Archive for the ‘Buyers’ Category

Why Green Is Good

Tuesday, June 1st, 2010

Taking steps to minimize your energy use is not only good for the Earth, but for homeowners as well. While being altruistic and helping a cause generally means giving—not getting—back, going green provides noticeable benefits to everyone. Here, Mike Vazeii, Director or Marketing, American Home Shield discusses why going green is in fact a good thing.


Lowering energy consumption can be good for the planet and good for homeowners’ pocketbooks. That’s because taking steps to minimize energy use in the home can often significantly lower heating, cooling, water and utility bills and may have other financial advantages for you and for your clients.


It almost sounds too good to be true, doesn’t it? Being altruistic and helping a cause usually means giving—not getting—back. However, going green can help save the Earth and help save household budgets. Helping your clients decrease their carbon footprints and protect our natural resources while spending less is a tangible way of delivering extra service value to them.


For example, make sure your clients know they may be eligible for federal tax credits or tax incentives for the purchase of specific energy-efficient products or renewable energy systems for the home. Today, energy-efficient improvements can often be incorporated into home mortgages, enabling homeowners to pay for the upgrades over the life of the loan.


Depending on the lender, there may be additional advantages, such as lower mortgage rates or reduced loan fees. Energy Efficient Mortgages (EEMs) and Energy Improvement Mortgages (EIMs) are also available. Encourage your clients to check with a tax professional for tax credit and incentive qualification specifics, deadlines and eligibility requirements, and to consult with their local lender for mortgage information and guidelines. Websites such as,, and also contain useful information.


You can help raise your clients’ awareness of the green compatibility in homes. For example, if you are showing a home that has skylights, be sure to mention that skylights decrease the need for artificial lighting and help warm the home during winter months, decreasing energy use. Home appliances with the Energy Star label meet and exceed minimum, strict energy efficiency government guidelines and can reduce energy consumption and lower utility bills. Even seemingly small things,

like light switch dimmer controls and automatic occupancy sensors, can contribute to energy and monetary savings.


For energy-efficient ideas that your clients can incorporate into their own homes, visit Living green and saving green is easy, fun and beneficial for everyone involved.


Your homeowners will be grateful for the conservation and cost-saving tips, and can appreciate the fact that you care enough about them and about our planet to share such useful information. You’ll find some helpful ideas for your own home, too. Find out for yourself and show your clients why living green isn’t only the right thing to do—it’s the smart thing to do.


RISMEDIA, May 2010

Mike Vazeii
Director of Marketing
American Home Shield

5 Tips to Save Money for First-Time Home Buyers

Tuesday, June 1st, 2010

Those who missed taking advantage of the first-time buyer tax credit but who are still planning the purchase of their first home, continue to have a wealth of opportunities in today’s marketplace. A few smart steps can save first-time buyers thousands of dollars. Here is a look at some of the ways how:


1.     Don’t buy if you don’t plan to stay
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner – even in a rising market. When prices are falling, it’s an even worse proposition.


2.     Start by shoring up your credit
Since you probably will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.


3.     Choose carefully between points and rate
When picking a mortgage, you usually have the option of paying additional points- a portion of the interest that you pay at closing- in exchange for a lower interest rate. If you stay in the house for a long time- say three to five years or more- it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.


4.     Hire a home inspector
A home inspector can let you know if you’re about to buy a lemon of a house or warn you about potential problems. At best, you can move into the house confident that it’s in good shape; at worst, the inspector’s report can let you back out of the deal if the house has major, unexpected problems. Most typically, the home inspection can allow you to negotiate the home price to account for necessary repairs.


5.     Get professional help
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.


6.      Bonus Tip: Be patient
Buying a home is one of the largest purchases most people will make in their lifetime. The key to avoiding buyer’s remorse is to be completely comfortable before signing on the dotted line.


RISMEDIA, May 2010

By Dan Steward

8,000 First-Time Home Buyer Tax Credit At A Glance

Tuesday, November 24th, 2009
Brought to you by the National Association of Home Builders
  • The $8,000 tax credit is for first-time home buyers only. For the tax credit program, the IRS defines a first-time home buyer as someone who has not owned a principal residence during the three-year period prior to the purchase.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The tax credit now applies to sales occurring on or after January 1, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, a home purchase completed by June 30, 2010 will qualify.
  • For homes purchased on or after January 1, 2009 and on or before November 6, 2009, the income limits are $75,000 for single taxpayers and $150,000 for married couples filing jointly.
  • For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

The $6,500 Move-Up / Repeat Home Buyer Tax Credit at a Glance

  • To be eligible to claim the tax credit, buyers must have owned and lived in their previous home for five consecutive years out of the last eight years.
  • The tax credit does not have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.
  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500.
  • The tax credit applies only to homes priced at $800,000 or less.
  • The credit is available for homes purchased after November 6, 2009 and on or before April 30, 2010. However, in cases where a binding sales contract is signed by April 30, 2010, the home purchase qualifies provided it is completed by June 30, 2010.
  • Single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.

                   for more information visit our website

Bargain Homes in the Best School Districts

Monday, October 12th, 2009

 Business Week worked with real estate portal Cyberhomes to find the most affordable zip codes with the best public schools.

 By Prashant Gopal, Business Week


The location of a home, as we all know, determines its value. Buyers consider proximity to jobs, public transportation, shops, parks, and entertainment when looking for a place to live. But they’ll pay a premium—even if they have to work multiple jobs, pinch pennies, and endure long commutes—to find a home in a top-rated school district.

Sep 25th, 2009



The best public schools are typically found in the priciest neighborhoods, as economist Sandra E. Black found more than a decade ago when she studied elementary school test scores in the affluent Boston suburbs. Black found that parents were willing to pay 2.1% more to live in a school zone where test scores were 5% higher. Studies by other researchers in other parts of the U.S. and the world have since confirmed the link between real estate values and school quality.

So, what’s a budget-conscious buyer to do? Business Week worked with real estate portal Cyberhomes to find the 25 most affordable Zip codes with the best public schools. The top-ranked places have relatively low home values compared with the closest metro area and at least three schools with excellent standardized test scores. We identified working-class towns such as Vandergrift, Pa., outside Pittsburgh, where the median home value in June was $65,600—half the metro area’s median price—and Irvine, Calif., an Orange County college town with excellent public schools and a median home price just over $500,000 (astronomical by western Pennsylvania standards but downright reasonable in California).

Long Commutes: Time Is Money

“We wanted to find places where—relative to the market—you could still find values,” says Sarah Max, a senior writer at Irvine-based Cyberhomes.

Among the top-ranked Zip codes were Pearl River, N.Y., and Nanuet, N.Y., both in Rockland County, a leafy suburban area only about 10 miles from Manhattan’s border at its closest points. Residents move to Rockland for the parks, the tree-lined streets—and because they get the best schools for their money.

Rockland is considerably less expensive than nearby Westchester County, N.Y., and Bergen County, N.J. That’s largely because residents endure long and unpredictable commutes, says Pete Sambets, an associate broker at Joyce Realty in Pear River. “You have to plan for a two-hour trip—it all depends on the traffic,” Sambets says. “That’s why the prices are where they are.”

California buyers can sometimes choose to forgo an ocean view to opt for inland property with a better school system. The college town of Irvine, which ranked No. 12 on our list, doesn’t have a beach, but it does have a renowned school system.

Involved Parents Count As Much As Schools

“There are definitely trade-offs people will make,” says Black, now a University of California at Los Angeles economics professor. “The hard thing is that places with better schools tend to be in wealthier neighborhoods. A place with an ocean view might also have better schools. It’s hard to say how much you’re paying for better schools and how much you’re paying for the views.”

It’s not just the beauty of a location that drives home prices. Marcus A. Winters, a senior fellow at the Manhattan Institute and an economist who focuses on education policy, says parents in wealthier neighborhoods tend to play a key role in pushing up test scores. They are often well-educated and want the same for their kids. They get involved in the schools and hold teachers and principals accountable. Students likely also benefit from being with peers with similar educational goals. And school choice can create competition and improve performance, he adds.

What remains unclear is whether people pay more to be in pricey neighborhoods because of the excellent schools or to live among the types of people who are attracted to good schools. Home buyers without children might also consider moving to neighborhoods with good schools for many reasons. It will cost them, but it could might make financial sense because homes near good schools are always in demand. On the other hand, investors might consider buying in a lower-quality school district and then work to improve the schools and, as a result, improve property values, Winters says.

The Most Bang For Your Buck

Of course, there’s more to school quality than test scores. Not all parents and students want the same things from their schools. Families look for extra-curricular activities or top sports programs. But perceptions matter, especially in academics.

A decade ago, Florida began giving letter grades to schools based on standardized test scores, with “A” being the best and “F” the worst. David Figlio, now a professor of education, social policy, and economics at Northwestern University, studied Gainesville (Fla.) area home prices in 199 subdivisions and 20 elementary school zones before and after the state School Accountability System went into effect in 1999. He discovered that that an A school was worth about $10,000 to a home’s value, on average—about 8%—more than a B school.

If you’re looking for a bargain, Figlio suggests finding a B school that just missed the top grade. That way a buyer could pay less for a home and still send their children to high-performing schools. And if the school improves just a touch the next year, a family could see some welcome home appreciation.

“If a school barely missed getting an A, you might be getting the biggest bang for your buck,” Figlio says.

Top 10 Most Affordable Zip Codes with the Best Schools

1. Vandergrift, Pa.
Zip Code: 15690
Metro area: Pittsburgh
Population: 45,440
Top schools include: Laurel Point Elementary School, and Kiski Area High School.
Average school rating: 8.3
Median home value: $65,600
Metro area median home price: $124,950

Vandergrift, located 35 miles north east of Pittsburgh on the banks of the Kiskiminetas River, is an affordable town with good schools and its own drive-in theater called the Riverside. About 27% of households in the Zip Code have children, and the median household income is $45,225.

2. Lake Worth, Fla.
Zip Code: 33467
Metro area: West Palm Beach-Boca Raton-Boynton Beach, Fla.
Population: 44,077
Top schools include: Panther Run Elementary School, Coral Reef Elementary School, and Manatee Elementary School
Average school rating: 9
Median home value: $185,500
Metro area median home price: $305,000

Lake Worth, a coastal city just south of West Palm Beach, is known for its political activism, beautiful beach, vibrant downtown, and diversity. Lake Worth is a hub for antiwar and migrant-worker rights activism. The tiny town is home to many immigrants, including migrant farm workers. About 16% of households in the Zip Code have children, and the median household income is $98,992.

3. Middletown, Md.
Zip Code: 21769
Metro area: Bethesda-Gaithersburg-Frederick, Md.
Population: 32,450
Top schools include: Middleton middle, high, and elementary schools
Average school rating: 9.3
Median home value: $340,700
Metro area median home price: $476,250

Middletown, located an hour west of Baltimore midway between the peaks of Braddock and South Mountains, is a mix of modern subdivisions and picturesque dairy farms. It is home to the renowned Hollow Creek Golf Club. About 35% of households in the Zip Code have children, and the median household income is $105,345.

4. Longmont, Colo.
Zip Code: 80503
Metro area: Boulder, Colo.
Population: 29,209
Top schools include: Hygiene Elementary School, Eagle Crest Elementary School, and Silver Creek High School
Average school rating: 8.9
Median home value: $244,600
Metro area median home price: $326,000

Longmont is about 15 miles north of downtown Boulder, the home of the University of Colorado. It has 300 days of sunshine and gorgeous views of the Rocky Mountains. About 30% of households in the Zip Code have children, and the median household income is $108,075.

5. Rancho Santa Margarita, Calif.
Zip Code: 92688
Metro area: Santa Ana-Anaheim-Irvine, Calif.
Population: 47,580
Top schools include: Melinda Heights Elementary School, Arroyo Vista Elementary, Las Flores Elementary School
Average school rating: 9.1
Median home value: $461,200
Metro area median home price: $585,000

Rancho Santa Margarita, a master-planned community located at the base of the Santa Ana mountains, is one of the safest towns in Orange County, according to the 2008 FBI Uniform Crime Report. About 45.28% of households in the Zip Code have children, and the median household income is $117,701.

6. Louisville, Colo.
Zip Code: 80027
Metro area: Boulder, Colo.
Population: 45,945
Top schools include: Louisville Elementary School, Louisville Middle School, and Coal Creek Elementary School
Average school rating: 9.3
Median home value: $326,000
Metro area median home price: $260,100

Louisville is a former coal-mining town southeast of Boulder, includes about 1,700 acres of government-controlled open space. About 40.55% of households in the Zip Code have children, and the median household income is $119,453.

7. Lindenhurst, N.Y.
Zip Code: 11757
Metro area: Nassau-Suffolk, NY
Population: 23,435
Top schools include: Alleghany Avenue School, Daniel Street School, and Edward W. Bower School
Average school rating: 8.5
Median home value: $342,200
Metro area median home price: $427,500

Lindenhurst, a village on the southern shore of Long Island, is part of the town of Babylon, which also includes the villages of Amityville and Babylon. About 37.52% of households in the Zip Code have children, and the median household income is $92,426.

8. Cincinnati
Zip Code: 45248
Metro area: Cincinnati-Middletown
Population: 24,162
Top schools include: Oakdale Elementary School, John Foster Dulles Elementary School and Charles W. Springmyer Elementary School
Average school rating: 8.5
Median home value: $155,000
Metro area median home price: $125,000

Cincinnati, the state’s third-largest city located, in the hills of the Ohio River Valley, is home to large corporations, a zoo, botanical garden, and downtown with a public gathering place known as Fountain Square. About 32% of households in the Zip Code have children, and the median household income is $84,825.

9. Nanuet, N.Y.
Zip Code: 10954
Metro area: New York-White Plains-Wayne
Population: 24,162
Top schools include: A. MacArthur Barr Middle School, and Highview Elementary School
Average school rating: 9
Median home value: $371,600
Metro area median home price: $452,967

The Rockland County suburb, conveniently located 30 miles north of Manhattan, is less expensive than many surrounding towns. Lake Nanuet Park has a water slide, bathhouse, and lighted ball field. About 33.44% of households in the Zip Code have children, and the median household income is $115,647.

10. Clayton, N.C.
Zip Code: 27527
Metro area: Raleigh-Cary, N.C.
Population: 27,954
Top schools include: Riverwood Elementary School, East Clayton Elementary School, and Riverwood Middle School
Average school rating: 9.3
Median home value: $167,900
Metro area median home price: $204,000

Clayton, located 20 minutes from the state capital in Raleigh, is close to the thriving Research Triangle area. It is home to three golf courses, a 600-seat auditorium, and the Harvest Festival, which draws artists and craft makers from throughout the state. About 26% of households in the Zip Code have children, and the median household income is $84,005.

       For More School and Neighborhood Information Please Visit



Friday, September 25th, 2009

New York State’s Mortgage Credit Certificate (MCC) Program is an alternative way for SONYMA to assist first-time homebuyers.  Wworthhouseith an MCC, 20% of your annual mortgage interest can be converted into a tax credit and deducted dollar for dollar from your Federal income tax liability.  The remaining 80% of mortgage interest continues to qualify as an itemized tax deduction.  The credit can be taken to reduce your tax burden every year for the life of the mortgage loan as long as you continue to live in the home. The feasibility of the MCC and the degree to which it can provide housing assistance is totally dependent upon the extent to which you have a Federal tax liability, which can be offset by the MCC tax credit. 

For details, click here to read our term sheet for the program.

The benefits of an MCC to a first-time homebuyer can be significant. For example, for a mortgage of $200,000 with an interest rate of 5.5%, the mortgage interest paid in the first year is $10,933.  With an MCC, 20% of interest, $2,186, can be converted to a direct tax credit, a savings of $182 per month.  Note that the MCC amount will decrease slightly each year as the amount of interest paid decreases.  To calculate your potential savings with an MCC, click here.

Federal law prohibits SONYMA from combining MCCs with its own mortgages.  However, MCCs can be used with other fixed-rate mortgages that lenders offer, such as: 

  • Conventional loans (Fannie Mae/Freddie Mac);
  • FHA-insured loans;
  • VA-guaranteed loans; or
  • Other fixed-rate products.

To take advantage of this program, you must file IRS Form 8396 with your Federal tax return for each year.

Mortgagor(s) receiving an MCC can also take advantage of the $8,000 Federal tax credit - which is available for loans closed by November 30, 2009.

All SONYMA Mortgage Credit Certificate Program participants must meet certain Household Income and Purchase Price limits.

How Do I Apply?

To apply for the Mortgage Credit Certificate program you must:

  • Contact one of our MCC Participating Lenders; and
  • Apply for a Mortgage Credit Certificate at the same time you apply for a mortgage from one of our MCC participating lenders listed above.
  • If you are approved for an MCC, you can take a dollar-for-dollar tax credit equal to 20% of your annual mortgage interest costs when you file your Federal income tax return.
  • The remaining 80% in annual mortgage interest costs remains tax deductible.

All SONYMA Mortgage Credit Certificate Program participants are subject to the Federal Recapture Tax.

Click here for more MCC FAQ’s.

How Does Yield Spread Help Buyers Buy?

Thursday, July 2nd, 2009

couple1 Commentary by Andrew Downs

RISMEDIA, July 2, 2009-Opportunity is knocking fairly loudly for many considering homeownership. Home prices have declined in many markets around the country and tax incentives and other inducements have first-time home buyers and others weighing the possibilities.  Home affordability, as defined by the National Association of Realtors’ Housing Affordability Index, stands near all-time highs, thanks to declining prices and historically low mortgage rates. Yet, while some consumers hold off on purchases as they attempt to catch the home-price bottom, they could miss the mortgage-financing opportunity of a lifetime.

Consider the weekly average yield spread between Fannie Mae’s 6.5-year bond to the “benchmark” 10-year Treasury note, a classic relationship that involves the cost of making mortgage loans to consumers. Before disarray in the financial markets, the spread ran about 1% above Treasury bonds, reflecting investors’ confidence that owning debt of bonds backed by Fannie and Freddie is nearly as safe as owning government bonds.

The spread began widening in July 2007 as the global financial crisis unfolded, then spiked to above 2% during the next year as the U.S. economy seized and credit grew scarce. It grew to a startling 2.5% late last year as bond investors’ skittishness about continued delinquencies and defaults-and that the risk of these mortgages had not been properly assessed-resulted in higher risk premiums and higher costs to borrowers.

Late last year, however, the Federal Reserve Bank stepped in with a promise to purchase $500 billion in Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities, and raised that figure to $1.25 trillion in March. The move, combined with loan-modification initiatives and other federal intervention, restored investor confidence in the secondary market and mortgage rates declined rapidly. The yield spread in March dropped to 1% and zero and then fell to an unprecedented minus 0.5% by early May.

This condition is certainly unique and, likely, short-lived. Statistically, when the yield spread deviates from historical norms, the chances are great it will return to those levels. That could quickly drive mortgage rates higher. How much is anyone’s guess, but if the cost of making a mortgage goes up by 1.5% so, too, might mortgage interest rates.

Yet, factor in some additional variables. The marketplace for bonds relies heavily on purchases by offshore buyers who remain skeptical as the global economy continues in flux. Then there’s the inflation-deflation conundrum. Many fear a deflationary spiral-with falling prices for goods and services that lead to falling wages-can still drag down a stabilizing U.S. economy.

Conversely, others believe inflation will kick in, ushering in higher consumer prices, including higher mortgage rates. How this issue shakes out will have important implications for interest rates.

One thing is crystal clear: the odds that mortgage interest rates will rise are much greater than any continued mortgage-rate decline. And for most home buyers, the cost of mortgage financing can be as important as the price of the home itself.

Real estate sales professionals can help their customers make the best long-term decisions by demonstrating the degree to which housing prices and mortgage interest rates could move from this point forward. Customers waiting for the absolute lowest price on a house could miss a golden financing opportunity and the lowest overall cost of homeownership.



2009 First Time Home Buyer Tax Credit - Big Benefit for Housing Recovery

Friday, April 10th, 2009

On February 17, 2009  President Obama signed into law the American Recovery and Reinvestment Act 2009.  A key component of this act is the First Time Home Buyers Tax Credit.   

The First Time Home Buyers Tax Credit provides for an $8,000 credit (or up to 10% of the purchase price) for first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.  The credit does not have to be repaid*. The credit will be claimed on a tax return to reduce the purchaser’s income tax liability.  If any credit amount remains unused, then the unused amount will be refunded by check to the purchaser. An example would be; if a qualified buyer is entitled to a full $8,000 credit and owes $3,000 on their tax return they would receive a $5,000 rebate check from the government.


In order to qualify as a first time buyer you cannot have owned a house in the past three years.  The home purchase must be your principal residence for a minimum of 3 years to avoid recapture.  

*If the home is sold before 3 years the tax credit must be repaid. This provision is designed to prevent “flipping” houses in order to get the credit.


Another requirement to qualify for the tax credit are income levels (please see chart below for income limits) 



Single Filers
Married Filers


This means that for singles making over $75,000 and couples making over $150,000 the credit is proportionately reduced as incomes approach $95,000 and $170,000 repectively.  As an example if a couple makes $165,000 the excess amount is used to create a fraction.  $15,000/$20,000 (.75) times the credit amount. 75% or $6,000 of the credit would be disallowed.  The couple would get a $2,000 credit.



***As with any tax law change please check with your tax advisor for your particular credit allowance or tax law changes that may take place.  The above information is accurate as of February 19, 2009.

Town of Babylon Enhanced Down Payment Assistance Program

Thursday, April 9th, 2009

Through the Town of Babylon’s Enhanced Down Payment Assistance Program, eligible homebuyers can a matching loan of $15,000 to be used towards the purchase of a home. 



(see Application & Instructions for full eligibility requirements)


Applicants must:

·     Be HUD-defined First-Time Homebuyers*

·     Have a Total Household Income between 80% and 120% of Area Median Income (see table below)

·     Occupy the purchased home as a principle residence

·     Not be in contract to purchase prior to the start of the program

·     Contribute $15,000 towards the down payment

·     Purchase a home within the Town of Babylon for up to $396,150

·     Participate in the Long Island Green Homes Program within six months of purchase

·     Sit for a one-time mortgage counseling session with the Long Island Housing Partnership

On April 1, 2009, the Department of Housing and Urban Development updated its annual income limits. New applicants must fall within these income limits to be eligible. The new limits for the Town of Babylon Next Generation Downpayment Assistance Program are:


2009 Income Guidelines 


Family Size

Minimum Total Household Income
(80% AMI)

Maximum Total Household Income
(120% AMI)


























Note: The Town of Babylon Community Development Agency offers Down Payment Assistance for households earning up to and including 80% Area Median Income. For more information and an application please call the Town of Babylon CDA at 631-587-3752.


Applications, along with a $75 application fee and all required documentation, must be mailed to the Long Island Housing Partnership, 180 Oser Drive, Suite 800, Hauppauge, NY 11788.

* HUD-Defined First-time Homebuyers: An individual who has had no ownership in a principal residence during the 3-year period ending on the date of purchase of the property. This includes a spouse (if either meets the above test, they are considered first-time homebuyers), or, a single parent who has only owned with a former spouse while married, or, an individual who is a displaced homemaker and has only owned with a spouse, or, an individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations, or an individual who has only owned a property that was not in compliance with State, local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure.

The Price is Right - 78% of First-time Home Buyers Say Now Is Good Time to Buy

Sunday, April 5th, 2009



  RISMEDIA, March 30, 2009-Century 21 Real Estate LLC, the franchisor of one of the world’s largest residential real estate sales organizations, announced the results of its recently commissioned first-time home buyer survey. The survey found that more than three-quarters (78%) of potential first-time home buyers say that now is a good time to buy a home, despite widespread concern about the economy. Out of the 1,000 prospective U.S. first-time home buyers surveyed for the CENTURY 21 First-Time Home Buyer Survey, 68% think now is a better time to buy than six months ago. Prices are the driving motivation for potential first-time home buyers with more than eight out of ten first-time home buyers (85%) saying they consider current home prices affordable and 73% citing that taking advantage of current prices is a major factor in their decision to buy. Interestingly, potential first-time buyers are still split between “being willing to consider an offer now” (42%) and “waiting for prices to go down before they seriously consider making a purchase” (48%).

“Current pricing, rates and incentives, such as the First Time Homebuyer Tax Credit, provide tremendous opportunities for first-time home buyers to get into the market,” said Tom Kunz, Century 21 Real Estate president and CEO. “Our research shows that while consumers still have concerns about the future of the economy, many are actively considering their options as we move into the spring selling season.”

Among the survey’s other key findings:

Bargains in the marketplace are providing additional options for buyers to consider. 56% of potential first-time home buyers are considering purchasing a foreclosed or short sale home, and 63% are open to purchasing either a “fixer-upper” or “as-is” home.

When asked to rate the features that they look for when choosing a home, price is the primary consideration with 87% saying this feature is “very important,” followed closely by neighborhood safety (80%) and the condition of the home (71%).

Having enough money for a down payment is a top concern for potential first-time home buyers as nearly half (46%) said they are “very worried” about the issue.

Most respondents (86%) are in the market for single family homes.

Available Government Incentives

In addition to affordable home prices and mortgage rates, the survey also showed strong interest in taking advantage of the recent government stimulus. More than three-quarters (77%) of potential first-time home buyers say they are more likely to buy a home in the next six months because of the $8,000 first-time home buyer tax credit offered in the American Recovery and Reinvestment Act of 2009.

Affordable Mortgage Rates

Perception about the lending market is a key concern for prospective first-time home buyers. Current mortgage rates are considered to be affordable by approximately three-quarters (72%) of respondents and 62% recognize that rates are lower than a year ago. However, 75% of potential first-time home buyers believe it is difficult to get a home loan right now and 74% think it is harder to get a loan now, than at the same time last year.

“Traditional mortgage investors, Fannie Mae, Freddie Mac, FHA and VA, are receiving significant financial backing from the federal government, keeping interest rates low and mortgage funds available for qualified buyers,” said Marshall Gayden, senior vice president of Century 21 Mortgage®. “Home buyers who have a stable job history of at least two years, solid credit (620 and above) and down payment money that can be documented (3.5% on FHA loans) are well positioned to secure a mortgage in today’s credit environment.”

Understanding the Buying Process

Prospective first-time home buyers also indicate that there is a real need for someone who can provide accurate and reliable information while they look for a home. When asked about the real estate transaction process, more than half (59%) of potential buyers rated their understanding of the process as either “fair” or “poor.”

“Between home loans, the closing process and understanding the new government stimulus, real estate professionals play a vital role in working with first-time home buyers to help them navigate the current market,” said Kunz. “Every individual situation is different, and consumers should use their Realtor as a trusted advisor to seek opportunities, get educated on the process and make informed decisions.”

In addition, the survey asked potential buyers which factors are most relevant in their decision to choose a home:

First-Time Home Buyers’ Top Reasons for Buying (% saying major factor):

Taking advantage of current housing prices 73%                       

Moving to a bigger living space 60%
Having a more suitable place to start or raise family 56%        

Buying a home as an investment 47%

Moving to a better neighborhood 44%

Moving to a better location for work 28%


Buyer Information

Thursday, March 12th, 2009

1. Develop a family budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

2. Reduce your debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.

3. Get a handle on expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

4. Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

5. Save for a downpayment. Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent downpayment.

6. Create a house fund. Don’t just plan on saving whatever’s left toward a downpayment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

7. Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate.

8. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.


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