Home of the Brave

The upcoming Fourth of July celebrations have me thinking about today’s pioneers in home ownership: First-time Buyers. It is certainly an event worthy of celebration. It is also worth honoring the bravery it takes to enter a market after the turmoil in the mortgage and real estate markets.

As a mother, I can’t help but see the similarity of buying your first home and the miracle of birth. When I was pregnant, my world stopped and re-centered around the miraculous event of my babies birth. This coincided with the perspective that everyday, all over the world, other mothers were giving birth. I was comforted to know that this was somewhat ordinary, despite how big the emotions felt. It is similar for new home owners. You find that first house and the thought of it can keep you up at night and fill your days with wonder of the life yet to be lived inside. There is also always a bit of fear in all of life’s big events. It is comforting to realize that others have gone through the process and settled comfortably into life as homeowners.

Beyond this sense of belonging to a larger movement, there are other ways to feel brave during the transaction. The more you know about the process, the less trepidation you are likely to feel. There is a lot of advice on the web on how to buy your first home. Much of it is useful. But remember, too much of information can be overwhelming. It is difficult to sift out the essential nuggets that pertain best to your local market. Even real estate agents, after obtaining their license and fulfilling the educational requirements, realize that what they learned in the book does not directly translate to the day-to-day practice. As a first-time home buyer, the only way gain the benefit of true market knowledge is to align your self with a trusted advocate, your Realtor. A good Realtor will walk you through the process and focus your concentration on the areas most crucial to your goals.

Beyond the insight gained by the self-taught and the well-represented, owning a home takes a leap of faith. Homes are intricate and complicated investments. Even with good advice, it is impossible to know everything that will be involved in the future stewardship of a home at the onset. The adventure of home ownership is not for everyone. This post is not about pushing anyone off the proverbial fence. For those who feel ready, be brave. A rare combination of low prices and historically low interest rates make it a good time to buy. Expert Realtors at Berkeley Hills Realty are waiting to help you. Check out our Agent Profiles to find your advocate.

New Legislation provides Golden Tax Credit for California Buyers

A piece of legislation was signed on March 25th that should be a tremendous incentive for home buyers in California to take action, and soon! AB132 provides $200 million for home buyer tax credits, dividing the money equally between purchasers of new (previously unoccupied) homes, and first-time buyers of existing construction. Beginning with purchases closing escrow on or after May 1 until the end of 2010, eligible purchasers of a personal residence will be able to take a tax credit equal to the lesser of 5% of the purchase price or $10,000, in equal installments over three consecutive years. A requirement of the bill is that purchasers live in the home for at least two years, or else they forfeit the credit. Those rules will apply from January 1 through July 31, 2011 as well, if funds remain.

C.A.R., the California Association of REALTORS, reported that nearly 40% of first time buyers last years indicated that they would not have purchased a home had the federal tax credit for first-time buyers not been offered. That program is still in effect, and first-time buyers who manage to get into contract by the end of April could qualify for an $8,000 Federal Credit in addition to the new $10K credit from the state.

The previous California program was supposed to have continued into the first months of 2011. However, the popularity of that program was so great that all funds were used by June 2009. That program applied only to buyers of new-construction. Some analysts calculate that the new California program funds will only last for one month or so before first-time buyers of existing homes snap them all up. Time is of the essence!

How does a homebuyer qualify? The state's Franchise Tax Board (FTB) allocates the credits on a first-come, first-served basis. The homebuyer must submit a properly executed settlement statement to the FTB within two weeks of close of escrow, which can occur no sooner than May 1, 2010. In order to receive the tax credit, escrow must close no later than Dec. 31, 2010, unless a credit has been reserved prior to that date, in which case the home must close escrow before Aug. 1, 2011. For these purposes a "first-time buyer" is defined as any individual who did not have an ownership interest in a principal residence for the three years preceeding the close of escrow date of this qualifying purchase. Homebuyers can check to see more details by checking the Franchise tax board website. That is where they also will need to check once the program has begun to see if funds are remaining.

Between this new text credit, the possibility of still taking advantage of the Federal credit through April 30th, and the current low mortgage interest rates that have been bobbing upwards lately, one would hope there would be great incentive for buyers to be willing to compromise a bit on their list of requirements, in trade for some handsome financial advantages!

First-time Buyers Benefit by Employing a California REALTOR®

From C.A.R: C.A.R. launches mortgage protection plan for first-time home buyers

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) launched the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP), for first-time home buyers.

Through the Housing Affordability Fund Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit.

C.A.R.’s Housing Affordability Fund is dedicating $1 million toward its Mortgage Protection Program, and estimates that as many as 3,000 families will benefit from the program this year.

To qualify for the Mortgage Protection Program, applicants must:

• Be a first-time home buyer – someone who has not owned a home in three or more years

• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009

• Use a California REALTOR® in the transaction

• Purchase the property in California

• Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

Note to first-time home buyers: All Berkeley Hills agents are REALTORS®, and can help with the paperwork. We can also help provide details of other programs such as the $8,000 tax credit for first-time home buyers. Call 1 800 Hi Berkeley to start the process.