As and active and informed Atlanta real estate agent, I have to say that there has probably not been a better time to buy real estate in this city in the past 20 years.
Throughout the second half of 2009, home prices were stabilizing and inventories of homes for sale in Atlanta were reducing. With the extension and expansion of the homebuyer tax credit, home buyers have been presented with the best buying opportunities in years! Many of my sellers are trying to “move up” because of growing families and because they can now afford to live in better school districts in the Atlanta area because of dropping home prices.
Let’s take a look at what the tax credit means to you and who is eligible. On November 6, 2009, President Obama signed The Worker, Homeownership, and Business Assistance Act of 2009 that extended and expanded the U.S. Tax Credit for homebuyers. The expansion portion of the legislation includes the following:
- Extends the $8,000 first time homebuyer tax credit and creates a new tax credit of $6,500 which includes most other buyers who close on a new or existing home by June 30, 2010
- Homebuyers with binding contracts by April 30, 2010 will qualify as long as they close within 60 days
- The credit is based on your income and homebuyers showing up to $125,000 on a single return or joint filers with an income of $225,000 are eligible for the full credit amount
- The credit is not available on homes over $800,000
- Homebuyers who owned in the previous three years are eligible only if the home they are leaving was used as a principal residence for five consecutive years of the last eight years. Please note that it must be the SAME home; it’s not enough that you have been a homeowner for five years. Also, the home you are leaving does not need to be sold, but you do need to remain in the new home for at least 3 years or face recapture of the $6,500
- Provides the IRS greater oversight in processing the credit and requires that buyers claiming the credit be 18 years or older
- Extended deadlines are available to certain members of the military, military intelligence and foreign service who are on qualified extended official duty or were deployed overseas for 90 days or more during the program’s availability period
If you look at the Case-Schiller Home Price Index, you will notice that Atlanta has dropped just over 8% in the last year. Places like Las Vegas which saw a dramatic and unsustainable increase during the housing boom have dropped over 25% during the same one year period.
Finally, mortgage interest rates have been at historic lows for a very long time. Most people in the mortgage business see rates gradually increasing throughout 2010.
Owning a home is still the American Dream and a wonderful way to build wealth. Now is the time to buy while there are still great deals in wonderful neighborhoods.
As a native of Atlanta and an experienced Atlanta real estate agent and realtor of many years, I feel that I can help you get the house of your dreams at the best possible price. If you would like to contact me to discuss your options, please call me at 770-826-5907 or email me at tanderson@remax.net.
Note: Homebuyers should contact a tax expert for financial advice pertaining to the above-referenced tax credit programs.
Atlanta Foreclosures
For those looking for a great deal on an Atlanta foreclosure, this is certainly the time to take advantage of the situation. The statistics are rather ugly, but will give you some idea as to how wide open the market is.
As recently as 2000, the 13 county metro Atlanta area had approximately 15,000 advertised foreclosures.
In 2009, the same 13 county area had approximately 117,000 advertised foreclosures.
I am a Certified Distressed Property Expert and can assist you in your search. If you would like to contact me to discuss your options, please call me at 770-826-5907 or email me at tanderson@remax.net.
Are you facing foreclosure? There may be a better way out!
If you watch the news, you may have the impression that the only people losing their homes to foreclosure are those that participated in risky loans. You know, the greedy homebuyers who wanted to buy the American Dream without putting any money down. Well, that’s just NOT the way it is.
In reality, there are many hardships that can cause the dream of home ownership to turn into a nightmare. Some of these hardships involve payment increases because of mortgage adjustments, but an awful lot are due to things like job loss, divorce, severe illness or death of a family member, military service and deployment, relocation, etc. In these situations, the bills keeps coming and the stress keeps rising and ignoring the bills doesn’t make them or the stress go away. Instead, everything just gets worse.
If you are having a hard time keeping up with your mortgage payments or you are already in the process of foreclosure, there are options. One of those options is a “Short Sale”. A Short Sale is when the lender agrees to accept less for the home than what is owed. Typically, a short sale does far less damage to your credit than does a foreclosure.
On November 30, 2009 The Treasury Department announced its guidelines to streamline the Short Sale process. Here are the highlights from that announcement:
- Lenders must respond to a Short Sale request within 10 days of receipt of the offer package (this process used to take months for a response)
- The seller will be released from all liability regarding the primary mortgage debt (previously the lender could require the family to repay the debt)
- The seller is entitled to a relocation incentive of $1,500
- The property must be listed with a licensed real estate professional who does work in the area
If you would like to explore the possibility of a short sale for your property, avoid foreclosure and save your credit rating, please email me at TAnderson@remax.net and I will be in touch with helpful information. This is a free confidential consultation and should we move forward with the Short Sale process there will be no upfront fees or charges.
HUD (Housing and Urban Development) has announced significant new lending guidelines that could take money right out of your pocket. David Stevens, the Commissioner for the FHA (Federal Housing Administration) made the announcement for the changes today. These changes are supposed to start taking effect during spring and into summer. The Homebuyer Tax Credit is set to expire on April 30, 2010. However, if you have a binding agreement by that date, you have 60 days (June 30, 2010) to close on the home and still get the credit.
The changes were made in an effort to strengthen capital reserves and manage risk while continuing to support the nation’s housing market recovery. In a nutshell, here are the changes that have been proposed:
1. Increase the Mortgage Insurance Premium (MIP)
2. Update the combination of FICO scores and downpayments for new borrowers
3. Reduce seller concessions
4. Measures to increase Lender enforcement
Let’s take a REALLY close look at number 3. Currently, FHA allows the seller contributions to max out at 6% of the loan amount. FHA limits in Atlanta are $346,250 for the total loan amount. However, FHA new guidelines will reduce seller contributions to 3% of the loan amount. That reduction just cost you $10,387 if you are at the maximum loan limit. On a $200,000 home, you just lost $6,000. I don’t think I need to go on with my calculations. We are talking about a major change here.
If you also qualify for the Homebuyer Tax Credit (first time or move up), you have between $6,500 and $8,000 that you can add to the current 6% in seller concessions. That’s a lot of money for those buyers that qualify. You could take your tax credit and put it in a savings account to help pay your mortgage or to use as a “rainy day fund”.
The other changes being made by HUD are not nearly as impactful to the buyers as item number 3. If you qualify for the first time homebuyer’s credit and you wait until June or after to buy a home, you are potentially kissing $18,387 good-bye. That’s a lot of money.
Now, I’m not trying to scare anyone into buying. What I’m saying is that if you are qualified and you have been thinking of buying a home, there is no better time to buy. Prices are still low; interest rates are low and FHA allows 6% in seller contributions. In addition, FHA loans are assumable. That means you could sell your home 5 years from now and if the buyer qualifies, they could assume your FHA loan AND it’s low interest rate! What a great selling point particularly if interest rates are significantly higher in 3-5 years. Most economists are predicting a rise in interest rates over the next couple of years.
If you wish to learn more about FHA, please go to www.FHA.gov. (insert link) If you are interested in buying a home, please feel free to contact me at TAnderson@remax.net or 770-826-5907.
From the National Association of REALTORS, here are some of the most frequently asked questions on the changes to the Homebuyer Tax Credit signed into law on November 6 by President Obama.
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 $6,500 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. Do I qualify for the new $6,500 tax credit?
ANSWER: Yes. The existing homeowner credit went into effect for purchases after the date of enactment (Nov. 6, 2009). 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 first-time 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 when I go to settlement, will I be eligible for a credit?
ANSWER: Yes. The new income limitations went into effect as soon as the President signed the bill. The income limit and other eligibility rules look to your status as of the date of purchase, which is the settlement date. So when you go to settlement, you should be eligible for the credit (or a portion of the credit if you’re within the phase-out 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 non-negotiable price of $825,000. Will I be able to use any of the $6,500 tax credit?
ANSWER: No. The $800,000 cap on the cost of the purchased home is firm. 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 and have been renting since. If I purchase a home, will I be eligible for the $6,500 tax credit if I meet all the other eligibility tests?
ANSWER: Yes. Because you lived in the home for more than five consecutive years of the previous eight you will qualify for the $6,500 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 five consecutive years out of the last eight years. The key word here is “consecutive.” As long as he lived in that house for five years straight, what he did since then doesn’t affect eligibility.
QUESTION: I am an eligible first-time 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. Now that the legislation has been signed, it will be as if the November 30 date had never existed. Therefore, so long as the binding contract is in place by April 30 (and you close before July 1), you will be eligible for the credit.
A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.
But to be technical, here’s a more official definition:
- A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
- A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
- Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
- Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
- Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals – Tracy Anderson is a Certified Distressed Property Expert and together, you can identify all possible options and, if it’s an option, she can assist you in the quick execution of a short sale transaction.
For more information on the simplified short sale process, click here.
A Certified Distressed Property Expert® is a real estate professional with specific understanding of the complex issues confronting the real estate industry, and the foreclosure avoidance options available to homeowners. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales.
The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The developers of the CDPE Designation believe that the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools needed to help homeowners find the best solution for their situation. Often, when other options have been exhausted, CDPEs can help homeowners avoid foreclosure through the efficient execution of a short sale.
While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be. Selecting an agent with the CDPE Designation ensures you are dealing with a professional trained to address your specific needs. For more information, contact Tracy Anderson, a Certified Distressed Property Expert to discuss your situation. You can call her at 770-826-5907 or email at tanderson@remax.net.
CDPEs don’t merely assist in selling properties, they serve and help save their clients in need.