Questions about home buyer credits.

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.

I'm bad

Real Estate in Minnesota is picking up. The market has increased in value 3.5% and new home starts are up. What a ride it has been. For all the people who have been sitting on the fence, now is the time to jump off. That’s enough about work today.

We had the best time at Halloween, it has been years since I dressed up and it was fun being a hippie. Everyone who came to the party had such creative characters. Matt spray painted dyed long johns green and cut the bristles off my ?mark red broom and spray painted that green as well, cut out question marks , put them all over the green long johns and sprayed them black. He painted his finger nails green and my granddaughter put? marks on them. My daughter sprayed his hair & goatee red. He was a great Jokester, Jim Carey would have been proud. They left the party and went to the local pub for the costume judging and Matt won first place. What a hoot.

It is suppose to be 58 degrees today. So back to work I go so I can enjoy the Rayes this afternoon.

All about realestate and current financing

One year ago….

It started with a trickle of failed subprime loans and without warning, the dam broke unleashing a torrent of failed mortgages and foreclosures. Last year, at this time, the mortgage markets were frozen, housing values were plummeting, the stock market was in free fall, Lehman Brothers crashed and burned and the Financial infrastructure of the United States was tottering on the brink of complete collapse. Bernie Madoff made off with a billion or more dollars of his client’s money and scheme after fraudulent scheme came into the limelight. There was no way to escape the media coverage. Foreclosures, bank failures, 401k’s turned to 201k’s, investment scams and the impending Next Great Depression were the story of the minute, the hour, the day, the week; relentlessly pounding us with wave after wave of devastating news. It just plain put everyone in a blue funk.

What a difference a year makes! The Cavalry arrived in the unlikely form of acronyms like TARP, HARP and HERA.

TARP(Troubled Asset Relief Program) is a $700Billion initiative that was supposed to purchase toxic assets(translation-foolishly underwritten failed mortgages) so that lender’s balance sheets would improve sufficiently to provide liquidity to the markets.

In short, it was meant to keep the banks from seizing up for fear of making bad loans while they had an unknown quantity of bad loans already on the books. It was soon determined that this was a bad use of the funds. So, the government(that would be you and me) decided to use our dollars to shore up the banks directly by buying shares in the biggest banks and then telling them what to do with their money. Most CEO’s of large banks did not like being told what to do and many gave back the money. So, eventually, we got around to using the money to make a market of cheap mortgage money so that everybody could refinance or purchase to a very affordable house payment; we went to main street with main street’s money. Imagine that. And…it’s working. 201k’s are now back to 301k’s, the stock market has regained some strength, the housing market is stabilizing, and Bernie, Tom and a bunch of others are in jail.

The next chapter will be bumpy….

The government has been providing almost all of the money to purchase mortgages for the past year, driving rates to historic lows. They are about to stop doing that because the money is running out. They have started to transition the mortgage market back to the private sector(expected to be complete by March 2010) and the private sector doesn’t think it’s a smart idea to loan money out for 30 years at these really low rates when they know that printing money is likely the only way out of the deficit that has been created. When that happens, the dollar is worth less(worthless?) and it will take more dollars to buy something. That’s inflation. Inflation is bad. If a loaf of bread costs $1 now and it costs $2 next year, but you aren’t making any more money, then you don’t get to buy as much bread. People on fixed incomes really lose in a scenario of high inflation. That would be the worker that gets a small raise each year and the elderly who are trying to live on Social Security or fixed incomes from pensions. So, if your buyer or seller has been waiting, use this to help them understand that the best opportunity of a lifetime to lock in an affordable payment, make that move, get off the fence, is right now. It could be a VERY long time before we see anything like the rates that are available today. Locking in on a fixed rate mortgage for 15, 20, 25, or 30 years is a HUGE inflation fighter. You may have to pay more for a loaf of bread but you’ll never pay more for your house payment.

Waiting to sell and buy until values go back to the peak? If you can wait until 2023, go ahead. That’s when values are predicted to return to peak levels in Minnesota. Otherwise, get going right now.

If values were to climb 5% over the next year, giving a seller more cash to put down, they would still have a higher payment due to the rates increasing.

The Home Buyer Credit of $8,000 will most likely be extended until June. This week, I learned from statistics gathered by the Minnesota Home Ownership Center that the average buyer this year is taking 11 months to make a buying decision, talking to 7 Realtors and 3 Lenders. To take advantage of this incredible bubble of opportunity, everyone is going to have to pick up the pace. In the Minneapolis Metro area there is less than a 5 month supply of homes in the 0-$250K range and that has caused prices to increase in this range by nearly 6% in the past 2 months. It’s provided a perfect opportunity for sellers with houses in this price range who want to move up a step. Values for move up houses are still lagging the market and are priced at close to 30% less than they were just 3 years ago. Make no mistake. The Homebuyer Credit is providing the impetus for this pocket of opportunity. In the months of July and August, Minnesota saw a record number of new Sheriff Sales and that means that by spring, sellers will be competing with a glut of new foreclosed properties, and higher interest rates.

I sure hope this helps you help someone make a buying or selling decision.

I’d love to know if this helps you help someone. Shoot me an e-mail at barbarac@fairwaymc.com and let me know if this helped you. - Barb Crea

PS. The window of opportunity on HARP and HAMP is narrowing as well. The Home Affordable Refinance and Home Affordable Modification Programs are also driven by rates. Right now, the ceiling has been raised to allow people who are at a 125% LTV refinance under the HARP program. HAMP has ramped up and under pressure from Washington, more and more people are getting their loans modified. So, if you know someone who is underwater, who tried last spring and failed, tell them to try again. In the spring, we were stuck with 95% LTV’s, then it was raised to 105% and now it’s 125%. The counselors have gotten a lot better at their jobs. Your clients will appreciate the help. The best place to get that help is still www.hopenow.com or have them call us and we’ll try to get them to the right place.

If you need help or someone you know would like to sell or buy contact me. madonna@seelhammer.com

or call 651-450-2164

Preventable suicide of youth!

I am amazed that with all the knowledge out there in our society, that we as a society do not demand that our schools do not provide the curriculum and tools to measure the success. The researched based programs which have a proven success rate are often sided stepped because of politics or cost. Think about it! Are the lives of our children not worth the price? Why do we stand by and allow the suicide rate to continue to escalate, when there is help for our kids. Proven through research based statistics. Dr. LaFromboise wrote such a curriculum, it has been in the market place since the early 90's, read it yourself and you will see how the stand alone chapters will work in any school. When you train teachers how to implement the subject matter into, English, Social Studies, Civics, Health and any class. American Indian Life Skills by Dr. Teresa LaFromboise, of Stanford University. Get it use, and stop our kids from this travesty.
Read the article that follows: Maybe Preventable???Really? Then do something proven!
Youth Suicide May Be a Preventable Tragedy
By Leslie LinthicumJournal Staff Writer
Within the past two months, four young people on the Mescalero Apache Reservation in southern New Mexico have taken their own lives. One was a 25-year-old man; another man was 19. Then it was a 16-year-old girl. On Sunday, a 14-year-old Mescalero girl died of an apparent suicide, the Ruidoso News reported. The tragic news brings back into focus the alarming problem of suicides in Indian country, a place where youths kill themselves at a rate 2 1/2 times greater than their peers. It is a vexing issue, one that has been studied by many academics and generally blamed on the depressing forces of poverty, substance abuse and isolation and the traumatic aftermath of the American government's relocation and assimilation efforts. If that were so, it would seem to be an unmovable problem. But it's not. The issue of suicides among Native Americans is made more complicated by the great success of some tribally based anti-suicide programs. Two of the most successful in the country were launched in New Mexico, one on the Jicarilla Apache Reservation in northern New Mexico and the other at Zuni Pueblo on the state's western flank. Those tribes have slowed the suicide rate through their efforts and — for many years — stopped it. In the span of about a decade, Jicarilla — once home to one of the highest suicide rates in the nation — reduced suicides by about 60 percent. Zuni Pueblo, which for decades had lost an average of two school kids every year to suicide, effectively reversed its suicide trend. How have they done it? By getting the attention and commitment of tribal leadership, agreeing it's a top priority and involving everyone in the community — schools, nurses, doctors, parents, elders. If they can do it, why can't everyone? Hayes Lewis was the superintendent of the Zuni school district in the 1980s when the tribe decided it had to change its course. Academics went in, studied the pueblo's structure and family, government and communication patterns and, working with the schools, developed the Zuni Life Skills Program. It was a curriculum that was integrated into language arts courses and covered communication skills, recognizing and dealing with stress, building self-esteem and encouraging students to recognize stressed or self-destructive behavior in others and intervene. "We told the students, we're not asking you to be clinicians or anything, and we totally understand you're kids," Lewis says. "But if you see something, here's the referral process." That referral process was not just an uncomfortable trip to a counselor's office. A school counselor or a home-school liaison would seek out the student quickly and check in. "It fairly immediately sent a message that you are really important and that we have a concern about your emotional and metal health." Sometimes the crisis could be as simple as a student being worried about his family being low on food, Hayes said, and tribal officials could quickly get a referral to an agency for help. Other times, long-term counseling could be recommended. Or a meeting with tribal elders might be set up. Or a traditional healing ceremony might be arranged. "They didn't just have one channel of assistance; they had a variety of them," Lewis says. Elders, who normally would be excluded from a clinical or school setting, were encouraged to be involved. "They had a lot of wisdom and a lot of cultural knowledge, and they were able to really get to the point in a way that was helpful," Lewis says. Zuni Pueblo has gone 18 years without any suicides in its schools, Lewis says. "It completely reversed." If there was a key to success, it was commitment. "That was the real priority of the community," he says, "and the Tribal Council basically set the tone for that prevention strategy." Another key was for the tribe to get over its own reluctance to talk about death and suicide. "It's always hard to talk about death and dying, but at some point you have to in respectful ways, as hard as it is for people," Lewis says. "There's always this talk that if you talk about death, you're going to bring death. But our problem was, if we don't talk about death, how are we going to end the taking of lives?" Acknowledging that suicide is taboo is part of the program. "That's one of the messages that we always send to our children, that based on our cultural advisers and our elders, is that suicide is not an option. For Zunis, that's not an acceptable alternative. So how can we help (youths) think through some of the options they do have?" Lewis now directs the Center for Lifelong Education at the Institute for American Indian Arts, which helps tribes align their resources so they can address their most critical concerns. Saving lives from being wasted is an obvious tribal concern. "We can do it ourselves," Lewis says. "I think if there was a message sent by tribal leaders and community leaders and educational leaders that the priority of having safe schools and meeting those prevention needs is paramount, then the action will follow or it should follow. So somebody really needs to be the champion." At Mescalero, the high school was just launching a three-year suicide prevention program in its high school, funded by a federal grant, when the first of the recent string of suicides occurred there in late August. (The tribe has seen worse years. In 2007, 11 tribal members killed themselves.) Jeremiah Simmons grew up on the reservation and just returned to run the suicide prevention program, which borrows many of the concepts of the Jicarilla and Zuni efforts. One of the cores of the program is encouraging every kid in the school to watch out for every other kid and get help as soon as problems begin to bubble. Another is to not be afraid of talking about suicide. "The idea of suicide is a very sensitive subject, and it's kind of taboo to talk about it here," Simmons says. "But avoidance hasn't really helped." UpFront is a daily front-page opinion column. You can reach Leslie at 823-3914 or llinthicum@abqjournal.com.

http://heavens-gates.com/18again/

http://heavens-gates.com/18again/

Oh yeah! I heard this and I new that I felt the same way!

Super, Duper week-end

Well, here we are on Monday aftyernoon and I am already getting into this social media stuff. I already wrote my real estate blog; I am coping this note in here, because it is so important. It is a note I recieved from my trusted loan officier. They play such a key role in the process of buying and selling real estate. Read this and let me know what you think.
Is that Pre-approval letter you’re holding Valid?One of our loan officers sold their mother’s house a couple of weeks ago and a loan officer wrote a pre-approval letter for the buyers contingent only on an appraisal and acceptable title work. A week into the process, she got a call saying that the parents were being added as co-signers because the co-borrower’s income wasn’t acceptable to the underwriter; less than a year on the job in a commissioned position. This past week, as we were completing loan applications for a number of borrowers, they shared pre-approval letters that they had already received from other lenders. When we asked them if they had actually sat down with the lender and completed all of the disclosures, provided paystubs, bank statements, and tax returns, etc, the answer in ALL cases was no. Each of them had merely had a conversation with someone on the phone or over the Internet. Nothing had been verified. Out of respect for the professionals who put themselves on the line daily and weekly to sell real estate, represent sellers and buyers, it is necessary that we ask a couple of questions to validate a pre-approval. Has the underwriter reviewed the file and issued an approval and what are the stipulations from the underwriter for final approval? In my business model, a pre-approval means that the file has been PROVED and underwritten. There are no shortcuts to reliable information. Do your sellers a favor and insist on full credit underwriting pre-approvals. They only take 24-48 hours with a qualified, prepared buyer and an in-house Underwriter. email me, madonna@seelhammer.com
This week end had 4 open houses, I felt like falling down last night. It was well worth the effort.

I'm getting it!

I think I am finally getting this stuff down; whew, it is tough to try to blog about this, paste on face book and tweet on twitter. Madonna, I think if you stay at this you might be half decent.
I read other blogs and some are outstanding, I mean to tell you they have those fancy pges with lovely pictures, (they take all themselves) either by camera orsomeone else's page. The time they spend. What on earth am I doing when I am so busy trying to make a living selling real estate in a down market...It takes you way longer to get the job done and you spend way more money doing the job and get pain 60-70% less. Sometimes I lay in bed at night and think to myself, what are you thinking?
I do love helping people and the oppurtunities for buyers and sellers is awesome. I know you think I'm blowing smoke, but really you need to look at the situation. You sell for less, yes, you do, but you buy for way less. Now, think about it; If your payments are twice as much and you sell and buy for less your payments are going to be 60-70% less than you were paying for the same kind of house. Notice your payment goes down the same percentage as my income. Pretty funny, but it is real. I work on commissions.
Life is wonderful and I hope you have a wonderful week-end. I'm doing opens all week end.
I am going to try my best to sell well.
See you next time, Madonna Seelhammer, Remax specialist, the best company in town.

Last weeend of summer?

I am still waiting for summer. Wow! this is definitely a strange climate.
The summer months left us short on sun and rain. How can that be?
I guess maybe that will mean that we have 6 feet of snow this winter.
Great for the ski resorts and the body shops. Oh, don't forget the towing companies and the repair shops when you run in the ditch and tear up your exhaust pipes.
Oh yes! Minnesota is a glorious place to live and our weather cycles improve the economics for small shops.
I wonder if I should go by a snow machine? It might be the only form of transportation on some day's. No, I think I'll just enjoy the day's off and stay warm inside. Those snow day's will give me the opportunity to study the real estate market, digest the statistics and analyze whether or not we are bouncing back.
The statistics already shows that the amount of inventory for sale in the twin cities has shrunk to less than 4 months. That is a huge factor in stabilizing prices.
I am looking forward to a great finish to 2009 and better economic times in 2010.
Sell Well! Be Well! and Keep the Faith!
Happy last week end of summer.
Madonna Seelhammer

Social media, lost and found

I have created a monster. OMG! I find myself more and more in front of a computer screen trying to figure out what I did and didn't do. I find the social media learning blog then I loose it, started another on MN real estate, lost that....Wow! now I have them both together and hopefully I will be able to keep up with the craziness I have created. Now I'm wondering where on earth all this stuff we put on the computer goes? I think I found a home for my stuff; but, how did it get there? How do we manage to find it? People all over the world are doing the same thing. Fascinating! I wonder if all these little bits will one day come flying out of space like dust from another planet? I am sure there is enough informational bits out there to create more real estate by filling in all the sink holes, adding to the mountains and filling in the swamp land. No! not our lakes and oceans, too. I better stop this rambling or I will create the next makings of a horror show, NOT, most likely there is already one about this subject, I just don't watch horror shows so have no idea. Since I am not sure if anyone besides myself reads these things I am going to try and be constructive today and create a fabulous, non resistable marketing plan for real estate houses I have listed for sale in wonderful Minnesota. Let me hear from you if you read my ramblings. madonna@seelhammer.com

Twitter / Home

Twitter / Home

What am I doing? What am I thinking? MN real estate

I am looking at my last blog, 9 days ago and I realize that I suck at blogging. It is hard for me to imagine how anyone would be interested in reading what I am doing without thinking I am trying to sell them something. I know it is terrible to know that 90% of my life is work related. I am a Realtor. What I do is eat, sleep and think real estate. Since I am just beginning this social media thing, I have been trying to think of things to blog about that don't make my readers want to lose their lunch or breakfast in this case. I spend a great deal of time trying to be motivated and inspirational and in a market where people who have to sell are losing so very much, my stomach turns with sadness for them. It has taken me a very long time to know in my heart that my duties to my sellers are needed more now than ever before; If I can market and sell their home now, they have abundant opportunities to move into a similar home for half the price. I can hardly believe that we as professionals did not band together and say hey, this crazy pricing is heading for disaster; history has shown us that whenever areas explode and double in price over night they will adjust and the adjustment is painful to all. That being said, I am still trying to figure out, stay motivated and visit twitter more often to write, what I am doing; However, I have to get comfortable and add a little spice to my twitter. My goal is to be back tomorrow to tell you what I am doing. WTF am I doing? Oh yes, I am setting a goal....for social media...I have a much easier time, face to face, If I do this am I going to get addicted? Am I going to spend hours a day following you? Does anyone really care? Maybe the guru's at RE/MAX can shed some light on my dilemma. You think? My broker shares a thought for the day, and I like this one so I am sharing it with you. Ummm , maybe that would be a good idea for tomorrow.. Oh well here it goes, "The sad truth is that opportunity doesn't knock twice. You can put things off until tomorrow but tomorrow may never come. Where will you be a few years down the line? Will it be everything you dreamed of? We seal our fate with the choices we make, but don't give a second thought to the chances we take."~ Gloria Estefan