Besides the extension their are other major changes that should not be overlooked.

Expansion of the tax credit – The homebuyer credit is no longer limited to first-time homebuyers. Homebuyers who have owned a home for 5 of the last 8 years will qualify for a tax credit of as much $6,500. The 5 years of ownership must be consecutive years and the home must be the buyer’s principal residence. The credit is available for purchases made after Nov. 6, 2009 and before May 1, 2010.

Higher Income Limits – Prior to these changes the tax credit phase-out range was a Modified Adjusted Gross Income (MAGI) of $75,000 – $95,000 (for single taxpayers) and $150,000 – $170,000 (for married taxpayers). Under the new legislation, the MAGI ranges change to $125,000 – $145,000 (for single taxpayers) and $225,000 – $245,000 (for married taxpayers).

Home purchased for more than $800,000 after Nov. 6, 2009 do not qualify for either the $8,000 or the $6,500 tax credits. Also, homes purchased from in-laws after Nov. 6, 2009 do not qualify for either credit.

Dependents of taxpayers under the age of 18 do not qualify for the tax credits.

Dave Ramsey, who has been on the radio for years on AM stations is now making the transition into his first valley wide FM radio program Monday October 19th.   The Dave Ramsey Show will now be on KTAR 92.3 from 10 PM to 1 AM following Mac and Gaydos, and Joe Crummey.

Ramsey’s syndicated radio program The Dave Ramsey Show is promoted with a tagline that “It’s about life and money,” and it is heard on over 400 radio stations throughout the United States and Canada, as well as on XM and Sirius satellite radio. He has written numerous books. His books and broadcasts often feature a Christian perspective that reflects Ramsey’s own religious beliefs. Ramsey was named the 2009 Marconi Award winner for Network/Syndicated Personality of the Year

Remax Alliance Group and The Reeves Team are excited to hear that The Dave Ramsey Show is back.  For over 9 years we have partnered with Dave Ramsey to help family’s improve their financial situation through the purchase or sale of a home.

Glad to have you back Dave.

As the date draws near many potential buyers are finding themselves in a touch position, should they cancel their lease early and buy a home? Or should they wait it out and hope that the tax credit is extended?  To help ease potential buyers minds we bring to you 10 reasons that the home buyers credit will be extended.

Reason #1: The NAR.  The National Association of Realtors is 1.2 million strong and they are spending time and money mounting unusually intense grassroots lobbying campaigns to make the case for extending the credit, and maybe even expanding it. The effort is targeted at the districts of members of congress.

Reason #2: The Hard Economic Facts. Lawmakers are aware of “the hard economic facts” and constituents are showing their representatives the numbers of houses that are sold in each district because of the 8000 tax credit. the economic ripple effects on local businesses, manufacturers and service industries; new jobs and income; plus the additional tax revenues that all this activity will help produce for local governments.

Reason #3: The NAHB.  The National Association of Home Builders like the NAR is lobbying congress hard.  They are proposing not only for the extension of the tax credit, but also an expansion.  They are calling for the tax credit to be raised from $8,000 to $15, 000, and to make every american eligible, not just first time home buyers.

Reason #4: Stimulus. 300,000 to 350,000 additional sales of houses will be stimulated this year by the credit. Each home sale generates approximately $63,000 in downstream “ripple effects” elsewhere in the economy.  According to the NAR - sales of furnishings, appliances, lawn mowers, landscaping, renovation materials, plus moving expenses.

Reason #5: Congress seems to be on board.  Bills are already pending in both houses to extend the credit for another year. Senate Majority Leader Harry Reid, D-Nev., whose state has been among the worst hit by the housing bust, reportedly now favors an extension of the credit. He was quoted to that effect by the Las Vegas Sun, adding, “It’s something we can get done.”

Reaons #6: Jobs. Extending the tax credit would mean creating 350,000 new jobs according to the NAHB with unemployment approaching double digits lawmakers are trying to save and create as many jobs as possible, extending the tax credit is a sure fire way to do that.

Reason #7: Bang for the Buck. The 8000 first time home buyer tax credit has been the fastest acting of all of obamas stimulus spending. Congress wont want to choke off that spending before all the rest of the money gets down the pipes.

Reason #8: Stabilization. The housing market has been stabilizing, but it is still soft.  There has been very slight growth over the past two months, Congress will not want to take the risk of destabilizing the sector right before the 2010 elections.

Reason #9: Size. The housing market in the U.S. accounts for more than 15% of Gross Domestic Product. Congress knows it needs to keep this sector strong if it wants the recovery to continue.

Reason #10: A sense of entitlement. The american people have has this program for a year now, they do not want to give it up.  Congress knows this, they also know that they want to keep their job.

So there you have it.  There is no guarantee that the credit will be extended, nor that it will be expanded.  Just know if you are in a lease, or can not purchase in the next two months, there is still hope.

As the deadline grows near we are sure to see a spike in the amount of first time home buyers entering the market.  The question many will be asking themselves is “will the tax credit be extended?”  The answer like many things involving the federal government is… maybe.

If you are a first time buyer thinking of jumping into the market there is much to consider.  The safe move is to purchase now.  If you are in the market and there is nothing keeping you from buying at this very moment, this may be the best option.  Buying now will guarantee your 8,000 credit next year, while eliminating the anxiety you may feel while waiting to see if congress will act.

While the safe bet is to buy now, not everyone is in the perfect position to buy at this moment.  There are many reasons one might wish to push their luck and hope congress extends the tax credit.  If you are in a lease that is not set to expire, or if you are having a hard time qualifying for a loan based on the length of time you have been at a job, or  residence, waiting may be in your best interest.

If you find yourself in the latter group hoping the tax credit is extended there is some good news.  Many experts feel there is a better than average chance the credits will be extended.  Why will congress extend this tax credit?  The same reason that congress does almost anything these days, the Economy.

The NAR(National Association of Realtors) has reported that the average home sale generates 63,000 dollars in ripple effect spending, or money spent buying a home not including the sale of the home itself.  Ripple effect spending includes moving fees, realtor fees, title fees, furniture, lawn chairs, etc.  They also estimate that up to 350,000 homes have been sold because of the tax credit.  that’s a lot of zero’s to be adding to the slumping economy.

If you plan on waiting it out and rolling the dice, the odds may very well be in your favor.  However do not expect your wait to be worry free.  If congress does pass an extension to the tax credit, they will more than likely wait till the last minute to get as many people as possible to act early.  So if your in a position to act now your blood pressure may well thank you, and if your plan is to wait it out may the force be with you!

Determining if a spouse can finance a home while their significant other is upside down on their current loan can be tricky.  The biggest determining factor is the relationship between the couple, these can be broken down into three basic groups.

1. When qualifying for a loan, if the couple is not married and they are not living together the lender considers the couple two separate people.  The lender does not require the buyer to list the spouse on the paperwork, and will not hold them accountable for the debt acquired by their significant other.
2. The situation is slightly more complicated if the couple is living in the same residence.  If the couple has been living at the same address for over 9 years the lender may require that the spouse be listed on the loan.   Fortunately if it has been less than 9 years neither person is under any duty to disclose information regarding their significant other.
3. If the couple is married and the one wants to get a loan, as their sole and separate property, the lender will decide if the client is to be held responsible for the spouses’ debt.   It is important to note that if married you are responsible to disclose information about your spouse if asked by the lender.  It is then the lenders decision to proceed in the direction it sees best.

While there is a pretty good chance an individual will be asked about their spouses’ finances during the lending process, they are not required to volunteer the information.  Given today’s tight credit market it would be fair to assume that one will have a much easier time getting approved if they are living separate, or have been living together for less than 9 years, than it would be for a couple who is currently married.

Other than the low prices compared to previous years there are more reasons people are choosing to buy investment properties.

• Buyers are seeing opportunities to make their rental properties “pencil”.   In other words they can rent out their investment home to someone for as much or more as it costs them to maintain the property(mortgage payment, HOA, insurance, etc).  Being cash positive allows investors to make their second home not only an investment but also another source of income.
• There are multiple private money funds of $1 – $300 million that are buying up 1-10 homes per day in the greater phoenix area.  These are cash buyers investing smart money back into the AZ real estate market.  This is lowering the inventory and will in turn drive up prices.
• Many smaller investors are following the smart money and buying homes in the phoenix market.  While they may not be cash buyers lending practices have eased slightly and investors with 20% down are finding it much easier to finance.

Because of the still stringent lending conditions it is tough to finance a house unless you are a cash buyer.  It is important to select an agent that has experience with investors when choosing someone to represent you.   The bottom line is that while inventory is drying up due to the increase in home sales, it is a great time to buy an investment home at a low price with a low interest rate.

J.D. Power’s polling results show that the importance of additional services has increased by 12 percentage points among buyers and by 8 percentage points among sellers from last year alone.  Simultaneously the survey reports that the use of these services has declined due to cutbacks among services offered by real estate agencies.

“In a tight market, every aspect of service offered will be scrutinized very closely,” Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates said. “For this reason, it is critical for real estate companies to promote the value that they bring to buyers and sellers, not only in any additional services they offer, but also in their agents and operations.”

Choosing and agent is a tough decision in the best of times, and can be downright daunting in hard economic times such as these.  Looking into the services offered by a prospective agency is a great place to start.  Not all companies are cutting services. In fact some are even offering new and creative options to help their clients such as the Mortgage relief Package.

Other findings in the study include:

• The proportion of first-time home buyers has increased considerably — to 56% in 2009 from 44% in 2008.

• For both buyers and sellers, the agent is still the most important driver of overall satisfaction.
• Home sellers report that, on average, 3.2 open houses were conducted for their property in 2009, compared with 4.5 in 2008.
• Approximately 64% of home sellers used a Web site listing to market their home in 2009, up from 61% in 2008.

 Mortgage Relief Program 2009

 

“After 15 years in East Valley real estate, this is my way of giving back to our community. With unprecedented prices and historically low interest rates, we have removed the last obstacle keeping buyers from becoming homeowners. This promise only helps in this uncertain time.” says Troy Reeves.

Troy Reeves and The Reeves Team are real estate industry innovators with over a decade of experience and hundreds of satisfied clients. Troy Reeves has created industry firsts, like:

“One Hour Return Call or Dinner For Two Is On Us”

“The 90 day Sale program”

“If you are not happy with the home you purchase with us, we will sell it for you FREE”

Troy Reeves was also one of the first REALTORS® in Arizona to create a “team” concept in the real estate market.

The following Terms & Conditions Apply:

• One or both spouses lose* their job over the next 365 days.  (person whom loses job must be primary mortgagee).
• Person or persons must purchase home with RE/MAX & The Reeves Team in 2009 and Troy Reeves & Team must receive 3% co-broke upon purchase of that home.
• If new home owner, at any time replaces or starts new job within 120 days of losing it, mortgage relief package does not apply   *”Lose” means laid off  (does not mean fired or quit)

The housing market tumble has created an enormous opportunity for first-time home buyers, those that have not owned a home in three years or those wishing to move up. Home prices have declined 14% in the last year. Mortgage rates are low.

1. According to the National Association of Realtors the “housing
affordability index” is higher now than at any point since the index was
started in 1970. The affordability index measures the relationship between
home prices, mortgage interest rates and family income. While home prices
may fall further, there is no guarantee that they will, or that mortgage
rates will stay at current low rates.

2. Now, the Federal Government, through the stimulus package, has
sweetened the deal. First-time homebuyers, and those who have not owned a
home in the last three years, may be entitled to a tax credit for purchasing
a home. This credit is up to 10% of the home’s value, not to exceed $8,000.
This is a real tax credit that can be used for tax year 2008 or 2009. For
example, if you purchased your first home for $150,000 in March of 2009, you
would be entitled to the maximum tax credit of $8,000. Let’s say you owed
$1,000 in additional income tax for 2008. Now, because of this tax credit
($8,000)… instead of paying $1,000 to the IRS, they would send you a
refund for $7,000. To qualify, your adjusted gross income must be below
$75,000 for individuals or $150,000 for couples.

3. There is a large inventory to choose from. Currently, there is about
a 12-month supply of homes on the market. This gives you, the buyer, extra
bargaining power. But, as the inventory of homes decreases, so does your
bargaining power.

4. Builders are offering extraordinary deals. Home builders may be even
more aggressive with their negotiations than foreclosed property or
individual homeowners. Another advantage of purchasing from a builder is
you get a warranty on the home and its appliances. Why would builders be
more aggressive? They want to save their credit, their brand name, and
reputation.

5. Mortgage rates are low. These rates affect your monthly payments.
The lower the interest charged on your mortgage, the lower your payments.
Right now the Federal Government is taking extraordinary steps to keep
mortgage rates low. The Federal Reserve is buying up to $500 billion in
loans, and the Treasury Department has just announced a $200 billion
purchase of Fannie Mae and Freddie Mac preferred shares. These low rates
will not be with us for long.

Before deciding on a home purchase, meet with your financial advisor and go
over your finances. He or she will be able to tell you how much house you
can afford. Making sure that you do not get over your head is more
important now than ever. Also, it is a good idea to get pre-approved for
your mortgage before you go shopping. With a pre-approved mortgage, you
will be in “the catbird seat” when it comes to negotiations.

What questions potential homebuyers should know:

• What percent of income should my mortgage payment be?
• Can I afford to take the jump into homeownership?

This blog was a guest column from Dennis R. Ederer, CPA who works for Money COncepts Financial Planning Center in Tempe AZ. You can reach Dennis at 480-968-4939

If you are a seller a short sale may be your only option, but if you are a buyer a short sale should often be your last option. Contrary to popular belief, a short-sale is not often going to be the best buy for a home shopper. In a rare case where a home may be going to foreclosure in just a couple of weeks and a buyer can come in and make a purchase in cash and close in just a couple weeks, then there may be a good deal, if you can get them accepted. But for most buyers this is not the situation.

More often than not the better deal is going to be in the bank owned foreclosure property. These properties are often selling for 10% to 15% below conventional sales and banks are looking to work with buyers to get rid of them. One of the big differences with short sales vs. a foreclosure property is the time and patience it will take. If you want or need to be in a home in the next three months forget about even stepping inside a short sale listing. It is very common for it to take as much as 10 to 12 weeks just to hear from a bank if they will accept an offer or not. If there is counter or conditions set it could add as much as another four to eight weeks on top of that if negotiations are needed. We currently have one offer on our team that a buyer made on short sale listing which we presented to bank the first week of December and we are still waiting for an answer ten weeks later. No matter how many times we call, we still wait.

During those months that you wait for an answer hundreds of foreclosure properties could come on the market that are better deals than the one you are waiting for. During that time you are off the market completely because if the bank does accept the short sale it is a binding contract you signed. If you were to work on a bank owned foreclosure property over a short sale you are most likely to get an answer from a bank in under a week. If that deal does not go through then there are hundreds of other properties to choose from and you did not waste three to four months waiting to hear an answer.

Another problem that short sales present to buyers is the amount that actually get to closing. Less than 20% of all short sales actually get accepted and go to closing. If you were to put an offer in for a short sale you are taking yourself off the market for up to three months with only a 20% chance at best the deal will get done in the end.