It's getting a bit harder for first time buyers to get a real deal on Seattle homes these days. If my personal anecdotes relate at all to the general real estate market in Seattle, there's a real floor being created in prices for entry-level homes. My first time buyer clients are finding that buying a home isn't as easy as making a low-ball offer and waiting for the transaction to close. In the last few weeks:

Buyer 1 tried to purchase 2 new construction condos in University District ($200k) and lost out on both to full price offers the same weekend. This developer doesn't need to negotiate, as sales are coming fast and all at the list price. This same buyer then purchased a new construction condo in Capitol Hill ($270k) at about an 8% discount from list price.

Buyer 2 made a nearly-full price offer on a house in Mt Baker ($250k), only to have another buyer pay full list price (after 4 months on the market) the same weekend.

Buyer 3 purchased a new construction condo in South Lake Union ($400k) at the list price with some financing concessions, as four other lofts in the building sold that same weekend, all at the full listing price.

Buyer 4 found 2 bank-owned condos in Edmonds and Lynnwood ($150k), was too busy with work to write an offer that day, and they were both gone the next day to full-price buyers. Currently has a full-price offer out on a bank-owned condo.

Buyer 5 made an offer of 2% below list price on a small home in Tukwila ($250k), while a competing offer was written above the list price. This home was on the market for 4 months, with no previous price reductions. Some buyers are getting the bidding war mentality.

Buyer 6 just got a contract signed around on a bank-owned home in SeaTac with a nice lake view ($250k). It took a month of negotiation, but this buyer is getting a 10% discount off the list price when we first made contact with the bank.

There are still some deals to be had, so there's no reason to be frenzied about buying a home. First time buyers should get serious, though, if they're trying to meet the November 30 deadline for the tax credit. Short sales will likely not happen in that time frame. Bank-owned homes are still possible, but they need to be under contract in the next few weeks. There will be a surge of home sales in the next month if the tax credit isn't extended, so get ready to make a strong offer and get a transaction moving.

Tax credit extension? Seattle waterfront homes could benefit

There's a big push by lawmakers, real estate professionals, and lobbying groups to extend the current tax credit for home buyers. First time home buyers can currently get an $8000 tax credit for buying a primary home. This credit lasts through November 30, with all transactions needing to be closed by that date to qualify.

There are a number of proposals from Republican and Democrat legislators to extend and even expand the tax credit. While some proposals are for a 6 to 12 month extension, the expanded monetary guidelines could have even bigger ramifications. One proposal is to increase the maximum tax credit from $8,000 to $15,000. This would make a real difference in higher-value markets like Seattle's waterfront homes.

Of course, nothing is certain in politics. There are many more high-profile budget issues at hand, so it's hard to say if these measure will get the attention they need. The only sure thing right now is that the current credit will be in effect through November 30.

3 Months Left - Will $8000 Tax Credit Get an Extension?

The federal government's $8000 tax credit for first time home buyers expires November 30. A buyer must have purchased a home by then, and most transactions take at least 30 days, so buyers really need to have that home under contract in October. That gives us just 3 months to find a home, write an offer, negotiate, and get that home mutual acceptance before November.

There have been proposals to extend the tax credit in congress, but nothing has taken hold yet. The theory I'm hearing is that the decision will be made at the last second, so buyers will have to jump on board now or take their chances down the road with the federal government.We're finding many buyers who qualify for the $8000 tax credit who aren't your traditional "first time buyers". Anyone who hasn't owned a home for the last 36 months qualifies, so we have repeat owners getting the credit now. Low prices and interest rates are making home ownership more attractive than ever.

First Time Buyer Tax Credit Details - Seattle Homes For Sale

Sam DeBord and Brian Wiegand - SeattleHome.com - Seattle Real Estate Brokers

Washington moves to make First Time Buyer Loans

First-time home buyers in Seattle and the state of Washington may be able to get that $8,000 tax credit earlier than expected. The WA Legislature has approved a plan to fund short-term loans to buyers and advance them the $8,000 at the time of their home purchase's closing. The loan would be repayable after receiving the tax credit at the end of the year.

From the Washington Realtors' press release:

The program authorizes the state treasurer to deposit $25 million in a financial institution, which would then open a line of credit for the Washington State Housing Finance Commission (HFC). The HFC would use that credit line to pay for down payment loans to first-time buyers. Buyers repay the advance loan after filing for and receiving the tax credit.