Don't agree to additional fees from service providers

There’s often a time during closings when those attending start talking while papers are being processed. That happened during this closing. Somehow the subject of the inspection came up and the first time home buyer, a young woman, shared how the home inspector asked her to pay for his parking in the Loop in addition to his fee. No one else had arrived for the inspection yet, so the young woman not knowing any better paid for the home inspector’s parking.

Parking in the Loop isn’t cheap, but it’s part of the cost of doing business in the Loop for all of us: Realtors, home inspectors, appraisers and other service providers. Don’t let an unscrupulous service provider try to convince you that paying for his parking is customary.

Trulia’s Rent vs. Buy Index for Q2 2011 shows that if you can buy, but are thinking of renting in Chicago, you might want to reconsider your decision.

Trulia's Rent vs. Buy Map for Q2 2011

Chicago scores a 13 on the Rent vs. Buy Index putting it in the middle of the buy side of the index.

I had a phone call from a gentleman this week asking if I was the listing agent for downtown condo. I replied that I wasn’t but that I could help him as a buyer agent to which he replied, “What’s that?”

Here’s what a buyer agent is along with explanations of other common real estate titles.

Real Estate Brokers – Real estate brokers have a real estate broker’s license and operate their own real estate brokerage or work as an associate broker with another broker. Baird & Warner is a real estate broker. I have an IL real estate broker license, but work as an associate broker with Baird & Warner.

Real Estate Agents – A real estate agent is someone with a real estate license working with a broker who helps buyers and/or sellers. Since I have a real estate license and work with a broker I am a real estate agent.

Realtors – A Realtor is real estate agent who is a member of the National Association of Realtors (NAR). I am a member of NAR and thus, I am a Realtor.

Listing Agents – Listing agents are real estate agents who represent sellers, market their homes and work to get their sellers the best price and terms. With written permission listing agents may also represent the buyers for their listings in IL, but I don’t recommend it for the buyers or the sellers.

Buyer Agents – Buyer agents are real estate agents who represent buyers, help them find homes that meet their criteria and work to get their buyers the best price and terms.

Home sellers in the starter home price range are enjoying a brief sellers market as first time home buyers who waited until the last minute to make offers on homes now find themselves bidding against other first time home buyers who also waited thinking home prices would continue to decline.

First time home buyers must close their home purchases by November 30th to qualify for the $8K first time home buyer tax credit.

The week before last one of my listings received 4 offers. Even after the contract was signed, yet another buyer insisted on seeing the home so he could make a backup offer in case the sale didn’t go through. Yesterday another listing received 2 offers. In both cases my sellers asked the buyers to present their highest and best offers which dramatically increased the offers. One woman increased her initial “firm” offer by $30K on a home priced less than $200K!

Time is running out for first time home buyers using FHA (Federal Home Administration) financing and hoping to make the November 30th deadline in order to qualify for the $8K first time home buyer tax credit. One of my listings received multiple offers over the Labor Day Weekend as FHA buyers rushed to make offers with closing dates in November.

FHA mortgages take longer to process than conventional loans. Buyers using FHA financing who don’t already have a home under contract are already risking missing the November 30th deadline to close on their home purchases. One unexpected event could push their closing date past the deadline losing them the $8K tax credit.

If you’re a first time buyer wanting to take advantage of the $8K tax credit and get a deal on a foreclosure or short sale, but you haven’t already made an offer, you’ve run out of time. To qualify for the $8K tax credit, you must close on your home purchase by November 30th at the latest.

That means you need to be under contract (have a signed contract with a seller) by October 1st, if you’re using conventional financing. If you’re using FHA financing, you need to be under contract by September 1st. If you go past those dates and an unexpected delay arises, you could risk missing the November 30th deadline for the tax credit!

Either way this gives you less than 2 months to get a reply to your offer from a bank or lender, not an unusual amount of time. I have a buyer who put in an offer on a short sale over a month ago. At the time the listing agent informed me that the first offer had been submitted 2 months earlier. So it’s been over 3 months since the first offer and no response from the bank yet!

You may have missed out on foreclosures and short sale bargains, but don’t miss out on the $8K tax credit! Contact me now so we can get you in your new home before the end of November and get you the tax credit you’re entitled to!

The $8K first time home buyers tax credit expires on November 30th. Buyers have less than 6 months left to find, negotiate and close on the purchase of their home!

Both conventional and Federal Housing Administration (FHA) insured mortgages are taking longer to process this year due to tightened lending guidelines, a spike in FHA mortgage applications and new appraisal procedures. Delays with financing are more commonplace this year. The closing for a buyer of mine in Lakeview recently was pushed back 3 weeks due to financing issues.

I recommend that buyers who use conventional financing have a contract to buy with a seller by Oct. 1st.

Buyers who use FHA financing should be under contract by Sept. 1st.

Buyers who plan on purchasing a foreclosure or short sale should be making offers 2-3 months earlier. For those wishing to use FHA financing, that means now! Some lenders will respond to offers within a couple of days, but many take weeks to respond. I had a bank take 11 weeks to respond to an offer last year!

Buyers who don’t follow these timelines risk unforeseen delays pushing their closing date past November 30th and missing out on the $8K tax credit. There are no extensions!

If you want to take advantage of the $8K first time home buyer tax credit, let’s talk now!

Today the U.S. Department of Housing and Urban Development gave the go ahead to mortgage companies to develop bridge-loan products that enable first time buyers to use the benefits of the $8,000 federal tax credit upfront. Such loans let the buyers borrow against the tax credit giving them up to an additional $8,000 for a down payment or closing costs.

However, the loans can’t be used to cover the minimum 3.5 percent down payment required for FHA insured mortgages. Contact me for more details.

The IRS has developed a page on their site with links to answers on a variety of questions related to the first time homebuyer tax credit. Visit “First-Time Homebuyer Credit: Answers“. Take advantage of the $8,000 first time homebuyer tax credit good for home purchases through November!

The National Association of Home Builders released a list of 21 frequently asked questions about the first time home buyer tax credit. Also check out my post about combining the tax credit with FHA financing.