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.