Buyers are beginning to run into a strange new phenomenon. COMPETING OFFERS!! Somehow we have done such a good job of making buyers believe in the 'slowdown' that they are starting to act as if it were real. You know the buyer who wants to offer 20% less than asking price on every contract. It doesn't matter to him whether the home is priced correctly or not; the guys at the office are telling him that you should offer less and he doesn't want to look like a pushover. He hasn't had an offer accepted yet, but he knows its only a matter of time!
Well this week I am running into a different reality. Some sellers and their agents have got the message and are pricing great homes at real market value. The buyer I am working with this week no longer believes in the real estate slump here in Central Pa. She found a home she loved... we went to lunch to talk about it. Ring y ding; home sold!
Two days later she found a great home, almost new, perfect size, lots of features, and priced right. We submitted a contract. So did two other families! We are to submit our best and final offer by noon on Monday.
Two fairly priced homes don't make a trend, to be sure, and I am not making light of the fact that the market has made a correction, but this might just be a sign of the upturn to come!
PS Got home to find The Today Show discussing how to sell a home in this historic slump in the market. Here's a thought...........PRICE IT RIGHT!!
Lots of sellers seem to be lamenting the fact that strangers aren't streaming through their homes. Seems to me that might be a good thing!
Maybe an example would be instructive.
This evening I wrapped up a deal on a home for a family from out of town.
First I sent them dozens and dozens of listings and they searched on line for weeks. ( they live an hour away)
Next, they scheduled a three day trip to the area and selected their six favorite homes of the hundreds I had sent via email for their consideration. Although they thought they knew for sure what their first and second choices would be they wanted to see a few more just to be sure.
Day one of their visit we toured 5 homes; (one of their selections went UA the day they got here) They were stunned that their first and second choice homes on paper turned out to be last on their list by the end of the day. ...fell in love with a home that they didn't really like on paper. We decided to look at three more homes on day two, pretty much because they couldn't believe they found their home on the "first day".
Day two they came to the office and asked to write up an offer immediately; cancelled all other tours. We crunched the numbers, made an offer and countered the counter offer.
Day three everybody agreed on the price and terms and we sealed the deal, scheduled inspections, sent contracts to the lender. They spent the rest of the day playing tourist.
Tomorrow is day four and they head home, very happy campers.
Unusual? Yes, a little. But the point is they DID shop carefully and they knew what they wanted when they saw it. They didn't pay full price because they had seen what similar homes were going for and had a pretty good idea what the real market value was. But they did see the home because the seller had the good judgment to drop the price to nearly where it belonged. (A few weeks earlier they would not have found the home at all because it was listed at $30,000 over market value and ten thousand out of their search limits.)
Was there another home in the hundreds they rejected on paper that would have caught their eye if they had stepped inside to smell the cookies? Sure! Did they ever get to it? No, because it never jumped out at them on paper, or did not come up in their price range.
Did I drive them around? You betcha! Did I spend half as much time driving as I had spent on the internet with them. Not by a long shot!
It's a different world; you have to play a different game!
Oh, and did I mention that before we met for the first time they had selected me as their buyers agent? Their file was set up with a pre-approval letter, their preferences, and their absolute turn-offs. None of those other sellers even knew they had been considered and rejected.
But that may be a good thing because some sports fan got to watch the Tar Heels knock the tar out of somebody on their way to the championship. If we had been in his house he would have had to spend the evening down at the local WAWA drinking bad coffee and chomping at to bit to get back to his "man cave".
Sellers, let the new system do its job; you'll spend less time over bad coffee.
We all know that if it seems too good to be true it probably is, right? Well maybe not in this case.
Please take a look at the information below and then be sure to get the word out to those you care about who may qualify to take advantage of this TRUE GIFT!
The question and answer session below has been adapted from an article by the Pennsylvania Association of Realtors. I have added some additional comments and a link to additional information.
Eileen Musser, Realtor
How much is the tax credit?
The maximum credit amount is $8000 or 10% of the cost of the home if the home price is less than $80,000.
What type of property is eligible?
Any single family residence (including condos, co-ops, townhouses) that will be used as a primary residence.
Is it a tax credit or tax deduction?
It is a tax credit. A credit reduces taxes owed after all standard deductions are calculated.
Is there a limit depending on income?
Yes. The full amount of credit is available for individuals with adjusted gross income of no more than $75,000 ($150,000 for a joint return.) It phases out above those caps until it reaches zero for individuals with income over $95,000. ($170,000 joint returns).
Who qualifies as a first-time buyer(s)?
Anyone who has not owned or purchased a primary residence in the last three years is considered a first-time buyer in this program.
Can the buyer receive the credit if they're financed with state or local bonds?
Yes.
Does the buyer have to repay the credit?
The buyer(s) must live in the home for at least three years; otherwise the credit must be repaid.
When does the tax credit program begin?
January 1, 2009.
When does the tax credit program end?
November 30, 2009.
How do homebuyers claim the tax credit?
Participants claim the tax credit on their federal tax return. The homebuyer would enter the $8000, or 10% of the home's cost, as a tax credit. This reduces any taxes owed or increases the refund to the homeowner. There is no application form to be filled out.
In addition, remember that you can claim the tax credit on your 2008 tax return. If you have filed your 2008 tax return before you settle on the home, then it is your option to amend your 2008 return, or to take the credit on your 2009 return. I would think the sooner the better, but the choice is up to you. Consult your tax advisor for other questions.
Please pass this information on to anyone you know who can (should!) take advantage of this opportunity. This is a true gift! When combined with the right loan program and with certain qualifiers, it is possible to get into a first home with almost no money down.
Help us get the word out, please! We are ready and waiting to help you make the most of this great buying opportunity.
Eileen Musser, EcoAssociate, ePro, Realtor
Eileen's Green Team
GATEWAY REALTY, INC.
120 North Pointe Blvd.,
Lancaster, Pa. 17601
Serving York, Lancaster, South Central Pennsylvania
If I were a first time buyer, I'm not, by a long shot, but if I were, how would my lender handle the fact that my Uncle Sam BHO is going to give me $8000 as soon as I buy my first home. OK, so it's not exactly right away, but as soon as I can file my taxes and get my return I am going to have a nice handful of cash.
Does a lender consider that when I ask for a pre-approval? If I have not been able to scrape together enough money for a downpayment, why would the lender think I am going to be able to afford to make payments on a home?
Isn't this just setting me up to get into a bind like my friends who did 100% financing two years ago? If I can't manage my money to put aside a down payment, then how will I set up an emergency fund so that I don't have to default on my loan as soon as I have a medical emergenty that is not fully covered by insurance, or wreck my car and need to buy another one to be able to keep going to work?
Rent Only: 5000 sq ft home on 5 ac. 1000 sq ft master suite. 5 bedrooms and a den. Two year lease preferred. $2395 per month.
THIS IS NOT MY LISTING, but it is a real one, and it got my attention.
Realtors are not going to want to hear this, but this may be a good time to RENT. Before you have a stroke, understand that I am talking about folks in special circumstances, not the average person who is looking for a home where they plan to stay for many years.
Yesterday I was talking with a family who may need to sell their large home because of a change in their circumstances. They own a beach house that they have been trying to sell with no success and are finding the load of owning two homes to be too much for them. They asked me if I thought it would be a good idea to sell their primary home and rent a less expensive place for a while.
First I went apoplectic, but when I calmed down I had to admit that they might have a point. By taking the equity out of their primary home they could pay down the mortgage on the beach house so that the payment would be at a very manageable. Several things work in their favor.
Even though they will sell the home for less than they paid for it two years ago, prices in our area have dropped less than 20% from their highs.
They are in a relatively high price range where homes are not selling well, which means that there are very nice rentals available for less than their mortgage payment.
They will be staying in the area and with careful monitoring of the market they may be able to buy again if they see that prices are trending upward.
Of course they are also taking some risk.
What if they miss the upturn in the market? Sell low, buy high is a real bite!
What if circumstances change and they find themselves unable to qualify for a new mortgage when they are ready to purchase.
There will be fees and costs associated with the sale of this home, and with the purchase of another one later. It could take a long time to recover those costs.
Still, as a stop-loss measure, in their situation it might be the best thing to do.
Would YOU be better off renting, and what is available if you decide to take that path?
It goes back to basics, doesn't it. This might be an option you should consider if:
you are going to be in the area for less than two or three years
you don't have the cash available to make a substantial down payment
you expect to make a career change that will allow you to buy a better home in a few years
At lease in Central Pennsylvania where I operate, the larger the home, the more likely that you can rent for less than the mortgage. Homes that sell for $120,000 may rent for over $1000, while a home that might cost $700,000 is available for under $2400 per month!
Pretty good deal for an executive who expects to be transferred again in 2 years........ not such a good deal for the everyday Joe who just wants a home to call his own.
By the way, do contact me if you want to rent that awsome home above! Just make it snappy; those are not available every day.
Great Buy in Brookside Heights Custom Features and Prime Lot
3 Bedroom, 2.5 Bath home built in 2007, 1884 Sq Ft, $220,000
Find SUPERIOR VALUE in this custom designed home w stone accents*CENTRAL VAC*double decks*large lot backs to common area*Luxury Master suite w laundry, double w/i closets, pocket doors to reading nook,den or office*Gas fireplace in LR*TV cubby*CUSTOM KITCHEN*large garage*SUPERIOR WALL bsmt easy to finish*
So you want a bargain and you think a bank owned property is your best chance to get it? Well get your ducks in a row kid! The banks won't wait for you to collect your missing quackers!
Sometimes working with REO property can be exasperating. I am not sure that I understand the full question since it looks as if you ran out of space in mid sentence. Here are some general facts about today's real estate climate.
1. You can find some great bargains, but you have to be ready to compete for them. The market is still slow, but there are buyers out there looking for their next purchase. When a great deal is available there are often several offers.
2. In order to be competitive you need to have you paperwork ready to go. The sellers' employees are extremely busy and don't have any patience with Realtors who submit offers without all the required documentation. They have posted notices listing documentation and addenda that must accompany the offer. If any part of it is missing they will not look at your file. PERIOD.
3. One part of the paperwork that MUST accompany your offer for every lender that I know of is a WRITTEN pre-approval letter. A pre-qualifying letter is not strong enough. There must be solid evidence that you are truly qualified to purchase. Without proof of your ability to purchase your offer will not be considered. The days of "get it to us when you can" are OVER, at least for now.
4. When the seller is a bank, or bank approval is needed it will take some time to get a response to your offer. Again the Realtor has very little power to speed up the process.
5. The bank can impose rules on the process and stipulate terms. For instance it is not unusual for them to demand that the buyer pay all transfer taxes. I have seen fees charged to the buyer that are called 'loss mitigation, or loss abatement". The point is that you and your Realtor need to know what your costs will be so that you can take them into consideration when you are writing your offer. You don't want to battle over the last $500 of the contract price and then find out that you will pay thousands more in fees and taxes than you expected.
So go ahead and get your pre approval letter in writing. If your bank is not cooperating get another lender. You don't have a full raft (of ducks) without a loan pre approval.
The tax credit may be used by folks who have owned a home in the past. It is called a first time buyer program, but if you have not owned your own home for 3 years you may qualify.
The credit can be applied to your 2008 tax bill even if you purchase the home in 2009.
If you are going to claim the credit on your 2008 return, you may be able to adjust your W4 so that you start getting a fatter pay check right now! Of course the idea is that you will save the extra money to put toward your downpayment and closing costs. Be smart! Don't blow the windfall on popcorn and bubblegum. If you don't buy the home by mid 2009, you are going to have some 'splainin' to do. (and some hefty tax bills to pay)
Do consult your tax advisor! I am not a lawyer or an accountant. This is just my read on the information found at the link above.
My husband and spent a lot of money building a super insulated home with foot thick insulated concrete walls. Kudos for us, right? Well not so fast. Because our water front view is to the north we have large windows that need a highly insulated covering for winter evenings.
I have driven the man of the house to distraction with my wild ideas about fabric covered, hand painted styrofoam accodion shutters, Roman shades with those space blankets as a backing, and a number of other wild ideas.
After searching the internet, I am still looking for some great ideas for my windows that will close the "barn door" sized holes in my wonderful superinsulated walls.
The honeycomb cell blinds, window quilts and treated films are just not heavy duty enough to do what I want to accomplish. (besides, I am cheap and don't have a fortune to spend on this project)
The six windows that I want to cover are three foot twins twins. Each of them measure five feet in height and six feet in width. I have plenty of space to work with since the sills have a full 10 inches of clearance from pane to face frame.
So help me out here. What am I going to do that will be easy to push aside or lift on the days that I want to see the river, but will keep us snug as a bug on the most blustery winter night?
That shrink wrap plastic wrap was great for my little river shack, but is just not going to cut it in my brand new home!
A cunsumer recently asked if it is a good idea to sell a home thorugh a lease purchase. She had been trying to sell her home for four months and was considering an offer from a person who expected a substantial settlement within the next year.
Here is my answer to her; What would you have added that I missed?
In some cases a lease purchase can be good for both the buyer and the seller. Be sure that you know if you are doing a rent-to-own, rent with option to buy, or some form of lease purchase. There are some similarities, but these terms are not interchangable.
You will want to have your lawyer review any agreement before you sign it. Also, be sure that you check with the lender who will put up the money when she does have the funds ready for her down payment on a convention or FHA loan. The lender should be able to give you a solid pre-approvel with the stipulation that the buyer will have funds available for a down payment. The loan officer may be able to help you structure the agreement so that the bank will recognise part of the payment to you as equity or downpayment when the new loan is written.
Be sure that you address inspections, appraisals, a non-refundable option payment, and a clear understanding of the expenses that each party will pay throughout the lease period. Specify an end date to the option, and clearly spell out what happens if the option is not exercised within the stated period.
You might also want to address what happens if an appraisal done a year from now shows a value that will not support the sale price that you have agreed to today.
The bank will write the loan only if the value remains high enough to be within their requirements for loan to current value.
Here are a couple of other questions that I suggest you ask:
1. Can she document with some certainty that she will be getting the settlement she is anticipating? Settlements from divorce, wrongful death, injury, inheritance, and permanent disability cases are often smaller than anticipated, and often arive much later than the recipient expects.
2. Will you have a monthly shortfall? If your monthly payment is $2100 and she is paying you $1500 then you have a decicit of $7200 per year before you consider any depreciation that may occur in the year. If you would reduce the price by $10,000 would the home sell now? If so, I think you should seriously consider selling through traditional means.
3. Have you consulted your accountant about the tax ramifications of doing a lease purchase or a rent to own. When you sell you will be asked if you have had any rental income from the property. Your answer to that question will determine whether you have any taxes due on your profits.
4. Who will manage the property while this person is renting from you? Will you be nearby to collect the rents and to monitor the condition of the home? How will you know if the home is being maintained in its current condition? If this person does not buy the property at the end of the option time, will you have a harder time selling it because there is a renter in place, or because the condition had deteriorated?
5. Last question.... Has the home been on the market with a Realtor, or have you been going it on your own? It is unfortunate, but true that homes are not selling based on what the seller needs to clear. The homes that are selling are the ones that are priced with full consideration of their value on TODAY's market. I recently showed a client a home that had been on the market one day. The buyer could not move quickly enough to have a chance to buy the home because 11 parties toured within the first day and three offers had been written. So...homes are selling when they are in great condition and priced right.
Good Luck with your decision. Please feel free to contact me with additional questions.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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