Everyone in real estate has their mind on one thing: What's going to happen on December 1st?

Realtor.org reported yesterday that bills are pending in both the US House and the Senate to extend the current credit - but don't expect to receive more money or for it to be extended to all home buyers - if the bill is extended at all.

If you're still on the fence about purchase your first home now is the time to jump down! To take advantage of the current tax credit you must have closed on your home buy November 30th - but with the Thanksgiving holiday we suggest closing by the middle of November.

Banks and title companies are busier then ever because of this credit so it's taking more then the average 30 days to close on a home. If you add in the 6-8 weeks it could take to see what is available in the market and have an offer excepted you should really start looking now.

Of course, The Heritage Home Team is here to help you throughout the whole process! 

As every first time home buyer knows, time is running out to cash in on the Federal Government's First Time Home Buyer's Tax Credit. As I've said before, and will say again-right now, the tax credit is a nice incentive but should not be the only reason you chose to purchase a home. You need to be ready for the commitment: financially, emotionally, and physically.

Here is an article from the Wall Street Journal about an over zealous first time home buyer. He lost sight of the reason to purchase a home and it almost cost him - big.

Remember to use a knowledgable buyer's agent (someone that works for you - not the seller) and know what the property is worth. Homes should not be purchased on PRICE alone - make sure you understand the VALUE of the home. Each person's situation is different, do not force yourself into believing that you are ready for home ownership if you know, deep down, you're not. And when you feel you are ready to purchase a home - give The Heritage Home Team a call!

Everyone wants the best deal they can - on a home, on a car, even on a gallon of milk. But, did you know that by waiting for the 'bottom to drop out' of the market you can actually be doing more damage to your financial life then you think you're bettering it? Here's why:

• Interest rates are on their way back up. If you wait for home prices to decline another 10% but interest rates go up 1% in that timeframe the payment would be the same as if you had purchased today. 
• Waiting for the right time to buy can be expensive. Some buyers would still have more equity in their home today (even with the falling prices) if they have purchased when they were first considering it - instead of continuing to pay rent.
• Financing criteria is a fickle world. Even if you were a prime candidate for a mortgage a year ago you may not be today (and if you are today who knows about tomorrow). The slightest change in lending laws or your personal financial situation can greatly affect your ability to qualify for the loan.  

As a home buyer you want to find the perfect home for you and your family.

Home staging can make a home very inviting to buyers and get them swept up in the thought of living there - it helps to draw the eye to the focal point of every room to draw out the beautiful features of a home. Staging is so important that The Heritage Home Team has a resident home stager that is available to work with every seller on their home.

That being said, buyers still need to be aware of the other issues that are important when house hunting - it's not all sofa placement and pretty paint colors.

Buyers need to remember that there are other major aspects of a home that can make or break a deal, that are not as obvious - structural issues, plumbing, electrical, building codes just to name a few.

Home staging is not meant to ‘trick' the buyers or ‘cover up' any problems. It's like cleaning for a big party; you'd never want guests over with toys all over the living room and laundry hanging. But buyers, especially first time home buyers, can get swept up into the beauty of a home and forget about all the other things.

Why is this important? By being able to pinpoint these issues early it helps in several ways:

• 1. It can keep the buyer from becoming too emotionally attached to a home that isn't of good quality - possibly saving them thousands of dollars in repairs and maintenance (you might not thank us now but you will later).
• 2. The issues can be used in negotiation of the offer price if the issues are correctable.
• 3. It keeps the buyer from having to invest too much of their valuable time later in the home buying process to deal with the issues, inspection of the issues, and repair of the issues.

Our knowledge does not take the place of a licensed home inspection but it does make a world of difference in how quickly and painlessly you can find your next home.

In case you haven't already guessed homes are more affordable then ever. However, that doesn't necessarily mean that everyone is clamoring to purchase right now.

A family earning the national median income of $53,182 is able to purchase about 75% of the homes on the market today.

Want to know more? Click here to view the press release from yesterday.

If you're looking to get a mortgage be ready to spend some time (and maybe headache) in the process. There are lots of options but really three main catagories of lenders: local banks, direct banks, and broker. 

• Local Banks: Think credit union or KC's Cap Fed,  they lend their own money (using their own rates and terms) so there is no 'middleman'. These loans are normally a little more conservative then the 'average' loan but there is the opportunity to receive preferential rates ro discount if you are already a customer of the bank. 
• Direct Banks: Think national bank, these banks often lend in such high quantities that they have low overhead and may be able to offer lower rates. The normally offer a little better information online and you can make payments there. More often then not, they sell your loan to another bank (or Fannie Mae or Freddie Mac).
• Brokers: Work with several different banks to find you the best deal. They don't lend their own money (like the banks do) but find you a bank that will. Brokers work best when you have complicated mortgage financing needs. Since the broker isn't lending their own money they are not making money through the interest you pay, they make their money in the form of a commission - make sure you know how they are getting paid.

Congress has approved a new first time home buyers tax credit. All it needs now is a signature from the President.

The credit has been increased to a maximum of $8,000 and is now a true credit with no repayment plan.

This website will continue to be updated once the President has signed the bill into law.

How about super low interest rates? 

The Washington Post is reporting that the Treasury Department is  strongly considering getting involved with the mortgage industry to drastically push down interest rates to stimulate the market.

Click here to view the full article.

These lower interest rates would only be for a short period of time so be ready to act.  Call The Heritage Home Team to set up an appointment and have us start looking for your perfect home!

In case the low home values and the low interest rates haven't enticed you enough into looking for your first home here is another incentive to add to the mix.

The first-time home-buyers credit is part of the Housing and Economic Recovery Act of 2008 and is available through mid 2009.

Any homebuyer that purchases their first primary residence between April 9, 2008 and July 1, 2009 is eligible for up to a $7,500 tax credit (both spouses, if married, have to be first time home buyers). Even if you've owned a home in the past (but not in the last three years) you are still eligible.

So, how does it work? This is a tax credit; it is taken on your federal income tax return, and directly reduces the amount of tax you owe in the year that you buy your first home. This credit is refundable so you may even receive a check!

The amount of credit you receive is based on the purchase price of your new home. It is 10% of the purchase price, up to $7,500. This credit can also be limited by your adjusted gross income (AGI). The credit is phased out after your AGI is above $75,000 ($150,000 if you are married filing joint). For a more specific breakdown of the amount of credit you will receive please consult your tax adviser.

Ok, free money - what's the downside? This tax credit is similar to an interest free loan from the government - there is a payback period. Two years after you claim the credit on your tax return you begin paying back this ‘loan' so that the full amount is paid back in 15 years ($500 per year). If you sell your home within those 15 years the remaining amount of the loan is immediately payable.

So why claim this credit if I just have to pay it back? Don't forget about the time value of money! One dollar today is not worth $1 a year from now. So, when you have to start paying back the loan in 2 years, that $500 is ‘worth less' than it is worth today.

Confused? So am I, here's an example:

In April of 2009 you buy a $200,000 home and get the full $7,500 tax credit. You live in the house for 6 years (2015) and then sell the house for a profit. Starting in 2011 you begin paying back your ‘loan'. Here's a chart to show that you actually receive a benefit for taking the tax credit (assuming a 6.5% discount rate)

This shows that you receive a benefit of just over $2,100 for taking the first-time home-buyers tax credit.

Here's another example:

In April of 2009 you buy a $200,000 home and get the full $7,500 tax credit. You live in the house for 17 years and then sell the house for a profit. Starting in 2011 you begin paying back your ‘loan'. Here's a chart to show that you actually receive a benefit for taking the tax credit (assuming the same 6.5% discount rate)

What if you sell your house for a loss? In most cases, you will not have to repay any amount of the loan. (Again, speak to your tax adviser for more specific information.)

I want to do some more research. Where can I go? Here are some websites that you can use to determine if buying your first home is for you:

http://www.realtor.org/home_buyers_and_sellers/preparing_for_homeownership

http://finance.realtor.com/homefinance/guides/buyers/

http://www.hud.gov/buying/

http://www.freddiemac.com/corporate/buying_and_owning.html

And, of course, The Heritage Home Team is here to help you through your entire home buying process! Please contact us with any questions or to set up an appointment to see homes.