Time Running Out for First-Time Home Buyers Credit

Chances are you have read recently about the bill before Congress to extend the First-Time Home Buyers Credit. Part of the American Recovery and Reinvestment Act of 2009, this opportunity may be gone very soon.

The $8,000 tax credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009, and is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

Some people have said that stimulus money given out since the beginning of the year has caused problems in the economy. As a full-time Realtor for the last ten years, I can assure you that the $8,000 first-time homebuyer tax credit has definitely been a success. Homebuyer interest and housing sales increased almost as soon the availability of this program became news.

Today's lower prices and interest rates appeal to consumers, but it's been the tax credit that has attracted people to open houses and to homeownership. Demand from first-time homebuyers helped drive a 9.4% increase in sales of existing homes from August to September according to the National Association of Realtors, continuing a trend of increasing sales in five out of the last six months.

This tax incentive is a true tax credit. The $8,000 home buyer tax credit is tangible cash, not a deduction from taxable income. This is not a loan and does not have to be repaid as long as you live in the house for the next three years.

A ‘first-time home buyer’ is defined as someone who has not owned a home in the last three years. There are other restrictions in the qualifications such as income caps, and the home must be your principal residence.

I explain to people that this program has had a ‘trickle up’ effect. Home owners in the lower-priced market have been able to sell to buyers eligible for this credit which has given those sellers the opportunity to move up into more expensive homes.

In my business in 2009, 40% of my transactions have involved buyers who qualify for and intend to apply for this credit. As the November 30th deadline looms I have seen a slump in my buyers’ activity. It’s close to being too late to enter into a sales agreement with any hope of closing by that date.

Uncertainty about the future of the credit will dampen consumer demand nationwide. There’s a strong lobby in Washington among realtors, lenders and builders urging Congress to extend this opportunity. The progress that has been made in the recovery of the real estate market could grind to a halt unless Congress acts now to extend the credit through 2010. Let’s hope they are listening!

Condominium Financing is A Challenge

This post is courtesy of Sally Lapides, Owner and CEO of Residential Properties Ltd.


HUD issued Mortgagee Letter 2009-19 with important changes to the guidelines for Condo financing. The guidelines were originally scheduled to take effect on October 1st, but are now scheduled to take effect November 2nd. One of the major changes has to do with the Approved Condo list. Currently, FHA has a list of Approved Condo’s. If a project is on the approved list then FHA financing is allowed, but only if the project meets the other requirements. Spot Approval provided a way to close FHA loans in projects that were not approved; now, spot approval will no longer be allowed. According to the new guidelines, any project not approved in the past 12 months will be taken off the FHA Condo Approval list and new projects currently approved will have 12 months to re-certify, so basically the entire list of approved condo’s is being redone.

Here are some more proposed guidelines to be mindful of:• 4+ units can have 30% maximum FHA financed units, (which might change to 50%).• No more than 15 % of the units can be in arrears of the condo association fee.• No more than 10% of the units can be owned by a single investor.• 2 and 3 units are now allowed, but HUD will only insure one of the units.• Right of First refusal considered on a case by case basis, (as long as you can prove it is not discriminatory).

Real Estate Insight tip:
If you are thinking about buying a Condo with FHA financing, do yourself a favor and look for HUD approved units. If you are selling a unit that is not HUD approved, understand that the pool of buyers is smaller, and non HUD approved Condos are going down in value, you might have to price below market to compete. If you live in a non-approved building, strongly suggest to your Condo Board that they go about the approval process. To find out if a condo project is FHA approved, click here for the HUD webpage: FHA condo approval search

Calling All Buyers

There's never been a better time to buy a home. Let me say that again.....There's NEVER been a better time to buy a home.

The Mortgage Bankers Association (MBAA) reported last week the average interest rate on new 30-year fixed-rate loans nationwide was 4.97%, nearing the lowest level in decades. And on Thursday, Freddie Mac reported that the average fixed rate on a 15-year home loan had dropped to 4.46%, the lowest level on record.

Not surprisingly, loan applications jumped 13% last week and are up 50% from late June. Aside from the holy grail rumor of 4.5% last summer, 5% seems to be the magic number that really spurs mortgage activity. Most of the activity has been for refinancing, but applications for new homes are growing as well, according to the MBAA.

That coupled with the amazing real estate values that are available in so many areas make this the time to buy.

And if you are a first time buyer or have not owned a home in the last three years, you may be eligible to receive an $8000 tax credit the next time you file your income taxes.

If you have been waiting to buy a home, the time is NOW!

Walk the Walk, Talk the Talk

I guess the real phrase is "You can talk the talk, but can you walk the walk?" I told you about my friends Chet & Nellie and the beautiful new home they just purchased. Chet owns a local hardware store. The business actually employs three generations of his family; sadly something almost unheard of today. I don't think you'll be surprised to hear that their business is struggling. The mom-and-pop-type of business is being hardest hit in this economy and thousands are going under every week.

A few months back I wrote about a buy local organization in our area called the Blackstone Valley Independent Business Alliance. Chet and Nellie have been instrumental in organizing and promoting that effort because the idea of 'buying local' could mean the continued success or failure of their business.

Think of it this way....the money you spend in a local hardware, paint, appliance, lighting, camera or computer store stays in your community. It goes to pay a family's mortgage, tuition, grocery bill and even better....it stays in the community when these people shop in other local businesses.

The money you spend in those big box stores certainly does pay some salaries and some local taxes but the biggest part of it goes to Georgia or Arkansas and pays the bonuses of high-paid executives who probably don't think much about you or your community! Do you ever see one of those company's names on the uniform of one of your kid's teams? They seldom reinvest in the community they are located in.

I got an email from Nellie this week telling me they have purchased new furniture, appliances and central vacuum. I asked where she bought everything, and she gave me a list of local companies. Here is what Nellie wrote...."I take the service of buying local for granted because I see the service provided by Vose, but when we were actually buying and listening to the expertise of the salesmen and getting priority treatment and instant service, I appreciate it so much more. Imagine free delivery in this day with the price of gas."

She and Chet are Walking the Walk not just talking the talk. We all should.


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House of the Week

19 Bel-Air Drive, Glocester, RI
$279,900

Within walking distance of Keach Pond, this 3 bed, 1 1/2 bath Raised Ranch is a must see! Set on a beautiful acre lot with natural pine grove in the front and well-manicured back yard you can sit on the 12' x 32' deck and enjoy life! Inside you'll find a NEW kitchen with quartz counters, maple cabinets and stainless steel appliances. The Kitchen opens to the Dining Room and Living Room. Interior inprovements include new hardwood floors and new paint. There are two fireplaces; one in the Living Room and a second fireplace with a woodburning stove in the finished lower level which has a huge Family Room with a walkout to the patio. The lower level also features a half-bath with laundry.

There's a two-car heated garage plus central air, double sinks in the main bath, tons of recessed lighting and sound system throughout the first floor. All this plus an award-winning school system.

Call me today at 401-338-5102 for your personal appointment to see this great house or email.

Providence Restaurant Week

Need a place to celebrate something? Looking to try a new restaurant? Mark your calendar for the 3rd Annual Providence Restaurant Weeks event which will be held July 12-25. More than 75 restaurants all over Rhode Island from East Greenwich to Woonsocket will be offering three-course, fixed price lunches and dinners. Lunch will be $12.95 and dinner will be $29.95.

So whether you want to visit your favorite restaurant or try someplace new, here is your chance. In its third year, the event was very successful the first two years. During a time when everyone is looking to stretch their entertainment dollars to the max, this is a way to do something special for not a lot of money.

When I have relocation clients visiting The Ocean State for the first time I'm always happy to tell them how many fantastic and varied the restaurants are in Rhode Island. With the reports of people staying close to home this year during vacation time, reservations are strongly suggested. A full list of participating restaurants with menus and reservation options are available online here. Prices are valid for prix-fixe menus only and other restritions may apply. Beverages, tax and gratuity are not included.

Appraisals and How They Can Impact a Sale or Refinancing

Real Estate appraisals are becoming major obstacles for many people trying to sell or refinance their homes in the U.S.

When housing prices were going through the roof, appraisers were often called back by buyers or sellers for a revision of an appraisal to provide a value to justify a higher agreed-upon sale price. Lenders who were burned by huge losses from defaults have now tightened up their guidelines for appraisals. In some cases lenders are not accepting sales closed more than three months ago rather than the six-month window generally used in the past.

Valuation disputes are also causing problems in some sales. Sellers who have put higher prices on their homes and have buyers willing to pay are finding that the properties do not appraise for the sales price. One solution might be for the seller to pay more of a down payment or they may want to renegotiate the purchase price.

Appraisers are also bringing in values that are too low to allow homeowners to refinance their loans. Credit lines that are secured by homes are being affected. If your line of credit was based on a value that was 50% higher than today's value, a lender may scale back your total line of credit. Some borrowers are receiving notices from their lender saying their credit limit has been reached or exceeded based on a new appraisal.

While these changes are designed to prevent abuses, they also are adding more frustration to an already difficult real estate market. Whether you are a buyer or a seller, make sure your Real Estate agent is reputable and looking out for your interests.

For all your real estate questions or if you are considering buying or selling a house this year, give me a call at (401) 457-1745 or drop me a line!

Helping you Find a Real Estate Agent in a New Area

If you are getting ready to move to another area or even considering such a move, I can help! And before you 'change channels' on me saying "I don't live near her" let me tell you that if you ever need a realtor ANYWHERE, I can help!

Sure, you can try to find a realtor by looking online and Googleing the area or have someone send you one of those glossy brochures that have listings that expired a month ago. But I'd rather talk to you, listen and find out what you are looking for and then personally connect you with an agent chosen just for you. What a concept! Personal, professional service.

I am part of an organization called Leading Real Estate Companies of the World, a global network of nearly 700 premier real estate firms with 5,500 offices and 170,000 sales associates in 38 countries around the world. This group is made up of trusted local experts selling more homes than any national brand. As a member of Leading Real Estate Companies of the World, we can connect you with top professionals who know the neighborhood – anywhere in the world. You’ll enjoy:

• Personalized assistance in finding the right home and neighborhood
  
• Information on schools, business and recreation
  
• Contacts with financing sources
  
• Discounts on household moving services
  
• A free relocation package for your new destination

So if you or any one you know is getting ready to relocate or purchase a second home and don't know who to call, call me at (401) 457-1745 or drop me a note. I will be happy to get you in touch with an agent in your new location who has the expertise to represent you!

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House of the Week

0 West Wrentham Road, Cumberland, RI

$199,900

Not a house yet but a spectacular location to build your dream house! A private 2-acre homesite already approved for a 4-bed home in North Cumberland on the Wrentham, Massachusetts line. A great commuter location. Be close to everything but have your privacy. With 260' of frontage this property has beautiful rolling hills, mature trees and a pond.

Call (401) 457-1745 today for more information and your private tour of this very special location.

What is a Short Sale?

What is a Short Sale? You’ve heard the phrases “upside down” and “under water” recently with regard to the situation many homeowners are finding themselves in. What that means is that the value of an owner’s home is LESS than the amount of his outstanding loans or mortgages. For example, if your home is worth $200,000 but you have a loan of $225,000, you are under water.

If you must sell and cannot afford to bring the $25,000 to closing and do not want to consider a foreclosure, you might approach your lender with the idea of a short sale. Certainly not a quick fix, a short sale generally does less damage to your credit than a foreclosure. While most lenders will not be thrilled at the prospect of a short sale, they are aware that a foreclosure is usually a far more time-consuming and costly option. In a real estate market where housing values are going down it is in the best interests of the lender to liquidate their problem loans as quickly as possible.

If you are a buyer and considering the purchase of a “short sale” be prepared for a much longer time line from signing your Purchase & Sales agreement to closing. These types of sales are taking 3 to 6 months to complete. So if you have the time and can be patient, it can be a great opportunity to buy a property you might not be able to afford otherwise.

Whether you are a Buyer or Seller of a short sale, my suggestion is to find a Realtor and attorney who are experienced in this type of real estate transaction. For more information, feel free to call me at (401) 457-1745.

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Your Realtor is an Independent Contractor

I had a buyer-client couple in my car over the course of several hours last weekend. As we were driving between appointments we were chatting about cars. They have seven between them so obviously we were looking for a property with a garage.

As we were driving along, Chris asked if my car belongs to my company or if they provide a car allowance. A reasonable question to ask of most salespeople but certainly not the case for a Realtor. I told him that it most defintely is my vehicle and that I am an independent contractor and pay most of my business expenses out of pocket; out of my own pocket.

It was a question I've been asked before but it brought back the realization that many consumers still have no idea how we realtors are 'paid.' Often they think we are paid hourly for those tours we give them of a new area or that we drive a company car. I explained to Chris I work under the 'umbrella' of a broker and I share my commissions with the company.

The percentage that a sales agent receives is determined by the employment contract the agent has with the Real Estate Company. Real Estate Agents are independent contractors and receive no financial benefit other than the sales commission. We are responsible for our own vehicles, auto insurance, gas & maintanence, malpractice insurance, computers, cell phones, and medical insurance to name some of our business expenses.

Certainly there are many different 'compensation programs' out there in real estate. Realtors who are affiliated with a franchise firm pays royalty fees. There are agencies who provide their agents with desk space, administrative support, a phone/computer line and cover soem of their advertising expenses such as business cards and print ads in local papers and magazines. Some pay none of that and the agent pays all expenses either per month or per transaction.

The important thing for the consumer to know is that your agent, whether representing you as a Buyer or Seller, receives no compensation until AFTER your transaction closes. No closing, no paycheck. So a Listing Agent representing the seller will likely have spent money during the time of the listing for advertising, color brochures, virtual tours, signs, etc, planning to recoup those expenses after the sale. A Buyers' Agent has the auto expenses already mentioned plus cell phone, computer, etc. An agent taking you around to see various listings is not being paid by anyone. They will be compensated when, and only when, they represent you in the purchase of a home that gets to closing.

Client loyalty is a valuable commodity to Realtors. If you find a Buyers' Agent you like and who seems to be doing a good job for you, stick with her! And Sellers, be sure you have given your Listing Agent an opportunity to sell your house before thinking you 'need a new agent/company.' When you change agents or real estate companies, that first agent has no chance to recover those expenses already spent on trying to sell your house.

Certainly if you are not happy with your agent for any reason, talk to her! Give her an opportunity to do for you what she's there for. As always, communication is the key to a successful business transaction.

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House of the Week

40 Rolling Meadows Road, Pascoag, RI
$374,900

Set in Rolling Meadows Estates in picturesque Pascoag, this 3 bed/2.5 bath Colonial is in pristine condition. Built in 2002, this home has a spacious kitchen with a tile floor, Silestone counters and stainless appliances all NEW in 2008. Plus new hardwoods throughtout the first floor. A very convenient floor plan with the laundry in the lavette on the 1st floor and a finished lower level. The lovely master has its own bath and two walk-in closets!

Set in a young neighborhood, you can sit on your Farmer's Porch and enjoy the peace. With a 1/2 acre lot, the property has a large flat yard with sprinklers both front and back. Close to everything, just minutes to Rts. 44 & 295.

Call (401) 457-1745 today for more information or a private appointment!

The Importance of a Home Inspection

You have finally found The House. Your buyers' agent has negotiated a great price, you have signed a Purchase & Sales Agreement and now it's time to have The Home Inspection. Never skip the Home Inspection!! No buyers' agent worth his salt will let a client forego an inspection.

Hopefully before you get to this point, your agent sat with you and discussed the inspection process. Some of the inspections you may want to consider include Physical & Mechanical, Termite & Woodboring Insects, Radon Measurements, Water Analysis & Flow Test (if the house has a private well), Septic Inspection (if the house isn't connected to public sewer system) and Lead Hazard. Generally there is a time limit by which you must have the inspections completed. Check with your buyers' agent to find out what the practice is in your area.

A qualified Home Inspector will look for deficiencies that seriously compromise habitability and safety of the home or would be expensive to repair. You may get a written report or the report may be delivered to you electronically. For first-time homeowners, the inspections are especially valuable because your inspector may also give you some information about the workings of some of the mechanicals in the house and provide some maintanence information.

Hopefully your reports will be short on problems and the rest of your transaction will go along smoothly. But at least you will know you've done your best to avoid any nasty surprises after the closing.

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The Value of Buying An Owner-Occupied Multi-Family House

When I was growing up they were called tenements or tenement houses. I haven't heard that term in years; they are now most often referred to as multi-family houses or just multis. I grew up in a city in the Northeast with many textile mills and neighborhoods full of tenements. Back then it seemed most of those houses of 2-3 units or apartments were owner occupied and often housed several generations of the same family.

That practice became less common as people who could afford to left the cities and moved to the suburbs often keeping the multis as investment property and becoming absentee landlords. Without the landlord right there to keep an eye on things, the properties often fell into some disrepair and showed less pride of ownership. When values of real estate skyrocketed in recent years, many of these owners sold their multis at incredible prices. Now we are seeing many, many of these multis being sold as short sales or after foreclosure. The poor condition of some of these houses is unimaginable.

If you are considering buying a multi-family property to either live in or invest in, my advice is to try to find one that is or was owner-occupied. Certainly that is getter more difficult in this market but it's not impossible. Sometimes you can tell by the information available on the multiple listing service (MLS) or your Buyers' Agent may be able to find out. It doesn't hurt to ask.

An owner-occupied multi is less likely to be for sale as a foreclosure or as a short sale so the price may be more of a conventional market price and not seem like such a bargain. But the condition of the property may more than make up for the additional cost of purchase. Also if the house is vacant and needs work before you can get paying tenants in there, every day it's empty is a negative for you.

No matter which way you go, find a Buyers' Agent to represent YOU and do your homework!


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House of the Week--OPEN HOUSE June 7, 2009

OPEN HOUSE

**Sunday, June 7, 2009 1:00-3:00 p.m.**

36 Valley Stream Drive, Cumberland, RI

$589,000

This custom-built Colonial is located in prestigious Valley Stream Estates. With over 4000 sf of living space, this home has 4 beds plus a full in-law/au pair suite. Built in 2001, this home is better than new. The gorgeous gourmet kitchen features a Wolf Range, Granite counters, Hardwood floor and Stainless Steel appliances. A very open floor plan, details include crown molding, French Doors, Master Suite with Sitting Room and closets galore!

There is also a finished lower level with lavette. Newly painted throughout plus new carpet and new hardwood floors, this home is ready to move in. The property is professionally landscaped with underground sprinklers and has a very secluded yard on a quiet street.

Call (401) 457-1745 today for more information or a private showing.

It's All About the Service and the Client

An article written about Zappos, the online shoe seller recently talked about how important customer service and happy employees are to a successful business. Now there's a news flash for you!

Talking about how all types of businesses are paying attention to customer-centric and employee-friendly approaches to business, the author felt that such ideas seem to run counter to the prevailing economic currents of cutting costs and services these days. I don't remember getting that memo. While we are all certainly being forced to cut costs, I don't see much value in cutting customer service.

Real Estate is all about service not sales. I've always felt more like a consultant or a counselor when working with a client to buy or sell a house rather than a salesperson. They look to me to bring them information that will help them make a decision to help them reach their goal.

I know this all sounds rather obvious and simplistic, but you'd be surprised how many Realtors I have met and worked with who seem to have forgotten or maybe never knew it. One of the most important qualities of a successful realtor is patience! I pride myself on listening to my clients and giving them the attention they need and deserve.

A house is probably the most valuable asset most of us will own in our lives. Any decisions made during or leading up to a real estate transaction can have far-reaching and long-term consequences. You need to have the right person assisting you and the right information to make those decisions.

If you are considering buying or selling a house this year, give me a call at (401) 457-1745 or drop me a line!

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Some GOOD News About the Real Estate Market

Calling all first-time home buyers!!

Would you or someone you know like to purchase a home in the next 6 months? Well, if you haven't owned a house in the last three years and meet certain criteria, this may be your year to become a homeowner!

Chances are you have heard about the First-Time Home Buyer Tax Credit which is part of the American Recovery and Reinvestment Act created in July of 2008. Revised earlier this year, it provides a maximum credit amount of $8000 to purchasers who qualify. This is not a loan; as long as you live in the house for three years, it doesn't have to be paid back; basically it's a GIFT. Only single family residences (including condos) qualify. Purchases of multi-family houses, even if owner-occupied, are not eligible. Only applicable to homes purchased between January 1, 2009, and December 1, 2009, there are a few rules.

1. Purchasers must have an adjusted gross income of no more than $75,000 for individuals, $150,000 on a joint return.
2. Purchaser and spouse may not have owned a house in the 3 years previous to the purchase.
3. If the home is sold within three years of purchase the whole amount of the credit must be repaid at closing.

Home prices are at the lowest they have been in years. There are many great opportunities out there. If you would like to find out if you qualify for a mortgage and the First-Time Home Buyer Tax Credit, give me a call or send me a message and I'll give you a referral to a lender who can answer all your questions. And if you need help finding your home, let me know! It's an exciting time to be a home buyer.

Note: I am a licensed Realtor in Rhode Island & Massachusetts. Even if you are not looking for a home in my area, please call me. I am part of Leading Real Estate Companies of the World, the premier real estate network providing service nationally and internationally. I would love to give you a referral to a qualified, professional Realtor in your area!

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