Tag Archive for short sales in Seattle King County

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.


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.