Darla's Blog

Qualifications for Selling your Spokane Home as a Short Sale

We talk to a lot of Spokane homeowners who have questions about selling their home and what it takes to do a "short sale". In order for your mortgage holder to approve a sale for less than what is owed, they will first try to determine if your situation fits their criteria.

If you can answer yes, yes, yes and no to the following questions, your lender will most likely cooperate with you on a short sale.

Has the Value of Your Home Has Dropped?

You must be able to show that your home is currently worth less than the unpaid balance you still owe on your mortgage.  Spokane home values have been declining since the market peak in 2007, so many homeowners who purchased within the last 5-10 years without making a substantial downpayment are "under water". Even if your outstanding balance is close to or at the current market value, you will have additional costs to sell, which can put you at a net loss. We can provide you with a market analysis to determine your home’s current value as well as an estimate of your net gain or loss after all selling costs.

Are you behind on Your Mortgage Payments, or will you soon be?

In the past, lenders would not consider a short sale unless you were behind on your payments, but that is no longer always the case. If you can demonstrate that you have explored all other options and you will not be able to make the payments in the near future, some lenders may agree to work with you on a short sale.

Do you have a Financial Hardship?

You will be required to write a letter that explains why you are unable to pay the shortfall due upon the sale of your home, including why you have or will stop making your monthly payments. This is where you explain your unique circumstances, such as health conditions, job loss, death, or other factors that result in the loss of income.

Examples of hardship are:

• Unemployment or Job Relocation
• Loss of Income
• Divorce
• Medical emergency / sudden illness
• Bankruptcy
• Death

To further document your current financial situation, you’ll be required to submit copies of your past two years tax returns, your most recent bank statements and current income/expense reports.

Do You Have Other Assets?

You must not have any assets that the lender can use to recover its losses.  This could include cash in a savings account, stocks, IRA accounts, or other real estate that you own. If your lender discovers assets, they may deny the short sale because they believe you have the ability to pay the shortfall. In some cases, they may still grant the short sale but will require you to pay back some of the shorted difference.

These are the four basic requirements of any short sale, however each bank or lender is unique and may have their own criteria. If you have questions or are considering a Short Sale, we can help! We understand that the prospect of losing your home is extremely stressful, and a short sale may be an alternative to foreclosure. Through this process, we can help you exit your home with dignity, get a fresh start and avoid the stigma of a foreclosure on your credit record.  Contact us today.

Darla and LeRoy Pilant are real estate brokers in Spokane, WA. Connect with them at TheRealEstateAces.com or SpokaneHomesforHeroes.com

Should You Appeal Your Spokane County Tax Assessed Home Value?

In many of our recent home sales, we find that the current tax-assessed value is significantly higher than the current fair market value. (What a surprise!) With declining market values, it is not uncommon for assessed values to be $40,000 or more higher than today's actual market value.

If you believe this is true in your case, you may want to file a request with the Board of Equalization to have your property value reviewed. If your appeal is approved you will most likely save several hundred dollars on your annual tax bill. The process can take a little time but is not difficult.

You'll need to make your case by providing recent comparable sales data in your neighborhood. This is something that we can provide for you at any time. If you have purchased your home recently, you may also use the appraisal that was ordered by your lender at the time of purchase to support your case.

Tax exemptions are also available for seniors or disabled homeowners. Your local Board of Equalization is the place to start, and here are some helpful links for Spokane County:

Spokane County Board of Equalization

BOE Forms to Request a Valuation Review

How taxes are calculated in Spokane County

Appealing your Property Assessment in Washington State

If you have questions, or if you are just curious about the current value of your home, give us a call!

Darla and LeRoy Pilant are real estate brokers in Spokane, WA. Connect with them at TheRealEstateAces.com or SpokaneHomesforHeroes.com

Does the Obama Health Care Plan include a Real Estate Sales Tax?

Does the Obama Health Care Plan include a Real Estate Sales Tax?

There have been quite a few emails and social media posts in circulation on this topic. Although everyone is entitled to their opinion about the new heath care plan, the story that is being promoted about a new real estate sales tax on all home sales is misleading and inaccurate.

Here’s an excerpt from an email that is making the rounds:

Did you know that if you sell your house after 2012 you will pay a 3.8% sales tax on it? When did this happen? It's in the health care bill. Just thought you should know. So, this is "change you can believe in"? Under the new health care bill - did you know that all real estate transactions will be subject to a 3.8% Sales Tax? The bulk of these new taxes don't kick in until 2013. If you sell your $400,000 home, there will be a $15,200 tax. This bill is set to screw the retiring generation who often downsize their homes.

The actual note was longer, with the usual directive to SEND THIS EMAIL TO EVERYONE YOU KNOW at the end. 

Here’s the truth. One of the provisions of the new health care legislation calls for high-income households to be subject to a new 3.8% Medicare tax on investment income starting in 2013. This has been frequently misreported as amounting to a 3.8% “sales tax” on all real estate transactions.

So who exactly would be subject to paying this tax? If you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the 3.8% tax on any net gain realized above and beyond this threshold.

This is not a new tax on every home sale, and only a very small percentage of home sellers and investors will be impacted by it. The tax is targeted at “high earners”.  You are allowed a net profit of $250,000 as an individual or $500,000 as a couple when you sell your primary residence. The tax would only apply to any net profit realized beyond those amounts. With the average home sales price in the U.S. at about $170,000 right now, clearly the majority of home sellers will not be affected.

As always, if you have questions about real estate, give us a call!

Sources: The Spokesman-Review, Spokane Association of Realtors, Snopes.com, RealEstateabc.com
 
Darla and LeRoy Pilant are Real Estate Brokers in Spokane, WA. Connect with them at TheRealEstateAces.com or SpokaneHomesforHeroes.com

To Heroes Everywhere: Thank You for your Service

As LeRoy and I were returning from the Exit Realty National Convention in Dallas, we saw something that really touched us.  Our flight back to Spokane was via Salt Lake City, and as we came down the jet bridge to the gate, suddenly a swarm of little kids, each dressed in army uniforms, came charging at the soldier who was walking just ahead of us. There was a chorus of high-pitched voices shouting “Dad! Dad! Dad! Dad!” as he knelt down and four of his children jumped into his arms.  Waiting at the gate was his wife and a little baby (also dressed in camo!) and all eyes in the place were on them as they embraced. The energy of their reunion seemed to send out a palpable wave of gratitude to each and every witness and bystander in the crowded Delta gate. I managed to find my camera by this time and snapped a photo.

I believe that if you are aware, the Universe provides signs that affirm your choices.  We recently joined the Homes For Heroes program in which we provide significant discounts for Spokane-area “Heroes”--be they soldiers, firefighters, law enforcement officers, medical first responders or teachers--when they buy or sell a home.  Seeing this soldier come home to his family was so moving, it was a huge reinforcement of our good decision to give back to the heroes who serve the public day in and day out. When we ran into this family in the terminal a few minutes later, LeRoy thanked the soldier for his service. The entire family smiled and he responded… “You are very welcome!”

Darla and LeRoy Pilant are Real Estate Brokers in the Spokane, WA Area
Visit their website at www.TheRealEstateAces.com

Introducing "Homes For Heroes" in Spokane County!

We are very excited to announce that we have partnered with an excellent program called “Homes for Heroes”. As the exclusive affiliates in Spokane County, we have agreed to provide a rebate of 25% of the gross commission to local "Heroes" who are buying or selling a home.
 
Workforce heroes include but are not limited to teachers, firefighters, public safety officers, health care workers, military personnel, and other everyday heroes who serve the public every day. If you aren’t sure if you qualify, give us a call or visit the Homes for Heroes website.
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The total amount of savings will vary with each transaction, based on the final sales price of the home and the applicable commission rate. But as an example, on a $200,000 home sale the rebate to the Hero at closing could be $1,500!

When we heard about the Homes For Heroes program we knew we wanted to get involved. It allows us to offer a significant discount to people who serve and make a difference in our community. But more than that, it gives us the chance to give back and say “thank you” to Spokane-area teachers, firefighters, law enforcement, health care and military personnel. Too often these everyday heroes are not recognized for the contribution they make, so we are proud to be affiliated with this program. For us, real estate is all about relationships, and we look forward to building relationships in the community as much as helping people with their real estate needs.

If you or someone you know is thinking of buying or selling a home, let them know about the Homes for Heroes program and tell them to contact us!

Darla and LeRoy Pilant are Real Estate Brokers in the Spokane, WA Area
Visit their website at www.TheRealEstateAces.com

Darla and LeRoy Pilant Recognized for Internet Marketing Excellence

We were recently presented with the “Real Estate Online Marketing Award of Excellence” from REALTOR.com®.  The Award of Excellence recognizes top agents who consistently provide great marketing services on behalf of their buyers and sellers. We received the excellence award at a recent real estate marketing and technology seminar that demonstrated cutting edge techniques for leveraging the internet and technology in real estate marketing.

We know our seller clients appreciate how we can help bring more attention to the unique selling attributes of their home and ultimately help attract more qualified buyers. Buyers are also appreciative of a well presented home that has a better description and more ways to learn about the property before arranging an appointment.

“There are always some real estate agents who distinguish themselves from other agents by doing a little more for their sellers. In particular; when the home they are selling is placed on a well trafficked site such as the 1st ranked REALTOR.com®, even simple efforts like having more photos displayed, crafting better descriptions or adding a virtual tour make a home stand out from competing properties.

The extra steps agents like LeRoy and Darla are taking on behalf of their clients is the reason we thought it worthwhile to call out the effort we have seen these agents make online and to recognize them for providing these added value services”
- Max Pigman, National real estate speaker and REALTOR.com® Vice President

REALTOR.com® is just one of the many ways we are leveraging recent trends in home buyer online behavior for our clients. If you’re thinking of selling your home and interested in finding out more about our extensive online marketing program, contact us today!

Get Cash for Renovation with FHA 203K Loan

In today’s Spokane home market, fixers and foreclosures offer a unique opportunity for many home buyers. FHA has a specific loan program to help homeowners who want to make improvements or repairs on their home, but do not have the funds to do so. These loans are called FHA 203k and can be used for either a purchase or a refinance.

A few facts about the FHA 203K Streamline Renovation Loan:

• Get up to $35,000 of loan proceeds to make needed upgrades and repairs.
  
• Cost estimates from a licensed and insured contractor(s) are required before signing the sales contract.
  
• The appraisal and loan amount are based on value after the completion of repairs. The loan closes before the work begins.
  
• Buyers have up to six months to complete the repairs or remodeling.
  
• The funds can be used for a variety of repairs and improvements, from roofing to flooring to appliances—virtually anything but furniture.
  
• Down payments as low as 3.5%.

If this sounds like something that would work for you, call Darla at 509-270-0782 and I will put you in touch with an experienced loan officer who offers the 203K loan program.

Darla and LeRoy Pilant are Real Estate Brokers in Spokane, WA. To connect with them or to view all Spokane MLS Listings, visit TheRealEstateAces.com

Tax Credit Deadline is April 30 for Home Buyers!

Last November, Congress extended a tax credit of up to $8,000 for first-time homebuyers and authorized a new credit of up to $6,500 for existing homeowners who purchase another home.

First-time buyers and existing homeowners have until April 30, 2010 to take advantage of the credit, offered as part of President Barack Obama's economic stimulus package. Members of the military serving outside the U.S. have an extra year (until April, 2011) to buy a home in the U.S. and qualify for the credit.

A "first-time homebuyer" is defined as anyone who has not owned a primary residence for the past three years.

To be eligible for the credit, you must have a purchase contract accepted by April 30, and the purchase must close by June 30. There's still time to get the credit, but call us ASAP! We can help you get financing approval and we are available to show homes seven days a week. It takes time to find the right home, and sometimes it can be several days between a written offer and final acceptance, so you don't want to wait until the last minute.

To claim the credit you have to file a paper return; e-filing is not acceptable. You need to attach Form 5405, and include a copy of the final settlement statement for the purchase.

More tax credit information is available on the IRS Web page: http://www.irs.gov/newsroom/article/0,,id=215827,00.html

Contact us today!

What You Need to Know Before You Buy or Sell Your Next Home

EXIT Real Estate has just announced that the company will host two public Webinars designed to help consumers make smart decisions before they buy or sell a home. Local buyers and sellers are encouraged to tune in for the discussion.

The webinar is titled "Changes in the Real Estate Market: What You Need to Know Before You Buy or Sell Your Next Home," and Webinar sessions will be given on Tuesday, March 9, 2010, from 1:00-1:30 p.m. PST and 4:00-4:30 PST. Both sessions will be hosted by Tami Bonnell, president of the U.S. organization of EXIT Realty Corp. International. Bonnell will address recent changes in the real estate market, as well as important factors home buyers and sellers should consider before they delve into the market. "This includes average sales prices, days the home is on the market, credit changes, extended tax credit and mortgage options", Bonnell said.

"Our goal at EXIT Realty is to give consumers a solid foundation before they go out and purchase a home or put their home on the market. There are many things to consider and we want to make sure they have done their homework before getting started," Bonnell said. "Home buyers and sellers are directly impacted by the changes in the real estate market, so it is very important for them to be aware of those factors."

To register for the "Changes in the Real Estate Market" Webinar, visit https://www2.gotomeeting.com/register/656547354 for the 1.p.m. session or https://www2.gotomeeting.com/register/309227258 for the 4 p.m. session.

The webinars are very simple to access, all you need is your computer and an online connection. For more information, contact Darla at 509-270-0782.

When Will Home Values Rebound? Predictions for Spokane and the Northwest

By now you know that home values have taken a dip in Spokane. So the million dollar question is: Will prices go lower? When will prices rebound? No one has a crystal ball, and much will depend on our employment rate and the number of foreclosures hitting our market.

A recent CNN Money article predicted home prices nationally could fall another 6% to their lowest point by September, 2011. However, their local forecast has Spokane values appreciating by 3.2% in that timeframe. Also of note, Tacoma, Kennewick and Seattle were among the top five on their list of best bets to rebound, which bodes well for the Northwest.

Several indicators point to the possibility that right now is one of the best times ever to buy real estate in the Spokane area. Average home prices have come down since the peak in 2007, there are many programs offering financial assistance to qualified buyers, and inventory of homes for sale is plentiful.

More importantly, interest rates are still very low, but are predicted to continue to climb as the Federal Government winds down its program for purchasing mortgage-backed securities. On March 31, the Fed plans to end a $1.25-trillion program for purchasing mortgage-backed securities that has helped keep mortgage interest rates near a record-low 5%. That exit is expected to further push up rates--various sources have predicted an increase of 0.5 to 1%.  (On a $200,000 30-year mortgage, the difference between 5% and 6% is an additional $125/mo. for principle and interest!)

While I can’t predict when home values will rebound, we have seen a definite uptick in buyer activity since the first of the year. The combination of unseasonably warm weather, low interest rates, low prices, soon-to-expire tax credits and lots of inventory to choose from seems to be bringing buyers off the fence.

As always, if you are thinking of buying or selling, we’d love to help you, and we appreciate your referrals!

First Time Buyers: Attend This Class & Get up to $10,000 Toward Your Down Payment!

There are many loan programs and financial assistance available to First Time Home Buyers in Washington!  Attend a FREE no-obligation Certified Home Buying Seminar to learn about:

• Down payment assistance programs up to $10,000 available to qualified buyers from the State of Washington Housing Finance commission.
• HomeChoice Program for people with disabilities. (Up to $15,000)
• SNAP sponsored grants programs up to $15,000 for qualified buyers.
• Up to $8,000 Federal Tax Credit for First Time Buyers!
• Washington State Bond new program for newly constructed never occupied home.  30 Year Fixed Rates range from 4.75% to 5.25%.
• Everything you need to know about obtaining a mortgage!
• Current Housing Market and how to purchase a home.
• Home Inspection.

February Class:                                                      

Date:  February 20, 2010

Time:    9:00 AM to 2:00 PM - Lunch provided                                           

March Class:

Date:   March 13, 2010

Time:  9:00 AM to 2:00 PM - Lunch provided                                           

Register today and find out how you can benefit from the Washington State Bond program, House Key + down payment assistance, SNAP grants and Home$tart grants!  All of these programs require that you have a Certificate of Completion for this class.  

TO REGISTER:

Call Darla at 509.270.0782 or LeRoy at 509.990.5150 or submit the form below!

Tax Credits and Avista Rebates for Making Your Home more Efficient!

There are a number of programs currently available to homeowners offering tax credits or rebates for making your home more energy efficient. This is a great way to save money on your monthly heating, cooling and electric costs and also recoup some of the upfront investment.

The Federal Government is offering a tax credit of 30% of the cost on several weatherization projects, up to a total of $1,500. Covered items include: Insulation, Window and Doors, Heating, Ventilating, Air Conditioning (HVAC), Roofs and Biomass Heaters. See the website for more details, which includes a helpful FAQ section. This program expires December 31, 2010. For specific questions about the rebates, contact your tax professional!

There are also local rebates available from Avista Utilities when you purchase ENERGY STAR appliances, switch from electric to gas heat or heat pump, add insulation or replace old windows. If you find yourself in a situation where you need to replace one of your household appliances, you might as well get the rebate! Check Avista's website for all the details.

2009 Spokane Year-End Market Report

In the chart below, the blue line is the 2009 average sale price, the green line is 2008, and pink is 2007. You can see that the first-time homebuyer tax credit (which expired at the end of November) weighed down our average price in the fourth quarter. The credit has since been extended to the end of April, 2010 and expanded to include move-up buyers.

New listings in 2009 totaled 9,782 compared to 12,833 a year ago.  However, because homes are staying on the market longer or not selling, total listing inventory at the end of 2009 was at 2,606, up 4.7% from December 2008.

New construction sales totaled 561 compared to 804 in 2008, down 30.2%.

You could describe our market in 2009 as "the Good, the Bad and the Ugly." It was GOOD for buyers, with Spokane-area home prices becoming more affordable, particularly for first-timers receiving up to $8000 from Uncle Sam for buying their first home. On the other side of the coin, 2009 was BAD for home sellers, who saw their home's value drop anywhere from 5-15% from the market peak in mid-2007. Lastly, things were UGLY for some realtors, with total sales falling to the lowest level since 1987 (see chart below.) State and local government also felt the pain, with reduced revenues collected from the excise tax on homes sold.

On to 2010!  All indicators show that the housing downturn has bottomed nationally and is showing signs of positive growth. Historically, Spokane tends to trail the national trends, following 12-18 months behind. Fortunately, our market has always been conservative -- we did not experience the extreme highs or extreme drops as other markets that had swings (up and down) of 20-40%.  Just another reason that Spokane is a great place to live! Contact me when you're ready to make a move.

Source: Spokane Association of Realtors

Looking for Land? LeRoy’s Your Man!

Want to feel Young? Join us out West!

A recent report from the Pew Research Center found that older adults feel younger out west. Fully 78% of adults ages 65 and older who live in the West say they don’t feel old, compared with 67% of older adults who live in the rest of the country.

We like to toot our own horn here in Spokane and the Northwest in general, so we’re not surprised by the numbers.

If you know someone who is thinking of moving, share the following statistics:

• Two-thirds of Westerners ages 65 and older say they feel younger than their chronological years, compared with 57% of older Americans in other regions.
• Among older Westerners, half say they feel 10 or more years younger than their actual age and one-in-five say they feel 20 or more years younger.
• Older folks living in the West also feel healthier than older folks elsewhere. Among adults ages 65 and older, some 72% of those living in the West say they are in excellent or good health. This compares with 63% of those living in other regions of the country.

So, celebrate the new year and don’t worry about that extra candle on the birthday cake. Embrace the future and remember you can always join us out west. And don’t forget to call your favorite realtors to help you buy or sell your home!

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