Sarah Adams

There are not a lot of real estate foreclosures here on the Main Line. According to the Philadelphia Inquirer, Philadelphia and the eight surrounding counties placed number 77 out of 100 metro areas nationwide in the number of people filing for foreclosures in 2008. However, I am starting to see more foreclosures on the Main Line and it is worrisome and it affects the whole community.

There is a home four houses down from mine on the Main Line that went through foreclosure. It once was a beautiful home surrounded by a picket fence with perennials planted next to the road. The yard had two large water fountains and had been professionally designed and landscaped. It resembled a large French cottage. It was an asset to our neighborhood. Then we started noticing that the privet hedge and perennial beds were starting to look overgrown. Next the picket fence was starting to fall apart and ivy starting climbing on the outside walls. Then we realized that the owners had left town. My neighbors started calling me. They were very concerned about someone breaking in and trying to live there. We talked about getting together to clean up the yard so the house wouldn’t look vacant. One day my child came home very upset because there were policemen at the vacant house. They were putting up a Notice to Sale on the front door. She felt horrible for the family that had lost their home and she was close to tears. In the end, there were about three large pink notices left on the front door for everyone to see. It is now a REO (Real Estate Owned) property and is listed for sale. There is a padlock on the front door along with a lock box . The house looks very scary and forlorn.

It takes about 10 months to foreclose on a home. A lot can happen to a home during that time. I understand that the hardwood floors are all buckled and that the basement is full of water. The yard and fence still look horrible. The REO company did cut back the privet hedge but that is about all. Who will buy the property? Will the house be fixed up or torn down? Will they turn it into townhouses? How will this house affect the values of the homes in the neighborhood? These are all questions that the community is asking. All we know is what was once a lovely home is now an eyesore and a reminder of what many families are going through in these difficult economic times.

Regards,

Sarahs

www.sarahsellsthemainline.com

Many people who have never been able to purchase a home on the Main Line would love to take advantage of the new 2009 $8000 tax credit, but they don’t have enough money for a down payment or to cover the closing costs. If you are a first time home buyer and you need your 2009 $8000 tax credit to help you purchase a home, there is a way to receive your tax credit early. First time home buyers who would qualify for the tax credit are allowed to lower their income tax withholdings up to the amount of the tax credit. This extra money will be brought home in the buyers take home pay. Buyers can then save and use this extra money to help them with their down payments or their closing costs. Buyers just need to adjust their withholding amounts on their W-4 through their employer or quarterly estimated tax payments if they are self-employed. However, if a buyer does decide to lower their income tax withholdings and does NOT make a tax credit qualified purchase then they would have to repay the IRS for the income tax possibly including even interest and penalties. If you would like to read the rules and guidelines concerning income tax withholdings, they can be found in the IRS Publication 919.

Also, some rules were changed as part of the stimulus package to allow first time home buyers to claim the tax credit and take part in a program financed by tax-exempt bonds. Some state financing agencies, such as the Missouri Housing Development Commission, have developed programs that provide a short-term loan in the amount of the tax credit to first time home buyers which can then be used for a down payment. Potential first time home buyers should contact their state housing finance agency to see if such a program exists. Most of these numbers are listed by state on the website www.housingfinance.com

Regards,

Sarah

Visit me at: www.sarahsellsthemainline.com.

Currently it’s a great time to be a first time homebuyer on the Main Line, or any where in the United States for that matter. The main reason being the new first time homebuyers $8000 tax credit that is retroactive to January 1, 2009 and lasts until November 30, 2009. How does the $8000 tax credit work? Basically, if you purchase your first home within the time period mentioned above, when you file your taxes next year you will receive a refund check for $8,000 if you do not owe any taxes. If you owe $3000 in taxes then you will receive a refund check of $5000. Unlike the first time homebuyers $7500 tax credit that went into effect April 8, 2008, you do not have to repay this tax credit back as long as you remain in the home for three years. This tax credit, along with 30-year interest rates being at 4.98% should remove any doubt that this is a great time to purchase your first home on the Main Line.

If you have never owned a home or if you have not owned a home or had any ownership interest in a home in the past three years, then you are considered a first time home buyer. If you are married, both parties have to be first time homebuyers. The home you are purchasing has to be where you will reside over 50% of the time and within the United States. It can be a condo, townhouse, co-op, or a single-family residence. If the home is new construction you have to be moved in by December 1, 2009. It cannot be a vacation home or rental property. The purchase price has to be over $80,000 to receive the full $8000 credit. If the purchase price is less than $80,000 then the credit is 10% of the purchase price.

There are some exclusion’s however. Even if you are a first time homebuyer, you will not qualify for the tax credit if your modified adjusted gross income is above $95,000 or if jointly it is above $170,000. You are also excluded if you have purchased your home from a close relative such as a parent, grandparent, spouse, child, or grandchild. Also, you cannot be a nonresident alien. The good news is that most first time homebuyers will qualify and will receive a huge benefit from purchasing their first home in 2009.

The new $8000 first time homebuyers credit, historically low interest rates, large inventory of homes at great prices makes this the best market in a long time for first time homebuyers on the Main Line.

I was watching the Today Show recently and their real estate expert, Barbara Corcoran, had a segment about foreclosures and auctions. While the real estate market on the Main Line has not been hit as hard as other areas, there are still foreclosure properties on the Main Line for sale. Radnor, St. Davids, Wayne, Devon, Berwyn, Bryn Mawr, Ardmore, and Haverford are all great areas to buy in on the Main Line because of their great school districts and proximity to Philadelphia.

If you are currently looking to buy foreclosures at auctions, here are three really good websites to help you find these types of properties: www.foreclosure.com/, www.foreclosures.com/ and www.realtytrac.com/. Remember that most foreclosures are sold “as is”, so it is wise to have an inspection beforehand and to have a contractor provide you with estimates on any repairs or updating that the house is going to need.

Before going to the auction you should know your maximum bid. You don’t want to get caught up in any bidding wars. You will also need a cashier’s check, picture identification, and a pre-qualification letter. Auctions usually require 5% of the selling price as a deposit and they won’t accept personal checks. Also, it doesn’t hurt to have a picture of the house you are bidding on with you. More buyers than you would think end up bidding on the wrong house at auctions.

Some questions that are important to ask are: is there a reserve on the property and does the buyer have a right to rescind the contract? If there is a reserve amount on the property then the seller does not have to accept the winning bid if it is less than the reserve amount. If it is an absolute auction, then the winning bidder gets the property no matter what. Most auctions will give you a 3-day review period, but if they don’t grant you the right to rescind then you will be required to purchase the property. If you back out of the deal or can’t get a loan to purchase the property, then you may be held accountable for 25% of the selling price.

To get the best price at an auction, bid on properties that come up in the beginning of the auction. Those first on the list always go for less because people are gauging prices. Don’t let your emotions get you involved in any bidding wars. Have your maximum bid written down and in front of you. Dress very professional and sit close to the front. Most people attending the auction will think you are with a bank trying to buy back a property and will probably not bid against you.

Even though the Main Line is an affluent area, the current economic hard times have caused home sales to decrease. Homes are taking longer to sell and home owners are facing stiff competition for buyers. So, why not use every marketing tool available to get a home sold faster? In real estate as in other industries, time equals money. The longer a home stays on the market the more money it costs the home owner and realtor. In my opinion, home staging is an underused marketing tool. According to the International Association of Home Stagers, staging a home can increase the sale price by an extra seven percent and enables the home to sell quicker than other homes in the area by 100 days. I have personally experienced how staging a home can shorten its days on the market and increase its value. Every home that I have staged as a realtor has sold within 30 days that is why I offer free home staging to all of my clients. I know times are hard but stagers are now offering more packages then ever. For as little as $125.00 a stager will come and give a verbal recommendation of what needs to be done to the house to help it sell quickly. To have those same recommendations put in writing costs around $300.00. Where else can you get such a good return on your sales and marketing dollars? Stagers inform home owners how to increase their home's curb appeal. They will tell them how to arrange the furniture so the house will look larger and have a better flow. They will have them remove the clutter and repaint. They will even go as far as recommending the actual paint colors. Some stagers even have furniture and accessories realtors and their clients are able to use. Want to get a vacant home sold fast? Home staging will do that too. It has been proven that vacant houses take longer to sell because the house appears smaller and buyers are not able to visualize how their furniture will fit into a space and the house appears stark and cold. Home staging is a great way to make a vacant house look larger and to increase the livability of a home. Builders have known about this secret for a long time that is why model homes are decorated and accessorized.

However, one of the things I like most about using a stager is that it reduces the tensions that can occur between a realtor and a client. Realtors no longer have to worry about offending clients because they were the ones that had to tell them that in order for their house to sell they needed to remove all the clutter, repaint, buy new accessories for the bathroom, clean up outside, etc. Not only do we not have to worry about stressing our relationship with our clients over home improvements but we can enjoy the praise that our clients will give us for providing them with a service that enabled their house to sell quickly and for more money.