Great news coming out of Washington DC for residential purchasers!
First-time home buyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the government extended and expanded the tax credit to include many purchasers who already own homes.
Buyers who have owned their current homes at least five (5) years would be eligible for tax credits of up to $6,500. First-time home buyers — or anyone who hasn’t owned a home in the last three (3) years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
Keep in mind that the credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. Also, the credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000. For those in the military, the credit would be extended an additional year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
So purchasers can now breath a bit easier at least until April 30, 2010 if you want to qualify for the credit.
While you are breathing a little easier contact me if you have any questions.
Welcome back to my blog, for those of you following along I have not written in a few weeks but now summer has ended and I am back!
In this post I will talk briefly about a topic that comes up frequently and that is the fees charged by real estate professionals ON TOP of the commission they earn from you as the client.
Often this fee is set unbeknownst to the consumer when you engage the services of a Realtor or broker. This fee is often buried in the contract so often you do not know you have even agreed to it. Read your documents carefully, contact me, and DON’T AGREE TO IT! If you do happen to agree to the charge it will reappear at your closing on the HUD-1 settlement sheet on page 2 in line 704 and is characterized as an Administrative Fee or a Broker Service Fee. Generally, the amount within the range of $175.00 to $375.00.
This fee is nothing more than that of a cover charge like you would see in a club for just walking in the door. I believe that it is a charge that has no value. Usually the “services” they are offering under the terms “Administrative Fee” or a “Broker Service Fee” are the same services that either must perform or should be performing on your behalf, to earn their already significant commission!
I sympathize with the professionals that their job is not easy during these difficult housing times but these additional fees are not the proper way to earn money.
Do your work and question them as to why if you are already paying a commission should you also be charged any additional fee for the services already expected. Bottom line… don’t pay any fees that have no value. Read your documents and contact me before you sign!
I just read an interesting article about the trend of installing fire sprinkler systems in residential homes. A study conducted by the National Fire Protection Association (NFPA) which reveals that mandatory fire sprinkler installation in new homes does not negatively affect the number of homes being built.
Throughout the country residential builders nationwide have argued that the 2009 International Residential Code (IRC), which requires new homes to be equipped with fire sprinklers beginning in 2011, would negatively affect the housing market because of the cost increase to home buyers.
However, statistics show that nationally, residential fire sprinklers will only cost approximately $1.61 per square foot, or 1% of the value of the home to install. This cost adds approximately $3,500-$5,000 to the price of the home. Over the life of a typical 30-year mortgage, that’s less than a few dollars per week and certainly not a hefty price in the event of a fire
The study findings believe that the inclusion of residential fire sprinklers for one- and-two-family dwellings could prevent serious fire-related injuries. About 85 percent of all fires occur in the home, fueled by new lightweight construction and more flammable home contents. In fact, the new sprinkler regulations are being endorsed by fire service professionals across the country, such as the U.S. Fire Administration, and the International Association of Fire Chiefs. Groups such as these agree smoke detectors are no longer enough in residential fire protection, as lightweight construction has become more prevalent, house contents are more flammable than ever, and the time to escape a house fire has been reduced from 17 minutes 20 years ago to 3 minutes today, according to a cost-benefit analysis by FEMA.
The NFPA study clearly demonstrates that home fire sprinkler requirements do not impede housing development starts,” says Jim Shannon, NFPA president. “This report is another point to make the case for enacting life-saving sprinkler requirements in local communities.”
While I realize that residential home buyers do not want items added to the cost of a new construction, home sprinklers provide value and safety, and they are definitely becoming a necessary part of the cost of home buying. Please reach out to me with any questions and to have me give your deal a legal inspection.
During the July4th holiday I had a conversation with a dentist who was contemplating the purchase of a home when he asked me perhaps the question I am asked the most … Do I need a lawyer to purchase my house? I have posted on my blog about my theory before but I am compelled to speak of it again
Generally, buying or selling a home is the largest financial transaction of one’s life. These real estate transactions give rise to a number of legal questions that a lawyer with real estate background and experience is best equipped to answer.
ONLY a lawyer and NOT a lender, title company, or a real estate broker or real estate agent, can give you legal advice.
Even an agent who represents only you, and not the opposing side, has a financial interest in seeing the deal go through. You hope that experienced, reputable agents won’t let this interfere with their advice to you, BUT it may cause new or less scrupulous agents to insist that you’ll never get the house unless you bid high, to recommend home inspectors who make light of potential problems, or to otherwise compromise your interests.
Throughout the process, the Buyer’s and Seller’s interests can be in conflict with each other, and with any professionals involved in the sale. The broker commonly serves the Seller, and the lender is obtained by the Buyer. Neither knows how to provide legal guidance.
Seeking the counsel of a lawyer is a very good idea from the start of the real estate matter until the actual closing. Of course transactions can proceed without an attorney but as I mentioned to the dentist, when a person gets a cavity would you recommend that they attempt to drill their own tooth?
Call me before you sign anything with your legal questions regarding any areas of real estate.
Increasingly I am receiving inquiries from potential home buyers regarding the $8,000.00 tax credit for ‘first time” home buyers.
Without question this credit is a great incentive for purchasers who are unsure if they are in a position to make a purchase. Often this credit is enough to put them over the edge to make the purchase. The tax credit has several restrictions the most important being that it will go away after November 30, 2009.
However, a new bill was introduced this week, HR 2801 or Home Ownership Moves the Economy (HOME) Act of 2009, which aims to make the current $8,000 first-time home buyer tax credit available to literally anyone that purchases a primary residence through the end of 2010. Click this link to learn more about whether you qualify. Also, here is a brief mention of the credit from a financial expert.
In addition the U.S. Department of Housing and Urban Development (HUD) announced that first-time homebuyers using FHA-approved lenders can now get an advance on the $8,000 tax credit created by the stimulus package and apply it toward their down payments or closing costs and not wait for a credit on their tax returns.
Now is the time to buy, reach out to me with any questions about the credit.
From time to time I come across what I consider a valuable video to watch. I have watched this video from Barbara Corcoran, a real estate sales expert, and while it appears she is speaking to real estate professionals, her advice gives perspective to both Buyers and Sellers.
Bottom line is the market is where it is, but that doesn’t mean buying and selling don’t exist, so watch Barbara and see what she has to say. Then contact me for legal advice and the “legal inspection” of your deal.
YES, you need a Home Inspector!
Let me start off by saying that you do need a home inspector for any purchase of real estate. Having a qualified company walk through a property you are purchasing is as important as having a legal inspection performed by an attorney of your deal. You want to know the condition of the property before you go to settlement. It is important to also remember that as part of the Agreement of Sale you make sure to chose the Home Inspection Contingency option that allows you to void the deal if a qualified home inspector finds too many issues. Finding the right home inspector is important and unfortunately most states in the US offer little or no regulations for the home inspection industry.
How do you find a qualified home inspector?
Talk to friends who have had an inspection recently. Did their inspector do a good job? You can ask the inspector for references, too, but keep in mind they probably won’t give you the names of unhappy clients. If you are working with an attorney ask who they recommend. Attorneys often see the inspection reports so they know who the good inspectors are.
Inspect the Inspector.
If statements in the appraisal or pest report cause the lender to ask for a structural inspection they will expect that inspection to be done by a licensed professional, usually a structural engineer .Before you select an inspector find out what type of licensing the lender requires if a structural inspection is necessary. Look for an inspector that is ASHI certified. Ask where was the inspector trained? Does he or she attend continuing education classes? Does the inspector belong to a professional organization? If so, what are the requirements for membership? Entry should require more than just an application fee. Does the inspector carry Errors & Omissions insurance? This type of malpractice insurance may come in handy if the inspector overlooks a major problem. If your inspector qualifies, it may save you time and money since you won’t have to hire a second person to verify structural integrity.
What does the inspection cover?
Once you find the Home Inspector ask many questions, after all they are working for you! Ask what systems are covered in the home inspection? Are there some services that require an extra fee, such as a septic inspection? A septic report is required for FHA and VA financing. Doing it at the same time as the home inspection is usually less expensive than bringing the inspector back again later. Will you be given a detailed report with photos of problem areas? It should include a checklist showing results for all systems evaluated. It should also include reports in paragraph form. Ask for a time estimate. A thorough inspection can take 3-5 hours or more.
Do not skip this step!
I am always stressing the importance of what I term the “Legal Inspection”, having all your documents reviewed by an attorney who routinely practices in real estate and just as important is a qualified home inspection, be sure to do it!
Buying a home is the most significant financial commitment most people will make, so much is at stake, that I believe an attorney should be involved in the process from the beginning. Buyers and Sellers are likely to confront a number of complex issues that can be resolved only by an experienced real estate attorney
The usual participants in the real estate process often include a real estate sales person or two, a lender, an appraiser, an inspector and a title insurance company, and possibly a builder and contractor. This generates significant competing interests, as such it is vital to have an attorney before you proceed into what will likely be a highly complicated transaction. It becomes imperative to have the advice of an attorney to protect your interests independent with an undivided duty of loyalty to you. The following are some significant functions provided by me to smooth the home buying and selling process:
NEGOTIATE THE SPECIFIC TERMS OF THE CONTRACT. This is the most critical stage of the negotiating process, because once a contract is signed, Buyers and Sellers are bound by its terms. I explain the terms of the contract and suggest changes to protect your interests.
ENSURE THAT THE OWNER HAS CLEAR TITLE TO THE HOUSE. I guide you to obtain a title search and evaluate the status of the title. If liens or other defects are discovered, I will work with the title company to remediate them through appropriate action.
EVALUATE FINANCING OPTIONS. I can assist a consumer in analyzing the relative merits of various types of financing and the nuances of the various products.
MAKES SURE EVERYONE PLAYS BY THE RULES. As your attorney I attempt to avoid future problems of home ownership by ascertaining that all existing laws have been followed.
SERVE AS AN ADVOCATE AT THE CLOSING. The settlement (closing), which was in the past a straightforward transaction involving a few documents, have, because of the sub prime mortgage failures, become extraordinarily complex involving the generation and execution of as many as several dozen documents. Many of these documents have a substantial impact on the rights and responsibilities of the consumer. A lawyer’s expertise is needed at virtually every stage of the home-buying process, but is particularly crucial at the closing. I can explain each document , review the uniform settlement statement (HUD-1)and tell you exactly where the money is going, as well as negotiate any last minute situations or requests. I ensure that all parties comply with the terms of the listing agreement and real estate sales contract and look for “junk fees” that lenders or other providers attempt to impose. My loyalty is to my clients which can often mean thousands of dollars in savings to you.
I try to be watchful of unique residential real estate websites for those who use the internet as a means of information gathering. The fact that you are reading my blog would indicate you do use the internet to research real estate!
An independent real estate economics and information company today launched Real Estate Economy Watch (www.realestateconomywatch.com), a new Web site providing insight and intelligence on the residential real estate economy.
From my viewing the site it appears that it has a great deal of analysis, and data. Real estate brokers, agents, builders, lenders, investors and other real estate professionals will find a wealth of information they can use, including real estate trends, the housing crisis, real estate investment, foreclosures, real estate consumers, economic indicators and indicators of the real estate recovery. It is worthwhile to check out the site. Knowledge is power, so use the site for its interesting information, then before you purchase or sell real estate, contact me at Jaffe Real Estate Law.
Recently, at a national home services trade show, I met Michael Ivankovich who operates a very unique service that aids residential sellers called Home Downsizing Consultants which aims to help you move, downsize or close –out your possessions as you ready to move.
The sale of a long time residence (or even a short time) can be very nerve-racking which is why I stress the importance of a real estate attorney in making the legal sides of the process go smooth.
In addition to the legal issues of a move, there is a physical and emotional side of the process as well; the moving and removing of personal possessions in the property. It’s a lengthy process and can be distressing as homeowners decide which mementos to keep and which to discard.
Mr. Ivankovich’s service aims to reduce the stress of the move. His service includes going to the clients’ homes, evaluating and appraising their household items, antiques & collectibles identify hidden treasures, help them understand the value of their personal property, and where best to sell it…before they sell too cheaply. He even handles the packing, and oversees of the move and final clean out.
What is unique to the service is that they are consultants only and do not buy. They give you an “in-home personal evaluation,” where he tells you what your things are worth and then gives you options on how to sell them.
Michael offers a free initial consultation, which in this economy makes at least inquiring about this service a “no brainer”. So after you contact my office for the legal help, call Michael to help your “peace of mind” in valuing, moving, and downsizing your possessions.
