Mid-Peninsula Real Estate News

Home Buyer Tax Credit Update: IRS Issues New Guidelines

2010-03-01T05:43:00Z

The Internal Revenue Service (IRS) recently issued new guidelines and clarified documentation that taxpayers must submit to successfully obtain the federal tax credit for home buyers.

The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500.

To receive the tax credit, home buyers must comply with the IRS’s documentation requirements,including a fully executed IRS Form 5405. On the form,which is available on the IRS’s Web site, taxpayers provide information supporting their claim of eligibility, such as income and home purchase date.

The IRS also requires home buyers to submit a copy of the closing or settlement statement that proves the transaction took place. The IRS previously said that the statement should show “all parties’ names and signatures, property address, sales price, and date of purchase.” However, since closing or settlement statements vary by state, and in some cases the form does not include both the seller’s and buyer’s signatures,the IRS has revised this requirement. As long as the closing or settlement statement conforms to prevailing local practices, the IRS will accept it.

One stipulation for repeat buyers is they must provide documentation they lived in their former property for a consecutive five years out of the previous eight years. Accepted documentation may include property tax records, hazard insurance records, or copies of annual mortgage interest statements filed with their federal taxes.

Click here for more information about the federal tax credit for home buyers, including eligibility requirements from IRS.gov

Click here to schedule an appointment with a qualified Realtor

Data from C.A.R.’s MarketMatters
February 26, 2010

Broker's Tour Report

2010-02-10T01:39:00Z

2/9/2010: SAMCAR Broker's Tour today. Every Tuesday we real estate professionals go out and preview new listings. I prepare my list the night before, scanning the new listings for properties that may fit my client's needs. I take a look at those first then I move on to my target communities to stay in the know about what is on the market, it's asking price and it's condition.

Today I was impressed with several new listings that came on the market in San Mateo's Baywood district, Hillsborough, San Carlos, Redwood Shores and Redwood City. Here are my top 5!

1475 CRYSTAL DR, Hillsborough, CA 94010

711 LACEWING LN, Redwood Shores, CA 94065

481 VIRGINIA AV, SAN MATEO, CA 94402

822 TOYON WY, Redwood City, CA 94062

203 EXETER AV, SAN CARLOS, CA 94070

I posted more on my Facebook page. Send a Friend Request to Martha Longhi and I'll connect you. Would love to hear from you! You can also follow me on Twitter ! MRVL44 that's me! aka #MarthaLonghi

Take a look at these lovely homes and when you are ready to buy property, contact a Realtor as good as I am or better yet, give me a call!

Have a good night folks! LOST is on tonight : ) Woo Hoo

Fed leaves key rate unchanged - Huge for the continuing recovery!

2010-01-27T21:05:00Z

The Federal Reserve today announced it will maintain its target for the federal funds rate in the 0percent to 0.25 percent range, and expects economic conditions to warrant exceptionally low levels of the federal funds rate for an extended period of time. “Information ...suggests that economic activity continues to strengthen and that deterioration in the labor market is abating,” the Fed said in a prepared statement.

“Household spending is expanding at a moderate rate, but remains constrained by a weak labor market, modest income growth, lower housing wealth,and tight credit. Business spending on equipment and software appears to be picking up, but investment in structures is still contracting and employers remain reluctant to add to payrolls.While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time,the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability,” the Fed said.

To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve also said it will purchase a total of $1.25 trillion of agency mortgage-backed securities and nearly $175 billion of agency debt, and will gradually slow the pace of these purchases in order to promote a smooth transition in markets. Read Press Release

Data www.car.org
Jan 27, 2010 12:33 pm

Homebuyers Tax Credit: Buy a Home and Get a Tax Break!

2010-01-25T01:46:00Z

First-time homebuyers who purchase a primary residence on or after April 9, 2008 and before April 30, 2010 are eligible. If you (and your spouse, if married) have not owned a primary residence for a 3-year period before your purchase, and you have never taken advantage of the DC first time homebuyer credit, you qualify as a first-time homebuyer. Starting November 7, 2009, buyers who have lived in their primary residence for five of the last eight years can also qualify for a tax credit. The credit for repeat buyers also expires April 30, 2010.*

How does it work?
Like all tax credits, it will directly reduce the total amount of taxes you owe. When you file your taxes, for the year you purchased your home, you will be able to subtract the amount of the credit from your Federal income tax liability, increasing the size of your refund or reducing the amount you owe. For example, if your ‘normal’ tax return shows that you owe $2,000 in taxes, with this credit, your tax liability could be lowered by $8,000—which means, in this example, you instead get a $6,000 tax REFUND check from the IRS.

Available at Closing!
When the credit was first passed, money was not available until a buyer filed a tax return after the home purchase. Several states – 18 and counting – creatively found ways to make cash available to buyers at closing through their state housing finance agencies. The Federal government followed suit. On May 29, 2009, the Department of Housing and Urban Development announced guidelines for FHA lenders that enable them to make the credit available to buyers to cover closing costs or a down payment above the 3.5 percent required for an FHA insured loan. This means the credit can be available at closing regardless of where you’re purchasing if your lender participates in this program. Check with your state housing finance agency as well as your lender for details.

How big is the tax credit?
The tax credit is equal to 10% of the purchase price of your home up to $8,000 for first-time buyers and up to $6,500 for MOST OTHER buyers. The full credit is available for single individuals whose adjusted gross income is less than $125,000. For married couples filing jointly, the credit begins to phase out at an adjusted gross income of $225,000. The dollar amounts in the chart below correspond to a phase out of the full tax credit.

Other conditions you should know about
- You cannot claim both the DC and the national First-time Homebuyer tax credit.
- Purchases by non-resident aliens are not eligible.
- 2009 and 2010 purchases financed by proceeds from a qualified mortgage issue are eligible.
- Any single family residence located in the United States that will be used as a primary residence and is purchased for $800,000 or less is eligible. Generally, a primary residence is the place where an individual spends most of his/her time. This includes single-family detached homes, condos or co-ops, townhouses or any similar type of new or existing dwelling.
- The credit will not result in an individual owing additional federal taxes under the Alternative Minimum Tax.
- Home purchases between relatives and other gifts of residences are not eligible for the credit.
- Other tax benefits of homeownership are still in place. The mortgage interest deduction, capital gains tax exclusion, and property tax deduction are some well known examples.
- There is a recapture provision if you sell the home within three years of purchase.

* Current law allows potential buyers who enter into a written binding contract by April 30, 2010 to close by June 30, 2010 and still claim the credit.

WHAT IS FHA MORTGAGE INSURANCE?

2010-01-25T00:54:00Z

The Federal Housing Administration (FHA) insures mortgages offered by banks, savings associations, and other financial institutions. An FHA-insured mortgage is backed by the full faith and credit of the United States government. While FHA does not make loans, it benefits the homebuyer by providing mortgage insurance which encourages financial institutions to make affordable financing available.

The Benefits of an FHA Loan
FHA offers low down payment options, eligibility with less than perfect credit, a loan at a reasonable cost, and help if there is ever trouble making the mortgage payment. Because an FHA mortgage insures the lender against loss, an FHA mortgage typically has an interest rate that is competitive with the best in your market and lower than the rates charged for subprime and other non-prime mortgages.

FHA not only helps people buy a home, but helps them keep it as well. In return for protecting lenders against loss, FHA requires financial institutions to offer assistance to borrowers experiencing difficulty making mortgage payments.

Eligibility?
In order to be eligible for an FHA-insured mortgage, a borrower must:

• Occupy the property as the principal residence;
• Possess a valid Social Security Number;
• Have a two-year employment history;
• School and military service count towards this two-year requirement.
• Not be delinquent on any Federal debt such as a student loan or other FHA-insured mortgage; and
• Meet flexible credit requirements.

Other Features worth Knowing About an FHA Insured Mortgage

• FHA adopted the industry appraisal standards permitting the use of the Fannie Mae appraisal forms with no additional specialized documentation, no Valuation Conditions form or Homebuyer Summary.
• FHA has eliminated unnecessary requirements to make minor repairs.
• The homebuyer and the seller, individually or jointly, can pay closing costs as agreed to in the sales contract. FHA no longer limits what closing costs the homebuyer is permitted to pay.
• Caps on payment and debt-to-income ratios are more generous than most standard conforming mortgage products. The payment-to-income ratio may not exceed 31% and the debt-to-income ratio may not exceed 43%.
• The Federal Housing Administration (FHA) won't raise the 3.5%minimum down payment requirement for mortgages it guarantees as long as borrowers have FICO scores of 580 or better. But beginning early this summer, borrowers with credit scores below 580 will be required to make down payments of at least 10% in order to participate in FHA's mortgage insurance program
• The buyer’s entire cash investment—as little as three percent—can be a gift from a family member, employer, charitable organization or local government entity.
• The seller can contribute up to 6% of the home’s price toward closing costs through a seller’s concession.
• There are no prepayment penalties on FHA-insured mortgages.
• U.S. citizenship is not required but, for those who are not citizens, they must be lawful permanent or non-permanent resident aliens with a valid Social Security Number.

The homebuyer incentive tax credit will not be renewed for a third time

2010-01-23T02:25:00Z

If you have considered purchasing a home, but are waiting for that “perfect time to buy” take note… The Buyer incentive tax credit will not be renewed for a third time. According to industry leaders and lawmakers, the provision that puts up to $8,000 in buyers’ pockets will soon come to an end.

In a recent Los Angeles Times article, the end of the program was explained. Home buyers hoping to take advantage of a new or extended tax credit should not procrastinate: This third bite at the apple will be the last.

Legislative advocates of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. This fact was confirmed by a lobbyist for the National Association of Realtors at the organization’s annual convention last month.

So what does that mean for potential buyers? If buyers meet the income eligibility requirements, they have until midnight April 30, 2010 to be in contract and must close escrow by midnight June 30th to qualify.

Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That is up from the current $75,000 limit for individuals and $150,000 for couples.This is a great incentive that can give the first time home buyer up to $8,000.00 back in tax credits.

Added is a $6,500 tax credit for existing home buyers who have lived in their residence at least five years.Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. Those buying homes worth more than $800,000 wouldn’t be eligible for the credit. Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.

Loan Limits Extended into 2010: President Obama signed a resolution extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through the end of next year.

FHA down payment will Increase for borrowers with lower FICO scores

2010-01-22T17:58:00Z

FHA loans are currently available and helping a lot of folks purchase a home because of the low down payment, 3.5% of purchase price. But some changes are on the horizon. The Federal Housing Administration (FHA) won't raise the 3.5%minimum down payment requirement for mortgages it guarantees as long as borrowers have FICO scores of 580 or better. But beginning early this summer, borrowers with credit scores below 580 will be required to make down payments of at least 10% in order to participate in FHA's mortgage insurance program.

Also this spring, the Obama administration also plans to raise the upfront mortgage insurance premiums paid by all FHA borrowers to 2.25 percent, up from 1.75 percent now.

FHA loans are the easiest type of real estate mortgage loan to qualify for. The FHA guidelines for loan qualification are the most flexible of all mortgage loans that require less than 5% down payment.

Following is the basic FHA loan qualification guidelines.

Two Years of steady employment, preferably with same employer.

Last two years Income should be the same or increasing.

Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 620 or higher or in some cases no credit score at all.

Bankruptcy's must be at least two years old, with perfect credit since discharge.

Foreclosure's must be at least three years old, with perfect credit since.

Your new mortgage payment should be approximately 30% of your gross (before taxes) income.

These are some of the most basic of FHA guidelines for qualifying for a FHA loan. If you have answered yes to most of these statements, you probably qualify for a FHA mortgage loan.

source: INMAN News, FHA
date: 1.22.10

The Benefits of Working with A Buyer's Agent

2010-01-17T06:40:00Z

For most of us, buying a home is the biggest single investment we’re likely to make – and we’re only likely to do it maybe once or twice in a lifetime. The process is, by nature, filled with checks and balances –and many complex details. Traditionally, agents were legally obligated to protect the interests of the home seller. Today preferences are changing. One of these changes is that more homebuyers are choosing to have their own real estate agent, known as a buyer's agent, to legally represent them.

A buyer’s agent represents you, the buyer, not the seller, and has full fiduciary duties, including loyalty to you. By definition, the buyer’s agent has your best interests in mind throughout the transaction. The benefits of buyer representation is the dedication of a buyer’s agent to the home buyer. The buyer’s agent and homebuyer establish a mutual agreement, known as a buyer agency agreement, that will entitle the homebuyer to, but is not limited by:

Loyalty The real estate agent must act in the best interest of the buyer.

Disclosure All material facts such as relationships between agent and other parties, existence of other offers, status of earnest money, seller’s financial condition, property’s true worth, commission split with other brokers, and legal effect of important contract provisions.

Confidentiality Any discussions, facts, or information that should not be revealed to others but does not include responsibility of fairness and honesty in dealings with all parties.

Accounting in dealings Reporting of where any money placed in the hands of the broker is kept.

Reasonable Skill and Care Arriving at a reasonable purchase price and advising the buyer of such,affirmatively discovering material facts and disclosing them to the buyer, investigating the material facts related to the sale. With a buyer agency, the interests of the homebuyer will be represented in the purchase of the home.

As you know, I am a real estate agent specializing in residential real estate on the San Francisco Mid-Peninsula. If you are think about purchasing property, I hope that you will consider contacting me to discuss your specific situation and how I can help you find and purchase your new home.

www.MarthaLonghi.com

LENDERS TO HALT FORECLOSURE EVICTIONS OVER THE HOLIDAYS

2009-12-18T20:53:00Z

Fannie Mae and Freddie Mac will suspend foreclosure evictions from December 19,2009 through January 3, 2010. To help struggling families over the holidays, both owner-occupants and tenants living in properties foreclosed upon by Fannie Mae will not be evicted. Freddie Mac's suspension of evictions will be limited to properties up to four units.

In a similar move, Citigroup Inc. will suspend foreclosure sales and evictions for 30 days through January 17, 2010 for loans it owns. Citigroup's foreclosure moratorium, however, does not extend to loans it services on behalf of other investors. Given these developments, other lenders may follow suit, so check with the lender if appropriate.

source: CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), 12/18/09

Fannie Mae: New Affordable Housing Options

2009-11-29T21:11:00Z

Fannie Mae announced Tuesday that it has launched several initiatives designed to stabilize neighborhoods and promote purchases by owner occupants and low-income buyers.

Fannie Mae’s “First Look” initiative offers buyers who intend to live in the home, particularly low-income buyers, an opportunity to make an offer during the first 15 days the property is on the market. Investors can only make an offer after the first 15 days have passed.

Other programs aimed at stabilizing neighborhoods include:

Deposit Waivers. Fannie Mae will waive the earnest money/deposit requirement for public entities using public funds to purchase a Fannie Mae-owned property. Individual home buyers who have qualified for public funds and want to purchase a Fannie Mae-owned property do not have to meet the usual earnest money/deposit requirement either. Deposits for these buyers can be as low as $500.
Reserved Contract Period. Upon receipt of an acceptable offer, buyers have the ability to renegotiate their offer after obtaining an appraisal.
Extra Time for Closing. Buyers receive up to 45 days to close – 15 days more than is usually permitted for purchases of Fannie Mae-owned properties.

Source: NAR Newslettter, 11.27.09

Getting Serious About Your House and The Market

2009-11-14T01:11:00Z

It often is difficult for homeowners to objectively value their homes, which often reflects their sense of personal style. However, by consulting with a REALTOR®, using online resources, investigating neighborhood trends, and soliciting the opinion of friends, homeowners can arrive at a reasonably accurate appraisal.

REALTORS® and real estate appraisers are the best sources of information on current market conditions. Consumers should begin the home valuation process by consulting with their REALTOR® or a local real estate appraiser. REALTORS® can provide homeowners with a list of homes that recently have sold in the area, and use that data to help determine the most accurate and competitive price for the home.

Homeowners also can contact their local tax assessor’s or county clerk’s office, many of which post real estate transactions on their Web site. The records will indicate what properties have recently sold in the neighborhood and the respective sales prices. Consumers should look for homes that have sold within the last six months for a more accurate picture of current market conditions.

Online sites such as zillow.com and trulia.com also provide free online home value estimators. Consumers should be aware though that these sites derive some of their information from public records, including tax appraisals, and are subject to error.

Some real estate experts recommend homeowners attend nearby open houses to see how their homes compare in size and amenities. Consumers also can consult the Marshall & Swift Residential Cost Handbook, which professional appraisers use to assess the value of features such as fireplaces, three-car garages, and the like. The handbook costs $300 and is available in some business school libraries. An online site,swiftestimator.com, enables homeowners to conduct an item-by-item calculation of the value of the home. Online sites and books only should be used as guidelines though, and homeowners are advised to contact a real estate professional to help determine the current value of their home. read more from the NYTimes article

Source:CAR.org
Data:New York Times

Fannie Mae announces “Deed for Lease™” program

2009-11-11T23:01:00Z

Fannie Mae last week announced a new Deed for Lease™ program. Deed for Lease allows borrowers to transfer their property back to the lender and then lease back the house at market rate. The lease period is for up to 12 months, with possible month-to-month contract extensions after that period. The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as a loan modification.

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income. more

source: car.org

It's Been a Good Couple of Weeks for Home Buyers & Real Estate Overall

2009-11-11T22:56:00Z

The past few weeks have been very favorable for home buyers and the real estate industry overall. President Obama signed a bill extending and expanding the federal tax credit for home buyers through April 30, 2010, and on Oct. 30 signed a resolution extending the current limits for Fannie Mae, Freddie Mac, and FHA loans through the end of next year.

These are important milestones that have and will continue to give real estate markets a shoot in the arm.

It's a good time to buy a home. Take advantage of these incentives!

The Cost of Selling Without a Realtor

2009-11-07T02:31:00Z

Real estate professionals do more for sellers than make the transaction easier. We make them money! In fact, the average seller who uses a real estate professional makes 16% more on the sale of their home than do sellers who go it alone.

That's an average of $123,840 per home!!

Real estate professionals assist both sellers and buyers with the services necessary for a successful real estate transaction, pricing, marketing and staging.

As your Realtor I will help price the property accurately and market it successfully using the variety of tools available today; internet, print, cable TV advertising, and our Alain Pinel network just to name a few. I know what attacks qualified buyers.

I will show your home objectively purely because I am not emotionally attached to the property. I can be objective and will not be unnerved or defensive towards a prospective buyer who makes a negative comment about the property.

If you need to sell your property consider the time and money that you will save by using a Realtor. Contact me today for a review of your property's value. There is no obligation.