Tax Credits Provide Outstanding Opportunities for Home Buyers 

The Worker, Homeownership, and Business Assistance Act of 2009 has extended the tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence. It also authorized a tax credit of up to $6,500 for qualified repeat home buyers.

Follow the link below to learn more.

http://www.federalhousingtaxcredit.com/faq2.php#2

If you or someone you know, is thinking of buying or selling Real Estate, please give me a call!

The President has signed the bill that will extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010 which was originally set to expire on November 30, 2009. 
This bill extends the credit of up to $8,000 through June 30, 2010, as welll as opens up the possibility of qualifying for a $6,500 incentive for those who have owned and lived in their residence for five consecutive years of the past eight.  

There is a deadline to qualify.  All contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.  There are also higher income caps in effecct as single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit.  But if you are a joint filer and you earn over $245,000 you are ineligible. 

The maximum purchase price is $8,000.No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

There are other qualifyig factors which you can review with your accountant.  If you do not have an accountant might I suggest visiting www.CoannahFinancial.org.  

If you feel you are read to take purchase your next home feel free to give me a call.

I look forward to "serving you".

As I sit here today I am reading through real estate related e-mails and articles and wondering if we are truly facing another wave of foreclosures or heading towards a tsunami style increase in home prices.  These emails and articles make it difficult to confirm their validity and weed through as each have their own agenda.  One email claims that an increase of foreclosures is on the horizon (selling tickets to a short sale seminar), another states the market is improving and this is the last month to get an excellent deal due before the huge increase in home values and the First time Homebuyer incentive expiring (new home builder trying to liquidate spec homes).

 As a real estate professional I find it imperative to keep a level head and not turn into Chicken Little with "the sky is falling" attitude.  Likewise I need to cautiously advise on the acquisition of real estate in our current market with care.  Really a Doris Day approach (Que Sera, Sera, whatever will be, will be) would be optimal, but when one is expending several years of salary on a home, it is not the time to be so carefree.

So you say okay Chad stop beating around the bush!  What can we expect?  Reality is, there is only One that can foretell the future, and I am not He.  But what I will address today is what some factors I will utilize to determine if another wave of foreclosures is on the horizon.  All I can say is to watch the how the feds deal with interest rates in the future.  If the Feds allow the rate to increase expect another wave of foreclosures as those 5 year ARMS (Adjustable Rate Mortgages) made in 2005-2006 will be at risk in 2010-2011.  An increase in rates for these type loans means an increased monthly payment with a higher risk of default.

There is one elephant that will remain in the room if the Feds keep the rates low over the next year.  At some point in time due to inflation the rate has to increase making the monthly payment on these loan structures less manageable.  With as much money as the Feds are printing to place in the outstretched hands of those companies/states, we are sure to see a massive increase in inflation and rates.  With this increase we will experience less buying power which will then lend itself to reducing home values as well as increased default of loans.

So my advice for those who are in an ARM is to either refinance, or negotiate a fixed rate with the few banks that are actually working with borrowers to modify loans.  If your bank is refusing to implement this aspect of the 2009 American Recovery Act (and if they accepted bailout money) try contacting your congressman to express your frustration with these banks. 

We are definitely in unique times and my heart truly goes out to those in distressed situations.  If you are having upside down in your home and are facing foreclosing, don't wait any longer and contact me today as I will do my best to help guide you through these troubled waters. 

As far as the concern over a Tsunami style increase of home values, I'll address that another day or even year for that matter.  Although history does indicate this may be in our future, but as far as in 2010, I don't expect so.  

If you feel you are read to take purchase your next home feel free to give me a call.

I look forward to "serving you".

Importance of Tried and True Real Estate Partners.

Today I am reminded of the importance of Tried and True Real Estate Partners.  With each buyer I have worked with since 2002 I typically have a conversation where I suggest to buyers that they use one of my trusted Real estate partners.   The particular trusted partner I am lacking with today's subject lesson happens to fill the role of the lender.  First what I consider to be a trusted partner is one who has consistently achieved a high level of service.  One might say a proven track record of excellent communication, thoroughness, proper file management, and a solid team helping to close files smoothly and timely.  Fortunately I have one of these trusted partners who have serviced client's needs extremely well over the years.   

What has prompted today's writing is the fact that I currently am involved with a lender who I have not had the opportunity to conduct business with prior to this particular transaction.  When this buyer came to me to assist her in locating a home, she was already engaged to a lender who previously assisted her father in a transaction late last year.  Much to my chagrin I chose not to have my normal Real Estate Partners talk with this client.   A mistake I will not soon repeat.

We were fortunate enough to get the jump on a lovely home in Chandler for under $125,000.  The purchase contract was executed on July 17 with a scheduled closing date of August 27.  Any lender worth their weight in salt will tell you this was ample time to gather and review all necessary documents, process the file, and have loan documents 3 days prior to the scheduled closing.  Certainly my Tried and True Real Estate Partner would have accomplished this task.  But remember my client is using a lender outside my referral system.  Now it became apparent to me, two weeks prior to closing that we were going to have a problem. 

Call me psychic, call me seasoned, but two weeks prior to closing I had that bad feeling we were going to have problems with this closing.  I guess the fact that the lender was not returning my calls was the first sign of distress.  When I was able to catch the lender (value of using a different phone so he doesn't recognize the number and pick up) he informed me that the lender he was originally going to place the loan with, charged extraordinarily high fee's, and they were desiring to have a second appraisal done on the property.  So this change in lenders was putting us behind but we still could close on time.

Now call me optimistic but I actually thought this could be done as the appraisal was already completed, they had 4 weeks to put together a solid file, and all they needed to do was to submit to the underwriter for approval.  But when he started contacting me trying to get assistance in gather supporting documents together for the file I quickly lost that glass is half full attitude. 

Today is September 1, and we still do not have the loan documents and the lender is frantically scrambling trying to produce the loan documents to supply to the title company so that we may close 7-8 days late.  Fortunately our seller has been understanding and has graciously extended our Close of escrow date allowing the lender another opportunity to service this loan so we should be alright.

A tried and true real estate partner understands that a Realtor, Lender, Inspector, and Escrow officer are all part of a team working for the buyer.  When one team member encounters a problem there is a residual effect on the remaining team.   On the realtor side of it, there typically is a need to manage and limit the amount of collateral damage created by these unexpected roadblocks as each closing poses their own set of obstacles that need overcome.   It's times like these that reinforce the value of a well established team in effecting a seamless close of escrow.

If you want to see how these Tried and True Real Estate Partners perform, don't hesitate to give me a call and I will show you first hand that the team I rely on, are truly intent on "Serving You".

 Almost daily the question is posed to me concerning the banks ability to come back against the homeowner should the bank not net the full mortgaged amount at the time of the trustee sale.   Arizona is an anti-deficiency state and therefore the banks can not pursue the homeowner for any remaining balance after the trustee sale occurs.  One exception may be if you happen to have a Home Equity Line of Credit on the home.  They may have legal recourse.  

With the newly adopted American Recovery and Reinvestment Act of 2009, there is a provision for first time home buyers who purchase a home.  Unlike the prior $7,500 tax credit of 2008, the new credit does not need to be repaid. 

This credit gives first time home buyers encouragement to take the leap of purchasing their first home.  Combined with near record low interest rates, and the colossal numbers of home competitively priced to choose from, should be cause to arouse the interest of that section of the public who has been uncertain as to the timing of purchase.     

To see the full fact sheet visit :

http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/FactSheet.pdf

I was meeting with a potential client just last night and was telling him of the advantages of buying a short sale property versus a bank owned property (REO's).  Banks have been streamlining their short sale processes and investors will start focusing their attention on short sales in lieu of getting into bidding wars on the REO's.  

I happened upon this blog this very morning and thought I would share it with you all with the authors permission.

Why It's Cheaper To Buy Short Sales Than REOs   

Some months ago, I had a long conversation with a real estate investor about short sale properties vs. REO properties.  He said he didn't think there was much in the way of savings derived from buying homes through short sales anymore.  Instead, he said it probably made more sense for him to buy foreclosed homes and wait patiently to buy them through lenders' REO Agents.  
 

I thought that was it.  I thought he had made up his mind on the subject and was just trying to politely tell me that he would no longer be needing my services, but then he added, "So what do you think about this?  Do you think I should start buying my investment properties as REO's?"  
 

With me being a Short Sales Specialist, I'm probably a bit biased on the advantages of buying short sale properties vs. REO's, but, in any event, here's what I basically told him.  
 

There are both advantages and disadvantages to buying short sale properties.  The major disadvantage of buying a short sale property is that there may be undisclosed liens or problems with the title.  When you buy a preforeclosed property; you're buying it as is.  There is always a risk that the distressed seller may have acquired liens (e.g. unpaid hospital bills or unpaid contractors' bills for home repairs) while they owned the property.  
 

Another downside to buying short sales is that they frequently take a long time to get approved and to close.  Most short sales take on average 3 to 6 months to close, and if you don't have the patience of a saint, you're probably going to lose interest in buying the property before too long.  
 

However, just like there are risks involved in buying short sale properties there are also benefits.  One of the biggest and most important benefits is the fact that short sale properties are usually cheaper to acquire than REOs.  If you wait for the property to be foreclosed on and placed on the lender's REO list, then you're going to usually pay more to own the property.   
 

The reason for this is the fact that by time the lender legally takes the property back he has already incurred an excessive string of additional fees, e.g. property taxes, HOA dues, hazard insurance premiums, mortgage insurance premiums, lost interest, attorney fees, property maintenance costs, real estate commission, etc. 
 

Naturally, the mortgage company plans to recoup these fees, and to help accomplish this goal, the lender subsequently raises the sale price of the REO property.  Depending on whether you're buying foreclosed property in a state that practices non-judicial foreclosures or judicial foreclosures, you could unknowingly end up paying an extra $10,000 on up to help reimburse the lender for these expenses.  
 

Well, that's my take on the subject.  If you disagree, please post your comments.  I'm really curious to hear your thoughts on this subject.   

 AUTHOR CREDITS: "Why It's Cheaper to Buy Short Sales than REOs,"   

from Tracy Miller's Blog:  Short Sales & More!   

  (Material Copyrighted 2008. Tracy Miller; All Rights Reserved.)   Tracy 's blog published at Active Rain Real Estate Network (www.activerain.com/blogs/tracyshortsales).  It is permissible to reprint, repost, reblog this material.  Please reprint material with the author's information included.  It is preferred that reprints of this material are published with this exact same "Author Credits" footer depicted or included at the bottom of any reproductions.