When I put out my market statistics for communities around Chicago I pull a large number of stats to share with you.  One of my favorites is Months Supply of Inventory or MSI.  This is a simple way to help us talk about whether or not we are in a “buyers” or “sellers” market.  A quick look at how we figure it:

Let’s say Naperville, IL has 200 properties for sale in a certain month and 25 of them go under contract in that month.  We do some simple math:  200/25 and we get 8.  That months supply of inventory for that particular month would be 8.  At the current rate of properties going under contract it would take 8 months to get rid of the current inventory.   So, now what?  What does 8 mean to you and me?  I’ll tell you.

When we are looking at the numbers once we have figured them out we have to know a few simple things.  A “healthy” MSI is 4-6 months.  Anything higher than 6 months and it is an indicator that we are in a “Buyers Market.”  Anything under 4 months and we are looking at a “Sellers Market.”  When we start seeing MSI’s that go above 10 or 20 months and we can attache the work VERY STRONG to “Buyers Market.”

Let me know if you have any questions?  I’d love to help and feel free to browse the site…you’ll find tons of monthly statistics on several Chicagoland communities.  Just stopping to search for homes?  Check out my MLS Property Search and you’ll find a state of the art search that uses Google Maps.  Enjoy!!

This weekend, the weekend of March 6-8, is when we are to set are clocks one hour forward.  We do this at 2am on Sunday morning, March 8, 2009.  Or, you can do as I do and just set them all ahead as I go to bed on Saturday night.  I don’t see 2am quite as much as I used to.

I can’t tell you how many times over the past 11 years of practicing real estate that adjusting the clock forward or backward has had an impact on my Sunday morning business.  The good news is I normally wind up an hour early rather than the latter in the fall.

I’ve also had clients forget and that 11am appointment on Sunday morning sneaks up on them as I ring the doorbell before the showing.  It all works out in the end.  For more information on daylight savings (translation: if you’re a dork like me and want to know the history of daylight savings) you can find it here.

Enjoy your weekends and as always let me know if there is anything I can help with.

So, thanks to previous posts, we’re all familiar with the first time home buyers credit that is available.  Well, I now have the form you can use in order to claim it with your taxes.  Or the form that you can give to your accountant in case they don’t have it.

One of the great things about his credit is you can purchase in 2009 but use it in your 2008 tax return.  If you have already filed your 2008 taxes then you can send in an amended return to take get the money this year.  UPDATE ON FIRST TIME BUYER CREDIT HERE….LEARN HOW SOME CAN USE IT AT THE CLOSING TABLE.

A few things to keep in mind:  1.  The $8,000 credit that you do not have to pay back is only good for homes purchased by first time buyers between January 1, 2009-December 1, 2009.  If you purchased between April 1, 2008 & December 31, 2008 you will be eligible for the $7,500 interest free loan from last year.  2.  Income for a single person can’t exceed $75,000 and $150,000 for a married couple filling jointly.  There is a phaseout so click here to see what those are.  3.  First time buyer is anyone who has not owned a home within 3 years of the new purchase.  This is also only for your principal residence and NOT investment property.

Let me know if you have any questions as I’m more than willing to help out.  Feel free to take advantage of my MLS Search which is listed above and I’d also invite you to subscribe to the blog to get updates.  Enjoy!

Click here to download Tax Form 5405 - First Time Home Buyer Tax Credit Form!

Seems every time I get excited about something there is another something that comes around the corner and ruins my fun.  Within the past few weeks we have been on somewhat of a roller coaster trying to make sense and see what passes to help home buyers within the Stimulus bill.  Well, we did pretty good.  As mentioned in previous posts we got a solid $8,000 tax credit for first time home buyers and they kept FHA lending limits higher so more people could take advantage.

So imagine my surprise when I started to hear more and more about the new lending guidelines coming out from Fannie Mae and Freddie Mac.  It’s kind of all over the place so I will do my best to make sense of it all.  I’ve heard about this through my lenders as well as several articles.  You can read an article on it from the Chicago Tribune by clicking here.  Take note that these changes are going to be effective as of April 1, 2009.

From what I understand in order to get the best interest rate now, more than ever, it is going to be a much bigger down payment AND higher credit scores.  From what I gather we’re talking about at least a 740 credit score and a 20% down payment.  If you are below 740 the magic number on down payment to avoid fees is 30% down.  The 20% down was always the threshold for getting that best rate so that has not changed unless your credit is under 740.  The 740 is up from around 720 a few months ago and roughly 670 a few years ago.  So, if you are below 740 and have anything less than 30% down you are now going to be hit with an up front fee (all percentage based.)

Let me try to lay this out.  If you have a 715 credit score and you are putting 22% down you will get hit with one of these fees from Fannie & Freddie.  If you have more than 30% then they’ll be more flexible on your credit score.  That’s crazy.  Since when did a credit score of over 700 become not good enough to get prime interest rates.  Complete over reaction.  In order to avoid fees you need a combination of more than 30% down and a credit score of 740 and above.

For my condo buyers out there things actually are a little simpler but not in a good way.  Just know that if you are buying a condo you are more than likely going to get hit with a slightly higher interest rate and will find it almost impossible to avoid these up front fees.  Magic number on down payment for a condo seems to be around 25%.  However, regardless of credit and down payment there is going to be a fee.  The better your credit and the more you put down will just reduce the fee but not avoid it.

I know this is kind of all over the place but so are these guidelines and the people who are implementing them.  The reason I bring this to your attention is so you are aware and you can discuss and get your questions ready for your lender.  Now more than ever you need to ask questions about fees.  If you’d like you can call me as it will be easier to discuss knowing some specifics.  there are 1,000’s of scenarios we can go over and none may apply to you.  Good luck out there!!  If you ever need to talk or have things explained my door is always open and my email always on.

Putting in a new deck?  New fence?  Mailbox?  Shrub, bush or other landscaping?  What are your responsibilities when it comes to any outdoor project you may be interested in?  Many people think that the company you hire is going to take care of everything.  Well, when it comes to underground utility wires  you may want to error on the side of caution and make the request yourself.  A minimum of two days before you start your project (whether you do it yourself or hire professionals) you must contact someone to mark the utility lines that are underground.  So who do we call?

I installed a wood fence in my yard last summer for my two dogs.  I found the company I wanted to use, filled out the proper paperwork, applied for the proper permits and wrote the proper checks.  At the end of it all I was told to call 8-1-1 and put in a request for utility wires to be properly marked.  8-1-1 is an easy to remember number that will connect you to the right company depending on where you live.  If you’re in the suburbs of Chicago you’ve probably heard of J.U.L.I.E. and you can contact them direct if you’d like.  If you’re in the City of Chicago limits you’re looking at contacting DIGGER.  Rather than remember all of this PLUS their phone numbers all you have to do is call 8-1-1 and they’ll get you set up.

Any project in your yard that require a shovel and you must follow these simple instructions.  Cost to you for calling 8-1-1?  NOTHING! They are a non-profit organization that was put together to make sure you don’t wind up dead putting in that new shrub in the back corner or the new mailbox that looks like a miniature version of your house.  Any digging and you must!  Here are some forms and brochures from JULIE & DIGGER:

Click Here to Download Digger Direct Brochure (City of Chicago)

J.U.L.I.E. Locate Request Form (Suburbs of Chicago)

Good luck and feel free to contact me with any questions.  Visit the website above as well as they are packed with information and statistics regarding properly marking these utility wires.  Enjoy!

Okay.  Updating my update on the First Time Home Buyer Tax Credit. Here is a closer look at the new and improved First Time Buyer Credit as we have seen it passed as part of the American Recovery and Reinvestment Act or the Stimulus as played on TV:

1. The $7,500 credit (that was to be paid back) will now be $8,000 or 10% of the purchase price not to exceed $8,000 and it  WILL NOT HAVE TO BE PAID BACK.  A TRUE CREDIT!!
2. Eligible property includes any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence (no change from previous bill.)
3. Income limitations are the same.  Full amount of credit available to individuals with a gross adjusted income of no more than $75,000 ($150,000 on joint return.)  Phases out above those caps not to exceed $95,000 & $170,000 (no change.)
4. THIS REMAINS IN EFFECT ONLY FOR FIRST TIME HOMEBUYERS! First time homebuyer is anyone who has not owned a principal residence 3 years previous to purchase (no change.)
5. Recapture.  If the home is sold within 3 years of purchase the entire amount of the credit is recaptured upon sale.  This applies only to homes purchased in 2009.
6. Still a small window of opportunity.  This expires on December 1, 2009.
7. Effective date.  All revisions to the old bill are effective as of January 1, 2009.  Translation:  if you purchased in after January 1, 2009 and before December 1, 2009 and meet all the other criteria this bill is for you.  If you purchased in 2008 you do not qualify.  The $7,500 credit is still in play for you just not the new one.
8. NEW UPDATE…LEARN HOW SOME CAN USE THE CREDIT AT THE CLOSING TABLE AND NOT HAVE TO WAIT!!

So we have increased the credit, extended the termination date on the credit and made it a true credit.  No payback if you don’t sell the property within 3 years of purchase.  I’ll take it!  I was hoping for a little less restriction (all buyers-not just first time buyers) but it has improved.

Click Here to Download a PDF version of the First Time Home Buyers Credit.

**From reading you can gather that I am a Real Estate Agent.  That being said please go over all of this information with your accountant or whoever does your taxes.  Make sure you qualify and meet all the requirements in order to take advantage of this credit.  Good luck! **

I was introduced to this new online tool that could really help buyers organize the properties they find online.  At first I was skeptical on its value but I did sign up and I did play around with it and IT IS COOL!!  It’s called “Dwellicious.”

Basically it is a bookmarking site for all of the properties you find on all the different real estate sites (mine included.)  Once you find sometihng you are interested in you click on a button in your bookmarking/favorite toolbar.  It automatically adds it to Dwellicious where you organize all of the properties from all the different sites.  You can add notes, look at photos, grade its “walk score” and even visit the original site where you found it.  Here is what you need to do to take advantage:

1. Click on the link here. This will take you to the sign up page.
2. Sign up for your free account.  There is a video explaining how it works.
3. Install the “Add to Dwellicious” button to your bookmarking toolbar.
4. Start searching on your favorite sites.
5. Start adding your favorite properties to Dwellicious.
6. Go to Dwellicious to see all of your properties nice and organized all in one spot.

They have pretty good instructions on how to sign up and get things rolling.  If not you can contact me and I’ll help you through it.  If you do sign up or already have an account I’d love to hear what you think.  I just signed up and did a few test runs last night and I thought it was pretty cool.  Enjoy!!

CLICK HERE TO SEE THE OFFICIAL UPDATE ON THE NEW & IMPROVED FIRST TIME HOME BUYER CREDIT.

A couple of days ago I posted an article regarding the $7,500 tax credit available to first time home buyers that was passed last July.  Well, over the past few weeks there has been a lot of talk about the Stimulus Bill and what will be included to help the housing market above and beyond that credit.  At first we all got excited because it looked like we were going to be dealing with a $15,000 credit to all buyers (not just first timers) and that it was going to be for principle residents purchased within a year of signing said bill.

Doesn’t look like that is what we are going to be getting.  When the House and Senate got to negotiating the credit was stripped down to what looks like an $8,000 credit.  It will also be just for first time buyers and not all buyers.

So, in summary and after all the chit chat it looks like the existing $7,500 first time home buyer credit will be bumped to $8,000.  It also looks like this will be a true credit and won’t have to be paid back. 

Nothing is official and nothing has been signed so please check back early next week and I’ll let you now where we stand.

I’m planning on having it all laid out for you once we know exactly what “it” is.  A lot of the specifics are yet to be laid out like income limitations and what qualifies as a “first time home buyer?”

CLICK HERE TO SEE THE OFFICIAL UPDATE ON THE FIRST TIME HOME BUYER CREDIT.

Well, credit is probably not the best word but that is what people are running with.  It is actually an interest free government loan.  Yes, you do have to pay it back over time.  After 2 years you start paying it back at $500 per year for 15 years.  Not the worst news I’ve ever heard (INTEREST FREE!!) but I can sprinkle it with a little more good news.  I’ve heard from some very reliable sources that a bill has been introduced where this would not have to be paid back at all.  Wow!  Again, it looks good but as of today you do have to pay it back.  With this or any other idea you think would greatly benefit you try to contact your representative and make your voice heard.  Here are some of the specifics on the credit:

1. THE CREDIT HAS CHANGED AND MANY OF THE RULES BELOW UPDATED.  CLICK HERE TO SEE UPDATED VERSION.
2. It is an interest free government loan, not a credit.  It is the lesser of 10% of the purchase price or $7,500.  Another way to put it is it is 10% of the purchase price not to exceed $7,500.
3. Definition of a first time home buyer—No home ownership in a principal residence in the U.S. during the 3 year period (counted by 36 months) before the purchase of the home to which the credit applies.
4. Short Window of Opportunity—it is for home purchases after April 8, 2008 and before July 1, 2009.
5. For existing homes, all dates measured from closing date.  For new construction, from date of occupancy (move in.)
6. Refundable Credit—paid to taxpayers who owe no tax or the amount of the credit that exceeds the amount they owe.
7. There are High Income Tax Limitations—total credit for up to $75,000 for those filing single & $150,000 for those filing joint.  There is a phaseout on the credit meaning if you make more you will receive a smaller portion of the credit and if you exceed the max income than you don’t qualify.  Here are the ranges:
   1. Single:  $75,000-95,000.
   2. Joint:  $150,000-170,000.
   3. These are all based on Modified Adjusted Gross Income.

   Example, if a married couple has an income of $165,000 their credit would be reduced by 75%.  Click here and go to question #5 to see this in greater detail.

8. Recapture or “Repayment”—15 years beginning the second year after the purchase.  So, $500 a year for 15 years starting 2 years after your purchase.
9. Accelerated Recapture or “Repayment”—due in full in the year the home is no longer your principle residence.  Basically if you sell it, move out or rent it out you will have to repay the entire credit.  The amount of the accelerated recapture is limited to gain on sale, if any.  Exceptions to the accelerated recapture are allowed for divorce, death and involuntary conversion.  Again, we’re hoping they pass the bill that will require NO REPAYMENT.
10. You can move a 2009 home purchase to your 2008 tax return by tax election.  Talk to your accountant!
11. There is no program on the state level (I’m talking Illinois.)

There are more details and you should talk to your accountant to make sure they are fully aware of this is you are a first time home buyer.  Pay attention to the dates and the points above and you’re off to a great start.  You’re Real Estate Agent should be aware of the basics of this credit and get you off to a great start but when it comes to doing your taxes always double check your work and the advice given to you by anyone other than who does your taxes.  Let me know if you have any questions….get out there and buy, especially you first timers!!  For those first time home buyers don’t forget that Chicago and many of the suburbs will have extra costs such as transfer taxes. Chicago’s is the most popluar and discussed but many of the ‘burbs have them as well.

This is a question I’ve been getting a lot lately.  It’s a question I typically get in a normal winter market but one that I seem to be getting a lot more in THIS winter market.

There are two schools of thought.  School A is the homeowner who wants to keep/put their home on the market during the winter months in order to take advantage of less “supply” in the market.  This way you can take advantage of being one of few that appeal to the buyers who are currently looking.  Problem is the number of buyers out looking is down as well as we take time off to enjoy friends, family and holiday cheer.

School B is what we typically run into.  Those who want to wait until the market picks up in the spring.  Yeah, me and everyone else will be listing but my place is better than everyone else’s so I have nothing to fear.  Positives here are that there are more buyers but of course there is also more competition.  And I hate to say it but maybe, just maybe, there is a place out there that said buyers might like better than yours.

So what do we do?

I wish it was that easy.  Each home and homeowner is going to be different.  If you NEED to move then don’t wait.  If you have time then talk to a professional and weigh your options.  If your home is “unique” you may benefit from less competition.  If you wait you may have to price lower to stand out.  We can go over 1,000’s of scenarios but it is a good discussion to have.

All I’d like to really emphasize is don’t wait just because your neighbor or co-worker is waiting.  If you know you’re going to list your home this year you should start thinking about and preparing yourself as soon as possible.

Hope all is well and Happy New Year!!