$8000 in your pocket....

The new stimulus bill has definite benefits for today's first time home buyer. This could mean great things for both first time home buyers AND sellers.

Buyers: If you are a first time home buyer and had heard of the $7500 tax credit (which was a 5 year interest free loan) you now have an upgraded offer: $up to $8000 in your pocket AND its not a loan! Yo can learn more about this at: http://www.realtor.org/government_affairs/gapublic/american_recovery_reinvestment_act_home#taxcredit

Sellers: With today's market being an incredible buying opportunity, all sellers feel they are in the same boat shouting "Pick Me, Pick Me!!!" Well the great news is that buyers may have just been encourage to take action and do just that. For the West Michigan and Grand Rapids areas the "first time homes buyer market" primarily is at $175k and under. In some cases professional, dual income home buyers may touch upon $200k but we are seeing most stay at $175k and below. With the new $8k tax credit this buyer group has been called to action. Couple this with the banks making an effort to reduce the number of foreclosures on the market an the market could potentially loosen up over the next 6 months.

Lastly, for sellers in the mean time - prior to your home selling, you may consider a refinance. If so the stimulus bill may have something in it for you too. You can find our more at:
http://www.nytimes.com/interactive/2009/02/18/business/0218-housing-graphic.html

As always please feel free to email us your questions.

Happy New Year!

Enjoy this time of reflection on 2008 and the wonderful new year that is to come.

For Ashley and I - we're excited about what is to come in 2009.

Stay tuned for our summary of the 2009 economic outlook, buyer incentives and many ways you can make 2009 work for you!

$7500 Tax Credit for you?

Have you heard the latest news in home purchases? Now most individuals who have not owned a home in the last 3 years will qualify for a $7500 tax credit upon the purchase of a home. It's retroactive back to April 9 of 2008 until July 1 2009.

At a glance it breaks down like this:

• The tax credit is available for first-time home buyers only. (The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. )*
• The maximum credit amount is $7,500. *
• The credit is available for homes purchased on or after April 9, 2008 and before July 1, 2009.*
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. *

*excerpts taken from the Federal Housing tax Credit website

What does this mean for you? It could mean $7500 taken directly off your income tax that you owe (see definition of income tax credit at http://www.federalhousingtaxcredit.com/faq.php#11 see #11)

To learn more about the Federal Housing Tax credit please visit their website at:http://www.federalhousingtaxcredit.com/index.html

If you're a first time home buyer now is the time to act! Not only do you currently get the $7500 tax credit as mentioned about but also the down payment assistance programs that have become so popular in recent history are going away. Meaning that if you intend to purchase a home with zero down action must be taken prior to September 30 of this year. Otherwise 3.5% will be required as a down payment. The details on this are slim at this point and I am hopeful something else will assist in allowing some home buyers to continue to purchase with zero or little down. I'll continue to update you on the progress of this.

If you would like more information regarding this program please contact me and I'll put you in touch with a lender who can answer your specific questions.

Foreclosures and Short Sales in Grand Rapids

In today's market the term "short sale" & "foreclosure" not only are making headlines - they're making today's smart buyer money. West Michigan has seen a rise in it's foreclosure rate - in fact it doubled. Doubled? that's not as scary as it sounds; our market went from a historical foreclosure rate of 2% to 4% in recent times.
With 4% of the market in foreclosure what does that mean for today's buyer? It means 2 things 1. Foreclosed properties are often offered at a discounted rate to that of a traditional sale as they are owned by banks or the government - 2 parties who consider the home a liability not an asset and who wish to sell quickly.
2. Today's traditional seller (not in foreclosure) is having to compete against significantly reduced comparable properties.
As a buyer in today's market how do you capitalize on this current foreclosure trend? 3 things:
A. Get a buyers agent to assist you. No seriously this is not simply a sales pitch for business. here's why: Bank list their properties with listing agents who work for the bank- they represent the bank for a set commission rate. There is a commission offered to a buyers agent for helping the buyer find a home so they're motivated to help the buyer with the buyer having to pay. However there is typically not a discount on commission for going straight to the list agent. It doesn't save the buyer money and the agent with the sign in the yard is working for the seller. Second- foreclosure markets can run quickly - the top properties can sell in a matter of hours. Working with a buyers agent will get you the inside line on a home as soon as it hits the market or prior to the general public being aware of it.
B. Get pre-approved. Banks won't even look at your offer unless it's from a buyer who has been pre-approved.
C. Be informed. Banks want to dump the house as fast as possible but that doesn't discount your right to know what you are buying. ASIS doesn't mean you don't have the right to inspections and it also doesn't automatically mean that is something drastically wrong with the property. It does mean that the bank does not plan on fixing any issues you come across. However you can usually negotiate for those issues. Let's say you place an offer for $140k on a home that's on the market for $160k in foreclosure. After negotiating the offer is accepted at $145k. You have inspections and find you need a new roof which is estimated at $3500. You can then go back to the bank to look to renegotiate and get that $3500 off the purchase price. Of course the deal has to be written properly in the first place to ensure you reserve the right to do this but an agent that's use to dealing with foreclosures can assist with that.

Want to learn more? Contact us or plan to visit our net seminar.

Note to Buyers: Maximize Your Equity

Question: What is the number one component to a home all buyers should seek in today's market?

Answer: The ability to increase equity. In a market where buyers are witnessing sellers bring thousands of dollars to the closing table - buyers are asking themselves "How can I avoid this when it's my turn to sell?" This is where the knowledge of a markets history is vital and knowing where to spend your dollars over the coming years after you've bought your home is key. What if you spent $30k on an indoor hot tub and dry sauna only to find out it's added no value to the next buyer and therefore it's money wasted? Knowing where to spend your money, how much potential improvements may cost you and what aspects of a home can and should be improved are key things to understand BEFORE you buy your home. Ashley and I recommend every buyer have an Exit Strategy Analysis completed before making an offer on a property. This analysis goes beyond market history to include potential market patterns, population & local economic factors affecting growth, and improvements tailored to the subject home that can identify equity maximizing improvements. Approaching the purchase of your home with your end goal in mind will assist you in your next purchase and will maximize your investment in real estate.

Want to learn more about an ESA (Exit Strategy Analysis)? Contact us.

Where have all the buyers gone....RIGHT HERE!

Here's a trend I'm noticing strongly in today's market: fewer buyers are touring the home in person. Does this mean less showings? No! Actually it has lead to more showings. Because of the Internet, digital media and the amount of information now available online you can have thousands of showings in just a week, have 100s of people "walk" through your master bedroom room with out you ever having to have made the bed.
This is a trend that has been picking up speed for the last few years and now and , I believe, has reached its tipping point. With the amount of inventory on the market and a million demands on the buyers time (without factoring in the time left looking for a home) the virtual tours and digital media online are key to both the buyer and the seller. Most buyers today won't even consider viewing a home if there are not some pictures of it online (and more than just the required exterior photo.)
In conjunction with this trend is the higher number of attendees at open houses vs private showings. Buyers see the home online, take the virtual tour and then stop by the open house to decide if they are serious enough about it to take the next step. If not they feel as though they have inconvenienced no one and not felt any pressure from anyone. The flip side to this is of course there are only so many open houses one can do in a day and most open houses happen on Sunday so on order to tour 15 homes it will take a 30-45 days.
Which leads to trend #3: longer market time. Because of the buyers typical buying habits the decision time for the buyer has lengthened and therefore so has the time on the market for most home owners. Your potential future buyer may have toured your home at the first open house but it might take that buyer 45-60 days to realize yours is the one.
To learn more about how Ashley and I assist both the buyer and seller in capitalizing on these trends please contact us!

Real Estate Update - Action Required

May 30, the week following the coveted Memorial Day weekend-the beginning of summer. For West Michigan this marks the time of year when summer festivals take over and the daylight lasts until late until the evening. This is also the time when the majority of those who going to buy a home this year, make their move. With the mark of the end of the school year, those who wish to be settled prior to the '08-'09 school will find their home over the next 3.5 months. Why is this important? This is the first year in recent history that new inventory coming on the market is less than the year prior plus interest rates are lower than they were last year at this time - this is the perfect blend to create a great market to make a move. With less inventory it could mean a slight firming of prices and with low interest rates it means more are able to afford a home that fits within an expanded budget. You combine these factors with CNN money report - see the last blog posting - and it's time to make your move.

The time is now....

Yes now is the time to make your move and capitalize one of the top 10 fastest growing real estate markets in America. What, you haven't heard? Grand Rapids MI is making news. If you don't believe me see for yourself:

Cnn.com

The Patriot Ledger

The opportunities exist for single family purchases, investment and condos. If you'd like to learn more about how you can capitalize on these please contact me.