Home Safety - Preventing Falls

Nothnagle Realtors has partnered with the Prevention 1st Foundation to distribute safety materials to homeowners. Many accidents that occur in and around the home are preventable with some simple precautions and safety tips to follow.

Did you know that falls are the leading cause of nonfatal unintentional injuries? Here are 10 Simple Ways to Protect Your Family From Falls.

1. Wipe up spills immediately.

2. Remove small rugs (or tape them to the floor).

3. Remove clutter, which can be a tripping hazard–especially toys.

4. Use a bath mat or nonslip strips in tubs and showers.

5. Use night lights in bedrooms, bathrooms and hallways

6. Make sure you have adequate lighting at the top and bottom of stairs.

7. Install handrails on stairs.

8. If you have children, use gates at the top and bottom of stairs.

9. Don't leave small children unattended on a table, bed or elevated surface.

10. Establish clear, firm safety rules for children such as no jumping on furniture.

Short Sale Tips for Buyers

Making an Offer on a Short Sale? What You Need to Know...

Are you looking to buy a new home? Are you thinking that now's a great time to find bargains? Before you make an offer, it pays to know a little about the seller's situation.

If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You're a good candidate for a short-sale purchase if:

• You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.

• Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.

• You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you're serious about purchasing a short-sale property, it's important for you to have expert assistance. Two key people you want to work with: An experienced agent and an experienced real estate attorney. Only about two out of five short sales are approved by lenders. Working with the right professionals who are knowledgeable about the process will increase your chances of getting an approved contract.

You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Many Nothnagle agents have attended seminars and training on handling short sales and can help you find short sale homes, negotiate the purchase when you find the property you want to buy, and smooth communications with the lender.

Some of the other risks faced by buyers of short-sale properties include:

• Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.

• Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.

• No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.

More FAQs about the Tax Credit

Does the tax credit ever have to be repaid?

Neither the first-time home buyer tax credit nor the repeat home buyer tax credit have to be repaid unless the home is sold or ceases to be used as the buyer’s principal residence within three years after the initial purchase.

How is the amount of the tax credit determined?

The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.

How do I claim the tax credit? Do I need to complete a form or application? Are there documentation requirements?

You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns).

No other applications are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and repeat home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to Form 5405 as proof of the completed home purchase.

What types of homes will qualify for the tax credit?

Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.

Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?

Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).

I am a first-time buyer but my husband previously owned a home that he sold two years ago. Will I qualify for the $8,000 first-time buyer tax credit?

No. Married couples are not eligible to claim the first-time home buyer tax credit if either spouse has previously owned a home within the past three years. They may, however, qualify for the repeat home buyer tax credit.

I would like to purchase my grandmother's home. Will I be eligible for the tax credit?

No. Home purchases from relatives of the taxpayer or the taxpayer’s spouse do not qualify for the tax credit. The IRS defines relatives as ancestors (parent, grandparent, etc.), lineal descendants (child, grandchildren, etc.) and spouses.

Take Advantage of the Home Buyer Tax Credit in 2010

A new year, a newly extended and expanded tax credit! Both first-time and repeat buyers may be eligible to take advantage of the tax credit in 2010. While buyers have until April 30, 2010, to be under contract, you won't want to procrastinate and potentially miss out on one of the best opportunities in real estate....and up to 8,000 incentives to buy now!

First-time buyers (defined as someone who has not owned a home in the past three years) can qualify for 10% of the purchase price, up to a maximum of $8,000. Repeat buyers (defined as someone who has owned a primary residence for five out of the past eight years) can qualify for 10% of the purchase price, up to a maximum of $6,500.

To qualify, the home must be used as a primary residence, must be under $800,000 and there are income limits of up to $125,000 for individual filers, $225,000 for married couples filing jointly. There is a modified tax credit available for some higher income individuals/couples.

The tax credit does not have to be repaid if the home is used as the primary residence for at least three years.

For more information, contact your Nothnagle agent or visit: www.realtor.org as well as the IRS information page.

Using a 203K Loan to Pay for Home Repairs

The 203K loan can be used for small repairs (with a minimum of $5000 of work) like a new roof or replacing the boiler, all the way up to practically rebuilding the home and anything in between. Maybe you love a home, the neighborhood, etc., but you hate the kitchen cabinets...the 203K may be for you.

Eligible borrows can receive a mortgage to purchase the home AND establish a Rehab Escrow Account to fund the agreed renovations. The Rehab Escrow Account is managed like a Construction Loan: money is released after work is completed, the property is inspected by the lender, and the title is updated. Like all FHA loans, the property must be owner occupied and loan approval requires full documentation of income, assets and credit worthiness. At the same time, underwriting guidelines have some flexibility built in.

Loans are processed in the same fashion as any other loan (in terms of income, asset and credit) with the exception of the appraisal. Appraisers work in conjunction with the home improvement contractor and a HUD Approved Pre-Planner to determine: “As-Is” Value, “After-Improved” Value, costs of construction, and the draw schedule of the renovation portion of the loan. This work typically adds about a week to the approval process, largely because it should be done BEFORE contracts are signed. HUD provides a calculator tool on their website to help you calculate the mortgage amount and cash requirements.

There is a Streamline(k) Limited Repair Program for projects that require less than $35,000 of repairs.

It is recommended that you work with an experienced loan officer when exploring the 203K Program, as there are many details that need to be considered (from selecting a qualified contractor to the inner workings of the draw schedule and preparing for different contingencies). While the program is more intricate, with the right education ahead of time, it is extremely manageable.

Nothnagle has two mortgage partners to assist you in finding out if the 203K program is right for you.