One of the mortgage blogs I read (or listen to) regularly is Tyler Osby’s Mortgage with Wealth. Even though he’s located in Iowa, he shares information that can be helpful for home buyers, regardless of where they live.
He recently emailed me this video, where he explains how mortgage lenders get paid. It’s just 5 minutes long and will explain a bit about the fees, as well as the front-end vs. the back-end of the mortgage compensation structure. If you are shopping for a loan, you need to know these kind of details, so you really are making accurate comparisons.
Good news for all the home buyers (and sellers) who’ve been caught in the limbo of a short sale, yet have a
CONTRACT PENDING
On June 30th, the Senate extended the tax credit closing deadline to September 30, after prior passage by the House. The bill was signed by the President on Friday, July 2nd.
The passage of H.R. 5623, the Homebuyer Assistance and Improvement Act, applies the homebuyer tax credit closing deadline extension only to homebuyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30. The legislation is designed to create a seamless extension of the new closing deadline for eligible transactions to September 30. There will be no gap between June 30 and the date the president signs the bill into law.
Good news for all the buyers who are patiently waiting for banks to make decision on pending short sales!
Yesterday, I got an email, or three, letting me know that the Senate had passed a tax credit extension for those who have accepted offers on homes, that will not close by the original deadline of June 30, 2010.
These mainstream articles that will give you a bit of background and more specifics on the proposed extension:
And, as Jay Thompson at PhxREGuy.com points out on his post, Senate Amendment to Extend Home Buyer Tax Credit Deadline, the bill still needs to be reconciled with the previously passed House bill, and signed by the President, before it goes into effect.
Extension of the closing date is a pro-consumer relief provision. It assures the fair treatment of prospective purchasers who have followed the rules and done their part to assure that the sale goes through. Congress must assure that those who have met the eligibility requirements for the credit and done all within their power to satisfy the timing requirements will not have to forfeit the credit because of events and challenges outside their control.
I imagine that the bill will be reconciled and signed by the President, but until that happens, it’s not a done deal. And then, it will be up to the banks holding the strings on the estimated 75,000 to 180,000 contracts that are currently under their review to step up and work towards completing these transactions in the next 3 months.
As an Accredited Real Estate Buyer’s Representative of the National Association of REALTOR®, I get the benefit of regular industry updates that give me insight into current housing trends.
Home Sizes Decreasing
Today, I was reading an article about the trend towards smaller homes, which shared that:
The average size of a new single family home was flat in 2008 and decreased in 2009.
Homes with at least three bedrooms decreased in 2009, for the first time since 1992.
The number of homes with four bedrooms have been decreasing since 2007.
Homes with two stories peaked in 2006, and have been on a downward trend since.
New Home Builder Trends
The article “Home Trends 2010: Consumers’ Most Sought-after Features” also included a list of the ten most likely features that builders will include in 2010:
Walk-in Closet in Master Bedroom
Laundry Room
Insulated Front Door
Great Room
Low-e Windows
Linen Closet
Programmable Thermostat
Energy Efficient Appliances and Lighting
Separate Shower & Tub in Master Bedroom
9-foot Ceilings or Higher on First Floor
Comparing Scottsdale to National Trends
From my perspective working with buyers in the Scottsdale area, I would agree with most of the list, but find that the insulated front door and programmable thermostat have never been on my client’s wish lists. However, ceiling fans, a newer (or high-efficiency) air conditioner, and a good roof are a big demand item in our area. And great outdoor living spaces are often a requirement, too. I think it’s just the difference in climate.
Buyers are more more concerned with heat than cold here. And because it’s so dry, roof materials dry out, and are more inclined to leak during our summer monsoon rains. And when the weathers beautiful, which if very often, home owners want to be outside.
Other features on the builders’ list are definitely similar to those that I get from buyers moving into the area. However, buyers quickly learn the differences between north and south Scottsdale, both in age and price of home.
Existing Scottsdale Homes
Older ranches in South Scottsdale are single story, in the range of 900-1500 square feet, and often 3 bedroom. They typically do not have walk-in closets, high ceilings, or great rooms. The laundry rooms are sometimes in a separate small workroom or in the garage. Master baths typically just have a small shower.
The farther north you look in Scottsdale, the newer the homes. And the newer the home, the more likely it will have high ceilings, a great room, walk-in closets (sometimes in all bedrooms), and large spacious master bathrooms. These houses will be much larger, ranging from 1,800-5,000 square feet, and more. Two story homes are more common. High-efficiency appliances are the norm, too.
New Home Communities
There are only a few new home communities in the Scottsdale area, since the city is mostly built-out. As of today, I know of Wingate Ranch, Sera Brisa, Montacino at McDowell Mountain Ranch, Rosewood at DC Ranch, Verandahs at Silverleaf, Quisana at Troon North, and a couple more in the most-northern parts of Scottsdale. Prices for these new homes range from $550K-$1.5M, so are often out of reach for many buyers.
The size of homes in these communities has not decreased, however, you will find, most if not all of the building features in these upper end homes.
Buyer must either purchase or be under contract to purchase a home by April 30, 2010. The property purchase must be completed by June 30, 2010. One important clarification that I learned in a Short Sale class taught by attorney Chris Combs earlier this week, is that if the seller has accepted a contract with a Short Sale contingency by April 30 that the sale is still considered under contract. The pending bank agreement is a contingency, similar to getting a loan approval or property appraising at purchase price. Very important for buyers and sellers to understand this, and at the same time, understand the property must still close by June 30th.
Both first-time and long-term resident buyers qualify for up to 10% of the homes purchase price, up to limits of $8,000 for the first-time home buyer and $6,500 for the move-up buyer.
To be considered a first-time home buyer, the buyer cannot have owned another personal home anytime in the past three years.
Long-term resident buyers must have lived in the same primary residence for five consecutive years out of the past eight.
If the home purchased using the tax credit, is sold in the first three years, the credit must be repaid.
There are a number of other requirements related to income, home price, and more, so you will want to read the entire article and review the following resources:
The following home buying stats from 1999 and 2009, were just published in this month’s Certified Residential Specialist magazine.
% of U.S. home buyers
1999
2009
Bought single family home
82%
78%
Bought in suburban neighborhood
46%
54%
Began home search online
37%
90%
Married
68%
60%
Single women
15%
21%
Single men
7%
10%
Median home value
$137,600
$172,600
Median age
39
39
Data Source: National Association of REALTORS®
The most significant change is how many more buyers start their home searches online, now reaching 90%. That number has been steadily increasing over the past 10 years.
More single people are buying homes, which I’m definitely seeing in my business, even more so than these statistics show.
I find it interesting that the median age has stayed the same. I would have guess that it would have decreased, but can think of a lot a reasons it didn’t.
