Archive for January, 2009
With so much buzz going on regarding the $7,500 tax credit in the news and also on this blog, I feel like I need to give you an update.
The measure to make the tax credit a true credit that does not need to be repaid, has cleared the House of Representatives. It is on to the Senate now. To be fair there is a lot of changes being discussed to the stimulus package in the Senate. It should take several weeks but from all I am hearing there is no moves to remove this item from the plan. Democrats and Republicans agree that tax credits, in particular those aimed at home owners and families with children need to remain in tact.
If the measure remains in tact, the tax credit could become law in the next month. In fact there is some discussion that the credit could be extended to all home buyers and not just first time home buyers.
Here is the break down:
Current Law:
- 10% of the cost of your home can be claimed as a tax credit
- You must make under $75,000 as a single person to qualify for the full credit or $150,000 if you file jointly.
- Needs to be repaid over 15 years
- Need to not have owned a home in the past 3 years to qualify
Proposed Law currently on the Senate floor:
- All previous previsions remain but the tax credit would no longer need to be repaid, EVER!
Being Discussed:
- There is some discussion that the tax credit may be extended to all home buyers, not just first time home buyers
In fact, the president of the National Association of Realtors Charles McMillan, was invited to Washington to testify in front of congress last fall and gave his thought on what measures he thought were essential to getting the housing market moving again.
Among his recommendations was extending the $7,500 tax credit to all home buyer’s not just first time home buyer’s
I’ll keep you posted. Subscribe to this feed if you want to receive future updates.
PS – feel free to leave comments for me or shoot me an e-mail or call if you need anything.
Rob Graham, Accredited Buyers Representative
Windermere Real Estate
206-321-6349
Popularity: 4% [?]
It’s no surprise to anyone that we are in difficult financial times for Seattleites. So if you are hoping to buy a home here in the Puget Sound area in the near future and also hoping to pull back on spending a little, what are some ways you can save a little extra each month for that down payment?
Getting Started:
Set up a Savings account that you promise not to touch. This account is exclusively to be used for money to go toward a down payment, closing cost and purchases to be made (read furniture, etc.) for your new home. Do it in an entirely different bank from your other accounts. Setting up a savings account does two things. First of all as it grows you will feel better about your financial situation. The account will also earn a small bit of interest that is free money toward your future home.
Once you set up your new savings account, where do you find the money to trickle into it?
For each area you cut back, take the money instead and put it in the savings account. You’ll get the hang of this soon and it actually becomes a bit of a game to find more places to save. Here are some suggestions.
- Cut back on a Latte or two. Ok this one is tough for me too, but cutting back on just two lattes per week would generate about $9 extra dollars in that savings account per week. Each time you drive by your coffee shop of choice, go ahead and deposit the money instead into the savings account. Each month you will be depositing around $40 into savings. Not a bad start.
- Loose change – This is an easy one. Each day when you come home have a jar set out wherever you leave your keys and wallet or purse. Put all of your loose change in a jar. Each month take the change roll it and deposit it in the savings account. Before long you will be surprised at how much it adds up to.
- Take your lunch with you to work. You can easily save $5 per day by doing this if not more. Again take that $25 and put it in the savings account. That’s $100 per month all by itself.
- Loose the land line. do you really need a land line for your phone? I gave mine up years ago and don’t miss it at all. In the era of cell phones, having an extra phone at home is somewhat wasteful. Ditch the land line and put that $30 per month toward your new home.
- Loose HBO and Showtime. Ok I love them too, but now is the time to be making some sacrifices. Premium cable channels are fun, but how often do you really watch them. Cut them out of your bill and you will be amazed at how much you save. Again, put that money instead into the savings account and watch the balance grow.
- Less dinning out. This is another hard one, but one meal for two can easily run between $50 and $100. One less meal a month at your favorite restaurant and you are one step close to that new home.
- Give up that gym membership. I only recommend this one if you have a membership that you do not use and or have a healthy alternative. Riding your bike, walking, jogging outside are all free. Don’t ever give up working out! but if you can find healthy free alternatives and can save that monthly membership, give it up. I did and now save $60 per month.
Some more tips:
- Track your expenses monthly. Go out and spend a little to get some financial tracking software. Grab your most recent statements and get to work. Actually sitting down to looking at your finances each month will do wonders to remind you where your money is going and where you can save for that new house.
- Pay off your highest interest debt first. any financial analyst always gives this advice first. Make a list of your debts and make it a goal to pay off the highest interest debt first. It saves you the most money in the long run and provided the interest rate you are paying is higher then the rate you are getting on that savings account, it is always in your best interest to pay it off.
- Tap other resources. With regard to down payments, programs such as FHA and VA loans have generous allowances for family members to gift you part if not all of down payments and closing costs. Ask for your birthday and holiday presents for the next few years in advance. See if grandma would like to help you out with either a gift or zero interest loan over the next few years. Often they love to help if they can.
- Be alert to upcoming opportunities. The Obama administration will announce shortly, their plan to get the economy back on it’s feet. Included in that package will be a lot of items aimed at stimulating home purchasing. Some things discussed may include, tax breaks for home purchases, removal of penalties for accessing resources such as 401K’s to purchase a home, etc. no one is quite sure exactly what will be introduces and ultimately passed by congress, but there will no doubt be incentives for accessing greater resources to purchase.
- Stay motivated. Place a photo of a beautiful dream home on the fridge, in your car or in your wallet or purse. Reminding yourself often why you are making these sacrifices will go a long way to keeping you motivated. Go on line and look at houses. Set up a free search to receive new home listings in the areas you are interested in on a daily basis. The more you do to keep your eyes on the prize, the more you are likely to stick to your efforts.
I’ll do my best to keep you posted right here to all the opportunities available to home buyers. Feel free to subscribe to the feed to get future updates.
Related Topics:
$7,500 Tax Credit May No Longer Need to be Repaid!
How much do interest rates matter?
Best Financing Options for Seattle Home Buyers: FHA Loans
Give me a call if you need help.
Rob Graham, Accredited Buyer’s Representative
Windermere Real Estate
206-321-6349
Popularity: 3% [?]
When a seller agrees to sell their home they are obligated by law to disclose to a potential buyer, any material facts that may effect the value of the home. It is a great idea that is designed to protect the buyer to some degree from unscrupulous sellers trying to hide the fact that the foundation is being held together by saltines or the wiring is actually old Christmas lights strung through the walls.
It is important to know what a seller is obligated to report and what they are not
obligated to report. Most buyers think that a seller is required to tell them
everything they know or could know about the home.
That simply isn’t true.
In an attempt to streamline the process and make sure all relevant areas are disclosed, multiple listing services across the country have designed forms for seller’s to fill out. The NWMLS, here in the Seattle area, has a five page form that is mostly a checklist. It covers the following general areas:
- Condition of Title – Encroachments, easements, boundary disputes, etc.
- Water - Has the property had an adequate supply of water, On-site sprinkler systems, irrigation
- Sewer – Public sewer or septic and is it working
- Structural – Has the roof leaked, has the basement flooded, any known structural defects
- Systems and Fixtures – Known problems with electric, plumbing, heating and cooling, etc.
- Home Owners Association and Common Interests – Primarily for condos and townhouses
- Environmental - drainage problems, fill material, radio towers, landslides, etc.
- Lead Based Paint – Every house built before 1978 has it so don’t eat the paint chips!
- Mobile Homes – Alterations to the home
- Other: Catch all category for anything not previously covered
In each section there are a series of questions that a seller answers yes, no or don’t know. For each one that might be of interest to a buyer, the seller is encouraged to provide more elaboration.
Most sellers are quite honest and disclose as much as they can. This protects them from you coming back at a later date and claiming that you didn’t know about something.
But notice that there isn’t a criminal activity section.
In the state of Washington a murder may have been committed
in the house the previous week, and the seller is not obligated
to disclose this to the buyer.
In fact, the only criminal activity a seller is required to tell the buyer about is the existence of a methamphetamine lab in the home. The reason for this is that the existence of a lab often has a serious detrimental effect on the condition of the home.
Keep in mind that the law is only concerned with things that may affect the material value of the home. Laws vary by states, but here in Washington, there is no need to disclose any criminal activity that occurred in the neighborhood or in the house itself with that one exception.
One more point. A home seller is not expected to be an expert. Not many of us are electricians or plumbers. A seller can only be held to the standard of what a reasonable person would have know if they lived in the house. The seller is not obligated to do any additional inspections of the home or go digging around looking for defects. They are only obligated to tell you what they know or should be expected to know.
Bottom line: Disclosures are great but always do your own homework. Have an inspection, sewer scope and do your own research of the area to make sure you know what you are buying.
Related Topics:
Where to find Seattle Crime Statistics
Always do an inspection!
The biggest Mistake a Seattle Home Buyer can Make.
Give me a call if you need help.
Rob Graham, Accredited Buyers Representative
Windermere Real Estate
206-321-6349
Popularity: 11% [?]
When you are making an offer on a home, you want to have all the information you can about the home and the seller. Information is power and the more you know the more you can structure the deal in your favor. So what kind of information is available.
1. Information in the listing: If you have looked at homes on-line you are aware that some listing agents are fantastic about providing a lot of accurate information and photos about the home. On the other hand, if a fact about the home isn’t all that flattering, an agent will often exclude it from the listing. Photos are the most notorious aspect of any listing. Many of you have no doubt had the experience of looking at the photos of a home on-line and when you get to the house, swear it is a completely different house.
Agent’s however have access to more information from the listing.
Many public web sites screen the information to prevent information overload on the part of potential buyers. They limit what they show to only what they think will be relevant to you. This is helpful unless you are truly interested and might be considering an offer. Then you want all the info. Agents have access to all that info, because we have access to all the information the agent was kind enough to enter. Not only that, but there is an “agent only” information section. This is where we tell each other about broker’s opens, or items that are helpful when making an offer but not of general interest to the public.
Another tid bit of information that is available to the agent through the listing but not generally to the public is if the home is subject to a short sale. Short sales offer a great opportunity to get a home at a fantastic price and are much more common now then at any time in recent history. I won’t go into the details of a short sale here, but feel free to read my post about them:
What are Short Sales and how can you benefit?
2. Tax Records:
Tax records are my favorite source of information on a home.
Most people have no idea that tax records are public knowledge and can be accessed by anyone. With regard to a home, information such as:
- when the home was purchased
- what it was purchased for
- how much the seller owes on it
- what the taxes are
- square footage of the home and lot (not always provided or accurate in the listing)
This is all really powerful information to have and is at an agents finger tips through the multiple listing service. If the seller owes $300,000 on the home and it is listed for $320,000. You know they don’t have a lot of room to negotiate. If on the other hand the home is owned free and clear by the seller, they may be much more flexible.
3. The seller’s disclosure.
We call this the form 17. It is a document that is required by law for the seller to fill out when they sell the home. It is essentially a checklist and asks a myriad of questions about the condition of the home.
By law, the seller is obligated to tell a potential buyer, any and all material facts that they are aware of at the time of sale.
For example, if there is a leak in the roof, faulty wiring, bad plumbing, a decommissioned oil tank on the property, etc. One important thing to keep in mind is that a seller is not obligated to do any additional research to “find” such defects. They are just obligated to disclose what they know or should reasonably know given that they are living in the home.
4. Asking the listing agent.
I love doing this. Whenever I am making an offer on a home on behalf of a buyer I love to call the listing agent and just see what they will tell me. The Achilles heel of most real estate agents is that we love to hear ourselves talk. By just calling an agent and saying, “Hi, my name is Rob Graham with Windermere Real Estate. I have a client showing some interest in your listing. What can you tell me about it?” Often times an agent will completely spill their guts and tell me all kinds of things about the home and the seller that I can use to better structure a deal for my client.
5. Web sites:
Ok, so you have access to nearly all the same ones I do and here are my favorites:
Also, here are some recent posts about other web sites that have tons of great info.
Grade any Neighborhood with WalkScore.com
Where to find Seattle Crime Statistics
In addition many agents subscribe to sites that allow us to compute data about a given area. Average days on market, average price of homes in an area, how many months of inventory is there in an area, etc. All great info to have when considering an offer.
Bottom line, information is king. The more you have the better. If you agent isn’t providing you with as much info as is available they are doing you a disservice.
Hope it helps. Give me a call if you need help.
Rob Graham, Accredited Buyer’s Representative
Windermere Real Estate
206-321-6349
Popularity: 2% [?]
Hey gang, a couple of weeks ago I posted an item about the $7,500 tax credit that the government was offering to first time home buyer’s.
Seattle First Time Home Buyer Federal Tax Credit up to $7,500
At the time of the post the tax credit needed to be repaid over 15 years at 0% interest. Not a bad deal. How often do you get an interest free loan from the government.
Well I am happy to announce that the government is considering it an actual credit that no longer needs to be repaid. It may became an actual tax credit. Not a tax write off and not an interest free loan, but an actual credit.
The government is considering such a proposal and many are convinced that the soon to be anounced stimulus package will contain language that eliminates the need to repay the credit.
So for example if you would have owed Uncle Sam $7,500 in taxes for 2008 but purchased your first home in 2008, you do not have any taxes to pay and nothing to pay back ever.
Pretty great stuff.
Side Note: Technically anyone who has not owned a home in the past three years is eligible for the credit so even if you owned a home before but have rented for at least the last three years and purchase a home, you can get the credit.
Give me a call if you need help.
Rob Graham, Accredited Buyer’s Representative
Windermere Real Estate
206-321-6349
Popularity: 5% [?]
ABOUT
Call today for a free consultation on how you can find the home of your dreams. 206-321-6349 or simply visit my web site www.robgrahamrealestate.com
