Real Estate Information

My neighbor’s home sold in 3 days. All other similar homes in the neighborhood are still on the market. Why?

This real estate market has been described as “a price war & beauty contest” wrapped up in one. The best looking home with a “fair”, not giveaway, price wins. Many homes are still sold in multiple offers. This is a testimonial to the Realtor with a plan and the seller who cooperates? Buyer’s top turnoffs are dirt, clutter and dated and worn decor. If you are thinking about selling your home make sure you ask a lot of question when interviewing different Realtors. Staging is critical. Fresh paint, newer and/or clean carpets are a must. In some cases kitchen and bath updates will put your home out in front of your competition. Many Realtors are Certified Staging Consultants. The Realtor, with that certification will give you a head start on the market. E-mail us at www.piketteamrealtors@hotmail.com or call 630-803-2437 for more information.

Unfortunately we have been asked this question frequently. Nationally there were over 3.1 million foreclosures in 2008. We could exceed that number in 2008. Foreclosure is avoidable in many cases. Some lenders are beginning to restructure loans for clients in trouble. Most are considering “Short Sales” if a homeowner meets certain criteria.. The best advice we give is to seek out expert advice, there is plenty of resources out there and www.hud.org is a good place to start. HUD is posting a great deal of information as the year progresses. We maintain a list of attorneys who specialize in “Short Sales”. Your lender will require evidence of hardship and back up data to proceed. The attorneys we recommend are paid from proceeds when the short sale closes. A short sale has a less negative impact on your credit then a foreclosure does. Please contact us for more information and details. We look forward to hearing from you!

A short sale is pre-foreclosure still owned by the current owner. The value of the property has become less than the mortgage owed. Normally, with assistance from a qualified Realtor, the seller requests the lender to accept a loan payoff less than  payoff value. This is a very involved process involving documentation and persistent involvement by a experience Realtor. Short Sales are excellent opportunities for  patient buyer’s. Many  short sales take up to 90 days for final approval from the lender.

Foreclosures available for purchase are normally Bank or Lender owned. Each lender has a Real Estate Owned department (REO). They list properties with local Realtors and most are posted on the multiple list service (MLS).  We are currently active with buyers searching for this kind of purchase. Buyers for foreclosures are increasing daily. Prices will begin to rise once the foreclosure market shifts to more buyers vs. homes to buy. Foreclosed homes are affecting the price of resale and new construction homes.

We are often asked if this is a good time to buy a home.  Some clients are concerned that home prices may fall further than they have already.  They are assuming that the best course of action is to wait for the bottom in the market and then buy.  The problem with this approach is that you don’t know where the bottom is until you see it in the rear view mirror, meaning until you’ve missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability.  Even though interest rates have gone up in the last six months, they are still near historic lows.  Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life.  It’s important to live in a home that reflects your taste and values, yet is within your financial “comfort zone.”  To that end, it may be more important to lock in today’s relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give us a call if we can be of any assistance in determining how much home you can afford in today’s market.

The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers.  Call everyone you know who wants to buy their first home (or who hasn’t owned one in three years), this is too good to miss – it’s a $7,500 tax CREDIT (not deduction but a credit).

If you have not owned a home in three years, you qualify as a first time home buyer.  If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for this credit.  Call your friends who just bought a home since April 9th and tell them they may take $7,500 off their tax bill if they qualify.  It has to be your principal residence, so rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit.  In other words, you take $7,500 off your tax bill.  But there is a catch; the credit you receive now is actually an interest-free loan that must be repaid.

The loan has no interest, and will be paid back over 15 years.  You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment.  You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year.  If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house?  You pay the balance back at the closing.  So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.  What happens if you do not make enough money when you sell your house?  They forgive the rest of the debt. 

Other restrictions stipulate that you have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.

If you’d like to learn more about this program, please call us!