Kent Anderson

It was a busy day today. I showed some clients around the mountain (SCHWEITZER MOUNTAIN, that is) and they were duly impressed. They’re great clients and very savvy to the declining market scenario. The question is, how long do they wait to find the bottom of the market. ...and when it arrives, will they realize it?

I certainly am not going to attempt to force their hand in any way. I did need to point out that there is another scenario they need to grasp when making the decision to purchase:

Interest rates play an important role in a buyer’s decision. The bottom may finally arrive next summer but will interest rates remain at today’s prices? If the rates go up 1% (which they are purported to do), then the “bottom” may, in fact be today.

Example:

Today’s $500,000 home loan at 4.75% = $2608/mth (excluding tax & ins.)

Tomorrow’s $450,000 home loan at 5.75% = $2623/mth (excluding tax & ins.)

This assumes the bottom is another 10% lower than today. What if interest rates go up and the market stays at today’s $500,000 price? ...the buyer’s payment goes to $2918/mth.!

Sometimes our buyers forget to look at the consequences of loan rate fluctuation when deciding on the home to purchase. It is good to keep them aware of this side of the equation.

Did my clients write...no. Just another day of real estate on the "mountain".

OK. Here goes my first attempt at video marketing.

The (hopefully) correctly imbedded video is of my new listing on Schweitzer Mountain...The Ridge. This afternoon, a potentially massive snow storm is approaching from the North. If you had a home on The Ridge, you could watch all the storms come in and get "psyched" for the greatest powder skiing on the planet the next day!

"This post is written as a submission to the ActiveRain Kodak Video Challenge contest. I have the chance to win the KODAK PLAYTOUCH Pocket Video Camera, great for Realtors looking to create wide angle home tours and real estate marketing videos!"

PEACE

"When the power of love becomes stronger than the love of power, we will have peace." Jimi Hendrix

The Schweitzer Alpine Racing School (SARS) hosts their annual Ski Swap at the Bonner County Fairgrounds on November 13 from 9 a.m. to 2 p.m. You can drop off equipment to be sold between noon and 7 p.m. on Friday, Nov. 12.

Admission is $2 per person, or $5 per family, and proceeds benefit SARS (Schweitzer Alpine Racing School). SARS.net.

You will NOT be disappointed by this sale! SARS has been running this sale for as long as I can remember and they do a great job! The massive quantity of skis, boots, snowboards, clothing and accessories is truly astounding and in these difficult times...the price is right! What I love most about the swap, is that the SARS racers are selling much of their personal and well maintained race equipment. To score some these, you better plan on arriving early.

SEE YOU THERE!

Watch for the government's BAIT & SWITCH for first-time home buyers!

I love being a hero. I sold a great home to a wonderful couple in 2009. ...their dream home, in fact, and they have no plans to let it go. Life is good for these first-time home buyers. They got their tax credit, paperwork went smoothly...the system actually worked. ...or so we all thought.

As we know, the economy has not been our friend the last several years, hence the introduction of the First-Time Homebuyer Tax Credit (FTHBTC). In these trying times, people have had to be rather creative to make ends meet and the FTHBTC afforded many young couples the opportunity to own a home they may not have otherwise been able to purchase. The problem, of course, is that job stability has become a slippery slope. Most of us no longer have the secure feeling of knowing our jobs are here for the long term.

Such was the case for my "first-timers". They were forced to temporarily leave the lovely hamlet of Sandpoint, Idaho and find employment in a larger metropolitan area and temporarily rent a home near their new jobs. They love their Sandpoint home and have no intention of selling it and it remains their primary residence. To make financial sense, however, they decided to rent out their home to add to their cash flow in the ongoing effort to survive in these difficult times. They only allow short term rentals (weeks at a time works here because it is a resort/ski area). In comes Uncle Sam...and I quote:

"You recently received a First-Time Homebuyer Credit, which doesn't need to be repaid as long as the home remains your primary residence for at least 3 years after you purchase it. However, if within those 3 years your living situation changes and the home is no longer your primary residence, you'll have to repay the ENTIRE CREDIT."

Shouldn't be a problem, right? This the ONLY home they own, they pay real estate taxes and they return to their Sandpoint home every chance they get. NOT.

Uncle Sam's edict goes on to say:

"The following examples are situations when a home is no longer considered a primary residence:

1) The home has been converted for rental or business use.

2) The home has been repossessed or abandoned.

3) The home has been sold.

4) The home becomes a "second" home and is not your main residence."

Not only do they need to refund their FTHBTC but they also no longer qualify for their Idaho Homestead tax break. In other words, they are "screwed".

This is a heads-up for all the first-time homebuyers out their and their Realtors. It does not pay to try to get creative in this economic environment. Uncle Sam has all his bases covered.