May Steve & Jack's Home News

Happy Mother's Day to all of the mom's out there!!! Without them none of us would be here. My mom Mary Anne will be in Italy for Mother's Day, as you will remember from last month's newsletter taking the vacation of a lifetime with Jack for 3-weeks. They are so excited and they were able to secure a tour of the Vatican. Michelle and I are so excited for them and can't wait to see some photos of their trip. If you have ever been to Italy, please e-mail or call Jack as he would love to have some more tips on what to do and NOT do while there. Steve remains exceptionally busy during this spring selling season. This has turned out to be one of the absolute busiest springs we have seen in 6 years! Houses are selling in days with multiple offers for above listing price in many instances. In fact, the numbers are unreal. In Central Indiana,.3% increase in closed sales, a 4.9% increase in median sales price, and an 11.7% decrease in inventory, which is excellent. Our inventory is down to 7.8% from over 13% just over a year ago. Distressed sales make up less than 25% of our total market, too. Anyway you slice it our market has improved 11 of the past 15 months. Interest rates are still at or below record lows at 4%. Looking into our crystal ball, home prices will continue to increase over the next several years, interest rates will have to go up, and we will officially enter a 'sellers' market next year sometime, which is defined as having <6 months of inventory. We have steadily been moving in that direction for months. Bottom line, if you are thinking of moving, do it NOW. On a personal note, Ana is having a great time playing soccer and is the star of the team consistently scoring 5-6 goals/game with multiple assists (technically we don't keep score, but every parent knows how many goals his child scores each week). We are so proud of her and she is truly having fun. Watching Ana play soccer is one of our favorite things to do each week. Brigid is having a great time coaching Ana again this year. Ana has also expressed an interest in joining the Indianapolis Childrens' Choir. Several people have told her she has a good voice and she constantly is singing. In fact, that is one way she memorizes things for school is by making up songs. Pretty clever. Ana still enjoys tumbling at Speed Athletics, too. And she continues to do well at school. Natalia is also doing very well at school and enjoys watching her big sister play soccer. She can dribble a ball better than most of the kids on Ana's team already. So, Ana, watch out!! Natalia is still very much of a bull in a china shop and has no fear of anything. Our one struggle with her right now is potty training. She is past being ready and has made progress, but it is very, very slow. We are frustrated since Ana was fully potty-trained by 18-months. Each child progresses differently, but it is still frustrating... We are open to suggestions... Brigid is still doing well at Merck and enjoys coaching Ana. We are looking forward to the Carmel Farmer's Market as we ride our bikes down there each Saturday morning. This year, Ana will be able to ride on her own as she recently learned to ride without training wheels. For spring break this year, we went to Edisto Beach, SC. It is about an hour SE of Charleston. We stayed in a time-share and were met mid-week by Brigid's family. We had a great time and Steve was even able to see his college roommate John Parker as well a few times. Don't miss out on some very interesting articles this month in the newsletter, such as: • A Good Example Goes A Long Way • May Quiz Question • What Mother's Know • May's Other Days • Charisma Can Be Developed • The Art of The Cheap Road Trip • Gas Waste • Thermogenic Foods Burn Fat • The Importance of Advertising Happy Mother's Day!! Thank you, moms for all of the sacrifices you have made and continue to make for us!!! Click here for a link to our May Newsletter, our blog, and our exclusive discount savings site. Click here to visit our website full of information on real estate and Indy: http://welcome2indy.com/ For the absolute BEST and brand new mobile real estate app in the state, text the following. You will be one of the very first to own this cutting-edge technology: TEXT: HOME21 to 87778

April Steve & Jack's Home News

Dear Steve & Brigid, Happy April Fools' Day!!! More importantly, Happy Spring! We hope this spring brings with it a renewed energy and optimism for the year ahead. I have already gotten my first sunburn of the year working in the yard this past weekend! With spring also comes Spring Break. What are your plans? We are driving to Charleston, SC to meet up with an old college roommate of Steve's and then off to Edisto Beach to spend some time with Brigid's family for part of the week. Jack and Mary Anne are taking a life-long dream trip to Italy in May. They are extremely excited and will have lots of pictures and stories to share upon their return. Have you ever been to Italy? Do you have any suggestions? Please e-mail them to Jack. This warm spring has brought out a recovering real estate market as well. Inman News-the pre-eminent real estate news source states that 2012 will be the best year for real estate in 5 years!! Pending home sales and closed sales are up double digits and inventory is nearing a 'balanced market'-something we have seen for years!!! Click here to read our April edition of our newsletter as well as to view exclusive coupons and discounts at places you shop every day! Enjoy the beautiful weather and safe travels to those traveling on Spring Break!

Indianapolis Housing Market EXPLODING!

With all of the warm weather, we can almost 'taste' Spring. This has been especially true of the real estate market with activity we haven't seen in years! I'll get to some great stats in a moment. Ash Wednesday was yesterday and 'Fat Tuesday' was the day before. For Catholics, that means Lent is here. I noticed quite a few 'good' Catholics with the ubiquitous crosses on their foreheads yesterday. Unlike the wind and the type of religion one practices, real estate seems to be very visible all of the time. It is nice to be able to report some good news. Click here to read our March 2012 newsletter and access our VIP Savings Site. The Indy real estate market, as mentioned earlier is quickly heating up, seeing gains we haven't seen in years. Our Months Supply of Inventory is down to 7.6 months (down 12.8% from last year). Active listings are down 10.4%, which is great as we need to reduce our oversupply of housing inventory. Median sales price is up 4.7%. Closed sales are up 28%!! Pending sales are up 18.3% and new listings are down 8.8%, which is also good as we need to reduce inventory more. Distressed sales are <20% of the overall housing marketing for the first time in years. Bottom line-the housing market is markedly improving!

February Steve & Jack's Home News

Happy Valentine's Day!!! Enjoy some fun and light reading in our February edition of our newsletter. Click here to read it along with links to our VIP Client Savings Site and our other blog entries. The Indy real estate market is heating up and the Spring Market has already started. We are seeing multiple showings/day on listings and, can you believe it, multiple offers as well!!! Inventory in down, buyers are up, sales price is up, and distressed sales are the lowest in years. Don't forget those historically low interest rates, too!!! This is a great time to buy or sell a house. Don't take my word for it, just Google real estate and you will find article after article extolling the virtues of this market, how it has hit bottom in many markets and is on its way back. No one can predict the future, but this sure is a good start!!!

January 2012 Steve & Jack's Home News

Happy 2012!! Click here for a link to our first newsletter of the new year as well as a link to our Indy-area real estate blog, & VIP savings site. Enjoy!!

Merry Christmas!

Merry Christmas to all of our loyal clients, friends, and colleagues who have been so supportive this past year!!! While many agents have struggled, we continue to have a strong business and it is because of you. May your 2012 be exciting, prosperous, and fun and feel comfortable knowing we are always here for you and those you care about for your real estate needs. Merry Christmas and Happy New Year!!

December Steve & Jack's Home News

Click here for our latest newsletter full of fun articles and entertaining articles, learn about little-known facts and take a quiz. Also, take a look at the coupons and discounts you can use at places you shop every day! Enjoy!!!

Housing Numbers Up in Hamilton County

The following article appeared in the Current Newspaper on November 8, 2011 in an interview of Steve Rupp by the editor Jordan Fischer: According to the MIBOR third quarter report, the number of closed sales in Hamilton County increased by 27.7% compared to 2010. Steve Rupp, REALTOR for Prudential Indiana Realty Group spoke with Jordan Fischer from The Current Newspaper about these figures. “The third quarter is turning out to be the best quarter of the year so far,” Rupp said. “new listings are down, and that’s excellent. We need those numbers to come down. And part of that is that foreclosures are down.” The monthly supply of housing inventory for Hamilton County dropped 3.5% in September to 8.3 months. That’s lower, Rupp said, than MIBOR’s average inventory, which is hovering around 9.5 months. The median sales price did drop 3.9% compared to this period last year, however, which Rupp said is a sign homeowners are still having to negotiate “pretty hard” to sell their homes (homeowners on average received 90.4% of their original list price sale in September). Rupp said he was optimistic MIBOR numbers were signs of an upward trend for the market. “It will be interesting to see where we are in February-March-April of next year, relative to 2011. My guess...is that we’re going to continue the trend of pretty good numbers. If you couple that with still significantly-lower than historical average interest rates, you’re going to have some pretty strong numbers...and you’re not going to have anything holding it back.” In fact, November's numbers just came in and they are even better!! Now is a great time to buy a home, especially in Hamilton County!!

November Steve & Jack's Home News Newsletter

Check out our November edition of Steve & Jack's Home News with some fun articles about curses, princes, employee surveys, 9/11, cleaning your phone before discarding it, and some common abbreviations. Also, some notable (and good) housing numbers just in for the Indy Metro Area: *Closed sales are up 24.1% *Median Sales Price is up 4.1% *Housing inventory is down 7.7% to 9.5 months *Interest rates are still low at around 4.25% Click here for our November Newsletter. Enjoy!!!

Sub-4% Interest Rates? Really?

Yes! Really!! On Friday of last week, we saw for the first time in decades interest rates below 4%!! This is for 30-year fixed, conventional, conforming mortgages. One client recently remarked, 'That is almost like free money!'. Unfortunately, due to the weak global economy and the significant action the Fed is taking on monetary policy, mortgage interest rates continue to drop. How low can they go, you say? No one knows, but if you are in the market for a house, rates like this literally can't get much better. Take some time to talk with a reputable and local mortgage consultant to show you know much more house you can buy with these low rates. Of course, I am not encouraging you to buy a bigger house than you need, but if you have been dreaming about a bigger/nicer/better location house, this might be THE time to seriously look into it.

September 2011 Steve & Jack's Home News

Check out the latest edition of our fun and informative newsletter. The link will also take you to our VIP discount site and a first-ever video introduction!! Let us know what you think!!! Enjoy!!

http://bit.ly/oFxDDy

Half Price Indiana State Fair Tickets!

Like to visit the Indiana State Fair, see all of the animals, interesting people, ride the fun rides, and eat that yummy food? What is better than that? How about getting in for HALF PRICE? Click the following link for a half price coupon courtesy of your Indiana BMV.

http://bit.ly/pvfjTT

Buy Your First Home from Your Bridal Registry? Yes!!!

Newlyweds say “I DO” to FHA Bridal Registry Gift Funds

Are you planning to get married and buy a home in Colorado, but wonder
where your down payment funds will come from?
FHA has a Bridal Registry program where the money you receive as a wedding
present can be used towards your down payment. Just like registering at a specialty or department store, the FHA Bridal Registry program allows you to register with a lender. Then your friends and family are able to make gift payments into an interest bearing account on your behalf.
It's a win win! Not only can your gifts earn interest, but they can be used as a down payment towards an FHA Loan.

Bridal Registry Guidelines

Bridal Registry Accounts were originally introduced in 1996, but still remain a little known fact when it comes to down payment assistance. The
misunderstanding of how this program works might be the fact that it was
originally only allowed by banks. Soon after, FHA modified the program and
offered new flexible options and the opportunity for the newlywed to set up the account at any bank. Plus, newlyweds are now able to make deposits on their own from the gifts they receive.

Here's how it works in 3 simple steps:
• You will open a savings account at your bank prior to the wedding
• Friends and family will be given the banking information where the gifts will be deposited
• All of the gift funds can go towards the FHA required 3.5% down payment
• Anyone with an interest in the purchase cannot be party to the gift funds (i.e. realtor)
• There is no requirement that you be married prior to closing on your new home

Another huge advantage is that there are no gift letters or other documentation required other than proof of your savings account
named "bridal registry account." It's that simple!
AGENTS: Marketing Ideas to Spread the Word in Your State
• Explain it on your website
• Blog about it
• Let your “to-be-married couples” know about it
• Send an email to past clients
• Attend wedding fairs & distribute brochures
• Mention it at your homebuyer seminars

The great news about this program is it is available Nationwide!

To learn more: Check out our FREE Top 20 Homebuyer Secrets that can save you thousands of dollars! Plus browse our Home Buying Resources section and fill-out a free no-obligation secure online application or call us in Colorado Springs, Colorado at 719.387.1368 with any questions.

Bad credit or No credit? Check out our Credit Repair Program and get started on the path to homeownership today!

Overcome loan application stage fright by reading my Simple Steps to a Complete FHA Loan Application
Newlyweds say "I DO" to FHA Bridal Registry Gift Funds was written by Rebekah Radice.

Activity is UP!

Wow!! The number of listings in Indy has dropped 24.4% per MIBOR since March and I am seeing it in the low inventory available to show my buyer clients. What I have found is that there are fewer homes in good condition at market-acceptable prices than in the recent past. This is making it more frustrating for buyers to see a number of feasible options when house-hunting, however it is having a positive effect on sellers in that the average sales price is increasing-a simple law of supply and demand.

If you or someone you know is thinking of selling their home, please talk with your real estate agent to see how the market has changed and how you might benefit from the low inventory. In many cases and areas, inventory is below 3 months right now, which is indicative of a strong SELLERS market.

The $250,000-$350,000 Vacuum

Do you or someone you care about have a house valued between $250,000 and $350,000 on the north side of Indianapolis? If so, ever thought of selling it? It just so happens the north side of Indy right now has a depleted inventory of homes in this price range and there are a lot of buyers wanting homes in this price range. What does this mean to you?

Many homes in this price range are selling in days, with multiple offers, for above asking price. It is a simple supply and demand problem. If you would like to know specifically how homes in your neighborhood are moving in this price range, shoot me an e-mail and we can talk specifics.

Spring Is Here!

Spring has sprung (optimistic thinking, I know), but unofficially the spring real estate market in Indianapolis begins the weekend after the Superbowl. The recent harsh weather has tempered activity, but if you are thinking of taking advantage of the spring selling season during which 72% of all homes in Indy are sold (February-June), then NOW is the time to make your preparations to get it show ready. Interest rates are creeping up (currently at 5.125% for a 30-year fixed conventional mortgage with a 740+ credit score), but that is still a really good rate given the 40-year average for a 30-year fixed conventional interest rate is 7.875%.

Start preparing your house by decluttering, depersonalizing, and pre-packing items you don't use on an everyday basis. A fresh coat of paint goes a long way and is probably the best investment in preparing your home for sale you can make. Paint over any bold colors with earth tones and for heavens sakes if you have wallpaper, please, please, please remove it.

A good, thorough, deep cleaning goes without saying paying particular attention to the kitchen and bathrooms. Your house should pass the 'white glove' test. If your carpet is clearly worn, please replace it. If it just needs to be cleaned, hire a professional carpet cleaner who will breathe new life into them. Any dirty grout should also be cleaned by a professional grout cleaning company.

When the weather warms, plant some colorful flowers and plants outside your house and make sure the front door is clean and welcoming. Cleaning the windows will allow more light into your home, too.

These are just a few tips and tricks. Feel free to contact us for more ideas and suggestions. Happy staging!!!!

Indianapolis One of Best Cities to Move

Did you see this article? CNBC posted an article explaining why Indianapolis is one of the 10 best cities in the US to move to right now. Read the full article here:

http://realestate.yahoo.com/promo/best-cities-to-move-to-in-america.html

This is just another example of why Indianapolis is still one of the best places to live in the US. We have very high quality of life, a vibrant city, low cost of living, a highly educated worforce, a stable economy, and the most affordable housing in the country.

FHA Increased Fees

Did you know that on October 4th, FHA increased its annual (monthly) mortgage insurance premiums? For loans with 5% down or less the monthly premium went from .55 to .90. It also decreased its upfront insurance premiums from 2.25% to 1%. This is for 30-year loan products. For a LTV less than 95% the monthly premium is slightly reduced at .85.

What does this mean to you? While the closing costs will be less, your monthly payment will slightly increase. On a house with a $200,000 loan, it could mean a monthly increase of your mortgage payment of around $42. At the current interest rates, this means that the average buyer will be able to afford $7,000-$8,000 less house than last week. Pleast note that these are very rough numbers and are used for a basic illustration only. Please talk with a mortgage lender to find out how these changes specifically reduce your buying power. But know that your buying power just went down no matter how you slice it.

For some great tools for buyers including a great mortgage calculator and nationwide listing search visit http://www.welcome2indy.com.

Interest rates--How low can you go?

3.99% fixed rate conventional 30-year mortgage with no points. Seriously? Yes, I saw one of my lenders offering that last week. Crazy!! It is unlikely that they will go much, if any lower, but then we thought that was the case at 4.375% last month. The effects of the housing tax credit expiring are being felt in the Indy market and throughout the country. As an example, here are some stats from July 2010 compared to July 2009:
29% decrease in homes closed
23% decrease in pending home sales
9% increase in average sales price-yea!
1% increase in price/s.f.
6.6% increase in homes currently available for sale
11.26 months of inventory currently on the market vs. 7.48 months in July 2009

Aside from values increasing, we are seeing some sobering numbers come in. The best markets as far as lowest months of available inventory is, believe it or not Decatur Township with 7.47 months of inventory and Carmel Clay Township with 7.88 months of inventory. The worst is downtown Indy with 24.73 months of inventory!!!

What does all of this mean? Well, with such low interest rates and higher inventory and a trend of increasing housing values, this is a great time to buy a house!! Not to sound too salesy here, but we are seeing values recover, but super-low interest rates and lots of choices. If you are thinking your window of opportunity has closed, think again. Conversely, if you already own your home and you have a 30-year interest rate of 5% or more, do yourself a favor and talk with a reputable lender about whether or not it makes financial sense to take advantage of these crazy low interest rates and save some money. E-mail me if you would like some names of good lenders in the area.

4.375% interest rates?

Who would have ever thought that we would see a 30-year fixed conventional mortgage interest rate at the 4.375% mark? Well...we are seeing it right now. What is your current mortgage interest rate? Is it 5% or higher? Do you know what it is? If not, it would merit checking. Reducing your interest rate by around 1% could save you hundreds of $$$$ each month. It might make sense to talk with a mortgage lender and see how these low rates could positively affect your monthly payment.

Indianapolis is in the recovery mode, however we are still short of buyers out there relative to what we usually see at this time of the year. If you are thinking of buying a home, these great prices of homes coupled with the super-low interest rates could be a big win for you with being able to afford more house than you would have otherwise been able to afford, or further reduce your mortgage payment. Either way, you win!!!

The tax credit vacuum

Welcome to the tax credit vacuum!! We saw this coming months ago. Unfortunately, we are in it now. What I am talking about is the void of buyer activity we are currently experiencing due to the expiration of the homebuyer tax credit on April 30th. No one knows how long this is going to last, but the first-time homebuyer price range is the most affected. Here in Indy that is $200,000 and under. Homes priced above $400,000 are not doing badly and homes above $900,000 are seeing some of their best activity in years.

The sooner the unemployment rate retreats, the sooner we can set our sites on a long-term recovery. Banks and secondary markets are preparing to release their 'shadow inventor', which are the homes they own, but don't have on the market as they are waiting for the market to improve. Since they have seen signs of improvement, we are hearing that these distressed properties will be released soon, further depressing the market.

The good news is that interest rates have fallen again and as of Friday afternoon were around 4 5/8% for conventional and 4.5% for FHA with excellent credit.

Either way you look at it, it is a great time for buyers to get back in the market with inventory increasing, sellers getting frsutrated with lack of activity, and super-low interest rates, which, by the way could save you more money in the long-run than the tax credit with higher interest rates!

Another low appraisal

Ah, the reality of real estate today-another low appraisal. These are becoming more and more rampant and are the bain of every real estate agent's existence. On top of the added research, work, stress, and communication with the other agent and your client, what can be done with low appraisals?

First, a thorough review should be performed to determine if any mathematical mistakes were made when adding and subtracting the adjustments for the comparables.

Second, was the subject property properly 'bracketed' by the sold comps? By that I mean, did the appraiser use relevant comps, some of which were higher in price than the subject, some about the same price, and some lower in price than the subject?

Third, are the comparables the best comps to use? Were they all in the same neighborhood as the subject? If not, why not? Sometimes there just aren't enough comps available in the subject neighborhood. If the appraiser must search outside the neighborhood, then he/she should look for similar neighborhoods to the subject and adjust for location as necessary.

Fourth, are the adjustments made fair?

Fifth, were any distressed properties (short sales, foreclosures, HUD homes, bank-owned homes, etc.) used as comps? If so, did the appraiser disclose that fact and make an additional adjustment for the distressed sale, which almost always is lower than a non-distressed sale.

Sixth, is the appraiser from the area or out of the area? If out of the area, has the appraiser perfomed many appraisals in the subject's area?

Seventh, was the subject labeled as being in a 'declining market'? If so, that can be the 'kiss of death' and require a 10% down payment from the buyer. This label is VERY difficult to remove.

As for action steps, I would gather all of my information and personally call the appraiser to talk with him/her about any discrepancies. HVCC DOES allow for a real estate agent to contact the appraiser directly, just not the lender. Not all appraisers will be open to talking with real estate agents, however. Some are more receptive than others.

If the appraiser is unwilling to adjust the appraisal, your next step is to file an appeal through the lender who will take your information you have showing that you believe the appraisal is flawed and run it through the appraisal review process. This could take up to a week.

If that doesn't work, you can always order another appraisal from a different appraiser (for a fee) and see if it will come back higher.

This is just a starting point for a low appraisal issue and there are other steps, which could be taken as well if the situation warranted. It is important to note that I am NOT a licensed appraiser, but have been through this process more times than I can count. If this post helps just one person avoid losing a sale based on a low appraisal it will be worth it. Good luck!

The clock is ticking...

That sound you hear, is the clock ticking away and the end of the homebuyer tax credits. The first-time homebuyer credit and the existing homebuyer tax credit both expire June 30, 2010 and you much have an accepted contract by April 30, 2010. What does this mean? If you want 'free' money from Uncle Sam and you are considering moving in the near future, this is the time to do it. The Indy market has consistently improved and so have home values making for fewer 'deals'. There are lots of buyers in the market already and we are seeing many multiple offer situations. In many markets it is already a 'sellers' market, which is defined as fewer than 6-months of inventory.

So, get out there and take advantage of these low rates, low prices, and 'free' government money. All three will go away this year.

36.5% Increase in Indiana Real Estate Market!

BIG news from the Indiana Association of Realtors yesterday with a HUGE increase in home sales throughout the state. Read the full article from the Indianapolis Star below:

http://www.indystar.com/article/20091222/BUSINESS/91222011/Indiana-home-resales-jump-36-in-Nov

BIG Increase in Home Sales

Click on the link below to read a recent article by NAR about a record home sales increase. Good news, for once:

http://www.realtor.org/press_room/news_releases/2009/11/record_big

FAQ for the Homebuyer Tax Credit Changes

NAR Frequently Asked Questions

Homebuyer Tax Credit Changes

National Association of REALTORS® Government Affairs Division

500 New Jersey Avenue, NW, Washington DC, 20001

Here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who

meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a

new home. I have lived in my current home for more than 5 consecutive years and

am within the new income limits. I will go to settlement on November 20. If

President Obama has signed the bill by the time I go to settlement, will I qualify for

the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment

(when the bill is signed). There is no reference to the date of contract for the new credit. The

provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a firsttime

homebuyer but was not within the prior income limits at the time I

entered into my contract to purchase on October 30, 2009. I will be covered,

however, by the new income limits. If the new rules have been signed into law by the

time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.

The income limit and other eligibility rules will look to your status as of the date of purchase,

which is the settlement date. So if the new rules have been signed when you go to settlement,

you should be eligible for the credit (or a portion of the credit if you're within the phaseout

range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I

have found a home with a nonnegotiable

price of $825,000. Will I be able to use any

of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount

above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an

absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting

since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the

other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you

will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000

and lived there until 2008 when he got a divorce. Whether John has been renting or bought in

the interim, he WOULD INDEED be eligible for the credit because he owned a home and

occupied it as his principal residence for 5 consecutive years out of the last 8 years. The

keyword here is "consecutive." As long as he lived in that house for 5 years straight what he

did since 3 years doesn't impact eligibility.

Question: I am an eligible firsttime

homebuyer. I entered into a contract to purchase on

November 1, 2009. Do I have to go to closing before December 1? How does the

extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as

if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30

(or July 1, worst case), the purchaser will be eligible for the credit.

Homebuyer Tax Credit Passes Congress

Congress overwhelmingly passed an extension to the homebuyer tax credit. See link below for details.

http://www.cnbc.com/id/33673455/

Deed for Lease Program

	News Release
	November 5, 2009
	Fannie Mae Announces Deed for Lease™ Program
	WASHINGTON, DC -- Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender. "The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications," said Jay Ryan, Vice President of Fannie Mae. "This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities." The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification. Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate. To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income. Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer. For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

Homebuyer Tax Credit Extended?

Wow!! Click the link below to read the latest news on Congress extending the homebuyer tax credit. This could be huge, especially if you are an existing homeowner. Click the link to read more.

http://www.cnbc.com/id/33536082/

I'd love to hear your thoughts!

Short Sales

Modern homebuyers will inevitably come across one or more properties currently classified as a short sale. A short sale is an attempt by the current owner to sell a home in lieu of the bank taking it back through foreclosure proceedings, thus partially salvaging their credit rating and lifting the burden of heavy mortgage debt.

The entire short sale process hinges on the hope that the bank will take a loss now, approve the sale, and eliminate the costly process of foreclosing, clearing, and reselling a home. Obviously, this is a big hope on behalf of prospective homebuyers as well and they need to understand some things in order to lessen the chance for disappointment of unapproved short sales. This is what they should know:

1) Price is usually set by the agent & seller, not bank - The agent and seller often create a very low asking price in order to attract buyers. The bank is normally unaware of the asking price; however, the bank has the final say in what an acceptable offer will be. Since the bank has the power to ultimately accept or deny offers, their lack of price awareness often leads to the process taking longer than anticipated. The bottom line is that the buyer needs to remain positive and patient throughout the entire process, sometimes even for months.

2) Loans owned by 1 bank usually better than 2 - If the seller has loans owned by two different banks it is a lot more difficult to approve the short sale. This is something the agent or the buyer cannot control; it simply depends on the willingness of the bank or banks involved. While the reasons are beyond the scope of this guide, buyers should know that when the seller only has loan(s) with one bank the short sale often becomes more buyer-friendly. A savvy Realtor can let you know this type of information.

3) Lowball offers get slow or no response - Remember that the bank is typically unaware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback. Surprisingly, it may also take painstakingly long to hear back even on good offers due to the high volume of transactions lenders are inundated with these days.

4) Agent must check comparables before submitting offer - The agent must be sure to check recent home sales in the area to give buyers a better idea of the properties that are selling. This will give the agent and the seller appropriate grounds for an asking price that will be more likely to be approved by the bank. Checking comparables will also give the buyer a better knowledge of what price homes in the neighborhood are selling for and ultimately make them a more informed homebuyer.

5) Don't hang your hat on the property - Short sales aren't necessarily "short." It can sometimes be a very long process. Don't get your hopes up for just one property, keep your options open and continue to actively look at multiple properties. Buyers must remain optimistic, the right property will come along. In most areas it is completely legal and risk-free to have multiple offers out at any given time with the proper contingencies.

6) Sellers with other properties or too strong of financials may not qualify for short sale and/or may be asked to pay the difference - Sellers that own more than a handful of properties or have an extremely large net worth will probably not be eligible for short sale. In some cases the seller will be asked to pay the difference of the sale. The seller might even need to sign a promissory note stating that they will pay back all or most of the debt. This has virtually no effect on the buyer as long as the seller cooperates.

7) "Approved" prices are quickest - It is important to remember that short sales are not always timely; however, making an offer on an "approved short sale" can be a quicker process. An "approved short sale" has a price that has already been given the green light by the bank. This could be due to the fact that another interested buyer made an offer that was approved, but didn't end up buying the property. These types of short sales are some of the most highly desirable.

8) Some banks look want strongest buyers, some want strongest offers - The bank has all the power in approving short sales. The bank can pick the most appealing buyer, which may mean different things to different banks. Some banks may prefer the buyers with large down payments while others just want the highest price regardless of down payment. Many buyers want to know if they will get a deeper discount for an all cash offer. This is very hard to predict and one will never really know until they make an offer. As long as the buyer is surrounded by a good team we would advise them to do just that.

9) Repairs are seldom done, credit is more frequent - If there are improvements that need to be made on a home, even if they are necessary to get a loan, it is often unlikely that they will be done. Typically there is some sort of credit issued and the buyer must take the responsibility of fixing anything that is broken.

10) When you get approval, must close on time - During a short sale there is no leniency with the closing escrow date as there often is in a traditional sale. During a short sale, exceptions are rarely made and the buyer must close on time. Because of this, it is important to take care of all loan paperwork immediately after opening escrow. We'd advise buyers to be extra prepared and try to have the loan finalized a few days in advance of the closing date. If there is going to be an issue that will prevent closing on time, a request for an extension will need to be made immediately. If the request is made early enough, many banks will grant an extension but don't just assume it will happen.

Conclusion
Short sales can be a great opportunity to find your new home at a competitive price. A Short sale could also be a major headache that lasts for months. It is important to have a good understanding of the factors that lead to a successful short sale to make it an enjoyable and profitable experience. We hope that these tips will help you to remain positive and optimistic throughout the process.

Todd Foust is the chief marketing executive for the FOUST Team at C21 Discovery; one of the top-selling real estate teams in Southern California. He specializes in Orange and Los Angeles Counties and operates one of the areas most informative real estate websites. To contact him or learn more about Anaheim real estate, please visit FOUSTonline.com.

About the Author: Jennifer McNamara works as a creative marketing contributor/manager for the FOUST Teams public relations division. She is a Southern California native and specializes in translating complicated real estate knowledge into user-friendly information for local homebuyers.

The Magic of A Child's Laughter

Welcome to Autumn! It seems like we barely had a summer and Fall hits quickly. We hope you are enjoying the colors, festivals and, of course your favorite football team!

Thank you for everyone who has called and e-mailed to inquire about how Brigid is doing with her pregnancy. Today is the beginning of her 6th month and she is still doing well, uncomfortable some days, but well. Ana is 'preparing' to be a big sister and is reading books and playing 'big sister' with her dolls to assist in this 'preparation'. As if this weren't cute enough, she asked to have the ultrasound photos in her bedroom so she could 'get to know' the baby better. What I've learned about being a father for a very short four years is that children can certainly try every last nerve in your body, but more importantly, they create more laughter and smiles than you would otherwise have ever thought possible. Parents, does that ring any bells or truths for you? I've shared my most recent funny story about my daughter with you. Now, I'd love to hear some of your funny stories, which have made you smile. Please e-mail me at Steve@Welcome2Indy.com or post on our blog at www.Welcome2Indy.com.BlogSpot.com. I can't wait to smile some more!

Finally, who do you know who should be a first-time homebuyer, but they haven't taken the first step for whatever reason? Please encourage them to talk with a trusted real estate consultant who can take the time to get to know their wants and needs as well as their hopes and dreams and can counsel them effectively on their options. We would love to be that consultant for them as the tax credit expires November 30th, which means they have to CLOSE by November 30th. Time is running out, interest rates are at historic lows, sellers are motivated, and inventory is still plentiful. Our market is getting stronger every day, and the historic values will not last forever, especially in Indy. Please introduce us if we can help make a difference in someone's life. Below is a secure link to our October Newsletter. There is a lot of good and fun information and articles in there. Enjoy! As always, thank you for your loyalty and support!!

http://tinyurl.com/yfoenxr

$8,000 First-Time Buyer Credit Expires Soon!

Are you a first-time home buyer? Do you know someone who would be? You have until the end of October to find a house and get an accepted purchase agreement in order to take advantage of this historic tax incentive. It expires November 30th, which means if you have CLOSED on your new home, you will NOT be able to take advantage of the tax credit. There are many outstanding houses out there still and interest rates are still historically low. Take advantage of this free money while it lasts. For more resources, check out: www.Welcome2Indy.com.

The Media Finally Catches Up...

It's about time! After many months, the mainstream media has finally caught up and started reporting something those of us in the industry have known for many months--the real estate market is healing. Welcome to the party!

We are seeing multiple offers, homes selling in days, and in some instances, for more than asking price. The bad part is that appraisers are still making things difficult and, in my opinion being too conservative and killing deals by valuing homes too low despite a ready, willing, and able buyer and seller happily paying the agreed upon purchase price and easily defensible comparables. So, buyers and sellers beware! Just because you got a great price for your house, that doesn't mean you are going to get an educated appraiser who will properly value your home.

If you qualify for the $8,000 first-time home-buyer tax credit, you only have until November 30th to close on your new home. And, don't forget that if you are bringing $10,000+ to closing, your funds MUST be wiring to the title company-absolutely NO exceptions.

Watch out for low appraisals

OK, so there are many sources out there pointing to the fact that we are heading for a real estate recovery. Monthly inventory continues to decline, sales are going up, never before seen market conditions exist for first-time buyers, and multiple offers are becoming a regularity in many neighborhoods (out of seven pending homes in a Carmel, IN neighborhood, they all had multiple offers!).

However, due to new appraisal guidelines known as HVCC, we are seeing low appraisals on home sales. This is affecting up to 50% of sales for some lenders and real estate agents. It is getting so bad that appraisers are the ones setting home values, not the market-buyers and sellers. This is just the beginning of this problem and it will continue to get worse. If you are thinking of selling your home, consider getting an appraisal before it goes on the market so you have an expectation of what to see after you find a buyer. It is a mess!

Housing Is Moving...

Wow! Things have really picked up in the last 45-days or so. I have shown over 60-homes to 4 different buyers in the past month and many homes in northern Marion County and southern Hamilton County are selling in under 30-days! Several are generating multiple offers and some still are selling for above asking price, including a listing of ours in Butler-Tarkington. The spring market is here and there are a lot of buyers taking advantage of the the low sales prices, motivated sellers, record inventory and selection, super-low interest rates, and the $8,000 first-time homebuyer tax credit.

This is all good news for everyone. That may be the light at the end of the tunnel we are seeing...

Recovery in Sight?

Is a housing recovery in sight?  No one has a crystal ball, but there are some very strong signs pointing in that direction.  Such as: 1) Home sales were up 5.1% in February, which is the largest single month increase on record, 2) Housing inventory is going down and is below 6 months of inventory in many areas of Indy, 3) Many homes are receiving multiple offers, 4) Many homes are selling in under 30-days, especially in Carmel, IN, 5) Buyer activity is WAY up for most real estate agents, 6) Showings for listings are increasing significantly, 7) Many buyers are asking about the $8,000 first-time homebuyer tax credit and the record low interest rates.

I think we hit bottom in February and things are turning around--finally.  Are you in a position to buy a home in 2009?  My guess is that 2009 will go down in history as one of the best years of all-time to buy a home.  I did.  Will you?

Foreclosure Information

Excerpted from Real Trends Newsletter-March 6, 2009

Mortgage rates hold steady
Fannie Mae/Freddie Mac launch new initiatives
11% of homeowners in mortgage trouble

Mortgage rates hold steady

A lousy week on Wall Street didn't have much effect on mortgage rates, according to Bankrate.com. Stock prices fell to 12-year lows. Normally, a giant slide on stock prices is met by a plunge in mortgage rates-not this time. The benchmark 30-year, fixed-rate mortgage was unchanged, at 5.41 percent, according to the Bankrate.com national survey of large lenders. Source: Bankrate.com

Fannie Mae/Freddie Mac launch new initiatives

Two new initiatives from Fannie Mae-Home Affordable Refinance and Home Affordable Modification-are now available to its servicers and borrowers as part of the Obama Administration's "Making Home Affordable" program. The two initiatives hope to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future. For more details about the programs, goto http://www.fanniemae.com/homepath/homeaffordable.jhtml Freddie Mac launched its new REO Rental Initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. Freddie Mac also will continue to suspend all eviction actions until April 1, 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.

11% of homeowners in mortgage trouble

Over 11 percent of all American homeowners are either delinquent or in foreclosure, according to a report from the Mortgage Brokers Association (MBA). The percentage of mortgage borrowers at least one month behind in their payments-but not in foreclosure -rose to nearly 8 percent during the fourth quarter of 2008, according to the MBA National Delinquency Report. That is the highest rate of delinquency ever recorded by the survey, which began in 1972, and reflects a record 13 percent jump compared to the third quarter. The number of homes in the foreclosure process rose to 3.3 percent, an increase of 0.33 percentage points from the quarter before and up 1.26 percentage points from a year earlier. That represents nearly 1.5 million homes at risk of sliding all the way through foreclosure. Combined, the number of frequencies and loans in foreclosure came to 11.18%, the highest ever recorded by the MBA.

The Credit Crisis Explained

Take a look at this very good, non-biased, straight-forward explanation of how we got into this credit mess we now face. It is very interesting:

http://www.crisisofcredit.com

Indianapolis Ranked Nation's Most Affordable City...Again!

Indianapolis and New York City bookend the most affordable-least affordable list. Lower homes prices and interest rates fail to push sales higher.

By Les Christie, CNNMoney.com staff writer, Last Updated: February 23, 2009: 2:17 PM ET

NEW YORK (CNNMoney.com) -- Crashing home prices have led to the most affordable housing market in at least five years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index released Thursday.

More than 60% of all U.S. homes sold during the last three months of 2008 were affordable - meaning that a family making the national median of $61,500 a year would pay 28% or less of their total income toward housing expenses.
At 62.4% affordable, the figure is up considerably from 56.1% in the previous quarter and 46.6% at the end of 2007, according to the report.

Topping the list of most affordable U.S. metro areas, which ranks areas with more than 500,000 in population, was Indianapolis. This is the city's 14th consecutive quarter in first place; it boasts a full 93% of all homes sold being affordable to median family households.

The least affordable was the New York City metro area, where only 13.9% of homes sold met the criteria.
In the fourth quarter, the national median home price fell to $190,000 from $205,700 in the previous-year period, according to a report issued last week by the National Association of Realtors. That combined with falling mortgage rates has made home buying the most affordable it has been since early 2002.

"Falling home prices and very favorable mortgage rates both contributed to the housing affordability gains we saw in the fourth quarter of 2008," NAHB Chairman Joe Robson, a homebuilder from Tulsa, Okla., said in a prepared statement.

That still wasn't enough to get moribund housing markets moving again. Existing homes sold at an annualized rate of 4.74 million in December, according to the National Association of Realtors, down from more than 7 million during the boom.
And a government report revealed that new home sales crashed to an annualized rate of 331,000 in December, the lowest since record keeping began in 1963.

"Worsening economic conditions, historically low consumer confidence and uncertainty about future home prices kept many qualified buyers on the sidelines," Robson said. Still no buying push

That affordability has improved so much does not necessarily make people go house hunting, according to Mike Larson, a real estate analyst with Weiss Research.

"You could argue that house affordability indexes are improving but that may not be the best way of defining whether it's a good time to buy," he said. "Concerns about the economy and whether they're going to still have a job have kept many homebuyers from stepping up to the plate."

During the boom, when house affordability plunged, buyers came out in droves. They were confident in the economy and afraid that home prices would soar out of reach. Today, just the opposite applies.

"Affordability is going to get even better," said Larson. "Home prices are not done falling. Buyers recognize this. There's no sense of urgency, and rightly so."

Indeed, according to Nicholas Retsinas, director of Harvard University's Joint Center for Housing Studies, affordability, which was a major factor in homebuying during the boom, no longer matters very much. In most parts of the United States, affordability has returned to where it was in 2002 or 2003.

"The new barrier is willingness to buy," he said.

That's why one major goal of President Obama's housing-rescue plan involves slowing foreclosures to stabilize housing markets and foster consumer confidence.

"If that happens, maybe people will start thinking, 'Hey, maybe prices won't go down tomorrow,'" said Retsinas.
Most and least affordable
Affordability in Indianapolis, the 33rd largest metro area in the United States with 1.7 million people, was buoyed by fairly high median income of $65,100 and rock-bottom home prices. The median price for a home sold during the quarter was just $103,000, according to the National Association of Home Builders report.

Those prices, combined with reasonable mortgage interest rates, make home-buying in the area a snap. A buyer of a median-priced home putting 20% down would pay only about $450 a month in mortgage expenses.
But even though house buying costs are reasonable, the city's weakening economy meant it did not escape the foreclosure plague. More than 20,000 homes, representing nearly 3% of the city, received a foreclosure filing of some kind in 2008, the 26th highest rate in the nation.

Other most affordable towns were: Warren, Mich. (89.6%); Youngstown, Ohio (89.4%); and Detroit (89.3%).

In the New York City metro area, home prices took a steep dive during the quarter, to $455,000 from $500,000 three months earlier. But even that was not enough to dislodge the city from its rank as the most unaffordable metro area in the land.
Median income in the area is $63,000, less than in Indianapolis and, with home prices more than four times higher than in the Midwestern metropolis, only 13.9% of the homes sold there were affordable to median income families.

That was still a major improvement from two years ago, when only 5.1% of homes sold during the fourth quarter of 2006 were affordable. And New York households have been barely brushed by foreclosure so far with only 0.71% receiving some kind of foreclosure filing during 2008.
Other least-affordable metro areas included San Francisco at 20.6%, where affordability improved greatly from 5.7% during the second quarter of 2007; suburban Long Island, where 25.5% were affordable; and Los Angeles, where 26.9% were.

First-Time Homebuyer Tax Credit Form

Looking for the IRS Tax Form 5405 to include the First-Time Homebuyer Tax Credit? E-mail me at Steve@Welcome2Indy.com and I'll send you the .pdf.

Homebuyer Tax Credit Further Explained

The following is information Lisa Hammond of Landmark Title (my favorite title company!) found through the Active Rain website:

"Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments."
WITHHOLDING EXAMPLES:
Note: The impact of estimated tax payments would be the same.
Situation 1: Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.
Result: Sally's withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000.

Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit.
Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 - $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200)

Situation 3: Charlie and Mary both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 - $5000). They also qualify for the $8000 first-time homebuyer tax credit.Result: Charlie and Mary have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 - $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.

Put the MLS on your cell phone

PUT THE MLS ON YOUR CELL PHONE AND IN YOUR POCKET

CENTURY 21 Realty Group has GONE MOBILE - CALL - CLICK or TEXT

Get ALL homes for sale 24/7/365 Anywhere - Anytime

Instructions to Download Application
Simply go to http://www.GoRealtyGroup.com or http://www.thinkrealtygroup.com
Click on the "Go Mobile" Application IconDownload our new "Go Mobile" Application to your phone

(Note: If your phone is not currently available, check back -- all will be available in 90 to 120 days)

Details on New Homebuyer Tax Credit

First-Time Home Buyer Tax Credit FAQ'S
Congress Enacts Bigger and Better Home Buyer Tax Credit

Provided Courtesy of CENTURY 21 Realty Group February 17, 2009, 4:57 PM

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

Who is eligible to claim the tax credit?

First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.

What is the definition of a first-time home buyer?

The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

How is the amount of the tax credit determined?

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

Are there any income limits for claiming the tax credit?

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.

What is "modified adjusted gross income"?

Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?

Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.

Can you give me an example of how the partial tax credit is determined?

Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?

The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.

How do I claim the tax credit? Do I need to complete a form or application?

Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.

What types of homes will qualify for the tax credit?

Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.

I read that the tax credit is "refundable." What does that mean?

The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit. For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?

Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.

Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?

Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009. In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?

Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.

I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?

No. You can claim only one.

I am not a U.S. citizen. Can I claim the tax credit?

Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.

Is a tax credit the same as a tax deduction?

No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS. A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?

Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment. Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.

If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?

Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

For further information click on this link: http://www.federalhousingtaxcredit.com/2009/faq.php

The 'New' Homebuyer Tax Credit

OK, there is now a new homebuyer tax credit just passed by Congress and signed into law by the President on Monday. It is $8,000 now and goes from January 1, 2009-December 31st, 2009. It is for first-time homebuyers (someone who hasn't owned a home for at least 3-years) and there are still income limits such as $75,000 for singles and $150,000 for couples. It is a true tax credit meaning you don't have to pay it back, unless you sell your home within 3-years and then you have to pay a portion of it back.

This is yet another reason to buy now, especially if you are a first-time homebuyer. Interest rates are still around 5% for a 30-year fixed conventional mortgage with a credit score of 740+. Sellers are giving great deals and there is plenty of inventory. If you are at all interested in looking into whether your situation is right or not, or if you can qualify for these incentives, please give me a call or e-mail. I'd love to help.

$7,500 Homebuyer Credit Explained

Have you heard about the $7,500 home buyer tax "credit"? There has been a lot of talk lately about it and with the proposed changes in Congress, it could get even more confusing. Currently, if you purchased a home from April 1, 2008-June 30, 2009, you are eligible for this "credit". There are some stipulations, however:
1. You cannot have owned a home as your primary residence in the past 3 years.
2. You cannot make over $75,000/year if you file your taxes as an individual or $150,000 if filing jointly.
3. This "credit" is in fact a loan--interest-free from the government. It is payable over the next 15-years on your taxes each year in $500 increments. If you sell your house before then, you have to pay the remaining balance back on your next tax return.

That last one is a pretty big difference from just being "given" $7,500 in free money. You get the credit on the next year's tax return and begin paying the following year. It can be a great help to people, but also must be repaid and many people are not a fan of this program as a result. The upside, is it can dramatically help first-time homebuyers afford that first home in time, which may go down in history as one of the best times ever to buy a home.

Congress is tossing around some bills now that would double the credit to $15,000, eliminate the income restrictions, and the 3-year rule, as well as the re-payment requirement. Needless to say, this would be huge to homebuyers.

For more information visit: http://www.federalhousingtaxcredit.com/faq.php

As always, feel free to e-mail or call me with any questions. Good luck in your home search!!

Activity Picking Up

Goodbye 2008 and welcome 2009! I don't think many people are sad that 2008 is behind us. Unfortunately, it holds many records, which no one wanted to see, however 2009 is here most experts are predicting the housing market nationally should have started to recover by 3rd quarter 2009. Indianapolis is still predicted to start its comeback in the spring of 2009.

Personally, I've seen activity marked pick up already this year for the first time since the fall market. Interest rates are lower still with a 30-year conventional fixed rate with no points and 5% down of 4.75% on Thursday of last week.

Clearly, these are unprecedented times. First-time homebuyers are getting unbelievable deals with some of the largest inventory, very motivated sellers, and low interest rates--all at the same time. That is typically unheard of. If you are a first-time home or move-up buyer, this is the time to get in the market and take advantage of a market most-likely none of us will see again.

Interest rates drop again

Thinking of refinancing or even buying a home? Now is probably going to be the time to do it. Even though we have heard many "experts" talk about the federal government artifically lowering them to 4.5%, don't count on it. There is too much debt currently outstanding for that to happen. Most experts agree that interest rates will continue to hover around 5-5.25% for a little while and then maybe trend up slightly. Interest rates are at near historical lows and sellers are giving great deals still. If you are contemplating a refinance or a purchase, this might be the window of opportunity for which you are looking.

Merry Christmas & Happy New Year!!

Buyers--Come Out, Come Out Wherever You Are!

We need buyers in this market. Interest rates just dropped again today to around 5.50%, which is unbelievable! Inventory is high and sellers are very motivated. In order to get through this housing and economic market slump, we need for houses to start selling again. Short of guaranteeing this, housing WILL come back and be a great investment once more. It is the basis of our economy and always will be.

Mortgage money is still plentiful. As long as you have 3% for a down payment, a steady job, and a respectable debt ratio, you can get a loan. First-time buyers are sitting by the sidelines in numbers never before seen. Generation Y is an even larger generation than the Boomers. We are going to see a huge boom in the housing market, but the question is how long will we have to wait. If you know a buyer who is thinking about buying a home, encourage him/her to talk with a real estate professional and a lender. For every first-time buyer who buys a home, 6-7 additional homes will be sold.

So, if you are thinking about becoming a homeowner, talk with your real estate consultant and see if now truly is the right time for you. My guess is that it will be.

What Just Happened?

Just when we start to see a bright spot in the housing market the stock market goes in the dump and we are getting pretty dim reports about the economy as well. What gives? While the stock market around the globe has taken it on the chin lately, there are still some silver linings out there. Houses are STILL selling. That's right, there is still a housing market out there. Depending on where you live, it is in a different state of recovery, but Indianapolis is still looking good.

Dr. Lawrence Yun, Chief Economist of the National Association of REALTORS (NAR) in a presentation in Carmel, IN a couple of weeks ago shared with real estate agents that he, Alan Greenspan and over 800 economists around the US feel the housing market will have begun its recovery by early 2009, if not sooner. Indianapolis' Pending Home Sales Index actually is up for the 2nd straight month and there is evidence of much pent up demand as buyers are waiting on the sidelines for even better deals and the bottoming out of the housing market. Many signs are pointing to Indy being at the bottom now or just pulling out of it.

As long as you have decent credit (650+), 3 1/2% to put down and aren't drowning in debt, there is plenty of mortgage money out there. For FHA, your down payment can even be in the form of a gift letter from a blood relative. Sellers are giving great deals and inventory is going down. Builders are seeing the fewest new home starts in over 60 years. That really helps our housing market.

Dr. Yun predicts that within the next few years there will actually be a shortage of homes on the market turning the tide, once again to a seller's market and homeowners seeing gains in equity once again. If you are a homeowner, are thinking about buying a home or moving up and are planning on staying in your home for at least 5 years, this could be one of the best times in history to buy a home. Interest rates are still very low (6.5% for a 30-year conventional, conforming loan) and sellers are anxious to sell. Take advantage of this historic occasion and if you are considering buying a home, this could be one of the last times to get such favorable conditions--especially from builders who are giving away unbelievable incentives.

Visit www.Welcome2Indy.com for more informationa and resources

End in Sight for Housing Slump?

While no one has a crystal ball, there are many indications that the housing slump MAY be nearing its useful life. I have seen showings pick up on listings. I've had several buyers write acceptable contracts on homes. Inventory of houses is going down and so are days on market. John Tucillo a nationally-recognized authority in the real estate market and former National Association of REALTORS chief economist in a speaking engagement for the Indiana Association of REALTORS last Wednesday said that he thought that by the end of this year, Indianapolis should be coming out of the housing slump along with much of the rest of the country. That is great news for homeowners, buyers, and real estate agents.

Along with this prediction, as well as lowering interest rates and the national election, we should have a fairly busy winter. Oddly enough, every time there is a presidential election, the housing market slows considerably in the weeks leading up to it, but then picks up right after the winner is announced. This could end up being a decent 4th quarter.

Visit www.Welcome2Indy.com for some great resources in the housing market.

Where Are The Buyers?

This is a question I am hearing a lot lately. Sellers are wondering where the buyer traffic is and why they aren't getting many showings. Real estate offices around the city are significantly slower than usual at this time of the year. Agents who work with buyers just aren't seeing many of them.

I ask, "Where are you, buyers?" Interest rates are around 6.5% for a 30-year fixed-rate mortgage. Historically, that is an excellent rate as the 40-year average is over 8.0%. If you are a first-time buyer, NOW is the time to buy. The market is not going to get much better than it is currently. It can't. Jump in with both feet and take advantage of this outstanding buyer's market before it is too late.

If you have a house to sell and are upgrading, more than likely you will get a better deal than you will have to give, further making sense to jump into the market. The real estate market isn't for everyone right now, but with good, solid, objective advice from a good real estate consultant, you can decide if it is the right time for you and, if so, jump in and take advantage of this once in a lifetime real estate market. For information on the market and to assist you with your research, visit www.Welcome2Indy.com.

Good luck!!!

Economy update

Unless you have been living under a rock for the past 2+ years you know the majority of the real estate market has been going through several challenges lately. In central Indiana alone our market has depreciated 11.3%. Not every neighborhood has seen this kind of depreciation-some have and some haven't. That is why it is critical to speak with a real estate professional to determine exactly what your neighborhood has seen as far as market conditions.

We aren't out of this yet, but the predictions I have seen recently is that the re-sale market is rebounding in the 3rd quarter of this year to as late as the 2nd quarter of next year. New homes are expected to rebound late 2009 or early 2010. Bottom line, with the low interest rates of around 6% and the high inventory of homes in central Indiana (11,000+), there is no better time than now to buy a home. There is a 9.7 month inventory of homes right now. The adage of, "buy low and sell high" clearly applies to buynig a home, too.

Visit our website at www.Welcome2Indy.com for lots of tools to help with your decision-making process and best wishes!

Indianapolis Real Estate Update

Well, the legislature finally got something right.  Effective with the 2009, pay 2010 taxes our property tax cap will be in place at 1% of the home's gross assessed valuation.  That will save homeowners potentially thousands of dollars each year in taxes and allow many to stay in their home.  As a result of the property tax cut, we have a 1% increase in our sales tax to a 7% total sales tax rate.  While this isn't a perfect option, it will give the greatest good, in my opinion to people who can be more discretionary in their spending.

This will make many more areas of Indianapolis, especially older homes much more affordable and help to make these homes more attractive to potential buyers.

This is an incredible time to buy a home with near record-low interest rates, lots of inventory, motivated sellers and extremely well-staged homes.  The phrase, "buy low, sell high" is very applicable here.  If you are even considering buying a home, now is the time to do it as the market is expected to start to balance out the 3rd quarter of this year.

For more real estate information, please visit www.Welcome2Indy.com

Happy house hunting!!

Negotiating with Builders

OK, we have all heard that builders are hurting right now and that isn't far from the truth. Some are hurting more than others, to be sure. What are your options if you are looking to build a new home or are considering buying a "spec" home (one that is already built or is about finished)? First of all, enlist the help of a knowledgeable real estate agent who is familiar with the building process and builders in the area. There are many nuances with each builder and knowing these could save you (or cost you) a lot of money.

First of all, find out whent the fiscal year of the builder ends, or when their sales quarter ends. They will be under more pressure to sell a home at these times than any other. Enlisting the help of an agent will show the builder you are serious and won't cost you any more. The commission the agent makes comes out of the builer's marketing budget and has nothing to do with the price of the home you are purchasing. You will NOT be able to save more money by bypassing the real estate agent.

Be willing to close quickly. Time is money for builders. A quick close is extremely important to builders. Equally important to builders is buyers NOT making the purchase of their next home contingent upon the sale of their existing home. If you can swing these items you are ahead already.

Most builders will pay your closing costs, but ONLY if you use their lender and title company. Be prepared for some road bumps by using their lender, however this can save you several thousands of dollars.

Next, no matter what the sales rep says, make an offer lower than the price of the home. They will have to take it to the VP of Sales, but he/she will take a look at their bottom-line and tell you whether or not they can accept your terms.

The worst that can happen is they will say no, but this is what we can do. Either way, you are ahead.

Check out our website at www.Welcome2Indy.com for other resources or contact me with any questions. Gook luck!!