---

Selling Your Home And Tips For The First Time Homebuyer

---

September 14^th, 2009

 

For many first-time home buyers who have still not found a house, time maybe running out. The government’s first-time home buyer tax credit of $8,000 will expire on Nov 30^th 2009. For many first-time buyers, they may end their search when that date arrives.

 

According to Realtor.com, currently the national median home sold is $174,100. With the inclusion of the tax credit, it has provided affordability at the highest level in 28 years. Consumer survey shows that the program has motivated 11% of buyers with 1.14 million people already completed filing.

 

Since we are drawing close to expiration, timing is everything for first-time home buyers. For those who bought a home this year, the tax credit is for 10% of the purchase price and up to $8,000. If you owned a home in the past 3 years, you will not be eligible for the program. There are also income requirements to qualify for this program. First-time buyers who make more than $75,000 or couples who make more than $150,000 combined will not be eligible.

 

There is an increase of eager buyers wanting to close in on their house before the tax-credit deadline.

 

In The Race

 

Experienced mortgage brokers and real estate agents suggests for first-time buyers to close no later than a week before Thanksgiving to avoid any holiday related interruption or delays. This is good advise for those who maybe in the process of selling their home to a first-time buyer and to collaborate so as to finalize the purchase or sale by or before Nov 20^th (one week before Thanksgiving). Back and forth negotiations on the mutually agreed price between buyer and seller can cost time and delays.  

 

Jim Sahnger, a mortgage planner for Palm Beach Financial Network in Florida says that to ensure that the buyer can take advantage of the tax-credit, it is best to get into contract by the 1^st or 2^nd week of October.

 

The National Association of Realtors reported the time needed to complete a home sale in the current market is about 2 months. This does not mean that first-time buyer should rush in blindly. Bear in mind that purchasing your first home for the first time should not be taken lightly. Make sure you are absolutely certain about the house you are buying and that you are making a careful choice aside from the upside of the $8,000 tax credit.   

 

The Risk

 

For those of you who don’t meet the deadline, there is a likely chance that it may be expanded or extended. According to Lucien Salvant, managing director of public affairs for NAR, there are currently more than 20 bills drafted in favor of the credit with a third of it just recently brought forward.

 

Some proposals will not only extend the first time buyer opportunity till next year but also proposals to include all home buyers, lower income restrictions and raising the maximum amount of the tax credit to $15,000.

 

Jerry Howard, president and CEO of the National Association of Home Builders said that the inclusion of all buyers will help stimulate some spending as buyers will have to spend money on things associated with moving such as a moving van, lawn equipment and etc. Both NAHB and NAR have been heavily lobbying for an extension and the expansion of the first-time buyer tax credit.

 

Mr. Salvant said that with all certainty, there is currently a tax credit today but there is no guarantee whether there will be an extension of the program although many believe the extension will benefit the housing market overall. 

 

Senate Majority Leader Harry Reid, D-Nev, according to a spokesman from his office, is supportive of the extension. Washington Research Group, a unit of securities firm Concept Capital estimated the chances for an extension is 60%.

 

Bruce Hahn, president of the American Homeowners Grassroots Alliance says that it maybe difficult for the housing sector to capture the attention of Congress as they are currently deeply concern with the country’s growing deficit and the controversial health care issue.

 

While congress may extend the tax credit, it is uncertain how lawmakers will pay for it. The Internal Revenue Service (IRS) reported that 1.4 million people have already claimed the first-time homebuyer tax-credit so far. When it expires by November 30^th 2009, it is estimated to have cost about $14 billion.

 

Tips for First-Time Buyers

 

The National Association of Realtors reports that first-time buyers spend an average of 12 weeks looking for a home. Below are valuable tips to manage your search till closing in on your home.

 

·         If you are searching online, sign up for automatic alerts for properties that fit your needs or criteria. This way you won’t waste any time viewing properties that are irrelevant or no longer available. If you are working with a real estate agent, he or she can also help do the homework for you by forwarding you fresh listings that fit your needs.

·         Ensure a smooth loan process. Obtain all income verification documents such as pay stubs, bank statements and tax returns. Get pre-qualified first. Julie Reynolds of Realtor.com highly suggest not to make any major purchases with your credit card while your loan is in process as doing this could delay your closing date. In a survey, 35% of first-time buyers felt the mortgage and approval process was more difficult than expected.

·         Appraisals can cause delays. Make sure your lender can deliver on time. Your loan will not be approved if the property is not appraised for the agreed price. If this is the case, request for an additional desk appraisal.  

·         Prepare yourself for closing costs. Contact your insurance company or your homeowner association to forward a cost estimate to the escrow company ahead of time. Closing costs in general and for many states must be paid in cash. According to the National Association of Realtors, closing can take up to 60 additional days.

 

 

Comments

News Archive

How To Keep Your Home If You Lose Your Job - August 28th 2009

Citigroup Performing Well In Foreclosure Prevention - August 25th 2009

Foreclosure Rescue Scams Preying On Homeowners - August 17th 2009

Deutsche Bank Estimates 48% of U.S Homeowners Underwater By 2011 - August 11th 2009

Loan Modification Progress Report Card - August 5th 2009

How Bad Are Foreclosures In Your City? - July 30th 2009

Rep. Barney Frank Threatens Banks To Stop Foreclosure Or Else? - July 28th 2009

U.S Government Wants 500,000 Trial Modifications By Nov 1st - July 28th 2009

Subprime Brokers Involved In Loan Modification Scam - July 21st 2009

'Walk-Away' Survey Shows 26% of Defaults Are Intentional - July 21st 2009

'Own-To-Rent' The New Emerging Mortgage Plan - July 17th 2009

Tools To Help Homeowners Save Big In Property Taxes - July 16th 2009

Lawmakers Dissapointed With Foreclosure Help Programs - July 16th 2009

New Jersey Attorney General Goes After Mortgage Scams - July 15th 2009

Watch Out For Some Misleading Reverse Mortgage Advertisements - July 6th 2009

Chase And Bank of America To Experience 2nd Wave of Foreclosures - July 6th 2009

Obama Extends Mortgage Refinancing Program, Raising New Limit To 125% - July 1st 2009

Paper Avalanche, Lack of Trained Staff Add Obstacles To Loan Modification Program - June 29th 2009

Government Loan Modification And Refinance Program Shows Substantial Progress - June 18th 2009

Luring First Time Homebuyers, Tips To Beat The Competition And Sell Your Home - June 15th 2009

Bank Of America has modified 50,000 loans in Countrywide settlement - May 26th 2009