Epain Homes

This wasn’t quite the celebratory transition I had in mind but life events have simply made it necessary so here goes…

2-3 months ago now I finally got around to moving this blog’s content to its own Website using Wordpress. That’s what all the blog consultants out there say to get your own site so people like Google can’t just shut you down (i.e. Google owns Blogger). And for a couple months I was just posting in both places with the intent of making a big, sexy announcement about the move once the “new” site was up to speed. Well, the new site isn’t quite where I want it yet but just because I’m falling behind with the double posting and don’t want you to think I’m just stale. Here’s the BIG, SEXY ANNOUNCEMENT:

COME JOIN (AND UPDATE YOUR RSS READERS AND LINKS) THE NEW, IMPROVED FUN OVER AT:

Oh, but I am.

Here’s Wikipedia’s definition:

An earnest payment (sometimes called earnest money or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious (earnest) about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.

I’ve been working with a long term client regarding sale of real estate over the last months. And won’t go in to many details here but there was a shocker regarding a recent offer and contract (where eventually the buyer’s backed-out of the deal) where the listing real estate agent didn’t require nor take any earnest money from these buyers when they made their offer and subsequently backed-out.

UNBELIEVABLE!

And in the end the result may have been the same but it sure would have been nice if the potential buyer’s had a little skin the game…ya know, I think it’s called leverage.

A nice little reminder/overview from Kiplinger’s regarding end of year tax planning for homeowners.

Notably, the new up to $7,500 tax credit for new homes brought from April 9, 2008, through June 30, 2009 and the Private Mortgage Insurance deduction for homes bought since 1/1/07.

I saw the piece over the weekend in the NYTimes but hadn’t gotten around to reading it until today. It’s been their most read article for nearly a week now so I thought I’d give it a skim. An important and true opening ‘graph:

Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.

But when is the right time? At least around Chicagoland, unless you can get a steal, I’d wait 6 months before buying anything. My view is that surely until the new administration comes into office things will remain dour. Then, I’m expecting Obama to make a big economic push right away but it will still take 2-4 months from legislative passage until that stimulus gets into the real economy. With greater confidence, I don’t think you lose much by waiting until spring 2010.

As is always the case with real estate, much depends on location. One study, “The Changing Prospects for Building Home Equity,” tries to predict where today’s first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines.

How should you proceed if you’re planning to buy a home in the next 1-2 years?

Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.

You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.

John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it’s free) at annualcreditreport.com and dispute errors.

While no one can easily predict the likelihood of losing a job, Friday’s startling unemployment figures suggest the need for caution if you think you might be vulnerable.

Remember the tax credit and it’s expiration date.

Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.

Saw this reported here. Some snippets from the piece:

Reported incidents of mortgage fraud grew by 45 percent in the second quarter compared to the year-ago period, as borrowers misstated their financial information to maneuver around tighter lending standards, industry data released Tuesday showed.

Florida properties led the way with about one-fifth of mortgage fraud incidents reported in the second quarter, the Mortgage Asset Research Institute reported. California was second, and Illinois third, the data showed…

The largest increase in mortgage fraud in the first half of this year involved borrowers misstating their financial profile, which is not surprising as borrowers try to get around stricter lending guidelines, the report said.

Some basic examples of fraud included false bank statements made on computers and pay stubs with white correction liquid on them, said Jennifer Butts, the institute’s director of operations.

See it’s not all the big, bad lenders. Now that the election’s over perhaps some acknowledgment of fault on the part of buyer’s signing these mortgages is at hand.