Buyers’ Negotiating Power On the Upswing

Great news if you’re looking to purchase a home: For the second month in a row, real estate Web site Zillow.com is reporting that in January, homebuyers across much of the U.S. negotiated larger discounts off the listing price of homes than they did the prior month.

Buyers in the United States paid 2.8 percent less than the last listing price in January—more than the 2.7 percent discount in December and 2.6 percent in November. December was the first month in which buyers actually regained negotiating power; during most of 2009, buyer discounts shrank.

A year ago, in January 2009, buyers were able to negotiate a median 4.5 percent off the last listing price of homes for sale.

According to Zillow, the biggest discounts are in Florida—Vero Beach and Punta Gorda yielded discounts of 8.6 percent and 7.4 percent, respectively—while Toledo, Ohio and Flagstaff, Ariz. ranked high as well. But discounts can be had all over the nation. New York, N.Y. buyers got 5 percent off the last listing price in January, Chicago, Ill. buyers got 5.1 percent and Cleveland, Ohio buyers got 5.8 percent.

Sellers did well in some markets, however. Most buyers in places like El Centro and Stockton, Calif., for example, actually paid more than the last listing price of homes sold in January.

There’s Still Time to Claim Up to an $8,000 Tax Credit on a Home Purchase

The federal homebuyer tax credit is set to expire at the end of April, but there’s still time for first-time homebuyers, and even existing homeowners, to take advantage of this substantial incentive to purchase a home.

First-time buyers may qualify for as much as an $8,000 credit, and buyers who already own a home can claim up to $6,500, providing they sign a binding purchase contract on or before April 30, 2010 and close by June 30, 2010.

Remember–these are tax credits, not simply tax deductions, so they reduce the amount of federal income tax owed dollar-for-dollar.

Special rules apply for U.S. military personnel, members of the Foreign Service and employees of the intelligence community, who have an additional year to buy and close if they are on a period of official extended duty.

The credits apply to the purchase of a principal residence. Buyers may qualify as long as their income doesn’t exceed $125,000 for single buyers or $225,000 for married couples. The tax credit is equal to 10 percent of the home’s purchase price, up to $8,000 for first-time buyers, or up to $6,500 for move-up or downsize buyers.

It’s important to remember that “first-time buyer” does not necessarily mean someone who has never owned a home. Under the law, a buyer is eligible if he has not owned a principal residence during the three-year period prior to purchase.

The tax credit, combined with historically low interest rates and an appealing inventory of available homes, has created a unique opportunity for buyers who have been waiting for the right time to jump into the market. But that opportunity will expire on April 30..

For more information about the tax credits, or to learn about available properties in your area, call our CENTURY 21 Office today.

*This is not meant to be tax or legal advice. Consult a tax professional for details.

FHA Changes Rules for Buyers

Planning to get an FHA loan? Then you need to be aware of some upcoming changes that may make your FHA loan more costly.

In January, the Federal Housing Administration announced a set of policy changes intended to strengthen its capital reserves. While the changes help FHA better manage its risk, they also have the effect of making FHA mortgages more expensive. That may make it more difficult for some buyers to afford a home.

The announced changes are:

• Mortgage insurance premiums will be increased to 2.25%. This will go into effect in the spring.
• New borrowers will need a FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 will have to put down at least 10%. This will go into effect in the early summer.
• Allowable seller concessions will be reduced from 6% to 3%, effective in the early summer.

“The FHA’s delinquency rate has been spiraling higher, and they’re trying to take some steps to tighten qualifying standards,” says Mike Larson, a real estate analyst with Weiss Research. “For a buyer at the margin, it will make it tougher to qualify for an FHA loan. You may have to have a better credit score or come up with more money.”

Since FHA loans are particularly popular with first-time buyers due to their low down payment, buyers need to be acutely aware of these impending changes and take appropriate steps to ensure they will qualify.

There’s Still Time for Many Homebuyers to Take Advantage of Expanded Tax Credit

When Congress extended and expanded the federal homebuyer tax credit in November, it created an exciting opportunity for more consumers than the original version, adding repeat buyers to those that could benefit.

Much has been written about the tax credit created for first-time homebuyers. But many people may not realize that there is now an attractive opportunity for existing homeowners as well.

Now, repeat homebuyers who purchase a principal residence can receive a credit of up to $6,500 as long as they have been living in their current home for five consecutive years out of the past eight years preceding the purchase.

Income requirements have been relaxed as well. Under the new rules, the credits are available to single buyers with incomes up to $125,000 or married couples earning up to $225,000. Partial credits may be available to homebuyers who earn more.

“This is great news for all homebuyers,” says Rick Davidson, president and CEO of Century 21 Real Estate LLC. “The expanded tax credit, combined with low interest rates, outstanding values and a great selection of homes is creating what may be a once-in-a-lifetime opportunity to get the home of your dreams at a price you can afford.”

But buyers need to act quickly to capitalize on the tax credit.

Congress extended the credit until April 30, 2010, giving buyers who have signed a purchase contract by that date until June 30 to close on their home.

This may be an ideal way to maintain home ownership for consumers who have considered down-sizing–or moving up to match their current circumstances.

For more information about the tax credits, or to learn about available properties in your area, call our CENTURY 21 Office today.

^*This is not meant to be tax or legal advice. Consult a tax professional for details.

Rebates Help You Save Money When Upgrading Appliances

In the market for a new appliance? Then think Energy Star. Not only will you be helping the environment by purchasing an energy-efficient appliance, but you’ll be helping your budget as well, thanks to a $300 million “cash for appliances” program funded by the U.S. government and being rolled out state by state. .
 
The Energy Star program is a partnership between the U.S. Environmental Protection Agency and the U.S. Department of Energy. According to the Department of Energy, by using Energy Star, Americans saved enough energy in 2008 alone to avoid greenhouse gas emissions equivalent to those from 29 million cars–and also saved $19 billion on their utility bills.
 
The appliance rebate program differs in each state, but the basics are this: Buy an Energy Star appliance and receive a rebate of between $50 and $250. You must be replacing an existing appliance to qualify. Depending by state, the program covers boilers, air conditioners, washers, dishwashers, freezers, furnaces, heat pumps, refrigerators and water heaters.
 
Each state runs its own program with funding from the Department of Energy. Dates and program details vary by state. Check out www.EnergySavers.gov for details on your state’s program.
 
One piece of advice: Act quickly. The rebate program will continue only as long as each state has the funds to support it. Once the funds are exhausted, so is the rebate program

Loan Program Provides Purchase and Rehab Funds in One Package

Interested in purchasing a foreclosure, short sale or other home that needs work? Then you need to know about a special loan program administered by the Federal Housing Administration.
 
The Section 203(k) program provides approved borrowers with the funding necessary to not only purchase a home but also to rehabilitate or repair it. Normally, when a buyer purchases a home in need of repair, he must first obtain financing for the purchase and then get additional financing for the rehab. The 203(k) program was designed to eliminate the hassle and cost of two separate loans.
 
The 203(k) program has become increasingly popular over the past year because so many properties—particularly those under foreclosure—are in need of repair. 
 
Here are some details on the program:

• The home financed must be at least one year old.
• Part of the loan proceeds are used to pay the seller (or if used for a refinance, to pay off the old mortgage) and the rest are held in an escrow account and released as the repair work is completed.
• The cost of the rehab must be at least $5,000, and the total value of the property must fall within FHA mortgage limits for the area.
• One- to four-family dwellings and condominium units are included (if the condos are in approved projects). Coops are not eligible. 
• The repair work can range from minor repairs (as long as they cost $5,000) to virtual reconstruction. Luxury improvements are not eligible.
• Applications must be submitted through an FHA-approved lender.
• Investors are not eligible; the property must be owner-occupied.

For more information on 203(k) loans or available properties in your area, call our CENTURY 21 Office today.

Easy Home Improvements for Healthier Living

Americans are more health conscious than ever before-or at least they should be-and the desire for healthy living is extending more and more to the home. Home is where we sleep, spend our spare time and raise our children, so the home should be a healthy environment for all.

It’s good to know that you can improve the environmental health of your home and improve its air quality with some quick and easy fixes. Here are some ideas:

• Select “green” paint. Paint may make your home seem fresh, but it has the opposite effect on your indoor air quality. According to the Environmental Protection Agency, paints and stains are the second largest source of volatile organic compounds (VOCs) after car emissions. By using a low- or no-VOC paint, you’ll breathe easier.
• Reduce allergens and asthma by repairing water leaks and ventilating rooms properly. If mold is present, have it professionally removed. Change air filters on a regular basis. Install allergen barriers on mattresses.
• Consider installing a water filter or reverse osmosis unit to purify water and improve its taste.
• Try limiting the use of toxic cleaning chemicals. Instead, use more natural products to clean, such as vinegar for glass, or steam clean floors and bathrooms.
• Test your home for radon, and install a mitigation system if the level is 4 pCi/L or higher.

These Do-It-Yourself Improvements Help Sellers Maximize Sales Prices

Wondering what home improvements will benefit you the most when you sell your home? HomeGain.com, a Web site that provides home value estimates, recently released a list of the top 12 do-it-yourself home improvements that cost under $5,000 and benefit sellers the most when they go to sell their homes. The list is based upon the responses of nearly 1,000 real estate agents nationwide. According to the HomeGain survey, the top five home improvements that agents recommend to sellers, based on cost and return on investment (from highest to lowest ROI), are: Cleaning and de-cluttering ($200 cost/$1,700 price increase/872% ROI) Home staging ($300 cost/$1,780 price increase/586% ROI) Lightening and brightening ($230 cost/$1,300 price increase/572% ROI) Landscaping ($320 cost /$1,500 price increase/473% ROI) Repairing plumbing ($385 cost/$1,250 price increase/327% ROI) Cleaning and de-cluttering always rank near the top of suggested home improvements for sellers. In fact, 99 percent of real estate agents recommend that their clients do so, HomeGain says. And it.s easy to see why.for a cost of about $200, cleaning and de-cluttering add an average of $1,700 to a home.s sale price, an 872% return on investment. “Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” says Louis Cammarosano, a general manager at HomeGain. Rounding out the top 12 of the list of projects: Updating electrical; replacing or shampooing carpets; painting interior walls; repairing damaged floors; updating the kitchen; painting the exterior; and updating bathrooms. For more information about low cost do-it-yourself improvements that will help your home sell faster, call our CENTURY 21 Office today.

What I do to get homes sold

6 Tips for an Easy Move with Kids

Hope Gibbs thought her move from Clifton, Va. to Arlington, Va.—a mere 45 minutes away—would be easy. And it was for daughter Anna, 14, who found new friends on Facebook even before she moved. But Gibbs’ 10-year-old son Dylan found it more difficult.

“You’d have thought we moved to Mars,” says Gibbs. “He still wants to go home despite having made tons of friends.”

Moving is one of the most stressful events in life—even more so for kids. But you can help ease the transition. Here are some tips:

Involve children in planning. Help them find local Web sites so they can learn about schools, sports and events in their new city. The goal is to increase familiarity and build excitement for the new area.

Communicate. Take time to speak with children about the move–and particularly about their fears or concerns.

If possible, allow children to pick their own bedrooms. This makes it fun and exciting. Let them help decorate as well.

Keep a few prized possessions out of the boxes. Familiar items, such as a blanket or stuffed animal, bring comfort to skittish kids.

Encourage children to make new friends. Introduce them to children in the neighborhood. Invite a classmate over for a play date. Or throw a kiddie housewarming party!

Seek help from professionals. A knowledgeable real estate agent can help you learn the area, give you leads on local children’s activities and make the whole move go more smoothly.