Indianapolis, IN Area Real Estate Blog: Carmel, Fishers, Geist, Noblesville, Westfield, Indiana

• What if you find major problems when you do the inspection and you don’t want the house after all?
   
• What if more than one person wants the house you want and you end up not being the highest bid and have to start over?
   
• What if there is a credit issue that has to be cleared up…no Uncle Sam is not going to say that you get a special dispensation just because the credit reporting agency made a mistake.
   
• What if you wanted to buy a foreclosure or short sale? If you haven’t already made an offer, you may have already run out of time.

For years, I have wondered why other Real Estate Agents representing Buyers do not make their “Offers to Purchase” contingent on receiving an acceptable C.L.U.E. (Comprehensive Loss Underwriting Exchange) Home Sellers Disclosure Report. The report lists losses for which insurance claims were filed during the past 5 years for a specific address. Ask yourself this, if the property you are thinking about buying has had major repairs done to the structure as a result of a fire or water damage from frozen pipes or roof damage etc. in the last 5 years, wouldn’t you want to know about these things before you bought the house?

If the house has had Termites or Mold in the past those things should be disclosed on the “Seller’s Residential Real Estate Disclosure” which the Buyer should have before they make the offer. But I bet you didn’t know that if a house has had major damage resulting from a fire, water leaks, rodent infestations etc. and the repairs have successfully completed “No Disclosure is Required”.

My experience can save you Money and Heart Ache.

1. Interest rates are still historically low but they will not stay there forever. I vividly remember buying a home in 1980 at a 14% interest rate (and that was a good rate at the time). In 1982 we were able to refinance and got our interest rate all of the way down to 10%.

2. There is a large inventory of homes on the market. In other words it is a “Buyers Market”.

3. First Time Buyers can get an $8,000 Tax Credit. This means that in most cases the government will pay you $8,000 to buy a home.

4. My Buyer Rebate will put more money in your pocket. This money is in addition to the $8,000 tax credit and is in addition to any additional concessions provided by the builder (If you purchase a newly constructed home).

5. If you have a good credit score you can get a loan with as little as 3.5% down payment (F.H.A. loan)

6. Economist very rarely agree on anything however at the present time they all seem to agree on 3 things.

• (1) Owning a home is still one of the best ways to build long term wealth.
• (2) The government is spending money that they do not have which means the government will have to borrow a lot of money in the near to intermediate future. This will without a doubt drive interest rates up.
• (3) High rates of inflation are expected in the near to intermediate future again brought on by the high rate of expected government borrowing. I paid $50,000 for the home that I purchased in 1980 and I sold it in 1985 for $84,000 (I invested $5,000 in improvements over that 5 year period) the rest of the appreciation was brought on mostly by the high rate of inflation over that 5 year period (and I did not have the advantage of a low interest rate). Low Interest Rates, Buyers Market and Future Inflationary Pressures make now the Time To Buy.
  

First-time homebuyers may soon be able to access their $8,000 federal tax credit when closing on a home through a short-term bridge loan that will cover their down-payment on FHA-backed loans.

The Department of Housing and Urban Development’s Federal Housing Administration is paving the way for first-time buyers to tap a federal tax credit of up to $8,000 for a down-payment. The announcement, made by Shaun Donovan U.S. Housing and Urban Development Secretary before several thousand real- estate agents attending the National Association of Realtors Real Estate Summit could prove to be a game changer for the sluggish housing market.

The FHA plans to allow lenders and state and local government agencies to issue short-term bridge loans of the $8,000 tax credit for buyers to use for their down-payment. Buyers can then repay the loan after getting their tax refund. Essentially it works like a tax refund advance.

“We want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down-payment” Donovan said.

Details of the new program should be coming soon.

There’s a small hang-up with the IRS, which has a rule about tax payers designating someone else to get their tax refunds. But there a lot of people, including the National Association of Realtors working on this issue.

It is thought by many that this plan could spark at least 300,000 additional sales. The national Association of Home Builders estimates an additional 160,000 new home sales- 101,000 of which would be first-time buyers who will receive the credit, Another 59,000 existing homeowners will be able to buy another home because a first-time buyer purchased their home.

If HUD and the IRS can remove the down-payment hurdle it could open the flood gates. We will all be watching this very closely to see what happens.

Recently one of my past clients contacted me asking about the value of the home he had purchased in Carmel. He bought it last fall for $457,000. He called after seeing its zestimate (estimated value) on Zillow for only $275,000! This is one of the more extreme examples I’ve seen on Zillow zestimates being way off the mark.

Automated home valuation systems such as Zillow base home values off of public data much of which is incorrect or incomplete. As many of us learned in our first computer science class “garbage in, garbage out”.

If you are going to be buying a home and want an estimate of its value, contact me @ Jim@HowToBuyAHome.com. As your Realtor, I’ll not only provide an estimate, but what I based it on.

Now is the time for 1st time home buyer’s to purchase the home in Carmel, Fishers, Westfield or Noblesville that they have always wanted with the help of "Uncle Sam" and the 50% Buyer Rebate from HowToBuyAHome.com inc.

First Time Home Buyer Tax Credit
(as modified by the American Recovery and Reinvestment Act, February, 2009)

Have you been thinking about buying but have been unsure of the right time? With the recent modification of the First Time Home Buyer Tax Credit by the American Recovery and Reinvestment Act, low interest rates and the generous Rebate from HowToBuyAHome.com inc. now may be your ideal window of opportunity to buy the home of your dreams. In addition to the $8000 tax credit and the 50% Rebate you have access to an abundant supply of homes from which to choose and affordable low interest financing.

What is the First Time Home Buyer Credit?
On July 30, 2008, a major housing bill (H.R. 3221) was signed into law. The law created a new, temporary tax credit equal to ten percent of the qualified home purchase price, with a maximum credit of $7,500. In February 2009, with the passage of The American Recovery and Reinvestment Act the maximum credit is increased to $8,000 and the repayment of the credit is no longer required for home purchases on or after January 1, 2009 and before December 1, 2009.

Who is eligible?
A first time home buyer is defined as a buyer who is a U.S. citizen who files a tax return and who has not owned a principal residence in the previous 3 years. The eligible property includes any single family home that can be used as a principal residence including a condominium. To qualify the buyer must close on the sale of the home between January 1, 2009 and before December 1, 2009.

Are there income limits?
Yes. Individuals whose Form 1040 filing status is Single (or Head of Household) are eligible for the full credit if their income is no more than $75,000. Individuals who file a Joint return may have income of no more than $150,000. A partial credit is available for income above the limits and is completely phased out when income reaches $95,000 for individuals ($170,000 joint return).

When will I receive the credit?
The credit reduces your income tax liability for the year in which you purchase the home. First time home buyers who close on their new home on or after January 1, 2009 and before December 1, 2009 will receive the tax credit when they file their 2009 tax return in 2010. The credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. In such instances, the taxpayer will receive a refund check from the government.

How is the tax credit repaid?
No, with the passage of The American Recovery and Reinvestment Act there is no repayment for purchases on or after January 1, 2009 and before December 1, 2009.

What if I sell the home?
If the homeowner sells the home within three years of purchase, the entire amount of the credit would be recaptured at the time of the home sale. This applies only to homes purchased in 2009.

Now that you have the knowledge, take the next step to home ownership - contact Jim Cadwalader @ 317-446-1605 or jim@howtobuyahome.com for your personal consultation about the buying process.

Consult a tax advisor about your individual situation. This information is not intended to provide legal or tax advice nor should it be relied on as such. Please seek the advice of your own legal or tax professional.