Hawaii VA Loans

The end of an era is fast approaching.  Real Estate professionals and potential homebuyers across the country are scurrying to submit purchase contracts before the swiftly looming April 30^th deadline of the $8,000 First Time Homebuyer Tax Credit.  This tax credit has been wildly successful; the IRS states that over 1.4 million first time homebuyers took advantage of this program as of September 2009.  While those numbers are a bit dated, it does show how successful this piece of legislation was.

So, what does this mean for a good majority of us?  Well, it’s just back to business-as-usual.  Rates are low, housing prices have settled, and the economy is starting to turn around - even without the credit, it’s still a great time to buy.

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In our last post we defined what a short sale is and what it isn’t.  Here we will go through the process in more detail.  I’d like to thank Attilio Leonardi of Team Lally & RE/MAX Kapolei for his insights into the process. He and his team have sold over 80 short sale properties and gladly shared their knowledge.

Of course, nothing is too good to be true, so let’s take a quick look at the potential challenges one could face when attempting to purchase a short sale property.

Potential Challenges

Short sales can be challenging for a number of reasons: [Read More]

We’ve all heard the sad news that foreclosures are increasing here in the Aloha State. Of course that also correlates to a lot of short sales as well. The reality is that this does present a buying opportunity for people who dreamt of owning a home over the past few years but couldn’t afford it. Not only are values lower than they have been in years, but the large number of foreclosures and short sales have banks ready to sell the properties at less than market value. Is this too good to be true? Let’s take a closer look.

What a Short Sale is…

First of all, what is a Short Sale? Is it different than a foreclosure? Or different than a ‘bank sale’, bank owned property or ‘REO’? They are all related, but there are critical differences between each. A short sale is an event where the owner of a property wants to sell his/her house, but owes more on the house than it is currently worth. So, in order to sell the property, the owner must obtain permission from the bank that services the loan on the property (because the sale amount isn’t enough to pay off the loan). [Read More]

Remember a few years back when Google Maps launched their ambitious new satellite tool that allowed you to see what your home looks like from space? If you thought that was impressive, wait until you see what Google just released for the Hawaii market; a tool called Street View. Street View allows you to see what a property looks like at street level, right from your computer screen. In addition, with the click of a few arrows, Street View allows you to move up and down that street as if you were taking a stroll in the neighborhood.

As you can imagine, this new feature, which which has been available in other mainland and foreign markets but only available in Hawaii as of last Monday, has major implications for home buyers scouting out their upcoming home purchase. There are already great web services that provide online MLS listings for Hawaii, but the pictures used in these applications are images provided by the listing agent as well as an aerial view supplied by online map provider such as Google or Microsoft. Now the aerial views are great, but it doesn’t give you the “curb appeal” of a particular property and you can bet the seller’s agent will only show images that display the property in the best possible angles which could be deceiving.

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Hooray! Last week, Congress passed and Obama signed the new Homebuyer Tax Credit into Law. Not only is it an extension of the $8000 first-time homebuyer tax credit, but it also adds a $6500 tax credit for repeat/move-up homebuyers.

This new version of the tax credit is part of The Worker, Homeownership, and Business Assistance Act of 2009, and extends the credits through purchase contracts dated April 30, 2010 or prior; however, the transactions must close by June 30, 2010.

Here’s a quick summary of the new version of the tax credit:

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The credit for first-time purchasers is scheduled to expire November 30.  Meanwhile, housing lobbyists are busy at work gearing up a major campaign to extend the $8,000 home buyer tax credit.

Home builders, Realtors and the Mortgage industry mounted an aggressive campaign during the recent congressional recess.

The expansion — or, at a minimum, extension — of the $8,000 first-time-home-buyer tax credit is at the top of the legislative agenda for the Mortgage Bankers Association, with one of the MBA’s leaders saying the trade group is “very close” to winning that battle in Congress.

The Effects of the Tax Credit So Far

Nationwide, pending home sales have been on the rise for seven months in a row, according to the National Association of Realtors.  But just as auto sales dropped sharply once the government’s Cash for Clunkers program ended, real estate pros are bracing for a letdown if this tax credit disappears.

The IRS estimates that 1.4 million taxpayers have utilized the program.  At these numbers, the total cost of the tax credit is slightly over $11 billion or less than 4% of the overall stimulus package (didn’t AIG get about fifteen times that???).

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