Tag Archives: first time home buyers

Real Estate

Five Mistakes Home Buyers Make

Affordable home prices and historically low interest rates have created an ideal situation for many qualified first-time home buyers to purchase a house.  Despite this opportunity, some buyers may be overconfident and make mistakes during the home-buying process.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • Some first-time buyers are unaware of the vast amount of paperwork and negotiations that go into purchasing a home.  As a result, buyers may think they can save money by forgoing the use of a REALTOR®.  However, managing the nuances of offers, inspections, financing, and other pivotal steps when buying a home often causes confusion and anxiety for buyers.  Working with a REALTOR®–who is obligated to put the buyer’s best interests first–will help to alleviate buyer concerns during this process.
  • Online mortgage calculators can help buyers estimate the amount of house they can afford, but calculators should not be the sole source for mortgage-approval information.  Buyers are advised to meet with a mortgage broker or banker prior to beginning the home search to help determine the loan amount for which they are most likely to be approved.
  • Although there is a large selection of homes available for sale, home buyers should not assume they can make low offers or unreasonable demands.  Even in hard-hit housing markets, homes in desirable neighborhoods are receiving multiple offers.

To read the full story, please click here.

John J. O’Del
Licensed Real Estate Broker
Call 530-263-1091

Real Estate

Now is the Time to Get Your Real Estate Deal, While You Still Can


The combination of affordable home prices, low interest rates, and the federal tax credit for home buyers have created an opportune time for many buyers to purchase a home.  Many real estate analysts also believe that most housing markets have stabilized, but that some markets may decline further.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • Buyers should keep in mind that housing markets are local and can vary greatly from one neighborhood to the next.  Working with a REALTOR® familiar with the area in which the buyer is searching can help the buyer select a house that best suits their needs.
  • California’s housing market has shown signs of stabilization since early last year.  Sales of existing, single-family homes bottomed out in August 2007, and the median home price reached its trough in February 2009.  In January, California’s median home price was 17.2 percent above the low for the current cycle.
  • The federal tax credit for home buyers was extended and expanded late last year.  Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010.  Repeat buyers may be eligible for a tax credit of up to $6,500.  Visit First Time Home Buyers Credit Answers for more information about the federal tax credit for home buyers, including eligibility requirements.
  • The Federal Reserve has helped maintain low interest rates, which, in turn, has assisted home buyers.  However, the agency plans to stop purchasing mortgage-backed securities at the end of this month, which likely will increase rates on 30-year fixed mortgages.  Buyers may be able to lock in a low interest rate by working with their lender.

To read the full story, please click here.

John J. O’Dell
Real Estate Broker
Here for you
Because I care
Call 530-263-1091

Local Writers & Contributors, Real Estate

Home Buyers Tax Credits Explained

federal-tax-credits

As you have probably heard, Congress passed a new act that extends emergency unemployment compensation during these difficult economic times. Included in that bill was the extension of the First Time Homebuyer Credit which was scheduled to end December 1st of   2009.  Not only has the credit has been extended but it has also been expanded to include a whole new group of potential homebuyers.

 First Time Home Buyers – This credit of 10% of the purchase price of the home or a maximum of $8,000 will remain available on purchases contracted by April 30, 2010 and closed no later than June 30, 2010.  A first time home buyer is defined as someone who has not had ownership in a personal residence during the 3-year period prior to the purchase of the home. 

A new provision has been added to include individuals considered Long-time Residents of the Same Personal Residence.  This provision includes homeowners who have used and owned the same home as principal residence for 5 consecutive years of an 8-year period.  When these individuals purchase a new home after November 6, 2009, they may be eligible for a 10% tax credit not to exceed $6,500.  

The following restrictions apply to both types of credits: 

  • A phase out for individuals with adjusted gross incomes of $125,000 to $145,000 for single filers and $225,000 to $245,000 for married couples filing a joint return.  

·        The purchase price of the home cannot exceed $800,000 or there is no credit of any amount. 

·        The credit is not available for buyers under age 18 or buyers who can be claimed as a dependent of another.  There are also additional restrictions on purchases of homes from family members. 

For extended duty military, Foreign Service workers and intelligence community workers who are serving outside the United States for at least 90 days, the credits have been extended by one year to April 30, 2011. 

To claim either of these credits, the taxpayer must include a copy of the settlement statement when filing their return.  

For tax planning purposes, keep in mind that the price of the home must not exceed $800,000 or the credit is lost completely.  Even a purchase price of $800,500 will eliminate the credit while a purchase price of $799,500 will qualify. 

The phase out amounts have been increased for this new time period which covers purchases between November 7, 2009 and April 30, 2010.  If you fall within the phase out ranges listed above, you can still receive a partial credit.  If your income exceeds those limits, no credit is available. 

No payback is required for credits unless the house ceases to be a personal residence within 36 months.  In other words, if you don’t intend to use the home for at least three years, be prepared to repay the full amount. 

If you have any additional questions regarding additional specifics of the Home Buyer Credits, please do not hesitate to call or email our office.

 Source: Courtsey of  Robertson, Woodford & Summers, LLP
 Abacus7.com

Real Estate

Home Sales to Increase 15 Percent in 2010

home-prices-increasing
Home sales will increase 15 percent to about 5.7 million units and REALTOR® income will be up 20 percent in 2010, NAR Chief Economist Lawrence Yun told a packed room of REALTORS® today in a residential economic update at the 2009 NAR Conference & Expo.

Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn’t have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households’ fear over continuing price drops.

This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. “The key is stabilizing prices and preserving household wealth,” he says.

Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.

The tightening inventory at all price points will help improve market performance by bringing supply into better balance with demand, but the added sales, particularly on the higher end, will also increase the number and quality of the market comparables used by appraisers to assign valuations. Once appraisals improve, foreclosures will ease, blunting their drag on the market and making it less likely that Fannie Mae, Freddie Mac, and even FHA will need help from the taxpayer.

“Then we’ll be set for a durable economic expansion,” he said.

New-home sales, which comprise about 10 percent of the market, will continue at suppressed levels–about 550,000 units, down from more than a million during the boom–mainly because builders have scaled projects way back, in part because financing isn’t available.

“Weakness in new-home sales shouldn’t be viewed as tepid demand,” he said.

Even under the most positive economic scenario, unemployment will remain elevated through 2010. Yun is predicting unemployment to stay near double-digits going into 2011, qualifying this recession, as some economists have, as the “Great Recession.”

Source: Robert Freedman REALTOR® Magazine

Real Estate

We’re Getting Back to a “Real” Home Market at Last

house-in-shopping-cart

Housing affordability among first-time Californian home buyers in Q109 improved more than 20 percentage points from the year-ago period, according to survey results released Thursday by the California Association of Realtors (CAR).  This is good news for us here in Nevada County. The more people who can afford to buy a home, the sooner home prices will stabilize.

Home prices became out of reach for over 86 percent of the people in California, when real estate was selling so fast and furious.  The only reason home sales kept going was the easy lending practices. Buyers who really couldn’t afford a home were able to get home loans, resulting in the large number of foreclosures that we have at the present time.   Now we are getting back to a “real” home market.

The data suggest the potential for a significant increase in first-time buyer presence on the market, although it’s unclear how many of these households will actually participate. The increased housing affordability indicates substantially lower home prices, likely affected by foreclosure sales in the state.

CAR found 69% of California households could afford to purchase an entry-level home in Q109, compared with only 46% in the same quarter last year.

The median entry-level price for a home in California was $213,040 in the first quarter, making the estimated monthly payment $1,270. A California household needs a minimum $38,090 yearly income to purchase under these circumstances, CAR said. These households typically purchase a home equal to 85% of the prevailing median price.

Californian households might enjoy some new affordability due to the state’s high foreclosure sales volumes. A monthly report released this week by ForeclosureRadar saw foreclosure notices ease by 18% in the state during April, while sales at auction rose 35% overall and a record number of properties sold at an average 28% below the estimated market value.

Areas like California with high volumes of so-called “distressed” sales — which traditionally fetch 20% less than non-foreclosures — also tend to show the first signs of recovery, National Association of Realtors economist Jed Smith tells HousingWire for the upcoming June magazine issue.

“We’ve seen some phenomenal strength in California, Arizona, Nevada and Florida recently, largely because prices in those markets got bid down to such a point that the first-time home buyer and probably many others have seen a real opportunity there…to come back into the market,” he says