Real Estate Information

Realty Check with Diana Olick - Published Oct 29th 2009

For those of you keeping score on the first time home buyer tax credit extension, here is the latest:

— The tax credit would be $8,000 for first-time home buyers and $6,500 for move-up buyers (from December 1, 2009 to April 30, 2010).

— Move-up buyers will be eligible, so long as the home they are leaving has been used as their principal residence for 5 years or more. 

— The tax credit would sunset on April 30, 2010. However, there would a binding contract rule that will permit those with contracts as of April 30th to qualify for the credit so long as they complete the transaction within 60 days.

— The income limits for both first-time home buyers and move-up buyers would be $125,000 for single return and $225,000 joint return.

— Cost of the home may not exceed $800,000 to be eligible.

— For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return.

— Home buyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date.

— The amendment includes a military waiver provision, meaning the recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the home buyer tax credit.

— The amendment also includes anti-fraud language that provides math authority to the IRS to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older as well as requiring a HUD-1 settlement statement to be attached when claiming the credit. 

AND supposedly, sometime after 11a, the Treasury and HUD Secretaries will officially call on Congress to extend the credit and the higher conforming loan limits.

Deadline is November 30th 2009

http://www.youtube.com/napstv#p/a

http://today.msnbc.msn.com/id/26184891/vp/33191501#33191501

Let Uncle Sam Help Pay for Energy Efficiency Improvements

The $8,000 New Home Buyer Tax Credit (along with the Cash-for-Clunkers) may have dominated the headlines recently, but some energy efficiency Tax Credits offered by the federal government could be even more useful for the average homeowner. You may be eligible for a tax credit equal to 30 percent of the cost of materials (up to $1,500) for certain products purchased between January 1, 2009 and December 31st, 2010.

Below are the rating specifications for eligible energy efficiency products:

Have you ever wondered what the median house price is in your area? What is the average sales price within your township?  How many homes have sold recently?  As a home owner you should be aware of what is happening around you and what's going on in your community.  Although the media can tell you overall conditions on a National level, WE can tell you what's happening in YOUR neighborhood.  Don't hestitate to call us for any information deemed necessary for you to make sound judgement within today's market.

Call Linda 231 633 2202     Call Julia 231 534 4600

NAR Applauds FHA Home Modification Program 

On July 30, 2009, the Federal Housing Administration (FHA) announced in Mortgagee Letter 2009-23, FHA's Home Affordable Modification Loss Mitigation Option, to assist FHA borrowers under the Making Home Affordable Program. The new FHA-Home Affordable Mortgage Program (FHA-HAMP) allows borrowers with a FHA loan currently in default to use a partial claim of up to 30 percent of the unpaid principal combined with a loan modification. The objective is to help borrowers who are in default to modify their mortgage and create an affordable payment. The program becomes effective on August 15, 2009. 

NAR applauds the new program as another tool in addressing the current real estate crisis. NAR President Charles McMillan said "these changes expand the Obama administration's Making Home Affordable Loan Modification Program to include FHA borrowers, and REALTORS® are optimistic that this will have positive implications for thousands of homeowners. Helping more families stay current on their mortgage and remain in their homes will reduce the impact of foreclosures on families and communities."

Here's an informative clip from our local news.  Sales are moving in the right direction. 

http://www.upnorthlive.com/news/video.aspx?id=329307

Decision Time Draws Near for First Time Buyer's Credit

While the economy continues to show signs of improvement and many housing markets are beginning to heat up, scores of would-be buyers are still waiting on the sidelines for further positive housing trends. But for first-time buyers, time is running short on the federal government's $8,000 tax credit.

Though the official expiration date of the credit is December 1, in reality on-the-fence buyers will need to make a decision one way or the other fairly soon. The reason: in order to qualify for the credit, the home purchase must close by December 1st. Merely having loan approval, an accepted offer or a signed contract won't be enough to qualify for the Housing and Economic Recovery Act

Decision-Making Timeline - While each transaction is unique, closing a real estate deal is no speedy matter. On average, closing takes place 45 to 60 days after the date that the contract is signed. In order to meet the December 1st deadline, this would mean having a signing date in late September or early October. Those who consider the tax credit an important incentive but are still unsure about entering the market will need to make a decision one way or another before many more summer days pass.

To have any chance at finding a home and having an offer accepted by early October, buyers will want to wade into the home buying process right away. The immediate steps include making a final list of desired home attributes, scouting favorite neighborhoods and areas, contacting a bank for mortgage pre-approval and beginning the home search process online.

Potential for Delays - Buying a home is a complicated process, and it is not unusual for purchases involving first-time buyers to take slightly longer than those involving experienced buyers. Some of the delays that first-time buyers may face over the coming months:

Competition with Other Buyers
While home may be selling at a lower rate than in years past, in many areas changes in inventory have created extremely competitive buying environments. Foreclosures or other homes with greatly lowered asking prices are particularly sought after, and in many cases investors are very active in the marketplace.

Disclosures & Contingencies The seller is obligated to disclose any material facts about the property, including any property defects or any lawsuits regarding claim to ownership on the property. Disclosures can stall negotiations and delay the contract signing depending on their nature and severity. Contingencies (written clauses in the sales contract that give protection to both the buyer and the seller of a home) can also result in some delay in negotiation, particularly if the contingency requires the seller to make specific repairs.

Appraisal
The lender will arrange for appraisal of the property, which will include a thorough inspection of the home's interior and exterior. The appraiser's report will describe the physical characteristics of the property and comparable property values will be used to determine the value of the property. If the appraisal of the home's value is lower than the agreed upon sales price, the buyer's chance of loan approval can be in jeopardy. In addition, recently added rules for appraisers have been causing some delays based upon anecdotal evidence.

Loan Approval
While interest rates remain advantageous for buyers, lenders are being much more fastidious during the approval process. Obtaining pre-approval can help prevent many delays.

The Holiday Season
Buyers who submit an offer in mid-fall may likely run into another roadblock to a pre-December 1st closing date: the approaching holiday season. Closing a real estate sale requires the work and attention of a number of professionals; from real estate agents to attorneys to bankers. Like many Americans, it is not uncommon for individuals in these fields to use up vacation time in the last few weeks of November. Securing a closing date during Thanksgiving week may be something approaching miraculous.

Additional Delays for Short Sales and Foreclosures
Buyers who make an offer on a short sale property or bank-owned foreclosure may find that it takes a significantly longer time to receive a reply than expected. Overall, buying these types of properties is a longer process than buying homes listed on the market by individual owners.

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We are often asked if it's appropriate for a Seller to have a Home Inspection BEFORE listing their home.  Our answer is YES.  This eliminates any problems that may occure when the Buyer completes their own inspection.  We advise that the Seller attend the inspection so they can ask questions. 

If you are thinking of selling your home now is the time to put your home in order.  To gain an edge within the Real Estate market, your home must be priced right and look better than the competition. 

Please call us if you are looking for contact details for local inspectors.  We would be happy to help.

Linda and Julia