Fact Check.org explains it this way:

The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

Now, I don't know about you but if I make a profit of $500,000 on my home I will gladly pay the government a 3.8% tax on the amount over $500,000.  We should all be so lucky.....With what has happened to the real estate market in the last three years I don't too many of us will be subject to the tax.

As with any of your real estate questions, please give us a call and we'll be happy to discuss it with you.  If we don't know the answer we will find someone who does.

Not all Multiple Listing Services send their listings to Trulia, Zillow or even Realtor.com.  In Charlottesville, our board of directors decided a few years back to only send to Realtor.com because that was the site of the National Association of Realtors. The syndication of listings was delegated to the individual offices.  Our office subscribes to List Hub and service that sends our listings our to sites all over the web.  The feeling being that the more places our listings showed up the better it was for our sellers.  More exposure means more buyers are looking at the home. 

Just this morning I got an inquiry from a buyer about a listing that was not mine and was under contract.  That listing was still showing active in Trulia although it was now under contract.  The aggregators are quick to upload the listings but not to update them.  They seem to like to have lots of property out there regardless of the status.  I emailed her back and told her it was not available and let her know that much of the data she sees on Zillow or Trulia is not up to date and she would be best served having a Realtor sending her information on the criteria she was looking for.  She agreed and sent me her must have list along with her contact information.

Almost everyone starts there search online and who knows where they will look first.  I tell my Seller's these days their first showing is online and if it doesn't look good online they won't get the second showing.  We are at a crossroads, in my humble opinion, of which way to go.  Do we pull our listings from these aggregators and rely on our own websites and MLS sites to satisfy the hunger of the cyber buyer out there, or do we accept that we've opened the barn door and find ways of conducting our business that will be beneficial to our Sellers and yet give Buyers accurate information that will help them in their buying decisions.  It's something to ponder, what do you think?

Here is the video from the President of ARG in San Diego.  Your comments are welcomed.

We all, me included, have been saying it's a good time to buy since 2008.  None of us ever expected that the housing bust would last as long as it has.  I've been in this business for 26 years and never in 1000 years did I ever think we would see 20% of our Charlottesville market be short sales and foreclosures.  It's happen and it's a fact.  Prices have fallen as much as 25% in some areas and even those buyers who did all the right things now find themselves upside down in their home.   But, I do believe prices have stabilized and Sellers have gotten the message.  Prices now are more reflective of the actual market than they were two years ago.  Everyone, Realtors and Sellers, have gotten the message that Buyers won't buy unless the price is right and the condition is perfect.  My Seller clients often hear me say "It's a price war AND a beauty contest, and YOU have to win both."  That's not to say everyone has accepted the realities of this market, there are some properties that are STILL overpriced.  It takes an experienced Realtor to separate the  good from the bad.

As far as prices, they do seemed to have stabilized and I think (I hope) we won't see much further depreciation in 2012.  I don't have a crystal ball, and my thoughts are also hopes.  It seems that when I am pricing a home today using comps that are only 4 or 5 months old that my suggested price to my clients is pretty much on the mark.  My listings in 2011 sold for 98% of what I listed them for.  Pretty good.....if I do say so myself. 

So, if you are thinking of buying a house in 2012 I think this has been the best time in a long time.  Interest rates are SO low!  I can't imagine they will get better, only worse.  If they go 1% higher (and they will) next year, even if prices do drop another 2 or 3%, your payment will still be higher.  You should really look at what happens if interest rates go up another percent.  That in itself will make a difference.  You need to buy now, even if you don't buy from The Savage Team, just do it!

A 15 year mortgage saves you lots of money.  If you can afford the higher payments.  If you keep your job and if you don't have to move for some unforeseen reason.  (Like a better job.)  If you have to move and you can't sell your home, can you rent it at a price that will cover the higher mortgage payment you are making?  If not, the negative cash flow could cripple you financially.  You can keep renting and losing money or you can sell at a loss and lose money.  Your choice.

In this market, with the ultra low interest rates, I believe the best option is a 30 year mortgage.  In fact, if I could lock in a loan for 40 years I would do that.  With inflation on the rise you will be paying back the loan with ever cheaper dollars.  A 30 year loan also gives you the flexibility to make extra principle payments and save thousands in interest that way.  (Be sure your note has a clause expressly allowing this.)  

Since you've read this far, you're probably a serious student of the home buying process.  Keep reading, keep studying, keep watching all the markets.  You'll do well.

1)  Do you own the home you are in?  (If you do and it is not on the market, how are you going to buy another one?)

2)  Do you rent your home?  (If you do and you have lease obligations, how are you going to buy?)

3)  Have you been pre-approved by a lender?  (If not, how do you know you can afford this home?)

4)  Are you working with an agent?  (If you are, you should have your agent show you the home.)

To save yourself time and disappointment, get pre-approved by a lender.  You'll know exactly how much home you can afford.  A good Buyer's Agent can walk you through the process.  ( I go to the lender with my client to explain and interpret "bankerese".  It also alerts the lender that the buyer has someone there familiar with the process so they don't try to sell you on a loan that might not be the best for you.)  When you know that you qualify for a loan you can put in motion the other steps in the process.

]]>http://www.wesellcharlottesville.com/Blog/The-CAAR-third-quarter-market-reportWhat-does-it-meanhttp://www.wesellcharlottesville.com/Blog/The-CAAR-third-quarter-market-reportWhat-does-it-meanMon, 10 Oct 2011 03:00:00 GMT Buying a home should not be considered an investment.  Your home is, well, your home.  A home is a dwelling place together with the family that occupies it!  Do you keep pictures of old stock certificates on your mantel?  How about photos of those Beanie Babies you thought would be ever more valuable?  But, I'll bet you have many pictures of homes you've lived in.  I'm sure you look longingly at them, remembering all the wonderful events that happened while you occupied the home.  Look, you're going to pay for housing whether you buy a home or rent an apartment.  That money is not lost, it provided you with the most important of neccessities, shelter.  When you buy a home the last thing you should worry about is how much you can make when you sell it.  Think about how much you will love living there.  Think about the security and happines it will afford you and every member of your family.  I remember every home I've lived in and each memory brings feelings of warmth and love and security and laughter.  When I think of investments I've made my emotions are somewhat less warm and fuzzy.  An investment is a business decision, buying a home is a lifestyle decision. 

Just suppose, after living in your home for 15 or 20 years, you can sell it not at a profit but at the price (adjusted for inflation) that you paid for it.  You've lived for free!  Even if you don't recover your initial cost, you have had a home all those years at very little cost compared to renting.  And should you make a profit, well, profit is good, but memories are priceless.

We welcome your questions.

Once you and your Realtor have found a home, have your Realtor do a Renovation Value Analysis.  The main reason a 203(k) loan falls through is underestimating the real cost to repair the property.  The property plus the renovation costs must appraise.  When making your offer be sure your contract includes an FHA 203(k) financing contingency.

You can save money using "sweat equity" by doing some of the renovation work yourself if you are qualified.  Work with your contractor, work must start within 30 days of closing and must be completed within 6 months of closing.  (Some lenders require less than 6 months.)

Communicate.  Be sure your contractor, your lender and your Realtor communicate with you and with each other.  This is a team game.  One weak link can hold up the project and the clock will be running from the day of closing.

Be prepared to work hard.  Learn what work is required and what you would like to do beyond the requirements.  There is so much you can do with 203(k) funds . . . new appliances, window and doors, carpeting, painting, roof and gutters are just a few. 

Enjoy the benefits of buying a home and renovating it to suir your tastes.  One loan, one closing, one mortgage payment.  Remember, homes needing renovation are typically the very best buy available!

Paul Jones is a  Certified 203K Specialist and will be happy to answer any questions you might have. You can reach him at Paul@savageteam.com.

     Some times there are "points" which are a percentage of the loan amount.  Discount points usually buy the loan down so you can obtain a lower interest rate.  But, be careful when paying discount points.  You need to be sure that the amount you are paying up front is really worth it.  If you only plan on being in the house less than five years the monthly amount saved may not be worth the cost up front.  A loan origination fee is sometimes referred to as "points" too.  They don't buy your rate down but it is usually a fee the lender is charging to make the loan.  

     The attorney will charge a fee to conduct the settlement and that ranges between $450-650.  You can also close at a settlement company and save a few dollars, however if you have a problem with your closing you will not have legal representation.  The attorney or closing company will arrange for a title search to make sure the title is clear and doesn't have any liens or title defects.  Then your lender will require that you obtain title insurance to insure them against any future title defect.  While you are at it you should probably go ahead and buy owners title insurance as well.  It's a small one time premium, especially if combined with lenders coverage.  Then you will be protected against any future claim to your property from an unknown heir, a boundary dispute and many other issues.  Title insurance isn't cheap and can vary from company to company.  The Savage Team and other agents at RE/MAX Assured Properties are owners of Affiliates Title.  Our clients all receive discounts on their title insurance.

Then there are all of those recording fees, another name for taxes.  The County of City governments charge you a fee for recording the deeds and mortgages.  They can get pretty pricey and can amount to several thousand dollars.  Also, if the tax assessment is more than what you paid for the house, too bad.  You have to pay the recording fee based on the higher amount!

The lender probably collected a fee for the appraisal at the time of loan application and for the credit report but those too are closing costs and will be listed on the settlement statement.

In addition to closing costs you also have to what is known as "prepaid items".  These are items that need to be paid in advance.  You must buy a homeowner insurance policy for one year.  That one year charge will be on your settlement statement.  In addition, you will need to place in an escrow account anywhere from 2 to 6 months worth of payments towards your homeowner insurance for next year.  They will also collect a portion of the property tax to put in the escrow account and again, depending what time of the year you close, they will collect anywhere between 2 and 6 months of payments for your escrow account.  Then the last prepaid item is interest from the date of closing until the end of the month.  If you close on the 1st of the month you will prepay the interest for the entire month.  If you close on the last day of the month you only pay one day of interest.  So, closing on the 1st of the month can increase the amount needed for closing by almost a months payment.  That doesn't mean you are actually paying more to close at the beginning of the month.  If you close on the 31st of October your first house payment will be due December 1st.  But, if you close November 1st and pay the interest for the entire month, your first house payment isn't due until January 1st.  Pay it now, or pay it later.  

So, you can see, the dollars add up so you should be prepared.  Your closing costs and prepaid items will vary according to your sales price.  Call one of us on the Savage Team and we can discuss in detail what you can expect when you are ready to purchase your home.

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In the end we were all ok and there was no building damage we were.  Our neighbors down the road in Louisa weren't so lucky but still it's nothing like we've seen on TV from the west coast.  The biggest thing I keep hearing is "this isn't supposed to happen here".  We've had about three after shocks since then and they say there will be more.  In all, we were really lucky that there wasn't more damage than there was considering we were so close.

Now, we all prepare for the next event of nature....Hurricane Irene.

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.