MAKE NO MISTAKES About Buying Real Estate

How Filing For Your Homestead Exemption Now Could Pay For Your Holiday Shopping!

2009-12-14T17:38:00.000-08:00

Within the last weeks I noticed that two of my clients whose homes I recently sold never filed for a homestead exemption!

A homestead exemption helps you save on taxes on your home (among other benefits). An exemption removes part of the value of your property from taxation and lowers your taxes. For example, if your home is valued at $100,000 and you qualify for a $20,000 exemption, you pay taxes on your home as if it was worth only $80,000. (Harris County Appraisal District)

They both thought they had. Please make sure you have done so. Your County Appraisal District will credit you for ONE year only. This means for the year 2008 you could expect a check in the mail if you failed to file. Simply fill out the form and fill in the year 2008. This would then provide you a credit for 2008 and 2009 taxes. This same rule applies for all other Appraisal Districts. Just think this savings could pay for your all of your Holiday Shopping!

To find more Money Saving Tips in my book, Make No Mistakes About Buying Real Estate.

10 Reasons to List During the Holidays

2009-12-02T19:30:00.000-08:00

1. Buyers who look for a home during the holidays tend to be very serious buyers.

2. Serious buyers have less to choose from.

3. There is now a $6500 tax credit incentive for you to sell and then buy.

4. First time homebuyers still have the $8000 tax credit incentive, which ends April 30, 2010.

5. Starting January, the number of listings that will hit the market jumps drastically. More supply means less demand for your property.

6. Buyers have more time to look during the holidays because vacation time has accumulated and must be used by year end.

7. Many families relocate into Houston to start their new jobs and want to get settled in before the New Year.

8. You stand a better chance of getting a contingent buyer which means a higher selling price for you.

9. The 30 year fixed mortgage rates are below 5 percent.

10. Houses are prettier during the Holidays and buyer’s love to see a home decorated and looking special.

Will Loan Officers Find a Way to Manipulate the New GFE and HUD-1?

2009-11-19T22:55:00.000-08:00

As we draw closer to the New Year, effective January 1, 2010, you will hear more talk about the new GFE, Good Faith Estimate (the statement documenting the proposed costs at closing) and the HUD-1 Settlement Statement (the closing statement documenting the actual costs at closing). These forms apply to all 1-4 family residential transactions introduced by RESPA, the Real Estate Settlement Procedures Act. These changes are very significant to the mortgage industry and the homebuyer who over the last 30 years has found the documents nearly unchanged and very intimidating.

The new forms are designed to protect and provide the consumer with the ability to easily compare lender offerings and make better financial decisions. I personally am looking forward to seeing a loan officer use it correctly, whereby the use of the free Lender Comparative found on the Make No Mistakes website becomes obsolete. In two recent closings, the loan officers knew they were in a competitive situation and used the forms incorrectly in order to appear as the best product offering. Most consumers still rely on the lowest interest rate and continue to fail to look at all aspects of the mortgage offering such as total closing costs. Using the Lender Comparative provided my clients the real ability to see the true cost of the loan and more importantly gave my client the insight and confidence to ask the right questions about specific fees, which in the end reduced their out of pocket expenses by over $6,000!

According to a recent article written by Stewart Title, lenders may begin using the new GFE at any time, and if a new GFE is issued to a borrower, the title agency must use the new HUD-1 for that transaction. But loans officers beware, according to HUD (Housing and Urban Development) the proposed reform intends to impose penalties for violations of specific sections of RESPA.

For more information on the proposed GFE and changes to the HUD-1, can be reviewed in their entirety at http://www.hud.gov/.

Make No Mistakes About Buying Real Estate Offers Free Resource Center Online

2009-11-17T12:13:00.000-08:00

Resource Center and Downloads from Make No Mistakes About Buying Real Estate, 3rd Edition.
feel free to go to www.MakeNoMistakes.com for more information.

Consumer Affairs

www.dol.gov

Equifax

Experian

Fannie Mae

FHA

Freddie Mac

Federal Housing Tax Credit

First Time Tax Credit - FAQ

First Time Tax Credit Info: 2009 - 2010 Changes

www.freecreditreport.com

www.housingprograms.org

www.hud.gov

www.irs.gov

www.irs.gov/publications

IRS Form 5405 Tax Credit

Loan Modification Information

Make No Mistakes

Metrostudy

One Call One Team.com

National Association of Realtors

Recovery Programs/

Salary Information (Geographically)

Transunion Credit Reporting

www.treas.gov

Veterans Info

President Obama Info & Programs

Mistake # 8: Not being S.M.A.R.T. before you buy

2009-09-30T08:03:00.000-07:00

You’ve decided you’d like to purchase a home in the near future. What do you do now to be able to buy later? Our advice: Be S.M.A.R.T: Rent only as long as it takes to save the money for a down payment, reduce your debts and improve your credit score. Prepare, plan and execute!

Purchasing S.M.A.R.T. means you took all of these wealth-building factors into consideration:

• Savings
• Make Your Deal Upfront
• Appreciation
• Resale Value
• Tax Advantages - Know them! Before December 1, 2009 earn a $8000 Tax Credit

check out www.MakeNoMistakes.com for more information on these SMART rules to purchasing real estate.

You're Driving This Ship

2009-09-24T14:42:00.001-07:00

Throughout this reference guide you’ll find descriptions and explanations about the mistakes other buyers have made. You’ll also find the tools and checklists to help you Make No Mistakes™ About…Buying Real Estate, even when you work with professionals. We provide this information because it’s our goal to level the playing field between the haves and the have not’s – the people with real estate knowledge and those who have little or none. Here are just a few examples of what you’ll gain from this reference guide:

• Examine your present and future financial goals to ensure you don’t buy too much house even when a loan officer says you can afford more
• Determine which mortgage loan is best for you when you’re presented with more than one option
• Choose the best property based on your budget, “must haves” and desires in a home
• Learn the specific contractual language you should have in your earnest money contract (which isn’t included in the standard contracts)
• Know which elements will help you negotiate the best deal
• Read and understand the HUD-1 (Settlement Statement), which itemizes the financial details at closing
• Know what to do after you close in order to best protect your investment

In reality, YOU are the only one who can truly look out for your best interest. And when the transaction is complete, you are the one who is ultimately responsible for the property and for paying the mortgage loan! That’s why, in addition to this reference guide, we have devised a Make No Mistakes™ System. In the event you don’t have time to thoroughly read all the chapters in this reference guide, the Make No Mistakes™ System will provide you with email reminders telling you what you have to do next in the real estate purchasing process. Like what to look for and what to avoid. In addition, you’ll be provided with your Make No Mistakes™ Home Buyer’s Checklist Workbook, which will assist you in completing each task to ensure that all parties involved in your real estate deal are doing what they are supposed to do on your behalf. Remember, you need to be the one driving this ship since you are the one who will ultimately be responsible for it. You can get more information on this system by going to www.MakeNoMistakes.com, clicking on the Make No Mistakes™ System.

Learning From Past Mistakes

2009-09-21T12:11:00.001-07:00

There are never any guarantees in real estate; however, if you ask questions throughout the process, use the tools and checklists in this reference guide, and aim to understand what you’re signing, you significantly reduce your risk of failure.

Some of you have tried and failed to make profitable real estate purchases in the past. If you feel you failed, it’s most likely because you ended up with a financial loss. Don’t quit! If you are honest with yourself, you probably know you made some mistakes. Based on our experience, we can guess what went wrong:

•You may have decided to not use a real estate agent’s help with the transaction because you believed the seller would pass the savings on to you – in the form of a lower sales price – because the seller wouldn’t have to pay your real estate agent’s commission.
•You may have had the wrong plan, approach or attitude. Perhaps you approached the process thinking you knew more than the professionals. And the professionals let you make your own mistakes.•You purchased a new home without selling the one you lived in and now you’re stuck with two mortgage payments. You chose not to listen to or hire a professional, and tried to sell the old home on your own at the price you thought it merited. Selling it on your own, For Sale By Owner (FSBO)[1] might have turned out okay, but you started off with an incorrect price. The extra time it took to sell the home cost you a lot of money in additional house payments!
•You tried purchasing real estate with the help of a professional but, unfortunately, that person was more focused on the commission than on helping you. Or, that professional tossed around confusing words and complex explanations that were difficult to understand, and you were embarrassed or too frustrated to ask for clarification. This is an intimidation tactic and it’s occasionally done on purpose.
•The professional didn’t bother to educate you during the process. You were uncertain about the questions to ask or what to look for. Through no real fault of your own, you were in the dark during much of the process. In the end, you own your home, but you might also have financial, tax or legal issues, or problems with the house’s structure that were overlooked.

In Summary, owning real estate can be worthwhile when you’re doing it for reasons that are right for you. Making a S.M.A.R.T. purchase will provide you with the security of owning your own home, and the ability to build wealth too! The real estate purchasing process is one of life’s most exciting events. Be open to the opportunities by being prepared! Taken from the book entitled, Make No Mistakes About Buying Real Estate.

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[1] FSBO, or “For Sale By Owner,” is when a seller chooses to sell a property on his or her own without the assistance of a real estate agent.

9 Steps to Achieving Genuine Happiness?

2009-09-21T11:54:00.000-07:00

I have always been in search of true happiness. And at the ripe young age of ___, I think I'm really close! There are moments when every thing in life is just clicking as it should and I feel that I am on top of the world, with no problems I can’t handle. Then life throws me a curve! Over the years I’ve learned to turn to my very best friend, her name is Me, Myself and I. And what I know that God lives within Me, so I try not to disappoint Me. When I make a mistake I easily forgive Myself, just as God forgives me. More importantly, I try to learn from my mistakes. Yes, there are times I get upset and mad at Myself, but I keep working on being the best friend that I can be. I often turn to books that are more spiritual in nature because when you really think about it, it’s not really about Me and my ego, but my alignment with God, my inner peace. I say this because I know it to be true, he never disappoints me. Certainly, he does things his own way and on his own time. My faith knows that when I am out of sorts with him because I am out of sorts with life. This only means that I'm in store for a life lesson to bring me back to him, back to self.

So the answer to how I believe one achieves genuine happiness?

1. Study and practice being your best friend while aligning yourself with God.

2. Rid yourself of negative energies, thoughts that you are lacking, missing something or someone in your life and believe it all comes to you at the right time.

3. Consciously work on replacing all negative thoughts with positive thoughts, until it becomes unconscious.

4. Look at others with the attitude of love and appreciation for who they are.

5. Give to others without destroying yourself in the process.

6. Know that God will provide all that you need.

7. Release certain items or others from your demands, for this release will take away its power to disappoint you.

8. Enjoy items or others without having to be in their presence.

9. Own your own home and use me as your realtor or your next speaker on the subject of avoiding costly real estate mistakes. There’s nothing like being able to create your own sanctuary that creates wealth when you've purchased it correctly. ( I had to tie this into real estate some how) (Smile)

Pay Attention to Escrow Accounts

2009-07-28T21:13:00.000-07:00

Section 6 of The Real Estate Settlement Procedures Act, also known as RESPA states that, lenders are required to make escrow disbursements on time! I recently experienced the lender not paying my insurance premium on time. I was made aware of this problem in a letter from the insurance company stating, that if I did not make a payment immediately my property would be uninsured. Not willing to take the risk of having to deal with the bureaucracy of a servicing company (this is who collects the money on behalf of the lender) I chose to pay the insurance premium. Then wait for a refund once I got the situation straighten. Here is how this situation could have potentially escalated into a costly mistake had I:
• Not paid attention to my escrow account,
• Read my mail or
• Not been in a financial position to pay the insurance premium.
The lender could have:
• Charged my escrow account with late fees,
• Hit me with a higher insurance premium amount through their own insurance carrier or
• Positioned me to be uninsured during the time a pipe bust costing thousands in repairs.
To take part in the Make No Mistakes™ System email me at Melissa@MakeNoMistakes.com.

BUYING A FORECLOSURE AND APPLYING THE S.M.A.R.T. RULES

2009-07-07T07:43:00.000-07:00

In Melinda Fulmer of MSN Real Estate article, Buying a foreclosure? Plot your strategy

http://realestate.msn.com/article.aspx?cp-documentid=20508059&pgnew=true#atoolb

She disucusses how Buying a foreclosure property is neither easy nor a guaranteed bargain. In her artcle she gives at least three tips on how beginner’s should approach this complicated part of the market.
I personally feel it was a great article stated simply and easy to understand. I added my two cents to to say, "Great article and you are so right. I would also like to add that investors looking to dive into the foreclosure market consider applying the S.M.A.R.T rules to any property to look to purchase. You can find more information on this websites www.MakeNoMistakes.com. It's a website that focuses on Avoiding Costly Mistakes including those when considering purcahsing a foreclosed property or a short sale." Best of Luck!

GET YOUR $8000 TAX CREDIT UPFRONT - MAY TAKE A LITTLE TIME

2009-05-19T14:15:00.000-07:00

An article by Kenneth R. Harney from the Washington Report wrote the article below about the $8,000 Tax Credit - This is good news for first time homebuyers that are looking for ways to come up with their down payment, but when will it really happen?

By Kenneth R. Harney
Home builders and Realtors cheered in Washington last week when HUD Secretary Shaun Donovan announced that FHA will allow lenders and government agencies to “monetize” the $8,000 federal homebuyer tax credit, providing purchasers with downpayment cash upfront, available at closing, rather than waiting for the IRS to mail them a tax credit check.

Speaking at the mid-year conference of the National Association of Realtors, Donovan said HUD supports “bridge loan” programs designed to help first-time buyers come up with needed cash.
Under the bridge loan concept, an FHA-approved private lender, a state or local housing agency, or an FHA-approved nonprofit organization could advance as much as $8,000 for downpayment and closing costs -- in anticipation of receipt of the $8,000 credit months or weeks down the road.
Sanctioning bridge loans could improve the effectiveness of the federal credit program significantly, said Joe Robson, president of the National Association of Home Builders.
Bill Riley, incoming president of the Washington State Realtors Association, estimates that half of all would-be first-time buyers lack the downpayment resources needed to complete a purchase, and therefore aren't making use of the credit.
Donovan said technical instructions to lenders for the bridge loan program would be provided by FHA shortly.
In the meantime, 10 state housing finance agencies already run credit monetization programs on their own. They include the states of Missouri, Colorado, Delaware, New Jersey, Tennessee, Idaho, Ohio, Pennsylvania, New Mexico and Washington.
Most of the programs provide second liens with no interest charges for a period of months, with the expectation they'll be paid off immediately after the homebuyers receive their IRS credit checks.
In some cases the liens turn into second mortgages with 10 year terms and floating interest rates if the buyers choose not to repay the advance with the tax credit check.
In the wake of Donovan's announcement, major mortgage lenders are likely to gear up their own programs, bringing bridge loans for first time buyers to all 50 states, not just the ten that pioneered the idea.
However, anyone who wants to take advantage of all this needs to move fast. Under the federal tax credit rules set by Congress, purchasers must close no later than November 30 to be eligible. They must not have owned a principal residence at any time during the three years preceding their purchase. Buyers can claim the 2009 credit against their 2008 federal tax returns - they just need to file an amendment - or can wait and file next April.
For a detailed Q&A on the credit program, go to www.federalhousingtaxcredit.com.
Published: May 18, 2009

Mistake # 1: Buying real estate unprepared because you lack the right knowledge

2009-05-11T20:07:00.000-07:00

Mistake # 1: Buying real estate unprepared because you lack the right knowledge

Though we encourage you to seek professional guidance throughout the real estate purchasing process, we’ll also tell you not to depend solely on these professionals. They’re human, and humans make mistakes! By all means, establish a good relationship with a professional, but do your own research too, so you understand what he or she is recommending. You can start by reading this reference guide and noting the real estate mistakes we’ve covered. You might also follow up with a seminar to further educate or refresh your memory on the buying process. It’s not every day you purchase real estate!

Throughout the Make No Mistakes About...Buying Real Estate reference guide you’ll find descriptions and explanations about the mistakes other buyers have made. You’ll also find the tools and checklists to help you Make No Mistakes™ About…Buying Real Estate, even when you work with professionals. We provide this information because it’s our goal to level the playing field between the haves and the have not’s – the people with real estate knowledge and those who have little or none. Here are just a few examples of what you’ll gain from this reference guide:

· Examine your present and future financial goals to ensure you don’t buy too much house even when a loan officer says you can afford more
· Determine which mortgage loan is best for you when you’re presented with more than one option
· Choose the best property based on your budget, “must haves” and desires in a home
· Learn the specific contractual language you should have in your earnest money contract (which isn’t included in the standard contracts)
· Know which elements will help you negotiate the best deal
· Read and understand the HUD-1 (Settlement Statement), which itemizes the financial details at closing
· Know what to do after you close in order to best protect your investment

In reality, YOU are the only one who can truly look out for your best interest. And when the transaction is complete, you are the one who is ultimately responsible for the property and for paying the mortgage loan! Go to www.MakeNoMistakes.com for more info or follow us on http://twitter.com/MakeNoMistakes.

VA Requirements on Foreclosed Property

2009-04-06T08:12:00.000-07:00

More protection for vetern's and the VA. A new rulings on how VA purchasers and sellers must now address home needed repairs has been announced. This a plus for homebuyers on thoses properties that are marketed AS-IS. However, a seller (Bank) could always consider another buyers offer. Read the circular below:

CIRC. 26-09-05: VA APPRAISAL REQUIREMENTS ON FORECLOSED PROPERTIES (03/31/09)
1.
Purpose. This circular reaffirms Department of Veterans Affairs (VA) policy that all properties, including foreclosed properties, must meet minimum property requirements (MPRs) prior to VA Loan Guaranty.

2.
Details. Since there has been an increased interest in the purchase of foreclosed properties, VA believes it is important to reaffirm its policies regarding MPRs. As outlined in the VA Lender’s Handbook (VA Pamphlet 26-7) Chapter 12, VA requires that all properties, including foreclosed properties, be in a condition that meets our MPRs or that there is a reasonable likelihood the property can be repaired to meet the MPRs prior to loan closing. In those cases where repairs are required, the VA appraiser must list on the appraisal report any repairs necessary to meet MPRs and provide an estimate of the fair market value for the property, as if repairs had been completed. The seller is expected to pay for these required repairs since they are included in the estimate of value. It is not allowable to escrow funds from the veteran purchaser for use in making the required repairs. Additionally, to protect both the veteran’s and VA’s interests, lenders selling a “Real Estate Owned” property may not process this case under our Lender Appraisal Processing Program; these cases must be ordered as an “IND” appraisal.

3.
Rescission: This circular is rescinded January 1, 2012.
By Direction of the Under Secretary for Benefits

VA Taking Steps to Reduce Mortgage Fraud

2009-04-06T07:58:00.000-07:00

In order to reduce mortgage fraud the VA is implementing certain guidelines. Someone up there is doing there homwork. :-)

The Secretary of Benefits department has released CIRC. 26-09-03: AGREEMENT OF SALE / SALES CONTRACT TO BE PROVIDED TO THE FEE APPRAISER (03/27/09)
1.
Purpose. The purpose of this circular is to announce the Department of Veterans Affairs (VA) requirement that a copy of the agreement of sale or sales contract be provided to the fee appraiser by the requester of the VA appraisal immediately upon assignment.

2.
Background. When the value opinion to be developed is market value, Uniform Standards of Professional Appraisal Practice requires an appraiser to analyze all agreements of sale, options, or listings of the subject property, current as of the effective date of the appraisal, if such information is available to the appraiser in the normal course of business.

3.
Details. VA believes that the fee appraiser must have access to such information to ensure that the estimate of value represents a proper value, which includes consideration of financing data, sales concessions, or property conditions typically contained in the agreement of sale. Furthermore, for VA loan origination purposes, VA expects that the agreement of sale is available, or would be available, to the requester of a VA appraisal.

4.
Actions. Effective immediately, the requester of a VA appraisal must provide a copy of the agreement of sale and all addenda to the appraiser immediately upon assignment, but not later than 1 business day after the date of assignment. If the agreement of sale is amended during the process, the requester must provide the updated contract to the appraiser. The assigned VA appraiser will analyze the agreement of sale and consider that analysis in establishing the fair market value of the property and any affect on VA minimum property requirement repairs. Should the requester fail to provide the agreement of sale to the appraiser, the appraiser will, upon notice to the requester, hold the assignment and notify VA of the delay.

5.
Rescission: This circular is rescinded January 1, 2012.

How Do You Stop Giving Your Money Away?

2009-03-12T11:11:00.000-07:00

So how do you stop from giving all that money away? Protect your credit scores, since it plays a major role in our society and how creditors view you when you want to borrow money or purchase items on credit. In fact, today, insurance companies and even employers look at your credit reports to see how you spend money, to determine your credit worthiness and to verify your employment. There are even creditors who use scoring models based on where you spend your money as a way to determine their risk. For example, in a recent article written by Money magazine, credit card holders who frequent certain types of establishments pose a higher risk. To our surprise, some of these were marriage counselors, nightclubs, massage parlors, billiard halls and bars.

Highlights of Obama’s Making Homes Affordable

2009-03-12T10:16:00.000-07:00

The Obama administration launched what it calls the "Making Home Affordable" initiative today: a $75 billion loan modification program, which runs through 2012.

Here are the highlights:

Mortgages for single-family properties that are worth more than $729,750 are excluded.
Interest rates can be lowered to as low as 2 percent and then if necessary; the term of the loan can be extended to a maximum of 40 years.
The home must be a primary residence (verified with tax return, credit report, and other documentation such as a utility bill). The home may not be investor-owned.
The home may not be vacant or condemned.
Borrowers must provide their most recent tax return and two pay stubs, as well as an "affidavit of financial hardship" to qualify. You need not wait to become delinquent with your payments -- a plan can be put in place as soon as you think you may have trouble making your mortgage payment.
Borrowers in bankruptcy are not automatically eliminated from consideration for a modification.
Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving their legal rights.
Borrowers are only allowed to have their loans modified once, and the program only applies for loans made on Jan. 1, 2009 or earlier.
Eligibility is restricted to loans originated on or before Jan. 1, 2009.
Incentives are provided to extinguish second liens on loans modified under the program.
Homeowners are eligible for up to $1,000 of principal reduction payments each year for up to five years. Monthly payments can come down to as low as 31 percent of the borrower's gross (pre-tax) income.
Separately, up to 5 million borrowers who have mortgages held by government controlled mortgage finance giants Fannie Mae and Freddie Mac should be eligible to refinance through June 2010.

Borrowers can find out if their loan is owned by Fannie Mae in one of two ways:

Call your current mortgage lender or servicer. The phone number should be on your monthly mortgage statement or monthly coupon book. --
Contact Fannie Mae. Call 1-800-7FANNIE (8 a.m. - 8 p.m. ET) or visit http://www.fanniemae.com/homeaffordable.

Fannie Mae also intends to make an online tool available later this month so borrowers can look up their loan and determine if it is owned by the company.

The Mortgage Reform and Anti-Predatory Lending Legislation

2009-02-23T17:42:00.000-08:00

The Mortgage Reform and Anti-Predatory Lending Legislation as it’s currently written is designed to:

· Stop predatory lending by calling for all mortgage originators, brokers and bank loan officers to be licensed and registered.

· Ensure that mortgage originators act in the borrower’s best interest. Mortgage originators must present borrowers with loan products that match borrowers’ qualifications.

· Require subprime lenders to take into account the fully-indexed rate and fully-amortized payment on adjustable rate loans before they give the loan to the borrower. This simply means the lender must show the borrower can pay the mortgage payment after it has fully adjusted to its highest rate. This is what happened to many people who ended up in foreclosure: they didn’t understand that their mortgage payment would keep going up, and soon they couldn’t afford it.

· Require the lender to include taxes and insurance payments while calculating whether or not a borrower can afford a house. Lenders must include them with the principle and interest calculations, so borrowers can see what their actual monthly payments will be.

Require a borrower to participate in pre-loan counseling if the borrower will receive a high-cost loan .A “high-cost loan” refers to a mortgage with very high points and fees.

Many people are opposed to the bill because they believe it will end the practice of brokering mortgage loans. By eliminating the yield spread premiums (i.e., commissions) the broker income will be affected, which means there will be fewer and fewer mortgage loan brokers. In turn, consumers will have fewer options to obtain financing.

$8000 Tax Credit For 1st Time Homebuyers - A Real Refund

2009-02-17T18:32:00.000-08:00

Below is the article from CNN regarding the $8000 Tax Credit for First Time Home buyers and those who have not owned in the last three years:

This is a great opportunity for all new 1st time homebuyers or those who have not owned for the last three years with good credit and/or cash for your down payment. So if you are low in cash and want to own this year you can apply the $8000 to last years taxes according to the article. Which means you can get the cash in hand in order to buy your new home by November 30, 2009. However, if you keep reading some states are trying to come up with some creative ways to address the down payment challenge. One example is to loan the money up front to the homebuyer then get it back later when their taxes are filed for example. I would think my solution is less complicated. Read on - love to hear your thoughts. Be sure to also check out www.MakeNoMistakes.com.

http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm

NEW YORK (CNNMoney.com) -- There's a nice windfall for some homebuyers in the economic stimulus bill awaiting President Obama's signature on Tuesday. First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.
A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision. Adam Billings of Knoxville, Tenn. wrote to CNNMoney.com asking:
"I will qualify as a first-time home buyer, and I am currently set to get a small tax refund for 2008. Does that mean if I purchased now that I would get an extra $8,000 added on top of my current refund?"
The short answer? Yes, Billings would get back the $8,000 plus what he'd overpaid. The long answer? It depends. Here are three scenarios:

Scenario 1: Your final tax liability is normally $6,000. You've had taxes withheld from every paycheck and at the end of the year you've paid Uncle Sam $6,000. Since you've already paid him all you owe, you get the entire $8,000 tax credit as a refund check.

Scenario 2: Your final tax liability is $6,000, but you've overpaid by $1,000 through your payroll witholding. Normally you would get a $1,000 refund check. In this scenario, you get $9,000, the $8,000 credit plus the $1,000 you overpaid.

Scenario 3: Your final tax liability is $6,000, but you've underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.

To qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers may not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
Applying for the credit will be easy - or at least as easy as doing your income taxes. Just claim it on your return. No other forms or papers have to be filed. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.

Lukewarm reception

The housing industry is somewhat pleased with the result because the stimulus plan improves on the current $7,500 tax credit, which was passed in July and was more of a low-interest loan than an actual credit. But the industry was also disappointed that Congress did not go even further and adopt the Senate's proposal of a $15,000 non-refundable credit for all homebuyers.
"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Association of Homebuilders (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."

Even so, the $8,000 credit will bring an additional 300,000 new homebuyers into the market, according to estimates by Lawrence Yun, chief economist for the National Association of Realtors.

The credit could also create a domino effect, he said, because each first-time homebuyer sale will lead to two more trade-up transactions down the line. "I think there are many homeowners who would be trading-up but they have had no buyers for their own homes," Yun said.
Who won't benefit, according to Mark Goldman, a real estate lecturer at San Diego State University, are those first-time homebuyers struggling to come up with down payments. The credit does not help get them over that hurdle - they still have to close the sale before claiming the bonus.

One state, Missouri, is trying to get around that problem by creating a short-term loan on the tax credit of up to $6,750. The state would loan borrowers the money so they could use it at closing as part of the downpayment. Then, when the buyers receive their tax credit from the IRS, they pay back the state. Other states may follow with similar programs, according to NAHB's Dietz.

Many may look at the tax credit as a discount on the home price, according to Yun. A $100,000 purchase effectively becomes a $92,000 one. That can reassure buyers apprehensive about purchasing and then watching prices continue falling, he added.

And it provides a nice nest egg for the often-difficult early years of homeownership, when unexpected repairs and expenses often crop up. Recipients could also use the money to buy new stuff for their home - a lawnmower, a rug, a sofa - and, in that way, help stimulate the economy.

New $15,000 Tax Credit - Slashed by the Senate!

2009-02-15T09:48:00.000-08:00

As of this writing, the Senate approved a $15,000 homebuyer tax credit in order to stimulate sales and soak up the excess inventory of unsold houses. The amendment expands an existing $7,500 homebuyer tax credit to $15,000, or 10% of the purchase price, whichever is less. It is our understanding that a borrower must also apply a minimum of 5% towards the down payment in order to qualify. Unlike the $7500 tax credit of 2008 the 2009 tax credit is available to all homebuyers purchasing a primary residence only. It is nonrefundable, which means that buyers can only claim the credit if they owe income taxes and can claim the credit on two years of tax returns. In addition, the 2009 tax credit does not have to pay back so long as the borrower lives in their home two years. For example, buyers could claim a $7,500 credit in 2009 and a $7,500 credit in 2010. However, if a family’s tax liability is less than $7,500 for two consecutive years they would not receive the full value of the credit. The Senate version requires buyers to pay back the credit if they sell the house less than two years after they buy it. For more information on this subject check out:

1.http://blogs.wsj.com/developments/2009/02/09/faq-senate-stimulus-bills-home-buyer-tax-credit/

2.http://www.makenomistakes.com/ or

3.http://www.irs.gov/newsroom/article/0,,id=187935,00.html

Loan Modifications - Is It Really Working For Those Who Need It?

2009-02-15T09:03:00.000-08:00

If you qualify for loan modifcation, you may be able to refinance the debt and/or extend the time period over which you pay back the past due amount to be as long as the remaining term of the loan. You may qualify for this if you no longer have the financial problem and can afford the new payment amount. This option should be the first you seek if your intent is to still live in and pay for the home. But beware, not too many loan modifications are working for struggling homeowners who need foreclosure prevention. And in many cases, the loan modifications backfire on homeowners they are meant to help. Here’s why:

· More than 50% of these loans are packaged with increased payments.
· Fewer than one in ten of the current loan modifications result in a reduced principal loan balance.
· During the housing boom many borrowers were sold on the benefits of a second mortgage in order to avoid paying mortgage insurance. Not many first lien mortgage holders are willing to help borrowers with payments on second mortgages. Similarly, the second mortgage holders would rather not waive their rights in a loan modification situation that could result in a 100 percent loss. They'd rather try collecting a few more payments before the borrower goes into foreclosure.
· Overwhelmed loan servicers are set up for an automated foreclosure process that has built-in financial incentives. They are not set up for the case-by-case negotiation process necessary for modifications.
· Many loan servicing companies are set up to receive monetary incentives to foreclose – rather than modify – your loan.
· Many of the loans that were purchased by private investors and not the secondary market can’t be found and brought into the process because the loans have been divided so many times, which means they would all have to agree to the modification.

As of this writing loan modification is not truly working for all those who need it. Instead we are seeing fraud from a largely unregulated industry of private loan modification service companies popping up to take advantage of those in need of real help. They are apparent when they charge thousands of dollars in upfront fees. We ask to you continue to check our blog on our website at http://www.MakeNoMistakes.com/ and click on loan modification to keep updated. It is our goal to always have information available that is current and helpful.

Mistake # 13: Not Taking Time Out To Analyze Your Personal Budget

2009-01-05T17:13:00.000-08:00

The Make No Mistakes Budget Checklist is designed to help you clearly see where you spend your income. We know the checklist will help you be more aware of your financial health. This is crucial, because we want you to be honest with yourself as you determine if owning a home is the right move for you. In Chapter 2, we stated that there are reasons why owning a home is not right for everyone. So be honest with yourself. Though home ownership offers many benefits, it can be a huge weight on your shoulders if you are strapped every month to keep up with your monthly payments. Don’t be overwhelmed or afraid to work through the Budget Checklist. Reality is sometimes harsh, but believe us when we say the reality of making a wrong decision on a home purchase is more than harsh – it’s a nightmare. We’re here to make sure your home-buying experience, whether you do it today or sometime in the future, is a not a nightmare but a dream come true.

Before we get started on the checklist, let’s define a few terms. Revolving debt is an important one. This is debt a borrower has applied for and which carries an outstanding balance. You make payments on your revolving debt at regular intervals. Examples of revolving debt are credit cards, a car loan, and a mortgage note, i.e., a mortgage loan. When you talk with a loan officer for the first time and he or she looks at your credit report, your revolving debt is primarily what the loan officer will use to determine if and how much house you can afford. Even though you probably make other monthly payments for such things as utilities and medical bills, they will not appear on your credit report (unless you don’t pay them at all, in which case they’ll show up as collections) and they won’t be factored into the loan officer’s decision because they’re not considered revolving debt.

Let’s get started on your Budget Checklist. While we show excerpts of the checklist in this chapter and that may be all you need for now, you might want to download a copy of the checklist and have it displayed on your computer screen while we explain how easily it works. It’s in Excel and uses several of the software’s unique features, so you’ll get more benefit from working with it onscreen than you will from a printed copy. Visit our website at http://www.makenomistakes.com/, click on “Real Estate Forms and choose the items you want to download.

Mistake #12- Trying to Sell Your Home…. Alone! - 8 Steps to FSBO Safety

2008-10-26T08:56:00.000-07:00

Selling your home without an agent can easily turn into a nightmare. You are taking a huge risk by inviting strangers into your home. Before you open the front door to someone you don’t know, read over the (8) safety tips below and take the necessary safety precautions.

Never ever show your home alone. Recruit a family member or a friend to accompany you.
Put all prescription medicines, jewelry, credit cards, keys and all other valuables in a safe place, or remove them from the home during showings.
If someone stops by unexpectedly, get their driver’s license number and a few references. Then, schedule an appointment for them to see the home at a later date. You will need the time to do some research and validate the prospective buyer. If they refuse to supply the information, refuse to show your home.
Always let a friend or neighbor know the dates and times you are going to show your home and give them the information you gathered earlier. If something were to happen, at least the police would have a lead on a suspect.
Do not park your car in the driveway. Park on the street so that the possibility of someone pulling in behind you and blocking you in is eliminated.
Have all visitors sign a guest book when they come to tour your home. Explain that it is a safety precaution and jot down a license plate number if possible.
When showing your home, pay close attention to what the visitors are asking. Questions like “Do you have a safe?” and “Do you have a security system?” should raise a red flag. Inform them that you are expecting another prospective buyer soon and escort them to the door.
Follow, never lead, your visitors through your home. You need to be able to see them at all times. Do not enter bedrooms, bathrooms, or other rooms that do not provide an exit to outside because you could be locked in. Always be prepared to make a speedy exit.

I know it seems overwhelming to think that someone might take advantage of you, but unfortunately, that is reality. If you choose to list your house on your own, be careful! Know the risks and be cautions.

Mistake #11- Not Maintaining an Appealing Credit Score – 5 Easy Steps To Improving it Fast

2008-10-26T07:09:00.000-07:00

A credit score is a number that is used to predict how likely you are to pay future debts. Most lenders consider a score of 700 and higher to be a good indicator of financial health. A high credit score can help you get a lower interest rate, with a lower down payment requirement. Mortgage lenders check credit scores 100% of the time before allowing you to take out a home mortgage. They look at things like how many credit cards or lines of credit you have, the amount owed on each one, and if you make your payments on time.

Here are a few simple ways to improve your credit rating:

1. Pay ALL bills On Time! Do not miss one payment! Get caught up fast!
2. Do not apply for any credit, credit cards, etc …
3. Do not use your credit cards unless absolutely necessary.
4. Do not cancel or close credit accounts that show excellent payment histories!
5. Do not co-sign for ANYONE!

There are services and websites that will allow you to keep track of your credit scores. If you think a mistake has been made on your credit report, contact the creditor and the credit reporting agency to let them know an error has been made. For more information on improving your credit scores check out www.MakeNoMistakes.com.

Mistake #10- Not Getting Your Home Prepared Before Entering the Market – 5 Easy Steps

2008-10-26T06:53:00.000-07:00

Many people don’t get their home in “Showing Condition” before placing it on the market. This could affect the time it takes to sell the home, and even the sales price.

Here are a few tips that will help your home stand out to buyers:

Clean and/ or paint the front door and mailbox. These are going to be some of the first things that buyers see and you want to leave them with a great first impression.
Keep the lawn nicely maintained and trim the trees and shrubs. Also keep the walkways and driveway swept. Add some color by placing a potted plant on the doorstep. This will help boost the curb appeal.
Remove the clutter from your home. Go ahead and pack everything that you won’t need. Things such as knick-knacks, games, CDs, worn rugs, magazines and books, and a collection of family photos can be packed and stored away. Reducing the clutter makes the home appear more open.
Add a fresh coat of a neutral-colored paint to the interior and shampoo the carpet. You want the buyers to feel like the home is clean and inviting.
Finally, get out those yellow rubber gloves! Dust the blinds, all furniture and wash those fan covers. Clean the bathroom and kitchen until they sparkle. Celebrate by setting out a bowl of potpourri or treating yourself to some fresh flowers to compliment a clean home.

For more resources, visit www.MakeNoMistakes.com.

Mistake #9- Not Taking Advantage of Assistance Available for First-Time Home Buyers

2008-10-26T06:51:00.000-07:00

Many first-time home buyers are not aware that there are several sources that will assist with a down payment. The government offers several solutions to assist with the purchase of a home that is only available to those who have not owned a property in the last three years.

Government bonds and Grant programs differ, but some provide monetary grants in the form of a forgivable loan. However, everyone knows there is no such thing as free money. The loan is typically due if, and when, you sell that home.

For more information, or to see if you qualify, google “down payment assistance” followed by your city and state.

Another form of assistance that the government is offering is in the form of a $7500 tax credit. Simply put, once all income, exemptions, deductions, etc have been totaled for the year, you can then subtract a maximum of $7500. But again, we know nothing in life is truly free. This tax credit must be repaid over a 15 year period. There is no interest charged, and the most you would be responsible for repaying is $502.50/year. There are restrictions based on income and sales price of the house.

Many first-time home buyers don’t take advantage of the assistance that is available. Do your homework, you might be pleasantly surprised by what you find.

For more information and buyer resources, visit www.MakeNoMistakes.com.

Mistake #8- Moving into a Neighborhood that Isn’t a Good fit

2008-10-26T06:43:00.000-07:00

There are many things to consider when searching for a new home. You may find the perfect home, but it could be a nightmare if the neighborhood isn’t what you thought.

Early in your home search, narrow down the neighborhoods. Drive through the neighborhoods in the evening and on the weekends. Are the other homes in good shape? Are they nicely painted with well-maintained yards? Roll down your windows or get out of the car and just listen. Do you hear loud music or parties? Talk to some of the neighbors and see if you think it would be a good fit for you and your family. You will also want to find out if there is a Homeowner’s Association, and what dues are required.

Also consider the location of the neighborhood. Is it convenient to your place of employment and activities that you do for enjoyment? Pay attention to the traffic patterns during different times and see if the roads are clear or congested. Check to see what the neighborhood has to offer. Many times there are parks, playgrounds, and sometimes a golf course located within a neighborhood. Are there restaurants, shopping centers, or movie theatres close?

If you spend a little extra time researching the neighborhood, it’s less likely that you will find yourself awake at night, listening to your neighbor and his friends and their friends choice of music for the third night in a row. Check out http://www.makenomistakes.com/ for its chapter on "Searching For The Right Property."

Mistake #7 - Help Is Available - Why Won't You Take Advantage Of It?

2007-12-12T20:27:00.000-08:00

Homeowners could get some relief from a plan negotiated by the Bush administration to freeze interest rates on subprime mortgages that are scheduled to rise in the coming months. The President has been accused of moving too slowly to address a crisis that has spread to the broader financial market. But he also was careful not to sound as if government money was involved. This plan involves a voluntary, private-sector arrangement among some of the largest lenders.

1.2 million people could be eligible for help, but only a fraction will be eligible for help iin the form of a rate freeze. Others would get assistance in refinancing with their lenders and moving into loans secured by the Federal Housing Administration.

The aid will only come to those who ask for it and call: 1-888-995-HOPE.

Mistake #6 - Most Real Estate Agents Suck! Don't Choose the Wrong One!

2007-12-12T20:05:00.000-08:00

No matter what profession one is in, only a small percentage of those in it will ever strive to perfect their skills. The rest are happy just learning enough to get by. Understand this: it does not take much to get licensed. In the state of Texas, if you are a college graduate you are required to take a minimum of four classes totaling 30 hours. Those without a college degree have to take much more. Most students’ goals at that time are to simply get through the boring class, pass the state test and get the state license. With this said, the retention of the information probably did not become useful until they actually found someone who became a guinea pig for them to get practical experience. Unfortunately, all the class training in the world doesn’t compare to actually going through a “real” complete transaction, a real experience.

You may ask, what about the national real estate companies that tout how great and knowledgeable their agents are? As much as real estate offices claim to offer training it is usually up to the agents as to whether or not they choose to go through any of the training classes or programs their real estate broker offers. Most agents are contracted and not employed. The real estate broker is typically the owner of the agency. The agency holds the active licenses of the real estate agent. The goals and objectives of a real estate broker and a real estate agent are different. The broker’s goal is to bring on as many agents as possible to help grow their business, and a real estate agent’s goal is to bring on as many buyers and sellers to help grow their business.

So, though it is in the best interest of the broker to put out well-trained agents into the field, their number one objective is to bring on as many agents as possible in order to charge a monthly fee and gain a split on the commissions. Therefore, you have many real estate agents who are out there winging it and trying to figure out how to run their business with no business experience. This lack of business experience is difficult to overcome and it is hard to get help because most busy real estate agents don’t make time to help each other. Many view it as helping their competition and are not interested in sharing trade secrets. As a result, many learn by making mistakes through trial and error. Don’t get caught up in one of their mistakes.

Also, real estate is a straight commission business: no sales, no income! As a result, many real estate agents start off part-time trying to work the business on the weekends. They have not committed to working the business full-time. The risk of them making mistakes is great because the business is so detail oriented. Years of practice makes perfect and you need a lot practice to get good, let alone perfect. Check out http://www.makenommistakes.com/ to get a list of a few characteristics that should disqualify them as your agent:

Mistake #5 - Do I Have To Pay School Taxes If I Don’t Have Children?

2007-11-06T11:02:00.000-08:00

Do I Have To Pay School Taxes If I Don’t Have Children? Yes! It is a fact that every home is assigned to a specific school district. You contribute to the school in the form of property taxes whether you have children attending them or not. So know your tax rate. You would be surprised as to how many people don’t pay attention to this aspect of the purchase process. You will need to take notice of the status of the seller’s tax base. Are they retired senior citizens? Is the property their homestead? Their rate may be different than yours, depending on your age, or what your use of the property is going to be. For more information or examples on this issue you are welcome to check out www.MakeNoMistakes.com.

Mistake #4 - At Closing, I want to Make Sure the Sellers Have Paid Their Fair Share of Taxes!

2007-10-28T09:44:00.000-07:00

At closing, it is the job of the Title Company to help determine the tax liability for the current year when the actually tax bill has not been issued. For example, the tax bill for the current year usually comes out around October. (Check your local city and state). If you close prior to this bill, the Title Company has to then estimate the tax liability. The decisions are always based upon historical data. That is, what was paid last year. This estimate could certainly pose a problem for the buyer if the title company did not estimate enough. That means the buyer may have to pay a portion of the taxes that was due from the seller. There is a document that both the seller and buyer signs off at closing that states that both parties agree to address the tax differential once the bill arrives. This requires the new homeowner to make contact with the old seller and ask for the difference. This means you have to hope the seller will be responsible and pay the difference. The Title Company will not get involved to resolve this issue if it becomes a problem. So it is always best that as a buyer the title company has taken out enough to address the estimated taxes.

How does one determine if enough monies were taken out to pay the taxes? I would suggest looking at the appraisal districts records and seeing if the appraised value and tax rates of the home increased or decreased. If any of these areas increased this is where it becomes important that the amount estimated reflects an increase over last year’s taxes. You can gain more information on this subject in our book entitled make No Mistakes About…Buying real Estate!

Mistake # 3 - What Happens When The Home You’re Buying APPRAISES For LESS Than You Offered?

2007-09-19T00:10:00.000-07:00

What Happens When The Home You’re Buying APPRAISES For LESS Than You Offered? The answer is quite simple, either pay the difference in cash or find another home. In the self published book, Make No Mistakes About Buying Real Estate, the authors discuss the emotions involved in purchasing. That is you can easily set yourself up for a major mistake because your emotions of wanting a particular home so bad blurs your logic and practical sense. However, it’s always best that you look at a home as a business opportunity if you plan to one day use the equity and appreciation for another property or something else. When an appraisal is done by the lender the appraiser is looking for comparable properties similar to the property you are interested in purchasing. They take into consideration number of bedrooms, baths and square footage of the property as well as other upgrades to the home. These differences whether they help to increase value or decrease are called the adjustments. Be careful to review them. Often times the appraiser can be encouraged to increase the values of the home in order to make the deal work. The problem with this is that you as the buyer end up paying more than the house is truly valued for. Get the facts at http://www.makenomistakes.com/.

Mistake # 2 - How Can You Lose THOUSANDS And Not Even Notice?

2007-09-18T22:51:00.000-07:00

There are many many ways a buyer can lose money in the Real Estate Game. One less conspicuous way is by not bothering to review the appraisal report. It’s extremely important that one takes the time to review the appraisal carefully. As a buyer you are entitled to receive a copy but may not get it from the lender. Often buyers just want to know what the home was appraised for and as long as it’s greater than they’re paying everyone is happy and no one bothers to look at the numbers. Here is where a HUGE MISTAKE takes place and is easily overlooked, it’s in the size (sq. ft.) of the property. Be wary of listings that say they are larger than they actually are in order to give off a lower price per sq. ft. For example, the listing can say a home is 3000 sq feet when in fact the home is 2900 sq. ft. If the home is priced at $150 a sq. ft., a mere 100 sq. ft of missing space can actually cost you $15,000!

Mistake # 1 Failing To Take Into Consideration the PREPAYMENT PENALTY

2007-09-18T20:43:00.000-07:00

As mentioned in the book, Make No Mistakes About Buying Real Estate, one of the first rules when looking to purchase real estate is to make your deal upfront! And part of that deal involves your Mortgage Loan and the Prepayment Penalty. That is the penalty associated with your loan in the event you try to Pre Pay the existing loan off before the agreed upon time. In fact, Pre Payment Penalties can be quite hefty! Often times it's 6 months of interest which is usually the majority of the mortgage payment during the first three years of the loan repayment. It is very important that at the time of signing your loan documents you understand whether or not there's language in your paperwork addressing this very subject. Regardless of what the loan officer said or anyone else tells you look at your paperwork for yourself and make sure you understand this particular aspect of your mortgage loan. There is nothing worse than trying to flip a property or trying to sell it early to find out that your profits have to go towards paying the lender because you didn't know you had a penalty. Go to http://www.makenomistakes.com/ to gain more information on the subject matter. --- "Pass The Knowledge On!"