Stimulus Plan to Give $15,000 to Home Buyers

If record-low interest rates and an abundant supply of houses on the Portland market weren’t enough to make you eager to start looking for a new home, the Senate yesterday passed a proposed economic stimulus package that includes $15,000 for home buyers purchasing within the year.

The plan would give a tax credit of $15,000 (or 10% of the home’s purchase price, whichever is lower) and applies to all buyers – not just those purchasing their first homes. The Senate plan has no income limits and, unlike the tax credit passed last summer as part of the Housing Recovery Act, does not have to be repaid.

At the same time, mortgage interest rates are expected by many to fall to 4.5% in the coming months.

Is a sizable tax credit combined with a rock-bottom interest rates and unprecedented selection enough spark stagnant sales? Or are potential buyers going to continue to wait, believing that our market has not yet hit bottom?

Current home prices in Portland metro area are down 17% from their peak. Houses in the local market usually sell quickly when priced at 80% of their peak price.

Home buyers waiting for the real estate market to hit bottom will inevitably be caught making their purchase as house prices are on the rise. There may never be a better time to find the home of your dreams….

Top 10 Ways to Make Home Buyers Hate Your House

Even though home buyers are all looking for something different, the majority will turn around and walk back out your door if they notice one or more of these problems:

1. Odors
If you smoke indoors or have pets your house might smell bad, even if you don’t notice it. Ask a friend or neighbor who doesn’t live there to take a whiff… and don’t get angry when they tell you the truth.

2. Dirty Bathrooms
Scrub them, paint them, buy a new shower curtain, rugs and towels–do what it takes to make them shine!

3. Dimly Lit Rooms
Replace dim light fixtures, remove heavy drapes, repaint some rooms with light colors and clean your windows inside and out to bring in more light.

4. A House Full of Busy Wallpaper
Don’t paint over it, because it will be obvious that you did… and ultimately make removal even more difficult.

5. Damp Basements
Most are not due to faulty foundations but occur when rainwater is not diverted away from the house. Prevention can be surprisingly inexpensive.

6. Dogs that Meet You at the Door
Dogs frighten some people and irritate others. Remove pets during showings if possible.

7. Bugs
There are many natural products that can help safely and effectively get rid of insects.

8. Gutters with Plants Growing in Them
Make buyers wonder what else hasn’t been maintained and can contribute to a leaky basement.

9. Sellers Who Hang Around for Showings
Home buyers feel awkward about opening closet doors and lingering for a really good look at the house if the seller is home. Give them their space!

10. Poor Curb Appeal
See above…

Landscaping and Curb Appeal

Trade Up – The Opportunity of a Down Market

Mortgage Rates Plummet Thanks to the Fed!

Should You Buy Your Home Now?

How to Find Your First Real Estate Investment

1) Determine a location and strategy
Define the area you want to invest in based on economic fundamental research; this includes breaking down your criteria to find the best neighborhood to suit your investment style. Next, you’ll want to determine your strategy. Are you specializing in long term holds (and if so, how long will you hold)? Short term flips? Renovation deals? Foreclosures? Tip: Review your financial plan and personal goals for the next 15, 10, five and three years. This will help you decide which strategy to use when looking for your property. Start from the end goal and work backwards.

2) Get pre-approved
Do you have your financing in place? Get pre-approved. You may not always know where your financing is coming from, but it is less stressful to have a few options lined up, and doing so makes you look like the professional you are. Be certain to have a back-up plan, or Plan B, to close your deal if things don’t go as expected at the bank or lender. Tip: Before you go to the bank, prepare a detailed financial binder. Include your employment history, tax statements, asset and liability sheet as well as current financial statement.

Should you consider buying a home in the current market?

The current real estate market is definitely a buyer’s market. With the high availability of homes on the market and interest rates at historical lows, this is an opportune time for buyers to purchase the home of their dreams at an affordable monthly payment.

If you have been saving to purchase a first home and have a good credit score and reasonable debt-to-income ratio then this is a great time for you to buy a home. Not only will you have a variety of homes to choose from, some that may not have been affordable if the market had been different, but you will also be able to obtain an affordable loan payment at a low fixed interest rate.

Be cautious, however, not to buy beyond your means. Consider all the costs of home ownership, such as upkeep, taxes and insurance, before you buy!

This is also a great time for renters with a stable income to consider purchasing a home. With so many homes on the market, many due to foreclosures, you may be able to find an affordable home that requires very little down. You could even look into purchasing a small home, holding it until the market turns upward, then sell and move into a larger home.

Newly retired couples, who have their home paid for and good retirement, may find this is a good time to purchase a vacation home.  With the good interest rates and the lower home prices, they may find a good deal that they otherwise may not have been able to afford.

For those who have money to tie up, this is a great time to purchase a home as an investment or rental. As a precaution, it is important that you can afford to hold onto the property for awhile. Use your purchase as a rental property for  a few years. When you’re ready to sell it, you’ll find you’ve made a good investment.

On The Fence About Buying A Home?

Owning a Home isn’t the same kind of investment as stocks and bonds. What you get is a USE asset that depreciates over time while it grows in market value. All you have to do is keep your home in good repair to maximize your investment.

Don’t Let The Economic Headlines Scare You Away!

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