The Group University will host a class, Homebuyer Basics, for first-time home buyers on Wednesday, September 14, at The Group’s office at 2803 E. Harmony Road, Fort Collins. Registration begins at 5:00 pm with the presentation beginning at 5:30 pm. Information will include current local market trends, the steps in buying a home, how to increase your odds of success, current loan options, and the advantages of owning versus renting. A question and answer session will follow. Attendees will receive a First Time Home Buyer Kit.

Register at www.thegroupinc.com, or by calling Rachel Bomgaars at 970-377-6068 or 970-223-0700.

The National Association of Realtors conducted a study that was released earlier this year about the benefits of homeownership. The report, Social Benefits of Homeownership and Stable Housing, cite the following results:

• Higher educational performance and better behavior of children
• Lower community crime rates
• Lessened welfare dependency among households
• More household participation in civic affairs
• Better household health

Of course there are many economic benefits as well:

• For every two homes sold, one job is created
• Each home purchased pumps up to $60,000 into the economy
• Home ownership accounts for over $2 trillion of the U.S. GDP

The Wall Street Journal reported the following this week, “The long-term benefits of homeownership remain very much intact. For now, at least, you can deduct the mortgage interest on your taxes—a big perk for people in higher tax brackets. You get to paint your walls any color you wish, without having to clear it with a landlord. And assuming you can buy a home for about the same price as you can rent one, buying will give you the ability one day to live rent-free. Come retirement time, a paid-off mortgage means your monthly expenses are significantly reduced, and you have a chunk of equity to play with.”

Interest rates are at a 50 year low.  Don’t wait….there are many reasons why homeownership ( and expecially Northern Colorado real estate) will benefit you and your family.

http://www.realtor.org/research/research/homeownershipbenefits

http://online.wsj.com/article/SB10001424052702304563104576361522020024248.html#project%3Dhomepriceindexapril20110603%26articleTabs%3Darticle

Although the Home Buyer Tax Credit has expired for most first-time and repeat buyers, special rules for members of the military, the foreign service and the intelligence community may apply.

Qualified service members who are ordered on a period of official extended duty have an extension to the dates for one year. For these home buyers the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011. ‘Official extended duty” means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

Call a Group Realtor to find out more about the Home Buyer Tax Credits for military personnel.

I’m pretty sure most of you have heard about this being the best time to buy a house in at least 20 and maybe 40 years. If you don’t know about it from your local paper, or your favorite online news source or even a neighbor, you’re either in retreat or you are insanely busy. Interest rates are at a historic low, the government is giving away free money, prices are more than reasonable for the most part, real estate agents are jumping at the chance to help you out, there is a decent inventory and it may get even better in the next month or so as sellers rush to get their homes on the market to take advantage of the upcoming homebuyer’s tax credit deadline.

The interest rates apparently aren’t going to last. The Federal Reserve Bank is threatening to stop buying back mortgage backed securities…blah, blah, blah…don’t nod off yet…but if they do what they are threatening, interests rates could go up 1-2 percentage points. And soon. Each percent equals $10,000 in purchase power. So if you qualify for a $200,000 purchase price, and the rates increase by 1%, your buying power goes down to $190,000. If rates go higher, the difference in purchasing power gets pretty drastic. And the FHA (Federal Housing Authority) is rethinking its risk exposure and considering raising its down payment requirement from 3.5% of purchases price to possibly 8 -10% putting many potential buyers out of the market.

So why are some buyers still hesitant? Sometimes all the statistics and incentives in the world can’t shake a lack of confidence in the economy. And sometimes it’s just a matter of helping the consumer understand what’s at stake.

But there are other issues. Just a few years ago the loans that helped bloat the real estate bubble were easy to get and buyers who shouldn’t have bought did and walked away from the closing table with a house that they had a good chance of losing. As a consequence lenders and their underwriters are not only operating under stricter guidelines but the new appraisal rules have affected at least 70% of transactions in 2009, according to the National Association of Realtors. I personally had two transactions go awry over some “inadequate” appraisals. One was resolved and another just didn’t happen.

A good credit score is more important than ever and many lenders insist on a score of at least 660 especially if you want to take advantage of those 4.75% interest rates. Even investors and buyers looking at jumbo loans are looking at 6% or below. So, let’s see…you need good credit, a decent down payment, a steady paycheck, a home that is worth the purchase price, and in return you get a decent deal, free money even if you are not a first-time homebuyer, the lowest interest I have ever seen, and a chance to move this economy out of the doldrums. Not bad.

And yet, some potential buyers still wait. Have consumers lost all confidence in the economy? Are too many people out of work? Are some buyers waiting for prices to tumble even further? On January 26, the Spokesman-Review published the following headline, “Poised for recovery, the economy is lurching forward,” giving a consumer confidence rating of 55.9%, the highest since September 2008 though not anywhere near the heady ratings of 90%, the gold standard in consumer confidence indexes. Then Investors Business Daily quotes an Economic Optimism Index (yes, there is such a thing, I didn’t make it up) of 46% down from 48% in January. The next Consumer Confidence Index comes out on February 23.

What does this all have to do with someone buying a house? Well, if we believe the naysayers and purveyors of a Chicken Little philosophy, we question our own decisions and tend to take a “wait and see what the rest of the world is going to do” attitude and by the time we hear about “one of the best real estate markets in the past forty years” in the media, that market is already passing us by.

There’s nothing wrong with a little caution. It would have been a blessing when lenders were handing out mortgages like Whole Foods used to hand out food samples. Have you noticed how Whole Foods is getting stingy with their samples? No more free lunches of brie and crackers with some smoked salmon followed by a dark chocolate truffle. Taking the lead from Whole Foods, lenders have become more judicious in their practices and the lending free-for-all has ended.

And there are still more foreclosures and short sales on the horizon and millions of Adjusted Rate Mortgages (ARM’s) are due to change in 2010 which could price some homeowners right out of their own homes.

But none of this should discourage investors, first-time homebuyers or move-up or move-down buyers from visiting a lender and checking out the inventory of homes. Looking doesn’t have to mean buying so offer your favorite Realtor lunch and a latte and head out for a couple of hours to see what you may be missing.

Once a week I email my customers a list of “Homes I Love” which could mean it’s a fabulous deal, unique property or prime location or a combination of all three. If you’re interested, I can put you on the list. As The Group’s founder Larry Kendall is often quoted as saying, “You may not be buying, but you always need to be looking.”

• I am a first-time home buyer and purchased a home before the Home Buyer Tax Credit extension. Should I have closed before November 30, 2009?
• I have rented out my present home for the last 2 years and now I want to buy a condo and move into it. Do I qualify for the Tax Credit?
• I just got married! My wife and I want to buy a home with the tax credit and I have owned a home for the last few years. Are we eligible?
• What if I buy a house with the tax credit then move in 2 years?
• Can I use the tax credit for the down payment?

These were just a few of the questions asked at a recent session on the Home Buyer Tax Credit extension held at The Group Inc. real estate offices  on January 13. Like Cash for Clunkers for the auto industry, the extension of the Home Buyer Tax Credit extension is meant to encourage buyers to purchase a home sooner than later.

And it seems to be working. Originally, the tax credit extension ended on November 30, 2009 but the feds decided to extend it to April 30, 2010 which means that as long as you have a signed contract by April 30 and close by June 30, you are eligible for either the first-time home buyer credit of $8,000 or the long-time resident tax credit of $6500.

But there are restrictions and here are just a few:

• You have to have lived in your home at least 5 out of the last 8 years in order to qualify for the long-time resident tax credit and the house you buy must become your personal residence.
• If you buy a home with your new spouse, the two of you must meet the qualifications of a long-time resident by living in the same house if the both of you are looking to qualify as long-time residents.
• You can keep your present home as an investment if you want.
• In a few cases and possibly a higher interest rate, the buyer might be able use the money as part of a down payment.
• Members of the military serving overseas get an extra year.
• The buyer can’t buy the home of a relative.
• Plan on owning the property for at least 3 years.
• There are maximum income levels and minimum sales prices.
• Ask your Realtor how to claim your credit and what forms you will need.

Congress passed the tax credits in an effort to boost the struggling housing industry and fight recession. Indications are that it’s had an impact. The National Association of Realtors reported that November sales of existing homes were up 44 percent from a year earlier. Although new home sales dropped in November, figures from the Commerce Department show that they’re up 8 percent from the low in January 2009.

As a real estate agent, I’ve been spending much of my time fielding calls from clients asking if they are eligible and asking for advice as to their next step. Each situation is different and my answers need to be about each client’s financial state, the local market and the client’s potential price range. We also have to consider the stress and time and effort it takes to buy a house and meet a looming deadline.

Since the long-time resident tax credit can also be used to downsize, it can work for someone living in a home that no longer meets the needs of a smaller household. Sell your family home and buy a patio home or a condo. But I think the majority buyers using the tax credit will be the first-time home buyer who can use the money to make some changes to their new home or they can just tuck it away just like a bonus but without the tax ramifications.

So bottom line: with less than 5% interest rate (for buyers with great credit), some fantastic inventory, motivated sellers (though not all!!!), and free money, we haven’t seen such a good buyers market in awhile. However, with reasonable prices for homes that are in popular locations and well-maintained, we are seeing multiple offers again.

I called clients about two homes that I saw on a Realtor tour before it even hit our local MLS, but both were under contract before the end of the day. So, no matter what you hear in the national media about the state of real estate, everything really is local. Not just the northern Colorado market, but neighborhood by neighborhood, the sales are widely different.

A couple of caveats here. Changes in the lending market are forcing contract deadlines to go from 30 days to close to 45 days to close and with FHA loans it can be up to 60 days to close. If you’ve been ruminating about a possible sale or purchase, call your Realtor, pay attention to your neighborhood, drive around the neighborhood you would like to live in, go to Open Houses, look on the Internet, talk to a lender; do your homework. But check this market out. And time is truly of the essence.

Stu Hoime, Venture Manager for The Group Guaranteed Mortage, submitted the following report for the week:

National average rate for the week ending November 20th:

30 year fixed:  4.83%
15 year fixed:  4.32%

Market Commentary:
A highly anticipated speech on Monday by Fed Chief Bernanke on the economic outlook revealed no change in the Fed’s stance on short-term monetary policy. There were also few surprises in the economic data released during the week. The monthly inflation readings continued to show that inflation is not a cause for concern in the short-term. As a result, mortgage rates barely moved during the week, remaining at historically low levels.

The decline in the value of the dollar has received a great deal of attention lately. While Fed officials rarely discuss the value of the dollar, Bernanke assured investors that the Fed is closely watching exchange rates. However, he then reminded investors that the Fed’s dual mandate is to promote full employment and to keep prices stable. According to Bernanke, the value of the dollar is just one of many factors affecting inflation, and the Fed is not concerned by the movement in the dollar so far. With a fragile economy and high a unemployment rate, he suggested that the Fed intends to keep the fed funds rate at very low levels. Tightening monetary policy to strengthen the dollar would hurt the economic recovery and slow job creation. After the speech, the value of the dollar fell to the lowest level since August 2008.

If foreign investors expect the value of the dollar to continue to fall, it may pose a risk for mortgage rates in the future. Foreign investors historically have been major buyers of mortgage-backed securities (MBS). When the dollar falls, the value of US assets to foreign investors in their own currency declines, making US investments less rewarding. With the Fed scaling back its MBS purchases over the next few months, a drop in foreign demand would further pressure yields higher to fill the void left by the Fed.

A wide range of economic data will be released during the holiday-shortened week ahead. Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the ! FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving.Copyright @ 2009 MBSQuoteline

Stu Hoime
Venture Manager
The Group Guaranteed Mortgage
Together with Bank of America
2803 East Harmony Road
Fort Collins, CO. 80528
970-229-2512
stu.hoime@thegroupmortgage.com

A recent article written by Inman News had the following information:

“The top seven sites on the list were unchanged from September, with No. 1 Realtor.com growing its U.S. market share of online visits to real estate-related sites from 6.86 percent in September to 7.1 percent in October.”

The research was done by Hitwise who monitors and analyzes thousands of websites on the Internet.

The Group, Inc. has enhanced all of our listings on Realtor.com.  The extra investment we have made allows us to provide more photos and information about our listings with an easy way for the customer to get in touch with our listing Realtors.  Based on the number of potential buyers who look at Realtor.com every month, this is an important feature for our customers.

Job Loss Protection Gives Homebuyers Confidence!

The Group, Inc. Real Estate, has announced today it is offering the Job Loss Protection program (*), a part of the HELP Program (Homeowner Education and Loan Protection) administered by the Rainy Day Foundation.

The Job Loss Protection program assists buyers who purchase a home listed by The Group in the event of an involuntary job loss within the first 24 months of the loan.The home must be covered by the program.The program covers mortgage payments up to $1,800 per month for up to 6 months.

Chuck McNeal, Chairman of The Group, Inc. said, “Job Loss Protection is an important and timely service that gives sellers a way to differentiate their property and gives buyers the confidence to purchase.The Group, Inc. is proud to be the first company in Northern Colorado and only the second in the state to offer Job Loss Protection. This simple program will be the difference many customers are looking for to proceed with their real estate plans.”

Realtors at The Group have been certified by Creative Alliances, the Administrator of the program, to offer this program.The program is offered at no cost to the buyer.If a seller elects to participate in the program, the cost is paid by the seller at closing.

The Group, Inc. real estate is independently owned by its Realtors, managers and staff.It has been the market leader in Northern Colorado since 1976 and has six offices in Fort Collins, Greeley, and Loveland.

(*) The HELP Program including the Job Loss Protection is made available by the seller’s enrollment in the Creative Alliances SAvE Program.The Sellers Advantage via Exposure is an optional multifaceted program which includes the HELP Program.

The Group, Inc. now offers its customers 24/7 secure online access to their real estate transaction file through www.thegroupinc.com whenever and wherever.  This new system, called SureClose, provides centralized communication with direct email contact to the Realtor and the lender.  As items in the file are added or updated, it is noted in SureClose.  This cuts down on the need for you to make a call to the Realtor or our Escrow Department…it saves time and is more efficient.  

All closing documents may be reviewed online prior to closing AND following closing, all documents are stored for 4 years for your convenience.

This is just another way The Group, Inc. is making the real estate transaction ‘transparent’ for our customers – making you a part of the process.  It is also one more way we are ‘going green’!

Contact The Group, Inc. for more information about SureClose and how it can streamline your next transaction with us!

In her position as Federal Reserve Senior Vice President, Julie Stackhouse has a front row seat to the twists and turns in America’s economic fortunes. So, it was noteworthy to hear her provide some encouraging words about the economy when she addressed a recent gathering of Group broker associates.

In her presentation titled “Understanding the Financial Crisis and Implications for the Future of the Home Mortgage Market,” Stackhouse reviewed the origins of the 2007-2008 financial storm, the government’s response, and the outlook for a return to normalcy.

In Stackhouse’s view, the definition of normal is likely to change. Mortgage lenders will insist on greater documentation. “We’re not going to see a lot of subprime loans,” she said. If subprime loans do return, it will be in far different form from the easy-access mortgages that emerged in recent years.

Stackhouse believes the real estate market is ideal for buyers who can qualify for conventional loans. “If you can qualify in the conventional market, or if you are a first-time homebuyer, it’s a great time,” she said. “And for refinancing – it’s a great time to do it. Take advantage of it.”

Stackhouse also contends that consumers shouldn’t succumb to fear. “As consumers, it is reasonable for us to continue spending money within our means,” she said.