When Does the $8000 First Time Home Buyer Credit Expire?

You’ve probably heard about the $8000 first time home buyer credit (click here if you haven’t or would like more information about it). But do you know exactly how long you have before it expires?

IMPORTANT: This is how long you have until it expires, but you must settle/close on the purchase of your home by this date. That means you should be starting your home search in the near future especially if you’re considering purchasing a short-sale property (click here to find out how much time each type of transaction takes to close).

H/T to Ken Brand for sharing about the widget

Loudoun Increases Cost of New Homes for Builders and Buyers

While neighboring counties and their officials are trying to help developers, builders and consumers weather the recession, Loudoun County is doing the opposite. In doing the opposite, Loudoun is taking money right out of the pockets of buyers, sellers and homeowners.

Here is what neighboring counties are doing:

• The Montgomery County Council is considering delaying a proposed 3.5 percent increase in impact fees
• In Prince George’s, the County Council has lengthened the life of development approvals and held off increasing impact taxes
• Fairfax County has reduced the amount a developer must put up in surety bonds to guarantee a project’s completion
• In the District of Columbia, lawmakers are allowing regulators to lengthen from two to five years the time developers have to begin work on projects in southwest Washington

What is Loudoun County doing?

• Loudoun just raised proffers (the amount of money a builder must the county to build a home) by as much as 22 percent – $59,470 per single family home. The increases per type of property are $5,000 per apartment/condo; $11,000 per town home; $13,000 per single family home)

Who bears the brunt of these decreases and increases?

In the end, it’s consumers.

Here’s why…

If it becomes less expensive for a builder to build a home, the builder may offer greater incentives and/or lower base prices to create increased demand for their homes. The consumer wins and sales pick up.

If it becomes more expensive for a builder to build a home, the builder will most likely increase the base price and/or decrease incentives to make up for the additional cost. The consumer loses and sales slow down.

Sales picking up is better for homeowners and sellers. Sales slowing down is bad for homeowners and sellers.

Loudoun claims that the increase in proffers in necessary to pay for schools and public facilities. Ok…I get it. You need to pay for those things.

But why must those costs fall solely on the shoulders of home buyers? And why would Loudoun “OK” an increase in proffers (aka increase in the cost of buying a home) at a time when everyone and their mother is trying to lower the cost of buying and selling a home in order to stimulate the housing market?

Seems a bit backwards to me…

P.S. Supervisor Eugene Delgaudio (R-Sterling) was the only board member to oppose the motion.

On a side note, the increase in proffers is only for Eastern Loudoun. The proffers in Western Loudoun remained relatively unchanged. Hmmm…interesting.

Home Buyers: Are You Worth $17.50?

Here’s a question for Loudoun and Fairfax County home buyers: “Are you worth $17.50?”

“Duh!” Of course you are!

So why would I ask such an obvious question?

Because you may be shocked to hear who doesn’t think you’re worth it.

Let me explain…

Background

To make a long story short… The majority of homes being sold through a Realtor in the Fairfax County area will have one type of electronic lock box known as a SentriLock while the majority of homes being sold through a Realtor in Loudoun County will have another type of electronic lock box known as a Supra.

Because there are quite a few Realtors that do business in both jurisdictions (Fairfax and Loudoun), both local Realtor Associations (NVAR and DAAR) have agreed to sell SentriLock and Supra lock box keys to the other association’s members for a nominal fee of no more than $175.00 per year.

If you’re wondering why this is so, drop me a line and I’ll email you the details.

Now back to, “Are you worth $17.50?”…

So let’s say you’re a buyer looking in Reston, Herndon, Sterling and Ashburn or… Fairfax, Centreville and South Riding or…(you get the picture). You will most likely run across both types of lock boxes on homes in those areas. Logic dictates that your buyer’s agent would/should have both sets of keys, right?

Wrong. Some Realtors do not have both lock box keys.

The ones that don’t have both keys have to call the listing agent and/or seller to ask them to let you into the home. This means that you have to work around the listing agent’s and seller’s schedule, not yours. This may also make you a bit uncomfortable considering that the listing agent and/or sellers will be hanging around the house while you’re going through it (aka zero privacy and sales pitches).

Why would an agent not have both lock box keys?

It’s not because it’s hard or expensive. To obtain a GE Supra Key, all you have to do is go to the DAAR offices in Leesburg (45 minutes from the furthest point in Fairfax County) and shell out a measly $175.00 per year. With 10 buyer deals per year (not hard to do), the cost of the key amounts to $17.50 per buyer. If a Buyer’s Agent is even a slight bit concerned about their buyer clients, they should have both sets of keys (as I and other quality agents do). Personally, if I didn’t have both keys, I would feel as though I was not giving my clients the service they deserve.

In my opinion, there is no excuse for not having both keys (except for laziness, lack of caring or too broke working as a Realtor to spend $17.50 per buyer client). Even if a Realtor has never done a deal in Loudoun before, the second they get a new buyer client that’s looking in Loudoun, they should go get a key. The longest they’ll ever have to wait to get a key is three days and that’s only if it’s a holiday weekend.

So, home buyers looking in Loudoun… Are you worth $17.50?

If someone doesn’t think so, contact someone who does – me.

I think you’re worth at least $18.00 if not $18.50

Why Buyer Agents Should Attend Home Inspections

From what I’ve seen and heard within the real estate community, some Buyer Agents attend their Buyer client’s home inspections while some do not. Personally, I believe that a Buyer’s Agent should attend every one of their Buyer client’s home inspections for a variety of reasons.

1) A home inspection almost always brings up questions and concerns that are best answered by the Buyer Agent, not necessarily the Home Inspector. For example, the Home Inspector finds out that there is a condensation leak in the HVAC unit and that the unit is near the end of its life expectancy. How does a Home Warranty affect that? And if an item is noted on a home inspection report, will the home warranty company consider it a “pre-existing condition” and not cover it in the future if it’s not fixed prior to settlement?

2) Being at the home inspection saves a lot of future emails, texts and calls back and forth between the Buyer’s Agent, Home Inspector and Listing Agent. Having everyone present at the home inspection allows the Buyer and Buyer’s Agent to get all their questions and concerns out on the table and answered right then and there. This is especially important if you’re coming up on the home inspection contingency deadline and need to submit your home inspection addendum and inspection report right away.

3) As the Buyer’s Agent, it is you who will conveying and negotiating the home inspection items with the Listing Agent. If you don’t have first hand knowledge of the issues, it will be difficult to properly explain the issues to the Listing Agent and negotiate them properly. Home inspection items can range from a few bucks to thousands of dollars so negotiating them properly is not a “small” deal.

4) As a Buyer’s Agent, your Buyer client is paying you thousands of dollars to represent and guide them throughout the entire real estate purchase transaction. Even though your Buyer’s Agency Agreement with your Buyer clients may not say, “I will attend the home inspection”, go the “extra mile” – your Buyer clients will love you that much more.

Buyers Lose Offers, Pay More Thanks to New HVCC Appraisal Rules

The new Home Valuation Code of Conduct (HVCC) rules that went into effect May 1, 2009 were supposed to protect consumers purchasing and refinancing homes by eliminating fraud and inflated appraisals. But the new appraisal rules are having a completely different and negative effect. They have made buying real estate harder and more expensive for home buyers. And it’s not only buyers getting hurt – it’s sellers, appraisers, real estate agents and lenders.

I’m not going to go into detail as to how the new process works here on this post. For a great explanation of that, check out Chris Griffith’s post entitled, “The HVCC Wal-Mart Effect”.

What I am going to discuss is how buying and selling real estate has changed since the new rules went into effect. Let’s take a look at real life examples involving either my or fellow agent’s clients…

Real life example #1: Appraisals are coming in low. And sometimes ridiculously low. Buyers who don’t have a hidden stash of thousands of dollars to make up the difference between the appraised value and purchase price are left to try and convince the seller to lower their purchase price. Any seller and their listing agent who knows the local real estate market and values will know that the appraisal is not accurate and tell the buyer to take a hike (in this market, there’s another ready, willing and able buyer nearby).

This just cost the buyer the chance to buy a home they love and they have to start back at square one. The seller has to go back on market in order to avoid losing thousands of dollars thanks to an inaccurate appraisal.

Real life example #2: Many Listing Agents and sellers no longer want to see FHA or VA financing on an offer. They’re either taking lower offers that are doing conventional financing or flat out saying, “No FHA or VA financing.”

Buyers with FHA or VHA financing are getting their offers rejected or can’t even submit an offer on many properties.

Real life example #3: Based on the average time from contract to settlement date (30 to 45 days), buyers are locking in their interest rates, setting up movers, contractors, turning in notices to their landlords, terminating leases, etc. As little as only 1 week before settlement date, the appraisal is nowhere to be found. Sometimes, not even the appraiser is anywhere to be found. Either the appraiser has to be hunted down or another appraisal has to be ordered. Either way, settlement is delayed.

To the buyer, this could lead to their rate lock expiring and their interest rate becomes higher than at the time of contract. It could also mean that they now have to pay a penalty for rescheduling movers, contractors, the lease termination date, etc. And even worse, it could mean that the buyer is in default of the contract – this could lead to a $100 per day penalty and/or loss of earnest money deposit.

Real life example #4: Appraisal fees were an average of $300 to $350. Now they’re an average of $400 to $500.

Who pays the appraisal fee? The buyer.

Real life example #5: A mortgage broker goes with lender “A” for the buyer’s financing only to find out that lender “B” has a lower interest rate and lower closing costs. Rather than lender “B” being able to use the completed appraisal from lender “A,” lender “B” has to order a new appraisal costing the buyer another appraisal fee.

The buyer has to pay another $400 to $450 for the second appraisal.

These are just some of the real life examples of what’s going on out there. As long as the HVCC stays in effect, home buyers will continue to pay more money for crappier service and, in many cases, their chances of getting their offer accepted will continue to be diminished. Not only is the HVCC screwing the transaction up for buyers and sellers, the new HVCC rules could be the single largest hurdle to US home price recovery.

The HVCC needs to be rescinded or changed – ASAP!

Understanding Closing and Settlement Costs

If you are buying or selling a house and are curious as to what closing and settlement costs are for, check out this short video entitled, “Understanding Closing and Settlement Costs” (click here if you can’t see the video)…

Hat tip to Midori Miller

What’s Up With the $8K Homebuyer Tax Credit Being “Monetized”?

On May13, HUD Secretary Shaun Donovan said that the Federal Housing Administration (FHA) is going to permit its lenders to allow first time home buyers to use the $8000 tax credit as a down payment (aka “monetize” the tax credit).

The next day, May 14, the Office of Management & Budget told the FHA to hold off on implementing the program because it was only a “proposal” (aka “sike!”).

Since then, consumers, agents, lenders and others have been waiting (impatiently) for a final and real answer to if/when the first time home buyer tax credit will be “monetized”.

Well, here’s the latest. According to an article in the Wall Street Journal,

“The FHA says that the rumors about the program’s demise were flat-out wrong and that the program will be rolled out soon. Some industry analysts say that the memo may have been pulled because the program, which uses a tax credit established in February’s stimulus package, needed an OK from the White House budget office.”

If the program is approved, it would only be available through November of this year so time is a ticking…

I’ll keep you posted as more becomes available.

« Previous Page