Do I Qualify For The Home Buyer Credit Extension

If you haven’t heard yet, the first-time home buyer tax credit that Barack Obama put into motion has been extended until April 30, 2010. This is a welcome sign to any first-time homebuyers that missed the original date of December 1st, 2009. Not only is a good for first-time home buyers, it also shows great promise for those that have owned real estate in the past. The tax credit has been extended and also enhanced and this is a great sign that the housing market may receive even further stabilization from this extension.

With get into details about the extension of the first-time home buyer tax credit. Sen. Johnny Isakson from Georgia propose the home buyer tax credit act of 2009 on June 10. The original plans was to have a $15,000 home buyer tax credit that later changed into the $8000 tax credit that we see today. The extension to this bill was signed into law just last week.

Now you can qualify for the $6500 credit if you have lived in your previous home for five years. This story was broke by Reagan Lachapelle, who is in aid to Harry Reid. This new enhancement of the bill really opens up the potential for how many consumers can execute advantage of it.

lawmakers decided that they really need to act even more than a half to prevent home prices from slipping any further because it has been one of the worst drops in our nations history dating back to the times of the Great Depression.

There’s also been some extensions to the incumbent limits of those two qualify. 75,000 250,000 used to be the income limits and novels have been changed to 125,000 to 250,000. Again, this opens the door for quite a few more people to qualify for the tax credit which will hopefully stabilize the whole market even more.

How Much To Offer On A Home

When you are looking to purchase a home, it is important to have a certain mindset before you offer.  Many buyers make the mistake of paying way more for a house that is staged or looks “nice”.   I have seen one home go for over $20k more than a very similar home just because it was staged and smelled nice.

Everyone wants to look at homes that the sellers have taken the time to prepare for sale, but as a buyer you have to think the exact opposite and think of the home minus the furnishings and staging.  It can be hard, but the buyers that can do it make a much better decision in the end.

Home Selling In Tough Market

If you are trying to sell your home, it is important to pay close attention to the foreclosure, REO, and short sale market.   Even though they might be a slightly different market, those foreclosure listings WILL directly impact your market value.  There are quite a few issues coming these days with appraisals.   Keep in mind that they buyer’s lender must see the value in the home as well and they will validate the price with strict appraisal standards.

Timing The Real Estate Market

Before You make a move to buy or even sell a home, take a second and think about your timing.  We can’t all wait until the market is perfect to make a move, but even knowing what to look for can help with your decision.   In the end it can end up making or breaking your retirement plans.

Real Estate Purchase Contract

Game Plan to Real Estate Investing

The following is a great article for the current economic environment, writen by Steven Marshall.  Real Estate is cheaper than it has been in a long time and interest rates have stayed steady.  Now if ever was the time, you should descide to add Real Estate to your investment portfolio.  If you are at all interested in investing in Real Estate I recommend you go out and buy Gary Keller’s bestselling book, “The Millionaire Real Estate Investor,” as soon as you can.

Real Estate – Our Security Still

Even though there has been a recent downward adjustment in real estate values in many areas, one age-old fact still remains true. Real estate is the best long-term way to build wealth. It’s the time-tested path to solid security for everyone from the first-time homeowner to multi-millionaires.

The current housing climate presents opportunities we may not see again in our lifetimes. Let’s talk about five of the reasons why real estate still is the bedrock of our security, why we’re extremely lucky to be living in this unique time in history and why smart homeowners should be looking to expand their own real estate investments. Here are five of those reasons:

1 Real Estate is a Familiar Friend.
We always need a roof over our head and real estate all around us. We can touch it and its value isn’t dependent on protection from corporate theft or takeovers. As long as it’s insured, it is a permanent tangible asset. It’s easy to understand, identify and pretty simple to find and buy. We all can tell a good neighborhood from a bad one and whether or not a property is desirable… just by viewing it and the street where it sits.

Over time we’ve seen values surge as much as 20% in just one year, but those abnormalities eventually adjust back to reality, resulting in an overall long-term upward trend. The housing price index (HPI) for the entire country, as calculated by the Office of Federal Housing Enterprise Oversight, has recorded the 30-year historic growth of residential real estate at 5% per year. Investors should look for value purchases and avoid purchases any time prices are spiking. It’s usually the speculation lemmings that get caught holding the bag when chasing quick profits.

2. Just Say “No” to Flipping Temptation.
Avoid buying distressed or foreclosed homes hoping to sell for a quick profit. The better approach to your real estate purchase is a plan for longer-term wealth creation. I know it’s not as exciting as the prospect of transforming pennies-on-the-dollar properties into fast cash overnight, but this plan sets you up for more likely success and safety. The time tested buy-and-hold strategy proven by history won’t leave you in the lurch like many starry-eyed hopefuls who were lured into gambling for a long-shot big return.

3. Seldom Seen Second-Chance.
How many times have you passed on an opportunity and later regretted the decision? Well, the recent fall in real estate prices just may be time for potential real estate investors to get serious again. Smart, forward-thinking folks who buy during this downturn will likely rake in some serious returns in the future. It may be a while before large returns are realized, but it will likely outperform the stock market in the next decade or so.

Real estate trainer and investor, James Smith, advises his investor students to locate future tenants before even searching for a property to purchase. Many homeowners who bought homes they couldn’t really afford will become renters again. The demand for rental properties will be on the rise, so begin by seeking out families who would love to rent a nice house but who cannot scrape-up enough money for a down payment. You’ll start with built-in tenants and income from day-one to cover your mortgage payments… even before you sign a sales contract.

4. You’re Likely Sitting on Your Assets.
You can make real estate investment a long-term plan in more ways than just implementing a buy-and-hold strategy. Begin by rounding up underperforming cash from several sources. The first place to look is the current equity in your own residence. That cash may be allowing you to keep a nice low monthly housing payment, but you should seriously consider alternatives for utilizing and leveraging that cash into greater long-term returns and safety. Your Mortgage Planner can assist you in strategizing on your plan for repositioning your assets.

There’s a huge benefit in using OPM or “other people’s money” and rolling it into more buildings with higher values as time passes. Targeting a paid-off property is not the choice I make with my personal wealth plan, but you must follow your own comfort level in your investment choices.

5. Real Estate Risk Reducer.
Property ownership liberates you from the roller coaster ride returns of the stock market. Did you know you could also diversify among geographic markets with your real estate just like you can diversify a stock portfolio? Locate excellent rental management near the property location. This additional cost may cut down on your return, but it frees up your time, reduces your stress immensely and tears down the barriers of geography. Look for towns that are investing in local infrastructure, attracting new employers, offering job stimulation and are in close proximity to at least one university or college. Major employment loss and economic downturns are less likely in a city like this. From state-to-state and city-to-city, real estate values may fluctuate independently of each other.

Use these considerations to find the risk-reward scenario that works for you.

Marian Snow is the bestselling author of “Stop Sitting on Your Assets.” For a preview copy of her bestselling book that includes the audio book, visit: www.FreeStopSittingBook.com.

What Is A Short Sale

Here’s the question that started coming in to us about two years ago as short so properties started to become more more prevalent. Their are a lot of common misconceptions about what a short sell it and how they occur.

First, let’s talk about what a short sale is not. A short sale is not a home that night needs to be sold in a short amount of time. It is not a home with a small amount of square footage, or a home that is short in stature. A short sale is when the owner of the property essentially owes more than what the property is worth and they are trying to get the bank take less than what is over the property when they sell it. This typically happens during these foreclosure process.

So in a short sell property negotiation, you are working with a buyer, seller, and a bank. Once an offer is accepted between a buyer and seller, it then has to be fully approved by the bank before the transaction can occur. Depending on the bank, this can be a very frustrating process. I have worked several short cells that take months to even hear back from the bank on whether they will approve the price or not. The seller also needs to prove that they are not able pay off the remaining balance because of market conditions or their financial stability.

With that being said, buyers of short sale properties can get a very good deal when they purchase one of these properties because the banks definitely do not want to take properties back through foreclosure. The foreclosure process just cost the banks too much to do. But, if they don’t get an acceptable offers through the short so process they will foreclose on the property and then try to re-list the house as a REO property. Also known as bank owned.

If you’re looking to purchase property and looking at short sales or foreclosures, make sure that you work with an agent that knows that market. Otherwise, you might be in for a long frustrating process.

The Commercial Real Estate Timebomb

In a committee hearing in Congress that just ended, Joint Economic Committee Chairwoman Carolyn Maloney said that commercial real estate is a “ticking time bomb.” That comment alone has generated a Dow Jones story, an Associated Press story, a blog entry at the Washington Post, a Reuters story, a CNBC story and a Bloomberg story.

The comment came in early in the hearing, which includes testimony from Jon Greenlee, Associate Director, Division of Banking Supervision and Regulation, Federal Reserve Board of Governors; Richard Parkus, Head of CMBS and ABS Synthetics Research, Deutsche Bank Securities; Jeffrey D. DeBoer, President & Chief Executive Officer, The Real Estate Roundtable and James Helsel, Partner, RSR Realtors, Harrisburg, PA and Treasurer, National Association of Realtors. All of their witness statements can be read at the bottom of this page.

One question: How can commercial real estate be a “ticking time bomb” when we’re already more than two years into the sector’s decline? This testimony is occurring as a wave of new data hits us that shows that commercial real estate has already been hit very, very hard. We got the June same-store sales data today. Sales came in down between 4.3 percent and 5.1 percent, depending on whose numbers you look at. Reis also released new numbers on shopping center and regional mall vacancies showing vacancies have hit 17-year highs. A report from Real Capital Analytics shows that commercial real estate worth $108 billion is now in default, foreclosure or bankruptcy. Isn’t the correction playing out? What exactly does the industry need?

The real problem at hand is the volume of refinancing that needs to be done in the coming years in the face of the fact that the securitization machine–which had accounted for up to 40 percent of annual commercial real estate financing by 2006 and 2007–is completely shut down. Other sources of financing–commercial banks, life insurance companies, etc.–are still out there. They have tightened underwriting standards for sure and loan sizes are dramatically smaller than in the past. But they are out there. Moreover, there are government programs in place to address this–namely, the TALF and the PPIP. In fact, today there were more announcements about PPIP that should supposedly get the program moving. (To be fair, though, there are major doubts that the PPIP will ever work.)

There is certainly a mess out there. And the delinquencies, defaults and foreclosures will continue to mount. But while lobbyists are taking the situation as an opportunity to convince the government to lend a helping hand, doesn’t the current dilemma–the volume of refinancing being much larger than the appetite of lenders to offer debt–get at a key problem in how commercial real estate financing is structured? Maybe it’s not such a great idea to have short-term loans on commercial real estate set up with huge balloon payments at the end of the loan terms. It sets up scenarios where the incentive is not to pay down the loan, but instead to sell the property or to refinance and keep rolling the debt over. Does leaving commercial real estate permanently encumbered by debt make sense? There are plenty of owners that prefer to own assets free and clear with little or no debt against them. The current credit situation makes an argument that a more conservative debt structure is a better and safer business model. Perhaps we shouldn’t turn around and prop up a system that has proved to be so unstable. I also wonder how the players that have been more conservative and haven’t leveraged to the hilt feel about investors who took out too much debt getting bailed out by the government? What does all of this say about the concept of “moral hazard?” If the government steps in and restarts securitization, that just creates incentives to keep the same financing model in place rather than having the industry amend its business practices.

It will be interesting to read the full testimony of the hearing. I only caught snippets of what the panel had to say. It seems like at the very least the industry lobbyists are looking for further extensions to TALF. But how much more legislation or government-backed programs does the commercial real estate industry need to weather the current storm? That’s ultimately the question I’d like to hear an answer to.

(This post originall appeared at TrafficCourt)

7 Questions To Know About Your New Home

When you buy a home, especially your first home, a lot of thoughts will run through your mind. Is it close to work? Do I love that kitchen? Are there any prisons or hidden toxic waste dumps nearby? A lot of times these concerns are shrugged off as over thinking but they will significantly impact the resale value of your home. Here are seven things to look for in your next home:

How far is it from mass transit? – With the teeter totter gas prices we’ve seen over the past few years it’s easy to forget that gas prices were once five dollars a gallon in some parts of the U.S. Since home buyers typically look for their new home in the Spring/Summer months you are most likely to sell your home during the peak gas price months of the year. Being close to mass transit to major cities will ensure strong resale in the future.

Where is the closest grocery store? – You need food to survive and the idea of driving 20 minutes each way to the nearest grocery store isn’t going to give your home much resale appeal in the future. Find the nearest grocery stores using online mapping services like Google Maps. I always recommend clients map the distance between each home’s address and major commercial shopping centers.

How old are the home’s crucial features? – Crucial features are things like your water heater, furnace, roof and foundation. Sometimes a home flipping company will renovate the most viewed parts of an older home like interior floors, siding and walls but not take care of the home’s utility machines. Know the age of everything in the home to save yourself from heartache later.

Is there room to grow? – Single family homes offer the most flexibility in terms of expanding but there may be local ordinances or zoning laws in place that prevent you from adding another floor or expanding within a certain amount of feet of the property line. If you think your home will need to expand in the future then verify the local zoning/ordinances before making a purchase.

What’s the shape of the lot? – Homes come in many different shapes and sizes but often overlooked are the shapes of the home’s lot. You can have a flag lot (shaped like a pole with a rectangle at the top), corner lot or regular square lot. Be sure to understand how the lot is shaped so you know what you can do with your land in the future.

Are there any easements or shared land to be aware of? – People can get pretty creative over the years of owning land and may have easements on their land to allow utility companies or neighbors to use part of their land for special reasons. Although easements are usually never too big of a deal a shared piece of land or common entrance can be cause for rift in the future. If you have a shared driveway, for example, make sure a maintenance agreement is in place before purchasing the home.

What kind of ownership do you have in the land? – There are a variety of different land ownership types including 100 year leases where the builder or homeowner leased the land from a third party for an extended period of time and condominium ownership where you own the home but not a controlling stake in the land its built on.

Using the list above you will have an excellent, though not totally complete, guide to begin your home search and find a home that you can enjoy for many years.

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