Washington State Wide Open House Weekend June 27th & 28th

This weekend, June 27th & 28th, thousands of homes for sale across the state of Washington are going to be open for viewing as part of the State Wide Open House Weekend being organized by Realtors throughout the state.

The Seattle area Real Estate market is starting to see increased sales, especially in the lower priced homes.  Attractive interest rates and now the $8,000 first time home buyer tax credit, along with lower prices, are factors as the market stabilizes.

The idea behind the open house weekend is to create greater visibility for the many homes for sale to coincide with the buyer opportunities now available. 

I’ll be participating by holding an open house at my Juanita Country Club Condo listing in Kirkland this Sunday, June 28th from 1-4pm.   http://12424.hellorealestate.net


Ethics in Advertising – I’m having my doubts

I hate misleading advertising.  I really do.  And I don’t think I’m alone in that.  I’m also not that keen on hypocrisy.  And trying to figure out mixed messages has never been my idea of fun.

Lately, in driving around and previewing homes with clients, we see these riders that say “$8,000 Tax Credit Available”, or “You may qualify for $8,000 Home Buyer Credit”.  And today, as I’m driving home from the office, on the radio I hear a Realtor ad talking about how “it’s time to take advantage of the $8,000 Home Buyer Credit before it expires.”

As Realtors, didn’t we have to take an ethics class?  How ethical is it that real estate companies and even the Realtor Association is putting out these teaser ads which I’m finding I have to explain as not being completely true.

It’s Not a Home Buyer Tax Credit.  It’s a First Time Home Buyer Tax Credit.  Would it be that hard to add two truthful words to these ads?

It may seem minor on the face of it.  But it’s not a minor thing when your credibility with a client is diminished by misleading ads that really appear to be just an attempt to get anybody breathing through the door.  As Realtors we have enough negative perception to fend off, surely it’s not a smart move to validate this with anything less than completely honest advertising.

$8000 Tax Credit Advance for Downpayment – UPDATE

Previous posts have detailed the Washington State Legislature’s efforts to get the Fed’s $8,000 first time home buyer credit available for use as a home buyer’s down payment at closing. Washington’s Governor Gregoire has signed the legislation that allows the Washington State Housing Finance Commission to make the funds available, however the program’s implementation has stalled at the IRS office.

A recent notice from Washington REALTORS® states they are working on alternatives to make this program available by the end of June.

Washington REALTORS® have provided the money to guarantee the program and all that is left is some sort of mechanism to ensure that when the borrower receives the $8,000 from the IRS, those funds are dedicated to pay off the bridge loan.

In the meantime, what can you do Now to prepare?

Attend a Free Homebuyer Education Class: First Time Home Buyers can attend a Washington State Housing Finance Commission Sponsored Home Buyer Education Seminar; this 5-hour seminar is a requirement for receiving a loan from the Commission. 

Once the Washington State Tax Credit Advance Loan Program does become available, as it is a loan, completing the Commission Sponsored First Time Home Buyer Education Seminar will be required.  Once you have your certificate, you will then be eligible to participate in the down payment advance program.

Steve Swanson is an instructor of First Time Home Buyer Seminars sponsored by the WSHFC.  Register online for his next class at www.helloRealEstate.net 

For a list of all the upcoming classes in the State of Washington sponsored by The Washington State Housing Finance Commission, visit www.WSHFC.org


Are We There Yet!??

Like a ten year old on a road trip, people are wondering if real estate prices have hit the bottom… are we there yet?  It goes beyond the usual “how’s the real estate market?”  More than ever, it’s:  Is this a good time to buy?  How do you buy a foreclosure?  Is it hard to get a mortgage?  Are homes selling … How long would it take to sell my home?  What if we buy and prices continue to go down?  Are interest rates going to increase?
It does seem that prices in the Seattle Bellevue Redmond real estate market are starting to level off.  While this is not true in the counties of Pierce, Thurston and areas in Snohomish County… King County and specifically Seattle and the Eastside have seen increases in home sales and a stabilization of pricing.  This is especially true for King County condos and homes under $400,000.  Many first time home buyers and those who have been waiting on the sidelines are jumping in and taking action as they find more affordable pricing and terrific interest rates.  Even if prices slide a bit more, all it takes is an interest rate bump and buying power can diminish.

Though it is a buyer’s market, it is only a buyer’s market if you buy.

If you are in the market to buy, Now is a great opportunity. Home sellers are still anxious as their home prices have fallen and many homes continue to sit waiting for a buyer.  Home foreclosures and short-sales have increased.  Interest rates are incredibly low.  There are also many First Time Homebuyer products available.  And the Housing Stimulus Bill provides a First-time Home Buyer credit of $8,000.   These facts, along with lower prices and tax advantages, even if the market hasn’t hit bottom, a buyer could loose money by waiting to purchase.

But the main point in home ownership is not even the economics.  While it is a fact that buying and holding real estate has been a great wealth generator, there is still ‘no place like home.’  Home is where families create memories.  Our home is our sanctuary.

Even with investment considerations, the main reason to purchase a house or condo is to live there.

Housing Activity Surges in King County

In a news release published today by the Northwest Multiple Listing Service, pending sales reported by members showed an overall increase of 11.4% from a year ago and up 21.3% from March.  Though these statistics are averages of the 19 counties that make up the NWMLS market area, there are areas where the surge in real estate activity isn’t so promising.   Also tempering this rare positive news is that activity for the moderate and upper priced homes still continue to be slow.  While the Seattle area real estate market is far from being turned around, the report is encouraging for condos, the more affordable lower priced single family homes and for the First Time Home Buyer.

In King County specifically, the report shows that the inventory is shrinking, that home prices seem to be stabilizing, and that real estate sales is showing a surge of activity.

Reasons for the real estate surge can be attributed to lower home prices along with the continued availability of remarkably low interest rates.  The $8,000 First Time Home Buyer Tax Credit and other programs are also playing a part.

Pending Single Family Sales in King County rose 25% from March to April. North King County  pending sales rose a whopping 52% (includes Shoreline, Kenmore).  The increase in pending sales on the Eastside was 35%.  Prices are still down compared to a year ago, however the median price for a single family home in King County for April is the same as it was in March at $350,000.

Pending Condo sales in King County, where nearly 60% of the condo sales occur, were still down compared to a year ago but jumped 42% from March.

What the stats show is that the demand is increasing.  With the inventory (the supply) decreasing,  Economics 101 rule of supply and demand is starting to have an affect on the stablization of home prices.

The real estate market is still highly advantageous to a home buyer.  It is still a buyer’s market.  Real Estate is ‘On Sale’.  Good prices can be found at every price level.  For the first time home buyer and those in the market for single family homes under $400,000 or condos or townhouses, the prices – the interest rates – the tax credit … the timing is right.

Steve Swanson is a Redmond Real Estate Agent servicing Redmond and the Eastside, and teaches First Time Home Buyer Classes in Redmond Bellevue Bothell Kirkland and Sammamish.

Search for Seattle area homes at www.helloRealEstate.net
Do your Redmond Home Search at www.RedmondHomesandCondos.com


Tax Credit Advance Loan Program waiting for Special Session

Included in the budget passed by the Washington State Legislature is a $25 million dollar fund to implement a Tax Credit Advance Loan Program for First Time Home Buyers.  (The definition of a First Time Home Buyer is basically if you have not owned a home in the past Three years.)

Introduced by Washington State Treasurer James McIntire, this program will allow qualified borrowers to get immediate access to the $8,000 Federal Tax Credit for use at closing as a home down payment.  Like the Federal Credit, this loan program expires November 30, 2009.

When does it start?

The Tax Credit Advance Loan Program is part of the 2009 Washington State budget which has not yet been signed off by Governor Gregoire.  Though the Legislature adjourned on April 26th, there is apparently going to be a need for a special session before the budget can be implemented.  The special session is expected to convene sometime within the next few weeks and is expected to be very short, possibly held to one day.  Since this proposal is not a bill, which can be signed into law separately, but part of the budget … it can not be implemented until the budget is approved and signed by Governor Gregoire.

The Washington State Tax Credit Advance Loan Program is in essence a bridge loan that will be administered by the Washington State Housing Finance Commission (WSHFC).  The $25 million of state funds would be deposited into an FDIC-insured bank. The bank would then provide revolving lines of credit to the WSHFC expand its current down payment bridge-loan program.

To help offset concern of any unexpected losses, The Washington Association of Realtors (NAR) has pledged $400,000 to cover the credit advance transactions.

State Treasurer McIntire is also trying to convince the Obama administration to allow the state to tap into bridge-loan-assisted homebuyers’ amended 2008 tax returns and be directly assigned the repayment of the lien. Under current IRS rules, tax-refund checks are sent only to the taxpayer’s address. To ensure prompt repayment of bridge loans, the state would like to have refunds mailed directly to the Washington State Housing Finance Commission where repayment of a bridge loan is due.

Research by the NAR has shown that fully half of all would-be first-time home buyers in the State of Washington”cannot save enough money for the down payment and closing costs” –  even though they could afford the monthly payments.

Once implemented, the Washington State Tax Credit Advance Loan Program will help First Time Home Buyers to take advantage of the current low mortgage rates and house prices, and the Federal $8,000 tax Credit.

Steve Swanson teaches First Time Home Buyer classes in Redmond Kirkland Bellevue Bothell and Sammamish sponsored by the Washington State Housing Finance Commission.  To Register for an upcoming class go to www.hellorealestate.net or view the class schedule for your area at http://wshfc.org/buyers/schedule.asp

Using First Time Buyer Credit as Home Down payment

Hot off the Press is news from the Washington State Legislature provided to me by Georgette Ballard, Sr Loan Officer with PrimeLending.  This budget provision would help First Time Home Buyers with their down payment thus helping home sellers getting their house sold.  If signed by Governor Gregoire, this would be the first program of it’s kind in the country. 

When the Legislature passed the state budget, it included a budget provision authorizing the State Treasurer to invest $25 million in a short-term loan program in order to provide an advance payment of the federal first-time home buyers’ tax credit. This program was designed to allow potential home buyers to use the tax credit as down payment when closing the sale of their first home.

The budget plan creates a Tax Credit Advance Loan Program.  This program makes the $8,000 federal tax credit for first-time home buyers available at the closing of a home sale instead of only when a buyer files a tax return. The Washington State Housing Finance Commission would provide the down payment loans. The plan is that home buyers would repay the $8,000 after filing an amended tax return and receive a tax refund.

Here are the basics: 

  • The State Treasurer’s Office would make a deposit in an FDIC-insured, short-term account with a selected financial institution. The investment would earn a low interest rate to stay fully insured under federal guidelines.
  • Realtors and other stakeholders back the loans with funds to provide security against losses.
  • The financial institution provides the Washington State Housing Finance Commission a line of credit to advance up to $8,000 to qualified first-time home buyers for a down-payment.
  • Buyers repay the advance loan after filing for and receiving the tax credit. 

The goal of the program is to get the money to buyers efficiently and return the federal refund quickly so that the WSHFC ( www.wshfc.org ) can turn it around to provide more assistance. The funds could revolve as many as three times before the tax credit expires, reaching up to 9,000 first-time home buyers. These “bridge loans” would expire at the same time as the federal tax credit, on Nov. 30.

Steve Swanson teaches First Time Home Buyer Classes sponsored by the Washington State Housing Finance Commission.  Learn more or register for an upcoming class at www.helloRealEstate.net



Ways to use $8000 tax credit to purchase first home

I was just reading that the National Association of Realtors is working with the State of Washington in exploring ways that will put the federal $8000 First-Time Homebuyer tax credit and economic stimulus money coming to the state to use at the closing of a sale.

I’ll be following this to see if this develops into something real.  It would be a tremendous benefit for the First Time Home Buyer.  It is usually the lack of down payment that is the main barrier to home ownership.  Especially for those who have stable incomes and good credit.

In researching this subject, I came across a couple of innovative ways to be able to use this credit as a source to come up with a down payment:

1) get a loan from a family member for the down payment.  FHA loans allow the down payment to come from family members, assuming they are in the position to help.  Then after the buyer closes on the purchase, amend the 2008 tax return and repay the loan to the family member.

By the way, many conventional loans allow money for the down payment to be gifted.  It has to be considered a gift.  But I don’t think anything says you couldn’t gift the gift giver back!!

2) buyers can increase their W-4 exemptions so less money is withheld from their paychecks. Then they can file for the tax credit with their 2009 tax return. The buyers just need to make sure they do not change their exemptions to net more than $8,000, the amount of the tax credit.

I also read one way that seems clever, but don’t think I would recommend this without talking with a CPA first.

Here’s what was said: If you meet the qualifications for the First Time Home Buyer Tax Credit (click here for details), you would claim the credit now on your 2008 income tax return.  Yes, even if you haven’t purchased a home yet, they’re saying claim the credit now.  Then get the money and put it toward the down payment or closing costs.  I thought this was clever.  Never said it was smart … or legal.  Might check with your accountant though, you never know.

The family gift and restructuring your W-4 are legitimate and positive ways to come up with a down payment and be able to take advantage of, not only the $8000 tax credit, but the low interest rates and affordable pricing to purchase your first home now. 

Did you know that you may also be able to get money from your IRA or even your 401k?  Here’s an article with ten more ways to come up with a down payment to buy your first home. 


2009 First Time Home Buyer Tax Credit

As an update to a previous post, details are now in on the First Time Home Buyer Credit in the Economic Stimulus Bill (formally called The American Recovery and Reinvestment Act of 2009).  The bill was signed into law on Tuesday, February 17th.


Here’s an overview of the provisions in the bill that will benefit First Time Home Buyers:


·   The tax credit is for first-time home buyers only.  A First-Time Home Buyer is defined as someone who has not owned or lived in a principle residence within the past three years.   

·   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.  (ex:  Home purchase price $300,000 x 10%= $30,000   Max Tax Credit = $8,000)

·   The tax credit does not have to be repaid.  (unlike the previous credit enacted in 2008)

·   There is a limited window of opportunity. The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.

·   The tax credit is income qualified so is subject to income limitations: single taxpayers will need an adjusted gross income of up to $75,000 for the full credit.  Married couples with incomes up to $150,000 qualify.  Those earning more than these limits may qualify for a reduced credit.

·   The tax credit is “refundable”, meaning even if you have little tax liability and don’t itemize deductions when filing your tax return, a qualified first time home buyer can still take advantage of the credit.

·   You will have to own the home for at least three years to capitalize on the credit.  Should you sell the home before three years, with the exceptions of death or divorce, there is a ‘Recapture’ provision where you would have to return a portion of the credit back to the government.


A note for those first time home buyers who purchased a home prior to Jan 1st, 2009… this bill is not retroactive.  It seems that this bill is to encourage those who have been thinking of purchasing a home to get off the fence to help spur the economy.


However, if you did purchase a home as a first time buyer between April 9, 2008 and December 31, 2008 you may qualify for the $7,500 tax credit and claim this credit on this year’s tax return. 


 A good source for FAQ explanations is http://www.federalhousingtaxcredit.com/2009/faq.php


I encourage you to explore Item 19 especially.  This is an interesting strategy for someone planning to purchase their first home this year and how you can take advantage of this tax credit without having to wait till the 2009 tax returns are filed.


I am an instructor of Washington State Housing Finance Commission sponsored First-Time Home Buyer classes, and will be conducting a class on the evenings of Tuesday, March 10th and Thursday, March 12th.  View a schedule of all the sponsored classes at www.wshfc.org


Complete details of the bill:  http://www.whitehouse.gov/the_press_office/ARRA_public_review/


The White House opened a website to provide some transparency as to where the money is being spent:  http://www.recovery.gov/


Stimulus – Not all Bad

In reading and trying to stay updated on what details that have been made available on the Economic Stimulus package that has apparently been negotiated and agreed, it appears that the proposed $15,000 Home Buyer Tax Credit was a casualty.  Sort of. 

The overall cost of this credit would have been $35 billion. In its place, a more modest proposal was negotiated that will increase the credit to $8,000 and will also eliminate the repayment requirement currently in place.  In its current format, the $7,500 credit is in effect an interest-free loan that must be repaid within 15 years or when the home is sold, whichever comes first.  Though there is a minor possibiilty that things could still change, it appears that now the $8,000 credit will be an actual credit, not a loan like before so you’ll not have to repay the credit.  So, not all bad news.

One article stated that the credit would be 10% of the home purchase price or $8,000, whichever is less, but haven’t seen anything more to validate or dispute this.  ( http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/02/13/BUSH15O70T.DTL )
The Stimulus Home Buyer Credit is income qualified and good for First-Time Home Buyers for houses purchased prior to the end of August 2009. 
A first time home buyer is defined as a person who has not owned or lived in a owned primary residence within the past three years.
The stimulus agreement would also allow taxpayers to deduct the sales tax paid on new car purchases, though not the interest on the new car loan.

President Obama is expected to sign the bill in Denver on Tuesday, February 17th.
 Read the complete stimulus bill here as supplied by consumerism commentary

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