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Another hidden gem in stimulus package for homeowners, $1500 tax credit for green improvements

going-green-at-home-small1It has been brought to my attention that there is another little nugget in the stimulus package signed by President Barack Obama earlier this month. If you own a home and are interested in making some “green improvements” you could find yourself getting another $1500 tax credit for going green.

If you make an improvement on your home in 2009 or 2010, you may qualify for the tax credit. Some projects that will qualify for the $1500 tax credit include installing energy-efficient windows, doors, furnaces and air conditioners. Also you can qualify if you are to add energy-saving insulation to your home too. Home owners will qualify to receive up to 30% of the cost of the improvements back up to $1,500.

This is a great opportunity for someone who has been looking to make green improvements to their home, but maybe holding off because of costs. Now you can spend $5,000 on improvements and receive $1500 of that back in a tax credit. Also to be considered into the cost is the amount of money the improvement could save you.

Can I get out of my contract because of the home inspection results?

cancel-contractIn my last blog post I explored the question Do I need a home inspection? Now that we know a home inspection is a must, what do we do with that information?

The Arizona real estate purchase contract gives the buyer ten days after contract acceptance to to have an inspection performed on the property. After the inspection i completed the buyer needs to notify the seller through a Buyer Inspection Notice and Seller’s Response (BINSR) either they accept the property as is, want to ask for certain repairs to be made or are backing out of the deal all together. After the BINSR is delivered to the seller, the seller has five days to respond in writing if they will make the requested repairs or not. A failure to respond is deemed as a refusal to make the repairs.

If you are going to ask for repairs, make sure you ask for everything you want repaired at this time. You cannot decide you want the garbage disposal fixed now, then come back in another week and say you changed your mind and want the garage door repaired too. If you may want the repairs made, ask for it all at once.

The ten day inspection period gives you other opportunities to cancel the deal. Even if the home inspection came back perfect, that does not mean you do not have option. Maybe you did a little research on the Internet and found out there was a sex-offender a couple houses down and that was a concern to you. Maybe you found out from the neighbors there was a barking dog right next to you and he barks from 7am-5pm every day. You even could decided after looking into the school district a little more that was not where you wanted to send your kids.

The inspection period protects the buyer by providing them a chance to do their due diligence on everything that could concern them. It is there for you, so use it.

Do I need a home inspection?

leaky-plumbing-problemYes. Thanks, come again for our next topic.

That is for the people like me who like to get right to the point. For those who like a little more meet to your subject I will go on. I just came back from showing a foreclosure home to a couple who is looking for a second home in Gilbert. For those of you who enjoyed our 87degree day in February, you understand why they would want to move here. When they asked about the process of buying a foreclosed property I was explaining to them the first thing you do after you get an accepted offer is to get a home inspection. They said “we don’t need that.” This is where buyers actually having a licensed real estate agent working on their behalf pays off.

I explained to them how spending $300-$350 bucks for a home inspection could save them thousands or even tens-of-thousands in the long run. While the home was very clean and looked like it was maintained well, you never know what is behind the walls or in the plumbing or wiring. A home inspection should not even be an option, even on a new build. More on that in a minute.

Worst case scenario, you pay around $300 to find out the home you are buying is in perfect shape. But, that $300 should be considered a great investment to give you peace of mind. Most of the time that will not happen. There will usually be something wrong with the property and it may be as simple as the air conditioning unit needs to be serviced or a countertop is loose. A good quality home inspection will point out all the flaws, small and large.

What if your home has termites, or a couple of trusses are cracked in the attic. These are things you would like to have known before you made that large investment. You do need a home inspection because there will almost always be something wrong. Knowing before hand gives you the opportunity to fix them when you move in, ask for them to be fixed before the deal moves forward or it gives you the opportunity to get out of the deal all together.

Then the not so obvious question, do I need a home inspection on a new build home? Yes I would even get one there too. You think a builder has never cut a corner or an employee has never made a mistake and tried to cover it up? I am not saying it always happens, but it happens. Two weeks ago I was at a home inspection for a buyer who was purchasing an eight year old home. The inspector had just come from doing an inspection on a new build. On the eight year old home he found about 7-8 minor things wrong with the home, nothing big enough to stand in way of the deal getting done. On the new build he reported 28 problems with the home. Three times as many issues on the new build as a house that was almost a decade old.

I don’t think there is an agent out there who is really looking out for their clients that would not recommend a buyer gets a home inspection a house they were buying.

Gilbert community event, come ride the RE/MAX balloon

atc_balloonThis Saturday, February 28th, we will be having a free tethered balloon ride from 9am-noon in the park behind our office at 725 W Elliot Rd in Gilbert. The RE/MAX balloon will be set up in a large park that is located directly behind us. If you can attend please visit our RSVP page and let us know how many will be coming.

We want to thank all of our clients for their support over the last 15 years and this is just one fun way in which we can do that. We look forward to serving you, your friends and family for the next fifteen years.

FHA limits restored under the stimulus bill

With all the attention of the first time home buyer credit which was increased from $7,500 to $8,000 under the new stimulus bill signed by President Barack Obama last week, another important element of the bill that effects real estate was greatly ignored. The stimulus bill overhauled the Federal Housing Authorization’s mortgage insurance program limits.

In the spring of 2008 the FHA loan limits were increased from $263K to $346K for a single family home in Maricopa County. The new limits expired in late 2008 though and the FHA loan limits were reduced back to $263K. Under the stimulus bill the loan limits wereincreased back to $346,250 for a single family home in Maricopa County.

Will the new housing plan help with my potential foreclosure?

President Barack Obama will be in Mesa Arizona today to discuss his new program to help homeowners. Reading the White House Blog this program may raise more questions than it answers. This is a summary of some vital information from the White House Blog, to read the full blog post you can go here.

One of the primary objectives of the plan is to provide an easier way for homeowners to refinance their loans if they have a Fannie Mae or Freddie Mac loan. To qualify for this refinance program your current first loan on your home cannot exceed 105% of the current market value. Looking at the local Mesa housing market that program will provide little help as most home buyers who purchased their homes between 2004 and 2007 are the ones who need the most help and most of them will owe well over the 105%. If you are current on your payments and you do owe less than 105% of your homes value there may be a good chance to refinance your loan in the current months to a lower interest rate.

If you are currently at a risk of foreclosure you probably will not qualify for the above program and may be wondering what is in the plan to help you and your situation? The government will be providing mortgage lenders with “financial incentives” to modify existing first mortgages. While there will be incentives, there will not be any mandatory obligations for the lenders to work with the homeowners so you will need to check with your lender about your situation. Banks will be smart to work with homeowners as it is in their best interest to keep you in your home, keeping a payment coming in and keeping your home off the foreclosure market which will help home values recover more quickly. But there are no guarantees.

To qualify for a payment reduction you will need to live in the home as your primary residency, your mortgage payment must be greater than 31% of your gross monthly income and your loan must not exceed current Fannie Mae and Freddie Mac loan limits. If you owe more than your home is worth and are facing foreclosure it will be up the lender if they want to work with you in restructuring your loan or not.

For even more information check out the White House Blog on this subject and the Presidents speech in which he will be delivering today. As always, when more information or details become available we will provide you with details on this space.

Obama to visit Mesa and see foreclosure situation, $15,000 tax credit may still come back

obamaPresident Barack Obama will be making his first trip as President to Arizona this week to hear about the Phoenix Area foreclosure market up close and personal. The President is scheduled to tour an unspecified Mesa neighborhood that has been hit hard by the foreclosure crisis before heading to Dobson High School to deliver a speech on the subject.

One suggestion to help the foreclosure market proposed by U.S. Senator Johnny Isakson (R-GA.) was a $15,000 tax credit for all homebuyers who purchase a primary resideance over the next year. That tax credit was cut down to $8,000 and included in the stimulus bill signed by Obama today.

That does not mean the $15,000 credit is dead though. Isakson told a Georgia radion station today he intended to bring the bill back up next week after legislators returned from recess. The new version would not be an amendment, but a stand-alone bill and believed he had the votes to get it through both the Senate and the House. After placing a call into Isakson’s office they did verify the Senator is considering putting the bill in after recess, but has not done so yet.

If you support this idea to give the housing market the boost it needs contact Isakson’s office and encourage them to move forward with the measure.

Latest on the stimulus bill and house tax credit

The US House is voting on the final passage of the bill today and then the Senate will follow shortly after. It is expected the “Stimulus” bill will have little problem getting through either chamber.

One new detail on the housing portion of the bill that I had not previously reported about has come to light. The Senate had wanted the tax credit for first time home buyers to be for on purchases of homes for one year, but the final version is only on purchases of homes that close by August 31, 2009.

Latest update on the house tax credit in the “Stimulus Bill”

making-sausageAt our office meeting this morning there was a lot of talk about the on-again, off-again tax credit in the stimulus bill so I promised a couple of the agents there I would research it when I got back to the office and post an update. Here is the latest. Yesterday the AP was reporting the tax credit was completely removed from the final version of the bill, then word came last night that said it was not removed, but reduced.

After reading more about it online one thing because clear, the old making laws is like making sausage is true. I contacted one of my old political buddies who works on the Hill and he did some quick research for me. Here is what the latest version is to the best of his understanding. He told me they have not even seen the final version has not yet been distributed to Republicans so he is going off what he has heard. In other words don’t take this for gospel.

  • The current tax credit which is set to expire in July is for $7,500. The version that passed the Senate in the new bill was for $15,0000. The final version looks to be $8,000 or 10% of the home purchase price, whichever is less.
  • The current $7,500 tax credit has to be repaid, the Senate version would not need to be repaid if you lived in the home for two years and the new version appears to have not have to be repaid, but we are unsure at this time if there is a time restriction on that.
  • The current credit on the books is for first time home buyers, the Senate version was for any home buyer’s primary residency and the final version is back to first time home buyers. First time home buyer is anyone who has not owned a house in the last three years.
  • There will more than likely be an income cap of around $150,000, you will need to make under that to qualify.

Again this is not gospel, just the best information we have at this time. As new information is clarified we will bring it to you.