Resources

How to Become a Homeowner

Between high purchase prices and lack of inventory, becoming a homeowner might feel like a distant dream for some these days. Let us give you some hope! Even if you’re not in a position to buy right this instant, there are things you can do to get on the path to becoming a homeowner. In fact, you might be feeling pretty good about your options by the end of this list!     Save Your Money to Get Your Own Place Before you roll your eyes, we know that you know to save for a downpayment. However, there are additional costs associated with the home-buying process that may not be so obvious and so it’s better to think about them early in the process.  Appraisal Appraisals are required by the lender to make sure the home is a good investment and you’ll likely need an appraiser recommended by your lender. The appraisal cost will depend on the size of the home but typically range from $400-$600. Inspection Inspections aren’t required in Washington state but we think spending the $400 (or so) is well worth discovering a hidden flaw in the house that could either be a dealbreaker or addressed and covered by the seller.  Earnest Money While not required, it’s common to put down what’s called “earnest money” after your offer is accepted which you can think of as a deposit on the home purchase. The amount is typically 1-3% of the purchase price but the good news is that it will end up as a credit on your closing statement!  If the idea of a downpayment has you feeling down, just know that it’s possible to get your own place for no money down or even as little as 3.5%. As always, we recommend analyzing your budget to cut back on what you can because the higher the down payment, the more you’ll save on interest.    To Become a Homeowner, Improve Your Credit! We’re sure that this comes as no surprise. However, it’s not always clear where to start… Building your credit score is rarely a quick fix, so it’s important to start improving before you even start looking.  Here are elements that factor into your credit score ranked by most to least impactful.  Payment History If nothing else, always ALWAYS make the minimum payment on time!  Utilization Aim to use 15% or less of your total credit limit. If you pay off your card each month, you won’t have to pay any interest. In some cases, you may be able to ask your credit card company to increase your limit and thereby reduce your utilization. Just make sure you do this responsibly, as it could trigger a hard inquiry.  Collections Prevent derogatory marks on your credit record because they can stay on there for 7-10 years!  Age of Credit You don’t have to go into debt to establish good credit. So, definitely don’t avoid it because having no history will do you harm. To assess your creditworthiness, lenders need to see proof of how you use credit. The longer your credit history, the better!   Total Accounts The more accounts you have, the better, but this doesn’t mean you need to open a bunch of credit cards. You can build credit with car loans, personal loans, federal education loans, phone plans, and by being an authorized user on someone else’s credit card.  Hard Inquiries Too many inquiries into your credit can be a red flag to lenders, so be selective when applying for anything that requires a credit check.    Calculate What You Can Afford Monthly Take a long hard look at your current expenses. Then, consider the added expenses that come after a sale goes through, such as utilities, potential HOA fees, and incidental expenses (like a hot water tank going out). It’s critical to calculate what you can afford to spend on a mortgage on a monthly basis because there is a chance you may get pre-approved for a home loan amount that you can’t realistically afford.  Get Pre-approved for a Home Loan You need to have a clear idea of what you’re pre-approved for so you know your price range when looking for a house. In a competitive market, there’s no time to wait until you fall in love with a house to then start the process of pre-approval. Besides, it can be a time-consuming process. To shorten the time, gather all your important financial paperwork into one place, such as your last two years of tax returns, bank statements, loans, and other assets such as savings or retirement accounts.  If you’re not acquainted with the different types of home loans that are out there, start by researching the most common types below. There are pros and cons to each, so don’t be afraid to ask your lender questions.  Private Loans Conventional - 3-20% down payment Government-backed Loans While these loans make it easier to get your own place, they often require private mortgage insurance (PMI) which is a monthly fee on top of your mortgage. Once your mortgage reaches 80% loan-to-value, which is either paying off 20% of your mortgage or a combination of your payments and home value increasing, PMI can be removed from your loan.  FHA - 3.5% VA - 0%   USDA - 0%   Choose a Real Estate Agent Early Similar to mortgage pre-approval, don’t wait on finding a real estate agent. You may need to shop around to find one you like! In all seriousness, finding the right agent can save you thousands of dollars. We’ve seen it, time and again! Your agent should be your top advocate, and work to get you the best deal while making the whole process as smooth and low-stress as possible.  If you have any questions about how to become a homeowner, we invite you to drop by anytime and chat with our agent on duty! We’ve helped so many people like you achieve their dream of homeownership, so let us know when you’re ready to make a plan! 

View more

Skagit County 2022 home sales stabilize; median sales price still rises 8.6% to $543,000

Rising mortgage rates tapped the brakes on Skagit County homes sales in 2022 but homeowners still saw their property values rise, according to managing broker Shelah Inman of Brown McMillen Real Estate in Burlington. The median price of a Skagit County home sold in 2022 rose 8.6% to $543,000. Inman said that’s a good increase in any year except in comparison to 2021, when it skyrocketed 18.5%. Skagit home sales kept rising for the first half of 2022, but mortgage rates that eventually doubled and hit a peak around 7% for a 30-year loan cooled off the housing market here and elsewhere, according to Inman. She prepared a report based on data from the Northwest Washington Multiple Listing Service. Prices pulled back some from their 2022 highs and fewer homes sold.  The number of Skagit County homes sold dropped to 1,783, which is 13% below the total just two years ago, Inman said. Inman said a 30-year fixed mortgage rate was around 3% at the start of 2022 but steadily began to rise. When the 30-year rate went above 5% in late summer, the dramatic effect it had on monthly home payments dampened buyer interest and resulted in some price adjustments, she added. “Skagit homeowners are doing well whenever annual appreciation is close to 10%,” Inman said. “Our home market can’t sustain increases close to 20% for long. However, Skagit County still is a great place to raise families and retire, we have more housing inventory and the 30-year mortgage rate has stabilized around 6.5%. Instead of a frenzied market with multiple offers for homes, we now have more of a balanced market for buyers and sellers.” Anacortes leads Skagit County in median home sales price ($775,000, up 20.2%), followed by Burlington and Mount Vernon, both at $540,000. While countywide home sales dropped, they rose in two communities: La Conner (19.5%) and Sedro-Woolley (8.9%). The median sales price, average sales price, number of units sold and average days on the market (DOM) before a sale for Skagit County and individual communities for all of 2022, with percentage comparisons to all of 2021, follow. Skagit County – Median price, $543,000, up 8.6%; average price, $616,656, up 7.7%; units sold, 1,783, down 4.6%; DOM, 25, up 19.1%. Anacortes – Median price, $775,000, up 20.2%; average price, $865,587, up 15.6%; units sold, 321, down 7.0%; DOM, 25, unchanged Burlington – Median price, $540,000, up 11.3%; average price, $605,217, up 5.8%; units sold, 219, down 11.7%; DOM, 23, up 27.8%. La Conner – Median price, $500,000, unchanged; average price, $589,355, down 2.8%; units sold, 92, up 19.5%; DOM, 30, up 36.4%. Mount Vernon – Median price, $540,000, up 3.9%; average price, $596,977, up 7.3%; units sold, 597, down 14.6%; DOM, 23, up 27.8%. Sedro-Woolley – Median price, $500,000, up 13.4%; average price, $526,326, up 9.4%; units sold, 379, up 8.9%; DOM, 24, up 20.0%. MEDIA NOTE: If using this information, please attribute it to Shelah Inman of Brown McMillen Real Estate.

View more

Making the Switch to Senior Living

  Whether it’s yourself or a loved one, switching to (some type of) assisted living is rarely met with the same excitement as, say, a first-time home purchase. In fact, many families avoid the topic altogether for fear of emotions running high and facing all of the financial and logistical challenges. We don’t blame them!  However, as with all life changes, a little planning and a shift in mindset can help make a challenge less scary. When exploring senior living options, we find that questions and concerns tend to fall into three categories: financial, emotional, and logistical. So, let’s remove some of the mystery and dive into what to consider when switching to senior living.  Financial Preparation  According to Genworth’s Cost of Care Survey, the average cost of assisted living in western Washington State is $5,500 per month. While this cost changes depending on the level of care needed, the price tag usually comes as a shock, especially upon learning that Medicare does not cover long-term care. To learn about different types of assisted living, we suggest checking out this resource from SeniorLiving.com.  A local resource is the Northwest Regional Council which has locations in Mount Vernon and Bellingham. Their goal is to help educate local community members on the different types of facilities and financial resources that are available.  Once you determine the level of care needed and which financial resources are applicable, you’ll be better equipped to research and tour individual facilities. This process is best done in advance when you and your loved ones can make decisions with a clear head and not as a reaction to an emergency.  Questions to consider when financially preparing to switch to senior living: How important is it that we choose a facility that can accommodate needs that change over time? (i.e. Illness progression, changes in mobility.)  What other services does the facility/community offer? (Housekeeping, dining, fitness spaces, enrichment, etc.) What other costs do we need to factor into the financial planning? (Home repairs, facility deposit, moving company, etc.)   Emotional Preparation For many, transitioning to senior living symbolizes lost independence and moving into the final stages of life. While it’s important to position this change positively, it’s critical to acknowledge and validate the discomfort of a huge life change, especially if it’s preceded by the loss of a spouse. Try to remember that fear and excitement are not mutually exclusive (and can exist at the same time!) The pride, memories, and hard work of maintaining a home create strong emotional ties that can leave people feeling a great sense of loss.  Talk about the switch early! Many families postpone this conversation for too long, then an accident or medical crisis can suddenly necessitate a higher level of care. The earlier you talk about a plan for senior living, the greater chances your loved one is making the decision on their own terms. Plus, talking about things in advance creates space to process the emotions that inevitably crop up from a big life change. If you’re struggling to speak with a loved one about planning for senior living, read these tips on tackling tough conversations. Logistical Preparation Finally, there is preparing for the actual move! The steps involved will differ greatly from person to person. But, chances are you or your family will help with the selling of a house or a move from an existing residence. As if these tasks aren’t enough stress, there will likely be other obstacles to overcome such as finding item storage for extra belongings that won’t fit in the new living space or a list of repairs that need to be made to the previous residence before it’s vacated or listed on the market. If possible, we recommend that the house be empty prior to putting it on the market so buyers can have an easier time envisioning themselves living in the space. Logistical tasks to work on and plan for in advance… Pare down belongings months, if not years in advance. Belongings can really pile up through the years and can be logistically and emotionally painful to sort through on short notice. Find a storage solution for items that need to be kept but won’t fit in the new space.  Prep the house for moving or selling by performing maintenance and repairs in advance. If you need to hire professionals, then book services and repairs early.  When it comes time to move, determine who will handle the packing, storage, moving, and unpacking. Find a real estate agent early and tell them about your situation. You might be surprised to learn the tips and tricks our brokers have picked up in their years of experience.  If you or a loved one is ready to make the switch to senior living and need help selling a house as part of the process, give us a call at (360) 757-6013. We would love to help make your transition a smooth one! 

View more