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Buying Your First Vacation Home

Buying Your First Vacation Home


Retirement is a good time to start pursuing your dreams. You’ve got money in the bank and time on your hands. For many people, this is the perfect time to consider buying the vacation home they’ve always wanted. If you’ve been contemplating a vacation property, here is what you need to know before buying.


How to Know if You’re Ready for a Vacation Home


When determining if you’re ready to buy a vacation home, consider whether this will be your primary residence or if you’ll just be staying there during certain seasons. If you’ll be spending time there year-round, that might mean you’re willing to spend more on a mortgage to get a more comfortable home.


It’s also important to know why buying a vacation property may not be right for you. For example, if you enjoy visiting different locales or trying different resorts, being tied down to a vacation home might not be the right choice.


Next, you need to be realistic about your budget and what you have to invest. Like your current home, a vacation home will require paying for a mortgage, insurance, and taxes.  You will also need to provide for upkeep and maintenance. Speaking of maintenance, it’s a good idea to have the property evaluated before you commit. Keep in mind, however, that you’ll need to hire someone for the job; in Spokane, for example, home inspections can run between $318 and $376 on average.


Maintaining Your Vacation Property


Maintaining your home throughout the year is important. You’ll need to:


  • Keep up with regular maintenance like changing air filters, cleaning gutters, maintaining the HVAC system, having the roof inspected, and anything else you would do at your primary residence.
  • Protect your home when it’s vacant. You’ll want to install a security system with alerts for when activity is detected at your home. has a comprehensive list of things you can do to safeguard your vacation home.
  • Maintain utilities when you’re not there and restart them when you arrive. According to HouseLogic, you can hire a property manager or local caretaker to run things when you’re not around and keep up with yard maintenance. According to All Property Management, a manager can cost anywhere from $100 to 8 to 12 percent of your monthly rental revenue.
  • Install an electronic thermostat if you don’t have one yet to help with energy efficiency, particularly when you’re not staying on the property.


Vacation Home Insurance


One of the more daunting aspects of purchasing a vacation home will be the cost of insurance. According to Southeast Discovery, vacation property insurance is more likely to be sold by an agency that specializes in vacation home insurance than standard agencies. This may be different than the “one-size” policy that your current home has.


These policies are called “Named Perils” coverage. The perils include the location (especially if isolated or in a scenic yet hazardous area) and the fact that you are not there 100 percent of the time.  According to the NAIC, “a ‘named perils’ policy covers losses for events specifically outlined in the policy, such as lightning, explosion, theft or smoke damage.” This type of insurance may also cover damage to your property or an injured guest. There is even coverage for renting waterfront property, such as a boat.


The Insurance Information Institute has some advice on how to save on vacation home insurance before buying:


  • Buy in a safe location. Avoid flood zones, areas with earthquakes, and other hazardous locations.
  • Your home’s condition and age also will affect insurance rates.
  • Certain special amenities, like a swimming pool, will raise rates.


Buying a vacation home can be a wise investment if you choose your property and location properly. Be sure to calculate all the costs and maintenance of your home before investing.

Guest Posted Thanks Jim

An article by Jim McKinley of Money with Jim

Are Home Prices Are Going To Go Higher

Home sales reached their highest pace in a decade in the first quarter of 2017 as property prices continue to escalate, according to the National Association of REALTORS®' latest quarterly report. I'll quote Lawrence Yun the chief economist for the National Association of Realtors. "Prospective buyers poured into the market to start the year, and while the increased presence led to a boost in sales, new listings failed to keep up and hovered around record lows all quarter"

The Commerce Department is reporting that new construction home starts are down 2.6% from a year ago. Due to the increase in sales and reduction in inventory for April, they don't see the rise in prices slowing anytime soon.

The country gets divided into 4 parts for reporting purposes and we being in the West region, saw  Existing-home sales rise 1.6 percent in the first quarter and are 7.4 percent higher than a year ago. Median single-family home price: $342,500, up 8.4 percent from the first quarter of 2016.

I have a link to the NAR article below which has lots of stats for the stats hounds!

Pediatric Hydrocephalus

Hydrocephalus defined =  is an abnormal accumulation of cerebrospinal fluid (CSF) within cavities in the brain called ventricles. Cerebrospinal fluid is produced in the ventricles and in the choroid plexus. It circulates through the ventricular system in the brain and is absorbed into the bloodstream. This fluid is in constant circulation and has many functions, including to surround the brain and spinal cord and act as a protective cushion against injury. It contains nutrients and proteins necessary for the nourishment and normal function of the brain, and carries waste products away from surrounding tissues. Hydrocephalus occurs when there is an imbalance between the amount of CSF that is produced and the rate at which it is absorbed. As the CSF builds up, it causes the ventricles to enlarge and the pressure inside the head to increase.

> 1 million people in the USA currently live with Hydrocephalus

> 1-2 babies born out of every 1000 will be born with it

> it is the most common reason for brain surgery in children

Our local Border Patrol team has taken up this cause, and we think it's a great one! To get involved with their fund raiser and play some golf at the same time, follow the link below. Help some great kids and have some fun at Downriver Golf Course June 3rd. You better hurry the spots are filling up fast!

Strongest Seller Market in History?

Low inventory and high buyer demand is the oldest formula in history, to put stress on any market. We are starting to see more homes come on the market in our Spokane area , but they are still selling fast, with multiple offers for sellers to choose from. The raw data for the first quarter this year, compared to last year doesn't tell the whole story. The number of homes listed is down almost 17%, and the homes sold is up over 6%. The number of homes sold doesn't count the buyers who made an offer, but didn't get the home. We would need a way to count those frustrated buyers, who haven't been able win in the multiple offer competition. I've been talking with some brokers who have been in the business for some time, and there is a common theme. Builders have not kept up with demand for entry level new construction, and the resale inventory isn't there for the first time buyers. I think the market will work thru this at some point this year, but it has not been a pleasant time for buyers.

I linked a great article by Diana Olick, who writes an article called Realty Check for CNBC, she says that prices have now surpassed their last peak. Interesting read on the National Real Estate Market.

Buy Now or Save More for Down Payment?

Quick facts from 2016 Statistics:

Nearly 40% of home buyers think they need 20% down.

The average down payment for the 2016 year was 11% of the purchase price.

You can buy a home with 3.5% down.

How do you take into account all the variables of waiting to save 20% vs buying now with what you have saved. The current market is trending higher for sale prices around the country, and you could expect to pay more for less home some years down the road. The rent that you are paying won't be going down, or of any benefit toward a down payment.  Here is a great tool from the Mortgage Insurance blog  MGIC Connects, hope you find it helpful!

Mortgage Rates got Cheaper


"The 10-year Treasury yield remained relatively flat this week,” says Sean Becketti, Freddie Mac’s chief economist. “The 30-year mortgage rate fell 9 basis points to 4.14 percent, another significant week-over-week decline.”

Freddie Mac reports the following national averages with mortgage rates for the week ending March 30:

  • 30-year fixed-rate mortgages averaged 4.14 percent, with an average 0.5 point, falling from last week’s 4.23 percent average. Last year at this time, 30-year rates averaged 3.71 percent.
  • 15-year fixed-rate mortgages averaged 3.39 percent, with an average 0.4 point, falling from last week’s 3.44 percent average. A year ago, 15-year rates averaged 2.98 percent.
  • 5-year hybrid adjustable-rate mortgages averaged 3.18 percent, with an average 0.4 point, falling from last week’s 3.24 percent average. A year ago, 5-year ARMs averaged 2.90 percent.

per Daily Real Estate News dated 3/31/17

Rent VS Own The age old debate!

This is a debate that has been ongoing for years, but seemed to be in the news more often after the "Mortgage Meltdown" of 2008. Jonathan Smoke an Economist for put together a great piece in Feb of this year. I've linked to the article at the bottom, and here are some highlights.

>There’s about $13.1 trillion stashed away in the United States, in plain sight. Where? In our homes! And that works out to almost $175,000 per owning household.

>Owning a home is a key reason why the median net worth of a homeowner is almost $200,000 while the median net worth of a renting household is just over $5,000.

>A mortgage payment unlike a rent check, a percentage of every monthly mortgage payment—after the lender is paid interest—goes toward the owner’s home equity. That means it’s really a forced savings plan.

>Here’s how that works out for a median-price home of $250,000 bought in January with 20% down with a monthly payment of $976.Before their first payment, the proud new homeowners had $50,000 in equity thanks to their down payment. (Actually, 20% down isn’t always typical or necessary, but, hey, it keeps this illustration simple.) In the first year, an average of 29% of the monthly payments builds equity. After 12 payments, the homeowners have just over $3,400 in added equity. By year 14, 50% of the monthly $976 payment goes toward equity. Don’t forget that the monthly payment hasn’t changed, because the interest rate was fixed. At the end of the 14th year, just shy of $64,000 has been added to the initial $50,000 in equity. In the final year of the 30-year mortgage, while the monthly payment remains $976, 98% of the monthly payments builds equity until that magic day when the home is owned free and clear.

>So, you want a better rent versus buy illustration? First, find a place to rent for no more than $976—the same as our mortgage payment example above. If you can rent for less, great. Will you be able to save that difference amounting to at least $3,400 in the first year? That would imply you can really pay only about $700 in rent to get the same savings effect. If you can’t save $3,400 yourself by paying less in rent, ask the landlord if he’ll take a portion of your rent payments and set it aside for your rainy day fund. Then ask the landlord if he’ll set your rent payment at today’s rate for the next 30 years. And before you close the deal, ask him to raise the rainy day share each year by 1% to 2% until year 30, when he’ll get only 2% of the rent payment.

Some interesting points made by Jonathan, and hard to find fault with his findings!!

So, you have a piece of land with a well, and you want to get a permit to start

Oct 16, 2016 the Hirst Decision basically said that water is not legally available, if a new well would impact a protected river or stream, or an existing senior water right.  I have heard this called a “Well Moratorium” or “ Building Permit Freeze” in Spokane County. The decision came from a court case in Whatcom County, but was upheld by the state Supreme Court.  This made the decision binding state wide in Washington. (Whatcom County v. W Wash. Growth Mgmt. Hr’gs Bd. No. 91475-3.0) The state legislature is the only one who can overturn this decision. The bill to address this stalled in the Washington State House of Representatives, the State Senate is currently working on a bill. (HB 1885 and SB 5239)

In Spokane County, you may be able to prove your well does not effect a river or stream, or existing senior water rights. This usually will require a hydrogeological analysis, which can be expensive. We have found them for around $1000, but each case is different.  Talk with the people at Spokane County Building & Planning before you do anything. We have found them to be very helpful.  

There are some rules that seem to hold true. Wells need to be at least 500’ from the nearest well, unless the hydrogeologist can identify your well as being in the granite aquafer. In that case, you may only need to be 200’ from the nearest well. One thing is for sure the situation is constantly evolving, so don’t give up get yourself up to speed!

Some useful links:

Ecology’s website about the decision

Ecology’s website about water resources

Ecology’s Instream flows website

Spokane County Building & Planning

Realtors Top Concerns for 2016

1. New mortgage disclosure rules: The implementation of the TILA/RESPA Integrated Disclosure (TRID) regulations on Oct. 3 has been delaying closings and having an impact on sales, according to members. About 47 percent of respondents reported longer closing times compared to a year ago, up from 37 percent in the October 2015 survey.  It typically took another 40 days to close a sale, up from 35 days in July 2015. We have not seen this as a big issue with the transactions we had close after Oct 3rd in 2015.

2. Condo financing: REALTORS® continued to report difficulty in obtaining financing for condominium unit purchases because many condominiums are not FHA or GSE eligible. Read more.   We have lenders that can make buying a condo pretty normal!

3. Tight inventories: A smaller number of homes for sale across the country are limiting choices for buyers and pushing prices up, decreasing housing affordability. REALTORS® particularly reported low inventory of properties in the lower price range and for those that are move-in ready. This has been a big issue in 2015 in Spokane but we combat it by staying on top of the market so our buyers get to the listings as soon as they hit the market! We don't expect the market to change in 2016 and our brokers will continue to be first to the market every time!

4. Tight credit: Stringent credit standards continue to affect sales, particularly for first-time home buyers who are still struggling to qualify for financing, according to the REALTORS® surveyed. “Credit profiles that fail to meet tighter underwriting standards are conditions that continue to work against first-time home buyers,” according to the report. The key for our clients is having the right lenders to refer them to so they can get them the loan they need for the home they want!

5. Appraisal issues: “Late” and “low” appraisal valuations was also cited by REALTORS® as being problematic in transactions. We have not had appraisal issues that cost our buyers money because we know the value of the properties we help our clients make offers on!

Source date " National Association of Realtors"


Will New Regulations Slow Closings

Survey of Buyer Agents Shows Consumers Should Be Prepared  for Delayed Real Estate Closings

A recent survey conducted by the National Association of Exclusive Buyer Agents (NAEBA) shows that some real estate closings are already being affected by the new “Know Before You Owe/TRID” regulations that went into effect October 3. The survey went out to brokers across the United States and nearly 20% stated they are already seeing issues, mostly delays in closing.

According to one respondent, “Lenders are almost all asking for 45 days to closing vs. previous 30 days.”  Another respondent stated, “We've been advised to prepare for further delays until everyone has more experience with the new CFPB/TRID Regulations.”

The study also showed that most NAEBA buyer agents are educating themselves about the new regulations. 72% of the buyer agents that are part of the NAEBA Referral Service stated that they have attended a class or workshop on the new regulations in order to better assist their buyer clients. “We wanted to make sure any agents to which we are referring consumers are informed and can help buyers plan for any delays,” states NAEBA Referral Service President Ken Reid. To find an agent who is part of the NAEBA Referral Service, consumers can visit

“At NAEBA, we applaud the Consumer Financial Protection Bureau for its efforts in educating consumers and giving them the tools they need to understand their mortgage,” states Dawn Rae, NAEBA President. “We believe, though, that this survey shows that consumers should also be prepared for real estate transactions to take longer to close at least in the near future as lenders adjust to the new regulations, and that it’s important to have an Exclusive Buyer Agent on their side to help them navigate through this complicated process.”

The National Association of Exclusive Buyer Agents (NAEBA), created in 1995, is an organization of companies dedicated to representing only buyers of real estate. NAEBA member brokerages do not list homes for sale and never represent sellers. This restriction to one side of the real estate transaction avoids conflicts and ensures that the interest of the home buyer is protected at all times from house-hunting and negotiation to inspection, financing and closing.

Thank you for visiting us today!

If this is your first visit, take your time and look around. If you're a return visitor, welcome back, we're glad you're here!

We love working with home buyers, so if you're thinking about buying a home in this area within the next year, let us know here and we'll get back to you right away.

Spokane Home Buyers
1507 E Nebraska Ave
Spokane, WA 99208
Phone: 509-327-7372

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Thank you for visiting us today!

If this is your first visit, take your time and look around. If you're a return visitor, welcome back, we're glad you're here!

We love working with home buyers, so if you're thinking about buying a home in this area within the next year, let us know here and we'll get back to you right away.

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