IT IS NOW OFFICIAL!

The first time home buyer tax credit has not only been extended, but it has been expanded, which affects not only first time home buyers, but also those homeowners selling and buying a new home (as long as they have lived in the home for at least 5 years).

The president just signed the new bill extending the first time home buyer tax credit. There must be a contract by April 30, 2010, and the home must close by June 30, 2010. The $8,000 still stands.

For homebuyers that have been in their current homes (must be a primary residence) for at least 5 years, will get a $6,500 tax credit. The deadline dates above apply as well.

The income limits have increased to $125,000 for the single buyer, and $225,000 for couples.

The bill does exclude investor owned properties.

The buyer must stay in the home for at least three years or they will have to repay the credit.

So this is great news for many people!

If you have further questions, ask your lender, or your realtor, or feel free to call or email me.

If you or anyone you know is in the market to buy or sell their home, feel free to contact me;

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises, LLC
850-803-8446
Valerie@ValerieSullivan.net
www.SullivanHomes4U.com

Hi all!

I know many would-be first time home buyers are wondering if the tax credit is going to get extended.  We all sit and wait with baited breath and hope and wonder.

Well, it looks like there is SOME good news--at least for active duty military;  H.R. 3590:  Service Members Home Ownership Act of 2009 is making it's way through voting right now.

Once this passes (and of course, we are not sure when that will be), it means that the current $8,000 tax credit is extended for active duty military that have served overseas for at least 90 days in 2009 and were unable to take advantage of the First Time Home Buyer tax credit.

It will extend this benefit for one year, until November 30, 2010 for those eligible. 

This is great news for those of you that are/were deployed!  Check back on the above link to follow the status (I know I will!).  If you have questions, feel free to contact me or if you already have a realtor, ask them for details! 

Until next time!

Valerie Sullivan
Owner/Broker, GRI, e-Pro
Sullivan Enterprises
Fort Walton Beach, FL
www.ValerieSullivlan.com
Valerie@ValerieSullivan.net
850-803-8446

How many of us have said this;

When conditions are perfect I will....(fill in the blank). This can be anything from taking that dream trip, buying that dream car, getting the dream job, or buying a house. "IF ONLY" the conditions were perfect, if they were right, then I would "do this." This expands to everything else. We try to make things and life "perfect" for our kids because we only want the best for them.

There comes a point in time when you just have to move forward and realize that rarely are conditions "PERFECT" for anything. This is life we live in, and it's to be enjoyed, and lived. In a continuous process, we learn in school, about life, and we grow. As we learn more, and expand our awareness, we continue to learn how to go after the things we want most.

Want to take that dream vacation? Why not start doing the research to see how much it would cost? Believe it or not, instead of putting that dream vacation on a credit card, you can put it on layaway. Or maybe take shorter smaller vacations that don't cost as much. There are SO many discounts out there where you can get a vacation on a budget.

As for having a better family life, and wanting the best for your kids. They don't necessarily want (or NEED) more THINGS, they want mom and dad to "be there." When I retired from the Air Force, everyone asked my then 5-year old son what he was going to do once I retired. His answer "Eat waffles for breakfast every day!"

So what about buying that PERFECT HOUSE with the PERFECT conditions? In my opinion, the PERFECT time to buy a home was about 50 years ago. They were a LOT cheaper then. Except I wasn't alive 50 years ago. I didn't NEED a house. Wouldn't it be great to make today's income, but pay house prices of 50 years ago?!

Realistically, conditions now are ripe for buying a house. For the first time home buyer, there's an $8,000 First Time Home Buyer IRS Tax credit (money in your pocket to buy a home!?), PLUS low interest rates (do you know that in the 1980's--when I was alive and could buy, but didn't, interest rates were in the double digits?)

Most people purchase a home based on the payment they can afford; not the home they can afford. I once worked for a mortgage broker who said price doesn't sell a house, the payment sells a house. I realized how right he was. Watch this:

The payment on a $250,000 house, financed at 100% (I work mostly with VA--one of the few 100% financing programs currently available), for 30 years; These are PRINCIPAL ONLY payments (Taxes and Insurance are usually included in your monthly payment at 1/12th the annual premium for each).

Percentage Monthly Payment

5.00 $1,342.05
6.00 $1,498.88
7.00 $1,663.26
10.00 $2,193.92

WOW! What a difference a few interest rates points can make!

For many real estate markets, prices are now on the rise--albeit MUCH slower than during the "boom" and interest rates are currenlty low. What better time is there? (hint: 50 years ago!)

Not sure if you qualify? Then call or go talk to a lender. Not sure where to find one? Contact me, and I can send you a list of lenders I work with that are there to help you. They are not there to "judge" you if your credit is not perfect, nor will they laugh at your situation that you feel may be less than perfect. If you know you need to work on your credit, then take the time to do it. It's a pay-off in the long run. Situations happen (that's life again!), and as with everything, circumstances do change.

Believe it or not, it is in YOUR power how you handle YOUR situation and what you choose to do with it.

Have questions?

Give me a call or email!

Until next time...

Valerie Sullivan
Owner/Broker
Sullivan Enterprises, LLC
850-803-8446
www.ValerieSullivan.com
Valerie@ValerieSullivan.net

Hi all! I hope this finds you doing well! We've been having some interesting weather around the country lately. I honestly don't remember seeing a hurricane making it so far north along the eastern seaboard, but then, when I lived in the midwest, I really didn't pay attention much to weather along any coast-lines. Or maybe that was because we only had 3 channels back then, and no weather channel!

Well, now that I have the weather channel (or maybe because I live in Florida Panhandle just a few miles from the Gulf of Mexico?) I keep an eye on major weather systems. Here's the newest one out...

Tropical storm Erika may or may not become a Hurricane, but this shows the expected area of activity from the NOAA.com website. This may be another one that goes up the eastern seaboard again, however, it looks like it is in line for Florida.

So, if you live in the Florida Panhandle, and don't even get a drop of rain from the storm itself, how does this affect you? Well, if you plan to have insurance on your home, once a tropical depression becomes a hurricane, and is within a certain distance of this Sunshine State, insurance companies immediately stop writing new insurance policies throughout the entire state. If you don't plan on getting insurance on your new home, it's not a big deal. Carry on and you'll be fine, however, for those of you that are getting a loan, your lender will require proof of insurance before the loan closes.

Does this mean you stop looking for houses all together if you are in the process of your diligent search? No, continue your search, but keep an eye on the weather. Insurance companies will begin writing (usually) once a hurricane has hit landfall and dissipated.

But what if you just got a contract? Does this put you on hold? It doesn't have to. When seeing something like this pop up, once again, keep an eye on it (it may never "grow up" in to a hurricane), talk to your insurance agent, lender, and realtor. You do have the option of locking in your policy before their "magic shut out" time. Locking in the policy means you can close as planned--even in the middle of a hurricane.

BUT, don't forget to keep other factors in mind...if the hurricane is heading or could head to your area, your closing could be delayed due to mandatory evacuations. Even if you and the seller are willing to sign the paperwork before getting out of town, the lender, title company, closer, and realtor may have all left town. OR, as the case with the military, when I was active duty, depending on the trajectory of a storm, we had mandatory evacuations--we were not given a choice.

Just make sure you keep an eye on the weather, and talk with your realtor if need be. If you have to extend closing, that's not necessarily a bad thing. If you come back to town, and the house you were planning on buying isn't there any more, you'll have to find another one. If it is still there, you have the reassurrance that your new home survived a hurricane!

With that said...how do YOU prepare for a hurricane? Assuming you don't live in the mid-west, that is!

Until next time!
Valerie Sullivan
Owner/Broker, GRI, e-Pro
Sullivan Enterprises, LLC
Fort Walton Beach, Florida
Valerie@ValerieSullivan.net
www.ValerieSullivan.com

Hi all!

The weather here has been great this week! Hot and humid in the morning, and then we get the rains in the afternoon, only to get more hot and humid after the rain. The best part...the grass just keeps right on growing!

Anyway, I hope this finds all of you doing well. This blog is for those of you that are first time home buyers, or those of you that may know any first time home buyers. I have giving a FREE First Time Home Buyer Seminar in Shalimar, Florida, on August 13, 2009. Once again, this is a FREE, NO obligation seminar.

For those attending, they will receive a copy of my e-book, 7 Things Every First Time Home Buyer Should Know for FREE. Click here for detailed information on this informative seminar.

So what's the catch, you ask? Well, you must attend, and spend an hour listening to me, a home inspector, and lender discuss programs that will help you as a first time home buyer. You can ask questions, too, whether one-on-one before or after the seminar, or during the seminar.

If you go to my website, www.ValerieSullivan.com or the website for my e-book www.7ThingsEveryFirstTimeHomeBuyerShouldKnow.com you will find additional details. Space is limited, so you do need to register.

If you have any questions, feel free to call or email me.

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises, LLC
850-803-8446
Valerie@ValerieSullivan.net
www.ValerieSullivan.com

Hi all!

I hope this finds you well. It's been very hot and humid here, but fortunately, cool enough in the morning to take my dog, Odin, on an hour-long walk. He loves it because there are always new smells--not to mention the squirrels, cats and other dogs.

Meanwhile, I get some great information from the lenders that I work with. Many times, when someone is thinking of buying a home, they know that interest rates affect their payments and how much house they can buy, so they call a lender with one question...and are frustrated because they don't get an immediate answer. While we can say "interest rates are great right now" what they actually are varies according to a number of factors. This is the email I received from Linda today;

Each day I get countless calls from clients shopping interest rates and they simply ask, "What is your current interest rate?" That is really an open-ended question because many factors affect an interest rate quote.

> What type of financing are you seeking?

> Are you putting any money down?

> Are you interested in a fixed rate or an adjustable rate loan?

> Is this loan for a primary, second home or investment property?

> If refinancing, do you wish to pull money out of the equity or only refinance an existing mortgage balance and roll in closing cost?

> And the most important question, what is your credit score?

Hi all!

There weather here has been fantastic the last week or so--it is warming up enough to go to the beach and not freeze any more. The water is still cool, but I guess that's all relative. My sister came to visit me one November from Minnesota. I was freezing and turning blue, and she was basking in the Gulf--amazed at how warm it is here in November. It's all relative!

I hope the weather is great wherever you are as well!

I have put together a Teleseminar for first time home buyers that will take place on June 9th. This is a free teleseminar loaded with all kinds of information! So what will this teleseminar cover you ask? Briefly,

• What to do first when buying a home
• What an adjustable rate mortgage is (how to figure out when they ARE a good idea)
• $8,000 IRS Tax credit and how it works
• First Time Home Buyer Programs
• What to look for when you do buy a house (i.e. size, location, features)
• Inspections
• There will also be a question and answer period at the end

This is a no-obligation, FREE teleseminar.

So, how do you sign up? Go to www.7ThingsEveryFirstTimeHomeBuyerShouldKnow.com and click on the sign-up button. You'll be glad you did!

Valerie Sullivan
Broker, GRI, e-Pro
www.ValerieSullivan.net
www.7ThingsEveryFirstTimeHomeBuyerShouldKnow.com
 

Hi all!

Spring break is still on in many parts of the state and country, and state legislators are trying to come up with a program where first time home buyers can use the $8,000 tax credit they will receive buying a home prior to December 1, 2009 as their down payment for the home they do buy.

The point being that as a first time home buyer, you will be receiving the credit when you file your 2009 tax return. This could be a good idea, create more jobs, and put money back in to the economy this year instead of next--AND also allow people to get in to homes that will qualify for a loan, but do not enough for a down payment.

Keep in mind that the home needs to be owner-occupied, and the first time home buyer cannot have owned a home in the last 3 years.

While this would be a great idea, due to the time it takes to pass new legislation, there is a slim possibility that it will happen. For more information and the latest information, go to the article here:

http://www.floridarealtors.org/NewsAndEvents/n4-040309.cfm

The good news is that VA (veteran's administration) loans still allow for 100 percent financing as long as you qualify. Rural Housing loans are currently the only other program that allows for 100 percent financing.

With interest rates at an all-time low, the $8,000 tax credit, and how many houses are available for sale right now--THIS is the time to buy!

Looking at the Emerald Coast Association of Realtors Multiple Listing Service, there are 97 homes under $100,000 currently on the market in Fort Walton Beach. Increase that area to the rest of Okaloosa county, and that number goes up to more than 250 homes available for sale under $100,000. Increase the price to $150,000, and there are 268, and 901 available homes in Fort Walton Beach and Okaloosa county respectively. Defnitely plenty to choose from!

So for those of you in other areas, please take a moment to share with us what prices you are experiencing--we're all interested in what is going on around the country!

Until next time!

Valerie Sullivan
Broker, GRI, e-Pro
Sullivan Enterprises, LLC
Valerie@ValerieSullivan.net
www.ValerieSullivan.net

Hi all!

It's been a hectic but fun few weeks. With spring coming, it's getting warmer out, and the kids are getting spring fever--waiting...ever so impatiently...for spring break! I can't say I blame them--I enjoy walking on the beach every chance I get!

I recently wrote a book 7 Things Every First Time Homebuyer Should Know, and after speaking with my publisher about it, we decided releasing it as an e-book due to the timeliness of the information was a good idea.

With a new and different economy upon us, there are still plenty of people that need and want to buy a home--and for many it's their first home. You've heard from family, friends, and co-workers that it's better to own your own home than to rent--but why? You hear bits and pieces, but this book will put it all together for you!

7 Things Every First Time Homebuyer Should Know will explain what to do first when looking for a home, how best to utilize your time, as well as the services of your realtor. It explains how adjustable rate mortgages work and why and when they might be a good option. You can also read about and understand how the $8,000 first time home buyer credit works--is it really a credit? How about first time home buyer programs? Do they really exist? How can I qualify?

Along with this book, there will be a 4-week free webinar for those that are interested, covering information many first time home buyers are looking for. The webinar will be offered in April.

Maybe you're just thinking about starting to look, and just want some information. There's a lot to digest, and having this book to refer to when you are ready is a handy resource. It explains the steps you will go through in the home buying process, and when you should and shouldn't get a home inspection.

What about short sales and foreclosures? Bank-owned properties and REO'S? What is a short sale, and how do you know if buying one of these is a good deal or not?

Purchase 7 Things Every First Time Home Buyer Should Know and receive for FREE:

- 4-week webinar series explaining the home buying process, how to get started and what to do next!

PLUS These FREE Reports:

- 10 Things to take the Trauma out of Home Buying
- 10 Questions to ask your lender
- 10 Questions to ask your home inspector
- What your home inspection should cover
- Common Closing Costs for Buyers
- What to keep from your closing

All for only $25.00!

SO, check back in a few days--I'll post the web address where you can purchase this e-book, and you can use it yourself, or give it to a friend or relative considering buying their first home!

Until next time!

Valerie Sullivan
Realtor, GRI, e-Pro
Valerie@ValerieSullivan.net
www.ValerieSullivan.net

Hi all!

Well, it looks like the economic stimulus plan had some changes made to it--go figure!

The one that affects the housing industry the most, though, is the homebuyer credit. It was rumoured that there would be a $15,000 tax credit to ANY homebuyer this year, but that got completely nixed (there goes the new house we were going to buy this year! Of course, we hadn't thought about what we'd do with the house we're currently living in yet...)

All is not lost, though. The $7500 tax credit that went in to effect last year for First Time Home Buyers was raised to $8,000 and now it doesn't have to be paid back (the original version had to be paid back over time). You do have to live in the home for at least three years, though.  If you sell the home prior to the three year mark, you will have to pay back the credit you do receive.

The dates were changed, too, and extend now to December 1, 2009--but remember, that means the property has to close by the first of December, not just go under contract. This also means that since it is a tax credit, it affects you when you file your annual taxes--this credit does not "come off the top" when you buy the house.

So make sure you talk to your tax professional if you are a first time home buyer and you buy that home this year!

ALSO, as a reminder to those of you that purchased a home in the State of Florida during 2008 through the end of February this year. If you have not filed for your homestead exemption, you have until March 1st to do so. You'll need to bring your paperwork from your closing to the county tax collectors office. They will verify that you are eligible for your homestead exemption. And for those of you unaware, the previous $25,000 homestead exemption is now $50,000, and if you are a disabled veteran, you are eligible for another $5,000 exemption, too.

Here's to lowering your tax bill!

Have a great weekend!

Valerie Sullivan
Realtor, GRI, e-Pro
850-803-8446
www.valeriesullivan.net

Author of 7 Things Every First Time HomeBuyer Should Know to be released Spring, 2009

Hi all!

It's amazing how different perspectives can be SUCH an eye opener...

I had a conversation with a friend this last week who made that title comment. "EVERTBODY is buying real estate." And you know what, she was right! EVERYBODY is buying real estate. Those that own their house outright, they've already bought, but they're still buying...by paying the taxes and insurance on the house.

The homeowner with the mortgage (whether they owe more or less than the house is worth is irrelevant) is buying real estate. While they pay the bank a mortgage every month, and only a fraction of that payment actually goes towards that principal payment, that homeowner is buying real estate, too.

But what about the renters? They don't pay a mortgage, they pay rent. Well, actually, a renter IS paying a mortgage. While some rental properties are owned outright, the majority have a mortgage on them. So as a renter, that $1300 a month rental payment goes to the homeowner, or apartment owner, and they in turn use that money to pay the mortgage, taxes and insurance, as well as maintenance, repairs and upkeep of the property. The advantage? The owner of that property gets the tax benefits of owning it. While the owner may get a cashflow (or, maybe not), depending on repairs and maintenance, they get to write off those costs. They also get a depreciation deduction--which also helps to lower that tax bill.

SO, while your entire house payment doesn't go towards paying down your principal, when you think of it, paying 5 percent on a mortgage, I think I would rather have my "rent" go towards my own mortgage payment, but that's just me.

What about you?

Hi all!

We've had some crazy weather running across the country the past few weeks--I'm not sure if I'm supposed to be hot or cold any more! I do feel like I need to keep multiple layers with me at all times, though!

I work often with first time home buyers, and it's alway interesting how we (those of us that have been through the process many times) take for granted the "little things." This past week I had one who was concerned about what and EMD is, how it works and does this mean I have to pay MORE for the house I'm buying?

First off, and EMD is short for Earnest Money Deposit, and this is a check you write when you put in an offer on a house. This money goes towards the purchase price of the house OR the closing costs. It is not in addition to the agreed upon price.

Why is an EMD required? This is a good-faith payment to the seller saying you are seriously interested in this home, however, if you get cold feet because you suddenly do not like the house, this is money you could lose. If you are getting a loan, though, and are concerned that you "might not get" the loan, there is a contingency clause regarding financing. This means that if you don't get approved for the loan to buy the home, you can get your EMD back.

How much is an EMD? It depends on your area specifically. It is usually at least one percent of the offer price, or some areas will have a minimum of $1000 regardless. Either way, this is still "your" money and goes towards the purchase price/closing costs.

Does the seller get my EMD as soon as I pay it? It can, however, not customarily. In Florida, you will make a check out to either the real estate brokerage listing the home, or a title company that will be holding the money in escrow until the closing on the home. The amount you paid will be a part of whatever your costs are at closing. If, for some reason, there is excess money left over at closing, then you can get that back at closing, depending on your lender.

I've seen a few buyers that are concerned about an EMD, thinking they are paying more, or it's money they will never see again, but you have to look at it like this--it's a large investment--buying your first home--you need to put forth a good faith deposit and let the seller know you're serious about buying their home.

If you have questions or are concerned about how the EMD works, talk with your lender or your realtor--or feel free to ask questions here!

Cheers!

Hi all!

It got cold over the last few days (ok, "cold" for this part of Florida is in the 30's at night and not getting above 50 during the day), but I have to admit, I'd rather have this weather than what they are dealing with up north! Digging snow tunnels is great when you're a kid though!

Anyhow, I had a conversation with a friend of mine this morning, a mortgage broker and one question that came up that many buyers are wondering right now...are there ANY 100 percent financing home loans available left? With all the changes, and stricter guidelines for getting a loan, people still may not have 20 percent of a down payment saved up to buy their home.

Well, believe it or not...the answer is yes...for starters, the Veterans Administration is still offering 100 percent financing (which in some cases can be raised to 103 percent to roll in the funding fee you must pay). If you are a disabled veteran, though, you do NOT have to pay that funding fee (minimum of 2.2 percent of the loan amount). You do need to ensure your lender gets a copy of your disability determination as part of your necessary paperwork.

But what if you are not a veteran? What are your options? Well, the only program out there that still does offer 100 percent financing is Rural Development loans. This means that the house itself has to be considered in a rural area--which may be different than what you think. In Okaloosa County, Florida, the area between Hurlburt Field, and Eglin AFB is NOT rural (Fort Walton Beach), however, areas of Mary Esther, Navarre and Destin (YES, DESTIN) are considered rural development.

So what about this Rural Development program? Right now, with one of the programs my friend was telling me about is that the seller gets an appraisal on the property when they list the property. Rural development lenders will not lend more than what the house is worth "today" (ok--so that's the way it is with ANY lender). However, since Rural Development lenders will lend up to 100percent of the property VALUE (not just contract price--all other lenders lend based on the LOWER of appraisal price or contract price).

Once the seller has the appraisal on their Rural Development property, they KNOW that the buyer cannot get more than that for their loan, so now they can determine how much they are willing to pay towards the buyers closing costs on top of their realtor fees, and determine their bottom line early in the process.

So why is this such a good idea? Many times, a house is listed and while the realtor does a comparative market analysis on it, the true value isn't known until the appraisal is done. With knowing the appraisal amount now, both the buyer and seller know what they're dealing with in terms of an appraisal. If the seller gets the appraisal and realizes that it won't give them enough, they don't have to waste their time listing the property for more than they will know it will sell for today.

So, are you ready to buy? Does this give you some good options? Then don't hesitate, do something about it!

www.rurdev.usda.gov

www.homeloans.va.gov

Hi all!

I hope everyone had a Merry Christmas and Happy New Year! I enjoyed time over the holidays spent with family, and everyone I've spoken with has said the same thing. Family is important, and my broker put it in perspective when he said "no matter what you do for a living, the bottom line is that you do it for your family, to be with them and spend time with them." This was a holiday season that it really hit home.

That said, we all have our New Year's resolutions, but I find it amazing how so many go by the wayside within six weeks. I stopped making "New Year's resolutions" many years ago for that very reason. I set goals, but not necessarily at the beginning of the year. Businesses usually set up projections/plans/goals for the next year mostly to be in conjunction with the new year--which coincides with the tax year.

So what are your goals? Not just for this year, but your future? Are you renting, or in a situation where you'd like to buy a home? Do you have a great job, but want a better job? Or are you working at a crappy job and want better, or you love your job, but think that things could be better? How about your family life? Are there things you would like to do and it just hasn't happened?

If you haven't written down your goals, now is the time to do it. Owning a house, buying an investment property, getting a better job, traveling or spending more time with your family--these are all goals. Some people prefer pictures--cut out from a magazine, or off the internet--do what works for you. Write them down and then be open to ideas on how to accomplish them as they come to you.

I'll use buying a house as an example. It's at the top of your list and you're ready to own. Let's say you've never owned a house, you know you're credit is not the best, but honestly are not sure what your credit score is. You have balances on a few credit cards, and you're able to put a little away each month to save for your new home. You think it'll take years before you will be able to buy, but have you really figured out the details? First, by talking to a banker or mortgage broker, they can pull your current credit report which will give you a credit score. This information alone can help determine your ability to buy. If you have a credit score of 395, chances are really good you won't get a mortgage. But in the 620+ range, you could be in a good range to buy, depending on your other factors.

Your household income and debt, as well as any savings you have also play a factor in your ability to buy. A lender will look at your debt-to-income ratio to help determine how much house you can afford to buy.

Also, as a first time homebuyer, there are first time homebuyer programs available based on your income and family size (a family of one is eligible), and/or occupation.

See, while a goal may be to "buy my first home" in the future, it could very well become a reality for you this year. Home prices are stablizing, and interest rates are now below five percent. The last time they were this low was when the housing boom did happen (now 3 years ago)--except home prices are much lower now--in a more realistic range.

If you figure out that you have just a little too much debt to buy a house, then come up with a plan to turn that around--a better paying job, and/or paying off credit card debt, putting just a little more each pay period in to the savings account. The point is to come up with a plan and stick to it--whatever that plan is.

Good luck and have fun with getting your goals together!

Hi all!

This is going to be a short post today--with getting ready for Christmas, like most people, and having too much on my plate, I managed to get the flu so am trying to get over it before family arrives for the holidays!

Anyway, I did receive an email from one of my lender contacts showing interest rates for today. Keep in mind that not every lender/mortgage broker will have the same rates on the same day, but this still gives you an idea of what's out there.

Getting a loan at 5 percent interest today is EXCELLENT, so if you're considering purchasing, don't hesitate! Now is the time to buy before rates begin rising!

CONVENTIONAL-30 years-4.875% with .875 points/5.250% with 0 points.
15 years-4.750% with 1.000 points/5.000% with 0 points.

JUMBO-30 years-7.500%% with 1.000 points/8.125% with 0 points.
15 years-7.625% with 1.250 points/8.000% with 0 points..

ARM'S-3/1 ARM-5.500% with 0 points/ 5/1 ARM-5.500% with 0 points/ 7/1 ARM-6.500% with 0 points.

GOVERNMENT(VA & FHA)-30 years-5.125%% with 1.000 points/5.500% with 0 points.
15 years-5.500% with 0 points.

INTEREST ONLY-3/1 ARM-6.500% with 0 points/ 5/1 ARM-6.250% with .375 points/ 7/1ARM-6.500% with .250 points.

RURAL DEVELOPMENT-30 years-5.500% with 0 points.

CONSTRUCTION/PERM-5.500% with 0 points.

BOND- 6.75% with 0 points-First Florida-(FHA/VA/RD) with down payment/closing costs assistance.
6.50% with 0 points-Community Heros(FHA/VA/RD) with down payment/closing costs assistance.
6.25% with 0 points-Florida Advantage(FHA/VA/RD) with down payment/closing costs assistance.

Stay healthy and enjoy the holidays!

Hi all!

I know I missed a week, but I'm back now! 

One thing about buying a house is that it's a time in your life when you pay particular attention to your credit score and what your credit report says about you and how you handle your finances.

We all are now aware that we can get a free annual credit report, however, after doing some research, I discovered a few things.  First off, like with any other search parameters, when you put in your search terms, it will bring up a plethora of places that say "free credit report" and when you go to the sites, you find out that you have to sign up for a "trial period" for another service and then remember to cancel the membership before you get charged.  I can never remember when I have to do that, so I don't like to sign up for those free trial periods.

Well, the good part is that there is a good option.  There is only one site that the Federal Trade Commission authorizes to give the free credit reports.  Mind you, you will not get your credit score (unless you pay a price--go figure!), however, it's still a good idea to get the free credit report from the 3 credit bureaus so you can see if there are any potentially negative things on your credit report that you need to clean up prior to getting a loan.

SO, if you haven't gotten your annual free credit report yet, go to www.annualcreditreport.com and you can get your report from each of the bureaus.   To verify it is you, they ask questions that only you will know that will appear on your credit report.

It's a good idea to check your report annually anyway, but if you haven't looked at it in a while, or your planning on buying a house in the next few months to few years, or you know you need to clean up your credit, take some time and get your free credit report.  If there are issues, there are directions on each of the sites on how to file a dispute.  I've had to do this, and while it may seem tedious and time consuming, it was worth it in the long run to get the issue pulled off my credit report.

Enjoy!

Hi all! I know it's been a while. I was in Atlanta last week in some pretty intense conferences and meetings. The best part was the meeting I had with my publisher. I have started writing a book "Nine things every First-Time Homebuyer should know." I realized after talking with just a few people at a time about buying homes--the majority being first time home buyers--that I could reach more people by writing this book. It's something I am quite excited about.

The home-buying process is daunting for anyone--regardless if it is your first time or not, and even though there is SO much information available at our fingertips--especially on the internet--it is sometimes hard to wade through it all.

With that said, I've talked with a number of first time homebuyers just in the last couple of weeks that were just getting started and had no idea where to start (confirmation for me to get this book written!) And while I always explain that the best place to start is to talk with a lender, I try explaining some things a first-time homebuyer may not know or understand yet.

When you rent a home or apartment, you know that your $1000 rent payment is RENT. Period. Sometimes you are lucky enough to have utilities included in that rent, some or all, or maybe the benefit of being a part of a complex that has a pool, tennis courts, and exercise rooms. You know before you start paying your rent what it will include.

The same should go for your house payment. When you talk to a lender to get qualified, and they tell you that the biggest payment you can afford is $1500, you need to know what goes in to that payment, and how that translates to how much house you can afford. Usually, if you put less than 20% for a down payment, your lender will require an "escrow" account to be set up. Part of your monthly payment will go in to that account each month and when your tax bill and insurance bill is due, the lender will ensure it is paid out of that escrow account.

When you talk with a lender and they say "you can afford a PITI of $1500 a month" this means that P=Principle; I=Interest; T=Taxes; I=Insurance. Your annual tax and insurance estimates are broken down in to 12 monthly portions which are added to your principle and interest payment.

SO, you ask, how do I figure out how much house the comes out to? Good question! You need to have an idea of how much the taxes and insurance are in your area where you live. Your Realtor can help you with this, or your lender. In Okaloosa County, Florida, we have the ability to go to the property appraiser's website, and find out what last year's tax bill was on any given property. Not all counties in the United States have that capability, though.

Interest rates and terms will also have an effect on your payment; allow me to illustrate on a loan for $175,000. The same home, this shows a fixed loan rate for 15 and 30 years, at both 6 and 7 percent interest rates, and the difference in total house payments. This is why it is important to talk with your lender. Interest rates change daily, and right now are under 6%, so that does affect what you can afford based on your personal circumstances.

Years	Interest Rate	Annual Tax	Annual Insurance	P&I	PITI (Monthly payment)
15	6%	$1,500.00	$1,500.00	$1,476.74	$1,726.74
15	7%	$1,500.00	$1,500.00	$1,572.94	$1,822.94
30	6%	$1,500.00	$1,500.00	$1,049.21	$1,299.21
30	7%	$1,500.00	$1,500.00	$1,164.27	$1,414.27

Tax and insurance rates depend on where you live. The only way to know how much insurance you will pay is to get insurance quotes for the house(s) you are interested in buying.

There is a lot to digest--and this should help explain where you are headed when buying a home!

Good Luck!

Well, it is now official. One of the first-time homebuyer programs the FHA currently provides, is ending as of 1 October, 2008. This program allowed someone (seller, builder, friend, relative, etc.) to gift the 3% down payment requirement to a first time homebuyer.  After October 1st, relatives or friends, or anyone that will not benefit from gifting the 3% down payment is allowed to gift/contribute the 3%. You just won't be able to request the seller or builder to contribute this down-payment any more.

This program is still in effect through September, so if you're a first-time homebuyer, you can still find a home, and take advantage of this program as long as you close on the property prior to October 1st.

So why is this happening? Well, the primary reason that lawmakers have stopped this program is that 40 percent of those FHA loans that used this program just since October have gone in to foreclosure.

This does limit those that don't have 3 percent saved up to put down on a home, or a friend or relative that can gift the funds, however, all is not lost. Keep in mind that there are other programs for first time home buyers. In Florida there is the SHIP program as well as Florida Bond money--programs that can be used together and you can qualify for up to $17,000 in assistance to buy your first home. FHA will still allow use of these programs. There are stipulations for each program, however, they are designed to help the first time home buyer with down payment and closing costs. You may still have to provide funds for the down payment, but you may not need as much as you think.

And let's not forget about the $7,500 tax credit for first time homebuyers as well. This is a program that is expected to last only a year, but will give you a credit spread out over a few years.

SO--the question is, are they any truly 100 percent loans available any more? Well, things are always changing, however, right now--today, there is only the VA Loan program and US Rural Housing Loan that are 100% loan programs.

With a VA loan, you have to have served in the military for a specified amount of time (it differs from full time active duty and reserves/guard duty).

With a Rural Housing Loan, the home has to be in a Rural Housing area. In Fort Walton Beach, FL, there are no homes that fall in to the rural housing category, but there are some in Mary Esther. Crestview, and Defuniak Springs both have plenty of these opportunities, as well as some homes in Destin. There is a website that your lender or realtor can go to and input the address--and find out if it is considered a rural housing area.

SO, if you aren't qualified for a VA loan, and not in a position to use a rural housing loan, and want to take advantage of this FHA program, get to your friendly lender, call your neighborhood realtor, and get started!! Time is running out!

GOOD LUCK!

Hi all! School's back in session! Now it's time to get back in to that "school routine" for those of you that have school-aged kids.

With that in mind, one thing I've learned is that there is always something new to learn. Even with how the real estate market works, and how loans works. Markets change, so we learn how to deal with that. The mortgage industry also changes, so we learn what we can do with those changes.

With so many short sales on the market right now, it's smart to have some strategies in your pocket. As I've said before, short sales and foreclosures can be good deals, you just have to make sure you do your homework and determine how much work you are willing to do. I've seen some short sales that are move-in ready, while others need everything, including kitchen cabinets, walls and appliances.

So if you've found that home, it's a good deal, you have money for the down-payment, and even the closing costs, but that leaves you with NO funds to put in new flooring and painting the inside (many of these short sales only require a deep clean, new flooring and paint). So the question is "HOW can you buy a home like this?"

Well, you can get an FHA 203K Rehabilitation and Home Improvement Loan. Keep in mind, not all lenders are signed up to offer these, so if this is what you want, make sure you ask around. With an FHA 203K rehab loan, you can get this on a home you already own, or one you are getting ready to buy.

In a nutshell;

- Must be on an owner-occupied property (up to 4 units)

- One time closing with up to 5 draws

- 30-year fixed rate loan

- Low down payment requirements on purchases

- Flexible requirements--down to 580 credit score (changes 1 Oct)

- Up to 6% seller concessions for closing costs

- Non-occupant co-borrowers allowed

These funds can be used for rehabilitation, structural alterations and reconstruction, modernizing and remodeling, replacement of plumbing, electric, wells, and septic systems, flooring, roofing, gutters and downspouts.

There is a minimum of $5,000 in rehabilitation costs in order to get one of these, and you do need to get estimates from qualified contractors. You don't have to actually use these contractors--but you need the estimates from them. If, for some reason, you don't use all the funds you asked for, it will go towards the principal of your loan--as a principal reduction.

This is a fantastic way to get in to some of these homes out here right now. With so many short sales on the market, this is one way for someone with limited funds to get in to the home that needs a little "TLC" as we call it.

If you have questions, you can talk with your realtor if you are currently working with one, or call around to some lenders to find out who can do these loans, and what you need to do in order to get one of these.

Good Luck!

Hi all!

I was talking with my husband yesterday--he's working out-of-town right now--and he was telling me that when he took a break from all the reading he had to do, he was listening to two co-workers talk about the housing market. One is in the process of moving to another state, and just put an offer in on a new house there, and the other was saying to her "well, in this market, you offer at least 20% below what the listing price is..."

First off, anyone who knows my husband would expect him to speak up, but he chose not to this time--he wanted to hear what was being said. I'm not so sure I could have kept quiet...which is why I chose to write in my blog about negotiating an offer in this market.

Second...in ANY market, there are NO hard and fast rules about "always offer 10% less than what they ask" or "never pay full price." There is more to the picture than the listing price. ALL real estate is local. Even in today's market, there are areas of the country that the list price is the starting price and when you put in an offer, you put in what you are willing to pay over that. The key is knowing the market where you are planning to buy. Even within suburbs in a city the markets can be VERY different.

In my local multiple listing service, I ran a search to see what homes are selling for compared to their list prices in Fort Walton Beach, FL, and it's been steady since January 2007 that the sell-to-list ratio is at about 95%--meaning that on average, sellers are getting within 5% of their asking price. In 2006, it was at 90%, 2003, 2004, and 2005 it was 96%, 97% and 98% respectively. In 2002 it was at 95%. We've come full circle.

So HOW do you negotiate an offer on your dream home? Well, as I always preach...get pre-approved first to make sure you are not wasting your time looking for something more (or less) than you can afford.

When you've found the home that meets your needs, you like the neighbors, the neighborhood, the schools, the amenities, the distance to everything you want and need, look at the houses that have sold recently in that neighborhood. You can look at the property appraisers page to see what has sold, however, in Okaloosa County, Florida, it takes 30-60 days for those to update after the sale of a home. This is where it pays to work with a realtor. If the house was listed in the multiple listing service, they will have near real-time--at most within 2-3 days knowledge of how much the house next door sold for.

Your realtor can get a comparative market analysis for you on the home you're interested in. It shows if this home is over priced, or under priced in comparison with other homes that have sold recently in the neighborhood. While some sellers are still stuck in the "boom years" and expect to get more than they paid for their house then (or think that the should be able to get the price others did during that time), more and more sellers are being realistic, and as a result, are pricing their homes competitively. You see, every seller is different, as is every realtor. Some houses will still be out there over-priced, and some won't.

If the home looks like it's underpriced, ask why--what's the sellers motivation? They're tired of it and they just want out? They want to pay off bills? They need to move? Sometimes "they're just ready to move" is the answer. But that doesn't mean they can or want to "give" the house away. If you as a buyer holds to that "offer 20% less rule" you may lose out on the perfect house in the perfect neighborhood that all your kids absolutely love because it has the yard that has the treehouse in it. The house is exactly what you've pictured, and has the layout you were looking for, as well as the size yard you need, and it's close to everything you want and need.

Sometimes terms are a bigger issue than price. A buyer knows what they can afford, and they're looking at that price range, but they have very little to pay in the way of closing costs. A buyer can ask for closing costs to be paid, plus offer a lesser amount, and see what happens.

I always tell my buyers to ask for everything, but don't expect to get it. I tell my sellers what I'm told is the buyer's motivation (no money to pay closing costs), so then they can decide how to come back with a counteroffer. Sellers have their bottom line that they want/need to walk away from the sale from, and that's where they negotiate from. Just as the buyer has their limit, so does the seller--so in the negotiating process, everyone wants to get the best deal. It is possible that can happen.

As a seller, it is best to come back with some type of counteroffer. This is part of the negotiation process. Sometimes it may take going back and forth a few times to make it all work.

Now, short sales and bank-owned properties are a whole different ball game. While the "motivation" is that the bank needs to get this property off their books, there is nothing "personally" motivating a corporate entity to negotiate a sale of a home. These are instances where you have to be patient and wait for the answer to come back. Sometimes there will be multiple offers, and you have no idea what the other offers are. All that you know is that the bank will take the offer that nets them the most money.

Builders are also a different issue. Usually they are not very flexible on their price, but they will offer other amenities or upgrades instead.

So the point is...know your market, wherever you are buying OR selling. If you don't have the time to figure it out and do the research, find a good Realtor that knows your market to help you out. It will be well worth your time.

Hi all!

I hope this finds you doing well!

The latest question that has come up is "Why are some loan programs better than others, and how are they better or worse?" Well, it all depends on your situation.

While there are Rural Housing Loans (the home has to be in a designated rural housing area), VA Loans (must be currently active duty, or a veteran with certain stipulations), FHA (government backed), there are also Fixed Rate, Adjustable Rate Mortgage (ARM), and Interest Only mortgages (just to name a few).

Fixed Rate Mortgages: when you get the loan, you get a fixed rate for 15, 20, 30 years. You pay that interest rate for the life of the loan, it does not go up or down. Your principal and interest payment will stay the same. That does not mean your payment won't change, though--your taxes and insurance may change, and if they do, it will affect your monthly payment. That's the advantage of having a fixed rate mortgage--knowing your payment won't change by too much. You can budget that amount for the next 15, 20 or 30 years (whatever the life of your loan), and know that it won't change. When you get the loan, your interest rate is based on "today's" going rate, and can be locked in for 30 or so days (how many days will depend on your lender--some will be longer, some shorter).

Adjustable Rate Mortgages (ARM): There are a many variations of these. They are fixed for a period of time, anywhere from one month to five years, and then they will adjust according to the index and the margin. The disadvantage of these is that your payment COULD go up, but it could also go down. When the interest rate adjusts, it adjusts according to what the rates are doing at the time of adjustment. There is a CAP rate you also need to be aware of. A CAP rate shows the maximum amount your rate can go up in an adjustment period and/or for the life of the loan.

Interest Only Loan: These are loans where you pay only the interest, and none of the principal on the loan. This means that your principal won't go down--you won't buy down any equity by making the payments. These usually have a balloon payment at a certain point, where you are expected to either pay off the mortgage in full, or refinance.

So what's the best loan to get? That depends on your situation. If you know you're going to be in your home for less than five years due to the nature of your job, an ARM isn't necessarily a bad option. With an interest-only loan, you may have gotten a GREAT deal, and already have a lot of equity in it, and only plan to be in it a short time (whether you occupy it, rent it or sell it or any combination of the three). Fixed rate, you're payment will pretty much stay the same except for tax and insurance adjustments that would affect your monthly payment.

The BEST thing to do is to talk to your lender about your current circumstances and what your future plans are regarding your current job, and with this home (live in it, rent it, buy/fix/sell it). AND ask a LOT of questions. Ask them to explain the different programs to you (there are SO many different ones, which is why it important to be honest with your lender). The ultimate decision is yours. It can all seem confusing, so if you need to, take the information home and read through it until you do understand it better. If you have additional questions, you can ask your Realtor, or your lender. There's a lot of paperwork you have to sign when you get a loan, so it's best to understand it before you get to the closing table.

Hi all!

This has been an interesting week--but the newest item is that The President signed in to law the new Housing and Economic Recovery Act (HR 3221) of 2008. There are a number of new provisions to help homeowners currently in distress with refinancing under the right conditions.

The one I like the best has to do with helping out First Time Home Buyers (those that have not owned a home for the last 3 years); it allows them a tax credit ten percent of the cost of the home (up to $7500).

Now, this home does have to be a primary/principal residence. And the income limit is $75,000 (or $150,000 on a joint return). It is phased out at $95,000 and $170,000 respectively.

This is a program that is effective on homes purchased on or after April 9, 2008, and terminates July 1, 2009.

So what does this mean for the first time homebuyer and how does it work? Well, since interest rates are still at an all-time low, and home prices about as reasonable as they're going to get, plus with this, it truly is an incentive to buy a house before July 2009! Once you buy your house, just make sure you provide your tax professional with the documentation of your closing they request and they'll get you taken care of.

If you've got questions on how it affects you and your taxes personally, the best thing to do is talk with your tax person to find out exactly how it affects you as everyones situation is different.

To find out more about the act, you can read the press release below;

http://www.reuters.com/article/pressRelease/idUS171972+30-Jul-2008+BW20080730

http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

Have a GREAT week!

Hi all! The weather has been wonderful here to go "house shopping" and that's what has been happening with my clients. And one question that came up with each of my clients--new and those buying again--is "ok, once I have a contract on a house--we've negotiated and agreed and I've turned over my earnest money deposit and we're supposed to close in 30 or so days...WHAT NOW?"

Good question! Even for those buying a house again after a few years--we all know markets change, and requirements change--especially when you move across state lines. Different states have different requirements. For example, in the state of Florida, each home closed on requires a pest inspection prior to closing.

Now your lender, your realtor, and the title company will remain in contact to stay on top of the transaction. The first thing is if you haven't already been approved for a loan, is to find a lender and get approved and make sure your lender and realtor have each others contact information. Chances are your realtor will ask for the lender info and follow up with them. Your lender may require additional information from you, even if you have been pre-approved (tax returns, bank statements, pay stubs or leave and earnings statements). The quicker you get this to your lender, the quicker the transaction can close.

Second, if you want to get a home inspection, you need to get it scheduled and done. This is usually a buyer's cost (around $300). It's not mandatory to have one, but highly recommended. If something is found like electrical issues, or a leak somewhere, something comes up that wasn't obvious when you were looking before, you can ask the seller to have it fixed. The Pest inspection is different from this, but could also find damage due to pests.

Third, get insurance quotes and decide on who will insure your home. The listing information you received for the house should have all the information the insurance agent will need to get you an accurate quote. Quotes can vary considerably so be sure to get more than one quote. When you decide on your insurance, tell them you need a binder and make sure they have your lenders information.

There are a number of things that happen "behind the scenes" that you may or may not be aware of. First, if you're getting a loan, the lender will require an appraisal. Sometimes a survey is required. If there is a survey from a previous sale, and no significant changes have been made to the property (additions), this will suffice.

The title company will need to do a title search on the property. This search identifies current liens on the property (loan, tax lien, mechanics lien, etc.) and they will ensure these liens are paid once closing happens and the "new" loan is funded.

Both the listing agent and buyer's agent will remain in contact and if there are any issues, they contact their respective clients. They are also both usually in regular contact with the title company. As it gets closer to the closing date, the lender will send the package to the title company to prepare the HUD-1 settlement statement. This shows all the numbers--who is paying for what, how much, and how much the buyer/seller needs to come to the table with, or will get at closing.

In Florida, it is not customary for buyer and seller to sign all the papers together in the same room at the same time. The title company will schedule with the buyer and seller separately.

As the buyer, you will do a final walk-thru the day prior or the day of closing with your realtor. If any repairs were to be done, this is when you verify they've been done. Also, this verifies no significant damage has been done to the property prior to closing (fire, flood, hurricane, tornado, etc.).

You arrive at the closing table, sign lots of papers, walk out with a copy of what you've just signed, and the keys to your new home!

Now you get to move everything in to your new home and start making memories that will last a lifetime!

Congratulations!

p.s. keep in mind, this is a for a "general" transaction. Each transaction is different, and short sales, bank-owned properties, and as-is sales have different requirements. Also, lenders and loan programs have different requirements so keep that in mind as well.

Hi all! I hope everyone is enjoying the weather! I've had a busy week that resulted in driving over the Destin bridge numerous times. I am always in awe of seeing the view from that bridge--the boats all over Crab Island as well as the Destin Pass and the Destin Harbor.

With the real estate market ever-changing, a question that comes up with buyers--new, first-time buyers, as well as those that are selling their current house and buying again. "How much money do I need for a down-payment on a house these days?" Well, that depends on your particular circumstances. Right now, the only loans that you can get at 100% financing are VA loans and Rural Housing Loans.

Of course, the best thing to do is talk with your lender and be honest with them about your debt and your income. You will likely have to prove your income through tax returns or pay stubs or a leave and earnings statement.

The lender will need to pull your credit to find out your credit score. Your credit score and debt-to-income ratio will determine the program(s) you qualify for, which also determine how much money you will need to put down when buying your new home.

FHA loans can require as little as 3% for the down payment (some of which can be used for closing costs). Some loan programs allow you to roll your closing costs in to the loan, or, as part of negotiations, you can ask the seller to pay some or all closing costs, depending on what your lender allows. Some lenders only allow the seller to pay no more than 2% towards buyers closing costs. Some will allow more. Just be sure to talk to your lender about what is allowed.

The best thing to do is speak with some lenders, find one you are comfortable with and that can answer all your questions to your satisfaction. Once you have decided on a lender, make sure your realtor has their information. The information you get from your lender can help you and your realtor with the best negotiations for you when you are ready to put an offer in on your new home.

Enjoy your week, and feel free to call or email me with any questions you may have!

Hi all!

I was looking at the Wall Street Journal for some information on the Housing Market as a whole today, and maybe to use for my blog and found out something interesting. One article from the WSJ I was sent last week said that the housing crisis nationwide is over. That April IS the bottom. This doesn't mean we're going to see values return to the boom levels of 2005, or even that they will begin rising soon. The builders have slowed down their building, so housing starts are lower than they have been in years.

Then I went to the same paper today and it states that the market is still declining nationwide, except for some pockets here and there. It's amazing how the story changes from day to day. But then that's the news.

So what does all this mean? In Valerie's opinion, we are in a normal market. While we had a big boom of 2005...that boom and fall is 3 years old. Real Estate has seen double-digit interest rates in the 80's, and people bought and sold houses regularly then. Interest rates are 1/2 to 1/3 what they were then, they've remained steady for the last few years, but how long will that continue? With interest rates in the 6% range, it's still a good time to buy. At least you know more will be going towards equity than for the interest than in the 80's timeframe!

So, if you have to move from one region to another due to a job transfer, how do you determine where within that area to buy your new home? Or would it be better to rent? That depends on your situation. If you are there for the short term--2 years or less, you may want to consider renting. Longer than that, buying may be an option, but of course, you need to do your homework. There is a lot of information on the internet to research the area, the schools, activities you prefer, and how long you prefer for your commute to and from your job. With gas prices, it's time to think about maybe paying a little more money for a house closer to work instead of your gas tank eating up the money.

Even if you don't have children, areas with good school districts have housing with better market and resale values, so that is something to consider. Also, just because your current commute where you live is only 30 minutes for a 30-mile drive, doesn't mean that's the way it will be in your new area, so make sure you ask someone at your new job, or your realtor if you are working with one, about traffic and commuting if that is a concern for you.

For example, in Fort Walton Beach, Florida, between Eglin AFB, and Hurlburt Field, from just about anywhere in Fort Walton Beach, you can get to either base in about 20 minutes at the most (depending on traffic). For those stationed at either base, they live anywhere from on the bases themselves, to Fort Walton Beach, Navarre, Gulf Breeze, Pensacola, Crestview, Holt, Baker, Defuniak Springs, and Freeport all climbing to an hour commute, sometimes more. As with anything, you have to decide if the commute is worth the house. If you've checked out the schools for your children if you have any, the house itself, the neighboring communities, and your new neighbors, jobs for those in the house that will be commuting and their commute time.

There are a lot of factors to consider--while the news stories paint a pretty picture one day, and then the next say we are still spiraling, the decision to "wait it out" is not always the best decision or option. While everyone wants to get a good deal when buying their new home, it's not only about the price of the house, it's the condition, the size, how it makes you feel being there, and in the neighborhood. This is a place you'll be building memories for just a few years, or maybe a lot of years to come. Memories your children will have the rest of their lives.

Gauging the value of a home is not always just about the price, but what you will get out of it as well.

Hi all!

As promised last week, I said I would speak about Tax Liens this week and explain how they work. This is an avenue some investors use in hopes to acquire real estate for "pennies on the dollar." Does it work? Well, that depends (hey! there's that phrase again!).

I know many counties across the United States do things differently, and since I live in Okaloosa County, FL, I will use how they do these sales as an example. In Okaloosa, taxes on your house are due no later than March 31 for the previous year. Lenders usually have an escrow account where you pay a portion of your taxes each month, and they pay them in November (to get the discount for early payment). They want to make sure "their" investment is protected. Tax liens on a property take precedence over lender liens.

If someone does not pay their tax bill by March 31, then your tax bill "goes up for auction" usually in May or June. This is where the public can bid (all online) to pay your taxes! (Sounds Cool! Someone else paying your taxes, right? But wait, there's more!). Well, what happens during this bidding, is that bidders compete against each other--yes they will pay this bill, but for a price. Bidding starts at 18% interest, and goes down in 1/4% interest points.

What does this mean? Say I win the bid at 14% on June 1st. I pay the tax bill, and am charging this rate for "loaning" you the money. Mind you, you will never meet the person who has bid/paid your taxes. Now, say you go in on August 1st to pay your overdue bill. You will owe your bill, plus the 14% interest rate to the tax assessor. Then the tax assessor pays me back plus the interest that you've paid.

So how does one get a property if you pay your bill? Well, some people don't, for whatever reason, and after 3 years of holding this certificate that shows I paid your taxes, I can now foreclose on your home. But what about the 2 following years? Well, if you bought those liens as well, then there is no competition. If not, then you pay those bills plus the interest and you have those deeds.

While all of this sounds SO simple...there's a LOT more involved. You need to do your research right from the start. I heard on the radio just a couple of weeks ago about a guy that bought a piece of property using this method for only $5000.00! He was going to build his dream home on the property...until he found out that it was a 4x100 piece of land. Yes those are the correct numbers. It was a county-owned easement. You see, he got SO excited that he had a piece of property for "cheap" (or so he thought), but he didn't do his due diligence prior to bidding on it.

The Okaloosa County website is www.BidOkaloosa.com and they have great information there, a tutorial on how the auction works, as well as previous years auction results so you can peruse them and figure out how it all works. From this website, you can also see other counties that have the same format, most in Florida, and some in Arizona, as well as other states.

If you plan on trying this route for investment or finding a lot to build your dream home, just make sure you do your research before you start your bidding. The parcel ID numbers are on the list, and you can go to the property appraiser's page to find out what kind of property this is--if there is a home on it or not--AND it will also identify whether it is a county or city-owned easement. Look at the lot size, and use the maps available to see where it is located. The research itself does take a lot of time, so be prepared for that. Also, when you do foreclose on it, you need to check to see if there are other liens on the property and if you will be responsible for those liens even if you foreclose on it to pay the taxes.

If you have further questions, feel free to ask here, or email me or call me.

Hi All!

I took a week off from blogging due to spring break. I have to admit, I got a whole lot of lazy done--I went to Tampa and hung around the pool and took naps! What a great way to recharge!

Anyhow, the latest questions I've been hearing have to do with all the deals out there in real estate. With the "mortgage crisis" there are a lot of deals, and figuring out what is the best avenue for you can be a challenge. With all these deals--are they really deals? Well, that depends.

I explained previously what a short sale is--where the bank will take less than what the home is currently worth. In essence, this is a "pre-foreclosure" where the seller/owner is doing what they can--working with the bank in getting the property sold so that they can move on.

But what about buying a foreclosure? Well, one way to do this is to buy it from the bank after they have already foreclosed on it, and now they are the "owners" of the property. Some banks will try to sell it on their own initially, and if it doesn't sell quickly enough, they will list it with a Realtor, and then you'll find it on the multiple listing service.

There is also the option of buying a foreclosure on the courthouse steps. This can be tricky, and you need to be prepared before walking up to the courthouse steps. I know different counties do it differently, however, in Okaloosa County, Florida, if you win the bid on the house, you have to have the FULL AMOUNT to them by the end of that business day. There is usually a bank representative there at the auction to make sure that the bidding starts at what the loan amount is (at least), so the bank doesn't entirely lose their investment (ever hear of those cases where someone bought a house on the courthouse for $100? I've heard of them but never met anyone who actually accomplished this.) So the bidding will start at or about what the loan value is. The disadvantage of this is also that you don't get to look inside the house and determine how much you want to spend prior to the auction on the courthouse steps. You might get lucky enough to peek in the windows and/or do a drive-by, but that's about as far as you get. Also, you need to make sure there aren't other liens on the property you will be responsible for--like a tax lien, or mechanics lien, a 2nd mortgage holder, etc. This is where it is wise to get a title search done with a title company if you're serious about this route. Also, check to see what the values of similar properties are in the area. If similar houses in the area are worth $250,000, and bidding starts at $250,000 (yes, this does happen), this might not be such a good deal-especially if you don't know what the inside looks like.

After doing your due diligence--checking all your facts--and you decide you want to try this route to get a house, decide BEFORE showing up at the auction what the HIGHEST amount you will bid--and stick to it. It's easy to get caught up in the frenzy and keep upping the amount until you realize you're short, and all the work you've done got you nowhere.

Some people that buy houses on the courthouse steps have funding all ready prior to showing up--if they don't have the cash ready that day. Even if one has cash in the bank, be sure to talk with your bank a few days ahead of time and find out what their requirements are. They may have requirements/approvals they need to accomplish for large amounts of cash withdrawals, or even large checks drawn on your account--even if it is sitting in your account.

Hard money lenders are also available to help out, or you can get multiple investors each putting up a predetermined amount. There are many options, and whatever you decide to do, make sure to do your homework ahead of time. It will help things run much smoother on the day you get the house.

Good Luck!

www.clerkofcourts.cc/foreclosures is the website for Okaloosa County foreclosures. Next week I'll talk about Tax Deed Sales and how they work!

Home inspections--to get one or not to get one...that is the question.

Many people are unaware what a home inspection is, what it does, and what it's all about. When buying or selling a home, there's an option to hire a home inspector to find out if there are any issues that need to be taken care of prior to closing.

Most home inspectors will charge for a home inspection based on the square footage of the property. The average price in this part of Florida is about $250-$300. The home inspector will inspect the entire home, including the electrical system, A/C, heating, plumbing, roof, and if any appliances are part of the sale, they will inspect those as well. With current technology, they are now able to take pictures of any problems they find and add them to their report findings.

While it is not mandatory to get a home inspection, I recommend it to all my buyers. Some buyers have bought homes before, and are confident they know what to look for and choose not to pay for a professional home inspection. It is definitely a personal decision.

In an home that's being bought "as-is" (a fixer-upper) it's a good idea to get one so there are no surprises. Even though, in a case like this, the seller will not make any repairs, if you find the repairs will cost you too much, you can choose not to buy the property.

So is it a good idea for a seller that's getting ready to put their home on the market for sale to get a home inspection? Once again, that is a personal decision, however, the advantage of doing this is that, as the seller, you can fix any problems ahead of time. Once completed, you can make this inspection available to your potential buyers, and show receipts/work orders where any issues were taken care of. If the buyer chooses to also get another home inspection, that is their decision, and they would have to pay for it.

How about getting an inspection on a newly built home? As always, it is a personal decision, but just like with older homes, an unbiased inspector can uncover issues that were forgotten or neglected--minor or major, so that the builder can take care of it quickly. While the assumption is that newly built homes have no problems, there is still that possibility that something wasn't finished or connected or attached properly, and if you're not sure what to look for, an inspector should be able to find it.

The home inspectors I've also worked with have also are very good about educating those at the inspection about things they look for in their new home.

I remember years ago when I bought my first house I'd "heard" about a program for first time homebuyers. The realtor I used to buy my first home didn't know anything about them, so I didn't have the benefit of using one of these programs. Things do change, though, and there are programs now that can help first time home-buyers in to home ownership.

The first assumption is that a first time homebuyer is someone who has "never" owned a home in their name. Well, when it comes to using Bond Money, the requirements for being a "first time home-buyer" is that you can not have owned a home within the last three years. Other requirements include income limits based on family size (a family of one can qualify as well) and limits on the price of the home ($281,137 in Okaloosa County, FL; $237,431 in Santa Rosa County, FL; $429,619 in Walton County, FL). Income limits in Okaloosa County are $62,600 - $77,700, and in Escambia, Santa Rosa, and Walton Counties, they are $54,800 - $63,020.

Depending on your qualifications, Bond money, or SHIP Funds (State Housing Initiatives Program) can both provide funds to help with down payment and/or closing costs. Also, depending on the location of the home, it may qualify for a Rural Housing loan. The benefits to using a Rural Housing Loan are that you can borrow up to the appraised value of the property (usually you can only borrow the contract price, regardless of appraised value). This is a way to roll your closing costs in to the loan and have to pay less at the closing table. Ask your lender or Realtor to check the address of the house you are interested in to see if the home is considered Rural Housing.

So how do you know if you qualify for any of these programs? First, by talking to a lender about what you are qualified for. Not all lenders will be signed up to use Bond Money, so be sure to ask the questions. Also, keep in mind that using SHIP Funds or Bond Money may require a longer process than the normal loan process (usually approximately 30 days from the contract date), so keep that in mind when considering your time frame to move.

The question always comes up as to when to buy real estate, and it's always that the best deal in real estate is the one you bought yesterday. Let's face it, as much as we'd all like to have a crystal ball, and KNOW that now is NOT the time, or IS the time to buy or sell, that's not going to happen. It's kind of like life...just like when you have a baby---you don't know if this screaming little bundle is going to grow up to be president (of the U.S. OR their own company), work in a factory all their lives, serve in the military, or just choose to live with you "forever." So how do you decide when the best time to buy is?

Look at your personal situation. Are you planning on staying in the area or the job you are currently at for more than 2 years? Look at your financial situation. Lenders look at your debt-to-income ratio as well as your credit rating--unless, of course, you can pay cash for the house you plan to buy. You also need to look at family size and what is necessary--you don't want to buy a small 2 bedroom house if you have 3 kids and one on the way. These are situations based on your personal life and decisions.

As it is, too many buyers assume they'll "wait until the prices drop" however, Jim Svinth, chief economist at Lending Tree says that may not be the best idea--especially now. Jim says "As the economy recovers, finance costs will rise. Waiting for the perfect time to get into the market may cost prospects, especially renters, more in the long run."

"The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher," says Svinth. Any savings you might incur by a further drop in prices might be offset by rising financing costs."

Svinth goes on to use the example of buying a $250,000 home in today's market at 6% on a 30 year fixed rate mortgage, 20% down payment, the monthly payment is $1199.10 (principal and interest only), however, if you choose to wait a year, and prices drop 10% to $225,000 on that same home, but interest rates are at 7%. The same 20% down payment and 30 year fixed rate mortgage, your monthly payment is $1197.54...a savings of only $1.56 a month.

The entire article is available at http://www.floridarealtors.org/NewsAndEvents/n1-030308.cfm

Meanwhile, waiting that year, a renter continues to pay rent (or rather, the landlord's mortgage), and is unable to reap the benefits of writing off interest and taxes paid on their tax returns.

Buying a home is one of the biggest decisions a person makes in their life and can be daunting. I've bought and sold many of my own personal properties so am quite familiar with the process on a personal level. If you have questions about the process of buying or selling, feel free to contact me at Valerie@ValerieSullivan.net, 850-803-8446 or visit my websites at www.ValerieSullivan.net, www.ValerieSellsTheBeach.com, or www.TheBeachRealEstate4U.com.

For those of you that bought a new home in 2007--in the state of Florida, March 1, 2008 is the deadline for filing for your homestead exemption. You will need to go to the property appraisers office to do this. March 1 is this Saturday, so you have until close of business on Friday to file.

The same deadline also applies for the portability of the homestead exemption if you acquired a new homestead and sold or moved from the previous homestead.

Previously the homestead exemption allowed you to get $25,000 off the assessed value of your home, lowering your tax bill. This year that has increased to $50,000 on homes worth at least $75,000, so taking a few moments to file this paperwork can save you a considerable amount of money.

Remember, also, if you are a disabled veteran, you also get an additional $5,000 added to your exemption. Benefits also apply if you are widowed as well.

There is also a 10% cap on non-homesteaded properties, however, it does not apply in 2008.

For Okaloosa County, Florida, the link for more information is:

http://www.okaloosapa.com/index-exempt.html

To find property appraisers in other counties in Florida, follow this link:

http://dor.myflorida.com/dor/property/appraisers.html

I've been getting a lot of questions lately about how does a person know if it is better for them to buy or rent. There are times when it is much better to rent for a while--usually if you expect to be in a place temporarily it's better to rent. If you plan to stay in one place 4-5 years, or more, financially you are better off buying a house.

Many people assume they don't qualify for buying a house, but they haven't talked to a banker or mortgage broker to find out what their status is. There are as many variables in a person's finances as there are people, so there is no cookie cutter answer, which is why it is best to talk to a banker or mortgage broker--maybe even more than one--I've worked with people that have been told previously they don't qualify to buy a home, yet, within a month of being told this, and a different lender, they were approved and moved into their new home.

Buying a house is the first step many people take towards long-term wealth management. Think of it this way, if you rent for 30 years, all the while your rent is going up, maybe not very much, but it seems every time you get a payraise, it goes straight for the increased rent. With a fixed rate mortgage, the money you put to the mortgage each month pays down the equity in your home. After 30 years, you own this property and have more options than you would had you rented all that time. I have a friend who's husband passed away after 40+ years of marriage. They lived in the same house for 28 years--renting. On her social security, she could no longer afford the low rent (the landlord rarely raised the rent as they were such good tenants!), so out the door she had to go...with very few options. She's angry because had they bought that same house 28 years earlier, she would have had so many options--even to rent out the other rooms in her house to pay off the last 2 years of her mortgage...and then have a place to stay rent-free the rest of her life...

The following is taken from the Florida Association of Realtor's website, and the full article link is below;

For someone who plans to stay put more than two or three years, home ownership usually makes more sense financially. The key benefits include annual tax benefits, "forced savings" from paying down the mortgage and potential appreciation in value. "Owning a home is one of the best builders of wealth," says Todd Nordstrom, a sales associate with Esslinger Wooten Maxwell, Miami Beach. "There is a huge difference in net worth between renters and owners." In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.

http://www.realtor.org/PublicAffairsWeb.nsf/Pages/TPHousingasanInvestment

Enjoy!

One thing I have discovered in helping people find their home, usually first time home-buyers is that in their search, they don't understand the best way to find a real estate sales professional to help them out. In their effort to find where they want to live, they search the internet, and drive the neighborhoods and find homes they think they might be interested in. Then they call the listing agent (this is the agent that has a listing agreement, or contract, with the seller of the home), and ask to see the home. And they will do this for each of the homes they might be interested in. When I find someone like this, I do my best to educate them on why they should enlist the services of just one realtor.

While it is an excellent idea to drive the neighborhoods and search the internet, there are some other things to consider when you are ready to buy--and knowing some of the steps to take at the right time will save you considerable time--especially in this day and age of having too much to do! :-)

First, see a mortgage broker or lender to find out how much house you can afford according to your situation. Interest rates do fluctuate, however, they are also affected by your credit score, and your debt-to-income ratio. Also, you may qualify for different types of loans--and the interest rates vary according to the type of loan you do get. If you are a veteran, you may qualify for a VA loan. As a first time home buyer, you may also qualify for bond money to help get in to your home. A first time home buyer in this case is considered someone who hasn't owned a home in at least 3 years. There are home and income limitations according to where you live for this program as well.

Second, (not necessarily after you speak with a lender), is the time to find a realtor to help you find your home. Understanding the home-buying process can be overwhelming and while you are focused on "the perfect home" to move in to, an realtor can help you narrow your searches, find out what is important to you, and often has knowledge of new listings that meet your requirements as soon as they become available.

You want to find someone that listens to your requirements and needs in finding your home. This person will be spending a lot of time with you showing you houses, and asking questions about what you like and don't like in certain homes. If you don't feel comfortable with a real estate sales professional, find one that you do feel comfortable with. This is one of the biggest decisions of your life, and you want someone you can trust and feel comfortable with to help you.

Now, let's say you've found 6 homes on the internet and through driving around neighborhoods that you are very interested in and would like to see the inside, and you haven't enlisted the help of just one realtor yet. You call the respective listing agents, and you are at the mercy of their respective schedules. If you are lucky, you will get to see 2, maybe 3 in one day--and that might take all day. Working with just one realtor, this agent can make the phone calls and set up the showings according to YOUR schedule. If these 6 homes are in close proximity, it would only take 2-3 hours to view them all. Also, this realtor can ensure these homes are in your price range and meet your other requirements so that you don't waste your time. They will also make sure these homes are still available--some that have a sign in the yard may be closing in the next few days and the sellers no longer want it shown. When you have picked out one or two favorites, they can provide you with a comparative market analysis that shows what similar homes in the neighborhood have sold for over the past few months.

Once you've found the home you want, your realtor will make sure appointments are made, and keep in contact with your lender, the title company, and the seller's agent to make sure the transaction goes as smoothly as possible. With the contract negotiations, home inspection, appraisal, survey, pest inspection, it can be overwhelming to try doing it all on your own. Why not find a realtor who will work for you?