Tax credit extended and expanded

Just last week I blogged about how the first time buyer tax credit was set to expire on November 30, 2009.  Well, a lot has happened in the past week.  Earlier in the week the House of Representatives passed an extension.  And Barack Obama signed it into law early on Friday. 

The extension now runs through June.  In order to take advantage of the tax credit up to $8,000, you will need to sign a contract by April 30, 2010 and close by June 30, 2010.  Just be careful.  If you are signing a contract to purchase a home that is going through a short sale, please beware.  A lot of banks can take longer than 60 days to approve a short sale or that closing.  So you’ll need to get everything signed prior to April 30.  April 30 is the last day you can have a contract signed and June 30 is the last possible day to close to take advantage.

Again, how the credit works is this.  If you purchase a home for $80,000 or more, you are eligible for an $8,000 tax credit on your 2009 taxes.  Remember, you file 2009 taxes in 2010.  If it’s a home for less than $80,000, you can get a credit for up to 10% of the purchase price.  If the home is $59,000, you will receive $5,900.

Obama also extended the income limits of who is eligible.  Single buyers can now earn up to $125,000 per year in income and married couples up to $225,000 to be able to receive it.  If your income level is above those amounts, you are not eligible to receive the credit.

Obama also extended the credit to move-up buyers, not just first time buyers.  In order to qualify for this $6,500 credit, you must have owned and occupied a principal residence for at least 5 of the last 8 years.  So many more people will qualify under the new rules.  Congress and the President are hoping the economy will get stimulated a bit by this expansion.

Originally, Congress was hoping that this tax credit would start a domino-like reaction.  First time buyers would purchase homes from sellers who would then choose to purchase homes and so on.  Unfortunately, a lot of buyers turned to vacant/foreclosed/short sales, so these homes didn’t have sellers who needed to move up.  But they’re hoping that offering a tax credit to move-up buyers will start this domino effect again.

More information on the expansion can be found in this article. I also have lots of great info on my Web site.

Hurry to take advantage of tax credit

I had to write this week about the first time homebuyer tax credit.  If you haven’t heard of this by now, please continue reading.  The government is actually giving buyers who purchase a home up to an $8,000 tax credit.  They are giving you money to stimulate the economy.  It does not get any better than this.  There is some fine print, of course, so keep reading.

First of all, this credit is for all homes which close prior to December 1, 2009.  That gives you less than a month from now to take advantage.  There are talks in place to extend it, but nothing has been approved yet, so we’re going to continue on as if December 1st is the last date.  You can’t write a contract on a home on November 30th.  You have to close on a home prior to then!

Who qualifies?  The government is defining a first time homebuyer as anyone who hasn’t owned a principal residence in the past three years.  So let’s say you owned a home five years ago but sold it to move out of state.  You’ve been renting for a few years and now want to purchase a home.  You qualify!  If you are married, both you and your spouse can’t have owned property in the past three years.

What qualifies?  Any home qualifies that’s used as a principal residence.  So no second homes or vacation homes.  But any type of home will work- single-family home, townhome, condo, mobile home, house boat, you name it.

Remember that I said you can get a tax credit of up to $8,000.  So, basically, if you purchase a home for $80,000 or more, you get all $8,000.  If it’s less than that, you can get 10% of the purchase price.  So if the home you buy is $54,000, you would receive a tax credit for $5,400. 

This credit can be claimed on your 2009 taxes (payable April 15, 2010).  Since you’ve most likely already filed your 2008 taxes, it won’t work for those.  Talk to your accountant if you’ve received an extension through this point.

So what’s next?  Pick up the phone and call me immediately at 800-858-7917.  If you’re out of the Illinois area, I can refer you to an agent in your area, too.  We need to get shopping ASAP!  For more information, you can also visit my Web site.   I’ve set up a page exclusively to this tax credit with an FAQ section and other links.  Make sure to check it out.  Just click on the graphic on my home page that you see on this blog.  I hope to hear from you soon.

Halloween activities to enjoy around the North Shore

Since one of my favorite holidays is coming up this weekend, I thought I’d blog about some great activities taking place relating to Halloween around Evanston and other North Shore communities.  First of all, it’s great that Halloween falls on a Saturday this year so that kids can actually trick or treat on Halloween.  Trick or treating is open in Evanston this Saturday, 10/31 from 4-7 p.m.

The South Branch Library is hosting a costume party at 949 Chicago Avenue on Thursday evening from 6-7:15 p.m.  Let your children dress up and listen to scary stories.  Refreshments are provided.  Call the library at 847-866-0333 for more info.

The Fleetwood-Jourdain Center at 1655 Foster is hosting a “HallaDaze” party on Friday night from 6-8:30 p.m.  This party is meant for kids ages 4-12 with a magic show, face painting, and costumes encouraged!  Call 847-448-8254 for more info. 

Highland Park has trick or treating hours from 4-8 p.m. on Saturday.  The same hours are true for Wilmette.  In Skokie, trick or treating begins at 3 p.m. and lasts until 8.

If you’re in the mood to travel this Halloween and visit some haunted houses and yard displays, make sure to visit Haunted Illinois.  This great Web site provides a directory that lists these attractions throughout the state.  Some of the biggest haunted houses are located in Crest Hill at Statesville prison and the large Dungeon of Doom in Zion.  Gurnee also has their annual Fright Fest going on at Six Flags Great America.

I hope you have a very safe and fun Halloween this weekend!  Visit me online if you need any real estate advice.

 

Keep your home warm and your energy bills low

With some very cool temperatures in the Chicago area this week, I know most people aren’t ready to start worrying about snow and shoveling and below freezing temperatures.  Unfortunately, it seems like summer is over and those 30-40 degree temperatures are here to stay.  In order to save money on your electric and heating bills this fall/winter, here are some tips to keep your house warm without costing a fortune:

1. Check for air leaks and drafts around all windows and doors.  One poorly sealed window can cost you hundreds of dollars this winter in extra heating bills.  You can purchase inexpensive insulation kits at all major home improvement stores, as well as Walmart and Target.  The plastic makes sure that all windows are sealed to prevent any extra air from escaping in.  Also, take advantage of those sunny days.  Even if it’s chilly outside, if there is a day with a lot of sunlight, open your drapes to get the solar energy to warm the room for you.

2. Check for leaks and drafts everywhere else.  You don’t want to forget to close your damper on your fireplace when not in use.  Please remember to keep it open if you are burning a fire.  Wall plates, plugs, and switches can allow cold air in.  You can purchase pre-cut foam to place under the switchplate to keep that closed.  And check your duct work.  Duct tape can fall off or bunch up over the years.  Make sure there’s no open holes bringing cool air in.

3. Give your furnace a yearly physical.  Replace its air filter to get the most energy efficiency out of it.  Clogged filters can cost you a lot of extra money since the furnace is working extra hard to get the heat through those clogs.  Have it inspected by a licensed and bonded HVAC technician yearly.  This can save you money in the long run to prevent any broken furnace in the middle of the winter. 

4. Invest in a programmable thermostat.  This way you can keep the heat lower when you’re at work so it’s not as warm when you’re not home.  You can set it to start warming up just before you get home at the end of the day.  Or if you’re on vacation, you won’t have to worry about your pipes freezing (it does happen!) because your heat is completely off.  These thermostats are so reasonably priced now.  They can be purchased for as low as $20.

5. Consider running your appliances (dishwasher, washer, dryer) in the morning and evening when you’re home.  It will help to heat the house as its running.  While you’re at it, make sure that dryer lint vents are cleaned after every load and that you’re only running full loads of laundry and dishes.

More great tips for the winter can be found here and here. Make sure you read the tips on attic insulation, too.

Visit my Web site if you have any real estate needs or questions.

 

Location near Metra boosts sales

While the housing market is in flux throughout the country and the Chicago area, there is good news for those of you that live near a Metra station.  According to a recent survey by Re/Max, housing prices in 2009 declined less in the Chicago suburbs that were located near the Metra than in other Chicago suburbs.

Great news for those in the Evanston area and other North Shore suburbs with locations near the stations.  There were three lines that had the strongest results: North Line (that runs through Evanston, Winnetka, and Lake Bluff), the BNSF (Riverside, Western Springs, and Lisle), and Heritage Corridor (Summit, Lemont, and Lockport).  The number of homes sold in these areas were less than the rest of the suburbs.  They also showed housing price declines of less than 7% and an increase of market time as less than 10%, much lower than the rest of the suburbs as a whole.

More results on the study can be found here.

So what does this mean for those in the area?  This is what sellers should do if they are listing their homes for sale:

1. Include your location to Metra in all remarks and advertising.  Advertise if you can walk to the station.  Let buyers know it’s only a 5 minute drive.  This is a huge benefit to buyers, especially those that are moving in from out of state and aren’t completely sure how they’ll get to their jobs in the city.  Even those that have gotten a new job might not know how easy it is to get downtown if they’re used to a previous job in the suburbs.  This can be a huge selling point.

2. To go along with that, insert a map to the Metra station in all of your brochures that are created for your home.  Show how easy it is to get to, and you might even want to include a Metra brochure with all the different lines and train schedules for your buyer.  If you’ve got a great looking station near you, include a few photos of that in your brochures, as well.  A map will definitely help prove how close you are.

3. Post flyers of your home at the Metra station, if possible, or hand out cards with your Realtor’s information to people you sit next to on the train.  You never know if the commuter next to you is looking to buy a home closer to the line!

For all map, schedules, and ticket information to provide to your buyers, you can view the Metra’s Web site here. If you’re ready to sell your home on the North Shore and need the expertise of a Realtor who frequently sells in the area, please visit my Web site.

Knock on your door? It could be your mortgage company

In an effort to help delinquent borrowers on their home loans, Freddie Mac just announced that they will be going door to door.  Freddie Mac has hired Titanium Solutions, Inc. to knock on homeowners’ doors around the country if they are behind on their mortgage payments.  This is all in an effort to reduce the amount of foreclosures across the country.

If you have a mortgage owned by Freddie Mac, you could receive a knock on your door.  They are coming to homes where the homeowners haven’t responded to their phone calls or letters OR if they need to provide additional documents or information to begin their three month trial under Obama’s housing bill to get a loan modification. 

According to CBS Moneywatch.com, “By meeting with our borrowers, one on one, in their homes Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods,” said Ingrid Beckles, Senior Vice President Of Default Asset Management at Freddie Mac. “We believe this can give borrowers seeking Home Affordable Modifications the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage.”

They are taking a step in the right direction in terms of gathering your personal information.  To avoid fraud, Titanium Solutions will not be allowed to accept mortgage payments from people in the house.  They’ll also carry a copy of the letter that was initially sent to the borrower.  In other words, don’t allow anyone into the house that doesn’t have this information.  You can click here to obtain more information on this and other programs that Freddie Mac has implemented to help stop foreclosures.

This is one of the newer ways that mortgage companies are assisting their borrowers.  Some will help you with loan modification programs by a phone call and with proof of an inability to make your payment.  Other people have found assistance by getting their local congressmen and women involved.  The upside to this program is that these agents will help you fill out documents to get your loan modified.  They aren’t just stopping by to hound you into paying.

What do you think of Freddie Mac’s program of going door to door?  I’d love to hear your thoughts.  Please leave a comment or visit my Web site.

Losing value may inhibit your desire to sell

With the recent news that home sales did increase slightly in the month of August, unfortunately, it wasn’t so true for the Midwest in general.  The Midwest home sales decreased about a total of 6%.  Now, I hate to be the bearer of bad news, but I want to make sure you’re educated before you decide if now is the right time to sell.  If you have a need, such as a relocation, new job, divorce, budget concerns, etc., by all means, you need to sell. 

However, there is a very interesting article from Smart Money that will give you some signs that your home may be losing value.  This should help you determine if now is the right time for you to sell, especially if there’s not a strong need.  Losing value in a home will not affect you unless you have an immediate need to sell.  If you plan on being in your house for years to come, there are no worries whatsoever. 

The article states, “‘Individuals who are staying put for at least the next five to seven years will likely recoup the lost value of their home,’ says Amy Bohutinsky, a Zillow.com spokeswoman.”  She goes on to say to be wary of borrowing money from your mortgage, however. 

So what are the signs?  Some are more obvious than others.

1. Foreclosures in your neighborhood.  Some of these may be easy to notice because of riders on the real estate signs that say “Foreclosure” or “Bank Owned.”  You may have heard gossip from another neighbor.  You can contact your local Realtor to look up the property to see what the status is.  As homes go into foreclosure, it creates a domino effect in the neighborhood, effectively lowering surrounding homes’ values.

2. Homes with excessive market time.  Any home sitting on the market without a sale for more than 3 months can be another factor.  It’s generally a good time for the seller to lower their price, which means that a price for another home in the area would most likely be lower, unless there is a significant difference in features of the home. 

3. Homes in disrepair.  This is one you probably haven’t thought about.  If you see homes in your neighborhood in need of a new roof, siding, have missing paint, etc., there’s a good chance that homeowner may be unable to afford to make those repairs.  Unfortunately, this could affect the value of your home.  It may be worth it to have a neighborhood pow-wow to determine if anything can be done to help everyone out and keep home values steady for the time being.

If you have questions about your home value, or need to know if a neighbor might be in foreclosure, please be sure to visit me online.

When to consider backing out of a real estate transaction

Let me just preface this blog by saying that you should always consult a real estate attorney prior to signing any contract you are not comfortable with or you have questions about.  In Illinois, a real estate contract has a clause written in allowing for five days for an attorney to review a contract prior to it becoming finalized.  However, this is not a reason to say you no longer want the property.   As a buyer, once you sign that contract you should want to move forward with it.  There may be some reason to consider calling off the deal.

1. Home inspection issues.  After your home inspection, you may find some items that are in need of repair.  Some could be as simple as replacing an outlet, fixing a stove burner, or replacing a light bulb in a closet.  However, you may run across some larger issues such as a damaged roof, broken furnace or water heater, or even structural problems.  If you’ve asked the seller to repair the items you want fixed and the seller refuses, this could be a reason for walking away from the deal.  Especially if there are items that are considered unsafe or unsanitary.  Some sellers will choose to offer a credit in lieu of a repair so that you can fix it yourself.  Consider this option if it works for you.

2. Liens.  When conducting a title search on a property, you will find out if the home has any liens against it.  This can happen because a seller refused to pay a contractor’s bill or taxes haven’t been paid.  Make sure that someone conducts a search for all liens prior to closing.  You don’t want to move forward with a deal to later find out that it’s your responsibility to pay the debts because you now own the house.

3. Permits.  Another important item to research is whether the seller obtained all permits for any renovations or remodeling they did on the home.  This can be found out with a call to the City or Village Department.  This could hurt you if you sell down the road and the buyer asks the same question.   You would be responsible since you are now the owner of the house. 

4. Mortgage problems.  In Illinois, you’re guaranteed to no longer be responsible for purchasing a house if it turns out that you cannot obtain financing.  You won’t be required to buy the house if it turns out that you can’t get an approval for the amount you’ve requested.  It’s always important to have a pre-approval prior to writing a contract so you don’t spend unnecessary time and money.

Sellers should think twice before backing out of a contract because they get a higher price from another buyer.  I’ve seen too many of those deals fall apart and then the seller comes back seeing if the first buyer is still interested.  By this time, they’re usually long gone and under contract on another property.  Definitely consult with your Realtor and attorney prior to doing this.

Another important thing to consider is that if you follow the rules of your contract, you should be able to obtain your deposit back if you do choose to back out.  If you walk away for another reason, you might forego your monetary deposit.  Again, it’s imperative that you consult a real estate attorney to help you through your transaction. 

If you have more questions on your real estate contract or are ready to purchase a property, please visit me online.

Positive Chicago real estate news

Lots of interesting news to come out of the Chicago/Illinois area this past week.  The first is extremely beneficial to buyers purchasing a home and getting mortgage assistance.  Bankrate.com conducted a recent survey of closing costs for buyers throughout the country.  It turns out that Illinois was located extremely close to the bottom on that list.  What great news for those with empty wallets these days!  49 states were surveyed and Illinois ranked 43rd on that list.  Lenders were surveyed in the largest city in each state and asked about closing costs for a buyer purchasing a $250,000 house with a $200,000 house.  So understand that this buyer would have a $50,000 down payment, or 20%.  Combining points, title fees, underwriting, title insurance, and various assorted other costs, the total amount of closing costs in Illinois would average $2,486.  The national average was $2,732.  Texas came in at the highest and Nevada came in at the lowest. 

Important things to take away from this survey are that this amount doesn’t include escrow fees or taxes.  You’ll also want to consult with multiple lenders to determine costs prior to choosing one to go with for your mortgage.  Ask them what the common costs are and how much their company charges.  It varies from lender to lender on the miscellaneous fees.  You can also talk with a mortgage broker who will determine which company that they work with can offer you the best deal.  So don’t go with the first referral you get.  Definitely talk to them but put your feelers out to other companies, as well.

Other interesting Chicago real estate news this week is the merger and acquisition of several local real estate companies. 

Warren Buffett’s company, Berkshire Hathaway, purchased Koenig & Strey.  Koenig & Strey has 21 local offices and around 900 agents working for them.  They’re going to keep the name Koenig & Strey.  They’re also looking to expand into more areas that their agents live in and are familiar with.  In a recent Chicago Sun-Times article, Doug Ayers, president of the company stated that the company is seeking to expand into communities where its agents live, noting that Koenig & Strey opened offices a year ago in Schaumburg and in the far north side Edgebrook and Sauganash neighborhoods.

Prudential Preferred Properties has acquired Rubloff, and will now be named Prudential Rubloff Properties.  They have 17 offices throughout the area and will be the fifth-largest brokerage in the area based on dollar volume of transactions.  More information on this deal can be found here.

If you need some recommendations for mortgage lenders that can help you obtain financing or need assistance finding a property to meet your needs, please be sure to visit me online.

News you can use for first time buyers in this market

As I’ve made aware several times, the time to take advantage of the first-time buyer tax credit is before December 1st.  The offer of the $8,000 tax credit is currently set to expire at the end of November, and you would need to close on your residence on that date or before in order to qualify.  If you’re in the market to purchase your first home (or you haven’t owned a home in the past 3 years), these important facts will help you learn everything you need to know.  For more on who is eligible for the tax credit and more specific details, be sure to click here.

1. Understand that the Mortgage Disclosure Improvement Act is now in existence.  This act went into effect July 31st.  It basically states that if there are additional costs that affect your APR, you need to get a new Truth In Lending statement a week prior to closing.  What this means to you is that your closing could be delayed.  If you know of any changes that could affect your mortgage affordability/interest rate, be sure to let your Realtor and mortgage lender know as soon as possible.  Some of these changes could be a change in your take-home pay from your job, an FHA home inspection, etc. 

2. Don’t forget about closing costs.  You may know that you can afford the down payment for your home, but don’t forget about those additional costs such as attorney fees, lender fees, title fees, and transfer tax, if it applies.  Be sure to speak to your lender up front about these costs and know what to expect.  Your lender should be able to come up with an amount you need to bring to closing prior to the closing occurring.  In Illinois, you will need to have this money as a cashier’s check made out to yourself.  And remember to bring your photo ID.

3. Be careful who you choose as your Realtor.  It’s great if you have a friend of a friend of a friend or your cousin’s mother’s boyfriend’s neighbor is a Realtor.  They could end up being a great agent for you.  On the other hand, they may not.  You’ll want to use someone who is knowledgable about the area you’re looking in.  If it’s a someone a family member or friend gave you the name of but they work in a completely different market, chances are you’ll be better off with someone local.  Make sure you ask for references and get referrals for a Realtor from people you trust, or those you know who closed in the past year.   As a first-time buyer, you might also want to work with someone who specializes in working with first-time buyers and is familiar with the tax credit.

4. Make sure as a buyer you know that you do not need to pay for a Realtor’s services (this is true in Illinois.)  If you are interested in having Realtor representation for for sale by owners, a Realtor may ask that you cover some of their commission if the seller refuses to do so.  If you are looking at homes in the MLS, the sellers pay the commissions out of the money they make on the home.  Understand this as you’re negotiating with them. 

5. The first closing can be overwhelming.  As you’re in the room looking at the stack of papers that could total the number of pages in an encyclopedia, take a deep breath.  The mortgage company requiers your signature on several pages just making sure you understand how the process works.  Make sure you have your attorney accompany you to the closing.  They will explain to you each paper that you sign so that you feel comfortable.  Don’t hesitate to ask questions.  It may be overwhelming, but it’s wonderful being handed the first set of keys to your new home! 

View this great article for more tips. If you do have more questions, please be sure to visit me online.