Charlotte Homes: February 2010

There are some important deadlines that everyone needs to be aware of. 

If you are planning on buying a house and you are a first time home buyer....you need to be under contract by April 30th, 2010 and you must close on the property and have the deed recorded by June 30th, 2010 if you want to receive your $8,000 first time home buyer tax credit.  (Remember...if you purchase a house that is less than $80,000 then you only get a tax credit in the amount of 10% of the purchase price)

To qualify for the tax credit your adjusted gross income must be $125,000 or less if you are single...and $225,000 if you are a joint filer.

If you are a move up buyer and want to receive your $6,500 tax credit then the deadline dates remain the same.  You must be under contract by April 30th, 2010 and must close by June 30th, 2010.  You must have lived in your current house for 5 of the last 8 years and the next house that you purchase cannot be priced over $800,000.

Also, here is a new one I bet you haven't heard about.  If you are going to be getting an FHA loan...starting April 4th, 2010 you can only receive 3% of the purchase price from the seller to use towards closing costs and pre-paids.  This will be more of an issue for people buying houses that are priced at or below $150,000. 

Also starting on April 4th, 2010...if you are receiving an FHA loan your upfront mortgage insurance premium will be increasing from 1.75% to 2.25%. 

You can get an FHA loan if your loan amount is $303,750 or less and then you are only required to have a down payment of 3.5%.

These deadlines are coming fast and if you think you want to buy a house for the first time or if you are a move up buyer then you should really start to make a move.  Interest rates are going up and I do not believe that the government will ever offer these buyer incentives again in the future. 

I read a quote in a news article a few months ago that I believe stands true in this real estate market.......If you are renting and don't buy a house in this market, you are either broke or stupid!  It is as simple as that.

If you are interested in buying new construction then you should be aware of what the builder/developer will expect. 

Be prepared to use the builder's contract and forms.  The contract will be much longer than the normal North Carlina Offer to Purchase and the contract will also be pro-builder.  The contracts do not protect the buyer as much and they also set stipulations that at times seem ridiculous.  It is important to work with well reputable builders so that you can trust that they will honor your rights as a buyer and to insure that your earnest money will be available if you have a legit reason to back out of the deal.

Expect to be told how much earnest money that you will be depositing.  Usually real estate agents will tell their buyer clients that they need to put down 1% of the purchase price as earnest money.  Often the builders will require a set amount...much higher than 1%....and you may have to sign that this money will be used to start more new construction in the subdivision. 

Be prepared to be pressured into using the builder's preferred lender.  Many builders will offer a lot of closing costs to attract the buyer but they make this money back by putting a slightly higher interest rate on your loan.  When the builder sells the mortgage on the open market they are probably making more than the amount of closing costs that they offered you...so make sure your agent pressures them to not only increase the amount of closing costs offered but to also argue about the interest rate and they will usually drop this to an "almost competitive" rate. 

Ask the builder's preferred lender to provide you with an estimated closing cost sheet prior to signing the contract.  Often they throw in bogus charges that your agent should argue to have removed. 

Expect the builder to complete all necessary repairs.  You are buying new construction and you have the right to expect it to be perfect when you close on the property.

If you are buying a house that is not already built, be sure that you get a list of the upgrades and a price sheet for these.  You need to have every upgrade that you expect to be in the house in writing.  When you view a community's model home, the house is decked out with all the possible moldings and upgrades and the price they are offering on their to be built houses do not include these upgrades.