There’s definately a new trend in homebuilding emerging.  Green.

Walking through opening day of the International Builder Show has shown a tremendous effort to provide eco-sustainable and eco-friendly living environments for more affordable prices.  Traditionally this technology has been quite spendy (and relative to many main-stream non-eco-friendly options, current eco-friendly options are still a notch or two higher in price).

I have been a fan of a more responsible approach to the way we conduct our lives, and the adoption of new building standards and techniques to minimize waste and improve the quality of life, is win-win.

Some of my favorite “eco-booths” were the Honeywell Wind Turbine and the Eco-Cottages.  The Honeywell Wind Turbine is designed to be a consumer grade wind tubine to help generate supplemental energy for your home.  Despite other turbine models that need elevations of 60 feet and unmanagable wing-spans the Honewell Turbine is designed to perch on your rooftop or similar structure.

According to the manufacturer the turbine can produce up to 18% of an average household’s energy assuming there is an average of a class 3 wind (5-6 mph).  The annual average wind speed in Spokane WA is 8.9 MPH, more than enough.  According to some online retailers of these turbines, one can be acquird for as little as $6,000 (not including any retro-fitting to accomodate installation).  The average cost savings to a home would be in the ball park of $20-$30/month (making  a recoup on investment about 16 years assuming steady energy costs).

My next favorite, and definately the coolest thing I’ve seen in a while are the Eco-Cottages.  These simple, compact and higly efficient dwellings are designed with panelized construction to minimize wast and are extremely efficient.

Entry costs for a studio unit are around $49,000 with installation being around $7,000.  They also have some great, “off the grid” wilderness packages with solar and alternative energy and water resources.  A great tool and a viable option for a lake or river home.

We’ll be spending some more time at the booth’s today looking at new (and old) ideas.  There’s a chance we may integrate many of these into our upcoming building project…

Tags: Fun, New Ideas by Spokane Home Guy (509) 990-7653
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As many are not aware, there is/was an obscure requirement affecting FHA financed homes and seasoning.  Simply put, an investor must have owned the home a minimum 90 days before conveying the home to a buyer with an FHA insured loan.

Not any more, well, at least temporarily.

Why is this a big deal?  According to FHA Loan Pros, FHA purchases increased by 181% over 2007 to 2008 (pending statistics for 2009 still…).  This is a HUGE majority of the market, and with incentives for the First Time Home Buyer Tax Credit – now is the time to sell.

The previous 90 day restriction, according to some, required that an FHA buyer not even enter into a purchase contract prior to the 90 days (this was one underwriter’s interpretation).  My buyer had to wait until the 90 day time period has passed to write an offer and submit it to underwriting.  I feel the underwriter was a bit rigid on this, and we could have looked elsewhere, but I found similar restrictions at several other banks.  So we waited. 

With the temporary reprieve on the seasoning rule, I look forward to showing my FHA buyers new flips on the market knowing we can successfully write offers and negotiate terms on the property without worry of seasoning requirements.   I belive this will have a big impact on inventory and is a very WELCOME  act of lieniency for investors who’s practices have been severely limited through current underwriting requirements and financing hurdles.  Opening up the doors for investors to make money will move properties, create jobs and get us on the road to recovery.  

I sincerely hope that down the road (hopefully soon) new lieniencies will be given to investors by means of underwriting.  A recent quote I got for an investor cited 25% loan to value (not a big deal), but a 3 points up front for non-owner-occupied which I thought was crazy.  This is a kind of market where if you can afford to buy another residence whether it be a rental, vacation property or land, you should (case in point, I just sold a bank owned vacation condo 2 bed 1 bath to a buyer for $39,000 — move in ready).  Home buyers should not be nickeled and dimed for buying inventory and building their portfolio - just my opinion.

Over 2010 I predict the gates will open up slightly for investors and homebuyers.  Bank policy (underwriting and investor backings) have affects on how fast inventory can move, I’m all about being rational and careful to prevent what we just went through the past 2-3 years.  Money changing hands will bring us out and up!

Tags: Uncategorized by Spokane Home Guy (509) 990-7653
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The thought of buying Bank Owned Homes is very appealing to many buyers – many like the glamor these foreclosed properties have garnished in the national media, television and the do-it-yourself investment gurus.  Bank owned properties can yeild great opportunity, but there are many pitfalls one must watch out for when hunting them.

The primary reason most people look for Bank Owned Homes is that they assume there’s instant equity, that cannot be more FALSE (Best said in the tone of Dwight Schrute, from NBC’s hit show “The Office”).  Many of the listing entities that manage the Bank Owned Properties (REO’s) are loss mitigation and asset management divisions looking to liquidate the banks newly acquired properties in the shortest amount of time for the highest amount of money.  Many bank owned properties start out merely under acutal market value and incrementally inch their way down in price as time passes. 

I’m sure there’s a bank formula for the way they handle their price reductions or their terms, but there’s no “golden rule” for REO’s,  I’ve seen banks take significantly less for a clean (low or no contingency) CASH offer when up against a more restrictive FHA or Conventionally financed offer.  In many cases, the quicker the asset can move, the better off and the more motivated the bank will be.  On the flip side, some asset managers are not impressed at all with cash (although, it’s hard to forget the “Golden Rule of Cash”  — “He Who Has the Gold, Makes the Rules”).

Some experts estimate that there are up to seven million bank owned homes that are currently not on the market.  This is an attempt for banks to manipulate the market inventory to help stabilize and firm up the prices on the current inventory being marketed. 

Case in point: a home a client of mine just put a cash offer in on was acquired by trustee deed (at auction) by the bank in mid OCTOBER 2009, the property reached the market the second week of January.  This home sat empty and unmaintained for over a quarter.  There are MILLIONS of homes out there like this.

My advice, do your home work on bank owned properties first.

Now the big fallacy aside, some other things one must watch out for:

1. Custom Bank Addendums – Fannie Mae and other Banks all have their own addendums, I call them CYA addendums covering the banks “Bum.”  Thes can have serious ramifications on your transaction that will affect your rights in the deal.  These addendums are not part of the standard Washington State purchase and sale agreement and it does modify some of the boiler plate.  If you have concerns or do not understand it it is advisable to get a competant real estate attorney to review.
2. Damage to property – The banks are getting a little better at winterizing homes prior to severe damage but they cannot always get to them in time.  In most cases you’ll find bank owned homes to be winterized (water turned off, antifreeze in the pipes and the water heater drained, some cases the power will be off).  It’s imperative that the utilities be activated for inspections.  In many cases the banks will refuse to do this for you and the burden to turn on the utilities is placed on the home buyer (keep this in mind when making your offer that there are sometimes increased costs when buying a bank owned home usually under a few hundred bucks).

Now there are probably a million other scenarios and hypotheticals for puchasing bank owned properties, but for the most part these are the top few in my book to watch out for.  Best advice, do your research  make a solid offer and be ready to walk away if you don’t get what you want.

Tags: Idaho Real Estate, Spokane Real Estate by Spokane Home Guy (509) 990-7653
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