Face it folks ... we're in the short sale market and there's little we can do about it except live with it. So, here's a short sale primer for Buyers and Sellers.
THE GOOD: For Sellers it's a chance to get out from under crushing payments on a house that is worth less than you owe on it and to move on with your lives. For Buyers it's a chance to make a good deal on a house and quit paying rent. Also, you may get $8,000 or $6,500 credit on your taxes provided you can close on this house before June 30, 2010.
THE BAD: For Sellers, you are going to be out of a house and out of the house purchasing market for a while because your credit is going to take a hit. For Buyers, it takes patience ... lots of patience. There may be several offers on this house and Banks reserve the right to look at all offers (in most instances) and yours may not be the offer accepted. This you may not find out until months down the road, precious time that is wasted on waiting for a bank to make up its collective mind.
THE UGLY: For Sellers it's all the time wasted trying to work with a bank to get this accomplished, and then they make unrealistic requirements on closing the deal. And, you may end up having to sign a note to the bank for unpaid debt or the bank may decide to go after you in court for the deficiency amount. For Buyers it's the not knowing IF and WHEN you may get this house, whether or not your Lender's appraisal agrees with the underlying lender's appraisal (which throws you back into negotiations) and the fear of not closing in time to get your tax credit.
Just a few of the ramifications I've run into recently. As always, get a professional's advice before proceeding with any type of sale on your property and I can't stress enough that, should you decide to short sale your property or buy a short sale property, get an Agent who is knowledgeable and experienced with them. Then, let the games begin.
As always, please call us if we can ever help with your real estate needs.
The Northwest Multiple Listing Service released their latest numbers and it looks like great news for the area. The reported pending sales for April was up 11.4% compared to 12 months ago and rose 21.3% over March. Brokers reported 5,372 pending sales for King, Snohomish, Pierce and Kitsap Counties which is the first time the number cracked the 5,000 level since August of 2007.
So, what do the numbers mean? Basically it looks like the inventory is shrinking ... good news ... and Buyers are finally getting off the fence because of the $8,000 First Time Buyer incentive from the Government, extremely low interest rates and bottom line prices on homes. So, if you are a Buyer waiting for the "bottom" ... the time is now to dive into the pool before the water in the pool gets shallower.
And, do you qualify for the first time Home Buyer Credit? IF you have not owned a primary residence or purchased a primary residence within the last 3 years and IF your net adjusted income is $75,000 or less ($150,000 for a couple), you may be eligible. Check with your Lenders now and it's always a good idea to check with your tax expert, too.
Average prices for a single family residence in King County is now $417,500 and in Snohomish County at $316,271 according to the NWMLS. And, the FHA insured loan limits are now at $719,000 so there's plenty of inventory for a 3.5% down payment through an FHA loan. The Feds may be taking a look at this number shortly, so get your oar in the water now.
As always, if you need a referral to a good Lender or want more information, please giveÂ me a call.
This real estate market reminds me of those road trips we took as a family when the children were young ... always impatient and asking, "Are we there yet?" That's the question on all agents' and clients' minds ... have we hit the bottom of the market and when do we start up again?
And the best answer is ... maybe. After every downturn there is an upturn and we're more than ready for that. According to the most recent numbers, the median sales price increased nationwide in March for the second month in a row, the biggest monthly jump since June 2005. The months' supply edged up to 9.8 from 9.7 but the raw inventory actually declined for all types of homes. The Federal Housing Finance Agency also reported that home prices rose 0.7% in February, the second month in a row that prices rose putting them up 1.7% for the last two months. Again, the biggest gain since 2005. And, March New Home Sales came in at 356,000 annual rate, a small decline from February but better than expected. And, according to the same source, inventory levels continue falling, down to 46.0% from their mid-2006 peak and at the lowest level since 2002.
So, what do the numbers mean? It shows, in my opinion, that we're "bouncing along the bottom" of this housing market and I believe we're looking toward a slow recovery starting this summer. Short Sales and REO sales are now dominating the market but there are still real "Sellers" out there that need to move and have some equity positions so they can sell without having to negotiate with the bank.
As for Buyers who've been waiting for the best deals ... they are out there NOW. My serious suggestion is to get off the fence and get in the game. Interest rates may never be lower and housing prices are unbelievable. Gentlemen and Ladies ... start your engines!