You may be well on your way to being a land baron (or slumlord) or perhaps you just have a property that makes more sense to rent than sell at the moment. Either way – welcome to the world of tenants and landlording.

Having a rental property can be a great financial tool for the medium- or long-term and it shouldn’t be a big hassle if you’re well-prepared and do some advance planning. There are many resources available to help you self-manage your property. Or if you prefer the hands-off approach, there are excellent property managers that are good AND cost-effective, my favorite combo.

Before you rent a property out, do a solid evaluation of the short, medium and long-term pros and cons of having rental property and being a landlord. I’m a huge advocate of having rental properties, but sometimes the numbers just don’t pencil out well enough to make it worth the work. If you’re considering renting a place out, call me. We’ll get together for coffee and hash out the “numbers” so you can take all the variables into account and make well-informed decisions on how to move forward with life.

Renting a property out happens in a few straightforward steps (click for more info on each):
– get the property ready for tenants
– market the property and find a tenant
– keep the tenants (and yourself) happy

If you’re considering the simpler hands-off approach, I can highly recommend Brenda Brynildsen, Windermere Property Management, as an excellent go-to property manager. She’s at 206.898.1428 or brenda@windermere.com.

Happy Landlording!

You’ve just made it through the finish line, leaping hurdles and sprinting to do an inspection, get a loan and close on your new home. Now what? Packing, moving and cleaning take over the brain. You’ve got one or two sets of keys, but who knows what handyperson/housekeeper/crazy ex-roommate might still have old keys to the place, so before the big move – change the locks! This is a nuisance, but is very much worth doing. Plus it gives you the opportunity to have all of the locks throughout the house using the same key, rather than having to have 8 different keys for every handle, deadbolt, garage door, etc.

There are a few ways to do this: hire a locksmith to come out and do everything, replace all of the handles and deadbolts with new, or simply take the existing locks in to be rekeyed.

A locksmith can usually be out next day and will likely charge $100-$200 for rekeying everything and possibly replacing older deadbolts/handles with new, basic ones.

You can replace handles and deadbolts yourself with new ones from the hardware store – ask the hardware store to make sure they’re all keyed alike before you buy them. This works well if you have outdated hardware that you’d like to replace anyways. For homes built before about 1950, look carefully at the configuration of your existing locksets – new holes may have to be drilled to accommodate new hardware.

Finally, you can simply remove your current handles and deadbolts, bring them into the hardware store and they can rekey them to all match a new key. That usually runs $5-7/handle or deadbolt – by far the cheapest option.

Good luck!

In an economy where many homeowners are sitting tight and not selling, unfortunate financial circumstances are one reason that many good homes do come on the market. When a homeowner can no longer afford to pay the mortgage and if the home is worth less than what is owed on it, the alternatives are temporary mortgage reduction, short sale or foreclosure.

Here’s a summary of the second option – the short sale – along with a rough timeline. There is no such thing as a schedule when it comes to a short sale – the banks operate on their own timelines, there are no deadlines and timing is primarily a function of the bank’s workload. Short sales can occasionally be done in as little as three months, or can drag on for six months or more and never close. So this is more to illustrate the steps rather than the timeline.

Steps in the Short Sale Process

1. Seller stops paying the mortgage. The seller’s mortgage holder will not usually consider a short sale unless the seller can prove that they’re unable to make the mortgage payments.

2. Seller puts their home on the market. The initial asking price may be unrealistically high (in order to pay off the loan completely,) at about current market prices (to get an offer in a reasonable amount of time with the best chance of the mortgage holder approving the offer in a reasonable amount of time) or unrealistically low (in order to get an offer very quickly and get something in front of the mortgage holder, even if the mortgage holder comes back with a higher amount.)

3. Buyer makes an offer and buyer and seller negotiate and finalize a purchase and sale agreement. This is what we’ll consider DAY 1.

4. Seller submits all the documentation required by the mortgage holder to show that they will not be able to make the mortgage payments in the foreseeable future, along with the purchase and sale agreement. This can easily take a week or more. Let’s say that gets us to DAY 7.

5. The seller’s mortgage holder inputs the information and assigns a loss mitigation negotiator. Let’s say that gets us to DAY 30.

6. The negotiator reviews the file, makes sure the documentation is complete and that the seller’s financial situation and the home are candidates for a short sale. They often request additional or updated documentation, which can add weeks to the process at this stage.

7. If the documentation is complete and the seller and property are candidates for a short sale, the negotiator will order a Broker’s Price Opinion (BPO.) The BPO tells the negotiator what the property is currently worth, so that they may gauge whether the buyer’s offer is a fair price for the home or if the mortgage holder (investor) should counter back at a higher price. On an optimistic timeline, this gets us to DAY 60.

8. Once the negotiator has the BPO in hand, they then review the BPO with the investor and the investor decides how much they’re willing to accept for the property. Sometimes this is based on the amount offered by the buyer, sometimes it’s a higher amount. The negotiator will then issue a LETTER OF CONSENT. This might happen as early as DAY 90.

9. If the letter of consent is based on the price offered by the buyer or the buyer accepts a higher price required by the letter of consent, the sale can then move forward on a normal timeline including the inspection, appraisal and financing which usually takes about a month, taking us to DAY 120.

So – If everything goes smoothly (and that’s the exception rather than the norm,) once a seller accepts a buyer’s offer in a short sale transaction, the sale might close in about 4 months. I’ve seen it happen in 3 months. I’ve seen it take 7 months. I’ve seen it take 7 months with absolutely no response from the lender and fall apart at that point. So there’s no predicting – just sharing the steps.

Whether you own an investment property, need a short-term renter while you’re out of town or have moved on and haven’t yet sold your home, sometimes you need to find a tenant to keep the cash rolling. To fill vacancies quickly and get the most rent, you need to have a successful marketing strategy that gets the word out and gets people in the door.
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Until the meltdown of the financial markets in fall of 2008, almost all mortgages were conventional and didn’t involve FHA. Now the opposite is true – over 90% of first time buyers are purchasing houses and condominiums with FHA loans. So if you are selling a condo, it’s important to know whether your building has been approved by FHA for FHA loans. If not, you’ve just lost 90+% of the available pool of first-time buyers out there.

To be approved for FHA loans, your condo must meet a list of requirements and go through the approval process. Look up your building here to see if it’s currently approved or if there’s an application in progress.

If your condo isn’t currently approved and you’re considering selling, contact your Board to talk with them about getting the condo approved. There are third-party facilitators that can assist condos with this, and your condominium management company may also be able to help.

I’m going to geek out here for a moment. Back in the early 90′s, some dirtbag broke into my house in the middle of the day while I was at work and took everything of value. Annoyingly, this did not include my 1970′s TV with dials. As I took stock of what was missing and what remained, only one thing did I panic about – my photographs. Everything else in the house was simply stuff. Replaceable stuff. Fortunately the thief didn’t consider pics of my family, friends or the Empire State Building worth anything, so I breathed a sigh of relief.

I called the cops. They came, took a statement and asked me to write down a list of everything that had been taken. So I sat down and thought through every room, wrote down everything I could think of that had gone missing and gave them the list. As it turns out, I remembered about half of what was actually missing. Months later I was still looking for things and realizing that they’d been stolen but I had forgotten to include them on the list.

Today, a couple of things would be different. The biggest change is that so much of our lives is digital now, and if all my data were lost that’d mean pictures (many thousands including hires scans of all my old hardcopy photos) as well as years’ worth of of writing and information. I’ve collected a few doodads and little pieces of art in my travels that I really dig and would be difficult to replace. But I’d get over them. But every year I take a photo inventory of the house and store the pictures somewhere NOT in the house.

So for those of you who mean to but haven’t got yourself backed up yet:
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We’ve heard that mortgage rates were about to start slowly rising for some time, but it looks like it’s finally here.  There are some changes coming up in the financial sector over the next few months that will increase pressure on interest rates to rise.  This article goes into a little more detail.

The vast array of maps, GIS themes and aerial/satellite photography available now is staggering.  Here are some good resources:

City of Seattle

GIS Maps
Side Sewer Cards & Maps
Parcel Data
Zoning Maps
For exact locations of the streets, curbs/gutters and sidewalks relative to property lines and right of way, you have to visit the Seattle Transportation Department in person and get a hardcopy of the applicable street plans.

King County

GIS Center

Snohomish County

Planning and Development Services Maps

National

USGS National Map Seamless Server (good for detailed aerial photography)

If any of these links don’t work – please let me know!

Good news! The Senate has voted to approve an extension of the $8,000 first-time homebuyer tax credit to April 30th, and add a new $6,500 tax credit for existing homeowners looking to change homes.  They’re also planning on increasing the level of qualifying income – see this article for more info:

Congress set to clear aid to jobless, homebuyers.