For The First Timers...

As we get closer to the end of the year, it's time to consider tax incentives for buying a home. If you are a first time buyer, you may be eligible for the first time buyer tax credit being offered by the federal government through July 1, 2009! If your income is $75,000 or less (double that if you're a married couple)and you bought a home after April 9th this year, don't let this credit pass you by when you're filing your tax return next year!

How it works:

If you're a first time buyer with a home purchase between April 9, 2008 and July 1, 2009, you may qualify (see income criteria above).

When you file your tax return, you'll get up to a $7500 refundable tax credit (you'll get less than that if the purchase price was under $75,000), as an interest-free loan from the government.

The tax credit is to be repaid over the course of 15 years, or earlier if you sell the home. If you don't have a capital gain on the sale of your home later, repayment of the loan is waived!

You don't have to begin repaying the loan until 2 years after the credit is claimed.

For example:

You bought a home in September 2008 and qualify for the tax credit. In early 2009 when you file your tax return, you will claim the $7500 credit on your tax return.

This means if, for example, you'd otherwise owe $1000 in taxes to the government, the first time buyer's credit will actually get you a $6500 REFUND!

In 2010, you'll begin repaying the government back at $500 per year for the next 15 years. If you sell the home before it's been fully repaid and don't have a capital gain on the sale, the rest of the loan repayment is forgiven.

Don't let this fantastic incentive pass you by if you're thinking of buying in the next year!

The Donkey & The Elephant Discuss Housing

In the weeks just prior to the election, you can't help but wonder...how do the candidates stand on home ownership? What will they do to crack down on predatory lending? Here are some brief details: Obama/Biden

~Universal Mortgage Credit - This credit will provide an average of $500 mortgage tax credit to 10 million homeowners, the majority of which earn under $50,000/yr.

~STOP FRAUD act - This act will officially define "mortgage fraud" in the law books as well as increase funding for enforcement programs and provide stricter penalties for those convicted of mortgage fraud.

~HOME score - Obama/Biden want to create a Homeowner Obligation Made Explicit score which will allow buyers to easily compare loans and understand the actual cost of borrowing.

~Bankruptcy Loophole - Currently, bankruptcy courts cannot modify mortgage payments for an individual. Obama/Biden want to eliminate this provision in federal law.

McCain/Palin

~Federal assistance to borrowers should not bail out speculators who took unnecessary risk.

~Increasing financial assistance should go hand-in-hand with increasing transparency and accountability.

~HOME plan - homeowners who meet certain guidelines will be given the opportunity to trade their mortgage for a manageable FHA loan reflecting their home's current market value. The McCain camp estimates this will keep up to 400,000 families from losing their home.

Spooktacular Haunted Houses

Every year around Halloween I try to hit up at least one, if not more, Haunted Houses. Here are some that I've been to in the past in Chicago:

Haunted Sanitarium at Theatre On the Lake (Fullerton & Lake Shore) - kind of your standard haunted house with a strobe light room, haunted graveyard, and mangled monsters carrying chainsaws that try to freak you out while you wait in line; not horribly scary but still frightening enough to be entertaining and definitely a good length. Guys - great for a date!

Disturbed at the Oracle Theatre (Broadway & Grace) - Let's just say the name is an understatement. Each year's show is a different short "interactive play" where the audience stands in the middle of the scene and the show is enacted around them. Last year's was too disturbing to even describe the plot line... let's just say this is not really as scary as you'd think... but very "I can't believe they're allowed to perform that"-type-of-disturbing. Guys - NOT great for a date!!

In the past, I've also been to a "adults only" haunted house at the club formerly known as Cherry Red (now one of my favorites, Uncle Fatty's Rum Resort) on Sheffield just north of Diversey. Unfortunately we thought it was "adults only" just because you were allowed to mingle at the bar beforehand and bring drinks through the haunted house, followed by a free shot of liquor at the end; we learned the hard way that "adults only" meant "adult themed" and was geared more towards necrophiliacs.

My Favorite Virtual Tours

These are some places that my team and I have listed for sale. Take a look at these beautiful homes using a 360 degree virtual tour...very cool stuff!

Beautiful 5BR/5.5BA Custom Built Home

HUGE 3BR Restored Vintage Condo In Lakeview

Another Enormous and Beautiful Home 6BR/5.5BA (potential short sale!)

Mark-to-Market

What determines the market value of property? Think about what the term market value means... Market value is the highest amount that someone in an open market is willing to pay for something.

That's why today's real estate market is very tough for sellers. Many fail to realize that market value is not determined by how much was originally paid for the property, or by how much the property's value "should have" increased since you bought it. A property's market value is equal only to what the market is willing to pay for the property NOW. This is dependent on a number of factors, specifically factors related to the economy. When unemployment is increasing, credit (lending) is tightening, the dollar's value is falling, people are losing equity in other investments, and cost of living is still rising... the market value of a given property will decrease. Why? Because in a market like that, people have less buying power and tighter budgets. Unfortunately this is the case today.

The best way to determine the market value of your property is to get as many potential buyers in for showings as possible. The more people that see it, the more opportunities you have to receive offers.

Of course, before you get showings on your property you have to decide on a listing price. Sounds like a catch-22, right? Not really. Your realtor should be familiar enough with the market to know what properties similar to yours have been selling for in recent months. This is why it is very important you sit down with your realtor and have them do a comparable market analysis (CMA) for you before listing your property for sale.

I'd rather have a seller price their property lower and leave minimal negotiation room, than price the property too high (to leave room for negotiation) and not get any showings. With as much housing inventory as there is right now, people do not have the time to see everything. So they'll start from the lowest priced properties and work their way up. Don't let your property be the last on the list for viewing!

I'd also rather see a seller get 5 low offers that they have to turn down and finally get one good offer, than not get any offers at all because the property was priced too high to attract showings.

My point? Price your property reasonably and you may even end up with a better offer than if you'd priced it too high!