Written by Erica Anthony | December 06, 2021
Image “Thoughtful Couple” by Ketut Subiyanto, licensed under Pexels
 
It’s been a long buying process and finally the end is near! You are about to close on your new home. But what should you do immediately after closing?

• Set up mail forwarding to your new address: USPS Change of Address

• Change your address on all your automatic or recurring payments, car tabs, voter registration, etc

• Set up utilities if applicable: water, sewer, garbage, electricity, gas, propane, oil, internet/TV. Not sure of your utility companies?

• (If your house is on oil, check if your state offers oil tank insurance and if so, register ASAP)

• If you have pets, do a thorough sweep of the house and yard looking for anything left behind that might make them sick: rat poison, poisonous plants, etc.

• If you’re going to deep clean and/or paint the interior, do so before you move all your stuff in! Way easier. Includes stuff like shampooing carpets, refinishing hardwood floors, etc.

• If you need re-grout your shower tile or re-caulk your bathtub, you generally have to let it dry for at least 24 hours before you can use your shower or tub. Especially if you only have one shower, it’s easiest to do this before you move in and need to take a shower!

• Change out all the locks/install smart locks

• After you change the locks, give someone a spare key (friends, family, maybe a neighbor you trust) – just in case

• Change your garage code or any other entry code into your home

• Consider installing a locking mailbox

• Consider installing a fancy doorbell and/or security cameras

• Locate your electricity panel, main water shutoff, and gas shutoff so you know where they are in case you need to shut them off quickly

• Make sure the seller left behind things like garage door opener, any remote controls for lights, gas key valve, etc

• Test your sump pump (if you have one) – you can pour water into it to make sure it works. Better to try it out before you need it!

• Make sure you have working smoke and carbon monoxide detectors. If your detectors are more than 10 years old, replace them.

• Make sure you have fire extinguishers: at least one on each floor of your house, and especially have one in the kitchen and in the garage.

• Put water pans underneath the washer and hot water tank, with water alarms to detect any future leaks. If you’re worried about your basement or crawl space leaking, it might be a good idea to throw an alarm down there too. Hell, put water alarms under anything you are worried about leaking: dishwasher, sinks, etc. (Be careful about putting a pan under your washer if the pan might throw off its balance.)

• Create a binder to collect any relevant home information, like insurance, repair receipts, paint colors, appliance manuals, stuff like that. Super helpful in the future to have everything in one spot, especially when it’s time to sell. Maybe throw utility bills in there too so you can easily track your utility use over time.

• Start tackling regular home maintenance items right from the beginning

 
Also, I recommend that your first box should include paper towels, toilet paper, and a plunger (you never know when you’ll need it). And soap and a hand towel because if you needed the plunger…
  

Written by Erica Anthony | December 3, 2021
 
One of my buyers sent me this article yesterday: https://www.dailymail.co.uk/news/article-10262293/Family-loses-320-000-house-deposit-shocking-legal-loophole.html
 
This is a great example of an article using a scary and generally incorrect headline to get more views. A couple points:

1. Real estate is very location-specific. Standard forms and typical practices in different parts of the world (and even different parts of the same country) might look very different. It’s good to keep this in mind when reading about real estate transactions online.
2. A real estate contract is the result of negotiations between buyer and seller. The article says “The sellers removed a section in the contract’s fine print that a standard home sale agreement will usually contain, called a ‘subject to finance’ clause.” The buyers were aware of this change and decided to move forward with the purchase. Yes, their agent and lender (more on this below) should have educated the buyers about potential consequences. But this is not a “weird” detail in the contract or a “shocking legal loophole” as the article claims. Honestly, this is just standard real estate in 2021.
3. The buyers did not get preapproved by a lender before submitting the offer. This is their biggest mistake and how this entire situation could have been avoided. Even one conversation with a lender would have told them they could not buy this house.
4. A 10% deposit is abnormally large. Around Seattle, the standard contract limits a buyer’s earnest money loss to 5% of the purchase price (unless the buyer decides to release the money to the seller early).
5. The buyers regrettably lost money that was intended to go towards the downpayment on a new house. We can assume that money had been in savings. Afterwards, why did they have to max out credit cards and overdraw their bank accounts to stay afloat? That makes no sense to me. If that was the case, it sounds like they really had no business buying such an expensive house ($3.2M Australian dollars is roughly $2.26M US dollars).

 
The reality of the Seattle area market is that many buyers end up waiving the financing contingency. This is a common practice to win offers, especially recently. However, there are inherent risks associated with doing so and it’s important that a buyer understands them. A buyer should ALWAYS be pre-approved and, if possible, pre-underwritten by their lender before submitting an offer. They should discuss with their lender and agent to decide if waiving the financing contingency is a good offer strategy for them.

 
 

Written by Erica Anthony | October 30, 2019
Image “African American Man Throwing Paper Sheets” by Ketut Subiyanto, licensed under Pexels
 
You hear about contingencies all the time. Perhaps a friend talks about “waiving” a contingency to win his home. Or you have your eye on a listing online that goes from “Active” to “Contingent.” Maybe your parents are having a hard time in the market because they are “buying contingent.” What exactly does all this mean?
 
In the broadest sense, contingencies are conditions on the purchase contract. When you submit an offer on a home, it is subject to certain conditions. If these conditions are not satisfied, the contract may terminate. Most home buying contingencies protect the interests of the buyer. If something goes wrong, they give the buyer an opportunity to back out of the purchase without surrendering their earnest money. Each contingency has certain steps that must be taken, and each has a timeline associated with it.
 
When a buyer waives a contingency, it means that they are giving up the protections normally afforded to buyers under that contingency. Doing so might sound crazy, but in a competitive market, having fewer contingencies can make an offer much more appealing to the seller. If a buyer waived his financing contingency but there was a problem with his loan that prevented closing, the seller would keep his earnest money. If a buyer waived her inspection contingency, she would give up the ability perform an inspection, negotiate repairs, or use the inspection to back out of the purchase.

Ways buyers can potentially terminate the contract and retain their earnest money (not a comprehensive list):

 
Okay, so most offers contain contingencies. Why is it that some homes go “Pending” while other homes go “Contingent”? There is only one contingency that will trigger the “Contingent” status in the NWMLS, and that is the Buyer’s Sale of Property Contingency. An accepted offer with any other contingencies will have status “Pending Inspection” (if subject to the inspection contingency), “Pending Feasibility” (if subject to the feasibility contingency), or simply just “Pending” (it can still be subject to a number of contingencies in this case). See below for the NWMLS definitions for each of these statuses.
 
If you hear someone say that they are “buying contingent,” they are also talking specifically about the Buyer’s Sale of Property Contingency. It means that in order for them to buy a new house, they need to use money from selling their current house. If their current house fails to close, their new house will also fail to close. You can understand why a seller might be less excited about receiving an offer with this particular contingency.
 
As a buyer, take time to understand the buying process at the beginning of your search. Ask your real estate agent about the different contingencies and what they mean. Houses move quickly, so you want to set yourself up for success BEFORE it’s time to write an offer.
 
 

  

Written by Erica Anthony | October 30, 2019
Image “Money” by 401(K) 2012, licensed under Creative Commons

This is a conversation I have with every single buyer: What is earnest money? Earnest money is the money you lose if you back out of the transaction without a “good reason.” But it’s a little more complicated than that.

A buyer provides earnest money immediately after their offer is accepted (usually by way of personal check, cashier’s check, or wire transfer). Most often, this earnest money will be held by the escrow company during the course of the transaction. If the buyer defaults on the purchase contract, the seller is allowed to keep all or some of the earnest money (in most cases). As long as the transaction closes successfully, the earnest money deposit goes towards the buyer’s downpayment.
 
There is no required amount for earnest money, but in the Seattle area the convention is around 3-5% of the price. More earnest money makes for a stronger offer. I always tell my clients that as long as the buyer doesn’t foresee getting cold feet, a higher earnest money deposit is a good way to strengthen an offer without costing them more money in the end. Plus, even in the case of buyer default, our standard forms cap the amount of earnest money the seller can retain at 5% of the purchase price.
 
So, if a buyer backs out of a transaction, they automatically lose their earnest money? NO! There are a number of contingencies included in most offers that provide protection for buyers. If a buyer decides to terminate the purchase for a reason covered by a contingency, the buyer gets their earnest money back. It’s only if a buyer backs out of a transaction outside of a contingency that they risk losing it.

Different contingencies allow different ways for the buyer to terminate the purchase and retain their earnest money. Each contingency has certain steps a buyer must take, and most contingencies also have different time periods associated with them. Talk to your real estate agent to make sure you understand the contingencies available and which ones you want to include with your offer.
 
In highly competitive markets, there are all sorts of tricks that buyers might use to make their offers more competitive. This might include waiving contingencies, where a buyer chooses to give up some or all of their protections. Sometimes buyers include “nonrefundable earnest money” or have their earnest money automatically convert to a “nonrefundable deposit” after X number of days. This means that the earnest money is released to the seller before closing, and there is virtually no chance the buyer would get it back (with a few exceptions). Releasing the earnest money may seem risky for the buyer, but it gives the seller extra assurance the transaction will close. And if it still fails to close, then at least the seller is guaranteed some cash.
 
Regardless of how you choose to structure your offer, it’s important to know what earnest money is, why you need it, and the legal ramifications of terminating the purchase contract.
 
 

Written by Erica Anthony | August 20, 2018
  

Whether you are planning on buying or selling, choosing the right realtor will make a world of difference. But picking one doesn’t have to feel like a shot in the dark. For buyers, here are some points to consider while you make your decision, and an inside view of how your realtor can help (or harm) you behind the scenes.
 

Where to find a realtor

Referrals
Real estate is a people business, and building personal relationships is a big part of the job. It’s no surprise, then, that personal referrals from past clients is the most common way people find realtors. Ask your family, friends, and coworkers for recommendations on who they liked (or didn’t like!) working with.
 
Open Houses
Open houses aren’t only to sell the house on display. Many people don’t realize that realtors also hold open houses to meet potential clients (both buyers and sellers) who stop by. Going to open houses is an easy way to get face-to-face time with a handful of realtors. Just start talking to them and see who you click with.
 

What to look for in a realtor

Everyone knows to look for an experienced agent with strong negotiation skills, but that’s pretty much how all agents market themselves. When you are meeting realtors, there are some less obvious characteristics you should seek out. It will be impossible to learn all of these details about potential realtors, but it’s still good to have an idea of different aspects to consider.
 
They understand you.
At the beginning of the home buying process, you’ll be spending a lot of time with your realtor looking at houses. You want a realtor who understands not only what you want, but also why you want it. If they know your story, they will have a better idea of what properties to show you. Having a person on the lookout will always beat the systems that spit out automated recommendations. And having that same person by your side as you tour homes will help them understand the nuances of your home preferences. That’s why it’s important that your actual realtor is with you when you’re touring houses.
 
They communicate well with you.
Your realtor should be helpful and relaxed, never pushy. You need someone who will explain concepts clearly, because most buyers have a lot of questions throughout this process. Your realtor will advise you when you’re looking at houses, making offers, and throughout the closing process. They should be easy to get ahold of and respond promptly. Some realtors are strictly 9 to 5, but find someone who is flexible and can work around your schedule. Your realtor should be excited to work with you and never make you feel like a burden.
 
They communicate well with other agents.
You want a realtor who will talk to the listing agents for houses you like, building friendly rapport and keeping them informed of your interest. They should ask the right questions, like “What can my buyer include in our offer that’s most important to your sellers?” There are agents who submit offers without ever talking to the listing agent, and often that’s why they lose. In a multiple offer situation, the seller will only negotiate with the top few offers. If your realtor has built a good relationship with the listing agent, the listing agent might give you an opportunity to “come back with your highest and best offer” to keep you in the running.
 
They have a good reputation.
When you eventually submit an offer, price and terms are important… but your realtor’s reputation is also important. Your realtor and the listing agent will be working closely together throughout the closing process. Is your realtor sloppy? Do they follow through? Additionally, is your realtor represented by an established and respected company? If your realtor has a bad reputation or the listing agent does not like working with them or their company, that could hurt the chances of your offer being accepted. The same is true if your realtor is pushy, rude, egotistical, or negotiates callously. It’s important not to offend the listing agent or the seller; the seller may not want commission going to an agent they don’t like.
 
They are on top of everything.
Your realtor needs to be organized and detail-oriented. In the real estate world, even the smallest mistake could lose you large sums of money. When writing your offer, your realtor needs to use the proper forms, without any omissions or errors. This may seem obvious, but some agents struggle to write a “clean” offer. After your offer is accepted, your realtor will need to be able to keep track of multiple legal timelines. Missing a deadline has major consequences for you.
 
They are versatile.
Ideally, you want a realtor who has experience sitting on both sides of the negotiating table. A realtor who has worked with both buyers and sellers will have greater insight into what each side wants. They can negotiate with the listing agent using their past listing experience as a reference. They will be more attuned to the seller’s needs when writing and presenting your offer, making your offer more likely to be chosen.
 
They have support.
You want a realtor who is backed by a strong support team. As they say, no man is an island. A realtor working with an established company will have substantial resources at their fingertips, and office support staff to help ensure your smooth transaction. A company that has weathered the ups and downs of the real estate market, over the decades, can easily navigate changing market conditions. Additionally, companies that have been around for a while are generally more stable, with lower agent turnover.
 
 
Of course, it’s hard to deduce all of that from just a conversation. Go with your gut. Find someone you like, trust, and feel comfortable with. Many real estate relationships turn into friendships. After all, buying a house is a major milestone in your life. You will want a friend by your side.

 

Written by Erica Olavarria | July 23, 2018
Image “Seattle view from Queen Anne hill” by brewbrooks, licensed under Creative Commons
 
For years, people have been talking about the “hot seller’s market” when they describe Seattle’s real estate scene. Sellers often received multiple offers within days of their home hitting the market. Cash financing, waived contingencies, and escalation clauses (soaring hundreds of thousands of dollars over list price) were common occurrences. But if you’ve been keeping an eye on the Seattle market, you may have noticed a shift in the past few months… and that’s great news for disheartened buyers.
  
Seattle is coming into a more balanced market. Let’s examine what that means:

• Houses stay on the market longer.
  Houses selling in a week or less has been common in Seattle, but that’s not usually common in real estate!
• Offer review dates are passing with no offers.

  The “offer review date” was a consequence of our hot market. Houses now might be on the market for a couple weeks before they sell.
• Price reductions are more common.

  Once a house hasn’t sold for some period of time, the sellers may drop the price to attract more buyers. This didn’t happen very often at the peak of the market, but it is happening all over the place now.
• There are fewer multiple offer situations.

  Most houses that are selling right now have only a couple offers. Buyers no longer have to fight 20 other people for the same house.
• Buyers don’t have to waive contingencies.

  In the peak of the market, buyers often made their offers more competitive by waiving contingencies, which are put in place to protect the buyer. This means that their offers were not dependent on other factors, like inspecting the house or obtaining financing. Now with fewer offers coming in, buyers no longer feel pressure to give up these protections.
• Buyers can ask for more in their offer.
  Apart from maintaining the protections mentioned above, buyers can start asking for more in their offers. This could include requesting a credit towards closing costs, or asking to keep appliances the seller was planning on taking.
• Contingent offers are being accepted again.
  
A contingent offer is when the sale is dependent on the buyer selling his own home first. In the midst of the seller’s market, contingent offers didn’t have much weight. In this balanced market, buyers with equity tied up in their current home can feel confident writing contingent offers again.


 
Some additional reasons why now is a good time to be a buyer in Seattle:

• There is more inventory!
  
This is an artifact of houses taking longer to sell, and it gives buyers more houses to choose from. According to The Seattle Times, the total inventory of homes listed for sale has now grown for three straight months on a year-over-year basis.
• There is less competition!

  Many buyers are worn out from the peak of Seattle’s market, when they submitted countless offers only to face rejection after rejection. It takes some time for people to notice the shift and act on it.
• Interest rates are still low!

  At the time of writing this article, a quick internet search shows that the interest rate for a 30-year fixed loan is 4.625%. While interest rates have inched up ever so slightly in the past few years, they are still staggeringly low compared with historic rates going back decades.

 
The real estate market always dips a little bit in the summer, as people start enjoying graduation parties and summer vacations. However, the shift we are seeing in Seattle this summer is more than usual. Frustrated buyers who have taken a break from their home searching should start paying attention again.
 
Sellers should be paying attention, too. A shifting market doesn’t necessarily mean it’s a bad time to sell. In fact, many Seattle homeowners will find this balanced market more favorable. In a hot seller’s market, a homeowner will easily sell her existing home but may struggle to find a new house to buy. Now, everyone who was hesitant to enter the market as a buyer might finally pull the trigger on the sale of their own home.
 
If you are considering taking advantage of this new market, a good first step is to talk to a realtor. The home you’ve been dreaming about might be closer than you think!

 

Written by Erica Olavarria | May 14, 2018
Image “Money!” by Thomas Galvez, licensed under Creative Commons
   
It’s very important to find your lender and get pre-approved for a home loan before you start seriously looking at houses or submitting offers.
   
When you are talking to lenders, they will be able to explain many of the points below in finer detail. A good lender will guide you through the entire financing process, and work with your realtor to get your offer accepted and ensure a smooth transaction.

1. Find lenders to talk to

2. Talk to lenders

3. Pick your lender

4. Get pre-approved

5. Find your new home!