Olympia and Thurston County Washington
Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from national market statistics to greater Olympia area home value trends and Thurston County happenings. That’s because we care about the community we serve and want to help you find your place in it. Please reach out if you have any questions at all or have a question or situation we can bring clarity to, and maybe it will end up being an article to help everyone!

Search our blog for helpful videos and articles.

March 15, 2022

FAQ: Don’t Get Caught Off Guard by Closing Costs

Don’t Get Caught Off Guard by Closing Costs | MyKCM

As a homebuyer, it’s important to plan and budget for the expenses you’ll encounter when you purchase a home. While most people understand the need to save for a down payment, a recent survey found 41% of homebuyers were surprised by their closing costs. Here’s some information to help you get started so you’re not caught off guard when it’s time to close on your home.

What Are Closing Costs?

One possible reason some people are surprised by closing costs may be because they don’t know what they are or what they cover. According to U.S. News and World Report:

“Closing costs encompass a variety of expenses above your property’s purchase price. They include things like lender fees, title insurance, government processing fees, upfront tax payments and homeowners insurance.”

In other words, your closing costs are a collection of fees and payments made to a variety of individuals and organizations who are involved with your transaction. According to Freddie Mac, while they can vary by location and situation, closing costs typically include:

  • Government recording costs
  • Appraisal fees
  • Credit report fees
  • Lender origination fees
  • Title services
  • Tax service fees
  • Survey fees
  • Attorney fees
  • Underwriting Fees

How Much Will You Need To Budget for Closing Costs?

Understanding what closing costs include is important, but knowing what you’ll need to budget to cover them is critical to achieving your homebuying goals. According to the Freddie Mac article mentioned above, the costs to close are typically between 2% and 5% of the total purchase price of your home. With that in mind, here’s how you can get an idea of what you’ll need to cover your closing costs.

Let’s say you find a home you want to purchase for the median price of $350,300. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $7,000 and $17,500.

Keep in mind, if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.

What’s the Best Way To Make Sure You’re Prepared At Closing Time?

Freddie Mac provides great advice for homebuyers, saying:

“As you start your homebuying journey, take the time to get a sense of all costs involved – from your down payment to closing costs.”

The best way to understand what you’ll need at the closing table is to work with a team of trusted real estate professionals. An agent can help connect you with a lender, and together they can provide you with answers to the questions you might have.

Bottom Line

In today’s real estate market, it’s more important than ever to make sure your budget includes any fees and payments due at closing. Let’s connect so you have the knowledge you need to be confident going into the homebuying process.

Posted in Buying, FAQ
March 10, 2022

How To Navigate a Market Where Multiple Offers Is the New Normal

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCMIf you’re thinking of buying a home today, you already know that the number of homes available for sale is low. But what does that really mean for you? As a buyer, low housing supply coupled with high buyer demand means you should be prepared to navigate a highly competitive market where homes sell fast and get multiple offers. Realtor.com has this to say:

“Homes also flew off the market at record pace as buyers put offers in the moment properties came up for sale….”

In a bidding war situation like this, doing everything you can to get ahead of the competition is a wise move. That’s because when you find a house and submit an offer, it’ll likely be up against strong offers from other buyers. According to the latest Realtors Confidence Index from the National Association of Realtors (NAR), homes today are receiving an average of 3.9 offers. That’s the most offers we’ve seen in January for the last 5 years (see graph below):

 

How To Navigate a Market Where Multiple Offers Is the New Normal | MyKCM

 

To help you navigate bidding wars with multiple offers, an expert real estate advisor is key. They know what’s worked for other buyers, what sellers are looking for, and how to help you prepare when it comes time to make an offer. Here are three tips to keep in mind that will help you make the best offer possible.

1. Know Your Numbers​

Knowing your budget and what you can afford is critical to your success as a homebuyer. The best way to understand your numbers is to work with a lender so you can get pre-approved for a loan. Pre-approval shows sellers you’re serious, which can give you a competitive edge. You should also know making an offer at the home’s asking price may not be enough. Homes today often sell for more than their listing price. An agent can help you understand the market value of the home and what other homes are selling for in your area.

2. Be Ready To Move Fast​

Speed and the pace of sales are contributing factors to today’s competitive housing market. When homes are selling fast, it’s important to stay on top of the market and be ready to move quickly. Your agent will help you stay up to date on the latest listings and help you put together your best offer as soon as you find the home you want to buy.​

3. Make a Strong but Fair Offer​

​When you’re up against other offers, putting your best offer forward from the start is key. Lean on your agent to write a strong offer and use their expertise on which levers you can pull to make your offer as enticing as possible. One option is to wave some of your contract contingencies (conditions you set that the seller must meet for the purchase to be finalized). Just remember there are certain contingencies you don’t want to give up, like the home inspection.

​Bottom Line

No matter what, your agent is your best resource for making an offer that stands out in a competitive market. Let’s connect to talk through what you can expect as a buyer and how to kick off a successful home search.

March 4, 2022

FAQ: How Does a Rent-Back Work?

A seller remaining in a property being sold for any amount of time after closing of the sale, whether it's days, weeks, or even just hours, is commonly called a "rent-back". The intent is to give the seller some extra time in their departing residence for logistical purposes.

For example, if you are also in the process of purchasing your next home, you may need the proceeds from your sale to apply toward your purchase, and those funds are not available to you until you close on your sale transaction. Whether you are relying upon those sale proceeds or not, your next home just might not be available to you before you close your sale, in which case you and your belongings may have nowhere to go. This is a common reason seller's seek a rent-back in their sale agreement with a buyer.

There are major risks. The practice of a rent-back has become a bigger concern to buyers since the State of Washington has enacted many more laws that make being a landlord a higher risk. And that is exactly what a buyer who allows a seller to remain in a property for any amount time after closing becomes; a landlord, and the seller a tenant, with all the protections the Washington State Landlord-Tenant Act affords a tenant.

In the back of a buyer's mind they should be wondering, "What if something goes wrong with the seller's moving plans and they remain in the home beyond our agreement because they have nowhere to go?" In that scenario the buyer (now landlord) would have to go through the costly eviction process. It could take months to get the seller out of what is now their home, which they committed to their mortgage lender they would occupy as their primary residence almost immediately.

Insurance is another challenge. Only the owner on title to the property has "insurable interest". Insurance companies will not insure a property in the name of someone else. So, upon closing, the seller no longer has insurable interest. Therefore, the buyer needs to be sure they have insurance in effect for fire and other potential perils. But, the buyer is not residing in the property, so they may need a landlord's policy of insurance for the time they will be renting the property to the seller.

Further, the seller no longer has a homeowner's insurance policy in effect. So, they would need a renter's policy of insurance to cover their personal belongings and that also protects them and the landlord from liability for personal injury or damage while they remain in the property.

Do rent-backs still work? Despite the risks, I can tell you that I have seen rent-backs work out just fine several times in my career, and I have yet to see the worst-case scenario come to pass. So, it is possible, but the risks are real and anyone considering a rent-back should consult an attorney very well-versed in Landlord-Tenant laws.

Be prepared to move in one day. It is also possible that a buyer will not be comfortable assuming the risks. In this case a seller might have to arrange a simultaneous closing for both their sale and purchase, which means they have to have everything moved out of their departing residence by the day of closing, likely without access to their next home until that same day at 5 p.m.

Renting the next home from the seller prior to closing is another, less-common option because, again, the sellers would very clearly be admitting a tenant into their home, which they intend to sell. If the sale of the buyer's property falls through, they may not have the funds to complete the purchase of the home they now reside in, and now that seller must evict.

A rental agreement is a must. In any case, if a party who is not on title to a property is allowed possession of a property, there should be a rental agreement signed by the landlord and tenant. MVP Realty Group brokers can draft these agreements as a part of a purchase and sale agreement.

Posted in Buying, FAQ, Selling
Feb. 1, 2022

Solar Panels | Is It Worth It?

MVP's perspective comes from clients who have purchased solar, both several years ago and more recently. Word is, the prices the solar sales companies have been quoting have increased significantly and they have incorporated unique financing terms into their pitches. Surely the price and sale pressure has increased lately because homeowners have gained significant equity in their homes over the past 5 years. The home improvement industry in general is looking to cash in on it.

What Are the Cons?

Solar is not yet common enough to be able to say that a homebuyer would be willing to spend more on a home with a solar system than a home without. None of our buyer clients are currently specifically requesting homes with solar. In fact, I would argue that home buyers might be intimidated by a solar system; not understanding the benefits or the long-term maintenance or complexities such as, "how much is it going to cost when I have to replace my roof?"

In consulting with a trusted home appraiser, he concurs that the professional appraisal community is struggling to meet seller expectations of the value in their solar systems. To value a home with solar higher, an appraiser must find another recent comparable sale of a home with solar that presents a higher value than those without. That is hard to do with so few solar panel systems out there. As a result, many appraisers, whom the banks rely upon to verify the fair market value of a home before granting a buyer a mortgage, can sometimes only justify about $8,000 added value to a home with a solar system. This reality can be quite disappointing to a seller who spent $20K+ on solar.

So, any claims of a solar system adding significantly to your home's resale value in general is unfounded. In fact, most home improvements (work that is beyond repairing defects) do not return 100% of the cost in resale value. Because solar is still such a novel concept, a homeowner adding solar is a pioneer in the technology.

Ask yourself these questions and do the math:

  • How much do you aim to save per year in power, especially if things like your heat, hot water tank, or even your fireplace, cooktop or clothes dryer are fueled by gas?
  • What is your total investment, not only in the purchase of the system, but the maintenance you can expect, interest you might pay on another loan, and the extra cost you will incur when replacing your roof?
  • How many years of saving $XXX in power must you have to first recoup all the costs above?
  • By then, will your system still be in good operating order, or will you need to replace some panels or other components?

These are all questions to answer for yourself. Don't rely upon a solar sales representative for these answers.

And, because solar is not yet a fundamental value addition to your home, you should consider if harvesting the equity out of your best wealth-building asset for this improvement is wise. If it is something you really want to do, before you pursue financing through a solar company, I would highly recommend you inquire with a local, trusted home equity mortgage lender about a home equity line of credit (HELOC) or second mortgage. The terms will likely be more favorable and, if a mortgage lender would hesitate to grant you a home equity loan, borrowing for this type of improvement is probably not a good idea.

BOTTOM LINE

Solar power systems might be a good way to decrease your carbon footprint and give you some energy savings in the long-term. They are not, however, common enough to derive reliable resale value data. Therefore, investing in or using your home equity toward a solar system comes with great risk, especially if you do not stay in the home long enough to realize a financial benefit. We would only recommend adding solar to your home if you determine for yourself that the benefits outweigh the risk.

Jan. 27, 2022

Matthew Beats 2021 Market by 5%

Breaking News! Matthew Plummer and MVP Realty Group both beat the 2021 average percentage of list-to-sale price ratio. Meaning on average, Matthew's listings sold for 5% over the average for the rest of Thurston County and MVP's listings, as a whole, sold for about 3% over. 

What it Means?

The sale-to-list price percentage is the final sale price of a home, divided by the last list price. If it's above 100%, the home sold for more than than the original asking price. If it's less than 100%, the home sold for less than the original asking price. 

Why is it Important?

Looking at sale-to-list percentages can help buyers and sellers get a sense of how to negotiate on pricing. For individual listings, high list-to-sell ratios are a direct result of agents using accurate and up-to-date sales data to help guide a home owner to the right sale price for their home. A Realtor's personal percentage is a direct result of their negotiation skills. Some agents don’t even know their list-to-sell ratio. Or their average days on market, or even their number of transactions last year. Yikes. These are all great questions to ask a Realtor when you are discussing the job of selling your most precious financial asset.

Dec. 29, 2021

2021 Real Estate Market in Review

With the year 2021 the real estate market exploded! Here is a brief run through of the 2021 market with a focus on Thurston and surrounding counties. We'll take a closer look at this year's stats like home sales, average market time and more while also comparing it to the "quote-unquote" 'normal' and why the definition of a normal market is changing.  

Available Homes for Sale

Seasons will always impact the market. Right now, with the holiday season and the dark, damp time of year upon us we are seeing a predictably low amount of new listings but in reality 2021 as a whole has been consistently low inventory with just a couple hundred on the market currently in Thurston County. 

Days on Market

This low inventory combined with the pace of the market creates lots of competition. The average time on market is just 15 days and here at MVP it's even shorter, usually just 7 days. Find out how that time frame might change in the 2022 Market Forecast

Months of Inventory

When taking the pace of the market and comparing it to the average number of homes for sale, we find the absorption rate, or the rate at which available homes are sold. Right now, we are looking at just .6 months of inventory in Thurston County or just a couple of weeks worth. 

Home Sales vs Inventory

While we might have low inventory, this is not synonymous with a low number of sales. Yes, we're talking supply vs. demand. We are experiencing a lack of inventory for the current demand but a record number of sales for the last several years. 

Why the High Demand?

The recent surge in home prices is due to more active buyers in the market than there are homes for sale. More buyers trying to take advantage of the low interest rates and affordability before it's gone. We are also seeing an influx in the number of Millennials joining the housing market, often times as first time homebuyers. With Millennials taking advantage of their monthly housing cost to build wealth, demand is higher than ever. When demand is high and supply is low, prices will naturally continue to rise. If you're a Millennial and looking to learn more about how you can join your peers on the path to owning your first home, check out our guide A Millennial's Guide to Homeownership

 

Why it Might Cost You to Wait?

Early 2021 saw the lowest mortgage interest rates in recorded history but rates are starting to climb. When mortgage rates go up, it impacts affordability. Here is a calculation prediction of how much more it will cost you waiting just one year to buy. To learn more about buying and making your dreams of homeownership happen in 2022, check out our Home Buying 2022 Guide

Bottom Line

A perfect storm of low inventory and high demand means don't expect home prices to drop in 2022. Think about your homeownership goals and considering purchasing a home before prices and mortgage rates rise further. Find out how in our Buying Guide Winter 2022 or debunk some common misconceptions about home buying with us in our Millennial's Guide to Homeownership

If you have given any thought to selling, now is the time as our Selling Your Home Winter 2022 Guide goes more in depth on. Today’s buyers are motivated to purchase a home and this might be the best time to sell in our lifetimes. If you're looking to make a move, you have a great opportunity to get the best of both worlds this season.

Let’s connect today to discuss how much leverage you have, and why it might be best to make that move now instead of later. Contact Us and don't forgot to download your 2022 Real Estate Market Forecast.

Dec. 8, 2021

Struggling To Find a Home To Buy? New Construction May Be an Option.

Struggling To Find a Home To Buy? New Construction May Be an Option. | MyKCM

There’s no question that the financial benefits of selling a house are outstanding today. Now is truly a great time to list if you’re ready to make a change. But if you do sell your house right now, you may be wondering where you’ll go when you move.

With so few homes available to buy right now, you might be considering building a new home as one of your options. But you may be unsure if that’s the way to go. Let’s compare the benefits of a newly built home versus moving into an existing one, and why working with a real estate agent throughout the process is mission-critical to your success no matter what you decide.

The Pros of Newly Built Homes

First, let’s look at the benefits of purchasing a newly constructed home. With a brand-new home, you’ll be able to:

1. Create your perfect home.

If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.

2. Cash-in on energy efficiency.

When building a home, you can choose energy-efficient options to help lower your utility costs, protect the environment, and reduce your carbon footprint.

3. Minimize the need for repairs.

Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle. QuickenLoans puts it like this

“Buying a new construction vs. existing home typically means you’ll have fewer repairs to do. It can be a huge relief to know that it’s unlikely you’ll have to repair the roof or replace the furnace.”

4. Have brand new everything.

Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.

The Pros of Existing Homes

Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:

1. Explore a wider variety of home styles and floorplans.

With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.

2. Join an established neighborhood.

Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.

3. Enjoy mature trees and landscaping.

Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal. As Investopedia says, if you buy an existing home:

“Odds are, too, that the home will have mature landscaping, so you won’t have to worry about starting a lawn, planting shrubs, and waiting for trees to grow.”

4. Appreciate that lived-in charm.

The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home. According to Houseopedia:

“Charm is priceless. Existing homes, especially those built in the 1950’s or before, often offer architectural elements, historic charm and a quality of craftsmanship not available in new homes.”

The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. Working with the guidance of your trusted real estate advisor will help you make the most informed and educated decision, so you can move into the home of your dreams.

Bottom Line

If you have questions about the options in your area, let’s discuss what’s available and what’s right for you, so you’re ready to make your next move with confidence.

Nov. 24, 2021

Taking Time Off of Your Home Search Could Cost You Thousands

How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCM

Last week, the average 30-year fixed mortgage rate from Freddie Mac inched up to 3.1%, and experts project rates will continue rising through 2022:

“The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for full year 2022.”

If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.

Taking Time Off Can Be Costly

Mortgage rates play a significant role in your home search. As rates go up, your monthly mortgage payment increases if you’re buying a home, directly affecting how much you can afford. And even the smallest increase can have a large impact on your monthly payment (see chart below):How Smart Buyers Are Approaching Rising Mortgage Rates | MyKCMWith mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of waiting and hoping rates will fall, today’s rates should motivate you to purchase now before rates increase more.

Smart Buyers Can Succeed by Planning Ahead

You can use your newfound motivation to energize your search and plan your next steps accordingly so you’re prepared to act no matter what happens with mortgage rates. One way to do that: take rising rates into consideration as part of your budget.

Danielle Hale, Chief Economist at realtor.com, puts it best, saying:

“Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move. . . .”

You should also be ready to act when you find the home that meets your needs. That means getting pre-approved with a lender so there won’t be any delays when the time arrives.

The best way to prepare is to work with a trusted real estate advisor now. An agent can connect you with a lender, help you adjust your search based on your budget, and be ready to act quickly when it’s time to make an offer.

Bottom Line

Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.

Posted in Buying, Mortgages
Nov. 23, 2021

Don’t Believe Everything You Read: The Truth Many Headlines Overlook

Don't Believe Everything You Read: The Truth Many Headlines Overlook | MyKCM

There are a lot of questions right now regarding the real estate market as we head into 2022. The forbearance program is coming to an end and mortgage rates are beginning to rise.

With all of this uncertainty, anyone with a megaphone – from the mainstream media to a lone blogger – has realized that bad news sells. Unfortunately, we’ll continue to see a rash of troublesome headlines over the next few months. To make sure you aren’t paralyzed by a headline, turn to reliable resources for a look at what to expect from the housing market next year.

There are already alarmist headlines starting to appear. Here are two recent topics you may have seen in the news.

1. Foreclosures Are Spiking Today

There are a number of headlines circulating that call out the rising foreclosures in today’s real estate market. Those stories focus on an overly narrow view on that topic: the current volume of foreclosures compared to 2020. They emphasize that we’re seeing far more foreclosures this year compared to last.

That seems rather daunting. However, though it’s true foreclosures have been up over the 2020 numbers, it’s important to realize that there were virtually no foreclosures last year because of the forbearance plan. If we compare this September to September of 2019 (the last normal year), foreclosures were down 70% according to ATTOM.

Even Rick Sharga, an Executive Vice President of the firm that issued the report referenced in the above article, says:

“As expected, now that the moratorium has been over for three months, foreclosure activity continues to increase. But it’s increasing at a slower rate, and it appears that most of the activity is primarily on vacant and abandoned properties, or loans in foreclosure prior to the pandemic.”

Homeowners who have been impacted by the pandemic are not generally the ones being burdened right now. That’s because the forbearance program has worked. Ali Haralson, President of Auction.com, explains that the program has done a remarkable job:

“The tsunami of foreclosures many feared in the early days of the pandemic has not materialized thanks in large part to the swift and decisive foreclosure protections put in place by government policymakers and the mortgage servicing industry.”

And the government is still making sure homeowners have every opportunity to stay in their homes. Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB), issued this statement just last week:

“Failures by mortgage servicers and regulators worsened the impact of the economic crisis a decade ago. Regulators have learned their lesson, and we will be scrutinizing servicers to ensure they are doing all they can to help homeowners and follow the law.”

2. Rising Mortgage Rates Will Slow the Housing Market

Another topic that’s generating frequent headlines is the rise in mortgage rates. Some people are expressing concern that rising rates will negatively impact the housing market by causing home sales to dramatically decline. The resulting headlines are raising unneeded alarm bells. To counteract those headlines, we need to take a look at what history tells us. Looking at data over the last 20 years, there’s no evidence that an increase in rates dramatically forces sales to come to a halt. Nor does home price appreciation come to a screeching stop. Let’s look at home sales first:

The last three times rates increased (shown in the graph above in red), sales (depicted in blue in the graph) remained rather consistent. It’s true that sales fell rather dramatically from 2007 through 2010, but mortgage rates were also falling at the time. The next two instances showed no meaningful drop in sales.

Now, let’s take a look at home price appreciation (see graph below):

Don't Believe Everything You Read: The Truth Many Headlines Overlook | MyKCM

Again, we see that a rise in rates didn’t cause prices to depreciate. Outside of the years following the crash, prices continued to appreciate, just at a slower rate. 

Bottom Line 

There’s a lot of misinformation out there. If you want the best advice on what’s happening in the current housing market, let’s connect.

Nov. 8, 2021

A Different Kind of Buyer's Remorse

It is still a challenging market in which to be a buyer, and we continue encouraging our clients to get in before prices and interest rates go up any more. If you don't currently own a home, you are experiencing inflation while homeowners are experiencing appreciation -- two very different things.

Besides being advisor, negotiator, and coordinator for our clients when they are purchasing a home, we do a lot of counseling; doing our best to keep their spirits up in what can be a rollercoaster ride until the very end. We remind our clients that everyone gets the home they were intended to have, and it will feel right.

But, despite all the counsel and insights we provide, many buyers still need to experience that sense of loss when they miss out on the first couple homes because they hesitate or don't make their "no regrets offer" right out of the gate, and that's okay. It's just part of the learning process.

Check out this article our CEO and Designated Broker, Matthew Plummer, was interviewed for in The Residential Specialist Magazine. https://trsmag.com/oh-no-no-dealing-with-buyers-remorse/

TRS Magazine Buyer's Remorse