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December 21, 2009 at 02:32 PM · Posted under Steve Bauman
If Paul Revere were alive today, he’d be shouting from his saddle (OK, maybe he’d Twitter from his Lazy Boy), “Higher interest rates are coming. Higher interest rates are coming.”
For much of 2009 the Federal Reserve has been buying mortgage-backed securities to the tune of more than $1 trillion. This aggressive buying program has helped keep mortgage interest rates hovering around 5 percent for 30-year money.
The Fed has set aside another $163 billion for purchases between now and the end of March. This pace of purchases is substantially less than earlier in the year. Once March 30, 2010 arrives, the buying by the Fed is scheduled to stop.
Everything I’ve been reading says to expect rates to start creeping up after the first of the year. Many experts are predicting 30-year mortgage rates of about 6 percent by April.
What does that mean to you as a home purchaser? Say you are buying a $300,000 home with 20 percent down. Monthly principal and interest at 4.875 percent on a 30 year mortgage is $1,270.10. That same loan at 6 percent will cost $1,438.92 per month.
Looking at it from a different angle, that $168 per month savings actually increases your buying power by almost $32,000.
So, the big question is, “what are you waiting for?”
Inventory of available homes is good and Uncle Sam is willing to chip in tax credits of $6,500 to $8,000. Housing prices are down but appear to be stabilizing and interest rates are incredibly low with most predicting an increase on the horizon. I’d say now is the time to buy that new home.
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Steve Bauman
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December 18, 2009 at 12:39 PM · Posted under Steve Bauman
Short sales can mean big savings to savvy consumers. They also can result in frustration and failure. Pull up a chair for a story about one very disappointing short sale non-transaction.
A builder was facing foreclosure on an expensive spec home that he had had on the market for three-plus years. There were two mortgages on the property held by the same bank and totaling about $1 million.
In June, we were able to cobble together an offer from a very qualified buyer for about $150,000 less than the amount owed on the property. The offer, Seller’s financials and everything else initially required by the lender was promptly forwarded to the lender.
For almost two months we heard absolutely nothing from the lender, despite repeated calls and emails. Finally, we were notified that the file had been assigned to a “negotiator.”
Just when progress was being made, we were informed the FDIC had taken over the file for the second mortgage and they had assigned the note to a collection agency. This is nearly three months into the process and the Buyer was growing impatient.
We begin the negotiations anew with the collection agency with the same sort of mind-numbing multiple requests for already provided documents. After a series of back-and-forths (the collection agency refused to speak directly to the first mortgage negotiator, so we had to serve as intermediary for all communication) the first and second mortgage holders were a few thousand dollars apart on a settlement.
We were at a standoff. And a ridiculous one at that. The second mortgage holder stood to receive absolutely nothing if the property went to a sheriff’s sale, yet its representatives would not reduce their demand. The first faced additional expenses of a sheriff’s sale and holding the property but would not up their offer to the second. Meanwhile, the Buyers had grown weary of the entire process and had found another home.
The Buyers gave notice that they would be withdrawing their offer unless a resolution between the mortgage company and collection agency could be reached in short order. Again, there was no movement by either party.
You guessed it…the Buyers walked.
Two more months have passed and the house now sits vacant, deteriorating from a lack of heat and electricity. And no sheriff’s sale has been scheduled.
I can’t imagine a worse outcome. Eventually, the first mortgage holder will take over the property. It will either have to hire someone to restore the home or sell it at a steep discount. Remember, this is a house that had been marketed for more than three years without attracting an offer, so a quick sale is highly unlikely.
Meanwhile, the second mortgage holder (a.k.a. you and me, Mr. and Mrs. Taxpayer) will lose about $200,000. Municipal taxes go uncollected. A neighborhood of expensive homes suffers because of the neglected property and its eventual sale at an extreme discount.
The FDIC’s representative however took it all in stride. When informed the deal was falling apart, his response: “Oh well, that’s one less file on my desk.”
Posted by:Steve Bauman
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December 16, 2009 at 10:12 AM · Posted under Colleen Kuchta
As you may well know, the First Time Home Buyer Tax Credit has been extended and expanded. The IRS has also issued a few guidelines for you to follow. Number one on the list: if you have purchased a new home since November 6, 2009 and you qualify for the tax rebate, you will need to wait until a revised Form 5405 is issued by the IRS later this month. The IRS has made changes to the old form and added instructions on claiming your Tax Rebate check. If you purchased after November 6th, and sent in your request for the Tax Rebate, it will be in vain. The IRS issued a bulletin before Thanksgiving that clearly states all rebate request must be made on the NEW Form 5405 - which will be coming out later this month.
Not sure if you qualify for the credit? Here it is in a nutshell:
You must be a first time home buyer (haven’t owned a home in the past 5 years) OR if you have owned a home for 5 of the past 8 years, and are buying a new home, the new home must be used as your principal residence.
The tax credit is equal to 10% of the purchase price with first time buyers receiving a credit up to $8,000, and current home owners receiving up to $6,500.
The new home must be under contract by April 30, 2011 and the transaction must be closed by June 30, 2011.
Members of the Armed Forces and diplomatic personnel serving in foreign countries will get an extra year to purchase a home. They will be given until April 30, 2011 to have a home under contract and until June 30, 2011 to close the transaction.
The new home cannot cost more than $800,000.
Single family homes, multi-family homes and condominiums are included in the credit, provided the purchaser occupies the property.
No one under 18 can qualify for the credit.
If you are able to be claimed as a dependent on someone else’s taxes, you will not qualify for the credit.
There are income restrictions, $125,000 for a single person and $225,000 for persons filing jointly. A single person making between $125,000-$145,000 and joint filers making between $225,000-$245,000 may qualify for phased down credit amounts.
Finally, if you are thinking of co-signing, but are unsure if this will effect the eligibility of a first time buyer. The IRS states that the ineligible co-purchaser does not effect the tax credit for the first time buyer, as long as none of the credit goes to that person.
Questions or concerns about the credit OR just want some help and guidance with your new home purchase? Contact The Kuchta’s - Kelly & Colleen at 262-894-6512 or send us an email to ckuchta@shorewest.com. We are both Accredited Buyer’s Agents and are happy to go the extra mile to help you find the home that is right for you. Visit us online at thekuchtas.shorewest.com
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Colleen Kuchta
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December 15, 2009 at 11:19 AM · Posted under Steve Bauman
Christmas is about 10 days away and already I’m thinking about shopping.
If you or someone on your gift list loves photographic prints I’d suggest you take a look at neilrongstadphotography.com.
Neil is a Milwaukee-based photographer who specializes in high-contrast black and white urban landscapes. Much of his work is shot at night and the images are truly striking. Neil’s stunning pictures of the Calatrava are worthy of an exhibit there.
An ever-expanding portfolio features many Milwaukee landmarks and Neil recently has added pieces from New York, Chicago and Madison.
I met Neil a couple of years ago when I sold his downtown Milwaukee condo. The buyer was so impressed with his work that his offer to purchase included several of Neil’s prints. At the closing, Neil graciously gave me a couple of prints as a gift.
Be sure to check out Neil’s website. Milwaukee has never looked so good.
Posted by:Steve Bauman
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December 11, 2009 at 02:23 PM · Posted under Pat Tasker
When it comes to selling a home, there are 4 mistakes some sellers continue to make. Avoid these, and you will find yourself at the closing table within normal market times!
- DECLINING A SHOWING REQUEST! Hard to believe but many times a seller will not approve a showing, as it conflicts with their “schedule”. “Sorry, my kids are napping then” or “Sorry, we are having friends over” or one of many other reasons we have heard. Make every attempt to accommodate the showing request. It may be inconvenient, but work with it. My experience has been, if you don’t set the appointment, there may be no second chance. GET THEM IN. If you are hosting a party at 2 pm, ask if they could come between l & l:30 pm, right before the company gets there. The house will be in great showing condition. DON’T SAY NO…
- NOT DECLUTTERING! A recent consumer panel revealed this comment: “The house was so cluttered! If they can’t find a place for all their stuff, how could we? It was just too small and didn’t look good.” You only have that one chance to make a good impression. In today’s market, that starts with your online presence. If the photos show a ton of clutter, buyers will most likely pass on your home.
- TESTING THE HIGH SIDE OF PRICE. “We know we won’t get this but want to try”. If you knew that strategy would cost you an additional few months on the market, becoming “shop worn” and eventually getting even less than the indicated market price, would you still try? NO. Price it right from the start, and it will sell. You control what you take, if the buyer writes too low, just say NO. The longer you stay on the market, the lower the price you will get. Buyers start to wonder “what is wrong” with the house, must be something or it would have been sold by now. Click here for a video with more details.
- LISTEN! LISTEN TO THE PROFESSIONAL you hire. If you have picked a good experienced agent, use their experience to help you through the process. They give you advice based on past experience, education and knowledge of the market. LISTEN TO BUYERS FEEDBACK. If you keep hearing the same thing over and over, it is an issue that needs to be dealt with. As your real estate professional, I can “decode” that feedback, and tell you what to do to overcome that issue and bring in an offer!
The home selling process doesn’t have to be frustrating, if you work as a team with your agent. For some good advice when it comes to selling a home in today’s interesting market, call Pat Tasker at Shorewest Realtors 262-437-5853.
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Pat Tasker
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December 04, 2009 at 02:52 PM · Posted under Area Attractions & Events, Pat Tasker
Looking for some holiday fun this weekend?
Travel out to the Windsong Subdivision of Germantown for the annual Luminary Night. Located 1 mile east of Pilgrim Road on Donges Bay Road, this Sunday, December 6th, from 5:30-8pm.
This subdivision’s annual tradition of a Luminary Night is a perfect ending to a December weekend…After you’ve put up the tree, baked a few batches of cookies and addressed some cards, load the kids in the car and enjoy a peaceful ride through this subdivision. Most of the homes participate, with thousands of luminaries lining the streets and curvy cul de sacs. It is quite a treat for viewers….Admission is a non perishable food item to help stock local food pantries!
If you are looking for a home in a neat community like Windsong, contact Pat Tasker at Shorewest. As an area resident, Pat can show you the area and point out some great values currently on the market!
For other holiday events in Germantown check out the website
.
Posted by:Pat Tasker
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