It’s official. $8000 tax credit extended!! …and expanded!!

CNNMoney.com is reporting that President Obama signed an extension and expansion of the first-time homebuyers tax credit yesterday.

The original tax credit was set to end at the end of this month, but with the new extension, homebuyers will be able to take advantage of the credit through the end of April, with closings as late as June.  The revised version of the bill calls for homebuyers to have a property under contract by April 30th, but will allow up to 2 months (June 30th) to close on the transaction.  This is a welcome adjustment to the bill, as the previous version didn’t allow for the extended amount of time for closing.

In addition to the extension of the length of time to take advantage of the credit, the new version of the bill will also include a tax credit for some current home owners looking to move up.  Home owners who have owned and occupied a home for at least 5 out of the last 8 years can qualify for a $6500 tax credit.

To read the full story, visit http://tinyurl.com/yhww8o2

$8000 tax credit to get extension?

Looks that way.  Senate leaders have tentatively reached a deal that would extend the credit into 2010 and give relief to some current home owners as well.  The proposed extension of the tax credit would run from December 1st, 2009 until April 30, 2010.  The revised credit would also allow 2 months for escrow after the cutoff date of the extension.  That means contracts would have to be finalized by April 30, but closing could take place as late as the end of June.  The previous version left no time allowance for closing after the original cutoff date. Contracts had to be signed and escrow closed by the cutoff date.

The new version of the tax credit will also allow some current home owners the option to ‘trade-up’ by giving a $6500 credit to homeowners who have owned their home for a minimum of 5 years and purchase a new home during the new credit window.

Details are far from final and a vote on the extension is not scheduled yet, but many sources are reporting it’s likely to happen soon.  The current tax credit is scheduled to end November 30th, 2009.

Madison County Homes Sold Report for 10/04/09 to 10/10/09

For the first week in a month, Madison County saw a drop in the number of homes sold this week.  Sales dropped from 69 last week to 42 this week.  It’s a large drop, but shouldn’t be cause for too much concern just yet.  Sales had been on a steep rise for a number of weeks and were expected to level out as we predicted in last week’s report.

 

Days on market (DOM) fell again this week to 109.  This is continued good news for sellers as this means homes are continuing to seller quicker each week.

 

Average sales price breakdown this week:

• $61,358 for homes with 2 or fewer bedrooms
• $152,745 for homes with 3 bedrooms
• $227,778 for homes with for or more bedrooms

Please keep in mind that figures provided are for Madison County as a whole and that prices, DOM, and sales figures will vary greatly throughout the county based on many factors.  For a more accurate report on your specific area, send an e-mail to salesreport@myrealtorjames.com .   (Only one report per household please)

Top 5 Markets for Homes Sold this week:

1. Granite City
2. Godfrey (tie for 2nd)
3. Collinsville (tie for 2nd)
4. Edwardsville (tie for 3rd)
5. Godfrey (tie for 3rd)

Statistics taken from the Southwestern Illinois Regional Multiple Listing Service on 10/12/09.  All information is deemed reliable, but not guaranteed.

$8000 tax credit ending soon

While the $8000 tax credit for first-time homebuyers isn’t scheduled to end until November 30th, 2009, your chance to take advantage of this tax credit may be gone in just a couple of weeks.   With a number of lenders requesting 45 days to close, if a contract isn’t submitted by October 15th, you just may lose out on the chance to claim this credit.

There has been a big push by a number of agencies and individuals across the country to extend the tax credit until 2010, as of this posting, the credit has not been extended and showed no immediate signs that it would be extended.

What I’ve advised my clients in regards to the tax credit is:

1. Don’t buy a house strictly to claim the $8000 tax credit.  Seems simple enough, but some people will push themselves to take a discount or freebie no matter what the cost.  The tax credit shouldn’t be your only motivation to buy a home.  It should just be a happy bonus.

2. If you’re on the fence, get off.  I just stated that you shouldn’t buy a house strictly for the tax credit, and that’s true.  You shouldn’t.  But if you’re on the fence and planning on buying a home in the next couple of months anyway, then what are you waiting for?!  Don’t need an extra $8000 in your pocket?  A tax credit works differently than a tax deduction.  I’m not going to go into a deep discussion on the ins and outs of the tax system, but the major differences between a tax deduction and a  tax credit is that while a tax deduction lessens your tax liability, a tax credit is essentially cash in your pocket.  If you qualify for the program and meet the requirements to claim the full credit, then the government will, in essence, cut you a check for $8000 and send it to you.  If you can’t use the $8000, I gladly accept donations.

3.  Don’t wait to see if they extend the credit or for house prices to drop lower.   Hindsight is 20/20.  After prices start to rise, it’ll be easy to tell when the market bottomed out.  And after the tax credit is gone, it’ll be easy to realize that you should have taken the credit when you had the chance.  While buyers should always do their due diligence, study the market, and make an informed decision, waiting for the ‘perfect time’ to buy will only cause you to lose out on some of the best opportunities around to buy a home at a great price and with some of the best conditions the housing market has seen in decades.

Work with your Realtor to find a great home, do your homework, and get that offer in today!!  Don’t miss out on this amazing opportunity!!

Madison County Homes Sold Report for 9/27/09 to 10/03/09

For the 3rd straight week, Madison County saw an increase in the number of homes sold, rising to 69 this week.  That’s almost an 8% increase over last week, and a whopping 46% increase over just 3 weeks ago when the month opened with just 47 sales.  Sales are likely to see a decline in the next week or two as they level out, but a full month’s growth in home sales is good news for Madison County home owners.

The average days on market (DOM) this week dropped to 137, a decline from last weeks 149, another hint of good news for sellers.

Average sales price breakdown this week:

• $83, 925 for homes with 2 or fewer bedrooms
• $137,078 for homes with 3 bedrooms
• $273,636 for homes with for or more bedrooms

Please keep in mind that figures provided are for Madison County as a whole and that prices, DOM, and sales figures will vary greatly throughout the county based on many factors.  For a more accurate report on your specific area, send an e-mail to sales_report@myrealtorjames.com .   (Only one report per household please)

 

Statistics taken from the Southwestern Illinois Regional Multiple Listing Service on 10/05/09.  All information is deemed reliable, but not guaranteed.

Quote of the Week

“You can’t solve a problem with the same mind that created it”  -Einstein

Ever run into a problem and just can’t seem to figure out how to get past it?  Change you way of thinking.  Step back from the problem and look at it from a different direction.  Take some time to do something else if you need to.  A “fresh pair of eyes” can work wonders in getting you through your troubles and on new and exciting things.

3 things to consider when making an offer

Now that you’ve found the perfect home, it’s time to make another big decision: How much do I offer?  There are many factors that should go into your decision.  In this article, we’ll discuss 3 of the biggest factors you should use when determining your first offer on a home.

1. Recent Sales – This should be your first and biggest factor when deciding what you should offer.  Also known as ‘comps’, recent sales of homes similar in style and size to the one you are considering purchasing will tell you what the market valueof the home is.  This method is very important, because it’s also how an appraiser will determine how much a lender will loan on a home.  If the purchase price is above what comparable sales are showing a property is worth, the lender will likely not loan a  buyer all the money necessary to fund a sale.  In this case, the buyer and seller would have to negotiate the difference, or the buyer would have to come up with the extra funds somewhere else to complete the deal.  Using recent sale to justify your initial offer should keep the seller from trying to negotiate an urealistic sales price based on what the market is doing.

2. List to Sell Ratio – The list to sell ratio is the difference between what properties are currently listing for vs what they are actually selling for.  For example: A home is placed on the market at $200,000.  3 months later, it sells for $184,000.  It’s List to Sell Ratio is 92%  ($184,000/$200,000=.92 or 92%).  The average List to Sell Ratio for Madison County over that last 6 months is 95%, so a home originally listed at $200,000 should likely expect to sell for around $190,000 based on the current market trends.

3.  Seller’s Situation -  A seller’s situation can have a huge effect on how much you will be able to buy a home for.  If the seller purchased another home 6 months ago and has been carrying 2 mortgages the entire time, they may be more likely to negotiate a lower sale price just to get out from under the second mortgage payment.  If, on the other hand, the seller thinks the market is good and is just looking to cash in on the upward swing in home sales and higher selling prices in their neighborhood, they may be less likely to even nibble at low-ball offers.  It’s never a bad idea to ask the seller’s agent why the seller is moving.  They may not always tell you, but any information you can find out about what is motivating the sale will help you better determine where you can comfortably expect to end up with you purchase price.

 

There are many other factors that may effect what number you should use when starting your negotiations to purchase a home.  In this article we’ve discussed just 3.  What other factors have you used in the past when preparing to write an offer?  Share your thoughts in our comments section.

In our next blog we’ll discuss: What you should NEVER do when writing an offer!

3 Tips for deciding when to make an offer.

One of the biggest decisions to make when looking for a home is when to write the offer.  Is there a perfect time?  Will there be bells and whistles sounding when that time comes to help me know?  The honest and truthful answer, no surprise, is no.

Working with a couple of first time home buyers recently we’ve looked at homes in Edwardsville, Troy, Collinsville, and Bethalto.  We’ve looked at some homes that likely need to be condemned and we’ve looked at homes that families could gladly grow old in.  In each home, we’ve found the basic criteria of what they are looking for: 2 or more bedrooms in their price range with access to the interstate.  But when do you write an offer on one?  Here are a few things to consider when you’re looking for a home and trying to decide if you should write an offer or not:

1.  I like the neighborhood and layout, but the orange walls in the kitchen and the avacado green bathroom were horrible!!

Look past the surface:  Some of the best deals that you will find are from ugly houses. Whether you are a handyman worthy of being featured on DIY Network or can’t tell the difference between a gable roof and Clark Gable, buying a home that ‘needs a little TLC’ can mean big returns in your pocket down the road.  Now I’m not suggesting that you should run out and find a house that’s about ready to collapse on itself and try to fix it up, but if a home needs new paint, carpet, and updated light fixtures, don’t rule it out, because this will give you a great opportunity to customize the home to your tastes as well as add immediate value.  The work that the seller has chosen not to do will give you negotiating power and should help you buy a good solid home for much less than that of a prettier one up the street. 

2.  I was really wanting a house with a master suite and jacuzzi tub.

When looking to buy your first home, or any home for that matter, realize that there will likely be a few things that aren’t going to be exactly what you wanted.  Short of custom building, any home that you purchase will likely come with some features that you love, and some that you just don’t like.  The key is to prioritizing which features are most important to you (those that are NEEDS) and those that would be nice to have (those that are WANTS).  What may be a want to some people can be a need to others, so ultimately it’s a decision that only you can make on how to rate the features that will be important to you in the home buying process, but it’s best to try and sort through your wants and needs list before you begin looking at homes, and adjust it as necessary along the way.

3. I just can’t decide

Ask for help.  If it’s your first time buying a home, there will be many factors that you may not be aware of that could have a direct effect on your happiness in a home.  Ask your friends, relatives, coworkers what they love about their homes: what they wish they had and why.  Or ask them to come along when you are looking at properties that you think you might be interested in.  Getting a second opinion is always a good idea when making a decision to buy a home.

 

These tips were designed with the first time home buyer in mind, but easily translate to purchasing any home.  When it’s all said and done, the decision is up to you when you should write an offer on a home.  Never let someone else make the decision for you.  Ask questions. Seek advice.  Read articles.  Then, take all the information you’ve gathered and make an informed decision.  Home ownership can be one of the most gratifying feelings you can experience, and by making an informed decision, it will be all that much sweeter.

It’s not how you start, it’s how you finish.

After a heart-breaking, last second loss to the Cincinnati Bengals yesterday, I’m reminded of a very valuable lesson in life:  It’s not how you start, it’s how you finish.  In all aspects of the game, my Pittsburgh Steelers dominated the Bengals yesterday afternoon early in the game, but with just 14 seconds left, the Bengals were able to cap off a late 4th quarter drive with a touchdown to win the game.

Hats off to the Cincinnati Bengals.  They never gave up, kept fighting, and won the game by finishing strong.  All too often in life when a new opportunity arises, we get all fired up and come out guns blazing.  The excitement of our new opportunity takes over our world and it’s all we can think about.  But as time progresses and as the inevitable setbacks arise, the novelty wears off, and we start letting things slip, eventually just throwing up our arms and giving up.  What’s important to remember is that it’s not those who start out with a bang that are successful, it’s those that get up time after time when obstacles keep getting in their way and knock them down.   It’s said that Thomas Edison ‘failed’ well over 1000 times in his attempt to invent the lightbulb.  But he never gave up.  The passion he exuded in his first attempt was the same passion that he held onto in his 1001st attempt and beyond until he reached his goal of creating the light bulb.  Can you imagine what our lives would be like if he’d fallen into the trap of losing faith and giving up?  I can’t.

Whether it’s buying or selling a home, starting a new business, or chasing after a dream, believe in yourself, stand firm with your convictions, and never give up.  Nobody remembers what the score was at the half, they only remember what’s on the scoreboard when the game is over.

Pittsburgh Steelers Week 3 at Cincy!

Well it’s week 3 already and my Pittsburgh Steelers are 1 and 1 going into todays game with the Cincinnati Bengals.  After a disappointing loss to the Chicago Bears last week, the Steelers need a win to stay in the hunt for the AFC North title.  The Baltimore Ravens are currently 2 and 0 and after last year, have proven that they will be a formidable foe for the title.  Even though the Steelers are the defending Super Bowl champions, or maybe especially since they’re the defending Super Bowl champions, they really need to step up their game soon, or they could be in trouble down the stretch as teams will be measuring themselves each week against the Steelers, wanting to prove they can stand with the ‘big boys’. 

The St. Louis Rams are taking on the Green Bay Packers today.  The Packers aren’t the same team they once were, but they should still put up a pretty good fight against the Rams, who have already dropped to 0 and 2.  Any thoughts on who will win?  or what the Rams need to do to get back on track?  Let us hear what you think!!

Have a great day watching for football!!