Cool tools for finding property information

Here in Snohomish County, we are fortunate enough to be able to find a whole lot of real estate information online, for free, through the Snohomish County website. Snohomish County actually has won prizes for their website because of its extensive collection of online public records, and the tools are invaluable for anyone who's interested in buying or selling real estate in the county. You don't have to be a professional to use the site, either. It's all public information and free.

You can look up property information in a variety of different ways. For instance, if you drive by a parcel and are wondering who owns it and what they paid, you can search for it using satellite mapping of the county. If you know the street it's on but not the street address, you can use the map to find it. The property lines are overlaid the display in either the map or satellite imaging mode. So if you know the property is 3 parcels south of a particular intersection, you can look for it that way. Or, if you know the street number you can enter that into the search mode.

Once you find the property, you can click on it and all the tax information will come up, including the owner, date of sale, what they paid for the property, the assessed value, etc. This is valuable if you want to make an offer to the person who owns the property. Just write them a letter and send it to the address on the records. A lot of times, you can pick up a property this way for less than you might find one on the MLS. At any rate, if it's a particular type of property you are looking for that is hard to find, it opens up the possibilities beyond just what's on the MLS.

Another type of information that Snohomish County makes available is notices of foreclosure sales. For investor buyers, this is a great tool for identifying distressed properties for rehabs or flips. I use it all the time and love it. I check the notices, move over to the mapping and assessor's information to check further data on the property, pull up a radius search in the MLS to determine the loan-to-value outstanding on the homes, and then compile all of this information into a report that I email to my investor clients once a week.

Anyway, these are just a few of the tools that are out there, public and free, that anyone can use to find out property information. I'm sure other counties offer similar information though I think Snohomish County's site is one of the most robust and comprehensive. Anyway, if you have any questions about how to use these sites, feel free to contact me at sandy dot kaduce at gmail dot com for a tutorial.

Snohomish County Online Property Information (SCOPI) - this page takes you to the property mapping. Once you find a property using the map, you can click on it for a link to the county Assessor's online tax records.

Snohomish County Online Public Records - This is where you can go to find out about foreclosure notices and other types of public filings. Also, marriage records are available here if you are doing any genealogy projects, although I am not sure how far those go back. Also, if you ARE interested in doing genealogy and your search leads you to Snohomish County, you should know that a lot of historical records prior to 1910 are missing due to a fire at the original county courthouse. Little-known historical trivia!

Foreclosures, Pre-Foreclosures and Short Sales

I have had an interesting week, working with a investor buyer who is trying to acquire a property that is in the foreclosure process. We weren't able to get the seller to bite on my buyer's bid, but nevertheless, it's been a very interesting few days.

When I very first got into real estate, I met a woman who worked for one of the big title companies who said to me something that at the time I thought was just a terrible thing to say, but now I realize was quite prescient. She said that I should be saving my money so as to be able to invest in the wave of foreclosures that she predicted was coming. Not being the kind of person who WANTS to profit from others' misfortunes I thought this was pretty heartless but in retrospect, I think she was right on the money.

Unfortunately, the last 4 or 5 years have seen lenders really lowering their standards as far as who they will lend money to. In one sense, it's good because it has allowed a lot of people to qualify to own their own homes who years ago would have been turned away. But it also means that a lot of people are in homes they can't afford, with 3 and 5 year ARM loans that are approaching the end of their fixed period. And, a lot of loans are what are called "no docs" loans, which means that people can claim a means of payment that may or may not exist, just to get into the house of their dreams. There are also negative amortization loans, which, rather than paying down interest and principal, actually ADD interest to the outstanding principal against the home. So, your interest rate is 2% as far as what you pay for now, but the extra interest (4% or more) is added to the principal, and counts against any equity in your home. So, when you sell it you end up owing money!

These loans suck. They prey on people who don't have a lot of income, have poor credit, and are not very financially savvy. Not surprisingly, the chickens are starting to come home to roost.

Back to my investor client. He was looking for a property that met a very specific, difficult to find set of criteria, and it so happened that I found a house that was a perfect fit. So we went out to take a look at it. Something about the house (perhaps it was the dirty diaper that greeted us at the bottom of the basement stairs, or the dead pet rabbit in the backyard? Don't believe anyone who tells you that real estate is a glamorous profession!!) made us feel that something about the place wasn't right. When you've been in enough houses, you start to get a feel for when a divorce, a death or financial problems are part of the picture. Anyway, we did some research and sure enough the house was subject to a pending Notice of Trustee's Sale. In other words, it was in foreclosure.

A search of the county records will usually tell you if a Notice of Sheriff's Sale, or a Notice of Trustee's Sale has been recorded against a property. Typically, if you haven't made a payment for 6 months, and you haven't made any arrangements with your lender to catch up on your payments, your lender will begin foreclosure proceedings. The first step is one of the two above Notices. I would explain the difference but that would get us into a discussion of different ways to hold title and it would probably be boring.

Anyway, these Notices are intended to inform the public that the house will be sold at auction unless the "arrearage" is "cured" or cleared up before a certain date. Here in Washington, that certain date is 11 days before the auction. Any money from the auction will go to pay off the creditors with a claim on the house. If the situation is bad enough, there won't be enough money to pay them all, and some of them will remain outstanding against the house, and the new owner can end up taking them on. This is a risk you take when you buy a house at a foreclosure sale. You also don't get to inspect the property.

A seller can stop the sale from happening if he is able to make arrangements with the lender, or if he is able to sell the house for enough money to pay off all outstanding debts recorded against the house before the cure date. If he gets an offer to purchase the house but it isn't enough to pay off all the debts, then he has to get his creditors to agree to a payoff that is less than they are owed. This is called a short sale.

If none of these things occur, the house will go to auction. The lender doesn't really want this to happen because the price they get at auction is often less than they are owed, plus, they aren't in the real estate business. They are in the lending business, which means what they really want is just to be paid back. But, if this is the only way they can get what they are owed they will do it.

From an investment perspective, buying a property at auction or on a short sale can be a good way to pick up a house for less than the market price. However, there are risks involved. For instance, you can get stuck with any outstanding liens against the house, or there can be problems with the house that are expensive to fix, such as needing a new roof. But if the price is right, a lot of investors are willing to take this risk in order to reap the profits on a flip. A lot of the time it works out pretty well.

Unfortunately, this particular house was also subject to more liens and judgements than the house itself was worth, and it was still the seller's right to accept or reject an offer to purchase the house. So, in order to obtain clear title, we needed to work with them as well as their lender to get them to accept our offer. The only way the sellers could pay off all their creditors and also pay closing costs would be if a buyer paid more than $50K over the fair market value of the house. My buyer wasn't going to do that.

So, we came in with a pretty low offer that was enough to pay off the first mortgage but not the home equity line, and we offered to pay closing costs. If we'd have gotten the sellers to agree it would have just been the beginning of the process. Sometimes it can take months to get a lender to agree to a short payoff. Doing so can be to their benefit--actually foreclosing on a property costs a lender quite a bit of money in terms of legal fees and so forth, so sometimes it makes more sense to cut their losses before it gets that far.

It can also be to a seller's advantage, because it reduces the damage to their credit rating of having a foreclosure recorded.

And it is obviously to a buyer's advantage, because they don't have to overpay for a property or take on the seller's debts.

But it's a complicated process and a lot can go wrong. Unfortunately, we didn't get out of the gate with this one. The seller didn't go for it--maybe they were not desperate enough yet! But it was a real eye-opener, and gave me something to talk about in ye olde blog. These sellers were a perfect example of WHY we will probably see a lot more of this kind of transaction in the years ahead. They had no way to make a payment (no verifiable income!) yet, they received a loan for a $400K house, then a 2nd home equity loan just 7 months later. They had a no down payment, negative amortization loan, and this wasn't even the first time they'd been in foreclosure!

Home Pre-Inspections and Doing the Right Thing

One of the areas where real estate agents can provide a good deal of value to sellers is in the process of preparing a home for sale. In recent years, many homesellers have realized what developers have known for years--proper preparation is a huge part of getting ready to sell. It's not just about making sure the beds are made and the grass is mowed and the furniture nicely arranged, it's also about making sure that you don't get blindsided somewhere down the road with having to address "delayed maintenance," or those maintenance tasks that were put off until later or half finished. Your home needs to be ready to sell in all respects, not just the cosmetic details.

That is why I recommend to all my sellers that they have a home pre-inspection done. It serves several purposes, and costs very little relative to what NOT having one done can cost--think rescinded or low-ball offers. The first purpose it serves is to help you identify any major or minor jobs that need to be done. Just because a problem is identified--such as failing siding or a roof needing repair--doesn't necessarily mean you have to address it, but it gives you an opportunity to determine your strategy for dealing with any issues. Forewarned is forearmed, as they say.

The second purpose it serves is as more of a marketing tactic. A good real estate agent will often create for your home a "marketing book" that contains all the pertinent information about your home and neighborhood. Buyers love these--they love being able to go through them at their own pace and learn about the house in question. In the ones I provide, I usually have a few pages about the town and neighborhood, the schools in the area, all the title information for the house itself, pictures of the home and flyers, mortgage information. When a seller has a pre-inspection done, we also include the pre-inspection and a letter detailing all the work the seller has done to prepare the home for sale. It shows the buyer that the seller is pro-active and not just waiting to sell the house to the "greater fool." It can actually encourage a buyer to make an offer on your house as opposed to another, because the home has been better cared for and the seller will be more reasonable.

Some sellers, of course, feel that this is unnecessary and of course, it's their house and ultimately they have to decide how much they are willing to do to get it ready to sell. In some cases, it might make even make more sense to sell a house in more of an "as-is" condition and not worry about doing the fixing up. Some buyers are looking for a "fixer-upper" and if your house falls into that category, then you want to let the buyer take on the expense and hassle. That's where they are going to add the value and take the profit. However, if you would rather take the profit yourself and get the best price you can, it's something to consider. Just realize that you will not be able to get "top dollar" for a house that is not in "top dollar condition."

The other argument I sometimes hear is, "well, it's a seller's market and with so little inventory out there, buyers are just lucky to buy whatever they can." This kind of falls under the "a sucker is born every minute" category of thinking. A year or two ago, maybe you could get away with thinking this way, but since rates have started to go up, we are in a different market. It's still a fast paced market, but buyers are being much more careful about what they buy and making sure that they are not committing to a house that will be a money pit. They are not desperate to get into a house this week or this month just because interest rates happen to be low and there isn't much to choose from. Rates are good, but not good enough to create a "feeding frenzy" type of atmosphere. This is a good thing. The kinds of price increases that real estate experienced in the last few years will inevitably slow down as interest rates go up. Sanity will and must return to the real estate market.

Sanity is good, peeps.

Everyone wants to get as much money out of their house as they can, but sometimes in our haste to save a few dollars, we can actually end up costing ourselves in the long run. The cost of an average home inspection is $300 to $400 dollars. The repairs themselves can be considerably more. But these expenses pale in comparison to what it may cost if you lose a deal based on inspection issues, fail to recieve any offers, or if your home is sold with undisclosed and unrepaired issues and a buyer decides to sue.

Ultimately, doing the right thing always pays. And as Wilford Brimley would say (anyone remember him?) "It's the right thing to do."

More on Volunteering

So, one of the big things I have wanted to talk about in here is some of the other organizations I have been getting involved with. One of the reasons I wanted to get into real estate is that it's the kind of job where you have the opportunity to be involved in the community. As I mentioned, I joined the Chamber of Commerce for Mukilteo, and also have been working with Habitat. I am pretty excited about both of those--I think the Chamber puts on some great events and obviously, Habitat is a great organization too.

The third thing I am excited about is the Mukilteo Lighthouse Festival. The Festival is basically Mukilteo's "Town Party" and it's an all volunteer event and a very big deal. Because it's all run by volunteers they basically need all the help they can get. So I told them that I would be willing to help out however I could--they took me up on it and now I am the "Sponsor Recognition Chair." Wow! You volunteer to help and you end up as a chairperson!

Okay, so really this is not that big of a deal. The first thing on my agenda is...THANK YOU NOTES! Later I'll be coordinating certificates and plaques for sponsors, and making sure everyone is recognized on signage and so forth. But it sounds impressive doesn't it, being a chairperson?

All joking aside, it's always amazing how many people it takes to make one of these things come together smoothly. I just have one little piece of it, and there are at least 20 other people who also are volunteering, and there is still more to do. It'll work out though...these things always do. Maybe not perfectly but the only people who ever notice the glitches are the ones running the show.

Anyway, next time you are at a festival or other volunteer-run event, think about how every single thing that you see requires someone to donate time or money to the cause. Most of the time, no one is getting paid to make sure things work out like they are supposed to, and of course, most of the time and effort people put into it has to be in addition to whatever the volunteers do for a living. Kind of amazing they run as smoothly as they do!