A PUBLICATION OF THE CAPITAL CITY WEEKLY
SOUTHEAST ALASKA
JUNE 2017
ON THE COVER
2803 Marsha Avenue Offered by Sarah Hines, Exit Realty Pg. 9
Beautiful seascapes with boats and houses on tiny forested islands are abundant in Sitka, Alaska PHOTO BY CHAD ZUBER
The Southeast Alaska Home & Real Estate Guide is a publication of the Capital City Weekly, a division of Morris Communications www.capitalcityweekly.com 3100 Channel Drive Juneau, AK 99801 907-523-2250 Fax 907-789-9097
General Manager Brian Naplachowski, brian.naplachowski@juneauempire.com Designer Matthew Wilkinson, matthew.wilkinson@juneauempire.com Advertising Director Kathryn Fritz, kathryn.fritz@juneauempire.com Distribution Manager Jack Marshall, jack.marshall@capweek.com
TABLE OF CONTENTS On The Cover: Photo by Hadassah Nelson 3 Coldwell Banker: Gwen Place 4 Ricker Real Estate Consulting AlaskaUSA Mortgage: Minerva Carandang Platinum Real Estate Valley Auto Parts 5 Ask a Broker 6 Selling your Home: 5 Modern Strategies Quick-Sell Strategies. 7 AlaskaUSA Mortgage 8 Home Investors: The REIT Time To Invest In Real Estate 9
Exit Realty
10 The Housing Market: High Times for the Not-So New Home 11 First Bank Mortgage 12 Cornerstone Homelending Try this on the Grill 13 Trending: Pitfalls of Procrastination 14 Curb Appeal: Going Green 15 Residential Mortgage State Farm: Malia Hayward 16 Southeast Alaska Real Estate: Karen Wright
ADVERTISE WITH US! Call Kathryn 523-2274
4
June 2017
ASK A BROKER By Peter G. Miller QUESTION:
We listed our home for sale. The asking price is $429,900. It turns out that a lot of people are interested in the property. Should we increase the asking price? ANSWER:
Everyone is familiar with real estate listings that say “new price” or “fresh price” — expressions that tend to mean a lower asking price — something designed to get more buyers in the door. However, you’ve got buyers, what you don’t have is a written offer with the price and terms you want. Let’s imagine that you go to a grocery store and there’s a big sign that says “oranges on sale this week” – you might have more interest in buying oranges if you know the prices are lower. If the sign said, “get your oranges today, prices are up” you might not be in such a hurry. Unless you have a listing agreement that says otherwise, and since there is no full-price offer on the table from a ready, willing and able buyer, you can certainly increase your asking price. If a local real estate broker lists the property, you should speak with the broker and first get his or her advice. Many brokers – but not all – will remember the last time they bought oranges and suggest that increasing your price will reduce buyer interest and maybe scare off potential purchasers. In the end, the decision is up to you. However, since you have a lot of people looking at the property, the best strategy may well be to do nothing. What you want are multiple offers and a bidding war that will drive offers above the listing price. With a bidding war you’ll have leverage and a better
chance to find the offer you want. We must assume that the original listing price reflects the value that seemed reasonable when the property was listed based on recent, local, comparable sales. The listing number might be a little high or a little low because we all see value differently, but basically the offering price must be reasonable otherwise you would not have agreed to it. This raises the question of what
happens if you get a really good offer, an offer far above the asking price. Will the buyer pay cash? If not financing will be needed and the property will be appraised. The lender will base the buyer’s loan amount on the sale price or the appraised value – whichever is less. If the appraisal is less than the sale price either the buyer will have to come up with more cash, the sale price will have to be reduced, or the deal will fall through.
peter@ctwfeatures.com Peter G. Miller is author of “The Common-Sense Mortgage.'
75
that said they’d use a % oflocalMillennials real estate agent instead of an online agent to buy a home.
Source: Survey of 2,050 Americans aged 18 to 34 conducted by CentSai, a financial wellness community.
www.capitalcityweekly.com
5
SELLING YOUR HOME By Madhusmita Bora
Smartphone photos no longer make the cut: 4
6
M O D E R N
Q U I C K - S E L L
S T R A T E G I E S
➤ ONLINE PRESENCE
➤ QUALITY PHOTOS
➤ VIRTUAL TOURS
➤ TAKE IT TO YOUTUBE
“The No. 1 strategy (for selling fast) is good Internet exposure,” says Elizabeth Weintraub, a Sacramento-area broker who writes on real estate expert for about.com. “People who keep their homes a secret hurt their chances of getting the highest price. You want to be everywhere online.” Agents need to focus on their online debut, says Martha Webb, an author and producer of the “Certified Home Marketing Specialist” course. “You get about 9 seconds to get people’s attention.”
Smartphone photos no longer make the cut. Agents are increasingly relying on professional photographers and high-tech equipment to shoot pictures of homes on sale. “You need to take lots of photos and choose a few that are emotionally appealing,” Weintraub says. Webb recommends developing a story through the photos. “That’s your first showing,” she says. “The biggest task is to prepare the home for compelling photography.”
Many agents and brokerage firms are offering virtual tours to nab buyers. At Redfin, a national real-estate brokerage firm, agents use software that gives buyers a high resolution, interactive tour inside a home. It helps people who are looking for a specific layout. If they don’t like what they see virtually, it saves them a trip to the property while also saving the sellers time.
Many agents are relying on videos for storytelling. “The key is to have a well-produced video with good sound and crisp clear visuals,” Webb says. “Think how you can bring emotion to it.” Her advice is to hire a professional and to keep the videos short. Sometimes the owner could get in front of the camera and talk about the home. “Tell a story,” she says. “Don’t just stand there and say the home has two bedrooms, fabulous dining room – they already know that.”
June 2017
A NEW HOME IS A BLANK CANVAS Connect with a home loan expert today
We’re ready to go to work for you!
Mac Carandang NMLS #203501
Laurie Gardner NMLS #204060
Charly Musielak NMLS #191337
License #AK157293 | Washington Consumer Loan Company License #CL-157293 | Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License #4131067
Southeast Alaska 8390 Airport Blvd., Ste. 102 Juneau, AK 99801 (907) 796-1206
People you know. A name you trust.
Apply for a loan online at alaskausamortgage.com
By the Numbers
8.7
Median number of years the average homeowner has owner their home in 2016, which has more than doubled since 2006. Source: Moody's Analytics
www.capitalcityweekly.com
1.34
%
81
%
Percentage of home equity loans that were severely delinquent in 2016 — down from 1.49 percent in 2015.
Percentage of people that say animalrelated considerations factor into where they choose to live.
Source: Equifax
Source: National Association of Realtors Remodeling Impact: Animals in Homes survey
7
HOME INVESTORS By Erik J. Martin
why now might be the
time to invest in real estate
Purchasing a primary residence and buying a self-managed rental property aren’t the only ways to capitalize on real estate as an investment. You can also put your money into a fund — called a real estate investment trust (REIT) — that invests in properties and loans and which may prove to be a safer and higher-yielding option than flipping a home or collecting rent as a landlord. REITs are publicly traded closed-end investment funds that are traded similarly to shares of stock on major stock exchanges, including the New York Stock Exchange, which trades190 different REITs. The two main types of REITs are: (1) equity REITS, which purchase commercial, residential or industrial real estate properties, wherein income is generated primarily from rental of the properties and sales of properties that have increased in value; and (2) mortgage REITs, which provide original mortgage loans to borrowers or purchase existing loans or mortgage-backed securities and which generate income from interest earned on these loans. “REITs were created as a special entity that allows investors to have exposure to real estate assets and enjoying the benefits associated with them without substantial capital investment,” says Vivek Sah, associate professor of real estate at the University of San Diego. “They are a great vehicle for 8
steady cash flow, which makes them particularly attractive for people planning for their retirement.” Robert Johnson, president/CEO of The American College of Financial Services in Bryn Mawr, Pa., says REITs offer other advantages to investors, too, including diversification. “REITs invest in a variety of properties, whereas direct real estate investing is often limited to a small number of properties,” Johnson says. “Also, REITs are very liquid investments compared to direct real estate investing that can involve significant costs in terms of time and money.” What’s more, REIT investors get paid dividends (distributed quarterly, semi-annually or annually), they benefit from capital gains as the fund appreciates over time, and the properties within a REIT’s portfolio are supervised by asset and property management professionals. The downside of this arrangement is that “the investor has relatively little control over the REIT’s activities,” says Andrew Maguire, an attorney at Devon, Pa.-based McCausland Keen + Buckman, who represent various REITs. “Also, like any other publicly traded company, the value of any public REIT’s shares can go down.” Yet the performance of some REITs in recent years has been impressive: June 2017
Johnson and research colleagues found that, from 1972 through 2013, during rising interest rate environments, equity REITs produced a 9.8 percent rate of return versus 8.5 percent for the S&P 500 over the same span. Mortgage REITs didn’t fare quite as well over that period, losing 4.1 percent. “Equity REITs have performed very well in rising rate environments. With interest rates expected to rise in the near future, equity REITs are an asset class that investors should be considering at this time,” says Johnson, who suggests holding no more than 10 percent of your total portfolio in REITs. He also cautions against dabbling in private REITs not traded on exchanges. Arturo Neto, founder and chief investment strategist for Orenda Partners LLC in Coral Gables, Fla., recommends taking a closer look at REITs that invest in hotels, student housing and self-storage asset classes, “because these property types have shorter leases and can adjust prices faster in an inflationary environment or when interest rates rise.” Before jumping into the REIT investment pool, be prepared to do your
www.capitalcityweekly.com
homework. “Be sure to educate yourself on the different types of properties and how each performs in different market environments. Targeting a fund with the highest-paying dividend isn’t usually the best strategy. The company has to be fundamentally sound to be able to continue to pay out a nice dividend,” Neto says. Sah recommends evaluating REITs based on several important criteria, including property type/asset class (for example, office, retail, hotel, apartment, etc.), dividend history, dividend payout ratio (as a percentage of funds flow from operations, or FFO), quality of management and portfolio of properties (including economic strength of the cities where they are located). “REITs are very transparent entities and easy to read, study and analyze compared to non-REIT funds, and a lot of information about their operations can easily be obtained from their annual reports and balance sheets,” Sah says.
9
THE HOUSING MARKET By Erik J. Martin
High Times for the Not-So New Existing home sales have hit a 10-year high. Here’s why and how long the trend may continue If you’re a homeowner that survived the Great Recession and had to wait patiently for a real estate rebound before thinking about selling your digs, you probably want to stop thinking and start acting – fast. That’s because sales of existing homes are enjoying their highest pace in more than a decade, rising 4.4 percent in March, based on the most recent National Association of Realtors data. What’s more, the median resale home price (among single-family homes, townhomes, condos and co-ops) hit $236,400 in March, up from $221,400 (6.8 percent) a year earlier, representing the 61st straight month of year-over-year increases. Average days on the market are dropping, too: for-sale properties commonly remained on the market for 34 days in March, down from 45 days a month earlier. The reasons behind hot sales of resale residences are multifold, say the experts. “Buyers are motivated to act before interest rates move up. Plus, a surge in the equities market has helped push consumer confidence nearly 10 points higher since October 2016, creating more optimism in the market,” says Steve Hovland, research director with HomeUnion, Irvine, Calif. “Finally, new construction home prices are significantly higher than existing home prices nowadays, and that wide gap in prices has forced many buyers into existing homes.” Brian Bair, a real estate broker and co-founder 10
of OfferPad, a Gilbert, Ariz.-based company that buys homes, says Generation Y is also contributing to this trend. “We’re seeing an upswing in first-time homebuyers entering the market, particularly among millennials, which has caused existing inventory to move relatively quickly once it hits the market,” Bair says. “Also, for years we saw money poured into the construction of new rental properties while money spent on housing starts declined. This naturally decreased the supply of new homes, which has caused the resale market to flourish.” Hovland believes the currently robust seller’s market should persist past the summer 2017 buying season, after which time “more normalcy will return to the housing market. Rising interest rates and prices will move more buyers to the sidelines, while job growth will be concentrated in many markets where home prices are already out of reach for many first-time buyers,” he says. On the other hand, Mike Manczuk, realtor with Team Zen Real Estate in South Jordan, Utah, says strong existing home sales at high prices may continue a lot longer than expected. “In certain markets located in strong economic areas, this trend should last for at least a few more years,” says Manczuk, who notes that good times for sellers can’t last forever. “The real estate market is cyclical.” Ask John Matthews, managing broker for Baird & Warner in Oak Park, Ill., and he’ll tell you that
sellers may want to strike now while the iron is hot. “Know the real value of your real estate, determine how real estate plays into your long term financial or living goals and then make the determination if it is the right time to sell. A real estate professional would be a great asset in determining this,” Matthews says. In addition, “think about having your next home ready to move into before you close on the sale of your current home and whether you need more predictability in terms of timing the sale of your home,” Bair says. “It’s important to evaluate how you want the transaction to go and what you have the time and patience for.” House hunters, meanwhile, need to have their ducks in a row and be speedy in their decisionmaking. “Buyers will be faced with significant competition over the next few months,” Hovland says. “To be successful, they’ll need to be prequalified, ready to act quickly and move on fast from disappointments.” Finally, don’t get discouraged if a negotiation falls through. “Buyers shouldn’t settle for a property that doesn’t feel right. There are still deals out there,” Bair says. “Figure out what your bottom line is, and don’t settle for less.”
June 2017
www.capitalcityweekly.com
11
TRY THIS ON THE GRILL
Orange-Ginger Baby Back Ribs INGREDIENTS: 5 pounds baby back ribs SAUCE: 1 cup ketchup 1/2 cup hoisin sauce 4 tablespoons soy sauce 2 tablespoons grainy mustard 3 tablespoons honey 2 tablespoons orange juice 2 tablespoons Asian chili sauce 1 tablespoon Worcestershire sauce 4 cloves garlic, minced 1 tablespoon ginger Grated zest of an orange Salt and pepper
Gather around the grill this Fathers' Day - June 18th It's all about remembering Dad's favorites on Father's Day. While everyone relaxes and enjoys the serenity of an Alaskan Summer, these ribs will be slowly cooking to mouth-watering perfection. 12
DIRECTIONS: Preheat the grill to medium and turn down to low. Prepare ribs for grilling by removing the membrane from the underside of the ribs. Prepare several foil envelopes and place 2 strips of ribs into each envelope, with 1/4 cup of water and seal tightly. Cook for 2 to 21/2 hours on low (300*F) with the lid closed. Check the thermometer on the front of the grill lid frequently and adjust the cooking temperature accordingly.This may require turning one or two burners off and cooking indirectly. To prepare the sauce: Combine all ingredients in a saucepan and set aside until the ribs are ready to remove from the foil. Gently heat the sauce on the side burner for 10 to 15 minutes before using. Carefully remove the ribs from the foil and place on grids. Baste generously with sauce, and grill for 10 minutes per side, leaving the lid open, turning several times, and basting with sauce after each turn. Heat remaining sauce to a boil and then allow it to simmer for 5 to 10 minutes. Serve on the side as a dipping sauce.
June 2017
TRENDING By Erik J. Martin
Pitfalls of Buyers aren’t the only ones who can have remorse — sellers can feel the pangs of compunction, too, as evidenced by the findings of a recent study that indicates how real estate-related delays can lead to disappointments. A Zillow Group Report on Consumer Housing Trends survey report reveals that the top regrets among home buyer and seller respondents were not beginning their home search punctually (indicated by 28 percent of buyers) and not prepping their home to sell early enough (as voted by 30 percent of sellers). With homes for sale in shorter supply during this spring buying season, these findings should serve as a cautionary tale to home hunters and sellers alike that it’s important to be prepared and get a head start on your competition, say the experts. “This spring home buying season may be one of the most competitive in recent history, due to tight inventory of for-sale homes and rising home prices. This means it’s more important than ever for home shoppers and sellers to take the time to be more strategic in their approaches,” says Jeremy Wacksman, CMO for Zillow in Seattle. Jennifer Shannon, broker with CrestEdge Real Estate LLC in Dallas, believes home hunters often procrastinate because they don’t realize how many multiple offer situations they could face, and how long the process can be to find the home that works for them. “Buyers tend to be very particular in what they want in a home, and it often takes looking at a lot of homes before they start to see that they may have to be flexible on some of their requirements,” Shannon says. Sellers, on the other hand, often postpone the steps required to sell quicker and at a higher price because of uncertainty and budget. “Repairs or updates take time, disrupt the dayto-day, require planning, and cost money. Plus, some sellers are reluctant to put money into a home they plan to sell,” Shaun Hamman, executive vice president of specialized lending for Parsippany, N.J.-based eLEND, says. Denise Supplee, Realtor with Long & Foster in Doylestown, Pa., echoes that sentiment. “Selling a home is a huge undertaking, and www.capitalcityweekly.com www.capitalcityweekly.com
human nature often has us retreat when we become beleaguered by a mountain of a task,” Supplee says. To claim a desired home over rival shoppers and get a better deal, it’s important for buyers to get the ball rolling early – ideally well before the spring market begins. “Have financial statements, proof of funds and references available to demonstrate financial strength to lenders. And get your professional team lined up in advance — including an agent, lender, and real estate attorney,” says Michael Shapot, associate broker for Keller Williams Realty in New York City. “Also, be flexible when it comes to wants, needs and location in a competitive market. Prepare to make a strong offer up front or at least have a negotiating strategy in place in advance.” Additionally, count on being decisive and quick when opportunity calls. “When a property enters the market and is perfect for a particular buyer, you must move fast,” Supplee says. For sellers to best capitalize on current market conditions, first determine an ideal listing timetable. “The most important thing is to know your market,” Hamman says. “Talk to a local experienced agent in your immediate area to discuss the best times to sell and what people are looking for in a home.” Set aside ample time, too, to invest strategically in repairs and cosmetic upgrades and prep and stage your property carefully, Shapot says. Remember: the early bird doesn’t just get the worm — it gets the nest. “As a buyer, most of your competition will likely be in the late spring and summer months,” Shannon says. “As a seller, if you wait too long and don’t give yourself enough time to get your house ready in time for the peak selling season, you could be leaving money on the table by not getting as many showings or offers.” However, don’t be too hasty. “It’s better to take the time to get your house show-ready and make a great first impression than to list it prematurely, simply because the market timing is right, and have a house that doesn’t show well,” Shannon says.
Start real estate adventures early to avoid regrets
77
Percentage of homebuyers that got pre-approval from a lender before finding a home on which they are interested in placing an offer. Source: Zillow
13
CURB APPEAL By Jesse Darland
REAL ESTATE GETS GREENER MORE BUYERS AND SELLERS THINKING ABOUT SUSTAINABILITY
When it comes to buying or selling a home, it can pay to be green. Those are the results of a new study released by the National Association of Realtors. The 2017 Realtors and Sustainability report found that over half clients (56 percent) express interest in sustainable
educating themselves and including additional information in their listings. Sixty-one percent reported that they’re comfortable answering questions from buyers or sellers about a home’s energy efficiency. Seven out of ten believe that promoting energy efficient features will
issues and practices. Four out of five realtors (80 percent) reported homes with solar panels being part of their local market. Nearly three quarters (71 percent) have found that promoting energy efficiency in listings gave increased value to clients. Nearly a quarter (24 percent) of realtors reported that tiny homes were available in their market. “As consumers’ interest in sustainability grows, realtors understand the necessity of promoting sustainability in their real estate practice, such as marketing energy efficiency in property listings to homebuyers,” said NAR President William E. Brown, a realtor from Alamo, California and founder of Investment Properties. “The goal of the NAR Sustainability Program is to provide leadership and strategies on topics of sustainability to benefit members, consumers and communities.” Real estate agents are responding to this changing market by
positively impact a home’s performance on the market. Entries in the Multiple Listing Services are also seeing some changes with additional fields to promote green features. More than two out of five respondents (43 percent) have included green data fields in their listings. When it comes to choosing a property, the most important feature to consumers is energy efficient lighting (reported by 50 percent of realtors). Smart or connect home technologies are also important (40 percent), as are community features such as bike lanes or green spaces (37 percent), water-conscious landscaping (32 percent) and renewable energy sources like geothermal or solar power (23 percent). Transportation that doesn’t require an automobile is also important. Realtors reported that 51 percent of clients considered walkability very or somewhat important. Bike lanes were desired by 39 percent of clients, and access to public transportation by 31 percent.
Top Reasons for Smart Tech A growing number of homeowners are adding internet-connected “smart home” appliances and features to their homes. A recent study took a look at what’s driving these purchases. Why add smart home tech? Spots for smart tech:
Top reasons for purchases:
Living Room 25%
• 75% safety and comfort • 68% energy efficiency
Kitchen 47%
Smart homes across generations: Millennials want a home that’s convenient for daily living • Gen Xers are looking to make their homes more healthy • Boomers seek to increase the value of their homes
Entryway 28%
Source: Scripps Network Interactive Under One Roof Study, 2016. © Content That Works
14
June 2017
TEXTING AND DRIVING MAKES GOOD PEOPLE LOOK BAD. STOPTEXTSSTOPWRECKS.ORG
www.capitalcityweekly.com
15
16
APRIL 2015