Take advantage of the $8000 Tax Credit !

Believe it or not the end of the First Time Homebuyer Tax Credit is rapidly approaching. Some first timers are thinking that there will be another extension planned. There is nothing confirming this rumor. Buyers, I encourage you to take advantage of this free money.
As it now stands, the federal tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline. First-time home buyers will continue to be eligible for a tax credit of up to $8,000, while existing homeowners will be eligible for a reduced credit of up to $6,500. To qualify for the $6,500 credit, existing homeowners must have lived in their current residences for at least five years. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.
It is still a great time to be a buyer. Some reports suggest that we have already hit the "bottom" of the market.... time will tell.

Vicki K. Reyes , Choice Real Estate
Realtor, GRI
vickirrealtor@aol.com
301-452-0157

Montgomery County Homes and the ICC

Yes, the ICC is on its' way to Montgomery County. It is important as a buyer to be aware of the location and proximity of this highway in relation to the home you are thinking of buying.

The Intercounty Connector (ICC) will link existing and proposed development areas between the I-270/I-370 and I-95/US 1 corridors within central and eastern Montgomery County and northwestern Prince George's County with a state-of-the-art, multi-modal east-west highway that limits access and accommodates the movement of passengers and goods.
This ICC is intended to:
Increase community mobility and safety
Facilitate the movement of goods and people to and from economic centers
Provide cost-effective transportation infrastructure to serve existing and future development patterns reflecting local land use planning objectives
Help restore the natural, human and cultural environments from past development impacts in the project area
Advance homeland security by providing additional mobility

You can get more info on the ICC project by visiting their website at http://www.iccproject.com/ If you still require more info than can be found on the site call the Maryland Park and Planning Commission and they can direct you to a neighborhood liason who can answer your specific questions.

Vicki Reyes
Montgomery County Maryland Realtor

Claiming Tax Credit

It's that time of year to prepare for tax filings. The IRS has just released the new form needed to claim the home buyers tax credit for 2009. You must prove that you do indeed qualify and this cannot be done by filing electronically. Time to break out a pen a paper for this one.

The form is # 5405, aka "First Time Homebuyer Credit" . Download this on the IRS website as well or pick it up in your local Post Office. What exactly is needed to prove you are entitled to the credit ? A copy the the HUD 1, also known as the "Settlement Statement ". It must be dated and signed off on by all parties. Do not send the original, send a copy. If you can't locate the Settlement Sheet/HUD 1, try calling your realtor who represented you, they should have a copy. Also try your settlement company where the closing took place, they too should have a copy. And make sure you retain a copy for yourself.


Vicki Reyes

Montgomery County Maryland

Realtor, GRI (Graduate of Realtor Institute)
301-452-0157


Choice Real Estate
Choice Finance

Loan Modifications Made Simple ?

Obama's Loan Modification Plan

So far this plan has failed to solve the problems of struggling homeowners.
A survey done shows that nearly 40% of those homeowners who received help from the plan are currently back in the SAME position they were in when they applied for help. While thousands of homeowners are facing foreclosure the problem gets bigger and bigger every day.

Let's take a look back at the start of the plan. In Feburary 2009 the government unveiled the " Making Home Affordable Program " which is made up of two main programs: one for loan modifications and one for refinance loans. The loan modification part is called the "Home Affordable Modification Program" (HAMP). It was developed to reduce the mortgage payments struggling homeowners pay per month to sustainable levels. The refinance plan is called the Home Affordable Refinance Program (HARP).


According to the details of the HAMP plan:
The lender would first be responsible for reducing the interest rates so that borrowers monthly mortgage payment is no more than 38 % of their income.
Then the initiative would match further reductions in interest payments dollar-for-dollar with the lender to bring that ratio down to 31 %.
Lenders will also be able to bring down monthly payments by reducing the principal owed on the mortgage, with Treasury sharing in the costs.
Borrowers will be put on a trial modification at the new interest rate and payment for three months. If they make all their payments on time, the modification will be implemented at the new rate and be fixed for five years.
Under the HAMP, loan modifications will be standardized, with uniform loan modification guidelines used by Fannie and Freddie Mac, and then they will be implemented throughout the entire mortgage industry.

Who is eligible for a HAMP loan?
To qualify, you must:
Have originated your mortgage before Jan. 1, 2009.
Be an owner-occupant.
Have an unpaid balance that is equal to or less than $729,750 (for a single-family home).
Have trouble paying your mortgage due to financial hardship. That could be because you have had an increase in your mortgage payments, or because your income was reduced or you suffered a hardship (like medical problems) that increased your bills, or, you can show that you soon will be unable to make your payments. You will be required to enter an affadivit of financial hardship.
Your monthly mortgage payment must also be more than 31% of your gross (pre-tax) monthly income.
To say the least they need a revamping of the current load mod system. It will be interesting to see what other programs, if any, the government develops over the next few months.

Happy Homehunting and Happy New Year to all !

Vicki Reyes

Saving for a Home

Saving for a home is very challenging, especially so in the current recession. BUT with prices and interest rate so low, it is a buyers market. It can be tough to save some money for a home but with perseverance and some self control it can be done. Begin today.

Step 1:
Take a picture of a home you would call your "dream home", and hang it up where you will see it everyday.This will help you stay on track, and ward off that temptation to take money out of savings or purchase something unecessary on a credit card.





Step 2:
Look at your total income, brainstorm where you can increase your income. Maybe you can add on a few more overtime hours, snag a part time job. Sell your unwanted items online or at a garage sale, its amazing how much extra stuff we have and don't use.





Step 3:
Keep a record of all purchases. Track where you may be wasting money and start to change your habits. Write down each and every expense you have on a monthly basis. Don't forget any quarterly payments such as insurance bills . Get back to basics and purchase only what you NEED vs. WANT.



Step 4:
Figure out how much money you can set aside from each paycheck and start doing it. Even if it is $50 each pay period, do it ! It really does all add up. If you are getting an income tax refund do not spend it, put it towards your nest egg for that dream home.



Step 5:
Have a tentative timeline. I say tentative because timelines should be somewhat adjustable. If you want to purchase your home in one year, then saving $100 a week will bring you $5,200.
This amount will cover a downpayment on a condo or a townhome in some cases. To review mortage rates, closing costs and other fees associated with home ownership contact Josh Burley at Choice Finance.



Step 6:
Consider opening up a CD account or a high-interest savings account. You will have to shop around. Check out the rates online such as bankrate.com. Online banks often offer a higher interest rate, so investigate those as well. Set up an amount to automatically go into your savings account each week.



Step 7:
Begin to research your credit report. Are there things that need fixed? What type of mortgages are available for someone with your score? Josh Burley can help you with that.



Step 8:
Look back at Step 1. Get your vision set in your mind and move towards it. You can do it !





Happy Homehunting !





Best Wishes,



Vicki Reyes

Realtor, GRI

Mold and Foreclosures

Mold and foreclosures can often go hand in hand. With so many foreclosures on the market and more slated to come, we are starting to see an increase in mold found in these homes. Buying a foreclosure is seen by some buyers as a "great opportunity", to others, it seems like too much work, a possible "money pit". While purchasing a foreclosure is often a great way to save thousands to tens of thousands off the sales price of comparable homes, a foreclosure can come with some hidden issues.

Finding out as much as you can about the home is critical. Since they are sold "as-is", it means exactly that. The bank has no prior history of the home and has nothing to disclose. The owners, having lost their home are long gone and are not there to share any disclosure issues with the possible buyer. You, as the buyer, MUST get a home inspection. Don't even try to save a buck by NOT having one. Big mistake. Home inspections are a critical part of the home buying process and are needed now more than ever.

It is not unusual for foreclosed homes in Maryland to sit vacant for months, whereupon these homes may not have any heat or air conditioning. Without the proper climate controls moisture intrusion from high relative humidity and water leaks that are left untreated can cause serious mold growth. This is often the case with vacant condos. Most recently I saw mold growing inside the kitchen cabinets due to a leak from the above unit, also a foreclosure. This included black mold on the ceiling panel as well. A good home inspector can evaluate the damage and give you the information you need to move forward and make a decision.

We have not even hit the "crest" of this foreclosure wave so say the experts. And I am venturing to say we will continue to see mold found in these homes as well.

Happy Homehunting,

Vicki

Buying a REO : How Low Can You Go ?

It really IS a great time to be shopping for a home. The Washington DC, Virginia and Maryland metropolitan areas are "on sale". We still are however in a bubble compared to more impacted states like Florida or Arizona. Yet some buyers are still unrealistic when it comes to deciding on what price to offer. Some buyers decide to immediately take 10, 20 even 30% off of the list price of a home, just because.
I always urge buyers to review all of the comparables of what has sold in the past 3 months. We then look at what is currently under contract and what is currently active. Getting my buyers INTO these homes is crucial so they can see the finishes and get a clear picture of the guts of the house. An REO home may have underpriced their home from the start to entice more offers and enter in to "highest and final offer" bidding war. It is not unusual for a REO to get 8 or more offers. This means you could be up against some heavy competition for a bank-owned home.
Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called "Highest and Final" offer. Sometimes the bank simply accepts the best offer at the start.
Here's how to get your offer ahead of the rest:

1) Get the History of the Home
Ask your buyers agent to find out the bank's purchase price on the Trustee's Deed or Sheriff's Deed. Compare that price to the price the bank is asking.

2) Determine Comparable Sales
Often the list price has little bearing on the value of the home. The market value matter the most. If you are up against multiple offers, other buyers will offer more than the list price.
Look at the last three months of comparable sales. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.
Look at the pending sales and the active listings.

3) Analyze the Listing Agent's REO Solds
Run a search using that listing agent's name to find the last three to six months of that agent's listings.
Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 6% over list price, then you may need to offer 7% over list price, and vice versa.

4) Ask About Number of Offers
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
If there are 10 offers it is possible that some of those offers might be all cash. Banks love all cash deals. If you are obtaining financing you will need to increase the price on your offer to be more attractive than an all cash deal.

5) Submit Preapproval Letter
You NEED a preapproval letter. NOT a pre-qualification letter. Get preapproved from your choice of lender in advance, try Josh Burley at Choice Finance.

6) Don't Ask for Repairs
Rarely, banks will pay for repairs. If there are problems found during a home inspection , renegotiate after your offer has been accepted.

7) Shorten the Inspection Period
Offer less days to complete the home inspection, you'll look lke a more serious buyer. Try to do it within 7 days.

8) Offer to Split Fees
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.