Warren Buffet and the affordability of houses

It was a wake up call to be quoted in the press as having an abandoned blog.  And to think this one deals with real estate, my business.  So, I have elected to hop back on this bus and create the time to post again as I actually have a wealth of information on real estate sales.

Warren Buffett came out with a statement in the last couple of weeks where he indicated to a staff member that the absolute best investment today is real estate.  Boy, does that make sense! Why is that you might ask?  There are several reasons.

1) Money is virtually free.  When I bought my first house in 1982, rates on mortgages were 18%. Yikes!  Today's rate is between 4 and 5%, even lower for terms less than 30 years.

2) Inventory is huge!  There are more houses than there are buyers. Period.  I have recently counseled sellers to take their houses off the market if they can't afford to price BELOW market. That's right...BELOW market.  This is a buyer's market and has been for a few years.  The Buyers set the price.

3) Affordability is back to historic levels.  What this means is that the number of houses that are priced at levels that the average buyer can afford has increased.  The Maine average sales price is down to $160,000. This means that a family with an income of $53,000 can probably afford a house at this price.

What can you do as a buyer?  Talk to an experienced Realtor such as myself and get qualified.  If your credit score is rotten, that's OK. We can help you make a plan to get on track for that purchase. And best of all...being represented as a buyer is FREE!  That's right. No cost to you.
Shoot me an email at catmacgroup@gmail.com. I can help.

Update on MSHA program

I have done a little more research and have talked to a lender who is as familiar with the program as can be at this point. It is actually a credit of UP TO $5000 but no more than 4% of the loan amount. The borrower must contribute 1% of the loan amount. Under programs such as MSHA/FHA this can be a gift. The program ends November 30, 2009. Hope that is more clear!

I strongly encourage any borrower to consult with a loan officer regarding whether or not this makes sense.

There are income limits ,also, that apply!

Where did the time go or Tempus Fugit!

I have been extraordinarily busy with first time homebuyers in the past week. They are all smart as heck to be out there looking and putting houses under contract while the sun is shining and the rates are still low. My little Wall Street prognosticator friends say all signs point to higher rates, sooner rather than later as the economy bumps and jolts out of its latest swoon.

As I have repeated frequently, there is $8000 out there waiting for you if you have not owned a house in three years. Why not take advantage of that? If you need to work out the credit blues, get hooked up with folks who can help you raise the scores. Believe it or not, you can get a 100% loan with a 640 score through RD guaranteed. Find someone who knows how to find out if you qualify!

The sun is out. Summer is around the corner........the time is NOW!

Uncle Sam has $8000 for you

If you haven't owned a house for three years, the government will give you $8000 if you close on a home purchase by December 1 of this year. I know it sounds too good to be true, but it is! And, even better, HUD is looking at ways for you to use the $8000 as a down payment and NOT have to wait for your tax return.

Here is a description from the National Association of REALTORS:

The temporary credit is only available for
home purchases made from Jan. 1, 2009 to before
Dec. 1, 2009 and is equal to 10 percent of
the cost of the home, up to a maximum credit
of $8,000. (For example, a home purchased for
$80,000 or more would qualify for the full $8,000
credit while a $70,000 home would only qualify
for 10 percent, or $7,000)
Buyers claim the credit on their federal tax return
to reduce their tax liability. If the credit is
more than their total tax liability that year, the
buyer will get a refund check for the balance.
Only first-time homebuyers can take advantage
of the tax credit. A first-time buyer is defined
under the tax credit as an individual who has
not owned a home in the last three years.
For married joint filers, both must
meet the first-time
homebuyer test
to take the credit
on a joint return.
Eligible properties include anything that will be
used as a principal single-family residence—including
condos and townhouses.
There are income guidelines on the credit. Individuals
with an adjusted gross income up to
$75,000 (or $150,000 if filing jointly) are eligible
for the full tax credit. The credit is phased
down for those earning more and is not available
for those with an income above $95,000
(or $170,000 if filing jointly).
The new tax credit does not have to be repaid
if the buyer stays in the home at least three
years. But if the home is sold before that, the
entire amount of the credit is recaptured on
the sale.
People who purchased homes under the 2008
$7,500 tax credit program will still be required
to repay that credit to the government over a
15-year period.
The American Recovery and Reinvestment Act of
2009 features an $8,000 tax credit for first-time
buyers who purchase a home on or after Jan. 1, 2009
and before Dec. 1, 2009.
Details of the tax credit include:
First-Time Homebuyer
Tax Credit
Consult with your REALTOR® or tax advisor
and visit to
learn more about the tax credit and
state and federal loan programs.

Buying a house and the cost of oil

It has been awhile as I have been very busy with my real estate business - a good thing. However, the perceived crush from oil prices seems to be having a choking effect on people's desires to move. This being said, I think that if I were looking for my first home, I would be anticipating that at least I can control my own fuel costs and not be at the whim of a landlord who will jack the rent to cover expenses, or, if I were paying my own heat, wouldn't be attempting to tighten up insulation, improving efficiency, etc. When one owns their own house, they are in control of their own destiny - and fuel costs - which in this market is a great thing!



Also, it looks like rates may be on the rise. If you are looking to buy, you might want to get out there now!



Happy hunting!