Barnett Associates Real Estate, LLC

So much change in a short period of Time

Toby Barnett — Wed, 01 Sep 2010 04:51:35 +0000

A few month ago, Mickie and I joined Keller Williams Realty NWRE LLC in Marysville Washington. Joining the KW team brought many changes and consolidation to our way of conducting real estate. With that said, the change has been a real plus to both of us along with an improved level of service to our clients.. As much as I would love to share the business perspective, I am compelled to touch on a personal journey my real estate career has taken.

Joining in February, I thought business would be a strictly real estate agent role but to my surprise that too changed. At the end of May, I caught wind of the Market Center Administrator position opening up in the office. Stemming from a business background and holding a similar role with Barnett Associates Real Estate, LLC it was a good fit to apply. To my amazement I was awarded the position and by doing so manage all the internal office operations and the market center’s financial reporting process. Having such responsibility is an eye opening experience.

Being the MCA for just over 3 months there has been much to learn. Besides the day-to-day operations, developing as a leader has been challenging to say the least. Leadership is something studied at UW but implementing the strategy is much harder than what is portrayed in the movies and digesting the most recent leadership training has the mind reeling.

Today, in Bothell, I was surrounded by some of the brightest minds in the Keller Williams Northwest Region and it gave me the opportunity to absorb focused leadership information. After this training I’ll fly to Austin for Mega Camp (Mega Camp is a high intensity KW training program – I’ll be attending MCA Leadership). With all this trainging I come back to thinking how to continue development of this website, I am missing Pubcon this year *sad face*.

Leadership to me is putting the right people in the right place so everyone builds success and long term goal achievement. In that idea sits an opportunity. I am currently building a blog team to bring new relative content regarding the Snohomish County real estate market and where it is going because being the MCA of a office of 80+ agents makes it challenging to stay active, relevant, and information a huge undertaking. The result of the idea is to bring on top quality agent bloggers from Keller Williams Marysville to deliver quality content in a timely manner – with me filling in from time-to-time.

I am excited to see the blog team develop and read their works because I am a firm believer that everyone can learn from others. Be it perspective or insight, the limit to learning in bound only by our own limitations.

Crabbing on the Puget Sound

Toby Barnett — Sat, 31 Jul 2010 21:27:33 +0000

Homebuyer Tax Credit Extension for Navy Families

Toby Barnett — Wed, 28 Apr 2010 23:22:52 +0000

As April 30, 2010 draws ever closer, many families across Snohomish County are scrambling to find a home, obtain mutual acceptance, and have the property record on or before June 30, 2010. This is not the case if you are in the Navy or another branch of the military.

Under the Worker, Home Ownership, and Business Assistance Act of 2009, which was extended November 6, 2009, eligible Navy families can wait till April 30, 2011 to become under contract on a property. That is great news for Navy personnel who is serving outside the outside the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

Additional Information from IRS.gov

Members of the military and certain other federal employees serving outside the U.S. have an extra year to buy a principal residence in the U.S. and qualify for the credit. Thus, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase. Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

In many cases, the credit repayment (recapture) requirement is waived for members of the uniformed services, members of the Foreign Service and employees of the intelligence community. This relief applies where a home is sold or stops being the taxpayer’s principal residence after Dec. 31, 2008, in connection with government orders received by the individual (or the individual’s spouse) for qualified official extended duty service. The credit is still allowable even if this happens during the year of purchase. Qualified official extended duty is any period of extended duty while serving at a place of duty at least 50 miles away from the taxpayer’s principal residence (whether inside or outside the U.S.) or while residing under government orders in government quarters. Extended duty is defined as any period of duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.

When Will the Real Estate Market Stabilize?

Toby Barnett — Tue, 13 Apr 2010 21:41:43 +0000

A friend of mine proposed a question to me about the real estate market: When will the real estate market turn around? Not satisfied with the short answer, in a few years, my friend asked for a little more detail.

Snohomish County, and the greater Seattle real estate market, has been one of the last metropolitan areas to feel the affects of the collapse. In very loose terms, the collapse started at the east coast and traveled west. While many market areas are showing signs of recovery, price stability and minor gains, Snohomish County is inundated with further pricing declines, short sales, and bank owned properties. Not a bad thing from a purchasing perspective but from the recovery standpoint it hampers the return to normal market.

Market recovery in Snohomish County is going to be driven locally and not by nationwide incentives likes the first time homebuyer tax credit – which expires at the end of the month with no forecast of renewal.

- Increase in local jobs and unemployment rate reduction
- Moving through the short sale and bank owned inventory
- Consumer confidence in home price stability

There are days when I feel I am beating a dead horse with ‘jobs’ being a solution but it’s a topic worth beating some more. If people are not employed the repercussions can be felt through the entire economy – don’t have to be a PHD in economics to understand that.

Here is where the Washington State government needs to ramp up its efforts. Elected officials need to make Washington State more attractive to business owners so they relocate their facilities here and hire locally – hint hint. By doing so, Washington State would see an influx of new employment opportunities that may not be centered on the aerospace industry or the technology sector (the State’s two leading industries). The County’s unemployment is still rising and as of January 2010 the rate is at 10.5%.

The next step, moving through the short sales and bank owned properties, is unfortunately just going to take time. How much time is dependent on how quickly people can obtain employment and then have the ability to purchase these homes. On average, there are 31 Notices of Trustee Sale filed per day since the first of the year and there is no definite answer on how many properties will be foreclosed on over the next 2 years. If the banks are unable to liquidate their assets due to slow economic recovery then the economic uncertainty will persist.

Finally, consumer confidence has to return to the real estate market. The DOW recently hit 11,000 but I feel it is going to be short lived – though the DOW is steadily proving me wrong – and not translate into local recovery though it may help. Experiencing a depression as we have, my educated guess leads me to believe consumers are, and will continue, basing real estate purchasing decisions on their family’s life cycle and financial situation more so than speculation.

Recovery is process and not a result of a single action. The multitude of factors going into the recovery are going to take diligence, hard work, and pulling ourselves up by the boot straps. Gone are the days of rapid decisions based on escalating housing prices and here are the days of planned and thought out financial decisions.

Poll: Has the Snohomish County Real Estate Market Hit Bottom?

Toby Barnett — Tue, 06 Apr 2010 21:53:06 +0000

Do you think the housing market has hit bottom?trends

In a poll released today by Fannie Mae, nearly 2/3 of Americans say right now is a good time to purchase a home and the bottom has arrived. With that said, Snohomish County is still experiencing high volumes of inventory and ever increasing amounts of short sales and bank owned properties.

Residential Market Snapshot for 4/6/2010

– 308 Active Bank Owned Properties on the Market
– 727 Active Short Sale Properties on the Market
– 4,318 Total Active Properties on the Market
– 25% of inventory is either Banked Owned or a Short Sale

This morning, I received the Snohomish County Notice of Trustee Sale report and 87 more properties are heading to auction on June 25, 2010 and will become available for sale sometime in July or August. Even though the national real estate market trend is showing stabilization and/or growth, the greater Snohomish County area has yet to feel any relief.

Price is another factor hindering the County’s recovery and it is mostly due to the competitive nature of selling bank owned and short sale properties. To stay competitive, and achieve a sale, it is imperative that property owners price underneath competing properties. As a result, the properties are more desirable but it further drives market prices down. Right now, Snohomish County is experiencing 0.5% – 1.0% decrease in property values per month. In dollars and cents, a property listed for $295,000 (that isn’t selling) is loosing $1,475 – $2,950 per month when it is sitting on the market.

So has the Snohomish County real estate market hit bottom and now is a great time to buy? Or, will the best deals be actualized in the coming summer months?

Buying Bank Owned Properties and What You Should Know

Toby Barnett — Thu, 01 Apr 2010 19:30:13 +0000

Yesterday, I attended a bank owned workshop presented by a top REO agent from San Diego with some REO colleagues of mine. As a REALTOR® who represents buyers on bank owned properties there have been many times where I have been more than frustrated with the banks. This workshop help shed some light on the process for submitting purchase and sale agreements and what to expect through the process but I doubt it will elevate buyer frustrations.

Things to Know When Buying Bank Owned Homes

– Pre-Approval Process
– As-Is Clause
– Highest & Best Offer
– Communication & Response Times

Pre-Approval Process

It is common when purchasing a property to have proof of funds and/or a pre-approval letter provided with a purchase and sale. This has not changed. However, who the pre-approval letter has been issued by has. In the previous post, Wells Fargo and Bank of America have dramatically increased the number of originated loans and I correlate that increase to buyers having to be pre-approved through them just to submit an offer on one of their properties. Having buyers submit for a pre-approval letter has caused a lot of frustration for buyers due to the additional step required and concerns over how it affects their credit score. So far, I have not seen the additional pre-approval affect credit scores or ability to obtain financing.

As-Is Clause

The most common verbiage used in a banked owed property’s addendum and advertising remarks is “as-is”. “As-is” means just that and the banks do not and will not take any responsibility for the condition the property is in, unless the property defects are called in the lender’s appraisal. In a normal transaction, a buyer will conduct a home inspection (Form 35) and then after ask for seller concessions in the inspection response (Form 35R). In the case of a bank owned property, the seller will not fix or give concessions to the buyer. Be very aware of this point as renegotiating the original contract could hinder or prevent a successful purchase.

Recommendation: Conduct a pre-offer inspection and become aware of any defects. This way, the requested work orders can be written into the purchase and sale agreement and avoid any renegotiations.

Highest and Best Offer

It has become standard practice by listing agents of bank owned properties not tell the parties involved what other competing offers are; they just say “present your highest and best offer”. To me this is a poor practice and does nothing to facilitate the sale of the property.

The result is ambiguity. As a buyer’s agent, I like the most information as possible so I can provide the best consulting services for my clients. With having no information, other than “present your highest and best”, there is nothing to ride with. If the numbers where known to the buyer’s agents then it would allow for the buyers to either stay in the transaction by raising their offer or bowing out and not wasting time on the transaction.

Communication and Response Times

Communication and response times are another area in which buyer’s agents have to be aware of. In a typical transaction communication happens between buyer’s and seller’s agent and their respective clients and response times are short – making for a speedy and informed transaction. With bank owned properties there are still the agents involved but one represented party is an entity (even though there is a person managing the file). This poses unique communication challenges and delayed response times.

The asset manager for the bank is usually working on 300 – 500 files at one given time and closing 10 -15 files per month. Not a large volume considering how many files the asset managers are working on. This leads me to believe that asset managers, as well as REO listing agents, want to try to have the smoothest transaction possible and why REO listing agents can be so hard on buyer’s agents. In addition, the amount of files on asset manager’s desk, at any given time, increases the amount of time between responses, if a response comes at all. Just be prepared.

Managing Buyer Expectations

From the agent’s standpoint this could be one of the most important aspects on a bank owned property purchase. As we have seen, the purchase of a bank owned property has some interesting quarks from normal transaction and knowing them up front will help the buyer’s understand what to expect moving forward. It is important for buyers to understand the process, even though it’s similar, and to expect that they may not be in the driver’s seat.

Snohomish County Mortgage Lending Report for February 2010

Toby Barnett — Wed, 31 Mar 2010 00:07:00 +0000

Since the last lender report in January 2009, the national lenders, Wells Fargo and Bank of America, have further increased their market share over local and less well recognized lenders. Wells Fargo and Bank of America issued 43% of all the loans in Snohomish County last month and with the next closest lender, JP Morgan Chase Bank, only issuing 6.7% of loans. A substantial divide but is it just because these companies are larger national brands or is there more to it?

Yes, I do believe brand recognition plays a vital big role in sales volume but another aspect is these two brands have a lot of toxic assets to liquidate. Originating loans and having a lot of properties to sell is directly related to an emerging real estate trend – in order to submit a purchase and sale agreement on one of their properties, a buyer must first be pre-approved by the bank holding the property. In all the bank owned purchases I’ve represented clients in, the buyer was required to provide an pre-approval letter from that bank 100% of the time – no doubt frustrating buyers. This leads me to believe that some buyers where and are willing to use these larger banks because buyers perceived it may make financing the property easier. I am not a fan of this emerging trend and fortunately buyers are not required to use that lender.

Also, in January 2009, Wells Fargo held the #1 spot with 174 loans originated and 13 months later that figure has increased 164% to 289. Then in the same time period, Bank of America has shown a 300% increase in loans originated and moving up from the 8th ranked spot to the 2nd. Coincidence? I think not.

Another significant insight is the decline of the originated loans by the smaller to medium sized lender business segment. The average number of loans originated in January 2009 for the subsequent twenty eight lenders was 48 and in February 2010 the number has adjusted to 23. I won’t speculate as to the reason for the decline but I do know that the smaller lenders, like Frontier Bank, do not require buyers to be pre-approved through their institution to submit an offer on their properties – though this may change in the future.

Top 30 Lenders in Snohomish County

Rank	Lender Name	# of Loans	Amount of Dollars
1	Wells Fargo	289	$73,159,000
2	Bank of America	214	$56,137,000
3	JP Morgan Chase Bank	78	$19,747,000
4	Golf Savings Bank	55	$15,150,000
5	Boeing Employees Credit Union	49	$10,376,000
6	Mortgage Advisory Group	47	$11,540,000
7	Cobalt Mortgage	43	$12,487,000
8	Guild Mortgage	41	$10,126,000
9	MetLife Home Loans	28	$7,466,000
10	US Bank	26	$6,528,000
11	Provident Funding	25	$5,859,000
12	Windermere Mortgage	25	$5,792,000
13	HomeStreet Bank	22	$5,724,000
14	Quicken Loans	22	$5,055,000
15	EverBank Federal Savings Bank	19	$5,292,000
16	Citi Mortgage	17	$3,513,000
17	USAA Federal Savings Bank	16	$4,303,000
18	Prime Lending	13	$3,452,000
19	Axia Financial	13	$3,180,000
20	Ally Bank	13	$2,750,000
21	Reliance Mortgage	12	$3,440,000
22	City Bank	11	$3,190,000
23	Legacy Group Lending	11	$3,076,000
24	TMBG	11	$3,026,000
25	Frontier Bank	11	$2,835,000
26	M&T Bank	11	$2,281,000
27	Mortgage Masters	10	$2,579,000
28	Cascade Bank	9	$2,855,000
29	Flagstar Bank	9	$2,677,000
30	Network Mortgage Services	9	$2,609,000
Totals		1159	$269,204,000

Top 10 Refinance Lenders in Snohomish County

Rank	Lender Name	# of Loans	Amount of Dollars
1	Wells Fargo Bank	253	$63,093,000
2	Bank of America	174	$44,207,000
3	JP Morgan Chase Bank	74	$18,857,000
4	Boeing Employees Credit Union	33	$6,047,000
5	US Bank	23	$5,573,000
6	Provident Funding	23	$5,410,000
7	Cobalt Mortgage	21	$6,118,000
8	Quicken Loans	20	$4,587,000
9	Mortgage Advisory Group	18	$5,025,000
10	Golf Savings Bank	17	$5,403,000
Totals		656	$164,320,000

Challenges When Purchasing Vacant and Raw Land

Toby Barnett — Fri, 26 Mar 2010 23:37:22 +0000

Recently, I have been more involved with people looking to purchase vacant land in Snohomish County for recreational uses or for a custom home.

As residents of Snohomish County know, the topography allows for a variety of different types of settings – river and lake front, mountain and territorial views, old growth forests and protected growth areas are just some attributes buyers are looking for. Each of these property types pose unique challenges.

Challenges of Vacant Land

– Determine how much of the land is usable through an environmental impact study. It is easier to spend a few hundred dollars to conduct a study then it is to purchase a property that can’t be used as intended.
– Has the property been tested (perked) to see if it can have a septic system installed (only if the property cannot be attached to city sewer)?
– Is there access to potable water on the property from either a well, share water source, or through city hook ups?
– Will the property require excavation to construct a access area?
– What are all the permits required to take a piece of raw land and make it livable, and most off, legal? In addition, what are all the costs associated with the many permits required?

Recommendations

– Take some time to walk the property and get a feel for the topography, wetness or dryness of the soil, and how much brush/trees are on the property.
– Visit the Snohomish County Planning & Development’s office for questions on properties and use their online resources (personal favorites: boundary line maps, planning & development homepage, assistance bulletins).

Here is an example from the other day while out showing land.

The subject property was located on the South Fork of the Stillaguamish River, outside Arlington, and from the online pictures the parcel looked like it was a gorgeous river front. But online pictures can be deceiving. Part of the problem with online pictures is advertising itself. Real estate agents do a great job of photographing a property to make it appear as good as it can.

The downside is the pictures may not truly represent the condition of the property. With a slight change of camera angle it is easy to avoid marshy sections and to skip out on other not so desirable areas.

Vacant and raw land has its challenges but if you are wanting to take the time and energy to go through the whole process the reward could feel like another world.

Name Washington’s New 64 Car Passenger Ferry

Toby Barnett — Tue, 09 Mar 2010 23:01:31 +0000

Many things can come from social networking and this gem comes from WSDOT’s Twitter status update. After reading the Tweet, my mind began to noodle over what would make a good name for Washington’s latest ferry. So far the brain hasn’t come up with anything worth mentioning and good thing the submission continues through April 30, 2010 to give us non creative minds a fair chance.

Factoid: “Of the 23 vessels currently operating in Puget Sound, 21 have names reflecting the state’s tribal heritage. The other two are named the Rhododendron and the Evergreen State”.

Naming Guidelines According to WSDOT

1. Names for ferries should carry statewide significance and represent our state’s image and culture.
2. Specifically, names should represent such things as: state adopted symbols, tribal names, names of bodies of water, geographic locations, cities, counties, or relate to nautical heritage, etc.
3. Consideration will be given to the consistency with existing WSF fleet names.
4. Names should have broad familiarity, be easy to pronounce, are non-offensive and meet ethical standards.
5. Names with commercial overtones or names honoring or commemorating individuals should be avoided, but will be considered upon very careful review. In these cases, the following guidelines will apply:
a. The individual must be deceased for at least 20 years.
b. They must have enduring fame and have played a significant historical role in the region and/or state.

According to the WSDOT Ferry Naming page there are current two submissions — the Salish and Squi Qui. Though the majority of the ferry fleet is named after Washington’s rich tribal history, the naming is open to include anything related to Washington.

Current Ferry Names

Cathlamet	Chelan	Elwha	Evergreen State	Hiyu
Hyak	Issaquah	Kalama	Kaleetan	Kitsap
Kittitas	Klahowya	Puyallup	Rhododendron	Sealth
Skagit	Spokane	Steilacoom II	Tacoma	Tillikum
Walla Walla	Wenatchee	Yakima

How to Sumbit

Submissions can be emailed to transc@wsdot.wa.gov and will go in front of the three Commissioners: Bob Distler, Richard Ford, and Dan O’Neal. More information regarding vessel naming submission can be found on the WSDOT’s Naming Policy and Frequently Asked Questions pdfs.

Purchasing Short Sales & Bank Owned: Deals or Headaches?

Toby Barnett — Tue, 09 Mar 2010 00:46:02 +0000

Bank owned and short sales properties dominate the Snohomish County real estate market and it’s no surprise that many buyers are actively searching for these types of properties. But are these properties the bargain of the century or are they more trouble than they’re worth?

Being an active agent, I can contest to both scenarios being true. Great homes with no home inspection issues and excellent buys that require sweat equity. In 2009, one of my clients purchased a short sale and by doing so he received an excellent deal on a home in Mill Creek. This home is situated in a established neighborhood with few fixer uppers left – this home seemed to be the troubled home on the block. On the flip side, a few other 2009 clients purchased bank owned homes in Marysville that where just a few years old and required little to no work.

The Fixer Upper

The majority of the short sales and banked properties fall into this category because the owners, or previous owners, where going through financial hardship and as a result regular home maintenance was neglected. This is not uncommon and, in my opinion, should be expected. My Mill Creek client purchased the home because it needed an injection of blood and sweat to recapture the brilliance the home once had. But this may not always be the case. When showing to clients I come across many homes that are rapidly approaching the point of no return. The homes are in such poor condition that it is highly recommended to have additional inspections, pest and mold etc, just to see if the purchase would even be worth it, envision The Money Pit with Tom Hanks and Shelley Long (1986). Both scenarios require a heavy investment of money, time and oodles of patients. When buying the fixer upper make sure you know what you’re getting into and ready for a lengthy hands on home.

The Great Deal

Some short sales and bank owned properties fall into The Great Deal category. Again, in 2009 I worked with a family to purchase a short sale in Aspen. The home was just a few years old and looked like it never had been occupied. It was outfitted with every known functional and cosmetic upgrade and was a classic example of Northwest Architecture. Another two buyers, also in 2009, purchased bank owned homes in Lake Stevens and Marysville that where built in 2006 and needed zero to a little touch up work at extremely low prices. These buyers took their time watching the market, viewing many homes and waited for that right home to appear. Both parties had goals of putting the least amount of money and time into the home post purchase. This has left them time to take weekend vacations instead of working on their home.

The property condition spectrum for short sales and banked owned properties can swing from “like new” to “I need a shower when I leave” so just be very aware what you are purchasing. As of March 8, 2010 there are 724 short sales and 339 bank owned properties in Snohomish County with those numbers expecting to rise in the next few months. So if you’re looking at banked owned or short sale properties there are no shortages.

Related Page: Bank Owned Property Search