Financing land in Leavenworth

I am hearing from a lot of clients that their banks are no longer financing land. I am finding that other local lenders are cutting back on their land loans by charging higher interest rates and/or requiring higher down payments. Some of these moves seem a little drastic to me. It’s unfortunate that these nationwide banks can’t look at the markets that are performing well (like Leavenworth) and exclude them from their ‘hide in the bunker’ mentality. It seems to me that cutting off good business in a good market is a poor way for a bank to recover. The real surprise to me is watching some of the other community banks that see the same market conditions we see and yet are still pulling back from land loans. It's as though they have been reading USA Today or something, instead of taking a drive around town. Buildable land in Leavenworth may be hard to come by, but that is kind of the point; the limited supply keeps the prices up, hence it is a good investment, and good for us to lend on.

So if Geordie has helped you find that perfect piece of land, but you have been disappointed by the response from your bank, keep calling around; we’re still out there with loans up to 90%, and 30 year fixed rates as well as ARMs and Interest-only.

Leavenworth FSBO (For Sale By Owner)

Leavenworth real estate searches can be tricky in this day and age.

As a consumer you have a multitude of choices - The Big Boys - Remax.com, Windermere.com, Johnlscott.com, or Realtor.com

You can use any number of newer online tools like Roost, Zillow, Estately, Craiglist or Trulia

or you can search local newspapers like the Wenatchee World and the Leavenworth Echo.

You can also use the big search engines which have real estate sections like Google or Yahoo or MSN.

Of course, I'd prefer that you used the Leavenworth real estate search on IcicleCreekRealEstate.com, but I'll admit that a handful of listings don't end up here either.

Here's the dirty real estate secret no one will say out loud. None of these websites has all the Leavenworth real estate for sale!

It's true. There are a number strategies homeowners use to sell a property in Leavenworth (and many of them don't work). If a homeowner is selling FSBO or For Sale By Owner - they might have an ad in the paper or on Craigslist, but they might just have a sign in the yard. Perhaps they have brought a few flyers by to each of the real estate offices in Leavenworth to let local real estate agents know about their home. Sometimes, FSBOs won't advertise at all! They just tell their friends that they would sell if the right buyer comes along.

But it's not just FSBOs that are "sorta trying" to sell their property.

There also home sellers that list with limited service brokerages or flat flee listing companies. Some of these won't show up on your normal MLS searches because the seller chose not to pay extra to have it listed on the MLS. Or they have paid to have it on the wrong MLS. (Here in Leavenworth we use the NCWMLS which is local to the Wenatchee Valley, very few homes in Leavenworth are sold using the NWMLS which serves the Puget Sound and Seattle.)

There are also home sellers who are taking a break from selling. It's common for properties, especially land, to be pulled off the MLS in Leavenworth or Lake Wenatchee for the winter. If everything is under 5 feet of snow it may be difficult to see. If the landscaping at your Leavenworth house is the prime feature, you may get a better price come Spring. Your real estate agent can help you find these homes by searching the Expired or Withdrawn listings on the MLS. This isn't a feature any of the search engines or real estate sites offers, but is something your agent can help you with.

If you aren't finding exactly what you want on a real estate search site, don't despair. There often are more properties to see than meets the eye. Ask your real estate agent to help you find them. Talk to your agent about Buyer's Agency Agreements or Buyer's Representation. Some FSBO sellers will pay your agent's professional fee or you may need to pay the agent yourself.

I recently helped a family buy a condo at Kahler Glen like this. When they first contacted me I told them that it had been 9 months or so since the last condo at Kahler Glen had been on the MLS and I educated them about what I thought the price should be. With a little luck, I found a willing seller and we put together a contract that worked out well for both parties. There was no advertising of the condo, no sign, no Craigslist, no MLS, no Zillow.

In Leavenworth there are plenty of opportunities that don't show up on Realtor.com or Craigslist. Not all of them are good opportunities, and some of them are just plain atrocious, but a great real estate agent can help you open many doors that you didn't know existed.

Leavenworth Vacation Homes and 1031 Exchanges

This article about using your vacation home or Leavenworth condo in 1031 tax exchange was provided by Ann Mclaren of LandAmerica 1031 Exchange Services. I have been fortunate to take a 1031 class from Ann in the past and I welcome anyone to contact her directly for more details on 1031 exchanges. She can be reached at (866) 962-1031. I hope to have more articles from her in the future.

A vacation home or second home held for personal use, solely for personal enjoyment, is not eligible for 1031 exchange treatment. However, a vacation home that is rented out at fair market value and is never used by the owner or his family is clearly eligible for 1031 exchange treatment. Most vacation properties fall somewhere between these two extremes, with some personal use and some rental use. Until recently, there has little binding guidance on the exchange of vacation properties in 1031 exchanges.

Revenue Procedure 2008-16, which is effective on exchanges occurring on or after March 10, 2008, provides safe harbor rules for vacation homes and properties converted to or from personal residences. If the safe harbor guidelines are met, the IRS will not challenge whether the property qualifies as property held for productive use in a trade business or for investment under Section 1031.

A vacation home or second home that you are selling and/or purchasing in a 1031 exchange will qualify for safe harbor tax-deferred treatment if:

1) The relinquished property is owned by you for at least 24 months immediately before the exchange and the replacement property is held by you for at least 24 month immediately after the exchange.

2) The dwelling unit is rented out at fair market value to another person for 14 days or more for each of the two years immediately before the exchange for relinquished property or two years immediately after the exchange for replacement property.

3) Your personal use is limited to the greater of 14 days per year, or 10 percent of the number of days of the year that the property is rented at fair market value, for two years prior to or after the exchange. You may use the property some additional days for repairs and annual maintenance, but must be prepared to prove actual work done.

Personal use is defined as being used by you, any family member, or anyone who has an interest in your property, such as a tenant in common, or by any arrangement where fair market rent is not paid. You may rent your property to a family member if they use it as a principal residence (not as a vacation home) and pay fair market rent.

Under these safe harbor guidelines you may sell, exchange, or move into your replacement property after you have met the requirements for the first 24 months. 1031 exchanges of vacation properties or second homes that do not follow the safe harbor guidelines in Revenue Procedure 2008-16 may still qualify for 1031 exchange treatment outside of these parameters, but you should be prepared for increased scrutiny by the IRS.

Author:

Ann Mclaren, Vice President

LandAmerica 1031 Exchange Services

(866) 962-1031

Buyer for Lake Wenatchee Cabin

Do you own a cabin on Lake Wenatchee near Leavenworth? It doesn't matter if your home is on North Shore or Cedar Brae, demand for lakefront homes on Lake Wenatchee (or Fish Lake) remains at an all time high. There is only one home for sale on Lake Wenatchee today.

Even if you don't want to list your home, but may be interested in a private sale, please contact me. I am working with a serious buyer who wants to buy on Lake Wenatchee today.

Top 5 Ways to Shoot Your Leavenworth Condo Project in the Foot

Top 5 Ways to Shoot Your Leavenworth Condo Project in the Foot

1. Price it high

You are not the first builder or developer to build condos in Leavenworth. Lots of price data exists, the closer you pay attention to that data, the quicker your project will sell. You're right "no one has built 10,000 square foot uber - condos made of gold" in Leavenworth, but that doesn't make it a viable niche.

2. Shun local real estate agents

Real estate agents tend to sell a majority of homes and condominiums. Most serious out of town buyers (and most Leavenworth buyers are from out of the area) are using a real estate agent to help them purchase a home.

Which agents sell homes in Leavenworth? No surprise, agents who work in Leavenworth. Despite 75% or more of the buyers being from the Puget Sound area, only a tiny fraction of homes sold are by out of area agents.

If you choose not to use an agent to list your condos, local agents will not sell them. It's too much work and the tools that could be promoting your condos are promoting someone else's. (MLS and related search engines)

3. Office Exclusive Listing

This is a takeoff on number 2. An "office exclusive" listing is one where a real estate company lists a property but does not cooperate with other brokers or place the listing on the MLS. In the Seattle area this practice is forbidden among members of the NWMLS. It is allowed in Leavenworth.

Again, if your home or condo is not on the MLS, it is INVISIBLE. In fact, if your home is listed with a Seattle area agent, it's also INVISIBLE. Real estate agents and buyers use tools that let them see the most active listings. This tool in Leavenworth is the NCW MLS.

Here's a sad story I have heard about two different projects in Leavenworth. An agent in my office (Windermere in Leavenworth) calls another real estate office (this happened at two different companies) and asked them for more info about a condo project they had. It hadn't started construction yet, but the agent claimed that all were sold out. To date NOT ONE UNIT has closed.

In the other example, an agent called for info and was told that this other project was sold out as well. She suggested that the agent create a waiting list in case some of the transactions happened to fall through. Only 50% of that condo development has sold at this point.

Office exclusives are about greed. Greedy people starve in the end.

4. Location, location, location

Have you heard this before? Downtown Leavenworth is good, close to recreational amenities is good. The real key in Leavenworth is the ability to use the condo as a nightly rental. For the most part, this is a function of location. In Leavenworth, condominiums zoned for Commercial Use can be rented out as vacation rentals, condos zoned for Multi-Family Residential cannot be rented out nightly. At least one project in Leavenworth is going to learn this lesson the hard way.

Two current Leavenworth condo projects made it hard on themselves and lost valuable time on market. They were zoned for Commercial Use, but created covenants (CCRs) that prohibited nightly rentals. This was a big hole to dig out of, and though the CCRs are gone, I think they missed their time in the spotlight. (See number 5.)

5. Hype

Condo buyers are looking for good value, but they are also looking for the hottest coolest thing around. Days on Market probably matter more to condo buyers than other folks buying Leavenworth real estate. If a condo has been on the market for 180 days buyers assume it has problems.

The typical Leavenworth condo project has missed out on the hype that comes with a new project. How did they miss out? Office exclusives, For Sale By Owner, Restrictive Covenants, etc, etc.

New condo projects should have lots of hype. Throw a big party and invite everyone. Make it easy for agents to show and sell your property. Buyers can't get excited if their agents aren't excited.

6. Dismiss the Internet as a Fad

I know the article says top 5 reasons, but I'm all about adding value. Today you get 6.

Over 80% of home buyers use the Internet to search for homes. This number is higher among the affluent. It's also safe to assume that the number is higher than the national average in high tech Seattle and among vacation buyers looking for property 2+ hours from home.

I know you want to spend money on newspaper ads and glossy magazine spreads, but the web sells homes. I know you want an agent to do 8 open houses a week, but the web sells homes.

Build a great website. Use lots of photos, use virtual tours or video, have floor plans and prices available. Use SEO to make sure that you come up on the top of the list for Google and the other search engines. Most projects in town can't be found on the Internet for their own name, much less "Leavenworth Condos" or "Leavenworth Condos For Sale".

* * * * * * * * * * * * * * * * * * * * * * * * * * * * *

Search Leavenworth Condos for Sale

Vacation Rental Ban in Chiwawa River Pines?

Own a vacation rental in Chiwawa River Pines? Do you have a cabin there that you have been thinking about renting out when your family isn't using it?

Al over at NCW Real Estate Blog reports that the community is debating how to enforce a ban on vacation rentals and all other commercial ventures that have been a part of the neighborhoods.

No matter your opinion on the matter, if you own property in Chiwawa River Pines, you should plan on attending upcoming meetings of the neighborhood association.

I think that enforcing a ban on vacation rentals will have a negative impact on property values. Buyers in the Leavenworth and Lake Wenatchee real estate market like the option of renting out their property even if they never use the option. Condos that can't be rented out languish in our market. Homes in the city limits of Leavenworth don't sell quickly for the same reason. I think a ban on vacation rentals in Chiwawa River Pines will only increase the property values in Ponderosa, where out of area buyers will turn their attention.

UPDATE March 20 - A date has been set for a community meeting for those who own homes and property in Chiwawa River Pines