If you’ve talked me at all, you’ve probably heard about the $7,500 Tax Credit that first time home buyers get.  I posted a pretty good FAQ on it earlier (Tax Credit Will You Get It) , but I’ve come across 2 additional questions I thought it would be worth sharing.  Keep in mind all of this should be verified with a CPA for your individual situation.

1. Can I use the $7,500 for my down payment?

   The short answer is no.  Basically, since it’s from the IRS/Government, it would bring the IRS into the HUD statement. [soap box] Basically, the Government is too big to be bogged down by your transaction, instead they would rather focus on taking your money at gun point for other projects.[/soap box]

2. So I can’t get the $7,500 until I file my 2008 Tax Return?

   Short answer.. Yep, you have to wait. The best suggestion would be consult with CPA then adjust your income tax witholding or adjust quarterly estimated tax payments.

It happens more often than I care to repeat, but there are people out there that I really don’t want to work with.  I’m sure those of you who are reading this article are not part of this bunch, but if you are no worries.  My Christian natures pretty much require that I love you as a brother or sister, but I don’t have to work with you, nor you me, for that matter.

I’m all for being blunt and honest and frankly I’ve lost a few clients that way.  I’m not eloquent.   However, what I am talking about today is a guy named Steve.  He could be named Joe, Bob, or even Samuel, but we’ll call him Steve.

Steve Doesn’t Get It.

Here’s the scenario: Steve calls last minute and would like me to show him some homes.  He’s going to buy a home for his daughter, he may want one for himself, and he even has other "family" thinking of moving.  He’s sounds like a nice guy and I’m sure he is.  He certainly doesn’t want to put me out, but he’ll really only be available tomorrow.  He’d like to see something tomorrow and come back and BUY something a little later.

Bare with me it gets better.

I inform Steve that I COULD cancel or move appointments for him , but if I am going to do that, that I would require a Buyer Brokerage, or a Fiduciary Agreement with him so that I could be his Realtor of choice .

NOPE! Out of the question.  Steve says he knows Real Estate and whoever shows him the home wins and if he finds it on his own, the listing agent wins.. big time. I ask him more about his situation, but people like this are all the same.  It’s not that they are just plain stupid, I just think they don’t use their brains.

Let me get this straight…

You are turning down:

1. A Free Service
2. A Service that will save you more then you could possibly save by yourself
3. A Service that will save you time and hassle and protect your earnest money (deposit)
4. A Service that may very well save you from litigation

Basically, he doesn’t see the value in the service that is provided, he just wants someone to let him in the homes.

That’s a smart plan, Steve.  Good luck with that one.  I prefer to work with and for clients who want to work with me and understand that my job was never to find or show them a home.  ANYONE CAN SHOW A HOME.  I get paid to negotiate.

If I (or should I say my Seller) get really lucky, Steve will buy one of my listings in Alpharetta or Gwinnett County and I will be able to demonstrate this skill to Steve up close and personal.

For Sellers out there in Alpharetta. If you want someone who can take advantage of people like Steve, please give me a call, he should be buying in 3 to 6 months.

I’ve been in Real Estate for 6 years. It’s not a long time for most at a job, but for the world of ACTUAL PROFESSIONAL REAL ESTATE, it’s an eternity.  Most of the top agents I work with have that many years, most of the ones that have gone back to their old jobs, did not.

I tell you that to say, none of us can remember being so motivated to almost call potential clients a name if they didn’t think it was time to buy.  Seriously, if you are paying $800 a month or more and have not been late on your bills and you have a job, you NEED to buy a home.

Don’t take my word for it, here’s what the NY Times says:

Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.

That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.

Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.

If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.

They finish up the article with some good advice:

Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.

If you watched CNBC today you likely heard "Bond Guru" Bill Gross comment on interest rates.  His prediction is that rates will continue to fall, likely as low as 4%’s.  1% reduction in rate is the equivalent of a $10,000 reduction in price.  So homes will be slightly more affordable.  The big question is whether buyers who are taking advantage of the market will wait after hearing this news.

The bottomline should require you to ask these questions:

1. Why am I moving?
2. What is my motivation for moving? (yes ask it again)
3. Why do I NEED to buy?

If you are buying investment property then there might be a reason to pause.  If you are renting, you should have already bought something.

Here’s more from the interview:

"The mortgage rate will come down another 50 to 100 basis points," Pimco’s founder and chief investment officer said. "That’s basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy. "

His advice: "[OWNERS] Don’t refinance yet. "

Purchasers on the other hand should move forward, especially, first time home buyers who should take advantage of the $7,500 Tax Credit while it lasts.

Some time next year, he sees stabilization coming to the economy, and lower mortgage rates are an essential part of that process.

The FED just announced that they are buying 600 Million worth of Mortgage Backed Securities.  It’s bittersweet since it seems like a short term fix, but here’s the good news.

Rates are at 5.5% TODAY !

If you have a rate of 6.5% or higher, REFINANCE, NOW.

Call me at 770-374-4667 to discuss!

As you start looking for a new home, you probably aren’t even considering your NEXT move . You probably just want to get this one taken care of! But it is always prudent to shop for a new home with an eye on potential resale value down the road. No one can predict what the future will bring , but here are some simple things you can look for:

• Lot Size and Shape: Larger Lots are beginning to add a premium to the price. This is especially true of new construction. And as a buyer, do not pay a premium for someone else’s landscaping efforts. Landscaping can typically decrease the time on the market but not increase the overall price by much.
• Neighborhoods: Pay special attention to the yard upkeep, neighborly involvement and the amenities. The best strategy is always to buy the smallest or lowest priced home in the best neighborhood. You can get community reports from me here or search all the communities in Georgia on my website .
• Kitchens and Baths: A spacious, updated kitchen is among the most important features in a home. Updated baths are also important.
• Basements: Although most in Georgia remain unfinished they can increase the resale value and decrease the time on the market. A finished basement can add an additional $50k to $100K depending on the neighborhood and the level of finishing work (i.e. Theatre Room with equipment staying, full kitchen, extra bathrooms). In a down market, Basements may only be worth $10K, but they can definitely speed up the sale!
• Backyard Features: Decks and patios generally yield almost a dollar-for-dollar return. But swimming pools are not generally great investments, however, they will decrease the selling time significantly. Typically buyers put a $10K - $20K premium on in ground pools, far less than what it cost to put in. Above ground pools actually decrease the home’s value in some areas as well.

As you can tell most items may not add directly to the value, but all these items will help the home sell much, much quicker. You’ve got to be the best of the best in a down market.

I’d be happy to answer any questions you have and show you properties that meet your needs. Please call (770-374-4667) or email me when you are ready to look for a new home.

One of the most important steps in the home-buying process is being pre-approved for a home loan. Many buyers apply for a loan and receive approval from a lender BEFORE searching for a home. This is called “pre-approval.”Why is pre-approval important at the beginning of the home-buying process?

• Pre-approval can cut days or even weeks off the closing, because the lender has already conducted its credit analysis and approved you for a mortgage.
• Pre-approval strengthens your offer and negotiating position. A home seller will often choose to accept an offer from a buyer who is pre-approved for a mortgage over one whose financial picture is still in question.
• Pre-approval will determine your price range and narrow your search parameters. Based on your down payment and that pre-approved mortgage amount, you will know how much you can afford before you even start looking for a house.

There is also a significant difference between buyers who are merely “pre-qualified” and those who are pre-approved.

Pre-Qualified Buyers - are those whose lenders have determined how much they can borrow based only on information the buyer has provided to the lender. Nothing has been verified to determine the buyer’s true creditworthiness. The buyer still must fill out a loan application and go through the lender’s approval process.

For buyers who have been pre-approved, the lender has already done a credit check along with verification of employment and deposit. The lender’s pre-approval is a commitment to loan the buyer up to a certain predetermined amount. The only piece missing is the lender’s appraisal of the home to confirm its value.

Contact me when you are ready to purchase your next home. And let me know if I can provide any additional information about pre-approval or financing options.

Real Estate across the country is different.  In some state, it may take 90 days to close while in others, like Georgia, 30 days is the norm.  Additionally, in some states you can close at a title company’s office, in other states you may get an attorney to help coordinate the closing while still in other states (Georgia) your Realtor is the one who coordinates for you. In Georgia, a Realtor has a fiduciary responsibility to look out for your best interest.

So what does fiduciary mean? Wikipedia defines it as,

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person they owe the duty (the "principal"): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.

This agreement is set by a contract known as the, "Buyer’s Brokerage Agreement."  If an agent does not go over this relationship with you AND asks you to sign it before helping you, they are not looking out for your best interest. It only with honesty, loyalty and integrity that someone can represent you in the biggest transaction of your lifetime.

It’s more than just searching for homes, it’s knowing the market and identifying good investments, negotiating the best price, protecting your investment of earnest money, looking out for your family in their move and it’s about telling you that you might consider waiting to purchase or not purchase at all in certain situations.

Just a little note to remind folks that I’m pretty much jumping into to becoming a social media guru.  I want to be the one on the internets for all your real estate needs, so be sure to follow me @JarvisTeam .

I’ll be posting some follow up to the tax credit in the coming days.  In addition, I’ll be covering some blog topics to use in my class.

On July 30th Pres. Bush signed a major housing bill (HR 3221) into law.  As part of the bill, Congress created a new, temporary tax credit to provide some incentive to buy a home.  Here’s a quick check list to see if you qualify:

• Bought and CLOSED after April 9th, 2008
• YOU MUST CLOSE BEFORE JULY 1st, 2009
• Must be your first home (or you must be an individual who has not owned a principal residence in 3 years)
• You must make under $75,000 or have a joint income of less than $150,000 (you still get partial credit if you are over)
• The credit is 10% of the purchase price of the home, with a cap at $7,500
• Obviously, this property must be in the US
• Finally, you must have use Joshua Jarvis as your Realtor (ok, so I am kidding about that one)