The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers. When is the last time someone gave you a $7,500 loan, that has no interest, no payments for two years, and if you do not make enough profit when you sell, you do not have to pay back the loan? That is what first time homebuyers get. Call everyone you know who wants to buy their first home; this is too good to miss.
If you have not owned a home in three years, you are a first time home buyer. If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for a credit. Call your friends who just bought a home and tell them they may take $7,500 off their tax bill if they qualify. It has to be your principal residence, so rentals do not count.
The tax credit is 10% of the cost of the home, up to a maximum of $7,500. So, if the home costs $65,000, your tax credit is $6,500. If the home cost $100,000, you would get a credit of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit. In other words, you take $7,500 off your tax bill. What if your tax bill is only $5,000? The IRS will send you the additional $2,500 as a refund. When was the last time the IRS sent you a refund because you bought something?
The loan has no interest, and will be paid back over 15 years. You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment. You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year. If you stay put for 15 years, you pay it off with no interest.
What happens if you sell the house? You pay the balance back at the closing. So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.
What happens if you do not make enough money when you sell your house? They forgive the rest of the debt. In other words, get $7,500 now and pay back nothing if your house only breaks even, or loses money, at closing. When was the last time you got a loan on a speculative venture where the person who gave you the loan forgave the rest of the loan if you did not make enough profit on the sale?
The risk of loss in buying now is on the government. In other parts of the country where real estate is going down in value, you can lose 10% of the value of the home (up to $7,500) and the loss is covered by the fact that you do not pay back the tax credit. Even a bad buy that does not go up in value is covered by the tax benefit because you get $7,500 no matter what happens.
Similarly, if you die before repaying the debt, it is forgiven. There are special rules for sales as a result of divorce or if the government takes your property by condemnation.
There are restrictions on the amount of income that you can make and still get the credit. But the restriction is $75,000 per year for a single person and $150,000 for a couple filing jointly, so the vast majority of people qualify. If you make more than that, you can still get some of the tax credit, but there are complicated rules about phasing out the credit as the income goes up. If you make that much money, you can afford to hire someone to figure out the formula.
The restriction on the location of the property is minimal; it has to be in the United States. Not too tough, huh?
What is the catch? You have to buy your first house in three years before July 1,2009, not have super high income, not use bond financing and buy anywhere in the US, Not too difficult, right?
If you know someone who wants to buy a home, call them and then have them call us and we will take exceptional care of them. If they want to buy anywhere in the US, call us and we will find them a terrific agent anywhere in the US.
The government gives tax credits to huge companies; here is one for the little guy. Don't miss it. (information by Tim Burrell via Kristan Cole)
For information on how you may qualify, contact us today 317-882-7210!
Friday, August 29, 2008
Monday, August 25, 2008
Preparing for the Closing
When you consider the myriad details involved in moving, it’s not surprising that one or two items remain unresolved until day of closing. Unfortunately, this is the normal course for most transactions. So, just try to remember to address each item one at a time and, in most cases, it will all fall into place. A good real estate profession can prepare you for the basics, so that those last-minute issues can receive your full attention:
Title commitment - Whether a buyer or seller, you should be able to review a title commitment prior to closing. This commitment will specify 1) what the title insurance covers, 2) list the recorded liens against the property, 3) show how it is titled and 4) any exceptions to coverage. When selling a property, you can ask your agent to order a preliminary title search at the time of listing. This should bring to light any unreleased mortgages, judgments, or other clouds on your title and give you time to resolve issues in advance.
Surveyor location report – This report reveals how the improvements are situated upon the land, informs them whether the property is located in a flood hazard area, and outlines possible encroachments. A seller ordering one of these at the time of listing would give them an opportunity to correct (or at least disclose) problems to the buyer at the time the contract is negotiated. It is a good idea for any buyer (unless they are buying a condo) to request a survey on their property. A surveyor location report usually costs around $150-$175 and is a small investment for peace of mind.
Mortgage documents – If you thrive on the nitty-gritty details, you can request your lender send a sample loan package for review. This allows you time to read each document in detail prior to closing. And, you have time for your lender to explain each document’s purpose and ramification. Then, at closing, you will sign the actual documents and the title company should give you a set of every document you sign at the table. When selling, you should review your current mortgages and lien holders. You can contact them to confirm how much you will owe and if any prepayment penalties or other fees apply when selling your home. They can give you your payoff as of the date of your closing, and explain their policies about applying escrowed funds to the balance due. If your agent or lender does not offer these documents to you prior to closing, ask for them. We recommend allowing two (2) weeks to review them so all your questions can be answered and any problems resolved in advance.
Other items that you will need for closing include:
Homeowner’s Insurance – Not only will you need to pay a full year’s premium in advance, but several months may be charged at your closing to fund your escrow account. Bring a copy of your binder and paid receipt for 12 months of coverage to the closing.
Picture ID – it necessary for the closing agent to verify your identity, so bring a valid picture ID.
Certified funds – any money to be brought to closing should be in the form of cashier’s check, certified check, or postal money order. Make the checks out to yourself, and then endorse them at closing. This includes any negotiation for lease backs, repairs, pro-rations for unused fuel, or personal items purchased from the seller.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
Title commitment - Whether a buyer or seller, you should be able to review a title commitment prior to closing. This commitment will specify 1) what the title insurance covers, 2) list the recorded liens against the property, 3) show how it is titled and 4) any exceptions to coverage. When selling a property, you can ask your agent to order a preliminary title search at the time of listing. This should bring to light any unreleased mortgages, judgments, or other clouds on your title and give you time to resolve issues in advance.
Surveyor location report – This report reveals how the improvements are situated upon the land, informs them whether the property is located in a flood hazard area, and outlines possible encroachments. A seller ordering one of these at the time of listing would give them an opportunity to correct (or at least disclose) problems to the buyer at the time the contract is negotiated. It is a good idea for any buyer (unless they are buying a condo) to request a survey on their property. A surveyor location report usually costs around $150-$175 and is a small investment for peace of mind.
Mortgage documents – If you thrive on the nitty-gritty details, you can request your lender send a sample loan package for review. This allows you time to read each document in detail prior to closing. And, you have time for your lender to explain each document’s purpose and ramification. Then, at closing, you will sign the actual documents and the title company should give you a set of every document you sign at the table. When selling, you should review your current mortgages and lien holders. You can contact them to confirm how much you will owe and if any prepayment penalties or other fees apply when selling your home. They can give you your payoff as of the date of your closing, and explain their policies about applying escrowed funds to the balance due. If your agent or lender does not offer these documents to you prior to closing, ask for them. We recommend allowing two (2) weeks to review them so all your questions can be answered and any problems resolved in advance.
Other items that you will need for closing include:
Homeowner’s Insurance – Not only will you need to pay a full year’s premium in advance, but several months may be charged at your closing to fund your escrow account. Bring a copy of your binder and paid receipt for 12 months of coverage to the closing.
Picture ID – it necessary for the closing agent to verify your identity, so bring a valid picture ID.
Certified funds – any money to be brought to closing should be in the form of cashier’s check, certified check, or postal money order. Make the checks out to yourself, and then endorse them at closing. This includes any negotiation for lease backs, repairs, pro-rations for unused fuel, or personal items purchased from the seller.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
Monday, August 18, 2008
Pets Ruling the Roost?
Pet lovers, be warned – some people in the world don’t share your passion for your dog, cat, bird, or other furry friend. It shouldn’t deter from the showing process, however, unless there’s evidence of abuse such as damage or odors. To make matters worse, this can be a sensitive issue for a real estate agent to talk to their sellers about.
Worse Than Its Bite - Even though he is just doing his job, Fido’s bark will sound ferocious to anyone knocking at the door. For security reasons, this may be a great deterrent. But when your home is on the market, real estate agents will bring several strangers to your door. Rightfully so, agents are concerned about the unpredictability of dogs they don't know. When they hear a barking dog, they may not be willing to enter the house unless the owner is at home or they were prepared ahead of time that the pet is confined in a cage or a specific area of the house. Talk with your real estate agent about the best way to manage your pet while your house is being shown. Your showing instructions should include where your dog will be located, whether they are penned in a cage or room, and any other specific instructions.
Odors - You guessed it - pet smells can turn some people off to the point they can’t look past it to consider your home’s other amenities. If you suspect your home is harboring odors -- whether caused by pets, weather, smoke, etc, take action by eliminating the source of the odor rather than merely treating the effects. Smells have a powerful effect on the way people react to a house, and no amount of room freshener or vanilla on the light bulbs can mask a serious odor problem. In fact, such remedies have been found to draw attention to the problem. We have seen nice homes with odor problems languish unsold on the market for months or sell for significantly less than other homes in the neighborhood.Hopefully the relationship you have with your agent is strong enough that they can speak candidly with you about your home. If you are concerned about anything that may be adversely affecting the marketing of your home, ask your agent outright. Sometimes in an effort to keep the selling atmosphere positive and uplifting, an agent will hesitate to drop bad news on a seller who really needs to take action in order to get their home sold. Your agent should be able to offer some constructive suggestions, and perhaps refer you to a professional who can help banish odors from your home!
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
Worse Than Its Bite - Even though he is just doing his job, Fido’s bark will sound ferocious to anyone knocking at the door. For security reasons, this may be a great deterrent. But when your home is on the market, real estate agents will bring several strangers to your door. Rightfully so, agents are concerned about the unpredictability of dogs they don't know. When they hear a barking dog, they may not be willing to enter the house unless the owner is at home or they were prepared ahead of time that the pet is confined in a cage or a specific area of the house. Talk with your real estate agent about the best way to manage your pet while your house is being shown. Your showing instructions should include where your dog will be located, whether they are penned in a cage or room, and any other specific instructions.
Odors - You guessed it - pet smells can turn some people off to the point they can’t look past it to consider your home’s other amenities. If you suspect your home is harboring odors -- whether caused by pets, weather, smoke, etc, take action by eliminating the source of the odor rather than merely treating the effects. Smells have a powerful effect on the way people react to a house, and no amount of room freshener or vanilla on the light bulbs can mask a serious odor problem. In fact, such remedies have been found to draw attention to the problem. We have seen nice homes with odor problems languish unsold on the market for months or sell for significantly less than other homes in the neighborhood.Hopefully the relationship you have with your agent is strong enough that they can speak candidly with you about your home. If you are concerned about anything that may be adversely affecting the marketing of your home, ask your agent outright. Sometimes in an effort to keep the selling atmosphere positive and uplifting, an agent will hesitate to drop bad news on a seller who really needs to take action in order to get their home sold. Your agent should be able to offer some constructive suggestions, and perhaps refer you to a professional who can help banish odors from your home!
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
Wednesday, August 13, 2008
HOME BUYERS - Limited Time for Down Payment Assistance Programs
No matter which category you fall into – thinking about moving, wanting to move and but still looking for the perfect home, or ready to move and have the perfect home picked out – this information affects you!
In the past, having the money saved up for a down payment was not overly crucial. For many years there were loan programs which allowed you to borrow the entire amount of money needed to purchase the home (100% loans). This minimized the need for a down payment as you could borrow the full amount you needed to buy the house. Last year 100% loan programs went away.
Currently there are loan programs that allow you to borrow 97% of the purchase price of the home. That means that the other three percent is needed for a down payment on the home to qualify for the loan. Currently there are many ways to arrive at the 3% down payment. A very popular way is to ask the seller of the home you are buying to pay the 3% on your behalf. However, the seller cannot just give you the 3% for the down payment - so there are programs/organizations that focus on passing the money from the seller to the buyer (while keeping a part of the money for their service.) These down payment assistance programs are going away October 1, 2008.
The programs do not end until October 1st but that date is a little misleading. October 1st is the last date available to close on a house using seller funded down payment assistance. It takes 21-30 days to close on a house after all contract negotiations are agreed upon between the buyer and the seller. It can take 1-2 weeks for negotiations depending on how ‘good’ the original offer is (ie offer price as compared to list price, amount of help from the seller for down payment and/or closing costs, etc). With that being said, to utilize the down payment assistance programs, you should really aim for being under contract by early September.
For more information, please call our office. We would love to work with you in finding the perfect home, negotiating the offer and getting you to the closing table. Time is of the essence if you want to utilize the down payment assistance programs that are set to expire on Oct 1, 2008.
In the past, having the money saved up for a down payment was not overly crucial. For many years there were loan programs which allowed you to borrow the entire amount of money needed to purchase the home (100% loans). This minimized the need for a down payment as you could borrow the full amount you needed to buy the house. Last year 100% loan programs went away.
Currently there are loan programs that allow you to borrow 97% of the purchase price of the home. That means that the other three percent is needed for a down payment on the home to qualify for the loan. Currently there are many ways to arrive at the 3% down payment. A very popular way is to ask the seller of the home you are buying to pay the 3% on your behalf. However, the seller cannot just give you the 3% for the down payment - so there are programs/organizations that focus on passing the money from the seller to the buyer (while keeping a part of the money for their service.) These down payment assistance programs are going away October 1, 2008.
The programs do not end until October 1st but that date is a little misleading. October 1st is the last date available to close on a house using seller funded down payment assistance. It takes 21-30 days to close on a house after all contract negotiations are agreed upon between the buyer and the seller. It can take 1-2 weeks for negotiations depending on how ‘good’ the original offer is (ie offer price as compared to list price, amount of help from the seller for down payment and/or closing costs, etc). With that being said, to utilize the down payment assistance programs, you should really aim for being under contract by early September.
For more information, please call our office. We would love to work with you in finding the perfect home, negotiating the offer and getting you to the closing table. Time is of the essence if you want to utilize the down payment assistance programs that are set to expire on Oct 1, 2008.
Monday, August 11, 2008
Challenges of New Construction
Building a new home can be challenging and exciting. For some, having a brand new home built to their exact specifications brings great satisfaction.
DAVID BRENTON'S TEAM is committed to bringing this opportunity to you through the use of special financing programs, our unique Guaranteed Sale Program and knowledgeable Buyer Specialists. As a member of the Builders Association of Greater Indianapolis, David spent over 20 years in the building industry before he became a REALTOR in 1992. We’ve already completed all the research to answer your questions about new construction.
Our office is just a click away from helping you locate the right new home community and providing you with information on each neighborhood, builder and even scattered building lots to help you decide which one is right for you. Click Here to contact a Buyer Specialist to help you in your new home search.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
DAVID BRENTON'S TEAM is committed to bringing this opportunity to you through the use of special financing programs, our unique Guaranteed Sale Program and knowledgeable Buyer Specialists. As a member of the Builders Association of Greater Indianapolis, David spent over 20 years in the building industry before he became a REALTOR in 1992. We’ve already completed all the research to answer your questions about new construction.
Our office is just a click away from helping you locate the right new home community and providing you with information on each neighborhood, builder and even scattered building lots to help you decide which one is right for you. Click Here to contact a Buyer Specialist to help you in your new home search.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
Monday, August 4, 2008
Buy Bug-Free
If your house is a typical one, there are probably some small, leggy creatures that make their home with you. Whether they are termites, fleas, roaches, ants, or spiders, it is a good idea to serve them with an eviction notice before you put your home on the market. If home remedies like ionized boric acid don't work, paying a professional exterminator will be money well spent. Many times a buyer will require a property to be inspected for evidence of pest infestation.
So, as a seller, it’s always a good idea to check for insect problems at the time you sign a listing agreement, so that it doesn’t become an issue in the sale. Some insects may not physically damage the house, but may reduce its chances of selling for top dollar. A prospective buyer having to constantly push back spider webs while touring the house could seriously undermine their ability to fully appreciate what your home has to offer.
Before you sign an agreement to buy or sell a home, you should read the termite clause and be sure that you understand it. Who selects the exterminator and pays for the inspection? If bugs are found, who pays for the treatment? Are the sellers obligated to repair any damage and have they placed a limit of the dollar amount they will spend on those repairs? If treatment is required, the buyers may want a chance to discuss the options with the pest control company, especially if someone in the family is sensitive to the chemicals used to control the termites. Ask about the exterminator's guarantees or service contract options.
Sound more involved than you thought? That’s why it’s important to use professional representation when purchasing or selling your next home.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
So, as a seller, it’s always a good idea to check for insect problems at the time you sign a listing agreement, so that it doesn’t become an issue in the sale. Some insects may not physically damage the house, but may reduce its chances of selling for top dollar. A prospective buyer having to constantly push back spider webs while touring the house could seriously undermine their ability to fully appreciate what your home has to offer.
Before you sign an agreement to buy or sell a home, you should read the termite clause and be sure that you understand it. Who selects the exterminator and pays for the inspection? If bugs are found, who pays for the treatment? Are the sellers obligated to repair any damage and have they placed a limit of the dollar amount they will spend on those repairs? If treatment is required, the buyers may want a chance to discuss the options with the pest control company, especially if someone in the family is sensitive to the chemicals used to control the termites. Ask about the exterminator's guarantees or service contract options.
Sound more involved than you thought? That’s why it’s important to use professional representation when purchasing or selling your next home.
If you have questions about moving, building, selecting your first home or moving up to your next home, contact DAVID BRENTON’S TEAM.
When you are serious about moving… put our TEAM to work for you!
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