Real Estate November 17, 2023

When is the Best Time to Buy or Sell a Home?

Market peaks, holidays, school, oh my! Once you’ve decided that you want to sell or buy a home, the when can be tricky to tackle. Many factors contribute to optimal timing. Scroll down for the pros and cons of selling or buying in each season.

While each season has its perks and challenges, your personal circumstances will be the most important consideration. Relocation, marriage, divorce, or other life changes may mean that it makes the most sense for you to move now regardless of market factors. If you have kids in school, it may be best to wait until after the school year to make your move.

If your timing is flexible, on the other hand, you’ll also want to consider things like the condition of your property—homes that need work or have challenges with location/layout may require a hot market (or serious lack of competing inventory) in order to sell. You’ll also want to analyze the micro-market in your neighborhood, including how many other listings are currently for sale. Check out our article on timing the market for some great tips on that.

Seasonal cycles are definitely worth considering. For sellers looking to get the maximum number of eyes on your home, it’s important to avoid listing during holiday weeks or inclement weather events like snow. Buyers might find it more difficult to purchase a home at the peak of the market when homes are selling like hotcakes. Below is a chart showing typical market activity based on a five-year average of pending sales.

 

Market Activity Based on Pending Sale Averages Over the Past 5 Years

 

When my clients ask for my advice on when to sell or buy, I typically analyze all of these factors along with seasonal pricing trends. Below are some of the pros and cons I tend to see for buyers and sellers in each season…


SELLING

 


BUYING

 

Pssst…I know decisions like this can feel overwhelming. Reach out any time for expert advice. I’m always happy to discuss your options and help you choose the best timing for your unique property, circumstances, and micro-market…

Connect with me to request an expert market timing analysis.

 


 

Windermere Mercer Island

 

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

© Copyright 2023, Windermere Real Estate/Mercer Island.

Real Estate May 19, 2023

Buying a Home: A Start-to-Finish Guide

You want to buy a home.

Where do you begin?

 

When you’re ready to buy—or maybe just ready to start seriously thinking about it—there’s a lot you can do to prepare. Here is a checklist to help you get started…

 

1. Determine a Price Range

Step one is finding out your budget for your new home. The best way to do that is to meet with a mortgage professional who will review your income, assets, and credit history in order to pre-approve you for a loan. Not only does getting pre-approved allow you to narrow your home search, but it also makes your offer stronger when it comes time buy. If you don’t currently have a mortgage professional, I would be happy to recommend one.

You can also use my Home Monthly Payment Calculator to experiment with different principal amounts, interest rates, down payments, taxes, and insurance to get an idea of what you can afford. Keep in mind that these calculations are meant to be estimates—interest rates change weekly and will be determined by your credit score.

 

2. Make a Wish List

Imagine your ideal home. How many beds/baths does it have? How big is the backyard? How close is it to the local park? Use our Wish List to guide you in your search online and with me.

 

3. Start Your Searching

Once you know how much you can afford and what you’re looking for in a home, it’s time to start your search. My online search tool makes it easy to search for homes, keep track of your favorites and subscribe to property alerts when a fitting listing hits the market in your area. I can also send you potential homes and take you to tour them in person once you’re ready to get serious.

 

4. Know What to Avoid

As you prepare to buy, knowing what not to do can often be just as helpful as knowing what to do. By understanding the pitfalls buyers can fall into, you can identify the signs of these common buying mistakes ahead of time. Check out this article on buying homes that have been flipped, too.


 

You’ve found the home.

What now?

 

Once you’ve found the home you can see yourself living in, what’s next? There are many steps to go through before you can officially call yourself a homeowner. I will guide you through this process, but in the meantime, here’s a preview of what you can expect.

 

1. Negotiation

When making an offer on a home, I will negotiate on your behalf in order to attain the best terms for you. This can include negotiating the price, repair costs, timelines, and contingencies.

 

2. Purchase & Sale Agreement (Contract)

This is the legal contract you and the seller will enter into once your offer has been accepted by the seller. It outlines the terms and conditions of the sale and is signed by both parties.

 

3. Inspection

Once the Purchase and Sale Agreement is signed, a home inspector is hired to examine the home’s health, safety, and major mechanical systems. If any issues arise from an inspection, you may be able to renegotiate.

In a competitive offer situation where you wish to waive your inspection contingency in order to make your offer more appealing, I may advise you to conduct a “pre-inspection”—that is, an inspection that is conducted before you put an offer in on the house.

 

4. Financing

After your offer is accepted, the next step is to get final loan approval. During this process the lender will decide if they’re willing to approve your mortgage based on things like your creditworthiness and the title history and appraisal of the home you want to buy.

 

5. Title Report

This is a report for you and your lender detailing the history of the home you’re buying to ensure there are no legal barriers to purchasing it.

 

6. Escrow

Escrow is an impartial third-party process in which documents and funds are deposited by buyers, sellers, and lenders to facilitate the closing of a transaction. To learn more, read this short guide to understanding escrow.

 

7. Closing

During this final step of the home buying process, ownership is transferred from the seller to the buyer, closing costs are paid, and several legal documents are prepared and signed, all leading to the closing date. After closing is finalized and recorded and the funds are disbursed, the home is yours!

 

8. Moving Day!

Check out my printable Moving Checklist as you get ready for the big day.

 


 

Windermere Mercer Island

 

© Copyright 2023, Windermere Real Estate/Mercer Island.

Real Estate June 15, 2021

Thinking About Buying a Second or Vacation Home?

Here are a few tips to make sure it’s worthwhile…

These days, having your own home away from home is a compelling concept. There are many clear benefits including being able to use your home how you wish, decorate to your taste, and include your furry friends in your time away. There are also challenges to be considered as home security, maintenance, and holding expenses are nothing to ignore.

One consideration to start with is whether the home will be solely used by your family or become an income-producing vacation rental. In addition to being a lifestyle choice, this determination will impact your income taxes and insurance needs and should be made before you embark upon this journey.

There are advantages and disadvantages to both options:

 

Second Home for Your Personal UseIncome-Producing Vacation Rental


 

Owning as a Personal Second Home

 

PROS

  • Comfort: Returning to the same place is familiar and often more relaxing than staying in a hotel or vacation rental. It allows you to enjoy your space as you wish and include pets and hobbies in your home away from home. Proximity to your primary residence is an important factor. How long will it take to get there? You will likely visit more often if your second home takes under three hours to travel to. Choosing a location that you will enjoy for years to come is essential to making a good purchase decision.
  • Convenience: The ability to keep your possessions that are used exclusively at the second home simplifies travel and packing and makes it easier to be surrounded by the things you enjoy.
  • Long-term profit: While assets fluctuate in value in the short term, vacation properties are more likely to retain their value and appreciate because they are located in popular areas with a geographically limited supply. At some point you could have a nice nest egg or a property that becomes a family vacation home for future generations.
  • Future retirement options: A common retirement goal is to have a place to retreat for part of the year in addition to your main residence. Whether a second home will become a full-time venue in retirement or continue to be a part-time get-away, having it established before retirement gives you options.

CONS

  • Initial cost: Buying a second or vacation home is a big investment. Down payment requirements are typically higher on non-primary residences and that cash outlay can take away from other investment opportunities.
  • Maintenance: Your second or vacation home will require maintenance and upkeep just like your primary residence. You’ll need to plan to tackle that yourself or hire someone else to do it for you. Let it get away from you, and you will be spending your leisure time worrying about everything that needs to get done instead of relaxing.
  • Commitment: When you are paying a significant amount of money each month for a second or vacation home, you may feel that you need to constantly visit the property to justify your investment. You’ll need to ask yourself if the idea of going to the same place over and over again is appealing or a turn-off.
  • Other considerations: Evaluating and mitigating your exposure to natural disaster (fire, flood, earthquake, tsunami, etc.) and liability risks (guest injury, burglary, squatting, vandalism, arson) on a home that is vacant for much of the time is an important consideration. Determine how you will keep your home safe and secure.

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Owning as an Income-Producing Vacation Rental

 

PROS

  • Income to offset expenses: A good vacation rental property generally provides a healthy rental revenue which could potentially cover mortgage payments and operating expenses. Using an online short-term rental service like Airbnb makes it convenient to manage your rental property. Their website interface makes pricing, marketing, and communication with potential guests straightforward and easy. Airbnb will also oversee the billing process for you.
  • Tax considerations: You may qualify for federal tax breaks and deductions related to holding your investment property. This can help offset the expense of owning and provide investment opportunities for the future.
  • Long-term profit: Like a second home, vacation properties are more likely to retain their value and appreciate over time. At some point you could have a nice nest egg or a property that becomes a family vacation home for future generations.
  • Future retirement options: While there are tax considerations to converting an income-producing property into a personal use property, owning a vacation home allows you to insulate yourself against rising real estate prices and give you options for future use.

CONS

  • Initial cost: Buying a vacation home as an investment property will require both a hefty down payment and initial start-up expenses to furnish and supply the home. You will need to evaluate that cash outlay with other potential investment opportunities.
  • Management and maintenance: Vacation rentals can be costly to manage, both in terms of time and money. These properties may require seasonal upkeep and special maintenance considerations. You may even incur costs to maintain or monitor the property even when it’s not actively being utilized.
  • Revenue fluctuations: Vacation rental properties are particularly sensitive to seasonal fluctuations and economic downturns, which could leave you financially exposed. Having a property that is attractive in multiple seasons is a definite plus.
  • Short-term rental restrictions: Many state and local municipalities are seeking to reign in short-term vacation rentals, which could put a damper on potential revenue from these properties. Many now require a minimum rental period of 30 days. In contrast, there are locations that are ideal for these kinds of short-term rentals. Look into regional ordinances, do a Google search, and check out local newspapers to discover recent talk of changing or enforcing such codes.
  • Other considerations: In addition to evaluating and mitigating your exposure to natural disaster and liability risks, you will want to consider other holding expenses. These might include higher renovation and repair costs due to high-use or damage. Most travelers expect the latest appliances and furnishings, so you will have to update every few years. Unfortunately, short-term renters are less likely to report any necessary repairs and guests are far less likely to treat the property with respect since there is no sense of ownership or obligation.

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Final Thoughts

Regardless of your decision to use the property personally or as an investment, checking in with your CPA and financial advisor is a good first step. They can advise you of pros and cons of each approach, States that are more or less favorable to own a non-primary residence in, and whether you should establish a trust or LLC to hold the property in.

Having a savvy real estate broker help you understand the local scene, evaluate options, and provide vetted resources is essential, especially when you are looking in an area you are less familiar with.

Still have questions? Conact me for assistance with exploring a second and vacation home purchase locally, or I can refer you to a great broker in other areas you are considering.

 


 

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We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative, and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446
mercerisland@windermere.com

© Copyright 2021 Windermere Mercer Island