By FrontDoor.com | Published: 10/22/2009
Add holiday adornments. The less-is-more mantra of home staging may tempt you to forgo holiday cheer this year. But a few subtle touches like a pinecone centerpiece, an evergreen wreath or a pot of cider simmering on the stove can create a warm and festive feeling in your home. Avoid overtly religious flourishes, which may be off-putting to some buyers.
Posted By susanne On November 23, 2009 @ 4:01 pm In Home Buying 101, Real Estate, Today's Marketplace, Today's Top Story, Today's Top Story - Consumer | Comments Disabled
[1]RISMEDIA, November 24, 2009—(MCT)—House shopping usually slows down in the winter, as people put their home searches on hold to trim the tree, buy presents to put under it and avoid the chilly weather. This winter, however, might be different, thanks to the extended—and expanded—first-time home-buyer tax credit.
“We’re going to see far more interest in the fourth quarter than we generally do because of the tax credit,” said Heather Fernandez, vice president of Trulia.com, a real estate search engine. Traffic surged on the site on Nov. 5, the day Congress approved the credit extension, she said.
The new law extends the tax credit for first-time home buyers and opens it up to some existing homeowners as well: The credit is now 10% of the home price, up to $8,000 for first-time buyers and up to $6,500 for repeat buyers. All buyers must have a binding contract on a house in place on or before April 30, 2010. The sale must close on or before June 30. 2010.
To be considered a first-time home buyer, an individual must not have owned a home in the past three years. And to be eligible, existing homeowners need to have lived in the same principal residence for five consecutive years during the eight-year period that ends when the new home is purchased. The credit is only for principal residences.
Income limits have risen as well. According to the IRS, the home buyer tax credit now phases out for individuals with modified adjusted gross incomes between $125,000 and $145,000, and between $225,000 and $245,000 for people filing joint returns.
The inclusion of move-up buyers might inspire homeowners to take action and list their house if they’ve been putting it off, said Carolyn Warren, a Seattle, Wash.-based mortgage broker and banker and author of the book Homebuyers Beware. “If somebody loves their home, it’s not going to entice them to sell. If they’ve had it on the back of their minds and really would like to move up, it might push them into doing it sooner than later,” Warren said.
The credit isn’t expected to have as large of an effect on move-up buyers as it has on first-time buyers, according to the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions. The maximum tax credit is about 4% of the average purchase price for first-time buyers, but about 2% of the average purchase price for move-up buyers.
“We estimate that the first-time home buyer tax credit will result in a 10% increase in home sales from March through November of 2009,” said Thomas Popik, research director for Campbell Surveys, in a news release. “We’d expect the effect of the proposed tax credit for current homeowners to be about half as large—from December until the tax credit expiration in the spring of next year, it might be 5% of 3 million transactions, or about 150,000 incremental home sales. Incremental sales to first-time home buyers could be an additional 300,000, for a total of 450,000 incremental sales due to the tax credit extension.”
Tips for buyersInterested in buying a home and claiming the home-buyer tax credit? Below are five tips:
1. Don’t procrastinate. Start searching for a home now. Getting an early start will give you a better chance of finding the right house before the credit deadline. Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker, and do a realistic assessment of what you can afford. Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible.
2. Don’t count on another extension. The credit won’t be available forever, Fadel said. If you want to take advantage, be sure to make that spring deadline.
“This is a medication for the housing crisis. Once the patient—which is the housing market—cures, there will be no medication needed,” he said.
3. Mind the interest rates. Mortgage interest rates are low right now, but will likely rise next year. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying. Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise.
4. Communicate with your lender. Throughout the process, make sure you’re communicating with your lender regularly; if there’s a piece of documentation you’re asked for, get it turned in as soon as possible, said Doug Heddings, a New York-based real estate agent with Charles Rutenberg Realty. Good communication is important in making sure the loan closes on time. And think twice before pursuing a short sale if you want to make the credit deadline. That’s where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner’s lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property.
5. Don’t take shortcuts. Don’t forgo any of the steps you would normally take just to make the tax credit deadline. Make sure the house is a good fit for your needs and get a home inspection. Skipping steps could cost you in the long run.
(c) 2009, MarketWatch.com Inc.
Distributed by McClatchy-Tribune Information Services.
A few basic elements can make the difference between a quick home sale and a frustrating ordeal. The experts offer their best tips.
No matter how long your home lingers unsold, you can comfort yourself that at least you're not Mark Twain.
The celebrated author put his Hartford, Conn., home on the market for $60,000 in 1901, according to biographer Fred Kaplan. Despite repeated markdowns, the elaborate house failed to attract a buyer until the price was finally slashed to $25,000 two years later.
What was once a much-loved home -- in which Twain estimated he'd invested more than $100,000 -- became a painful albatross.
"I would rather go to hell," Twain wrote the friend who was helping him sell the place, "than own it 50 days longer."
If you want to avoid Twain's agony, you'd be smart to do some work up front to make sure your house sells fast.
Finish the "honey do" list. Just about every homeowner has a string of little repairs that never quite get done. Now's the time. Fix the screens, oil that squeak, patch the cracks, paint the trim. Stuff that you've long since stopped noticing could be shouting "Deferred maintenance!" to every potential buyer.
The cost: A few bucks if you're handy, a couple of hundred or so if you hire someone who is.
"Having an inspection (report) right on the counter during the open house . . . shows the buyers that the seller's got nothing to hide," said Kelly, author of several real-estate books, including "Cashing in on a Second Home in Mexico."
The cost: Around $400.
Pack up the clutter. "Clutter eats equity," said real-estate broker Barb Schwarz, CEO of StagedHomes.com and a pioneer of the concept of professionally preparing houses for sale.
Too much stuff makes rooms look smaller and focuses buyers' attention on your possessions rather than the home you're trying to sell. That's why many professional stagers recommend removing as much as a third of your things to better show off rooms and closets.
"Since you're going to have to pack it up anyway, do it now," advised Schwarz, who said she has staged more than 5,000 homes. Buyers "can't imagine themselves living there if they can't see the space."
The cost: $150 to $300 a month for three months' storage.
Depersonalize and neutralize. The first items that should go in those packing boxes: family photos, collections and just about anything else that says "you." Streamline your artwork and consider toning down bold decorating statements, said Ilyce Glink, author of "50 Simple Steps You Can Take to Sell Your Home Faster and for More Money in Any Market." That means neutral shades if you need to repaint walls or replace carpets.
"Buyers have a hard enough time envisioning how their stuff will look on your walls," Glink said. "By neutralizing your decor, you can help give them the blank canvas they need to imagine your house as theirs."
The cost: $10 and up for paint; $500 and up for new carpet.
You'll need to banish suspect smells as well; you don't want your house to become known in real-estate circles as "the cat pee place." If your pets have had one too many accidents, you may need to replace the affected carpet and padding and have the underlying floor sealed. If you're not sure how your place smells, get your least tactful friend to take a few whiffs and tell you the honest truth.
The cost: $10 or so in home cleaning products, if you do it yourself; $75 and up if you hire help.
Stage the rooms. Stand in the doorway to find each room's focal point, and use furniture placement to highlight that. The back of your sofa shouldn't block the view of the fireplace, for example, and the dining room table shouldn't be sharing space with a stair climber.
You should remove any extraneous pieces of furniture, but you may be able to "repurpose" them in another room. A wingback chair that's crowding the family room might help create a nice reading nook in the master bedroom, Schwarz suggested.
The cost: Nothing, if you do it yourself; $1,500 and up if you hire a professional stager.
Tend to the floors. Keeping them spotless won't help if they're dated, worn or impossibly stained. You shouldn't spend a fortune installing hardwood or tile, though, since you're unlikely to recoup the cost. Look for compromises that can improve the home's appearance without busting your wallet.
Carpets should be steam-cleaned to see if they're salvageable. If not, you may be able to reduce the costs of replacement by offering to do some of the work, such as removing the old carpet and moving furniture.
And banish scatter rugs, Schwarz advised. Little rugs add to the visual clutter and can be dangerous besides.
The cost: Anywhere from a few bucks to a few hundred bucks.
Kick up the curb appeal. By now, you probably realize the garden gnomes are a no-no. But you may not realize how many sales you're losing before potential buyers even get to the front door.
"Most people will start their search for a home on the Internet. If your house's Internet photo doesn't 'wow' them, they might never call for a showing," Glink said. "That's why your front landscaping needs to be in perfect condition." Given the pressure to make a good first impression, you'll need to do more than trim back the hedges and plant a few pansies.
"Hire a professional landscaper to clean up the leaves, plant some fall flowers, trim the bushes and trees, and really manicure your lawn," Glink suggested. "If your front walkway is cracked, now might be the time to replace it."
The cost: $300 to $500 for the landscaping, more if you need to fix walkways or driveways.
Pick the right publicist. If you're working with an agent, you'll want one who can really sell. That means somebody who knows your neighborhood intimately and who's enthusiastic about your home. That also means someone other agents want to work with; someone who's too abrasive or who isn't trustworthy won't help your cause.
If you're going to try to sell your home yourself, make sure you're up for the job. Hawking a home can be hard work.
The cost: 3% to 6% of the sale price of your home.
Your goal should be a fair price -- something that's reasonable given the price of other homes in your area.
"Buyers who are actively searching for a fairly-priced home," Glink said, "will pounce on what they perceive is fair value."
Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.
Homebuyer tax credit program extended
Cynthia Shelton, 2009 Florida Realtors® president, shares the great news about the newly extended and expanded homebuyers tax-credit program.
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