203k program~Rehab Loans

Looking to Buy a ‘Fixer-Upper’? The 203k Program Can Help Make It Happen Today’s real estate market presents a lot of opportunity for interested home buyers—with the growing supply of foreclosure properties and short sales, there are certainly some great deals to be had. The problem in buying a “distressed” property, however, is that these homes are often damaged due to lack of maintenance or prolonged vacancy. So while the price tag might be right, the investment necessary to make the home livable might just push buyers well beyond their budgets. I have access to the latest information on mortgage and financing options. One particular option that is providing hope for many of today’s home buyers is HUD’s FHA 203k program, a loan that enables buyers to not only secure a mortgage, but receive the funds necessary to improve the home as well. Here are five facts about the 203k program to help you determine if it might be the right fit for you:

1. The FHA Section 203k program was originally introduced by HUD in 1978 as a program to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements. A simpler version, the Streamline 203k, was introduced in 2005. This version offers less documentation and lower loan fees for renovations that don’t exceed $35,000.

2. In today’s market, conventional financing, which often requires 20% – 25% down on a home and a perfect credit score, is often hard to come by. However, with less-than-perfect credit and as little as 3.5% down, you can get an FHA loan, such as the 203k.

3. The 203k approval process is a little more complicated than a conventional loan. For example, you’re required to secure renovation costs from an established, licensed contractor and deliver a package of the proper paperwork to the lender to secure FHA approval. Make sure you work with an agent—like a member of Top 5—who is well-versed in the 203k program, or who can connect you with a lender that is.

4. The 203k loan is not just for foreclosure or distressed properties. More than 80% of the homes in America were built before 1990—that’s over 100 million homes that are 20 years old or older—and almost every one is in need of some amount of repair and updating. The 203k loan, therefore, offers advantages for almost any home purchase.

5. The 203k loan is not just for home purchases but can be used to finance a home improvement, as well! For complete details on the HUD 203k program, you can visit www.fhainfo.com/fha203k.htm. Please feel free to e-mail us, too, since this information can be hard to digest and confusing. Be sure to pass this e-mail on to any friends and family who might also be able to take advantage of a 203k loan.

Looking to buy a foreclosure or short sale?  Don’t do it alone.  Buying in this market can be daunting.  Let us help.

kjpremier@atproperties.com

First Time Home Buyer Tax Credit Extended!

First Time Homebuyer Tax Credit Extended Into 2010! Plus…A New Tax Credit for Certain Existing Home Owners! It’s official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009. In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time. So Who Gets What? The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn. Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Deadlines In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010. Higher Income Caps in Effect The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible. Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible. Maximum Purchase Price Qualifying buyers may purchase a property with a maximum sales price of $800,000. First-Time Homebuyer Tax Credit – Frequently Asked Questions Here are answers to some commonly asked questions about the tax credit. What is a tax credit? A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence. What is the tax credit for first-time homebuyers (FTHBs)? An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000. Who is eligible for the FTHB tax credit? Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible. As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500. How do I claim the credit? For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 (http://www.irs.gov/pub/irs-pdf/f5405.pdf). Can you claim the tax credit in advance of purchasing a property? No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place. Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property? Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property. Are there other restrictions to taking the credit? Yes. According to the IRS, if any of the following describe your situation, a credit would not be due. You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild. You do not use the home as your principal residence. You sell your home before the end of the year. You are a nonresident alien. You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.) Your home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.) You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009. Can you buy a home from a step-relative and be eligible for the credit? Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed. Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit? Yes. Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years? No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA. So, get on out there today and start shopping.  There is some great inventory, and many great deals waiting to be purchased. Contact us today to discuss this awesome opportunity further.  kjpremier@atproperties.com

6 reasons your house won’t sell~Just take it from the Trib!

These are reasons we tell clients everyday are the reasons that places don’t sell, but don’t take our word for it.  See it in the Chicago Tribune article below..

However, the biggest reason, being it’s not priced well.  The well priced properties are selling, so don’t be a discouraged seller.  Call us today to get the most appropriate pricing for your property.

kjpremier@atproperties.com

 

 

6 reasons your house won’t sell

By Ilyce Glink | Tribune Media Services

August 2, 2009

The spring selling season has quickly faded. Homeowners who want to sell now pin their hopes on the third quarter of 2009.

With a strong buyers’ market in place, many sellers are bound to be disappointed as buyers skip over their homes for others nearby.

Here’s my list of six reasons why your home won’t sell:

1. It looks drab in photos. Since the vast majority of home buyers start their search for a home on the Web, your house had better look fabulous in print. If it doesn’t track well online, no one will take the time to see it in person.

2. It’s overpriced for the neighborhood. If your neighborhood is filled with foreclosures and short sales, you’ll be hard-pressed to get top dollar, even if your home looks better than all the rest. However, if you have just a few foreclosures, you may be able to overcome any objections by pricing your home correctly.

In this case, correct pricing means figuring out at what price point buyers are looking in your neighborhood. If everyone is looking at homes priced at $250,000 or less, that’s the price point you want to be at.

If you can’t afford to sell at that price level, then you should consider removing your property from the market.

3. There’s no “wow” factor inside. Once you get buyers inside the house, you need them to be wowed by what they see. Hiring a professional stager can work wonders, turning a blah interior into one that looks sleek and polished, like the homes featured on HGTV.

If you don’t want or can’t afford to spend the money on a professional stager, consider watching a few staging videos online.

4. No one knows it’s there. Your agent isn’t getting the word out, either because the property isn’t listed properly on the multiple listing service, or because he or she hasn’t posted it on Craigslist, Zillow or other online search engines that don’t feed directly from the MLS posting.

Online marketing should include a Web site that has the address as the URL (you can sell it to the buyer as part of the deal) and as many photos, floor plans and video as possible.

5. Your commission isn’t high enough or the agent isn’t splitting the commission equally. Agents will tell you that they won’t push a buyer to make an offer on a house simply because it has a higher commission. But many agents see no harm in making sure their buyers see as many properties that are in the right price range.

Some agents take 60 percent. But you need to make sure your agent is splitting the commission equally.

6. Your house won’t pass inspection. If your house looks great, but the faucets leak, the windows don’t lock, the ceilings have water stains and the furnace is on its last legs, buyers may move on to the next house.

Forbes Report of Most Liveable Cities

Does your city make the list?  Cities were determined based on the following criteria:

To form our list, we looked at quality of life measures in the nation’s largest continental U.S. metropolitan statistical areas–geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics. We eliminated areas with populations smaller than 500,000 and assigned points to the remaining metro regions across five data sets: five-year income growth per household and cost of living from Moody’s Economy.com; crime data and leisure index from Sperling’s Best Places; and annual unemployment statistics from the Bureau of Labor Statistics.

15. Lounge with the Clinton’s–Little Rock, Arkansas.

14.  Peabody, Massachusettes

13.  There’s more than just cheese in–Madison, Wisconsin

Madison, WI

12.  Harrisburg-Pennsylvania

11.  If you’re in to the outdoors, then you’ll want to check out–Denver, Colorado

10.  Pittsburgh, Pennsylvania

9.  Just a short drive from Bean Town–Worchester, Massachusettes

8.  Baltimore, Maryland

7.  Where the intellects abound-Cambridge, Massachusettes

6.  Oklahoma City, Oklahoma

Cambridge, MA

5.  Tulsa, Oklahoma

4.  On the water’s edge–Stamford, Connecticut

3.  Des Moines, Iowa–Go Hawkeyes!

2.   Bethesda, Maryland

1.  Laid back living in–Portland, Maine

Several points considered in this were the cities’ cultural draw, affordability of living, income growth, low crime stats, and low unemployment rates.  To read more about these cities, feel free to check out the full story here.

To find out more on the cities near you that you should be investing in, contact us today at kjpremier@atproperties.com.

More Positive Press for the $8000 Stimulus Package!

What could you do with an extra $8000?  If you’ve never bought before or have had no home ownership interest in the previous three years, you could make an easy $8000 if you buy before December 1st, 2009.  This article below from the Chicago Tribune talks about the decision to buy now, while loans are cheap and the government is giving you a great rebate.

Call or email us today to see if now is a great time for you to get into the Real Estate market, while there is great inventory with low prices, and low rates!  kjpremier@atproperties.com.

 

Stimulus plan’s $8,000 housing credit can be sweet in the right circumstances

Chicago Tribune

April 13th, 2009

Receiving $8,000 to buy a house is a tempting deal.

And Uncle Sam is willing to offer it to you, under certain conditions.

Under the economic stimulus plan that became law last week, if you are buying a home for the first time, you can get your hands on up to $8,000. In fact, if you are one of the savvy people who saw the housing bubble threat in 2005, sold your home and have been renting since then, this could be an especially sweet deal if you go bargain-hunting this year.

Under the rules for the new $8,000 tax credit, you have to buy your first home between Jan. 1 and Nov. 30, or have had no ownership interest in a home for the last three years, said James Seidel, director of federal taxes for Thomson Reuters.

This could be a way to help come up with a down payment, or to receive $8,000 to save for emergencies. Keep in mind, however, that Uncle Sam doesn’t put the money directly into your hands when you need it most—at the point when you close, or complete the legal formalities, on the purchase of your home. You must come up with your down payment, then file your tax return and seek the $8,000 as a tax credit.

As a credit, you receive money the way you would a tax refund. The good part: This is a refundable credit, which means that even if you do not owe much in taxes, the government will give you the money, Seidel said. That makes it better than a normal credit or a deduction.

There are some caveats: You would receive less than $8,000 if the house you buy costs less than $80,000, or if you owe the government taxes that weren’t taken out of your paychecks. The $8,000 is a maximum. If the house you buy costs less than $80,000, you will receive 10 percent of the price.

For people desperate for a down payment, the waiting period might not work. But for those who can turn to a relative for $8,000, the home buyer could use the cash at the closing on their new home, move into the house, apply for the credit on their 2008 tax return, obtain the money from the government and repay the relative if necessary.

The $8,000 credit that just went into effect is a much better deal than the one aimed at luring home buyers last year. In 2008, first-time home buyers could receive a $7,500 tax credit, but important strings were attached: The home buyer has to repay the sum to the government over 15 years.

In contrast, home buyers this year can receive $8,000 without any obligation to repay the money, provided they live in the home for three years.

And if people buy a home soon, they can capture the new $8,000 credit quickly, on their tax return for 2008.

Even if you filed your 2008 tax return already, a first-time buyer can still claim the credit on a home purchased early this year. Seidel suggests filing an amended return with Form 1040X. If you plan to buy a home later this year, you can request an extension of your 2008 taxes and claim the credit as you complete your tax return by Oct. 15, Seidel noted. The other option is to claim the credit on your 2009 tax return.

Despite the attractive credit, buying a home is not a simple decision.

Home prices are still dropping, and unemployment is rising, so think carefully about whether your job is secure and how you will pay for your home if you lose income.

As a rule of thumb, people should not buy homes if the monthly payments will consume more than 28 percent of their income and if they are carrying balances on their credit cards from month to month.

Before buying, run through your income and expenses to make sure a house is affordable now and will continue to be if you face a layoff. For a new homeowner, keep in mind that you must calculate mortgage payments; condo fees, if applicable; property taxes; homeowner’s insurance; utilities; and maintenance. As a rule of thumb, it’s wise to put aside $150 a month for repairs in case you must call in the plumber or face some other unbudgeted expense. Try working a budget with www.kiplinger.com/tools/budget/index .html.

To compare the cost of renting versus owning, try www.dinkytown.net/java/MortgageRentvsBuy.html.

Price Reductions: Good or Bad Idea in Today’s Market

Experts say that it is the worst-case scenario for home sellers to endure price cut after price cut.  In today’s market buyers are all ready looking for a steal.  They will think you are really desperate if you keep continually making price reductions.

But how can you avoid this unpleasant situation in today’s troubled housing markets? The answer, experts suggest, is to put your home on the market at the right price, and, if it doesn’t sell quickly, cut the price deep and fast, so you won’t be caught in a downward spiral of price reductions.

 Setting a higher price on a home does not mean that you will sell for top dollars.  It is usually the direct oposite.  Pricing is especially crucial today because home prices have fallen drastically over the past two years.  The good new is in the Chicagoland area we are seeing home prices begin to stabalize and home sales are rising.  This is why KJ Premier has a proven stategy for accuratly pricing and marketing your home so that it does not rack up a ton of market time and need several price reductions.  Both of these instances cause buyers to smell desperation and almost always will submit extreemly low initial offers.

If you are not seeing good action on your property in the first 30 days which is an extremely critical selling period because the listing is fresh and new a price cut is usually a good idea.   The price cut should be meaningful, so your home will get the buyer’s attention again.  A series of smaller cuts, rather than one big one, can result in a slower sale and lower price.

Contact KJ Premier at kjpremier@atproperties.com today so that we can help accurately price and ultimately sell your home for top dollar.

A Presidential Thought

Amidst all of the Presidential hoopla, I came across a great quote that I had never heard before.  It’s great.  Wheather Democrat or Republican, it makes you take a step back and think.  Am I a critic or am I taking action? 

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.” -Theodore Roosevelt

Taken from the speech “Citizenship in a Republic” April 23, 1910.

 

To take some action today, contact us today at kjpremier@atproperties.com.

 

Why Should you Buy Now?

No one can predict if we have hit “bottom” or when the market will kick back up.  KJ Premier Real Estate is not looking for the “bottom.”  We are helping our clients make sound and well thought out real estate investments.  People seem to think that a “bottom”  will automatically result in an upturn.  This is not so, we should be looking at this more as a stabilization in the real estate market instead of a bottom. With that being said here are 5 reasons why you should buy now.

5 Reasons to buy
1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don’t like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can’t: the mortgage-interest deduction on your taxes.

4. You’ve found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You’ve built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.  And if you are buying up, you will inevitably see a bargain right now.

And to reiterate what we are saying, please see this article from this week’s New York Times.  If you wait, you may be kicking yourself when you look back a year from now…

Please keep in mind that Real Estate as a whole is very “local’ and your area’s low does not necessarily mean that it coincides with the country’s low or bottom.  Contact KJ Premier Real Estate Services to help you with all of your Real Estate needs.  kjpremier@atproperties.com.

Checking in…..

Well, it’s been a while since we’ve written.  We’ve been in lovely St. Paul, Minnesota for some training.  Let us update you on what’s been going on.

First we’d like to let you know that our team is now offically your Relocation Specialists.  If you know of anyone relocating to Chicagoland, or from Chicago to another place, let us know, we’d love to help.  Our relocation company at @properties is quickly becoming one of the tops in the nation, and we are striving to help it become that way.

Secondly, there is hope!  I was just reading a statement by the IAR (Illinois Realtors Assoc.) that said that the Real Estate Market leads the economy.  Look to Real Estate, as a gauge to what the economy will continue to follow up with.  The foreclosure numbers are a few month delay, which means that we hit the bottom several weeks ago, and things are now beginning to improve.  Rates are still vary favorable, especially on the safe 30 year fixed.

Let’s be positive!  When we look at the big picture, the real estate market is very local, and foreclosures and drastically falling prices have really impacted only several states, and not necessarily the nation as a whole.  Bernice Ross, gives us a good commentary on how the media likes to play into our emotions and use it’s “scare tactics,” to illicit a flurry of response and activity.

My thoughts~forget what the media is saying and contact your local professional.  They have a better handle on what is going on in your market, than a journalist reading a piece of paper.  And remember, once you’ve come down, the only way to go is up…

Contact us today for a market analysis in your area, or information on buying in today’s market.  kjpremier@atproperties.com.