The First Time Homebuyer Tax Credit

There has been much discussion about the First Time Home Buyer Tax Credit being offered by the government. A few quick notes about how it works and then I will address some recent news articles.

The credit is for up to $8,000 and is a true dollar for dollar tax credit. What that means is that if the government owed you $500 for your tax refund and you were eligible for the tax credit, you would receive $8,500 total from the IRS for your refund.

There are limits on what income you can make but they are fairly generous. For instance, the credit does not begin to phase out for a married couple until their Adjusted Gross Income is above $150,000.

The credit does not need to be paid back if you own the home for three years or more.

Now, there have been some news reports that have been released recently indicating that the credit can be used for the down payment or closing costs. As of now you can not use the credit for your down payment but you may be able to use it for closing costs. It is important to understand the pros and cons of using it for your closing costs as you must initially take a second mortgage from a non-profit which can increase your overall costs of borrowing.

There was also a report recently that the government was going to increase the credit and offer it to everyone. It is very easy to get caught in the trap of waiting for something bigger and better and it is very possible that rather than increase the credit the government may just let it expire as planned.

The credit is available only on closings on or before November 30, 2009 so time is ticking away...

IS THIS A WELL? OR A MOAT?

Reflections on what lies ahead… Yesterday I took my teenage son to the airport. This was the meeting place for the Heroic Journey he was about to embark on; a week-long program that blends the grief support of Judi’s House with an Outward Bound experience in the Rocky Mountains. Sounds like a great way to close a painful year for a grieving teen, doesn’t it? He was not so certain. During our last minute preparations, the child towering over me was wracked with fear. Was it the high ropes course or the rocks he would be “forced” to climb? Which would be worse, summiting a 14,000 ft. mountain, or the feelings he knew would rise within with every step? I know he would rather have stayed in the comfort of his home, his basement cave, with his brother and his Xbox than face a wilderness week outside of his comfort zone. And I knew that as a single mother, I would have to find the way to help this boy cross the bridge to his manhood that this week would initiate. I asked myself, “Is this a well? Or is it a moat?”

So much relies on our perspective. Fears can paralyze or propel. As we gaze into that seemingly endless void, there can be a shift in our vision, like those optical illusions we stared at during art class; where once we saw and ocean, now we only see a puddle. It is an internal shift of focus and never will this be more critical than in time of fear or crisis. Is that vast body of water something we draw from to sustain us, or do we use it to create a barrier? Does what we believe protects us also keep us from possession of our castle?
What would it take for you to shift focus?

I am certain the young man I left at the airport has had a change of perspective in the past 24 hours, will go through many more as the week goes on, and so will I.
The moat will become a well…

A foreclosure that didn’t need to happen

Several days ago I was searching the MLS listings for homes for a buyer and ran across an address that sounded familiar. I thought it sounded like the address of someone I had met, a relative of a musician my husband played with. Indeed, it was her home. I had spoken with her because she said she wanted to sell her house. She ultimately decided to market it as a For Sale By Owner (FSBO) because she felt she couldn’t afford the Realtor fees for selling.

I understood that consideration, although I didn’t agree with her reasoning, and honored her choice. I provided her with the basic information she would need to be successful in her efforts. I stayed lightly in touch with her, letting her know that I would be happy to serve if she tired of the effort.

The unfortunate outcome of her strategy is obvious. She lost her home to foreclosure. If she had been working with me when her mortgage went in to default, I would have advised a short sale.

The principle of a short sale is simple (not easy, just simple); the homeowner negotiates with their lender to accept less than owed to declare the loan paid in full. The pitfalls are many and the process is not short. A realtor will consult with you , list the home & negotiate with the lender for a commission on the sale; no fees up front. A short sale is not always a perfect solution, but it does serve the purpose of keeping a foreclosure off the borrower’s credit report. See http://money.cnn.com
If you are in default on your mortgage use the resources at HUD now to avoid foreclosure. http://www.hud.gov/foreclosure/

Lil Lively
Broker Associate - Your Castle Real Estate
Cell: 303-746-8827 Fax:303-265-9318
http://www.LilLively.com
Lil@TopProducer.com
LilLively@Gmail.com

The Open House/Open Heart

I was raised in a home with an open door policy. My aunt two young cousins lived with us one summer while she relocated from Northern to Southern California. There was a family from Amsterdam who stayed long-term, my high school friend, and there were others. No one ever came for a week or a weekend; they came for a month or three, sometimes a year. They spoke languages I’d never heard of, made picnics with foods far from my familiar suburban tastes. I learned to accommodate, to share my bike, I taught their children to swim. In exchange for the hospitality and saving their kids from drowning, I to Disneyland a lot.

As a REALTOR this “open house” thing still bears the imprint of my mother’s ideology. On any given Sunday, I choose a listing, put out signs and balloons, cookies if I’m feeling generous—and fling wide the doors to greet the world. But here is where my childhood trumps my sales training:

• I don’t make people “sign in”, though their address would be handy for the requisite thank you note.
• I don’t play Catch the Client; trailing them through the house with a string of questions about the reasons for their move and their need for closet space.

We respected privacy in our post-civil-rights-movement house.

• I don’t do the hard sell. I play it like I wanted my parents to greet me when I came home from school as a teenager— be friendly but not overly glad to see me. Offer me a cookie and if I want to talk to you I will. Most of the conversation taking place as I’m hitting the door to go back out; the “don’t forget your coat or don’t be out too late” type of thing.

I’m sure there are REALTORS who’d think I’m nuts but it works for me. It’s a solitary openness. The open door of my childhood taught me to read people in the quiet actions of their daily routines, the signs and silences between them told me more than their words. With each group of houseguests there was always someone who I came to adore without effort and the same thing happens at an open house. Every weekend I will meet someone I click with, someone who I feel compelled to work with to help them find what they’re looking for. As we’re chatting at the doorway, we will know it. I’ll offer you my card and one last cookie, confident we’ll see each other again. And from that moment on—it’s Disneyland.

~Tracy Schaffer

Blueprint Denver in Overland Park

I attended a zoning meeting tonight at the John Collins Church in the Evans/Overland Park neighborhood. It was delightfully informative. City Coucilman Chris Nevitt and Senior City Planner Barbara Frommell braved the wonderfully opinionated neighbors, providing keen listening and clear answers.

The new code (aka Blueprint Denver) is being informed by current zoning, the plan and what is standing now, using 2 approaches: Context Based and Form Based.

If you have ever puzzled over the incomprehensible language in the Denver code to figure out what is allowed or disallowed on your property, you will love this!! http://newcodedenver.org/ . The Form Based approach to zoning uses diagrams to illustrate what was previously mind boggling, and often contradictory.

Good news for many homeowners! ADU’s (Accessory Dwelling Units) will now be allowed in many areas . ADU’s are carriage houses, apartments above garages, etc.
Check it out! The first draft of the new plan for Council District 7 will be presented on June 17, 2009 6:00 pm to 9:00 pm Location: Governor's Ballroom in the Driscoll Student Center North University of Denver, 2055 E. Evans Avenue Denver CO .
The calendar at http://newcodedenver.org/meetings shows the presentation dates & locations for other districts.

Lil Lively
Your Castle Real Estate

The Good News in the Housing Market

With all of the negative news reports about the housing market, it is easy to become anxious and feel that things will not get better. However, there are many good things happening with regards to the housing market and here are just a few:

• Interest rates are at historic lows. Rates very briefly touched 4.50% a few months ago and have consistently been between 4.875% and 5.125% for the past few months. Refinancing a $300,000 mortgage from 6.00% to 5.00% could save a homeowner as much as $190 per month.
• First Time Homebuyer Credit. As part of the recently passed Economic Stimulus Bill a First Time Home Buyer (defined as someone who has not owned a home in the past 3 years) may be eligible for an $8,000 tax credit (not a deduction but a true cash credit) and would not have to pay back the $8,000 if they live in the home for 3 years.
• The Home Affordability Index. The home affordability index is at multi-decade highs which means it has not been as affordable to buy a home in a generation. This applies to an owner occupied home and a rental property. Rents are covering more of a mortgage payment than in the past 20+ years.

Imagine the incredible experience of buying a new home at a historically low interest rate and receiving $8,000 from the government.

Imagine buying your new dream home and securing a historically low rate so that the payments will be more affordable than at any other time.

What a wonderful time to buy!

~Matt Hanson