By: Andrea Hartmann
Check out this latest press release from Fannie Mae- they are offering 3.5% credit to use toward closing costs or new appliances! This is a great opportunity for buyers to save money!
Here’s how you can spend that money:
• Closing costs;
• The purchase of new Whirlpool® appliances by Fannie Mae; or
• A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%.
To be eligible for this incentive:
• Offers must be accepted on or after January 28, 2010;
• Property sales must close before May 1, 2010, and;
• Buyers must be owner-occupants (investors are excluded).
You can check out the press release at the Fannie Mae web site: http://www.fanniemae.com/newsreleases/2010/4923.jhtml?p=Media&s=News+Releases
Properties eligible for this incentive are listed on HomePath.com
By: Andrea Hartmann
The buzz is all about the Homebuyer Tax Credit Extension. But how does it work? Do you qualify? Here’s a concise article laying out the details for you from TurboTax. And when you are ready to start looking, the team at Living Dimensions Real Estate is ready to help find the right home for you!
http://turbotax.intuit.com/support/kb/tax-content/tax-tips/6360.html
By Andrea Hartmann
I did a lot of research and felt like I was pretty informed when I bought my first home back in 2004. I bought a single family home in Bayview, which is considered an “up-and-coming” neighborhood as a single person. Looking back knowing what I know about real estate (and life in general) now I am amazed at how well I ended up considering how much I didn’t know. Like many, I thought the real estate market would continue appreciating uninterrupted forever. I assumed I would be able to easily afford the maximum loan amount I was pre-approved for. I didn’t anticipate the amount of money and work regular maintenance, much less remodeling would cost. I ignored my parents’ warning that this was a big commitment and a lot of work.
I did get certain things right, though. Buying a home in a neighborhood that is appreciating is key- especially when it comes to the appraisal (by the way not all “up-and-coming neighborhoods” are appreciating in value). Having a space that I was able to rent out was very important for me as well. I bought what I considered an ugly house and redid some of the easier finishes (painted, stripped molding, changed kitchen cabinets, counters, appliances), but I made sure that the major expenses were covered (newer furnace, water heater, roof, no structural issues). But nothing is as important as working with a knowledgeable real estate agent because they can really help guide you through the process. They can and should be an indispensable resource in finding and negotiating the right home for the buyer. And they should also have a repertoire of other reliable experts to help with any other issues that arise (inspector, mortgage broker, plumber, real estate attorney, etc).
I have three suggestions to anyone looking to buy a home:
1. Research as much as you can about the home buying process (financing, home maintenance, neighborhoods, etc)
2. Talk to friends and family who do own a home to get an honest feel for what it entails
3. Work with a knowledgeable, reliable agent
I ended up selling my home this past year and still was able to break even with remodeling costs. Considering the current market that’s a pretty good feat! I moved back to renting to lower my monthly payments, and set a few ground rules before buying again:
1. Have at least 10% down payment saved. When I bought they were still handing out 100% loans and that’s what I took. Had I been more prudent in my spending prior to buying and saved some money, my monthly payments would have been much more manageable. Right now you can get a FHA loan with only 3.5% down and a conventional loan with only 5%, which are often utilized. But for me it’s as much of the conditioning to not spend that saving 10% will mean as actually having that much down. I think it’s a great idea for each person or couple looking to buy to set a down payment percentage goal and work to achieve it prior to buying.
2. I want to wait to find someone to share the responsibility (and joy!) of home-ownership with. Working full time plus and trying to maintain a home on your own is a lot of work. It’s totally doable, but I see the wisdom now of sharing that with another reliable, hardworking person. It really cuts the job to less than half for both because you can share the time and joy of accomplishments with each other!
By Andrea Hartmann
There are lots of really great incentives right now to buy a home. The Hombuyer Tax Credit has gotten the most publicity, but there are plenty of others. Right now property values are deflated, which means you can most likely get the same property/condition for less than you could a few years ago, and for less than you will most likely be able to in the coming years. Also, mortgage interest rates are extremely low, so the total cost of purchasing a property is less than when interest rates are higher. And of course there are all the regular tax breaks that accompany home ownership and the opportunity to build equity. But before you go diving into the market, it would be wise to do a self-evaluation to make sure you’re ready and able to reap these benefits. Here are some things to look at:
Finances:
Do you have money saved up for a down payment? What kind of monthly payments can you afford? Are you willing to give up the morning stop at Starbucks to save money? You may have to put off or cancel the new car, trip to Europe, or even eating out regularly to save money. You also want to make sure you have some employment stability to sustain those payments over the long term. And it’s always smart to have your earnings and savings sufficient to well support the mortgage, taxes, insurance, utilities, and the 1-2% (of the purchase price) basic maintenance costs per year.
Career:
How secure is your current employment? Do you have job skills that can transfer to another job/ career if something happens to your current position? A large number of the current foreclosures are at least in part due to rising unemployment. You want to be sure you have a game plan to be able to make your mortgage payments.
There are other career considerations worth mentioning. For instance, it doesn’t pay to buy a lavish home if you’re only going to be able to enjoy it 1/3 of the year because your career has you traveling the rest of the time. Also, you don’t want to find out you need to take a different job in another part of the country 6 months after you buy a home.
Lifestyle:
Not everyone lives like a king, but we all enjoy certain luxuries from time to time. These may have to be adjusted when one becomes a home owner. There are the monetary diciplines, mentioned above, but there are others like time that are less tangible. You may have to cancel happy hour to mow the lawn while the weather holds out or stay home from the big ski trip so you can have your furnace repaired.
All in all this is a great time to buy a home! But just make sure that you know what you’re getting into as well. Talk to people who have or currently own a home similar to what you are considering (single family, duplex, condo, etc) to get a better idea of what is required. That way you can take home ownership by storm and maximize your investment and enjoyment of your own home!
By: Andrea Hartmann
There are several advantages and disadvantages to owning a home. Some of them are pretty common knowledge but some are less well-known. Here are a few things to consider if you are looking to buy:
Advantages:
Multiple tax incentives: mortgage interest deduction, property tax deduction, first time homebuyer credit
Equity: ability to make money on the investment; your money goes into something YOU own as oppose to paying someone else’s mortgage with your rent money
Freedom: the ability to customize the property to fit your lifestyle/tastes
Space and Privacy: especially in a single family home- gaining square footage and some distance from your neighbors
Payments: especially in 2+ unit homes but also for anyone who finds roommates- there is the ability to reduce your payments even to less than you were previously paying for rent!
Pride of home ownership: it does feel good to have your name on a deed! And most people will take better care of something they own as opposed to something they rent
Stability: especially for families with young children- an owned home provides stability and comfort for family members
Disadvantages:
Cost: mortgage payments, etc and when something breaks, you have to pay to fix it
Illiquidity of investment: not something you can liquidate quickly /easily if you want to move the capital into another investment or if you need to move somewhere else
Instability of market: historically the real estate market has been a very safe, solid investment option, but as we’ve seen lately it’s not a guarantee of profits. It’s also something that takes some time to appreciate
Maintenance: Performing all the necessary duties to “keep up the property” or having enough money to pay someone else for these services
Many Sellers think they want to wait until after he first of the year to list there homes. Some Buyers put off looking for a home during the holidays.
Christmas 2009 is different!
For Sellers, there are all those “Home Buyer $8,000 Credit” Buyers that are on a deadline. Now, add to that the $6,500 credit for people who currently own a home. Why wouldn’t you want to be in the available searches.
Sellers, your home looks wonderful during Christmas…all decked out and delightful. Who wouldn’t want to live in your home when they see the Christmas tree up and all those lights outside. You have to put up all that anyway, so get some selling benefit out of it.
Sellers, your competition is less…all those other Sellers are waiting until after the first of the year!
Sellers, there are Buyers coming home for Christmas and New Years vacation that want to move here. They have the time on their vacation to look at homes. “Home Buyer Credit’ Buyers have more days off during this time to look at homes.
Buyers, there is a rumor that after January 1, new Fannie Mae automated underwriting will be released with tighter guidelines…this has to do with debt ratio. You won’t be able to buy as much house for what you make.
Buyers, perhaps credit score requirements will go up. What used to be 620 two years ago was all you needed to get the best rate in a conventional loan; now 740 is needed…who knows what happens after the first of the year.
Buyers, Private Mortgage Insurance (PMI) is harder to qualify for. A minimum 700 credit score is required. What if that changes after the first of the year.
We at Living Dimensions Real Estate have all the elves standing by during this blessed season to show you homes and to list your home the Real Estate ¢a la carteâ way. Let’s get working!
The Homebuyer Tax Credit that was supposed to expire in mid-November has now been expanded until April of 2010. A reduced credit has also been made available to those that are not considered first time home buyers.
Income and cost of purchased house limits are still being enforced. To get up-to-date, check out this great overview. You can also checkout these Frequently Asked Questions. Otherwise, please feel free to email me with any questions: judyrae@sbcglobal.net
If you are a Seller or a Buyer, the Offer to Purchase determines everything! Be careful and aware and make sure your Realtor is a great negotiator and explains the contract carefully. Conditions in the Offer are set in stone and cannot be changed without being mentioned in the original Offer or Amendments.
Exact dates are set in the Offer. Dates like when the earnest money has to be in; when the Building Inspection must be completed (and that includes time for negotiating if something is found to be wrong); when the Financing Contingency ends so the Buyer’s mortgage is verified via a commitment letter.
The date of closing is set in the Offer and this date determines the amount of the real estate taxes, utilities and mortgage payoff the Sellers & Buyers pay. Closing day determines that the Seller will have to be moved out and left her home in clean shape for the new Buyers. It means the Buyers’ mortgage starts that day.
The Offer determines the price! The price paid for the home, the conditions of the mortgage the Buyer will pay, any closing costs either will pay, who pays for the Home Warranty, if any, who pays gap insurance, who pays for testing or who pays to fix (cure) what is found to be wrong in the Building Inspection.
The Offer determines the exit strategy for the Buyer…if you find something in the Building or testing inspection that is too big (material adverse fact), if you can’t sell your current home in time (home sale contingency), if you cannot get financing (financing contingency). It determines if the Buyer defaults and what happens if they do.
The Offer determines the stuff you keep and the stuff included in the sale…like the appliances, the $5,000 stair runner (yes, I had to pay for that one once), the hot tub. If it’s not in the Offer, it doesn’t count.
These are the general terms of the Offer. There is much more especially having to do with legal processes. Be sure you know what you are signing and accepting!
Yes, it really is the incredible Offer to Purchase!
You are on the fence trying to decide if you should sell your home…Will I get some profit out of this? What do I need to do to get ready? Is the market soft now? What if I don’t find another home I like? I think my basement is damp so I can’t sell…
It’s time to try…AS IF.
Acting AS IF you are going to sell your home means you get things in a row and make the decision later.
You get a Building Inspection to see what your home really needs so there are no surprises…AS IF you were selling.
You fix the list the Building Inspector comes up with…AS IF you were going to sell.
You sort, go through the basement stuff and all the closets; you paint and clean…AS IF you were going to sell.
You find your Realtor and she will send you active and sold listings of your area and you will become familiar with the market… AS IF you were going to sell.
You have your Realtor send you active listings of where you want to live…just in case you sell! Now you are looking forward in life.
You now have a clean, staged, beautiful home ready to sell. You know the value of your home and you know where you want to live. Grab a glass of wine and think about it…AS IF the decision is already made.
The first few weeks your home is for sale are the most important. There is a certain momentum and enthusiasm created with the newness. Once your MLS listing hits the internet, the whole world can have your listing in front of them. Hundreds of hungry Buyers will see your new listing as it arrives in their email searches. This is the broadest showing it will have. This is why it is essential to price your home to sell and do it from the start.
So many home Sellers think they will start high just in case…just in case there is an uniformed Buyer who just happens to walk in and buy their home. This phantom Buyer will not have looked at the competition, has never watched HGTV, has extra money in his pocket and really cares that you raised your whole family in this home and so is willing to pay you thousands of dollars for the same feeling. They can see with their mind’s eye how the walls could be painted, how the floors would look carpeted and how the kitchen would look with painted cabinets. Oh, by the way, they like the cat smell.
Sellers, it will never happen. As weeks go by you will have to lower your price but by then you have lost the momentum and as a result have lost money paying for holding costs, have lost time looking for your new home and have lost your negotiating power.
Listing price is so important. If you are still considering a higher price than your Realtor advises, get more information…get a building inspection before you list, do your homework to pack and stage, study the comparable sales and active listings, talk to your bank and be prepared to come “out of the gate” (as we say regarding a Montana rodeo) with a great competitive price.
A question to ask yourself…”Would you buy this house and could you afford it?”
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