Clark County WA Real Estate Blog

There is a new ‘buyer bonus program’ available through Suntrust Mortgage. This program allows the seller to contribute up to 6% of the loan amount towards the buyers first six months mortgage payments. Here’s an example:

With less than 10% downpayment on a $200,000 loan, the maximum seller contribution is 3% or  $6,000. If you use this weeks interest rate of 5.875% the buyers mortgage payment would be $1183.30. If we divide $6,000 by $1,183.30,  we see that the seller can make up to 5 Buyer Bonus Payments utilizing the Suntrust Mortgage Buyer Bonus program. 

How It Helps Buyers
If you are a buyer with 3% down, this could really give you a helping hand during the first six months, as you are settling into your first home.  Since you can save mortgage payments for the first five months, you now have extra money to spend on household furnishing.

How It Helps Sellers
Anything you can do to increase the pool of buyers in today’s market is a positive.  This program should be especially attractive to first time home buyers, who could us the assistance with their mortgage payments.

First time homebuyers now have another program that they can use to get their first home.  That’s a good thing!

You open your mail. It looks official, and it’s from your mortgage company.  Accross the top it reads ” Notice of Default”.  Homeowners accross the country are getting these every day, and although it’s scary, there are things that you can do to avoid foreclosure.  Here in Washington, it’s not as commonplace, but it still happens.  Here’s a timeline for the Washington State foreclosure process:

1. 11/01/2007  Homeowner stops making payments, and loan is deliquent.
2. 2/15/2008 Notice of Default letter is sent by lender.
3. 4/05/2008 Lender files Notice of Trustees Sale with Clark County
4. 7/09/2008 Property is auctioned off at Trustee Sale at Court House

So, as you can see, from the time you stop making payments, it will take approximately 8 months until your home is officially foreclosed on.  During this time you have the following options:

• Cure the default by making payments covering missed payments, fees, and penalties.
• Work with a Short Sale Specialist to list your home as a short sale.
• Do nothing and wait for the foreclosure auction at the Court House.

If you decide to sell your home, the first contact with your agent will be very important. Your agent will need to know who your mortgage company is, the loan#,  contact name, authorzation form (to talk to your mortgage company),  loan statements, tax returns, bank statements, pay stubs,  as well as Profit/Loss statement if you have a business.  Your agent will also help you to draft a Hardship letter to the lender,  making your case for a short sale.   Banks are willing to work with homeowners who owe more than the house is worth, but they will require a lot of documentation.  You must be able to prove financial hardship and that your home is worth less than the loan.

If you have the potential of foreclosure in your future, I suggest you be proactive.  Contact a Realtor and discuss how a short sale might work for you. It will cost you nothing to find out your options, and it certainly will reduce the stress level.

In today’s market, it seems everyone needs a bit of a reality check.  

For Sellers

• In a good market, where there is 6 months inventory, 2 in 12 homes are selling every month.In today’s market, it’s 2 in 19 homes selling every month.

• Only motivated sellers are selling their homes.

• If a sellers home is not priced right and in excellent condition- it will have trouble selling.

• Sellers should see their home’s competition before putting their home on the market.

• Home staging  adds  $10,000 to the value of a home

• Yard staging adds $10,000 to the value of a home

• Professional photography adds $10,000 to the value of a home (only cost $150.00)

 For Buyers

• 80% of the SW WA homes on market are covered by the FHA/Conventional loan limits of $418,500

• Interest rates are near historic lows

• There is a great selection of homes on the market and sellers are very motivated

• We are at the beginning of the next 10 year market cycle and historically, prices have always gone up from there. 

• The increase in population and other demographics point to a shortage of housing in the next 20 years, which means that price appreciation is almost a certainty.

• The upswing in the Real Estate market will start with the most affordable homes. 

• The spread between the more affordable and higher end homes will shrink, making higher end homes available to step up buyers.

 So that’s my reality for Clark County.

Agency refers to Agency Law. 
That means that when I work with a buyer or seller, there is an agency relationship established, and I have certain duties or responsibilities due to this relationship.
As a buyer’s agent…
I have a duty to exercise reasonable skill and care,  deal fairly and in good faith, to present all written offers, to disclose all existing facts,  to maintain confidentiality,  and to account for all money and property received.

As a seller’s agent…
I have a duty to be loyal to the seller, to disclose any conflicts of interest, to refrain from giving advise outside my areas of expertise, to maintain confidentiality, and to make a good faith effort to find buyers for their property.

An agency relationship continues until a property is sold or bought or a listing agreement expires. Even then, I still have an obligation to maintain confidentiality.

That’s it in a nutshell.

A short sale is when the seller owes more money to the lender than will be realized from the sale of the property. How does it happen?
I will use a hypothetical example. Owners Jim and Jasmine Smith purchased their home two years ago, in 2006, when the market was hot. They paid $400,000 for their home. They put down $20,000- and paid cash for all their closing cost. When the transaction closed, they had $20,000 equity.

Fast forward to today. They want to sell their home, but don’t know if they can afford to. They are afraid they owe more than their house is worth. Let’s take a look around the neighborhood, to see what their home is worth.

They have a neighbor, Mr. Jones, who has had his house on the market for the last 6 months. His home is exactly the same as the Smith’s home. He initially listed his home for $400,000, but has not had any showings and no offers. After three months, his agent recommended he lower the price to $380,000. Still no showings and no offers. Mr Jone’s is getting desperate, and needs to move in three months. He decided to lower the price again,to $360,000, hoping to get some showings and some offers. Two weeks later, Mr. Jones receives an offer for $350,000. He accepts the offer.

How does this affect the Smiths?
The market price for their home has now dropped from $400,000 to $350,000. They no longer have any equity in their home; they owe more than their home is worth. In other words, if they sold their home for $350,000, at closing they would be ’short’. They would have to bring cash to closing, or negotiate with their lender to ‘forgive’ some of the loan.