Every real estate season brings its own challenges in Cincinnati. Fall in particular it is an opporunity to make small improvements and efforts that will go a long way in the spring. It takes a lot of vision to know that you are going to want to list you house in the spring, and if you know now you can start to prepare!
1. Clean out the gutters – after the leaves are all done falling clean out the gutters so that when the winter snows melt and the spring rains come that water will have somewhere to go aside from into your attic!
2. Move your Potted plants and Potters – Bring in your smaller potted plants so they do not freeze over the winter and make sure that any empty potter are moved into the garage or somewhere they will not freeze and crack.
3. Rake your leaves – because if they sit on your lawn they will leave unsightly brown patches. They block the sun damage the grass underneath them. If you have a mulching mower you can also mow the leaves a number of times to chop them up very fine and the material will compost into your yard. Just make sure they are dry when you do it!
4. Weed and Feed – your lawn will rebound faster if you feed it in the late fall. Also take the opportunity to pull out the crabgrass and spray the dandelions that are still hanging around.
If you take care of these things in the fall your lawn and home will look its best in the spring!
Congress — both the U.S. House and Senate — passed the Homebuyer Assistance and Improvement Act of 2010 (HR 5623), which extends the Closing Deadline for Homebuyer-Tax-Credit eligible transactions to September 30, 2010 (instead of June 30).
This extension of the Closing Deadline applies only to transactions with ratified contracts in place as of April 30, 2010 but not yet closed.
Up to 180,000 homebuyers nationwide (including approx. 8,500 in Ohio) would have lost their tax credit had Congress not passed this extension.
What happened
The Senate approved the legislation – by unanimous consent – last night at 9:40 pm.
The House approved the legislation on Tuesday, June 29 by a vote of 409-5.
The legislation provides a seamless transition. There is no “gap” between June 30 and the time when the bill will be signed into law by President Obama (likely to occur today).
Government Affairs staff from the National Association of REALTORSâ worked vigorously with Congressional leaders on both sides of the political spectrum to get this legislation enacted.
Recently there has been speculation that there is now a Medicare tax on home sales as part of the new federal health care bill. That is not true!
According to the language in the law, as explained in this FactCheck.org article, the Medicare tax would be assessed only on proceeds from the sale of a home that are ALREADY SUBJECT TO TAXATION.
Every American who sells a home can earn up to $250,000 of proceeds tax free from the sale of the property. Couples that are married can earn $500,000 of proceeds before having to sell taxes. Proceeds are your profit – so if you purchased a home for $100,000 and sold it for $300,000 your proceeds are are only $200,000.
Moreover the medicare tax would only apply to high earning individuals with annual incomes of – $200,000 individuals and $250,000 couples. So in order to pay this tax a married couple would have to earn $250,000 in income and net over $500,000 in proceeds from the sale of their home. And the tax is only 3.8% on every dollar over $500,000.
Make sure that when you sell a property you always consult your tax professional for assistance in planning and recording for the IRS. The Government affairs office at the Cincinnati Area Board of Realtors provided additional information for this post.
The numbers released form the Cincinnati Area Board of Realtors show that the local real estate market has improved since last year and is trending towards stability and balance. Year over year 2010 spring season has been much more active than 2009. Below you can see the increase in number of homes SOLD, not under contract, but SOLD!
March 2010 vs. March 2009 = +13.97%
April 2010 vs. April 2009 = +32.69%
May 2010 vs. May 2009 = +25.43%
The $8,000 tax credit did have an impact on the sales volumes, and according to the board the sub $200,000 price point was particularly active. What is important to remember is that the tax credit ended in April, but closings can be as late as June 31 so expect to see strong June numbers as well.
Better yet is that inventory of homes has gradually decreased, bringing the market closer to balance. With an inventory of 6.75 months we are leaving a ‘buyers market’ ( 7+ moths of inventory) but are a long way from a Sellers market (5- months of inventory). Overall look for prices to stabilize and being to increase. Cincinnati’s average home price is up 9.9% for the first 5 months of 2010 compared with the first five months of 2009.
The Federal Government has recently implemented another program designed to assist home owners in financial trouble. The government has already rolled out the Making Homes Affordable Modification Program (HAMP) designed to help homeowners modify their mortgages.
The new Home Affordable Foreclosure Alternatives Program (HAFA) goes one step further. In the case where someone has already had a loan modification and is still not able to pay their modified mortgage. The HAFA program essentially pre-approves participants for ‘short sales’, fast-tracking them to sell their home and settle their debt with their creditors.. The program is efficient because it already uses financial hardship information collected by HAMP.
This program is going to impact the Cincinnati real estate market by helping to shit the home inventory from foreclosures to short-sales, The larger impact could be a stabilizing effect on local home prices. While short sales tend to sell below market, they tend to sell for higher amounts than foreclosures. Below are some details on the HAFA program. For more visit the article posted on Realtor.com.
* Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds and acceptable closing costs).
* Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holders receive an incentive under HAFA, those debts as well (no cash contribution, promissory note, or deficiency judgment is allowed).
* Provides financial incentives: $3,000 for borrower relocation assistance; $1,500 for mortgage servicers to cover administrative and processing costs; and up to a $2,000 match for mortgage investors for allowing a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders (up to 6 percent of the remaining balance of each junior lien).
* Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
The program sunsets on December 31, 2012.
here has been a lot of talk recently about the impact of the Federal First Time Home Buyer tax credit. The newspapers, the talk shows, the blogs, and the radio dj’s have all been talking about how important it is. I wanted to take the opportunity and make clear, in detail, the benefits to first time home buyers, aside from the $8,000, and give some much needed insight into how this program is going to impact the number of home and condo sales in the Cincinnati real estate market in the winter/spring 2010.
The Federal Government extended the tax credit through April 30. This means that you must have an accepted contract signed by both parties by then and must close the sale on or before July 1, 2010. But there is more.
Did you know it now offers $6,500 to people who have already owned a home and are buying another larger or smaller home? So if, for example, you are looking to move out of Hyde Park and into the burbs, this credit is great news for you. The program is designed to create new inventory for first time home buyers. If you have owned and occupied your current home as your primary residence for 5 of the last 8 years then you may be eligible for a $6,500 tax credit depending on your income as there are income limits.
To qualify for the $8,000 tax credit you (and your spouse if you are married) cannot have owned a home within the last 3 years. If you owned a home and sold it back in 2005 to relocate and rented for 4 years then you may qualify! Never have you ever owned a home you say? I’d say it is worth finding out if you’re eligible for an $8,000 credit. There are income limits and sale price limits on this tax credit so please check with your accountant or Realtor to be sure you meet the criteria.
You should also know that you can use the tax credit in a number of ways. You can use it on your 2009 or 2010 tax returns. The credit amount is equal to 10% on the purchase price of the home up to $8,000 of credit, or $80,000 of purchase price. Now that you know there is an $8,000 credit waiting for you, how are you going to take advantage of it? What should you do? Who should you call? When do you need to take action?
The first step is thinking about your home as an investment, an investment you can sleep and entertain friends in. Start evaluating if home ownership is right for you right now. This is not a decision you should rush. It is always better to wait and buy when the time is right for you. Next, you need to speak with a mortgage lender and get prequalified for a loan that is within your financial means. Mortgage brokers or mortgage lenders can help you with this step. The third step is finding a house that is the best fit for you. But with an April 30th deadline when should you start and when should you write a contract?
If possible, you should start your home search in earnest in February, and submit your offer no later than mid April. You have to work backwards and look at the contracting process and the whole market to understand why February is the key month. Sellers who want to capture the surge of these qualified first time home buyers are going to need to get their houses prepared for sale and listed in February to give them the most exposure to the potential buyers. The same thing is true for buyers. If you are not actively looking for your dream home it may be purchased before you even see it. I believe that February is going to be a very active month for new listings and proactive buyers in every neighborhood in Cincinnati.
Typically the process of completing a contract from purchase to closing takes between 30 and 45 days. There are many steps that go into a real estate transaction, including home price negotiations, home inspections, repairs, remediations, loan applications and acceptance, appraisals and more. Another important tip is that it is best to try to secure a property before the April 30th deadline if possible to ensure enough time to find the property and negotiate agreeable terms. Inspectors will be busy, contractors will be booked, and banks underwriters will be backlogged. So the sooner you make an offer the better the chance you have of making the deadline.
If you have any additional questions about the Tax Credit and how you can take advantage of it please feel free to call me and ask questions. I would be happy to provide you resources and information that will make your home buying experience exceptional.
Alison Moss is a 9 year veteran of the real estate industry and can be reached at 513-518-1140 or by e-mail at Alison.moss@comey.com
Nationwide buyers are paying 2.7% below current listing price in October 2009 according to a recent report. This variation has been shrinking since January when buyers were selling 4.6% below list. All real estate is local, and in some Florida markets buyers are still paying more than 7% below listing price, and in some California area buyers are actually paying over list.
As a Cincinnati Realtor I can see what is going on locally in my market and this change is being driven by two main factors. The shrinking gap is being perpetuated by basic supply and demand economics, and a better understanding of fair market value by both buyer and seller. Buyers are more realistic about the price of their property, and agents are giving better advice.
As the year comes to a close sellers are reducing their price and creating a greater demand for their property which is yielding stronger offers. In addition the number of foreclosures being purchased is up and those properties tend to sell at or above list price skewing the data. What is most important as a prospective buyer is that your realtor provides you solid comparable data to help you make an informed decision on your purchase price.
Price Sells Real Estate! If you price your property appropriately for the current market conditions your real estate will sell. NPR ran an article a few days ago that really highlights this point. last year the Miami, FL condo market was nearly dead. To many built and proposed condos, to few buyers, and prices that reflected the 2007 levels of nearly $400 sqf.
Move forward to today, Fall 2009, and condo buildings are selling out in 6-8 weeks … at $200 sqf. Peter Zalewski, a real estate broker who runs the Condo Vultures, explains that the Miami Condo market’s price reset has sparked interest in Latin American and South American investors. They seem to be cash buyers and feel that the current prices are a relative bargain.
The challenge that is preventing more buyers form purchasing is that financing is very hard to obtain in these new construction condo buildings. Fannie Mae and Freddie Mac are denying loan applications to well qualified purchasers simply because there is such an over-suply of units that reselling a unit could prove a dauting challenge.
The lesson we all need to learn here is that to sell real estate ANYWHERE you need to price it correctly for today’s market. If you are interested in a condo, or a home in the Cincinnati area contact me today!
The Cincinnati Area Board of Realtors recently issued their monthly report. The news is pretty much what we all in the real estate field expected. Prices are still slightly depressed, but home sale volume is slightly better than last year. August 2009 was slightly better than August 2008 in terms of the number of homes sold. The average cost of real estate sold is lower this year, due in part to the volume of short sales and foreclosures being purchased.
There is wide belief that the First Time Home Buyer Tax Credit has helped increase sales volumes and help avert further decline in our area’s home prices. The below graph shows the steady seasonal increase in sales that we see in our market during the warmer months of spring and summer. I am trying to impress on my clients that although the tax credit ends on November 1st, they truly need to have contracts written and the financing process started no later than the middle of October, and even that is cutting it close.
In this current economic climate the possibility of losing your home to foreclosure can be terrifying. Currently there are con artists using mortgage rescue schemes to take advantage of home owners in distress. . The Federal Trade Commission warns that many of these foreclosure assistance firms claim they can help you save your home and sometimes offer a money-back guarantee.
If you are having difficulties paying your mortgage contact your bank immediately and inquire about the Making Homes Affordable program. Many major banks such as Countrywide (Bank of America) and Wells Fargo are participating and can help you modify your home loan so you can avoid foreclosure.
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