The President has signed legislation that contains an enhanced tax credit extension.  Not only was the first time buyer tax credit extended, but a tax credit for current home owners was included as well.   Below, are some of the commonly asked questions about this new legislation. 

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?

An eligible home buyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

• They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
• They do not use the home as your principal residence.
• They sell their home before the end of the year.
• They are a nonresident alien.
• They are, or were, eligible to claim the District of Columbia first-time home buyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In The Property) co-signs for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

INFORMATION COURTESY OF TIM CASSILL @ LANDOVER  MORTGAGE 

Tim Cassill

Landover Mortgage

WA License 510-LO-39408

206 383-9777  cellular

888 812-7676   toll free

866 779-7333   efax

Frighteningly Fun Halloween Events Coming to Edmonds

Coldwell Banker Bain is pleased to announce its annual Halloween Extravaganza taking place in Edmonds with fun and FREE events for the whole family.  Be sure to mark your calendars!

Pumpkin Carving – FREE
Sunday, October 25, 2009
11:00 AM – 3:00 PM
Horizon Bank Parking Lot at 6th and Dayton, Edmonds

Movie: Ghostbusters II – FREE
Sunday, October 25, 2009
1:30 PM (doors open at 1:15 PM – tickets available at the pumpkin carving event)
Edmonds Movie Theatre – 415 Main Street, Edmonds

Haunted House Coloring Contest – FREE
Now through October 30, 2009
Entries can be picked up at the following locations:
Coldwell Banker Bain – 108 5th Ave. S., Edmonds
Horizon Bank – 103 5th Ave. S., Edmonds

Halloween Costume Photos – FREE
Saturday, October 31, 2009
5:00 PM – 7:00 PM
Coldwell Banker Bain – 108 5th Ave. S., Edmonds

Sponsors of this year’s Halloween Extravaganza include the following companies:

Coldwell Banker Bain of Edmonds, Edmonds Beacon, Edmonds Movie Theatre, Horizon Bank, Kinder Britches, QFC, and Robin Hood Lanes.

206.799.3877

TylerEch@Cbbain.com

These graphs were created through “Trendgraphics” using residential listing, pending, and closed stats from the NWMLS from the South Snohomish County market area.  

Chart one shows us the trend of the number of active homes  compared to the number of pending and closed sales in each month.  As you can see, we currently have significantly less inventory than a year ago, and pending sales are up about 50% as well, all very good!

Chart two shows the market areas ”months of inventory” which is obtained by taking the number of active homes divided by the number of Sold homes in a given month.  Also known as the absorption rate, this shows us how long it will take to sell the current inventory in the current market. 

Typically, a “Seller’s Market” would be 3 months or less of inventory, a Buyer’s market would be 6+ months of inventory, and a balanced market would be 3-6 months of inventory.

If you would like more information about your own specific market area, e-mail me and I will run this same report for the neighborhood you live in. 

Tyler J. Echelbarger

TylerEch@Cbbain.com

206.799.3877

In today’s unique market, a Buyer should consider worrying  less about price and focus more on what the interest rates are doing.  It could save them literaly tens of thousands of dollars at closing and even more money over the life of their loan, here is how…

In previous articles, I have talked about the fact that, as a buyer,  it is impossible to purposefully buy at the very bottom of the market.  We will not know that the bottom has actually hit until we are at least six months down the road and prices are already on their way back up or they have at least flat-lined.  When seller’s realize the market has stabilized, they are less likely to accept an offer below their asking price, give up concessions such as closing costs, or perform seller paid home repairs prior to closing.  Closing costs and repairs alone could easily cost a buyer $15,000 to $20,000 out of pocket, a buyer needs to know the facts and be in the best position to negotiate from the start.

DID YOU KNOW:  If you wait too long to buy and interest rates climb just 1% it could cost you over $220/month?  That is a significant amount of money, and when you pay that over the life of a 30 year loan,  it equates to nearly $80,000 more out of your pocket.

A real life example:  I had a buyer who was comfortable with payments of around $2,500/mo after principle/interest, taxes, and insurance.  I performed some simple calculations and showed that he could afford a home right around $456,000, the rates at the time were 4.75%.  He was on the fence for about a month, not sure if the market had hit the bottom or not. 

By the time the month had passed, the rate was at 5% and he no longer could afford the $456,000 home and the neighborhood he loved.  The rate jumped up only .25% and he lost $11,000 of purchase power.  I then showed him that if the rate jumped to 5.5%, still historically low, he could only afford $423,000!  By the rate jumping less than 1%, my buyer lost more than $33,000 of purchase power.  In essence, the buyer was going to pay the same, roughly $2500/month, for either a smaller house, less upgrades, smaller yard, and/or a worse location, all because he was trying to wait for the market to drop a bit.

In today’s market my recommendation to buyers is to find a house they love for the payment they are comfortable with.  If they do that, they will have made a great investment and will be very happy in their home for a very long time. 

Here are the year to year annual mortgage interest rates since 1980:

If you know anyone buying or selling real estate, please keep me in mind.  My business can only continue with all of your support.  Your referrals are greatly appreciated and will never be taken for granted.  Thank you!

206.799.3877

TylerEch@cbbain.com

More good news is emerging from the housing market as pending sales rose 30% in Snohomish County from a year ago.  Despite a 9% drop in median price from June 2008, Western Washington has seen a 4.4% increase since January of this year according to the Northwest Multiple listing service.  Most of the sales are coming in the low to mid price ranges from $200,000 to $500,000.  However, the upper end market is also showing since of improvement as buyer traffic has increased significantly over the last two months.

Read the full story from the Everett Herald here:

http://heraldnet.net/article/20090706/BIZ/907069987#Pending.home.sales.up.in.Snohomish.County

Closed sales are up 4% from a year ago in King County but the median price during that same time edged down slightly.

Read the full story from the Seattle Times here:

http://seattletimes.nwsource.com/html/realestate/2009424140_webhomesales06.html

As always, thank you for trusting me with your referrals.  I do not take them lightly and will always provide excellent information and professional real estate service to my clients.  Have a great week, Tyler

206.799.3877

TylerEch@Cbbain.com

Congratulations to our 2008 Volunteer of the Year, Tyler Echelbarger!   

 Tyler has been involved with the Alderwood club advisory board for several years and has helped with our annual auction, Campaign for Kids, and work parties at the club.  He has helped produce marketing material and hosted volunteer information parties.  Tyler is also on the committee for the Ed-Lynn Golf Classic helping to raise money for the Edmonds and Alderwood Clubs.  The club thanks Tyler for his dedication and efforts.

~ The Alderwood Club Staff

Click below to see all that is happening at the  Alderwood Club:

http://www.bgcsc.org/main.asp?id=47

The Northwest Multiple Listing Service released their April stats yesterday and outlined the fact that 2009 has some positive signs emerging in what has been a difficult and troubled market. 

 The statistics show that pending single family home sales rose over 28% in Snohomish County and 15% in King County from a year ago.  The surge is being attributed to lower prices, low mortgage rates, and buyer incentives such as the first-time home buyer tax credit.

 The majority of the recent sales have been in the lower end market which should trigger a similar surge in the “move up” market in the next two or three months.  Despite the fact the million dollar market continues to struggle, once these other segments stabilize, we should see sales pick up considerably in that upper end market as well.

Here are the links to the May 6^th articles from our local papers:

Seattle Times:

http://seattletimes.nwsource.com/html/businesstechnology/2009180657_homesales06.html

Everett Herald:

http://www.heraldnet.com/article/20090506/NEWS01/705069742#Hopeful.sign.for.housing.market

Despite the fact the State of Washington has diversified its commercial industries over the last two decades; The Aerospace industry, namely Boeing, has always been our state’s most important when it comes to the economy, jobs, and net-in migration.

The front page of the Herald on April 23, 2009 read, “Could Boeing Fly Away?” and outlines the idea that our State is not a competitive business climate and claims the “clock is ticking” on Boeing’s relocation. 

Read the full article here:

http://heraldnet.com/article/20090423/BIZ/704239866&news01ad=1#Could.Boeing.fly.away.from.Washington

Should Boeing phase out of Washington over the next 10 or 15 years, how would that effect our economy, net migration, and of course, real estate?

In the April 14^th publication of the Washington Alliance for a Competitive Economy, they help answer these questions and paint a rather dismal picture of our State’s economy through the year 2030 should Boeing leave.

Here are a few highlights (really low lights) from that report:

·        Boeing has a “job multiplier” of 3.96 where each Boeing job supports nearly 3 additional jobs.  The loss of Boeing’s 72,000 jobs would result in a statewide loss of around 285,000 jobs.

·        Net-in migration decreases year to year through 2022

·        Home prices decline by an estimated 6.5% by 2030.

·        Employment shortfalls total 320,000 jobs by 2022 and 375,000 by 2030.

Call Olympia and let them know that they must act now to encourage Boeing’s future investment and production stays here in Washington, our State’s economic future depends on it.

E-mail me to receive the entire eight page report from the Washington Alliance for a Competitive Economy.

If you know anyone thinking about buying or selling real estate, I would be happy to give them great advice and help however I can.  I never take a referral lightly and appreciate the opportunity.

206.799.3877

TylerEch@Cbbain.com

Looking to buy your first home, condo or townhouse?  Or, haven’t owned property in the past three years?  Now you can benefit from the governments new and improved first-time homebuyer tax credit, part of this year’s stimulus package.  Learn more here about this extra credit, and contact me for more details.

Sign up to receive Market Remarks by e-mail, Subscribe from the home page, right column.  Thanks for reading!

Tyler J. Echelbarger

206.799.3877

TylerEch@cbbain.com

I often ask myself why the majority of real estate agents continue to market like they did in the early 1980’s, dumping thousands of dollars into outdated, tired marketing plans.  I have concluded that it is because, number one, many agents are just plain lazy, number two, agents are creatures of habit and resist change, and number three, they do not fully understand how the industry is evolving, the new tools available to them, and are unable to communicate to their buyers and sellers anything other than what they have always done.

DID YOU KNOW???

·        Roughly 88% of buyers first find their home on the Internet.

·        Buyers are 900% more likely to find their home on the Internet than in the newspaper.

·        Buyers are 3400% more likely to find their home on the Internet than in a real estate home book.

(Source: 2007 National Association of Realtors, Profile of Home buyers and sellers)

NEWSPAPERS

I am about to touch on one of the big reasons newspapers are going broke.  Simply put, circulation is down, readership is down, and they are losing millions of dollars a year in real estate ad space because it is an outdated marketing tool.  According to the Belo Corporation consumer surveys conducted in 2006 and 2007…”Barely 10% of the Tri-County population receives the Seattle Times/P.I. and only 1.5% of that 10% reads the Classifieds section”.  The result is that newspaper advertising to sell a house is practically hopeless.

It costs between $120 and $200 for one ad in the Sunday paper which will run for one whole day.  There are much better ways to spend those marketing dollars which will help find qualified buyers in this busy buyer’s market.

It seems perfectly logically to me that if nearly 9/10 buyers first find their home on the Internet and are 900% more likely to find that home on the Internet than the newspaper, my clients had better be completely and skillfully positioned online in order to get the greatest return on their home.  Yet, most agents ignore the importance of not just simply being online, but maximizing that opportunity when a potential buyer clicks on their listing.

Grocery Store Books

Do not even get me started on the various real estate home books!  They are NOT organized by Price Point, Neighborhood, Agent, Alphabetically, Office, number of Bedrooms, or any other logical search criteria.  I will admit they are fun to look at while waiting for a Teriyaki take out order, but the goal is to find QUALIFIED home buyers, not to provide entertainment to those who might be bored at restaurants, grocery stores, and mini-marts!  I spent six months in two different home books smack dab in the middle of the real estate boom.  It cost me $500 per page, per book, per month ($6,000) and created ZERO leads for my sellers.

THE PICTURES

Just this past week I stumbled across a listing of a 1.3 million dollar home with pictures my two year old could have taken.  I honestly felt sorry for that seller at how their beautiful home was being portrayed to buyers when compared to other million dollar homes in the area. 

The following photos compare the picture quality that most agents achieve to those photos that I guarantee to my clients…

The quality of a home’s pictures are extremely important when buyers are searching online.  How easily a buyer can get the wrong impression of a home and rule it out unjustly because of poor pictures.  Let’s face it, real estate agents are NOT photographers and it shows…badly!

VIDEO

Another untapped opportunity in real estate marketing is professional property videos.  The virtual tour is a thing of the past and never really caught on as it distorted rooms and was difficult for buyers to navigate.  But with the millions of people watching videos on YouTube, Yahoo! video, and the scores of other web-sites, this is an avenue that will only grow as real estate marketing continues to catch up to the 21st century.

Here are two examples of professional property tours.  One utilizes Steady Cam technology to make it feel as if you are walking through the home, while the other is a less expensive alternative but still is able to capture the essence of the home nicely. 

MY GOAL

There are so many more marketing opportunities to discuss, but simply put, my marketing plan is designed to find those buyers who are qualified to buy that home I am listing.  I am not interested in simply shuffling as many people through the door as possible just so I can update my clients that we had 23 neighbors through the door over the weekend.  I would much rather have that update be, we had 5 qualified buyers through the home this week, and that is my goal.

Furthermore, I want my listings to be easily accessible to people, not just in the greater Seattle area, but all across the world.  Making certain that all of my listings are positioned on the most reputable, comprehensive, and state of the art Websites.  And finally, once they are online, making sure they have the best pictures, video, and information so that they stand apart from the competition attracting qualified buyers and ultimately the highest and best offers. 

From there, my job really just begins.  The marketing of a property is maybe 20% of the overall transaction, 80%, and by far the most important aspect, is making certain that I save my clients thousands of dollars by negotiating the purchase agreement, protecting them within the contract, and managing the various parties involved such as the buyer’s agent, title, escrow, mortgage, inspectors, and appraisers, so a smooth, hassle free closing is achieved.

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