First-time home buyer tax credit not what it seems

By Marcie Geffner -

If you're planning to buy a home in the next 10 months, you may be eager to take advantage of the federal government's latest effort to jump-start the nation's moribund housing markets: A tax credit of up to $7,500 for certain home buyers.

The credit may appear to be an attractive opportunity, but you should be sure you read the fine print before you elect to claim it on your federal tax return.

"The big story is that it is not a credit. It is a loan, and you are going to have to pay it back, so you'd better make sure that you have the money," says John W. Roth, senior tax analyst at CCH Group, a Riverwoods, Ill.-based company that provides tax software, services and information.

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Same-sex couples denied property tax perks

By Marcie Geffner -

Most married couples take their special tax benefits as property owners for granted. But gay and lesbian couples who tie the knot in California or Massachusetts may not be able to take full advantage of certain property-related tax breaks because federal law doesn't recognize their marriages.

California and Massachusetts now consider so-called "same-sex" marriages to be equivalent to traditional, now so-called "opposite sex," marriages. However, federal agencies, such as the Internal Revenue Service, must take their cue from the 1996 Defense of Marriage Act, or DOMA, according to John W. Roth, a senior tax analyst with tax-software provider CHH Group. DOMA stipulates that only a marriage between a man and a woman is valid in the U.S.

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What appraisers really do

Home buyers, sellers may be surprised to find out the truth about the appraiser’s loyalty

By Marcie Geffner, Cyberhomes Contributor

An appraiser is one of the most important people in a home-buying transaction. Yet few home buyers or sellers understand the facts about who appraisers are or what they do.

The most common misperception is that the appraiser represents the home buyer. That mistaken idea is understandable since the buyer typically pays for the appraisal. But in fact, appraisers are hired by lenders, and appraisals typically are done not to make sure the buyer doesn’t overpay for the home, but to assure the lender that the home won’t be mortgaged for more than a certain percentage of its value.

“Home buyers generally are not my clientele, and that’s the case with most appraisers,” explains Sara Goodwin, a certified real estate appraiser with Ashcroft & Associates, an appraisal firm in Vancouver, Wash. “For the majority of appraisers, lenders are the clients.”

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Copyright 2008. Marcie Geffner. All rights reserved.

McCain keeps hands off housing

Perspective: Candidate advocates market transparency, accountability
By Marcie Geffner, Inman News

Real estate professionals who turn to John McCain's Web site for information about his housing policy may be disappointed to discover there's not much there to examine. But the omission of specific plans and programs may be less of an oversight on the candidate's part and more of a statement in and of itself as to his views.

The presumptive Republican nominee in this year's presidential election has spoken out about the housing crisis and established parameters for the steps he believes the federal government should and shouldn't take in response. He's also announced one specific housing program that he'd try to enact if elected.

McCain addressed the "devastating impact" of the housing crisis on U.S. financial markets and household budgets in a March 27 statement that recapped a day-earlier speech on the crisis. The candidate acknowledged a responsibility to help "deserving" homeowners who were in danger of losing their home and expressed his commitment to consider "any and all proposals" that would accomplish that goal. But he also emphasized that any government intervention should be limited in scope and aim to prevent a recurrence of the crisis.
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Obama's housing plan is long on rhetoric

Perspective: Candidate proposes $10 billion to aid foreclosure victims

By Marcie Geffner, Inman News

As Democratic delegates and power brokers prepare in Denver, Colo., for the political party's presidential convention that begins tonight, real estate and mortgage professionals and homeowners may be curious about likely nominee Barack Obama's housing proposals.

The candidate's three-page housing policy statement doesn't say how many houses Obama owns (one), but offers plenty of speculation about the causes of the housing crisis, tons of rhetoric about the value of home ownership and a broad overview of the programs he supports. The statement offers some general insights into Obama's perspective on housing, but includes hardly any meaningful details about how his plans would be implemented.

Dubbed "Protecting Homeownership and Cracking Down on Mortgage Fraud," the plan aims to "crack down on fraudulent brokers and lenders," "make sure home buyers have honest and complete information about their mortgage options" and expand a tax credit for all "middle-class homeowners," according to the candidate's Web site.

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Housing Bill To Aid Homeowners, Home Buyers

By Marcie Geffner -

The federal government is poised to enact a major housing bill that aims to assist first-time home buyers, homeowners who need to refinance their mortgage and an assortment of housing-related companies.

The House of Representatives has already passed the 694-page bill, which is now being heard in the Senate. President Bush has said he will sign the bill, which could be on his desk within a few days.

The details won't be official until the ink dries on the President's signature, but here's a summary of several key points:

FHA refinancing program
A new FHA loan program would be established to help struggling homeowners refinance their mortgage with a new 30-year, fixed-rate FHA loan.

To qualify, the homeowner must:

-- have an existing mortgage originated before Jan. 1, 2008,
-- be unable to afford the payments on that mortgage,
have a mortgage debt-to-income ratio of at least 31 percent (or potentially higher),
-- live in the home and
-- meet a number of other requirements.

The homeowner's current lender would have to agree to reduce the amount owed on the existing mortgage to no more than 90 percent of the home's current market value.

Borrowers who want to apply for this program should first contact their current mortgage servicer and then an FHA-approved lender. Borrowers will have to pay a monthly premium for FHA mortgage insurance, be reasonably able to afford the payments on the new mortgage and share a portion of future appreciation in the value of the home with the FHA.

First-time home buyer tax credit
Home buyers who purchased a home on or after April 9, 2008, or before July 1, 2009, and had not owned a home during the previous three years would be eligible for a federal income tax credit of up to $7,500. The credit would have to be repaid over a 15-year-period and would be phased out for taxpayers whose adjusted gross income exceeds $75,000 (single filers) or $150,000 (joint tax return).

Higher loan limits
The maximum loan limit for FHA-backed loans would be increased to 115 percent of the local-area median home price. The maximum loan limit for loans that could be purchased by Fannie Mae and Freddie Mac would be set permanently at $625,500. The Department of Veterans Affairs loan limit also would be increased.

New Fannie Mae, Freddie Mac regulator
A new federal regulator would be created to oversee Fannie Mae and Freddie Mac. The government's thinking is that a new tougher regulator would enhance Wall Street's confidence in the two government-sponsored mortgage companies. That could indirectly result in lower mortgage interest rates, which would be an added benefit for home-loan borrowers.

© 2008 LendingTree, LLC. This story, "Housing Bill To Aid Homeowners, Home Buyers," is reprinted by the author with written permission of LendingTree, LLC.

Downpayment assistance bites the dust

By Marcie Geffner •

A countdown clock on a Web site operated by Nehemiah Corp. of America is ticking off the days, hours, minutes and seconds until a new government ban will terminate virtually all seller-funded down payment assistance programs in the United States. But the clock may be stopped, now that a bill has been introduced in Congress that would reverse the ban.

The clock will tick off its last second Oct. 1, the last day when homebuyers will be able to use seller-funded down payment assistance with any mortgage backed by the Federal Housing Administration, or FHA, a division of the U.S. Department of Housing and Urban Development, known as HUD.

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How To Deal with a Low-Ball Offer

Don’t get mad. Get smart. Negotiation and patience can turn that disappointing offer into a better deal.

By Marcie Geffner, Cyberhomes Contributor

Weak housing markets embolden bargain-minded homebuyers to offer much less than the seller’s asking price. While there is no agreed-upon definition of a lowball offer, any price that’s discounted enough to provoke the seller’s wrath may well qualify for that distinction.

Conventional wisdom says sellers shouldn’t bother to deliver a civil counteroffer to buyers who present a lowball offer because they may prove excessively demanding or miserably difficult to work with during the transaction.

But that approach might not be so wise if your home has been on the market for a while and hasn’t attracted other bidders.

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How To Sell a Vacant House

You’ve moved out, but can’t afford to rent a houseful of furniture: tips to better your odds of a quick sale

By Marcie Geffner, Cyberhomes Contributor

Houses may be vacant for any number of reasons: Some owners have moved to a new home that better suits their needs. Others have gotten married, gone through a divorce or relocated to take a new job. Sadly, some homes are vacant because the owner has died.

Regardless of the reason, a vacant house can be a real turnoff for buyers and, consequently, more difficult to sell than a house that’s occupied.

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Hiring a Home Stager

By Marcie Geffner

Every home, no matter how luxurious or well-kept it may be, can benefit from at least a few improvements before it's put on the market to be sold. Though not every home that needs to be staged also needs the services of a professional stager, a professional can help you de-clutter your home and highlight its best features in a way that will make the home more attractive and appealing to prospective buyers.

"Most people love their own home," says Dan Eason, president of Energized Seller, a Web site that helps home sellers improve their home's marketability. "Your home might look great to you and your friends. But selling your home isn't about you or what you like, it's about the home buyer and what that buyer wants. Buyers don't want clutter, disorganization, disrepair, wild colors or crowdedness. They want a home where they can easily imagine themselves living."

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