First Time Home Buyer

St. Louis Real Estate - Building Inspection - Termites

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

Termite2 TERMITE INSPECTIONS FOR REAL ESTATE TRANSACTIONS by Harry Morrell, Allied Building Inspections LLC

A full building inspection for a house involved in a Real Estate transaction does not necessarily mean that a termite inspection is included. Inspectors must have a special license in the state of Missouri to inspect for termites. It is true that inspectors will call out wood structural components that have been damaged by termites, whether the damage is significant or just minor. However, observing and reporting termite presence will not generally occur if a full termite inspection is not included with the building inspection. Keep mind that when a buyer orders and schedules an inspection for a house they bought, their inspector will deliver them a report describing the conditions of the major structural and mechanical components of the house only. Read the rest of this entry »

Posted by doug | Read More | Your Comments Are Welcome! | 08.11.2008

St. Louis Mortgage News - Housing Assistance Tax Act of 2008 pt 2

Filed under: First Time Home Buyer, For Buyers, Mortgage News, Relocation Buyer, Uncategorized

Credit for First-Time Home-buyers by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

The single largest provision in the Housing Act is a measure allowing taxpayers buying their first home to take a tax credit of up to $7,500 of the purchase price. Qualified home-buyers can subtract the credit amount from their federal income tax when they buy a home and even get a refund if the credit exceeds their tax. However, they are then required to pay the credit back over fifteen years. The result is that the credit resembles an interest-free loan that must be repaid to the government.

Here are the details of the new credit:

• The home must be located in the United States and must be the taxpayer’s principal residence. The taxpayer (and the taxpayer’s spouse if married) must not have owned another principal residence in the United States in the three-year period before purchasing the new home. Accordingly, the home does not literally have to be the taxpayer’s first home ever purchased in the United States.
• The home must be purchased between April 9, 2008 and June 30, 2009. Purchases from certain related persons and acquisitions by gift or inheritance do not qualify. A home constructed by the taxpayer does qualify if the taxpayer moves in between April 9, 2008 and June 30, 2009.
• There is also a special rule that allows taxpayers who purchase a qualifying principal residence in the first six months of 2009 to treat the purchase as if made on December 31, 2008. This allows the credit to be claimed on the taxpayer’s 2008 taxes rather than waiting to claim it on the taxpayer’s 2009 taxes.
• The credit is equal to ten percent of the price paid for the home, up to a maximum of $7,500. The $7,500 maximum credit applies both to individuals and married couples filing a joint return. A married individual filing separately can only claim a maximum credit of $3,750.
• The credit is phased out for individual taxpayers with modified adjusted gross income (AGI) between $75,000 and $95,000 ($150,000 and $170,000 for joint filers) for the year of purchase. Taxpayers with modified AGI over $95,000 ($170,000 for joint filers) can’t claim the credit at all.
• The credit is refundable, which means that households with incomes too low to owe any income tax can still benefit as the excess credit available after applying to any income taxes will be refunded to the taxpayer.
• In the second year after purchase (note that the payback doesn’t immediately start in the subsequent tax year), taxpayers who took the credit must start paying back the credit in equal interest-free installments over fifteen years. For example, suppose a first-time home-buyer purchases a home for $100,000 in December 2008 and claims the maximum credit of $7,500 on his 2008 tax return. He would then be required to pay back $500 (one-fifteenth of the credit) on his tax return for 2010 and for each subsequent return for the following fourteen years, finishing in 2024.
• If the taxpayer sells the home (or the home ceases to be the principal residence of the taxpayer or the taxpayer’s spouse) before the complete repayment of the credit, any remaining credit is due on the tax return for the year in which the home is sold (or ceases to be the principal residence). If the home was sold at a loss to an unrelated person, repayment of the remaining credit is forgiven to the extent of the loss.
• No credit is allowed if certain conditions exist: the taxpayer was ever entitled to a District of Columbia homebuyer credit, the home purchase was financed through tax-exempt mortgage revenue bonds, the taxpayer is a nonresident alien, or the taxpayer disposes of the residence (or it ceases to be a principal residence) in the same year as it was purchased.

For a chart of the tax credit information, click here

For Questions or Comments, please contact Chris Scheer chrisscheer@stlouisrealestatevoice.com

Posted by doug | Read More | Your Comments Are Welcome! | 08.05.2008

St. Louis Mortgage News - Housing Assistance Tax Act of 2008

Filed under: First Time Home Buyer, For Buyers, Mortgage News, Relocation Buyer

On July 30, 2008, President Bush signed into law the “Housing Assistance Tax Act of 2008” (the Housing Act). It includes a $15.1 billion package of housing tax incentives.

Here are the highlights of the bill for homeowners and first time home buyers.by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

Part One

Property Tax Deductions for Non-Itemizers

The Housing Act created a new, temporary property tax deduction for non-itemizers (i.e., for taxpayers who claim the standard deduction rather than itemizing their deductions).

Highlights include:

• The provision creates a new standard deduction for state and local real property taxes paid by non-itemizers. Since most homeowners who are paying on a mortgage have enough deductions (e.g., mortgage interest and property taxes) to justify itemizing them on their return, this new provision chiefly benefits homeowners who have paid off their homes.

• The deduction is currently only available for tax years that begin in 2008.

• The amount of deduction will be as much as $500 for single filers and $1,000 for joint filers. Since this is a deduction and not a credit (i.e., a dollar-for-dollar reduction in tax liability) the actual tax benefit will not be all that substantial. For example, it only proves a maximum of $100 to a couple in the ten percent tax bracket and $150 to a couple in the fifteen percent bracket (and only $50 and $75, respectively, to singles in those brackets). Granted, in this economy every little bit helps.

Part Two

Credit for First-Time Homebuyers (to be continued)

Chris Scheer can be reached at chrisscheer@stlouisrealestatevoice.com

Posted by doug | Read More | Your Comments Are Welcome! | 08.04.2008

St. Louis Real Estate - Mortgage News - FHA takes the gloves off

Filed under: First Time Home Buyer, For Buyers, For Sellers, Mortgage News

Take the Gloves Off FHA Lifts 90 Waiting Period by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

In a move to help get foreclosures off the books of lenders quicker and help avoid deterioration of properties that have been foreclosed upon the Department of Housing and Urban Development has lifted their ban on writing a contract if the title has changed in the past 90 days.

See the following article: FHA Lifts Waiting Period, Extends Insurance Coverage

For further clarification you can visit HUD’s website.

For questions or comments please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Mortgage+News, FHA

Posted by doug | Read More | Your Comments Are Welcome! | 06.18.2008

St. Louis Real Estate - Mortgage News - Foreclosure

Filed under: First Time Home Buyer, For Buyers, Mortgage News

Summertime Summer is almost here! by Chris Scheer, Cornerstone Mortgage, O’Fallon, MO

After spending 5 of the last 7 days on the golf course, I realized (not for the first time) that my future is not in professional golf. Thus I am resigned to continuing to help people achieve the American Dream of home ownership. So what is going on in the real estate world you ask?

Well we finally have the long awaited change in FHA mortgage insurance premiums coming into play. Therefore after July 14, 2008 it will be more expensive for borrowers with less than stellar credit to purchase a home. The effect in most cases will be less than $20 per month, but when you are living paycheck to paycheck, $20 a month can be a lot of money!

Foreclosures continue to rise! That is to be expected, but what it has done is that over the past 10 years an appraiser could ignore a comparable sale if it was a foreclosure. Now with the amount of foreclosures, they have to be treated as part of the marketplace. Thus property values are declining in areas of numerous foreclosures. The positive aspect of this is that those property owners who have been complaining about their rising real estate taxes will see a freeze on the rise and in some cases may see there property taxes come down in 2009!

For questions or comments on this post, please contact Chris Scheer at chrisscheer@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Mortgage+News, First+Time+Home+Buyers, Home+Buyers, FHA, mortgage+insurance+premiums

Posted by doug | Read More | Your Comments Are Welcome! | 06.16.2008

St. Louis Real Estate - Building Inspection - The Report

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

UNDERSTANDING THE REPORT by Harry Morrell, Allied Building Inspection, ASHI Certified Inspector

Home inspection reports have made dramatic changes from its earliest beginnings of 25-30 years ago to now. Although there still are old time inspectors providing hand written check lists type reports, most of today’s inspectors provide comprehensive computer generated reports that include color digital pictures. Even though these newer upgraded reports look spectacular compared with the obsolete hand written check lists, a new set of problems and concerns has raised its ugly head.

There are a wide variety of home inspection computer software programs on the market that today’s home inspector’s use. Inspector’s usually purchase the shell of the program and are able to boiler plate whole paragraphs that describe certain mechanical and structural components. Additional paragraphs can be built to describe the defects or conditions for any mechanical or structural component as well. These boiler plate paragraphs can be entered into the report by a click of the mouse. This allows the inspector to provide a 25-30 page report with photos in about 30 minutes. There are also inspectors that are capable of providing on site computer generated reports similar in length, but usually formatted by a check list. The downside of this is that the boiler plate paragraph may not apply to your particular house.

Home buyers should be aware of and question any technical type verbiage that appears too vague or confusing in nature. Reports should be simple and easy to read as well as being comprehensive. For example if an inspector merely states that the roof needs further review by a qualified roofing contractor, he may be cutting the client short. This leaves an opening for the roofer to recommend a new roof when the roof may still have several years of service left. It leaves the question of what exactly is the general condition of the roof unanswered. If the inspector states that 45% of the roofing has significant deterioration, and missing and damaged shingles, then goes on to recommend a new roof, there is no need have a roofer further evaluate the roof, just replace it. Understanding Quote

This type of reporting can apply to any structural or mechanical component as well. If you are reading a report describing the electric service panel as appears to be OK, but better have a qualified electrician further evaluate it just in case. The buyer may be getting short changed. If the inspector noted rust and corrosion within the interior of the panel, burn marks on the conductors and connections, and conductors running across the bus bar, the inspector probably did a pretty good job inspecting the service.

A good inspection report should include a summary of defects and conditions on each and every structural and mechanical component, as well as a comprehensive narrative with photos expounding on the summary. All this should not include repetitive and ambiguous statements. A verbal summary, with a photo slide show by the inspector after the inspector should give the buyer a pretty good idea of the level of competence of the inspection and of the finished report. All buyers should thoroughly read their report and then read it again. If there is anything that the buyer does not understand or feels the inspector missed, there is always only one thing to do, CALL BEFORE CLOSING!

Harry Morrell

Harry O. Morrell
ASHI Certified Inspector

Harry can be reached at harrymorrell@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, Saint+Louis+Real+Estate, Home+Buyers, ASHI+Inspectors, Inspection+Report

Posted by doug | Read More | Your Comments Are Welcome! | 06.06.2008

St. Louis Real Estate - Building Inspection - New Construction

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

NEW CONSTRUCTION INSPECTIONS by Harry Morrell ASHI Certified Inspector, Allied Building Inspection

For those buyers that are considering a new home purchase and believe the home inspection should be waived just because it is a new home, BEWARE. There are many circumstances to consider when buying a new home relating to the inspection process in general that buyers should know.

If you are buying a home close in to the metropolitan area from a well known and reputable general contractor chances are that the home will be well built and up to code. However, consider that this well known builder uses many sub contractors who can always have that one bad day or are in a rush to get to that next job. Short cuts occur all the time even in those multi-million dollar homes. In the world of construction speed is everything and sometimes digs right into the heart of the quality and craftsmanship that all home buyers want. Your home inspector will go back over all the important and significant structural and mechanical components to make sure you are getting the quality that you are paying for. Remember code inspectors do not do a top to bottom inspection. If you are buying a home out in rural areas from a weekend/amateur home builder, I have four words for you, GET A HOME INSPECTION!

New construction inspections can be grouped into three major categories:

Phase Inspections
End of Construction Inspections
Warranty Inspections

Phase inspections are recommended for the buyer that is purchasing a new home in a rural area with no or little code enforcement to ensure good building quality and safety and usually includes the initial foundation pour, framing, mechanicals, and roofing.

End of construction inspections are the most common and usually are more than adequate for any purchase close in the metro area.

Warranty inspections are a great idea for builders who offer a one year top to bottom warranty.

Home owners can get their inspector to perform a top to bottom inspection before that one year warranty expires. Most common defects discovered during these type inspections are foundation wall cracks, leakage or water/moisture intrusion, concrete pad settlement, and drainage and grading issues.

Harry Morrell Most home inspectors have a solid general background in residential home building and have looked at thousands of homes during their career. Do not get side tracked by that new home being perfect. Spend a little now for an inspection to avoid paying more for a major repair or replacement later.

Harry O. Morrell can be reached at harrymorrell@stlouisrealestatevoice.com

Tags: St.+Louis+Real+Estate, New+Construction, Home+Buyers, ASHI+Building+Inspectors

Posted by doug | Read More | Your Comments Are Welcome! | 05.09.2008

St. Louis Real Estate - Home Inspection - Legalize

Filed under: Building Inspection News, First Time Home Buyer, For Buyers

THE LEGALITIES OF HOME INSPECTIONS by Harry Morrell, ASHI Certified Inspector, Allied Building Inspections

Sellers and most always buyers are somewhat confused or do not understand the legality of Real Estate transaction home inspections in the state of Missouri. First and foremost a real estate transaction inspection, whether it be a full building inspection, a termite inspection, a Radon test or a combination of all three is not mandated by state law, nor is the findings by the inspector and the written documentation resulting from the inspection mean that the owner or seller of the home or building is mandated to repair, replace, or improve defects discovered during the inspection.

Listing agents often relate to me the hard time they have explaining to the home owner why they should improve some significant defects when no state law mandates their repair or replacement. My explanation to buyers is much simpler. I advise my clients, (mostly buyers), that the main purpose of their home inspection is for them to be able to make a common sense and intelligent decision on their purchase based upon the condition of the home at the time of inspection. If there is significant structural damage and defects, some buyers may decide to move on to another home even if the seller agrees to repair and improve. Minor mechanical and structural defects and concerns can be negotiated for repair or replacement, but the buyer must realize that he or she will be dealing with three types of sellers.

1. One seller may agree to repair and replace all listed items that are defective. This would be a motivated seller who wants to move the home.

2. Another seller might acknowledge that these defects are real and significant but will tell the buyer to fix them if the buyer wants the house. The seller might not care if the house gets sold or not.

3. Still another seller might say that he will repair the plumbing if the buyer agrees to repair the electric. This is called negotiating and your Realtor will be able to be in your corner for this.

What if your inspector finds extremely high levels of Radon gas in the house, and extensive Termite damage along with a live infestation of termites in the house? Then the seller most certainly will have to make the repairs and improvements, right?? The answer is pure and simple.

ABSOLUTELY NOT!

The seller will have to disclose these items to the next potential buyer, and will certainly have a very difficult time in selling his house, but he does not have to make any repairs or improvements. All buyers should be prepared to run into difficult sellers who do not want to bargain in good faith and move on to that next home. There is a lot to choose from. It is a great buyers market, and sellers will find that they will find a great buy as well on their next home.

Home buyers should always remember and consider the alternative when difficult sellers refuse to negotiate. Just imagine if you purchased the home without an inspection and discovered thousands of dollars worth of defects a year after you moved into the home. Be sure and ask your inspector what he considers a significant or minor defect. Most veteran inspectors will have no problem giving you an estimated dollar cost guide on repairs and upgrades as well. Make sure your inspector in ASHI certified.