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VA Raises Loan Limits

There is a slight increase in the VA loan limit for 2011 on purchase transactions to 100% for King, Pierce and Snohomish counties.

• 2010  = $481,250.00


• 2011  =  $500,000.00

New higher limits apply to loans closed Jan 1,2011 - September 30, 2011.  Kitsap Co. limit remains at $ 417,000.00

VA Raises Loan Limits

There is a slight increase in the VA loan limit for 2011 on purchase transactions to 100% for King, Pierce and Snohomish counties.

• 2010  = $481,250.00


• 2011  =  $500,000.00

New higher limits apply to loans closed Jan 1,2011 - September 30, 2011.  Kitsap Co. limit remains at $ 417,000.00

Assessed values, are they important?

Tax assessment values in the Puget Sound area counties  are lower for 2011 than 2010 for median priced homes by  $20-$30,000.00 or more.  Land assessments are similar. Assessment values on MLS listings may be out of date.  Home prices are driven mainly by the market comps  and not assessed value.

Seller's Home Pre-Listing Inspection

Sellers who want to be fully prepared to market their home may want to include a pre-listing inspection.  This is particularly beneficial to owners of older homes and homes that have had multiple owners.  A pre-listing inspection will give the seller important information as to the real condition of the home and what a buyer might potentially discover upon inspection that could devalue the property or terminate the sale.  Surprise defects and requests for expensive repairs prior to closing or something that doesn't pass an appraiser's inspection are no fun for the seller and creates concern and worry on the part of the buyer.    Inspection reports will contain all the noted defects from a missing light bulb to a furnace or roof that needs replacing.  These are items the seller can take care of before listing the property and will be able to assure a buyer they are getting a well maintained home in good condition.

What are Buyer’s Closing Costs? Who Pays?

What are the Buyer's costs?

Buyers and Seller's of property both have what is termed " customary costs " incurred for the transaction.  The buyer's customary costs are a  50/50 split of the escrow fee, (except for the portion required to be paid by the seller in an FHA or VA transaction ), prorated taxes, HOA dues if applicable, pre-paid interest and insurance premiums.  Additionally,  buyer's costs also include Loan fees, appraisal charges and title insurance costs for the lender.   These costs combined are what make up the buyer's closing costs and can add up to 3.0% - 3.5% of the purchase price for an FHA, VA or USDA loan or other special program loan.    ( Ex: up to $ 7500.00  on a $200,000.00 purchase ).  Buyer closing costs are generally lower when using a Conventional Loan and lowest for a cash purchase.

Who Should Pay?

Buyer's closing costs are just that, the buyer's costs.  In contrast, it has become almost a custom in our northwest area market for an offer to purchase to include a request for the seller to contribute funds to the buyer's costs to close.   In some cases the seller will include an offer to pay some of the buyer's closing costs pre-calculated into the listing price.    When making an offer to purchase that includes a request for buyer closing costs, keep in mind that the seller has closing costs as well ( see What are Seller's Closing Costs? on this Blog ) and work with your Realtor to structure an offer that can be accepted by the seller.   At times the price of the property may need to be raised to accommodate the buyer's costs.

Are There Advantages to Paying My Own Closing Costs?

Yes, for many buyers, closing costs are a deduction on your tax return.  If you have funds to close, it may be to your advantage to pay at least some or all of your own closing costs and negotiate a lower price for the property.   Seller's are more willing or able to accept a lower selling price if the offer does not include a seller contribution to buyer closing costs.

What are Seller's Closing Costs?

Sellers should consider closing costs and  bottom line ( net proceeds ) when pricing their home. Ask your Realtor to provide you with a net proceeds statement for possible selling price scenarios prior to listing and for any offer to purchase during the listing period.

Customary closing costs for sellers include:

• Half of the escrow fee (for some programs, the seller pays all of the escrow fee)


• Title insurance for the buyer


• Real estate brokerage fees ( negotiable, but generally 5-6% of selling price )


• Misc recording fees


• Washington State  real estate excise tax.  In King, Pierce and Kitsap counties in the excise tax rate is 1.78% of the contracted selling price.

Sellers hiring a brokerage to list and sell their properties should estimate their closing costs to be 8-9% of the contracted selling price.   Delinquent taxes or unpaid assessments due at closing are not included in this estimate.  FSBO ( Seller's selling their own properties )  should expect their customary costs of 3.-3.5% of the contracted selling price.

Realtors have seen over time a growing expectation on the part of buyers that the seller will pay all or part of the buyer's closing costs.  This can be expensive for buyers.  When pricing your home to sell,  keep in mind that you will most likely receive a request for a closing cost allowance or specific dollar amount to be paid for the buyer within an offer to purchase.   Expect to receive a request of up to  3% of the selling price to be contributed to the buyer's closing costs.  This is most common when the buyer is purchasing with a VA, FHA or USDA loan.  Conventional and cash buyer's closing costs are lower overall and they generally request a smaller amount or nothing at all.   It is in the seller's best interest to keep the door open and offer your home for sale to buyers using all of the buyer programs your property will qualify for.   Your Realtor will advise you how to adjust price to accommodate buyer closing costs within the home's value.

Why should I buy a home using a VA loan?

Why a VA loan?
The more you know about our home loan programs, the more you will realize how little “red tape” there really is in getting a VA loan. VA loans are often made without any down payment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran’s certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan.



What is a VA guaranteed loan?
VA’s guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn’t previously used the benefit may be able to obtain a VA loan. Qualified veterans and active duty military can obtain a loan of up to $417,000, or $625,500 in high-cost areas, with no money down. The amount depends on the borrower’s income level and the appraised value of the property. Let a knowledgeable, courteous VA loan specialist help you to maximize your VA benefits today!

Shane McGraw veteran and VA loan specialist at Legacy Group,  is happy to talk with you and answer your questions about VA loans.   Call him at ( 360 ) 698 6471.

Contributed by: www.ShaneMcGraw.com

Are You Eligible for a VA Loan?

Almost 30 million veterans and service personnel are eligible for VA financing. Even though many of that 30 million have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.

• Veterans with active duty service, that was not dishonorable, during World War II and later periods are eligible for VA loan benefits.


• World War II (September 16, 1940 to July 25, 1947)


• Korean conflict (June 27, 1950 to January 31, 1955)


• Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days’ service.


• Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days’ active service.


• Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16, 1981, must in most cases have served at least 2 years.


• Persian Gulf Conflict—Generally, reservists and National Guard members who were activated on or after August 2, 1990, served at least 90 days and were discharged are eligible.


• Selective Reserve—Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible. Expanded eligibility for Reserves and National Guard individuals will expire October 28, 1999. Contact the local VA office to find out what is needed to establish eligibility. Reservists will pay a slightly higher funding fee than regular veterans.


• Information contributed by Shane McGraw of Legacy Group Lending.

Shane McGraw, veteran and VA loan specialist is happy to answer your questions about VA eligibility and your personal VA loan program.   Give him a call.. he does the rest.   Phone contacts: 360 698 6471  or 360 698 6440  Email:  ShaneM@LegacyG.com

Your Pet's Moving Day

Your new house is almost closed and you are ready to move. Pets can become stressed and upset  during this time and a few tips can make their move  a smooth transition.

1.  Your veterinarian will be a  source for medications or sedations that may be required for air or car  travel.  It's a good idea to have your pet's vaccination record with you and all shots and records current.

2.  It's advised to feed your dog at least four hours prior to travel.  Adult dogs and puppies can get car sick.

3.  If possible, stop along with way frequently for short play/exercise/potty breaks and offer water.

4. Bring familiar bedding, toys and food.  Try  to set them up in the new house right away to make your pet feel more secure in the new environment.   If you pet sleeps in your bedroom, set up there and close to something familiar.  Serve him/her the same foods as previously.  Wait  to introduce new or different foods.   It may take some time for your pet to adjust to eating in the new home.  Be sure your pet has access to plenty of water.

5.  Spend a little extra time at play with your pet and resume normal walk and play times as soon as possible.   Your pet will feel at home much quicker and appreciate the attention.

6. Be prepared;  locate veterinarian and pet emergency services just in case. Emergencies and accidents are more likely to happen when your pet is stressed.

2010 - Not your Grandfather's Real Estate Market !

Welcome to 2010 and the best home buyer's opportunity we are likely to see in your lifetime and mine.  Thanks to the information age we have been flooded with advice both good and not so good.  Consider this:

• Despite rumors to the contrary, banks and mortgage companies are open for business and are  lending money to qualified buyers.  Although lending guidelines have tightened,  loans are being funded in record numbers.  Lenders are hiring more workers to underwrite and process loans !


• Zero and low down financing programs are available.


• Home prices are much lower. Mortgage interest rates are at historic lows which should put a  smile on your face and give you bragging rights at social events for the rest of your life.


• First time buyers in particular can jump in the shallow water now  and ride the wave upward.


• Experts recently estimated ( and announced on K5 News ) we will see a 30 - 40% increase in property values by 2014 here in the Pierce, Kitsap, King County region.

Tacoma 98404

Tacoma's downtown and waterfront has experienced unparalleled growth in new  development over the last 5 years.  High end condos, hotels and restaurants have emerged, invigorating the city facade.   Theatre and Arts districts evolved from the addition of the world class Glass Museum, catering to the artist community with studios and lofts.  The University of Washington Tacoma campus is located in this area housed in beautifully restored historic style buildings.  Young people are flocking downtown, eager to experience trendy new cafes and night spots.  Tacoma 98404, an affordable downtown experience,  just 40 minutes from Seattle.