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THE ENCLAVE IN SAN PEDRO
Need to rush your home purchase? Here’s how
The $8,000 first-time homebuyer tax credit runs out Nov. 30, but it can take 45-60 days to close on a home. Here are 4 ways to expedite your home purchase so you can take advantage of this federal freebie.
By Lisa Scherzer of SmartMoney
The days are numbered for the $8,000 federal tax credit for first-time homebuyers.
The credit expires on Nov. 30 – a deadline that’s putting pressure on would-be homeowners trying to take advantage of a real-estate market on the mend.
“Most first-time homebuyers understand that time is running out. Now they need to understand how little time is left to get into action,” says Jay Papasan, the vice president of publishing for Keller Williams Realty and co-author of “Your First Home: The Proven Path to Ownership.”
In the current housing market, it takes about 45 to 60 days to close on a home from the time you have an accepted offer, Papasan says. So buyers should have their offer accepted no later than mid-October if they’re trying to make the Nov. 30 deadline. (For information on who can qualify for the credit, check the IRS Web site.)
Several bills have been introduced in Congress to extend the credit by six months to give the real-estate market another boost, though they are still up for debate. The National Association of Realtors estimates that the credit has generated 350,000 home sales this year. Moody’s Economy.com puts the number at 400,000.
The process of buying a home is neither quick nor easy. Compiling your financial paperwork, applying for a loan, negotiating an offer and signing contracts can take months. And that’s if everything goes smoothly. There are myriad ways homebuyers – especially novices – can get tripped up by the process.
Here are four strategies that can expedite a closing.
1. Make sure you’re liquid
When it’s time to make a down payment, homebuyers should make sure they have enough cash available. Their funds should not be tied up in a stock portfolio, 401(k) plan or other investment that could delay the money by days.
Using gift money for a down payment is another potential snag for homebuyers. Say your parents gifted you the $60,000 you’d need for a down payment on a new house. The bank underwriting your mortgage needs a paper trail to track the money’s origin, says David Hanna, president of the Chicago Association of Realtors. Money that suddenly shows up in your account can raise a red flag. Buyers should expect a thorough financial examination, a process that “won’t necessarily derail [a] transaction,” Hanna says. “But it will slow it down.”
2. Forget about short sales
A short sale occurs when a homeowner is no longer able to make his mortgage payments and owes more on his home loan than what it can fetch in the current market.
They’re attractive from a price point, but they can take months to close. So if you’re after the tax credit, “you have no business looking at short sales,” says Steven Senter, a real-estate broker and the owner of Keller Williams Fox Valley Realty in St. Charles, Ill. When making an offer on a short sale, not only does the seller have to accept the offer, but the bank must accept and approve it, too – and that can take awhile. “There’s no guarantee on when the bank is going to approve it – it may approve it in 30 days, maybe in 300 days,” Senter says.
3. Don’t go on a shopping spree before you close
Refrain from making big purchases on a credit card before closing on the home and completing the transaction, Papasan says.
Big buys can trigger concern because a buyer’s debt-to-income ratio is usually the most important factor lenders use to determine how much they can borrow. This ratio compares the amount you earn to the amount you owe (including credit-card debt, student loans and car loans). Once you enter into the loan application process, that ratio is set. If you’re in the middle of securing financing, buying a $5,000 living room set might throw that balance off. Any increase in credit-card debt can come under scrutiny from a lender, who may be looking at buyers’ credit reports until the day of the closing. It can also prompt an inquiry on your credit report, which then might have a negative impact – albeit a slight one – on your credit score.
4. Be aware of closing costs
Each state has its own closing requirements, and first-time buyers should know in advance what and how much they’re required to cover. For example, in Maryland, the buyer pays the closing costs. In most states, the buyer and seller share the costs. In many states, closing costs must be paid in cash at the closing.
Buyers “need to hold onto every penny until they make sure they get it done,” Papasan says. “You don’t want to be short at the last minute.”
I hope you found this information helpful. Happy hosue hunting! 
Don’t aim for success if you want it; just do what you love and believe in, and it will come naturally.
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A little positivity
State home prices are forecast to rise 3.3% in 2010
By Muhammed El-Hasan Staff Writer Posted: 10/07/2009 11:11:39 PM PDT
Home prices in the Golden State will rise 3.3 percent in 2010, a mild increase but a major turnaround from the double-
digit annual drops witnessed for two consecutive years, according to a forecast released Wednesday.
The Los Angeles-based California Association of Realtors said it expects the median price of an existing single-family home in the state to rise to $280,000 next year.
The median price is the middle figure where half of homes sell for more and half for less.
Next year will “mark the beginning of the `new normal’ for California’s housing market,” said James Liptak, the association’s president, in a statement.
“This `new normal’ likely will feature a steady stream of sales driven by distressed properties in the low-end of the market, coupled with moderate home-
price appreciation,” the statement continued.
The forecast price reversal will be weaker than in previous rebounds, said Steve Goddard, a local Realtor who is the association’s president-elect.
“Normally, the California real estate market just goes like gangbusters when it comes out of these recessions,” said Goddard, a broker at Re/Max Marquee Partners in Manhattan Beach. “But this time, I think it’s going to be slower.”
However, that expected price increase is contingent upon various “wild cards” with highly uncertain directions, like foreclosures, loan resets, the labor market and the state’s budget crisis.
For example, home prices could see “downward pressure should a heavier than expected wave of foreclosures come to market next year,” said Leslie Appleton-Young, the association’s chief economist, in a statement.
The South Bay’s housing market will likely mirror the state as the whole, Goddard said.
But even a slight improvement in local home prices would come as a big relief for South Bay communities, which have seen dramatic annual price declines over the past two years, including in the high-
end beach cities and Palos Verdes Peninsula.
Statewide, the association forecasts a drop of 2.3 percent in resales for single-family homes to 527,500 units. Sales have generally been strong this year because of rising affordability and historically low interest rates.
Homes at the low end of the market – driven largely by distressed properties like foreclosures – will continue brisk selling. Sales of higher-end homes will remain relatively weak because of a tight credit market, where banks are requiring larger down payments and better credit scores before giving a mortgage.
As a result, the association expected distressed properties to account for nearly a third of sales in 2010.
“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed.”
The association expected median prices to continue dropping “slightly” through 2009 and the first half of 2010 before leveling off in the summer.
Because of the forecast’s predicted slow recovery in prices, people shopping for a home should not feel rushed about buying as soon as possible, Goddard said.
“This time it’s going to be a little easier to take six months to a year to think about it and still get into the market and be OK,” Goddard said.
He added: “Things are looking up. If you’re looking for a house to buy and you find the right one, I’d be buying it now.”
muhammed.el-hasan@dailybreeze.com
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Last week in the news
Last Week in the News
Retail sales decreased 1.5% in September, following a revised 2.2% increase in August. However, excluding automobiles, retail sales rose 0.5%, more than the 0.2% increase economists had expected. Car sales fell 10.4% from their August high, as the ‘cash for clunkers’ program expired.
The Commerce Department reported that total business inventory decreased 1.5% in August, following a 1.1% drop in July. It was the 12th straight monthly decline as retailers, manufacturers and wholesalers sought to cut inventory. Total business sales rose 1% in August, pulling the stock-to-sales ratio down to 1.33 months to exhaust inventories at the August sales pace.
The Labor Department reported consumer prices rose 0.2% in September. For the year, consumer prices are down 1.3%. This gives the Federal Reserve room to leave interest rates at record-low levels in a further effort to give the economy a boost.
Initial claims for unemployment benefits fell by 10,000 to 514,000 in the week ending October 10. The figure was lower than the 520,000 that economists had forecast. The number of people continuing to claim jobless benefits in the week ending October 3 fell by 75,000 to 5.99 million, the fewest since the week ending March 28.
Industrial production at the nation’s factories, mines and utilities rose 0.7% in September, following an upwardly revised 1.2% increase in August. For the third quarter, industrial production increased at an annual rate of 5.2%, the largest quarterly gain since the first three months of 2005. The overall factory-operating rate rose to 70.5% of capacity in September.
The Reuters/University of Michigan consumer sentiment index for October fell to 69.4 from 73.5 in September. Economists had forecast a reading of 73.3.
Upcoming on the economic calendar are reports on the housing market index on October 19, housing starts on October 20 and existing home sales on October 23.
Don’t aim for success if you want it; just do what you love and believe in, and it will come naturally.
I was on the fence for a while as to whether Congress would extend the $8000 first time home buyer tax credit and whether the Administration would stand behind that, but I’m getting some clues that have pushed me over the side.
I think it may happen.
I’ve been asking Administration types for weeks now, one “on background” who said, “There are a lot of ideas out there for what to do with the extension of the home buyer credit and other credits, and those issues are not yet finalized from our perspective internally.” So yes, he punted it.
I asked FHA commissioner David Stevens in an interview. He said, “We’re looking at the first time home buyer tax credit. It’s had an impact. It’s being measured. The administration will come out with a recommendation and their position on where we stand on the tax credit. We’ll support that position.” Same kick.
An industry insider I know who went to a meeting with Treasury types this week said she came away feeling like “it was going to happen.”
But yesterday Maria Bartiromo did an interview with Treasury Secretary Geithner, and while he didn’t come right out and endorse an extension, he didn’t punt it either; in fact, he hinted it would happen:
BARTIROMO: A lot of people say, well, what happens when the stimulus is gone?
You look at what happened with the cash for clunkers deal. We went from horrible to great to horrible again. The first-time homebuyer credit. So what happens when the stimulus is gone?
Sec. GEITHNER: … We’re not going to make the mistake many countries made in the past of putting the brakes on too early and creating risk that we have a, you know, weaker recovery with even higher levels of unemployment going forward.
Last week Congress’ Joint Committee on Taxation put out a score (financial projection) of a potential extension of the credit.
It estimated the cost at $16.7 billion to extend it through June 2010 and expand it to all home buyers, not just first timers. Its estimate also figures in raising the income cap for eligibility to $150,000 for individuals and $300,000 for joint filers.
Concept Capital’s Washington Research Group says this “strongly suggests that a mere extension of the program will be much less and refutes whispers in Washington that an extension alone could cost more than $15 billion. The Group also notes, “This amendment offers room for Senate Democrats to negotiate with House Democrats. In conference, Senate Democrats could agree to drop the expansion in exchange for House support of an extension of the credit until June 30, 2010. We continue to believe this is the most likely outcome.”
Oh, and by the way, the House Ways and Means Oversight Subcommittee is holding a hearing next week on fraud involving the first time home buyer tax credit
*Courtesy of cnbc
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Sec. GEITHNER: The Congress is carefully looking at a range of important things, like setting unemployment insurance, other types of programs that are critical to recovery…
BARTIROMO: A good case for a second stimulus?
Sec. GEITHNER: No, for what I just said, which is looking at a set of programs like unemployment insurance, other sets of things that have–that are set to expire. And there’s a good case for extending them. And I think a lot of support fundamentally for doing it.
I think the “that are set to expire” is a pretty good indication of what he’s talking about.
Programs Designed to Expand Resources for Working Families to Access Affordable Rental Housing and Home Ownership over Long Term at Little or No Expected Cost to the Taxpayer
WASHINGTON – As part of its comprehensive plan to stabilize the U.S. housing market, the Obama Administration today announced a new initiative for state and local housing finance agencies (HFAs) that will help support low mortgage rates and expand resources for low and middle income borrowers to purchase or rent homes that are affordable over the long term. Following up on the intent to support HFAs first outlined in February under the Homeowner Affordability and Stability Plan, the Administration’s initiative has two parts: a new bond purchase program to support new lending by HFAs and a temporary credit and liquidity program to improve the access of HFAs to liquidity for outstanding HFA bonds.
The HFA Initiative using authority provided to Treasury by the Housing and Economic Recovery Act of 2008 (HERA) will provide hundreds of thousands of affordable mortgages for working families and enable the development and rehabilitation of tens of thousands of affordable rental properties. It will do this at little or no cost to the taxpayer because it is paid for by the HFAs themselves and, as a temporary program, it incentivizes HFAs to transition back to market sources of capital as quickly as possible.
“This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times,” said Treasury Secretary Tim Geithner. “Through the years, many low and moderate income Americans have been well served by state and local HFAs, but the housing downturn has hit these organizations too. Through this initiative, the Administration aims to help HFAs jumpstart new lending to borrowers who might not otherwise be served and to better support the financing costs of their current programs – key components in stabilizing the housing market overall.”
“Housing Finance Agencies are critical partners to helping American families through this tough economic time,” Department of Housing and Urban Development (HUD) Secretary Shaun Donovan said. “Today’s announcement makes clear this Administration’s commitment to providing responsible homeownership opportunities, affordable rental homes and getting our housing market back on track.”
“FHFA supports this initiative and the important role Fannie Mae and Freddie Mac will play in implementing it,” said Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco. “The HFA program has been structured to be on commercially reasonable terms for the Enterprises, to be carried out by the Enterprises in a safe and sound manner, and to support market liquidity, stability, and affordable housing. I wish to thank FHFA, HUD, Enterprise and Treasury staff for their hard work and leadership in developing this program.”
The Department of the Treasury and HUD, together with the FHFA, Fannie Mae, and Freddie Mac, have developed this initiative to maintain the viability of HFA lending programs and infrastructure. The key parts of the new initiative are:
· New Issue Bond Program (NIBP). The NIBP will provide temporary financing for HFAs to issue new mortgage revenue bonds. Using authority under the Housing and Economic Recovery Act of 2008 (HERA), Treasury will purchase securities of Fannie Mae and Freddie Mac backed by these new mortgage revenue bonds. The program can support several hundred thousand new mortgages to first-time homebuyers this coming year, as well as refinancing opportunities to put at-risk but responsible and performing borrowers into more sustainable mortgages. The new bond issuance will also support development of tens of thousands of new rental housing units for working families.
- Temporary Credit and Liquidity Program (TCLP). Fannie Mae and Freddie Mac will provide replacement credit and liquidity facilities available to HFAs that will help reduce the costs of maintaining existing financing for the HFAs. The agreements will serve to help relieve financial strains experienced by HFAs and enable them to continue their important work. Treasury will backstop the GSE replacement credit and liquidity facilities for the HFAs by purchasing an interest in them using HERA authority.
HFAs will pay a fee to have access to both programs under the HFA Initiative. These fees have been designed to cover expected costs to the Treasury Department and the taxpayer. The fee for the TCLP will also increase over time to encourage HFAs to find private alternatives as quickly as possible. The HFA Initiative has also been designed to include other features that minimize risk to the taxpayer, such as requiring HFAs that issue new bonds under this program to also prove their ability to issue bonds to private investors.
The initiative is designed to be temporary in nature and will be available for only a short window to help bridge the transition period as the HFAs resume their activities after experiencing a number of challenges in the course of the housing downturn. After today, each HFA that desires to participate will be asked to develop a program participation request in consultation with Treasury, Fannie Mae, and Freddie Mac, indicating its desired level of participation in either the new bond or liquidity program. These requests for new issuance should generally not exceed what the HFA would have received in allocation from Congress for a similar period through 2010 and will generally follow the allocation formula established for 2008 by HERA. If program demand is smaller than these guidelines would allow, the total program size will be capped at a lower amount. This bottom-up review is being used to prudently shepherd taxpayer resources, and the program will not be sized any larger than needed to meet specific demand.
Pricing under the program will reflect both the cost of any financing required by Treasury as well as a fee designed to cover any risk posed by the HFA. While there is risk that losses could exceed estimates, the fee schedule Treasury has adopted is designed to cover net losses under most stressed conditions and thus would minimize risk to the taxpayer.
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Look neighbors!! Redondo Beach is in the L.A. Times today. check it out:
http://www.latimes.com/theguide/events-and-festivals/la-et-neighborhood20-2009oct20,0,5686761.story
Don’t aim for success if you want it; just do what you love and believe in, and it will come naturally.
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(310)872-6358
Today there are millions of real estate sites for the consumer to access listings. Leaving the consumer to question which ones are accurate? Now with listing book a new program through the MLS Realtors can offer their clients a customized search through the MLS allowing them real time information with the same information as us Realtors receive. It is great! It takes the frustration out of house hunting….well…..some of it!
To search through my listingbook go ahead and sign up! It is simple and free:
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LOS ANGELES (Oct. 7) -”California’s housing market continued its strong sales rebound this year, resulting from the continued pace of distressed properties coming to market,” said C.A.R. President James Liptak. “This follows two years of double-digit sales declines in 2006 and 2007. Looking ahead, we expect sales to moderate to a more sustainable pace.”
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) “2010 California Housing Market Forecast” will be presented this afternoon during CALIFORNIA REALTOR® EXPO 2009 (www.realtorexpo.org), running from Oct. 6-8 at the San Jose Convention Center in San Jose, Calif. The trade show is expected to attract more than 7,000 attendees and is the largest state real estate trade show in the nation.
“After experiencing its sharpest decline in history, we expect the median price to rise modestly next year,” Liptak added. “2010 will mark the beginning of the ‘new normal’ for California’s housing market. This ‘new normal’ likely will feature a steady stream of sales driven by distressed properties in the low end of the market, coupled with moderate home-price appreciation.”
The median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 this year, according to the forecast. Sales for 2010 are projected to decrease 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.
“Housing in California has become a tale of two markets,” Liptak said. “The low end continues to attract first-time buyers and investors, with a resulting shortage in the number of homes for sale. Sellers at the high end, however, continue to be challenged by the ability of home buyers to secure financing as well as their concerns about where prices are headed. While demand from first-time buyers for low-end properties will continue throughout next year, sales could be impacted if discretionary sellers do not return to the market by the second half of 2010.
“2009 marked a unique opportunity for first-time home buyers,” Liptak said. “Homes were more affordable than they have been in years, interest rates hovered near historic lows, and the federal tax credit helped more than 1 million people become homeowners nationwide. Now is the time for Congress to extend the federal tax credit and to expand it to all buyers, not just first-timers.”
“With distressed properties accounting for nearly one-third of the sales in 2010, inventory will be relatively lean, under six months during the off-season months, and a roughly four-month supply during the peak season,” said C.A.R. and Vice President Leslie Appleton-Young. “We expect the median price to decrease slightly through the remainder of 2009 and into next year, then rise before leveling off next summer. For the year as a whole, home prices are forecast to reach $280,000.”
“Although it appears at this time that lenders are closely monitoring the flow of distressed properties onto the market, there could be an exertion of downward pressure on home prices should a heavier than expected wave of foreclosures come to market next year,” she said.
“The wild cards for 2010 include foreclosures, loan resets, the labor market, and the California budget crisis, as well as the actions of the federal government,” Appleton-Young said.
Don’t miss “The ‘New Normal’: What Recovery Means in 2010″ at the San Jose Convention Center in San Jose, Calif. on Thursday, Oct. 8, from 2:30 p.m. to 4p.m. Panelists include Richard Green, director of the Lusk Center for Real Estate at the University of Southern California; Glenn E. Crellin, director of the Washington Center for Real Estate Research at Washington State University; and Jack Kyser, chief economist for the Los Angeles Economic Development Corporation. C.A.R. Vice President and Chief Economist Leslie Appleton-Young will serve as moderator.
Don’t aim for success if you want it; just do what you love and believe in, and it will come naturally.
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Lunada Bay Stats are in
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