In the last year with the help of the tax credit, there has been a rise in first time home buyers. The National Association of Realtors says the percentage of first time buyer is up to 47% in 2009 compared to 41% in 2008 and 36% in 2006.
The unemployment rate is close to peaking and is projected to ease to 9.5% by the end of next year.
Read more: http://rismedia.com/2009-11-17/housing-and-economy-headed-for-sustainable-recovery-first-time-homebuyers-lead-the-way/#ixzz0YN46kqLc
This is a UTUBE video I thought you all would like. I thought it was funny and entertaining. It hits close to home in regards to bank owned homes and the “foreclosure specialists” assigned to list them..
When I first heard about the new housing bill, that would force banks to modify loans to keep people in their homes, or face stiff fines. I was excited. A housing bill that would help keep people in their homes, and slow or stop the dreaded foreclosures. Woo Hoo! How wonderful for the many people faced with losing their homes.
Then I viewed my Active Rain site and read a blog by JP Lowry of Preferred Financial Funding, titled What are We Doing America? in which he VERY ADAMANTLY stated why the bill was Disgusting, Ridiculous & Entitled. I have to say after reading it there were some very good points. Now I am not sure where I stand and was wondering what other opinions were.
I am very happy for the families that will be able to keep their homes, but at what cost? I agree that some people bought homes that they knew they could not afford, but… the lenders let them. Also as tax payers have already bailed out the banks shouldn’t the money be used for what it was intended?
The Federal Housing Administration (FHA) has delayed the implementation of rules that could make life more difficult for condo buyers across the country. The delay should be especially helpful for those hoping to qualify for the first-time buyer tax credit that expires after Nov. 30.
The new FHA rules, which were to take effect Oct. 1, 2009 will now be effective on Nov. 2. They are designed to improve the lending process, but they could cause some short-term delays in completing loans and closing purchases. The FHA was wise to delay the implementation of these changes. Now, buyers trying to close a transaction by Nov. 30 should be able to file their FHA loan applications early enough to qualify under the old regulations.
The importance of FHA financing has grown substantially in the last few years because conventional mortgage financing has become harder to obtain due to more stringent underwriting requirements. According to some estimates, 25% of homes purchased this year in the United States will use an FHA insured mortgage, up from 2% just three years ago.
About 1/3 the transactions I’ve closed this year involved FHA backed mortgages, and most of those folks were first-time buyers purchasing a condo. Many first-time buyers are short on cash and turn to FHA financing because it allows them to put down as little as 3.5%, in contrast to the 10% down payment required for most conventional loans.
The new FHA regulations now will apply to all mortgage applications received on Nov. 2 or later. Files that were initiated prior to Nov. 2 will be processed under the old regulations, even if the loan does not close until after Nov. 2.
The major reason the new regulations may slow down the purchasing process when they become effective is that they end what are known as spot approvals of individual condominium units. Instead, the entire condominium property will need to be approved before an FHA-insured loan can be used.
Many condominium properties have never received FHA approval. However, even those condo complexes that now have FHA approval will need to be recertified after Nov. 2 if their approval was recieved more than two years ago. It may be possible to expedite that certification process by seeking a loan from an institution that is also an FHA Direct Endorsement Lender. That status allows a lender to directly carry out the certification process needed to grant FHA approval to a condominium complex.
The new FHA regulations taking effect Nov. 2 also contain other restrictions that could make life more complicated for condo buyers. Here is a partial list:
-At least 50% of units in the project must be owner occupied or under contract to owners who intend to occupy them. For new construction, the 50% owner-occupied rule applies to those units closed or under contract.
-For new construction condominiums, at least 50% of the total number of units planned must be sold or under contract before an FHA insured mortgage can be closed.
-No more than 25% of the total floor area of a condo property can be used for commercial purposes.
-No more than 15% of the units can be more than 30 days past due on their assessment payments to the condominium association.
There is, however, some good news for borrowers in the new FHA regulations. For example, they eliminate the long-time prohibition against the FHA financing units in condominiums where the homeowners association retains a right of first refusal.
Another change allows the FHA to insure loans in new condo conversions for any qualified buyer. Previously, only former rental tenants could get FHA financing for the first 12 months.
The changes in FHA regulations are just one example of the current environment. It has seemed as if lending requirements have been changing on a daily basis this year.Thjose looking for a condo will benifit greatly by working with a Realtor who knows the local condominium market. An agent with in-depth knowledge of the local market offers two important advantages to buyers right now, First, they are going to know which condo buildings offer the best opportunity to secure good financing, whether it’s conventional or FHA. If you have a building where the association has financial problems or one with a high percentage of renters, it can be almost impossible to get a mortgage right now. Second, the agent will help buyers avoid the potential potholes that can come with condominium ownership. For example, before I even show a condo building now, I will study the minutes of the condo board meeting to learn what plans and problems might be on the horizon. An agent who doesn’t normally work in an area just can’t develop that kind of knowledge.
Tired of paying rent, and enticed by a first-time home buyer tax credit, First time home buyers are scouring the cities of the east bay for a house to meet their needs. And they are already running out of time.
The federal tax credit for first-time buyers is “a huge motivator” for these buyers, and they may end their search if the Nov. 30 deadline arrives and they still have not closed on a deal.
Timing is everything for many first-time buyers today. For those who purchase a home this year, the tax credit is for 10% of the purchase price, up to $8,000. Those who have owned a home in the past three years aren’t eligible. Buyers also have to meet eligibility requirements regarding income; the current credit begins to phase out for singles who make more than $75,000 and couples who make more than $150,000.
Unless it is extended, this credit will expire on Nov. 30. We are seeing an increase in buyers wanting to get closed prior to the tax credit closing deadline. there is also an increase in sellers wanting to get their homes on the market and closed by this deadline.
Some real-estate agents and mortgage brokers are recommending that first-time buyers close no later than the week before Thanksgiving to ensure that no holiday-related office closings or abbreviated schedules interfere with the process. That means finalizing a purchase on or before Nov. 20. In fact, to make sure you can take advantage of the credit, it’s probably best to go under contract no later than the first or second week of October.
The National Association of Realtors reports that it’s taking about two months to complete a home sale in the current market, as lenders scrutinize borrower paperwork and issues with appraisals pop up. In short, first-time buyers probably need to select a property and make an offer by the end of this month. But rushing to meet the deadline is a double-edged sword. The purchase of a home—let alone your first one—isn’t a decision that should be taken lightly.
For buyers who don’t make the deadline, there is a chance the credit will be extended. There are at least 20 bills drafted regarding the credit; one-third of them have been introduced recently. Some proposals would not only extend the first-time buyer credit into next year, but would also expand it to include all home buyers, remove income restrictions and raise the maximum amount of the credit, up to $15,000.
By including all buyers, there could be more of a ripple effect as more Americans spend money on moving vans, lawn equipment — any items or services associated with making a move. NAR has been lobbying heavily for the extension. “The first priority is going to be to renew the $8,000 credit, but we have some good arguments for expanding it,” said Jerry Giovaniello, senior vice president and chief lobbyist for NAR. He argues that the credit doesn’t cost much but has a huge impact.
There is growing Capitol Hill support for the extension of the credit. Senate Majority Leader Harry Reid, D-Nev., said it needs to be extended by the end of the year, according to a spokesman from his office. And Washington Research Group, a unit of securities firm Concept Capital, recently put the chance of extension at 60 percent.
Yet with Congress currently focusing on other issues, and concerns about the country’s rising deficit, some wonder how difficult it will be for housing to garner attention anytime soon.
If you’re a first-time buyer, however, waiting is a gamble. What you have in front of you now is a tax credit. After that, you don’t know what you have.
NAR estimates that about 1.8 million to 2 million first-time buyers will take advantage of the tax credit this year, and says that roughly 350,000 sales wouldn’t have taken place without the credit.
In the state of California you can apply for two different tax credits one from the state Gov. and one from the Federal Gov.
The federal Gov. is giving a tax credit in the amount of 10% of the sale price or 8000.00 which ever is less.
The state of California is giving a tax credit in the amount of 5% of the sale price or 10,000.00 which ever is less.
Neither is a loan nor does it have to be repaid.
What’s the catch, you ask? Well the federal tax credit has a limit on the income amount on the buyer can earn 75,000 for a single taxpayers and 150,000 for married taxpayers. Also, they must be first time buyers and purchase the home between 01/01/2009 and 12/01/2009
The state tax credit does not have a limit on your income, but it does require you to be purchasing a newly built home, between 03/01/2009 and 03/01/2010. the credit is not a loan as long as the home remains your primary residence for two years.
Home buyers can tap both programs and get a possible 18,000 tax credit, but time is running out to cash in on the opportunity. California set aside 100 million for the program and it is depleting faster than expected. Also the end of the federal program (12/01/2009) is fast approaching. Home buyers who don’t act now could end up out of luck…..
Buying a home
Homebuyers can make the most of several tax breaks that help lower their tax bill based on the purchase of an existing or new home. For instance:
-First-time homebuyers: The Recovery Act provides a credit of up to $8,000 if a taxpayer buys a home between Jan. 1, 2009 and Nov. 30, 2009. The homebuyer also must not have owned a home in the previous three years and the home must be the primary residence.
-Points: The points paid on a mortgage are generally deductible as interest if taxpayers paid enough of a down payment or earnest money at closing to cover the points. Homebuyers can deduct the points even if the seller paid them.
-PMI premiums: Buyers who make a down payment of less than 20% of the home’s cost usually pay private mortgage insurance (PMI). But the PMI premiums generally can be included in your home mortgage interest deduction.
-Job relocation: Taxpayers who moved due to a job change can deduct the cost of moving. In order to take the deduction, they must move within one year of starting the new job, work full-time at least 39 weeks during the first 12 months at the new location, and the new job must be at least 50 miles further than the old residence was from the old job. Qualified moving expenses include your out-of-pocket cost of moving yourself, your family, and belongings to the new location.
Owning a home
If a taxpayer typically has claimed the standard deduction, owning a home will likely mean itemizing for extra deductions. Some tax breaks for homeowners include:
-Mortgage interest: For most taxpayers, the biggest tax break comes from deducting mortgage interest. Taxpayers can deduct interest on up to $1 million of the loan used to buy, build, or make substantial improvements to a main or second home. Interest on a home equity loan up to $100,000 secured by the main or second home is deductible too.
-Real estate taxes: Taxpayers can deduct real property taxes they pay on real estate to their municipalities, whether made directly or through their lending company.
-Home improvements and energy credits: The Recovery Act gives incentives to homeowners making improvements and energy-efficient upgrades to their homes. Taxpayers can get credits for 30% of the cost of qualifying doors, windows, HVAC, water heaters, roofing and insulation, up to a maximum credit of $1,500. Solar energy and wind energy systems are each 30% of cost with no maximum.
Selling a home
Sellers won’t have to pay taxes on a profit up to $250,000 for single filers and $500,000 for joint filers. Taxpayers must have lived in the home for at least two of the past five years to claim this exclusion. In some cases, taxpayers can claim a partial exclusion if they are selling due to a change in employment status, health reasons, divorce or other unforeseen circumstances.
Taxpayers whose homes were foreclosed may be able to exclude the mortgage debt that was forgiven in connection with the foreclosure. This provision applies to debt forgiven in calendar years 2007 through 2012, of up to $2 million is eligible for this exclusion ($1 million if married filing separately).
The U.S. housing market continues to show signs of stabilization with a drop in the number of Multiple Listing Service (MLS)-listed homes for the twelfth consecutive month. The number of single family homes and condos listed for sale according to MLS data decreased in June 2009 from May by 2.1%, bringing the total number of active listings in 28 major U.S. markets to 696,858.
Other highlights from ZipRealty’s Housing Inventory Index, compiled from local Multiple Listing Service (MLS) data, for June 2009 include:
-Las Vegas, Los Angeles and Phoenix all recorded a decline in inventory which may have contributed to some homes receiving multiple bids.
-Median list prices have flattened or increased in Las Vegas, Phoenix, San Francisco Bay Area and Los Angeles, pointing toward stabilization in those areas.
-While South Florida has substantially fewer homes for sale than last summer, housing inventory there is plentiful. For example, Miami has 27.1% more homes listed for sale compared to Los Angeles even though Miami has a significantly smaller population than Los Angeles.
-California is seeing the most dramatic inventory declines with massive year-over-year inventory reductions: Los Angeles saw a 53.9% decrease year-over-year while Bakersfield/Fresno tracked a 56.2% decrease.
-Several major metros that have been hit hardest by foreclosures had limited inventory in June 2009, which is at levels not seen or experienced in years.
“‘Affordability’ has been the buzz word in real estate this summer, and with a significant number of listed homes bank-owned, we’re seeing instances in some areas of banks dropping prices to generate more offers from buyers,” said Zip RealtyZip Realty President and CEO Patrick Lashinsky. “If the number of home listings continue declining and buyer interest and activity remains strong, we should see sales prices and home values increase as we head into the fall.”
In these economic times, the decision to purchase a home has become a very serious consideration, with cost of ownership in both the short and long term being in the forefront of the buyer’s mind. One of the most important factors consumers should consider when buying a home is its energy efficiency rating, as this can add up to substantial savings over the life of the home. Today’s energy efficient manufactured home is no different from any other home, except it has been built off-site, usually in a controlled factory environment, using the latest in energy efficient technologies. Coupled with a lower cost per square foot as compared to site-built homes, today’s manufactured home is a smart investment for savvy homebuyers.
Each manufacturer may have a different label, but one that stands out is the Energy Star designation. The Environmental Protection Agency (EPA) created the Energy Star logo as the symbol for energy efficiency because of the direct link between wasted energy and air pollution. Manufacturers and builders voluntarily display the logo on products and new homes that meet or exceed high energy efficiency guidelines. Some of these everyday products include heaters, air conditioning units, household appliances, residential light fixtures, and new homes. The Manufactured Housing industry is proud to display this designation on its quality homes.
By implementing these standards into the construction of today’s manufactured home, consumers and builders alike can reap the benefits of energy efficient housing solutions, further emphasizing a manufactured home is not any different when it comes to energy efficiency. Manufacturers who utilize energy efficient light fixtures and appliances show that they are doing their part to help preserve and protect our precious natural resources, while offering the consumer significant savings on their utility bills. Combined with an almost 30% savings on heating, cooling and hot water, manufacturers make it possible for the consumer to afford more home, due to the lower cost per square foot that is inherent to the factory construction process.
In challenging markets…like the one we currently face…it’s difficult to find new clients.
Why would you even consider firing a client?
Purely and simply, even the best client relationships can turn bad…and when they do, it’s time to end them by firing the client.
Most of us are too busy to allow deteriorating client relationships to drain time and energy from attracting new clients and serving existing clients. With that in mind, here are 5 reasons for firing a client.
1. Perfection Obsession
These are the buyers who are obsessed with finding a perfect home, in a perfect location and at a perfect purchase price.
Or they are sellers who insist on selling their homes terms and conditions that they consider perfect.
Perfection rarely exists in our world, and besides, your responsibility is to give clients the best possible service, helping them find the best possible deal…not the perfect one.
2. Lack of Trust
This can cut both ways.
For whatever reason, you no longer trust your client or vice versa.
Since trust is a key element of all client relationships, once the trust is gone for either party, the relationship is essentially over.
3. Miscommunication
Sometimes miscommunication is inadvertent or accidental.
Others times it is deliberate.
In either case, when miscommunication becomes a common element it represents a problem to be addressed.
If the problem of miscommunication itself cannot be resolved, it’s time to end the relationship.
4. Conflicting Advice
We all have advisor’s who offer opinions and suggestions on our decisions.
Some of these people are professionally trained, qualified and well informed. Others are well intentioned but otherwise poorly informed and mis-directed friends relatives and acquaintances.
It is the second group of advice-givers that have the most potential for causing problems in client relationships.
When clients start to be guided more by this group than by your professional advice, it’s best to reserve your time, energy and expertise for clients who value it.
If clients do not value what you offer them…fire them.
5. Indecision
Certainly changed circumstances result in changes in clients needs and wants.
However, when clients continually change their minds for no obvious reason, it’s hard to be sure of what they really want.
If they don’t know what they really want…how can you help them?
Is it not better to devote your resources to helping clients achieve what they know they want?
What other reasons might there be for firing clients?
What stories do you have about firing clients?