$8,000 Tax Credit Extension Almost A Done Deal

"I'm just a bill sittin' on Capitol Hill" from School House Rock series

In case you haven’t heard the great housing news…yesterday the Senate passed the $8,000 home buyer tax credit extension by 98-0. Today the House approved the measure as well. Now it’s up to President Obama to sign it into law, and that could happen as early as tonight.

Do I hear a Hallelujah sister?

Here are the provisions:

1. The $8,000 home buyer tax credit is extended thru April 30, 2010, with closing taking place by June 30, 2010.
2. Current home owners moving up are eligible for a $6,500 tax credit if they have resided in their current residence for five out the last eight consecutive years.
3. Income limits: $125,000 for single buyers, $225,000 for couples.
4. Credit is good on homes under $800,000.

The National Association of Home Builders estimates the extended and expanded home buyer tax credit will create 211,000 jobs and generate 180,000 additional home sales in 2010. It is also expected to generate $9.6 billion in wage income and $6.9 billion in federal, state and local taxes.

Mr. President, your blessing will make many Americans happy campers. Get ready to sign!

Jan Sperry Astani
Marketing Director
Home Creations

Lunch Conversation Includes Refinancing Question

My sales director and I had lunch today with one of our great media reps. She’s in the process of refinancing her 30-year mortgage down to a 15-year loan, lowering her current 6% rate down to 5%. Her payment will actually increase about $200 per month, and her closing costs are $6,000. She asked if she should go ahead with this loan.

We talked her out of it for three main reasons:

1. There’s not a lot of difference in the interest rate.
2. The cost of $6,000 to refinance with her current lender seems rather high. There didn’t seem to be any advantage to sticking with her current mortgage company (a national bank) for this new loan.
3. If she sells her home in the next two – three years, she won’t have a chance to recoup those $6,000 in fees.

Here’s what we recommended: Keep the current mortgage with the 6% interest rate. Pay an additional $200 or more per month with the current mortgage payment (write a separate check) and designate the funds to principal only. It also helps if you can get your payment in a few days before the 1^st of each month.

Rumor has it that if you make one extra principal and interest payment per year from the start of a 30-year loan, you’ll pay off your mortgage in 17 – 19 years. Here’s an example: If your monthly P&I is $800, send $80 extra in every month to your lender. Over 10 months, you’ve made one extra house payment. That doesn’t lock you into the higher payment of a 15-year loan, and when you don’t have the extra funds, say around the holidays, you’re not required to pay extra.

Keep your money, girlfriend. You’re in a good position already with your current mortgage.

Jan Sperry Astani
Marketing Director
Home Creations

 

Play Date Could Solve Tax Credit Extension Puzzle

What if all the Senators, Congressmen and Congresswomen paired up with a representative from the housing industry and had a play date to solve the perplexing puzzle of the home buyer tax credit extension? As it currently stands, the House will propose a tax credit extension bill that the Senate dislikes; the House brings up ideas the Senate shoots down; the Democrats don’t like the Republicans, and the Republicans don’t play with Democrats. Man, Washington is complicated.

Here’s how the Home Buyer Tax Credit Extension Puzzle Game works:

Each politician gets one of the following people to play with: Realtor, builder, title company rep or mortgage loan officer.

The politician must listen, truly listen, to the suggestions and ideas from his/her playdate. The playdate’s decision is final.

They select one puzzle piece from these four categories:

P / Participant:            Decide who is eligible for the tax credit?
1. First-time buyers and those who haven’t owned in three years.
2. Current homeowners who have lived in their home consecutively for the last five years.
3. 1 only.
4. 2 only.
5. 1 & 2.

P / Price:                     Decide how much the credit will be?
1. Keep at 10% of sales price, not to exceed $8,000.
2. Give current homeowners $6,500.
3. Give everyone up to $15,000.
4. 1 & 2.

P / Paycheck               Decide the maximum home buyer income to qualify.
1. Single income less than $75,000; couples $150,000.
2. Single income less than $125,000, couples $225,000.
3. No income limitations.

P / Penalty                  Decide how long buyers need to keep their home before selling it and incurring a repayment penalty?
1. Keep it at least three years before selling.
2. Keep it at least two years before selling.
3. Remove all sales penalties.  

Upon deciding the winning piece for each category, the perplexing home buyer tax credit extension puzzle is solved, and Americans continue buying homes to stimulate the economy! It’s that easy.

Jan Sperry Astani
Marketing Director
Home Creations

More Good News on Home Buyer Tax Credit Extension

Home Creations recently received a letter from Congressman Tom Cole, 4^th District Oklahoma, regarding the home buyer tax credit extension. In Congressman Cole’s letter, he stated that more than 30 percent of all home buyers this past year have taken advantage of the tax credit and noted the tax credit deadline, Nov. 30, has already slowed down the housing industry. In addition, the Congressman stated that construction of single family homes was down three percent nationally in August after an increase for the past five months. Builders have slowed construction because they’re afraid they can’t get the homes done for a Nov. 30 closing.  

Congressman Cole is a true friend of the real estate industry and has co-sponsored H.R. 1245, the Homebuyer Tax Credit Act of 2009. It would keep the 10 percent credit based on the sales price but would increase the maximum amount to $15,000. In addition, H.R. 1245 calls for repayment of the tax credit if a buyer sells or fails to occupy the home within two years of purchase. The current tax credit program requires repayment if a home buyer sells within three years of purchase.  

A big thank you to Congressman Cole for his work to keep the home buyer tax credit program alive. We’ll keep our fingers crossed that his friends in Washington will agree with him and continue the dream of making homeownership a reality for thousands more Americans.  

Jan Sperry Astani
Marketing Director
Home Creations

New Home Owners Experience Goblins for First Time

One of the surprising new experiences of first-time home buyers is having ghosts and goblins appear on their doorstep begging for candy on Halloween. Apartment living, with its darkened hallways and scary stairwells, doesn’t provide the ideal environment for trick-or-treaters, so new home owners are often surprised when they hear the words “Trick or Treat” coming from their front porch.

A few years ago I had new neighbors next door, and they had never experienced Halloween on Landsdowne Drive before. I told them to be prepared for 150 – 200 kids. They were shocked. When I saw them a few days after the holiday, they thanked me for the heads-up. They had no idea so many children came out of the woodwork to collect bags and pillowcases full of candy on that spooky night.

If you’re a new home owner, find out from your neighbors how many candy bars you should buy for Halloween. In case you’re not familiar with trick-or-treating rules, you turn your porch light on when you’re ready for the onslaught of Power Rangers, Transformers, Doras and Strawberry Shortcakes. When you’re out of candy or just plain tired of answering your door every two minutes, turn your porch light off.

By the way, if you live in Norman, Oklahoma, city officials decided to have kids trick-or-treat on Friday, Oct. 30. The reason: there will be too much traffic out on Oct. 31 for OU’s home football game, and it won’t be safe for kids to be dodging all those crazy football fans driving Suburbans and Escalades.

Bah humbug Norman! Let kids be kids, and let the official day of Halloween remain Oct. 31. May the wild rumpus of scary trick-or-treaters begin!

Jan Sperry Astani
Marketing Director
Home Creations

U.S. House is Housing’s New BFF

The U.S. House approved a bill yesterday that would extend the $8,000 home buyer tax credit through December 2010 for military personnel serving away from home in 2009. In addition, the bill would eliminate the current tax credit repayment penalty if military families receive government orders to move within the first three years of homeownership.

Co-sponsor of the legislation was U.S. Rep. John Tanner, D-Tenn.

U.S. Rep. ED Whitfield, R-Ky., said in a news release, “Homeownership has long been a cornerstone of the American dream. The brave men and women who serve our nation abroad should be given every opportunity to make this dream a reality.”

 Keep your fingers crossed that the Senate will give this important bill its blessing as well. 

 Thank you to the men and women of the U.S. House for being housing’s new best friend.

 On a similar note regarding the home buyer tax credit, I was recently interviewed by a local newspaper regarding Home Creations’ experience with buyers taking advantage of this wonderful $8,000 free government opportunity. Read on for the questions and my answers.

1. How would you say the OKC market has responded to the tax credit? The Oklahoma City real estate market is blessed with reasonable pricing that puts homeownership in the hands of many people who wouldn’t be able to afford it in other states. I hope I’m speaking for all local builders and Realtors by saying that the tax credit has been a blessing to the local housing market in 2009. Home Creations sales numbers have been unbelievable. By July of this year, we had sold as many homes as we did for all of 2008. I’d say that about 75 percent of our buyers are first-timers taking advantage of the tax credit.

2. How have price ranges above the first-time range responded? We have homes from the $120s to the $250s, with our average price around $148,000 for 1,550 square feet. It’s not unusual for us to have first-time buyers purchasing a $175,000 home, and then we have families purchasing their 2^nd home in the $130s. In our market, we have a greater pool of buyers for homes priced under $175,000 than we do for homes priced above $175,000.

3. What will happen to the market here if the credit expires and Congress doesn’t renew it? In September 2008, down payment assistance was eliminated, and we feared that buyers would be forced out of the market. Fortunately, that didn’t happen. Then the government increased the down payment from three percent to three and one-half percent in January. That didn’t stop buyers, either. While we’d be disappointed to see the tax credit go away, we know that buyers will continue to find ways to purchase a home and take advantage of the numerous homeowner benefits. I saw a recent statistic that said this year’s tax credit accounts for almost 400,000 home sales nationwide. That’s amazing.

We were excited to see the U.S. House approve a bill Thursday that would extend the tax credit through December 2010 for deployed military families. The bill also removed the tax credit’s three-year repayment penalty for military families forced to move by government orders. If the Senate passes the bill, that will be a big boost to VA home buyers. Home Creations remains optimistic.

4, What’s the rush? Why should people act now? It typically takes a minimum of 30 -45 days to close a home loan once a purchase contract is signed. Right now, buyers have less than 50 days to make the Nov. 30 tax credit deadline. There are many players in the home-buying game (buyers, sellers, builders, contractors, mortgage companies, title companies, inspectors, etc), and each player needs adequate time to perform its job accurately. From our perspective as a builder, we can only control our job of completing the homes and making them ready for closing, pending the unpredictable weather. We can’t control how quickly the other players act and get their jobs done. That’s why time is of the essence for buyers to act now if they want to close by Nov. 30. The rush is on. 

Jan Sperry Astani
Marketing Director
Home Creations

The $1 Million (or $8,000) Question

One of the most popular questions that is leading readers to our blog has to do with whether or not the $8,000 home buyer tax credit will be extended beyond Nov. 30, 2009. That is the million dollar question of the day.

One of my colleagues suggested that the government would extend the tax credit at the last minute, just like the government extended the “Cash for Clunkers” program at the 11^th hour. We’ve noticed that prospective buyer traffic and Realtor inquiries have greatly increased at our show homes in the last few weeks. Sales people are once again seeing prospects they met back in the spring who are still in the market and trying to beat the tax credit deadline.

The tax credit program has definitely been a blessing to Home Creations here in Oklahoma and the national real estate and residential construction industry in 2009.

If you’re a first-time buyer who was inspired to enter homeownership because of the $8,000 incentive, let us know. Would you have bought a home without the tax credit? What will you do with the money? 

To see if you qualify for the tax credit, visit www.federalhousingtaxcredit.com. Hurry though…you have to be under contract and close by Nov. 30, 2009. Your home buyer clock is ticking.

Jan Sperry Astani
Marketing Director
Home Creations

Green doesn’t have to cost money

While the “in” color right now around the world is definitely green, are home buyers willing to pay more for a green home? Apparently not, according to a recent survey of prospective home buyers by the National Association of Home Builders. While buyers want energy efficient new homes, most wouldn’t pay more for a green home. Of those buyers who were willing to pay more for energy efficiency, 57 percent wouldn’t pay more than an extra two percent.* On a new home price of $150,000, that equates to paying $3,000 more to help save the earth.

The term “green” means different things to different people. Perhaps if the housing market doesn’t support more expensive green homes at this time, builders should look at the way they conduct their daily business and see what efforts they could implement around the office to “go green.” They can recycle paper, aluminum cans, plastic and newspaper. They can encourage employees to bring their own reusable cups from home instead of using Styrofoam containers. They can keep the office thermostat warmer in the summer and cooler in the winter to save on utility bills. They can encourage sending documents via email instead of printing so many weekly reports. They can examine and implement ways to diligently reduce construction waste on the jobsite. They can drive fuel-efficient vehicles and leave the Hummers and heavy-duty trucks at home.

Going “green” at home doesn’t have to cost money. My family and I proudly fill up our recycling bin every week for the City of Norman. I’d love to see my town implement a payment system where residents are charged for the amount of trash put out and credited for all the pounds of materials they recycle.

Would I pay more for a green home? At this time, probably not. But I will continue to encourage my company to look for more ways to “go green” during our day-to-day operations. And I’ll continue filing my big green recycling bin to the brim each week. Now if Norman would only start doing curbside cardboard recycling.

*The Oklahoman, Sept. 19, 2009

 Jan Sperry Astani
Marketing Director
Home Creations

You’re Invited To Our Tax Credit Open House Sept. 27

Make plans to attend Home Creations $8,000 Tax Credit Open House scheduled Sept. 27 at all Oklahoma City metro show homes from 2 – 4 p.m.

Home Creations has show homes located in Edmond, Oklahoma City, Moore, Norman, Yukon, Midwest City and Del City. For exact locations, call 405.364.9999 or visit www.homecreations.com/communities.     

“Time is running out for buyers to take advantage of this amazing free gift from the federal government, so we’re inviting the public out to learn more information,” said Sales Director Anita Wagoner.

Mortgage lenders will also be at the show homes to answer financing questions and help buyers get pre-qualified, Wagoner said.

According to the tax credit guidelines, buyers must be under contract and close on a home by Nov. 30 to qualify. The money is available for first-time buyers purchasing a home as a primary residence or those who haven’t owned a home in the last three years. The credit is based on 10 percent of the sales price, not to exceed $8,000. More information is available at www.federalhousingtaxcredit.com.      

Jan Sperry Astani
Marketing Director
Home Creations

 

Garage Sale to Benefit Women’s Resource Center

Go outside in your front yard and count three homes to the left of you and two homes to the right. One family out of those six homes will experience intimate partner violence, better known as domestic abuse.* Home is supposed to be where the heart is. But what if your heart, and the hearts of your children, lived in a home filled with hateful words, hitting, slapping and kicking? What if you felt trapped in your own home – a prisoner behind those freshly painted walls and newly carpeted floors – and leaving meant the risk of being beaten up, or worse, being beaten so badly that you were left for dead?

Want more alarming statistics? Over a 12-month period starting in September 2006, almost 1,900 women checked into Oklahoma shelters seeking reprieve from violence.* In 2007, 23,400 domestic abuse incidents were reported across the state to police.* And finally, here’s a proud ranking for the Sooner State – we rank 7^th nationally for the number of women murdered by men* (typically husbands, boyfriends or former partners).

As frightening as those statistics may be, Norman’s Women’s Resource Center continues to fight back for women’s rights each and every day. Founded in 1975, the agency “believes that women have the right to live in safety, to be treated with dignity, to make choices and to hope.” In addition to their battered women’s shelter, the WRC operates a 24-hour crisis line and a rape response team. As with other organizations coming on hard times during this crazy economic period, WRC funding has been cut by almost 50 percent.  

That’s why a Norman family, Danny and Bobbi Johnson and their four children ages 10 – 17, are organizing a weekend garage sale to benefit the agency. Planned for Saturday, Sept. 26, the sale will take place from 8 a.m. – dusk at Cornerstone Christian Church in Norman, on Classen Blvd. between Lindsey Street and 12^th Avenue SE. Donations are still being accepted, and Bobbi is looking for people to help at the sale.

Give Bobbi a call at 405.640.6401 if you can help or if you have items to donate. Thanks to efforts from Bobbi’s family and to the excellent work performed by the WRC, women and children may once again live in peaceful homes where the threat of violence never enters the door.

For more information about the Women’s Resource Center, visit www.wrcnorman.org

*Statistics compiled from Oklahoma state agencies like Department of Health, Oklahoma State Bureau of Investigation, U.S. Census 2000 and Office of Oklahoma Attorney General and printed on the Oklahoma Women’s Network Blog.Jan Sperry Astani
Marketing Director
Home Creations