Can I use the tax credit for the down payment?

These were just a few of the questions asked at a recent session on the Home Buyer Tax Credit extension held at The Group Inc. real estate offices  on January 13. Like Cash for Clunkers for the auto industry, the extension of the Home Buyer Tax Credit extension is meant to encourage buyers to purchase a home sooner than later.

And it seems to be working. Originally, the tax credit extension ended on November 30, 2009 but the feds decided to extend it to April 30, 2010 which means that as long as you have a signed contract by April 30 and close by June 30, you are eligible for either the first-time home buyer credit of $8,000 or the long-time resident tax credit of $6500.

But there are restrictions and here are just a few:

• You have to have lived in your home at least 5 out of the last 8 years in order to qualify for the long-time resident tax credit and the house you buy must become your personal residence.
• If you buy a home with your new spouse, the two of you must meet the qualifications of a long-time resident by living in the same house if the both of you are looking to qualify as long-time residents.
• You can keep your present home as an investment if you want.
• In a few cases and possibly a higher interest rate, the buyer might be able use the money as part of a down payment.
• Members of the military serving overseas get an extra year.
• The buyer can’t buy the home of a relative.
• Plan on owning the property for at least 3 years.
• There are maximum income levels and minimum sales prices.
• Ask your Realtor how to claim your credit and what forms you will need.

Congress passed the tax credits in an effort to boost the struggling housing industry and fight recession. Indications are that it’s had an impact. The National Association of Realtors reported that November sales of existing homes were up 44 percent from a year earlier. Although new home sales dropped in November, figures from the Commerce Department show that they’re up 8 percent from the low in January 2009.

As a real estate agent, I’ve been spending much of my time fielding calls from clients asking if they are eligible and asking for advice as to their next step. Each situation is different and my answers need to be about each client’s financial state, the local market and the client’s potential price range. We also have to consider the stress and time and effort it takes to buy a house and meet a looming deadline.

Since the long-time resident tax credit can also be used to downsize, it can work for someone living in a home that no longer meets the needs of a smaller household. Sell your family home and buy a patio home or a condo. But I think the majority buyers using the tax credit will be the first-time home buyer who can use the money to make some changes to their new home or they can just tuck it away just like a bonus but without the tax ramifications.

So bottom line: with less than 5% interest rate (for buyers with great credit), some fantastic inventory, motivated sellers (though not all!!!), and free money, we haven’t seen such a good buyers market in awhile. However, with reasonable prices for homes that are in popular locations and well-maintained, we are seeing multiple offers again.

I called clients about two homes that I saw on a Realtor tour before it even hit our local MLS, but both were under contract before the end of the day. So, no matter what you hear in the national media about the state of real estate, everything really is local. Not just the northern Colorado market, but neighborhood by neighborhood, the sales are widely different.

A couple of caveats here. Changes in the lending market are forcing contract deadlines to go from 30 days to close to 45 days to close and with FHA loans it can be up to 60 days to close. If you’ve been ruminating about a possible sale or purchase, call your Realtor, pay attention to your neighborhood, drive around the neighborhood you would like to live in, go to Open Houses, look on the Internet, talk to a lender; do your homework. But check this market out. And time is truly of the essence.

The new documents which go into effect on January 1, 2010, require a detailed comparison of the Good Faith Estimate with the Settlement Statement at the time of closing, assuring the purchaser the loan terms they receive at closing are the same as the terms they agreed to initially.

For more information, contact a Group Guaranteed Mortgage loan officer at any of The Group, Inc.’s 6 offices in Northern Colorado.www.thegroupinc.com

National average rate for the week ending November 20th:

30 year fixed:  4.83%
15 year fixed:  4.32%

Market Commentary:
A highly anticipated speech on Monday by Fed Chief Bernanke on the economic outlook revealed no change in the Fed’s stance on short-term monetary policy. There were also few surprises in the economic data released during the week. The monthly inflation readings continued to show that inflation is not a cause for concern in the short-term. As a result, mortgage rates barely moved during the week, remaining at historically low levels.

The decline in the value of the dollar has received a great deal of attention lately. While Fed officials rarely discuss the value of the dollar, Bernanke assured investors that the Fed is closely watching exchange rates. However, he then reminded investors that the Fed’s dual mandate is to promote full employment and to keep prices stable. According to Bernanke, the value of the dollar is just one of many factors affecting inflation, and the Fed is not concerned by the movement in the dollar so far. With a fragile economy and high a unemployment rate, he suggested that the Fed intends to keep the fed funds rate at very low levels. Tightening monetary policy to strengthen the dollar would hurt the economic recovery and slow job creation. After the speech, the value of the dollar fell to the lowest level since August 2008.

If foreign investors expect the value of the dollar to continue to fall, it may pose a risk for mortgage rates in the future. Foreign investors historically have been major buyers of mortgage-backed securities (MBS). When the dollar falls, the value of US assets to foreign investors in their own currency declines, making US investments less rewarding. With the Fed scaling back its MBS purchases over the next few months, a drop in foreign demand would further pressure yields higher to fill the void left by the Fed.

A wide range of economic data will be released during the holiday-shortened week ahead. Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the ! FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving.Copyright @ 2009 MBSQuoteline

Stu Hoime
Venture Manager
The Group Guaranteed Mortgage
Together with Bank of America
2803 East Harmony Road
Fort Collins, CO. 80528
970-229-2512
stu.hoime@thegroupmortgage.com

“The top seven sites on the list were unchanged from September, with No. 1 Realtor.com growing its U.S. market share of online visits to real estate-related sites from 6.86 percent in September to 7.1 percent in October.”

The research was done by Hitwise who monitors and analyzes thousands of websites on the Internet.

The Group, Inc. has enhanced all of our listings on Realtor.com.  The extra investment we have made allows us to provide more photos and information about our listings with an easy way for the customer to get in touch with our listing Realtors.  Based on the number of potential buyers who look at Realtor.com every month, this is an important feature for our customers.

During his tenure with Slifer Smith & Frampton Real Estate, Thompson led the company from no.5 in local market share to no.1 in local market share.He has extensive experience in all aspects of real estate brokerage including sales, recruiting, training, managing, marketing, and new construction and development.In addition, he holds a Bachelor of Arts degree in Economics from the University of Colorado.

McNeal said, “Eric’s values and beliefs are in perfect alignment with the culture of The Group.His vision for the future of our company as well as the broad experience he brings is nearly impossible to find in this business.We are very excited to have someone of this caliber as President of The Group and I am confident he will become an important part of the Northern Colorado real estate and business community.”

The Group, Inc. Real Estate is the largest real estate company in northern Colorado and was founded in 1976. Its family of companies is independently owned by Realtors, managers and staff.Over 300 people work in The Group’s six real estate offices in Fort Collins, Greeley and Loveland.The Group has been the market leader since its inception in 1976 and has been named the most productive firm in the country by Realtor Magazine and RealTrends.

The annual rankings are based on six factors: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life.

Forbes rates Colorado No. 1 in the nation on labor supply, based on educational attainment, net migration and projected population growth; No. 2 on prospects for growth; and No. 5 on economic climate, which includes unemployment and presence of big companies as well as gross state product, job and income growth. The state’s regulatory environment places No. 17 on the list and quality of life comes in at No. 15.

Business costs, including labor, energy and taxes, were the only areas where Colorado ranked below the median at No. 33 — and were also the most heavily weighted of the criteria.

“Colorado is honored to be recognized by Forbes.com as the fourth best state to do business,” said Gov. Bill Ritter Thursday in a prepared statement. “We have one of the nation’s most highly skilled workforces and tremendous job growth opportunities. There’s no question Colorado will emerge from this downturn quicker, stronger and healthier.”

The top 10 states for business this year, according to Forbes.com: Virginia, Washington, Utah, Colorado, North Carolina, Georgia, North Dakota, Texas, Nebraska and Oregon.

Rhode Island, which finished last for its regulatory environment, brought up the rear at No. 50 on the list. Michigan was No. 49, Wisconsin No. 48, Vermont No. 47, West Virginia No. 46 and New Jersey No. 45.

Earlier this year, Forbes ranked Fort Collins as the second-best metro for business and careers, right after Raleigh, N.C., and right ahead of Durham, N.C. Colorado Springs came in No. 10 on that list.

Congratulations to Group Realtors who were honored at the Loveland Berthoud Association of Realtors Awards and Installation Banquet on September 17.

Debbie Hansen was named Realtor of the Year.

Matt Thompson was recognized as Rookie of the Year.

Jim Muller, Miki Roth and Robert Walkowicz were installed as members of the 2009-2010 Board of Directors.

Nancy Walkowicz received her 35 year pin for her commitment to the real estate industry.

We are proud of all of these individuals and appreciate the contribution each of them have made to the Loveland Berthoud Association of Realtors and to our industry.

The Certified Negotiation Expert designation was designed to give Realtors the knowledge, training and ability needed to become an expert negotiator – a vital skill required for real estate transactions.Better results can be derived for the customer when collaborative approaches are used to help identify and create value for all parties.The CNE designation training course was ranked in the Top 5 New training courses in the 2008 Swanepoel Trends Report. 

There are currently only 3,000 Realtors in the country who have earned the CNE  designation.   Group Realtors who have completed the course are:

Kathy Albertz

Kathy Arents

Deb Baker

Scott Beasley

Jason Billings

Cindy Blach

Kathy Boeding

Brian Bogaard

Dianne Breneman

Chad Brent

Sally Brent

Steve Bricker

Nate Buie

Jo Carney

Jim Chance

Lee Cord

Leone Coryell

Sharianne Daily

Dave Dornan

Chris Doyle

Kurt Faulkner

Rita Greywood

Debbie Guinn

Chris Hau

Rhonda Heth

Troy Hiebsch

Prue Kaley

Larry Kendall

Stephanie Kirkland

Cindy Kurtz

Cindy Kutin

Sally Lee

Coleen Ligotke

Bob Lone

Diana Luthi

Ron Maulsby

Nancy Maus

Deanna McCrery

Terry McNeal

Doug Miller

Tracie Milton

Vern Milton

Jeff Montgomery

Jim Muller

Dave Muth

Carole Newberry

Lisa O’Brien

Layne Payant

Julie Perich

Leigh Ann Peters

Anne Pielstick

Joey Porter

Chuck Rehmer

Miki Roth

Karen Rowan

Tracey Ryk

Andrea Schaefer

John Simmons

Bob Skillman

Todd Sledge

Darin Slocum

Tami Spaulding

Kristen Specketer

Linda Stenson

Jack Taylor

Laura Thomas

John Valencia

Cathy Vance

Carol Voorhis

Wynn Washle

Mari Wildt

Tracy Wilson

The Group, Inc. Real Estate, has announced today it is offering the Job Loss Protection program (*), a part of the HELP Program (Homeowner Education and Loan Protection) administered by the Rainy Day Foundation.

The Job Loss Protection program assists buyers who purchase a home listed by The Group in the event of an involuntary job loss within the first 24 months of the loan.The home must be covered by the program.The program covers mortgage payments up to $1,800 per month for up to 6 months.

Chuck McNeal, Chairman of The Group, Inc. said, “Job Loss Protection is an important and timely service that gives sellers a way to differentiate their property and gives buyers the confidence to purchase.The Group, Inc. is proud to be the first company in Northern Colorado and only the second in the state to offer Job Loss Protection. This simple program will be the difference many customers are looking for to proceed with their real estate plans.”

Realtors at The Group have been certified by Creative Alliances, the Administrator of the program, to offer this program.The program is offered at no cost to the buyer.If a seller elects to participate in the program, the cost is paid by the seller at closing.

The Group, Inc. real estate is independently owned by its Realtors, managers and staff.It has been the market leader in Northern Colorado since 1976 and has six offices in Fort Collins, Greeley, and Loveland.

(*) The HELP Program including the Job Loss Protection is made available by the seller’s enrollment in the Creative Alliances SAvE Program.The Sellers Advantage via Exposure is an optional multifaceted program which includes the HELP Program.

Mary has two children.  Her daughter Sarah, is a third-year law student at the University of Denver.  Her son, Dan, was drafted by the Tampa Bay Rays in the June 2009 draft.  Mary is involved in a number of animal welfare organizations in Northern Colorado.  She frequently jogs on the bike path with her three rescue terriers.
She can be reached at 375 E. Horsetooth Road, Fort Collins, 970-223-0700.