First Time Home Buyer's Tax Credit

Great News! The bill with the tax credit extension has passed both the House and Senate. It will be going to the President's desk in the next day or so to be signed. There are a few good changes and the National Association of Realtors has been instrumental in pushing this. The NAR has posted a comparison chart on their website with good info.

http://www.realtor.org/fedistrk.nsf/files/government_affairs_tax_credit_ext_chart_110409.pdf/$FILE/government_affairs_tax_credit_ext_chart_110409.pdf

Check it out and give me a call to see how I might be of service.

Marty Bautista, CRS, TRC
Frank Howard Allen Realtors
415.925.3272

Tic-Toc... Don't loose your $8,000 Tax Credit

The time clock is winding down with the December 1st, 2009 deadline fast approaching for the $8,000 tax credit. Almost all of us in real estate see the surge in first time home purchases in the entry level price range. Some of my colleagues and I are focusing the next few weeks primarily on assisting our first time buyer clients achieve their dream of home ownership. I invite you to connect with me or one of my CRS Professional colleagues.

The National Association of Home Builders has posted some very informative pages explaining the Tax Credit.

http://www.federalhousingtaxcredit.com/2009/glance.php
http://www.federalhousingtaxcredit.com/2009/faq.php

I look forward to sharing your stories of success!

Doing The Financial Two-Step

Direct Lender, Bank, Mortgage Broker or Internet, where do we go? I've heard pros and cons from all sides. In a recent meeting with a well respected mortgage broker, I learned of the many various tools at her disposal. One that caught my attention was her information on the beneffits of FHA loans. She discussed that:

FHA (Fair Housing Administration) loans are federally insured loans backed by HUD (Housing and Urban Development).

FHA loans are a great vehicle for buyers with very little down and / or first time buyers. Here are some of the great benefits of doing an FHA loan:

• As little as 3.5% down (can be all gift funds)
  
• Minimum credit score 600
  
• Loan amounts up to $625,500
  
• No reserve requirement (savings history)
  
• Primary residence only
  
• Co-signers OK
  
• Debt to income ratios as high as 50%
  
• $8,000 credit for energy efficiency improvements

After seeing the benefits, you might not understand what this all means. On a standard conventional loan, you are currently required to put down a minimum of 10% down, compared to 3.5% on FHA. On a conventional loan you are also required to have a minimum of 3 months reserves, the reserves consist of the new mortgage payment, property taxes and insurance in an account after the purchase closes.

FHA loans are for the purchase of a primary residence only, (1, 2, 3, or 4 units), but you must live in the property. (no investments properties).

If you have a difficult time qualifying for a property on your own, FHA will allow parents or sibling to help you qualify.

Debt to income ratio means the percentage of your income that is taken up by your mortgage payment, property tax, and insurance or home owner’s dues, along with any additional credit card debt, auto payment or student loans. On a conforming loan the maximum debt to income ratio is 45%, FHA allows 50% (maybe even slightly higher, depending on the strength of the borrower).

FHA offers an energy efficient package up to $8,000 in loan reimbursement. The property is inspected by an FHA inspector who completes a report verifying what items will help conserve energy in the property (new windows, new heater, etc.).

There are some pretty amazing features FHA loans offer that a standard conventional loan does not offer. If you think it might be something you would be interested in learning more about this, please feel free to contact Gina Kemsley with RPM Mortgage; 415.464.3144

Resource List

Welcome to Marin. Now that your here, who do you call? Where do you go? Where do you eat? My Intern Assistants have created an easy to use resource guide/phone list for those of you coming to Marin. You can easily access it on our www.DreamTeamMarin.com/Resource.html page of our website.

You can also see all of the wonderful activities Marin has to offer as well as Marty's restaurant guide on: http://www.martybautista.com/Marin%20County.html

We hope you can appreciate all that we have come to know about Marin and look forward to seeing you out and about.

Marin First Time Home Buyers Solutions

Ready... Set.... Go....

What a great time to buy your first home. Marin County finally went above a 50% eligability of residents being able to purchase a home in Marin. This is up from 2 years ago when it was around 18% of the residents qualified financially for a house. I have conducted seminars in the past and below is the out line and notes.

Home Buyers 101

Deciding to buy- There are many reasons why people decide to buy a home. For some it is what they should do because Mom and Dad did it. For others it is a good investment tool for their future. However, most people I talk to just want to own their own property, their home, their investment property. Deciding to buy is is not a decision taken lightly. With the right direction and help it can be the most important and empowering choice of their life.

What does the “Home” mean to you?- This is a question I ask all of my potential property buyers to ask of themselves. There is no correct answer but the truth in it will help greatly in locating the right property for you. Be aware that most people go through life changes every 6 years or so and I suggest it a good idea to plan for the future.

What amenities are important to you?- This is the basics; how many bedrooms, bathrooms, kitchen type, sun exposure, views, schools, garage, style, neighborhood, fireplace, pool, play area, fixer, etc..... The list is endless. I usually ask Buyers to make a list and prioritize it. Then ask your selves what do you absolutely have to have and what would you like to have. It is ok if you do not know exactly. Some people just want the home to "feel" right. It is a good idea to go out exploring with your agent.

Committing to one Agent- This is a very important step. I strongly advise that it is best to commit to One Agent and to have that agent commit to you. Most agents talk with several people about buying property. They will always favor the clients who are committed to them. I do. When someone is committed to me to represent them in the purchase of their property, I put them on the "short list". Point Blank, when that good buy comes along in the hot market they get the call.

Financing- The financing of a home or income property is one of the most important decisions for a Buyer to make. This decision could have a major affect on their lives for the next thirty years or so as well as potential added stress to the escrow. I advise all buyers to speak with at least one if not three mortgage brokers concerning available rates, what types of paper work will be needed to secure the financing, what time frames they can work within and how compatible you are with them and they with you. I also recommend that you only run your credit report once and obtain a copy of it to pass on to additional potential lenders. Multiple credit checks may lower your credit score. Click Here to go to my Financing page with recommendations for local Marin mortgage brokers.

Knowing the areas and communities- The biggest factor for most people about their home or investment property is the location. I am sure you have heard the old adage, "Location, location, location". It is a good idea to explore the areas and get a good feel for them. It is also a good idea to keep a watch on the market in your targeted areas. Here my Home Alert site will come in useful.

Schools- Marin has very good schools available. Consult with your agent about what schools would be the best fit for your situation. Even if you do not have children in school, good schools and school districts tend to keep better property values for their neighborhoods. If you would prefer to do your own research Click here to go to the school links page.
Churches- Marin has a wide variety of places of worship. Click here to go to the marin.org resource list for Marin.

Commuting- Commuting through Marin can be quite challenging as with any other thriving metropolis. It can also be quite bearable. Check with your agent about respective commute times from potential cities if you are unsure. If you are commuting to the San Francisco Financial District I suggest to check out Golden Gate Transit. The commuter busses have convenient routes and stops and I always seem to see the commuters standing in line at the stops. My favorite method of traveling to SF is on the Larkspur Ferry. It is a nice ride with cocktail service available. Click here to go to the website for the GGT.

Shopping- Marin has convenient shopping centers throughout as well as being close to San Francisco for major shopping excursions. To locate stores, businesses and restaurants I go to SBC'c smartpages.com or to MarinMarket.com

Locating “Your” home- Once you are emotionally, financially and physically ready to buy, the real search process begins. Your agent will help you with this process. They should have a lockbox key or be able to make arrangements to show you potential properties. Here to I suggest using the Home Alert site to see the new listings in real time..

Writing Offer- Once you locate your property, it is time to write the offer. The offer is written on a standard purchase contract. Your agent should be very familiar with the contract and how to use it to best protect your rights and concerns. Once you sign the offer, you will be expected to provide a good faith deposit check. The agent will hold this in a secure trust funds place until your offer is accepted and ratified. Then it will be sent to the Escrow officer to be deposited into the escrow account. Don't forget to include a Home Warranty in your contract.

Negotiating- The negotiating of the contract is the bringing together of the Buyers and Sellers desires for the terms and conditions of the sale of the property. This can be very complicated and almost always is very emotional. Sometimes there are "Multiple Offers" and most times only one. Your agent can best inform you as to the current market trends. I ask my Buyers to be available by phone and fax during this process.

Opening Escrow- Once your offer is successfully negotiated and accepted, your agent will open escrow with the Escrow Officer/ Title Agent (in Marin it is usually one in the same). The Deposit Check will be sent to the Escrow Officer. The time clock begins...

Escrow Process- The escrow process usually seems like a rollercoaster ride. I set up a time line on a calendar for my clients so that they know what steps we will be taking and when. It is important to keep watch of the time so as not to be in breach of contract and possibly forfeit the deposit. It is very important to start searching for Insurance just after opening escrow. If you don't already have a local insurance agent, check on the Resource List for some suggestions.

TDS- During beginning of the escrow you will receive the Disclosure Statements. Once you receive them you will have a few days as set forth in the contract to review them. If you have any additional questions after reviewing them, I advise to put the questions in writing and have them sent to the Seller ASAP within the disclosure time period. If you find anything objectionable, this would be the appropriate time to get out.

Discovery- I call the inspection process the Discovery Period. During this time (as set forth in the contract) you will have the ability to perform any inspections that you deem necessary to understand the property and items concerning the value. This could include: Pest Inspection, Home Inspection, Soils Engineer, Chimney Inspection, PG&E Courtesy Inspection, Roof Inspection, Structural Engineer, City/County permit review, Clue Report (Insurance Claims), School District, Police Reports for the neighborhood, or anything else that may be of concern to you. Resource List

Loan Approval- The contract will stipulate a specified number of days for the Loan Approval. This means that the mortgage broker needs to have the lender approval by this time which will require an appraisal and in most cases all of your financial data.

Deposits- As specified by the contract, there will be a time in which an increase of deposit will be needed. Generally if this is within less than 10 days of closing the escrow officer will ask for a cashier's check or money wire transfer. Just before close of escrow there will be an additional amount of funds required to close escrow. At the signing the escrow officer will give this figure to you.

The “Signing”- The Signing is the term we use for when the Buyer goes to the escrow office to sign the loan papers. At this time they will review the escrow account and reconciliation of funds. The Buyer(s) need to bring with them a driver's license or other acceptable form of ID so that the escrow officer can Notarize their signature. Most signings take about an hour.

Closing- The closing is when the escrow officer has received all funds to close and sent the deeds out to be recorded. When we have confirmation of the recording the escrow is considered to have "Closed".

Keys- You will receive the keys to your new home property either at time of closing or when the Sellers have vacated after a rent back. I strongly advise to change the locks or re-key all locks when you move into your new home. Resource List

Moving- Moving is my least favorite part. It is not fun in my book but it does allow for some much needed purging and organizing. I suggest to start packing well in advance of the move. There will be so much required of your time during the last few days before closing. I also recommend to hire a professional, licensed and insured mover. Start shopping around for a mover 3 to 4 weeks in advance of the move. Resource List

Setting up Utilities- Setting up utilities in advance is important to do in advance. Many times during the year the telephone, cable and dsl companies are backed up for weeks in advance. Resource List

To see how this process has worked for many Home Buyers, see my Testimonial Page. Hopefully we will see your testimonial here soon.