Real Estate Information

Did you know that in 2009, the Federal Housing Administration (FHA) insured nearly 30% of the single-family mortgage market and that more than 50% of all first-time home buyers used FHA programs?

In today’s challenging credit climate, many home buyers and homeowners are turning to FHA for insurance, to purchase loans, and for refinancing options to get out of risky ARMs or subprime loans. As a Member of the Top 5 in Real Estate Network®, I have access to information from the National Association of Realtors® (NAR) regarding recent and upcoming changes to FHA’s single-family program that could impact the use of these important programs for consumers in the future. According to Jerome Nagy, senior regulatory policy representative at NAR, in order to replenish its dwindling reserves, FHA has implemented or proposed the following changes:

1.  Mortgage Insurance Premium (MIP)
FHA has increased the upfront MIP from 1.75% to 2.25% for borrowers while it awaits legislative authority to increase the annual premium. FHA stated it will decrease the upfront premium when they can increase the annual premium.

2.  Credit Score Changes
FHA has proposed that borrowers with a credit score below 580 be required to make at least a 10% down payment. The minimum down payment will remain at 3.5% for all other borrowers.

3.  Seller Concessions
FHA intends to propose a rule to decrease allowable seller concessions from 6% to 3%. NAR plans to argue against this decrease since closing costs differ greatly among states, and with fees on services (such as appraisals) increasing, seller concessions can be a vital part of closing the transaction.

4.  FHA Loan Limits
Current FHA loan limits are as high as $729,750 in high-cost areas, and are set to expire at the end of the year and revert to lower amounts, potentially putting a damper on a housing market rebound. A decrease of current limits would adversely affect 612 counties in 40 states and the District of Columbia, reports NAR, which is urging passage of legislation to make the loan limits permanent.

5.  Condominium Rules
FHA is delaying implementation of “Mortgagee Letter 2009-19” and making temporary enhancements to the policy instead, such as eliminating the owner-occupancy requirement for FHA condo mortgages and reducing the number of units sold prior to FHA’s endorsement of a unit from 50% to 30%.

Please feel free to e-mail me for guidance on the above FHA programs and how changes might affect your particular situation. Also, please pass this article on to anyone you know who could be impacted by changes to FHA policy.

Fact: All Real Estate Headlines Are Not Local

None of us are immune to the constant stream of negative news about the real estate market. There’s no denying the fact that the market has suffered, along with our country’s economy, over the past couple of years.

Unfortunately, this has created a serious dilemma as many consumers unwittingly base their real estate decisions on national media reports. Those of us in the industry live by the term “all real estate is local,” and as a consumer, so should you—otherwise, you run the risk of making an irreversible real estate mistake.

The truth, which you won’t find in the national media, is that real estate markets not only vary from region to region but from county to county, neighborhood to neighborhood…even street to street. I know from my national network of leading real estate professionals, The Top 5 in Real Estate Network®, that there is tremendous variation in home sales prices from locality to locality, and that buyers and sellers are often heading into—or worse, avoiding all together—a real estate investment based on misinformation from national media reporting.

Therefore, if you are thinking about buying or selling a home, it’s essential that you talk to a seasoned real estate professional in the areas you’re considering. Keep the following tips in mind when considering a real estate sale or purchase:

1.  Consult with a local real estate professional—like a Member of Top 5—for the most up-to-date information on the local market.
2.  Ask for statistical reports and trend graphs—the hard facts. Real estate professionals have access to actual data that can be broken down into extremely finite components, such as a particular street or neighborhood.
3.  Ask for comparative reports for the last 3-4 months of the current year, versus the previous year. This will reveal the latest market trend and provide you with concrete facts.
4.  Media reports can vary widely based on state, city, and neighborhood – read, listen, learn, but always revert to the facts for the specific area in which you are looking, especially if you are relocating to a different state or region.
5.  Also take seasonal considerations into account. In vacation-destination areas, the numbers will vary greatly from national and state data.

For many real estate consumers, today’s market is an unbelievable opportunity to buy or move up to a different home. Don’t let the national headlines scare you away. Consult with a local real estate professional to get only the facts that matter to your specific situation and location. Please e-mail me for more information and pass this article along to others who might benefit from the real facts.

Expand Outdoors, Increase Your Home's Value

With many Americans experiencing a financial pinch these days, there is a growing trend among homeowners nationwide to look to the outdoor areas of their own property for not only relaxation and entertainment value, but to also expand their living space and thereby, increase their home’s value.

Through my national network of leading real estate professionals, the Top 5 in Real Estate Network®, I have learned that homeowners across the country are spending more time at home and showing an increased interest in outdoor living areas. By sprucing up your patios, porches and decks, you are making your home more livable now and more attractive to future buyers.

Stylish patios and outdoor rooms with comfortable furnishings and convenient cooking and eating areas provide new opportunities for recreation and relaxing family times. A recent survey by the Propane Education & Research Council, found that 35% of homeowners have a finished outdoor room and 34% say they are planning to design one in the next year or two.

Some of my clients are even foregoing expensive vacations in favor of putting in a swimming pool. The reality is, however, that you do not need to make a major investment to improve your outdoor living areas. Here are five quick additions that will make an immediate difference:

1. Outdoor lighting units
2. Gas grills with cooking and food preparation surfaces
3. Outdoor fire pits or fireplaces
4. Patio heaters
5. Mosquito/bug eliminators

In any market, financial planners all agree, real estate is the best investment one can make. Increasing the value of that investment with features that extend and enhance the family living area is always a wise decision. For more information and ideas, feel free to e-mail me…and be sure to pass this on to family and friends who are ready to explore the “great outdoors.”

How to Save Money on Your Homeowners Insurance

In today’s economy, homeowners need to save money wherever possible. If you’ve been the victim of damage this winter, thanks to Mother Nature, you may be confronting the not-so-pleasant realities of your homeowners’ insurance policy. From high deductibles to lack of coverage to rising rates, many homeowners have been left to foot a big—unexpected!—bill.

As a member of the Top 5 in Real Estate Network®, I am well versed in some of the ways you can save money when it comes to homeowners insurance. For starters, you may be able to save hundreds of dollars a year by shopping your homeowners’ policy around, so please e-mail me if you need a referral or two. Also, here are some great, money-saving ideas from the Federal Citizen Information Center (www.consumeraction.gov):

•Increasing your deductible is an easy way to save money on a monthly basis. Even raising it by just a few hundred dollars can make a big difference in your premium.
•Ask your insurance agent about discounts. You may be able to get a lower premium if your home has safety features such as dead-bolt locks, smoke detectors, an alarm system, storm shutters or fire-retardant roofing material. Long-term customers and those over age 55 may also be offered discounts.
•Insure your house, not the land under it. After all, your land will still be there even if your home is damaged. If you don't subtract the value of the land when deciding how much homeowner's insurance to buy, you will pay more than you should.
•Don't wait until you have a loss to find out if you have the right type and amount of insurance. Discuss with your insurance agent exactly what types of damage are covered, including natural “acts of God.” Many homeowners are caught offguard by this loophole.
•Purchase enough coverage to replace what is insured. "Replacement" coverage gives you the money to rebuild your home and replace its contents. An "Actual Cash Value" policy is cheaper but pays only what your property is worth at the time of loss - your cost, minus depreciation for age and wear.
•Consider any special coverage you may need for valuable and/or unique items, such as computers, cameras, jewelry, art, antiques, musical instruments, stamp collections, etc.
•Remember that flood damage may not be covered by a standard homeowners’ policy. If you live in an area prone to flooding, take advantage of the National Flood Insurance Program.

Bottom line, make sure you are working with an insurance agent who is experienced and trustworthy. Feel free to e-mail me for further information and please forward this e-mail to family and friends to keep them in the know as well.

Top 5 Reasons Why Now Is the Best Time to Buy a Second Home

With all the negative news about the economy and the real estate market, in particular, there’s a good chance you’ve put any ideas of buying a second home on permanent hold.

As a Member of the Top 5 in Real Estate Network®, however, I can tell you that just the opposite is true. The reality is that now is the best possible time to shop for a second home, whether it be the vacation spot you’ve always dreamed of, a retirement home or an investment purchase. Or, if you’ve thought that a second home was not a possibility for you, it just might be now. Here’s why:

1. Just about across the board, prices are down…in some spots, they are actually down to 2001 levels. Those of you who may have been priced out of the market in past years are suddenly back in.

2. Mortgage rates are sticking at about 5%. This won’t last forever, however, especially as the market slowly starts its climb upwards.

3. If you're able to itemize deductions on your tax return, then the interest expense on your second mortgage is tax deductible.

4. If you’re buying in a popular vacation spot—such as on the shore, in the mountains, near a lake, in the city—then you can rest assured that your investment will increase as the market continues to recover.

5. If you’re not ready to retire or take advantage of a second home yet, bear in mind you’re creating an excellent source of additional income in terms of rental revenue…something we can all use in today’s economy. Consider making this purchase now, while conditions are favorable for buyers, rent it out, and then enjoy your home when the time comes.

I’ve seen many a savvy client take advantage of today’s market to make a desired lifestyle change or an investment that will pay dividends when the market picks up. Don’t let the media negativity prevent you from missing this great opportunity to buy a second home. Please e-mail me for more information and pass this article along to friends and family who might also find it helpful.

The article below identifies some the the expansion stiupulations of the homebuyer tax credit extension that was signed into law in November 2009.  Remember, time is ticking, if you're in the market to buy a home, NOW is the time, if you qualify for the homebuyer tax credit.

RISMEDIA, December 7, 2009—

The extension is part of a $24 billion economic stimulus bill that extends the $8,000 tax credit for homebuyers who purchase their first home and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate. The home must be purchased prior May 1, 2010,

The following details apply to the homebuyer tax credit expansion:

Who Is Eligible

-First-time homebuyers, who are defined by the law as buyers who have not owned a principal residence during the three-year period prior to the purchase, may be eligible for up to an $8,000 tax credit.

-Existing homeowners who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.

-All U.S. citizens who file taxes are eligible to participate in the program.

Income Limits

Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.

-For married couples filing a joint return, the combined income limit is $225,000.

-Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit.

-The credit is not available for single taxpayers whose MAGI is greater than $145,000 and married couples with a MAGI that exceeds $245,000.

Effective Dates

-The eligibility period for the tax credit is for homes purchased after Nov. 6, 2009, and before May 1, 2010. However, home purchases subject to a binding sales contract signed by April 30, 2010, will qualify for the tax credit provided closing occurs prior to July 1, 2010.

Types of Homes that Qualify

-All homes with a purchase price of less than $800,000 qualify, including newly-constructed or resale, and single-family detached, townhomes or condominiums, provided that the home will be used as their principal residence. Vacation home and rental property purchases do NOT qualify.

Tax Credit is Refundable

-A refundable credit means that if the amount of income taxes you owe is less than the credit amount you qualify for, the government will send you a check for the difference.

-For example:

-A first-time buyer who qualifies for the full $8,000 credit who owes $5,000 in federal income taxes would pay nothing to the IRS and receive a $3,000 payment from the government. If you are due to receive a $1,000 refund, you would receive $9,000 ($1,000 plus the $8,000 first-time homebuyer tax credit).

-A repeat buyer who owes $5,000 would pay nothing to the IRS and receive $1,500 back from the government. If you are due to get a $1,000 refund, you would get $7,500 ($1,000 plus the $6,500 repeat buyer tax credit).

-All qualified homebuyers can take the tax credit on their 2009 or 2010 income tax return.

Payback Provisions

The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

Examples of Who Can Benefit

“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. “Although the tax credit remains at $8,000 for homebuyers that have not owned a primary residence in the last three years, it has been expanded to include a $6,500 tax credit for homebuyers that have lived in their current primary residence for at least five consecutive years out of the past eight years. Under the old rules, move-up homebuyers did not qualify.” Consider these three examples:

Example 1:

Jane purchased a home in 2002, lived there for 5 years as her primary home, moved out in 2007, and turned that home into a rental property. If Jane decides to buy a new primary residence today, she would qualify for the $6,500 tax credit based on the fact that she lived in the same residence as her primary home for at least five consecutive years out of the past eight.

Example 2:

Harry purchased a home in 2004, and lived there for the past 5 years as his primary home. If Harry decides to buy a new primary residence today, he would qualify for the $6,500 tax credit based on the fact that he lived in the same residence as his primary home for at least five consecutive years out of the past eight.

Example 3:

Nicole purchased a home in 2006, and lived there for the past 3 years as her primary home. If Nicole decides to buy a new primary residence today, she would not qualify for the $6,500 tax credit based on the fact that she did not live in the same residence as her primary home for at least five consecutive years out of the past eight.

“If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010,” Nicholas said. “It works kind of like a gift certificate that can be redeemed for cash. You simply file a form with the IRS right after you buy your home, and the IRS will send you a check for the full amount of your credit.”

The income limitation for single tax payers went up from $75,000 under the old rules to $125,000 under the new rules. For married tax payers, the income limitation went up from $150,000 to $225,000. “This means that more people will qualify for the credit – especially in parts of the country with higher costs of living,” Nicholas said. “This should help stimulate parts of the housing market that may not have been impacted by the old version of the credit.”

There are many creative ways of structuring your home purchase transaction in ways that maximize the benefits of the credit. Here are a few examples:

-The credit applies to 1-4 unit homes as long as you live in one of the units as your primary residence – you could live in one unit and rent out the others

-If two unmarried individuals buy a home, and only one of the individuals qualifies for the credit based on their income or past home ownership status, the individual who qualifies for the credit can claim the full credit. (Note: In the case of married couples, both spouses must qualify for the credit).

-The credit applies even if you have co-signers on your mortgage loan

The www.federalhousingtaxcredit.com site has been updated. Check this site or www.CMPSInstitute.org and www.nahb.org for more information.

Interested in knowing six fantastic steps to a quicker sale in today's buyers market?  Check out the link below for some great tips!!

View Video Here

Courtesy: Mike Parker
Top 5 Real Estate Network

On January 15, 2010 the IRS released a new form that home buyers who are eligible for the tax credit need to use to claim the tax credit.  There is new documentation requirements to deter fraud related to the first time home buyers tax credit.

according to the article titled, "New Homebuyer Credit Form Released; Taxpayers Reminded to Attach Settlement Statement and Other Key Documents," written by the TaxAlmanac, "the new form and instructions follow major changes in November to the homebuyer credit by the Worker, Homeownership, and business Assistance Act of 2009.  The new law extended the credit to a broader range of home purchasers and added new documentation requirements to deter fraud and ensure taxpayers properly claim the tax credit."

Early taxpayers claiming the tax credit may see tax refunds take and additional two to three weeks.

In addition to filling out Form 5405, all eligible home buyers must include one of the following documents to receive the tax credit ALONG with their 2009 tax return:

1.  A copy of the settlement statement showing all of the parties' names, signatures, property address, sales price and date of purchase.

2.  If you purchased a mobile home and you are unable to get a settlement statement, you can use a copy of the executed retail sales contract showing all of the parties' names, signature, property addresses, purchase price and the date of purchase.

3.  For a home that is new construction where a settlement statement is not available, you can use a copy of the occupancy certificate showing the owner's name, the property address and the date of the certificate.

The new law also allows a long-time resident of the same main home to claim the home buyer tax credit if they purchase a new principal residence.  Eligible taxpayers who qualify have to show that they lived in their old homes for five consecutive years during the eight year period ending on the purchase date of the new home.  As stated by the TaxAlmanac, " 

The IRS has stepped up compliance checks involving the home buyer credit, and it encouraged home buyers claiming this part of the credit to avoid refund delays by attaching documentation covering the five-consecutive-year period:

  1.  Form 1098, Mortgage Interest Statement, or substitute mortgage interest statements,

  2.  Property tax records or

  3.  Homeowner’s insurance records.

The IRS is also reminding home buyers that these new documentation requirements mean that if you are claiming the credit, you cannot file electronically and you must file a paper return.

When can you expect your refund?  Normally, it takes from four to eight weeks to get a refund claimed on a completed and accurate paper return with all the correct attached documents.  For home buyers who file early, the IRS is expecting the first refunds based on the home buyer tax credit, will be issued towards the end of March.

The IRS is encouraging taxpayers to use direct deposit to expedite their refund.  To tract the refund, taxpayers can visit www.IRS.gov and use the "where's my refund?" portion of the site.

If you are interested in finding our more details on claiming the tax credit and the instructions to the Form 5405, please visit www.IRS.gov.

The Northern Kentucky 2009 Real Estate Market numbers are in and we would like to share them with you.  These numbers are taken from the Northern Kentucky Multiple Listing Service as of February 6, 2009.

Residential Property SOLD in 2008  - 5,142 Units

Residential Property SOLD in 2009 - 4,852 Units

THIS TOTALS TO a -5.65% DECREASE from 2008

Average Price SOLD in 2008 - $160,531

Average Price SOLD in 2009 - $139,537

THIS TOTALS TO A -13.08% DECREASE from 2008

Median Price in 2008 - $132,000

Median Price in 2009 - $126,600

THIS TOTALS TO A -4.17% DECREASE from 2008

Total Dollar Volume for 2008 - $825,452,718

Total Dollar Volume for 2009 - $677,032,211

THIS TOTALS TO A -17.98 DECREASE in SALES VOLUME

Northern Kentucky got hit pretty hard the first part of 2009 until about mid-year.  Currently, the market is brisk due to the $8,000 and $6,500 tax deduction.  REMEMBER, now is an EXCELLENT time to buy!!  In order to take advantage of the tax credit you must have a SIGNED contract by April 30, 2010 and close by June 2010.  Questions about the tax credit?  Click Here for more information!!!

For Northern Kentucky properties currently for sale, Click Here.

For The Mike Parker Team properties for sale, Click Here.

For Northern Kentucky properties currently for sale by SCHOOL DISTRICT, Click Here.

We can help you find any home in the Greater Cincinnati/Northern Kentucky area!!  Contact Us today!!