3 Reasons to buy in 2009/2010

1) Tax Credit

If you are a first time home buyer who buys between January 1st 2009 and April 30, 2010, you will receive $8,000 after you file your 2009 taxes. This is a grant from the Federal Government that you do not pay back as long as you live in the home for at least three years.

This is a perfect option for a down payment. For example, if a buyer can borrow money from a family member of friend for the down payment, as soon as you file your 2009 taxes and receive the $8,000 credit, you can pay your family or friend back.

The tax credit would also be perfect for potential home improvements. For example, one of my first-time-home-buyer clients just purchased a home and are using the tax credit toward doing landscaping in the backyard of their new home. Upgrades such as counters, carpet, cabinets or finishing the basement would be perfect uses for the tax credit.

For a more extensive explanation of this tax credit, go to:

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

2) Short Sales

Some homes in Utah are now selling for hundreds of thousands of dollars less than what is owed to the bank (short sale). For instance, I just sold a 5,000 sq ft. new home in Farmington (built in 2007 and never lived in) that appraised in 2007 for just under $500,000. The builder of the home owed the bank $471,000 and had to sell. The bank agreed to sell the home for less than what was owed on the mortgage (hence "short" sale). I represented the buyers, who purchased the home in January, 2009 at an incredible $350,000.

Due to over-speculation from builders and bad loans on larger, second or third-time buyer homes, there is an over-supply of these homes on the market. This over-supply has driven prices down and has necessitated banks to take less than what is owed on the mortgage when the owner sells.

This situation is the perfect opportunity to buy if you purchased a smaller home (under 3000 square feet) a few years ago and are looking to upgrade. This is because the demand for smaller homes in contrast to the larger homes, has remained fairly consistent throughout the Wasatch Front over the past few years. Now is the opportunity to "buy low".

Obviously, this situation of over-supply and lower priced larger homes, is also a perfect for investors. If someone is looking for a fantastic investment, there has hardly been a better real estate opportunity than right now. Because of the tragic mortgage crisis, there is an increasing number of people who have defaulted on their loans (dinging their credit), lost their homes and have been forced to rent. These renters often have good jobs. And although they could not afford their very large mortgage payment, they can still afford semi-high rent. And in the 5 years it might take for these renters to get their credit back in shape (all the while renting from an investor), the home will no doubt bring a fantastic return upon sale in ~2014.

3) Interest Rates

Home buyers are now getting locked into loans at less than 5% & even 4%. Historically this is a dramatically low exception to the norm. Over the past 20 years, interest rates have averaged 7.68%

I will put the savings into perspective if you borrowed a home at the current interest rates, compared to the past 20 year-average interest rate:

Mortgage amount: $250,000 at 7.68% (past 20 yr. avg.)

-Monthly Payment (with no mortgage insurance) = $1,779

In contrast,

Mortgage amount: $250,000 at 4.9% (possible current rate)

-Monthly Payment (with no mortgage insurance) = $1,327

At the current 2009 rate, you would be paying $450 per month less than the past 20 year average. $450 per month!!

In short, real estate opportunities knock, whether you are a first time home-buyer, upgrading, or if you are an investor. If you are in any position to buy a home right now, you can't lose. Email or call me and I will help you find and offer on the best real estate deals in decades.