First-Time Buyer Tax Credit Extended & Expanded Today

Congress passed legislation expanding an $8,000 tax credit for first-time homebuyers today on a 403-12 vote.

The legislation now goes to President Barack Obama, who will sign it tomorrow, according to spokeswoman Jen Psaki. All 12 House members voting against the bill were Republicans. The Senate passed the bill 98-0 yesterday after weeks of delays.

Homebuyers now have until April 30, 2010 to be under contract with a closing before July 1, 2010 to qualify.

Besides the date extension, the main changes to the tax credit for first-time buyers is that the income levels have been increased to $125,000 for single buyers and $225,000 for married couples with a $20,000 phase out. The previous limits were $75,000 and $150,000 respectively. In addition, the home purchased must be under $800,000 for the first-time homebuyer to qualify.

Expansion to Current Homeowners

The bill also expands the tax credit to current homeowners who purchase a new primary residence. The main qualification for them is that they must have used the home being sold as their primary residence consecutively for at least 5 of the previous 8 years. Current homeowners would be eligible for up to $6500 or $3250 for those married filing separately.

Contact me if you have any questions on this. For a good cheat-sheet explaining the differences of the new changes, click here.

Senate Agrees to Extend First-Time Buyer Tax Credit Until April, Reduced Credit offered to repeat buyers

The Senate tenatively agreed today to exend the $8,000 first-time homebuyer tax credit, which was set to expire at the end of November.
Details are still emerging, but the tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes.


In addition, they are adding a $6,500 credit for some current homeowners who buy a new residence by then.

To qualify, current homeowners must have lived in their primary residence for five continuous years.

Senators have not agreed on how the tentative deal would come up for a vote, but sources from both parties said they are considering adding the housing credit to a bill that would extend unemployment benefits. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.

House Speaker Nancy Pelosi has indicated she also is interested in extending the homeowner credit, but House leaders have yet to endorse any one bill.

Homes not the only thing the government is giving tax breaks on!

Special Sales Tax Deduction for Car Purchases Available through End of 2009
 

WASHINGTON — With 2010 models arriving in dealer showrooms, the Internal Revenue Service reminds taxpayers that purchasing a new car, light truck, motor home or motorcycle could qualify them for a special deduction for the state and local sales and excise taxes on their 2009 tax returns. 

Purchases made before Jan. 1, 2010, will qualify for this deduction under the American Recovery & Reinvestment Act of 2009 (ARRA).

The deduction is limited to the sales and excise taxes and similar fees paid on up to $49,500 of the purchase price of a new vehicle. The deduction is reduced for joint filers with modified adjusted gross incomes (MAGI) between $250,000 and $260,000 and other taxpayers with MAGI between $125,000 and $135,000. Taxpayers with higher incomes do not qualify.

Taxpayers who make qualifying new vehicle purchases this year can estimate the deduction with the help of Worksheet 10 in IRS Publication 919, How Do I Adjust My Withholding? Lines 10a to 10k of the worksheet show how to take into account purchases above the $49,500 limit, as well as the reduced deductions for taxpayers at higher income levels.

The special deduction is available regardless of whether taxpayers itemize deductions on their returns. Taxpayers who do not itemize will add this additional amount to the standard deduction on their 2009 tax return.

For those that have questions about the deduction for sales tax and other fees, these questions and answers might help. A videovideo on the IRS Youtube.com channel and audio podcasts in English and Spanish are also available to help taxpayers take full advantage of the deduction.

Another example why you need a Realtor when buying

I've said it more than once --the most important things Realtors do you likely will never know -- that's because when we keep a deal together or fight for our clients you won't hear about it. But without someone looking out for you, the result may not be to your liking. Read this brief article from the Wall Street Journal to learn why one buyer should have utilized the services of a Realtor. Click here to read it.

A different take on the KWRP community garage sale...

It was about 2 p.m. Saturday when I decided to take a bike ride. Sunny and 80 degrees, it was warmer than average for September – the kind of day that makes you feel guilty if you aren’t outside, especially here in Chicago, where the bitter cold of winter is never that far away. I’ve heard people say that Chicago would be the most populated city in the world if the weather was always like it was that Saturday and it is true that people here are especially nicer in the summer – but that is a story for another time.

CLICK HERE TO CONTINUE READING THIS

Free First-Time Homebuyer Seminar September 19

I am proud to announce that I am taking part in a Free First-Time Homebuyer Seminar September 19. Taking place at the Eisenhower Public Libary, 4613 N. Oketo in Harwood Heights, from 1-3 p.m., I will be joined by another award-winning Realtor, a mortgage consultant, real-estate attorney, tax professional and home inspector. For full details, go to Newbiebuyer.com

We will be discussing issues that first-time homebuyers need to know about, including the government's $8,000 tax credit (which expires December 1), mortgage options, things to consider before looking for a home, tax implications of home ownership, does it make sense to rent or buy for me? And much more! The event is free but you must rsvp. To do so, call 847.878.3724 or email your name, address and phone to chiarito@kw.com

In addition, the first 15 who RSVP will get a free hardcopy book "Your First Home: The Proven Path To Home Ownership." All attendees will get a CD-ROM containing the presentations.

Space is limited so RSVP today! Hope to see you September 19! Bring your questions!

One first-time buyer's experience

For regular readers of this blog you may remember a post I wrote about why it is vital to use a Realtor when purchasing real estate. Below is a video of her talking about her experience working with me. To read the story about the "closing from hell" click here!

Something to keep in mind!

Prices are near rock-bottom right now. For buyers who may be thinking of holding out a bit longer, keep in mind that interest rates are headed up. If prices decline by another 10 percent, but interest rates increase by 1 percentage point, the monthly payment will be the same. So, the time the act is sooner rather than later, especially for first-time buyers!

Buyers - The signs are flashing - The time to act is now!

I've talked to a number of potential home buyers over the last few months who said that they were sitting back, waiting for home prices to drop even lower before making any offers. While I can appreciate that strategy, one thing many must realize is that there will be no official announcement that the market has bottomed-out. Figuring this out is the job of economists, financial and real-estate professionals.

And while there has been no official announcement, the fact that home prices and sales increased in May over April is a huge sign that should spur you into action if you are a buyer.

Prices are still down from a year ago, but the Standard&Poor's/Case-Schiller Home Index report shows that it was the first month-over-month improvement in more than a year. In the Chicago area, prices edged up 1.1 percent from April. Nationally, the average was .5 percent.

Another sign prices are increasing

Just last week the Illinois Association of Realtors issued a report that showed even greater price improvement. The median price of homes sold in the Chicago area rose 5 percent in June from May. That followed a 4.2 percent increase in May over April.

So, if you are a buyer waiting to look at homes again, the time to act is now, especially for investors and first-time buyers.

As for sellers, if you thought you had to wait until next spring to list your home, there is a window open now that you should take advantage of.

As always, I urge you to contact me to find out more specific information about your area, as the picture may be even better where you live than for the overall Chicago area.

So remember, the opportunity to buy has never been better. Act now to take advantage of the situation!

Helpful video about the $8000 first-time home buyer tax credit information

Please watch this video and contact me if you have any questions or need more information.




For more first-time buyer resources be sure to click here!

Improve Air Conditioner Efficiency

Heating and cooling comprise 40% of the average citizen's energy consumption. To reduce your electrical bills and increase efficiency, proper maintenance of your air conditioner is imperative.

Prevention is always smart. You don't want to have to replace an air conditioning unit due to neglect . Take these steps to maintain your system, so you don't end up with an added cost of a repairman when you could have intercepted the problem during its early stages.



How to Maintenance an Air Conditioner

Check the Controls:
Make sure that your AC unit starts, operates, and then shuts off properly. Get into this habit as soon as soon as possible.


Check Your Settings:

Turn your AC down when you leave. A timer that turns off when you leave and restarts right before you get back is a good investment.


Check the Drain:

A plugged drain can cause water damage.


Lubricate:

Any moving parts that are un-lubricated can cause friction and increase the amount of used energy.


Tighten All Connections:

Bad electrical connections are unsafe and can damage your appliance.


Measure Voltage and Currents:

Faulty currents can reduce the life of major components.


Adjust Blower Components:

This provides better airflow and thus more comfort. Airflow problems can reduce efficiency by 15%.


Change Air Filters Once a Month:

A dirty filter decreases efficiency, and reduces the life of your air-conditioner.


Clean Condenser and Evaporator Coils:

Dirty coils cause the system to run longer because the system cannot function as well, jacking up your electrical bill.

Senators Push To Expand & Increase Homebuyer Tax Credit

June 10 - Lawmakers are pushing to revive legislation in the Senate that would almost double an $8,000 tax credit for first-time homebuyers and expand the program to all borrowers.

Senator Johnny Isakson, a Georgia Republican, introduced a bill today that would increase the tax credit to $15,000 and remove income and other restrictions on who can qualify, according to his spokeswoman, Sheridan Watson. The Treasury Department declined to comment on the proposal.

The legislation, co-sponsored by Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, would extend the homebuyer credit to multifamily properties used as the borrower’s primary residence. It would also eliminate income caps of $75,000 and $150,000 on individuals and couples seeking to claim the credit.

“The housing market continues to be a drag on the economy, John Castellani, president of the Washington-based Business Roundtable, said in a telephone interview today. “We believe that if we don’t stabilize this vital sector, we can’t turn the tide on the recession.”

The Business Roundtable represents more than 100 chief executive officers including General Electric Co.’s Jeffrey Immelt and Exxon Mobil Corp.’s Rex Tillerson. The group and the National Association of Realtors are pushing to expand the tax credit and to lower mortgage rates to revive the housing market.

For All Borrowers

“One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can,” Isakson said in a statement. Isakson said his legislation would spur demand in the housing market by giving homeowners the incentive to trade up to a more expensive home.

The bill would extend the tax credit, which now applies to homes purchased from Jan. 1 to Dec. 1, 2009, to one year after the new measure is signed into law, according to Watson. Isakson’s bill would make the credit available to all borrowers, not only borrowers who haven’t owned a home in the previous three years as is the case under current law. It would also let borrowers divide the credit over two years. The legislation wouldn’t be applied retroactively to purchases completed before the date of enactment, Watson said.

The bill is co-sponsored by Republican Senators Lamar Alexander of Tennessee, Saxby Chambliss of Georgia, David Vitter of Louisiana, James Risch of Idaho, Lisa Murkowski of Alaska, John Ensign of Nevada and Jim Bunning of Kentucky, according to a statement from Isakson.

Senator Joseph Lieberman, a Connecticut independent, has also signed on to the bill, according to the statement.

Using the First-Time Buyer Tax Credit Towards Your Down Payment --Clarification!

There has been a lot of confusion about whether or not first time homebuyers can use their tax credit to fund their downpayment. The answer is YES, but with a small catch. Only buyers who get FHA loans are eligible to do this, but they must have the required 3.5 percent down payment on their own. (The tax credit would be used on top of the 3.5 percent).

I hope that clarifies things for anyone who was confused. There also is a movement to expand the tax credit to all consumers and to increase it to $15,000 from the current $8,000. I will publish a post on this soon.

You can now use the $8000 First-Time Home Buyer Tax Credit as a Down Payment

Big Improvement to First-Time Buyer Tax Credit

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Other Solutions for Today's Market

During his address at the summit, Donovan went on to say that the Obama administration plans to further stabilize the housing market. “I do think we have some early signs that the market overall is stabilizing,” Donovan says. “Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate.”

The morning session included a panel discussion that was moderated by CNBC’s Ron Insana. Panelists examined cutting-edge solutions necessary to promote and preserve homeownership and real estate development, stimulate the economy, and protect the nation’s taxpayers. They also shared their ideas on what the role and responsibility of the federal government is in the revitalization effort.

“Right now the Federal Reserve is the market,” said panelist Jay Brinkman, chief economist for the Mortgage Bankers Association. “What will be the effect when the Fed stops buying?” Brinkman explained that an exit strategy must be planned for the long-term; the federal government cannot continue to support the mortgage markets indefinitely.

“We are thrilled that so many high-caliber individuals were able to join us today at this important meeting to promote stability in the housing market and the U.S. economy,” said NAR President Charles McMillan. “We look forward to an ongoing dialogue and action toward this goal, during our midyear meetings this week and beyond.”

The real estate summit is part of the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo. During the week ending May 16, more than 8,500 REALTORS® will attend meetings, visit lawmakers and inspire action on Capitol Hill.

Source: NAR

Act NOW to take advantage of today's historic low interest rates

You may not of heard but interest rates dipped to extremely low rates today.
A conventional 30-year-fixed is right about 4.875% and FHA 30-year-fixed is 5.125%

To lock in and take advantage of this, contact me asap!

Tired of hearing all the gloom and doom about our economy?

Believe it our not, there is a good deal of real estate news that is pretty good. You won't hear it on the tv news or newspapers these days because it doesn't sell. I figured I'd share it with you though -- click here to feel better today.

First-Time Homebuyer Tax Credit Form

As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.
True to tax code standards, the 10-field form is accompanied by 3 pages of instructions. Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit. For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".
In addition, Form 5405 highlights the math behind the tax credit.

In general, the First-Time Homebuyer Credit is equal to the lesser of:
$8,000 for homes bought in 2009
10 percent of the home's purchase price

Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".

Form 5405 is a comprehensive reference. However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances. There is no substitute for professional, paid advice.
Download the form here!
For more information vital to first-time buyers, click here!

First-time home buyer Tax Credit Explained!

The American Recovery and Reinvestment Act of 2009 features an $8,000 tax credit for first-time buyers who purchase a home on or after Jan. 1, 2009 and before Dec. 1, 2009.

For detailed information, contact me. For an overview, I have posted a brochure for you to read and share! To view the brochure, click here

Homeowner Affordability & Stability Plan announced

On February 18, 2009, President Obama announced his Homeowner Affordability and Stability Plan, designed to help up to 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. In doing so, the plan not only helps responsible homeowners behind on their payments or at risk of defaulting, but prevents neighborhoods and communities from being pulled over the edge too, as defaults and foreclosures contribute to falling home values, failing local businesses, and lost jobs.

The key components of the plan are:
1. Government Sponsored Enterprises (GSEs) Refinancing for Up to 4 to 5 Million Responsible Homeowners with GSE loans to Make Their Mortgages More Affordable
2. A $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners
3. Supporting Low Mortgage Rates By Strengthening Confidence in Fannie Mae and Freddie Mac

Below are some helpful links: Be sure to comment on this blog with your thoughts and questions.

Questions and Answers for borrowers:

Executive Summary of the plan:

Fact Sheet:

3 Housing examples:

Homebuyer tax credits part of new economic stimulus bill

The Senate voted February 4 to give a tax break of up to $15,000 to homebuyers in hopes of revitalizing the housing industry, a victory for Republicans eager to leave their mark on a mammoth economic stimulus bill at the heart of President Barack Obama's recovery plan.
Sen. Johnny Isakson, R-Ga., who advanced the homebuyers tax break, said it was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.
The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break for the purchase of new homes only.

It May Be Time to Think About Buying a House

From the NY Times. Dec. 6, 2008
By RON LIEBER
Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.
Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.
Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.
That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.
Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.
If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.
But if you are a potential first-time buyer yourself, or lending or giving the down payment to one, you are probably as frightened as you are tempted by all the “For Sale” signs that have become “On Sale” signs. So let’s quickly review some of the still-grim pricing data in certain areas — and consider the reasoning offered up by first-time buyers who have forged ahead anyhow.
As is always the case with real estate, much depends on location. One study, “The Changing Prospects for Building Home Equity,” tries to predict where today’s first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines. The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas.
This is obviously scary. (I’ve linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It’s worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs.
Also, the price projections in the study are based, in part, on the fact that the ratio of purchase prices to annual rents is still higher in many areas than the historical average, which is roughly 15 times rents. While past figures may well have some predictive value, I have never been convinced that first-time buyers compare a home that they could own and one that they would rent in purely or even primarily economic terms.
When Jaime and Michael Proman moved this fall to Minneapolis, his hometown, from New York City, they craved a different sort of life after two years together in a 450-square-foot studio apartment. “We didn’t want a sterile apartment feel,” said Mr. Proman, who is 28 (his wife is 26). “We wanted something that was permanent and very much a reflection of us.”
The fact is, in many parts of the country there are few if any attractive rentals for people looking to put down roots and enjoy the sort of amenities they may spot on cable television home improvement shows. Comparing a rental with a place that you may own seems almost pointless in these situations, especially for those who are now grown up enough to want to make their own decisions about décor without consulting the landlord.
Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.
You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.
John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it’s free) at annualcreditreport.com and dispute errors.
While no one can easily predict the likelihood of losing a job, Friday’s startling unemployment figures suggest the need for caution if you think you might be vulnerable. A. C. Panella, who teaches communications at Pasadena City College in California, waited until she had a tenure-track job before buying a home in the Highland Park section of Los Angeles with her partner, Amy Goldman, a lawyer for a nonprofit organization. “We could afford the mortgage payment on one salary, were something to come up,” Ms. Panella, 31, said. “It’s really about being able to stay within our means.”
For many first-time home buyers, that philosophy stretches to the down payment, too. Ms. Panella and her partner put down 20 percent when they bought their home in September, as did the Promans when they bought their home in the Lowry Hill neighborhood of Minneapolis.
Alison Nowak, 29, put just 3 percent down on a Federal Housing Administration-backed loan last month when she and her partner, Lacey Mamak, bought a $149,900, 800-square-foot home several miles south of where the Promans live. “Anything that is an opportunity also has a bit of risk,” she said. Her house was in foreclosure before a plumber bought it and fixed it up. “One way we mitigated it was that we bought a really tiny house in a very good neighborhood.”
One other strategy might be to buy new instead of used. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, says he believes that a steep drop-off in inventory of new homes is coming soon, thanks to a rapid decrease in home builder activity.
Since prices generally soften in the winter, it may make sense to start looking seriously once the mercury bottoms out. “If you look at new developments next spring, you may not have the choice you thought you would have or be in the bargaining position you thought you would be,” Mr. Shepherdson said. Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.
Finally, allow yourself to consider how it would feel if you bought and then prices dropped another 10 or 15 percent. It might not bother you if you plan to stick around. Plenty of people seem to be making a longer commitment to their homes. According to a survey that the National Association of Realtors released last month, typical first-time buyers plan to stay in their home 10 years, up from 7 last year.
Perhaps people are more aware that they will not be able to build equity as rapidly as others did in the real estate boom. Or they simply have more confidence in hard, hometown assets now than in other markets.
“We wouldn’t let another decline bother us,” said Michael Proman. “You can never time a bottom. This is a long-term investment for us, and it truly is the best investment we have in our portfolio right now.”

Time to Appeal That Tax Bill?

If home price drops, so should property taxes. Home owners might be smart to initiate a property tax appeal.

In these uncertain times, many home owners have had to face the fact that the current market value of their homes is less than they once thought.

Yet, most of these home owners continue to pay property taxes based on that higher value.

Higher taxes may also make a property less appealing and affordable to buyers, since higher taxes will increase their overall costs, at least until the property is reassessed. That’s why it’s a smart strategy to advise past clients who might be considering a sale to appeal their property taxes at the next opportunity.

Evaluating Your Assessment

The vast majority of taxing jurisdictions throughout the United States assess residential property based on market value: the amount a willing buyer would pay a willing seller without duress. However, assessments are generally not reviewed on an annual basis, so a property’s assessment will never be 100 percent of market value.

To compensate, taxing bodies apply an equalization ratio, which is designed to ensure that assessments are relatively equal among different taxing districts to all assessed values. For example, a property worth $100,000 with an equalization ratio of 50 percent would be assessed at $50,000. Home owners can obtain their equalization ratio from local taxing authorities.

If, after a review with a residential broker or appraiser, a home’s assessed value seems out of line with current market values, the home owner should undertake an investigation to determine what might have caused the incorrect valuation. Here are some steps for your client to follow.

1. Arrange a visit with the local tax assessor and request a complete copy of the home’s tax records. Property record cards are public records and are universally available.

2. Pay particular attention to the market comparables listed on the property record card. These recently sold homes are the basis for the assessor’s valuation of your client’s home. Visit those houses or view them online, and compare them to the client’s house.

3. Take the appropriate equalization ratio and multiply the market value you believe appropriate for the home by that rate. If the number is lower than the current assessment, your client should file a tax appeal.


Filing an Appeal

Most home owners should be able to properly file the appeal without counsel, but most jurisdictions require a licensed real estate appraiser to prepare an expert analysis of local market values for the local tax board.

Home owners should work closely with the appraiser to review all the amenities and issues that might affect the valuation of their home. Many times an appraiser may not be aware of construction, zoning, or general neighborhood issues that negatively affect value.

Real estate brokers familiar with the property and the area may also be a valuable resource for this type of information. They may also be able to assist the appraiser in determining which properties are the best comparables for a particular home. All of the appraiser’s conclusions need to be properly documented with supporting evidence in the appraisal report that will be submitted with other supporting paperwork prior to the hearing.

In addition to compiling evidence, the taxpayer should take care to learn and follow the rules of the local board of assessment review. Each taxing jurisdiction has appropriate appeal forms. It is also critical to determine the deadline for filing an appeal.

The final step in an appeal is a hearing before the assessment appeal board. Proper preparation is the key to a successful hearing. The home owners and the appraiser should prepare a script detailing the important points that need to be made during the appraiser’s testimony in order to prove a lower market value and assessment.

The key focus should be comparing the home in question with every presented comparable. The appraiser should be prepared to analyze each important amenity and discuss how it positively or negatively affects value.

During uncertain economic times, the effort of appealing a property tax bill reduction may prove well worth the time and effort involved.

New home sales post unexpected increase as prices fall to lowest level in 4 years

By MARTIN CRUTSINGER
AP Economics Writer
9:24 AM CDT, October 27, 2008

WASHINGTON (AP) _ Sales of new homes recorded an unexpected increase in September as median home prices dropped to the lowest level in four years, the Commerce Department reported Monday.Sales of new single-family homes rose by 2.7 percent last month to a seasonally adjusted annual rate of 464,000 homes, Commerce said. Economists had expected sales would drop from the August level.The median price of a new home sold in September declined by 9.1 percent from a year ago to $218,400, the lowest price level since September 2004, a period when home prices were rising rapidly as the country experienced a five-year housing boom.The surprising increase in September sales still left them 33.1 percent below the level of a year ago as the country is battered by the worst slump in housing in decades.The report on a rise in new home sales followed news last week that sales of existing homes rose in September by 5.5 percent, the largest monthly gain in more than five years.Analysts are not convinced that the sales increases are signaling a bottom for the housing market. They note that the September gains came before the latest upheavals in financial markets which have raised new worries about the overall state of the economy.Many analysts believe the country has already entered a recession. They are forecasting significant increases in job losses which will make it even harder to mount a sustained rebound in housing.New home sales fell by 21.4 percent in the Northeast and were down 5.8 percent in the Midwest. However, sales rose by a sharp 22.7 percent in the West, a region of the country which has seen some of the biggest declines in prices, a development which has spurred sales. Sales were up 0.7 percent in the South.The rise in sales left a total of 394,000 unsold new homes on the market at the end of September, down a record 25.4 percent from the number of unsold homes on the market at the end of September 2007.Builders have been sharply cutting back on production, trying to get inventories more in line with sales.Even with the latest drop in total unsold new homes, the inventory represents a 10.4 months supply at the September sales pace, still a historically high level.The inventory of unsold existing homes is also remaining near historic highs as that market is being increased by a record wave of home foreclosures.The 2.7 percent rise in sales for September new home sales followed a big 12.6 percent drop in August, which was revised sharply lower from the government's initial estimate. Sales in July had risen by 3.6 percent.

United Mortgage Services Sheds Light on Government $

The government is offering a credit of up to $7,500 for First Time Homebuyers who purchase a new primary residence between April 9, 2008 and July 1, 2009. There is a misconception that these funds are a grant, they are not. In fact, it's a loan from Uncle Sam but it is interest free.
When you file your tax return you'll get a tax credit, which is applied to your income tax filings and you get a bigger refund or you owe less taxes. Although, at the onset it may seem more complicated than it's worth, it is actually quite simple and is a great way for new homebuyers to get some cash on hand just after the big purchase. Let me try to simplify it further. To start, the program is only offered to folks who make $75,000 maximum earnings per year if filing single, or $150,000 if filing jointly. If your income exceeds this there may still be the possibility of a partial credit, but nothing if you make more than $95,000 per person per year. To get the credit you would close on the property as usual. Then come tax time, if you fit that income bracket, you claim the available $7,500 credit on your tax return. For example, if you owed $1,000 on your federal taxes normally, your return would be $6,500. If you were getting $2,000, you would instead get $9,500. Going forward, over the course of the following 15 years you would pay back the credit, remember interest free, as part of your tax filings. The figure comes out to roughly $500 due per year. This works the same way, at tax time if you were getting back $1,000 normally, you would instead get $500, and pay back the other $500 towards the annual principal owed. Something to consider is that in the event that the property is sold before the 15 years, the balance would be due at the time of sale. However, if there is no appreciation the loan is forgiven. Likewise, if the property is converted to a rental or investment property the outstanding balance of the loan would be due at the time of conversion. This and other government programs exist to help homeowners. The trouble is that homeowners and especially new homebuyers aren¢t made aware or are often times confused by these programs. United Mortgage Services takes pride in educating and supporting our customers, and we would be happy to help you in any way we can. Please feel free to contact Geno Tucci for more information on this or any other loan related issues:


Geno A. Tucci, Sr. - Founding MemberResidential / Commercial Loan SpecialistUnited Mortgage Services, Inc.630-640-5031 (cellular) 630-396-3132 (fax) gtucci25@yahoo.com
www.unitedmortgageteam.com

First time buyers -- act now!

On Sunday, I was exhibiting at a Bridal expo in the Chicagoland area and was very privileged to meet several potential first-time buyers. Thinking of the excited couples, I am envious of them in one respect -- many of them are in a position to buy and do not have to worry about selling. Now I am not saying it is a bad time to sell --- I actually think it is a good time in many cases, but it is DEFINITELY A GREAT TIME TO BUY!

Why? Well, prices are at very low levels, with fall here and winter fast approaching, many sellers are getting nervous and will take any reasonable offer. Interests rates are still very low, and this is important because this is likely to change in the next year. Yes, I know, loans are tougher to get, but I work with a team of professionals who always do a great job.

So, for those of you who I met Sunday or others who are considering buying, please act now and contact me today so that you can take part in this wonderful buyer's market!

10 reasons why the fall/winter is the best time to Sell!

That's right, you did not read that wrong! There are several reasons why the fall and winter is the best time to sell.

Take a moment to consider all these. Why wait till spring -- when there is more and more competition! Make your move now and get on with your life!

1. Buyers looking are truly serious
2. Your house looks great decorated
3. People are always looking 365 days/year
4. Less competition (less homes on the market)
5. Moving costs are usually less expensive
6. Interest rates are still good
7. May be a tax benefit
8. Easier to schedule a closing
9. Be in your new home for the New Year
10. More time to shop while I show your home

Why it is essential to be represented by professionals in real estate transactions

When thinking about what duties Realtors perform in the sale of a home, many people assume our main job is marketing. And on the buying side, many assume our main duty is to set showing appointments. While marketing and setting up appointments are part of a Realtor’s job, it is hardly the main function or most important.

In my opinion, the most important function of a Realtor is to protect our client’s best interest.

Recently I represented a buyer in the purchase of a home in Bellwood. My client, whom I’ll call Vivian, was a first-time buyer. After showing her a few homes, she fell in love with a home in Bellwood. I then educated her about what similar homes recently sold for in that area and she made an offer. A day later, we received a contract back signed by the owner. Sounds pretty simple huh? Well, the simple truth is without a team of professionals, she would have never closed the deal and gotten the keys to her home.

That’s because of several factors. First, although we had a signed contract, it didn’t mean anything because the seller turned out to be in pre-foreclosure and had to get approval from their lender to sell their home. After explaining that the home was being sold “short,” Vivian wanted to move forward with the purchase. In situations where the home owner owes more than his home is worth, he must get permission from his lender to take a fair market price. In this case, I was told that the lender had approved the asking price and given an estimate of three weeks for approval. Knowing that short-sales typically take two-three months, I prepared Vivian that possibility. In the meantime, I recommended a mortgage broker to her and made sure she had everything lined up and ready to go. I also explained why it is imperative for her to work with a real estate attorney and put her in touch with an excellent attorney whom I work with often.

It took three months for lender approval, which was in line with the original timeframe that I estimated for Vivian. Once we received approval from the lender, we scheduled the closing date! Ironically, even though my client had a mortgage commitment and was ready to go weeks before, the seller’s lender told us that we had to close on the scheduled date or they would foreclose on its seller. I know it doesn’t make sense, but short-sales and the way lenders work is a discussion for another time. Regardless, we had a scheduled closing so the hard part was over….right?

Like many suburbs, the Village of Bellwood requires a city inspection before they will release tax stamps, and without the stamps, a closing cannot be completed. Once the closing was scheduled, I called the village to schedule the inspection but was told that the seller would have to schedule it. After checking with the village every so often, I was told that the seller had it scheduled and it would take place about 10 days before the closing.

Well the closing date arrived and Vivian, her attorney and I arrived on time. After a few minutes we were told that the seller’s attorney was at the Village of Bellwood picking up the tax stamp. [The seller never told us that the stamps were not issued after the village inspection 10 days before.] After another hour of waiting the title company informed both parties that they had to transfer funds within 15 minutes or the closing would not take place! Remembering that the seller’s lender said we had to close on that day or the deal would be off, I got on the phone to the seller's attorney and was told that he had the tax stamps in hand. He then called the title company representative, told her the same thing and we were done ….but not quite!

The title company representative took the seller’s attorney word and transferred the funds. At this point, my client was congratulated and we thought we were just waiting for the seller’s attorney to bring us keys when I received another call! This time, the seller’s attorney informed me that he did not actually have the stamps. He said that he was sure he’d get them and didn’t want to ruin the deal so he had told us a lie! He added that there was a “small problem.” When I asked what it was, he said the village wanted to hold money in escrow to ensure that my client brought the property up to city code. Then he told me how much the village wanted from my client -- $11,000. I knew that my client did not have an extra $11,000 and for a few minutes I thought the deal was dead. I told Vivian the situation and could see the disappointment on her face. In fact, I was surprised that she didn’t cry. I probably would have if I was in her position.

After huddling with my client’s attorney, her position was that the property was closed and that the title company should be on the line for the $11,000. They approved the transfer and now would have to go after the sellers’s attorney for the money! While this sounded good in theory, I knew in reality that the only way my client would get the home would be after a long legal battle. I knew there had to be another way.

Vivian’s attorney and I both made several calls and in the end we got the $11,000 escrow reduced to $160. That’s right --- we got it reduced by $10,840
How’d we do it? I could probably write a book about that, so all I’ll say here is that we were persistent and tenacious and I am very happy to report Vivian closed and moved in!

To me, it scares me that some people would attempt to buy a home without professional representation. I can’t imagine if my client forked over $11,000 for a ridiculous village escrow. Even if she would ultimately get the money back, she would have to make several costly repairs and upgrades that her attorney and I convinced the village were unnecessary. On the flipside, if Vivian didn’t pay the escrow, she would not have been able to close that day and the lender would have foreclosed on the seller. Either scenario would not have been good for Vivian.

I hope this example gives you a little insight into some of the ways Realtors and other professionals help their clients. If have any questions about short sales, foreclosure properties or other real estate issues, contact me anytime! Also, you can see a list of attorneys, mortgage professionals and home inspectors that I recommend by clicking here.

Your friend and Realtor,
Robert Chiarito

This is Not The Great Depression

Comparing the current crisis to the Great Depression is just plain wrong, say historians and veteran financial experts."The nomenclature of the word 'crisis' has cheapened," says Roy Smith, a professor at New York University's Stern School of Business and former partner at Goldman Sachs .

“The Great Depression had thousands of banks failing and people losing their life savings, 25 percent unemployment and social unrest and tent cities of the poor," says Allan Sloan, Washington Post and Fortune magazine columnist.

"With just 6 percent unemployment, we are having a debate as to whether we are even in a recession," says Richard Sylla, professor of the history of financial institutions and markets at New York University.