Extend the Tax Credit!!!

Life has been good the last year or so for first time buyers. With an extra $8000 in their pocket, the prospect of investing hundreds of thousands of dollars in a new home has been a lot better. For those who have waited or weren't ready, what does the future hold? Will the tax credit be extended?

The National Association of Realtors chief economist, Lawrence Yun sure hopes so. He believes an extension of the tax credit is essential to preserving the incentives for financially qualified buyers. Speaking of which, I have noticed that becoming financially qualified is much more difficult than it was a couple of years ago. Banks and other lending institutions are tightening restrictions on mortgage loans to the point that us realtors are pulling our hair out! For those of us who have been in the business more than 15 years, it's simply back to the old days. This is how it used to be. "You mean you actually need to have money for a down payment?!" Uhhh... yea, you do. You also need to prove where that money came from. 100% financing and no documentation loans are all but over. That's what got us into this housing crisis in the first place.

So, back to the real issue... will we see an extension of the tax credit? I don't know, but I sure hope so too. In Omaha, we have seen an impressive surge of first time buyers come into the market. I have even seen a few competing offers on a few listings. I didn't see that happening in a down economy! Those new homeowners are excited about using their tax credit to add on to their home, put in a new kitchen, or invest/save. We have also seen the Omaha metro's inventory go down by 17% in the last year or so, and the entry level market has seen pending sales go up by nearly 50%!!! That's huge people. I'll keep you posted on the tax credit news....

Stay tuned...

Oh By the way... I'm never too busy for any of your referrals!

Buy First or Sell First?

This is a great topic for the current market conditions. The answer, of course, depends on the situation in which each homeowner is involved. Most markets are seeing high inventory and not enough buyers to lower those levels. So what do you do? Some sellers choose to carry a bridge loan. This will help them to buy before they sell. A bridge loan helps borrowers by halting payment on their new home until their old home sells.

While this is an option, the old home may not sell. Some research shows less than 50% of homes listed do NOT sell. In a buyer's market such as the one we are in, It is wise to sell before you buy. In a seller's market, it may be a smarter choice to find your new home before you sell because the amount of buyers outweigh the number of homes on the market. This fosters competition and quick turnaround for listings.

I would advise my clients in our current market to do a few things before they decide to make any decisions. Sellers should find out what they owe on their current house. They should get prequalified for a home loan to see how much they can afford for a new home. They could also find out if they qualify for a bridge loan. Their lender should give them a good faith estimate of settlement costs. This will show them what their payments and settlement costs will be for their new home purchase. Sellers will also incur some closing costs on the sale of their current home. When we perform a market analysis, we always provide our prospective sellers an estimated costs to sell sheet. This will give them a pretty good idea what they can expect to net from the sale of their home.

Oh By the way... I'm never too busy for any of your referrals!