Charles S. Ramsay » First Time Buyers Tips

No More Tax Credit Extentions

ramsaych — Sun, 27 Dec 2009 20:28:05 +0000

2010 will be the year during which it becomes clear to most everyone that waiting for the bottom of the market is over. One of the best ways to improve your investment is to buy before it becomes common knowledge that prices are rising. As they say, once you get a tip on a “hot stock” it is too late because too many other people will also have received the same tip…
Nonetheless, I think all of 2010 will be a good year to buy in Portland. However, if you are planning to buy, you should definitely try to take advantage of the tax credit before it goes away for good…

Real world First Time Home Buyers Start to finish overview

ramsaych — Fri, 11 Dec 2009 23:58:39 +0000

First Time Home Buyers Start to Finish overview:

Here goes! This has been done in a more conservative way so many times before, I thought I would go for a more real world feel.

Not necessarily in any linear order:
1. Choose a great team! Realtor, Lender, Home Inspector, and trow in some level headed/ not too opinionated friends to bounce your favorite house ideas off of… (not your fearful, conservative parents who have not re-thunk their ideas of you since you were 12 years old. They are not usually all that helpful). However, if your parents rock (hi Alyssa!) then bring them on!
If you don’t have any idea how to put together a great team (these people are not necessarily the friends you hang out with at the bar…) don’t worry. If you find a terrific Realtor, they will have a great team already. **Check out: “Negotiation skills and real world experience are vital now” (my post from August 17th, 2009) for tips on how to choose the best Realtor for you!

2. Get your money figured out. You need a down payment (3.5% -10% will do it), earnest money to put down (like a deposit) when you make your offer, (say $2,000-5,000) and $300-500 for inspections.

3. The Seller pays for your Realtor’s fee, so don’t worry about that.

4. Find the best house you can. Notice I did not say the perfect house, as these are hard to come by under a million. Mak e a list of your dream features, and stay flexible. You will become an expert in no time with regard to the specific area and price range of homes you are looking for. Listen to advice from the experts who are helping you. They have been this every day for years and years.

5. Make sure to have an easy way to communicate back and forth without any delay. I love twitter and text, but phone and in person are best! If you can tweet your Realtor asking to have them call you right away for example… make agreements.

6. Ask lots of questions as things unfold. There are over 1,000 things that have to happen for a home purchase. Luckily, the buyers only have to do about 50-100 of those things if they are well represented.

7. go to the home inspection and remember that you have hired a professional to find as many things wrong with your dream house as possible. Almost everything can be repaired or replaced. You need to know what it will cost and as long as it is not too much, relative to the price that has been negotiated, or better yet, if the seller is paying for it, then you can keep moving forward to close. Focus on the major things: roof, siding, foundation, utilities, (not the paint color in the kitchen).

8. Ask your agent to get you what you want. Expect to get everything within reason, and don’t forget, you can always walk away. Your only liability is for your earnest money, worst case. I have never lost anyone’s earnest money and have represented almost 500 people… (OK there was one guy who changed his mind like the day before signing, but he felt that the sellers deserved some compensation).

9. Try to enjoy the process and have a good time! It is a big deal, but it is not a permanent decision. Most people stay in their house for only seven years. Also remember, you are not spending the whole amount of the purchase price, but in an up market, you do get to enjoy the increase in value for the whole amount!

10. Plan a house warming party! Do not wait until you are all settled in, cause you will forget.

11. If you feel you were well cared for and represented in a professional yet ready to go to the mat for you way by your Realtor, then recommend him/her/them to your friends and family. They depend on you for the survival of their business.

Call me if you want an extra opinion on anything. I have plenty to go around!

PS if you want a dictionary style rendition of this process, (click here) and you will link to a more conservative version…

IRS Tax Credit Explained in 60 Seconds!

ramsaych — Mon, 30 Nov 2009 21:47:41 +0000

The new deal! Find out the key points here with links to the source.
1. $8000 tax credit extended through June 30th of 2010, however, you must be under contract by April 30th, 2010!
2. Existing home owners also qualify now. As long as they have been in their existing home for 5 years or more, and meet the income restrictions, they will receive a $6,500 tax credit!

3. Please feel free to call me with any questions.

Real Estate Tools and Calculators

ramsaych — Fri, 20 Nov 2009 18:34:27 +0000

This is a great resource for people who want to work up their own personal numbers on everything having to do with Real Estate transactions. You will also see an excellent summary of the closing process!
Click anywhere on the image below to link to the website.

It is official! Obama signs the First Time Homebuyer Credit

ramsaych — Fri, 06 Nov 2009 18:36:29 +0000

Some good news for the first time buyer!

Washington, D.C. (AHN) – The House moved quickly on Thursday to pass an extension of jobless benefits and a home buyer tax credit, giving final congressional approval to a measure that had been delayed for weeks due to partisan disagreements. President Barack Obama signs the bill into law on Friday, the same day the Labor Department reports on latest unemployment numbers.

The House voted 403-12 to pass the Worker, Homeownership, and Business Assistance Act of 2009. All opposing votes came from Republicans, including Reps. Michael Burgess (R-TX), Jeff Flake (R-AZ), Scott Garrett (R-NJ), and the head of the conservative caucus, Republican Study Committee Chairman Tom Price (R-GA).

The chamber passed the measure in September by a vote of 331-83 but needed to approve amendments introduced by the Senate, which passed the bill on Wednesday by 98-0.

Read more: http://www.allheadlinenews.com/articles/7016917249#ixzz0W6cQkOM3
Kris Alingod – AHN Contributor

First Time Buyer Credit Passes Senate and House!

ramsaych — Thu, 05 Nov 2009 22:52:24 +0000

Great News! The First time Buyer tax credit has passed the Senate and the House and will be extended as soon as President Obama signs it!

Big Rebound in Existing-Home Sales Shows Buyer Momentum!

ramsaych — Tue, 03 Nov 2009 20:32:40 +0000

This is great news!

Big Rebound in Existing-Home Sales Shows First-Time Buyer Momentum

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homebuyer_couple_1026RISMEDIA, October 26, 2009—Existing-home sales bounced back strongly in September with first-time buyers driving much of the activity, marking five gains in the past six months, according to the National Association of Realtors®. Existing-home sales–including single-family, townhomes, condominiums and co-ops–jumped 9.4% to a seasonally adjusted annual rate of 5.57 million units in September from a level of 5.10 million in August, and are 9.2% higher than the 5.10 million-unit pace in September 2008. Sales activity is at the highest level in over two years, since it hit 5.73 million in July 2007.

Lawrence Yun, NAR chief economist, said favorable conditions matched with a tax credit are boosting home sales. “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home,” he said. “We are hopeful the tax credit will be extended and possibly expanded to more buyers, at least through the middle of next year, because the rising sales momentum needs to continue for a few additional quarters until we reach a point of a self-sustaining recovery.”

Even with the improvement, Yun said the market is underperforming. “Despite spectacular gains in the stock market, principally from the financial sector recovery, most of the 75 million home owning families have more wealth tied to their homes. Home values could soon turn consistently positive and help the broad base of middle-class families, but we are not there yet,” he said. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth and to fully remove consumer fears, which would then revive the broader economy. Without a firm foundation for middle-class wealth recovery, the post-recession economic growth likely will be one of the weakest in U.S. history.”

Early information from a large annual consumer study to be released November 13, the 2009 National Association of Realtors® Profile of Home Buyers and Sellers, shows that first-time home buyers accounted for more than 45% of home sales during the past year. A separate practitioner survey shows that distressed homes accounted for 29% of transactions in September.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said affordability conditions remain historically high. “Potential first-time buyers can take heart in that affordability conditions this year are the highest on record dating back to 1970, but with the first-time buyer tax credit scheduled to expire at the end of next month, people could hold back from entering the market,” he said. “Our read is that housing overshot on the downside because homes are selling for less than replacement construction costs in much of the country, and the home price-to-income ratio has fallen below the historical average,” McMillan said.

Total housing inventory at the end of September fell 7.5% to 3.63 million existing homes available for sale, which represents an 7.8-month supply at the current sales pace, down from an 9.3-month supply in August. Unsold inventory totals are 15.0% below a year ago.

“The current housing supply is the lowest we’ve seen in two and a half years,” Yun said. “If we could continue to absorb inventory at this pace, home prices would return to normal, modest appreciation patterns next year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.06% in September from 5.19% in August; the rate was 6.04% in September 2008. The national median existing-home price for all housing types was $174,900 in September, which is 8.5% lower than September 2008. Distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area.

Single-family home sales rose 9.4% to a seasonally adjusted annual rate of 4.89 million in September from a pace of 4.47 million in August, and are 7.7% above the 4.54 million-unit level in September 2008. The median existing single-family home price was $174,900 in September, which is 8.1% below a year ago. Existing condominium and co-op sales jumped 9.7% to a seasonally adjusted annual rate of 680,000 units in September from 620,000 in August, and are 9.7% above the 561,000-unit pace a year ago. The median existing condo price was $175,100 in September, down 11.7% from September 2008.

Northeast
Regionally, existing-home sales in the Northeast increased 4.4% to an annual level of 950,000 in September, and are 11.8% higher than September 2008. The median price in the Northeast was $234,700, down 7.0% from a year ago.

Midwest
Existing-home sales in the Midwest jumped 9.6% in September to a pace of 1.25 million and are 7.8% above a year ago. The median price in the Midwest was $147,600, which is 1.0% below September 2008.

South
In the South, existing-home sales rose 9.0% to an annual level of 2.06 million in September and are 10.8% higher than September 2008. The median price in the South was $153,500, down 7.6% from a year ago.

West
Existing-home sales in the West surged 13.0% to an annual rate of 1.30 million in September and are 5.7% above a year ago. The median price in the West was $219,000, which is 15.0% below September 2008.

Read more: http://rismedia.com/2009-10-25/big-rebound-in-existing-home-sales-shows-first-time-buyer-momentum/#ixzz0VpY70WJG

National Association of Realtors Overview on First Time Buyer’s Credit

ramsaych — Tue, 03 Nov 2009 20:28:46 +0000

This is the best site for comprehensive First Time Buyer information. Click on this link and you will find all of the information you may want! Please call me with any questions you may have, anytime. http://www.realtor.org/government_affairs/gapublic/homebuyer_tax_credit http://www.realtor.org/government_affairs/gapublic/homebuyer_tax_credit

First Time Buyer Credit Looks Certain. Obama gives the Nod!

ramsaych — Tue, 03 Nov 2009 20:04:38 +0000

I like this report!

First-Time Home Buyer Tax Credit Gets Obama Nod

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By Luke Mullins

Posted: October 29, 2009

An extension of the $8,000 first-time home buyer tax credit appears all but certain after the Obama administration called on Congress to give house hunters more time to claim the popular tax perk. The move comes shortly after Senate lawmakers stuck an agreement to not only push back the measure’s looming deadline but expand it to allow current homeowners and more affluent buyers to claim the credit. “We welcome efforts taken by Congress to extend the first-time home buyers tax credit for a limited period,” Treasury Secretary Tim Geithner and HUD Secretary Shaun Donovan said in a joint statement today. “This credit has brought new families into the housing market and contributed to three consecutive months of rising home prices nationwide.” Here are five things you need to know about the development:

[See New Home Buyer Tax Credit: 7 Things You Need to Know.]

1. Roots and impact: A tax credit of as much as $8,000 for certain qualified first-time home buyers was included in the Obama administration’s sweeping economic stimulus package, which the president signed in mid-February. The measure was designed to stimulate additional demand for residential real estate and help absorb the overhang of unsold properties that was putting downward pressure on home prices. Along with cheaper home prices and attractive mortgage rates, the perk has helped reduce the glut of unsold properties. Mark Zandi, the chief economist at Moody’s Economy.com, expects the tax credit to result in as many as 400,000 additional home sales by the time of its scheduled expiration at the end of November. But trade groups—like the National Association of Home Builders and the National Association of Realtors—have been lobbying Congress to push the deadline back, arguing that failing to do so would jeopardize recent signs of stability in the housing market. The NAHB, for example, blamed yesterday’s weaker-than-expected new home sales report on the tax credit’s impending expiration.

[See Weak Home Sales Suggest a Slog of a Recovery.]

2. Extending the deadline: Although various proposals to extend and expand the credit have circulated in Congress for weeks, Senate lawmakers finally reached a deal in recent days. Under the terms of the agreement, the deadline for first-time home buyers to claim the $8,000 credit would be pushed back to April 30, 2010. But the term “deadline” doesn’t mean the same thing as it does in the current credit. The Senate agreement stipulates that buyers must have a sales contract on a house by April 30 to be eligible, but it gives them an additional 60 days to close the purchase. That’s much different from the current credit, in which transactions must be closed by November 30. Looked at one way, the effective deadline of the credit under this agreement is actually the end of June.

3. Existing buyers: But perhaps the most significant change is that current homeowners would become eligible for the tax perk as well. The current credit prevents home buyers who have owned a primary residence within the past three years from claiming the credit. The agreement, however, would allow current homeowners to claim up to $6,500 as long as the property they are vacating has been their primary residence for at least five years. Expanding the credit beyond first-time buyers is intended to boost home sales to “move up” buyers—those moving from one house to another—which some lawmakers, most notably Georgia Republican Sen. Johnny Isakson, argue is essential to a housing recovery.

4. More-affluent home buyers: The agreement also enables more affluent Americans to claim the tax credit. Senators moved to increase its annual income limits from $75,000 to $125,000 for single buyers and from $150,000 to $225,000 for married couples. These limits apply to both first-time and move-up buyers, although neither can purchase a home for more than $800,000 and still get the credit. Anyone taking the credit on a 2010 purchase can claim it on his or her 2009 tax return. And as long as home buyers live in the property they purchased via the credit for three years or more, the tax credit does not have to be repaid.

5. Credit controversy: Zandi estimates that the Senate agreement would generate more home sales than the current credit would. “It’s broader, [and] the industry is geared up to take advantage of it now,” he says. But first-time home buyer tax credits have already cost the government more than $10 billion in lost revenue, and Zandi expects that the Senate agreement would cost at least as much. And although it’s been popular with those purchasing homes, some economists have called the credit an inefficient use of federal resources. Calculated Risk, a financial blog, has estimated that Uncle Sam has paid $43,000 for every additional home sale. And the Senate agreement—which enables households making more than $200,000 a year to claim the credit—could certainly appear overly generous in a time of trillion-dollar budget deficits.

At the same time, the credit has recently been linked to widespread abuse. Russell George, the Treasury Department’s inspector general for tax administration, told a congressional panel last week that 19,300 taxpayers had claimed the first-time home buyer credit before they had even purchased a home. In another 74,000 cases—totaling more than $500 million—taxpayers claimed the credit despite evidence that they had owned a home within the past three years. And in at least one case, a 4-year-old claimed the credit, George said.

[See First-Time Home Buyer Tax Credit: All Sorts of Sketchy Claims.]

Although the agreement appears to have broad bipartisan support, it still has to get out of the chamber. Along the way, it could be stripped of certain generous provisions. But in light of the White House support, it appears all but certain that at the very least, the first-time home buyer tax credit will be extended beyond its November 30 deadline.

Another Hurdle Overcome Towards First Time Buyer Credit!

ramsaych — Tue, 03 Nov 2009 19:55:18 +0000

We are making progress!

Homebuyer Tax Credit, Unemployment Bill Advances in Senate

By Brian Faler

Nov. 2 (Bloomberg) — Legislation to extend unemployment benefits and a tax credit for first-time homebuyers cleared a procedural hurdle in the U.S. Senate as Democrats pushed to complete work on the measure this week.

Lawmakers voted 85-2 to move closer to a final vote on the bill, which would extend until April 30 the $8,000 homebuyer credit that otherwise would expire at the end of this month.

Senate Majority Leader Harry Reid, a Nevada Democrat, said last week he hoped both houses of Congress would pass the legislation by tomorrow.

That’s unlikely to happen if Senate Republicans, unhappy that Democrats are blocking their amendments to the plan, force the chamber through a series of procedural steps before the final vote.

In addition to extending the tax break for first-time homebuyers, the measure would let more people qualify for the credit, including some who already own homes and those with higher incomes.

Homebuyers who have lived in their prior residence for at least five years could receive a credit of $6,500. Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That’s up from the current $75,000 limit for individuals and $150,000 for couples.

The tax credit was enacted as part of an economic stimulus plan in February. More than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the homebuyer tax credits this year, according to the Treasury Department.

The Obama administration has endorsed the extension. The Joint Committee on Taxation estimated the revised homebuyer tax credit would cost $10.8 billion over 10 years.

The legislation also calls for spending $2.4 billion to extend unemployment benefits by 14 weeks in all states, and by six additional weeks in states with the highest jobless rates.