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Posts Tagged ‘home buy’

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Time Running Out On Home Buyer’s Tax Credit

March 10th, 2010 by Matthew C. Keegan | 2 Comments | Filed in Home Buying

April 30, 2010 is a date circled in red on the calendars of some home shoppers. That is the last day when prospective home buyers can enter into an agreement to purchase a home in order to enjoy an extra special benefit: a federal home buyer tax credit of as much as $8000.

Tax Credit

new homeThough home buyers still have until the end of June to close on their homes, a binding sales contract must be in hand on April 30 in order to be eligible for the credit. That credit has limitations including a salary cap of $125,000 for single home buyers or $225,000 for married couples filing joint returns.

Even if you already own a home, you may qualify for a $6500 tax credit. In either case the value of your home, which is to be your primary residence, cannot be above $800,000.

Credit Advice

So, are you ready to take the plunge? Not so fast! At least that is the opinion of some credit counselors who are concerned that potential buyers could be pulled into the market thanks to lower home prices and generous tax credit.

“Many people are able to benefit from this tax credit, but that does not always mean buying is a good option for them,” said Lindsay Alston, a credit counselor with CESI Debt Solutions. “You have to look closely at your income to see if the numbers work.”

Alston went on to say that buyers should make sure that their annual costs including mortgage, insurance, association fees, and property taxes should not exceed more than 30 percent of your gross income. That means if you make $40,000 annually than your home related costs should be no higher than $12,000.

Extra Costs

Lots of home buyers fail to consider other expenses related to owning a home including lawn upkeep; replacement of appliances; roofing and gutters; windows and doors; and other maintenance expenses.

“The tax credit is a great incentive for people who are financially in good shape and planning to buy a new home anyway,” said Alston. “But if you don’t think you can make the numbers work without it, you should probably wait and continue to save, even if it means missing out on the tax credit.”

If you aren’t certain that you should buy a home, ask an objective party such as a financial adviser whether your should buy now or pass on the tax credit. Friends, family members, real estate agents and mortgage brokers may encourage you to jump in, but if you aren’t adequately capitalized you can find yourself battling to keep up down the road.

Adv. — Are you looking for tips on how to control your costs, perhaps how to set up a budget? SayLowerBills.com is your one stop resource center designed to help you gain control over all of your expenses. Don’t let a sour economy hold you down — take charge by learning how to save money and use your resources wisely.


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Nearly One In Four Homes For Sale Have Already Seen A Price Reduction

June 8th, 2009 by Matthew C. Keegan | 1 Comment | Filed in Home Buying, Home Selling, News

The current housing market continues to offer a good news/bad news scenario. First the good news: prices continue to drop. Now for the bad news: sellers are dropping their prices. Well, the bad news for the seller is good news for the buyer who may discover that the home that they are interested in has already seen at least one price reduction, strengthening their position as a buyer.

Falling Prices After The Initial Listing

home buyAccording to Trulia.com, which tracks the US real estate market, nearly one in four homes currently on the market has already gone through one round of price reductions. This is taking place even as sellers are pricing their homes at rates much lower than a year ago. Finding that their homes are not selling at the original asking price, 23.6% of homeowners have lowered their home prices at least once. Trulia’s data excludes foreclosed homes.

“Summer time is the peak season for buying and selling, and with some of the lowest prices in the last decade, we expect to it be a busy season,” said Pete Flint, Trulia co-founder and CEO. “Everyone wants to think they are getting the best deal available and price reductions are helping to spark a renewed interest in the U.S. real estate market.”

A number of major markets are seeing home prices reduced by their owners at a much greater rate than the national average. For example, Jacksonville, FL homeowners are leading the way with some 36% of the homes having gone through one or more price drop. Tucson, Boston, Los Angeles, Columbus, Dallas and Honolulu are among the markets where homeowners are more apt to drop their prices than average.

Taking Tens Of Thousands Off Of The Initial Price

More telling is just how much homeowners are willing to drop off of their selling price. Trulia says that this average is 10.6% which means that a home originally listed for $229,000 may have already been reduced to about $205,000.

Detroit homeowners are dropping the price on their homes by the largest amount, averaging 23%. This means that a Detroit home listed originally for $159,000 may have been reduced to around $127,000. Trulia noted that those markets with a greater number of foreclosures are forcing home prices down at the greatest rate.

Few experts are willing to concede that the national market has bottomed out yet. However, prices in some local markets appear to be stabilizing, even rising where demand exceeds available supply.

Source: Trulia, Inc.

Adv. – Are you considering buying a home this year? If so, you may be eligible for an $8000 federal tax credit if you are a first time home buyer. Make you move now while prices are low and before mortgage rates start to climb. Please visit PickMyMortgage.com to learn more about the lending process and to review our free, handy financing tools.


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Buying Foreclosed? Consider This First!

May 29th, 2009 by Matthew C. Keegan | 1 Comment | Filed in Home Buying, Home Financing

Not many people are calling the bottom of the housing market yet, realizing that in some markets further declines in home values may still be happening. But, for the person who is ready to buy and is looking for a very good deal, foreclosed property can be an excellent way to help them become a homeowner this year.

Consider The Risks

foreclosureNaturally, buying a foreclosed home can be risky. You want to make sure that the home hasn’t been trashed and that the price you pay for the home minuses out whatever repairs must still be done. What a horror it would be to buy a home and find out later that tens of thousands of dollars in repairs still need to be completed in order to make your home habitable.

But, there is another downside to buying foreclosed property, one that every buyer should consider – is your local market, particularly the neighborhood, flooded with foreclosed properties? If so, your home’s value may take years to recover as the oversupply of foreclosed homes (which are already undervalued) can take a long time to finally sell.

Riding Out A Depressed Market

Of course, if you plan on staying in your home for many years, then you can probably ride out a depressed market. Just keep in mind that a neighborhood with an abundant number of foreclosures could be experiencing other problems, such as an overall deterioration. Get acquainted with where you want to live by driving up and down nearby streets to look for signs of blight. Check with the local police precinct to find out what crime rates are in that area. And, if you see a neighbor ask them for their honest assessment of the neighborhood.

So how much should you bid on that foreclosed home? Well, the first thing you’ll need to do is find out what its current value is. That can be hard to determine in a sinking market, but real estate comparables (comps) as well as checking home values on a site like Zillow.com can reveal that information. Once you determine what the value is, be prepared to knock as much as twenty percent off of the value of the home when submitting your bid to the bank who holds the property.

Banks Aren’t In The R/E Management Business

Banks aren’t in the business of managing real estate and may entertain your offer even if it is considered to be a “low ball” bid. In any case, your initial bid is a good starting point to give you some room to up your price, but not by too much otherwise you defeat the purpose of buying foreclosed which is to save you some money.

One more point: check online sites such as Trulia.com and RealtyTrac.com to keep up with home sales in a particular area. The latter is particularly good at pinpointing foreclosures, giving you a good idea if there are too many foreclosures in one neighborhood or not.

Adv. – If you are a first time homeowner, don’t forget that the federal government is giving to you an $8000 buying credit good through November 30, 2009. For more information about buying a home, finding a mortgage or refinancing, please visit SayLending.com.


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Smart Tips To Weigh Before Attending An Open House This Weekend

March 16th, 2009 by Matthew C. Keegan | 7 Comments | Filed in Home Buying

I was considering posting this article later in the week, but then I realized that the tips I’m planning to share with you here need several days of rumination. After all, a home buy will likely be the largest new homepurchase you’ll ever make and certainly is worth much consideration before you take the plunge.

Before you hit the reply button to tell me that this is a lousy time to buy a home, let me say this: for some people this is the perfect time for them to jump into the market. With housing prices dramatically lower than just a year ago and mortgage rates remaining quite low, people who are ready to buy are already out there looking. And, with warmer weather here (or on the way) the spring selling season has begun.

What To Look For When Buying A Home

Over the next few days you’ll want to do some research to learn a few things about the local real estate market, particularly neighborhoods that are tops on your list. Keep reading and we’ll explore some things for you to look for and to remember when you are visiting open houses this coming weekend:

Get Online – If you’re reading this article, then you’re already online. Head on over to Trulia.com to find homes for sale in your neighborhood. Sign up for this free service and acquaint yourself with everything they have to offer to you. Familiarize yourself with “My Trulia” as that will be the section of the site where you’ll spend the bulk of your time. You can find homes on the market that are of interest to you, comparing five homes side by side to get a good feel for what’s out there. Alternate site: SayHomeBuy.com.

Contact Lenders – Maybe you aren’t planning to buy a home immediately, but if you believe that you’ll be ready within the next month or so, then why not contact a mortgage lender to get pre-qualified for a loan? Buyers who are shopping for a home can gain an edge in this market by arriving at open houses with a qualification letter in hand from their lender. In most instances a qualification letter does not obligate you to use that lender, but it does send a strong signal to the homeowner that you’re ready to buy.

Case The Neighborhood – You don’t want to look like you’re trying to break into houses, but you’ll want to visit interested neighborhoods often and at different hours of the day and week. Travel down streets that interest you and then go down nearby roads and through adjoining neighborhoods to see what those areas are like. Make a note of traffic patterns, home conditions, zoning and points of interest (parks, shopping, schools) to help you decide whether the area is right for you. Multiple and varied visits can help you experience the neighborhood as residents see it.

Keep These Points In Mind At The Open House

Once you’re ready to attend open houses, you’ll want to:

Arrive On Time – Choose which homes you want to visit and try to be one of the first ones there. That way, you’ll be sure to get the undivided attention of the real estate agent and receive a personal tour of the home.

Ask Questions – You’ll want to use your time wisely when attending an open house, so be prepared to ask questions including obtaining information you may not have been able to get ahead of time: utility costs, taxes, schools, age of roof, landscaping costs, garbage removal, etc. If allowed, take pictures of the inside and outside of the home for later reference, especially if what was shown online or included in sales literature doesn’t go far enough.

Follow Up – In most cases, homes on the market today are selling at or below list price. And, home prices are much lower than they’ve been in some time. Still, you may not want to wait to long to make your decision because other home buyers will place their bids, especially if a home is priced right, in excellent condition and other favorable terms are included (e.g., closing costs or other fees paid). If you’re interested in the home, let the real estate agent know – she’ll keep you informed about its availability and ask you to make an offer.

Interested? Make An Offer!

Should you find yourself desiring a particular home, but you still haven’t gotten qualified for a mortgage, go ahead and make a reasonable offer as soon as you can. You can contact a lender once your offer has been submitted and speed up that process if your bid is accepted.

This season’s selling season will be slower than last, but homes will be on the market and owners are in the mood to work with any reasonable offer. For the person ready to buy a home, 2009 could be their best opportunity to jump in.


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