The Federal Housing Administration (FHA) has recently announced that sometime this summer they will halve the amount a seller can offer in concessions to a Tri-Cities WA home buyer for things like renovations, or some of the services and taxes associated with a home purchase from the current 6% of the home’s purchase amount to only 3%.
This “Seller Concession” can be used for a myriad of things by the buyer, including loan origination and local transfer fees, appraisals, inspections, closing and escrow costs, among others — though not the down payment.
Since conforming loans through Fannie Mae and Freddie Mac already limited this figure to 3%, this feature of an FHA loan often made the choice of going with an FHA loan a no-brainer. Let’s break it down.
If you were buying a $200,000 Kennewick WA, home under the current rule your Realtor could write-up your real estate contract so that the seller would pay at settlement all your closing costs PLUS some of the needed repairs to the house, up to 6%, or $12,000. On a $400,000 house the number shoots up to $24,000! That’s a big, BIG number, especially when you’ve had to save up the 3.5% down payment amount in the first place. After FHA announces the change, your $12,000 available to you on your $200,000 home collapses to $6,000.
Why is the timing of this so critical? Because this announcement could come any day now.
FHA said the change would occur in “early summer” after publication of a Federal Register notice and a public comment period. But Lemar C. Wooley, an FHA spokesman, confirmed May 19 that there has been no Federal Register announcement, and public comment periods frequently run for 60 days, followed by a review period.
The 6% Seller concessions are still allowable- at least until FHA says they’re not. Here’s the real kicker to this:
THE CONCESSIONS ARE ALLOWABLE BY FHA UP TO THE DATE OF THE CLOSING OF A PURCHASE, NOT AT IT’S INITIAL AGREEMENT DATE.
That means if you need that 6% to make your home purchase work, you’d better get it under contract and closed very soon, or lose out on 3% of your concession amount. Also, if you are planning to put your house on the market, this is just as important. Being able to cover closing costs as well as, say, new carpet throughout the house, is a BIG attraction to your home’s being able to sell in a timely manner and for the price you want.
If you are looking to buy or sell a home in the next 60-90 days, contact Aaron at Desert Hills Realty (509)554-6585 and let him use this and other strategies to successfully buy or sell your home.
I'm often asked, during the initial presentation for a home listing, why I don't have a strong marketing presence with the local paper in the Tri Cities Washington.
The reason is because advertising in the paper is a great way for me to get buyer clients for other homes, but not to sell your home.
I can say this because statistics bear this out.
The vast majority (87%) of recent home buyers in the US say they used the internet as an information resource during their home-buying process, with nearly one-third reporting they first learned about their newly purchased home from an online source, according to a study from the National Association of Realtors (NAR).
The poll went further, and asked where they first learned about the home they purchased, and 34% of buyers said a real-estate agent; 32% cited the internet; 15% said from yard signs; 7% said from a friend, neighbor or relative; 7% said home builders; 3% said from a print or newspaper ad; 2% learned directly from the seller; and 1% from a home book or magazine.
It is imperative that the listing agent one chooses for their home's sale is both aware of these statistics as well as capable of using this information for your benefit. This means you should choose a listing agent with an aggressive internet marketing plan, one that incorporates multiple online channels.
Does the agent you are interviewing do the following?
As we can see from the poll statistics, concentrating the marketing of your home on internet outlets is critical. Most real estate agents will still utilize the traditional methods of yard signs, flyers, etc., but in the new market reality, choosing an agent who is "internet savvy" could mean the difference in getting a full-price offer on your home, and more quickly, than relying only on the traditional methods.
For More information on selling or buying your home in the Tri City real estate market, please contact Aaron Johnson the Tri City Home Team.
Many retirees, when preparing for the beginning of the next phase of their lives, begin the process of retirement by deciding where they will live. Do they want to stay where they've had their careers, near established friends, close to the kids and grandkids or move closer to them? Is temperate climate important, or do they plan on travelling a lot?
For many, the most important question really falls to one. How do we stretch our budget to last the rest of our sunset years?
If the last question is the most important, yet you don't want to settle for a one-bedroom walkup in a mid-west suburb, then the latest issue of US News and World Report is a good guide. This issue offers the report "10 Affordable Places to Retire on the Water" and the Tri City Home Team is pleased once again to find a national periodical that touts our area in a top ten list. Affordability is one thing, but quality of life has to be a part of the equation when decided where to relocate- whether it is for a new job or retirement.
When the article above discusses water element, it mentions Columbia River Journeys and the Hanford Reach National Monument jet-boat tour. This is one of many activities centered around our area's "three rivers" (another much-used moniker for our area). The Yakima and Snake rivers all terminate into the Columbia river here at the Tri Cities.
The area is a bee-hive of aquatic activity. Boating for pleasure with friends and family, water skiing and wakeboarding, kayaking and canoeing, fishing for steelhead or bass, or just strolling along the walk and bike trail (one of the longest contiguous trails in the US) along the Columbia are other activities enjoyed by residents and visitors alike.
Since the Tri Cities of Washington enjoy an average of over 300 days per year of sunshine, these activities are enjoyed much of the year.
When our area's amenities are combined with the low cost of living, it's pretty easy to see why we've become a real mecca for retirees. It only follows that national magazines are constantly pointing this out, year after year.
For more information about our wonderful Tri Cities WA of Richland, Kennewick & Pasco, please contact me at the Tri City Home Team! I love it here...
According to all sources in the Tri Cities area of Washington state, the area’s job growth continues to defy trends across the rest of the country.
Since May 2008, the Tri City area has gained 500 jobs in professional and business services, education and health services, leisure, hospitality and food services according to Dean Schau, the regional labor economist. Since this April, an additional 1200 jobs have been added, bringing the total nonfarm jobs to 95,200 at the end of May.
Federal stimulus money from the American Recovery and Reinvestment Act (ARRA) has been the driving force behind this growth of course, with almost $2 billion earmarked for the Hanford site and millions more towards transportation and technology projects. Lest anyone believe this is a one-time dump of funds, it is actually a slower trickle. The output will carry over the next 30 months.
“If you create 1,000 jobs, you’ll have 1,200 workers come in. That’s been like that for years” Schau went on to say. Gary Petersen, Tri-Cities Industrial Development Council Vice-President reinforced this when he said that each Hanford job creates about 1.8 other jobs in the community.
In April, Hanford contractor CH2M Hill held a job fair along with 11 subcontractors in Richland, WA for an initial 300 job openings. There were over 3500 resumes collected. 
The stimulus funds from ARRA is expected to create or save 4,000 jobs at the Hanford site and create 7,200 other jobs in the community. Since CH2M Hill is required by federal rulings to subcontract out 40 percent of their jobs, and most of those jobs will be filled by locally-owned companies, “That money will have a real impact on the community, not just at the site” Petersen said.
The unemployment rate in Benton and Franklin counties dropped from 7.7 percent in April to 7.2 percent in May. In contrast, Washington state’s unemployment rate increased to 9.4 percent in May from the 9 percent April rate.
In addition, corporate companies are beginning to notice the area, which will further diversify the economic base of the Tri Cities. Cascade Natural Gas recently announced it is moving its main office to the Tri Cities from Seattle.
All these new jobs will have a heavy impact on the area’s housing market- both home sales and short-term housing such as apartments and RV park rentals.
The April apartment survey conducted by Crown Property Management showed all three cities, Richland, Kennewick and Pasco, with an occupancy rate topping 96%, and the local RV parks are near capacity.
The local real estate market has been severely tested. With builders’ credit lines tied up in spec homes, the demand for new construction has been unmet, resulting in a run on resale homes.
Members of the Tri City Home Team, over the past 4 weeks, have seen many of the resale home sales involved in multiple-offer situations, and their home listings have experienced a sharp spike in the number of showings.
“If they’ve been sitting on the fence up till now, they’d better get (their) homes listed now while we’re seeing this seller’s market” said Daryl Myers with the Tri City Home Team.
With the onset of spring the Tri Cities WA real estate market has begun to see signs of heating up. But for those still on the sidelines, I thought it would be important to see just what the new $8000 First-time home buyer tax credit can do.
Many people have asked emailed me at the Tri City Home Team or called and asked about the program. Quite a few wanted to know how they could use it for a down payment. Well, the answer is, you can't. BUT, I do have a slick way of accessing the credit after you've purchased your home- and I mean getting your hands on it within an estimated 10-12 weeks after you've closed on your new Tri City home.
By now, most of us have filed our 2008 tax returns and, for many of us, have written a check to the man in the red,white and blue top hat. 
So here's a strategy for getting the credit BEFORE next year.
The 1st thing to do is to call us here at the Tri City Home Team and let's work together to find you a new home you'll want to purchase. Right now is a great time to get an FHA loan for your new home, and they only require a 3% down payment! If you are looking at a purchase price of $200,000 you'll only need $6000 for your down payment. And many, many of the Tri City homes being purchased are negotiating to have the seller's cover all, or most, of your closing costs.
The 2nd step is to go through the purchase steps and close on your new home!
Now--- You go to your tax-preparer with your HUD-1 Settlement Statement and have them file an AMENDED 2008 tax return, claiming your First-time Home Buyer Tax Credit, and 10-12 weeks later receive from the man in the top hat a refund check for your tax credit amount! Then send me a box of Campfire Girls Thin Mints as a thank you! Take that money and go put it into a safe and secure investment account- do not go buy jet ski's, do not pass GO, etc.
And welcome to homeownership and all the pride of ownership and tax benefits that comes with it.
Below is a matrix of the program, and to see a video explaining it, please go HERE to the Tri City Home Team page regarding the program. After that, please visit the front page and try our interactive, map-based Tri City homes search engine- you'll find it a better way to look for your new home!
The Tri City Home Team is Realtors who all bring a diverse background in real estate, who've come together to combine their different strengths to offer their clients the finest service possible.
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