Saturday, February 28, 2009

Real Estate a better investment than the stock market...

Random thought for ya here.... Yesterday one of my agents stuck his head in the office and told me that he met one of his clients from last year. He said he was actually thanking him for convincing him to buy this apartment building as a real estate investment. While the step to actually do it, was a big one and hard to take... he calculated that if he had left the money it took to buy the property where it was, today it would be gone! But! Today, thanks to my agent's efforts, he has a stream of income from the four apartments and he has a building that is appreciating. Maybe not as rapidly as in years gone by, but at least it is appreciating!

So maybe, diversification is the key here.... hmmmmmmmmmmmmmm?

Friday, February 27, 2009

Good FHA news

Well, it seems that the most popular way to finance a house these days is using FHA mortgages.

Here's the skinny around Albany New York:

Maximum loan limits:

$312,500 single family
$400,050 two family
$483,550 three family
$600,950 four family

Pretty cool, eh?

Rock on!

Wednesday, February 25, 2009

I Just Want To Get This Off My Chest

It amazes me how our "leaders" think. "Leaders"... I couldn't follow some of them if the other choice was the doorway to Hell!

They sit on their pompous asses and question the lending institutions as to how they could have done what they did to all these poor mortgage applicants... Many years ago, when we had a pure free enterprise system, banks decided who they could loan money to when someone wanted to buy a house. They knew they had to be careful, though, because it really wasn't "their" money... it belonged to the depositors. And they took that concept very seriously. So they were very careful by making sure the borrowers had real jobs. They were careful to make sure that the borrowers had exhibited an ability to save money. They were careful to investigate what the likelihood of repayment would be. In the process of their "carefulness", they, as a result, turned people down for loans. Often, telling them to save more money, or get more established, nonsense like that.

So not EVERYONE qualified for loans. The banks had executive committees that would review applications and collectively decide on whether or not to extend credit. Sure, they wanted to loan money, because they figured out it was a good way to make money, but still, it was not their money. So if they sensed that this applicant was a bad risk, they would reject the loan.

Enter our government. Our government decided that more people should have the right to get a loan. So the government imposed quotas and regulations that would require lending institutions to "loosen the purse strings". EVERYONE should be able to get a mortgage! "What about qualifications?", the bank would ask. Don't worry about that, just make sure a broader segment of our society gets loans... in fact, make sure you can document that more "low-income" persons are getting loans. Wait... "low income"... so that means that they don't make as much money as most people, but they should be extended credit... Even if that means getting them into a situation that most bankers would agree they would not be able to handle? Yup. Give em all loans.

The government, so much believed that this should be done, that they went into the banking business to compete with the privately owned banks. Not only to compete with the banks, but they decided they could use the money we all paid them in taxes to sell money to the banks.... And then all hell broke loose. The private banks could not compete with the government, and if they wanted to stay in the mortgage business, they would have to buy money from the Feds... And of course the Feds said if you want to buy money from us, we have the right to regulate and restrict and tell you what percentage of borrowers have to be "low to moderate income". And at first it seemed to work. Until these low to moderate income person got into their homes for a few years, and used other "easy money" (read: credit cards) and started to have trouble paying their bills.

The AMERICAN DREAM (owning your own home) became the American Nightmare. There were people buying homes that had no business buying homes. Get this... it even became popular for buyers to pay thousands of dollars more than the asking price. Why? So the sellers would turn around and give the "overage" back to the purchaser for the purpose of a down payment and closing costs! The buyers wanted to buy a home, but they haven't saved enough money for down payment and closing costs! Should that be a red flag if you are thinking about loaning someone money?!!!! Wait, you have NOT exhibited the ability to live on a budget and save for a rainy day, more so to buy a house, yet you still think you should go get a loan??!!!

So, when the interest rates, which by the way are now pretty much controlled by the Feds, got too high, the adjustable interest rate was invented... We'll start you out at a low rate and worst case scenario it will increase 2 percentage points a year and now more than say 5 percentage points over the lifetime of this note... It's all mapped out in a worst case scenario here... and if you agree, just sign this and we're off... you just bought a house! Then in a couple years after what they told you could happen actually happens, you bail out.... stop paying... go broke... declare bankruptcy! Used to be bankruptcy was the LAST THING YOU WOULD DO! Not any more. There is no shame in it. In fact, it's encouraged! There are companies that will "Help" you with it! Call us! Consolidate you loans... we'll get those creditors off your backs! Yeah, you remember them.... the folks that were nice enough to give you money to buy something you could not, at the time, afford! The nerve of them! Wanting us to play by the rules we had agreed to!

I want to sell houses! I really do. And I want every person in this country to be able to own their own home. But I don't want it to break them financially... and I don't want the government controlling the process. Monitor it ? OK. Control it? They can't even control their own show!

So today, I got some stuff off my chest! I might remove this post later, but I typed what was, and has been, going through my mind for a long time!

Be smart. Live within your means. Don't put undue pressure on yourself. And don't let others sucker you into that kind of situation!


Wednesday, February 18, 2009

Congress enacts Home Buyer Tax Credit

Here's what I have:

Credit of $8,000 to first time home buyers. Actually 10% of purchase price UP to 8K.

Must purchase between January 1 and December 1, 2009.

Must be principal residence.

Single taxpayers with incomes up to $75,000.

Married couples with incomes up to $150,000.

If your income exceeds these amounts, you MAY be eligible for a "partial" credit.

Home buyers must use the residence as a principal residence for at least 3 years or face recapture of the tax credit amount. Certain exceptions apply.

What is a "First Time Home Buyer"? Anyone who has not owned a home in the last three years!

So congratulations you first time home buyers! If you have other questions you can check out this site:

Stay strong!


Tuesday, February 17, 2009

I'll be glad when they finally decide about the home buyer's tax credit!

I remember once many years ago when an older than me co-worker commented that the
" camel is a horse designed by committee."

So our government... these days the "ultimate committee" have been trying to "invent a good economic environment". It will be interesting, at best, to see what comes out at the other end!

So today... February 17, 2009, I am of the understanding that the tax credit will be $8,000. It will be offered to first time buyers only. It will require a contract purchase one's primary residence no later than July 1st.

NOTE: This could change. Remember this is a committee.

Whatever the result, I am still certain that most people will want to, at some point, want to own their home. I suspect that the driving factor will not be the tax credit (although it may help), but rather our seemingly age old desire to own our own home. Plain and simple.

Questions? Concerns? Comments? I'd love to hear from you!

Keep the faith!

Thursday, February 12, 2009

Hmmm No tax credit after all...

As you may recall a few days ago I "jumped the gun".... (can we say that these days?) I have removed the post. Anyway, I was given enough information to feel confident that we would have an "up to 15% tax credit for purchasing a home in 2009".... Didn't get past the Senate. At this point (2/12/09) I'm not sure why. Our economy is still slated for several governmental manipulations designed to "stimulate" but it appears the house purchase portion will not be included. At least the banks and the large corporations who couldn't manage their business and possibly cost you serious money will get some assistance.

Sorry for the misinformation. If you rushed out and bought a house on my account, you are NOT going to get that 10% up to 15K credit. But you know what you will get? A place to live. A place to call your own. A place to work on. And maybe even some "standard" tax deductions. Good for you.

Here's to good government and freedom!


Wednesday, February 11, 2009

"You know what? I'm not sure... let me find out and get back to you"

Have you ever heard this from your real estate agent? God bless the agent that has the courage and the common sense to say it! This means they are not going to risk giving you misinformation, in what might be the biggest financial activity of your life!

I appreciate that we live in a society that wants answers and wants them now. We can be in a real big hurry for everything! Look how edgy we get when we sit at a stop light... or while we wait in line at the fast food joint, and the person in front can't decide on whether or not to "super-size" it... or we are sitting waiting for the computer screen to pop up and it has taken more than 10 seconds! TEN SECONDS!

OK... that may be the way we're going in our society, but when you are thinking about buying or selling a home, and there is information needed that may be critical in the decision making process... appreciate the agent who tells you (admits to you) that they don't know the answer, and they will research it and get back to you.

Value added!

Gotta love it!

Tuesday, February 3, 2009

We're buyin'... BUT we're sellin' too!

When it comes time to "move up" to the next stage of home buying, the need to have a professional is even greater than before!

So, you have lived in this wonderful bungalow for seven years and you're gettin the itch to find a bigger palace! You've outgrown your first home. So what is the drill? How does this work?

Well, if you find the new house and make an offer to the sellers, and everything looks great... price, timing, etc... what happens when you tell them you have to sell your home first ? They are going to want to know a lot of different things. They have a right to... Is it currently on the market? How long? What price? Have you had any offers? What does it have? Can you buy this house without the funds from the sale of your house? Can you get a bridge loan? You need to be ready to answer these questions and project great confidence.

If you tell a seller that you are "going to sell it on your own" watch the look in their eyes. They aren't sure you know what you're doing... Believe me you've lost a little credibilty right there. And if you tell them you're "going to put it on the market", they will think to themselves... "oh boy... when?"

This is where a well poised real estate professional can get the job done. We are trained to keep this process together. And the thing is... it's never the same process. Each situation may require different approach and the trained real estate agent is equipped to analyze and execute the appropriate course of action.

So, go ahead and look. But be ready to answer questions. Be ready to show you mean business. Keep your Realtor informed, and follow their advice.

Good luck! Keep on Rockin!