Now’s the time to make a move if you want to take advantage of the homebuyer tax credit, which expires on April 30. Remember, you have to close by June 30. That means short sales, which can often take longer than 60 days to close should be a last resort. Focus on bank owned and non-distressed properties. Happy hunting!
If you are interested in taking advantage of the homebuyer tax credit and buy a home in Northern Virginia, the clock is a-ticking. Seventy days to find your home sounds like a lot of time, but it will surely go by very quickly as you are competing with throngs of other buyers looking to cash in.
A word of caution: beware of writing offers on short sale listings. These transactions typically take 60 days or more to get to closing after you’ve ratified your contract. Keep in mind, you must close by June 30 to receive the credit. If you get under contract right at the deadline of April 30, you’ve only allowed yourself 61 days to get your deal closed.
If you or someone you know would like to buy a home in Northern Virginia, contact me anytime at 703-403-0536 / patrick@patrickduffyrealtor.com.
You see the foreclosure notices in the local paper and you hear they conduct these auctions “at the courthouse steps”. The courthouse isn’t the first place on your list of places you want to be.
Well, it’s actually a place brimming with opportunity for Northern Virginia real estate investors. Just take a look at how many people faithfully show up day in and day out hoping to snatch up a property.
Here are four things (this is certainly not all-encompassing) to consider before joining in the great poker game that is bidding at foreclosure auctions:
Decide what your goals are. Are you looking for a long or a short term investment? Long term will mean having your money tied up for longer and a smaller, but steady stream of income (renting the property). Short term will mean a larger lump sum back with a quicker recovery of your investment and profits (selling the property).
Do your research before and after getting involved. These transactions involve a significant amount of risk. I highly recommend getting a “lay of the land” before you ever participate. Go as a spectator a few times – see how the bidding process typically unfolds, see how various people operate, who bids on what. And once you are “in the game”, extensive research is required for each property you are considering buying. How much is the property worth? Are there any title issues that could impact me? Has the roof caved in on the house? I can’t stress enough, the importance of having good, reliable information before you bid on a property.
Get your team in place. Some team members you will need are a REALTOR, title company, insurance agent, and a licensed contractor for repairs and/or renovations.
Get your money ready. If you’ve won the bidding on a particular property, a minimum deposit, usually around $15,000-$20,000 will be required immediately. From there, (typically) you will be required to close within 15 days. That means getting your cash and/or financing lined up quick. Keep in mind there are significant monetary penalties if you do not close on time.
Buying properties at auction can be a very lucrative investment. I advise you to seek the services of an experienced real estate team when engaging in any form of real estate investment. Please feel free to contact me anytime to see how I can help you invest in Northern Virginia real estate at 703-403-0536 / patrick@patrickduffyrealtor.com.
Stay tuned for future posts with tips on foreclosure auctions and real estate investing.
Last November, when Congress approved an extension on the first-time homebuyer tax credit, potential homebuyers who missed the original deadline were excited. It was another chance to buy a Woodbridge home for sale and receive an often badly needed $8,000 on their tax return.
Real estate agents were excited as well, because the tax credit extension expanded to include “upgrade” buyers – those who wanted to replace their current home with a bigger one. The possibility of selling a home was higher than it’d been in a while. However, expansion to include upgrade buyers wasn’t the only change.
If you’re hoping to buy a Woodbridge home for sale and take advantage of the tax credit before the new 2010 deadlines, here are a few things to keep in mind:
You still have until April 30 to sign a contract on a Woodbridge home for sale to get the tax credit. Today’s real estate market is beneficial for buyers. Put it to work for you!
If you’d like to take advantage of the homebuyer tax credit, I can help. Call me right away at 703-403-0536 or email me at patrick@patrickduffyrealtor.com so we can beat the deadlines.
Links:
Approved an extension on the first-time buyer tax credit: http://money.cnn.com/2009/11/06/real_estate/tax_credit_extended/
Get pre-approved for a mortgage: http://personalmoneystore.com/moneyblog/2009/12/03/preapproved-home-mortgage/
Negotiating for closing costs: http://www.lenders.us/mortgage-loans/closing-costs-and-how-to-negotiate-them
Have you heard of the first-time homebuyer’s tax credit extension? Last month, President Obama signed the extension to help first-time homebuyers (who didn’t get their sales in by November 30th) buy a house that meets their needs. What about those who already own Woodbridge homes, are doing well and want a larger home?
To those who already own a home, Merry Christmas! The Workers, Homeownership and Business Assistance Act of 2009 didn’t just come with an extension; it came with improvements. Those in governmental positions of authority reasoned that if someone wanted to get a bigger home, they should get some kind of help too, thus further helping the overall real estate market.
If you own a home, you can now receive up to $6,500 in tax credits for buying one of the Woodbridge homes for sale. The actual wording is “$6,500 or 10%.” Here are a few of the important points you need to know:
Most couples move into a home thinking they will “eventually” get a bigger home once they have a family. Then the family comes along, the house is full and they can’t buy a larger home due to financial issues. The tax credit is a perfect opportunity for families to find Woodbridge homes that fit their expansion needs. Take a chance and look around; your dream home may be only a city block and $6,500 away!
If you’re looking to expand and take advantage of the tax credit, I can help. Call me at 703-403-0536 or email me at patrick@patrickduffyrealtor.com for more information.
Links:
First time homebuyers: http://www.federalhousingtaxcredit.com/
Modified adjusted gross income: http://www.moneybluebook.com/adjusted-gross-income-and-modified-adjusted-gross-income/
Tax credit: http://www.irs.gov/newsroom/article/0,,id=204671,00.html
A Deed-in Lieu (DIL) of Foreclosure is sometimes referred to as a “friendly foreclosure” since the homeowner essentially gives the Deed back to the bank. Because this may prevent the bank from go through lengthy (and costly) foreclosure proceedings, they will sometimes forego their right to a deficiency judgment. The bank agrees to take the Deed back in exchange for the property and the homeowner and back part ways with no further recourse.
This solution often only works when there is only one bank holding a note on the property and there are no significant junior liens on the property. If the homeowner has equity, this is usually not a good route to take. Why forfeit your right to that hard earned equity?
As with other foreclosure alternatives, the bank will only accept a DIL if you cannot make your mortgage payments. Also like the other alternatives, it is often less damaging to your credit than a foreclosure. Keep in mind, the bank will not present this as an option to you because this has to be done by you voluntarily. To maximize your chances of your lender accepting a DIL, do not wait too long – approaching them one week before the home is to be auctioned will often not work.
If you or someone you know is falling behind on their mortgage, please call me at 703-403-0536 or email me at patrick@patrickduffyrealtor.com. I’m here to help!
Links:
Deed-in-Lieu of Foreclosure: http://banking.about.com/od/loans/g/deedinlieu.htm
Deficiency Judgment: http://dictionary.reference.com/browse/deficiency+judgment
Our second foreclosure alternative to look at is forbearance (or repayment plan). Think of forbearance as reinstatement on a payment plan rather than in one lump sum. Much like the reinstatement we looked at yesterday this is a good option for homeowners experiencing a temporary hardship and the homeowner will be required to pay their lender what they are owed.
In some cases the lender will tack the missed payment and fees onto the end of the scheduled loan amortization, however it is much more likely to be given a period of time in which to pay the delinquencies. Forbearance will often require income documentation from the homeowner showing that they have the wherewithal to comply with the terms of the repayment plan.
Forbearance Example
Homeowner misses four payments on a $2000 per month mortgage and the foreclosure process has been started.
Reinstatement Amount
| 4 months @ $2000/mo. |
$8,000 |
| Late Fees |
$400 |
| Legal Fees |
$1,600 |
| Processing Fees |
$300 |
| Total Reinstatement |
$10,300 |
The lender allows payments to be broken up over the next 12 months:
| Total Reinstatement |
$10,300 |
| Reinstatement Pmt 12 mo. |
$858 |
| Current Payment |
$2,000 |
| Monthly Repayment |
$858 |
| Total Monthly Pmt |
$2,858 |
Once the homeowner completes the 12th repayment, the mortgage would go back to its original amount.
NOTE: a mortgage will not be fully reinstated until the payments are made in full. If the homeowner misses just one payment along the way, they can end up in the same stage of the foreclosure process they were in prior to the forbearance plan.
If you or someone you know is falling behind on their mortgage, please contact me at 703-403-0536 / patrick@patrickduffyrealtor.com. Additional foreclosure information can be found at www.NorthernVaShortSaleHelp.com.
In my first of a series of posts on foreclosure avoidance options, we will look at the quickest way to “get back in the good graces” of your lender – reinstatement. Unfortunately due to the homeowner’s hardship situation, it is often difficult to pursue this route. However, if the reason you have missed payments is temporary, this option allows you to reinstate your mortgage all the way up until the bank sale.
To have your mortgage reinstated, you quite simply have to pay the lender what they’re owed to bring you current. In order to due this, you will contact your lender and request the amount needed in the form of a reinstatement letter. Keep in mind this letter often is time sensitive, usually requiring the full amount in one payment within 3o days.
Once reinstated, go ahead and keep making those payments.
Reinstatement Example
Homeowner misses four payments on a $2000 per month mortgage and the foreclosure process has been started.
Reinstatement Amount
|
4 months @ $2000/mo. |
$8,000 |
|
Late Fees |
$400 |
|
Legal Fees |
$1,600 |
|
Processing Fees |
$300 |
|
Total Reinstatement |
$10,300 |
As you can see, this option will often require a sizable lump sum payment. Due to the difficulty of coming up with that payment, other options may need to be explored – which will be covered in the coming days. The next foreclosure avoidance option in my series of posts will be Forbearance.
If you or someone you know is falling behind on their mortgage, please contact me at 703-403-0536 / patrick@patrickduffyrealtor.com. Additional foreclosure information can be found at www.NorthernVaShortSaleHelp.com.
| 4 months @ $2000/mo. | $8,000 |
| Late Fees | $400 |
| Legal Fees | $1,600 |
| Processing Fees | $300 |
| Total Reinstatement | $10,300 |
