What’s Your Interest in More Homeowner Topics?

The Tim's HomeIn a recent comment thread a few readers expressed interest in occasional posts on some more homeowner-focused topics, including finishing the “knife catcher” series of posts I began back in June about my personal homebuying experience (yes, that’s my home pictured at right behind Crystal, the Seattle Bubble Mascot).

Here are some of the potential posts I was thinking of running about my home hunt before I put the series on hold:

  • How did we choose our agent?
  • Where did we get financing?
  • What was the path to closing like (inspection, escrow, etc.)?
  • Closing thoughts on the process & decisions.

I’ve also had some ideas for post-buying posts on home ownership in general:

  • How much does ownership really cost (interest, maintenance, other stuff)?
  • Home maintenance: what needs to be done, costs, etc.
  • Home improvement: costs, uses, practicality, etc.

Are these types of topics things that would interest you, the readers? Or, would you rather I stick to market analysis and listings? Let me know!

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

53 comments:

  1. 1

    Variety is the Spice of Life

    Challenge us Tim with different types of posts, it keeps the same old blogs coming from us mitigated on like statistical chart trending, with some monthly changes, but trending similarily.

    Buying a house can have surprises, so being honest and telling us like it is will prepare buyers to have a monetary cushion in place, just in case.

  2. 2
    Lake Hills Renter says:

    As a new homeowner myself, I’d love articles on home maintenance and improvement. Since this is my first home, a lot of this is stuff I’m having to figure out myself.

  3. 3
    Scotsman says:

    I posted this over on another thread:

    “Here’s the truth. Housing isn’t an asset, it isn’t an investment, it’s nothing more than an expense. In the Housing Lotto of Life you may get something back after 20 years, but don’t count on it. Down payments and closing costs are an amortized expense, payments and taxes are an expense, repairs are an expense. That’s all. How much do you want to pay? When all is said and done after 30 years the expense drops by the amount of P+I, but that’s it. You still have to pay taxes (vastly increased), insurance, repairs, etc. How much do you want to spend every month? ”

    I really think this is the way we need to be thinking of housing for some time to come. So yeah, let’s take a look at the real costs of owning, maintaining, improving, and “enjoying” home ownership. Then the old rent verses own question can be more accurately answered.

    Since many people may be staying in their homes longer than originally anticipated how about some threads on the costs of additions, upgrades, changes for the sake of change. Whay pays, what doesn’t, where could one cut costs, what was most satisfying, etc.

  4. 4
    HappyRenter says:

    How much does ownership really cost (interest, maintenance, other stuff)?
    Home maintenance: what needs to be done, costs, etc.
    Home improvement: costs, uses, practicality, etc.

    Yes, I would be interested in this type of questions. My wife and me are still evaluating different options, like house, townhome, condo or rent one of these?

    Cost is important, but there are other things that are important, too, like how much do you like to take care of your home or backyard, if you have one? We have been visiting houses for rent in Seattle. Some of them required yard maintenance by the tenant. I had to ask myself: Do I really want to put time and effort in keeping up the backyard of a house which in the end does not belong to me?

  5. 5
    Tim McB says:

    Sounds good to me. I have some experience and interest in the maintenance/remodel/upgrade area (these lines sometimes are blurred) and would to hear other stories/analysis in these areas as well.

  6. 6
    Yaj says:

    Like all of the ideas you posted. Might not be worth a blog post, but something along the lines of “here’s how much (in percentage terms)” you should plan on having to spend to get into a house (over and above the downpayment)

    I’ve heard estimates of between 1 and 1.5% of the purchase price. A breakdown of the various fees and what they typically run would be very helpful.

  7. 7
    ray pepper says:

    I’d be interested in something like this:

    Since you pulled the trigger and purchased what do you perceive you:

    1. Could sell the home for if you had to?
    Has the property went up or down in value based on nearby comps, time on mkt, etc.
    Also factor in cost to sell, title/escrow, excise, commissions, etc.
    In essence have you made any money?
    How long do you think it would take you to sell?

    2. What would you do differently based on your experience?

    3. How would you list your home? (if you had to given your knowledge)

    4. Would you still have bought THIS PARTICULAR home knowing what you do today?

  8. 8
    The Tim says:

    RE: ray pepper @ 7 – Some of those are easy enough to answer in a comment. This comment, specifically.

    1) Don’t care. Absolutely zero interest in selling. See this post for more thoughts on this subject: Does anyone pursue actual home ownership anymore?

    2) Lessons learned will probably be addressed in the final post of the “knife catcher” series, should I finish it.

    3) I’d certainly be interested in writing a post about that, although my thoughts on this matter come more from studying real estate data and looking at listings than anything in my own personal experience since, as I addressed above, I am interested in actually owning my home, not attempting to use it as some sort of “investment” or a rung on a fantasy “equity ladder.”

    4) Yes.

  9. 9
    Drone says:

    I’m definitely interested in this info.
    Of particular interest to me are the buying costs… obviously as fees increase, the down payment is reduced which reduces the overall offer price by about 5x (assuming 20% down).
    And if there are large (and surprising) expenses immediately post-move, that would also be good to know.

  10. 10
    David Losh says:

    RE: The Tim @ 8

    The “equity ladder” is for increasing an equity position. Once you hit a wall on your $250K purchase, you may want to move up to $500K.

    In my opinion, people don’t understand that with an equity position you can make any kind of deal you want in your next purchase. You don’t need an agent, and may not need a lender.

    When I started in Real Estate in the 1970s I remember a person who traded a sail boat as a down payment, and made payments at 7% interest for about seven years to own the home free and clear.

    Way too many people are over thinking the idea of Real Estate as an investment. It is a simple easy meat head kind of thing to do, if that’s what you want to do.

  11. 11
    ray pepper says:

    RE: The Tim @ 8

    Well, I’m satisfied with those answers!

    Kind of rare that I feel satisfied…Good Job!

  12. 12
    David Losh says:

    RE: Scotsman @ 3

    People will also have to pay down principal balances, and get closer to home ownership. I don’t think the government, or the banks, will be helping any one with cram downs, or special programs.

    People are going to have to deal with the situation they have.

  13. 13
    HappyRenter says:

    I know people who have moved up the equity ladder and now they are stuck. They have paid off their newest home, but still, they are hoping for home prices to go up in value before they sell. This is because their home is their retirement and they have put all their life savings into their home.

  14. 14
    Sparky says:

    I’d love to read the rest of the home hunt series that you had planned. I was really looking forward to those articles as I’d like to see an engineer’s perspective on the process (vs. “Suzanne researched this,” which isn’t likely how I’d go about buying my first house…)

  15. 15
    David Losh says:

    RE: HappyRenter @ 13

    That’s an excellent point, and one that I didn’t consider.

    My home is my office.

  16. 16
    Passed Doo says:

    13. HappyRenter
    “This is because their home is their retirement and they have put all their life savings into their home.”

    They received bad advice, chose poorly and/or didn’t think things through.

    It could have been worse. They could have been with Madoff or MF Global or purchased Zillow stock at the wrong time… A paid for home isn’t the worst outcome after all.

  17. 17
    Pegasus says:

    Why don’t you post where your wife was in this transaction? What were her concerns, wants, etc? Did she totally rely on you and your judgement or was she independent and opposed to some things in the transaction along the way and you had to compromise? There is another half to this transaction but I am not sure we are really hearing the entire picture since there were two buyers and not one. Just a thought…not a criticism.

  18. 18
    Macro Investor says:

    How about building vs. buying existing. Or exploring building vs. various installing various types of pre fabs. How do you get permits, utility hookups, zoning changes.

  19. 19
    jeff says:

    I would be interested to see information on the true costs. Maybe you could get someone who owns a condo/townhouse to do a similar piece on different housing types.

  20. 20
    HappyRenter says:

    By Passed Doo @ 16:

    13. HappyRenter
    “This is because their home is their retirement and they have put all their life savings into their home.”

    They received bad advice, chose poorly and/or didn’t think things through.

    It could have been worse. They could have been with Madoff or MF Global or purchased Zillow stock at the wrong time… A paid for home isn’t the worst outcome after all.

    You might be right, but I think that a lot of baby boomers received that advice. You are also right that it is not the worst outcome, but they thought that the home might be worth 1M$ one day. It was valued below that in 2007 and decided to wait. Now it’s worth even less and they are still waiting. But, on the other side, I find it really hard to know where to invest my money right now. Until recently, the advice was to work your way up the equity ladder. Today, the advice is to have a diversified portfolio, but who knows.

  21. 21
    Azucar says:

    RE: HappyRenter @ 20

    ” But, on the other side, I find it really hard to know where to invest my money right now. Until recently, the advice was to work your way up the equity ladder. Today, the advice is to have a diversified portfolio, but who knows.”

    The advice that I’ve always received was to stay diversified. It was everyone who was caught up in the real estate bubble… buying places that they couldn’t afford… that were telling everyone else to “invest it all” into a house, because it seemed to be working for them (according to Zillow, for most anyway).

    I agree that it’s currently hard to know where to invest money right now. There’s tons of risk in the stock market (I’d say as much or more at this point than in buying a house, considering how much housing prices have come down over the past couple of years and where the stock market may be headed if all of the doom and gloom economic scenarios play out), but “safer” things like savings accounts, money market funds, and CD’s are paying basically nothing in the way of interest. Where to put the cash while waiting for the right moment to buy a house??? Gold? No, that’s spiked too much recently (looks bubble like to me!). Utility stocks? Maybe. What is a “safe” investment that can reasonably be expected to generate a 5-10 percent return with little risk of losing large amounts… and that will be liquid quickly when the right moment to buy a house arrives?

  22. 22
    David Losh says:

    RE: Azucar @ 21

    Local business is the best investment you can make.

  23. 23
    turf says:

    my father-in-law is 92 years and living in a house he purchased for cash in 1955 approx. if he was renting 3-4 months rent would represent the 1955 purchase price. Buying isn’t a good idea?

  24. 24
    Chuck C says:

    I like Macro’s idea of building vs. buying “used”, working with the county for zoning changes, building permits, dividing land parcels into smaller lots for sale, etc.

  25. 25
    Chuck C says:

    As an alternative to your “how to choose an agent” idea, how about a discussion about how not to use an agent at all? (buying, selling, or both).

  26. 26
    Scotsman says:

    RE: Azucar @ 21

    “What is a “safe” investment that can reasonably be expected to generate a 5-10 percent return with little risk of losing large amounts… and that will be liquid quickly”?

    How about cash? If home prices are falling 5-10% a year and your ultimate goal is to purchase a house, just holding cash is a winner. In fact, in a deflationary environment cash is a consistent winner. Our brains are conditioned to think of the purchased asset increasing in value as the winning investment strategy. But the end result is the same when the purchasing power of current dollars increases in the face of falling prices. Just sit tight.

  27. 27
    Chuck C says:

    I ran out of time to edit my comment at #24, but to expand/add –

    I think the topic of working with the county on various issues (permits, etc) and buying used vs. building new (or buying with intent to re-build) would generate interest because of the seemingly large number of old crap-box teardowns in the area. Most of the “best” land in the area was developed decades ago, be it waterfront property, view property, or in-town property (for those who like city living) and as such the structures on this prime property have often exceeded their shelf life. After looking at so many of these crap-boxes myself, I’m starting to consider the tear-down and rebuild idea which may boast the additional benefit of being able to take advantage of things that just can’t be done anymore (building within xxx feet of the shoreline, having a dock/boathouse, etc).

  28. 28
    ARDELL says:

    RE: The Tim @ 8

    The reality is that very few people who are selling their homes today, planned to do so “ever” at time of purchase, just like you are saying now. Very often, someone putting their home up for sale in the last five years, has had to do so because of an unforeseen event.

    Every day I hear someone ask a potential home buyer “How long do you plan to live in your house?” Yet very few sellers are listing their homes because they have reached the end of some “planned” period of time, that was ascertained at time of purchase. Almost none. “How long do you plan to live in your house?” is a pretty dumb question most of the time. People feel compelled to answer it, but they are usually just picking a number out of the air.

    Even people with lots of money down, or cash buyers who love their house and don’t “want to” leave, are forced to sell due to divorce as example. The wife wants half the equity in cash and the husband can’t buy her out lump sum, plus pay alimony and child support on top of that.

    Having no exit strategy is about the same as having no purchase strategy.

    Deciding whether or not to buy, is a much more elective process than “deciding” that you have to sell. Almost no one “has to” buy a house. Many, and even most in a weak market, “have to” sell for reasons that happened to them, and not ones they could have foreseen at time of purchase.

  29. 29
    Peter Witting says:

    Wow, I like all of these! I even agree with SWE this morning!

    Build new versus buy especially, with discussion of costs, risks, permitting, restrictions and opportunities – this is an area I am interested in but haven’t seen addressed. Drilling a well, scouting raw land, tear down to the foundation but build upon the same footprint….See Chuck C’s and Macro’s comments.

    I’m looking forward to spicing up the regular features with some new topics.

  30. 30
    Dorothea says:

    The Tim asks “Does anyone pursue actual home ownership anymore, or are most people just interested in home buying and perpetual debt?”

    I’m interested in actual home ownership; buying a home is a drag, and the less times I have to buy/sell real estate in this life, the better. SB is enormously helpful when it comes to tracking prices and learning about value, the blog would be refreshed by addition of the topics already suggested on this thread. I don’t want to repeat what has already said, other than to say that all of the new directions mentioned above interest me.

  31. 31
    ChrisM says:

    We already get this to some extent on this site and RCG, but I always enjoy Realtor(tm) ethics!

    http://www.bubbleinfo.com/2012/01/09/realtor-ethics/

  32. 32

    Gosh, I dunno — I guess of those listed, I’m most interested in hearing how you chose an agent…

    :-)

  33. 33
    Passed Doo says:

    “20. HappyRenter
    January 9, 2012 at

    Today, the advice is to have a diversified portfolio, but who knows.”

    Nicely said, and Really, who as a thinking person would, with a straight face, take exception or argue with that statement ? (unless you are paid to argue, one way or another or have a vested interest, one way or another)…

    What would you tell your children, Buy a Home today because ‘Suzanne researched it” ?

  34. 34
    The Tim says:

    RE: ARDELL @ 28 – I’d like to see some data backing up your assertion that “very few” people elect to sell their home vs. needing to for some completely unforeseeable reason.

  35. 35

    Perhaps a bit on the various options that home buyers and home sellers have, and what’s good and bad about each option. For example, a buyer can try to buy a home without any representation at all, or use a deep discount brokerage, or an attorney, or an attorney brokerage, or a full service real estate agent with no rebate, or a full service agent who gives rebates.

  36. 37
    One Eyed Man says:

    I have several polls to suggest. They could be topics other than polls and would need to be reworded to be in a form for a poll in any event. The last one listed below is just a rhetorical question.

    1. How many buyers have had their broker explain to them (verbally or in writing) how they will get paid and how much they will get paid (at least as a percentage of price) before the buyer saw the closing statement? (Its my recollection that outside of the area of real estate agency, at least arguably a common law agent who received a commission from an adverse party without disclosure and consent of the principal would be liable for forfeiture of the commission.)

    2. How many people think that the buyer’s broker should have an explicit statutory duty to explain to the buyer how, and how much, they will get paid in the transaction before the buyer signs a purchase offer? Or perhaps before the broker shows them a house (or renders any brokerage services)? If the broker is an MLS member, should the agent be required to provide a pamphlet or other written disclosure explaining that the agent is a member of an MLS and by contract when a selling broker receives a commission from the seller, an agreed portion of that commission gets paid to the buyer’s broker pursuant to the MLS agreement and the listing agreement?

    3. How many buyers have had their broker explain to them the approximate cost to later sell the home they are buying before they buy? (Note that the selling commission would have to be based upon some approximation like perhaps upon what that brokerage firms current going rate is, or perhaps an average rate for the prior year, or for the MLS in general.) How many people think that the agent should have a statutory duty to provide a pamphlet concerning selling costs and how commissions are paid to the buyer before the selling agent shows them a house (or provides brokerage services)?

    4. Is it just costly consumer protection overregulation to require disclosure of this type of commission information, which just makes the transaction more expensive with no significant benefit?

    5. How much lobbying money do you think RPAC (the realtor’s lobby) would spend to keep from having a statutory duty to provide the above referenced commission information (and related selling cost information) to the buyer? Five figures? Six figures? Seven figures?

  37. 38

    Those are all excellent topics and I think sharing first hand your experience with Seattle homes is a great way to go. A topic you might consider is ‘considering remodeling when buying a property’. Thanks!

  38. 39
    David S says:

    RE: One Eyed Man @ 37
    “3. How many buyers have had their broker explain to them the approximate cost to later sell the home they are buying before they buy? (Note that the selling commission would have to be based upon some approximation like perhaps upon what that brokerage firms current going rate is, or perhaps an average rate for the prior year, or for the MLS in general.) How many people think that the agent should have a statutory duty to provide a pamphlet concerning selling costs and how commissions are paid to the buyer before the selling agent shows them a house (or provides brokerage services)?”

    I’m going to ask an MLS agent this very question tonight. Thanks chiming on with this OEM. This is a strength of SB, is inspires one to think about real estate in more abstract ways than one would otherwise without SB.

  39. 40
    New Kids on the Block says:

    Im very interested in your continuing your knifecatcher series. Would you be amenable to also providing a way that you and all the readers could provide reviews and recommendations of contractors and other home-related services? As a newbie in the area, that would be very helpful as well.

    Thanks in advance!

  40. 41
    Ray pepper says:

    RE: David S @ 39 – 10percent my friend!

  41. 42
    HappyRenter says:

    By turf @ 23:

    my father-in-law is 92 years and living in a house he purchased for cash in 1955 approx. if he was renting 3-4 months rent would represent the 1955 purchase price. Buying isn’t a good idea?

    It’s nice when you buy a house now and 57 years later you are still living in it. I’m just not sure that this will be the case for myself. I might have to relocate from Seattle in the next 5 years or maybe not. And who knows whether I am really going to like it in the new place that I will live there for at least 10 years? Ok, if you have kids you get stuck in a place, you might think. But I know plenty of people who have moved to a different city, state or even country with kids. Having kids doesn’t necessarily mean you will live in the same place until they turn 18. Also, buying a home is not a necessary condition to have kids. So, what used to be true for the majority of people 60 years ago (be born, grow up and die in the same place), might not apply any more today where we are more mobile.

  42. 43
    Drone says:

    Maybe outside of your expertise Tim, but I’d also like to hear some expert advice on major remodels. We’ve all been through plenty of open houses where you see the little signs saying “potential extra bathroom” or “potential view deck”. But if you’re buying a property based on potential, you should know what that potential is going to cost you. Specific remodels I’m curious about include:

    1. Raising the house to turn a cramped basement into a full-height living space. Or digging down, if that’s better.
    2. Taking a 1-bathroom house and adding an extra bathroom to the upper floor. Assume the upper floor currently has no plumbing.
    3. Adding a second floor to a 1-floor house.
    4. Extending a structure horizontally (adding a bedroom, expanding a kitchen, etc)
    5. Adding a garage. Might include a standard detatched, a standard attached, or maybe even one of those fancy concrete block jobs dug out of the front lawn if the house is above the street on a small hill.
    6. Fixing sinking homes with uneven floors and/or cracked foundations.

    My primary interest here is in the structural costs. I figure that finish costs would be approximately the same whether adding or remodeling, but major structural work is a complete unknown to me.

  43. 44

    I’m very interested in what you looked for when choose an agent, and also why you hired a lawyer separate from the agent to help you with the home buying process.

  44. 45
    m-s says:

    RE: Drone @ 43
    Short answer – $200/sq.ft. for any of the above! :)

  45. 46
    Tim McB says:

    RE: m-s @ 45

    I’d say that’s a pretty simplistic answer to many different complex projects. Each question has many different variables (topography of the lot, location of sewer line, accessablility of plumbing lines, lot boundries, to name just a few) to consider which could sigificantly raise or lower the cost of the project. This is already outside of the variations of contractor charges which can vary significantly as well. I’ve heard basic (horizontal) additions quoted out at around $100/sq ft assuming no significant structural impediments and contractor (read: Home Depot/Lowes) materials. Vertical additions are much trickier and usually pricier since the roof will almost always need to be modified. Our home inspector gave us a $150ish/ per sq ft quote to bump out our 1 1/2 story home. Not too sure about his accuracy on that as we didn’t pursue it any further and just remodeled the 1/2 story instead. And of course these data points are just very vague rules of thumb.

  46. 47
    Erik Heiberg says:

    RE: Seattle Homes @ 38

    I’d have to agree with Seattle homes.

    What interests me most right now is taking on a few projects when purchasing a home. Perhaps a little about how to use rehab loans, hold back some of my downpayment for the project, etc….

  47. 48
    Dweezil says:

    Building new vs. buying existing homes is a good one.

    And specifically to Tim’s experience, what was the strategy, tools, process for deciding how much to pay for your house. What data did you use, how did you use it? How did you get to that number? I think yours was an REO, so how did the price negotiations go down?

  48. 49
    ARDELL says:

    Just thought I’d mention, since some expressed more info on home remodeling projects, that there is a Remodeling Expo in March:

    http://www.homeshowcenter.com/Visitors/HomeShow.aspx?show=seattle

    I think the cost is $6.00

  49. 50
    Jesse says:

    Not sure if this has been mentioned before, but maybe now since you’re a homeowner – I mean you have to know how much regional sway you have – could you, like, spin the news in favor of us homeowners? I’ll cut you in on our profits when we sell 10 years from now. ;-)

  50. 51
    DT40 says:

    In your recent poll, “good commute” was voted the top factor in real estate location. So how about some analysis on how tolling 520 will impact real estate prices?

    For high-end real estate, it seems like tolling will help prices along the 520 corridor: Montlake, Madison Park, Medina, Hunts Point, Yarrow Point, Clyde Hill, north Bellevue, etc. 520 tolling will hurt Mercer Island, Mount Baker, southern Bellevue, Issaquah. The wealthy who live in these areas will appreciate the lessened congestion and shorter commutes on 520.

    The opposite may happen in the low-end, with price sensitive people not wanting to be near 520.

  51. 52
    Graham S says:

    I’d love to see some realistic comparisons between renting and buying outright. Mostly, this is thinking about the full expenses of owning (e.g. my parents just did a bunch of work on their house that equated to about a year of my rent). Boil it down to things like average monthly cash flow delta and payback period. Also, do it across several different types of dwellings – small/large condo, small/large home, urban/suburban location, etc.

    The idea would be to build a baseline that someone thinking of buying could add their mortgage costs onto or that people rending could use to back out what their landlord is actually making from them (or they could actually make if they own the property).

    It’s something I’ve been thinking about for a while, but I don’t really know where to start on doing the research.

  52. 53
    whatsmyname says:

    I’d like to see some graphs showing the 20 year price trends in utilities, perhaps in comparison to home prices.

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