I have had a flood of first-time buyers call or email in the past couple of weeks. Whether they are finally coming to the realization that the $8000 tax credit may really expire and they need to get on board or they have heard that there are additional credits and assistance for those buyers willing to purchase foreclosures, the interest has been phenomenal. That being said, you can almost see the smile disappear from their face when they realize that most of the incentives and policies are extremely contradictory to what they are saying they want to achieve.
Take for example the first-time buyer wanting the tax credit. The buyer cannot make but $75,000 per year as an individual or $150,000 combined as a couple. That does sound like a bit of money in this day and time, but these are some of the only folks who have the minimum 3.5% down required for an FHA loan and even then, they cannot purchase a home in our area for over $277K. Most folks who make less than that are not able to buy because they have little or no cash reserves for the down payment, much less the additional 3% in closing costs that would be required.
If the credit applied to everyone, regardless of income or first-time, second-time, vacation, investment, etc. the inventory would be drastically reduced, thus stabilizing prices and putting contractors back to work on homes that need a little TLC because they have been on the market for so long or have been bank-owned.
Speaking for foreclosures...there are apparently programs out there from local municipalities on up that are offering down-payment assistance or breaks for purchasing foreclosures. I am assuming this is being done in an effort to reduce the inventory as well. However, with the buyers that are calling, most of them being first-time buyers and having barely enough to cover their down-payment, meaning they are doing FHA or VA loans...these foreclosures are not even in condition to pass the guidelines for these loan programs. Sounds good, but it just doesn't work. Everything has a catch...once again, a great example of not being able to take everything you hear in soundbites at face value.
If you are trying to buy before the deadline or you think that you may qualify for some of these programs, give me a call or shoot an email and we can sit down face to face and find out what exactly is going to work for you, what you qualify for and how you can get the most bang for your buck on this major investment.
Have a great weekend!
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