Real Estate Weekly: September 23, 2022

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Real Estate Stat 6.937%

WHY USE A REALTOR®?

Buying or selling a home ca n be one of the most exciting , and most stressful things you will ever do. The terminology, the pap erwork and the amount of investment you make can seem overwhelming Wh en you make the decision to use a R EALTOR®, you can be sure that th ey will be l ooking after you r best interests.

The term REALTOR® is a registered trademark, the use of which is earned by your real estate agent or broker through ongoing tra ining and membersh ip in the largest trade organization in the coun try, The National Association of REALTORS®

Every member of the Nation al Association of R EALTO RS® makes a commitment to adhe re to a strict Code of Ethics, which is based on professionalism and protection of the public. The Code of Ethics is a promise - as a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction -related matters.

If you want to be sure that you are dealing with a REALTOR® member, visit our website at www.n psar .realtor to see a listing of current local member offices, or look for an office that has earned the distin ction of displaying the REALTOR® logo.

Source: www.realtor.org

custom-built home with amazing views of Fidalgo Bay and Mount Baker from ever y room. Built in 2016 and impeccably maintained, this house feels brand new and has all the features you want. Amenities include a gorgeous kitchen featuring Patagonia granite counter tops w/ under lighting, Sub-Zero fridge/freezer, Wolf range/ oven, beverage fridge and more. Upstairs features an impressive primar y suite with a dream bathroom, private patio, and walk-in closet with laundr y Two additional bedrooms and a game room above the garage complete the space Downstairs offers a great room, bed/bath, gym and opens to a private patio surrounded by lush landscaping This setting is quiet and close to ever ything including the ACFL just steps away!

Record-low interest rates is renewing interest in the housing market for many people.

“When sellers are interviewing real estate agents to market their homes, their primary focus is usually on the advertising that the agent will offer them,” says Jessica Goodbody of Weichert Realtors.

Let us help you meet your marketing goals by advertising your listings in Real Estate Weekly.

In print and online goskagit.com ads@skagitads.com

Looking to flip a home? Watch out for these cut corners

By Erik J. Martin CTW Features

Here’s a statistic that may catch you offguard: Nearly 10% of all homes sold in the first quarter of this year were flips – properties that were purchased, most likely improved, and then quickly sold for a profit by home flippers and investors. That’s a big jump from five years ago when less than 6% of all homes sold were flipped, per ATTOM Data Solutions data. Consider, too, that the jump in the house flipping rate during the first quarter of 2022 marked the fifth straight quarterly increase.

But while home flipping may sound like a surefire way to make extra cash,

it can quickly backfire on you if you aren’t prepared for the risks and pitfalls involved.

“In the current housing market, savvy real estate investors can still make a profit flipping homes, but not at the high levels they were seeing before the hyperactive seller’s market,” cautions Jason Gelios, a Realtor in Southeast Michigan. “House flippers today can likely expect delays in goods arriving as well as lengthened timelines for professional laborers to complete work on a home.”

Braden Chandler, a professional home flipper and real estate broker in Sarasota, Florida, concurs that flipping successfully isn’t a guarantee nowa-

days.

“Finding good homes to flip has been challenging over the last couple of years. Because of rising home prices, many homeowners have equity they can tap into to make costly repairs themselves instead of selling their homes. I’ve been flipping houses since 2010, and not only is inventory much more scarce today but there are also a lot of people trying to get into the business, which drives prices up,” Chandler says. If you’re determined to climb aboard this bandwagon and make extra cash by flipping homes, it’s crucial to avoid some of the most costly red flags.

“Before committing to a house flip, I look at

several factors. One is bad history: Many vacant houses result from foreclosures that lead to unhappy owners. In many situations, they may destroy the property out of spite, making it harder for anyone to engage in subsequent repairs,” cautions Alex Capozzolo, co-founder of Brotherly Love Real Estate in Philadelphia. “Another factor is an unfavorable location. Investing in a house flip in a poor location could decrease earnings before you even make any. You need to research the area’s schools, recreational facilities, and overall neighborhood carefully. Also, buying a house with unapproved renovations could land you in legal trouble, so

steer clear if you can’t get approved permits.”

Jennifer Okhovat, a real estate agent in Los Angeles, says one of the home flip corners she sees cut is when the flipper places too much emphasis on the property’s aesthetics over structural issues like a compromised foundation, roof in need of repair, and plumbing or electrical problems.

“This is why I strongly recommend doing your due diligence and hiring a reliable home inspector. If you have a short due diligence period, try to schedule the inspector to come out immediately,” she advises.

Gelios agrees that a failing foundation – one that shifts too much or has significant gaps and

cracks – is a bona fide deal breaker.

“Another red flag is major signs of mold. When you have a home with mold spreading along the walls, attics, crawlspaces, and interior walls for a lengthy amount of time, it can cost thousands of dollars to remediate,” warns Gelios.

Chandler tries to identify any high-ticket repairs that can crush a rehab budget before he commits to a flip.

“The first thing I do is look at the roof and decide if it needs to be replaced. If the shingles are curled, that’s an indication that the roof is at the end of its life,” he explains. “Once inside, I start to pay close attention to any signs of mold. I check all the windowsills, where I can find evidence of active termites. I’ll ask the current owners or real estate agent for approximate dates of when the HVAC system and water heater were replaced and if there are any known issues with the property. And if I am considering a property with a crawlspace instead of a concrete slab, I will pay close attention to any soft spots on the floor, which is a sign of subflooring damage that can end up as a very expensive repair.”

If you doubt the flippable potential of a house for sale, consult closely with your hired home inspector, a real estate agent, and an experienced property attorney. Lastly, crunch the numbers carefully to ensure you won’t exceed your budget.

Refinancing with high interest rates

Question:

With higher interest rates, is there some way to lower the cost of an existing loan without refinancing?

Answer:

Refinancing at this time has become unattractive because with today’s higher rates, most outstanding mortgages are simply cheaper than the replacement financing now available.

For example, in January 2022 – with rates that month averaging 3.45% according to Freddie Mac – Black Knight, a mortgage technology and data provider, estimated that 5.9 million borrowers could benefit from refinancing and roughly one million would save at least $400 a month. These borrowers included those with an 80% loan-to-value ratio, credit scores of 720 and above, and the ability to cut current mortgage rates by at least 0.75%.

In June, with typical rates at 5.52% – Black Knight estimated that just 472,000 mortgage borrowers were good refinancing candidates – the lowest number seen since 2000.

The usual refinancing goal is to reduce monthly

costs. However, while refinancing may not be practical, it may still be possible to get rid of private mortgage insurance, a big monthly cost for many households.

If you bought with less than 20% down, you may be able to end private mortgage insurance. This can happen if you have a good payment record and a solid loan-to-value (LTV) ratio – at least 20% equity. How much you can save will depend on such factors as how much you borrowed and the original amount down. For many borrowers, the savings will exceed $100 a month.

To eliminate private mortgage insurance, you must contact the loan servicer, the company where you send monthly payments. If your equity reaches 22% the coverage will likely be automatically eliminated.

However, there are complications.

First, with the VA program, there is no monthly guarantee cost, so there’s no cost to eliminate.

Second, HUD says that for FHA mortgages originated “on or after June 3, 2013, the FHA insurance can be terminated by the servicer or holder if the mortgage is paid in full before the maturity date.”

In other words, the only way to get rid of the FHA’s

Q&A Q&A

ASK OUR BROKER

By Peter G. Miller

mortgage insurance premium for recent loans is to refinance or pay off the entire debt.

Third, if you don’t have 20% equity today as a result of amortization, you still may be able to cancel private mortgage insurance and significantly reduce monthly costs. This can sometimes be done with a “curtailment,” a special payment to the lender.

Many households are now flush with cash as a result of rising wages and less spending during the past few years.

To have a curtailment, call your loan servicer – the party that collects your monthly payments – and say you want to reduce your current mortgage balance by x dollars. If you make such a payment, will they end private mortgage insurance and recalculate the monthly payments to reflect the new and lower balance. Some lenders will accept such offers, some will bargain, and some will just say no.

For details and specifics, speak with mortgage servicers via their 800 numbers and get responses in writing before sending a check.

Email your real estate questions to Mr. Miller at peter@ctwfeatures.com.

That old house: Will buyers love it or level it?

By Marilyn Melia CTW Features

Homes don’t have to die of old age.

But just as high blood pressure or inactivity impacts humans’ longevity, older homes have their own predictors on whether a buyer will purchase it to live in or tear it down.

Homes which haven’t been updated and located in highly desirable neighborhoods without nearby buildable land are most likely fated for the bulldozer.

Being “functionally obsolete” compared to nearby homes – say one bath vs. others with two or three, or no central air when that’s the norm, or a one car garage when others have room for two or three cars – marks a “teardown,” says Vincent Cyr, Keller Williams Real Estate, Westchester, Pa.

Ken Johnson, a Florida Atlantic University real estate professor, offers a formula: When the value of the newly constructed home will be three to five times the cost of the old home torn down, the teardown makes economic sense. If the value of the newly constructed home and lot is less than three

times the purchase price the teardown, it “runs the risk of being underdeveloped for the neighborhood.”

In 2020, six percent of newly constructed homes were built on lots where an older home was razed, and percentages were significantly higher in New England, Pacific, and mid-Atlantic regions.

For sellers of older homes in pricey neighborhoods, the question is “Should they invest in some remodeling or even the typical pre-sale spruce-ups, like painting?

If all a home needs is the typical pre-sale preparation, it’s more likely to be loved and lived in by a buyer.

Some buyers “want a vintage home in great shape,” observes Francine Viola, Coldwell Banker Evergreen Olympic Realty, Olympia, Wa.

Consulting with agents on an older home’s appeal helps define the proper marketing plan.

When a home is clearly a teardown, selling it as such can yield a greater price, says Viola. “Instead of thinking about present use [buyers] start thinking about future use and possibilities.”

RENTALS

Apartments Unfurnished

Bayview Apartments:

The Housing Authority of the City of Anacortes is accepting applications for 1, 2 & 3 bedroom apartments. Project Based Section 8 and Tax Credit Units. PBS8 rent is 30% of income. No Smoking/ pets. Rent for Tax Credit units are below fair market rent. Must income qualify. Apply online at www.anacorteshousing. com or email info@anacorteshousing.com or call 360-293-7831 for an application. This advertisement has been placed in compliance with HUD regulations. The Anacortes Housing Authority Bayview Apartments Limited Partnership is an equal opportunity agency.

Wilson Hotel: We are currently accepting applications for studio and 1 bedroom apartments. Must income qualify. No smoking/pets. Full time students are not eligible. Apply online at www.anacorteshousing. com or email info@anacorteshousing.com or call 360-293-7831 for an application. The Anacortes Housing Authority Wilson Hotel Housing LLC is an equal opportunity corporation.

Are you paying more than 30% of your gross income for rent and heat? You may be eligible for low-rent housing. Rent is based on income. We are currently accepting applications for 1, 2, 3 and 4 bedroom apartments. No Smoking. Apply online at www.anacorteshousing. com or email info@anacorteshousing.com or call 360-293-7831 for an application. The Anacortes Housing Authority is an equal opportunity agency.

Proper ty is beautifully unique and there is no close comparison. Spec tacular views from most ever y room in this excellent and unique Dan Estabrook built custom home: amazing attributes throughout including outstanding kitchen features Thermador Professional oven with ex tra burners and griddle; oak cabinetr y; generous size closets (signature Estabrook); rooms positioned for optimal views throughout the well designed home. Primar y bedroom offers walk in closet, en suite with double sinks, separate shower, and jetted tub. Second full bath also offers two sinks. Total of four bedrooms plus amazing, ex tremely spacious office nicely separate from the main par t of the home. Air conditioning. High speed internet. Built in Bose speakers and stereo. Large utility room has deep sink. 960 square foot garage could accommodate four vehicles if placed tandem. Situated on .65 acre. MLS#1975189

Ready to Build

in the street Build your dream home in Nookachamp Hills, a desirable community in the foothills near Big Lake. Enjoy walking/biking the trails and swimming/fishing in the community ’s small private lake/ pond. Trail leading to pond/lake nex t to proper ty.

Classic 1965, 4 bedroom/3.5 bath near Hillcrest Park , hospital and medical facilities. The central ‘show room’ features a raised section for a dance band that may also enter tain guests in the outdoor patio next to the brick BBQ, as well as a covered patio in case of rain. This classic beauty has many favorite mid-centur y modern features; vaulted wood beamed ceilings, slate entr y, extensive built-ins, and a lovely stone fireplace in the daylight basement. The workshop in the far corner of the large backyard is wired for power tools.

MLS#1981154

Danya Wolf (360) 708-8294

Beautifully remodeled 3424 square foot commercial office space just 7/10 mile from 1-5 with stupendous visibility Large open reception area, 11 private offices, break room area with kitchenette, 4 bathrooms, upstairs conference room, upstairs storage, and 20+ parking spots. Former CVAB; former RE/MAX building; former Depar tment of Licensing building (driver ’s licensing) prior to being C-21 real estate office. Front half and back half can be leased separately. Front (southerly por tion) 1712 square feet offers frontage on East College Way and four offices plus a reception area, a common area; a lunch room plus three baths Back por tion offers seven offices (three on the main level and four upstairs); a common area and one bath. A/C. Signage MLS#1983118

1413 E cOLLEGE WAy, MOUNT VERNON $20 sQ. FT. GROss RENT

Danya Wolf (360) 708-8294

3424 sQUARE FEET TOTAL

3710 Mohawk Court, Mount Vernon

$790,000

Danya Wolf (360) 708-8294

NOOkAchAMPs hILLs DRIVE LOT 136, MOUNT VERNON $235 000