Do Renters Have It Better?

Several years ago, a successful agent who had “temporarily” moved into his in-laws’ old house said to me, “I’m never owning again.”  It struck me as odd.  Here was  a successful agent working in an industry that depends on buyers and sellers buying and selling saying that his temporary rental was going to become permanent.

His reasons?  It wasn’t mowing.  He still had to do that.  The expense? In many cases, including his, a mortgage payment is cheaper than rent. flexibility? He has kids in school and a good job, so he wasn’t planning on an escape to sunny California at some point.

The reason was responsibility.  As a renter, he was no longer responsible for the house he was living in.  If something needed maintenance, or broke, or started leaking, he just called the landlord.  Or even…ignored it!  Oh that does sound sweet!  To put the expensive and overdue needed maintenance to my chimney out of mind, go to bed, and let someone else worry about it…even if that other person is your mother-in-law.

But alas, I enjoy the rewards of home ownership too much.  I just can’t give up these benefits:

1.  I love my neighborhood! Only one house on my block has come up for rent in the last 5 years.  If I wanted to rent, I’d have to give up living on this block.

2.  I love my house! I could never have found this house if limited to rentals. Purchasing opens up way more options.

3.  You have to pay to live somewhere. Eventually, I will own my home free and clear.  As a renter, I would just be helping my landlord say the same about the house I continue to pay her to live in.

4.  Speaker cables.  I can drill into the basement and run my cables under the floor.  I can’t go back to hiding cables along moldings and under rugs.

5.  Control! Sure my old windows are drafty and leaky and expensive to replace, but at least I can replace them if I choose. Those old windows in your rental?  Ha!  Fat chance of your landlord ever replacing those.  Need permission to paint?  Nope!  Hate that brass light fixture from the 90’s? It’s gone!  Wish there was a pass-through from the kitchen to the dining room? Break on through to the other side!

New Homebuyer Tax Credit Bill To Be Signed Today!

What are the specifics?  Well you'll be able to use the $8000 on contracts through April with some expanded income qualifications.  And you'll be able to qualify for up to $6500 even if you're NOT a first-time buyer.  You will have to have owned your current home for 5 years.  This leaves some people out who could really use the $6500, but hopefully it will lead to better inventory for all the first-time buyers.

Check out this news brief from the National Association of Realtors for a break down of changes from the old bill:  http://www.mnrealtor.com/AM/CM/ContentDisplay.cfm?ContentFileID=2950&MicrositeID=0&FusePreview=Yes

$8000 Tax Credit Helps Sellers Too!

Hurry!  Your time is almost up.  The $8000 tax credit is only for first-time home buyers who close before December 1st.  Do the math…  If it takes 45 days to close after finalizing negotiations on a purchase agreement, that means you need to be in a contract by October 16th.  That's just fine if you are actively looking, but if you are still procrastinating meeting with a lender…uh…hurry? 

Should everyone run out and do this?  Well, probably not.  Don't make long term decisions like buying a home just to get your $8000.  Don't buy a home that you will out grow in two years.  Don't buy a home that you can't afford.  Don't buy a home if you might be moving to Washington D.C.

However, if it makes sense for you to buy a home in the next year, then I'm talking to you.  HURRY UP!  You might not find a home.  You might decide not to buy after meeting with a lender or real estate agent (I know a good one by the way).  But if you want to have the option, ACT NOW, or the decision will be made for you.

And if you're a seller, the time-line is even tighter.  Do you want the buyers rushing to find a home before the deadline to have your home to choose from?  Or do you want to miss the boat? 

Not sure what your home is worth (who is anymore?)?  Not sure if your home is in the price range first time buyers are looking in?  Not sure if you should replace that shag carpet and flocked wallpaper?  It's time to figure it out.  Call your agent this week.  Did I mention I know a good one?

What’s Up With This $7500 Tax Credit?

Good question.  Congress has been passing laws faster than the industry knows what to do with them.  The current law, as was passed last year, gives a $7500 credit on your tax return for qualified first-time buyers who purchase a home between April 9, 2008 and July 1, 2009.  Except it isn't a credit.  It's a zero interest loan that must be repaid on your future taxes over the next 15 years.

As you can imagine, this did little to stimulate the housing market.  It doesn't increase your ability to purchase a home.  It just makes expenses easier to handle once you're there…eventually…when you get a refund…that you pay back.

The new stimulus plan that passed the house on Wednesday turns that credit into a…CREDIT!  If the bill becomes law, that $7500 would become a straight-forward credit on your 2009 returns.  It would retroactively include purchases made since January 1, 2009 and extend through either June or August (depending on the bill). 

Will this simply be a windfall for the qualified first-time buyers who were going to buy anyway?  Or will this be enough incentive to convince someone on the fence to buy?  It still won't give you $7500 to use towards your down payment.  But knowing it's there in 2010 may just be the assurance you need, that you can afford to buy in this well priced market.

Things That Go Bump in the Night

Haunted_house Your haunted house is the prefect place for a Halloween party.  Other parties have to spend lots of money creating the illusions of ghosts and ghouls.  It takes lots of wires, motors, and smoke machines.  You, however, were lucky enough to end up with a truly haunted house.  Sure the spirits keep you up at night, but all your friends say you have the best Halloween parties.  I mean, no one is willing to spend Christmas at your place.  But once a year, October 31st, it's all worth it.

But now, you decided to take a job in Salem and you have to sell your home.  Do you advertise that it's haunted?  Perhaps people will pay a premium for poltergeist.  Or do you paint over the bleeding wall and keep it all a secret? 

I'm not going to tell you what to do, but you should familiarize yourself with the law.  The state of Minnesota requires a nine page disclosure.  In which, it is necessary to disclose any material facts that would affect the normal use and enjoyment of the home by any future buyer.  But you are in luck.  There are a few exceptions to this rule.  And one of them is haunted houses.

Page 9, lines 39-42:  There is no duty to disclose the fact that the property…was the site of a suicide, accidental death, natural death, or perceived paranormal activity.

But I assure you, after the new owners move in and meet the neighbors, they'll learn all about your paranormal parties.  And expect their lawyer to come knocking, regardless of duty to disclose.