Here are a few reasons that this is a great time to purchase in Northern Virginia now.
1)Existing Home Sales rose 5.1% in February to a seasonally adjusted annual rate of 4.72 Million units. First-time buyers made up about HALF of this number during the month. The first-time buyer tax credit will stimulate the lower-priced homes first and then will help those seller's move up.
2)New home starts are down, there will be less new home sales, less inventory will lead consumers to purchase re-sale properties.
3)The housing affordabitly index hit an ALL-TIME high of 173.5. This affordability will alllow those purchaser's who could not buy before enter the market.
4)Mortgage rates are at a FIFTY YEAR LOW. A home that is purchased at 6% for 360k is equal to a 400k home at 5%.
5)Although unemployment has risen, it is still extremely low relative to National trends and norms.
Thomas Merical
http://www.findahomesellahomenow.com/
In recent times many clients of mine have come to ask what the meaning of the different status’ they see in the Multiple Listing Service I provide to them, www.FindaHomeSellaHomeNow.com . Here is a summary of the different status’ and what they mean.
As you look through the property listings, you will notice the Multiple Listing Service displays each listing as to its “Status.” Here is the list provided by our area MLS (MRIS).
· ACTIVE - Indicates that the property is available with no contingencies, contract or application registered against it.
· CNTG/KO - (Contingent with Kick Out) - Indicates that the property is available but has a contract with at least one pending contingency that includes a kick out clause.
· CNTG/NO KO - (Contingent with No Kick Out) - Indicates that the property is available but has a contract with at least one pending contingency and the pending contingencies do not contain kick out clauses.
· APP REG - (Application registered) - Indicates that the property is available but a rental application has been registered on it.
· CONTRACT - Indicates that the property has a ratified contract with no pending contingencies. If the only remaining contingency is financing the status should be contract.
· SOLD - Indicates that the property is sold and settled.
· RENTED - Indicates that the listing has been rented.
· TEMPORARY OFF - Indicates that the property is not available for showing. This status is for short term use and must have seller approval.
· EXPIRED - Indicates that the listing agreement has expired.
· WITHDRAWN - Indicates that the listing agreement has been terminated prior to its original date
If you have any questions regarding the status of a listing, or more Real Estate information in general. Please feel free to email or call at any time.
Thomas Merical
http://www.findahomesellahomenow.com/
I have been getting tons of calls and emails regarding the $8000 Tax Credit towards down payment & closing. To clarify, only non-profits, government agencies (Federal, State & local) approved by FHA/HUD can offer the $8000 as a second lien for the buyer. The $8000 can NOT be utilized towards the 3.5% down payment. The $8000 can be used towards any additional down payment or closing costs. Enclosed is the HUD mortgagee letter guides Using First Time Homebuyer Tax Credit.
Example: Purchase price $250k, down payment 3.5% $8750 – the $8750 MUST come from the buyer(s) OWN funds. The $8000 tax credit can be utilized to cover closing & pre-paids and any additional down payment.
Non-profits and other government agencies that are offering this will have their own guidelines as well. The IRS has additional restrictions on income. Per IRS guides: The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.
Thomas Merical
http://www.findahomesellahomenow.com/
Helping Clients Estimate Their Affordability Range
by Ralph Roberts
Traditionally, real estate and mortgage professionals have encouraged homeowners to stretch – to shop for homes at the upper end of their affordability range. We wanted them to maximize their investment, and we were seeing property values and incomes rise, especially for homeowners who were first starting out. It all made for a very sound investment in housing.
Recently, I have begun to question what an "affordable house payment" means. Even some of the major players in the mortgage lending industry have different ideas of what "affordable" means:
The trouble with these guidelines, even my guideline, is that they fail to take into account other mitigating factors. For example, couple with four children paying their own medical insurance premiums is probably going to be able to afford less house than a young couple with no children whose employers provide health insurance.
Likewise, a family that spends $400 per month to heat their home will have less money available for a house payment. Let's look at a specific example. Suppose a family of four is pulling in about $6,000 per month. That's $72,000 annually. To simplify, we'll assume the family is debt free, except for the new home they are about to purchase. Based on a front-end DTI of 31 percent, the couple should be able to afford a monthly house payment of $1,860. That leaves them with $4,140 per month to cover everything else.
According to Ginnie Mae's How Much Home Can You Afford? calculator, an annual gross household income of $72,000 can afford a monthly house payment of $2,235. This represents a 37 percent front-end DTI, which is outside most guidelines.
Before we encourage the couple to purchase a $200,000 plus house, let's take a look at their current monthly budget. Assuming we were to sell them a house and saddle them with a $1,860 monthly mortgage payment, here's where the rest of the money ($4,140) would be going each month:
Income taxes (28 percent) $1,160
Daughter's college $1,000
Electricity (avg.) $250
Husband's health insurance $160
Groceries $400
Auto insurance $180
Auto fuel $100
Auto license $28
Auto maintenance/repairs $200
Charitable contributions $100
Movies, TV, Internet $120
Medical/dental (un-reimbursed) $250
Clothing & shoes $80
Dining out $100
Gifts $50
Personal care $40
Pets $40
Total $4,258.00
Now, you wouldn't exactly characterize this family as living large, yet if it had a house payment of $1,860, it would be seriously struggling every month to make ends meet.
What we as real estate professionals can learn from this example is that home financing eligibility guidelines are just that – guidelines, ballpark figures to get the conversation going. Mortgage lenders, real estate agents, and other professionals who are providing guidance to homeowners on how much house they can afford do their clients a grave disservice by using these general guidelines to make recommendations to specific families about how much house they can afford.
Currently, we are doing this all backwards. We tell homeowners how much house they can afford and then expect them to make the tough budget decisions to make that payment affordable. When the family still can't afford their house payment, we assume they are overspending and send them to credit counseling to become further humiliated.
Perhaps a better way to qualify homeowners for mortgage loans is to start with the family's existing budget and projections and develop a realistically affordable house payment based on current and projected net income and monthly expenses. Remember, every family's situation is unique. We need to tailor their house payment to their budget, not the other way around.
Published: June 1, 2009
Thomas Merical
http://www.findahomesellahomenow.com/
Millions of Foreclosures, More Renters and Multi-Family Sales
by Michael Minervini
Look around and you may notice that 40% or greater of your marketplace is distressed properties. These properties may be comprised of short sales, foreclosures, REO’s and even owners about to go into pre-foreclosure status.
According to some accounts, there may be over 8,000,000 projected foreclosures in the United States for the year 2009. In fact, according to RealtyTrac there were nearly 750,000 foreclosures filed in the 4th quarter of 2008 alone. To further illustrate this point, nearly 15.25% of FHA mortgages were in default in the first half of 2008 and nearly 33% of all mortgages were in default in the first 3 quarters of 2008.
With these staggering numbers being realized throughout the country, many visionary agents are taking aggressive actions to stay ahead of the curve. You may have noticed an increased amount of agents in your marketplace specializing in short sales and foreclosures. Since the marketplace looks to remain full of these types of sales for the next several years, this may prove to be a wise endeavor.
New Focus on Multi-Family Investment Properties:
Another smart decision that many agents are making is to become proficient in all aspects of multi-family sales. Agents are quickly learning that there is an undeniable direct correlation between foreclosures and multi-family sales. The fact of the matter is that due to home foreclosures, the following positive effects are taking place in the multi-family market:
In essence, the multi-family market is benefitting from the downturn of the general market. This means that educated agents in the field of multi-family homes are reaping large gains. Agents today seeking to learn all that they need to know about multi-family properties are earning the “Multi-Family Specialist®” real estate designation. They are choosing to earn this certification so that they can react intelligently to the positive turn in the multi-family marketplace.
Educational Solution: Multi-Family Specialist® (MFS) is the only certification and designation available to real estate agents which is specifically geared toward multi-family properties. Multi-Family Specialist designees have the ability to differentiate themselves in this very competitive market. This is due to the fact that agents who previously only focused on single family sales can now confidently approach and target multi-family property owners and display the array of knowledge that they have in this specialized field. Additionally, MFS members can effectively demonstrate to investor purchasers their ability to translate facts and figures from an investment property to determine the true appeal of the subject property. Only until the introduction of this informative designation, many agents have avoided the multi-family market. By earning the MFS designation and adding this additional niche to their sales portfolio, agents are increasing their income dramatically. Earn the MFS designation today by logging onto www.MFspecialist.com and begin to tackle this untapped market today! Questions Answered:
Agents who earn the MFS designation will be able to respond intelligently to their client’s questions. Agent will be able to inform their buyer and seller multi-family clients about many important topics, such as:
Agents wishing to earn this powerful and timely designation can register for and take the online course at www.MFspecialist.com. The course is taken online in the comfort of your home or office and is done at your own pace. Agents will read course materials online with the assistance of the corresponding video that is segmented by chapter.
Published: May 27, 2009
Thomas Merical
http://www.findahomesellahomenow.com/
CEO Keller Williams Fairfax Gateway
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