Kenneth Belferman

In a previous blog, I mentioned the Homebuyer Tax Credit for first-time buyers which is included in the housing bill recently passed by Congress - the Housing and Economic Recovery Act of 2008.

To recap - the bill provides a credit of up to 10% or $7500 (whichever is less) for first-time home buyers. The "credit" is actually a loan which is paid back over 15 years in equal payments. If you sell your home before the credit is paid back in full, the balance is due at time of sale.

The credit applies to the purchase of a home made between April 9, 2008 and July 1, 2009.

Here are a few more details on this credit:

Residency - The home you buy must be your primary residence until you pay back the credit. So, if you’re thinking of buying and then renting out the property, you’ll have to pay the balance of the credit in the year that you first rent it out.

Repayment - Starts two years after the year in which the residence is purchased.

First-time homebuyer - According to the CCH Group (a tax advisory company), "a person is considered a ‘first-time homebuyer’ if he or she (or spouse) had no ownership interest in a principal residence during the three-year period before the new home is purchased."

Income Eligibility (based on adjusted gross income) - For married couples, you can receive the full tax credit if your income is less than $150,000/year. The credit is then phased out up to an income limit of $170,000. If you’re single, you can receive the full credit if your income is less than $75,000/year; the credit is then phased out up to a limit of $95,000/year.

Claiming the credit - The credit is claimed after you purchase the home, so it cannot be applied to your closing costs.

For more information on real estate in the Pittsburgh area, visit my web site at Pittsburgh Homes R Us.

Prudential Preferred Realty of Monroeville will be sponsoring a huge garage sale on September 27, 2008 to benefit the Make-A-Wish Foundation.

Donations are encouraged.

For more information please visit the Pittsburgh Community Events page on the Pittsburgh Real Estate Blog.

The Make-A-Wish foundation is a non-profit organization that fulfills the favorite wishes of children under the age of 18 who have been diagnosed with life-threatening medical conditions. The work of this foundation would not be possible without the help of volunteers, contributors, corporations, businesses, and individuals from the community.

I would not normally post a listing to my blog - but this home is very unique and the owners have just dropped the price so I thought readers in the area who are looking for a home in the Pittsburgh area might be interested. It's a lot of home for the money ...

Very spacious (3800 sf) 9 year-old, 4/5-bedroom home on a half-acre at the end of a cul-de-sac in desirable area of Plum Boro. Located just minutes away from the Oakmont Country Club and Golf Course.

Features include elevator with power backup and access to all levels, hardwood floors, and wall-to-wall carpeting. Upgraded Custom Kitchen with newer countertops, pantry, newer flooring, island, 2 stoves, microwave oven, and custom-installed Sub-Zero fridge. First floor laundry room in kitchen area could be 2nd pantry.

Master bath with whirlpool tub and recessed ceiling heat lamps. Vaulted bedroom ceilings, cedar-lined closets thru-out the home.

Family and game rooms with surround sound audio and electric fireplaces.

Custom-designed lower level features an in-law suite with walk-in closet, direct access to elevator, walk-out to yard, and kitchenette. Separate laundry and utility rooms. Security system, outdoor Norwegian sauna, above-ground pool with newer cement walkway, and maintenance-free Trex decking. Plus, a 3-car heated garage and AHS Home Warranty.

MLS # 713690

Price: $235,000

Please contact me for more information or to schedule a showing.

Ken Belferman can be reached at 412-372-1050 x340, by e-mail, or thru his web site at http://www.pittsburghhomesrus.com

Tips for Selling Your Home in Pittsburgh

There are numerous articles and blogs available for home sellers that deal with how to prepare a home for sale. So, why am I diving into the fray?

The answer is that this aspect of the home sale is so important that it never hurts to remind sellers. We are in a very competitive market right now and anything you can do to give your home an edge in this market will certainly benefit you in the long run.

Here are my tips for a quicker home sale:

1. Pre-inspection - Probably the number one deal-killer is the home inspection. With a lot of homes to choose from, buyers are not shy about walking away from a deal if they don't like what they see in a home inspection report.

A pre-inspection will alert the seller to any problems. Regardless of how long you have owned your home, and how well you think you know it, there will usually be something that comes up in an inspection that you were not aware of. Knowing what the problems are in advance can give you a head start in figuring out how to deal with the repairs.

You can either make the needed repairs or decide in advance how much to offer in concessions to the buyer by getting an estimate for the repairs. The bottom line is that you won't be caught by surprise.

My advice is to make the repairs, if at all possible, rather than take it to the negotiating table where things could get sticky and the deal could fall apart.

Another advantage to a pre-inspection is that you can present prospective buyers with the inspection report, along with documentation on any repairs you made. That should go a long way in gaining the buyers' trust.

Cost for a complete home inspection, including pest and radon test, will probably cost around $450. However, it's a small price to pay for the possibility of selling your home faster and at a higher price. At the very least, it will minimize the possibility of losing a sale.

2. Home Warranty - Whether or not you choose to go with a pre-inspection, offering a home warranty to the buyer is a great selling point. Home warranties typically cover all the major home systems - heating, cooling, ductwork, plumbing, electrical, water heater, dishwasher, stove, and other items. The more peace of mind the buyer has before making an offer, the more likely an offer will submitted.

Some companies are now offering a la carte "flex plans," which will allow you to pick and choose the systems that are covered, at varying costs.

2. Interior - The smallest of things can give a buyer the impression that a home has not been well maintained - even if it's in otherwise excellent condition.

A burned out light bulb, dust bunnies scurrying across the floor, chipping paint, clutter (in the home as well as the garage), dirty windows, stained carpets, scratched flooring, dripping faucets, odors - any of these can, and usually will, send up a red flag for a buyer.

Note: In the case of odors, try to figure out what's causing the problem, rather than try to mask the odor with air freshener. The heavy use of these fresheners can arouse suspicion that you're trying to hide something.

If you can afford to paint, refinish hardwood floors, or replace carpeting, do so. But be careful about the colors you choose. Neutral is always best.

Try to move out as much furniture as you can to create a feeling of spaciousness, especially in smaller homes.

3. Let there be light - A dark home will probably turn off a buyer. Make sure the shades are up and drapes are pulled back for showings. Turn on all your lights, even if it's in the middle of the day.

4. Exterior - Make sure lawns are mowed and leaves are raked. Check for loose or disconnected downspouts. Screen doors should be in good condition. Consider new paint or a power wash for siding. Replace the doormat if it looks worn. De-clutter the yard, front and rear. Check the condition of your deck if you have one.

5. Updates and upgrades - There are also larger projects you may want to consider, such as updating your kitchen and baths, which buyers consider the two most important rooms in the home. However, you'll have to be careful that you don't over-improve. In other words, you want to avoid having a lot more money invested in the home than what it can sell for in your particular market.

You may also want to consult a professional in the field of home staging. These people are trained to bring out the best in the appearance of a home.

If you can't afford to make all the repairs or improvements that are needed, do as much as you can. Every little bit will help. If nothing else, keep your home spotless (especially kitchens and baths). It will go a long way toward making a good first impression.

For more suggestions on how to prepare your home for sale, visit HGTV's web site at:

http://www.hgtv.com/hgtv/ah_real_estate_selling/article/0,,HGTV_3165_5819925,00.html

Ken Belferman can be reached at 412-372-1050 x340, by e-mail, or thru his web site at http://www.pittsburghhomesrus.com

Buying Foreclosures in the Pittsburgh Area

PART 3 OF 3 - FORECLOSURE PRICING

In this final part of the series on buying foreclosures, I'd like to discuss the topic of how foreclosures are priced. Some people are under the impression that you can buy a foreclosure for pennies on the dollar. This is very rarely the case and usually leads to wasted time and effort and disappointment for buyers.

Lenders will price a foreclosure based on a number of factors. These include the money owed on the mortgage and any other outstanding liens such as mechanic's liens or unpaid property taxes. The lender has other expenses as well, such as legal fees as part of the foreclosure process, clearing the property of debris, and the cost to market the property.

According to Freddie Mac (Federal Home Loan Mortgage Corporation), the average cost to foreclose on a loan is in excess of $50,000, and the average loss on sale at foreclosure is 20 percent to 25 percent of the loan's value. This is why lenders will usually work with owners to avoid foreclosure if the owners notify the lender ahead of time that they are in financial trouble. This is also why lenders are not willing to sell these properties at bargain-basement prices.

Before placing a property on the market, the lender will have an appraisal performed to determine market value. The pricing is then based on how much is still owed on the property and the current market value, while taking into consideration the cost of work needed to put the property into good condition.

For example, a home that would normally sell for around $100,000 and needs $30,000 worth of work would probably list for around $70,000. Even at a sale price of $70,000 it's more than likely that the seller is losing money on the deal.

The average Sale Price to List Price (SP/LP) ratio in Allegheny County in 2007 was 90%, which means these properties sell at an average of 90% of the listing price. However, this ratio can vary widely by area. Below is a sample of SP/LP ratios based on 2007 statistics taken from the West Penn MLS:

McKeesport - 86%
Monroeville - 96%
Hampton - 96%
Murrysville (Westmoreland County) - 97%

All of which is to say is that the belief that a buyer can put in an offer which is 30% of the listing price and expect to even get a counter offer is, for the most part, a myth.

So, how can a foreclosure be a good buy? If you're prepared to do all or most of the work yourself or if you know a contractor who is willing to give you a break on prices, then there are some good deals lurking out there. Even if you pay the going market price for repairs you still could save some money.

If you're patient, you can also wait for price reductions made by the seller if the property sits on the market for a while. But with this approach you run the risk of losing it to someone else.

You should team up with a real estate agent who can show you a foreclosure before you submit an offer and who can perform a Comparative Market Analysis, which will provide an estimate of the property's market value.

When you look at a foreclosure in person, have someone with you who is experienced with recognizing problems and estimating repair costs, if at all possible.

At this point you should be able to determine whether or not a purchase would work for you.

Ken Belferman can be reached at 412-372-1050 x340, by e-mail, or thru his web site at http://www.pittsburghhomesrus.com