Snowflake House-Hunters

Yes, amidst the snowflakes and icy sidewalks, there are people out there shuffling through the muck, hoping to find a new home. Maybe some are first-time homebuyers who want that tax credit that expires soon. Maybe a few of you are moving back to the area. Maybe some are thinking of buying in the springtime and want to start looking now. All these reasons are great reasons! Why not buy yourself a new home for Christmas or Hanukkah?

I found a great cost analysis of buying vs. renting on our MRIS website. Keep in mind, this is an example for someone buying in the $350,000 range with 20% down. Take a peek and see why so many people purchase homes.

Payment breakdown

	Rent	Buy
Monthly payment	$2,100.00	$1,524.56
Monthly taxes, maintenance, insurance, association dues and PMI	$30.00	$639.58
Total monthly payment	$2,130.00 to $2,393.57	$2,164.14
Total payments over 5 years	$135,590.22	$129,848.40

Tax savings over 5 years

	Rent	Buy
Total payments	$135,590.22	$129,848.40
Total payments less tax savings	$135,590.22	$106,418.02
Total tax savings	$0.00	$23,430.38

Home appreciation vs comparison investment over 5 years

	Rent	Buy
Sale price of home		$425,828.51
Remaining loan balance		($257,573.14)
Cost for purchase and sale of home		($31,849.71)
Down payment, points, and closing costs invested	$74,300.00
Investment return	$8,946.69
Investment tax owed	($2,236.67)
Gain on home or comparison investment	$81,010.02	$136,405.66

Total cost analysis over 5 years

	Rent	Buy
Total payments	$135,590.22	$129,848.40
Total tax savings		($23,430.38)
Gain on home or comparison investment	($81,010.02)	($136,405.66)
Total	$54,580.20	($29,987.64)

NOTE: Home purchase is potentially the greatest investment you will make in your lifetime. This calculator considers only the financial benefits of renting vs buying. Home ownership has other benefits as well. Please consider all the factors when making your final decision.

Your tax rate is used to calculate the monthly advantage of your interest deduction. If you wish not to include the interest deduction advantage, you may set your tax rate to 0. Please keep in mind that your tax deduction may be limited beyond the scope of this calculator. Talk to your tax advisor before using these results in your specific situation.

Your investment rate of return is used to compare the difference between investing in a house and investing elsewhere (e.g., like your savings account).

Tax on your yield in equity is not taken into account. Talk to your tax advisor if you think you may be subject to this tax.

This calculator does not consider the potential benefits of accepting the standard rent credit or the standard deduction when comparing the tax savings of renting versus buying a home. The decision to itemize or accept the standard deduction is beyond the scope of this calculator.

"Cost for purchase and sale of home" includes agent commission for selling as well as closing costs, points, and fees for buying.

This calculator assumes that the difference between the monthly rent payment and the monthly mortgage payment is not invested.

NOTE 2: The information provided by these calculators is for illustrative purposes only. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results. The calculated results are intended for illustrative purposes only and accuracy is not guaranteed.

And don't forget, I can help you find that perfect property in Maryland or Pennsylvania now, or at the turn of the New Year. I don't mind the snow and the muck. I even have a 4-wheel drive truck take you shopping.

Happy Holidays!

8 House-Hunting Tips

Buying a home this winter or spring? The very First step is finding an Exclusive Buyer Agent who has your best interest and goals in mind. For a full description of Exclusive Buyer Agency, please go to their website at www.NAEBA.com.

Follow these steps with your Buyer Agent to make the experience fun and successful!

1. Consider the location you want! You've probably heard the old real estate joke about "location, location, location," but the point still bears repeating. Location is crucial. Is the house next to RR tracks? How far are you really willing to commute to your place of employment? How good are the local schools, shopping centers, public transportation, seniors services and other public amenities? Will your new home be next to a vacant lot or a commercial property? Even a picture-perfect dream home can be a mistake if it's in an undesirable location, and a poor-location home can be a particularly bad choice if you anticipate reselling the home within a few years. Try not to buy the biggest home in the neighborhood.

2. Make a list. Do you (and your spouse, significant other) really know what you need and want in your home? You'll save yourself many hours of shopping if you make a list ahead of time. Start your list with Must haves, would likes, neutral ideas. Don't forget, cosmetic repairs such as paint or counter tops are minor; structural repairs and additions are major deal killers.

3. Do your homework. Not long ago, consumers had very little access to information about recent home sales prices, market trends, homes on the market, neighborhood statistics and the home-buying process. Today, all this information and more is available on the Web. Go surfing. Get educated. Become empowered.

4. Get preapproved for a mortgage. A qualification on a home price is a function of your household income, your debt, your creditworthiness, interest rates, the type of loan you select and how much cash you have for the down payment and closing costs, among other factors. Rather than guessing or estimating how much you can afford to spend, ask a lender or mortgage broker to give you a full assessment and a letter stating how much you're qualified to borrow. The true amount may be much more or much less than you think. And yes, student loans are taken into consideration when qualifying.

5. Use a checklist. Touring multiple homes is a confusing experience for most people. Rather than relying on memory, make notes about the homes you visit. Turn your priorities into a personalized home-shopping checklist and use it track the features of each home. Try to only view 4 or 5 properties in a row -- otherwise you may get the homes confused.

6. Wear comfortable clothing and sturdy shoes. House-hunting can be tiring, especially if you're relocating to a distant community and want to see a dozen homes in one day (this is only true of relocation -- take your time otherwise and surf on the web whenever possible.)

7. Be prepared to make an offer. House-hunting can also be frustrating, especially if you know in your heart you're not really emotionally or financially ready to buy a home. If you're not ready, don't put yourself through the exercise. If you are ready, go through a blank purchase contract ahead of time so you'll know what decisions you'll face when you make an offer.

8. Relax. Granted, buying a home is a major life-altering event. But it's not worth making yourself insanely crazy or super-duper stressed. Save time at the end of your house-hunting expedition to unwind, calm your thoughts and emotions and keep the whole experience in perspective.

Work closely with your agent and try to have fun!

Next week, watch for my post on the difference between a short sale and a foreclosed property.....

Detailed info about Tax Credit

This information came to me from a lender in Frederick County, MD. I think it is a good summary of tax credits for a homebuyer. However, I urge you to double check with an accountant to make sure these figures are correct for YOUR tax situation.

If you have any questions, please call me or email me. I'm always here to help! -- Joanne Spivey, Exclusive Buyer's Agent, The Buyer's Best Realtors, Urbana, MD

Great News! Congress has passed a bill extending and expanding the tax credit provisions for buying a home. These provisions become effective for homes that close on or before June 30, 2010. Here are some of the key elements of the bill.

FEATURE RULES AS THEY APPLY TO THE EXPANSION

1^st Time Buyer $8,000.00 or 10% of the purchase price of the home for individuals

Amount of Credit or married couples. ($4,000 per individual if married filing separately) **

----------------------------------------------------------------------------------------------------------------------------

1^st Time Buyer May not have had an interest (title) in a principal residence for 3 years

Definition of Eligibility. prior to purchase

-----------------------------------------------------------------------------------------------------------------------------

Current Homeowner $6,500.00 ($3,250 married filing separately)

-----------------------------------------------------------------------------------------------------------------------------

Current Homeowner - Must have used the home sold or being sold as a principal residence

Definition of Eligibility consecutively for 5 of the previous 8 years

-----------------------------------------------------------------------------------------------------------------------------

Binding Contract Rule So long as a written binding contract to purchase is in effect on April 30,

2010, the purchaser will have until June 30, 2010 to close.

-----------------------------------------------------------------------------------------------------------------------------

Income Limits $125,000 – single (phase out up to a maximum $145,000 income)

$225,000 – married (same as above with a maximum of $245,000)

-----------------------------------------------------------------------------------------------------------------------------

Limitation on Cost $800,000.00

Of Purchased Home

----------------------------------------------------------------------------------------------------------------------------

Anti-Fraud Rule Purchaser must attach documentation of purchase to tax returns

Note: If a parent, who will not live in the property, cosigns for a mortgage, the child will be eligible for the credit as long as they meet all other eligibility.

Other restrictions that might apply per the IRS in which no tax credit would be due:

1. Buying the home from a close relative (spouse, parent, grandparent, child or grandchild. (purchase from a step-relative is allowed as long as there is not a direct blood relationship)
2. They do not use the home as a principal residence
3. They sell their home before the end of the year
4. They are a nonresident alien.
5. Their home financing comes from tax-exempt mortgage revenue bonds.

** Tax credit is not required to be paid back as long as the buyer lives in the property as their primary residence for at least 36 months.

First time homebuyer credits

Hello Homebuyers --

As many of you know, the first-time homebuyer’s credit was front-and-center on many peoples' minds last week. We also mentioned that we thought chances were good the credit would be extended. This could be materializing... maybe.

Senate negotiators reached a tentative deal to not only extend the current credit but also add a few bells and whistles: namely, a new credit of up to $6,500 (with income limits). The new credit would be available to all homebuyers who resided in their current residence for a consecutive five-year period in the past eight years (effectively excluding real estate investors). But it's not a done deal yet; a few House members have balked at the added costs.

Many property experts have cited the credit as the principal reason for the housing recovery. Although new home sales fell 3.6% in Sept., homebuilders could find comfort in the news that home prices continue to rise while inventory continues to fall. Based on the latest data, it should take only 7.5 months to sell all homes at the current sales pace. This is true for the Frederick, MD area as well. Keep your eyes and ears open for new housing reports this week too. They will show the latest in pending home sales.

Low home prices, low interest rates and an extended homebuyer tax credit make it a great time to buy a home. But buyers beware: housing inventory is dropping so the sooner you buy, the better.

Please contact me for your next purchase in Frederick, Washington, Montgomery County, MD; or the lower central-PA area! I'd love to help you find a home for your family or for an investment purpose.

Homebuyer tax credits......for all!

Hello Homebuyers --

As many of you know, the first-time homebuyer’s credit was front-and-center on many peoples' minds last week. We also mentioned that we thought chances were good the credit would be extended. This could be materializing... maybe.
Senate negotiators reached a tentative deal to not only extend the current credit but also add a few bells and whistles: namely, a new credit of up to $6,500 (with income limits). The new credit would be available to all homebuyers who resided in their current residence for a consecutive five-year period in the past eight years (effectively excluding real estate investors). But it's not a done deal yet; a few House members have balked at the added costs.
Many property experts have cited the credit as the principal reason for the housing recovery. Although new home sales fell 3.6% in Sept., homebuilders could find comfort in the news that home prices continue to rise while inventory continues to fall. Based on the latest data, it should take only 7.5 months to sell all homes at the current sales pace. This is true for the Frederick, MD area as well. Keep your eyes and ears open for new housing reports this week too. They will show the latest in pending home sales.

Low home prices, low interest rates and an extended homebuyer tax credit make it a great time to buy a home. But buyers beware: housing inventory is dropping so the sooner you buy, the better.

Please contact me for your next purchase in Frederick, Washington, Montgomery County, MD; or the lower central-PA area! I'd love to help you find a home for your family or for an investment purpose.

Home Values in and around Baltimore and DC improving

Good Fall Day and Good News! The home values seem to be stabilizing in our area in Frederick. The number of listings currently on the market are about 1200 which is considered a "normal" selling market. Fairfield, Gettysburg and Littlestown, PA are still experiencing slower sales.

I found the following information at www.clearcapital.com. This article goes into greater depth about the general area market. Read it for more detail.

Micro Markets (Aug. 27, 2008 - Sept. 25, 2009)

This section highlights a single market every month with a deeper dive into how the micro- and macro-markets relate to each other.

(click on image for larger view)

Baltimore's micro markets returned to a positive quarterly gain (0.1%) after seven consecutive quarters of decline, contributing to a 21.0 percent decline in home values since its market peaked in late 2006. As a whole, the Baltimore market performed similar to much of the Northeast and South, returning modest pricing declines compared to the national decline of -31.6 percent since the market peaked. REO saturation rates in Baltimore also remained below the national rate, peaking at only 19.5 percent last spring.

However, a disparity exists within Baltimore's micro markets, with notable differences between the REO-saturated city limits and the more distant suburbs-particularly those suburbs to the Southwest which are closer to the better performing housing markets of Washington, D.C. Within the city limits of Baltimore, REO saturation peaked last winter at 31.5 percent due to declining non-REO sales amidst growing REO activity. These conditions reflected a -17.7 percent decline in price the last year alone; significantly worse than the more suburban southern counties of Carroll (-11.7%) and Howard (-7.9%), which peaked at less than 19 percent REO saturation.

While its market has not fully recovered, the suburban city of Laurel (ZIP 20723) is proving more resilient to price declines (-0.9%) this past year than the Baltimore market as a whole. Laurel seems well-served by its location between the two metro cores of Baltimore and Washington, D.C. and its proximity to Interstate 95 and the Baltimore-Washington Parkway. Even though Laurel has seen its number of REO sales grow over the past year, in recent months the city has maintained a healthier amount of non-REO sales activity than the city's core.

Research Center in Frederick County

I received an email from a fellow Realtor in Pennsylvania today talking about the expansion at Fort Detrick and how it will enhance housing sales in 2010. For all those waiting to get a home, you may want to act now. We may see a rise in housing prices when new folks move to the area.

With financing now approved, it is the real beginning of biotechnology expansion to a research park and will mean a lot as Frederick City annexes property to make this county a research center. Builders will need to provide housing for people moving to Frederick and the surrounding areas. There will also be a demand for commercial building to support NCI.

I am quite excited about this news. Yes, some people feel there is too much traffic along route 15 during rush hour. Perhaps it is time to expand route 15 which has been on the city books for years. But this research park will bring welcomed jobs in a downtrodden economy -- from scientists to support staff.

To learn more, please find more information at: www.fortdetrickalliance.org