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Federal Housing Tax Credit - Detailed Breakdown

by Mark Brace
 Important things to know about the Tax Credit:
*The money is not immediately available to the home buyer! The buyer must fill out a specific form when filing their 2008, or 2009 tax returns. (Note, buyer can file an amended tax return to their 2008 tax returns if they buy a house in 2009, and still get the tax credit in 2009 instead of waiting!) They then receive the money as though they would be receiving a tax refund. Please know this is not a tax refund or a tax deduction, this is essentially a 0% interest loan.
*Must be a first time home buyer OR buyer can not have owned a home in the last three years.
*Buyer can claim a credit of up to 10% of the purchase price, with a max credit of $7,500.
*Repaid over 15-years with no interest.
*$500 per year repayment at time of doing taxes each year.
(Example: If buyer was expecting $1,000 back on taxes, buyer would only receive $500 back. If buyer had to pay $500 on taxes, buyer would actually need to pay $1,000. Caution - if buyer cannot come up with money at tax time there are penalties and fees!)
*If buyer bought/buys the house in 2008, and filed for tax credit on 2008 tax returns, buyer would not need to start repayment until 2010. (Credit available to home buyers after April 9th, 2008)
*If buyer buys a house in 2009, and filed for tax credit on 2009 tax returns, buyer would not need to start repayment until 2011. (Credit available for home buyers up until June 30th, 2009) (Please note the above - tax credit available immediately in 2009 IF buyer files amended tax return for 2008)
*Full $7,500 available for singles with gross income of $75,000 per year, OR joint filings with gross income less than $150,000 per year. The tax credit phases out from there until single filing reaches $95,000, and joint filings reach $170,000. After which no tax credit is available.
     *Important! If buyer is expected to pay (example) $4,000 in taxes on returns, and is applying for the $7,500 tax credit, the buyer would actually only receive $3,500. Vice versa if buyer is to receive $1,000 back on taxes, buyer would actually receive $8,500 back.
*No restrictions on location or type of house.
*No restrictions on what the money is used for. Can be used for remodeling, paying off credit cards, etc.
*Tax credit is not available for nonresident aliens, or if the home is anything other than a primary home.
*If buyer sells house before repayment period and has no gain on the sale, buyer will not be expected to pay the credit back. If the buyer has a net gain, the "recapture" cannot exceed the amount of buyers gain.
 
If you would like to investigate further, please visit www.federalhousingtaxcredit.com or call me anytime.
 
Information Provided by:
Zac Ellerbroek
Independent Mortgage Broker - Treadstone Mortgage

Outside investors sink $150M in West Michigan properties

by Mark Brace

It's a record year in western Michigan for out-of-state investment, which likely surpassed $150 million, estimated Colin Kraay, investment adviser at Grubb & Ellis|Paramount Commerce in Grand Rapids.

In the last days of 2007, the firm negotiated the sale of 17 industrial buildings for $35 million to $40 million to California-based Core Realty Holdings - a return buyer in the region. Core in 2005 purchased several industrial buildings in Kent County and the lakeshore.

This purchase, of an undisclosed price, totaled 572,000 square feet and included 90 tenants, Kraay said. Principals of First Cos. Inc. in Grand Rapids, which managed all, built many, and owned some of the properties, organized the sale and will continue to manage the buildings.

"It was a sale we have thought about for quite some time," First Cos. President Jeff Baker said. "It's one of the biggest ones we've done."

"West Michigan doesn't often see a lot of these large portfolio sales," Kraay said, noting that the buyer sought multiple buildings in one transaction. "Core looks for stable properties with solid income potential and income growth. They saw those in these properties."

Kraay, along with brokers Chad Barton, John Kuiper and Duke Suwyn, represented buyer and seller. The firm handled a record $115 million in 2007 out-of-state investment into western Michigan, Kraay said, estimating the entire region brought in about $150 million.

"We'll probably see a little bit of a slowdown" in 2008, he predicted. "One hundred fifteen million dollars is a big number. 2007 was really an enormous year."

Investment broker Patrick Mohney of NAI West Michigan in Grand Rapids expects even larger figures in 2008, however.

"I wouldn't be surprised if in the next year, it wasn't three times that," Mohney said. "Investment's at least half the (real estate) activity going on in the area. Sometimes I'm even getting calls from people with no connection here whatsoever."

Daily calls from investors, most often in San Francisco and Chicago, continue unabated, he said. A continued weak dollar might even prompt foreign investment, he added.

"About 70 percent of our buyers for Michigan real estate come from out of state, lured by the relatively high cap rates and relatively low prices," noted Michael Cagen, associate broker at Marcus & Millichap's Grand Rapids office.
Properties included in

The Top Ten Reasons It's a Great Time To Buy Real Estate!

by Mark Brace
  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!

The Top Ten Reasons It's a Great Time To Buy Real Estate!

by Mark Brace
  1. Selection, selection, selection. There are about 57,000 resale homes on the market in Maricopa county(Phoenix). 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 5,000 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!

Grand Rapids area home prices keep falling

by Mark Brace

It's the mantra of the real estate industry, posted on yard signs everywhere: It's a great time to buy.

If you are in a financial position to do so, statistics continue to show the mantra is true.

The average home price in the Grand Rapids area last month was $147,148, a drop of 6.5 percent from September 2006. The average price year to date -- $152,742 -- represents a 4.4 percent drop from this time last year.

Part of that reduction is attributed to the laws of supply and demand.

While there are 8.5 percent more listings than this time last year, residential sales last month were down 6.7 percent from September 2006.

Jamie Starner, president of the Grand Rapids Association of Realtors, said he would like to see more sales, but a drop in the number of listings joining the market was promising.

Nearly 11,700 residential properties were on the market last month. Based on overall sales figures, that equates to more than a year's supply of homes for sale.

But the number of listings entering the market in September was more than 10 percent lower than last September.

"We've got to burn off some of that inventory that we have," Starner said. "We've got to get back to a balanced market."

Pat Vredevoogd, a real estate agent and president of the National Association of Realtors, believes the market is turning.

"I see this in a number of marketplaces, where that number of new listings is stagnating a little bit now, and the number of homes being put on the market is quieting down," she said. "We're also seeing quite a few more people out in the marketplace."

The market is taking its toll on real estate agents.

Membership in the association is down 9 percent from a year ago. And agents say they are working harder for the same or less money.

The decrease in the sale price means a decrease in my paycheck, because it's all based on commission," said Ethan , an agent with A local Realty Company. "I sold about six more units last year than I did in '05 and made the same amount of money."

But as a real estate investor, Ethan also is reaping the benefits of the lower prices. He bought four homes this year to add to his stock of rental houses. They included a property next door to one he already owned.

"I paid less for a neighboring house than my wife and I paid five years ago for the house next door," he said.

The average sale price also is affected by the prices of homes being sold. Sixty percent of homes sold last month were priced for less than $140,000. Last September, it was 54 percent.

Twenty-two percent of homes sold were priced between $140,000 and $200,000, and 18 percent were more than that, including three priced at more than $1 million.

By Cami Reister
The Grand Rapids Press

What you get for your real estate dollars

by Mark Brace

Real estate guru Barbara Corcoran compares the country’s housing prices

The wavering housing market sure is a hot topic these days, as it affects those looking to buy and sell across the country. And while there are deals to be had out there, what you get for your money still fluctuates a great deal — depending on where you live and what your community offers. Are you an urbanite or a suburban dweller?  Do you need a good school system or are cultural amenities top on your list?  It will make a big difference in the price of your home.

Real estate expert Barbara Corcoran highlights homes across the country to find the difference in dollars:

The best deals are obviously in the Midwest and the South ($173,000 and $186,000) and the worst deals are on the West Coast ($349,000) followed by the Northeast ($290,000). The properties listed below, which are all a value for the money, offer a good example of the wide range in property to dollar ratio across the country.

Under $300,000
1. Studio apartment in Brooklyn, N.Y., $292,000: It's tiny, only 400 square feet, but it's on a beautiful tree-lined block, steps from a city park with playgrounds, tennis courts and more. It's a great value for an up-and-coming neighborhood, surrounded by a stretch of great restaurants and a short train ride from Manhattan and all that it has to offer.

2. 4BR, 2 bath in East Grand Rapids, Mich., $279,000: Here's a classic colonial home in a wonderful private community. The school system is one of the best in the state and kids can ride their bikes to get ice cream without any worry. It's newly renovated, with 2600 square feet. That includes a wine cellar, exercise room, big kitchen, brick patio and more.


$500,000 - $550,000 range
3. 2BR, 2½ bath in Tucson, Ariz., $499,000: This Southwestern-style townhome is brand-spankin' new in a gated community surrounded by country clubs, golf courses and endless sunshine.

4. 4BR, 3 bath on 11½ acres in Decatur, Ala., $539,000: You get a lot of land and a lot of house — 3800 square feet. The property comes with its own pond and a screened-in pool and patio. It also has a huge kitchen with two big pantries. And even with all that property, it's just minutes from town.

What you get for a million dollars
5. 1BR, 1 bath in Malibu, Calif., $979,000: Here you're buying location — and it's a good one. This home sits on a third of an acre on top of a mountain with beautiful California views. The school system is excellent, with some of the highest SAT scores in the country.

6. 5BR, 5½ bath in Raleigh, N.C., $1,170,000: This is a real Forrest Gump-style big Georgian mansion. It has a rambling 6000 square feet on five wooded acres. There's the 3-level deck, a 2-story great room, and a gourmet kitchen that would make any cook proud. It's also in a very temperate climate with one of the most neighbor-friendly communities in the U.S.

Figure out what you really want and whether or not you're getting good value:
1. Make a short list of the three things most important to you: Is it the school system? Is it the space? Or is it the commute?

2. You need to understand that you can't get everything you want, but you can always get the three things that are most important to you. If you want a shorter commute you'll get a smaller house. But if you buy a smaller house, you'll pay lower taxes. If a great neighborhood is your top priority, you'll automatically get a great school system and that's great if you have kids.

3. Values are always personal, and it's no different with house buying. It's all out there. You've got to be clear about what's most important to you.

Most Affordable Suburbs in Midwest. There are still spots in the Midwest where home prices are not out of reach yet and the quality of life is high. It's great to see a suburb of Grand Rapids, MI Highlighted in this article.

In its ongoing series, BusinessWeek Online is taking a look at the most affordable suburbs in the Midwestern states. Using data compiled by Sperling’s Best Places, it lists the most attractive suburbs alphabetically, taking into account cost of living, violent crime, school test scores, and median home prices.

The following are the top 25 Midwest suburbs that made BusinessWeek Online's list, along with their proximity to big cities and their median home prices. Locales are listed alphabetically.

Most Affordable Midwest Cities

  1. Appleton-Oshkosh-Neenah, Wis. (89.3 miles to Milwaukee): $119,500
  2. Columbia, Mo. (145.5 miles to St. Louis): $269,000
  3. Coralville, Iowa (4 miles to Iowa City): $239,800
  4. DeForest, Wis. (12.3 miles to Madison): $274,900
  5. Elkhorn, Neb. (15.6 miles to Omaha): $298,000
  6. Evendale, Ohio (9.2 miles to Cincinnati): $259,900
  7. Fargo, N.D. (276.7 miles to Minneapolis): $199,000
  8. Green Bay, Wis. (101.1 miles to Milwaukee): $229,900
  9. Hilliard, Ohio (10.8 miles to Columbus): $195,000
  10. Hudsonville, Mich. (16.5 miles to Grand Rapids): $214,900
  11. Lake Zurich, Ill. (37.2 miles to Chicago): $659,900
  12. Lakeville, Minn. (18.9 miles to Minneapolis): $402,300
  13. Lawrence, Kan. (48.6 miles to Kansas City): $284,900
  14. Maumee, Ohio (8.5 miles to Toledo): $234,700
  15. Noblesville, Ind. (19.9 miles to Indianapolis): $185,000
  16. Rapid City, S.D.: $239,500
  17. Rochester, Minn. (77.9 miles to St. Paul): $373,000
  18. Shawnee, Kan. (15.1 miles to Kansas City): $300,000
  19. Sheboygan, Wis. (50.8 miles to Milwaukee): $329,000
  20. St. Charles, Mo. (21.6 miles to St. Louis): $249,800
  21. Waukesha, Wis. (19.6 miles to Milwaukee): $209,500
  22. Wausau, Wis. (131.5 miles to Madison): $149,900
  23. West Des Moines, Iowa (9 miles to Des Moines): $349,000
  24. West Lafayette, Ind. (69.2 miles to Indianapolis): $195,000
  25. Wichita, Kan.: $127,900

This article was taking from Daily Real Estate News  |  June 2, 2007

For Sale By Owner -- Is It Worth It?

by Mark Brace

Sell Your Home Yourself And…You Can Save The Commission! Many homeowners believe that to maximize their profit on a home sale, they should sell it themselves. At first glance, they feel selling a home is simple and why should they pay a broker fees for something they could do themselves? In fact, close to 25% of all the homes sold last year were sold For Sale By Owner (FSBO). However, close to half of the FSBOs said that they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why? Many FSBOs told us that the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the amount of fees paid to outside consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising...they would have been better off having paid the broker’s fee (which would have included many of these charges up front). Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBOs discovered that the lost money as a result of poor decisions outweighed the commission. Before you decide to sell FSBO, consider these questions and weigh the answers of assuming the responsibility versus employing a professional. A little time spent investigating up front will pay off tenfold in the end.

Questions To Consider:

  1. Do I have the time, energy, know-how and ability to devote a full-forced effort to sell my home? One of the keys to selling your home efficiently and profitably is complete accessibility. Many homes have sat on the market much longer than necessary because the owner was unwilling or unavailable to show the property. Realize that a certain amount of hours each day is necessary to sell your home.
  2. Am I prepared to deal with an onslaught of buyers who perceive FSBOs as targets for low-balling? One of the challenges of selling a home is screening unqualified prospects and dealing with low-ballers. It often goes unnoticed...how much time, effort and expertise it requires to spot these people quickly. Settling for a low-ball bid is usually worse than paying broker commissions.
  3. Am I offering financing options to the buyer? Am I prepared to answer questions about financing? One of the keys to selling, whether it’s a home, a car...anything, is to have all the necessary information the prospective buyer needs readily available and to offer them options. Think about the last time you purchased something of value: did you make a decision before you had all your ducks in a row? By offering financing options, you give the home buyer the ability to work on their terms and you open up the possibilities of selling your home quickly and more profitably. A professional real estate agent will have a complete team, from lenders to title reps, for you to utilize...they’ll all be at your disposal.
  4. Do I fully understand the legal ramifications and necessary steps required in selling a home? Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state's disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, a professional would be a wise choice.
  5. Do I have the capability of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented? Ask yourself if you are well-versed in legalese and if you are prepared to handle disputes with buyers. To avoid disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misinterpretation of what was negotiated.
  6. Have I contacted the necessary professionals... title, inspector (home and pest), attorney and escrow company? Are you familiar with the top inspectors and escrow companies? Don’t randomly select inspectors, attorneys and title reps. Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction.

If these questions raise some concerns, you may want to speak with a professional. We sincerely hope these tips and ideas are of value to you. If there is any way we can be of service, please contact our office. We would consider it a privilege to serve you! Best regards, Mark Brace

Displaying blog entries 51-58 of 58

Contact Information

Mark Brace, Realtor, ABR, GRI, CRS, SRES, e-PRO, A
Berkshire Hathaway HomeServices Michigan Real Estate
3000 East Beltline NE
Grand Rapids MI 49525
Direct: (616) 447-7025
Cell: (616) 540-7705
Fax: (616) 447-7025

Berkshire Hathaway HomeServices - Michigan Real Estate is a full service, locally operated real estate brokerage company backed by the strength of a solid national and global brand. Our full service businesses include Residential, Commercial, Relocation, Mortgage, Insurance, Home Services and New Homes & Land. Our core values, service philosophy, cutting edge technology, and most importantly our people are what make us the leading real estate company in Michigan. We are committed to providing the highest quality real estate services possible and making each customer's experience one that surpasses their expectations.