For Sale by Owner, please take note

You are approached by a prospective buyer and they want do a lease purchase, or maybe they ask you to sign the deed over to them, but they promise to continue making the payments on your behalf. Please, please, please if you are asked to sign any paperwork, have it reviewed by a real estate Attorney. It is so important in this economic climate to have representation. In speaking with other for sale by owners, many of them are now working with Realtors and their team of professionals because of these type of experiences.  There maybe cases where the above scenario may have worked, but unfortunately there are people that may be taken advantage of.
If you would like to sit down and talk about how we can work together to sell your home, please contact us.  We look forward to partnering together and getting your home SOLD!

First Time Homebuyer Tax Credit

I am sure you have heard the stimulus package included a revision of the homebuyer tax credit. Here is a brief overview:
WASHINGTON – Feb. 17, 2009 – How does a first-time homebuyer take advantage of the $8,000 tax credit that President Obama is expected to sign into law tomorrow? It comes with a few rules. According to the most recent analysis, the following rules will apply – though things could change as tax professionals weigh the details:
• The deduction is worth 10 percent of a home’s value up to $8,000, which means all homes worth more than $80,000 could qualify for the maximum amount.
• There is an income limit to qualify. A married couples’ modified adjusted gross income (MAGI) should be under $150,000 and single filers’ MAGI should be less than $75,000.
• Partial tax credits may be available for married couples with MAGI incomes over $150,000 but under $170,000, and single filers with incomes over $75,000 but under $95,000.
• If married couples file separately, they can both claim 5 percent of the home purchase ($4,000 each for a home over $80,000) on their tax returns.
• It’s a tax credit, not a deduction. That means the entire amount goes back to the first-time homebuyer unlike deductions, such as mortgage interest, that are subtracted from gross income before tax is calculated. If qualified for $8,000, the buyer gets $8,000, even if they would not owe that much in taxes otherwise.
• The tax credit applies to homes purchased between Jan. 1, 2009, and Dec. 31, 2009.
• The tax credit does not have to be paid back, providing the homebuyer keeps the property for at least 36 months and resides in the home.
• To qualify as a first-time homebuyer, the purchaser cannot have owned a home within the previous three-year period. However, ownership of a vacation home or rental home does not disqualify the buyer.
• If purchasing a new home, the effective date to receive the credit is the first day the homeowner actually lives in the house. If construction began in 2008, that buyer could still qualify. And if construction begins in 2009 but the owner does not take possession until 2010, the buyer would not qualify.
• The tax credit can be claimed on 2008 income tax forms even though the purchase took place in 2009. A buyer could close on a home the same day that President Obama signs it into law, fill out their income tax forms the next day, and receive the tax credit fairly quickly.
The tax credit is not a downpayment, but it could be used toward a downpayment if first-time homebuyers plan ahead. U.S. taxpayers have money withheld from every paycheck for income taxes. If they owe more tax than the amount deducted, they pay the IRS; if they owe less, they get a tax refund.
By anticipating at least an $8,000 refund in early 2010 when they file 2009 taxes, these buyers could cut down on their tax withholding this year and save the money toward a downpayment. There is one caveat, however: Should they not buy a home in the qualifying period, they would still owe the IRS the money, and reducing their withholding amount could result in a high bill at tax time.

Please consult your accountant to confirm qualification.
Be sure to SURF the MLS today to see what buying opportunities are available

New Construction

There are a lot of DEALS out there on newly constructed homes, along with many benefits.  There are even scenarios where purchasing new construction may be less expensive than some of the resale's in the same community. When purchasing a new home, (in most cases) the builder offers a one year bumper to bumper warranty. Anything wrong with the house, you just give them a call! Typically the second year is electric and plumbing followed by a limited 10 year structural warranty. 
Many builders will offer incentives, such as finance through one of their preferred lenders and we will pay for a portion of your closing costs. This amount can vary, but I have seen $3000 up to $6000 towards closing costs. They may also agree to pay 1 year of your Homeowners Association dues (if the community has one).
It is also important to use a Realtor when purchasing new construction. The sales person in the office represents the Builder/Developer, and it is important to have someone on your side.  Best of all, it costs you NOTHING!!
For more information on some of the areas that offer New Construction.

FHA Financing

Many of my customers are utilizing one of the best programs available to buyers at this moment: FHA Loans!
FHA Loans require ONLY a 3.5% down payment – so on a $150,000 home that is only $5,250. Combine this with the low interest rate and it is achievable – particularly for first time home buyers.  In many cases, you can negotiate with the Seller or Bank (if it is a bank owned) and ask for a contribution towards your closing costs (typically between 3 and 6% of the purchase price in many cases).
To qualify for FHA loans, borrowers must be able to document their incomes and assets and not have defaulted on student loans or other government-backed debt. They usually need credit scores of at least 580. Credit scores range from 300 to 850. Borrowers who don’t go the FHA route will face stricter credit requirements on conventional loans. The conventional loans depending on qualifications, typically require 5% or more.
It is a great time to contact us and we can put you in contact with a Mortgage Company that can help.