Act now, the homebuyer tax credit ends soon! The $8,000 federal tax credit for first-time home buyers expires Nov. 30, and real estate agents say they’re busy trying to hammer out deals for clients who want to close by the deadline.
Who Qualifies? First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. Which Properties Are Eligible? The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos and townhomes.
How Much Will the Credit Be? The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors: The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000. The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.
Will the Tax Credit Need to Be Repaid? No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.
Wednesday, September 30, 2009
What is Escrow and Title?
What is Escrow and Title? Escrow is a non-biased third party that collects, holds and delivers documents and monies in accordance with dated and written instructions in a real estate transaction. They handle loan documents and funds, prepare documents, obtain signatures, and records documents. Best example: A neutral third party that ensures the buyer gets the home and the seller gets the monies.
Title is legal term meaning ownership. Deeds to land are sometimes referred to as title deeds. If a person has good title to a property, their proof of ownership is beyond doubt. Title insurance protects the lender against any claims that arise from arguments about ownership of the property and is used for homebuyers.
Understanding Contingency Removal
Understanding Contingency Removal Once you have an accepted offer on a home, you have 17 days to decide you want to proceed with the home purchase or back out. If you back out before the 17day mark, you can keep your good faith deposit that was included in your offer to purchase the home.
During the 17 days contingency removal period, you are allotted time to conduct a home inspection to ensure the home you are purchasing is structurally sound and up to code; also to make sure there is nothing seriously wrong with the property. You will also be required to get a home appraisal to make sure your home is worth the amount of money you offered to purchase the home. These are both out of pocket expenditures and can range from $350 to $500 each and $750 to $1000 total.
The last and most time consuming item you need to address during your contingency removal timeframe is securing your underwritten loan approval. This means your loan is guaranteed in writing by a loan underwriter. If for some reason you do not complete all three items before the 17 days is over, you are at risk of losing your deposit if you choose to proceed with the home purchase or you will have to cancel the contract.
Choose a REALTOR®
Choose a REALTOR® To sell real estate, a person must be licensed by the state in which they work. Before a license is issued, minimum standards for education, examinations and experience, which are determined on a state by state basis, must be met. After receiving a real estate license, most agents go on to join their local board or association of REALTORS® and the NATIONAL ASSOCIATION OF REALTORS®, the world’s largest professional trade association. They can then call themselves REALTORS®.
The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics (which in many cases goes beyond state law). In most areas, it is the REALTOR® who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Every home for sale in San Diego County is usually listed with a REALTOR and put on the Multiple Listing Service. Working with a REALTOR® who belongs to an MLS will give you access to the greatest number of homes.
The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics (which in many cases goes beyond state law). In most areas, it is the REALTOR® who shares information on the homes they are marketing, through a Multiple Listing Service (MLS). Every home for sale in San Diego County is usually listed with a REALTOR and put on the Multiple Listing Service. Working with a REALTOR® who belongs to an MLS will give you access to the greatest number of homes.
Understanding Agency Relationships
Understanding Agency Relationships You’d probably wonder what agency relationships might have to do with you, regarding buying or selling real estate. Most people are unaware of the importance of these types of relationships, unless they do a lot of buying and selling of real estate and have become educated in the importance of knowing what side your agent is on. The buyer’s side, the listing side or both!
If a real estate agent represents the seller of a property, they have established an (seller-agent) agency. This agent has been hired by the seller to represent them, not you. You can work with the seller’s agent when you purchase a home and it established a dual agency. So, how does a buyer protect themselves? Hire a Buyers Agent of course! A buyer’s agent has the fiduciary responsibility to represent the buyer in a real estate transaction. The advantages of using a buyer’s agent are great. Services that are provided to a Buyer-Client are as follows:
Helps Buyer with loan pre-approval.
Physically shows Buyer properties for sale.
Pays full attention to the Buyer’s Needs.
Informs the buyer all that is learned about the seller.
Focuses on expanding the range of choices to satisfy the buyer’s needs.
Find the best property for the client.
Promote the buyer’s search.
First opportunity to view new listings.
All properties are available and viewable, and the sales price is negotiable.
Give advice with FACTS.
Compare competing properties.
Negotiate on behalf of the buyer.
Share all known information about the seller.
Negotiate approved purchase agreement to safeguard buyer-clients.
Attempt to solve problems to the buyer-client’s satisfaction.
All real estate agents can represent either the buyer or the seller. When you are looking to purchase a home, please select someone who is going to work for YOU and not the other party.
If a real estate agent represents the seller of a property, they have established an (seller-agent) agency. This agent has been hired by the seller to represent them, not you. You can work with the seller’s agent when you purchase a home and it established a dual agency. So, how does a buyer protect themselves? Hire a Buyers Agent of course! A buyer’s agent has the fiduciary responsibility to represent the buyer in a real estate transaction. The advantages of using a buyer’s agent are great. Services that are provided to a Buyer-Client are as follows:
Helps Buyer with loan pre-approval.
Physically shows Buyer properties for sale.
Pays full attention to the Buyer’s Needs.
Informs the buyer all that is learned about the seller.
Focuses on expanding the range of choices to satisfy the buyer’s needs.
Find the best property for the client.
Promote the buyer’s search.
First opportunity to view new listings.
All properties are available and viewable, and the sales price is negotiable.
Give advice with FACTS.
Compare competing properties.
Negotiate on behalf of the buyer.
Share all known information about the seller.
Negotiate approved purchase agreement to safeguard buyer-clients.
Attempt to solve problems to the buyer-client’s satisfaction.
All real estate agents can represent either the buyer or the seller. When you are looking to purchase a home, please select someone who is going to work for YOU and not the other party.
Buyers, Don’t Forget Your Pre-Approval Letter!
Buyers, Don’t Forget Your Pre-Approval Letter! Most home buyers know they should get a mortgage pre-approval letter from a lender before they begin seriously shopping for a home. But the reasons for this advice aren’t always clear, and buyers sometimes are dismayed by the amount of paperwork involved. Here is some of the reasoning behind the advice:
1) A pre-approval letter is more reliable than a pre-qualification letter. Getting a pre-qualification letter is easy. You just call a mortgage broker or lender, provide some basic financial information, then wait a few minutes for the letter to come through your fax machine. Getting a “pre-qual” from a Web site is just as easy. Enter some information, click “submit” and voilà. A pre-approval letter, on the other hand, involves verification of the information. Rather than taking your word on faith, the lender will ask for documentation to confirm your employment, the source of your down payment and other aspects of your financial circumstances. Granted, a pre-approval is more time-consuming (and possibly more stressful) than a pre-qualification The additional due diligence is exactly why the pre-approval carries more weight.
2) You’ll know how much money you can qualify to borrow. Most home buyers have a rough idea of how much they would feel comfortable paying every month on their mortgage. However, there’s no quick-and-dirty way to translate that monthly payment into a specific maximum mortgage amount because other factors — down payment percentage, mortgage insurance, property taxes, adjustable interest rates and so on — are part of the calculation. And, you might not be qualified to borrow as much as you think you should be able to borrow, depending on your income, your debts and your credit history.
3) You’ll have more leverage in negotiations with the seller. Sellers often prefer to negotiate with pre-approved buyers because the sellers know such buyers are financially qualified to obtain the financing they need to close the transaction. A pre-approval letter is an especially favorable point in a close multiple offer situation. And, you might feel more confident about making an offer with a pre-approval letter in hand and the knowledge that you’ll be able to obtain a mortgage.
4) Your real estate agent will work harder on your behalf. A pre-approval letter signals to your real estate agent that you’re a well-qualified buyer who is serious about purchasing a home. The increased likelihood of a closed sale — and a commission — will naturally motivate your agent to devote more time and energy to you. In fact, some agents won’t even show property to buyers who don’t have a pre-approval letter.
5) A few caveats: Pre-approval letters aren’t binding on the lender, are subject to an appraisal of the home you want to purchase and are time-sensitive. If your financial situation changes (e.g., you lose your job, apply for credit or run up credit-card bills), interest rates rise or a specified expiration date passes, the lender will review your situation and recalculate your maximum mortgage amount accordingly.
1) A pre-approval letter is more reliable than a pre-qualification letter. Getting a pre-qualification letter is easy. You just call a mortgage broker or lender, provide some basic financial information, then wait a few minutes for the letter to come through your fax machine. Getting a “pre-qual” from a Web site is just as easy. Enter some information, click “submit” and voilà. A pre-approval letter, on the other hand, involves verification of the information. Rather than taking your word on faith, the lender will ask for documentation to confirm your employment, the source of your down payment and other aspects of your financial circumstances. Granted, a pre-approval is more time-consuming (and possibly more stressful) than a pre-qualification The additional due diligence is exactly why the pre-approval carries more weight.
2) You’ll know how much money you can qualify to borrow. Most home buyers have a rough idea of how much they would feel comfortable paying every month on their mortgage. However, there’s no quick-and-dirty way to translate that monthly payment into a specific maximum mortgage amount because other factors — down payment percentage, mortgage insurance, property taxes, adjustable interest rates and so on — are part of the calculation. And, you might not be qualified to borrow as much as you think you should be able to borrow, depending on your income, your debts and your credit history.
3) You’ll have more leverage in negotiations with the seller. Sellers often prefer to negotiate with pre-approved buyers because the sellers know such buyers are financially qualified to obtain the financing they need to close the transaction. A pre-approval letter is an especially favorable point in a close multiple offer situation. And, you might feel more confident about making an offer with a pre-approval letter in hand and the knowledge that you’ll be able to obtain a mortgage.
4) Your real estate agent will work harder on your behalf. A pre-approval letter signals to your real estate agent that you’re a well-qualified buyer who is serious about purchasing a home. The increased likelihood of a closed sale — and a commission — will naturally motivate your agent to devote more time and energy to you. In fact, some agents won’t even show property to buyers who don’t have a pre-approval letter.
5) A few caveats: Pre-approval letters aren’t binding on the lender, are subject to an appraisal of the home you want to purchase and are time-sensitive. If your financial situation changes (e.g., you lose your job, apply for credit or run up credit-card bills), interest rates rise or a specified expiration date passes, the lender will review your situation and recalculate your maximum mortgage amount accordingly.
Are You Buying the Right House?
Are You Buying the Right House? Anyone who has ever bought a home remembers the wonderful feeling of finding the right property and falling in love with it. It’s an indescribable mixture of comfort, excitement and dreams about to come true. “Can we afford it? Will the sellers accept our offer? How soon can we pick up the keys?” the excited buyers ask. Great vibes are undoubtedly a good sign in deciding to purchase a home. But you shouldn’t let your emotions overrule a reasonable assessment of whether a particular home really meets your needs. Here are a few of the many rational questions you’ll want to ask yourself before you rush into a commitment to buy.
Price Your lender says you can afford to buy the home you adore, but are you comfortable with the monthly payments you’ll be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?
Condition Along with price, the condition of the home should be a top consideration. Does the home need a new roof or new plumbing? A fixer-upper home with lots of potential can be a great find or more often a money pit. Will you be able to meet the financial challenges and live with the mess and inconvenience while the home is being brought up to your expectations?
Size and configuration Is the house the right size for your needs and does it have the right combination of bedrooms, bathrooms and other living areas? Is that small closetless den really big enough for your child’s bedroom? Is one bathroom adequate and if not, what are the real costs and headaches of adding a second one? Does the kitchen have enough cupboard and countertop space? Is the garage wide enough and deep enough for your vehicles? Will your piano really fit in that alcove near the staircase?
Comfort Does the house have a central heating system? A central air-conditioning system? Are those climate controls important to you? Are the windows large enough and positioned to create cross ventilation? If the house has two stories, are you comfortable with the idea of walking up and down stairs every day? Is there a downstairs bathroom (and bedroom, if needed) for guests who can’t navigate the stairs?
Style Is the design and architecture of the house too modern or too traditional for your preferences in furniture and home furnishings?
Resale potential People move to a new home every seven years, on average. If you wanted to sell your home or were forced by unexpected circumstances to sell it, how easy would it be to find a ready, willing and able buyer?
Features Some buyers fall in love with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than the buyers anticipated. Do you really want a swimming pool? High-maintenance ornamental trees? Commercial-grade built-in kitchen appliances? Expensive hardwood floors? Some homes are easier to visit than they are to own.
Price Your lender says you can afford to buy the home you adore, but are you comfortable with the monthly payments you’ll be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?
Condition Along with price, the condition of the home should be a top consideration. Does the home need a new roof or new plumbing? A fixer-upper home with lots of potential can be a great find or more often a money pit. Will you be able to meet the financial challenges and live with the mess and inconvenience while the home is being brought up to your expectations?
Size and configuration Is the house the right size for your needs and does it have the right combination of bedrooms, bathrooms and other living areas? Is that small closetless den really big enough for your child’s bedroom? Is one bathroom adequate and if not, what are the real costs and headaches of adding a second one? Does the kitchen have enough cupboard and countertop space? Is the garage wide enough and deep enough for your vehicles? Will your piano really fit in that alcove near the staircase?
Comfort Does the house have a central heating system? A central air-conditioning system? Are those climate controls important to you? Are the windows large enough and positioned to create cross ventilation? If the house has two stories, are you comfortable with the idea of walking up and down stairs every day? Is there a downstairs bathroom (and bedroom, if needed) for guests who can’t navigate the stairs?
Style Is the design and architecture of the house too modern or too traditional for your preferences in furniture and home furnishings?
Resale potential People move to a new home every seven years, on average. If you wanted to sell your home or were forced by unexpected circumstances to sell it, how easy would it be to find a ready, willing and able buyer?
Features Some buyers fall in love with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than the buyers anticipated. Do you really want a swimming pool? High-maintenance ornamental trees? Commercial-grade built-in kitchen appliances? Expensive hardwood floors? Some homes are easier to visit than they are to own.
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