I received a message late last week from one of my helpful resource folks, Garrett Huffman of the Master Builder’s Association, regarding real estate closings and King County furlough days.

Earlier this year I posted a blog entry listing the days various King County offices would be closed in an effort to help minimize budget overruns. One of the most troublesome dates on the list is scheduled furlough for November 25th … just 5 days prior to the end of the First Time Homebuyer’s Tax Credit, as it is currently defined. Add in the typical Thanksgiving holidays of November 26-27, the last week of November has generally been deemed a write-off as far as getting transactions closed.

According to Garrett, the folks at King County have taken into account the general “panic” that may WILL occur by folks trying to get transactions recorded so as to qualify Buyers for their tax credit.

I have a couple of transactions that are looking like last minute closings too. YIKES!

The Master Builder Association has been working hard to be sure that last minute transactions are recorded on time. Here’s what they’re reporting:

“King County has been very responsive to our association’s concern regarding a furlough day planned at the county in late November. To make sure that the home sales to first time homebuyers close by Nov. 30 and are therefore able to qualify for the federal first-time homebuyer tax credit, the Recorder’s office is taking the following action:

• King County plans to have 15 employees in the Recorder’s Office designated as furlough ineligible and therefore able to work overtime during Thanksgiving week.
• These designated staff will work overtime on Monday, Nov. 23 until all documents are recorded.
• On Tuesday, Nov. 24 the Recording Office will start at 7:15 a.m. and stay late until everything is recorded.
• They will have a team of seven recorders on stand-by to work on Wednesday, Nov. 25 should there be any additional work not completed on Tuesday.
• The office will not be open to the public on Wednesday, Nov. 25 and would not receive any additional documents.

In addition, we have requested that King County be prepared for Recording office staff to work overtime on Monday, Nov. 30, to help ensure that all sales are recorded and no first time homebuyer will miss the tax credit deadline.

Thank you, Garrett for such great information!

I know, I’m a broken record. Buy now. Don’t wait. Get going. Don’t look back on 2009 as the year you “should have” bought and didn’t. Here are 10 reasons why you may not want to wait any longer to buy a new home:

1. 1.   The number of houses available from which you can choose is staggering. Just a few years ago Buyers had to choose from a handful of houses in their price range. Not so much right now. There are a lot of houses in inventory!

 

2. 2.   In fact, you can take your time (a little bit!!). Generally at least long enough to go home and have dinner and talk to Mom and Dad. Again, just a very short time ago, houses were selling so fast with multiple offers that folks were writing up offers on the hood of the car just outside the house. (Oh yes, I remember!) Now, you don’t want to take too much time (hence the title to this blog entry) and lose out, but at least you can breathe a little! 

 

3. Yes, I know that for many first-time buyers, it seems as though the best houses out there are short sales. And they take forever to close. And some don’t! But some do! The trick here is to make offers on several short sale houses. It’s all a numbers game. ONE of them will be approved and close.

 

4. There are also a lot of savvy sellers that have figured out the pricing game — price it right and the house will sell! Work with a qualified agent to help get through all of the hundred or so steps it takes to actually close on a sale. (It IS complicated right now!)

 

5. There are also a ton of bank-ownedproperties. Most banks are aggressively pricing their foreclosure inventory. They want those houses gone! Believe it or not, some of those properties are getting multiple offers as asking prices are so low.

 

6. Tax credit. Yep … more on the $8,000 first time homebuyer tax credit. No word yet as to whether this will be extended. There are a lot of proposals, lots of talk in Congress to extend the credit and perhaps even increase the amount. But nothing’s been done and I sure wouldn’t want to miss out on this golden opportunity. $8,000 is a LOT of money. Think of the “fixing up” you could do with that amount! I mean, every house has something you’ll want to change or improve or paint or fence or …..

 

7. Loan qualifications are more stringent. Yes, that IS a reason to get off the fence: when all is said and done you’ll be more secure in your ability to make your payments. Compared to last year, and the year before that and the year before that … it truly is harder to qualify and go through all of the steps to get a mortgage. But in the long run, that’s probably better for you as a Buyer.

 

8. Mortgage loan programs are amazing too! I work with a number of excellent loan officers. Bless them, they regularly call and/or send me messages telling me about various programs they have available. For example, my contact at Bank of America last week helped me understand one of the FHA ARM (Adjustable Rate Mortgages) they use. Now, I know that ARMs have received a terrible rap over the year or so. After all, the deal is that people got in over their heads in payments when the rates adjusted. But good grief … common sense prevails … and with a program like the FHA 5/1 ARM he described, it’s hard to go too far wrong: 3.75% for the first five years; the rate can adjust up or down no more than 1% a year … and it caps at 5% … 5% for the remaining life of the loan! Wish we were buying now … that’s AMAZING!

 

9. Perhaps you truly HAVE saved enough for a down payment. One of the common reasons I hear for waiting is that they Buyers haven’t saved up enough down payment to bring their payment down to their comfort level. That’s a bit of a two-edged sword. It seems logical. But here’s some information sent to me by another loan officer today:

 

Next year, the rates could be at 6.5%, which is far more “normal” than the extreme lows we are seeing at 5.0%.  This rate of 6.5% would take the monthly payment on a $300,000 loan up to $1896.20 per month (P&I).  That equates to a difference of $285.74 per month in mortgage payment.  Follow me here……  That $285.74 per month is the same as $57,000 in purchasing power.  This means that if someone is qualified at $300,000 at a 5.0% rate today, next year, if rates increase to 6.5%, that same buyer will only qualify up to $243,000.  Spread this information to your buyers who are “on the fence”.  Money is cheap right now but won’t be that way forever.”

“In today’s market, with a loan amount of $300,000 and an interest rate of 5.0%, the monthly payment would be $1610.46 P&I.

Downpayment can be as low as 3.5% of the purchase price when using an FHA loan, or even zero percent if you are buying a qualified USDA house. (That’s a home in a designated rural area.) Actually, there are a few other zero percent loans, too. School teachers police and fire officers all have some special programs available.

10. And finally, interest rates continue at record lows. You may have heard this before: A loan less than 8% is amazing. I remember buying at 17% back in the 1983. Yikes! But we did it and we made the payment. Of course we refinanced as soon as possible too. I’m told that interest rates right now are hovering right around 5%. 

So … have I convinced you? Or at least given you a bit more to think about? 

If you’ll forgive me for sounding a bit like a the local town crier: It truly IS Time to Get Off the Fence! It just doesn’t get … and may not get … any better than NOW!