Real Estate Information Archive

Homebuyer Tax Credit

The government recently passed an incentive credit for people buying homes that have not had an ownership interest in a property for the past 3 years.  You don’t necessarily have to be a first time home buyer.  The way this works is that the year after you purchase your home, you will receive up to $7500 as a tax credit when filing your taxes.  This can result in a refund to you.  If you receive the full $7500 you will then start to repay the money at $500 increments for the next 15 years.  This is essentially an interest free loan from the government.  A lot of home buyers wonder how they will pay for improvements to the home.  This may be a great way to make some of those upgrades that you don’t have the money to initially do.  You can do whatever you want to with that money though.  You could put in the bank or invest it in some other account. 

In a new market when there are very few 0% down programs left, this may be a way repay yourself for the initial down payment requirement, or simply afford yourself a little cushion in the unique market.   

For more information or any questions, contact

Matt Smith – Countrywide Financial – 616-299-2951

The Rust Belt city of Grand Rapids, Michigan, takes on a green patina -- and finds that it boosts business

On a sunny afternoon in Grand Rapids, a group of earnest, middle-age folks is gathered in a conference room, looking at slides of wind turbines and charts about wasteful energy use. A full-bearded man, who looks as if he's just back from a nature walk, talks about his plans to build a home showcasing the latest in low-impact design. At the front of the room, the speaker asks, pep-rally style, "What's the most effective source of renewable energy today? Conservation!"

But this isn't a meeting of Earth-loving Hippies Reunited. The speaker, Michael Ford, is an executive at Cascade Engineering, a plastics manufacturer that makes ducts for Ford, dashboard silencers for Chrysler, and all manner of doodads for other industries, and he's presenting at the West Michigan Sustainable Business Forum's monthly meeting. The attendees are top managers from major companies in and around Grand Rapids, the region's commercial center and Michigan's second-largest city. "We are in business to make money," Ford reminds them. They're doing it by turning eco-friendly, in the belief that reducing the environmental cost of commerce will raise their profits, boost the regional economy, and burnish Grand Rapids' increasingly credible claim to the title of greenest city in America.

Grand Rapids leads the nation in the number of LEED-certified buildings per capita. In 2005, Mayor George Heartwell pledged that more than 20% of the city's power would come from renewable sources by 2008; it hit that target a year early, and Heartwell upped the target to 100% by 2020. The municipal government's energy use has been cut by more than 10%. The public-transit fleet features hybrid buses. And here, in the heart of the Rust Belt, manufacturers are leading the greenification charge. Office-furniture heavyweights Herman Miller and Steelcase both have LEED-certified buildings in the area, as do industrial firms such as Cascade Engineering.

Peter Wege, Steelcase's retired chairman, is the father of green Grand Rapids. "In 1937, when I started working in the desk plant of my father's metal-office-furniture company, I learned that we recycled steel to cut costs," Wege recalls. "Seven years later, flying an Army plane into Pittsburgh on a sunny day, I became an environmentalist when I had to ask for tower lights because I couldn't see the airport through the black smog. Those two experiences helped make me an economicologist -- a word I coined to define the balance we need between economy and ecology."

Over the years, Wege ordered various eco-friendly moves, introducing the reprocessing of toxic solvents and investing in a baler for recycling packing materials -- a purchase he cites as a proof of economicology because "once the baler was paid for, Steelcase began saving $20,000 a year." Last year, Wege gave $20 million for the construction of the Grand Rapids Art Museum, the world's first LEED-certified art museum.

Wege also popularized the term "triple bottom line" here, listing human welfare and environmental responsibility on par with fiscal profit. Today, that's the most common eco-biz buzzword in Grand Rapids. "Environmental drivers may be the reason companies try sustainable business practices, but eventually business drivers take over," says Dave Rinard, Steelcase's director of global environmental performance. The company's LEED-certified wood-fabrication facility, for example, cost up to 5% more to build than a traditional plant, but it uses about 30% less energy; Steelcase recouped the extra cost in 18 months. It also refined its wood-manufacturing process, replacing harsh solvent-based chemicals with a water-based one. The new finish costs more but proved easier to recover and reuse, and takes just 24 hours to cure wood, compared to 90 days for the toxic solvents. It also makes workers happier. "At the finishing point in most plants, workers wear hazmat suits and respirators," says Steelcase manager Kevin Kuske. "Ours wear shorts and T-shirts."

Like Steelcase, Cascade Engineering sought LEED certification -- its HQ is rated platinum -- and greenification has opened the company's eyes to new lines of business. Its new EcoCart, a curbside trash receptacle made with recycled plastics, has quickly become a hot seller, and the firm has inked a deal with a Scottish company to be the exclusive North American marketer of an innovative wind turbine that includes a plastic propeller produced by Cascade. "Most businesspeople think of instituting sustainability as a zero-sum game," says Cascade founder and CEO Fred Keller. "But it is the right thing to do -- and we think we can make it a good business, too."

In becoming a green center, Grand Rapids is also turning itself into a lab, a training camp, and both an exporter and a magnet of expertise. Keller teaches a sustainable-business course at Cornell University, and it was there that he recruited Michael Ford, one of his MBA students, who has launched two energy-related subsidiaries in the past two years. Integrated Architecture, designer of several of Grand Rapids' LEED-certified buildings, has an expanding list of out-of-state clients drawn by its hometown work. Aquinas College launched the nation's first undergraduate-degree program in sustainable business in 2003, underwritten by a $1 million donation from Steelcase's Wege. "We see ourselves as part of the new knowledge-based economy," says Bill Stough, CEO of Sustainable Research Group, a consultancy with a growing national business. "We're exporting the information we've learned to other parts of the country."

Matthew Tueth, chair of Aquinas's sustainable-business program, goes so far as to call what's happening in Grand Rapids a "movement" that could secure the region's economic future. "You can make lots of money while at the same time having a restorative -- not just a less-bad -- effect on the environment," he says. "This is not a fad. And if it is, we're done as a species."

Thinking about moving to Grand Rapids click here to view available homes

Article taken from Fastcompany.com: View Original at : http://www.fastcompany.com/magazine/129/new-urban-eco-nomics.html?page=0%2C0

1. Selection, selection, selection. There are about 10,000 resale homes on the market in Grand Rapids Metro Area, Regardless of the price range a buyer desires, there are plenty of houses from which to choose. Just a few years ago the resale inventory dropped below 3,000-4,000 units. A buyer was forced to make compromises if they were going to locate the home of their dreams. There is a great selection of attached homes, condos, and townhouses. You can find large lots, small lots, and a lot that will accommodate your boat or RV. There are lots of options in this market.
   
   
2. No Bidding Wars. In 2005 we had one client that made an offer on ten homes. They lost the first nine to the 'feeding frenzy' that existed. Other buyers bid the properties up substantially from the original listing price. There were escalation clauses where buyers authorized their agents to outbid other offers by thousands of dollars. There is no competitive bidding in this buyer's market.
   
   
3. You can make an offer. A few years ago when you made an offer, the only question was how high above the list price could the buyer reach in hopes of being the best offer on the table. Today the sell price list vs. price ration is about 96%. A seller will not be insulted if you 'make them an offer they can't refuse'.
   
   
4. Patience is tolerated. In the hot seller's market that existed everything was rushed. Find a house before other buyers did. Hurry up and make the offer.  Today a buyer can take their time. Look at several homes and think about your decision for a few hours.
   
   
5. Due diligence is welcomed. In this market a buyer is encouraged to obtain a home inspection, termite inspection, and appraisal. In 2005 many buyers waived these contingencies in order gain an advantage with multiple offers.
   
   
6. There are plenty of specs. In the not too distant past buyer had to 'play games' if they wanted a new home. There were lotteries and waiting lists in order to obtain new construction. Some buyers slept in their cars in order to get to the head of the lines. R.L. Brown estimates that builders have thousands of specs ready for immediate occupancy.
   
   
7. Repair requests are welcomed. After a buyer completes a home inspection, they are allowed to submit a repair request to the seller. In the past a seller might insist the home was sold 'as is'. Many times, there were back-up buyers waiting for a primary buyer to upset the seller whose home was increasing in value almost daily.
   
   
8. Few, if any investors. It is estimated that one third of all sales in 2005 were to investors. These non-owner occupied buyer caused the market to inflate and affordability to decline. Mortgage fraud became commonplace. It's a great time to buy without having to compete with hundreds of prospective landlords.
   
   
9. Location, location, location. Today's buyers can find homes closer to work. In the past buyers flocked to Maricopa and Queen Creek in order to find affordable homes. In this market, reasonably priced homes are within biking or walking distance to schools, rapid transit lines, and relatives.
   
   
10. Real Financing is available. The 'wink, wink' zero down, no doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first time homeowner bond programs, special loans for teachers, and police officers are back in business. It's a great time to buy real estate!

Anyone can research the potential resale value or sales history of their home -- or their neighbor's -- by plugging in the address on Internet sites like Cyberhomes.com, RealEstateABC.com and Zillow.com.

However, while all three allow house hunters to price or compare properties they may be interested in, and potential sellers to get guidance in setting an asking price, the sites aren't always 100% accurate.

Zillow's calculation of a home's value  -- a "Zestimate" -- should be a "starting point," says Amy Bohutinsky, Zillow's director of communications.

All these sites utilize at least some public information, so in regions where housing data is not complete or up to date, these sites' calculations may fall short.

"In some places, we don't have enough information to complete a Zestimate," Ms. Bohutinsky says. According to Zillow, of the 70 million homes in their database, the site has Zestimates for 52 million of them, or approximately 74%.

Likewise, Cyberhomes has data on more than 100 million property records across the U.S., and RealEstateABC has property information for more than 60 million U.S. homes.

To counter these issues, Cyberhomes, RealEstateABC and Zillow invite consumers to update property data. On Zillow, anyone can view changes to a home's profile, so the site may be useful to sellers who want to market their properties. Zillow has several measures in place to restrict non-homeowners from editing other people's property profiles. "Any user can flag content for review by Zillow's customer service team," Ms. Bohutinsky says.

Any consumer can adjust a home's details on Cyberhomes and RealEstateABC, but the revised profiles are available only to the person who made the changes. As a result, these sites can be used by anyone who wants to factor in how multiple variables may affect the price a particular property may get on the market.

To get the most out of these sites, use these steps to update home profiles and price estimates:

Cyberhomes.com

Type your home's address to get to the property's highlights page. To adjust the home's estimated worth, click "Refine Value" and add the number of bedrooms/bathrooms, square feet, etc.

To factor fixes or remodels into a property's estimated value, click on the plus sign to the left of "Home Improvements." Select a project from the pull-down menu, type in the date it was completed and its total cost. Hit "Add" to factor in the changes. Repeat for additional home improvements and click "Apply changes & continue."

To further refine the site's estimate of a property's value, select similar nearby homes. To do so, hit "Choose Comparable Home Sales." Click on the properties most like the home in question and hit "Apply changes & continue."

Choose "Adjust Market/Home Conditions" to rate the property's lot size, view, privacy and other features on a scale ranging from "Worse" to "Same" to "Better," and to describe the local real-estate market as "Slow," "Average" or "Hot."

Click "Update" for a new calculation of the home's worth.

The information you supply will be used to create a new estimation of the property's value, which will be listed under "Your Changes" on the search results page, and isn't made public. "It is a clipboard just for you to use," explains Marty Frame, senior vice president and chief information officer of Fidelity National Real Estate Solutions. While homeowners may want an updated measure of their residence's worth, not all want that estimation to be public, say to a neighbor or tax assessor, he explains. "There is a real reluctance of people to come online and give up their private information," he says.

RealEstateABC.com

If RealEstateABC has calculated an "ABC Value" for your home, you can adjust it by clicking on the "Adjust Value" tab in the table to the left of the map. (If there is no ABC Value for your property, your changes will have no effect.) Rate the residence's interior, exterior, lot size, view and privacy/noise on a scale from "worst in group," to "average" to "best in group." For example, if you think the house is under par for a certain quality -- say, perhaps it's on a busy street -- slide the slider to the left.

Again, only if the home has an ABC Value assigned to it, you can fix or add property characteristics (e.g., number of bedrooms or bathrooms) by clicking on the edit button for that feature and entering the correct information.

To further refine the site's calculation of the property's worth, select homes that are a close match in value from the provided list of addresses. After making your choices, click "Done" to save.

The new ABC Value is available only to you and is not permanently kept on the site. RealEstateABC doesn't make these new calculations publicly available because of the "subjectivity" involved in estimating a home's value, says Michael Dodge, general manager of the home and real-estate division of Internet Brands. "What is valuable to one seller or buyer isn't valuable to another," he explains. Homeowners can use ABC values to set a selling price, while house hunters can utilize them to compare various properties they may be interested in, he says. "A buyer can go out and look at a few different homes and adjust [the scales] according to what they observed in a particular house," he says.

Zillow.com

Homeowners can "claim" their house or property on Zillow.com and update information for Zillow's users (and potential buyers) to see about their property, such as the number of bedrooms and square footage, and note recent remodels or important details about the home. "It is something we recommend any seller to do," says Ms. Bohutinsky, Zillow's director of communications. Homeowners can advertise their home for free on Zillow or suggest a "Make Me Move" price (a dollar amount that might convince a homeowner who isn't selling to move), so updating one's home facts on Zillow is potentially important for those reasons. At least 600,000 U.S. homeowners have claimed and edited the profiles on their properties, Ms. Bohutinsky says. For homes for which Zillow has a "Zestimate" (an estimation of the residence's market value, based on public data) adding additional details about a home will create an "owner's estimate," or a new calculation of that property's worth. Such estimates run side-by-side with Zestimates, but later this year, the site will incorporate homeowner-added information into the Zestimates, Ms. Bohutinsky says.

To claim a home and create a new estimate, enter in an address, click "Claim Your Home" and register with the site by choosing the legal name of the property's owner from a list of randomly generated ones and agree to a virtual affidavit.

To proceed, go to your home's details page, click on the address and hit "Edit Facts." Adding information to a property's profile is as simple as typing in the new data and saving.

By Lauren Baier Kim :Ms. Kim is a senior editor at  www.RealEstateJournal.com.