Looks like it's going to happen... HOORAY!!!

It's (almost) official... and it's about time!!! The senate has finally reached a consensus on the first-time homebuyer tax credit and it looks like they may expand the benefits to include other homebuyers. It also looks like they are going to expand the income restrictions as well.

This is great news for all of us. Everytime someone buys a house they make a trip to Walmart, K-Mart, HomeDepot, Bed, Bath & Beyond, etc. They also hire contractors, landscapers, painters, and so on. All of this helps strengthen our economy.

Check out the full report from this mornings Wall Street Journal.

Who’s Really Responsible for…The Crushing Burden of Debt in America

As a Realtor, I maintain a special checking account and credit card just for real estate-related expenses. This past week, I sat down to pay bills and got a huge surprise (and it wasn’t a good one). When I pulled up my AMEX bill online, something didn’t look right. For some odd reason there was a $172 finance charge on my bill. (While I’m not proud to admit this, out of necessity I sometimes carry a balance on my business credit card.) What I couldn’t figure out was, why was the previous month’s charge only $32?

Here’s what I found out…

I paid May’s American Express bill 4 days late. My payment was due on the Friday preceding the Memorial Day weekend; I paid it on Tuesday of the following week. Other than this instance, I don’t think I’ve ever had a late payment. Because my payment was 4 days late, they readjusted my interest rate from 4.99% to over 27%! After I called AMEX complaining and threatening to cancel my card, they immediately readjusted my interest rate back to 4.99% and they are reimbursing me for the overcharged interest of $142.

That same afternoon, I looked at my electronic bank statement from Bank of America and for the past 2 months they had charged me $9.95 per month for the privilege of keeping money in their bank. When I called them about it, I was told, “Oops… you’re a good customer; we didn’t mean to do that.” They removed the charges immediately.

So, being the good dad that I am, I figured I better send an email to my grown children to tell them to beware. Here are their replies…

Reply from Christi: Dad, mine jumped from 10.65% in April to 17.90% in May. Should I switch credit cards? I think I've only been late on a payment like once... I don't even look at that stuff.

Reply from Rocco: Hmm, I just checked this and my Discover Card went from 6.99% last month to 12.99% this month!!! I called to find out why and they said it was a "business decision" across all accounts and was not because of any late payments or anything on my credit record. It sounds like they're all piling on the increases during this 9-month grace period before the new credit card legislation goes into effect.

Wow…

Apparently, in the American credit markets, the word “fiduciary” has been conveniently replaced by “caveat emptor – buyer beware!” Unfortunately nobody told the consumer! Unbridled greed on all sides is not only eroding our economy but it is tilting our moral compass way out of whack. I guess it’s just not enough to pay your bills on time anymore, now you have to look over your shoulder when you do it! It’s just not right.

If you want to protect yourself from out of control interest rates, here’s a link to info on how to opt out of future increases: about.com.

*crushing debt image courtesy of American Consumer News LLC.

How 'bout an Old-Fashioned Summer Vacation on Cape Cod

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I say, forget the Caribbean... Europe will wait... save Mexico for next year. If you've ever craved an old-fashioned, laid-back, lazy summer vacation, then look no further. Susan and I and our 3 kids and my brother-in-law, sister-in-law, and their 3 kids, and my other brother-in-law... well, basically our whole family have been enjoying summer vacations on the Cape for over 25 years.

The natural beauty of Cape Cod is unmatched, offering a wide variety of outdoor activities. There's lots to do... kayaking, surfing, tennis, golf, sailing, fishing, sight-seeing, bird watching, and so much more. Most of the time we just hang out at one of the wonderful beaches or freshwater lakes in Eastham. And every 4th of July we have a huge family bonfire at the National Seashore.

Don't get sucked in by consumerism this summer. Money is too tight. Spend some quality time with your family and get to know them... again. You'll be glad you did!

If you're looking for a place to stay, we highly recommend The REACH, and why wouldn't we-- it's our home away from home.

HUD Announces New Details on First-Time Home Buyer Tax Credit

On May 29, 2009, U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced that the Federal Housing Administration (FHA) will allow home buyers to apply the Obama Administration's new $8,000 first-time home buyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that this will help stabilize the nation's housing market by stimulating home sales across the country.

The announcement detailed FHA's rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. [Source: NJ Association of Realtors]

First-Time Buyers Seminar This Week

MERCERVILLE - I am delighted to be working with Michael Stewart and other local business professionals to provide a FREE informational session for area first-time homebuyers. The purpose of this seminar is to help buyers understand the full benefit of the recent economic stimulus package as it pertains to their individual situation. There’s up to $8,000 waiting out there for many first-time homebuyers, but using this money can be somewhat complicated and not everyone will qualify.

We are bringing together a number of seasoned local professionals to assist us with this event, including the Hamilton accounting firm of Nowak and Gehan along with Prosperity Mortgage Loan Officer, Matthew O’Connell and Michael J. Stewart, a Certified Financial Planner. Our ultimate goal is to help people determine their eligibility to take part in this program. We will talk about accessing low interest and low down payment mortgage programs offered through the FHA and we’ll make suggestions on how to use these funds to receive the maximum benefit.

The seminar will take place on Tuesday, March 31st at 6:30 pm at Our Lady of Sorrows Church in Mercerville. For details and directions please contact me directly at 609-731-4687 or via email at rockybalsamo@gmail.com.

No pre-registration is required.

Long & Foster President Tapped to Head FHA

President Obama is likely to announce this week that Long and Foster Real Estate President and COO, Dave Stevens shall be appointed to head the Federal Housing Administration in Washington, DC.

While I am certain my colleagues and I join Wes Foster in celebrating this wonderful achievement of Dave’s success, I’m also saddened by the fact that Dave will be leaving our ranks. During his short tenure at Long & Foster, his recent business leadership has created an unprecendented benchmark of excellence. It is my hope that we will strive to replace Dave with someone of equal business character, experience, and ethic. I believe Dave’s appointment was and is a testimony to our good decision-making as an organization and his exemplary qualifications as a leader. Good luck and Godspeed to Dave and to Wes in choosing a worthy successor.

Read more about Dave’s pending appointment…

Americana... we just want a slice!

Leave it to the New York Times editorial staff to find fault in the one part of the economic stimulus package that will likely have the strongest and most reverberant implications to our ailing economy.

The Senate’s version of the bill (which just passed) presently calls for $39 billion in tax credits that would allow for a $15,000 credit to anyone who decides to purchase a primary residence as long as they meet the income requirements. The House version ($3 billion), however, has paired down the homebuyer credit to include only first-time homebuyers with a maximum credit of $7,500. The New York Times thinks the House bill is the more appropriate.

Are they freakin’ kidding me!?

Our government is about to spend away nearly a trillion dollars of our children’s and grandchildren’s (and arguably our great-grandchildren’s) future and the NYT thinks they shouldn’t give a measly 3% directly back to us… to the people?! Boy, are they flat out wrong. They need to give us more credit than that (pun intended).

Consider that ever time real estate is bought/sold people buy stuff at places like Wal-Mart, Target, Home Depot, etc. As a result, state, local, and federal taxes are collected. Home buyers and sellers hire plumbers, electricians, attorneys, and well… me. And we all go out and spend a portion of what we make at Wal-Mart, Target, Sam’s Club, Home Depot, etc. This, my friends, is how the economy gets going again.

Our government needs to know that Americans don’t want the pork. We just want a small slice of the pie… our pie!

FREE Money from Uncle Sam!

The Washington Post reported yesterday that the House has added a provision to the new economic stimulus package that could greatly assist many first-time homebuyers. The initial provision to the program offered a $7,500 tax credit to qualified first-time homebuyers or any other buyer that hasn’t owned a home in the last three years. Naturally buyers need to meet income criteria in order to qualify and the funds are actually dispersed in the form of an interest-free 15-year loan. The real news here is that Congress is looking to eliminate the re-payment requirement.

Yee Haw-- FREE money from Uncle Sam!!!

There are some strings attached. First of all, you can’t earn more than $95,000 as a single, or $150,000 as a couple. But the truly frustrating part of this program is that the money comes to the buyer after their closing when they file their income tax return. That means if you closed on your house today, you won’t get your $7,500 ‘til next April 15 or so. If you don’t have friends (good friends) or family that can help you with “gift money” (whatever you do, don’t let the mortgage people hear you call it a loan) then this credit doesn’t do you a bit of good.

What were they thinking?! First-time homebuyers need the money before closing. Who wrote this legislation, Homer Simpson?!

Either way, a savvy Realtor, a willing seller, and a buyer with a generous granny can normally join forces to help make the transaction happen. It’s just a shame that our legislators are so detached from regular people that they can’t see the merits of making this legislation a little more user friendly.

Ultimately, Congress got it right. If you want to stimulate the economy, you start with the real estate market. And if you want to stimulate the real estate market, you get money in the hands of first time homebuyers.

Are You Ready for the “Bounce”?

In recent months, many people have begun to ask questions like, “Is now the right time to buy a home?" or "Has the housing market hit bottom yet?”

The short answer to both questions is, “I think so.”

Statistically, when mortgage rates are down, housing prices are normally up and vice versa. So what happens when mortgage rates are down and housing prices are also down like they are right now? I think it means that the market is about to shift from a buyer's market. This is something economists and real estate market watchers call “the bounce.”

Consider the real estate market in central New Jersey communities like Hamilton, West Windsor, Hopewell, Ewing, and Lawrenceville. After two solid years of steady decline, the prices of many homes in these markets have stabilized and in some cases have actually increased; add to that, unprecedented opportunities for first time buyers to get into the mortgage market and you have the perfect climate for the bounce.

As of this writing, 30-yr fixed rate mortgage rates have been tracking in the high 4% range. Additionally, first-time homebuyers can now avail themselves to FHA mortgage programs with as little as 3.5% down payments. Additionally, the federal government is offering a $7,500 tax credit to first-time homebuyers who qualify. Unfortunately, this program expires in June of 2009.

So, if you are a seller, some relief may be at hand. If you are a buyer (especially a first-time homebuyer), don't wait too long. As the saying goes, ya' snooze... ya' lose!

CELEBRATION [first post!]

This year, I celebrate my 10th year as a Realtor®. I use the word "celebrate" because for me, that's what this is: a celebration! I have met so many wonderful new people over the past decade, many of whom I now consider my friends. It’s been an awesome journey.

I first became a Realtor® out of economic desperation. After 15 successful years, my steel business no longer provided enough income to meet the challenges presented by having to send three children to college. After nearly two decades in a familiar industry, I was forced to find a new career. I hoped the skills I had honed as a former business owner would prepare me for a completely new field. For years, I had been an industry leader, and now was about to become the Rookie.

My first and probably most memorable transaction came almost immediately after I entered the real estate business. I signed on with Coldwell Banker on November 2nd of 1998 and went right to work doing open houses. I figured, the quicker I get out there and meet people, the better. That’s when I met Debbie and Melanie.

One cold and icy afternoon, I was hosting an open house in Berrien City, a small neighborhood of older homes near the Princeton Junction train station. Debbie and her daughter, along with her parents, walked into my open house looking to… buy a house… imagine that! After the usual pleasantries, I realized that although Debbie was desperate to own her first home, this wasn’t going to be it. She really needed something smaller and a little more affordable. The problem was, if you want affordable, and you want West Windsor, Berrien City is almost the only place to look. After our conversation, I suggested that she come to my office one night after work and perhaps we could find her something to suit her budget. I was hopeful, but not optimistic.

After a few days had passed, Debbie called me and scheduled an appointment to come into my office. We had a great conversation. We searched the MLS (Multiple Listing System) and talked about all of the important things people need to talk about before they buy a home. Little Melanie sat patiently in the corner of the room coloring with some crayons on copy paper. As our conversation came to a close, it was apparent to both of us that the market was going to make it very difficult to find Debbie and Melanie an affordable home in West Windsor [near Melanie’s school.] One of the last things I said to Debbie is something I still say today to struggling first time homebuyers, “Don’t worry… be patient… we will find you a place to call home.”

Working together, Debbie and I did just that. Actually, Debbie found the home and told me about it! It was a small ranch home being offered FSBO (for-sale-by-owner) in Penns Neck. I arranged for Debbie and me to meet the owner at the property and on January 15th (1999), Debbie and Melanie would have a place of their own to call home.

Debbie’s closing took place in a small private attorney’s office in Cranbury. It wasn’t what I would have expected. Actually, I didn’t know what to expect. After we had killed a forest full of trees signing documents, it was over. She owned her own home and I got my first commission check.

That’s not why I’m celebrating.

As I drove back to my office, the reality of the situation hit me like a speeding freight train-- I just helped make someone’s dream come true. In years past, I’d sold tens of millions of dollars worth of steel, but I’d never been able to make someone's dreams come true… ever. Then it hit me-- HOW FREAKIN’ AWESOME IS THIS!?

So, today I celebrate… I celebrate for me. I celebrate for Debbie and Mel. I celebrate with all of my clients who place their sacred faith and trust in me. I celebrate by thanking God for a career, where sometimes I get to help make people’s dreams come true.

I couldn’t imagine doing anything else.

Thanks Debbie and Melanie!
Mel, I still have that picture you drew for me 10 years ago. It’ll always be very special to me.