$15,000 Home Buyer Credit?

Most people agree that the $8,000 first-time home buyer tax credit program has been such a success.

It now has some people in Washington asking: Can we live without it? The program credit is set to expire on December 1, 2009, but Sen. Johnny Isakson, (R-Ga.), has introduced legislation that would provide a $15,000 home buyer tax credit to any home buyer (not just first timers) who occupy the home they purchase for at least two years.

Sounds good, right? But if you are a prospective first-time home buyer here is your dilemma: Should you act quickly to take advantage of the $8,000 tax credit before it expires, or wait to see if the $15,000 home buyer tax credit becomes law?

Sen. Isakson’s proposed legislation would make available up to a $15,000 tax credit for any home buyer of any home over the next year. It would also remove the income limits that currently apply to the first-time home buyer tax credit. In a press release on the Senator’s Website, he says:

“If we do this, home values will return, unemployment will go down, our economy will turn, and consumer price confidence will go up. I would submit it is a part of the main solution we need to take an economy that is on the bottom and move it back toward equilibrium and prosperity for America.”

Another bill recently introduced would extend the $8,000 first-time home buyer tax credit for another six months. If this bill passes, first-time home buyers would have more time to claim the existing credit, although the rules would remain the same. (The tax credit would only apply to first-time home buyers and income caps would remain in place).

So what do you think will happen, or should happen? My guess is that the first-time home buyer tax credit will be extended. I also think Congress will debate expanding the program to a $15,000 home buyer tax credit, but don’t look for any quick resolution.

If the expansion passes, I think it will include limitations (less than $15,000). What do you think? Is expanding the credit a good idea, or has the first-time home buyer tax credit run its course?

Even the White House is Going Green!

Inhabitat magazine announced last week that the White House is looking at a remodeling effort to earn LEED certification.  The Leadership in Energy and Environmental Design standard is offered by the US Green Building Council.  (Learn more about green building standards here.) 

These plans by the Obama family follow efforts by Carter and Clinton which focused on energy conservation, and by the first Bush family to introduce solar panels.  If the plans push forward, the certification will make the Obama effort different from the others.  The existing green building certifications require a wholistic approach to new green buildings or remodeling of existing buildings.  To earn LEED certification the White House will have to significantly improve energy efficiency and the quality of the indoor air throughout the property.  This takes a focused effort beyond the more one-product solutions previously introduced at the White House. 

Whether you live at 1600 Pennsylvania Avenue or not, this wholistic look at home improvement is the smart way to enjoy your home more, save money, and cut utility usage. 

Stay tuned for updates on the efforts to make the White House green!

DuPage Program Offers Great Deal on Rehabbed Foreclosures

DuPage County has received a $5.2 million federal grant to rehab foreclosed homes and bring them back to productive use.  Under the new Neighborhood Stabilization Program (NSP), the County will purchase bank-owned properties, fix them up, and sell them to home buyers.    

NSP offers an attractive financing package that includes a zero-interest deferred second mortgage provided by DuPage County.  This special financing can help boost your purchasing power.  

Visit www.dhoc.org to download an information package with all of the program details! 

Home Sales Gain for the 3rd Month in a Row

Mainstreet Organization of Realtors August home sales statistics show a gain for a third month in a row.  Those numbers show a gain of almost 9% over the statistics for the same period in 2008.

Many communities in the west and south suburbs had triple digit gains. Addison-225%, Glendale Heights-170%, Lombard-100%, and Brookfield-183%, these are just a few.

Has the first time buyer tax credit fueled the rise in home sales? That is the big question. What is going to happen on Dec. 1, 2009 when the tax credit has expired?

Home sales are critical to a thriving economy. In 2006, the real estate industry brought in an additional 12 Billion dollars to the Illinois economy. Every time a home sells and closes there is a residual effect.

Many dollars are spent after a closing from services for painters, contractors, carpet, appliances, flat screen tvs, title industry, lawyers, home inspectors.  Time is running out if your are a first time home buyer. Find a Realtor and buy a home to take advantage the opportunity to become a homeowner and take advantage of the first time buyer credit before the Dec. 1, 2009 deadline.

Selling For Sale By Owner

Recently, a marketing company that assists consumers in selling their home for-sale-by-owner, placed an advertisement stating reasons why today's home sellers can successfully market and sell their own homes without real estate agents.

Within this advertisement were statements and comments made that were grossly inaccurate.  While the advertisement was not intended to specifically market Illinois home sellers, Mainstreet believes that we need to correct these inaccuracies so that our home sellers in Illinois remain informed.

The MLS that covers Northern Illinois is called Midwest Real Estate Data (MRED).  MRED is a REALTOR owned MLS that only allows two types of listings, both of which are exclusive.  Neither home seller nor marketing companies can post listings to this MLS on their own.  A home seller must enter into an exclusive listing agreement with an MLS Subscriber (REALTOR) in order for their home to be placed into the service.

MRED allows two types of listings.  The "Exclusive Right to Sell Agreement" gives rights and responsibilities of marketing and selling the home to the REALTOR, while the "Exclusive Agency Agreement" allows the seller the opportunity to market their home on their own in addition to the exposure of the MLS.  This type of agreement will require that commission be paid to a buyer's broker, if the MLS is where the buyer is procured from.

Some marketing companies will offer packages called "Platinum," "Gold," or "MLS Listing" that specifically state that the home will be placed in the MLS.  If you read the fine print, you are notified that a broker will contact you to fill out the MLS paperwork.  In Northern Illinois, this "MLS Paperwork" is an EXCLUSIVE LISTING AGREEMENT as no listings are allowed in MRED without an exclusive agreement. Through that broker, your listing is placed into the MLS, not by a marketing company.

In Illinois, when you enter into an exclusive agreement, you are entitled to specific services that are required pursuant to Illinois real estate law.  This means that when you purchase the Platinum/Gold/MLS Listing package from the marketing company, you are also entering into an exclusive agreement which requires the broker to do the following:

1. Accept delivery of and present all offers and counter-offers to you.
2. Assist you in developing, communicating, negotiating, and presenting your offers, counter-offers and notices until you accept a contract. 
3. Answer all of your questions related to those offers, counter-offers, notices and contingencies.  

Still sound like you are selling for-sale-by-owner?  Make sure that you read any contract before you sign it to ensure that what you think you are getting is what you actually ARE getting.  

With all this said, you can avoid all of this trouble and confusion by simply trusting your home with someone who can be depended on to help you negotiate, guide you through the home selling process, market your home in innovative ways, provide objective evaluations of every buyer's proposal and someone who just knows real estate - a REALTOR. 

Bensenville Makes a Wise Decision

At the September 8th Bensenville City Council meeting, the City Council repealed the onerous Home Improvement Ordinance.

Bensenville homeowners no longer have to sign away their Fourth Amendment rights as part of an ill fated "Home Improvement" ordinance.  The ordinance dangled a very attractive loan to homeowners but had a heck of a requirement: you have to sign off your right to refuse the city inspectors access to your home.

The Fourth Amendment protects homeowners from unwarranted searches. It is our position that you just can't buy that basic constitution right.  While the previous city administration ignored the Realtors call to defeat this ordinance, the new administration listened to our arguments and found them persuasive. During the campaign, Realtors brought this issue up and asked for the repeal. While most people understand search and seizure when it comes to police work, most people forget that municipal inspectors are a government police force, they just enforce a code book.

While I researched a little of the history of the government searches I found out that this exact issue was one of the visceral and vital issues to our founding fathers. Every wonder why we have a Fourth Amendment in our bill of rights?

Before the American Revolution the British would use a writ of assistance to search the home of colonists for a variety of reasons.  Often the purpose was to discover seditious materials or prohibited or uncustomed goods. These writs were general warrants, in other words they could search everything and seize everything.

In 1760 King George II died, and all writs signed by the crown would expire six months after his death. A group of 50 Boston merchants petitioned the courts to hear their case against general warrants and writs of assistance.  Lead by James Otis, the group protested that the law should protect men in their own homes and businesses. Future President John Adams was in that courtroom and heard the men argue their case and he was impressed.  In fact, Adams later commented that the American Revolution was sparked that afternoon in that courtroom as those 50 men pleaded to be secure in their homes and private businesses.

Otis lost. 

More importantly, Otis was soon elected to the Massachusetts General Assembly where he helped pass legislation requiring warrants and writs to be issued "with cause" by a justice, judge, or justice of the peace."  The law passed. However, the colonial governor voided the law as in violation of English common law.

So important was this issue to colonists, it was included in the Virginia Declaration of the Rights of Man, a precursor to the Declaration of Independence and the Bill of Rights.

Each of us has a constitutionally protected right to be secure in our homes and Realtors take this right as sacred. Each home buyer holds a bundle of rights, rights that have been fought for and defended for many years.  Realtors are proud to stand with property owners and help them defend their rights against government intrusion.

For the homeowners of Bensenville, Realtors will continue to work with the city.  Offering our analysis, our experience, and our talents to the civic dialogue with the aim of preserving our freedom.

What's In a Number?

WHAT’S IN A NUMBER?
Assessing months supply (also called “Absorption Rate”) is an important consideration when describing market conditions. It succinctly measures activity in the housing market at a given point in time.

Months supply is determined by calculating the ratio of inventory available for sale at the seasonal sales pace in a given month. If months supply increases, the implication is housing demand favors buyers; if it decreases it suggests better opportunities for sellers.

The current national months supply of housing inventory is 9.4 months, down from 11 months one year ago. This means that, at the current rate of sales and available inventory, it would take about nine months to sell all the homes currently available for sale.

However, for homes under $250,000, months supply is six months, which indicates greater demand. In contrast, the market for $1 million+ homes is virtually frozen at 21 months.

“ALL REAL ESTATE IS LOCAL” (including Absorption Rates)
This is especially true in understanding the importance of your area’s Absorption Rate. Knowing your area's Absorption Rate helps to track trends.Understandingthe market and where it is headedis part of a REALTOR’s job as a real estate professional.

PROPERTIES ARE SELLING
The absorption rate at the end of the first quarter of 2009 for the Chicagoland area serviced by Midwest Real Estate Data, LLC multiple listing service was 11.59 months supply – a 18.5% reduction from the same time period in 2008.

The Definition of Absorption Rate:

Number of weeks it takes to sell the current inventory at the present rate of sales.

So what is considered a Buyers or Sellers Market in Real Estate Sales

• “Normal Market” conditions exist when the Absorption Rate is 5-7 months.
• “Sellers Market” conditions exist when the Absorption Rate is lower. (1-4 month)
• “Buyers Market” conditions exist when the Absorption Rate is higher. (7+ months)

Absorption Rate is not all you need to look at to determine the condition of the local Real Estate market. In fact, many people misunderstand the application of this important ratio, and overlook several important factors:

1. To have real meaning to you, or in understanding the local Real Estate market you are buying or selling a home in, you need to look at not the overall conditions, but the local, price-range specific conditions. A $35,000-$40,000 home may have 5 months of inventory, while a $75,000-$80,000 range may have 13 months. While the combined of all prices may be 9 months.
2. The ratio reflects a general condition or a trend. That is, it is not specific. Specific property features, condition, and price will do more to determine how fast it will actually sell than any mathematical formula will.

A sampling of local absorption rates as of August 1, 2009

NAPERVILLE
$0 to $199,999	12.34 months supply
$200,000 to $340,999	7.9 months supply
$350,000 to $499,999	14.09 months supply
$500,000 to $749,999	44 months supply
$750,000 to $999,999	0 months supply
ALL NAPERVILLE	10.88 months supply

CONSULT A REALTOR
Absorption rate is NOT an exact science. Figuring it is based on the premise that one will be looking for a TREND. It is advised to talk to a REALTOR who consistently tracks the numbers each month, to be able to track a trend.

EPA has new lead paint rule beginning April 2010

The Environmental Protection Agency’s new Renovation, Repair and Painting law becomes effective in April 2010 . EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.

If a landlord disturbs more than six square feet of a painted surface inside, more than twenty square feet outside or conducts any window replacement or demolition, he or she is subject to the new rule. The rule requires that landlords use lead-safe work practices during renovations.

However, if you're renovating, repairing or paint your own home and doing the work yourself, you don't have to comply with the rule. And, if you're not disturbing any lead-based paint and there's no money involved, you're not affected by the rule. If you are a homeowner performing renovation, repair, or painting work in your own home, EPA's RRP rule does not cover your project. You have the ultimate responsibility however for the safety of your family or children in your care. If you are living in a pre-1978 home and planning to do painting or repairs, please read a copy of the EPA's Renovate Right: Important Lead Hazard Information for Families, Child Care Providers, and Schools lead hazard information pamphlet.