Here is an interesting article about the Governme…nt and the Fed pulling out of
the mortgage market:

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402996.html

Which property will they choose?  It’s a mystery, unless you’ve already seen the show… It’s been re-run quite often on HGTV.

30 Year Conventional – 4.875%
15 Year Conventional – 4.375%
30 Year FHA – 5.00
30 Year Jumbo – 6.375
5/1 ARM – 3.75
5/1 Jumbo ARM – 4.375 , int.only @ 4.625
7/1 Jumbo ARM – 4.625 , int.only @ 4.875

Rates are subject to change at any time, and may be affected by loan amount, loan to value, credit score, property type and occupancy. If you need a good mortgage broker, let me know, I work with some of the best!
risa@risaweiss.com

Question:

Existing homeowner credit: Must the new house cost more than the old house?

Answer:

No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question:

I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for  the new $6500 tax credit?

Answer:

Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question:

I am a first­time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer:

Yes. The new income limitations go into effect as soon as the President has signed the bill. The income limit and other eligibility rules will look to your status as of the date of purchase, which is the settlement date. So if the new rules have been signed when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase­out range).

Question:

I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a non-negotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer:

No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit.  The $800,000 is an absolute ceiling.

Question:

I owned my home for 10 years, but sold it two years ago year and have been renting since.  If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer:

Yes.  Because you lived in the home for more than 5 consecutive years of the previous 8, you will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000 and lived there until 2008 when he got a divorce. Whether John has been renting or bought in the interim, he WOULD INDEED be eligible for the credit because he owned a home and occupied it as his principal residence for 5 consecutive years out of the last 8 years. The keyword here is “consecutive.” As long as he lived in that house for 5 years straight what he did since 3 years doesn’t impact eligibility.

Question:

I am an eligible first­time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer:

You do not have to close before December 1. Once the legislation has been signed, it will be as if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30 (or July 1, worst case), the purchaser will be eligible for the credit.

Since the short sale is now so prevalent, I figured I’d share my advice with everyone, since it could benefit a lot of people. Here are my short sale purchase tips, in no specific order:

• In a short sale the deal is still negotiated with the homeowner (the homeowner’s Realtor). However, once you come to terms in your negotiation, the signed offer is sent to the bank holding the note to get their approval. They, the bank may take up to 6 weeks to accept, reject or counter the offer already agreed upon. Additionally, the bank will continue accept offers during that time period and will select an offer not based upon first in priority, but rather the strongest offer. A strong offer in a short sale has NO CONTINGENCIES, offers a significant amount in down payment (LTV), preferrably cash deal, quick close, and accept in as is conditions.
• The prices on the listing sheets Realtors put together on short sales are often based on comparable sales. However the home is worth less than the mortgage note the homeowner is on the hook for, and, as I mentioned previously, it’s the bank who’s calling the shots now, not the home owner. The fact that the homeowner and the homeowner’s agent are not in control of the transaction gives them the freedom to advertise a price that is pure nonsense, and is more of a marketing ploy than an actual list price.
• Back in the good ol’ rockin’ and rollin’ mid 2000s, if you brought a fully qualified offer at list price for a home with no contingencies on the contract, and there were no competing bids, that house was pretty much yours. Now, since the list price is purely fantasy, and the person who is selling the house doesn’t call the shots on the deal, a fully qualified offer at list price doen’t mean a thing. It’s all up to the bank whether your offer will be accepted. And chances are, it won’t be accepted without significant modification in terms.
• Despite the fact that your fully qualified, no contingency offer doesn’t mean what it once used to, you pretty much have to bring one anyway. The bank generally isn’t going to allow for any contingencies. You might find it surprising, but despite a few years of a ramping up of short sales, banks are not equipped, nor will they be equipped in the future, to handle the transaction in a traditional way, with allowing for contingencies and the back-and-forth follow up and negotiations required to resolve the contingencies. The bank is going to do its best to force the buyer into an ultimate “caveat emptor” situation with no wiggle room to get off the hook.

Understanding the 2 points above, it behooves the buyer of a property that is being sold short to plan ahead and expect a drawn out process. Consider the following…

• If you are wanting to buy a home and have a short contract-to-closing timeframe in mind, the short sale might not be for you. The bank probably has a huge backlog of short sales to work through, and as I mentioned above, they’re just not set up to handle these transactions expeditiously.
• If you have need to sell a property in order to buy the short sale, sell your property before even considering the short sale purchase, since the bank isn’t interested in your home sale or home close contingency.
• Once you’re ready to submit a contract on a short sale property, have a thorough home inspection done by a trusted, qualified, and licensed home inspector. Since you’re probably going to have to come up with a no contingency offer, you have to get your inspection done up-front, rather than after-the-fact, as is done in traditional residential real estate transactions.

And finally…

• Make sure you have a real estate attorney who has experience handling short sales. The process can be very intensive, and the contract is most likely not going to be a standard real estate contract a Realtor is accustomed to dealing with.
• If you have a Realtor assisting you with purchasing a home on a short sale basis, and they aren’t providing you with the kind of tips and insights in this article, perhaps it’s time to find a new Realtor.

There seems to be some talk in Washington, D.C. about extending the first time home buyer’s tax credit. While many people know about the tax credit in general terms, they don’t know all the details or how to take advantage of the tax credit. Currently, the details of the first time home buyer’s tax credit are:

• The current tax credit is $4,000 for a single person or a married couple who file their taxes separately.
• Married couples who file jointly can each take advantage of the $4,000 credit up to a maximum of $8,000, or 10% of the purchase price of their home, which ever is smaller.
• The first time home buyer tax credit provision sunsets on December 1, 2009, so homes must close before this date.
• The first time home buyer tax credit only applies to the purchase of a primary residence.

Download the IRS Form 5405 – First Time Home Buyer Tax Credit here.

When I hear more about any concrete details of an extension of the first time home buyer tax credit, I will pass the information along.

As always, please consult your accountant or financial adviser when it comes to financial matters such as the First Time Home Buyer’s Tax Credit.

Rubloff, with eight offices in the Chicago area and another in New Buffalo, Michigan, will bring the number of agents in the combined real estate brokerage to over 900. The company will operate under the name Prudential Rubloff Real Estate.

Consolidation within the real estate brokerage community is certainly expected given the current economic climate, as companies continue to look for greater economies of scale and capture market share. With this merger, Prudential Rubloff has positioned itself for future growth and dominance in the greater Chicago area real estate brokerage market.