Archive for Real Estate

26 Feb 2013
Real Estate

Who Pays Excise Tax?

Who pays excise tax?  In the state of Washington excise tax is 1.28% of the purchase price of the home and is paid by the SELLER.  So on a purchase price of $200,000, the state excise tax would be $2,560.  (some counties may add a small levy to this amount. King County total excise is 1.78%)

As a home buyer, why do I care what the seller is taxed?  In most instances you probably wouldn’t, UNLESS you’re buying a foreclosed/bank-owned property.  Some financial institutions may require the BUYER to pay the excise tax, and such is stated as part of the purchase and sale real estate contract!

Is this a rip off?  It depends on the scenario.  Maybe if you’re getting the property for 20% under fair market value, you’d be more than happy to pay an extra 1.28% out of pocket.  However, it’s something you need to be aware of BEFORE you get under contract on a home.

Can any real estate agent help me buy a foreclosed/bank-owned property?  Generally yes, but for the previous reason as well as others, it’s important to use a real estate agent that has EXPERIENCE with these type of properties, so you can go into the transaction eyes wide open.

Don’t make the biggest decision of your life without getting educated first!  If you would like more information about foreclosure/bank-owned properties or the first time home buying process in general, go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.

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05 Feb 2013
Real Estate

The 3 P’s of Real Estate

         

What are the 3 P’s of real estate?  The 3 P’s of real estate are Property, Price & Process.  You must consider ALL of these when buying your first home, as they all play an integral part of the first time home buyer process.

“Property” concerns the location and structure.  First time home buyers should be asking themselves questions about the area they’re buying in.  What are the school districts, what is the owner-occupancy rate, how walkable is the neighborhood?  You should also be evaluating the structure.  Were quality materials used, how has the property been maintained, will this house last longer than my 30 yr mortgage?

“Price” is obviously important as well.  You should be asking yourself, is this price in my budget, how does it stack up against other properties in the area, and how affordable is the monthly payment for me?

“Process” is probably the most overlooked item.  Most first time home buyers write an offer on a home solely based on the first two criteria, property and price.  However, process can affect how much of a hassle it can be to close the transaction, or even if the transaction will close at all!  Process is generally dictated by the seller, so normal transactions, bank-owned/foreclosures, short-sales, etc, will all have DIFFERENT processes.  Regardless of how nice the home is and how well it’s priced, the process involved may not align with a first time home buyer’s needs.

Don’t make the biggest decision of your life without getting educated first!  If you’d like more information about the 3 P’s of real estate or buying your first home in general, please go to our Calendar/Reservations page and register for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.

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15 Jan 2013
Real Estate

King County Home Prices Up 20% YOY!

         

King County home prices are up 20% year-over-year!  The Seattle PI stated a couple different reasons as to why this could be.  The first being that due to an incredibly low level of available housing, many first time home buyers are getting caught in bidding wars.  The second being that as continued reports surface about a recovering economy, people become more confident in buying more expensive housing.

Are those the only reasons prices are up?  Another reason prices are probably rebounding so quickly is because they fell so far.  In mid-2011, many home prices we’re so low that you could buy a home with barely any down payment and still pay less per month to own than you would pay to rent the same place.  Many renters/first time home buyers (and investors) saw this opportunity as a no brainer, causing a huge flood of new buyers into the market, leading to increasing prices.

Regardless of the reason, prices are still up drastically!  You can debate the reasons behind these increases to no avail.  But the reality is as prices rise, consumer confidence rises, causing more people to jump into the market, causing prices to rise.  It will continue to build on itself, and hopefully this time around now that prices are a bit more realistic, the prices will rise at a more sustainable level (5-7%/yr) moving forward.

Did I miss the boat?  If you’re a first time home buyer, it’s not too late to get a great deal.  You just need to know what you’re up against so you can properly navigate the landscape with confidence.  Staying informed will help you make the best decision for your specific situation.

Don’t make the biggest decision of your life without getting educated!  If you’re a first time home buyer looking to get more information about down payment assistance or the home buying process in general, go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer/Down Payment Assistance workshops.

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08 Jan 2013
Real Estate

Good News for Short-Sales

Good News for Short-Sales!  Part of the fiscal cliff deal approved last week included an extension of the forgiveness for taxes owed on relieved mortgage debt related to short-sales.  This extension will last until 12/31/2013.  In the past, when a homeowner completed a short-sale, the forgiven debt would have been counted as income and therefore taxed.

How does this help first time home buyers though?  Extending this tax forgiveness will probably mean more underwater homeowners will make the decision to sell.  If the Federal Government wouldn’t have extended this break, it would have potentially been one more thing forcing underwater homeowners to stay in a home they couldn’t afford.

But how does that help me, if I’m buying my first home?  The Greater Seattle area has had quite a lack of inventory for some time now.  Home prices in Seattle are continuing to rise partially because there are a lot of first time home buyers looking to buy, but not many homes on the market.  This causes multiple offer situations and bidding wars, which increases prices for first time home buyers.

So should first time home buyers buy short-sales?  Short-sales can be great deals in some cases, but there are some risks first time home buyers need to be aware of.  If you are considering buying a short-sale, you should first become educated on how they function.

Don’t buy a home without getting educated first!  If you’re thinking about buying a short-sale, or are looking for general information about buying your first home, please go to our Calendar/Reservations page and sign up for one of our FREE First Time Home Buyer workshops.

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04 Sep 2012
Real Estate

Fannie and Freddie Short-Sales

Where’s all the short-sales?  If you’re a first time home buyer in Seattle and you’re wondering where all the inventory is, you’re not alone.  Transaction types in King County are down across the board, including short-sales.

I thought there was supposed to be tons of distressed properties out there?  One of the reasons short-sales are not coming on the market is that many financial institutions require that a homeowner miss multiple payments before they’ll even review a homeowner’s request for a short-sale.  Homeowner’s may be hesitant as missed payments will lower their credit score.

Will more short-sales come on the market in the future?  They might.  Starting November 1st, Fannie Mae and Freddie Mac will start to review short-sale requests even if the owner is CURRENT on their mortgage.  This may allow for more inventory to come on the market, therefore giving first time home buyers more houses to choose from.

So will we see another dip in the Seattle market?  With signs of a housing recovery and potential appreciation on the horizon, many underwater homeowners that aren’t FORCED into default may continue to make their payments and wait the decline out.  So even though this new change may put some much needed inventory into circulation it may not be enough to cause a continuing decline in Seattle area housing values.

Don’t buy your first home before getting educated!  If you’d like to find out more about the Seattle housing market or general information about becoming a first time home buyer go to our Calendar/Reservations page and sign up for one of our First Time Home Buyer/Down Payment Assistance workshops.

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