First Time Homebuyers Nationwide are scrambling to find a home that they can purchase in time to receive the $8000 Tax Credit. Home sellers are competing to get offers from this very active section of the market. Competitive bidding is taking place on REO/Bank Owned homes that are priced aggressively.
A common strategy is to price the home slightly below market value for a quick sale. We are seeing multiple offers on these homes and quite often they end up selling ABOVE the listing price. Asset managers are seeking the HIGHEST AND BEST OFFERS, and quite often that means a cash buyer with no contingencies and a quick closing date will be selected.
This can lead to 1st Timers becoming frustrated, as financing approvals can take 45 days for FHA Buyers. Many buyers are taking a second look at properties that have been on the market for awhile that are not in the short sale category. A seller that is priced above the market would be well advised to lower their price to get an offer.
Most 1st timers will need to be under contract by September 30 to close in time to receive the Tax Credit. There is very little talk of extending the Credit, and it is my opinion that the government does not want to remove the urgency to purchase. If they choose to extend it, I would not anticipate it to occur until the last minute. It is simply too big of a chance to take for most 1st Time Home buyers.
The "Obama Loan" as many now call it, is actually part of the Making Home Affordable Program that was introduced a few months ago. Passionately Introduced to an awaiting public, the plan has not lived up to its lofty expectations. Far fewer people have received relief than the founders of the initiative had hoped. At the core of its problematic implementation is the lack of incentive for banks to participate.
Foreclosures continue to pile up and Congress is threatening new reform acts to stimulate participation in loan modification programs.
Some interesting feedback from a national news service demonstrates how a well intentioned program can have unintended consequences. Michelle Caruso-Cabrera, a well respected Reporter for CNBC, details how government intervention is not always a good thing. Her article, How I Qualified For A MHA Refi is a MUST READ.
It has certainly been an interesting sequence of events surround the $8000 tax credit that is available for 1st time Home Buyers that purchase before November 30,2009. Perhaps the best way to characterize the situation is to stop short of saying that there is misleading information, but rather say that there is a lack of complete information. The disconnect appear to lie in the fact that there are several initiatives, in various degrees of implementation, regarding the availability of the $8000 tax credit, as well as the use of such funds. The National Coalition of State Housing Agencies has information available their NCSHA Website for state specific updates.
As of this morning, here are a few facts for the state of Florida.
•· $8000 tax credit can be received from a qualified home purchase with an Amended 2008 Tax Return this year or in their 2009 tax return
•· The State of Florida has approved the use of the tax credit for closing costs* however the funding is not currently available
•· Lenders are not equipped to implement the use of the credit for closing costs at this time* release of info was premature
•· Use of the tax credit for down payment has not been approved at this time. Florida Association Of Realtors Web Page shows what you can do
With real estate sales on the increase it seems to be an appropriate time to give a quick loan program update. Many buyers have recently gotten off the fence, and started shopping for homes.
It's a great time to buy, and banks are lending more than in recent months. They key to any deal is getting the right price. How do you know you are working with a loan officer with the skills to get you the best deal? Will the loan with the unbelievable rate actually close? A quick checklist for any home shopper is below.
•1. Make sure your pre qualification letter is current - If more than 30 days old you are at risk
•2. Make sure all of the fees are on your good faith estimate
•3. Rates change every day, sometimes several times per day - Make sure you are getting excellent communication from your lender
•4. Loan Programs are subject to change at any time - Do not take your approval for granted
•5. If you need seller concessions for closing costs - make sure it is clearly stated on the contract - and is not more than allowable for your program
•6. If you are buying an investment property - plan on 20 % down as a minimum
•7. If you are buying a condo, plan on 20% down - find out if the HOA (home owners association) is in good shape - In Some developments you cannot get financing regardless of how strong your application may be.
This list could easily have 100 important items on it.
Do you really want to work that hard to buy a home?
Hire an expert that you trust, and make your home buying experience a pleasure.
Let me figure out the complicated financing details, so you can focus on finding the perfect home.
Home Buying Made Easy
FHA JUST 3.5% down payment - seller can pay closing costs*if you qualify
VA Loans Up to 100% finance - Seller can pay closing costs*if you qualify
USDA Loans up to 100% - Closing costs may be financed*if you qualify
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