For BuyersFor SellersReal Estate March 10, 2011

Top 7 Reasons Real Estate Sales Fail to Close

I’m gearing up to do monthly statistics on how the real estate market is doing on Seattle’s eastside.  Every month I report on how many homes have sold and I also mention how many real estate sales have failed.   Contracts on homes close all the time, but there’s always a certain number each month that don’t close.  There are many reasons why this can happen.

Here are 7 of the top reasons home sales fail to close:

Buyer rejects the seller’s disclosure form. The disclosure form, form 17, is a 5 page document delivered to the buyer no later than 3 days after a purchase and sale agreement (the contract) is mutually agreed upon by both parties.  The buyer has 3 business days to review the form.  The disclosure form covers many issues about the home, including defects, remodeling, permits, whether the home is on septic or sewer and hooked up to public water or on a well.  If the buyer disapproves of anything in the form, the buyer has the right to terminate the purchase and sale agreement.

The inspection falls through. Inspections fall through because there’s something structurally wrong with the house.  The structural problem can’t be fixed, the seller refuses to fix it or the buyer no longer wants to buy the home because of the problem.  Sometimes the repairs requested can be remedied, but the buyer and seller don’t come to agreement on which repairs will be done or how to do the repairs.  The buyer can also terminate a contract based on the inspection without giving a reason to the seller.

The buyer walks over neighborhood review. Some offers include a clause giving the buyer an opportunity to check out schools, crime, views, and other neighborhood issues in the 3 business days after an offer is signed.  If the buyer finds something they don’t like about the neighborhood, they can terminate the agreement and walk away.

Good old fashioned buyer’s remorse. Buyers get cold feet and decide not to buy the home.   Buyers have the right to serve the seller a termination notice, get their earnest money returned, and continue to look for a home without giving the seller a specific reason.  This can happen only during specific times outlined in the contract.  For example, the buyer can simply terminate the contract during a neighborhood review or the review of the disclosure form.

A low appraisal on the home.  The home sells for $500,000, but the bank appraiser says the home is only worth $485,000. The seller doesn’t agree to the lower purchase price to the appraisal price, so the buyer can choose not to buy the home.

Running up a credit card bill.  The buyer buys a new car before closing the sale on the new house, running up a credit card bill.  Incurring more debt before closing can mean the buyer no longer qualifies for the loan.

Death of a buyer or seller. I recently heard of this happening in a sale on the eastside. It happened during one of my closings a few years ago.  The seller passed away during the closing period.  Luckily, the heirs saw the sale through.  Heirs can contest a sale if it’s in process.

It sounds pretty daunting when you read this list, but the reality is most months only 1 or 2% of the home sales fail to close.  Clearly, the majority of homes that sell go all the way to the closing table.

By the way, each state has different contracts with different clauses, so what happens in Washington State real estate contracts stays in Washington State.  This post is not legal advice.  If you have questions or concerns about real estate contracts, you should consult an attorney.

What are some of the other reasons home purchases fail to close?  There are many more reasons out there.  Do you know of some unique situations that caused real estate sales to fail?

Bellevue Real EstateBellevue, WAFor BuyersFor SellersKing County Real EstateKing County, WAMarket StatisticsReal EstateRedmondSeattleSeattle real estateWindermere Real Estate March 4, 2011

How Badly is Seattle's Eastside Real Estate Affected by Distressed Sales

“Distressed Homes Sales Dragging Prices Down” screamed the print version of The Seattle Times, while the online version shouted  “Median Home Price in King County Drops in February, Dragged Down by Bank Repos.

Pretty scary headlines.  Scary headlines certainly attract readers. Distressed home sales, bank repos and short sales, are out there and affecting home values, but in varying degrees depending on which neighborhood is being discussed.    If you read further down in the article:

The percentage of King County single-family homes that fit the “distressed” category in February varied widely by area, according to Windermere’s analysis.

By lumping all of King County together, it gives an inaccurate picture of Seattle real estate.  Seattle real estate is far more localized. The neighborhoods of Queen Anne and Capitol Hill are usually the strongest performing areas, while the eastside suburbs of Bellevue, Redmond, Kirkland, and others are doing better than most of King County.  The suburbs of Mercer Island and Medina have few distressed properties for sale.

The chart below gives a picture of the 2010 distressed property sales for all the counties around Seattle.  My focus is on Seattle’s eastside neighborhoods, since it’s the market where I work. The eastside data is broken out from the rest of King County, because it’s usually different than the rest of the county.   The pattern for distressed sales activity can be seen through 2010.  The eastside had less distressed properties for sale than the rest of King County. I expect a similar pattern to continue in 2011, although the numbers may be different.  When the 1st quarter numbers are released, I’ll report those numbers.

Irrespective of the distressed sales issue, homes are selling well in some areas.  Prices are less than they were, but there are fewer homes for sale in many neighborhoods.  So the old law of supply and demand is working in these neighborhoods. Near Microsoft in Redmond, there were three home sales that closed this past week.  All the homes sold in less than 8 days.  One was for full price, another for slightly over, and one sold for about 2% less than the asking price. Neighborhoods in Kirkland have a lot less homes for sale than is typical.

Distressed home sales are a part of the picture of Seattle eastside real estate, but they are not the complete picture.  Too bad the screaming headlines didn’t balance more of the good news with the bad.

Seattle Area Distressed Property Data

2010 Distressed Properties by Seattle Area Counties

What is happening in your neighborhood?  Are homes selling?  Are there a lot of distressed sales?

Bellevue, WAFor HomeownersKing County Real EstateReal EstateSeattleSeattle real estate February 23, 2011

The Tolls Are Coming! The Tolls Are Coming to Seattle's 520 Bridge

The tolls are coming for the 52o bridge from Seattle’s eastside to Seattle starting in March, 2011. Travel across the bridge to Seattle during peak times will set you back $3.50 each way.  The cost is less during other hours of the day.  In fact, if you head across the lake during the middle of the night, it’s a lot less money!

520 Bridge Crossing Seattle's Lake Washington

Seattle's 520 Bridge

I’m wondering how the new tolls will impact how you live.  What got me thinking of this was when a client called me about moving.  Last year he was hoping to move his family to Seattle.  Since both he and his wife work on the eastside, he’s now looking at Bellevue and Mercer Island.

Will the new tolls impact how you commute?

Will you rely more on public transportation?

Will you try to go across the lake during off-peak hours?

Are you considering a move to the side of the lake where you work?

Do you think the tolls will cause more people move?

Do tell what you think.

Exploring the EastsideSeattleWoodinville, WA February 22, 2011

Snow In February in Seattle? Here's Where You Can Think Spring

Snow in Seattle in February? Sounds impossible but with temperatures predicted to go down into the 20’s later this week, it’s possible.  If you need a cure for the wintertime blues check out Molbak’s in Woodinville.  It’s a springtime frenzy with gorgeous flowering plants.

Whites, blues, purples, pinks, and reds.

Spring flowers at Molbaks in Woodinville

Spring flowers at Woodinville's Molbaks

Spring Flowers at Woodinvilles' Molbaks

Spring Flowers at Woodinville's MOlbaks

Molbak’s is a feel good kind of place that will remind you spring is just around the corner.   I’m sure if you check your yard you’ll find things starting to bloom and come back to life as I did in my front yard.

Bellevue Real EstateFor BuyersFor SellersIssaquah Real EstateKing County Real EstateKirklandMarket StatisticsReal EstateSammamish, WA Real EstateSeattle real estateWoodinville, WA Real Estate February 17, 2011

How Did January, 2011 Seattle-Eastside Condo Sales Compare to January, 2010?

This is the fewest number of condos for sale in years, and I mean years.  I checked all the way back to the beginning of 2008.  There were only two months in 2008 when less than 1100  condos were for sale on Seattle’s eastside.
 

This is a better time than most of the past three years (tax credit time is the exception) to sell a condo.  Buyers are getting “off the fence” to buy, hence the higher absorption rate. The best of the best are selling quickly, while the rest just stay on the market.

Seattle Eastside Condo Sales

January 2011 Condo Sales on Seattle's Eastside

(The absorption rate, the percentage of condos selling, is the number of condos for sale in any given month divided by the actual number of condos sold that month.  So if the absorption rate or chance of selling is 10% that means out of 100 condos for sale, 10 received offers and sold.)

January, 2011             1028 condos for sale      174 condos sold               17% odds of selling.

December, 2010         1084 condos for sale      120 (was 135)  condos sold      11% (was 12%) odds of selling.

January, 2010             1217 condos for sale       117 condos sold          10%  odds of selling

*Adjusted from previous month’s original numbers to reflect the actual number of condos sold and closed.  Some of the sales originally reported last month failed and did not close.   Some of the reasons sales fail are the buyer and seller don’t agree on the building inspection, the condo does not appraise for the sales price or the buyer’s financing does not come through.

If you plan to sell your condo in the near future, feel free to contact me if you have questions about what you need to do to get ready to sell.  Every seller has to do a few things before putting a home on the market.   If your home is positioned properly, it can be one of the lucky few to get an offer.


Bellevue Real EstateBellevue, WAFor BuyersFor SellersIssaquah Real EstateIssaquah, WAKing County Real EstateKirklandMarket StatisticsReal EstateRedmondSammamish, WASammamish, WA Real EstateSeattle real estateWindermere Real EstateWoodinville, WAWoodinville, WA Real Estate February 16, 2011

How Many Real Estate Sales Were on Seattle’s Eastside in January 2011 Compared to 2010?

[googlemaps http://maps.google.com/maps?f=q&source=s_q&hl=en&geocode=&q=Bellevue,+WA&sll=37.0625,-95.677068&sspn=23.403932,58.271484&ie=UTF8&hq=&hnear=Bellevue,+King,+Washington&ll=47.610377,-122.200679&spn=0.310148,0.910492&z=10&output=embed&w=425&h=350]

How did January, 2010 compare to January, 2011 in your neighborhood?

(Click on the cities below to see real estate trends for the past 5 years.  You’ll find the median pricing for each city and whether the number of homes for sale and the number of sales went up or down.  The odds of selling a home in each area is a result of the number of homes for sale divided by the actual number of home sales, so if 10 out of 100 homes sold, the odds of selling would be 10/100 or 10%)

The plateau:  Sammamish, Issaquah, North Bend, and Fall City

The odds of selling a home were 18%.

Median sales price hardly dropped: $499,900 to $493,975.  Home values have been more stable here than anywhere else on the eastside.

The number of homes for sale increased by 4% and the number of home sales decreased by 4%.

A total of 118 homes sold.

Redmond/East Bellevue

The odds of selling a home were 28%.

Median sales price decreased by 9% to $409,925 from $450,000.

The number of homes for sale was down by 16% and sales were down by 14%.

A total of 54 homes sold.

South Bellevue/Issaquah

The odds of selling a home were 19.5%.

Median price decreased from $559,900 to $460,000.

The number of homes for sale dropped by 10% and sales were down by 30%.

A total of 63 homes sold.

Woodinville/Bothell/Kenmore/Duvall/North Kirkland

The odds of selling a home were 18%.

Median price was down from $389,725 to $359,900.

The number of homes for sale declined by 3% and sales were down by 8%.

A total of 105 homes sold.

Kirkland

The odds of selling a home were 18%.

Median price increased to $506,950 from $499,950, a 1% increase.

The number of homes for sale declined by 19% and sales were down by 35%.

A total of 52 homes sold.

West Bellevue

The odds of selling a home were 21%.

Median pricing was up from $899,000 to $1,000,000.

The number of homes for sale decreased by 11% and sales increased by 48%.

The total of 40 homes sold.

Redmond/Education Hill/ Carnation

The odds of selling a home were 20%

Median pricing decreased from $524,990 to $376,250.

The number of homes for sale decreased by 5% and sales decreased by 8%.

A total of 52 homes sold.

If you’d like more specific information about your neighborhood or home, feel free to contact me.



Bellevue Real EstateBellevue, WAFor BuyersFor SellersIssaquah Real EstateIssaquah, WAKing County Real EstateKing County, WAKirklandMarket StatisticsReal EstateRedmondSammamish, WASammamish, WA Real EstateSeattle real estateWoodinville, WAWoodinville, WA Real Estate February 15, 2011

Has a Positive Trend Started in Seattle-Eastside Real Estate?

The positive trend in Seattle’s eastside real estate continued from December, 2010 to January’s sales.  Maybe the uptick in December was not an anomaly?  We’ll still need to wait and see.

This, again,  is what the Seattle Times said after December’s home sales numbers were released:

• Buyers are climbing off the fence, even if they suspect prices will continue slipping, because they fear interest rates will rise and wipe out any savings.

There was a lot more “climbing off the fence” in January.  Truthfully, the number of sales hasn’t increased all that much, but the number of homes the buyers have to choose from is a lot less.  It’s that old law of supply and demand, which is what we call the absorption rate.*

There are fewer homes to choose from, so the good ones are grabbed up.   That’s what feels different. The “fence sitters’ are jumping on the good home buys.  Some homes that hit the market are gone in a matter of days. The homes that are priced right and show well are the homes that sell quickly.

Since the last two months have had stronger absorption rates, I hesitate to call it a trend just yet, but I’ll keep you posted.  I can tell you that the number of buyers looking at homes, multiple offers (gasp), and the absorption rate (see below) have all increased since the first of the year.


Seattle eastside real estate sales

Seattle Eastside Real Estate Sales-January 2011

The odds of selling a home on the Eastside in January ranged from 18% to 28%, with an average 19.5% absorption rate.*  Most home sellers on Seattle’s eastside had a 19/100 chance of selling their home last month.

*(The absorption rate is the number of homes for sale in any given month divided by the actual number of homes sold that month.  If the absorption rate is 10%, then 10 out of the 100 homes for sale sold that month.)

January, 2011          2392  homes for sale    467  homes sold                 19% odds of selling.

December, 2010      2499 homes for sale    369 (was 397) homes sold     15%  (was 16%) odds of selling.**

January, 2010          2588 homes for sale   460 homes sold                 18%  odds of selling.

**(Some home sales fail because of the buyer financing or an inspection.  The number of sales is updated when we find out the actual number of homes that sold during that time.)

_____________________________________________________________

January, 2011 Seattle-Eastside real estate market compared to January, 2010:

  • The average  price of pending homes (recently sold homes) went from $525,462 to $495,080, a 6% decrease in pricing.
  • On 2-14-11, there were 10,530 King County homes (houses and condos) for sale.
  • The number of homes sold on Seattle’s Eastside: down 11% from last year.
  • Number of homes for sale on Seattle’s Eastside: The number of homes for sale in January, 2011 was 7% less than January, 2010.

Best odds of selling: East Bellevue/Redmond around Microsoft.

Worst odds of selling: Sammamish/Issaquah/North Bend/ Fall City.

Decline in home sales from last year: Three out of the 7 Seattle-eastside areas had fewer sales, South Bellevue, Kirkland, and Sammamish/Issaquah/North Bend/ Fall City.

What’s happening with real estate in your neighborhood?


Built Green and Sustainable LivingFor HomeownersHome maintenance tipsRemodeling and style trends February 14, 2011

Happy Valentine's Day-Keep Loving Your Home

Do you love your home?

Keep loving it by taking good care of it.  Become a fan of my Facebook Fan Page which is dedicated to home ownership.  I post about energy savings, green living, housing trends, and all things that are “house” related.

Looking for a last minute Valentine’s Day gift for your honey?  Make it something for you, your honey and your home.  Check out the lipstick sofa, the heart shaped lamps, and the satin sheets!

Happy Valentine’s Day!

Bellevue Real EstateFor BuyersFor SellersKing County Real EstateReal EstateSeattle real estateWA real estateWindermere Real Estate February 8, 2011

Seattle Economist's Predictions for the 2011 Real Estate Market, Part II

Matthew Gardner, of Gardner Economics,  spoke at our annual Windermere Real Estate/East, Inc kick-off meeting today.  Mr. Gardner shared his thoughts about the local economy and Seattle real estate. Here are some of the highlights:

  • Seattle will recover more quickly than other parts of the west.
  • Growth will be slow and from the center, Seattle, out to the suburbs.
  • The private sector has increased job growth in the last 4-5 months and will continue to do so.
Seattle Area Private Sector Employment

Private Sector Employment in the Seattle Area

  • There will be more price corrections for those hi-rise condos that have not sold both in Seattle and Bellevue.
  • Buyers are still looking for good deals and feel uncertainty remains.
  • Prices are stable and, hopefully, will stay that way this year.
  • Banks are not releasing all of the bank owned homes to sell. The banks would go bankrupt if they flooded the market with these homes, causing prices to drop.
  • Mortgage rates will increase:  over 5% this year, 6% in 2012, and 7% by 2014.
30 year Mortgage Rates

30 Year Fixed Mortgage Rate Predictions

Here’s a few of Mr. Gardner’s thoughts for 2011 from the first of the year.

What do you think?  Is this what you see happening in the area and with real estate?

ArchitectureBellevue Real EstateBellevue, WAExploring the EastsideJust for FunLocal news and information February 7, 2011

You've Been to Downtown Bellevue, But Have You Really Seen Downtown Bellevue?

Do you think of downtown Bellevue as a drive-through from the highway to the mall? I bet most Eastsiders zoom along NE 8th to the mall. Most have probably never walked around downtown Bellevue.   This should not come as a surprise, since downtown Bellevue was designed to accommodate a car culture.

I’ve lived on Seattle’s eastside, near downtown Bellevue for 25 years.  I’ve been all over downtown Bellevue.  I’ve watched it change dramatically from a handful of tall buildings to a city dominated by buildings, some over 40 stories tall.

Downtown Bellevue

Bellevue skyline

I frequent shops, restaurants, the Art Museum, Meydenbauer Center, and the mall in Bellevue.  I know downtown Bellevue pretty well.

But I, too, had never just walked around downtown just for the sake of walking.  Bellevue is a great place to walk around and explore. It’s made an amazing transformation from a car centric downtown to a place to live, a destination place, and a great place to walk.

I did that just this past weekend.  I walked from the Bellevue Square mall over to the Bravern as part of the Seattle Architecture Foundation’s Bellevue 2.0 tour.

I know a lot about Bellevue’s history and real estate, but I learned a few more tidbits from the two great guides, John Hotta and Eli Lemanski.  The tour began at the mall on the second floor of Macy’s in the women’s jeans department.  (Kind of fitting for Bellevue, since the mall has always represented downtown.)

Bellevue Mall

Bellevue Square

It started as an outdoor shopping mall (bet you didn’t know that) was enclosed, expanded, and became one of the top 20 malls in the country.    The granddaddy of all arts fairs takes place in the parking garage of said mall. The art fair is a true winner.  The caliber of art is far above most art fairs, even if it’s in the mall garage.

From the second floor perch in Macy’s there’s a great view of the downtown skyline.  The Bellevue Art Museum is right across the street from the mall as is Lincoln Towers with its Westin.  Bellevue Place is just down the street.

You can also see some of the newer “kids on the block,” Washington Square, Bellevue Towers,

Downtown Bellevue Living

Bellevue Towers

and the City Center Plaza from the big window.   A walkway begins right across from the mall and can take you almost across downtown, which we ultimately did.

One of the most creative new buildings is the Elements complex. Not only is the exterior fascinating,

Element Building in Downtown Bellevue

Bellevue's Elements Building

if you have a chance to step inside the lobby, it’s quite interesting.

The tour is great in the sense that you are out seeing the city, but wisely takes advantage of many indoor sites for long conversations.  We got to see the view from Lincoln Tower and the City Center building.  Of course, it was pretty foggy out, so the stellar views of Lake Washington, Seattle, and Mt. Rainier were all behind the fog.

Fog in Bellevue

Foggy Highway 405 in Bellevue

Lots of great questions were answered by the guides and many of the participants, including me, added their share of information regarding downtown Bellevue.

Here are some of the questions that will be answered if you take this tour:

  • Where did the bricks come that were used to construct the Bellevue Library?
  • What country is planning a consulate in Bellevue?
  • What architectural firms were active in downtown Bellevue development?
  • Who are Bellevue’s 3 biggest employers?
  • What’s going to be built north of the Hyatt?
  • Who was Meydenbauer?
  • What was the first hi-rise in downtown Bellevue?
  • What’s the difference between curtain walls and window walls in skyscrapers? (This one was graciously answered by one of the participants, so that may not come up on your tour)
  • Whose wood sculptures can be found decorating some of the buildings and plazas in downtown Bellevue?  (one of my contributions, so it may or may not come up on your tour.
  • Where was the first Bellevue Art Museum?

You’ll have to take the tour to find out the answer to these questions. The tour is fun, engaging and a nice thing to do on a Saturday morning.  Let’s hope the day you take the tour you get to see some of the stellar views available from downtown Bellevue.