Great news folks, the House of Representatives passed the bill to extend the tax credit closing deadline yesterday! All that needs to happen now is to have the Senate pass the bill.
This extension was part of a larger bill that fell through on the Senate floor last week. There was wide support amongst the senators for amending the American Jobs and Tax Loopholes Act by adding the tax credit extension to this bill, however the much larger bill stood still last week when discussed within the Senate.
There seems to be lots of support within Congress for the extension of the tax credit, it'll all depend on whether both sides can come to terms and agree to pass it once and for all.
Again, I will continue to keep you posted on the progress of the extension as it happens.
Feel free to contact me with questions!
Wednesday, June 30, 2010
Monday, June 28, 2010
Is there an inspection needed to list my home on the market?
Did you know that a large portion of the cities in the Metro Area now require that an inspection be performed on their home prior to transferring ownership? Quite a few of these cities even require the inspection be performed prior to listing on the MLS, so that the report is available to all interested parties prior to offer submission.
Nowadays, more and more cities are joining the ‘inspection train’ where a seller must have a property inspection be performed prior to the transfer of ownership. The inspection is very different than that of the buyer’s inspection performed in that it only goes over the specific city's code requirements. All cities that require these inspections have a detailed form, specialized by each city, that an inspector must go through when evaluating the structure. Most cities allow for qualified home inspectors perform this inspection, so long as they’re approved by the city to perform said inspections. Some cities require a city employed inspector perform the inspection. No matter who does this inspection, the inspector must go over a specific list of items to test or evaluate and disclose the findings on a report. Each city has their own way of ‘checking the list’ but they do have similar levels of notating whether or not the item is up to city code. For the most part; an item can either meet the minimum requirement, be below the minimum requirement or considered hazardous if not repaired.
Once you have the report, you may need to complete some of the items ‘flagged’ prior to transfer of ownership. Which items need to be taken care of will depend on each city. For example, in the City of St Paul, all homes must have at least one hardwired smoke detector in the home. If the home does not contain one of these detectors, then this item is marked Hazardous and requires the installation of the detector prior to the sale of the home. This is the only item on the St Paul report that is required to be addressed before transferring ownership. Almost all cities will allow the transfer of ownership on the required repairs to a buyer, so long as they repair and have the items re-inspected within a specified timeframe. A buyer must submit a signed form to the city and include a copy in their closing paperwork in order to move forward with the sale. Some cities even require an escrow agreement be put in place for the required repairs notated on the report.
Now you ask yourself, should I complete all the repairs notated on my report? While most buyers are agreeable to assuming repairs, if you are in a financial position to complete them, I highly suggest that you do so. In this real estate market, most of the homes being sold are now ‘As-Is’ sales. This means that the seller will not be doing any repairs to the property, unless required by the city to do so, prior to closing and the buyer must accept the property condition as is. Banks and servicers are already taking a large financial hit on these assets as it is and have little intention of spending any more money to sell the home than is necessary. The sellers who sell their home as a short sale have experienced great financial difficulty and do not have the means to fix every item flagged on their report. Lenders who approve these short sales also require these particular sales to be As-Is anyways. A home that has an inspection report that is ‘clean, where there are no repairs required to sell, is much more appealing than a home that has required repairs already notated before even viewing the home. Every buyer will have built in expenses with the purchase of a new home, furniture, paint or even fixture updates. No need to pass along the additional expense of fixing the required repairs and hiring an inspector to re-inspect the completion of the repairs if it isn't absolutely necessary.
If you have any questions regarding the different city required inspections, or are in need of a quality, certified inspector, please feel free to ask me.
Nowadays, more and more cities are joining the ‘inspection train’ where a seller must have a property inspection be performed prior to the transfer of ownership. The inspection is very different than that of the buyer’s inspection performed in that it only goes over the specific city's code requirements. All cities that require these inspections have a detailed form, specialized by each city, that an inspector must go through when evaluating the structure. Most cities allow for qualified home inspectors perform this inspection, so long as they’re approved by the city to perform said inspections. Some cities require a city employed inspector perform the inspection. No matter who does this inspection, the inspector must go over a specific list of items to test or evaluate and disclose the findings on a report. Each city has their own way of ‘checking the list’ but they do have similar levels of notating whether or not the item is up to city code. For the most part; an item can either meet the minimum requirement, be below the minimum requirement or considered hazardous if not repaired.
Once you have the report, you may need to complete some of the items ‘flagged’ prior to transfer of ownership. Which items need to be taken care of will depend on each city. For example, in the City of St Paul, all homes must have at least one hardwired smoke detector in the home. If the home does not contain one of these detectors, then this item is marked Hazardous and requires the installation of the detector prior to the sale of the home. This is the only item on the St Paul report that is required to be addressed before transferring ownership. Almost all cities will allow the transfer of ownership on the required repairs to a buyer, so long as they repair and have the items re-inspected within a specified timeframe. A buyer must submit a signed form to the city and include a copy in their closing paperwork in order to move forward with the sale. Some cities even require an escrow agreement be put in place for the required repairs notated on the report.
Now you ask yourself, should I complete all the repairs notated on my report? While most buyers are agreeable to assuming repairs, if you are in a financial position to complete them, I highly suggest that you do so. In this real estate market, most of the homes being sold are now ‘As-Is’ sales. This means that the seller will not be doing any repairs to the property, unless required by the city to do so, prior to closing and the buyer must accept the property condition as is. Banks and servicers are already taking a large financial hit on these assets as it is and have little intention of spending any more money to sell the home than is necessary. The sellers who sell their home as a short sale have experienced great financial difficulty and do not have the means to fix every item flagged on their report. Lenders who approve these short sales also require these particular sales to be As-Is anyways. A home that has an inspection report that is ‘clean, where there are no repairs required to sell, is much more appealing than a home that has required repairs already notated before even viewing the home. Every buyer will have built in expenses with the purchase of a new home, furniture, paint or even fixture updates. No need to pass along the additional expense of fixing the required repairs and hiring an inspector to re-inspect the completion of the repairs if it isn't absolutely necessary.
If you have any questions regarding the different city required inspections, or are in need of a quality, certified inspector, please feel free to ask me.
Wednesday, June 23, 2010
Tax Credit Deadline Extension - Update
I'm sure you've been hearing in the news that there is movement to extend the $8,000/$6,500 tax credit deadline. Last week, senate passed the vote on this matter however it has been attached to a jobless benefits bill that is still in need of passing. While this is good news for most, it may seem slightly misleading.
All parts of the tax credit are not being extended, merely the closing date portion. The two important criteria of this tax credit are those of buyers having a purchase contract executed by April 30th, 2010 and that of closing the transaction by June 30, 2010. The portion that is in the middle of debate is that of the closing deadline, where the powers that be are in the process of extending this deadline to September 30th, 2010. A new buyer can not have an executed contract after the original April 30th deadline, close by September 30th and expect to receive an $8,000/$6,500 check in the mail. A buyer must have already had a purchase agreement executed by April 30th, but was struggling to close in time for the June 30th deadline in order to be eligible for this credit.
This extension was initiated due to the heavy inventory of the properties being sold in these transactions being either bank owned or homes sold as a short sale. Very often, these transactions are delayed due to title issues, short sale approvals and other miscellaneous reasons not caused by the buyer's actions. Congress has clearly taken note that the buyers in these circumstances should not be penalized when they’ve done everything in their power to close the sale in the designated timeframe.
Again, while this is good news to the buyers who fit the criteria of having an executed contract by April 30th, do not be confused and think you can find a home and close by September 30th and receive the tax credit.
I’ll be watching this closely and in turn post at the time that it does come into law. If you have any questions regarding the tax credit or other real estate issues please give me a call and I’d be happy to answer!
All parts of the tax credit are not being extended, merely the closing date portion. The two important criteria of this tax credit are those of buyers having a purchase contract executed by April 30th, 2010 and that of closing the transaction by June 30, 2010. The portion that is in the middle of debate is that of the closing deadline, where the powers that be are in the process of extending this deadline to September 30th, 2010. A new buyer can not have an executed contract after the original April 30th deadline, close by September 30th and expect to receive an $8,000/$6,500 check in the mail. A buyer must have already had a purchase agreement executed by April 30th, but was struggling to close in time for the June 30th deadline in order to be eligible for this credit.
This extension was initiated due to the heavy inventory of the properties being sold in these transactions being either bank owned or homes sold as a short sale. Very often, these transactions are delayed due to title issues, short sale approvals and other miscellaneous reasons not caused by the buyer's actions. Congress has clearly taken note that the buyers in these circumstances should not be penalized when they’ve done everything in their power to close the sale in the designated timeframe.
Again, while this is good news to the buyers who fit the criteria of having an executed contract by April 30th, do not be confused and think you can find a home and close by September 30th and receive the tax credit.
I’ll be watching this closely and in turn post at the time that it does come into law. If you have any questions regarding the tax credit or other real estate issues please give me a call and I’d be happy to answer!
Friday, June 18, 2010
Home Inspections - Are they really necessary?
I've had many buyers ask this over the years, whether or not an inspection of the property is really necessary when buying a home. A lot of cities now require some sort of inspection be done prior to or at the time of listing, whether it be just a well/septic inspection or a full structural inspection. While this information is very handy when looking at properties, it should not be the only inspection you rely on to decide if that particular home is the right one for you. These city inspections do not go into the full depth that a buyer's home inspection will dig.
I think I'll have my handy father do the inspection. Or maybe my uncle who's a contractor? While these people may have a good base of knowledge on a home, they have not gone through the training required to be an inspector. It's very possible they may not know what to watch for on a foundation, in a particular neighborhood or style of house, to adequately inform you on whether or not it is collapsing. Your father or uncle likely specialize in certain areas and can be a great sounding board for rehab/remodeling ideas in the future, but they will not give you the scope of information that a quality licensed inspector can.
It is always best to perform a full home inspection, prior to committing to the purchase, so that you can truly get a feel for the home's strengths and weaknesses. It's extremely important to be present during said inspection as well. This will give you a chance to have someone walk you through how the mechanicals work, if there's moisture seeping in, where to find certain things (like your gas/electric/water meter!) and how each part of the home functions. If after the inspection, you find that there is much more work than the naked eye could detect, you may be able cancel your purchase agreement. However, your purchase agreement must be contingent on the home inspection in order to have the right to cancel and retain your earnest money.
If you have any questions on home inspections, need the name of a quality inspector or any other real estate topics, please give me a call or send me an email and I will be happy to help.
I think I'll have my handy father do the inspection. Or maybe my uncle who's a contractor? While these people may have a good base of knowledge on a home, they have not gone through the training required to be an inspector. It's very possible they may not know what to watch for on a foundation, in a particular neighborhood or style of house, to adequately inform you on whether or not it is collapsing. Your father or uncle likely specialize in certain areas and can be a great sounding board for rehab/remodeling ideas in the future, but they will not give you the scope of information that a quality licensed inspector can.
It is always best to perform a full home inspection, prior to committing to the purchase, so that you can truly get a feel for the home's strengths and weaknesses. It's extremely important to be present during said inspection as well. This will give you a chance to have someone walk you through how the mechanicals work, if there's moisture seeping in, where to find certain things (like your gas/electric/water meter!) and how each part of the home functions. If after the inspection, you find that there is much more work than the naked eye could detect, you may be able cancel your purchase agreement. However, your purchase agreement must be contingent on the home inspection in order to have the right to cancel and retain your earnest money.
If you have any questions on home inspections, need the name of a quality inspector or any other real estate topics, please give me a call or send me an email and I will be happy to help.
Friday, June 11, 2010
HAFA - Lenders and Servicers are now sending solicitation letters
Hello Folks-
I just heard in one of my latest Partner First training sessions that lenders and servicers are now sending out solicitation letters about short sales or a deed in lieu to gauge interest with the homeowner on how they would like to proceed with their mortgage/home after missing one or more payments.
The most recent list of lenders/servicers that are officially participating in the HAFA/HAMP program is as follows:
Bank of America
Citibank
GMAC
Wachovia
Wells Fargo
If you pay your mortgage to one of these companies and are behind on your mortgage payments, do not be surprised to find a letter in your mailbox asking if you would like to sell your home as a short sale. The letter will also ask if you're interested in a deed in lieu.
If you find yourself with one of these letters and want to discuss which option is best for you, please give me a call or send an email.
I just heard in one of my latest Partner First training sessions that lenders and servicers are now sending out solicitation letters about short sales or a deed in lieu to gauge interest with the homeowner on how they would like to proceed with their mortgage/home after missing one or more payments.
The most recent list of lenders/servicers that are officially participating in the HAFA/HAMP program is as follows:
Bank of America
Citibank
GMAC
Wachovia
Wells Fargo
If you pay your mortgage to one of these companies and are behind on your mortgage payments, do not be surprised to find a letter in your mailbox asking if you would like to sell your home as a short sale. The letter will also ask if you're interested in a deed in lieu.
If you find yourself with one of these letters and want to discuss which option is best for you, please give me a call or send an email.
Monday, June 7, 2010
Tenants - Where is the rent?
So you've got rental property. You have a lease in place (verbal or written) with tenants to occupy the home. Soon you find yourself wondering each month if the rent will come by the first. Some months it comes on time, others days or even weeks later.
What do you do if it doesn't come for 30 days? What exactly do you do if it's not coming at all?
If this is familiar territory for you, I sincerely advise you to meet with a real estate attorney. While this may pull anywhere from $150-500 out of your pocket, the return on investment will be the information obtained from this meeting. You will gain knowledge of how to approach the situation surrounding eviction, how to proceed in accordance with the lease you have in place with your tenant. This can also be a great time to discuss all sorts of topics revolving around your rental property, including the leases you are currently using or have used in the past.
Researching topics on the internet will only get you so far. Once it comes to enforcing the contracts you have in place, you'll more than likely find yourself feeling as though the meeting with an attorney can be priceless! They will not be able to do the 'work' for you, but at the very least, they will point you in the right direction.
If you need a real estate attorney referral, please let me know and I'll send you a few good names.
If you have questions on this topic of real estate or the market your home is in, do not hesitate to drop me a line.
What do you do if it doesn't come for 30 days? What exactly do you do if it's not coming at all?
If this is familiar territory for you, I sincerely advise you to meet with a real estate attorney. While this may pull anywhere from $150-500 out of your pocket, the return on investment will be the information obtained from this meeting. You will gain knowledge of how to approach the situation surrounding eviction, how to proceed in accordance with the lease you have in place with your tenant. This can also be a great time to discuss all sorts of topics revolving around your rental property, including the leases you are currently using or have used in the past.
Researching topics on the internet will only get you so far. Once it comes to enforcing the contracts you have in place, you'll more than likely find yourself feeling as though the meeting with an attorney can be priceless! They will not be able to do the 'work' for you, but at the very least, they will point you in the right direction.
If you need a real estate attorney referral, please let me know and I'll send you a few good names.
If you have questions on this topic of real estate or the market your home is in, do not hesitate to drop me a line.
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