Is it really party time?

Right now, you may be wondering if you should go ahead and buy a house or wait.  With the amount of information being tossed about in the news about home sales, it’s really hard to know.  One minute, it’s doom and gloom and the next minute, it’s party time!

Point 1 – Realtors tell you it’s never been a better time to buy and lenders are telling you interest rates are below 5% (as of this posting date).  Both statements are true but the bottom line is this….Do you want or need a house?  Can you afford to own a home?  If you can answer both questions with a resounding “YES” then by all means buy.

Point 2 -Folks can speculate about the future but that’s about it.  Real estate has always been and continues to be an industry that’s value is based on supply and demand.  There is a saying that goes like this….   A seller can set the price but the market sets the value.  That statement has never been more true.   Never before have more homes been priced at market value  That means that you are paying a reasonable price and getting a great value.

Point 3 – Home buying credits are available to some buyers now but they will end.  Though credits are attractive, they should not be the only motivating factor.

Again, please remember to ask the 2 most important questions first.   That will make the decision easier to make.  Please feel free to contact me if you have any questions or would like to start looking for a home.   Always glad to help

Frequently Asked Questions – Homebuyer Tax Credit Changes

Question:  Existing home credit:  Must the new house cost more than the old house?

Answer:         No.  Buyers who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6,500 credit.

I am an existing homeowner.  On October 25, 2009, I signed a contract to purchase a new home.  I have lived in my current home for more than 5 consecutive years and am within the new income limits.  I will go to settlement on November 20.  Will I qualify for the new $6,500 credit?

Answer:           Yes, the existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed which is November 7).  There is no reference to the date of contract for the new credit.  The provision looks solely to the date of purchase, which is generally the date of settlement or closing date.

Question:     I am a first-time home buyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009.  Will I be covered by the new income limits?

Answer:            Yes.  The new income limitations go into effect as soon as the President signs the bill.  The income limit and other eligibility rules will look to your status as of the date of purchase or settlement date.  You should be eligible for the credit (or a portion of the credit if you’re within the phase-out range).

Question:      I am an eligible existing homeowner.  I have a fair amount of equity in my home.  I have found a home with a non-negotiable price of $825,000.  Will I be able to use any of the $6,500 tax credit?

Answer:             No.  The $800,000 cap on the cost of the purchased home is firm at $800,000.  Any amount above $800,000 makes the home ineligible for any portion of the credit.  The $800,000 is an absolute ceiling.

Question:      I am an eligible first-time  home buyer.  I entered into a contract to purchase on November 1, 2009.   Do I have to close before December 1?  How does the extension date affect me?

Answer:             You do not have to close before December 1.  The bill was signed November 7 and is  effective the date of signing.   Therefore, so long as the contract settles before April 30 (or July 1, worst date), the purchaser will be eligible for the credit.

The source of information for this blog is National Association of Realtors® Government Affairs Division.    Let me know if you have any other questions.  Always glad to help.

Things Needed After Purchasing a Home

Now that you’ve signed all the paperwork and your loan is approved, it’s time to move in.  But wait!  Before you put your feet up, there are a few things that you will need in order to make your new house a home.

Locks

Regardless of whether you purchase a newly constructed home or one that was formerly owned by someone else, it’s important that you have the locks changed.  Everyone from REALTORS® and contractors to friends and family of the former owner may have a key, which is why getting new locks should be at the top of your list.

Furnishings

You can’t hang your hat without a hatrack, so don’t forget to add some necessary furnishings.  Some homes may include appliances and possibly even some furniture, but most homeowners prefer to decorate their house themselves.  After all, someone else’s taste in decor may not necessarily be the same as your own.  If you purchase from a furniture store, they will handle the delivery for you.  Otherwise, you can hire a moving company. 

Appliances & Cookware

Even if your new home is equipped with appliances, you may still need to add a few items into the mix.  For instance, a coffee maker, toaster, microwave or blender may be items you want for your kitchen.  You will also need flatware, tableware and a quality dish drainer to hold your dishes that require the handwash method.

Tools

When you move into a new home, there will likely be some things to do that require the use of tools.  Whether you need to assemble furniture, a desk for your office or just need to tighten some bolts here and there, a good set of tools is a necessity.

Personal Touches

No home is complete without personal touches that represent the new owner’s taste, so don’t forget to include them on your shopping list.  Pictures, paintings, special window dressings, accent pillows, plants, decorative throws, accent rugs and bedding sets will create a custom interior that’s all about you.  Other things to consider include portable air cleaners, water filters, an answering machine, wastebaskets and a bathroom plunger.

Outdoor Décor

If you like to entertain, equipping your backyard accordingly is a must.  Patio furniture, an outdoor grill, landscaping tools and garden supplies are essential to creating an outdoor atmosphere that your family and friends are sure to love.  Speaking of the outdoors, don’t forget to purchase a lawnmower and trimmer unless you live in a subdivision where lawncare is included in the maintenance fees.  If you live in an area that’s prone to snowfall, keep this in mind when shopping for maintenance supplies.

The best way to tackle a large list of necessities is to keep a pad of paper nearby and write down each item as you think of it.  Think about each area of your new home and do a mental inventory of what is needed.  There will always be new items to add to the list, but you will cover the basics with your handy checklist of necessary items for your new home.  Also, if you would like a complete move guide, please contact me and I’ll get it to you right away.  

First-Time Home Buyer Credit Extended and Expanded

On November 5, Congress passed an extension to the  First-Time Homebuyer credit. The credit for first-time home buyers is still $8,000.  The credit remains 10% of the cost of the home or whichever is less.

First-time home buyers who are presently trying to the meet the November 30 deadline can still qualify under the new bill.

DETAILS:

All qualifying buyers using credits must be under contract (that means all parties in agreement and signatures) by May 1, 2010 and then must close by June 30, 2010. 

SPECIFICS:

• A first-time homebuyer is someone who has not owned a home in the past three years.

• Income limits for those using the credit is raised from $75,000 to $125,000 a year for individuals and from $150,000 to $225,000 for couples.

• Credit for first-time homebuyers remains 10% of the cost of the home or $8,000, whichever is less.

• Existing homebuyers must have owned and lived in their current home for 5 years.  Does not apply to second homes or investment properties.

• The existing home buyer credit is $6,500 or 10% of the value of the home whichever less.

• The purchase limit on a new home cannot exceed $800,000.

To claim either credit, use the same IRS form 5405 and add to an amended return form.  There is also now a requirement to add a copy of your certified Settlement Sheet.  To get all the details go to http://bit.ly/1×4iNY.

The other great news for homebuyers this week, is that the 30-year mortgage rate fell below 5%.   If you need help, check out http://bit.ly/howur Send me an email or a tweet and I’ll be glad to suggest someone who can assist you in your area.   Always glad to help…

Buying a Home with Bad Credit – Is it Really Possible?

Buying A Home With Bad Credit

When it comes to buying a home, having bad credit is not the end of the world.  Your future doesn’t have to be defined by your past.  Whether you have suffered from a bankruptcy, foreclosure or some type of financial hardship that resulted in late or missed payments, there are lenders who specialize in financing for those with less-than-perfect credit.  You will likely have to produce a larger down payment and/or pay higher interest rates than someone who has good credit, but the important thing to know is that buying a home is an option for you.

Bankruptcy & Foreclosure

If either a bankruptcy or foreclosure is on your credit report, it could take some time before you can qualify for a good interest rate on a mortgage.  FHA loans, which are especially desirable for those with past credit problems and first-time home buyers, are backed by the government and offer a low down payment and interest rate option for those who qualify.  Although the notation remains for up to 10 years, individuals with a bankruptcy or foreclosure on their credit report may qualify for an FHA loan after two years.  Some mortgage lenders may approve a loan sooner, but the interest rates will be higher and the required down payment may be as much as 35 percent of the purchase price of the home.

Cleaning Up Your Credit

Even if you have bad credit, it’s important to check your credit report from each of the three major credit reporting agencies – TransUnion, Equifax and Experian – before applying for a loan.  If anything is inaccurate, file a dispute with the reporting agency and request a correction.  You can request a free copy of your credit report every 12 months.

In addition to correcting any inaccuracies on your credit report, it’s important that you know what can help or hurt your chances of obtaining a loan.  You can start improving your credit by avoiding the temptation to apply for new credit right before submitting a mortgage application.  Multiple inquiries will cause your FICO score to drop, and lenders will rely on this information when deciding whether or not to issue your loan and how to calculate your interest rates.  With past credit problems, most lenders will want to see that you have rebuilt your credit history with 1-3 major credit cards and timely payments over a two-year period.

Money Matters

When it comes to obtaining a home loan, a healthy bottom line will help the lender to see you as being creditworthy.  It’s important that you have sufficient income, along with the ability to prove steady employment for at least one year (longer is better) preceding your loan application.  Most lenders will request a copy of your tax returns for the two most recent years, along with current pay stubs.  If you have money for a down payment, this will also work in your favor.

Creative Financing

In some cases, a conventional mortgage loan may not be available no matter how hard you try.  Owner financing is one way that individuals, who may not otherwise qualify for a traditional mortgage loan, can purchase a home.  This type of financing is offered by the owner and may include interest rates comparable to other loans, flexible down payment options and no credit check.  Your REALTOR® can assist you in finding homes that offer alternative financing options.  Let me know if you have more questions.

I’ll be glad to help.  This link will send me your way.  http://bit.ly/howur

Home Buying Negotiating Tips

When it comes to buying a home, the ability and willingness to negotiate is a must for both buyer and seller.  In general, sellers ask for more than they are actually willing to accept and buyers offer less than they are willing to pay.  The trick is to find the perfect balance so that you, as a buyer, feel good about the purchase price without leaving the seller feeling insulted.  In the past, this was understood.  Now, more than ever it important the both sellers and buyers understand the market value of the property being considered.

Make It Personal

When you make an offer, the seller will see nothing more than a piece of paper with some numbers on it that represent the price you are willing to pay.  If you really want the seller to take your offer to heart, let them know why you want to buy the home.  As a realtor, I compose a short narrative for all of my buyers to accompany the initial offer.  Sometimes it will include a short bio and other times it will consider other information that the seller might find helpful.  You can also do this by preparing a handwritten letter expressing your interest and the reasons you fell in love with their house.  If you have a family, tell the seller about everyone who will be living in the home.  Let them get to know you and allow them to picture the happiness that you can bring to their house.  Believe it or not, some sellers actually look at the process like finding a good home for a lost puppy.  They want quality people to buy their home, so do your best to show them that you are sincere.

Nobody Likes Rejection

Not every offer is accepted, so don’t be disheartened if your first offer isn’t a winner.  In some cases, the seller will make a counteroffer for your consideration.  Have you ever heard the old saying, “never take the first offer?”  The same is true in real estate, and almost every seller knows it.  Your first offer is likely to be less than you are actually willing to pay, which leaves you some bargaining room.

Why Your Offer May Not Be Accepted

There are a number of reasons why a seller may choose to reject an offer, including a feeling that the offer was just too low, the house is newly listed on the market or another offer may be higher than the one you created.  In some cases, sellers may also reject an offer that includes owner financing or other requests that are impossible to meet.  One example may be an offer that requires the house be available within a certain amount of time.  Most contracts require that the seller move out within 45 days, but anything less would require negotiation.

Read The Fine Print

Before you sign anything relating to a real estate transaction, make sure that you read over every detail of the agreement.  If you have any questions, ask your REALTOR®.    If you need local help, check out http://cctulsa.com/vhenry Send me an email and I’ll be glad to suggest someone who can assist you in your area.   Always glad to help…

79 Days and Counting – The Gift that Won’t Keep Giving

There’s been some recent talk about extending the First Time Home Buyer’s credit but there has not been a lot of  action on the topic.   For buyers who are considering buying a home, here are the details.  I am providing links to the actual IRS page to give you the details but I am more than happy to talk to you about the them as well.

• Applies to purchases that close after April 8, 2008 and before December 1, 2009.
• Applies only to your primary residence and cannot be used to buy a second home.
• Reduces your tax bill or increases your refund, dollar for dollar.
• Is fully refundable, meaning the credit is only paid to the tax payer.

Here’s the actual link to get more details.  www.irs.gov/newsroom/article/0,,id=204671,00.html

What that means for you?  If you have not owned a house in the last 3 years you qualify.    It also means that you can take advantage of all the great homes that are currently on the market at a reduced price.

What that also means for you is that you must get qualified and go under contract by October 15.   That means that you need to make an offer, negotiate with the seller to agreed upon terms and close by December 1.  Honestly, as soon as you can find the best house the better.

We make the best decisions when we can consider all the options and setup a situation where all out bases are covered.  All the emotion is kicked up a notch when you are not able to find  a home and you have calendar date looming in the distance.  Closing companies are going to be heavily booked as these dates near.   There will only be a certain number of closings that can occur on a given day so keep that in mind.

If you are looking for a home, get a good realtor.  If you need help finding one, contact me and I’ll put you in touch with the very best!

What is a Home Warranty?

A home warranty plan, also known as a home protection plan, is a service contract that offers homeowners a way to safeguard themselves against possible breakage or a malfunction within the home.  It’s impossible to predict the future, which is why so many buyers look for that little extra peace of mind to comfort them when life unexpectedly throws them an unforeseen problem.

Who Needs A Home Warranty Plan

Basically, anyone who purchases a home and is concerned with the cost of repairs should consider a home warranty plan.  This is especially true of first-time home buyers who may not be familiar with home maintenance.

Factoring In The Cost

When factoring in the potential cost of repairing a major appliance or other home component, a home warranty plan may not be a bad investment.  The actual cost of warranty coverage will depend on the plan chosen and the items protected.  As is the case with everything in life, it’s best to shop around and compare prices.

Who Pays For A Home Warranty Plan

As a buyer, you can order a home warranty plan in conjunction with the purchase of your home.  However, some sellers or builders may include this type of offering as an incentive to attract potential buyers.  In this case, the plan is yours at no additional cost.

What’s Covered & What’s Not

Just like a car warranty, no two policies are the same.  Coverage varies by location and issuer, and your REALTOR® can help you to choose a warranty plan that best suits your needs.  Most basic plans cover a home’s heating and cooling system, electrical system, plumbing, water heater and major appliances, including a dishwasher, range/oven/cooktop, garbage disposal, etc.  Coverage does not apply to items that are misused or damaged, either intentionally or through negligence.  Instead, most home warranty plans are designed to protect the homeowner from defects that result during the course of normal wear and tear.

When considering the purchase of a home warranty plan, review the complete contract and familiarize yourself with exactly what’s covered under your policy.  If you want an upgraded policy, don’t hesitate to ask.  Most companies do not require a home inspection and will notify homeowners when their coverage is about to expire.  The good news is that most policies are renewable.

A Home Warranty can be purchased at any time so if you first decide not to buy one, you may want reconsider after a year or two in the home.

I hope you found this information helpful.  Feel free to contact me by phone or by email.

Real Estate is Not a Universal Language

Once you’ve made the decision to buy a home, it’s time to start thinking about what comes next.

Learn The Lingo

Every state has its own real estate laws, contracts and practices.  But in all cases, a buyer wants to buy and a seller wants to sell.  The terms are worked out between the buyer and seller.  Another common denominator is money or something of value given in exchange for ownership.    That’s why it’s helpful to not only look at houses but to get familiar with the lingo.   Try this test.   Google or search “ohio real estate purchase contract” or any other state that you are curious.

Typically, what will come up in the first group is a quick reference to the state’s real estate commission.

Next Talk To A REALTOR®

Nobody knows the real estate business like a REALTOR®, so let them help you in your search for the perfect home.  They can answer questions relating to the neighborhood, recent inspections on a particular home and any needed repairs.  Because a REALTOR® has access to a number of area homes, they have the ability to show you various choices within your preferred area and price range. Your realtor can also provide you a copy of a copy of a real estate purchase contract, but  Here are some common contract terms found in purchase contracts.

• Name of buyer and seller
• Legal description of property to be sold
• Purchase price
• Earnest money.  Earnest money is not required in every state.
• Closing Date
• Personal property to be included in the sale
• Disclosures
• Inspections
• Home Warranties
• Title insurance
• Contingencies

So, although real estate is not a universal language, it is understandable with some local help.  If you have questions or would like to start looking for your next home, you can reach me by phone at 918-625-6555 or contact me at vicky@vickyhenry.com.  I can also refer you to someone in your area to help you with all the details.

Oops – I forgot to tell you…

As I show buyers homes, I always printout a disclosure for each home.  I explain the seller’s disclosure so that they can get comfortable with the information that is being provided.

Frequently, I am asked, “Does a seller have to reveal everything?”  My response is always, “A seller should reveal every material fact about the home.”  Lexicon defines a material fact as “a fact that would be important to a reasonable person in deciding whether to engage or not to engage in a particular transaction.”   So, if it’s something that could affect whether a buyer would buy then it should be disclosed.   This gets confusing sometimes because one person’s idea of “everything” is different from another’s.

Neighbors are always good about bringing up information about a home to its new owner.  But, neighbors are not always the best source of information.  After a recent move-in, a buyer asked about plumbing problems that he thought might have occurred with his home prior to ownership.  The buyer was upset because a neighbor had told him that a plumbing truck was parked in his neighbor’s drive-way at least twice a week.  Of course, the buyer was alarmed.  I called the seller and asked if they had ever had plumbing problems with the home.  The sellers said, “No, in the 10 years, that we owned the home, I can’t think of any plumbing problems.”  I explained what had happened and the seller started laughing.  The seller’s response was “Oh, for goodness sake.  Our son recently got a new job with a plumbing company and he sometimes stopped by the house on his way home.”

But the key is to ask questions about the disclosure.  If you walk through a house and you see things that aren’t on the disclosure, you need to ask.  For the most part, people will share what they know. ” Oops, I forgot to tell you” is never a good defense or explanation.   Also, if a seller hasn’t been the only owner, the “everything” may not be known.  Having inspections can sometimes help.  What I tell homeowners is that if it is something you would want to know, then you need to have it on the disclosure.

Please contact me if you have any questions about disclosures.  States have different disclosure requirements so check with your state.   Ask your realtor for a copy of the form that is used in your market.  Information is readily available.