The $790 billion stimulus package signed by President Obama today increases the home buyer tax credit to $8,000, drops the repayment feature, reinstates last year’s 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans, and provides $2 billion in additional funding for states and localities to be used to purchase, manage, repair and resell foreclosed and abandoned properties.

Homebuyer Tax Credit. The bill provides for a $8,000 tax credit that would be available to:

• First-time home buyers

• Home buyers who haven’t owned in at least three years (falls under First-time buyer definition)

This credit may be used for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.

The Home-buyer Tax Credit does not require repayment for buyers who hold onto their property for at least three years.

The credit will be claimed on a tax return to reduce the purchaser’s income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

Other features of this very important and transformative bill include:

Rental assistance. Up to $1.5 billion to provide short-term rental assistance and other aid for families during the economic crisis.

Low-income housing grants. Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.

Tax-exempt housing bonds. Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.

Energy efficient housing. Grants for energy retrofits for federally assisted housing (Section 8), funding for energy efficiency and conservation block grants to states, increases in the residential tax credit through 2010 for certain energy efficient upgrades and $5 billion to weatherize low-income homes.

Transportation infrastructure. Up to $29 billion for highway construction projects, $8 billion for rail projects.

 
Lynn Robertson
Real Estate Broker

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Seattle, WA, 98101.

Toll Free: 1 888 FOR YOU2
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Email: info@yourseattlehometeam.com

Despite the above conditions, many buyers are waiting for the “bottom of the market” before investing in their home. Below is an explanation of the “bottom of the market” and how it will affect your buying experience.

The following graph represents the housing market. The left side of the V represents the market going down, the right side represents the market going up, and of course the bottom of the V represents the bottom of the housing market.

Assuming that the current housing market was at the point of the red arrow on the left, we would say that the market is going towards the bottom. The problem with waiting for the bottom is that we won’t know that the housing market has hit the bottom until prices start to go back up. It will be difficult to be sure that the market has hit bottom for a few months. It’s not a sudden shift, it is a slower more gradual shift.

You’ll be able to tell that the market has turned when prices reach the point marked by the blue arrow. There is not much difference in the price between the point marked by the red arrow and the pint marked by the green arrow. But there is a major difference in the housing market…

If you buy a home on the left side of the graph, it is considered a buyer’s market. Your would be more likely to get concessions from a seller including price reductions, repairs, or maybe even personal property.

If you wait until the market turns and you buy on the upswing, you will be entering a seller’s market and you and every other buyer that has been waiting for the market to hit bottom may be bidding on the same house.

Posted by:
Lynn Robertson
Broker, YourSeattleHomeTeam.com
Direct (206)330-1213

YourSeattleHomeTeam.com

• View as soon as you can (the early bird catches the worm!).
• Take pen and paper and a tape measure to make notes and check
  dimensions.
• Take a checklist of points you want to cover.
• Don’t be put off by the estate agent or owners’ presence and don’t be afraid to ask questions.
• Don’t rush. Think in terms of a first look for general impressions and a second look for the details.

First look:

You’re trying to work out whether the property is broadly the sort of thing you’re after. Look at the layout and the space of the rooms. Try to imagine yourself and your family living there. Will it be big enough? Is it light and bright or dark and gloomy?

Second look:

If the property looks promising, it’s time for a second and more detailed look. Ideally, schedule several visits so you can see what the traffic, lighting and neighbors are like at different times of day.

Location:

• Consider the aspect. South or west-facing properties will get the sun most of the day; north-facing could be dark in winter.
• Have a look round the locality. The proximity of schools, shops and transport links are all likely to be important.
  
• Is there a flood threat from a nearby river, or a pollution problem from factories in the area?

Layout:

• Are the rooms big enough for furniture and family? Check the sizes against the estate agent’s descriptions.
• Will you and your family be able to cope with the steps and stairs?
• Will the storage space be adequate?

Structure:

• Questions can be revealing, so don’t be afraid to ask a few!

Indoors, look at:

• Walls and ceilings. Can you see damp stains or cracks? What is new paint or wallpaper hiding?
• Woodwork. Woodworm or rot can show in springy floors, cracks and shrinkage.

Outdoors, look at:

• Walls. Any signs of damp? Peeling paint and stains could be an indicator. Is there a damp course?
• Roof. Has the roof had major repairs recently? Try to get a feel for the general condition by looking from outside for missing tiles or leaning chimneys.
• Windows and doors. Is there anything to suggest expensive repairs may be necessary?

Services:

• Consider the heating system. Is it centrally heated throughout, or only partially? How old are the appliances?
• Drainage and sewerage. If there’s a septic tank, how much does it cost to empty?
• How old is the electrical wiring?
• Is the TV reception OK?

Consider:

• Noise, from neighbors, traffic or nearby public amenities such as pubs or schools.
• Future planning developments that could become problems, like motorways or retail parks

Outdoors:

• If you’ll be spending a lot of time in the garden, will it be light enough?
• Is there a garage, and is it big enough? If not, is there adequate on-street parking?
  

· View as soon as you can (the early bird catches the worm!).
· Take pen and paper and a tape measure to make notes and check
dimensions.
· Take a checklist of points you want to cover.
· Don’t be put off by the estate agent or owners’ presence and don’t be afraid to ask questions.
· Don’t rush. Think in terms of a first look for general impressions and a second look for the details.

First look:
You’re trying to work out whether the property is broadly the sort of thing you’re after. Look at the layout and the space of the rooms. Try to imagine yourself and your family living there. Will it be big enough? Is it light and bright or dark and gloomy?

Second look:
If the property looks promising, it’s time for a second and more detailed look. Ideally, schedule several visits so you can see what the traffic, lighting and neighbors are like at different times of day.

Location:
· Consider the aspect. South or west-facing properties will get the sun most of the day; north-facing could be dark in winter.
· Have a look round the locality. The proximity of schools, shops and transport links are all likely to be important.
· Is there a flood threat from a nearby river, or a pollution problem from factories in the area?

Layout:
· Are the rooms big enough for furniture and family? Check the sizes against the estate agent’s descriptions.
· Will you and your family be able to cope with the steps and stairs?
· Will the storage space be adequate?

Structure:
Questions can be revealing, so don’t be afraid to ask a few!

Indoors, look at:
· Walls and ceilings. Can you see damp stains or cracks? What is new paint or wallpaper hiding?
· Woodwork. Woodworm or rot can show in springy floors, cracks and shrinkage.

Outdoors, look at:
· Walls. Any signs of damp? Peeling paint and stains could be an indicator. Is there a damp course?
· Roof. Has the roof had major repairs recently? Try to get a feel for the general condition by looking from outside for missing tiles or leaning chimneys.
· Windows and doors. Is there anything to suggest expensive repairs may be necessary?

Services:
· Consider the heating system. Is it centrally heated throughout, or only partially? How old are the appliances?
· Drainage and sewerage. If there’s a septic tank, how much does it cost to empty?
· How old is the electrical wiring?
· Is the TV reception OK?

Consider:
· Noise, from neighbors, traffic or nearby public amenities such as pubs or schools.
· Future planning developments that could become problems, like motorways or retail parks.

Outdoors:
· If you’ll be spending a lot of time in the garden, will it be light enough?
· Is there a garage, and is it big enough? If not, is there adequate on-street parking?

You have hired a good real estate agent who has researched several comparable homes in your area, knows the trends of your neighborhood, and has consulted with you on how to market and price your home competitively. The ultimate goal is to sell your home for the highest price within 60-Days.

The agent knows they must market your home aggressively. The agent has hired a home stager, a professional photographer, and has a plan to market your home well through print advertising, the Internet, newsletters, open houses, and for some luxury homes, magazines.

So your house is priced right, looks great, and has a well positioned marketing strategy. Now what?

You have heard horror stories of houses being on the market for six, nine, and even twelve months, but you have 60 days to sell. At this point, your nerves are getting the best of you, but remember your agent is an expert in real estate research, real estate trends, real estate marketing, and most importantly real estate transactions.

Low and behold the first weekend goes by and an offer comes in. The offer is for $470,000, closing in 30 days, and the buyers are putting down five percent.

Well you are probably going to counteroffer, but how do you decide if this is the right offer for you. If you are waiting until this point to figure out if this is the right offer for you, chances are high that you’re going to regret your decision to take or reject a particular offer.

Know your Bottom Line

So here are a few things every seller should think about before they put their house on the market in order to pick the right offer. Your agent has done extensive research so you know your house is competitively priced. First ask yourself what is your bottom line. What is the lowest amount that you will accept, and break that amount up according to time periods? For example, what will be the lowest you accept if an offer comes in during the first three weeks, 45 days, 60 days or beyond? It may look something like this:

• · After 30 Days – $490,000

• · After 45 Days – $480,000

• · After 60 Days – $470,000

By using a time-line based drop-down strategy you can hedge against taking a low-ball offer to soon.

Know your Market Conditions

Second, know your numbers and you will know your home’s value. You can’t make an informed decision unless you know your local real estate market. Also realize that market conditions can change rapidly. Be aware of any new factors that can influence your homes value for the positive or negative. These numbers include the average days on the market (how long it takes to sell a house in your area), the price of like-properties that are currently on the market, pending real estate transactions, interest rates, foreclosures, and the prices of homes that have sold in the last three months. Remember that the current market determines the value of your home and there are several factors to consider.

Know the Players and the Terms of the Deal

The third consideration is to be aware of the players and the terms of the deal. Ask yourself the following questions:

• What type of financing are the buyers using?

• · How much are they putting down?

• · How long is the financing contingency?

• · How long is the inspection contingency?

• · How far out is the close date?

• How much earnest money are the buyers depositing into escrow?

These terms may feel minor to you, but it provides key insight to your likelihood of getting a transaction closed on your time line.

Having a 60-day time line to sell your home can add tremendous pressure. However there are strategy-rich ways to insure you get the best offer at the best price. Knowing how to pick the right offer for you starts with you knowing your numbers, knowing the current conditions of your market, and knowing the players and rules of the offer. In today’s market the highest offer is not always the best offer. Each offer requires careful scrutiny to insure that you are getting the best deal within your time frame.

]]> http://yourseattlehometeam.wordpress.com/2008/06/10/60-days-to-sell-how-to-pick-the-right-offer-on-your-listing-in-today%e2%80%99s-market/feed/ 0 yourseattlehometeam seattle_home_logo.jpg http://yourseattlehometeam.wordpress.com/2008/06/04/im-buying-a-home-what-questions-should-i-ask/ http://yourseattlehometeam.wordpress.com/2008/06/04/im-buying-a-home-what-questions-should-i-ask/#comments Wed, 04 Jun 2008 00:41:49 +0000 yourseattlehometeam http://yourseattlehometeam.wordpress.com/?p=23 ]]> When you’re in the market for a home, it seems as if there are millions of questions to ask — and no doubt plenty more. As buyers we become so wrapped up in the physical aspects of the house — the rooms, amenities, and structure — that we give less attention to quiet issues which may strongly impact our ability to enjoy a home.

What kinds of factors will affect your quality of life? The obvious ones are the first to come to mind: the distance to work, the special programs available through the local school system, and neighborhood shopping and recreation.

Those factors, while important, may not touch the issues specific to your situation.

Consider the thousands of families who have an aging parent residing with them. The average age of our population has grown older, meaning we are living longer lives, spending longer periods as widows and widowers, and increasingly choosing to take up residence with our children. In such situations, the distance from our homes to the nearest hospital is vitally important.

Public transportation is also something we tend to overlook in a nation of drivers. As more of us get older, many elect not to drive, thus nearby public transportation becomes important –especially if buses stop frequently.

Public safety is a major issue, and proximity to police stations, emergency medical services and fire houses is important. Community groups — including homeowner associations, PTAs, and a neighborhood crime-watch — are also important.

What about trash pick-ups? Okay, this isn’t a glorious subject, but consider the alternative. In rural areas there are often communal dumpster zones to which residents haul trash. If the community will pick-up from you, great. If they recycle, better. Check for pick-up dates, if Mondays ask how holidays are handled.

If you’re moving to a new community you might look forward to such recreational facilities as clubhouses, playgrounds, exercise rooms and other offerings. Before you sign on the dotted line, check out the “fine print” details. Is use free or an additional cost? Are there plans to build a playground or other amenity next to the property you want to purchase? Do you regard a playground as a convenience or noisy problem? What about that nice stand of trees behind the lot where you want to build — is that land being preserved or will a zoning change allow it to become a gas station next year?

Another issue concerns property taxes: You know what the owners pay today, but is that what you will pay tomorrow? Property tax rules may allow special benefits for older citizens, veterans, or long-time residents — benefits which may not apply to you.

Here’s one more: That nice condo or homeowner association you’re thinking about. You know about their assessments now, but are they planning a “special” assessment soon? If yes, you could be out big money (or you could make an offer which is discounted to reflect the cost of the special assessment).

Are there more questions to ask? You bet. But the ones above are a good place to start.

I foresee that the market will become more competitive and that could be good news for renters. Just this month I noticed several advertisements for free rent and/or reduced deposits…..its been a long time since we’ve seen promotions like that. Even so, the market should still remain strong for rentals as the local economy, job market, and immigration to the area remain strong. The credit crunch also will make renting a good decision again for many individuals.

If your an investor, its a great time to buy up properties and rent them out. In my experience over the last 24 months the Lower Queen Anne, Queen Anne, and Belltown areas seem to have the most potential for bringing in high rents, although the competition for renters is on the rise in the Belltown area. In these high rent areas its still possible to find property that will cash flow.

According to the Seattle Office of Housing, rents have increased by 14% citywide in the last two years and they are expected to increase in 2008 as well.

1. As the homeowner you give us a written agreement for permission to speak with your lender on your behalf. The agreement, which can be a power of attorney, should specify the property address and loan number. We will also need the last four digits of your social security number for verification with your lender. Either you or we will on your behalf, ask your lender if they will consider a short sale before beginning this process.

2. We will place your property on the market for fair market value. Most lenders will only consider offers that are at least 75-80% of what the property appraises for, based on their independent appraisal.

3. When we get a contract, we’ll ensure that it states it is “contingent on seller’s mortgage holder’s approval”. Your signature is required on this contract.

4. We’ll send the contract to your lender with the following documents: mortgage pre-approval letter for the buyer, hardship letter which explains why you need a short sale, financial worksheet itemizing all income and expenses (may be provided by lender), last two years tax returns, recent pay stubs, recent bank statements, copy of the listing agreement, copy of MLS printout, estimated net sheet.

5. You can expect to wait two to eight weeks for final approval from the bank “negotiator”. During this time the lender will order an independent appraiser or broker price opinion of the property.

6. If approved, the lender will provide a letter with instructions to the title agent regarding the reduced pay-off amount. Typically, the lender will absorb all closing costs including conveyance taxes and broker fees. Escrow monies, however, may not be returned to the borrower, such as for taxes and insurance, and will be retained by the lender to cover some of the loss.

7. Consult your accountant regarding tax implications of a short sale. The forgiven debt may be considered income, and taxable by the federal government.

A real estate short sale is not the perfect solution for everyone, but it is an option. You need to way the pros and cons of your particular situation. For many, it provides for a faster economic recovery and could allow you more credit options and opportunities than you would have should you be foreclosed on. To learn more about your options call 1-888-For-You2.

Many people in the situations noted about don’t have enough equity in their home to pay the mortgage, late fees, commissions and excise taxes due at the sale of real estate. In other words, they owe the lender more on the mortgage than the property plus selling costs will support. When this is the case, and the borrower needs to sell, one solution is a “short sale”. In some situations, the lender may allow the homeowner to sell the property for less than the mortgage payoff. The loss is either completely written off by the lender, a payment arrangement is made with the borrower, or a lump-sum for a potentially lesser amount is agreed to. The lender will make its determination based on the financial status of the borrower. For example, if the borrower has enough income and has been keeping up with payments, the lender may not be as motivated to make such an arrangement. Or, if the borrower has liquid assets that would cover the loss, the lender may not be amenable to a short sale.

Getting started on a short sale is easy. First, we’ll guide you through a series of questions to see where you are in the qualifying process. Next we will work with you and your lender, along with a team of title and escrow representatives, to put together a package that the lender will require to get started. Then we’ll list and market your home for you, all the time working closely with your lender, and procure a buyer for your home. Lastly, we’ll submit a signed purchase and sale agreement to the lender, completing the lender required package and again organize and work with the team to complete your short sale.

Lynn Robertson, a Seattle real estate broker explains, “Ultimately our goal is to get you out from under your mortgage with few or no penalties, and with far less damage to your credit then a foreclosure would otherwise leave”.

YourSeattleHomeTeam.com Inc. has helped many homeowners through the short sale process. They provide confidential consultations and have agents available to answer questions and offer their experience and guidance to you. For many financial troubles come at a huge emotional cost and are often barriers to seeking help. Lynn explains “I feel great compassion for people who are experiencing financial downturns and it is our goal to give them a better option than foreclosure… short sales offer potential for quicker financial turn around and less long-term devastation than foreclosures”.

The key to avoiding foreclosure is to be proactive. It is better to ask for help and guidance and not need it than to try to ignore the situation before it is too late. You may be surprised at how willing your lender may be to work with you rather than let you go into foreclosure.

Sub-prime clients are not the only home owners biting their nails. Pre-construction investors, those of whom purchased properties under construction with the intention of selling them the day after they had taken possession of the home, are being hit especially hard. Many dreamed of selling these properties for a wild profit and are now forced to make payments they had never planned to make. To compound the problem, the explosive growth they anticipated was never realized and they are now at risk of losing money should they be forced to sell and pay brokers fees.

In some extreme cases, investors have purchased several pre-construction condos and are now having to make payments of $20,000/month or more. Currently in Seattle, the average time a house is on the market is 81 days. This is far better than most of the nation. However for some property owners, they will be bankrupt in a matter of weeks as their savings are rapidly drained. What should you do in this situation? BECOME A LANDLORD!!!

At first they may turn their noses to this idea. Some are overcome with fear that they will get the tenants from hell. While there is no guarantee that you will get the perfect tenant, there are a lot of upsides to renting and there is a lot you can do to make sure you get qualified tenants. Currently the rental market in Seattle is red-hot. Steve Glover, a Seattle-based property manager explains that “often when the housing market falters the rental markets explode”. Many of his rental listings have been rented before he is able to post advertisements for them. “It reminds me of the the housing market situation a year and a half-ago… the very first day a house was listed you had several offers”, he explains. Roughly 25% of his clients are investors that were caught off guard by the current housing situation and choose to rent their real estate versus getting foreclosed on or selling at a loss. Often this buys them time to acquire new loans or new sources of revenue.

Hiring a professional property management company can help make becoming a landlord a much easier process and help you avoid costly mistakes. There are many housing regulations you must follow as a landlord and not following them could lead you to legal trouble. Another advantage you will find with property management companies is they provide credit and background checks for prospective tenants. This will help insure that you have the most qualified individuals and families renting your property. On the outside chance your tenants did not pay the bills or needed to be evicted, a professional management company can facilitate the eviction process much faster than a first-time landlord could.

Property managers also know how to market your property. Steve uses several tools to market his listings including professional photography, listing the rentals on a variety of web sites, and maintaining the listing continuously throughout the year on his own real estate website. Most importantly, professionals managers know what you will likely get for rent. Much like selling a house, you do not want to overprice your rental. Being priced too high could lead to months of vacancy. On the flip-side, not getting the rent you could be getting will only diminish your financial potential.

Depending on your loan situation the rent you get for your property may or may not cover your costs completely, but it could buy you valuable time. Seattle’s real estate market has many positive things going for it. There is very little land left to build on, the weak dollar makes us attractive to foreign investment, and interest rates cuts are on the way. Soon the Senate will address the sub-prime issue and the credit crunch. You can bet that Seattle will be among the first markets to post major gains when the housing market turns. After all, when many markets in the United States lost 40% of their value, Seattle still managed to squeak out a 3.3% gain. Renting your property for 6 months could prove to be your very best real estate move or a financial lifesaver.

Not all property management companies are the same. You should find a reputable company that has up-front fees. Generally speaking, property management companies charge a fee of about 10% of the rental price of the property. Some pitfalls to avoid are hidden fees including applications fees, processing fees, credit check fees, and marketing fees. While many of these fees may be legitimate beware of heavy mark-ups or other fees that you did not know would occur. Read your rental agreement fully and do not hesitate to ask questions. Always get everything in writing.

A good property manager will have both a short-term and a long-term plan for your property and should customize a plan based on your specific needs. If you anticipate keeping your investment as a rental for years to come you need to allocate a certain percentage of money towards major repairs and up-keep. Keeping a well-maintained property will only serve to insure you can get the highest market value both as a rental and as a real estate listing.

The following are a list of services you should expect when hiring a property manager:

• Tenant Screening and Contract Negotiation
• Repair and Maintenance Management
• Monthly Rent Collection
• Managing your Utility and Tax Payment
• Monthly Fund and ROI Disbursement
• Financial Reports
• Vacancy Management
• Lease Renegotiation and Lease Extension Services
• Annual Property Market Analysis