by CRESTICO | Mar 25, 2010 | CRESTICO
Governor Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law today. This is a law that will allow for approximately $200 million for home buyer tax credits,. Of this $200 million, about half will be set aside for first-time home buyers who qualify and purchase existing homes. The other half will be set aside for qualified buyers who purchase new, or previously unoccupied, homes.
Under this program, eligible taxpayers purchasing personal residence and who qualify for the credit must purchase the property between May 1, 2010, and Dec. 31, 2010, unless they purchase the property after Dec. 31, 2010, and before Aug. 1, 2011, but have an enforceable contract executed on or before Dec. 31, 2010, will be the individuals who will be allowed to take the tax credit.
The amount of the credit is equal to the either 5 percent of the purchase price or $10,000 ( taken in equal installments over three consecutive years); whichever is less. Additional requirements in order to be eligible for the credit include the fact that buyers MUST live in the home for at least two years. If this last requirement is not met, the credit will be forfeited, and any portion previously claimed will immediately be due, payable to the state.
Historically, programs such as this one have led to a positive increase in Home Purchases. Many buyers describe themselves as being more willing to purchase a home when they know they are eligible for a tax credit. A prime example of the impact of credits on the housing market can be seen by the impact the Federal credit has had on the housing market.
Industry professionals are hoping that this state tax credit will result in just the push that the housing market in California needs to stimulate sales, motivate rehabilitation and create employment for Construction and contractor-related jobs.
by CRESTICO | Mar 23, 2010 | CRESTICO
Earlier I wrote about how the federal government was going to institute the Home Affordable Foreclosure Alternatives ("HAFA") program that is aimed at streamlining the short sale process specifically for properties with mortgages owned or guaranteed by Fannie Mae or Freddie Mac.
As it currently stands for most buyers considering short sales, they have had to wait weeks and even months before hearing back from lenders regarding whether or not short sales will be getting approved. HAFA intends to change that. Even though, for the most part, HAFA impacts lenders and homeowners of the subject properties, buyers will also be affected by these new rules.
For example, as a buyer, you will now need some sort of proof of funds in the form of a verification or pre-approval letter, that will need to be provided to the lender within three days of the lender’s receipt of your offer. Additionally, lenders will now be required to approve or deny an offer made on a short sale within 10 business days of receipt. The impact of this is huge! This means no more months of waiting.
Furthermore, buyers will be affected by HAFA in that the new program will require settlement to take place within a reasonable period of time after the offer is made. More specifically, a lender may not require less than 45 days from the date of the sales contract for a closing, without the home seller’s consent. This again will be reducing the total time spent on a "short sale deal."
As a buyer of a short sale, you will also be required to maintain ownership of the property for at least 90 days. This "seasoning" period is intended to avoid "flipping" and inflated prices for these properties. Finally, as a buyer of a short sale property, you will not be able to be related to, have a close personal or business relationship with the seller. Violation of these rules and guidelines may result in the loss of the property as well as other legal ramifications.
All in all, HAFA is hoping to achieve the end result of preventing foreclosures from inundating the market and facilitating the process involved in buying, selling and approving short sales. In doing so, it is hoped that we will be once again on a steady road to recovery. Once the process is streamlined and simplified so sellers, buyers and professionals can work together with greater ease, the Real Estate market will necessarily begin to grow and experience the health that it once did.
by CRESTICO | Dec 17, 2009 | CRESTICO
With the current state of the economy and more particularly, the housing market, it is easy to get lost and confused about the programs available for distressed homeowners. In March, 2009. President Obama introduced the Home Affordable Modification Program in connection with his Making Home Affordable (MHA) plan. These plans and programs represent efforts on behalf of the Obama Administration to allow borrowers who are eligible (according a specific set of standards and guidelines) to avoid foreclosure by modifying their loans to a level that is affordable and sustainable for the long-term.
The recently announced Home Affordable Foreclosure Alternatives program (HAFA), which provides instructions for lenders and servicers participating in the Making Home Affordable Program and HAMP. HAFA is designed to streamline the short sale and deed-in-lieu process. Specifically, the program is aimed at presenting an alternative to foreclosure homeowners who were either ineligible or unable to get loan modifications for their existing loans and mortgages, as prescribed by HAMP. Additionally, another of HAFA’s goals is to establish and maintain clear and easily understandable timelines, that are capable of being enforced against servicers. These timelines are intended to urge the servicers of these loans to respond and grant relief to the homeowners in a timely manner.
Under HAFA, short sales will be permitted if they are pre-approved before a property is listed on the market. This way, the servicers of the loans will not be able to reduce the commissions available to the hardworking professionals helping the distressed homeowners. Additionally, borrowers will be freed from future liability for the debt and there will be financial incentives created for borrowers, servicers and investors alike.
Specifically, HAFA sets a deadline of three business days to submit an executed purchase offer to the servicer with regard to a short sale and the servicer then has ten business days to respond to the offer, thereby speeding up and clarifying the process. This standardization works to the benefit of everyone involved. Although servicers are still allowed to negotiate commissions (not to exceed 6 percent), they are only allowed to do before the property is listed and not after.
Also, the servicer will still be able to decide on the minimum net proceeds for a short sale; however if an offer presented to the servicer by the borrower or listing broker meets the net proceeds requirement, then the servicer must accept it. This creates a beneficial environment for the selling homeowners and the potential buyers making offers.
To further facilitate this process, each participating servicer is also required to establish and uphold a written policy that describes the basis and terms upon which it will offer the HAFA program to its borrowers. However, it must be noted that all borrowers must be evaluated for a loan modification under HAMP before they can avail themselves of benefits under HAFA.
Finally, HAFA goes into effect on April 5, 2010, however the industry rumors are leaning toward the earlier implementation of this program by servicers. Currently, the program is available only for non-Fannie Mae- or Freddie Mac-owned loans up to $729,750 but this may change in the future.
We at Crestico Realty believe in staying informed and up to date regarding events in the market that can affect each and every current and future client we may have! Please feel free to contact us with any questions or concerns you have and we will do our best to help!
by CRESTICO | Oct 30, 2009 | CRESTICO
Our country’s economy, like many things, is on a cycle and just like the old adage says, what goes up, must come down. We experienced a boom in Real Estate in the early 2000s and we are merely seeing the after effects of that boom now. While perhaps you may not be able to purchase a million-dollar oceanfront property this year, or even next; you will still be able to realize your very own version of the American dream.
The Mortgage Bankers Association issued a statement saying "Sales of existing homes will rise 11 percent in 2010, and sales of new homes will climb 21 percent over this year." This is great news for everyone, particularly future homeowners! What this means is that we are entering a part of the real estate cycle where things will start going back up. Just like everything else, you have to practice patience and good judgment when buying a home. Homes in the lower end of the market, also known as "entry level" or "starter" homes are a great place to start. Buying a starter home will not only ease you into the concept of owning a home, but will also familiarize you with the process of actually purchasing it. Additionally, while living in your new home, you will be able to experience the trials, tribulations and joys associated with being a homeowner.
Having a great real estate agent is the first step in this process. You will need someone to guide you through the market, not only in terms of prices and mortgages but also in terms of choosing a home that fits your lifestyle. Remember, your agent has access to multitudes of customers, buyers and sellers and the best way for you to take advantage of everyone else’s experience is to work with an agent who is experienced!
by CRESTICO | Oct 6, 2009 | CRESTICO
Is It A Good Time To Buy A Home? The simple answer is YES! It is still a good time to buy a home. With the help of the right agent, you can make this "good time" into a "great time" for you and your family. The news is full of stories about the housing crisis, homeowners losing their homes, and the overall bad state of the economy. Not all of this news, however, has to translate into dissuading you from buying a home. In fact, right now is a very good time, especially for some, to jump in and achieve the American dream of home ownership. As of late, the housing market is starting to look better. Read on for more information about why it is still a good time to buy a home.
First, the government is looking to help you. If you are a first time buyer (which, to the government, is defined as anyone who has not owned a home in the last three years), you are entitled to a maximum $8,000 tax credit. Additionally, Interest Rates are at all-time lows and the Federal government is taking steps to insure and make these loans available to more and more people.
Leverage. Leverage is defined basically as borrowing money to supplement existing funds for
investment. Imagine if you invested ten thousand dollars in stocks and those stocks earned ten percent, you would have earned one thousand dollars. But investing ten thousand dollars on a home, and having that home's value increase ten percent; effectively, you would have earned ten thousand dollars. Which sounds like a better investment to you?
Next, you have to live somewhere. And so does everyone else. According to nationwide statistics, approximately 800,000 new households are created each year in the United States alone. Each of these households will need housing, regardless of the state of the economy. This fact alone ENSURES the recovery of the housing market.
Cycles. The economy is a cycle, and like a cycle, what goes down must come back up. Once this happens, it will create INSTANT equity for you. That means you will have earned FREE money just by living in your home, which you are going to do regardless of where you live. Why not buy a home and earn free money in the process?
Mortgages. Many people think a mortgage is just like paying rent, right? WRONG! With the right fixed-rate mortgage, you are basically ensuring the same payment for thirty years. If you try to rent an apartment for thirty years, odds are that every year or so, your rent will be increased. That does not happen with mortgages.
Ownership. Owning a home is a GREAT accomplishment and it allows you to express yourself in the best way possible. You can decorate it any way you want, furnish it, paint it, and improve it and all the while you will be increasing its value and the value of your investment. Ownership also gives you and your family a sense of stability and a place to lay your roots.
These are only a FEW of the reasons why right now is a good time to buy a home. A qualified agent will be able to answer any questions you may have and also give you more reasons to consider investing in your next home!
