We are always on the look out for great buys for our clients. This 4 bedroom bank owned home in the desirable Maple Woods neighborhood of Maple Valley recently became available for less than what it sold for brand new in 2002! It is currently listed for $225k and provides an excellent investment property opportunity because it is eligible for Home Path financing. Home Path is a loan program for Fannie Mae owned properties. This financing allows you to purchase the home with as little as 3% with no mortgage insurance if you buy it as your primary residence, or 10% down with no mortgage insurance for investors. Traditional investment property purchases require up to 25% down, so this home provides a unique opportunity to own an investment property with significantly less upfront capital.

Here is what the numbers would look like if it was purchased as an investment:

• Purchase price: $225,000
• Down payment: $22,500
• Monthly payments at 5%: $1,087
• Monthly property tax costs: $284
• Monthly home owners dues: $50
• Monthly home owners insurance estimate: $50
• Total monthly payments: $1,471
• Average rent for this home: $1,800
• CASH FLOW POTENTIAL: $329

This same floorplan just sold in the neighborhood for $240,000 so there is already $15k of potential equity in the home at this price! View full details on this home listing here (Note: the price change to $225k in our MLS just occurred this morning and might not be reflected in the public listing yet).

To arrange a private showing of this home, or if you are interested in viewing any of our other great investment properties, contact us today at 206-372-0218 or info@HappyHomeTeam.com

Some of the points touched on:

• Prices are down 34% from the peak
• Interest rates are at historic lows
• Foreclosure rates will likely slow down soon
• Rental prices are on the rise

Read the full article here.

Good Housekeeping: Five tips. . goodhousekeeping.com/home/renovation/boost-curb-appeal-mar02

HandyAmerican.com: Serves up extensive list of home improvements to maximize a home's curb appeal. www.handyamerican.com/articles-tips-imv-exterior-improvements.asp

Home Gain: Offers spending considerations and guidelines for remodeling a home. homegain.com

Kiplinger.com: Spotlights curb-appeal beautification options for free, $100 and $500. kiplinger.com/columns/kiptips/archives/10-cheap-ways-to-improve-curb-appeal.html

Bank of America has stated that they plan to provide mortgage relief to as many as 200,000 homeowners who are underwater on their mortgages. These relief plans may include reductions in the principal loan amount by as much as $100,000. 

This plan is in part of a $25 billion settlement with 49 state attorneys general and federal officials that was reached in February earlier this year. The other banks involved in the settlement were Wells Fargo & Co., JPMorgan Chase & Co., Citigroup Inc. and Ally Financial Inc.

Mortgages that are owned by government entities Fannie Mae and Freddie Mac, or backed by the Federal Housing Administration, will not be eligible for this new settlement.

For additional details on this settlement view the full article here.

The health care legislation enacted in 2013 included a new tax that was designed to affect upper income taxpayers. Understand this tax will not be imposed exclusively on real estate transactions. The tax is NOT a transfer tax on real estate sales and similar transactions.

Rather, when the legislation becomes effective it may entail a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). These items are all included in an individual's adjusted gross income (AGI). The tax will fall only on individuals with an AGI above $200,000 and couples filing a joint return with more than $250,000 AGI

The new tax does NOT eliminate the benefits of the $250,000/$500,000 exclusion on the sale of a principal residence. Thus, ONLY that portion of a gain above those thresholds is included in AGI and could be subject to the tax.

Tax payers should familiarize themselves with the tax. The amount of tax will vary from individual to individual because the elements that comprise AGI differ from taxpayer to taxpayer. Contact us today at 425-413-6428 or info@happyhometeam.com for a referral to a licensed tax professional.

In case you missed it, the whole interview was captured on video which you can watch below (I guess you can no longer have a face for radio).

The days of multiple offers and bidding wars has returned. Available home inventory is the lowest it has been in the Puget Sound since April 2006, while pending home sales are the highest they have been since August 2007. Over the last 4 months, there have been more homes selling each month than new listing coming on. The basic economic principles of supply and demand suggest that right now is one of the best opportunities to attract an offer in 5+ years.

Wondering what your home would sell for? Contact us today for a current market analysis

BUYERS

Home affordability is the best it has been in decades (see the full article on affordability here). Interest rates are hovering around 4% on a 30 year loan which is the lowest they have been since World War II (see mortgage rate history here), while prices remain over 35% lower than what they averaged at the peak. The combination of low interest rates and low prices at the same time allows you to get more home for your money than ever before. Click the image below to see what can you buy now vs. what you could have bought in previous markets.

Want to own your own home but not sure where to start? Be sure to check our monthly Home Buyer Classes here

INVESTORS

Cash flow rental properties are readily available in King County and surrounding areas! In the past our investors would often have to search out of state to find homes that offered returns on their investment that made sense. We are now able to find many homes in the $200k range that cash flow over $400 a month. Vacancy rates are down from nearly 7% in 2009 to 4% today, and rents have increased over 5% in the last year (Read the Seattle Times article here). Interest rates remain in the mid to high 4% range for non owner occupied properties, and there are financing programs that require as little as 5% down for rental homes (ask us how).

Contact us today for a list of our best investment property buys

REFINANCE

Many people are still paying 5% or 6% on their mortgages because they think they cannot qualify for a refinance due to the type of loan they have or they are upside down on their home. It is important you know that finance guidelines are changing rapidly, and within the last 30 days there have been significant changes that have created new opportunities for home owners to refinance where it was not possible before. On a $300k loan amount, a 1% change in interest rate can save you nearly $200 a month on your mortgage payment!

Contact us today to see if you qualify to refinance your current home

WE CAN BE REACHED AT 425-413-6428 OR INFO@HAPPYHOMETEAM.COM

Please join us at our next Home Buyer Class!

Thursday, March 29th - 6:30pm

Located at Bank of America

27103 185th Ave SE

Covington, WA 98042

Here are a few things that we go over at the class:

- How you can own a home for less than what it costs to rent

- What makes up your credit score and what credit score is needed to qualify for a home loan

- What type of financing programs are currently available

- What is the process involved in purchasing home

- Where our real estate market has been and where it is headed from here

Take a look at some of the great deals available in today's market:

Brand new home in Covington for just $1,082 a month!
http://www.happyhometeam.idxco.com/idx/3647/details.php?idxID=041&listingID=307590

Penthouse two story loft in downtown Seattle for only $175k!
http://www.happyhometeam.idxco.com/idx/3647/details.php?idxID=041&listingID=225763

Experts are forecasting property values to increase nearly 25% in the Puget Sound by 2013. Read the article here:
http://blogs.wsj.com/developments/2011/08/09/tacoma-seattle-lead-list-of-strong-housing-markets/

If you have already bought a home with us, THANK YOU! Please do us a huge favor and forward this on to anyone you think might benefit from this information.

Also, we are basically walking home buyer seminars, so if the timing or location is not convenient for you, please send us a message and we can coordinate something more convenient.

More information at www.BuyerClasses.com

Space is limited. If you would like to guarantee a seat please call 1-888-499-0684 ext. 2008

Tune in Tuesday, March 20th at 3pm to 1150 AM KKNW Radio where will be talking live about our First Time Home Buyer Classes.

Not near a radio? No problem! You can stream it live here

Interested in learning more about our home buyer classes? Visit www.BuyerClasses.com

On a $200k loan amount that increase is about $1500 up front and about $17 per month. If you have any questions please let me know. There is still a window of time to avoid these increases in premiums. Call us today at 425 413 6428 or email info@HappyHomeTeam.com to discuss your options.

U.S. News and World Report, ©2012

There are two things you can count on when you become a homeowner: You get more tax breaks, and your taxes get more complicated. Whether you’ve purchased a single-family home, town house, or condominium, there are tax breaks available to you. It’s time to get familiar with the Form 1040 and Schedule A because that’s where you will have to provide all the details about your new tax-deductible expenses.

To take advantage of these tax breaks, you have to itemize your deductions. If this is the best choice for you, here some of the expenses you can deduct.

Mortgage interest deduction. 

Owning a home allows you to deduct the interest you pay for your mortgage. This is usually the biggest tax break for most people because a significant amount of your house payment goes toward interest during the early years of a mortgage. You can deduct all the interest you pay unless your loan is for more than $1 million. This includes any interest you pay on a loan to buy your home, and with some limitations, the interest on a home equity line of credit or home equity loan.

There are two conditions you must meet in order to get this deduction. You must file Form 1040 and itemize deductions on Schedule A (Form 1040). The mortgage is a secured debt on a qualified home in which you have an ownership interest.

Points deduction. 

When you finance a home, you may pay what are called “points.” Points lower the interest rate on your mortgage by effectively prepaying a portion of the interest at closing. Points are paid by the borrower to the lender as part of the loan deal and they are a percentage of the loan. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points.

Points are deductible as interest, but you generally can’t deduct the full amount in the year they were paid unless you meet certain requirements. If you aren’t eligible to deduct your points the first year, you can deduct them over the life of the mortgage. To determine if you are eligible, reference the exact guidelines provided by the IRS.

Deduction of PMI premiums on certain mortgages. 

If you make a down payment of less than 20 percent, you are required to carry private mortgage insurance, or PMI. This type of insurance is paid for by the buyer, but protects the lender in the event the borrower stops paying on the loan. PMI premiums can be deducted if the mortgage was issued after 2006. This deduction is effective for premiums paid through 2011. There are no limits on the amount of PMI premiums you can deduct; however, your income may reduce the deduction amount.

Tax savings on the gain when you sell. 

This one almost seems too good to be true. When you sell your home, the amount of your gain from the sale is tax-free if you meet the criteria. The rules are broken down into two categories: married and single. If you are married, you can earn up to $500,00 on the sale and you won’t have to pay tax on the earnings. If you are single, you can earn up to $250,000 without paying any federal tax. There’s only one catch: You have to own and occupy your home for at least two of the past five years.

One more thing.

Tax breaks are great.  But so is equity.  If you rent, you gain nothing except a roof over your head.  If you buy, you get to keep the roof.

Want to know more about the benefits of home ownership?  Let’s go look at houses and we’ll talk about it while you pick one out.

Home Prices Relative to Peak Prices During Bubble

Home prices are off anywhere from 10% to more than 60% in cities across the country. There is no reason to believe that prices were “fair” during the bubble as we have seen they were largely caused by loose and aggressive lending by banks and non-banks. But, it is always better to buy at a discount rather than at a historical peak, and these seem like awfully big discounts. And by my calculations, in most cities across the country, real prices adjusted for inflation have just about come into line with where prices were in 1997, before all this crazy bank lending started, so there should be little additional downside risk by buying today. There are still some neighborhoods across the country that have not seen very dramatic declines in price, many of them very wealthy and expensive enclaves, but given the distribution of incomes lately heavily weighed toward the wealthy, these areas may never see a really large home price decline.

Home Prices Relative to Construction Costs or Replacement Costs

Homes in many cities across the country are now selling for as little as $60 to $70 a square foot. Depending on the quality of construction and the underlying land value, this represents a 50% to 65% discount to the costs you would incur if you tried to build a similar home today in these cities. While there is no guarantee that there will be a strong rental market in the short run, in the long run it just seems to make sense to buy if you can acquire assets at half or less of the cost of building them.

Home Prices Relative to Incomes and Rents

During the peak years of the housing bubble, entire cities like San Diego were seeing their homes priced on average at 11 times the area’s median family income. Such prices financed primarily with debt are by definition unsustainable. Now, because banks have pulled back on their lending formulas, homes in many cities are changing hands at three to four times average family incomes. Similarly, at the peak, houses traded at such large multiples of possible rents that it made the projects uneconomic from the start. Now, with homes trading at more reasonable multiples of rents, houses and condos can be purchased that are immediately cash flow positive in year one and enjoy all the upside of any appreciation that will occur as inflation returns.

Home Prices in Real Terms, Not US Dollar Terms

We still talk about home prices in dollar terms, which is silly because the dollar has lost 98% of its purchasing power relative to a more stable asset like gold over the last fifty years. If instead of pricing houses in dollars, we look and see what a home would cost in ounces of gold, we see that houses today are a real bargain. As a matter of fact, this graph shows that average homes, measured in the number of gold ounces it would take to buy them are now trading at forty year historical lows. 

 

You might argue that this is because gold is priced highly today. I would argue that gold’s purchasing power has changed very little over time, it is the dollar that is depreciating and thus giving the appearance that the price of gold is rising. Actually, gold is quite stable relative to other assets and commodities and it is the dollar that is highly volatile and declining in value due to the US funding its deficits by printing dollars.

The Real Bubble - US Treasuries and Future Inflation

The real bubble out there is longer US Treasuries and 30-year fixed rate mortgages for homebuyers. With US debt equal to its GDP and equal to more than four times our government’s total tax revenues and with annual deficits of $1.3 trillion and growing, it is amazing to me that people will lend to the US for thirty years for less than 3.0% a year. Even more amazing is that individual homeowners can borrow at 4.0% (around 3% after tax) for thirty years on a fixed rate basis, some 300 basis points better than Italy which has a lot more people and makes much better shoes. Homes may not appreciate greatly in real terms over the next twenty years, but they don’t have to if inflation comes back, which is the only way the US and Europe are going to get out from under the huge debts on their countries and their banks. You may not make a lot in real terms on the house, but if inflation returns, you could make a killing on your investment as your thirty year debt becomes worth less and less in real terms. Run the numbers, but if inflation and interest rates go back to say, 7% to 8%, you could easily make eight to ten times your equity investment on the house because you locked in your borrowing costs and home appreciations historically have always correlated well with unanticipated inflation.

Conclusion

Run, do not walk to your neighborhood banker and either finance a new home purchase or take out the maximum amount of money he or she will lend you on a home equity loan and buy hard assets, not financial securities, with the money. When inflation comes roaring back the only perfect hedge is to be a borrower, not a lender or investor. Shakespeare said “Neither a borrower nor a lender be,” but they didn’t have huge government deficits and the risk of future inflation back in the Bard’s time.

This is Nick Gerisilo with the Gerisilo's Happy Home Team. Most times our blog and newsletter posts are specifically related to the topic of Real Estate. But I wanted to share with you some of the exceptional things my personal health and fitness coach, David Weaver, has done for me.

I had been working out fairly consistently for nearly 10 years before connecting with Inner Icon. I had always considered myself to be in pretty good shape, but I was starting to get very bored with working out. I was going to the gym about 4-5 times a week and adhering to the old school principles of bodybuilding.  Progress was slow and I wasn't really feeling challenged at all.

Fast forward to connecting with Inner Icon about 8 months ago and I actually look forward to working out. We are always doing something new... Everything we do pushes us to be our best and see what we are capable of. The programming is great because David and Wynter have you set clear and concise goals to work towards so you are not just wondering aimlessly. Progress has been awesome. I am the leanest I have been in years, and for several months I was only working out twice a week with David and I was still getting stronger and leaner than when I was going to the gym 4-5 times a week by myself.

They go beyond just the training in the gym as well. At Inner Icon, you will receive sound nutritional advice as well as special programming such as running seminars.

I am a raving fan of Inner Icon and suggest to everyone I meet to go check it out and dive in head first. You will never experience any training program better than this.

As a courtesy to me, David has agreed to spend one full hour with you free of charge and dispense his best advice – as well as provide you with a 50% off intro classes or an assessment.

There is absolutely no catch and there is no obligation to ever use his services. This is just something I persuaded David to do because I thought you could benefit from his guidance just like I have.

Just give David a call at 253-347-7402 to schedule your free consultation and assessment, and let him know I sent you to get your free hour. This offer expires March 15^th.

Here is a quick recap of the items mentioned in the video:

• Sales are up 8%  -  56,000 home sales in 2011, up from 52,000 home sales in 2010
• Inventory down 18%
• Of the homes sold last year, 9% were short sales and 28% were bank owned
• Median sales price in King County in 2011 was $311,000, down from $349,000 in 2010
• 3.75 months supply of inventory in King County which indicates a seller's market. A 6 month supply of inventory is considered to be a balance market which favors neither the buyer nor the seller. Above a 6 month supply of inventory indicates a buyer's market due to an oversaturation of inventory.

By Derek Kravitz, The Associated Press

WASHINGTON — The average rate on the 30-year fixed mortgage this week dropped to 3.94 percent, the same record low set in October.

Low rates offer a historic opportunity for those who can afford to buy or refinance. Still, many people either can’t take advantage of the record-low rates or have already done so.

The rate on the 30-year home loan fell from 3.99 percent the previous week, Freddie Mac said Thursday. This week’s 3.94 percent average matches the lowest on records dating to the 1950s.

The average on the 15-year fixed mortgage fell to 3.21 percent from 3.27 percent. That’s also a record.

Rates could fall further still. Many economists think the yield on the 10-year Treasury note could creep lower in 2012. Long-term mortgage rates tend to track the 10-year Treasury yield.

Should the Federal Reserve launch a new program of bond purchases in the coming months to try to help the economy, that could further drive down mortgage rates.

Mortgage applications have risen slightly in recent weeks but are up from extremely low levels, according to the Mortgage Bankers Association (MBA). Last week, refinancings rose more than 9 percent, while loan applications to buy homes fell more than 8 percent.

Some lenders have reported an increase in applications through the Obama administration’s refinancing program. That program was broadened in October to allow up to 1 million more homeowners to lower their mortgage payments. But the MBA said such government-assisted loans account for just a small portion of refinancing.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

So what about it?

The numbers don’t lie.  If you need to refinance your home - you could save hundreds of dollars on your house payment - now is the time to do it.  Or if you were sitting on the fence waiting to buy a home - jump!  Let me show you how to buy a house NOW!  CALL US! 425-413-6428

Here is a quick recap of the items discussed in the video:

• Inventory is shrinking. Fewest amount of new listings added over 10+ years!
• Limited supply of new construction homes. Less than 2,000 new construction lots in Puget Sound added in 2011 vs. over 14,000 new construction lots added in 2005
• January 2012 had the highest rate of sales since July 2007
• Interest rates at 200 year lows! 3.9% in 2011 vs. 4.9% in 2010
• 37% of sales are bank owned or short sales
• Significant backlog of bank owned and short sale homes that have not come to market yet
• Affordability has allowed buyers to own for less than rent
• Affordability has allowed investors to cash flow on rentals
• People that foreclosed on their homes or declared bankruptcy will qualify to buy again in the next 1-2 years
• Strong local economy. Tech jobs are growing 4 times faster than any other industry, and Seattle is leading the country in growth in this employment sector