HomeBuyer Tax Credit Extended and Expanded: Will We See Another Surge in Home Sales and Increased Competition Among Home Buyers?

On Thursday, November 5th, Congress approved an extension and expansion of the first time home buyer credit which President Obama is expected to sign into law today.

Here is a summary of the new program:

- $8,000 First Time Home Buyer Tax Credit (with first time buyers defined as people who haven't owned homes in the previous 3 years) extended to purchases on or before May 1, 2010 with closings required before July 1, 2010.

- Current Home Owners who have owned and lived in their home for at least 5 years may now gain up to $6,500 in credits.

- Income Limits have been increased to $125,000 for single buyers and $225,000 for couples, from $75,000 and $150,000, respectively.

Sources: Wall Street Journal
Yahoo Buisness News

Recent Increases in Real Estate Sales Activity, Foreclosures, Unemployment: What’s going on in our Market?

Loretta Nastasi, Licensed Real Estate Associate Broker, Associate Manager, Bay Ridge Branch, Fillmore Real Estate, Brooklyn NY. October 26, 2009

Homeowners and potential buyers have received conflicting signals about the state of the market in recent months. This past week reports indicate that existing home sales have been steadily increasing for the past 6 months with sales surging nationwide in September jumping 9.4% from that of the prior month. So what does this mean for the housing market?

Real estate sales activity in Brooklyn for the months of July through September increased more than 29 percent from the prior quarter resulting in the second consecutive quarter of increased sales activity. First time home buyers wanting to take advantage of the $8,000 tax credit set to expire on November 30^th has accounted for much of that momentum. However, the number of sales is down nearly 20 percent compared to this same period last year and home prices are down on average nearly 7 percent from this time last year with declines ranging from 3 to 13 percent across the borough. In southern Brooklyn, including the neighborhoods of Bath Beach, Bay Ridge, Bensonhurst, Borough Park, Dyker Heights, Gravesend, Homecrest, Madison, Marine Park, Midwood, Sheepshead Bay, and Sunset Park, while sales spiked 25.3 percent from the second quarter, prices slipped 4.2 percent and sales fell 14.4 percent from this time last year.

After more than 2 years of straight declines, this increase in sales activity is indeed positive news however, it doesn’t necessarily imply we are on an upward swing. With existing inventory still above normal levels and unemployment and foreclosure activity still rising, homeowners should not conclude that this recent activity indicates price appreciation. On the other hand, much of what is reported in the media is national data, so it is important to consult your local real estate professional for advice on what is happening in your particular market. Moreover, for those considering buying or selling a home at this time, the decision should go beyond global and local market conditions to include personal factors such as the amount of equity in the home for a seller or future income potential for a buyer. For homeowners who are considering selling, be sure to consult your local Realtor who knows how to properly price and strategically market your home for a timely sale in this market keeping in mind that there are different marketing strategies for different markets. For those thinking of buying a home, consider the following: according to Freddie Mac, a 30-year, conventional, fixed-rate mortgage fell to 5.06 percent in September from 5.19 percent in August; the rate was 6.04 percent in September 2008. As inventory returns to normal levels and unemployment eases, we will begin to see some modest price appreciation. One final note to help us keep this all in perspective: this is New York folks and New York Real Estate owners have typically enjoyed greater price appreciation than the rest of the country. As the old Real Estate adage says: Location, Location, Location! So consider your local market and personal motives when making sell/buy decisions and don’t get too caught up in all of this media frenzy.

Sources: Bay Ridge Courier October 22, 2009

Associated Press, October 23, 2009

Wall Street Journal, October 22, 2009

National Association of Realtors, October 23, 2009

TIPS FOR HOME SELLERS ON SHOWING YOUR HOME: HOW MAKE A GREAT FIRST IMPRESSION EVERY TIME (part 3 of 3)

Here is Part 3 which includes Tips 8 through 10 (of 10) on Effectively Showing Your home to get the best return on your investment.

8. Curb Appeal is Important. Do you recall that feeling you got when your Realtor® first drove you up to your home? Well, your buyer wants that same feeling. Take steps to ensure your home looks welcoming from the outside. Moe the lawn, clean the leaves, trim the hedges, repair and illuminate all walkways.

9. A word about Staging. Consider the positioning your furniture in a way that provides the greatest degree of ‘openness’ or that creates the least obstruction. Try to ensure each room is consistent with its primary purpose. For example, put away the treadmill in your bedroom or remove the computer workstation from your dining room or the stacks of mail in your kitchen. Furnished homes show better than unfurnished homes and staged homes show better than un-staged homes. Ask your Realtor® to recommend a Professional Stager. According to the National Association of Realtors®, homes that are staged, sell quicker and for more money than homes that aren’t.

10. Show and Sell. A home that is well prepared and staged for showing should pretty much speak for itself. During a showing, keep conversation to a minimum and be careful not to emphasize things that may not be very important to a buyer. Sure you may want to point out things that add value such as double insulated windows or an energy efficient heating system but peripherals such as an extra large wall unit or artificial fireplace are likely to matter very little to a buyer.

TIPS FOR HOME SELLERS ON SHOWING YOUR HOME: HOW MAKE A GREAT FIRST IMPRESSION EVERY TIME

Part 2 of 3 - Tips 5 through 7 of 10

5. Tidy Up. Be sure beds are made and dishes are not piling up in the sink. Put away all children’s toys, laundry, and any excess clutter.

6. De-personalize. If you have many family photos around your home (i.e. pictures on the refrigerator) and awards and trophies, now is the time to begin packing these things away. A buyer wants to walk in and imagine your home as his/her home and excess presence of your personal items might make it difficult for your buyer to establish this connection.

7. Insure all lights are working. Light adds warmth and cheerfulness. Darkness conveys the opposite impression. Be sure all light fixtures are working properly and replace any broken light bulbs.

TIPS FOR HOME SELLERS ON SHOWING YOUR HOME: HOW MAKE A GREAT FIRST IMPRESSION EVERY TIME

As the saying goes, you never get a second chance to make a good first impression. The same holds true when selling your home. While selling a home is mostly a logical decision, buying a home is mostly an emotional one. Of course factors such as price and interest rates will impact a buyer’s decision, but when a buyer walks into your home he/she must be able to connect with it in a very personal way. If this connection is not established, the buyer will be off to the next home; period. This is especially true in today’s market where there is an excess of homes on the market and a shortage of qualified buyers. There is simply no need for today’s buyer to compromise.

Many sellers have difficulty looking at their home through the eyes of a buyer. They may have lived in the home for years and while they are not bothered by that water stain on the ceiling from an old roof leak or that cracked window pane, or that leaky shower head causing mildew in the tiles, such imperfections are likely to turn your buyers away and drive them directly to your competition. Moreover, these imperfections detract from your home’s value. You can be assured that when a buyer walks through your home, he/she is making a mental deduction from your asking price for each of these issues.

When I first list a home for sale, I ask my sellers to get a notebook and pen and walk through every inch of the home with an objective mindset and make a list of things that they would do to improve the home’s appearance to a buyer. All of these things should be addressed prior to showing the home to insure that the best impression is made the first time.

Here are 10 tips to ensure your home makes a great first impression on a buyer and thereby greatly increases your chances of getting the best possible sale price:

1. Make all minor repairs. Ensure minor issues such as leaky faucets are repaired and bathroom tiles freshly grouted. On the outside of the home, insure gutters and drains on both the home and garage are free of debris and repair any cracks in walkways.

2. Address any major repairs. There are four major things that a buyer looks for - the so-called big ticket items in a house: the roof, the heating system, the electrical system and windows. Be sure each of these is in working order. If not, and you don’t have the means to repair/replace these big ticket items, many Real Estate Companies offer a Home Warranty. Ask your local Realtor® about this.

3. A Little Paint Goes a Long Way and Consider Color. If the paint on your walls is old and dingy or especially if it is cracked or peeling get a fresh paint job. While you may love that deep purple wall, many buyers prefer neutral tones such as soft greens or blues or beiges.

4. Clean up. Dust and polish all furniture. Sweep and mop all floors. Clean all windows. Kitchens and Baths always receive a lot of attention from buyers so be sure these rooms sparkle. This is also likely to ensure the home smells fresh and clean. Part 1 of a 3 Part Series.