Jenny Browne, US Preferred Realtor

Is it a Buyer's market or Seller's market?

Home inventory is at a record low, but pricing is not reflecting the true supply and demand principle.  When inventory is low - we say that it is a Seller's market.  When prices are low - we tend to think it is a buyer's market.  So which one is it?  Maybe both?  If you are a buyer right now, you are competing for homes... even short sale properties are receiving 3-5 offers.  Buyers are getting into bidding wars on homes - driving the purchase price up above the list price.  The problem may come with the appraisal because appraisers are not falling into the same pattern as we saw years ago.  Appraisers are staying on the conservative side.  Prices are going up, but at a small rate so not as a true reflection of the market.  Some say that is good - keeps the pricing affordable and the buyers coming.  Sellers would say that appraisers need to let the market BE the market.  The house is worth what a buyer is willing to pay for it.  I'm with the sellers on this one... let's just call it what it is... a "weird market". 

Open House 10-2, March 3rd at 1801 E Winged Foot Drive, Chandler

It's been awhile...

It's been a crazy 6 months... I have learned quite a lot in these last months with respect to short sales, bank owed homes and the current market in general.  Short sales seem to be moving faster... sometimes.  Bank owned properties tend to give you a "smoother transaction"... sometimes.  There are good old  normal sales out there... in some areas.  Homes are priced correctly... most of the time.  What am I trying to say?  A recent instructor said it best. The only consistancy in today's market is the inconsistancy in today's market.  Whatever your neighbor has said about their transaction is true, but for only their transaction.  You can't assume that the same will be true for your purchase or your short sale...  Even if it is the same bank... every transaction is different.  How do you prepare yourself for your next purchase or sale?  Consult a Realtor (me :), consult your tax advisor, and a lot of times you even want to talk with a lawyer too.  We are successfully buying and selling homes in AZ... you just need to do a little more homework and work with helpful professionals.  Call me with any questions or concerns!! 

 Have a good one.   

FHA released the new loan limits today for 2010. As you probably guessed, many areas are going to see a decrease from 2008 and 2009 levels going in to 2010. Here in Maricopa County, we will see the max loan limit drop from $346,250 to $271,050 for single family residences. This figure may look familiar to you. You may recall HUD stepped in and raised loan limits temporarily to allow for more folks to qualify for an FHA loan back in 2008.



For a majority of the country, the FHA loan limits will be as follows:



One-Unit $271,050

Two-Unit $347,000

Three-Unit $419,400

Four-Unit $521,250

Gov't looking into increasing down payment for FHA loans - Bad idea!

The minimum down payment for borrowers looking to obtain an FHA loan for the purchase of a home currently sits at 3.5%. However, a bill introduced to congress last month by Representative Scott Garrett, a New Jersey Republican, aims to increase the down payment to a minimum of 5%.

In addition, the new bill would also prohibit the FHA from letting borrowers roll their closing costs into the outstanding balance of the loan. Thus, further increasing the minimum out of pocket contributions by home buyers.

This comes at a time where FHA financing continues to play a larger and larger role in insuring new home mortgages. However, with an increased percentage of the current marketplace also comes increased risk. As a result, the FHA said in a Sept. 18 statement that it's tightening credit and appraisal standards and appointing a chief risk officer.

However, there has been no indication from the FHA that an increase in down payment is yet necessary to manage their increasing role in the housing market. And in a time when more and more first time home buyers are purchasing homes in the current marketplace, the potential passage of such a proposal could certainly put the process out of reach for certain buyers.
At this point this bill has yet to move forward and would need approval from the House of Representatives before moving forward.

First Time Homebuyer Tax Credit Extended Into 2010!
Plus...A New Tax Credit for Certain Existing Home Owners!

It's official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So Who Gets What?
The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect
The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price
Qualifying buyers may purchase a property with a maximum sales price of $800,000.

Extension of buyer tax credit... almost a go.

Senate votes to renew tax credit for first-time home buyers

Provision for $8,000 refund part of bill to extend jobless aid

By Dina ElBoghdady

Washington Post Staff Writer
Thursday, November 5, 2009

The Senate voted Wednesday to renew the government's $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.

For the first time, the tax credit program would also enable many homeowners who buy a new primary residence to receive a $6,500 refund.

The measure was attached to a bill that would provide 20 weeks of unemployment benefits in more than two dozen states with jobless rates above 8.5 percent and up to 14 weeks elsewhere. Another provision in the bill would allow businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.

The bill, which passed 98 to 0, should reach the House floor by Thursday, House  Majority Leader Steny H. Hoyer (D-Md.) said in a statement. His office said the legislation would then go to the White House for the president's signature.

The Obama administration has previously supported extending the $8,000 tax credit, and without congressional action the program would end Nov. 30.

Under the bill, first-time home buyers would receive the $8,000 tax credit if they sign a contract by April 30 and close on it by June 30. The plan would also make those who buy a new primary residence eligible for the $6,500 credit if they owned their current home for at least five consecutive years in the previous eight years.

But the measure limits the purchase price of the home to $800,000. It also imposes income caps so that people who make more than $125,000 annually and couples who make more than $225,000 would not be eligible for the program, which is estimated to cost $10 billion.

 Sen. Johnny Isakson (R-Ga.), a longtime advocate of the tax credit, praised passage of the bill in his chamber but said the extension would be the last one. "Tax credits like this only work by creating the sense of urgency to take advantage of them," Isakson said in a statement.

The tax credit and the broader bill in which it is included are part of a series of Democratic-led initiatives aimed at helping the economy and people who have lost their jobs.

The unemployment benefits of more than 1 million people would lapse without this extension, according to the National Employment Law Project, a nonpartisan group that tracks the issue. More than 15 million Americans are unemployed, more than a third of them for longer than six months.

Although the legislation gained wide bipartisan support, it had been mired in bickering for weeks as Republicans tried to attach amendments that Democrats opposed. Party leaders from both sides voiced support for the core measures, including the tax credit.

Supporters of the tax credit, including the real estate industry, say it has energized home buyers and helped increase sales. But critics say the program is too expensive and has attracted mainly people who were going to buy a home anyway.

In the Senate's measure, taxpayers would be able to claim the credit on their 2009 income tax return for purchases made in 2010.

Staff writer Perry Bacon Jr. contributed to this report.

 

Congress nears deal on extending home buyer tax credit

 

By Jessica Holzer, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- U.S. senators are nearing a deal on a measure to extend the first-time home buyer tax credit through next April and expand it to some buyers who already own a home.

Under the deal, certain "step up" buyers who have lived in their current home for at least five years would also qualify for the tax credit, according to lobbyists close to the negotiations.

The deal comes amid heavy housing industry pressure to extend the tax credit, which is set to expire Dec. 1 unless Congress acts. The measure, which proponents hope to offer as an amendment to legislation extending jobless benefits, could receive a Senate vote this week.

Under the measure, the credit would run through April 30 of next year, though sales contracts in force by that date would be eligible as long as the deal closes within 60 days. The credit would amount to 10% of the sales price, with a maximum of $7,290. The current credit has a cap of $8,000.

To qualify, first-time home buyers must make no more than $75,000 a year or $ 150,000 for couples. For step up borrowers, the income caps are $125,000 for individuals and $250,000 for couples.

Many advise that you ask your lender to produce the note

Write-offs to Remember

Deductions in the Loan Process

Write-offs are the government's way of rewarding taxpayers when they've done something the government likes. And to judge by the write-offs, the government likes it when people borrow money to buy a house. There are write-offs aplenty, many of which people often forget.

Make sure your clients take advantage of every break the IRS will give. Here are a few they tend to forget:

Points:
According to the IRS, origination fees charged as points must be paid for the use of money, (for example, to obtain a lower interest rate) in order to be tax deductible. Origination fees that constitute a "service fee" are not tax deductible. The question must be asked, "Does the fee apply to the use of money, or is it a service charge?"

Pre-payment penalties:
Unforeseen circumstances often cause borrowers to pull out of their mortgages sooner than expected. Fortunately, pre-payment penalties are tax deductible, which helps ease the pain.

Pro-rated real estate taxes:
Even if the seller sent the tax collector the check, chances are the buyer paid a pro-rated portion of the taxes for the year at closing. Be sure they know to deduct their fair share.

Pro-rated mortgage interest:
Depending on when in the month the home sale closes, buyers pay either a hefty or a tiny amount of pro-rated mortgage interest for that month. Big or small, they can write that off. The Final Closing/Settlement Statement will show just how much they're due.

Home construction loan interest:
As long as the construction period doesn't last more than two years before they make the new place their "principal residence," they can write off the interest for that construction loan.

It pays to pay attention – all these write-offs can add up to some serious savings when tax time comes around.