Posts Tagged ‘seattle homes’

The inevitable first question I get from home buyers is, “How much house can I afford?”. 

The better question is: How much do you want to pay?

If you walk into a bank and ask what you qualify for in a home loan, the number that comes back is frequently larger then you will be comfortable with.  So attack the question backward.

Sit down with the decision makers in the family.  Start with what the combined housing costs are for everyone who will be living in the new home.  Then make a guess as to what price range you would be comfortable paying.

As you start searching for homes, get in the habit of putting whatever the difference is between what you are currently paying and what you think you are comfortable paying in savings each month.  Don’t touch that money.  You can always adjust up or down as you feel comfortable.

When the time comes to buy, you won’t suffer from sticker shock and you’ll have a nice little sum of money to pay for things like inspections and a new flat screen TV.  (You could even take your favorite agent out to dinner.  Just a thought.)

Happy Hunting.

Popularity: 2% [?]

So in my last post, I explained the difference between short sales, distressed properties, foreclosures and bank owned property.  Still confused?  Don’t feel bad.  There are many agents who don’t know the difference either.

Short Sales however are when a seller is trying to sell a home but will not make enough money from the sale of the home to cover what is owed on the mortgage and the closing costs of the sale.

In this situation the bank, who is going to take a loose on the sale, needs to approve the sale.

I am sure you won’t be too surprised to find that when big banks get involved, the situation gets complicated.  In fact I have found that the bigger the institution generally the slower the process. 

Getting bank approval can take anywhere from a few weeks to several months. 

You make an offer on a short sale home the same way you would any other home.  Since the seller is not going to make any money on the sale anyway, they are more then happy to accept almost any offer.  The offer then needs to be forwarded to a bank.  Where it generally sits for a long period of time.

In the eyes of the bank they are in no hurry.  The longer they wait, the longer time for a potentially better offer on the home to come in is and the more time the owner has to come into money and decide to not sell. 

In my experience the entire process takes on average 4-5 months.  During that time you will not hear nay information from the bank at all.  Your buyer’s agent can not contact them either.  It is like you sent an offer off into the wild blue yonder. 

It can be very frustrating.

The banks almost always have the following rules in effect.

1. The bank will not make any changes to the home.  You are free to do an inspection, and should, but unless it is a major item that will prevent the sale of the home, they will not fix anything.

2.  The bank reserves the right to receive and consider any and all additional offers that may come in on the home.  Short sales tend to be priced somewhat low and get a decent amount of attention.  If another offer comes in, it gets forwarded to the same committee and we all wait for a decision. 

Again, very frustrating and time consuming.

3.  The bank reserves the right to change it’s mind and the components of the offer at any time.  The agreement to sell is between you and the seller, but the bank has the right to refuse to allow the sale for any reason at any time. 

It isn’t uncommon for the rules to change and a buyer to have to come up with additional cash after a previous deal has already been approved. 

The bottom line is that short sales are long, frustrating, and cumbersome.  The bank holds all the cards.  Despite the fact that it is them that wrote a bad loan and the market that is dictating the price and their client who is forced to sell, they will hold you over the fire to get as much out of you as they can.

If you have the stomach for it, you can get a great house at a great price.  The financial problems of the previous owner are no longer your concern after close and the bank has no more claim to the home.

Still, short sales are not for everyone.  I have had many clients try and change their minds against short sales.  Those that have seen it through to the end, are split about 50/50.  Half say they would never do it again, and half feel it was worth it.

Hope it helps.

Give me a call if you need help.

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Rob Graham, Seattle Home Buying Expert

Windermere Real Estate

206-321-6349
robgraham@windermere.com

www.robgrahamrealestate.com

Popularity: 3% [?]

I have fielded many questions about the effect that the Cap and Trade Bill and the recent changes to Health Care will have on home owners. 

Just This week I received this e-mail from the Washington Association of Realtors in an attempt to clear up a lot of the misinformation that is out there.

Is The Rumor Fact or Fiction?

4/23/2010

A couple rumors are circulating that are causing unnecessary concern among our members (and here is a hint, both of these rumors are false)

Rumor Number One

The new "Cap and Trade" Climate change bill in Congress requires a homeowner to license their home prior to selling it.

FICTION!
There is no requirement in the law to license a home before your clients are allowed to sell their home. In addition, there is not a requirement to make a home more energy efficient before it can be sold.

Want Proof? Here you go…

Rumor Number Two

The recently-passed health care legislation imposes a 3.8% tax on homes sales.

FICTION!
An article has been circulating that mischaracterizes and overstates what is actually in the legislation. Here are the facts.

There is a new 3.8% Medicare tax for "High Income Filers" that goes into effect January 1, 2013 The tax is on unearned income and will apply ONLY to single filers with more than $200,000 of Adjusted Gross Income (AGI) and joint filers with more than AGI of $250,000. Unearned income includes interest, dividends, capital gains and net rents.

Keeping in mind the income limitations above, real estate income that will be affected for high-income filers include:

• Sale of a primary residence: If the gain from the sale of the property is below $250,000 (individual)/ $500,000 (couple) NO tax will have to be paid on the gain. The new Medicare tax would only apply to any gain realized over the $250K/$500K existing primary home exclusion that will bring the filers AGI over the $200K/$250K limits.
• Second Home/Investment property: The additional 3.8% tax will apply to the portion of the gain realized on the sale of a second home or investment property that will bring the filers AGI over the $200K/$250K limit.
• Rental Income: The portion of net rental income that exceeds the $200K/$250K AGI limits will be subject to the new 3.8% tax.

Want more info? Download NAR’s Q&A

Rumor Number Three

If you send $1,000 to this Nigerian banker, he will transfer $21 million dollars into your account.

Actually, we don’t know for sure on this one, but we do know the top two are false rumors!

Do your friends and co-workers a favor and pass this email along to them if you think they have received bad information.

I hope this helps clear up some of the confusion

Give me a call if you need help.

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Rob Graham, Seattle Home Buying Specialist

Windermere Real Estate

206-321-6349

robgraham@windermere.com

www.robgrahamrealestate.com

Popularity: 2% [?]

Here is a great video explaining the expansion and extension of the current first time home buyer tax credit.

Give me a call if you need help!

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Rob Graham, Accredited Buyers Representative

Windermere Real Estate

robgrahamrealestate.com

206-321-6349

Popularity: 3% [?]

Ok, so we all agree that the end is in sight if not passed.  The economic climate is improving and home prices are bouncing around the bottom.  Winter is traditionally a great time to buy a home in Seattle with less competition and generally lower activity.

 Right now is a unique opportunity for some, but not for all. 

So who should be buying a home right now?

Here is the unique situation we are currently in:

• Homes overall in Seattle have come down 22% since the highs of 2007
• Interest rates while not at their lowest are still WELL below there 20 year average and near record lows
• First time home buyers as well as Repeat buyers who have owned for more then 5 years are in line for an unprecedented tax credit of $8,000 and $6,500 respectively.

So who should be buying in this environment and who shouldn’t?

As a general rule, anyone upgrading is in great shape. 

If you are currently renting or are in a smaller home and plan on buying something

more expensive, now is the time to pounce!

Why?  If you are a first time home owner you are not likely to see a better scenario.  If you are upgrading, you will see less profit from your current home. but the discount you are getting on the larger home, more then offsets the loss you will take on your current home.  This is even further exaggerated when you consider the tax credit and low interest rates.

If however you are downsizing or considering a move to a smaller home, now may be the worst time to make a jump.  If you can avoid it consider staying put or renting out your current home to avoid taking a loss until prices rebound.  Be advised however that if you are expecting a quick jump similar to what we have seen in the stock market, you will be disappointed.  Home prices should not get back to their 2007 prices for years to come. 

Plan accordingly, good luck, and give me a call if you need anything.  Happy New Year!

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Rob Graham, Windermere Real Estate

Your Home Buying Expert

206-0321-6349

robgraham@windermere.com

Popularity: 3% [?]