$7500 Tax Credit- or Is It?

I have had a few buyers ask my about the $7500 tax credit. It initially sounds great, but then you read the fine print. It's not as great as one would hope. As long as you are a first time home buyer and purchase a home prior to April 9, 2008, you are eligible for up to $7500 to deduct at tax time. Not really free money, as you have to repay all of it within a few years or when the house sells, whichever comes first. So it is really an interest free loan, which may or not be of interest for some buyers out there. I have seen the tax credit mentioned in house listings on the MLS. "Take advantage of the tax credit" or "best time to buy with the tax credit".

I am not a mortgage or tax expert and do not claim to be, but guide your Buyers to the best education out there. Allow them to have access to all of the pertinent info when it comes to home buying. This is a huge undertaking, one that should not be taken casually or lightly. Many folks are in trouble today due to their less than stellar education in exotic loans and adjustable rate mortgages. I have always lived by the phrase "If it sounds too good to be true, then it probably is". Investigate, investigate investigate. Immerse your self in useful knowledge and if you don't know where to start, then ask! You need to be informed and in "the know".

The Head Shot

It's been a long time now that I have been waiting to get a good head shot taken for my professional look. I vowed to lose 10lbs, then wait until I got a hair cut, the list goes on. I still am not even represented on my Broker's website by an image. All because I can't figure out how I want to be represented. Do I want to wear a suit jacket with thick glasses and appear as the "smart professional" young woman? How about the fun "young Realtor" who likes to attract young and trendy Clients? The realty is, I just would want a stable Client base and want to work with others that chose to work with me. I don't have to appear young and rich, or smart or nerdy to attract business. People just tend to gravitate towards certain personalities. Since my personality can not be conveyed through this picture, you will just have to take my word for it, people like to be around me! Simple as that. I don't think it matters which image I chose to convey through a picture, I attract like personalities. People know that they can trust me and feel confident that they chose me to help guide them through a sometimes challenging and anxiety provoking transaction. This is the biggest financial decision that many will choose to take one, sometimes only once in their lives, or sometimes many times. I am glad to be of service to the folks that feel I am worthy of their business and I thank them every day.

The Bad Foundation

I took a Client to see an REO property the other day. My Client is young and ready for a challenge, but this seemed a bit much. Upon entering the property, we noticed an obvious slant in the floor. We went further into the house and the kitchen towards the back was down right crooked. The foundation had given way in the back corner of the house, where the kitchen stood above. As we entered the basement, we noticed the posts at the base of the basement stairs were crooked and appeared to be ready to splinter at any minute. What a sight. The pictures looks distorted, but trust me, its not. The wooden posts are really bending like licorice! I am not an inspector and do not claim to be, but if you encounter bending posts like this in any part of the house, RUN!

The "No-Show"

Well, it's happened again.....last week I had to deal with a "No-Show" appointment. Working 2 jobs can be daunting, especially when I have to make arrangements to show homes during my normal work hours. Taking time off from work isn't the best idea, but real estate is a 24 hour job and one must make the selves available for the sell. I certainly do not want a buyer choosing another agent, simply because they have made them selves more available than I.

The Gentleman did a "drive by" of the house and called my Brokerage immediately for the details on the house. Since I was the listing agent, the call was routed to me. He wanted to see it right away, how about tomorrow at 5? he asked. There was another showing at that time, but we can see it right after,at 6:30, I explained. The Buyer agreed and arrangements with the seller were made. The Buyer asked me to give him a call at 5:30 to remind him, since he is often busy with work and loses track of time.

The following day comes and there I am, having taken a few hours of personal time from work, waiting in the drive way of the home for sale. I waited and waited, and finally called the Buyer to see if he planned on showing up. I had to leaving a message since he wasn't answering his phone and left the showing 15 minutes later.

I often wonder who are these folks that believe that they are ABOVE common courtesy? Why is it "ok" to leave an agent waiting for an appointment that isn't going to happen? It certainly isn't ok for the sellers who have to accomodate these appointments, as they frequenlty disrupt their evenings. A simple call to the agent's cell phone is certainly all that is needed to remedy the situation with all parties. With that being said, there are plenty of folks that do manage to make their appointments or make those important phone calls. I wish to thank them all!

Seller Concessions

In the summer of 2008, I had a property for sale and was anxiously awaiting my first offer. When I finally had received it, I let out a large sigh. The offer was 10k below asking with an additional 6% seller concessions. That means, the Buyer wants me to give them 6% back to cover closing costs and down payment. That is almost 10k in concessions for a total off 20k below asking. Is the market really this bad where I am suppose to give my house away?

First time homeowner programs promote seller concessions. If someone can get into a house with out having to pay closing costs or even a down payment, that is great. Where were these programs when I was a first time home buyer? I remember saving like crazy and working as much as I could to scrape up my own down payment and closing costs. Times have changed and here we are, still 20k below asking. I ended up turning the offer down and waited a little longer for a better one that came through shortly there after.
Lets fast forward to October of that same year. I had a buyer who had Mortgage commitment prior to Oct 1st, 2008. His Mortgage guy instructed us to write the offer with 3% back from the seller and 3% to a down payment assistance program ran by one of the first time home buyer programs. FHA states that as long as the house was under contract prior to Oct 1s, 2008, they would honor the down payment assistance program. The only problem was, the bank that my buyer was using, wasn't going to honor the program. Well, wouldn't you know it, laws changed and they ended up getting rid of the down payment option. He was stuck with having to come up with the 3% for a down payment, which he didn't have.
I feel badly for those who work hard and just want the American Dream. To come so close to being able to purchase a home and then have it ripped out from under you is pretty horrifying.

How Do They Do it?

My brother Walter and his new wife Ally, live on long Island, NY. A very large suburb of Manhattan, it goes with a very large wallet to boot. Real Estate on Long Island is a very difficult market to break into, especially if you are a first time home owner. Walter and Ally had the dream of getting their first home right after their wedding date. Well, the date came and went and they still haven't had luck finding the right home for them. From what Walter reports, a beginner home is often an REO and one that needs ton of work. It is often 800 sq feet, accompanied with a leaky basement, no garage and a dumpy kitchen. Oh yeah, it costs 300k at least.

I can't even imagine how young couples today are suppose to achieve the "American Dream" when they keep encountering the nightmares. Long Island is one of those areas in the country where the cost of home ownership is still outrageous and often isn't accompanied with higher salaries unless you work in Manhattan or are in upper management/business positions. The cost off what these young couples face for a monthly PITI payment is crazy. How can they enjoy owning a home when they are working overtime to pay for it? Just food for thought, I am glad I live in another state now and can afford the keep a roof over my head at a moderate price. Good luck to my brother and his new lovely wife.

"Tell Me About the Market"

"Tell me about the market" is often a question I hear. I have been in the Real Estate industry for a little while now. It is not my only job, as I work full time in another industry and only act as a Realtor on the side. I often encounter a lot of people who think that since I am a Realtor, I must be an expert and have all the answers to the current mortgage crises. Unless you have been living under a rock, I am sure you have all heard about the problems within the mortgage industry and the millions of families who have lost their homes, or are about to in the upcoming months.

The market is slow as molasses, but not dead. I had a house on the market for 1.5 months and ended up getting 2 offers at the same time. Who would have thought a bidding war would ensue with all the negative reports in the media?

As I tell my friends who ask me about the market. I do not know when it will "bounce back". The media reports it will happen, although not in the present months, but "down the road", but who knows. As for "bottoming out", I don't think it has. I gauge my thinking and opinion on the house I bought in 1998 for 145K. It was in a town that has everything from rentals to million dollar homes and it is in a suburb of a "commuter city", which is a city where people venture in to work, not live. I owned the home for about 6 years and sold it for 315k. That was 3 years ago and the home values in that area are still in the high 200's. As I tell my friends, when that house returns to the 145k value that I purchased it, then I can say that the market has "bottomed out".

My First Short Sale

Given the dramatic mortgages industry changes within the last few years, it is often a topic of conversation between friends or on the news. I have personally encountered a lot of folks who were left "stymied" by their ARM's (adjustable rate mortgages) without the ability to pay the fluctuating payments. They tell me that they knew the payments were going to increase, but they counted on raises or promotions to pay it. When those raises didn't come, they were left holding the ball, and were still expected to play the game.

I have met this nice couple, who like many Americans, are in the pre-foreclosure process, waiting for the hatchet to drop on their home. Purchased for 125k 8 years ago, it would be a great investment today. Unfortunately, the couple refinanced and did some upgrades to the home, leaving the owners to a mortgage of 285k. Some personal and medical bills on top of that and this family finds themselves quite behind the ball, and unable to catch up.

I have offered my real estate services to these kind folks who have graciously agreed to let me negotiate a short sale to get them out of their predicament. The bank is anxiously awaiting a good offer, but to no avail. A water drainage situation that occasionally floods the garage, drives most potential buyers away. The house is priced at 199k now, a drastic difference in what they actually owe the bank. Its is a fair priced home for the area, an upscale town with a great school district and wonderful town services. I can only hope that the right buyer comes along soon, as winter is on the horizon and the market gets slower as we progress through the fall months.