Archive for Tolin Peterson

16 Jul 2013
Real Estate

What’s a Buyer Letter?

What’s a buyer letter?  A buyer letter is a short letter from the buyer written to the seller.  It simply gives a short description of the buyer(s) and explains their interest in the seller’s home.  In the recent months we’ve seen many first time home buyers utilize this tool.

Do I have to submit a buyer letter?  You definitely don’t need to submit a buyer letter.  Some buyers don’t want to disclose their personal situation.  However, especially in many first time home buyer demographics where we’re seeing multiple offers and bidding wars, buyer letters can really make a difference.

Doesn’t the seller just care about the purchase price?  Not necessarily.  To most sellers, selling their home is more than just a financial transaction, it’s also an emotional process.  Many sellers may be drawn to a specific buyer that they can relate to, may it be through their hobbies, families or career paths.  Also, many sellers may feel for first time home buyers just starting out.

Are there any down sides to writing a buyer letter?  Generally, no.  There is no cost or down side to writing a letter to the seller.  It takes five minutes of your time, and we suggest all first time home buyers utilize this strategy.  Just keep it to a couple paragraphs, as the seller doesn’t necessarily need to know your life story.

Don’t make the biggest financial decision of your life without getting educated!  If you’d like to learn more about the first time home buyer process in general, please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer workshops.

Share
| No comments | Tags: , , , , , ,
09 Jul 2013
Real Estate

King County Home Prices Up 12.5% YOY!

Are King County home prices still on the rise?  Yes, King County home prices are up 12.5% year over year.  We posted a similar blog back in Jan of this year which reflected a 20% YOY increase.  So these recent numbers are not quite as dramatic, but we’re still definitely in a quickly ascending housing market.  Especially in the first time home buyer demographic.

Why are prices rising so quickly?  The recent Seattle Times article stated several reasons including drastically low but rising interest rates, along with super low levels of inventory.  Another reason cited was a moderate level of 5% unemployment due to large companies in the area hiring such as Google, Amazon and Microsoft.

Are prices going to keep rising at this pace?  It’s hard to say for sure, but prices may start to taper off towards a more historical rate of around 5% per year.  One of the other reasons not directly mentioned in the article is that affordability, especially as it relates to rent, is still very attractive.  Once you take into consideration the tax benefits involved in owning it’s actually about the same monthly expense to own a home as it is to rent.  As long as this equation holds true, prices and the housing market will stay strong.

Is it even still worth buying if you’re a first time home buyer?  Because of the previously mentioned affordability factor, owning a home still makes a lot of sense for many first time homebuyers.  Even as prices rise and interest rates rise and the affordability of homes moves away from rent, it will still make sense for many first time home buyers.  Even if it costs a couple hundred dollars more a month to own than rent, the mortgage payment still stays fixed for 30 years until it goes away.  Rent on the other hand will always be there, and will continue to increase in the long run.

Don’t make the biggest financial decision of your life without getting educated!  Buying your first home may not be for everyone, it really just depends on your personal situation.  If you’d like to get more information on the home buying process in general, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops

Share
| No comments | Tags: , , , , , ,
02 Jul 2013
Real Estate

What the Listing Agent Won’t Tell You

Is it ok to use the listing agent when buying a house?  No!  More and more often we’re seeing first time home buyers contacting listing agents through sign calls, internet postings, etc, to view homes and write offers.  The listing agent has a fiduciary responsibility to the SELLER, and no matter how hard they may try there will always be a conflict of interest when practicing dual agency.

What’s dual agency?  Dual agency is when a real estate agent represents both sides of a transaction.  Many agents like to do this because they get paid twice, but it is not in the best interest of either client.  First time home buyers need an agent on their side that will represent them solely and fully.

How much does it cost to hire an agent?  In the state of Washington both listing and buyer side commissions are paid by the seller, so the buyer pays NOTHING for their representation.

So why would first time home buyers choose to NOT have their own agent?  There is no reason first time home buyers shouldn’t have their own agent representing their best interest.  Some people feel like real estate agents are just salesmen.  It is true that some agents are salesmen, but there are many out there that are educated professionals and advocate for their clients.  You may just have to interview a few to find the write one.

Don’t make the biggest financial decision of your life without getting educated!  If you would like to find out more about how to interview real estate agents, or the home buying process in general please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

Share
| One comment | Tags: , , , ,
04 Jun 2013
Mortgage

Home Advantage Down Payment Assistance

          

How much Down Payment Assistance can I get with Home Advantage?  This depends on the price of the home and lending guidelines.  Home Advantage provides down payment assistance up to 4% of your loan amount.  So if your loan amount was $200,000, you would potentially be eligible for $8,000 in down payment assistance!

Do I have to pay the Down Payment Assistance back?  The money would have to be paid back eventually, but there is NO monthly payment and ZERO interest!  You would repay the down payment assistance when you either sell the home, rent it out, or pay off your 30 year mortgage.

What loan programs can be used with Home Advantage?  Almost any loan program can be paired with this down payment assistance program, including Conventional, FHA, USDA, and even VA loans.

Is Home Advantage any different than other Down Payment Assistance programs?  Yes.  The rates are much better than other programs that have been offered by Washington State in the past.  Also, for this down payment assistance program you DO NOT have to be a first time home buyer AND it can be paired with the MCC program!  This is unprecedented as in the past most programs have only been available to first time home buyers and could not be paired with the MCC.

Is Home Advantage right for everyone?  Everybody’s personal situation is different.  To find out more about Home Advantage guidelines, as well as other down payment assistance programs offered by the state, go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.  Don’t make the biggest decision of your life without getting educated first!!!

Share
| One comment | Tags: , , , , , , , , ,
28 May 2013
Mortgage

What is the Mortgage Credit Certificate?

          

What is the Mortgage Credit Certificate?  The Mortgage Credit Certificate (MCC) is a dollar for dollar tax credit for first time home buyers.  The credit relates to the mortgage interest paid on a homeowner’s property over the life of their loan, as long as it remains owner occupied.

How does this differ from the standard interest deduction?  The first 20% of interest you pay on your mortgage will come back to you in a dollar for dollar tax credit.  The remaining 80% of interest paid will still be used to write down your income on your taxes as it normally does with owner occupied properties.

Can you give me an example?  Let’s pretend the Johnsons are first time home buyers and purchase their first home for $275,000.  We’ll also assume they will utilized FHA financing with a down payment of 3.5%, a fixed interest rate of 3.75%, and are in a 20% tax bracket.

Year #1…Total interest paid = $10,040.95
Annual property taxes = $2,750
Mortgage insurance paid = $3,375.24
Total paid in = $16,166.19
Annual tax savings = $3,233.24 or $269.44/mo

Annual refund with MCC = $5,819.83 or $484.99/mo

Does the MCC last for the life of my loan?  The MCC does last for the life of your loan as long as you’re occupying the property.  However, keep in mind that as time progresses, though your monthly mortgage payment may stay the same, more of your payment will go towards principle.  Therefore, your tax savings will slowly decrease because you are paying less and less interest every year.

The MCC sounds like a no brainer for first time home buyers!  The MCC is a fantastic program, but there are parameters you have to meet, as well as repercussions if you stop occupying the property.  Don’t make a decision without getting educated first!  If you’d like to learn more about the MCC go to our Calendar/Reservations page and sign up for our FREE First Time Home Buyer/Down Payment Assistance workshop.

Share
| No comments | Tags: , , ,
« Older Entries   Recent Entries »