Basic Math 101:

Everyone has to pay for housing in one form or another. With today’s historically low home prices and interest rates, the cost to be in your own home may be less than the cost to rent. As an example, if you pay $1000 in rent, to your landlord you will have spent $12,000 after a full year. If you pay a monthly mortgage payment of $1000, you’ll have spent $12,000 to your future – and have realized a variety of tax breaks in the process. I can provide rent vs. buy flyers and examples that clearly illustrates this benefit.

Are you a first time homebuyer?

If so, you can write and ratify a contract as late as April 30th, 2010 and still realize up to an $8000 tax credit provided the transaction closes no later than June 30th.* Remember the amount of the actual tax credit is contingent on whether filing singly or jointly, and that there are income and other limitations. 

Are you moving up to a larger property?

If you have lived in your primary residence for no less than five out of the past eight years, you may be eligible for a tax credit of $6500.*  As with the first time homebuyer credit, the same deadlines and income etc. guidelines apply. 

Buyers are requiring more time from their Realtors before they make a decision with whom to work. As Walter Sanford noted in Broker Agent News, “The public is seeking experienced and successful real estate agents who know how to cope and be successful in a more normal market.” I can introduce you to a Realtor that will help you understand the transaction, work diligently to help you secure your home, along with being easy and fun to partner with.

In addition, there’s no need for you to become a mortgage expert yourself. When you work with Coldwell Banker Mortgage we take care of providing experienced personalized service to help you with every aspect of home financing. This lets you focus more time on finding your perfect home!

If you have any questions about this, or would like to discuss your mortgage options, please contact Marianne Lane at Coldwell Banker Mortgage.

From the NRV Living blog ...

There are five bills currently making their way through the Virginia General Assembly that homeowners in Virginia, particularly those in Montgomery County, should be paying attention to.  From the Virginia Homeowners Alliance:

• HB570 – real estate taxes are based on a real estate assessor’s assessment of your property’s value, and is almost always based on a combination of a visual inspection of the exterior (read – sitting in the car) and a quick perusal of the property card.  If you don’t like the assessment, it’s up to YOU to defend whether the property’s value should have gone up or down.  This bill shifts the burden of responsibility from you to the assessor who valued the property.
• HB552 – a scenario to consider – you want to build a detached apartment on your property, and you petition your local government to change the zoning to allow for just that.  You break ground, start building, and then … the locality changes its’ mind and makes you undue everything.  Hmmm … I can’t think of anything like that happening around here.  HB552 strengthens a property owner’s “vested rights”.
• HB191 – this legislation unifies the process of filing formal complaints against a homeowners association.  Right now, the rules are different for each association.
• HB205 – when your home gets damaged, your hazard insurance should pay to fix that damage.  However, there’s no guarantee that the brown roof you had on the house won’t be replaced with a green one.  This bill serves to make sure that you’re not stuck with a green roof when you ordered a brown one.  Unless, of course, you wanted the green roof … oh, nevermind.
• HB430 – Remember HB570, up above?  HB430 focuses on values as well, but this time requires that real estate assessors have more education, and make the appeals process easier for homeowners.

I like that HB570 shifts some of the responsibility away from the individual who isn’t actively involved in the assessment process to the one who should be well-versed in the area.  There needs to be a balance, certainly, but it’s a step in the right direction.  And certainly more education can’t be a bad thing as it pertains to HB430, but certainly education doth not a good assessor make.  Interested to see what the final iteration of this one might be.

If you’re a homeowner in Virginia, I would highly recommend joining the Virginia Homeowners Alliance.  This service, provided by the Virginia Association of REALTORS, helps all of us protect our homes’ value by knowing what’s happening in legislation that affects each of us.  As someone who’s worked very closely on the implementation of this very important service, I can speak firsthand to the attention to detail that has gone into it.  The link to signup is here, and as always, it’s SPAM-free!

As a final aside, during the middle of this month I’ll be attending what’s called the Day on the Hill. It’s an opportunity for the real estate community to talk one-on-one with our elected officials in Richmond, and some of the discussions might center around topics like these above, or most certainly the first-time buyer credit.  If there are housing issues you’d like addressed directly to your representatives, email me and let’s see if we can get it in front of them.

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From the NRVLiving blog ...

The title of this post is a bit shocking, no?  I pulled it from an article posted at BusinessWeek.com last week entitled “If You Don’t Buy A House Now, You’re Stupid Or Broke“.  Do I believe you’re broke?  I hope not.  Do I believe you’re stupid?  No, although I’ve certainly been called worse.  Nevertheless, the title still makes you stand up and take notice.

If you have a few moments I’d encourage you to read the whole article; Marc Roth talks about the historical lows that interest rates are at, and gives some insight into how they’ve arrived at these levels.  While I find the constant yelling “interest rates have never been lower, buy now!” a bit tiresome and insincere given the current economic climate, the truth is that they’ve never been lower, and Marc gives a good visualization of that.

Where the post really resonates though, is when you look at the true costs of a loan at today’s interest rates.  Check out the section beginning at “Loan Costs”:

We are at 5%. As you can see by the graph above, as the economy stabilizes, it is reasonable for us to see 30-year fixed rates climb to 6% within the foreseeable future and probably to a range of 7% to 8% when the economy is humming again.  If every quarter of a point is worth $12,000 per $200,000 borrowed, then each point is worth almost $50,000.

Let’s put that into perspective. You have a good stable job (yes, unemployment is at 10%, but another way of looking at that figure is that most of us have good stable jobs). You would like to own a $240,000 home. However, even though home prices have steadied, you may be thinking you can get another $5,000 or $10,000 discount if you wait (never mind the $8,500 or $6,500 tax credit due to run out next spring. Or you may be waiting for the news to tell you the economy is “more stable” and it’s safe to get back in the pool. In exchange for what you may think is prudence, you will risk paying $50,000 more per point in interest rate changes between now and the the time you decide you are ready to buy. And you are ignoring the fact that according to the Case-Shiller index, home prices in most regions have been trending back up for the last several  months.

If you are someone who is looking to buy or upgrade in the $350,000-to-$800,000 home price range, and many people out there are, then you’re borrowing $300,000 to $600,000.  At 7%, the $300,000 loan will cost just under $150,000 more over the lifetime, and the $600,000 loan an additional $300,000, if rates move up just 2% before you pull the trigger.

Am I suggesting everyone should buy a home right now?  Absolutely not, but it’s helpful to see what buying a home at today’s fixed rates (not a resetting ARM) will mean in dollars.  It’s also a good starting point for those planning on buying a home in the future, but not necessarily right now, as you can use his figures.

I can’t think of a clever way to end this post, and so I’ll just end it here.  Maybe some of those people were right when they called me stupid.

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If you need one more reason to make buying a home a smart financial move– aside from home prices being very attractive and mortgage interest rates continuing to hold at all time lows, there is money just waiting to be had in the form of a tax credit!

The home buyer tax credit has been revised to still include first-time home buyers but also expanded to current home owners too.

What to know:

First-Time Home Buyers:

• The definition of a first-time home buyer is someone who has not owned a home in the past three years.
• The tax credit is up to $8,000

Repeat Buyers (those who currently own a home):

• You must have lived in the home you own now consecutively for at least 5 of the previous 8 years.
• The tax credit is up to $6,500

For Both First-Time and Repeat Buyer:

• The annual income limit to be eligible is $125,000 for individuals and $225,000 for couples filing jointly.
• Individuals with income up to $145,000 and joint filers with income up to $245,000 may qualify for a partial credit
• The home you are buying must be used as your primary residence – no vacation homes or investment property qualify

But hurry up - because there is an expiration date on this offer! You must sign a purchase contract by April 30, 2010 and complete the transaction by June 30, 2010.

Please remember, these are guidelines and your accountant or tax advisor can provide information specific to your individual situation or needs. To apply for a mortgagee, or if you have mortgage related questions please contact Marianne Lane at Coldwell Banker Mortgage.

FHA Commissioner David Stevens announced a set of policy changes last week for FHA mortgages. FHA will propose to take the following steps:

1. Increase the mortgage insurance premium (MIP)
2. Update the combination of credit scores and down payments for new borrowers
3. Reduce seller concessions to 3 percent, from 6 percent
4. Implement a series of significant measures aimed at increasing lender enforcement and accountability

Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased
In an effort to build up capital reserves and bring back private lending MIP is being increased. The first step will be to raise the up-front MIP from 1.75% of the mortgage amount to 2.25% and request legislative authority to increase the maximum annual (monthly) MIP FHA can charge. If this authority is granted, the second step will be to shift some of the premium increase from the up-front MIP to the annual (monthly) MIP. This will take effect this spring.

2. Update the combination of credit scores and down payments for new borrowers
New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 score will be required to put down at least 10%. This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in early summer.

3. Reduce allowable seller concessions from 6% to 3%
The current level exposes FHA to excess risk by creating incentives to inflate appraised home value. This change will bring FHA into conformity with mortgage industry standards on seller concessions. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

4. Increase lender enforcement and accountability
• Increase enforcement on FHA lenders
Publicly report lender performance rankings to complement currently available Neighborhood Watch data - will be available on the HUD website on February 1. This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.

• Enhance monitoring of lender performance and compliance with FHA guidelines and standards
Implement Credit Watch termination through lender underwriting ID in addition to originating ID. This change is effective immediately.

• More lender accountability with the risk of losing their ability to offer FHA loans
Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting and lending approval for a lender nationwide on the basis of the performance of its regional branches.

The mortgage industry has many changes both now and on the horizon. Feel free to schedule a time to talk with me about these changes. I will explain exaclty what you need to know to when purchasing a home.

A quick sale ultimately creates less inconvenience for you. The faster your home sells, the more you save on carrying costs, mortgage payments and other ownership costs. If you've moved before, you know the energy it takes to prepare for showings: altering your lifestyle to keep the home clean, make childcare arrangements, etc. Proper pricing reduces these demands by helping your home sell faster. A home priced at market value will gain exposure to more prospects that can afford the price.
 
Sellers who list at a high price are looking for that "one special buyer" who will pay it, often not realizing that they have discouraged many potential buyers who could have afforded the home. The final sales price is typically one that is affordable by more purchasers. In the end, sellers often must accept a much lower price at a much later date since that "one special buyer" willing to pay the higher price never comes.
 
When a buyer's agent is excited about a home and its price, they make special efforts to contact all of their potential buyers. Knowing that it is priced properly for its market, they expect it to sell soon and encourage their prospects to act quickly. Their excitement is contagious!
 
When price is not a deterrent, ad calls and sign calls to REALTORS® turn into showings. The most serious prospects are well educated about asking prices in the areas they are seeking. They will not waste their time on a home they consider overpriced.
 
Most buyers fear they might lose out on a good home when it is priced right. They are less likely to make "low ball offers." Better pricing attracts multiple offers!
 
Bottom line, if a home is priced right, the seller will net more both in terms of actual sale price and in less carrying costs.

Contact me with questions concerning real estate and pricing.

The series continues!

If you've been following along in our Best of the NRV series, you've heard from the managing Brokers of the "2009 #1 Real Estate Company in the NRV," and the #1 [Mike Eggleston] and #2 [Jeremy Hart] agents in the NRV (based on 2009 Roanoke Times Discover survey). But with the 2010 Best in the NRV nomination deadline just a few weeks away, who will you choose as this year's Best Real Estate Agents in the New River Valley?

Will you choose Mike Eggleston as the number one agent again this year, or will you choose Jeremy Hart, last year's first loser? Perhaps, you have another agent in mind altogether that will take this year's title.

In an effort to make this year's decision a little easier, we asked the people closest to Mike and Jermy to give us their opinion. Here's what they had to say–

[Don't forget to cast your vote  for the 2010 #1 Real Estate Company and the #1 Real Estate Agent in the NRV at www.newrivervalley.com!]

The series continues!

Yesterday you heard from Jeremy Hart, the "*2009 2nd Best Real Estate Agent in the NRV." He provided both a comical and touching commentary on his experiences as a NRV real estate agent. Although he was unable to answer his final interview question, his tears were worth a thousand words...[click here to view Jeremy's interview]

Now, in part 3 of our "Best in the NRV" video series, we hear from Mike Eggleston, the "*2009 Best Real Estate Agent in the New River Valley."  Mike speaks about his transition into the real estate business, what he likes best about living in the NRV, and how he manages to keep the high honor of being named "#1," from going to his head. Click the video below to view Mike's answers.

View the entire "Best in the NRV" video series at www.youtube.com/cbtownside and don't forget to cast your vote for the 2010 Best in the NRV at www.newrivervalley.com!

*Based on the 2009 Best of the NRV poll. See page 32-33 in the NRV Discover section of the Roanoke Times.

The series continues!

In Part 1 of the “Best in the New River Valley” series, you heard from Bill Gearhart and Anne Lee Stevens, managing brokers for Coldwell Banker Townside, REALTORS®. They provided several reason's why they think Coldwell Banker Townside, REALTORS® was named the "*2009 #1 Real Estate Agency in the New River Valley."

In the second part of our "Best in the NRV" video series, we sit down with Jeremy Hart, the "*2009 Second Best Real Estate Agent in the New River Valley." He explains how he got into the real estate business and what he loves best about living in the NRV. Jeremy also expresses his true feelings about being named "2nd best." Click on the video below to watch Jeremy's interview.

View the entire "Best in the NRV" video series at www.youtube.com/cbtownside and don't forget to cast your vote for the 2010 Best in the NRV at www.newrivervalley.com!

*Based on the 2009 Best of the NRV poll. See page 32-33 in the NRV Discover section of the Roanoke Times.

Voting for the 2010 "Best in the NRV" is already underway! The New River Current's annual Discover section will soon be featuring the best places, companies, and business people in the NRV. Last year, Coldwell Banker Townside, REALTORS® made the list*, being named the "Best Real Estate Company in the New River Valley." Additionally, you voted two of our agents, Mike Eggleston and Jeremy Hart, as the #1 and #2 “Best Real Estate Agents in the NRV!"

But who will make the list in 2010?

As the deadline for the 2010 vote is only weeks away, we thought it would be appropriate to recognize the 2009 winners one last time, and to find out exactly what makes them the Best in the NRV!

To begin our interview series, we sat down with Brokers Bill Gearhart and Anne Lee Stevens, of Coldwell Banker Townside, REALTORS® to ask them why they beileve their company is #1...

Voting ends February 14th; Don't forget to cast your vote on www.newrivervalley.com!

*See page 32-33 in the NRV Discover section of the Roanoke Times