Di Kawell Real Estate Blog

Quick Video about the First Time Home Buyers Tax Credit

Here's a short video (just 4 minutes) which addresses the first time home buyer tax credit (available until December 1, 2009) and our historically low interest rates...could now be the time to buy your first home?

Federal Way Mayor Hosts First of Four Town Hall Meetings

Mayor Jack Dovey is hosting an informal town hall meeting on March 25th, 6:30 PM at the Federal Way Community Center, 876 S 333rd St, near the Celebration Park campus. This is a great opportunity for area residents and business people to learn and ask questions about life in Federal Way, as it is and what's new and coming soon. The mayor will give a brief update, and area service clubs will make a short presentation on volunteer opportunities in the community. 

For more information, contact Brook at 253-835-2401.

What's Up with Loan Limits?

Towards the end of 2008, it was announced that the loan limits above conforming $417,000 and below jumbo (aka Jumbo Conforming or High Balance or FHA Jumbo) would be adjusted based on home values by region.  In our local area of King, Pierce and Snohmish counties, this meant that the loan limit went from $567,500 to $506,000.  We lost $61,500 of financing power on upper end homes. 

On Friday, February 13, 2009, Congress approved the "American Recovery and Reinvestment Act of 2009" came along which reinstated the higher 2008 loan limits to "high cost areas".   OFHEO, who oversees Fannie Mae and Freddie Mac (conventional lenders) announced they were endorsing the loan limits and provided a list the "high cost" areas that would benefit on February 23, 2009.  FHA soon followed with their acknowledgement of the higher limits as well.  And then...we waited for everything to trickle into place.   I began quoting the higher loan limits for FHA insured loans around March 6, 2009.  Just this week, I've noticed Fannie Mae loans reaching $567,500...we're still waiting on Freddie Mac...which should be available soon.  I happen do more Fannie Mae and FHA than Freddie Mac loans.

What's in it for you?

With an FHA insured loan at $567,500, you only need 3.5% down payment to purchase a home.   For conventional, you now have $61,500 more of buying power!  Rates for high balance loans are much more attractive than a true jumbo (non-conforming) mortgage.  Here are examples of what's available right now:

Sales price $585,000.  Home buyer minimum required down payment of $20,475 (3.5% of the sales price) -- which can be in the form of a gift or loan from family members.  The seller can pay all of the closing costs (up to 6%) as long as the buyer meets the 3.5% requirement.  Based on this afternoon's rate of 5.00% (apr 5.665%) for a FHA High Balance, the total estimated mortgage payment (including taxes and insurance) would be around $4,000. Credit scores for this progam need to be 620 or higher.  This is a great option for home buyers with decent income and shy on down payment.  

Sales price of $700,000 with 20% down payment of $140,000 would create a loan amount of $560,000.  Based on credit scores of 740 or higher, this afternoons rate would be 5.00% priced with 1 point (apr 5.132%).  Total estimated payment would be around $3,800.

These new loan limits are available now through the end of this year.  Here are FHA loan limits for Washington State and other High Balance Conforming loan limits (not all counties qualified).

Rhonda Porter CMPS is a Licensed Loan Originator 510-LO-32047 for residential mortgages in Washington State.  She has worked at Mortgage Master Service Corporation, a Correspondent Lender, in South King County since April 2000.  Prior to mortgage, Rhonda managed an escrow branch of a title insurance company located in Federal Way--this is how she first met Di Kawell.  Rhonda has been helping Pacific Northwest families with their real estate needs since 1986.

You can contact Rhonda at 206-718-9488 or visit her nationally recognized, award winning blog The Mortgage Porter.

What's "High End" for Home Pricing in the Federal Way area?

According to Windermere's Premier Properties qualifying guidelines effective January 1, 2009, in the Federal Way and Jovita/West Hill Auburn areas, minimum pricing is at $700,000. But, more importantly is the quality of the home and neighborhood. Upscale quality and excellent interior/exterior maintenance plus architectural interest or historical significance are all criteria upon which Windermere agents and brokers must evaluate a property to qualify for this special category marketing. 

In general, based only on mls pricing & stats for this area, there are currently 26 homes listed for sale from $720,000 to $1,340,000. Avg square footage is 4,084, and avg lot size is approx half acre up to 4.9 acre currently.  In the past 6 months, there have been 8 closed sales in this range, from a low of $700,000 to a high of 1,593,000, and avg days on the market were 162. Impressive Puget Sound, Lake waterfront and Mountain views are often features included in this price point. Southwest King County Washington is well known for value pricing; and the drive time to Seattle is approx 45 minutes - to Tacoma, under a half hr. Come check us out - you'll be glad you did!

Federal Way Goes Green on March 21st ..

Selling Your Home Or Not, one thing we all need to do is clear the clutter and do some "Spring Cleaning"at least once a year. The City of Federal Way is having it's semi-annual community recycling event March 21st from 9 a.m. to 3 p.m. at the Twin Lakes Park & Ride, 21st Ave SW and SW 344th St.

Residents can recycle a wide range of materials that are not typically collected at the curb, including appliances, scrap metal, clean wood, bulky yard debris, petroleum products, tires, oil, gas, batteries, rigid plastic, holiday lights and select electronics, such as computer keyboards, mice and printers, fax machines, scanners, cell phones and CD/DVD players. Most items are accepted free of charge - however there is a $10 cash fee for recycling fridges, freezers and air conditioners. For more information see the City of Federal website.

Burst of Home Sales in Federal Way - Last 2 weeks

According to my search in the MLS database,for February 2009, 40 of the 50 new sales contracts accepted on homes in Federal Way happened in the last 2 weeks - hopefully this is not just a flash in the pan, but we'll take every bright spot we can find in this real estate market!

Current Inventory of Homes for Sale total 349 and are priced from a low of $85,405 to a high of $1,340,000 - and a median price of $299,950.

Sales Pending currently total 103, from a low of $75,000 to a high of $685,000 and the median price of $259,000. These homes averaged 73 days on the market before a sale.

February Closed Sales totaled 23, low $152,400 to high of $621,000, and median at $270,000.  The total closed is virtually unchanged from January (21)  So based on closed sales we are at a 15 month supply of homes.

Regarding foreclosure, short sales, bank owned and pre-foreclosure stats - 28% of actives, 31% of pendings and 35% of solds fall into these categories.

Hopefully the increased activity over the last 2 weeks will be gaining momentum with the buyer tax credit and other government actions taken recently, and being clarified. I'll keep you posted!

Facing a Low Appraisal - $60K Low Appraisal But Has No Effect On the Loan!

How would You feel if you're the buyer and your agent calls to tell you the bank's appraisal report shows the value of your new home at $60,000 less than what you have agreed to pay for it? But, because you are putting 50% down on the property, the bank will make the loan anyway.

Yours truly is the agent, and I feel it's my duty to inform the buyer and have a discussion about it. Do we ask the seller for a price reduction? Do we protest the appraisal to have it reflect a higher value?

In both cases, we decided no. Why? Three reasons: 1. We made it our business to know the market before negotiating the offer, meaning we have very recent comps that differ from the appraisal report, and the buyer is already receiving concessions from this seller toward closing costs. 2. The appraiser was restricted to using data from the immediate neighborhood where there really is no recent comparable sale, so he had to make dollar adjustments that did not truly compensate for differences. There is a limit on the dollar adjustments an appraiser can make. 3. Because the appraisal report is not a matter of public record, and therefore does not 'stigmatize' the property - and protesting it would be a waste of money and time; plus any delays due to a protest would also delay the buyer's move out of his current prpperty & could jeopardize that sale.  The buyer did not want to run that risk in this market.

I have contacted one of my favorite mortgage professionals, Rhonda Porter of Mortgage Master Services, for her comments on this transaction .. and I'd love to hear from anyone else with questions or comments.