Archive for July, 2009

I received a great question from a reader yesterday and I thought I would post it here for all of you to read:

What is present status of extending the $8,000 first time home owners refundable tax credit past November 30, 2009?

Good question. 

 
As things stand right now, congress can’t decide what it wants to do with the $8,000 tax Credit when it expires in November.

There were as many as four bills floating around congress to either extend, expand, or continue the existing law.  Some versions were as generous as to extend the tax credit to all home owners and expand it to $15,000 per home.  Others simply wanted to extend the deadline on the current $8,000 first time home buyer tax credit. 

Part of the problem is that each congressman wants their version of the bill to pass so that they can get their name on the bill and get the publicity for having come up with the idea.  (politics as usual)

Another problem is that congress is now preoccupied with coming up with healthcare reform before the end of summer.
Still, there is no momentum to let the law expire in November and a lot of momentum to at least extend it.

My guess is that once we get into fall we will see a new bill.  No idea what it will look like. 

Just to give you some idea of what we are talking about: One suggestion was to have the tax credit available to all homebuyers and expand it to $15,000.  Another just suggests extending the deadline to next summer on the current $8,000 first time home buyer tax credit.

Just this past January, both houses of congress passed a $15,000 home buyer tax credit for all home buyers, that was shot down in committee. 

My home is that they will revive that idea.  I think it would do wonders for the housing market. 

Until this fall though, I think we are just going to have to sit and wait.  I am confident something will happen before the deadline however.

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Rob Graham, Accredited Buyers

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 9% [?]

I have been getting this question a lot lately, so I thought I would throw out a list of questions for you to rattle around in your brain if you are just getting started.

These are questions that are good to toss around at the dinner table with all the family members involved in the move. 

What Neighborhoods do you want to consider?

Things to consider: schools, commute, parks, proximity to shops, pet friendly, parking.  Seattle is a treasure trove of differing neighborhood personalities.  Some will be drawn to the quiet and sleepy and some will be drawn to the up all night neighborhoods.

What type of home?

Single Family, Townhouse, Condo, Co-op, House Boat.  Consider Condo’s Co-ops and house boats all tend to come with dues.  So do some town houses.

Busy Street?

Most are closer to shops and bus lines but they do tend to be nosier.

How much work are you willing to do to the home after you move in?

Does it need to be in pristine condition, or are you willing to swing a hammer?  Most homes that need a facelift are cheaper, but don’t overshoot your budget or time.

How much space do we need?

Is your family growing?  Is someone going off to college in the next few years?  Might mom need to move in in the next few years?  How often does family visit?

Design? 

This one is harder to know before you go and preview a bunch of homes.  One style will start to tug at your hears strings though and others will repel you.

What can you realistically afford?

Start with your current monthly cost for housing and realistically estimate what you can swing for your total monthly payment.  Take that number to the bank and find out what it translates to for a mortgage.

How long do you plan on being in the home?

The average length of stay in a home is 7 years.  Less for first time home buyers.  Don’t get into a serious fixer is you are moving in three years. 

It isn’t an exhaustive list, but a great place to start.  Begin to narrow down your focus then give me a call and I’ll set up a day where we can go out and take a look at some of the homes that match your ideas. 

Talk to you soon,

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Rob Graham, Accredited Buyers Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 9% [?]

The picture below was generated using data from the North West Multiple Listing Service.  It shows the dramatic change in the Seattle Housing Market over the past few months.

The green areas represent buyers markets, yellow are balanced markets, and red are seller’s markets.  This information is only for single family homes.  Ignore the downtown corridor where there are almost no single family homes, but the remainder of the map paints a dramatic picture. 

Just three months ago we were looking at a strong buyer’s market in almost all areas.  Now, nearly all of western King county is showing up as a balanced market where buyer’s no longer hold a strong advantage. 

I can tell you from experience that buyers are still very nervous and trying to get the best possible deal.  Some are loosing out on great homes because they are getting too greedy.  The map explains why.  It is no longer the case that a buyer can walk into a negotiation and ask for the moon.  Much of the lower priced inventory has been absorbed and continues to be absorbed.  Sellers are becoming more rigid on price and buyers are having to jump a little higher to get what they want. 

All this is typical for this time of year and I don’t want to oversell the point.  We are still in a difficult economy as yesterday’s jobs numbers showed, but the idea that buyer’s are squarely in the drivers seat no longer seems to be the case. 

As an aside, I can tell you that I am currently involved in two negotiations for homes on behalf of buyer’s of mine and both have multiple offers on the home. 

Seems to me that much of the bottom feeding has already taken place and now the good homes are getting a lot of attention, while those with flaws are getting ignored. 

Stay tuned as we watch what happens in late summer and early fall.

Give me a call if you would like me to find your perfect home for you.

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Rob Graham, Accredited Buyers Representative

Windermere Real Estate

Seattle, WA

206-321-6349

robgraham@windermere.com

Popularity: 8% [?]

Regular readers are well aware of my unhealthy preoccupation with statistics.  The Multiple listing service recently released the compiled numbers for June and I have been sifting through them for my and your benefit.  Below is a chat of the past 3 years for single family homes in Seattle.

Here is what you need to know The light green bars are the homes for sale in each given month.  The dark green bars are the ones that have sold in each month.  The red line are the pending sales for each month. 

A few comments on the numbers.  Obviously there are many more homes for sale this June then prior to the recession.  Still the numbers are down from a year ago and suggest some improvement in the market.

Sales However are similar to last year suggesting that buyers are not more willing to buy this year then last. 

The red pending line however is markedly different.  It is sharply up over the past several months.  This is partly due to the first time home buyer tax credit and some is due to a seasonal uptick that we see each year anyway.

One more thought that I will leave you with.  I saw a statistic that first time home buyers make up approximately 50% of the market right now.  That is up sharply from the typical 25-30% of the market they typically occupy.  I have to say that many of my current clients are first time home buyers, so I am seeing the effect of the tax credit.

There is some noise in congress to extend the first time home buyer tax credit to all buyers and extend it into next year. 

I’ll keep you posted on that.

Give me a call if you need help.

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Rob Graham, Accredited Buyers Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 3% [?]

I received this question from a reader of this blog.  

I thought many of you might appreciate reading the response:

Dear XXXXX,

Currently the minimum down payment for an FHA loan is 3.5%

You will also have closing costs including your loan fees, escrow fees, title
fees, prepaid taxes and interest, and recording fees.

Also keep in mind that you will want to have an inspection done on the home and
I highly recommend a sewer scope if you are purchasing a home but not if you
are purchasing a condo.

Here is an estimate of what you can expect to pay for a $300,000 home.

Escrow Fee:  $500-$600
Title Fee: $700-$800
Recording Fees: $100-$150
Inspection: $400
Sewer Scope $200

The fees associated with your bank loan will be the most expensive part of the
closing costs.  It is difficult to estimate what they might be.  Banks vary.
1% of the loan amount is typical for an origination fee, but then there are
other fees associated that you would need to speak to you lender about.

Prepaid Tax and interest is dependent upon when in the month you sign.  You
typically don’t make a mortgage payment the first month after you move but the
interest and taxes still need to be paid at closing for the period before you
first payment.

I hope the info helps.  If you have more specific questions.  Let me know a
little more about your situation and I’ll be glad to see what I can do.

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Rob Graham, Accredited Buyers Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 10% [?]