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Bainbridge Island, WA Real Estate News

By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
I was chatting with  Karl Buchmeier this week about insurance matters and asked him to share a story about why health insurance is valuable.  Last November Jim, a 42-year-old general contractor from Port Orchard, met with Karl to explore health insurance options.  Jim had no coverage at all.  He chose a high-deductible plan with a monthly premium of $160. In February, after suffering for several weeks with an intense headache, Jim went to the doctor.  A series of tests revealed a large and growing brain tumor. Jim immediately went into surgery but it did not go well.  Another surgery was performed in March, and then again in June.  Finally in mid July, Jim learned that he was going to be okay.  But the good news had some bad mixed in. Jim's medical bills exceeded $800,000 dollars, of wh...
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By Brenda Prowse
(Prowse and Company)
Bainbridge Island residential properties were selling for an September median price of $592,000, about 11% lower than in August. The more stable three month moving average of closed sale price fell 17% from last month to $580,417 and is 2% lower than it was a year ago (recall that the median price can be misleading when the price distribution of sales is changing). Sales at the top of the market lagged - there was only 1 closed sale above $900k in Kitsap County last month. The Kitsap County 3 month moving average median price has fallen 8% over the past year. Note that prices tailed off at the end of last year so we expect this gap to close in the coming months. The 3 month moving average for Bainbridge Island's number of closed sales is 15% higher than a year ago - a testament to last ...
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Condo rule changes from both Fannie Mae and Freddie Mac as well as FHA are radically altering the condo lending landscape.   Condos sales have been distressed and unfortunately, many of these changes are unlikely to help spur condo sales.  But Realtors need to know about these changes if they are going to make an offer a condo. Most condo loans have been approved through a process called Limited Review or Streamline, used for established condominium projects.  In recent years, for new condos, Fannie and Freddie required the lender to handle the approval, but now there is a formal approval process established with Fannie and Freddie to make sure the new condo complex meets their more stringent requirements. As part of this formal approval, which the builder often pays for, Fannie and Fre...
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Many homeowners who have been unable to sell their homes and take it off the market have been surprised by a lending rule when they go to refinance their home. It's called the "Time off Market" rule.  Because of it, many lenders require the homeowner to wait for six months after their listing expires before they will allow them to refinance. The clock starts when the application is taken, not when the loan funds. That puts homeowners in a bind. First they couldn't sell their home, now they want to take advantage of today's record low interest rates because they plan to be in the home for a while and would like to save money but are told they can't refinance. But there is hope as not all lenders have this rule.  At most of the big brand name banks, the rule is pretty much the same: you c...
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By Paul Pival, A Realtor with the soul of a professor.
(Coldwell Banker Bain)
Slowly we turn, inch by inch . . .  . Activity this week was less than last week, but ahead of this time last year. Average selling prices were higher. I expect activity to increase in the coming weeks as the deadline for first-time homebuyers approaches.  If you are interested in the details of the home that sold in your neighborhood, email me.                  
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Lenders continue to tighten their rules and the latest salvo is that a credit report, which for years has had an expiration date of 120 days from the time it was pulled until the loan recorded has now been shortened to 90 days. What can that mean for home buyers? If they get pre-approved too soon, before they are ready to make an offer, they are going to be looking at their lender pulling a credit report mid-way through their transaction. That means: More credit report fees charged to the buyer That could mean: The borrower's approval status could change and they could end up being denied if their credit score fell below their loan program's threshold or a derogatory item appeared on the new report that did not appear on the old one. The borrower's loan terms could change. If the loan's...
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FHA is the loan of choice for parents that want to help their kids buy their first home.  Even if your son or daughter is in college and has no income, if you are on the loan with them, FHA will allow your income and assets to be used to qualify for the home purchase. As long as you meet the lending requirements to qualify, your kids can be in their first home while they are attending school. How cool is that? That's been a big advantage to using an FHA loanL conventional loans require sufficient income and are not as accomodating for a "non-occupying" coborrower. Another big advantage is the down payment: today's minimum down payment is only 3.5 percent and the ENTIRE down payment can be a gift from you to your children.  Add on another huge plus: FHA loans are at or below 5.00% today....
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There are 30+ pending transactions currently and the Jumbo Fixed mortgage market is showing some signs of thawing.  While we only had 20 single-family detached home sales in August according to the Peekmeister (aka Jim Peek at John L. Scott, one of my favorite data gurus) vs. 26 in August 2008, we are likely to catch up in September. We only had 16 home sales last September. Sitting a Broker's Open House with Susan Murie Burris of Windermere on Cherry yesterday, we saw buyers come by from as far away as Florida and Virginia.  That's a very good sign, seeing buyers at an Open house repeat, albeit the home just had a very nice price improvement (reduction).
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If you are looking for more good news in the real estate market, don't talk to local appraisers. They have a pretty dim view of the next few months.   Appraisers are seeing more distressed properties coming across their desk and its making them a bit pessimistic about values. Just ask anyone who is in the middle of a refinance what the thought of their appraisal.  That's bound to continue to spill over to appraisals on sales. Buyers are out there: I have 16 different couples and singles pre-approved for a home purchase and only three are actively making offers this week. The rest are dipping their toes in the water, but not jumping in just yet.   Sure would like to see an nice fall where they make the big leap, wouldn't you?
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Fannie Mae is making so many changes with their newest announcement that the link to the full document is listed below. Many of the changes will result in more paperwork for borrowers, but some guidelines are being radically altered, such as the one real estate columnist Ken Harney covered this weekend: no more trailing spouse income can be counted for those relocating. Here are some of the categories being impacted: - Age of Credit Documents (90 days max vs. 120)- Construction-to-Permanent Financing and Single-Closing Transaction (re-approval of the borrower)- Credit Card Financing (may allow up to 2% of loan amount outside closing)- IRS Form 4506-T (will require up front, urges lenders to pull tax returns during underwriting to verify income)- Home Equity Lines of Credit (expands use ...
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U.S. News & World Report placed the Bremerton-Silverdale area on its top ten list for the nation where home prices are expected to appreciate the most over the 10 years. The news magazine predicts home prices will increase an average of 5.2 percent annually in the next decade. Among the positive factors, the magazine noted a large military presence that adds greater employment stability to Kitsap County, as well as stronger employment prospects on the other side of the pond in the Seattle and Tacoma areas. PDF copy go to http://www.bainbridge-island.us/email/usnews.pdf  
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By Susan Peters, The Better it Looks the Better it Sells
(Dove Realty Inc.)
On Bainbridge Island, just a 35 minute ferry ride away. When it comes to interior design my philosophy is “fast and cheap,” with one exception: artwork! Take some of the money you’ve saved on furniture and spend it on something you’ll love for the rest of your life. Director’s Gallery on Bainbridge Island is my new favorite resource for beautiful, evocative, original paintings. Owner and director Jack Mclaughlin not only has an incredible eye (there was not one thing in the place I didn’t like), but he is so knowledgeable and so not pushy! While his taste is exquisite, his prices are very reasonable. When you buy artwork, buy something you absolutely love! Director’s Gallery 126 Madrone Lane Bainbridge Island, WA 98110 206.842.6000 www.TheDirectorsGallery.com
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Finally, it drives me nuts when I pick up the Seattle Times and they run a chart of "local lenders" and mortgage rates.  First, there is not one major lender on this monthly list, just companies you have never heard of before.  Second, the rates are a week old and mortgage rates can change daily and even several times in one day.  Third, how can you have the same loan amount and show the exact same fees, but the APR they list in the Times is wildly different between lenders offering the exact same thing??? Here's the truth about APR: it can be manipulated.  An APR or Annual Percentage Rate is supposed to be used as an apples-to-apples comparison between lenders quoting mortgage rates as it supposed to unveil the real cost of the loan and indicate if there are hidden fees. Unfortunately,...
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If you threw away a recent "disclosure" notice from your credit card company thinking it was junk mail, you better check your interest rate online or in your next statement. Dozens of my customers -- many with nearly perfect credit -- have told me their interest rates have recently been raised, some as high as more than 29 percent! Apparently there are new regulations coming next summer and credit card issuers are rushing to raise rates now as they will be more limited in the future.  If you pay your bill off each month, you still may be impacted as some companies will charge you interest from the moment the charge is made.  Recommendation: do read the fine print. NEW RULES COMING: http://www.creditcards.com/credit-card-news/help/what-the-new-credit-card-rules-mean-6000.php  
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 Beginning May 1 we'll have a new acronym for the industry to memorize:  the new HVCC or Home Valuation Code of Conduct. Loans purchase by Fannie Mae and Freddie Mac will require lenders to follow a new set of standards that is designed to eliminate anyone who works for a lender --  from processors to mortgage brokers -- being able to control the order of which specific appraiser is used and lender staff will be strictly prohibited from trying in any way to influence value.  HVCC:* eliminates broker-ordered appraisals* prohibits appraiser coercion* reduces the use of appraisals prepared in-house or through captive appraisal management companies in underwriting mortgages. Independent mortgage brokers are scrambling as most don't have the capacity to meet the requirements of the new rules...
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Two years ago, anyone with a 680 credit score or better was considered having  "excellent" credit.  A 680 or better middle credit score got you the best interest rates.  Even documentation requirements were less taxing if you had a score at this threshold.  A solid score of 680 also meant very little (if any) paper documentation for assets or income. Today, most people have discovered we once again live in a full income and asset documentation world. But borrowers are stunned when they learn that a 680 score can cost them dearly when they go to refinance a home loan.  That's because what was considered an "A" borrower yesterday, is at best a "C-plus" borrower today.  The Fannie Mae credit score bar now is at 740 or better for your "middle" credit score. A middle credit score is calculat...
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Two years ago, anyone with a 680 credit score or better was considered having  "excellent" credit.  A 680 or better middle credit score got you the best interest rates.  Even documentation requirements were less taxing if you had a score at this threshold.  A solid score of 680 also meant very little (if any) paper documentation for assets or income. Today, most people have discovered we once again live in a full income and asset documentation world. But borrowers are stunned when they learn that a 680 score can cost them dearly when they go to refinance a home loan.  That's because what was considered an "A" borrower yesterday, is at best a "C-plus" borrower today.  The Fannie Mae credit score bar now is at 740 or better for your "middle" credit score. A middle credit score is calculat...
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The rule of thumb for decades in the lending industry was that if you could lower your interest rate by 1 percent, you should refinance. Did I tell you I hate rules of thumbs? That's because there are always exceptions to rules. One such exception to this rule I call the "Lender's Little Secret."  It is a simple calculation that few loan officers will ever mention, much less offer as part of their analysis to run the numbers for a potential refinance customer. After all, the answer might convince the customer NOT to refinance, and that means the loan officer loses the deal. But this is a calculation I do for every single customer because refinancing is a math problem: if it makes financial sense, one should refi; if it doesn't, one should not. It is simple as that. The "secret" is to ca...
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Financing a rental property (called a non-owner occupied loan in lender lingo) is more expensive today. Fannie Mae and Freddie Mac continue to tweak the amount of "add ons" that are attached to a rental property. Across the board, if you are purchasing or refinancing an investment property, there is a minimum 1.75 in points that are added on up-front, regardless of credit score. If your Loan-to-Value (LTV) is more than 75%, you will pay THREE POINTS more.  That's right, purchasing a rental property with just 20% down today will cost you at least 3 points more than an owner-occupied loan (primary or secondary residence). In the past, to avoid the extra points associated with an investment property, a lender would simply increase the interest rate to significantly reduce -- or even elimin...
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