Homebuyer Tax Credit Repayment to be Eliminated?

This just in from the Greater Piedmont Area Association of Realtors:
"The House Ways and Means Chairman has voted out the tax portion of the economic stimulus on a party-line vote, 24 - 13. It contains a provision that would eliminate the repayment feature of the $7500 first time homebuyer tax credit for purchases between 1-1-09 and 6-30-09. An amendment that would have significantly modified the credit was offered, but failed on a party line vote. During the course of debate on the Heller amendment, however, senior Committee member John Lewis offered vigorous support for extending the effective date of the credit through year-end. The National Association of Realtors continues to push to have the credit extended and expanded. A vote on all the parts of the economic stimulus (tax and non tax) is expected in the House on 1-28-09."

Since most potential buyers didn't realize that the tax credit had to be paid back, this isn't likely to bring a collective sigh of relief. However, this step IS important. I want to make sure my Buyers get as much help and encouragement as possible and if the credit isn't extended or expanded, it is set to expire in July of this year.

Foreign Investors to Boost US Commercial Investments by 73% in 2009

While we usually offer information based on residential sales, an article provided by the Commercial real estate service, CoStar, recently caught my eye.

Despite the slowdown of foreign investments towards the end of 2008, the US commercial market may see a significant increase in foreign investors this year. The Association of Foreign Investors in Real Estate (AFIRE), which represents 200 members holding $1 trillion in real estate, released the results of a recent survey that found 73% of foreign investors plan to increase their commercial investments in the US in 2009. This will be supported by an expected 58% increase in financing through foreign lenders.

Why the US?

• Stability & Security. 53% of respondents said that the US is the country with "the most stable and secure" real estate investments. Our laws protect and promote property ownership.
• Attractive Opportunities. "Respondents reported that finding attractive U.S. investment properties is becoming less difficult, with fewer than 20% describing it as "very difficult" -- the lowest percentage holding that opinion in the last five years."
• Asset Appreciation - "37% of those surveyed ranked the U.S. as the nation providing the best opportunity for asset appreciation."
• High Expectations. Most importantly, foreign investors and lenders are eying the US with the expectation that it will be the first global financial power to recover.

What about our area? Our metropolitan area is, according to the article, to be THE hot spot for investors.

"With the excitement over the incoming Obama Administration and the renewed demand for space that comes with a change in government, Washington, D.C., has emerged as the belle dame among U.S. commercial real estate markets in most product types, and foreign investors ranked the Nation's Capital as the top city in the world for foreign investment. For the first time in two years, D.C. topples New York City, which falls to third behind London in the wake of the Wall Street meltdown. "

What will they be looking for? The investors responded that they will be looking for the following (ranked according to popularity):

1. Multifamily
2. Office
3. Industrial
4. Retail
5. Hotel

Read the whole article here.

Tips on Buying "REO" properties

TIPS ON BUYING “REO” PROPERTIES
Courtesy of Graystone Realty, LLC – graystonerealty.com

By Lynn Stone, Broker

A property that is taken back by the mortgage company, bank, or investor after an unsuccessful foreclosure auction is known as Real Estate Owned (REO.) Purchasing an REO is different from making offers to an owner/seller.

• Mortgage companies, banks, and investors have their own protocols for selling their REO properties. Generally, they offer their properties at competitive prices because they desire quick sales. However, they want to get the best price possible based on research done by local Realtors through Broker Price Opinions (BPO.)
• Because the prices are competitive, there may be several buyers making offers on these REO properties and bidding wars may ensue. When more than one offer is submitted, the bank will usually send out notices that there are multiple offers and that each bidder should respond with their “highest and best” offer by a deadline. The bidding is then closed and the bank studies the offers, considering both price and terms. It may be that the highest offer contains many contingencies (home/radon inspection, financing contingency, etc.) that make it less attractive to the bank. In that event, a lower offer with better terms may be chosen. While contingencies are for the protection of the buyer, you do not want to include frivolous terms as contingencies in a competition of this sort; you want to make your offer as “clean” as possible, while protecting yourself with necessary contingencies regarding condition of the property and financing. Keep in mind that banks will not accept offers contingent upon the sale or settlement of another property. Also, banks do not allow pre-settlement occupancy or decorator’s agreements. Banks may also charge a per diem (up to $150) for delayed settlements, if the cause for the delay is on the buyer’s side.
• REO properties are sold in “AS IS” condition without any warranties. Most banks will not make repairs. You are advised to have a home inspection for informational purposes. If structural or mechanical (electrical/plumbing/HVAC) deficiencies are found, you may ask the seller to make repairs. Some banks have conceded when asked. Or, sometimes your “clean” contract may have removed the home inspection contingency or never included it initially. In that case, discuss the options with your Realtor, as you may want to have an inspection before an offer is submitted.
• Once an offer is accepted, the bank will provide a standard clause addendum for you to sign. No changes may be made by the buyer, so please read this form carefully before signing it, as it cannot be amended.
• Generally, it takes several days to obtain a verbal counter or acceptance from the bank. If accepted, the contract is considered ratified. The escrow deposit, usually made payable to the selling agent’s firm, may have to be made payable to the listing broker or to the settlement agent in certified funds. Some banks require that the escrow deposit be forwarded to the bank/seller after buyer’s financing contingency is removed from the Contract of Purchase. There may be other addenda required by the bank as the transaction progresses; any forms submitted to the bank usually must be in original format, not copied.
• Normally, an REO transaction may take thirty to forty-five days; however, if circumstances occur regarding the deed of foreclosure or other title issues, it may take longer.
• Communication throughout this part of the transaction may not be easy, as the agent representing the seller may not have direct contact with the bank/seller. Answers to your questions could take several days to be communicated back to you. Patience is required.
• The bank/seller’s addendum will dictate that the buyer use the settlement agent employed by the bank/seller for all their foreclosures. Money-saving advantages such as lender’s title insurance and other benefits may be offered. The Real Estate Settlement Protection Act (RESPA) states that buyers have the right to choose their own settlement company if they so desire.
• Once settlement occurs and the HUD statement is signed, the buyer may still not be able to take possession of the property. Sometimes it takes 24-48 hours for the bank/seller to complete settlement and all documents, title, and deed are recorded. (Court houses are not open on weekends/holidays.) Therefore, you should not depend on a set settlement date or make definite moving arrangements until you know when recordation will occur. When giving notice to a landlord, please arrange for extra time; you cannot move into the REO property until the bank/seller releases the keys. Some bank/sellers are more lenient in this regard than others.

Although the purchase of an REO property is attractive to a buyer, the buyer who is armed with the knowledge of how to proceed is more likely to be successful in closing a transaction. Consult with your buyer’s agent regarding the offer itself and listen to your agents recommendations as the transaction progresses. Do not hesitate to ask questions, and remember to be patient; the result will be a pleasurable transaction that all parties feel good about.

First Time Home Buyer Tax Credit

President Bush just signed the Housing and Economic Recovery Act of 2008 (H.R. 3221) into effect. The Act is aimed at helping home buyers and strapped borrowers, strengthening the housing finance system, and ending the current cyclical downturn in the housing industry.

What does this mean to you as a buyer? Well, if you're looking to purchase your first home (after April 9, 2008) before July 1, 2009, you can qualify for up to a $7,500 tax credit. For more information on this program visit http://www.federalhousingtaxcredit.com/

Not a first time buyer? You still benefit from this bill. The following is courtesy of the NAHB press release:

• FHA modernization and expansion. A revitalized FHA will have greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and play an important role in the mortgage markets. To address the foreclosure crisis, the FHA is given additional authority to insure up to $300 billion of mortgages to refinance loans headed for foreclosure.
• GSE (government-sponsored enterprise) reform. The law reforms the regulation of Fannie Mae and Freddie Mac and permanently increases the conforming loan limit to help buyers in high-cost markets. To reassure financial and global markets, the government will temporarily expand its line of credit to Fannie and Freddie and permit the U.S. Treasury to purchase an equity stake in the companies through the end of 2009.
• Mortgage Revenue Bond Program. The measure gives states the ability to issue an additional $11 billion in mortgage revenue bonds, which will help strapped borrowers seeking to refinance their home loans.
• Low Income Housing Tax Credit. Enhancing this program will expand the supply of much-needed affordable rental housing.

"REAL" Real Estate Statistics

The real estate industry has made quite a few headlines lately. From network news stations to websites across the internet - we are being bombarded by statistics about the market (usually obtained through the National Association of Realtors.)

It is important to remember that every market is unique. The market in San Francisco, California has little to do with the market in Culpeper, Virginia...but the national statisics don't differentiate. That's why it is important to know your local market.

Our Piedmont area is primarily served by the MRIS (Metropolitan Regional Information System). The MRIS provides monthly stats to member agents. (You can access them at http://www.mris.com/reports/stats/) It makes much more sense to use MRIS statistics than it does to go by national statistics, but should you relay completely on those stats?

The answer is "No." While the market snapshots provided by the MRIS database are very helpful for a quick overview of the market, a good agent needs to do his or her own research to get an accurate picture of the market.

To prove a point, I completed a search of the residential listings on the market in Culpeper County as of April 17, 2008. Here is what I found:

MRIS Total Listings: 874
Months of inventory predicted by last month's sales: 30

I could've stopped there, but I wanted to make sure that I was getting an accurate picture of the market, so I did some additional research. I found that there were 220 residential listings that weren't existing residences. How can that be, you ask?

Duplicates: 4 (usually the same home available with difference acreages)
Condos (To Be Built): 27
"Paper listings" (To Be Built): 189

Realtors representing builders use what is commonly known as "paper listings." You've probably run across them if you've searched for real esatate recently. They are easily identifyable by the "Similarity Photo" written across the photo or "To Be Built" in the description. While these paper listings are of vital importance to builders who need to show potential buyers exactly what they can get for their money, the unfortunate consequence is the negative effect on the market stats.

The REAL number of residences available: 654
REAL months of inventory predicted by last month's sales: 20

That's 10 MONTHS difference!

The moral of the story, folks: not all statistics are created equal. Make sure that you base important decisions on ACCURATE facts!

Looking for hay?

The drought in our area has hit local farmers and horse owners hard. Here are a few helpful links for those in need of hay:
USDA’s online hay network
HayExchange.com
Virginia Department of Agriculture Hay Clearning House
Hay Barn.com - Virginia

Welcome to the Graystone Realty Blog!

Hi! Welcome to the Graystone Realty blog.

My name is Stephanie Pennell (formerly Clatterbuck). You could say real estate is in my blood. I grew up watching my father, custom home builder Anthony Clatterbuck of Graystone Homes, making real estate deals and interacting with both Buyers and Sellers. He taught me the value of honesty, integrity, and hard work - principles I live and work by.

In 2006, I received my real estate license and went to work as Lynn Stone’s assistant. Lynn is a wonderful teacher and role model and I learned many valuable lessons from her. I am thrilled to be able to continue working with her as full fledged agent. My current position as a Realtor for Graystone Realty is my dream job. I am able to work with things I am passionate about: land, homes, and helping people realize their dreams!