$7500 Tax Credit Assist You IN SEATTLE
FIRST TIME HOME BUYER TAX CREDIT
The passage of the Housing and Economic Recovery Act of 2008 should not only benefit hundreds of thousands of Seattle home buyers and sellers, it also marks the beginning of the next real estate cycle. Two of the most significant provisions in this legislation are first-time home-buyer tax credits and permanent increases to FHA loan limits. In order to qualify for the first-time home-buyer tax credit of 10% of the home purchase price (up to $7,500), buyers must not have owned property within the last three years and must make their purchase between April 9, 2008 and July 1, 2009. The credit phases out for individuals making more than $75,000 or couple making more than $150,000 a year. The credit functions much like an interest free loan from the government. It is not a tax deduction and must be paid back in equal installments over 15 years. The last time the government passed a tax credit for Seattle home buyers in the 1970s, 535,000 people took advantage of it, sales of homes increased 10%, and inventory of new Seattle homes and properties on the market went from over 10 months to under 6.
Increasing FHA loan limits
As much as $625,000 (varies by area) will help many potential borrowers qualify for affordable mortgages. Loan limits in our area are $xxx,xxx.
While there is a good selection of homes in the more affordable price ranges, there is not an overabundance. Homes in the more affordable price ranges will only go up over this next ten-year housing cycle. The ripple effect of increased sales in the more affordable markets will eventually cause a chain reaction of sales up the price points, helping to stabilize the entire housing economy. If you are interested in learning more about how this new legislation could affect your and your home, please feel free to contact me. I would be happy to answer your questions or put you in to touch with a qualified mortgage consultant who can discuss financing options with you.
Insist on a Quality Home Inspection when Buying in Seattle
What Is an Inspection?
A home inspection in Seattle takes place after you’ve made an offer on a home that the seller has accepted. A professional will examine the home to ensure it meets specific codes and laws as set by the City of Seattle, King county, and state of Washington. Put simply, the purpose of a home inspection is to make certain that the home you’re about to buy doesn’t have any major defects of problems that will cost you money down the road.
What Are They Looking for?
A home inspection usually includes an examination of a home’s major systems, such as heating and air conditioning units, plumbing, and electrical systems. It might also include looking at the roof, attic, insulation, walls, ceilings, floors, windows, foundation, and basement or crawl space. Once the inspection is over, the inspector will prepare a report detailing what he or she found. If any major repairs are needed, you will work with your Realtor® to determine how to proceed.
Finding a Good Inspector
Your Realtor® is likely to know someone who they’ve worked with in the past that they’d recommend. However, if you’d rather find an inspector on your own, you can start with home inspection organizations such as the American Society of Home Inspectors or the National Association of Home Inspectors. Once you have narrowed the field of inspectors, ask to see their records of experience as well as referrals from past clients. Also, make sure they are experienced in Seattle and King county residential inspections. You can ask them for an estimate, too. When you’ve found the right inspector, schedule a time for the inspection, and be present as it’s going on. You’ll learn more about the home you are buying and can ask the inspector questions. The inspector might also point out things he or she wouldn’t mention in the report but that you should be aware of nonetheless. Any inspector that doesn’t want you around during the inspection should raise a red flag.
Let Me Help!
As your Realtor®, finding a home inspector in Seattle is just one of the services I offer to you. If you’d like help finding an inspector, I’d be more than happy to put you in touch with one or two with whom I’ve worked in the past. You can also visit www.ashi.org or www.nahi.org to view inspectors who are certified through the American Society of Home Inspectors or National Association of Home Inspectors.
10 Tips for Buying a Fixer Upper in Seattle
Several Key Home Buying Tips To Understand With Seattle Real Estate
Did you know?Whether it’s a starter home, an investment property, or simply a fun project, according to the National Association of Realtors®, buying a house in need of some TLC requires a few special considerations. · Purchase a home that is at least 30 percent below the market value of comparable homes in the neighborhood. · Choose a location with a low crime rate, good schools, and quiet streets. There isn’t anything you can do to cure a poor location.
· Choose a house with three or four bedrooms. Smaller homes are unlikely to have the same buyer appeal.
Top Tips for Home buyers in Seattle
Get Pre-Approved
In addition to getting a good idea of how much house you can afford, getting pre-approved for Seattle homes in advance shows sellers that you are serious about buying—they might even consider your offer more seriously than unapproved buyers.
Make a Strong Offer
Use a Realtor
®A Realtor® is an agent or broker who belongs to the National Association of Realtors and subscribes to its strict Code of Ethics. Along with maintaining a high level of knowledge about the Seattle real estate market, a Realtor can help you evaluate homes, negotiate offers, remove contingencies, assist in the escrow process, and assemble a strong team of home inspectors in Seattle, title insurance representatives, lenders, and escrow agents.
Be Ready to Act Quickly
What you want in a house, how much you’re willing to spend on it, and make a commitment with your Realtor that you will be able to get in touch with each other 24/7. You never know when the right house could come on the market, or how much might ride on a 9 p.m. phone call. Sonny Kwan has his cell phone by him anytime his clients have questions on the Seattle home buying process. his number is 206-819-8228
Be Flexible
Know Your Risks
Use All Your Information Resources
Understanding Your Credit and Buy More Real Estate in Seattle
Did you know?
Many credit rating files contain inaccuracies that can affect your credit rating. With the threat of identity theft, the possibility of data sneaking in from a file of someone with a similar name to yours, and creditor reporting errors, it’s a good idea to keep an eye on your credit—particularly if you are thinking of making a large purchase, such as a Seattle area home, in the coming year.
Your Credit Report
Most creditors use one of three major credit bureaus: Equifax, Trans Union, and Experian. Because creditors aren’t required to report to all three agencies, the only way to get a complete overview of your credit is to request a report from all three, which you can do at www.MyFico.com. Once you receive your reports, check them for clerical inaccuracies, including late or uncredited payments. Review everything very closely and dispute any errors.
Disputes
What Lenders Look For
When lenders review your credit report, they are looking for a pattern of consistent, on-time payment. Too many open accounts, credit cards with high limits, and maxed out cards can all reflect badly on you. Close any opened but unused accounts, and be sure the creditor notes that the account was “closed at the consumer’s request.” Otherwise, lenders might think the creditor closed it for other reasons.
Make It a Habit
If you’d like more information on credit and home buying, please feel free to contact me at anytime.
Your First Mortgage-Buying a Home in Seattle Can Be Very Profitable
Did you know?
Low interest rates have enabled record numbers of people to become homeowners over the last few years and home ownership in Seattle is tops on forbes list of places to live. A buyer-friendly market has also motivated many to seek good deals in Seattle real estate. If you’re in the market to buy, one of the most important steps is learning about mortgages.
Your Budget
One of the first things you need to do is examine your finances very closely; this will help you determine how much of a home you can buy in Seattle. Depending on your income, you may actually qualify for a larger loan than you can afford to make monthly payments on, so it’s up to you to take stock of your income and expenses, both current and projected. Keep in mind, too, that other fees such as mortgage insurance, homeowner association dues, and property taxes can also be rolled into your monthly payment, so you need to account for those items when determining what you can afford. Buying a home in the Seattle city limits or outside of Seattle proper makes a huge difference on home value.
Your Finances
Your Mortgage Consultant
Home Values in Your Seattle Community
Wondering about
HOME VALUES in Your
Community? (Seattle)
WHO SHOULD YOU BELIEVE?
WHO SHOULD YOU BELIEVE?
WHO SHOULD YOU BELIEVE?
Are you trying to time the market in order to make the smartest real estate move?
We all wish we had a ringing bell to alert us of the perfect time to buy or sell a
home, but even industry experts disagree about the condition of the current market
and when a given real estate cycle begins or ends.
For instance, during the first quarter of 2008, the S&P/Case-Shiller Index
reported that their 20-city composite saw a 12.7 percent year-over-year decline,
while the OFHEO (Office of Federal Housing Enterprise Oversight) reported
that national prices were up 0.6 percent. Meanwhile, NAR (National Association of Realtors®)
marked an annual decline of less than1 percent.
Why the discrepancies? First, how each of these bodies evaluates numbers is vastly
different. The Case-Shiller Index only accounts for numbers in 20 metropolitan
service areas, excluding many markets that consistently show home appreciation.
In addition, Case-Shiller only counts repeat sales of the same house and
doesn’t include condominium and new construction sales, which can drastically
affect home appreciation in a specific community. In contrast to national numbers
quoted by the Case-Shiller Index, Oregon, Washington, and Idaho multiple listing
services look at all home sales, including condominiums and new construction, for
its reports. In the meantime, none of these national experts can tell you exactly what’s
happening in your local community. A report on the Seattle housing
market by OFHEO found that homes in Seattle appreciated over 64
percent the past five years. And, as you can see , home values here in King County remained
even with last year’s numbers while the national data aggregators showed decreases
from 3-14 percent year over year. The statistics quoted in the media don’t
offer much help in terms of understanding the current value of a single home. When
the median price increases, this can reflect higher overall home values. Or,
it can simply mean that more expensive than inexpensive homes sold during a period.
A decrease in the median price usually indicates that more inexpensive
than expensive homes sold during that period. Many foreclosure properties
are in the lower price ranges. In areas where the median sales price is declining
dramatically, a higher volume of lowerprice foreclosure sales could be a
contributing factor. When it comes to timing the market,
make sure you have all of the facts before making a guess. There is no ringing bell,
but there is plenty of accurate information to be had…if you know where to look.
Your First Home, Buy in Seattle
y o u r f i r s t h o m e
Congratulations! You are thinking of buying your first home in Seattle. You are about to enter a wonderful new chapter in your life that we know can be both exciting and scary. Many first-time home buyers will contemplate the decision for years before taking any action, even a first step. This brochure helps you to take that first step.
Once you purchase a home, you will soon reap the tax advantages of home ownership and the opportunity to build equity (or wealth) over time. According to the Federal Reserve, the median household wealth accumulation for a homeowner was $184,000; in comparison, the median net worth of a renter was $4,000. It’s time to start taking those steps!
Step 1
Find the right help to find the right home
You’ve probably already been using the Internet to search for homes in Seattle, financing options, and homebuying information. You will find many of those resource links included in this brochure. We also encourage you to contact a John L. Scott Residential Specialist at the very beginning of your quest and put the Sonny Kwan Group to work for you. John L. Scott Residential Specialists are Realtors® and subscribe to the Realtor® code of ethics. He or she will help you find what you are looking for in a home, in the area you want, and at a price you can afford. When you find a home that you want to make an offer on, your Real Estate Team will research the market and let you know if the price is fair. He or she can help you negotiate an offer and advocate on your behalf throughout the process.
The team at the Sonny Kwan Group can help take the mystery out of the purchase of your new home and show you the ropes. There are hundreds of little details in buying a home, and some details that are not so little—like property lines, easements, earnest money, and the time allowed for home inspections (to name a few). Don’t worry, you will be involved throughout the process and if you have any questions along the way, do not hesitate to ask Sonny Kwan or his associates.
F i n d t h e r i g h t R e a l t o r ®
You may already be working with a trusted real estate agent/broker.
If you aren’t, take the time to find the right Realtor® to meet your needs. Ask family, trusted friends and coworkers for Realtors® with whom they have worked and would recommend.
L e a r n a b o u t t h e m a r k e t
Every market in the Northwest is a little different but, in general, now is an excellent time to purchase your first home in Seattle if you find the right home at a fair price. At the time of this printing, interest rates on fixed-rate mortgages are near historic lows. If you want to know what a percentage rate can do to a monthly payment, go to johnlscott.com and follow the mortgage links to the mortgage calculator and plug in some numbers. You will be amazed. The Seattle real estate market is a much more balanced market today with buyers finding many more properties from which to choose. That wasn’t the case over the past few years. Greater selection means the chances are better you will find the right home for you with the amenities you are looking for.
W h e r e Seattle i n t h e r e a l
estate c y c l e ?
That is the big question isn’t it? We are at the beginning phase of the next real estate cycle. Some people are getting good deals out there right now because some sellers are motivated and need to sell today. However, in general we do not think we will see across-the-board dips in prices. Here is why:
• In general, Seattle and the Pacific Northwest has an extremely strong economy: unemployment is under five percent (according to the U.S. Department of Labor) and we are projected to add more than two million residents in the next 12 years.
• Seattle and the Pacific Northwest has fewer subprime loans in danger of foreclosure so, unlike what is happening in some states, we have many fewer “distress sales” or foreclosures.
• The historic low mortgage rates are turning the market around. If you are renting, you are not alone. There are thousands of people just like you who want to buy a home and are just waiting to see what the Seattle market is going to do. As these people enter the market, supply will go down and the market will heat up, especially in the more affordable price ranges (under the median/midpoint).
Step 2
Get Qualified for a Loan and Find Out How Much Home You Can Afford
This is another one of those “first steps” you need to take. It costs little or nothing to determine if you can buy a home right now and the price range in which you should be looking. Most first-time home buyers are surprised at what they learn and wish they had started the process a long time ago. Your John L. Scott Residential Specialist will help you find a reliable loan officer.
D o y o u h a v e e n o u g h m o n e y
t o b u y a h o m e ?
If you have saved some money for a down payment and you anticipate living in that home or condominium for three to five years, the answer is almost always yes. It is time for you to start building your own wealth instead of contributing to somebody else’s with your rent payments. In most cases, the interest portion of your mortgage payment and your property tax payments are tax deductible. There are also valuable financial assistance programs for first-time home buyers.
F i n a n c i a l a s s i s t a n c e p r o g r a m s
There are many federal programs and dollars available to assist first-time home buyers. Get on the computer and start with the HUD site www.hud.gov. Basically, Down Payment Assistance Providers (DAP) are government agencies that are developed to help you—the first-time home buyer. Otherwise call Sonny Kwan.
The most common and available DAP is an FHA (Federal Housing Authority) loan. FHA loans are becoming more popular and recent changes in FHA loan limits have expanded the number of people and properties that qualify. In some cases, you can get an FHA loan for as little as 3.5% down.
Many first-time home buyers don’t realize you can also use up to $10,000 from your IRA to purchase your first home. In many cases, you can use gifts or loans from family members as long as you disclose this information to the lender. The federal government knows that first-time home buyers are good for the local and national economy.
Lenders look at three things when you apply for a mortgage: your debt-to-income ratio, your down payment, and your credit score. If you pay your bills on time, do not carry a lot of debt, and have a down payment needed for the loan program, you will be fine. Getting prequalified by your lender is an important first step in actually starting to look for your first home, and you will have real negotiating power when you do find the right home. If you don’t quite qualify, your mortgage expert should be able to suggest a plan with steps that will lead to qualification over a period of months.
The Sonny Kwan Group will help you to find a qualified mortgage consultant who can discuss your loan options with you.
Well, this is a giant step isn’t it? By now, you know how much you should spend on a home. The Sonny Kwan Group at John L. Scott will help you to find the best home that is within your budget and meets your needs. Using your Residential Specialist’s market knowledge and negotiating skills, together you will craft a written offer that details the amount of the offer and the conditions of the sale. If the seller “counters” your offer, your Residential Specialist may need to negotiate until you both agree to the terms of the sale. Your John L. Scott Residential Specialist can advocate on your behalf at your direction during these negotiations. You will be very much a part of all the decisions, and your questions will be welcomed.
Step 4
What to Do Next – A Checklist
There is still a lot of work to do after your offer is accepted. Sonny Kwan guide you through the process. Among the next steps:
G e t a h o m e i n s p e c t i o n
Many offers are made contingent on a home inspection. You and your Residential Specialist should have agreed on a reasonable length of time for the inspection and include it into the offer.
An inspection will tell you about the condition of the home and can help you avoid buying a home that needs major repairs, or help you negotiate with the seller to have the repairs made before you buy the home.
S h o p f o r h o m e o w n e r ’ s i n s u r a n c e
Lenders require homeowner’s insurance to cover the collateral for the loan (the home). Consult with Sonny Kwan if you have questions.
C o m p l e t e t h e p a p e r w o r k n e c e s s a r y t o c l o s e y o u r l o a n
Your loan officer can advise you as to exactly what is needed.
D o n ’ t f o r g e t t o s i g n u p
f o r u t i l i t i e s !
You want to be sure that the lights come on and water flows from the faucets when you move into your new home. Go to the Our Services tab on johnlscott.com, then click on Home Services.
You can connect essential home services online for no additional fee as well as compare service providers for telephones and high-speed internet connections.
C o m p l e t e t h e t r a n s a c t i o n
You are now ready to complete the transaction. This is also called “settlement” or “closing.”
Closing is where you need to read and understand the documents you are signing. Ask if you don’t understand any part of the document. There are no dumb questions when it comes to a purchase of this size.
Resources
The following resources are more than links to information, they are sources for down payment assistance and low interest loans for many household incomes.
F e d e r a l H o u s i n g
A d m i n i s t r a t i o n ( F H A )
FHA operates within HUD and has the primary responsibility for administering the government home loan insurance program. This program allows a first time home buyer, who might otherwise not qualify for a home loan, to obtain one because the risk is removed from the lender from FHA who insures the loan for the lender. The most common loan offered by FHA only requires a 3.5 percent down payment and that down payment can be a gift from a relative, non-profit organization or government agency.
U S D e p a r t m e n t o f H o u s i n g
a n d U r b a n D e v e l o p m e n t
( H U D )
This is where you will find valuable leads and information about all federal programs that assist first time home buyers, including FHA, Fannie Mae or Freddie Mac.
A m e r i c a n D r e a m D o w n
P a y m e n t I n i t i a t i v e ( A D D I )
www.hud.gov/local/wa/community/home/
Many local agencies that assist with firsttime home buyers.
U S D e p a r t m e n t o f
A g r i c u l t u r e R u r a l
D e v e l o p m e n t l o a n
p r o g r a m s
www.rurdev.usda.gov/wa/housing.htm
These programs are for rural development and you may qualify.
H a b i t a t f o r H u m a n i t y
Not all real estate practitioners are Realtors®. The term Realtor® is a registered trademark that identifies a real estate professional who is a member of the National Association of Realtors® and subscribes to its strict Code of Ethics. Here are nine reasons why it pays to work with a Realtor®.
1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert like Sonny Kwan will help you prepare the best deal, and avoid delays or costly mistakes.
2. Get objective information and opinions. Realtors® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your Realtor® to find all available properties.
4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Sonny can advise you as to which investigations and inspections are recommended or required.
5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family.
When a property is marketed with the help of a Realtor®, you do not have to allow strangers into your home. Your Realtor® will generally prescreen and accompany qualified prospects through your property.
6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.
7. Realtors® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. Realtors®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
8. Ethical treatment. Every member of the National Association of Realtors® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a Realtor®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for Realtors® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.
Housing Bill Passed by the Senate, How does this affect Seattle homeowners?
THE NEW HOUSING BILL
The Housing Bill was passed by the Senate and includes some changes that will impact Seattle real estate. Two of the changes that will impact the Buyer(s) is the increase in down payment requirement for FHA, which will increase from 3% to 3.5% and the depletion of the Down Payment Assistance programs. Both go into effect on October 1, 2008, giving some buyers limited time to find their home and take advantage of the old allowances.
The Housing Bill includes many incentives to overextended borrowers and first time Home Buyers. However, these incentives do not come without stipulations. These incentives include, but are not limited to:
* Renegotiating Mortgages for loans originated before 01/01/2008 and expiring 11/30/2011:
*Must be the Primary Residence
*Maximum LTV is 90%
*Borrower will be unable to take out any home equity for 5 years
*When you sell you will be required to give the Government 50% of any appreciation
* Tax Break for 1st Time HomeBuyers
retroactive back to 04/09/2008 and expiring 07/1/2009 :
*Tax Break is 10% of Purchase Price OR $7,500 (whichever is Less)
* Tax Break is based on your AGI (adjusted Gross Income) and you may not be eligible if your income exceeds $75,000 (single) and $150,000 if you are married, filing jointly
*The Tax Break has to be PAID BACK over the next 15 years, so it is really an interest free loan, versus a true Credit
* Additional Tax Deduction for Homeowner(s)
*For anyone who chooses the Standard Deduction over Itemizing, there will be an additional $500 deduction for single and $1,000 for married, filing jointly.
*Redefinition of Jumbo Loans:
* The redefinition does not apply to us in Thurston County, however, will help provide relief in other areas that are considered to have high housing costs, such as King County.
*Break for Veterans, expiring 12/31/2010:
* Lenders will have to wait 9 months (versus 90 days) to start Foreclosure Proceedings on homes owned by a Veteran who is returning from the Military Service.
* Lenders will have to wait a year before raising interest rates on an ARM mortgage held by someone returning from Military Service.
Seattle South lake Union
SOUTH LAKE UNION LIVING
Microsoft Billionaire Paul Allen retired from a company his high school friend William Gates III started in 1975 and bought 80 acres of land in South lake Union and envisioned an expansive park for the City of Seattle. After the citizens of Seattle Voted against having another park, City Investors Capital (Vulcan) turned this area of rundown warehouses into striving Bio-tech companies and cool lofts and condominiums.By 2010 this area dubbed “AllenTown” will become the worlds epicenter for High-tech, Bio-tech, A state of the art City within a Metropolitan City.
Community Information Here you will find hotels, art installations, New world headquarters for Bill and Melinda Gates Foundation.GSK Biologistics, Seattle Bio-medical Research Istitute, UW Cell Systems, UW Medicine, Fred Huthinson Cancer Research, Seattle Cancer Care Alliance, Zymogenetics, Childrens Hospital Regional Medical Center, Rosetta Inpharmatics, Battelle Memorial Institute, Dendreon, Corus Pharmaceuticals, Restaurants, Movie theathers, Groceries.
The South Lake Trolley will take you from the front door of your new home to the CBD and back within 20 minutes. Living in South Lake Union will be like living in Manhattan or Hong Kong without the overcrowded hustle and bustle of 7 million people crammed into a 425 square miles of land. Get in early and purchase a home here, just like those larger cities above mentioned where cost per square foot is a staggering $5417. $350,000 for a 600 square foot loft isn’t bad!
Be the “Christopher Columbus” of South Lake Union by moving here first
Veer Lofts Due to open mid-2008 at 9th Avenue and Harrison Street, The Veerlofts is a Green Built Comtemorary. Organic and industrial style floor to ceiling windows to bring in great natural lighting into your flexible floor plan you design yourself. The architectural design includes exposed heavy timber beams, stained concrete floors, natural eco-friendly finishes, open kitchens, 9-16 feet ceilings. Units have large patios on the first floor and “Zen Garden” decks on the top floor units allowing spectacular views of the Space Needle and City. The rooftop deck has a BBQ grill and a Bocce court for entertaining. For more inside information as it comes up, contact Sonny Kwan at John L Scott Real Estate
Rollins Street Flats Due to open fall of 2008, These NYC style lofts has gallery sized walls, floor to ceiling windows, hardwood floors and natural stone surfaces. German made Eggersmann cabinetry is a must see with Bosch appliances. An expansive outdoor deck with views of the Space Needle while you entertain your friends with the outdoor fireplace and BBQ. Call Sonny Kwan, John L Scott direct for more information 206-819-8228
