, the one that you buy, the ONE that becomes YOUR HOME…and it is very exciting, and yes, kind of scary too.  For the sellers though, it is very stressful because currently this IS their home, and they’re leaving so that strangers can come in.  As a Realtor, we are trying to make this as easy as possible for both the buyer and seller, but we need help…

From the homeowners (sellers), we are asking that the home be available to show, that the home be clean, nothing of value is being left out, all medicines are put away and out of sight (not left in bathrooms or kitchen cabinets), anything that a seller wants excluded from the sale is noted, that sweet pups are either removed or kenneled, that sweet kitties are noted as inside only or inside/outside ok, and that please, please… homeowners (sellers) be gone for showings.  Before you go on the market, talk to your Realtor about HOW the showings will work with your home.  Some folks are cool with a few hours notice, some need more time.  Most of my clients need a bit more time for showings.  If you have kids and/or pets, it’s ok to ask for 24 hour notice.  That way you have time to prepare your home to be seen in its best possible condition.  You are still living in your home, and the buyers and buyers Realtor will (or should) respect that.  A lockbox will be put on your home, and during a showing the buyers agent will access the box for the key.  An email and/or a text will be sent to the sellers Realtor to let them know that a Realtor with XYZ company has accessed the home, and for how long we were there.  Before a seller puts their home on the market there is preparation, and usually some ‘honey-do’s’ that need to be done.  As always, there is more to it than this, but that is a different class….and email.  You can always call me for more information when you are selling your home. 

From the buyers….it gets a bit more complicated…  before we go house shopping, we are asking that you have a pre-approval letter with a solid lender, we are asking that you do not look at homes above your price range, we are asking that you have thought about the Top Three things you want in a home (so we can show you homes that have those items you value most), and that you help us help you….  
    When a Realtor opens the lockbox to show you the home, we are taking responsibility for everything that happens from that moment on….until we lock up the house and put the key back into the lockbox.  As I say all the time…  Real Estate is NOT like HGTV…  you don’t just get to wander the home while your Realtor sits outside…  we must be with you at all times when touring your potential new home.  Sometimes this can be like herding cats, but we understand your excitement…  just please, please as you are touring the home, and we know you have your family with you, please…we must all stay together.  Don’t make me sing to you here…..
    As cool as those toys look, I’m sorry but the kiddos can’t play with them, and sorry…but you can’t jump on the beds either.  It’s ok to open cupboards, and closets, but we can’t open dressers, or go through someone else’s personal items.  Touring a home is a VISUAL thing….sorry.  Yes, you can use the bathroom. 
    When it’s wet out (and lately it’s been VERY wet), it’s always a good take off our shoes before we enter someone else’s home so be sure to wear easy on & off shoes, or use shoe booties.
    When we are looking at homes, often we have more than one home to look at, and many homes are owner occupied so your Realtor makes appointments.  We do the best we can to make sure we have enough time to look at the homes, but we need to stay within our timeframes as the sellers are waiting to come home after we leave, or there are other Realtors waiting to show the home.  I promise we are not trying to ‘rush’ you through the home…we are just trying to stay within the timeframes so that you can see the other homes on your list. 

    With the real estate market starting to pick up for spring, it’s important that if a home comes up that you like, you need to let your Realtor know as soon as possible so we can make an appointment for you to see it.  Your Realtor should be sending you a list of homes as they come on the market for you to check….drive by the homes…check out those neighborhoods….and let’s make an appointment to go see the inside of the home.
    Do not trust Internet photos!  Realtors hire professional photographers for our listings for a reason.  🙂  Internet photos are a lot like internet dating…you don’t know what you’re going to get when you get there  
    Like the neighborhood, but not sure about the house?  Let’s at least go check out the inside!  You never know as you can’t judge a book (or a house) by its cover. 
    ASK QUESTIONS!!  For heavens sake…this is a home you are thinking about buying…  ask questions!  As your Realtor, we are here to help!  If we can’t answer your questions, we can at least set up in the right direction to get those answers. 
Buying a home is a very emotional experience.  Your Realtor is here to point out pros/cons, and to help you…. Trust your heart, but use your head…  or your Realtor.  🙂  Remember that we work FOR you.
  Once you find THE home it’s time to talk about making an offer, and those pesky timelines that you need to know, and that we need to abide by.  So, let’s talk about that….next month!  

Thank you, as always, for reading this. 
I hope this helps you this week!  Please, if you have any questions, please feel free to call, email, text, or even facebook me anytime.  I am always here to help!   

Informationis power, and I hope that I am help you!  Good luck, and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.

I hope that explains this a bit, but if you have any questions, or comments please call or email me anytime!  Please remember that while I mean these emails/blogs to be helpful, and educational, I am still hoping that you will call, or email me.  I would love to help you with your home buying, or home selling adventure!  🙂

    As always….this is just a quick overview…. again…and I can’t say this enough…please remember that your agent is NOT a salesperson, and should not be acting like one.  Real Estate is not really about houses, it is about relationships.  Your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.  

Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers. 

 ….disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings… 


Upcoming Topics:
How long is the home buying process… aka….when do I GET Keys?

Last Month:  New Year…New Home?  Maybe?  Where to Start?

Have a great day, and I will talk to you soon,   
;-D   
Tracie DeMars   
Real Estate broker 
Re/Max – Van Mall   
360/ 903-3504 cell   
360/ 882-3600 fax   
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home education classes?  Go to www.freehomebuyerclasses.com for local upcoming home buyer and home SELLER classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.”
“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”    
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).

Upcoming Free (& non-promotional) Home Buyer Classes:    Saturday, January 11th, from 9am-12pm (ish)       Marshall Community Center, conference room       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Monday, January 13th, from 5pm – 8pm (ish)
        Marshall Community Center, Conference room
       1009 E McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)

Saturday, January 25th, from 11am-2pm (ish)
​       Vancouver YMCA, conference room
       11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave).                                                                                           

If these class dates and/or times don’t work for you, please let us know.  We understand that you have lives, and families, and work.  We will work something out that works better with your schedule.  Just let us know….….we also have home seller classes available too…link on left on website
                  Remember…with reservation…we will throw in lunch, or dinner!  😀 ~~~~~~~~~                                                                    

Happy New Year!
  First I want to thank everyone for attending the Client Appreciation events!  Frozen II, and Star Wars:  The Rise of Skywalker was pretty awesome, and we loving hosting these events for you.  Just our way of saying Thank You for allowing Chris Berg & I to be a part of your home adventure.  The Star Wars Promo we used is on my Facebook page at Tracie DeMars Real Estate. Go…Enjoy!

   Happy New Years!  🙂  2020  Is it just me, or was 2019 a bit bipolar?  It was a bit of a rough year, but now we move forward, and every day is a new start…thankfully!  You know, I remember being told that that time goes by faster as you get older…. I am here to tell you that it really is true.  I guess we all need to listen to Dr. Who, and to stop blinking!!!  ….sigh…  
   I hope you had a wonderful Christmas with friends, family, and food…. holiday food really is the best.  With the new year starting though, a lot of folks start thinking about new things, and resolutions.  I’m not a fan of resolutions… unless they are to eat more bacon, read more books, crochet more blankets, or help folks buy (or sell) a home…. those are about the only resolutions I can keep!  Do you have resolutions?  Do you keep yours?  

   The holidays are really about family & home, I think…..having friends & families over for the holidays, or going to someone else’s home for the holiday celebration…add that to the new year, and new beginnings and many people start thinking about the next big step.  Is it time for a new home?  Maybe your current home is too small for your family now, and it’s time for  a bigger home?  Maybe your family has become smaller and it’s time for a smaller home?  Or are you renting your current home, and want to be a homeowner? 
Purchasing a home, whether it’s your first home, or you’ve owned homes before, is one of the four BIG steps we take in life.  What most folks don’t know is where to start, and what questions do you need to ask yourself?  What questions do you ask a lender? A Realtor?  What about classes?  There are SO many right now (it’s because it IS the beginning of the year), but how do you KNOW which one is going to give you the best information?    There are definitely some questions you should ask….
Let’s start with questions to ask yourself…. 
Bonus Answer…. What if I have a home currently, but want to get a new home?I bought my first home in 2001.  It was an amazing time for my family, and while we made quite a few mistakes in the purchasing of the home (we went through a builders representative and didn’t have our own Realtor), it was still exciting.  I started working for a builder shortly after we moved into our new home, and boy…was that an education.  A few years later we thought about selling, and buying a new home, but were not sure how that would work.   I mean….how do you buy a new home if you are IN the old home?  How would that work?  So we didn’t…. we stayed, and that was ok as I was leaving the builder and working real estate outside of the builder by then…and it was best to stay put as the market was starting to slide…hello recession.  
I started teaching home buyer education classes because I remember how lost I was when I purchased my first home.  I mean…  believe it or not, but I did take a class before I bought…it was a very LONG class, and they used a booklet that made ZERO sense to me, so it was no help whatsoever.  I wanted to teach classes that made SENSE, and that used the paperwork that people would actually see when buying a home….that was 15 years ago.  About 7 years ago, as the market was heating up from the recession, I had a client call me asking this very question…  HOW do they buy a new home when they own a home already?  How do they sell their current home?  What about paperwork? Agents?  Fees?  Marketing? How do they set up, or handle showings?  How do they sell, and buy at the same time?  So….  we came up for a class for that too.  www.freesellerclasses.com, for upcoming classes, and YES, THE FOLLOWING ANSWERS STILL APPLY TO YOUR SITUATION TOO.  You can always call me with questions too…  I’m always here to help…
#1…  Do you have a steady income? When you decide it is time to try to buy a home, a lender is going to want to see a steady income.  Have you been on your job for at least 6 months?  Were you working before that?  Was it in the same industry?  If you weren’t working before your current job, were you in school?  Were you in school for the occupation you are in, or something similar?  Are you self employed?  Do you have at least 2 years of 1099’s and tax records to prove your income?  These are all questions a lender will ask, and need answers to.  Want more information on this part?  Contact Chris Berg at Cardinal Financial for answers.  He can be reached at Chris.Berg@cardinalfinancial.com, 503-320-0925.  Don’t let the 503 number fool you….he is local.  🙂
Owning a home is usually a bit more expensive than renting.  With the rising costs of monthly rent, your rent and mortgage payment may be about the same, but owning does have a few more expenses.  When you rent, and something breaks, or has an issue, you call your landlord, or rental management company, and eventually things get repaired.  When you own a home, YOU are the landlord, and so you need to budget for those home repair issues that will come up.  Take $20 from each check and have it automatically deposited in a credit union or financial institution of your choice.  Do not have a check book or card for this account.  This is your home maintenance fund.  You know I love the home warranty, and remember that you can continue it year after year.  Use this fund to pay for that next year of the home warranty.  However, remember that the home warranty does not cover roofing, windows, walls, flooring, or siding.  This account should also be used to maintain and take care of those items as well.  
#2…How much debt to you have?This is a big one.  We all have debt, and don’t get me wrong….I think Dave Ramsey is a good guy with many excellent ideas, but there is one area that he preaches that actually hurts you in the pursuit of buying a home.  The idea of a cash based living style is wonderful, but when it comes to buying a home this will actually hurt you.  Strange as it is, having NO credit is worse than having BAD credit!  Some debt is actually good….not a lot…but some.  A lender will base the amount of your pre-approval on how much income you have vs how much debt you have.  Your mortgage payment can only be a certain percentage of your disposable income which, in a nutshell, is your income minus your debt.  Some debt is good because it gives you a history of payments.  Are you credit worthy?  Do you pay your debts?  Do you pay those debts on time?  Are you reliable?  Too much debt is bad because the ratio of your debt to your income is too high.  When you are applying for a mortgage, that is (for some of us) the largest debt we will ever carry.  How do lenders know if you will pay back that debt?  They will look at your credit score…which is determined by how well you pay your current debt.  This kinds of leads me to our next question.#3…  What is your credit score?Ah yes…the dreaded credit score!  In the upcoming weeks we will spend some time talking about credit scores…the good, the bad, and the ugly.  For right now though, a credit score is based on your credit history.  It tells the lender a story about your reliability of repaying your debt.  Frankly, at some time, we all have credit issues…or at least most of us do.  Many moons ago, when my husband and I were in the early years of our marriage, we had ‘issues’.  We had 2 young children, and a ton of medical debt.  When our son was a baby, we declared chapter 7 bankruptcy.  At the time it was the only thing we could do.  My husbands wages were being garnished, and we couldn’t even afford diapers.  We were, in a word, BROKE…and only going broker.  So, we made the decision to go bankrupt.  It was, looking back at it, really the best decision we could have made.  After the discharge, we took it upon ourselves to learn about how ‘this’ all works.  I think they should teach budgeting, and credit in schools.  This lack of understanding gets a lot of young adults in trouble….of course….just like everything else here this is just my opinion  🙂  So, we learned, and we made better decisions, and choices.  We learned to live within our means.  We learned to stock up, and save.  We went back to school to better ourselves, and our situations so we could provide a better life for (at the time) two children.  Our oldest daughter, and our son in law had a baby this year, and like most young couples they are broke. I guess it is where most of us start. She *barely* remembers what it was like when she was very young.
So about that Credit Score….A credit score is based on what type of credit you have, if you make your payments on time (late payments ding your credit score), how much credit you are carrying, and if you pay off your credit in a timely fashion.  Do you have a car loan?  Do you make the minimum credit payment, or more?  Have you paid off a debt?  If you have paid off a credit card….don’t close the account because closing the account can hurt your credit score.  Cut up the card if you want, but keep the account open.  Do you have high credit balances?  Lenders don’t like to see this because if you have high credit balances it means you have less credit to draw on in case of emergency, and let’s face it, we all have emergencies sometimes.  In short, a credit score is based on your past credit history, and lenders use this number to determine how risky it is to loan to you.  With lending…it is all about risk.  They prefer to loan money to individuals with reliability.  They don’t want to loan money to individuals with a high risk…someone who most likely won’t pay back the money.  So what can you do if your credit score is somewhat, less than stellar?  Call your lender, or call Chris.  They can go over your credit report with you, and point out the areas that you need to address.  They can, and should, actually HELP you to understand your credit report, and should be able to give you some steps to take to better your credit score.  Is it hard work?  Yes…but the end result is absolutely worth it.  It may take some time, but if you do all the steps, we can….and will…help you find a home.  
What is ‘good’ credit?  Most loans will want to say a ‘mid-score’ of at least 620.  There are three credit scoring companies, Equifax, Transunion, and Experian.  The lender will use the middle score of the three.  The better the credit score, the lower your interest rate for some loans as they have determined you have less risk. With a few loans, you can go as low at 580 on your credit score, but there are some ‘hiccups’ with that.  The majority of loan programs, especially the loan programs that help home buyers with downpayment will require a 620 mid score to loan money to buy a home.     

#4… Do you have a down payment?  Do you need help with one?There are still a few 100% loan programs for those without a down payment, but there are a few strings for these…. mainly location, or being a member of the military.  Surprisingly, you don’t have to be a first time home buyer for these programs.  What if you are a first time home buyer thought?  Well, there is quite a few down payment grants & loans out there that can help with that.  Yes, there really is!  Many lenders, and classes will talk about one…maybe 2, of them…but there are some grants to help with your down payment too.  No lie…  There are also other ways to come up with a down payment….401k, ‘gifts’, tax refunds, etc.  All of these options (and the pros/cons of each) are discussed by Chris Berg at the free & non-promotional home buyer education classes. However, and this is VERY IMPORTANT, remember that you do need money for a earnest money deposit, the home inspection, and the appraisal though.  Anyone who tells you that you don’t need any money to buy a home is blowing smoke…. *and I’ll let you finish that*   
#5….  Have you taken a home buyer education class?Buying a home, whether you have a home already, or are a first time home buyer, is a tense, exciting, thrilling, fun, and yet scary time for everyone.  These classes are about 3 – 3 1/2 hours long and will go over the entire real estate process & what the papers all really mean to you.  The lender will go over the entire loan process including closing costs, down payment loans/grants, and the loans (including the 100% loans), the pros & cons of each (not just the good stuff, but the things you really do need to know too) , credit (and help to get you there), interest rates, and more.  The real estate portion will help you understand the steps, the questions to ask a Realtor, inspections, appraisals, earnest money, and what all those papers involved in an offer really mean.  The classes are free, non-promotional, and taught at community centers for your convenience.   Before you talk with a Realtor, or a lender, and definitely BEFORE you sign any papers with either a Realtor or a lender… TAKE A CLASS.  A home buyer education class should be your first step….not the last one.  When you call to rsvp for a class…. ask how long the Realtor and lender have been teaching classes.  Ask how long the Realtor has been licensed.  Ask where the classes are being held at….are you going to a lender office?  A real estate office?  What will they go over?  There’s nothing wrong with taking more than one class too..  Buying (and selling) a home are some of the biggest things that you will ever do.  The only thing that will cost you more money is having a child….and wouldn’t it have been nice to have a handbook for that?  😀                         Informationis power, and I hope that I am able to help you.  Good luck, and as always…May the odds be ever in your favor out there….  If you are looking for a real estate agent, I would love to be able to help you.                                                                           As always….this is just a quick overview…. please remember that your agent, and your lender work for YOU.  You drive the bus…we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  🙂  We are, however, hoping you will call and want us to help with your adventure.  
If you have any questions about this, or something you have heard…or if you would like me to help you with your home adventure, please call, email,  text, or facebook me anytime.  I am, as always, happy to help! Thank you again for your business and your referrals!!  …and thank you for referring these classes to your friends, family, and co-workers.   .   ..disclaimer…if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings…  Next Week:   Interview Questions to hire a Realtor, or How long is the home buying process aka WHEN do I get keys?
      Last Week:   Winter time & buying (or not) buying a home
Have a great day, and I will talk to you soon,   
;-D   
Tracie DeMars   
Real Estate broker 
Re/Max – Van Mall   
360/ 903-3504 cell   
360/ 882-3600 fax   
www.traciedemars.com
traciedemars@aol.com

“Interested in free and non promotional home buying or selling classes?  Go to www.traciedemars.com or www.learningtobuyahome.com, for upcoming classes, or facebook: Tracie DeMars Real Estate for my home adventure education blog.  Classes are now available for home owners thinking about selling their home.  Links are on the left.”“Listen to the mustn’ts, child. Listen to the don’ts. Listen to the shouldn’ts, the impossibles, the won’ts. Listen to the never haves, then listen close to me… Anything can happen, child. Anything can be.”    
   – Shel Silverstein, American poet, cartoonist and composer, (1930 – 1999).