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ARDELL's Seattle Area Real Estate Blog

Aug. 6, 2009 - Seattle Starter Homes

Starter Homes defined as $350,000 or less with at least 3 bedrooms and 1.5 baths.

BK = Bothell, Kenmore  

KBR = Kirkland, Bellevue and Redmond

03,14,15,25 = last two digits of zip codes in North Seattle

Because I am seeing more people coming out to buy a starter home for $350,000 or less, I thought it would be a good time to point out why the odds of getting one are greater...and where.

Worth noting, in the green and blue areas, townhomes are generally NOT included, in the orange area townhomes are generally included. That makes the liklihood of finding a true single family home with a yard in those areas of 98103, 98115, 98117, 98125 even smaller. So if you are on the Seattle side, heading up toward Shoreline or points south, will likely be necessary.

The good news is you are almost EIGHT times more likely to find one in Kirkland Bellevue and Redmond, than you were in 2007.

In Kenmore and Bothell, homes sold in 2009 for $350,000 or less, represented more than 1/3 of the total homes sold.

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Required Disclosure - The data used in this post is not compiled, verified or posted by The Northwest Multiple Listing Service. Hand calculated by ARDELL.

 

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Jan. 7, 2010 - RE: Seattle Starter Homes

Posted by Greg
I'm a 45 year old divorced father of four.  In January of 2006 I quit claimed all interest in the home my ex wife and I owned and lived in.  Three and one half years later, I was debating whether to renew my annual lease on an affordable apartment in a convenient location.  My landlord, a realtor, told me I'd be crazy NOT to take advantage of the new first time home buyer credit being offered.

I looked into it.  I clearly qualified as a first time home buyer.  I knew of a nice little house for sale in a neighborhood I liked.  I didn't have much money for a down payment though.  I heard of a local bank offering to lend downpayment money to borrowers qualifying for the first time home buyer credit.  Everything was lining up!  I got pre-qualified, made an offer, got it accepted, and scheduled a closing.

In June of 2009 I became a home owner.  I paid $65,000 for the house.  I borrowed the 10% downpayment in a balloon loan- to be paid when the tax credit came in 6 to 8 weeks.  This may seem like the kind of borrowing that got the country into trouble, but the house appraised well above the purchase price, and with the $6500 credit, I'd be in a great equity position in no time!

Two months later I'd heard nothing from the IRS.  I went online to check the status.  It showed nothing.  I called a toll-free number and was put on hold for twenty minutes!  You never get those minutes of your life back!

Three months later I called again.  I learned that the IRS was overwhelmed by applications for this first time home buyer credit.  The Economic Stimulus was doing some stimulating.  Things were backed up.  The balloon loan came due.  I extended it for another six weeks,  (at 13%)

Four months later I got a letter from the IRS.  My credit was denied.  Their records showed that I'd owned a home within the three year period preceding the purchase of the qualifying home.  Their records were wrong, but that didn't matter much.  the letter was final.  My only option, it stated, was to appeal in federal tax court!

What????  Once I settled down, I began researching.  I found phone numbers that got me directly to IRS agents. (See the page: IRS contacts)  I made calls and surprised a few bureaucrats.   I also filled out a form to procure an IRS tax advocate.  If you are having trouble getting your credit, click here to FILL OUT THIS FORM: !!

I got them to reopen my case.  I called my advocate every week.  I felt like, maybe she was helping- maybe she was pacifying be to get me off the phone. 

Six months later, I closed out the year with a report from the IRS.  The advocate had told me nothing of the report landing in my mail box- the report informing me that A. My First Time Home Buyer Credit was denied.  B.  A review of my 2008 tax filing revealed an underpayment of $1600.00!

Wow!  Both items were in error.  Try telling the IRS that!

I've since refinanced the balloon loan into a second mortgage.  Now I'm paying two loans and property taxes, and utilities, AND maintenance!  Thanks Obama.  You dangled a carrot.  I jumped from my affordable apartment.  The carrot got yanked away and here I am.  The irony of a first time home buyer home going into foreclosure is rich and tragic.

Have I quit fighting?  No Way! 

1.  I contacted my U.S. Congressional representative.  I encourage anyone having trouble of this sort to do the same.  After signing a release of information, the office of my congressman will be advocating for me.  A file stamped: CONGRESSIONAL INTEREST might just float to the top of the pile.

2.  I submitted paper copies of all documentation directly to the agent who signed the report, along with a letter summarizing my situation and itemizing the documents included.

3.  I submitted paper copies of all documentation directly to the taxpayer advocate assigned to my case.
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Jan. 7, 2010 - RE: Seattle Starter Homes

Posted by ARDELL DellaLoggia

Thank you for posting your story, Greg. We have had several conversations on Rain City Guide about the credit and I have been firmly against anyone using the credit to buy the house. I have had a couple of people spend their last dime on buying the house (their own dime) and then get the tax credit. But no one buying the house using the credit to qualify to buy.

Quitclaims are difficult in that they do not erase you from the mortgage on the house you "gave" in the divorce. I hope it works out for you.

The homebuyer credit never pretended to be a means by which people could buy a house. It is a reward of sorts, after the fact, for people who do buy them who qualify without it. I'm surprised you got a mortgage on that basis and that someone advanced the credit. 

Again  I appreciate your posting this as a warning to people who think the credit is how they will be able to buy. In the old days that came under the category of "don't count your chickens before they hatch".

Let us know how it turns out and hope it turns out well for you. It would seem to me that you are likely qualified for the credit. Quitclaims are often not recognized as final until the property is actually sold. I signed a quitclaim when I purchased a house for mortgage qualifying reasons, but still received half the proceeds after we divorced when it sold. So a quitclaim does not have the same clout as a transfer of deed upon sale of house. 

Often when a house is conveyed by quitclaim, the party has to re-sign a new quitclaim if the house is later sold. Often quitclaims are signed for administrative reasons, and are not viewed as your "selling your half of the house to your wife". If she had bought you out, you might have had a stronger claim. Still, I hope it works out for you.

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Jul. 27, 2010 - RE: Seattle Starter Homes

Posted by Greg Cook

Ardell, the rules are changing almost daily for financing first time homes. It's critical that first time home buyers develop a plan with their Realtor and Lender, then follow the plan.

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Jul. 27, 2010 - RE: Seattle Starter Homes

Posted by ARDELL DellaLoggia

 Greg,

Most of my clients want to find that info on the internet LONG before meeting a lender or a real estate broker. That is why I blog :)

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ARDELL DellaLoggia of Sound Realty on Seattle Real Estate process and market including Kirkland, Bellevue, Redmond, Green Lake and most areas around the top of Lake Washington North of Downtown Seattle. Phone: 206-910-1000 - Mailto:ARDELLd@gmail.com

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