Many new and second homeowner’s use FHA loans. The market can be confusing and here are some helpful facts to help you in your home buying process. Qualified Lenders offer FHA loans, considered mortgages, and these mortgages are insured by the Federal Housing Administration (FHA). Many buyers still do not totally understand the benefits that can be had from FHA Loans.
Here are some interesting facts.
- Low-income borrowers are not the only one’s to benefit from FHA Loans.Â There is no maximum income restriction.
- FHA loans can be for more than first-time home buyers.
- FHA loans are not only for lower priced homes. Loan amounts for FHA can be almost $800K. The loan amount cap was originally around $363,000 and increased to almost $800K to help stabilize the housing market.
- FHA does not have anything to do with low-income housing. Simply FHA loans are mortgages that are insured by FHA.
- FHA loans, in many cases, are more affordable conventional loans and allow the borrower to have a smaller down payment.
- More lenders are willing to loan to to FHA (the federal government) that assures repayment.
- FHA loans can be assumed. This means a new buyer can take over the payments as long as they bring the seller’s current equity (cash in the home) to the table. This works well when interest rates have risen greatly compared to what the seller’s current mortgage interest rate is.
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According to Realtor.org home sales are expected to increase in the coming year.Â The tax credit has already shown to improve the market and the first time home buyer tax credit extension is expected to keep the momentum going bringing additional “step-up” buyers into the market.Â Don’t let the holidays slow you down.Â There is still a limited amount of time to find your dream home and get closing processed successfully.Â Find a good agent that can walk you through all the steps.
Here is what Realtor.org had to say:
“Home sales will increase 15 percent to about 5.7 million units and REALTORÂ® income will be up 20 percent in 2010, NAR Chief Economist Lawrence Yun told a packed room of REALTORS today in a residential economic update at the 2009 NAR Conference & Expo.
Yun credited the home buyer tax credit with unleashing sales on the lower-end of the housing market this year, bringing up to 400,000 first-time buyers into the market who wouldn’t have bought otherwise. That influx tightened inventories of starter homes, shored up prices, and helped reduce households’ fear over continuing price drops.
This virtuous cycle will continue now that the federal government has extended the credit to mid-2010 and expanded it to make a smaller credit available to repeat buyers and to households with higher incomes. â€œThe key is stabilizing prices and preserving household wealth,â€ he says.
Yun predicts the supply of homes to stabilize at the historic norm of six to seven months. Homes above $500,000 will remain elevated in the near-term, but that weakness will be offset by a hefty drop in starter-home inventories, which are running at about a five months supply.Â Â Â Â . . . ”
Quoted from Realtor.org where you can read more.
Photo Copyright 2007, Amy S Myers
Many recent transactions and potential transactions that I have dealt with have been buyers who were enticed by the first time home buyer tax credit.Â Since you must close by November 30, 2009, the window is no longer open.Â Â The market has changed this month.Â I believe buyers are holding out to make their next move.Â Â It appears that the tax credit has done its job by pumping up the economy and reducingÂ inventory.Â The National Association of Realtors is pushing for an extension of the tax credit.
Here is some information from the National Association of Realtors:
â€œThe data on the present home buyer tax credit show that the credit has had its intended impactâ€”sales have jumped in recent months to a projected 5.1 million for the year and housing inventory has been trimmed, thus stabilizing home prices noticeably,â€ Phipps said.Â He also pointed out that each home sale generates approximately $63,000 in additional economic activity, providing a tremendous economic boost to the national economy.”
Read more . . . .
Quoted from Realtor.org
Additional Tax Credit Info
Staging is a very import process in selling a home.Â Some are more talented than others and some have larger budgets than others.Â Recently, I sold a home that was staged very well by an investor.Â We were quite surprised at the closing when my buyers and I met the home owner.Â This young single woman in her mid to late 20’s was quite the investor with 300 rentals and close to 10 house flips in the process.Â One of her special talents was staging her properties.Â She has the man power to do the renovations and then she runs out and picks some a few pieces of furniture, throw rugs and some accents.Â She does such a great job with the cosmetic items, fresh paint, flooring and decor, it makes the place hard to resist.Â The staging really brings out the buyers emotions and draws them in.Â I must say it might make some people jealous being able to go out shopping each time she flips a house – which she pretty much does.Â She does not always use the furnishings over because most of the time theÂ buyers ask her to include her furniture and accents with the sale of the house.Â It sounds like a win win situation for the buyer and the seller.
So sellers out there, are your walls and carpets dirty?Â I had a seller that was not able to see this even after potential buyers made comments.Â If you don’t have extra funds for special accents, at minimum make your home squeaky clean and clutter free.Â You need to be competitive in this buyers market.
It is a great time for people to get into the housing market as I have mentioned over the last few months.Â Â There is still time to take advantage of the market conditions but don’t wait too long.Â Things will change.
Believe it or not but I have had different buyers bidding and buying properties less than $20K and some that do not need that much work.Â It is anÂ amazing deal and some did not need always need a major overhaul.Â As the market begins turn turn around there are going to be less opportunities like this.Â The deals that are there will be more competitive.Â Some houses such as these can have mulitiple bids on themÂ (as many as five or ten bidders or more).Â If you see a deal move fast and bid competitively whether for investment property or for owner occupied.
It appears that first time home buyers have really taken advantage of the tax credit.Â Â Â “”First-time homebuyers, most between the ages of 25 and 45, accounted for about 45 percent of home sales from January through July 2009, according to the National Association of REALTORSÂ®”.
“This is a historic time,” says George Jaramillo, a 35-year-old business analyst in Atlanta, who recently bought three homes, two of them foreclosures. “It’s a great opportunity to make some great gains in the future.”Â – Realtor.org, Associated Press
Have you ever heard of an air conditioner in a door?Â I had not since I saw this listing over the weekend.Â There was one in the kitchen and one in the basement.Â The one in the basement did not even vent to the outside.Â The unit vented to a storage room.Â Interesting set up I must say.Â My buyers comment on the kitchen door unit was, that you had to leave the door open to use the unit because it was in the storm door . . . .??
Another oddity in the last few weeks was a garage (at another property).Â There was a garage that was behind the house.Â The house had a single integral one car garage in the front.Â But a few feet behind the house was the detached garage.Â Â Ok well that sounds somewhat normal you might think but not so.Â The garage door was facing the house only a few feet from the house.Â My question is how do you get the car in there???
Photos are below . . .
Another Property below . . .
When selling your home, it is not required that you be at the home for your buyer’s appraisal. When I sold my last home many years ago before I was an agent, I was there. I made sure the appraiser knew how much I paid for my home, and how much I put into it. I had a large list of all the upgrades and maintenance items that I had done and how much I paid for everything. I also made sure the appraiser knew all the features of the home. I had even prepared some home comparables from the neighborhood (even though I knew the appraiser had access to the data). I even had the house immaculate as if I was showing it to the buyer. I think everything helps.
Here is some additional helpful information:
“Tips for Getting a Good Appraisal
Appraisals can be tricky these days. Hereâ€™s some advice from Maureen Sweeney, a Chicago-area owner of an appraisal firm, on getting an accurate and fair appraisal.
* Both the real estate practitioner and the owner should be present for the appraisal and follow the appraiser around. Make sure he doesnâ€™t miss anything important.
* Ask questions to determine if the appraiser has identified the correct neighborhood boundaries and if sheâ€™s comparing the home to similar properties.
* Bring a copy of a recent tax bill and a survey of the property, and give them to the appraiser.
* Provide a list of improvements to the home.
* Offer your professional opinion about what makes this property worth more than other properties in the area.”
Quoted from Realtor.org
I have been extremely busy with buyers. Buyers are getting ready to purchase something knowing that they only have a limited time to take advantage of the tax credit opportunity. Due to this activity, I, of course, get to see a ton of homes – more than the norm. The more homes you see the more strange and interesting things you see as well as some really beautiful homes.
Well, yesterday, I showed a very nice two story colonial. An older couple owns it. Every inch of it is cared for. It is immaculate and for the most part move-in ready. My buyers loved this home looked on the outside. Then walking in we discovered (but we kind of new from the photos) . . . . there was wall paper everywhere. Eeeek . . . My buyers said “forget it”, even though it was a wonderful home. They were disappointed because they would have to tear off all the wall paper. Most of the wall paper was very nice. This kind of decor is very personal and makes it very hard to sell because there is a great cost in changing it all. So, even though it was move in condition, it really was not due to strong personal decorating. I told the listing agent about this and she said the owners would be willing to negotiate having all the wall paper removed by a contractor. My buyers were not the ones to say the wall paper was an issue.
Wow, so wall paper can kill the deal. Sellers keep in mind when investing in your home with decorating. Choose something that is appealing to the masses but tastefully done. Keep in mind neutral, neutral, neutral. This consideration will save you headaches when you go to sell. Do you really want a contractor to have to come in and strip all the walls in your home just to get it to sell or yet alone have to do it yourself? The buyers will turn away because it just looks like too much work to make it their home.
I must say I see some strange things when I show homes.Â Take a look at this shower from a Penn Hills, PA home that I showed recently. Â Many times you can see where flippers just did not go the whole way to make it nice – some do and some don’t.Â I really laughed when I saw this bathroom shower.Â The owners appear to have added a tub surround but left the shower nozzle on the ceiling.Â Well, or maybe, they put it there on purpose.Â Â Very unique and somewhat bizzare if you ask me – not a selling point. Â Â Check out another interesting bathroom and the photo to go with it.
Interest rates are still great but rising.Â If you are on the fence for buying, now is the time to take a serious look and get out there and get moving.Â Take advantage of this great market of inventory, rates, and tax credit benefits.Â I was looking through the home stats yesterday to send a client a list ofÂ homes in a few different towns,Â what I found to were a high number that have recently gone under contract.Â Â Buyers are buying, don’t miss out.Â If you are selling, make sure you have a competitive price.
“Sales of existing homes showed another gain in May, benefiting from favorable affordability conditions and a first-time buyer tax credit, according to the NATIONAL ASSOCIATION OF REALTORS Â®. Mayâ€™s increase was the first back-to-back monthly gain since September 2005.
Existing-home sales â€“ including single-family, townhomes, condominiums and co-ops â€“ rose 2.4 percent to a seasonally adjusted annual rate of 4.77 million units in May from a downwardly revised level of 4.66 million units in April. Sales remained 3.6 percent below the 4.95 million-unit pace in May 2008.”
Quoted from Realtor.org