I sell real estate in Ulster County. I love selling real estate in Ulster County. I also consider myself the type of person who thinks or envisions her cup half full. I also do not give out what I don't want coming back, that is my religion. So, that said it is my humble opinion, based on all that I have been reading to include Standard Poor's, my peer website called activerain.com, which compiles blogs from Realtors, bankers and other in the real estate industry, and other info that this year will see a deluge of foreclosures that will bring home prices down more. That coupled with the not so good report on unemployment going up again leaves me to believe if you need to sell now you must go out of your way to make your home the best it can be at the best price you can sell it at. I also think now is the time. We do not have an overabundance of great homes at great prices on the market right now( again this is my humble opinion) as people tend to wait until Spring to put their homes on the market.
So here are my simple steps to ready your house-
1- Clear out, clear out clear out. Get as much as you can out of the house the basement, the garage, the yard etc. as you possibly can. Less is more. Think model home.
2- Paint is the most inexpensive home improvement. It is hard enough to think you need to lower your house price to be competitive and SELL, you don't want to spend money unnecessarily. If your house is totally dated expect that you will not be getting today's prices for yesterdays goods. Paint and clean it to sparkle. Accept that you have a dated house and price it accordingly
3-Hire a great real estate company. That said, our company, Westwood Metes & Bounds has been the top selling company(based on mls statistics) for 17 years in a row. You don't get there by accident.
4- Hire a great real estate sales agent. Get numbers of her current and recent clients and ask how that person took care of them.
5- Price your house right. Look at the recent comps your real estate agent gives you to help establish price. Don't think about how Betty down the block got that great price two years ago. If you are paying for a professional real estate agent trust their knowledge. Understand that they work on commission so if they price your house higher they will make more so if they price your house lower than you think your castle will sell for ----hello--- there must be reason.
The one thing positive to think about is when you do sell, if you are buying another house, it will probably be a lateral move as the same circumstances will apply to the home you are buying and again my reco is to get a great real estate agent that will do a comparative market analysis on the home you are buying to make sure its value is there( also remember to to have a contingency that the appraisal shall meet or exceed the selling price so if the appraisal comes in lower you have a way to exit sale or renegotiate).
That all said:
I do think that now is a good time to put your house on the market. I do think this is going to be a challenging year. I also think if you price your house right and present it right, it may take longer(they are estimating 5 months now) it will sell. So good luck and call for any help from me at 845-417-1314- Remember a good Realtor is worth every penny you pay them.
Thursday, February 18, 2010
Wednesday, February 17, 2010
Home valuation Code of Conduct
THIS IS A REPRINT FROM HOUSE WATCH WRITTEN BY SHEREE CURRY
Greedy appraisers, who put lofty valuations on properties to please lenders and line their pockets, played a large role in the housing bubble. And the fallout continues: On Jan. 29, a former Beverly Hills real estate appraiser was sentenced to three years in federal prison for her role in a multimillion-dollar scheme to profit from inflated property values. That came on the heels of the arrest of a father and son appraiser team in Laguna Beach, CA charged with altering appraisals to inflate home values by up to $40,000.In fact, a closer look at the industry and its scandals reveals a "Godfather"-like underbelly, complete with death threats on public officials and sting operations.The conflicts have led to the increasing use of appraisal management companies -- middlemen that are supposed to act as a firewall between lenders and appraisers. But for millions of homeowners, the issues still linger.
Just ask the owners of the quaint, but extremely moldy Denver home that apparently appraised for about $370,000, despite comps suggesting a value at least $100,000 less. The 2-bedroom home ultimately sold last summer for $237,000. How did that happen?Some of the cases working their way through the courts give a glimpse of the back-door dealing that went on. Landmark Equities Group, the family-owned appraisal firm being charged by the California DA, for example, brazenly had an on-site office at a mortgage broker's facility. The appraisers, James Merritt Eaton, 60, and his son Brian Chandler Eaton, 28, secretly changed data on staff appraisers' reports, allegedly to deliver the outcome the loan officers wanted. In the case of eAppraiseIT LLC, a division of title company First American Corp., New York State Attorney General Andrew Cuomo charged that the unit gave in to demands for higher appraisals to secure more of Washington Mutual's business. In 2006 and 2007, the appraiser did 262,000 valuations for Washington Mutual over an 18-month period, and had a total $50 million in earnings, Bloomberg News reported.Now, that's not to say all appraisers are corrupt. In fact, 11,000 of them signed a petition protesting the pressure and unethical practices. But the bad apples have given the whole profession a black eye. Thanks in large part to Cuomo, Freddie Mac and Fannie Mae last year adopted the "Home Valuation Code of Conduct" to counter such abuse. The code says that appraisal management companies, which are paid by the lender out of the appraisal fees collected, must act as a liaison to keep appraisers and lenders from having direct contact on Fannie and Freddie-backed loans. Needless to say, not everyone is pleased. In one extreme case, an appraiser was arrested and held on $500 million bail in December after allegedly threatening to shoot New York AG Cuomo. The man was "apparently upset over some of the actions [Cuomo's] office has taken regarding cracking down on mortgage-related fraud," the New York Post reported. (It should be noted that some believe that Cuomo, former HUD secretary under President Clinton, was largely responsible for the subprime mortgage crisis. And in 2004, he joined the board of AMCO, a Cleveland-based appraisal management company).Some say the appraisal management companies (AMCs) may only make things worse, after all, some of them are owned by banks. (Landsafe, an AMC, is a subsidiary of Bank of America). The well-known New York appraiser Jonathan Miller, CEO of Miller Samuel, calls it all "an accident waiting to happen."Although the HVCC is intended to ward against improprieties, it is not fail safe. In fact, the code still allows banks to be involved in the appraisal process. For one, lenders can still use in-house appraisers, and are "responsible for selecting, retaining, and providing for payment of all compensation to appraisers." It's right in the guidelines on Freddie Mac's website, with the caveat that the loan production staff is not to have direct involvement in the selection of an appraiser or discuss valuation with the appraiser or AMC.The biggest concern is that the use of AMCs opens the door to appraisals being conducted by far-flung appraisers unfamiliar with the local market, which in turn will cause more erratic valuations. "The problem is that anybody with a state-issued appraisal license has the exact same level of qualification to appraise here, whether they live in New York or Buffalo or Albany or Rockland County," Jeffrey Jackson, co-founder of New York-based appraisal firm Mitchell, Maxwell & Jackson, told The Real Deal after the code was passed last spring. "The appraiser is just the first step in the process, yet we are taking all the blame," Portland-area appraiser Burr Robson told HousingWatch. "I had the same clients for literally 15 years until HVCC. I now have to fight for appraisal work from AMCs, and my income has fallen 67%. I am worried that I'm going to have to sell my house." And there's a new concern for some homeowners and lenders: low-ball appraisals. Walt Molony, spokesman for The National Association of Realtors, one of the most vocal critics of the code, said out-of-area appraisers often lead to "apples to oranges" comparisons, resulting in many valuations coming in below the price agreed upon between the buyer and seller. "In an environment where prices have declined over the past three years, this is absurd," huffs Molony. "It has caused a rise in contract cancellations -- not exactly the best way to solve the problem, particularly when homes are selling for less than replacement construction costs in much of the country."In the end, there will always be the temptation to give in to pressure to win repeat appraisal business -- even if the pressure may not come in the form of a severed horse's head under the bed sheets. It might be something as simple as the boss of a New York appraisal management company -- let's name him "Don CordeLoan" -- saying, "I'm gonna make him an offer he can't refuse." In essence, work for us, our way, or don't work at all.Some industry watchers say appraisers should be better regulated, but setting up appraisal management companies as the intermediary has the potential of re-creating the same problem we're trying to escape.
Just ask the owners of the quaint, but extremely moldy Denver home that apparently appraised for about $370,000, despite comps suggesting a value at least $100,000 less. The 2-bedroom home ultimately sold last summer for $237,000. How did that happen?Some of the cases working their way through the courts give a glimpse of the back-door dealing that went on. Landmark Equities Group, the family-owned appraisal firm being charged by the California DA, for example, brazenly had an on-site office at a mortgage broker's facility. The appraisers, James Merritt Eaton, 60, and his son Brian Chandler Eaton, 28, secretly changed data on staff appraisers' reports, allegedly to deliver the outcome the loan officers wanted. In the case of eAppraiseIT LLC, a division of title company First American Corp., New York State Attorney General Andrew Cuomo charged that the unit gave in to demands for higher appraisals to secure more of Washington Mutual's business. In 2006 and 2007, the appraiser did 262,000 valuations for Washington Mutual over an 18-month period, and had a total $50 million in earnings, Bloomberg News reported.Now, that's not to say all appraisers are corrupt. In fact, 11,000 of them signed a petition protesting the pressure and unethical practices. But the bad apples have given the whole profession a black eye. Thanks in large part to Cuomo, Freddie Mac and Fannie Mae last year adopted the "Home Valuation Code of Conduct" to counter such abuse. The code says that appraisal management companies, which are paid by the lender out of the appraisal fees collected, must act as a liaison to keep appraisers and lenders from having direct contact on Fannie and Freddie-backed loans. Needless to say, not everyone is pleased. In one extreme case, an appraiser was arrested and held on $500 million bail in December after allegedly threatening to shoot New York AG Cuomo. The man was "apparently upset over some of the actions [Cuomo's] office has taken regarding cracking down on mortgage-related fraud," the New York Post reported. (It should be noted that some believe that Cuomo, former HUD secretary under President Clinton, was largely responsible for the subprime mortgage crisis. And in 2004, he joined the board of AMCO, a Cleveland-based appraisal management company).Some say the appraisal management companies (AMCs) may only make things worse, after all, some of them are owned by banks. (Landsafe, an AMC, is a subsidiary of Bank of America). The well-known New York appraiser Jonathan Miller, CEO of Miller Samuel, calls it all "an accident waiting to happen."Although the HVCC is intended to ward against improprieties, it is not fail safe. In fact, the code still allows banks to be involved in the appraisal process. For one, lenders can still use in-house appraisers, and are "responsible for selecting, retaining, and providing for payment of all compensation to appraisers." It's right in the guidelines on Freddie Mac's website, with the caveat that the loan production staff is not to have direct involvement in the selection of an appraiser or discuss valuation with the appraiser or AMC.The biggest concern is that the use of AMCs opens the door to appraisals being conducted by far-flung appraisers unfamiliar with the local market, which in turn will cause more erratic valuations. "The problem is that anybody with a state-issued appraisal license has the exact same level of qualification to appraise here, whether they live in New York or Buffalo or Albany or Rockland County," Jeffrey Jackson, co-founder of New York-based appraisal firm Mitchell, Maxwell & Jackson, told The Real Deal after the code was passed last spring. "The appraiser is just the first step in the process, yet we are taking all the blame," Portland-area appraiser Burr Robson told HousingWatch. "I had the same clients for literally 15 years until HVCC. I now have to fight for appraisal work from AMCs, and my income has fallen 67%. I am worried that I'm going to have to sell my house." And there's a new concern for some homeowners and lenders: low-ball appraisals. Walt Molony, spokesman for The National Association of Realtors, one of the most vocal critics of the code, said out-of-area appraisers often lead to "apples to oranges" comparisons, resulting in many valuations coming in below the price agreed upon between the buyer and seller. "In an environment where prices have declined over the past three years, this is absurd," huffs Molony. "It has caused a rise in contract cancellations -- not exactly the best way to solve the problem, particularly when homes are selling for less than replacement construction costs in much of the country."In the end, there will always be the temptation to give in to pressure to win repeat appraisal business -- even if the pressure may not come in the form of a severed horse's head under the bed sheets. It might be something as simple as the boss of a New York appraisal management company -- let's name him "Don CordeLoan" -- saying, "I'm gonna make him an offer he can't refuse." In essence, work for us, our way, or don't work at all.Some industry watchers say appraisers should be better regulated, but setting up appraisal management companies as the intermediary has the potential of re-creating the same problem we're trying to escape.
Wednesday, February 3, 2010
driving home sunset in Ulster County
I love where I live. I like so many of the people in my area. I left work this afternoon and stopped in Emmanuel's for some food stuffs. I was going to the checkout and remembered something on my list that I did not pick up and whirled my basket around and there in front of me was this gentleman who probably thought who is this wild demon. But just like the gentleman I know he is he waved me on and gave me a lovely smile. When I had put my groceries in the car and was pushing my cart back to the store a woman stopped her car to let me pass. As I drove home I saw this wonderful sunset and thought wow, God is a fabulous artist. Every day a new painting for me and never the same. So I stopped to take this pics to share with you. Now I am no Polyanna and every day is not perfect but those are the days I give no power to and this day is the day I give power to and attention to.
I am so grateful to be able to drive home and see things like this or horses or cows or hawks gliding in the sky. I give my attention to these things. I love this area that I sell houses in. I just sold a house up the road from me. They are a young couple, sweet as can be. I am looking forward to them being my neighbors and enjoying watching them put their personality into their new home. I am very lucky. I love where I live and I love what I do. Selling real estate in Ulster County with a great quality of life.
Monday, January 18, 2010
News for investors of short sale and REO flipping
As we have been saying all along ... short sale and REO flipping are becoming more and more accepted by the government and major lending institutions. This is evidenced, among other things, by Freddie Mac's recent bulletins, updated credit policies by major lenders allowing for C buyer financing, and revised title bulletins stating that the C purchase price does not need to be revealed to the A lender as long as certain disclosures are made.
Last Friday the FHA has rescinded its 90 anti-flipping rule and will, for a period of 1 year, allow FHA buyers to obtain loans on properties that have been recently purchased by investors who intend to flip them for a profit
SO WHAT DOES THIS MEAN FOR YOU?????
In an effort to facilitate the sale of bank-owned properties, the Federal Housing Administration (FHA) has temporarily suspended its 90-day rule against flipping properties. Under the anti-flipping rule, the FHA will not insure a mortgage loan if the sales contract is executed within 90 days of the seller's acquisition of the property. Effective June 9, 2008, the anti-flipping rule has now been waived for one year for properties acquired by lenders, their subsidiaries, and their outside vendors.
The purpose of FHA's new policy is to facilitate the sale of bank-owned properties, given that foreclosed and abandoned homes harm neighborhoods and delay a community's recovery. However, FHA still requires homes to be "safe," "secure," and, "sound," which may not be the condition of certain foreclosed-upon properties.For information, go to http://www.fha.gov/. For general information about bank-owned property transactions.
The purpose of FHA's new policy is to facilitate the sale of bank-owned properties, given that foreclosed and abandoned homes harm neighborhoods and delay a community's recovery. However, FHA still requires homes to be "safe," "secure," and, "sound," which may not be the condition of certain foreclosed-upon properties.For information, go to http://www.fha.gov/. For general information about bank-owned property transactions.
This is information gathered and presented.
sandyreid.com is providing the information on this blog for general guidance only. The information on this blog does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the information on this blog is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
Wednesday, December 16, 2009
FOOD AND COAT DRIVE THIS MONTH
MY HOME OFFICE AT 134 MAIN ST. IN NEW PALTZ IS HAVING A FOOD AND COAT DRIVE FROM DEC. 16TH TO THE 31ST OF DECEMBER.
WE WOULD BE VERY GRATEFUL FOR ANY GOOD USED COATS AND ANY FOOD YOU WOULD LIKE TO DONATE.
STOP ON DOWN TO OUR OFFICE OR IF YOU HAVE A LARGE AMOUNT OF COATS OR FOOD CALL US AAT 255-9400 AND WE WILLPICK UP.
BLESSINGS TO ALL.
WE WOULD BE VERY GRATEFUL FOR ANY GOOD USED COATS AND ANY FOOD YOU WOULD LIKE TO DONATE.
STOP ON DOWN TO OUR OFFICE OR IF YOU HAVE A LARGE AMOUNT OF COATS OR FOOD CALL US AAT 255-9400 AND WE WILLPICK UP.
BLESSINGS TO ALL.
GREAT NEWS FOR 1ST TIME BUYERS FROM SONYMA
Here is some great first time buyer news: SONYMA has announced two new features that can be used with their loan programs.
1. Down payment assistance loan of up to 3% of the home price with a max of $10,000. This is a no payment 0% interest rate loan that is forgiven after 10 years.
2. Tax credit advance loan. Now the applicants can receive their $8,000 federal tax credit at the closing, when they need it! If the advance is paid back by 6/30 2011 there is no interest ! In order to be eligible borrowers must be generally be First time buyers and have contracts for a home signed on or before April 30th 2010 and close on or before June 30th 2010. SONYMA will launch this on 1/1/2010 .
Income limits for Ulster County:
1-2 person household 3 + Household
$83,640 $ 97,580
Max single family home price $ 354,970
1. Down payment assistance loan of up to 3% of the home price with a max of $10,000. This is a no payment 0% interest rate loan that is forgiven after 10 years.
2. Tax credit advance loan. Now the applicants can receive their $8,000 federal tax credit at the closing, when they need it! If the advance is paid back by 6/30 2011 there is no interest ! In order to be eligible borrowers must be generally be First time buyers and have contracts for a home signed on or before April 30th 2010 and close on or before June 30th 2010. SONYMA will launch this on 1/1/2010 .
Income limits for Ulster County:
1-2 person household 3 + Household
$83,640 $ 97,580
Max single family home price $ 354,970
Tuesday, November 24, 2009
IF YOU WERE THINKING OF SELLING--NOW APPEARS TO BE THE TIME
With the new extended and expanded tax credit approved and in place it appears that home owners who were sitting on the fence about selling could come down off the fence and list their home. I love to list and sell homes in Ulster County New York
This is a reprint from Rismedia:
, November 24, 2009—(MCT)—House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather. This winter, however, might be different, thanks to the extended—and expanded—first-time home-buyer tax credit.
“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she said.
The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now 10% of the home price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers. All buyers must have a binding contract on a house in place on or before April 30, 2010. The sale must close on or before June 30. 2010.
To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased. The credit is only for principal residences.
Income limits have risen as well. According to the IRS, the home buyer tax credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
The inclusion of move-up buyers might inspire homeowners to take action and list their house if they’ve been putting it off, said Carolyn Warren, a Seattle, Wash.-based mortgage broker and banker and author of the book Homebuyers Beware. “If somebody loves their home, it’s not going to entice them to sell. If they’ve had it on the back of their minds and really would like to move up, it might push them into doing it sooner than later,” Warren said.
The credit isn’t expected to have as large of an effect on move-up buyers as it has on first-time buyers, according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The maximum tax credit is about 4% of the average purchase price for first-time buyers, but about 2% of the average purchase price for move-up buyers.
“We estimate that the first-time home buyer tax credit will result in a 10% increase in home sales from March through November of 2009,” said Thomas Popik, research director for Campbell Surveys, in a news release. “We’d expect the effect of the proposed tax credit for current homeowners to be about half as large—from December until the tax credit expiration in the spring of next year, it might be 5% of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time home buyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension.”
Tips for buyersInterested in buying a home and claiming the home-buyer tax credit? Below are five tips:
1. Don’t procrastinate. Start searching for a home now. Getting an early start will give you a better chance of finding the right house before the credit deadline. Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker, and do a realistic assessment of what you can afford. Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible.
2. Don’t count on another extension. The credit won’t be available forever, Fadel said. If you want to take advantage, be sure to make that spring deadline.
“This is a medication for the housing crisis. Once the patient—which is the housing market—cures, there will be no medication needed,” he said.
3. Mind the interest rates. Mortgage interest rates are low right now, but will likely rise next year. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying. Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise.
4. Communicate with your lender. Throughout the process, make sure you’re communicating with your lender regularly; if there’s a piece of documentation you’re asked for, get it turned in as soon as possible, said Doug Heddings, a New York-based real estate agent with Charles Rutenberg Realty. Good communication is important in making sure the loan closes on time. And think twice before pursuing a short sale if you want to make the credit deadline. That’s where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner’s lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property.
5. Don’t take shortcuts. Don’t forgo any of the steps you would normally take just to make the tax credit deadline. Make sure the house is a good fit for your needs and get a home inspection. Skipping steps could cost you in the long run.
The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information on this blog is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
This is a reprint from Rismedia:
, November 24, 2009—(MCT)—House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather. This winter, however, might be different, thanks to the extended—and expanded—first-time home-buyer tax credit.
“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she said.
The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now 10% of the home price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers. All buyers must have a binding contract on a house in place on or before April 30, 2010. The sale must close on or before June 30. 2010.
To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased. The credit is only for principal residences.
Income limits have risen as well. According to the IRS, the home buyer tax credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
The inclusion of move-up buyers might inspire homeowners to take action and list their house if they’ve been putting it off, said Carolyn Warren, a Seattle, Wash.-based mortgage broker and banker and author of the book Homebuyers Beware. “If somebody loves their home, it’s not going to entice them to sell. If they’ve had it on the back of their minds and really would like to move up, it might push them into doing it sooner than later,” Warren said.
The credit isn’t expected to have as large of an effect on move-up buyers as it has on first-time buyers, according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The maximum tax credit is about 4% of the average purchase price for first-time buyers, but about 2% of the average purchase price for move-up buyers.
“We estimate that the first-time home buyer tax credit will result in a 10% increase in home sales from March through November of 2009,” said Thomas Popik, research director for Campbell Surveys, in a news release. “We’d expect the effect of the proposed tax credit for current homeowners to be about half as large—from December until the tax credit expiration in the spring of next year, it might be 5% of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time home buyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension.”
Tips for buyersInterested in buying a home and claiming the home-buyer tax credit? Below are five tips:
1. Don’t procrastinate. Start searching for a home now. Getting an early start will give you a better chance of finding the right house before the credit deadline. Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker, and do a realistic assessment of what you can afford. Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible.
2. Don’t count on another extension. The credit won’t be available forever, Fadel said. If you want to take advantage, be sure to make that spring deadline.
“This is a medication for the housing crisis. Once the patient—which is the housing market—cures, there will be no medication needed,” he said.
3. Mind the interest rates. Mortgage interest rates are low right now, but will likely rise next year. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying. Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise.
4. Communicate with your lender. Throughout the process, make sure you’re communicating with your lender regularly; if there’s a piece of documentation you’re asked for, get it turned in as soon as possible, said Doug Heddings, a New York-based real estate agent with Charles Rutenberg Realty. Good communication is important in making sure the loan closes on time. And think twice before pursuing a short sale if you want to make the credit deadline. That’s where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner’s lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property.
5. Don’t take shortcuts. Don’t forgo any of the steps you would normally take just to make the tax credit deadline. Make sure the house is a good fit for your needs and get a home inspection. Skipping steps could cost you in the long run.
The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information on this blog is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose
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