The Washington Post - Many homeowners who haven’t bought or sold a house in the past few years may find that many of the old “rules” have changed.
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Senator Chris Dodd, D-CT, has been negotiating for several weeks with Senator Johnny Isakson, R-GA., to craft an extended tax credit for homebuyers that would pass the Senate. Last Wednesday, they announced agreement on a bill that would extend the tax credit for first-time homebuyers and offer a reduced credit of $6,500 to repeat buyers who have owned their current homes for at least five years.
The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said last Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.
The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.
If the full Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for homebuyers.
It takes 45 to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, unless the tax credit is extended.
About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of REALTORS® estimates that 350,000 of them would not have purchased their homes without the credit.
A survey of first-time home buyers conducted by the California Association of REALTORS® shows that 40 percent would not have purchased a home without the tax credit. In tandem with organized real estate’s efforts to extend the current loan limits, both CAR and NAR are vigorously working to have the soon-to-expire federal First Time Home Buyer Tax Credit extended, and in that regard the assistance of every REALTOR® is needed.
Sometime today, please find time to contact your congressional representative today (Nancy Pelosi for San Francisco, Jackie Speier for the peninsula). In the Senate, an amendment offered by Senators Dodd, Lieberman, and Isakson will both extend the program into 2010 and expand the eligibility requirements. The amendment has been attached to a bill that will extend unemployment insurance benefits. It is expected that the bill will pass the Senate and then be voted on by the House of Representatives. It is critically important that every REALTOR® member of the San Francisco Association of REALTORS® contact either Nancy Pelosi or Jackie Speier to urge them to support the unemployment extension bill that contains the home buyer tax credit. Please respond to the National association of REALTORS® Call for Action http://takeaction.realtoractioncenter.com/campaign/hbtc?qp_source=actionsplash. Working together, REALTORS® can make a difference in Washington, D.C.
Purchasing a condo often is the first step in the homeownership process, and can be a good opportunity for first-time buyers. However, as more homeowners living in community developments with homeowner associations find themselves in trouble, many are not paying their dues. As a result, residents who do pay their HOA dues are seeing increases in their monthly bills or unexpected special assessments. This is especially true for communities that do not have enough funds in reserves to pay for property maintenance and repairs. Buyers considering the purchase of homes in community developments with HOAs are advised to closely monitor the homeowner association’s financial health.
MAKING SENSE OF THE STORY FOR CONSUMERS
Buyers are advised to request all financial documents relating to the homeowners’ association during the home inspection period. In most cases, buyers receive these documents one to two days before closing, or find they are incomplete. Financial advisors recommend that buyers work with their REALTOR® to ensure the documents are received in a timely manner—preferably with at least three days to review.
Los Angeles Times – If ever there was a great time buy a first home, it’s now. Interest rates and housing prices are low, and the federal government is giving money to buyers in the form of an $8,000 tax credit.
From the Wall Street Journal - Buyers hoping to purchase deeply discounted homes may want to consider purchasing homes in the high end—especially those priced $2 million or more. In some cases, buyers may be able to command even lower prices on these homes, as financing continues to be a challenge for buyers of luxury homes.
MAKING SENSE OF THE STORY FOR CONSUMERS
We are issuing an urgent plea for everyone to contact members of Congress immediately to urge them to extend the First Time Home Buyer Tax Credit to help keep the economy recovering. Some 1.2 million households have used the $8,000 tax credit since it was enacted earlier this year as part of the economic stimulus package. Without congressional action, the credit will expire on December 1. Since it takes 45-60 days to get to closing, if not longer, households have little time remaining to take advantage of the credit. That’s not good for markets. “Uncertainty about the future of the credit will dampen consumer demand,” says Charles McMillan, president of NAR. “The only way we can assure that the progress we’ve made can continue is to extend the credit and to do that now.”
You will need to contact your representative depending on your location. The best resource we have found for finding contact information on members of congress is here.
- Janis Stone
Instead of searching the paper for open houses, the San Francisco Association of Realtors has just launched a new website specifically for open house information. Go to:
www.sfopenhomes.com for the latest in open house information!
- Janis Stone
A reader asks: I am considering buying a home in San Francisco, but have all these fears that I will make the wrong choice or that once I am in, I won’t be able to afford it. How can I get past this?
Our reply: What you are experiencing is not uncommon, whether it is before you buy or after. If you had already purchased it would be called “buyer’s remorse”. And there are 5 things you can do to help you feel more comfortable with the decision.
MarketWatch by Dow Jones has a nice article covering these points in its latest “weekend edition” which may be found here. It is about “buyers remorse”, but we think you can see how it can apply to your situation as well.
- Mick Orton
David Lereah, chief economist for National Association of Realtors, was very optimistic for 2007 in his recent article, “As Sellers Get More Flexible, Buyers Get a Break”. In it he says what we were saying all last year… that there was no “bubble bursting” in San Francisco real estate, though there was a market correction. Sales were down, but there were not significant price reductions.
…Let’s be clear, though. The sky never did actually fall in 2006— or, to use that phrase that the media love, there were no “bubbles” bursting. But air did come out of some inflated balloons. According to our National Association of REALTORS® latest estimates for last year, existing home sales were down 8.2 percent from a year earlier. Similarly, new home sales were down 17.4 percent and housing starts were down 12.5 percent. Our nation’s housing sector suffered a contraction, inhibiting overall GDP growth.
Read the entire article here.
- Mick Orton