Stan Suther's Real Estate and Stuff » first time homebuyers

Old Friends and Real Estate

Stan Suther — Wed, 12 May 2010 20:58:21 +0000

I met for dinner last night with a bunch of my old buds from my Duke Power (Energy) days. I spent the better part of my adult life there working with a bunch of great folks, and we still get together occasionally. This dinner (euphemism for beer and nachos) was on the occasion of the retirement of Don who I’ve known since around 1974. We always have a nice time when we get together for some funny talk and some semi-serious talk. The subject of my post-Duke career in real estate came up, and a comment was made about how they could never consider being in sales. This is a bunch of engineers, so you can understand. I told them that while I was working at Duke, I thought about that from time to time since I can’t stand for a “salesman” of any sort to try to get me to buy something. That just turns me off totally. My Duke buds just couldn’t believe that I was able to do that successfully.

The answer of course is that this is not what I do when working with real estate buyers and sellers. I wouldn’t even be in this business if I hadn’t done a stint after Duke with a technical company as a manager who also got involved in helping the company’s clients buy products that worked best for them. I found that I actually enjoyed listening to and understanding what people want, and helping them reach their goals. That eventually led to my investigating real estate and finding that, properly done, the job of a Realtor is not to push someone to buy something, but to listen to wants and preferences, help people clarify their priorities, then help them find the right properties to consider and negotiate a transaction that is in their best interest. The flip side of this is as a listing agent I won’t try to push a person to buy my listing. The correct and honest thing to do is to present the property in such a positive and complete way that if it is a good match for a buyer, it will be obvious to the buyer. That includes helping the seller price the property competitively.

I explained all of that to my friends. I also explained that any Realtor who is interested in referral business, the very best kind of business there is, will do everything he or she can to be sure that the client has no regrets in hindsight. A happy client will send me future business and be happy that they can recommend me confidently. So, yes, you could say I’m working this way out of self-interest because I need future business to stay afloat. But the nice thing is that the style of business that brings referrals for future business is the style of business that makes clients happy, now and in the future.

That’s a win-win situation.

Details on Extended Housing Tax Credits

Stan Suther — Mon, 09 Nov 2009 19:42:37 +0000

With Congress and the President signing the extension of the first time home buyer tax credit and the expansion of tax credits to include some repeat buyers, details are starting to be published on both of these programs. The first time home buyer program continues to pay up to $8,000 for purchase of a primary residence and the repeat buyer program will pay up to $6,500 for purchase of a primary residence- both for purchase contracts dated before July 1, 2010. Under some circumstances, HUD will allow these funds to be used for the required 3.5% minimum down payment. In other cases, they require those funds to come from the buyer, but allow the tax credits to go toward additional closing costs and pre-paid fees normal to a closing. These funds are accessible for these front end charges though short-term loans.

The National Association of Home Builders has put together a great site with Frequently Asked Questions on both programs. You can see that site HERE. Of course, details matter, and these FAQs contain info on who qualifies. HERE is another very good sight recently published by Coldwell Banker United, Realtors.

I have been working with clients using the first time buyer tax credit, and they chose to make purchases solely because of the tax credit. Hopefully, this will continue to move some real estate and get our housing industry, and our economy moving again. Lenders may be slow to lend to business, but they are lending to credit-worthy home buyers.

Let me know if the availability of these real estate tax credits can help you decide on your next move.

Housing Tax Credit Extended and Expanded

Stan Suther — Thu, 05 Nov 2009 20:42:51 +0000

I just read that the Home Buyer Tax Credit has now passed the House and the Senate, both by overwhelming votes and will go to the President for signature in the next few days. President Obama has already said he would sign the bill when it comes to him. This extends the deadline for first time home buyers. They must be under contract by April 30, 2010 and closed by the end of June. It also ups the qualifying income level from $150,000 to $225,000 for a married couple. In addition to first time home buyers, it provides up to $6,500 tax credit for home owners who are selling a home they’ve occupied for 5 of the last 8 years so that they can purchase another, likely move-up, home. This last detail is the first to address the fact that the first time home buyer tax credit has been successful in driving sales, but left out those who need more space, or need to move to a new location and couldn’t get the numbers to work for them to make the move. This should significantly improve the home resale market and new home market while the tax credits are in place.

Hopefully, there will be enough sales to be a catalyst for overall improvement in the economy. It would appear that our federal legislators, having studied the issue, have concluded that we’ll be helping our economy more than hurting it with this spending. If the economy does improve over the long haul, that will greatly increase income and other tax revenues and help to pay back these huge investments our government has made in keeping us afloat and getting us out of the recession.

Here’s a good US News report on the details of the bill.

IRS Q&A on First Time Home Buyer Tax Credit

Stan Suther — Thu, 10 Sep 2009 21:08:51 +0000

We’re closing in on the final date to be able to claim the up-to-$8,000 first time home buyer tax credit. Home purchases have to be closed by November 30, 2009. Since it’s taking up to six weeks from contract to close on home loans, a first time buyer needs to have found the house they want, complete negotiations on it and be under contract by the middle of October or sooner preferably, since the end of November is going to be crunch time in closing attorney offices. As I told a client today, if you schedule a closing for November 30, and there’s a hitch and a delay (fairly common), the IRS will probably not cut you any slack on getting the tax credit. Also, finding the right home is something that should not be rushed, so if that’s what you have in mind, better get with it!

HERE is a useful link to the IRS that explains how this works for homes bought in 2009. It includes a link to the proper claim form and several other good informational links.

There are legislators who have proposed extending the time limit, among other changes, but given the political climate, I wouldn’t “bet the farm” on this. This is like timing any market- you won’t know you’ve missed it until you’ve missed it.

If you’re interested in buying a home in the Iredell County or Lake Norman, NC area, give me a call- I happen to be in that business- and let’s get started!

First Time Home Buyer Tax Credit News

Stan Suther — Tue, 02 Jun 2009 23:05:30 +0000

I told you last week that HUD has decided to allow FHA approved lenders to offer a bridge loan in order to enable first time home buyers to use the $8,000 tax credit for additional down payments and closing costs (FHA still requires the buyer to provide a minimum 3.5% down payment). I’ve talked to several lender reps about this, and they all say their companies are still working out details on how they’ll do this. This bridge loan money will come from the lender, not the feds, so the lenders have to figure out how they want to do this and what interest rate they’ll charge for the term of the loan. I still have not gotten an answer as to whether this has to be an FHA loan or just underwritten by an FHA approved lender. As soon as I find out from a lender that they’re ready to make this happen, I’ll let you know the details.

$8,000 Tax Credit Now Available Up Front

Stan Suther — Fri, 29 May 2009 19:05:17 +0000

Great news for first time home buyers that we’ve been hoping for! Today, Shaun Donovan, secretary of the Department of Housing and Urban Development announced that they’ve worked out the details of allowing lenders to make a bridge loan to first time home buyers for the $8,000 tax credit so that it can be used for down payment and closing costs. Mr. Donovan had said several weeks back that they intended to do that, then a couple days later pulled back because of a variety of concerns to insure that it would actually work and not be abused. Looks like they’ve gotten most of those concerns resolved. Now, before you think it’s Christmas, HUD says that a buyer using an FHA backed loan from an FHA approved lender will still have to come up with the minimum 3.5% requirement without assistance from the tax credit. The buyer can use the tax credit for closing costs, a larger down payment or buying down their interest rate.

This tax break was great already, but many people couldn’t take advantage of it because they couldn’t get their hands on it until after a property closed. If they didn’t have the money for a down payment and closing costs, then they were left out of the game. This change will effectively make that situation much better.

This comes none too soon. As I said yesterday, the mortgage interest rates are creeping up. Just got an email from Kim Peschock (704- 500-9087), our Coldwell Banker Mortgage rep, saying that 30 year conventional rates are slightly above 5% and 30 year FHA rates are around 5.4%. If you or someone you know qualifies and has been thinking of buying, now’s a great time to get an excellent price, low interest rate, and a big tax credit (cash) from the feds. Hey, call me!

For more details, HERE is a link to an article on this at Realtor.org and another about the minimum 3.5% down payment is HERE.

Another First Time Home Buyer Incentive from NC

Stan Suther — Thu, 21 May 2009 23:00:15 +0000

Of course, we’re happy to have the $8,000 first time home buyer tax credit from the feds. We’ve seen quite a few people use that. Trouble is that you have to have cash available up front for the down payment and closing costs. The feds are trying to figure out how to give the tax credit to qualifying people up front to be used for these costs, but they have not yet worked out the details and have not actually committed that they can figure it out.

In the meantime, if you or someone you know would be a first time homebuyer who does qualify for the $8,000, you should also be aware that the NC Housing Finance Agency has an additional tax credit to the buyer’s income taxes. It’s called a Mortgage Credit Certificate (MCC). “ The MCC allows eligble buyers to take a federal tax credit of 20% of the mortgage interest you pay annually. It can save you up to $2,000 each year that you occupy your new home.”

Click HERE for more information about this and other benefits available to first time home buyers from NCHFA. This agency operates under the blessing and oversight of the NC General Assembly.

$8,000 First Time Home Buyer Tax Credit Bridge Loan?- Hold on There a Minute!

Stan Suther — Tue, 19 May 2009 16:02:49 +0000

Got this from the North Carolina Association of Realtors Government Update from last Friday (5/15/09):

“HUD Reconsidering Tax Credit Use for Down Payment
HUD is apparently delaying its determination that the $8,000 first time homebuyer tax credit can be used for down payments. This Tuesday, Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration was going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment. But later in the week this was rescinded and is apparently still being evaluated.

Donovan’s comments came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C.. The NATIONAL ASSOCIATION OF REALTORS® has been asking that the credit be advanced in the form of down payment assistance.”

I certainly hope they work this out. The tax credit is a great buying incentive, but as it stands now, you won’t be able to take advantage of it if you don’t have enough cash for a downpayment and closing costs and pre-paid fees (insurance, taxes, etc.) which can be substantial- 2-3% of the price of the house. It certainly makes sense to me that if the feds are going to give you the money after closing, then provided you qualify, you should be able to get that up front as a bridge loan from the lender which will be paid back when the tax credit check comes in. They’d just assign that cash to the lender.

Stay tuned!

Now on Sale!- A House for You

Stan Suther — Fri, 24 Apr 2009 18:31:44 +0000

OK, let’s review:

House prices have come down to the lowest levels in years. There’s some evidence that many markets are finding a bottom.
Morgage Rates are around 4.75% for a 30 year conventional loan or 6% for a jumbo (over $417,000).
USDA mortgage loans that offer no money down transactions for qualifying buyers are still available (income limits at $56,600- joint- for Iredell residents- varies by county).
The Federal government is providing up to $8,000 tax credits (like cash) to qualifying first time home buyers (income limits up to $75,000 single and $150,000 joint).

If you think it will get better than this, I’d not hold my breath. This is all driven by the difficult economy and slow housing sales. As soon as sales pick up substantially, you’ll probably see the interest rates go up and the incentives become harder to get. Timing markets like this is next to impossible- we’ve never seen anything like it, so how do you predict the future?

If all that looks to you like an ideal situation to buy a home, let me know. I’ll be happy to get to work finding the right home for you.

First Time Homebuyer- Could You Use $8,000?

Stan Suther — Thu, 23 Apr 2009 21:11:21 +0000

I keep running into people who don’t know about the government incentive to encourage first time homebuyers to go ahead and make that purchase. For gosh sakes, you can get up to $8,000 free and clear for buying a house. This is not a tax deduction like mortgage interest. This is cash that the government will send to a qualifying first time homebuyer. I’ve closed one transaction for a client who’ll amend his 2008 tax return and go ahead and get the cash. I’ve got another ready to close in May. Why let them have all the fun?

If you plan to buy your first home (or first after 3 years of renting) or know someone who’s thinking of doing it, now is the time. You’ve got to purchase your home by November 30, 2009 to get the tax credit as things stand now.

Here is a pdf summary of the details.

Here is a much longer explanation.

Here is a look at the IRS form that you’d use to claim the tax credit.

Now, you have no excuse. Call me, and we’ll find the right house for you!