29 May 2009

Utah Home Buyers & Homes Sellers Catch A Break !

Last week I had the opportunity of attending the National Association of Realtors’ Midyear meetings in Washington, D.C., where each year Realtors and government officials talk about all things housing-related.

                While many of the topics are usually targeted to Realtors and the successful operation of a real estate business, this year there were several announcements of particular interest to Utah home buyers and owners. Here are three such updates that could influence your home-buying and selling decisions:

Home buyer tax credit keeps getting better

                During the first day of the conference, the secretary of the U.S. Department of Housing and Urban Development, Shaun Donovan, announced to attendees that HUD would provide short-term bridge loans that would allow first-time home buyers to use the federal government’s $8,000 tax credit as part of their down payment and closing costs.

                The step essentially allows home buyers to get their $8,000 tax credit at closing rather than waiting until after filing their 2009 taxes. For many potential buyers, the fact that the tax credit couldn’t be received until 2010 made it difficult to make a purchase before the Nov. 30 deadline— especially if they planned on using the tax credit as part of their down payment. Under this new program the $8,000 can be used right at closing.

                The short-term loan program would be available to buyers using FHA mortgages. It is expected the loans could be made by FHA-approved lenders, HUD-approved nonprofits, and state and local entities.

                HUD officials say more details on the program will be published shortly. When that happens, more information will be available on Realtor.org.

Short sales poised to get easier

                The Obama administration also announced last week that it was putting in place a program that would make it easier for “underwater” homeowners to sell their homes using a short sale.

                A short sale occurs when an owner owes more on a home than it is worth and, rather than allow the property to go into foreclosure, a lender agrees to a sale for less than the mortgage amount. The short sale saves the lender money and leaves a less-severe mark on the borrower’s credit report.

                However, short sales in Utah are known to be time-consuming and fraught with pitfalls. That’s why the Obama administration is taking steps to create a simplified and uniform process for the transactions.

Under the program, the government would provide incentives to banks and borrowers to encourage the “quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future,” according to U.S. Treasury Secretary Timothy Geithner. The incentives include $1,000 for servicers who complete a successful short sale, $1,500 for borrowers to help with relocation expenses, and $1,000 toward paying junior lien holders to release liens that may be hindering the process.

To learn more about buying or selling a home using a short sale, contact a Realtor experienced in short sales.

Economy shows signs of hope

                Along with the information about the home buyer- and seller-assistance programs, the conference also presented several optimistic economic reports.

                During one session, former Federal Reserve Board Chairman Alan Greenspan said he could see “seeds” of a bottom in the housing market, while NAR Chief Economist Lawrence Yun said U.S. home prices could stabilize by the end of the year.

 “My projection is home sales will be 10 to 20 percent higher the second half of this year than last year and we will come out of this recession in 2010,” Yun said.

Yun said it would be critical to watch housing activity in the summer, because at that point buyers will have had a chance to respond to the government’s $8,000 tax credit and other incentives. If sales activity does pick up, home prices should stabilize, triggering a broader economic recovery.

Nevertheless, Yun cautioned that if sales did not pick up in the summer, a recovery could take longer. He also said local price forecasts would vary depending on location.

For more information about home sales and prices in your area, contact your local Realtor or find one at UtahRealtors.com.

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