Rick's Real Estate Blog

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If you have recently decided to move from renter to homeowner, you are not alone. First-time homebuyers made up 41 percent of the market, according the National Association of REALTORS®’ 2008 Profile of Home Buyers and Sellers. And price declines in many markets around the country have created unique opportunities for those considering home ownership for the first time.

As a homeowner, you have security and stability, the freedom to decorate and remodel, potential to build equity and tax benefits. And with interest rates still at historically low levels – 5.22% for the typical, 30-year fixed-rate mortgage (as of early August 2009), combined with ample inventory, now is a great time to buy.
Plus, there are several incentives and programs available specifically for first-time homebuyers.

First-Time Homebuyer Credit
One program that is a great financial opportunity is the highly publicized First-time Homebuyer Credit, which was part of the Housing and Economic Recovery Act of 2008. This federal initiative allows first-time homebuyers to take up to an $8,000 tax credit, which doesn’t have to be repaid, toward a new or resale property purchased prior to Dec. 1, 2009. For new construction, the purchase date is considered to be the date you first occupy the home.

Under this program, a first-time homebuyer is considered to be anyone who has not owned a principal home within the last three years. If you are married, both spouses must meet this criterion. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer. In addition, ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer. You are also eligible to claim first-time buyer status if you owned a principal residence outside of the United States within the last three years.

The actual tax credit may vary depending on the purchase price and your income. The credit is generally equal to 10 percent of the home’s purchase price, not to exceed $8,000. In addition, the income limit to receive full credit is $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return.

For complete details, visit www.irs.gov and www.federalhousingtaxcredit.com. As always, consult with your tax adviser on how this tax credit may affect you.

State Programs
Many states also have first-time homeowner programs. Under these programs, first-time homebuyers may be eligible for grants for down payments and closing costs. Some states even offer various tax deductions and credits.

Mortgage Loans
As a first-time homebuyer, you don’t have the advantage of using the equity in a previous property to help bridge costs associated with down payment, closing and other fees. Many financial institutions have mortgage products with you in mind. In addition, the Federal Housing Administration (FHA) offers mortgage programs in which your down payment can be as low as 3.5% of the purchase price, and allows most of your closing costs and fees to be included in the loan. Although FHA does not directly loan to consumers, you can work with a FHA-approved lender. For more information, visit www.hud.gov.

Workshops
Besides financial assistance, there are workshops specifically geared toward first-time homebuyers. They provide a wealth of information about the home-buying process, such as how to search for a home, setting up a budget, choosing a real estate professional, loan products, and so on.

The transition from renter to homebuyer is a large step and is arguably one of the largest investments you’ll make, so make sure you take advantage of all the assistance available to make the road to homeownership that much easier.

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A good home inspector is worth their weight in gold! This is the understatement of the century! But it is true, a professional home inspector tears the house you are buying down and inspects every nook and cranny in intricate detail. Ironically, they are unusually inexpensive.

Thermal Imaging finds pests within the walls before they do significant damage.

One of the best statements my old broker used to use about inspectors rings true. “You don’t want the home owner there because he doesn’t want to see what the inspector is going to do to his house”. Not that they will damage anything, they just take everything apart for a “looksee”.

Any contract can be written with a “right to inspection”, but make sure you do it in the time allotted. Otherwise, the seller can enforce the contract without the inspection. A good realtor here is vital! Make sure your realtor is on top of things, knows the process, and keeps you informed. Call me right away if you need a good realtor at 386.837.5300.

A good inspector will provide you with a pre-purchase building report that identifies all the defects found during the inspection. The report will identify significant building defects, problems identified, and possibly an estimate of repair cost. The inspector will compare the property inspected with buildings of similar age and construction and will give an overall rating for the dwelling. They will access the roof void, the sub-floor as well as the entire building externally and internally to report on such defects as:

Dampness. Good inspectors carry moisture meters.
Plumbing checked for past and present leaks.
Wood rot and/or termite damage.
Cracks in external brickwork and internal walls.
Roof condition.

Another very important inspection is a pest inspection. This may be carried out by the existing home inspector or may be completed by a specialist. Either way, it is crucial, and a prerequisite to getting a mortgage. A pre-purchase pest inspector will report on all areas to the homes sub-floor, roof void, internal rooms and areas around the dwelling or within the boundary lines. The inspector will report on defects such as:

Termite activity past or present.
Past termite treatments where evidence or paperwork is provided.
Borer damage to dry seasoned timbers.
Significant decay.
Poor sub-floor ventilation.
Recommendations to help prevent future termite attack.

A new technology available today is a thermal pest inspection. With standard pest inspections, reporting is restricted to those areas visible with the naked eye. Moisture meters are used, however it is not possible to check all wall surfaces with a moisture meter. Unfortunately most termite activity is hidden in wall cavities and is often undetected until termites reach the roof void, particularly if the structure is on a concrete slab footing as most Florida homes. By the time termites reach the roof void they have usually caused considerable damage to the wall framing timbers on the way up.

Thermal image camera inspections can extend the inspection boundaries into the wall frame. Termite activity gives off a large amount of heat and moisture which is detectable on wall surfaces using a thermal camera.

The bottom line is find someone you trust, pay them what they are worth, and rest assured that the home you are purchasing is solid, sound, and ready for you and your family.

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The only thing certain is change. The world famous Sears Tower in Chicago will no longer retain its name. From now on it will be called the Willis Tower. (I will pause now for all the “whatca talkin’ about jokes). Done? OK, hard to believe how far the mighty Sears has fallen.

Back in Purcellville, VA, where I lived before I moved to sunny Florida, we used to list houses by their Sears Catalog Number. They were the original distributors of the pre-fab houses. Now, they don’t even have a building in Chicago. Apparently they have not really occupied that building for years anyway, but it is another indication of the changing of the guard.

Are you changing with the times or still doing things the same things you did years ago with diminishing results? What is the one thing you can do today differently that will increase your business?

Source: http://narblog1.realtors.org/mvtype/infocentral/2009/03/whatcha_talkin_bout.html

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