Top 9 Home Buying Mistakes
Filed Under Uncategorized · Tagged: buyer, buying, first time buyer, home, information, mistakes, Oregon, pdx, Portland, portland metro, Real Estate, vancouver, washington
Buying a home is perhaps the most arduous, expensive and, ultimately, valuable acquisition you’ll ever complete. Just one mistake could mean disaster — perhaps the worst mistake you’ll ever make. In order to avoid titanic trip ups during such a trying transaction, buyers should get to know the most common home buying blunders. To know them is to avoid them.
1. Going solo: Buying a house is a complex transaction. It should be a team effort. You’ll need a REALTOR®, lender, inspector, insurer, perhaps a lawyer, and other team members to help you through each step of the way. Team build before you start the search.
2. Love at first sight: If you believe in fairy tales you probably shouldn’t be buying a home. You won’t live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.
3. ‘Loanless’ shopping: Being pre-qualified gives you a general idea of how much you can afford to borrow. It’s better to be pre-approved for a given loan. Sellers will take you more seriously. You’ll stay on budget.
4. Overbuying: Home buyers buying more than they could truly afford, in part, led to the collapse of the housing market. Buy more than you can afford and your dream home will become the same nightmare. Analyze all your monthly costs including debts, food, transportation, entertainment, and savings. Your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don’t forget to budget closing costs (often two to five percent of the home’s purchase price), plus moving, redecorating and maintenance. Look ahead and allow for increases in ongoing expenses such as utilities and taxes.
5. Misplaced trust: You are engaged in what’s likely your most valuable acquisition ever. It’s a business transaction. Ask family, friends, co-workers, professionals and others you trust for referrals, but don’t take their word for it. Vet your team members.
6. Accepting oral agreements: Get it in writing. The rate lock, the home inspection, disclosures, the contract. Always. Should a dispute arise, you’ve got the details documented.
7. Skipping the fine print: Understand what’s really in any document before picking up a pen. Get documents in advance, take time to read them and ask questions. Get copies of your mortgage and closing papers a few days ahead of closing.
8. Forgetting or betting on resale: Avoid buying a home that costs 50 percent more than neighboring homes. Reconsider buying the most expensive home on the block. Neighbors’ lower home values will weaken yours. Buy intending to flip your investment only to have the market fail means when it’s time to sell your price may not cover your costs.
9. Making an unconditional offer: Protect yourself with these contingencies:
A. Mortgage financing: You may be preapproved but is the house? A formal appraisal confirms — or not — that there is sufficient value in the home to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.
B. Inspection: Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.
C. Insurance: Confirm you can get adequate insurance coverage. In some areas, or following certain disasters, it can be difficult to get types of hazard insurance.
-Originally Written by Broderick Perkins, but edited for this blog
There’s still time to qualify for the home buyer tax credit!
Filed Under Uncategorized · Tagged: 2010, 2nd home, eligibility requirements, first time, government, home buyer, IRS, Oregon, pdx, Portland, Real Estate, tax credit
The federal first-time and long-time home buyer tax credit is still available until April 30th for purchase agreements signed by that date, and sales that close by June 30th. You must meet certain eligibility requirements outlined by the IRS. The following information comes from: http://www.irs.gov/pub/irs-pdf/p4819.pdf . . .
The Worker, Homeownership and Business Assistance Act of 2009 was signed into law November 6, 2009.
If you are in the market for a new home, you may still be able to claim the First-Time Homebuyer Credit. This new law extends and expands the first-time homebuyer credit allowed by previous legislation. Here are key points the IRS wants you to know about the expanded credit and the qualifications you must meet in order to qualify for it.
1. You must buy – or enter into a binding contract to buy a principal residence – on or before April 30, 2010.
2. If you enter into a binding contract by April 30, 2010 you must close on the home on or before June 30, 2010.
3. For qualifying purchases in 2010, you will have the option of claiming the credit on either your 2009 or 2010 return.
4. A long-time resident of the same home can now qualify for a reduced credit. You can qualify for the credit if you’ve lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the new home is purchased and the settlement date is after November 6, 2009.
5. The maximum credit for long-time residents is $6,500. However, married individuals filing separately are limited to $3,250. The maximum credit for first-time homeowners is $8,000 (up to $4,000 for married filing separately).
6. People with higher incomes can now qualify for the credit. The new law raises the income limits for homes purchased after November 6, 2009. The full credit is available to taxpayers with modified adjusted gross incomes up to $125,000, or $225,000 for joint filers.
7. The IRS will issue a revised Form 5405 to claim this credit on 2009 tax returns. The revised form must be used for homes purchased after November 6, 2009 – whether the credit is claimed for 2008 or for 2009 – and for all home purchases that are claimed on 2009 returns.
8. Homebuyers who claim the credit on their 2009 tax return will not be able to file electronically but instead will need to file a paper return. For homes purchased in 2009 there is an option to take the credit on an original or amended 2008 tax return.
9. The new law includes documentation requirements. See revised Form 5405 for details.
10. No credit is available if the purchase price of the home exceeds $800,000.
11. The purchaser must be at least 18 years old on the date of purchase. For a married couple, only one spouse must meet this age requirement.
12. A dependent is not eligible to claim the credit.
IRS encourages all eligible homebuyers to take advantage of the First-Time Homebuyer
Credit but at the same time cautions taxpayers to avoid schemes that help ineligible
people file false claims for the credit.
Visit IRS.gov/recovery for more details on the First-Time Homebuyer Credit. Forms are
available on www.irs.gov or by calling the IRS at 1-800-829-3676.
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Lois has been a proud Oregon resident for more than 20 years, and is a licensed real estate broker in both Oregon and Washington. 
