Your Advocate in Real Estate for SW Washington State

Residential Real Estate Services with Passion, Integrity, Knowledge

Another Rewarding Closing for First Time Homebuyers!

By

It’s just SO rewarding to hand the keys over to first time homebuyers! Especially one that’s been five children in the making!

Last night I had the pleasure of giving the keys to a buyer moving into their very first … very own … brand new, built-just-for-them, house. And it was really cool! Imagine having five children and never owning your own place. Raising the crowd in a two-bedroom rental. For years! Saving, saving, saving, so there was a downpayment.

And then having home prices and interest rates drop significantly enough so that you can afford a five bedroom, plus den, plus bonus room, three-and-a-half bathroom brand new home! The excitement was so thick one could have cut it with a knife!

Not that the purchase wasn’t without tremendous trials, topped off with the fact that, at the last minute the courier taking their closing documents to the County for recording had a breakdown on the side of the freeway … so recording really didn’t occur yesterday! Thankfully the builder allowed this very deserving family to begin moving in last night. And recording occurred first thing this morning!

But their calm, collected attitude of “We’ll get there if it’s to be” kept their dream alive, right down to the key exchange. Unfortunately, with all the starts and stops of yesterday’s closing, it was dark and only the wife was able to be there — flying on air!

Congratulations Reggie and Janine! You’ve earned this many many times over! We have to get together for pictures now!

Dear Bank — Can I buy my own short sale house?

By

Dear Bank President:

See here’s the thing. Like much, if not MOST, of the country, the value of my house has dropped substantially. So has my income, but I’m STILL WORKING! Of course my income is now only about 2/3rds of what it was when I bought my house because I had to take a cut in pay to keep my job.

But I’m STILL WORKING and I’ve never missed a payment. I’ve now built up all of my credit cards to their limit and raided almost 100% of my 401k so that I can make my mortgage payments, yet I’ve NEVER missed a payment.

But the ratio between my mortgage and my house value is laughable. I’m so far upside down, I might just as well keep tunneling. Maybe I’ll end up in China like my Momma used to say.

And my friend, the very educated and talented REALTOR, says that the best way for me to get out from under this mess is to short sell my house because, like my income, it’s only worth about 2/3rds of what I paid for it five years ago. I even consulted with that real estate attorney who says maybe I should just let the house go back to the bank.

But, you see, I’m a responsible person. I make a commitment and I stick to it. Again, let me stress, I’ve NEVER MISSED A PAYMENT! It won’t be long now though. I just can’t continue to make payments at that fantastic 6.8% interest rate I had five years ago.

Here’s my proposal: My income supports a purchase that’s 2/3rds less than the current mortgage on my house. And interest rates have dropped below 5%. I CAN AFFORD THAT! And I can save you thousands of dollars and all of us can come out of this without egg on our faces and tons of embarrassment if you’d allow me to just buy back my own short sale property. Well, technically we shouldn’t have to go all the way through the short sale process. That’s messy, lengthy, expensive, and totally unnecessary!

So let’s do this: You process your own unbiased and fully researched Broker Price Opinion and I’ll pay for the appraisal. And then we’ll agree that the value of my house is 2/3rds of what it was. And then you’ll rewrite my mortgage/loan for that number at the current interest rate of less than 5%.

You’ll save money. You’ll not have yet another house sitting in your “bad loans” portfolio. And I’ll get to stay in my house and continue to maintain it, thus saving my neighborhood from further decline and dropping my house value even more. And my credit score will stay reasonable since we won’t have to go through all that “miss a payment or two or three so we’ll look at your short sale offer” business. My kids will continue to grow up in the same house at the same schools with the same friends in the same neighborhood, thus continuing to contribute to their sense of security. (We need these future secure workers to pay for their own houses and cars someday, thus helping to ensure your bank’s longevity.) We’ll all be winners.

How about it, Mr/Ms Bank President? Doesn’t that make loads more sense?

Sincerely,

Struggling Homeowner
i.e., Your Next Foreclosure Client

FHA Mortgage Insurance Changes & How They May Impact a Sale

By

 

FHA loan billboard
http://www.flickr.com/photos/thetruthabout/4041556932/


You may have heard that costs surrounding FHA loans is changing in October, reducing the dollar amount needed at closing for Upfront Mortgage Insurance, while increasing the monthly portion of mortgage insurance that is added to a homeowner’s payment.

If you have previously been approved for an FHA loan but haven’t yet found a home, you’ll want to be sure to factor in the larger payment requirement into your budget, along with contacting your home loan advisor to be sure that your preapproval is still valid for the higher payment amount. You may also want to consult with your advisor to see if a different mortgage program might now be more attractive.

If you are a Seller, you may be expecting to contribute towards a Buyer’s closing costs, which are dropping considerably when the Buyer uses an FHA loan. In the past, I’ve suggested to a Seller that the buyer’s closing costs could easily total 3-4% of the purchase price. With the 1.25% drop in upfront mortgage insurance, contribution towards closing costs may be less hurtful towards your net amount at closing, thus perhaps becoming an attractive marketing tool.

Monthly Mortgage Insurance for FHA Increases October 4th:  For FHA case numbers that are assigned after October 4th, FHA will

  • decrease the Upfront Mortgage Insurance premium from 2.25% to 1.0%. 
  • increase the monthly mortgage insurance premium from .50%- .55% to .85% – .90%, depending on the combined loan to value.

My trusted Mortgage Advisor sent along this chart to help you understand how this will affect a homebuyer’s mortgage:

Sale Price

Increase in Payment

Decrease in Upfront MIP

$250,000

$54.17

$3015.63

$350,000

$75.85

$4422.03

$450,000

$97.62

$5428.48

$550,000

$118.53

$6588.87

Mama Passarelli and The Soup Ladies

By

About a month ago I met Ginger Passarelli Senecal, respectfully and gratefully referred to in our area as “The Soup Lady.”

Known as “Mama” to everyone who’s ever met her, several years ago Ginger felt a compelling need to fill a desperate need by those who are “first responders” in times of need and disaster — our fire fighters, police, EMTs, military personnel, search and rescue teams, and so on.  

Several years ago, Mama decided that the folks at her church needed more connection with one another. And so she began bringing pots of soup to the church after services. It was a way to get to know one another! As happens periodically in our area, in 2003 we had a windstorm go through the area that toppled trees, cut our electricity and other essential services. For many of us, it meant that cooking and warm meals were just not available.

Typical of Mama, she helped arrange for members of the congregation to clean up the area, then set up barbeques and portable stoves in the church parking lot to serve … soup!

From that time on, Mama Passarelli began her mission to provide soup to those people who do so much to help all of us.

Mama and her dedicated crew have served soup and provided a friendly face in so many disasters — both local and nationwide. She and her volunteers respond to house fires, search-and-rescue operations, flood relief, hurricane cleanup. They were there for Katrina, they were there for Gustav. They were in Lakewood for days to serve when four police officers were killed. They were even there recently when fire crews rescued a dog that fell over the edge of a cliff in Snoqualmie.

Mama Passarelli owns a home-style restaurant in Black Diamond, Washington. She’s a talented and accomplished cook. Down home meals are definitely her specialty–YUMM!!! You may want to have soup as an appetizer.

While I can only pray that you never have a need to meet Mama because of a personal tragedy, I do encourage you to visit Mama Passerelli’s at 24306 Roberts Drive, Black Diamond.

Can You Believe Your Own Condo for $99,999!!

By

Zero down and free closing costs from Preferred lender. FHA Approved! Looking for a change under $100k. Why rent when you can own. Great condo with a mountain and sound view. Kitchen boasts oak cabinets, title counters, dual sink & appl stay w/built in microwave. Fireplace w/tile mantel, huge bath w/titled counters & surround. Perfect for communters. Seconds to I-5 & 99. Guest parking & carports available. NOT a short sale!

 

 

 

 

Courtesy of Lorene Bennett, RE/MAX Select R.E.


Price Reduced! Easy Covington Location

By

Updated tri level in excellent neighborhood. Hardwood floors thru entry, kitchen & dining rooms. Italian tile in family room. New carpet in all other rooms. White, 6 panel doors. New kitchen counter tops, & interior paint . Family room w/gas log fireplace and built-in decor shelving. Master suite w/walk-in closet & 5 pc bath including claw foot tub. 2 level deck in fenced back yard. Cedar siding. 9 ft garage doors. Yard needs TLC otherwise, this house is move in ready!

 

 

 

 


 


 

 



Courtesy of Dawn Rushton, RE/MAX Select R.E.


Investor Alert: FHA Financing for “Flipped” Houses

By

In mid-January, 2010, the Department of Housing and Urban Development (HUD) issued a temporary waiver (good until February 1, 2011, or until extended or withdrawn) to give FHA borrowers the ability of obtaining an FHA-insured mortgage on a home that was purchased less than 90 days previous. What this means is that a Buyer can use FHA financing for a home which was bought by an investor less than 90 days before, then repaired or rehabbed.

On its surface, it would seem as though this waiver would be greatly beneficial to investors. After all, an investor needs to purchase a real bargain house, do some repairs, and then re-sell the home as quickly as possible for a profit.

In my experience, most investors look for the original purchase to be no more than 70% of its repaired value, with 50-60% (or even less) preferred. Considering that the cost of buying and then selling a home can easily run approximately 10% of its resale value, that there are costs of borrowing funds for purchase, and, of course, the necessary costs of repair, an investment home must be sold for far more than 120% of the investor’s purchase price.

It’s also important to bear in mind that many buyers (if not most) are also looking for homes that are a bargain … and are using FHA financing to secure their purchase.

So .. where this gets difficult is that there is a 20% variance to the flip rule for homes being resold within 90 days of an investor’s acquisition of the property:

* If the home is being sold for no more than 120% of its purchase price, then flipping guidelines do not apply.

* If the home is being sold for more than 20% above its purchase price, then the Buyer’s lender will require an independent home inspection, selected by the lender and likely paid for by the Buyer (OUCH!), and

* The Lender must justify the loan value by acquiring support documentation of the increased value or TWO appraisals, and

* Even if an appraiser doesn’t find the need for a repair, a lender can require that any issues revealed by a home inspection be fixed prior to closing!

A home inspection in the hands of an underwriter can be problematic. Every home requires some repair–no home is perfect. In a typical transaction, Buyers and Sellers often agree to financial adjustments rather than repair. Underwriters aren’t necessarily equipped to interpret the findings presented on a written inspection report, and an transaction otherwise acceptable to a Buyer and Seller may be stalled or cancelled.

Finally, in most transactions, the Buyer pays for the appraisal of the property they wish to purchase, used to assure their lender that the value of the home is at least equal to the amount of the loan. With the requirement that a flipped home sold for more than 120% of its investment purchase price, the Buyer may be required to pay for two appraisals, which further impacts the Buyer’s closing costs. In today’s buyer-driven market, remember also, that the Seller is very frequently asked to pay all or some of the Buyer’s closing costs.

Click to read the HUD Waiver of Requirements for FHA loans, then be sure to factor in these additional requirements that may be impactful of your desire for a quick resale of your investment property.

There is NOT a 3.8% Sales Tax on All Home Sales Starting in 2013!

By

Over the last several weeks I’ve had a number of clients and contacts email me with a “Is This True?” question about the rumor of a 3.8% “sales tax” to be added to the sale of a home after 2012. With the passing of President Obama’s Health Care bill, some people are digging deep for every possible reason to cause panic and mayhem.

Last night I received yet another forwarded copy of this message. I’ve copied the message in the three bordered sections that follow. My response is below.


Subject: REAL ESTATE SALES TAX TO GO INTO EFFECT 2013 (Part of HC Bill)

 

This excerpt from the Healthcare Reform bill has been grossly misstated. There is a 3.8% tax that will be imposed beginning in 2013 (if not repealed before them … and it’s under discussion) … but it’s not on the gross amount of a sale.

In fact, this provision has  been so widely misunderstood and misquoted, that the National Association of Realtors produced a Question and Answer publication to expressly discuss the matter. Be sure to expressly study questions 8-10. Click to read the publication.

Essentially, it’s like this:

A 3.8% tax will be imposed on high income earners (single earners with Adjusted Gross Income (AGI) over $200k, couples with AGI over $250k); that sell property realizing a gain over $250k (single) or $500k (joint filers). So .. if you’re married with AGI over $250k, and you sell a piece of property with a gain over $500k, you’ll pay a 3.8% tax on the gain, not the entire sales price.

I’m not a tax expert and can’t speak to computation of AGI, but I suspect that there will be some fairly extensive calculations involved to minimize AGI.


 


Move In By The Holidays & Have GORGEOUS Land, Trees, Privacy & Easy Living!

By

Quiet & Peaceful perfectly describes this idyllic property located in Ravensdale. With 2.28 fully-fenced & gated acres, you’ll have plenty of room to raise critters, garden, park your toys, or just enjoy the lovely waterfall and pond.

This 1536 sq ft home features a gigantic living room & dining room—both with bay windows, nicely appointed kitchen and laundry, plus three bedrooms. The master bedroom, located at one end of the home features a private 5-piece master bath, complete with soaking tub. And just down the hall is another huge bath, also with double sinks, soaking tub, and shower.

The owner recently updated all of the windows and carpeting, installed a Gen-Tran to guard against possible power outages, and built a roofed and concrete based shelter as additional parking (he uses it for an outdoor exercise space). In addition, the detached 2-car garage, plus another outbuilding provides yet more storage and living space. The outbuilding is currently used for rough storage, with one end as a wonderful roofed and floored dog kennel, complete with dog runs.

A previous owner had horses and the property has still has some cross-fencing. With just a little renovation, you’ll have great pasture areas!

Fall Has Fallen Around My House!

By

Okay, so it’s just now coming into early Spring … but I ran across this old post from 2010 and figured I should update it before losing sight of it again. Besides, Fall seems to come around every year and the fall clean up tasks will arise again!

 

Our Pacific Northwest area has had an “almost – on again/off again” summer this year. Other than just a week or two of hot weather early in August, much of the rest of the summer has been wet, overcast, or just daggone cool! We didn’t really have much of a winter this last year either, now that I think of it. Leaves have been dropping steadily over the last week or so, although we really haven’t been hit with the onslaught from the big maple in the front yard. It’s coming soon though!

Yesterday was a gorgeous fall day — just hot enough to make you think about turning on the A/C … but not quite because “Hey! This may be the last of Summer!” Today … notsomuch. Overcast, cool, breezy, early 60-ish.

Around our house, this time of year signals frantic activity trying to get the house ready for winter. Sure enough … hubby got up this morning and said “We better get the stove cleaned before winter hits!” (We have a pellet stove that gets hauled outside, blown out, tuned up and touched up every fall.) … His first comment was quickly followed by “Shoot, I don’t have those doors re-weather stripped yet either!” Bless him — he really works hard around the house!

I know that most folks have a Fall house tune-up list, but thought I’d throw my list out there just to add a bit more to your own To-Do list! After all, I don’t want to suffer alone.

1. That pellet stove!

2. Scrub out re-caulk around the windows.

3. Winter-ize / weather strip the doors.

4. Knock off any bird nests that arrive every spring in that tantalizing overhang we have. … Oh and while we’re up there, doublecheck and repair any of the bird blocking that’s been vandalized.

5. Oh yeah. Speaking of bird blocking … we usually get under the house to repair any of the critter-screens in the foundation vents to be sure nothing’s gone awry there either. This is usually my job. It’s a lot of fun …. (not!)

6. The gutters’ll be cleaned after the leaves are finished — we can wait for a month or so for that event. It’s much more fun in the really pouring rain anyway.

7. Check all the connections for the Christmas lights. They’re definitely NOT fun to refurb when it’s pouring!

8. Touch up and seal the driveway. … Ours is asphalt. It’s a yearly thing.

9. Walk the roof to be sure that flashing looks good, shingles aren’t popping, or whatever.

10. Check the downspouts and water-runoff thingies at the bottom to be sure they’re in place and pointing the right direction … away from the house.

11. Scrub the deck and re-stain. (I think this one’s gonna have to wait this year. It’s looking like a BIG job–more like needing to replace the decking.)

13. Drain and scrub out the hot tub. (Done! Whoo hoo!)

14. Without getting too much into the garden thing … it’s time to get a weed and feed down soon so that I can still reseed those bare patches when it starts raining daily. (I’m avoiding the inevitable Fall yard work — it’s coming … but the daggone tomatoes aren’t even ripe yet! Gee whiz!)

15. Take a good hard look at the pantry … what’s still needed for my winter stock-up? I like to take an inventory this time of year and add to the staples so that I have at least a couple, two or three, month’s supply of things like rice, noodles, canned fruits, soy milk, that sort of thing.

16. Take the dogs and cat in for their yearly vaccinations. They’re due every September.

Okay, that’s enough. I’m tired just typing. What’ve I missed?