Windermere Woodinville Blog

Sunnier Days Ahead

With unemployment reaching new highs, it is no surprise that Americans are nervous about their futures.  Over the last twelve months, consumer confidence dipped as consumers worried about keeping their jobs and paying their mortgages.

At the same time, however, purchasing power is actually increasing for some Americans.  Consider the facts:

• The price of crude oil has declined 71 percent from July 2008 to February 2009 (from $133/bbl to $33/bbl), and retail gas prices have dropped 53 percent.  To fulfill annual driving needs in July 2008, consumers were spending an average of $3,045 at $4.06 a gallon; In February 2009, that figure declined to $1,440 at $1.92 a gallon - a savings of $1,605 per year.  And with the average American household owning two cars, the potential savings are even higher.

• Food inflation has moderated since July 2008 to current levels of 2 percent.

• While a great deal of attention has been focused on those people who had subprime mortgages and are now experiencing foreclosures on their homes, 30-year fixed mortgage rates have declined 1.30 points during the same period, also resulting in potential savings.

• Tax credits in the stimulus legislation passed by Congress will put an additional $672 in the average worker’s pocket.

Combine these facts with a growing sense that we may be seeing the first signs of a bottoming out in the housing market and many Americans will be well-positioned to resume their spending. 

Thanks to James Russo, Vice President, Marketing, Nielsen as posted on March 19th in Consumer, Nielsen News.

The Washington State Distressed Property Law has been revised, effective now .  Agents in the State of Washington breath a sigh of relief. 

Under the former Distressed Property Law, agents worried about Consumer Protection law suits.  Swept up in the definition section of the Law, agents had been forced to use many extra forms and - some suspect - avoid work that has helped increase the inventory of foreclosed properties, unbalancing the market and driving down home values.

That’s over.  For all intents-and-purposes professional agents are out of the distressed property dance-of-doubt arena.  Real estate transaction work has been simplified for a change, not made more complex.

There is now a general exemption for all real estate agents and brokers so long as they don’t participate in a distressed home conveyance (essentially a scam transaction.) This will be easy to avoid.  Few if any agents in our area, working in any brokerage, every crossed that line.

Here are the new guidelines.

Buyers who purchase or close a transaction within 20 days of a foreclosure sale will not be distressed home consultants so long as seller is represented by a lawyer or real estate agent/broker.

In the case of delayed possession, the possession can be for no more than 20 days and must be for the purpose of allowing seller to relocate to a new residence, and again, seller must be represented.

The Washington statewide listing agreements have been revised to eliminate language relative to whether seller is a distressed seller and to add a paragraph stating that listing agent will not participate in a distressed home conveyance.

The “DH” listing agreements have been eliminated altogether. There is no need to have sellers sign a revised listing agreement if sellers are already subject to a listing agreement.

The Buyer Agency Forms (41A and B) have been revised to include a paragraph stating that buyer’s agent will not participate in a distressed home conveyance. Again, there is no need to have buyers sign this new form if buyers have already signed a buyer agency agreement.

Forms 22NFW and 22FSBO have been combined into a single form (22 FSBO) and should be used when seller is unrepresented by either a lawyer or a real estate agent/broker and when a represented seller intends to delay possession for more than 20 days following closing.

Consult your broker and attorney. There are few other minor changes that do effect practice.

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Thanks for considering our blog and thanks to Realtor Magazine.

The Recovery and Reinvestment Act of 2009 has several lesser known provisions that will benefit home
buyers and the housing market. The legislation:

• Will help home buyers in high-cost markets by extending the FHA, Fannie Mae and Freddie Mac loan limit of $729,750 through the end of 2009.

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The King County Assessor revalues all property in King County each year, notifying property owners of their new value determinations by mail on Official Property Value Notice cards. The Assessor typically begins sending out these revaluation cards in April, finishing sometime in August.

These new valuations will be the basis for the amount of taxes due the following year. Property owners who believe the new assessed value of their property exceeds its fair market value have the opportunity to appeal each year following receipt of the Assessor’s revaluation notice by timely filing a petition to the King County Board of Equalization (BOE).

Petitions must be received by the Board on or before July 1st of the assessment year or within sixty (60)
calendar days after the date listed on the Assessor’s value change notice – whichever date is later. If
submitted by mail, petitions must be postmarked by the post office no later than the filing deadline.

For more info contact:

King County:

The Board of Equalization or the Department of Assessments.
Board of Equalization Department of Assessments

www.kingcounty.gov/appeals

www.kingcounty.gov/assessor

(206) 296-3496 (206) 296-7300

500 4th Ave. Room 510, Seattle 500 4th Ave. Suite ADM-AS-0708, Seattle

Snohomish County:

Board of Equalization Assessor’s Office

(425) 388-3407 (425) 388-3433

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First-time home buyers purchasing any kind of home new or resale– are eligible for a tax credit.

• The tax credit is equal to 10% of the home’s purchase price up to a maximum of $8,000.

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Thanks to attorney Annie Fitzsimmons, the Legal Hotline Attorney with Washington Realtors(R), we touch upon some myths that persist with real estate transactional work.   Ms. Fitzsimmons presented these points in an article in the May/April 2009 edition of the Washington Realtor(R) News.  We have  abridged and, in part, paraphrased.

Myth Number 1:  A short sale is always better for a seller than a foreclosure.  If seller must carry unsecured debt and pay income tax on the released debt, the short sale may not have been the best choice.

Myth Number 2: REPOs are exempt from the Seller Disclosure Act.   Sellers who own property because they took title to the property either through a foreclosure sale or deed in lieu of foreclosure are not exempt.

Myth Number 3:  FHA & VA REPOs are exempt from LBP (lead based paint warning) Requirements.  They are not.

Myth Number 4: The buyer’s financing contingency expired.  Using the statewide financing contingency Form 22A, the buyer’s financing contingency does not expire unless the seller forces buyer to waive by sending out a termination.

Myth Number 5:  There is a statutory warranty for new construction.  There is no such thing a one-year, statutory warranty that protects buyer against defective construction.  The 2009 Washington Legislature is considering a law that would establish some form of statutory warranty for new construction.  Stay tuned.

Myth Number 6:  Buyer has no obligation to disclose the source of down payment.   If buyer has sufficient cash or liquid resources to pay the down payment and all required closing costs, then absent a request from the seller, buyer has not obligation to reveal the source of the down payment.  Buy if buyer is relying on gift funds, the sale of a house, the extension of a line of credit or any other source of contingent funds, buyer must disclose  this fact to the seller.

Thanks for considering this blog and thanks to attorney Annie Fitzsimmons.

Talk to your stock broker and you may hear some reassuring talk about stock prices always rising over time, despite periodic bear markets. AllianceBernstein has such thoughts.  This is Bernstein’s chart, above.

The Great Depression differed from other crises in that it featured an adherence to the gold standard.  The more quickly countries left the gold standard in the 1930s, the more quickly their economies reflated. Under the gold standard, governments were virtually powerless to influence the money supply and therefore to take any action that would reflate their ailing economies.

Today, governments strongly influence the money supply, says Bernstein, so they “view a repeat of this aspect of the Great Depression as virtual impossibility.”

That’s good.

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