I don’t think most people realize how important it is to extend the tax credit for home buyers.  Right now it is set to expire December 1, 2009.  What most buyers do not understand, if they have not purchased a home recently, is that you cannot buy a home in November and expect to go to closing ( a requirement of the credit) before December 1, 2009.  My daughter is now buying a home and has signed a contract and applied for a loan and it will be about a 45 day process from signing a contract to settlement. This is normally how long it takes to go from contract to closing.  Assuming the Tax Credit is extended it will allow for many of the buyers who maybe haven’t even found a home to buy to conitnue in their purchasing efforts.

Our company, Oliver Homes, Inc. builds new homes and you can imagine how hard it is to move the time table backward.  If it takes 4 months or more to build a new home you will need to to start construction within 120 days of the end of the tax credit or tax credit extension.  Moving that back further it may take a few weeks or so at a minimum to decide what type new home they would want so it is imperative to almost start now in looking at a new home to be constructed. 

As we move thru life it comes and goes too fast.  For one buying an existing home or new home the six month extension that is really necessary for the real estate industry it will come and go too quickly.  You need to start looking right now -not to take advantage of the current tax credit but to take advantage of the new extension of the next tax credit.  Then hope it gets approved.  Happy home buying!!

When it comes building on your lot many things need taken into consideration for the home buyer. I will in this post only talk about  the value of the lot.  In looking at the value of the lot in the build on your lot situation one needs to be aware that if a client is doing a construction loan he will probably need a 20 % downpayment of the total amount of the home purchase price and the lot value.  If the lot is worth say $ 80,000 and the new home to be built would be $ 170,000 then the total cost of the new home (including the lot) would be $ 250,000.  A 20% downpayment would require an investment of cash or more likely value of $ 50,000.  We have stated that the land value was $ 80,000 which would then qualify for the 20% downpayment.  This assumes that no loan remains on the land itself.  If there is a loan on the land it cannot have a loan balance of greater than $ 30,000.  Financing for a new home that is built on build on your lot situation can be tricky but very rewarding with a lender that specializes in this situation. The website www.oliverhomes.com has some good information on building on your lot as they build many homes on individual homeowner’s lots.  Good luck with your building.

The current stimulus package including the $ 8,000 first time buyer tax credit which is set to expire November 30, 2009 needs to be extended.  In the current state of the economy we are not seeing a tremendous influx of homebuyers who are taking advantage of the tax credit.  They are obviously saying “I need to make sure I have a job before I can take advantage of the tax credit”.  This is very true.  If you don’t have employment you don’t need a tax credit.  Extending the tax credit would at least help people as their confidence in employment increases they will feel more inclined to make a major purchase such as a new home.  Let’s work on congress to extend this tax credit.

With the recent snow in the Northeast it’s hard to imagine that spring is really just around the corner- less than three weeks away.  Now I’m not thinking of the birds and plants and so forth but those people that have heard all the bad things in the economy and maybe they’ll just come out and buy a new home.  With the recent $ 8,000 tax credit - a real credit not one you have to pay back, and great prices the opportunity is fantastic.  We have Home Shows the next three weekends and with some good weather and maybe even some fair economic news we’ll see some buyers.  People who have some type of stable employment and reasonable credit and downpayment will find this is a time they can find housing at a more affordable price than possible in years past.  We’re not talking just a few dollars but thousands of dollars in savings that are out there right now.  Happy Homebuying!1

In looking at the economy and housing we see all the negative things shown and say - woe is me.  Actually, there are more postive things happening that the press wants us to know.  Even in a recent article in my local newspaper it talked about the job losses, etc. and then at the end of the article did say during that timeframe (of the job losses) the local economy saw an increase in local job growth.  We don’t really know where those gains were because the media doesn’t want us to know.  Good news rarely sells any media whether it’s papers, internet advertising, or other media. 

Analyzing the housing industry there is such a slowdown in the large housing states of California, Florida and Texas that they make any slight gains in other areas look like overall losses.  Is it bad- yes it is bad - but is it as bad as the media reports- probably not.  We do face tough times in today’s market but there are bright spots.  We must work to clean up the credit crisis and get money back into the economy.  Yesterday in a meeting with a financial advisor it was stated that around 40 percent of monies available are sitting on the sidelines waiting to see what will happen and where to put it.  We need to get consumer confidence back so that 40 percent can go to work and earn some money and buy American products.  Housing is a commodity that will survive as people will need homes but we will probably not see the excesses that we have seem in the past.  Looking forward to your thoughts as we proceed thru the next weeks and months.

As we look at the real estate market today we see a rather slow and depressed economy.  That being said it is important to analyze whether this may be a good time for “You” to buy a home.  Remember, you as an individual are not going to set a trend in the market nor will you need to follow the trend in the market.  In other words, in a down market which we are in now, it may be a very good time for you to buy if you have good job stability and good credit.  You can save money and get a great deal on a home.  Conversely, if the market is strong, but you as an individual do not have job stability or any funds it would not be a good time to buy a home even though others may see it as a great time.

Now everyone who is looking to buy wants to get the best possible deal that is out there, but you really need to consider is it a good deal for me?  We have all purchased an item and then looked at another store, saw the same item and checked the price to see if it is more or less than what we paid.  In trying to guess when the market is at the bottom neither you nor I will know the day when the market picks back up.  By that time, we’ve missed the bottom of the market that we’ve been waiting on.  Therefore we’ll never really know when the market hits the bottom until we’ve missed it!! 

From a buyer or seller standpoint then, we need to look at our given situation and say is now a good time for me -not is it a good time for “the rest of the world.”  Look at your situation and see if this makes sense.  There are many good buys today in the real estate market.  Happy house hunting.

Since this is our first posting on the blog I thought it would be good to describe what we are doing and why.  Primarily I am going to be talking about the New Home Building industry and how the process works.  I’ll also talk about why you should build a new home and what challenges and benefits there are in new home construction. 

When we think about building of new homes we can think of two different types of purchases.  The first of those purchases would be the purchase of a new home that has already been built.  In essence, it is the purchase of a new home that the builder has completed and now is available for sale. You, the buyer can merely move in and set up your “home”.  The second type of purchase is having a new home built on your lot or a lot owned by the builder.  Both have their advantages and disadvantages.  In the first case where the home is already completed you will be able to move in immediately and may be able to negotiate a great price- after all this may be a completed home the builder is discounting to sell.  In the second case, where you have a home built for you on your site or the builder’s site we see some different advantages.  You, the homebuyer, now get to choose the type of home, the colors of your carpet, flooring, cabinets, countertops and many other items.  If you have specific requests for your new home this is an great time to see about having them implemented by your builder.  If you don’t like to make decisions have the builder help you or go back and buy a completed new home.  If you own your own lot this is the only way you’ll be able to proceed.

In my next posting I will be talking about the decision to buy a new home versus the decision to buy an existing home.  Both have specific advantages and disadvantages.  We’ll discuss that in my next posting.  Hope to talk with you then.  Happy home buying and building.