Actually, it's neither.

Rumors swirling around buyers, asking agents " I heard about a $15,000 tax buyer credit--I'm thinking of waiting to buy".  Let's hear the full story!

It's true that Senators Christopher Dodd (Conn-D) and Johnny Isakson (Georgia-R) have introduced legislation to 1) extend the current $8000 tax refund past the November 30 deadline, 2) increase the credit to $15,000 and 3) make it available to ALL home buyers, not just first time buyers. Senate Majority Leader Harry Reid supports extending the credit. 

As a Realtor, I would love to see the tax credit at the very least extended past the November 30 deadline. Here in the Kansas City area, sales of homes priced under $200K are what's hot--because those are the homes within reach of a first time buyer.  That's where most of my sales are this year. A $15,000 tax credit for all homebuyers?  Yea baby let's do it!

As a taxpayer,  I wonder about the chances of the extension and increase of the credit.  Today we hear the deficit will hit over $9 trillion dollars over the next ten years.  How would the extension be funded? By just adding more red ink to the deficit?  Would that get passed by the House and Senate?  Both sides surely agree about the impact for the economy with a strong housing market, but at what cost ? 

We're hearing that housing sales are up.  Yes for first time buyers, yes for foreclosures, but we need those second and third time buyers to feel confident enough to sell and buy.  SECURE JOBS are the key to that market.

Once the health care debate is decided, you'll hear more about extending the housing credit/refund.  And if it passes, the media will be all over it, just like the 'cash for clunkers' program. 

And unlike the 'cash for clunkers', a truly robust housing market will have a much bigger effect on the overall economy. 

Thanks for reading!  Comments welcome.  maryhutchison.org

The market is full of first time buyers now, scrambling to buy within the next couple of months and cash in on the $8000 tax refund from Uncle Sam.  This home, near UMKC, offers any homebuyer a great location, lots of charm, and an updated, move in ready interior.

5835 Cherry, Kansas CIty MO   Three bedrooms, one bath, newer roof, large closets, off street parking, close to UMKC and Brookside shops, $182,500.  Email me for more pictures and information!   maryhutchison.org

It's not as easy to buy or sell a house today as it was three years ago.  New rules and regulations, much needed, are popping up all over.  If you are buying or selling a home RIGHT NOW, you need to know about the new Truth in Lending law, aka Mortgage Disclosure Improvement Act.

What is Truth in Lending?  That is the paperwork with outlined estimated costs to the buyer for purchasing the home.  All closing costs are displayed, including tax prorations, insurance, escrows, APR, etc.   The Mortgage Disclosure Improvement Act (effective July 30, 2009) now requires a specific timetable for the buyer to review the charges. This Truth in Lending paperwork will come from your lender.

Once the buyer has a signed contract for a property, the lender must supply this TIL document.  This is for the protection of the buyer--so the buyer can review the charges associated with the purchase of the home well before closing. Note these deadlines:

• No loan may be closed prior to seven business days after the buyer receives the initial TIL statement. 
• If the loan terms change between the time of the signed contract and closing (due to inspections and/or renegotiations, change of closing date, etc), and these changes cause the APR to increase or decrease more than .125%, a NEW TIL statement must be prepared for the buyer's review. 
• The buyer must have this updated TIL statement for review at least three business days before closing.

Let's look at a couple of examples. If you have a contract to purchase a home for $150,000, your lender will send you an initial TIL statement based on that price and other terms of the contract.  After inspections, you and the seller agree to drop the price of the home to $140,000.  That's approximately a 7% price drop.  Therefore, your lender needs to write up a new TIL statement reflecting the charges that go along with the new agreed upon price.  And you have to have that statement for at least three days prior to closing.  Or, let's say the price doesn't change but as a buyer, you decide to close 3 weeks earlier than initially planned.  That is going to affect the interest paid, taxes paid, and other closing costs by more than .125%--so a new statement must be issued reflecting the updated numbers.

How does this affect the seller?  The seller better be sure that the buyer's lender is following these new rules correctly or there could be delays in closing.  And nothing is worse than last minute delays in closing--for either party.

Talk over these new rules with your listing agent and/or buyer's agent.  Your agent should be keeping up with these new regulations and keeping you informed at every step that they are being followed!

Thanks for reading my blog. Need information on real estate prices in your area?  Email me!