Heather Morris Realtor Expert for Cedar Rapids, Marion, Hiawatha & Robins

          Green standards to one person may not be good enough or meet the expectations of another’s measurement.  According to NAR, the National Association of Realtors, 90% of home buyers value green friendly building products that save them money and benefit the environment.  For generation x and y, living green has become their lifestyle.  Eco-friendly consumers live by the habits of reduce, recycle, and reuse.  For residential homes, a measurement to comparison shop is called Energy Star.

 

          Energy Star is a government program between the US Department of Energy and the Environmental Protection Agency, EPA.  They have created standards and measurements for sustainability and issue certificates upon new construction completion and attach tags on the building products.  In 2008, Energy Star reported that American homeowners reduced greenhouse emissions equivalent to 29 million cars while saving 19 billion in utility costs.  For new homes, an Energy Star certificate will be issued if the house is 20-30% more efficient then their standard of a typical home.  The new home is also 15% more efficient then a home built to the 2004 International Residential Code, IRC. 

 

          Existing homes may also be updated with green products.  Adding house wrap, insulation, high performance windows, sealed heating and cooling ductwork, and water saving plumb fixtures saves money long term on energy costs and promotes cleaner health standards for you.  Air leakage and improper insulation can waste 20% or more of the heating and cooling you pay for in your house.  A house without exterior vapor house wrap is similar in energy rating to leaving a 3’ x 3’ window open year round!  The US Department of Energy also reports a high efficient furnace can save $570.00 annually in heat bills. 

 

          As a consumer, you can start with a few inexpensive products.  Using energy saving light bulbs, appliances, water based or natural cleaning products, eco-friendly grocery bags, and toxin free or mold resistant flooring can add up to a  savings and better health for you.  With the economic stimulus rebates and tax credits, homeowners should consider an energy audit to learn about the efficiency of the home you live in.  For additional benefits and energy facts, visit www.energystar.gov.  Seek a professional Realtor for the payback of energy star updates in the value of your home.

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate with Skogman Realty

 

           The extension of the tax credit for first time home buyers and new legislation for current homeowners passed on November 6, 2009 will stimulate the Cedar Rapids, Marion, Robins, and surrounding community real estate markets.  It is important for you to understand the qualifications, benefits, and concerns regarding whether you qualify for the tax credit before writing a purchase contract.

 

            First time home buyers (defined as not owning real estate for the last three years) with an income of less then $125,000 qualify for the maximum tax credit of 10% of the purchase price or $8,000.  A partial credit is available for the first time buyer with an income $125,000 to $144,999.  Single tax file returns with income $145,000 do not have any benefits.  For joint returns, the maximum credit will be provided if less then $225,000 is earned, partial up to $244,999 in income and no benefits with income over $245,000. 

 

            The existing home owner tax credit is for current owners owning a primary residence that was occupied 5 consecutive years out of the last 8 year period.  The new house does not have to cost more then the old house.  The tax credit for current owners is $6,500.

 

            The maximum purchase price that qualifies is $800,000.  This is over four times the median home price in Linn, Johnson, and Benton County creating an incredible opportunity for move up buyers.  Low fixed interest rates create a winning equation for both home buyers and sellers.  All offers must have a purchase contract date of April 30, 2010 or sooner with a closing date of July 1, 2010 or sooner. 

 

            A key change to the 2008 tax credit is that there is not a repayment penalty unless the house is not owner occupied during the first three years of ownership or sold.  Another modification to the tax credit is seller financing for contract home sales where the seller holds the title.  The IRS has identified 7 qualifications for contract sales available on their web site or you may seek a tax professional.

 

            Verifying your eligibility by seeking a tax professional is important.  Blood relative sales, non-resident alien sales, non-owner occupied sales are a few conditions that void eligibility.  For a market conditions report of home sales and a buyer counseling interview, seek a professional Realtor.

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate/ Skogman Realty

            With nearly 80 million baby boomers in the US as the largest generation, we must consider the impact on real estate their children will have.  Generation Y, also known as the millennial, were born 1980-1995 and are currently 14-29 years in age.  There will be a wave of change in real estate practices, home building trends, and communication styles as these new homeowners enter the real estate market. 

 

            The National Association of Home Builders estimates the average age of the first time home buyer to be thirty three years of age.  (We all know a family who still has their thirty-ish kid still living at home!)  Generation Y is on the verge of lowering that statistic.  2009 home sales have been influenced by Generation Y purchasing real estate sooner due to low interest rates, attractive or regressing home prices, and the $8,000 first time home buyer tax credit. 

 

            Generation Y is changing the expectations of Realtors and home buying trends.  They want information, answers, and quick responses.  The desired form of communication is usually email and text.  Gen Y desires on-going communication and want Realtors to be a source of information, not a barrier to it.   They will search for homes on various web sites, walk-through the homes interior on-line called a virtual tour, Map Quest the distance to work and social importance’s, and run their monthly house payment before requesting to “see” the house or a Realtor.  This process is much different then the home buying practices of their baby boomer parents. 

 

            Generation Y lifestyles are quick paced, technology friendly, and social driven.  Town homes, condominiums, and urban loft lifestyles are more attractive then a single family home with a lawn to mow.  They expect the features in their home that they grew up with.  Examples include the latest technology, energy efficient products, and a computer solution area.  They want a smaller more modern home.  Amenities may include stainless steel appliances, hardwoods and tiles, and granite or designer counters. 

 

            This high tech generation demands commitment and skill.  Communication styles continue speeding up and they want Realtors to do the same.  To date in 2009, the National Association of Realtors reports a loss of over 70,000 licensed Realtors.  This drop out has confirmed the importance of Realtors commitment and the value of their service, skills, and knowledge.  The evolution of real estate provides more information to the consumer faster.

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate / Skogman Realty

10/2009

Pending Does Not Mean Sold

 

          In today’s changing market, sale pending does not mean sold.  Most real estate purchase contracts have contingency (escape) clauses for the buyer and seller to perform specific tasks.  Whether you are the seller or buyer of the purchase contract, there are specific dates for the contingencies to be released.  These dates and results determine if you will close your sale.

 

          All contingency escape clauses are important. The financing commitment is one of the most crucial to be released.  Federal lending regulations have changed buyer and house qualifications.  Credit score, tax returns, job time, and down payment need to be verified in writing.  If the buyer qualifies, the house requirements are then determined by an appraiser.  The appraiser determines the bank’s risk for default by comparing the subject house to the three closed similar house sale prices.  The house also needs to be in good repair to pass the appraisal conditions. 

 

          Inspection contingencies are the next step toward closing.  Within 10 days from the accepted offer the buyer may perform inspections of concern with the house.  They may included radon, termite, septic, well, home inspection, lead paint, and mold inspections.  Any concerns will need to be negotiated between the buyer and seller.

 

          Transferring a clear title is usually the last contingency to be released.  Extension of the abstract and review of any unpaid liens or encumbrances will need to be released prior to recording the warranty deed.  Liens may be a mortgage, tax liens, or unpaid judgments.  Any title objections will halt the sale. 

 

          Both buyer and seller have a commitment toward following the purchase contract contingency deadlines.  Having the legal releases from the sale may effect whether the sale moves from pending to sold.  The earnest money holds the buyer to the commitment to close while moving through the sales contract.  To ensure your houses closes, hire a full time professional Realtor or legal representative to handle one of the most important financial agreements of your life. 

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate Skogman Realty

 

          Two new federal lending regulations effective July 30, 2009 will tighten the belts on banks, brokers, and credit unions. In an attempt to protect home buyers from predatory lending practices, the HERA and HOEPA laws were passed.  HERA, the Housing and Economic Recovery Act and HOEPA, the Home Ownership and Equity Protection Act will provide more information to home buyers prior to signing a mortgage.

 

          When interviewing lenders for a mortgage, have them provide a GFE, Good Faith Estimate and a TIL, Truth in Lending Disclosure.  The Good Faith breaks down the out of pocket cost and monthly payment for the home.  The Truth in Lending Disclosure provides the actual cost of borrowing the money over the term.  The Final Truth in Lending Disclosure and costs must be given to home buyers 4 business days before closing or sooner.  The APR, annual percentage rate will now requires the lender to disclose their fees and all third party costs placed on the closing statement.

 

          The appraisal process has also been modified to protect you.  The lender you choose will not have knowledge to who will be selected to verify the value of your house purchase.  The appraiser will review the last six months of similar closed properties to establish value.  Any appraisal required repairs must be negotiated between buyer and seller, work completed, and re-inspected prior to closing. 

 

          The new lending regulations are designed to help you avoid surprises at the closing table.  Comparing lenders payment options with the Good Faith Estimate, determining the true cost of money with the Truth in Lending Disclosure, and tightening the appraisal process to determine a more accurate value, and providing the final numbers before closing all make you a smart home buyer.  The state of Iowa is a leader in consumer protection.  Originating your new mortgage in Iowa through a local lender you trust is another smart buyer decision. 

Green grass and sunny days are amongst us!  It’s time to get moving again.  Spring boom is how I usually describe the real estate market this time of year.  2009 lends a new tag phrase I’ve been using for the market shift we are experiencing, HOT, HOT, HOT!

 

            A cooperating effort between the Federal government, NAR (National Association of Realtor) and increased FHA loan limits gives people the tools they need to buy today.  The Federal government provided a needed stimulus for real estate sales for the bread and butter market; the market recognized as the median home values.  The $8,000 first time buyer tax credit paired with historic low mortgage rates have created numerous new homeowners and move up buyers.  The trickle-up of home sales in the median sale price have converted sellers into buyers for more expensive homes.

 

            The Cedar Rapids Area Association of Realtors sales statistics reflect amazing home movement under a $150,000 sales price.  A seller’s list to sales price ratio has increased and the average days on market has dropped.  The housing shortage created by our recent flood has also increased the demand for this price range of home.

 

            The stimulated market activity for homes under $150,000 has helped the move up market.  The move up market has struggled with a decrease of relocating home buyers.  Increased FHA loan limits with a low mortgage interest rate has allowed buyers to afford more home price for less monthly payment.  Buying a better home for less money equals market stimulus!

 

            If you have ever considered building or moving up to a luxury home, it is your time.  The deflated financial markets remind us that real estate is a good option for your dollar.  The tax savings from the mortgage interest and property tax deduction also create tax relief for you.  Home builders welcome the opportunity to build the home of your dreams for a fair price in today’s market. 

 

            To view homes for sale in the Cedar Rapids, Robins, Hiawatha, Marion, and Corridor area, visit www.heathermorrisrealtor.com.

 

Heather Morris CRS, GRI, ABR, CLHMS

Broker Associate/ Skogman Realty

 

            Owning a home with a septic has a few additional responsibilities then a city sewer line.  As of July 1, 2009, a new DNR Time of Transfer inspection has been implemented called Senate File 261.  Septic homeowners will want to be aware of the new regulations if they are considering selling the real estate.  Vacant properties and homes sold when weather does not permit the inspection will be affected financially.

 

            The new regulation is called Time of Transfer because the recorder will not record the deed until the septic inspection has been done with repairs that may be needed completed or escrowed.  The septic inspection must be completed by a certified inspector with a DNR certificate.  Once completed, the inspection will be valid for two years.

 

            For real estate transfers when weather does not permit the septic inspection, a DNR recorded escrow agreement can be recorded with the groundwater hazard statement.  The buyer must have a binding contract with the seller to have the inspection and any repairs if needed completed within a reasonable time. If you are the seller, an escrow agreement for the septic inspection and possible replacement may take away or diminish the proceeds of your sale.  To protect your proceeds at closing, have the Time of Transfer required inspection before winter arrives or the property becomes vacant. 

 

If the property has not been occupied for thirty days, additional procedures to test the septic are required to inspect the distribution box and leach lines.  This will cost the seller more money.  After sixty days of vacancy, a septic meeting the Time of Transfer will not be accepted until a resident occupies the property for thirty days prior to the testing. 

 

Exclusions to the Time of Transfer septic regulations are real estate sales by court order, foreclosure, estate, transfer from marriage or divorce, and transfer between joint tenants in title.

 

Senate File 261 will be implemented on July 1, 2009 to bring current septic and leach fields protecting our groundwater.  For additional information on this new septic regulations or references of DNR certified inspectors email heather@skogman.com or call 319-350-7653. 

 

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate to Skogman Realty 

 

          To be stimulated is defined as a rouse to activity or heightened action, creating excitement.  This is the plan to better our economy with the American Recovery and Reinvestment Act of 2009 passed in February. This consumer benefit encourages us to move money by purchasing real estate, updating our home with energy efficient components, and is assistance to many distressed neighborhoods and home owners.  Will you be stimulated by any of these opportunities? 

 

          First time home buyers benefit with either 10% of their home purchase or $8,000 tax credit (refund) for homes purchased January 1, 2009 through December 1, 2009.  Buyers are using the tax credit in many ways.  Paying student loans, auto loans, and credit cards to lowering monthly debt.  Another option amongst new home owners is to build up savings or replace the down payment they spent to buy their new house.  

 

          Could a remodel or energy efficiency update be a consideration in the new future?  To promote green and energy independence, 30% tax credit on new furnaces, windows, insulation, weatherization, and other efficiency updates.  You must verify the components you agree to put in your house meet the requirements of the energy bill.  This benefit for updates in your home is available through 2010.  Energy efficient updates will save you monthly utility costs and be a benefit when you decide to sell. 

 

          The stimulus bill also increases FHA loan limits to $271,050.  FHA loans are government backed mortgages allowing fewer down payments, a low fixed rate term, more flexibility with your credit score for qualifying.

Neighborhood stabilization for depressed markets, foreclosure assistance, and low income housing grants are available to balance home values.

 

          Our local real estate market will benefit due to the increase of buyers purchasing homes.  For a summary of “The Recovery and Reinvestment Act of 2009” visit our e-newsletter at www.heathermorrisrealtor.com.

 

Heather Morris CRS, ABR, GRI, CLHMS

Broker Associate/ Skogman Realty