Legislation was signed over the weekend to extend the closing deadline for the First-Time Homebuyer Credit. The extension moves the closing date requirement from June 30th, 2010 to September 30th, 2010. Please note that this does not open up the tax credit to those that do not already have an executed purchase agreement…it just allows those who had a purchase agreement in place by April 30th, 2010 to be able to close at a later date and still [...]]]>

Legislation was signed over the weekend to extend the closing deadline for the First-Time Homebuyer Credit. The extension moves the closing date requirement from June 30th, 2010 to September 30th, 2010. Please note that this does not open up the tax credit to those that do not already have an executed purchase agreement…it just allows those who had a purchase agreement in place by April 30th, 2010 to be able to close at a later date and still receive the tax credit.

Many soon to be homeowners were running into issues with short sales taking longer than expected to get approved or were having issues getting financing in time for the previous closing deadline.

Image from www.larealestateblog.net

President Obama signed the American Recovery and Reinvestment Act of 2009 into law last week.  Of note to potential home buyers and current home owners was Section 1006, which granted an “Extension of and Increase in First-Time Homebuyer Credit” as well as a Waiver of the requirement to Repay.  Here are the details:

A new state mandate requiring carbon monoxide alarms in existing single-family homes went into effect on August 1, 2008, that is protecting buyers and surprising sellers.  Keep reading to find out how to prevent this silent killer’s new law from sneaking up on you…

The new carbon monoxide (CO) alarm law requires that “every single-family dwelling and every dwelling unit in a multifamily dwelling” have “an approved and operational carbon monoxide alarm installed within ten feet of each room lawfully used for sleeping [...]]]>

A new state mandate requiring carbon monoxide alarms in existing single-family homes went into effect on August 1, 2008, that is protecting buyers and surprising sellers.  Keep reading to find out how to prevent this silent killer’s new law from sneaking up on you…

What is it?

The new carbon monoxide (CO) alarm law requires that “every single-family dwelling and every dwelling unit in a multifamily dwelling” have “an approved and operational carbon monoxide alarm installed within ten feet of each room lawfully used for sleeping purposes.” (See MN Stat. 299.51) This law was effective as of August 1, 2007 for newly constructed homes, and just became effective August 1, 2008 for all existing single-family dwelling units. It becomes effective in August 1, 2009 for existing multifamily dwelling units. The alarms must be an approved device (conforming to UL2034 standards), and may be hardwired, plugged in, or battery-powered (if attached to the wall).

What is Carbon Monoxide?

Carbon monoxide (CO) is a deadly gas that human senses cannot detect because it is both colorless and odorless. It is produced by the incomplete combustion of fossil fuels, including natural gas, propane, kerosene, gasoline and heating oil.

CO — the Silent Killer

•  CO is the leading cause of poisoning deaths in North America.  (AMA Journal)
• On average, over 10,000 people are treated annually for CO poisoning. (North Haven Professional Firefighters Association)
• Carbon monoxide exposure kills approximately 1,800 people each year. (AMA Journal)

Common Sources of CO

Potential CO sources include your fireplace, woodstove, furnace, water heater, gas dryer or stove, vehicles, grill and space heater.

What does it mean to you?

If selling your house, recognize that you have a direct legal obligation to equip your home with carbon monoxide detectors and take proactive steps to be sure that you have them installed before selling.

And if you’re currently house hunting, be sure to check that the home you ultimately purchase is properly equipped with these detectors, provided by the seller.

Finally, to save $5 on a new carbon monoxide alarm click here and for more news coverage of the Minnesota CO alarm law click here.

Further information about this statute can be found by discussing this issue with your attorney, or by reviewing the statute online at https://www.revisor.leg.state.mn.us/statutes/?id=299F.51.

UPDATE (2/24/09): Revisions have been made to this bill with the American Recovery and Reinvestment Act of 2009.  After reading about this bill, read about the changes made here.

In this second post of our H.R. 3221, the “Housing and Economic Recovery Act of 2008″ Series, we talk about a provision included that allows most first time home-buyers to receive at $7500.00 tax rebate.  Make sure you read all the way through as there are some caveats and a TWIST.  Here [...]]]>

UPDATE (2/24/09): Revisions have been made to this bill with the American Recovery and Reinvestment Act of 2009.  After reading about this bill, read about the changes made here.

In this second post of our H.R. 3221, the “Housing and Economic Recovery Act of 2008″ Series, we talk about a provision included that allows most first time home-buyers to receive at $7500.00 tax rebate.  Make sure you read all the way through as there are some caveats and a TWIST.  Here are the details you need to know:

• The $7500 Tax Credit is available to firs-time home buyers that purchase a principal residence sometime after April 9th of 2008 and sometime before July 1st of 2009.
• The Credit is a “refundable” credit.  So, if you have a tax liability of $2000 next year and qualify for the full $7500 credit, you would be hypothetically entitled to a $5500 refund!
• A first-time home buyer is classified as someone who has not had an ownership interest in a property within the past 3 years.
• There are income restrictions on the tax credit, so if you make more than $75,000 filing single or$150,000 filing jointly, you may not be eligable for the tax credit (I haven’t found a good description of the calculations used to phase-out the credit…let me know if anyone knows them and I’ll post it here).

• The tax credit is tied to the price of the home you purchase.  It will be 10% of the purchase price of the home with a maximum of $7500.  For example, if you purchase a home for only $50,000,then the credit you could receive would be $5000…but a purchase price of $160,000 would max out at $7500.

BUT WAIT….THERE’S A CATCH!

Unlike most other tax credits, this tax incentive must be paid back.  All eligible purchasers who claim the
credit will be required to repay it over 15 years.  The statute specifies that the repayment amount will
be 6.67% of the credit amount each year.  Thus, a buyer who qualifies for the full $7500 credit will repay
$502.50 each year.  There will be no interest charge on outstanding balances.

When the person who used the credit sells the home, any amount of tax credit that has not been repaid
will be due in the year of sale.  For example, if an individual still “owed” $4000 in repayments and
realized $25,000 of proceeds from the sale, the $25,000 of seller proceeds would be reduced to $21,000
and $4000 will be remitted to the IRS.

If the gain on the sale is less than the amount that must be repaid, part of the liability is forgiven.  For
example, if the individual still “owed” $4000 but the gain on the sale was only $3500, then the seller
would not be required to repay the IRS the $500 shortfall.  If there was no gain or even a loss, then the
remaining $4000 would not be repaid.

All in all, I’m in favor of this provision in the bill.  It gives first-time home buyers a great incentive to purchase a home over the next year, and allows them to basically “borrow” up to $7500 from the government and pay it back with the equity they gain in their home…with no repercussions if they gain no equity by the time they sell.  I’m sure there are a bunch of questions, so feel free to fill up the comments section or shoot us over an email.

Tomorrow we’ll be talking about some of the changes to the FHA program the bill brought about.

Your $8000 Tax Credit | What Home Buyers Need to know about the American Recovery and Reinvestment Act of 2009

H.R. 3221, the “Housing and Economic Recovery Act of 2008″ Why You Should Care Series – Post 1

First-Time Home Buying in 2008: 5 Reasons Why Now is a Good Time To Buy

Search the MLS for your first home here!

Okay, “10,000+ Reasons to Buy a Home” might seem a bit excessive, but in a new housing initiative called Minneapolis Advantage, the city of Minneapolis is offering just that….up to a $10,000 zero-interest, zero-payment loan that’s forgivin over a 5 year period (a.k.a. totally FREE after the 5 years are up) to qualified buyers that purchase a home in one of the city’s 18 eligible neighborhoods.

Developed in response to the city’s rising level of foreclosures, the Minneapolis Advantage loan program is a downpayment and closing [...]]]> Okay, “10,000+ Reasons to Buy a Home” might seem a bit excessive, but in a new housing initiative called Minneapolis Advantage, the city of Minneapolis is offering just that….up to a $10,000 zero-interest, zero-payment loan that’s forgivin over a 5 year period (a.k.a. totally FREE after the 5 years are up) to qualified buyers that purchase a home in one of the city’s 18 eligible neighborhoods.

Developed in response to the city’s rising level of foreclosures, the Minneapolis Advantage loan program is a downpayment and closing cost assistance program to help rebuild the housing market in key neighborhoods (located mostly within the central South and North communities) that have experienced higher than normal levels of mortgage foreclosures.

In addition, the Harrison, McKinley, Folwell and Webber-Camden neighborhoods are offering buyers $4,000 in mortgage assistance, and Harrison is adding another $15,000 for renovations. That makes $29,000 in forgivable loan money to fix up an abandoned home in that neighborhood.

So, if you’re looking to buy a home in Minneapolis and you have good credit, now you have 10,000+ more reasons to get out there on the house hunting trail and buy today

Make sure to check out these two listings, which both qualify: 2810 Aldrich Ave / 1820 Skyline Curve

For more information on Minneapolis Advantage program details and detail on how to apply click here.

Newsweek has recently published their list of America’s Top Public Schools.  Edina High School ranked number 93, and was the only Minnesota high school in the top 200.  Other notable schools in the top 300 were St. Louis Park High School at 209 and Southwest High School (in Minneapolis) at 215.  To see other schools in Minnesota and Nationwide, here’s a link to their rankings.

Google has been synonymous with everything from great search, to amazing free email, to maps, etc…but one of their relatively new features (for Minnesota at least) is Google Street View. Google Street View is built right into their Google Maps feature. The implications of this tool for your home search are enormous. Google Street View allows you to type in an address, location, or point of interest and then take a virtual walk through the [...]]]> View Larger Map

Google has been synonymous with everything from great search, to amazing free email, to maps, etc…but one of their relatively new features (for Minnesota at least) is Google Street View. Google Street View is built right into their Google Maps feature. The implications of this tool for your home search are enormous. Google Street View allows you to type in an address, location, or point of interest and then take a virtual walk through the neighborhood.

For example, if you were interested in our listing on 1511 W 33rd Street in Minneapolis and wanted to see how far your actual walk to Lake Calhoun would be, you could go to www.google.com/maps, type in the address and click search. You’ll notice 5 options in your upper-right hand corner. The one farthest to the left is “Street View”. If you click on it, it will highlight all the streets that Street View is available for in a light blue color. You’ll also see a little yellow person pop up. If you click on that yellow person, it brings up a small window with a picture of the approximate address location (some of the pictures are more recent than others). Now, using your arrow keys or your mouse, you can walk up and down the street, turn right or left, and zoom in and out. If you head West from our current location, you’ll take a nice 2 block stroll to Lake Calhoun.

Minnesota is not completely covered yet by the Street View team, but the majority of the Twin Cities has ample coverage. So now, not only can you search for your future home online, but you can also take a stroll around the neighborhood…all while in the comfort of your current abode (and in your pajamas if you’d like)!

Here are some other resources and fun stuff for Google Street View:

Google’s Own Street View Tutorial

Some Fun Pictures That Were Taken While Creating Street View – gtstreetsightings.com

There are currently at least 29 short sales that are available for sale in the Edina and Southwest Minneapolis markets (found by searching in agent comments for “bank approval” and “short sale”). In the Camden area of Minneapolis, there are at least 70. If I look at Minneapolis proper, the number is over 315…St. Paul proper gives us over 300 as well. So, needless to say, there are a good amount of short sales out there. The question is, [...]]]>

There are currently at least 29 short sales that are available for sale in the Edina and Southwest Minneapolis markets (found by searching in agent comments for “bank approval” and “short sale”). In the Camden area of Minneapolis, there are at least 70. If I look at Minneapolis proper, the number is over 315…St. Paul proper gives us over 300 as well. So, needless to say, there are a good amount of short sales out there. The question is, what does that mean to you, the buyer? How can you keep your dream home from vanishing before your eyes (like the one above)? Short sales open a whole new can of worms throughout the buying process…but first, a short (no pun intended) explanation of them.

In the current market, its no secret that inventory is high. If you look back in history, you can see spikes of inventory followed by lulls. What makes this time around a little different are the sheer number of foreclosures and “short sales” that make up the inventory. Most people are familiar with foreclosures, but when I mention short sales to people, the glazed look over their eyes has led me into deeper explanations almost every time. A short sale usually occurs when a seller owes more on their mortgage than their house can sell for in the current market. The bank or lender agrees to reduce the loan due from the seller. The homeowner sells the home for the current market price and the bank or lender receives the proceeds from the sale. They will then release the homeowner from their debt obligation. I’ll get much more detailed regarding the short sale process in my next post (What Every Seller Should Know About Short Sales).

First, the good news…

Short Sales can bring great opportunities for home buyers. In the transactions that have involved a short sale where we have represented the buyers this year, the buyers have typically purchased the home at a good discount in comparison to similar homes in the neighborhood (analyzed through a comprehensive comparable market analysis). The homes are usually in pretty good shape as well, as they are more often owner occupied than foreclosures by owners who are looking to just get out from under their mortgages, rather than being forced to vacate by their bank or lender. It call all look like a pretty rosy picture…until

Now, the bad news…

Short Sales can be a nightmare to navigate through on the buyer side. First, lets assume a house has been selected by the buyer. In the comments of the listing, it says something like “sale subject to bank approval”. That’s your first clue that a short sale is being attempted by the seller. Now, one of two scenarios has taken place:

1. The listing agent and the seller did their homework before they put the home on the market and contacted the bank or lender. They talked to the bank or lender about what they were going to do, how they were going to price the home, and the proper steps and paperwork needed by the bank to help the short sale move along smoothly

2. More often, the listing agent and the seller have talked about doing the short sale with each other…but not with the most important entity in the transaction, the bank or lender.

We write up an offer on the property (including the dreaded phrase “Purchase Agreement Subject To Bank Approval”). We spend a couple of days negotiating with the homeowner and come to an agreement on all terms. Usually, that makes it close to a done deal (only inspection, financing, escrow to worry about)… But in a short sale, that’s only the first step. After we have worked hard to get an offer the buyer and seller can agree on, it gets submitted to the bank. The bank will assign it to someone in their “Loss Mitigation Department”. Now, keep in mind that the Loss Mitigation Department is probably grossly understaffed due to the recent influx of short sales an foreclosures. Its now typical to wait and hear absolutely nothing for 30 to 60 days (so make your closing dates realistic…ie “within 30 days of final bank approval”). And now here is the really bad news…after waiting for maybe 6 weeks, the bank can come back and accept, reject, or counter your previously negotiated agreement. So you could have agreed to this offer on May 1st, not received a response until June 15th and then gotten a flat rejection from the bank or lender. Or you could get a counter offer (read ultimatum many times ) of maybe $20,000 more than the previous agreed upon offer. Not to say we haven’t had short sale transactions accepted by the bank or lender within 30 days of submission with the agreed upon terms, but that is not the norm.

Now, I don’t want to scare all of you off from pursuing homes that are attempting to do a short sale. Just make sure you are working with an agent that does their homework upfront to see if the listing agent and seller have already contacted the bank or lender. Make sure you arepersistent with getting info from the listing agent (thus prompting them to stay in contact with the Loss Mitigation Department of the lender). Also, ensure you are looking at other homes throughout this offer process. There’s a good chance your short sale offer will not be accepted, or will be countered. If this is the case, its good to have some backup homes in place so you don’t have to go through the entire homebuying process from the start again and waste valuable time.

That’s it for now. I’ll be posting shortly on What Every Seller Needs To Know About Short Sales. Until then, if you have any further questions about short sales or real estate in general, feel free to leave a comment or contact us.

Springwise points us to a new online marketplace with the descriptive name Home Equity Share matches home buyers with investors. To be exact: it brings together buyers who can afford monthly payments but not a 20% down payment, and investors who want to get into real estate but don’t want to become landlords or make monthly payments.

Potential home buyers post a profile listing their preferences, including the area they want to buy in, and the price range they’re looking for. [...]]]>

Springwise points us to a new online marketplace with the descriptive name Home Equity Share matches home buyers with investors. To be exact: it brings together buyers who can afford monthly payments but not a 20% down payment, and investors who want to get into real estate but don’t want to become landlords or make monthly payments.

Potential home buyers post a profile listing their preferences, including the area they want to buy in, and the price range they’re looking for. They’re automatically matched with compatible investors, come to an agreement and sign a preliminary commitment. This allows the buyer to become pre-approved for a loan, and to start looking for a property. Once buyer and investor agree on a property, the investor provides the down payment, the buyer arranges a mortgage for his home and moves in. At the end of a specified agreement term—usually three to seven years—the buyer can purchase the investor’s interest in the property, or they can sell the house and share its appreciation in value.

Home Equity Share provides the matching service and contracts at no cost to buyers and investors, but requires that they use a real estate agent who is registered with the company. Agents pay a referral fee of 20% of the commission earned on transactions referred by Home Equity Share.

Unlike P2P lending services we’ve written about in the past, such as Zopa and Prosper, Home Equity Share is targeting a very specific niche: real estate down payments. It matches the parties and provides them with contracts, but doesn’t facilitate the exchange of money. Other niche P2P lending matchmakers to follow?