Joshua Koffler's Real Estate Blog

Changes in the mortgage industry!

There has been many changes in the lending industry, below is a brief summary that will come into affect in the near future.

EFFECTIVE OCTOBER 1,2008

SELLER-FUNDED DOWN PAYMENT ASSISTANCE PROGRAMS (DPAs) ON FHA LOANS ARE ELIMINATED
MINIMUM CASH INVESTMENT BY BORROWERS ON FHA LOANS INCREASES TO 3.5% FROM 3%
A MORATORIUM ON FHA RISK-BASED MORTGAGE INSURANCE PREMIUMS GOES INTO EFFECT
VA LOAN GUARANTY INCREASES
FHA LOAN LIMIT WILL REMAIN AT $271,050

EFFECTIVE JANUARY 1, 2009

FNMA/FREDDIE FLOOR WILL REMAIN AT $417,000
THE MAXIMUM LOAN AMOUNT FOR FNMA/FREDDIE and FHA IN HIGH COST AREAS WILL DECREASE FROM $729,750 TO $625,500, BASED ON 115% OF THE AREA MEDIAN HOME PRICE VS THE CURRENT 125%

FNMA/FREDDIE AND HUD HAVE NOT YET COMMUNICATED THE PROGRAM REQUIREMENTS TO MORTGAGE LENDERS AND INVESTORS. ONCE ADDITIONAL INFORMATION IS AVAILABLE, Platinum Home Mortgage WILL COMMUNICATE THE PROGRAM DETAILS AND IMPLEMENTATION PLAN BASED ON THE ABOVE CHANGES.

Earl Schmidt

Platinum Home Mortgage

425-252-5757

Seattle Queen Anne Condo

Exceptional Find! This 2 bedroom, 1.75 bath condo features a master bedroom, living room, dining room, and an efficient kitchen with an open floor plan. The bamboo floors, tile floors in baths, granite countertops, stainless appliances, and washer and dryer are only a few of the extras. Secured private parking and a rooftop deck with panoramic views of Seattle, sound, and mountains are what set this complex apart from the rest, not mention the location being close amenities and entertainment!

Charming Rambler in Arlington

You will find your quality built 1542 square foot rambler nestled on a .22 acre lot in Arlington. Your home boast 3 bedrooms, bonus room, dining room, and a large living room. You will appreciate the efficiency of the gas heat, gas hot water, and gas insert. The hardwood floors throughout the home with accent colors on the walls makes this home very appealing. Your private lot includes a covered patio, outbuilding, and a private fully fenced backyard in a well established quiet neighborhood located by parks, schools, and all other amenities. This is a great home at a great price!!

May Real Estate Update for Snohomish County

Snohomish County Stat Comparison	May	April	March	February
Residential Home Sales	487	489	555	364
Residential Homes Pending Sale	867*	911	879	925
Active Residential Listings	5,608	5,345	5,058	4,831

*483 went pending in the month of May.

The pulse of the real estate market seems to be picking up. I am beginning to see more buyers inquiring about properties, more offers coming in, and more homes coming on the market. The majority of this activity is in the lower price ranges. For example, over ¾ of the homes in May were under the price of $400,000 - a trend that has been continuing since January. In this price range, we have 5 months worth of inventory on the market, and this is least amount of inventory in the majority of price ranges. As prices drop, mortgage standards increase, and adjustable rates begin to adjust, I predict this trend will continue.

For a breakdown of March’s sales by price go to: http://www.joshuakoffler.com/uploads/SalesBreakdownbyMonth.xls .

Interest rates are still hovering around 6.0% with no points.

Washington State Employees Credit Union

Washington State Employees Credit Union WSECU

Eunice R. Capiral

Home Loan Consultant

ecapiral@wsecu.org

425-350-3893

Seven steps to take in buying a home

Step 1. Start searching for a home-

You've probaly already been using the internet to search for homes. You will find many websites that help you see what is on the market but what these websites cannot offer is the hands on experience. This is where a real estate agent comes into play. Washington has different markets in different areas and an experienced agent will help you determine if the market is right for you. Agents also have access the Northwest Multiple Listings, this where all the other sites get their information from. As a member of the NWMLS we are able to get you the latest information, status, and history of the home you are interested in.

Step 2. Determine how much home you can afford

Are you ready to buy a home? If you have saved money for a down payment and you anticpate living in that home or condo for three to five years, the answer could be yes. As a certified financial counselor I can help you determine this, sometimes buying a home won't be the best choice at that point in time. Go to www.nwfinancialnav.blogspot.com for information on this service.

Step 3. Shop for a loan

There are many great programs for first time home buyers, including downpayment assistance programs. If you are a move up buyer or investor the interest rates are still looking good and now is a great time to get move up or invest for the long term. If you do not know any good mortgage brokers, I have a team of brokers that I work with that trust worthy and honest.

Step 4. Decide on a home and make an offer

This is where your agent will really help you through the process and negotiating. By doing the research ahead time, like property history, comparative sales in the neighborhood, how much you can afford, and being pre-qualified you will be in the driver seat in this market as a buyer.

Step 5. Getting the home inspected

After you have found the home you are looking and made an offer on the home that the seller has agreed upon you will then have an opportunity to have an inspection the home. This is very important, with this inspection you will be able to see what faults or potential faults this might have, after the inspection there will another time of negotiating with the seller, again this is where your agent will be working on your behalf!!

Step 6. Shop for homeowners insurance

Lenders require homeowners insurance to cover the collateral for the loan (the home). Shop around as you would for any insurance coverage, your agent will also be able to help you with this process, as I have a team of insurance agents that use.

Step 7. Complete the transaction and move in

There will many other contingentcies built into your offer, like financing, title, well addendum, septic addendum, neighborhood review, homeowners insurance, and others that as a buyer will give the opportunity to do your homework to make sure this is the right home for you. Again your agent will be a huge help in all this.

These are just some the steps in the process of buying a home. The most important step is finding a real estate agent that is comprehensive in all these steps and more. one that is willing to take the time to listen to your wants and needs and use their expertise to get you results. I am that type of agent!!

April Real Estate Update for Snohomish County

Snohomish County Stat Comparison	April	March	February	January
Residential Home Sales	489	555	364	343
Residential Homes Pending Sale	911*	879	925	768
Active Residential Listings	5,345	5,058	4,831	4,644

*503 went pending in the month of April.

The first quarter of the year is finally complete, and the numbers really did not show any kind of change in the real estate market. We are plodding along with lower than usual sale, but higher than usual listings with longer market times. We are still in a buyers market with plenty of inventory to choose from and interest rates are still hovering around 6%. A recent change that will affect the real estate industry is House Bill 2791. This will change the way we do short sales, and from what I can see, appears to include a large amount of the homes priced under $400,000. Watch my blog on this issue to see how it plays out.

For a breakdown of March’s sales by price go to: http://www.joshuakoffler.com/uploads/SalesBreakdownbyMonth.xls .

Interest rates are still hovering around 6.0% with no points.

March Real Estate Update for Snohomish County

Snohomish County Stat Comparison	March	February	January	December
Residential Home Sales	555	364	343	441
Residential Homes Pending Sale	879*	925	768	743
Active Residential Listings	5,058	4,831	4,644	4,239

*462 went pending in the month of March.

The month of March is now behind us and hopefully the snow will follow! As for the real estate market in Snohomish County, we have seen activity begin to pick up in all areas – buyers and sellers included. Did the FHA loan limit being raised help? Not really. Was it the weather? Certainly not! I believe it had more to do with fact that people are tired of hearing all the negative press on how “bad” things are, are beginning to think for themselves, are realizing that the economy really isn’t in the toilet like “they” say, and that now really is a good time to buy real estate. And why not? It’s on sale! Low interest rates, high inventory, and stable home prices are still in effect. This equals a great buyer’s market!

For a breakdown of March sales by price go to: http://www.joshuakoffler.com/uploads/SalesBreakdownbyMonth.xls .

Interest rates are still hovering around 6.0% with no points.

Seattle Area Real Estate Market

FHA loan limits have increased, the Fed has cut rates, the economy is good in the Seattle area, housing prices are stable or declining, and we are in a buyer's market. So with all this news, why are we not seeing an increase in market activity? Why are buyers still not coming into the market? My opinion on this issue is derived from working in the field and dealing with it first hand: there is no sense of urgency. Buyers are hanging back to see what will happen next. Will housing prices continue to drop? How low will rates go? There seems to be a great deal of uncertainty in the buyers' minds right now – not to mention the surplus of inventory to choose from!

What will stimulate the housing market? A sense of urgency. That pressure will only come when interest rates and housing prices begin to rise again…and that is when you will see buyers leaping into action.

March Real Estate Update for Snohomish County

Snohomish County Stat Comparison	February	January	December	November
Residential Home Sales	364	343	441	445
Residential Homes Pending Sale	925*	768	743	868
Active Residential Listings	4,831	4,644	4,239	5,021

*515 went pending in the month of February.

We are closing the month of February with greater buyer traffic and an increase in pending sales, all of which indicates an overall increase in market activity. How long will it last? I see this coming and going throughout the year. We will have short bursts of increased activity, subsequent slowing, followed by more activity. Why? The interest rates are unstable, as is the stock and bond markets, and we also have the coming election playing into things. People are operating on emotion right now, and this is what will cause some of the up and downs in the market. A change in the FHA loan programs may add some stability, but will likely only last a short time.

For a breakdown of February’s sales by price go to: http://www.joshuakoffler.com/uploads/SalesBreakdownbyMonth.xls .

Interest rates are still hovering around 6.0% with no points.

Three Lakes 3 Bedroom on 3.5 acres

Drive down the cherry tree-lined driveway and come home to your efficient 1848 square foot manufactured home on 3.5 acres! Go beyond the ordinary ( 3 bedrooms, 1.75 baths, dining room, living room with fireplace, family room, and utility room), and savor the extraordinary- a quiet morning in the sun room with a view of your 2.0 acre fully fenced pasture. Enjoy marionberries, raspberries, blueberries, and over 30 fruit trees in this uniquely pastoral setting. A woodshop and a 1287 square foot 3-car multi-purpose garage complete this picture. You have many opportunities here- equistrian, hobby farmer, livestock, or build. Public water and mountain views are here! Call me with any questions or for an appointment to view this beautiful property!

Warm Beach 4 Bedroom home on .42 acres

Looking for a 4 bedroom home on acreage for under $255,000? Then look no further! This enormous 1960 square foot 2005 manufactured home boast an open floor plan that includes a dining room, family room with fireplace and French doors that lead to you deck, living room, and a large kitchen with a island. The master bedroom is located on the opposite end of the other 3 large bedrooms and includes a walk-in closet and 5 piece bath. Your .42 acre lot has a fully fenced backyard, ample parking, storage shed, and a large deck. Call me with any questions or for a time when I can show you this great property!

Why are home prices dropping in Snohomish County?

I see it evey day on the 24 hour watch I have set up in the MLS - more price reductions than new listings in Snohomish County. Why? Here is what I am observing. We currently have at least a 1o month supply of inventory available to today's buyer and not enough active buyers to consume that amount of inventory. So sellers and agents are becoming desperate to sell their homes, hence the prices drop. I believe that this market is more about time on the market than price. Let's say you have six homes in one neighborhood with simular floor plans and lot sizes all priced within $5,000 of each other to start. Thirty days later you have one seller that is desperate to sell their home, they drop their price by $20,000, and in 30 more days their home goes under contract. What options do the other 5 sellers have? Is the market value really $20,000 below what they are on the market for? In the buyer's eyes they see the home that is under contract for $20,000 less than the other homes and think this is market value. Is it? In my opinion, no! The home under contract didn't have the patience to wait for their home to be exposed to the market and had to sell in a short amount of time. Even if the other 5 homes reduce their prices by $20,000, there are not enough active buyers to buy the remaining 5 homes. Just because we have sellers and agents that are lowering their prices out of desperation does not mean that the rest of the homes have to follow suit. Again, in this market where there are few active buyers, it is more time than price. Don't get me wrong, you do need to be competitively priced, but you don't have to give your house away to get it sold!

If you'd like an honest evaluation of the value of your home in today's market, give me a call.

Foreclosure? What do I do?

What should you do if you can't pay your loan? Foreclosure is not the only answer. Here are some steps that can help prevent foreclosures.

Call your lender immediately, the number of your lender should be on your statement, and ask for the loan mitigation department.
Get a hold of a reputable credit counseling agency. You may want to call the Homeownership Preservation Foundation (888-995-HOPE) or contact your local HUD- approved counseling agency (800-569-4287) or www.hud.gov
Look into loan modification options. The following modifications could be available to you-

Forebearance: an agreement to temporarilylet you pay less or nothing for a agreed upon time
Reinstatement: pay the total amount you're behind in a lump sum by a certain date
Repayment plans: a fixed amount of time to repay the amount you are behind by combining a portion of what's past due with your current payment
Loan modifications: a written agreement that permanently changes one or more of the original terms, such as extending loan term or lowering interst rate

As you can see there are ways to avoid foreclosure if you are willing to make the effort. The lender does want to foreclose on your property and will work with you if you make yourself available to work with.

Now if your financial circumstances have changed that your are no longer able to afford your house, your mortgage company may offer some other options, like-

Loan assumption: Even if your mortgage isn't assumable, your lender may allow someone else to take over the payments
Short sale: This allows you to sell your house for less than the amount of the loan
Deed-in-lieu- of foreclosure: The bank may be able to transfer title to your property to the mortgage company in exchange for the complete cancellation of your mortgage debt. In most cases, your lender will have required you to try to sell the house for 90 days before a deed-in-lieu will be considered.

Home Loan Options

Here some examples of loans available to first time home buyers or repeat buyers that require little to no down payment-

Fannie Mae Flexable 100

For repeat or first time home buyers
Down payment: none
Loan limit: $417,000
Income restrictions: none
Interest rates: As much as 1/2 percent higher

Fannie Mae Mycommunity Mortgage

For low-to-moderate income buyers who don't have a traditional credit history
Down payment: none
Loan limit: $417,000
Income restrictions: Combined household incomes must be $85,000 or less in the county based
Interst rates: As much as 1 percent higher

Federal Housing Administration (FHA)

For first time home buyers, people with fair to excellent credit and modest assets
Down payment: 3% but can be gifted or come from nonprofits (Nehemiah program)
Loan limit: $362,790 subjet to change
Income restrictions: none
Interest rates: comparable to conventional market rates if not better

Veterans Administration (VA)

For honorably discharged, retired or active duty service personal
Down payment: none
Loan limit: $417,000
Income restrictions: None
Interest rates: comparable to conventional loans

These are just a few of the available loans. To chose the right loan for you I would suggest talking with an experienced mortgage broker. I work with only qualified, trusted mortgage brokers and would willing to give you there name and number.