Residential Real Estate in SW Washington State

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Don’t Move Money Around

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money bagI sometimes hear frustration from buyers who are being asked to produce the papertrail that supports the source of the  money being used for the downpayment and closing costs. The underwriter (the person that issues final approval for your loan) requires this information as one method of eliminating the possiblity of fraud, to meet the requirements of investors with whom they work, and for quality control. They’re just doing their job, but sometimes meeting this requirement is difficult and tedious.

You may have  been diligently consolidating money from various accounts so that it’s easier to manage, but this can actually cause more loan approval challenges.

During the time you’re working on purchasing a home, or at least for the prior three months or so, don’t move money around unnecessarily. The underwriter will require documentation of any large deposits or withdrawals from your account. This could include money you received as gifts, from transferring funds between accounts, investment liquidations, cashing out mutual funds, retirement funds, or whatever. You may be asked for copies of cancelled checks, deposit receipts, or other supporting documents that may see inconsequential.

If you’re relying on gift monies that will be used in your purchase in any fashion, you’ll likely also be required to produce a letter from the person giving you the money that documents the fact that you are not required to repay the gift. In fact, the person from whom you’re receiving the money may also need to produce copies of bank statements, etc., that documents where they received your gift money.

In fact, this is also not the best time to be changing banks, or even opening new accounts.

Don’t move your money around … or if you do, be absolutely certain you can document everything thoroughly.

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Dear Buyer … Please Quit Spending!

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spending moneySigh, it’s happened yet again. Somehow no matter how much counseling, another Buyer’s forgotten one of the golden rules of buying a house: If you spend money on credit cards, buy a new major appliance on credit, buy a new car, decided to furnish your new home before closing … you run the risk of not qualifying for your loan. Even if you qualified before you ever started shopping.

There’s nothing more disheartening to find the home of your dreams, go through all the steps … qualify and be preapproved for your loan, inspection, title searches, negotiations, etc., … and then find out just before closing that, yes, the underwriter reviewed that last credit report only to find an additional new monthly payments

OH NO! There’s a new credit line that blows the debt to income ratios totally apart.

Yes, sometimes life gets in the way of judicious decisious during the period of time between making application for a home loan and closing. And some Buyers have sufficient income and are shopping far enough below their top qualifying number to sustain an extra monthly payment, but typically not.

Not only are your credit scores, credit history, and monthly debts examined at the time application is made, they’re checked again right before closing to be sure no significant changes have occurred. Qualifying for a mortgage is difficult right now. Hang on just a few more weeks. Wait until after closing.

There’s a Certain Peacefulness About Owning a Home

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DahliasI just came back in the house and to my home office desk. The weather is gorgeous — clear blue sky and the garden just called for a quick walk through. Picked a few dahlias and stuff to put in a vase on my desk.

Such peacefulness.

Yes, I know that owning a home is tremendous commitment. It’s hard, daggone it! Like many of you, we’re close to being upside down on our house. We bought right in the middle of the 2005 upswing of prices. Four plus years later, we’re back to where we started.

At least once a week I walk through the house and the yard and mutter about all of the remodeling that’s still undone. And bemoan the hundreds … make that thousands… of dollars we’ve spent on it thus far. With thousands yet to be spent.

Sometimes we make mistakes in our home choices. Sometimes we’ve spent too much or picked the wrong neighbors or painted the walls the wrong colors. Sometimes we just flat out can’t afford our choice due to circumstances beyond our own control. Sometimes we have to face up to those mistakes and start over.

Every seller I’ve helped sell that had to sell for one reason or another–not just because they wanted a bigger or better house but because financially the house just didn’t work for them–told me they couldn’t wait to buy another one.

Homeownership IS a tremendous responsibility. But the Buyers with whom I work constantly remind me just how important it is to have one’s own space. How badly they want it . It’s an American obsession this desire to own a home. To be able to walk about one’s own rooms or yard and look about.

There’s a certain peacefulness about owning a home. I’m hooked. The dahlias are calling.

Impact of King County Furlough Days on First Time Homebuyer Tax Credit

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j0433136I 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!

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Happy Thanksgiving to My Canadian Friends!

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roast turkey

 

May you be surrounded by friends and family …

and may you be full of good things … like TURKEY!

and may you find a comfy chair afterwards to nap it all off!

 

 

 

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Still on the Fence? — 10 Reasons to Get Moving!

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Town Crier

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!

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  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! 

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  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.

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  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!)

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  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.

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  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 …..

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  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.

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  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!

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  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:

    10.  

    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!

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The Importance of a GREAT Home Inspector

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Home InspectionA good home inspection, in my opinion, is so much more than just a thorough “systems” check.

As an active agent representing both Buyers and Sellers, I’ve had sales go “south” due to bad inspectors (not bad “inspections!”). After all, the inspector really can influence the type of decisions that a client/buyer/seller must make. They can scare them off by emphasizing things that perhaps are just future maintenance items, or can de-emphasize items that can be chronic issues.

For example, I’ve had inspections done by potential Buyers for a listing of mine, that backed out because a gutter was leaking. I’ve had inspectors tell us that a hot water heater was at the end of its useful life when it was less than seven years old. And then I’ve had wonderful inspectors that truly help a Buyer understand that just because the linoleum floor has a small split doesn’t mean the house is falling apart around them.

A good inspector is gold. They can truly help support a transaction and they can truly be an asset to a Buyer. I encourage inspections for every single purchase — whether new construction or a 50-year-old home. There’s always something and being informed is priceless.

Be absolutely certain that the home inspector you choose is certified and licensed! 

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Pre-Listing Inspections

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House ChecklistIn this trickier market, it can be imperative in the eyes of a Buyer that the house in which they’ve fallen in love be in “perfect” condition. Now, granted there’s absolutely no such thing as a house in “perfect” condition, but a house where it’s obvious that the Seller has taken good care of the property and truly gotten the house in tip-top shape as it goes on the market, can truly make or break a Buyer’s decision to make an offer. After all … there’s another house on the market just down the street — sometimes for less money.

I’ve begun emphasizing the importance of a pre-listing inspection to my clients, the Sellers. Learning about and taking care of all the little things makes a home just that much more attractive to a potential Buyer. And heavens, we certainly want to hang on to those Buyers right now!

When a Seller can show a potential Buyer a fully-checked-off inspection list, that’s a tremendous selling point and benefit.

As always, be absolutely certain that the Inspector you choose is property certified and licensed!

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SOLD — Beach Rights Included!

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Drive to the end of a culdesac and in to your attached two-car garage—then walk straight in to your new home. There are no stairs at any entrance! Even better, these easy-care duplex-style condos are just up the path from the private Lake Meridian Village beach with its tennis court, cabana, and picnic tables.

Once inside, the huge high vaulted ceiling and new vinyl windows bathe the living and dining areas with natural light; even the kitchen is light, bright and open!. Quiet mornings can be spent in the beautifully landscaped and fenced backyard with its soothing pond and patio. Three bedrooms, 2 baths and laundry area round out the essentials.

Lake Meridian Village provides the best in comfortable living! Well maintained and managed, the siding, roofs, and windows have all been recently updated. Make an appointment to see what the best in lakefront living is all about!