First-Time Buyers Race to Beat the Clock, Qualify for $8,000 Federal Tax Credit
September 10 2009 - 8:15AM
PR Newswire (US)
Realtor.com Experts Share Secrets of Efficient House Hunting,
Financing, Closing LOS ANGELES, Sept. 10 /PRNewswire/ -- First-time
home buyers have just 12 weeks to find and close on a home to
qualify for the $8,000 Federal tax credit before the November 30th
deadline. Those just beginning the process today will have to beat
the average time it takes to buy a home, a challenge smart buyers
can meet even though it's taking longer today to close most
transactions.(1) Two significant challenges first-time buyers face
today include the potential for a lengthy process related to search
and closing if not managed carefully at every step, and intensified
competition. On average, first-time buyers search 12 weeks to find
a home(2), while closing can take up to 60 days, depending on
individual circumstances and local regulations. Additionally, the
tax credit has proved to be extremely popular this year, since
taking advantage of the first-time homebuyer's Federal tax credit
and relevant state incentives is the most important reason
motivating 10.8 percent(3) of buyers today. In fact, approximately
1.14 million buyers have already filed for the credit. Many more
are expected to file for the credit when income taxes are due April
2010.(4) Still, while time is short and competition high,
historically high affordability is a major factor driving
first-time home buyers today, a growing group(10) accounting for
one third of all purchases in July 2009.(5) The National
Association of Realtors' affordability index in July 2009 was 36.0
percentage points higher than July 2008. Under these conditions the
typical median-income family can allocate 15.8 percent of their
gross income to mortgage payments, well below the traditional
allowance of 25 percent. Interest rates, which play a major factor
in affordability, remain low, at 5.22 percent in July for a 30-year
fixed rate loan.(6) Realtor.com President Errol Samuelson explains,
"The national median home today costs approximately 174,100.(7) By
moving quickly to find and close on a home by November 30,
first-time buyers qualifying for the $8,000 tax credit can actually
purchase this same home for only $166,100, an almost four and a
half percent discount off of the price of a typical new home.
Because affordability this year is at its highest level in 28
years(8), and the market offers an incredible selection of homes
within reach of most first-time buyers, we expect their numbers to
grow as they pursue today's once in a generation opportunity to
become homeowners." Samuelson suggests that by combining effective
use of technology and the greater access to information it delivers
with expert advice from local Realtors, today's first-time home
buyers can beat the clock and use the $8,000 Federal tax credit
along with any available state-level credits to purchase a home
under the November 30 deadline. "By moving quickly, being prepared
to make decisions in the face of increased competition, and taking
the learnings from others to reduce time without cutting corners,
first-time home buyers starting today can close on time and qualify
for the $8,000 Federal tax credit," added Samuelson. "To help this
important group trying to enter today's market, Realtor.com will
offer tips and expert advice in the next eight weeks that can help
expedite the search, negotiation, finance and closing processes so
they can beat the clock." Tips for the first time home buyer
starting their search today: -- Searching - Search While You Sleep
- Since 87 percent of all buyers start online(9), you probably will
too. On Realtor.com it's easy to sign up for email alerts and
create personal portfolios for homes of interest. Soon you'll be
searching while you sleep, at the office or even while you're at an
open house. You'll be the first to know if a home you want comes up
for sale or receives a price reduction. -- Negotiating - Freshness
counts. You don't have time to look at unavailable homes. Stale
data on prices, time on market, features, or property values puts
you at a disadvantage when negotiating. Most listings on
Realtor.com are updated every 15-minutes, giving first timers an
advantage. -- Appraisals - Appraisals can be a problem today; make
sure the lender can deliver the appraisal on time. Your loan will
not be approved if it doesn't appraise for the agreed price, so
don't delay. If the property doesn't appraise for the bid price,
ask for a desk appraisal; you'll receive a second look. -- Finance
- Don't let the financing process slow you down; 35 percent of
first-time buyers find the mortgage application and approval
process more difficult than what they expected.(10) Start saving
pay stubs and bank statements now. Collect your tax returns;
anything proving your income qualifies you for the home you want.
If you don't have a lender, ask your Realtor or look online.
Pre-qualify now! -- Closing - Get your insurance company and the
home owner association, if applicable, to forward a cost estimate
to the escrow company early. This will make it easier for them to
more accurately estimate your closing costs, which in many states
must be paid in cash at closing. ABOUT REALTOR.COM Realtor.com ,
where the world shops for real estate online, is operated by Move,
Inc., (NASDAQ:MOVE) and is the official Web site of the National
Association of REALTORS . Ranked as the #1 homes-for-sale site,
Realtor.com currently offers potential home buyers access to over
four million property listings, as well as the most brokers and
agents. It also provides REALTORS and the home sellers they
represent with the Internet's largest real estate marketplace,
reaching more than 8.3 million(11) consumers in July 2009. Agents
and companies have the power to customize Realtor.com resources to
maximize their brand and productivity. REALTOR and Realtor.com are
registered trademarks of the NATIONAL ASSOCIATION OF REALTORS .
REALTOR is a federally registered collective membership mark, which
identifies a real estate professional who is a Member of the
NATIONAL ASSOCIATION OF REALTORS and subscribes to its strict Code
of Ethics. All other trademarks appearing above are the property of
Move, Inc., or of their other respective owners. This press release
may contain forward-looking statements, including information about
management's view of Move's future expectations, plans and
prospects, within the safe harbor provisions under The Private
Securities Litigation Reform Act of 1995. These statements involve
known and unknown risks, uncertainties and other factors which may
cause the results of Move, its subsidiaries, divisions and concepts
to be materially different than those expressed or implied in such
statements. These risk factors and others are included from time to
time in documents Move files with the Securities and Exchange
Commission, including but not limited to, its Form 10-Ks, Form
10-Qs and Form 8-Ks. Other unknown or unpredictable factors also
could have material adverse effects on Move's future results. The
forward-looking statements included in this press release are made
only as of the date hereof. Move cannot guarantee future results,
levels of activity, performance or achievements. Accordingly, you
should not place undue reliance on these forward-looking
statements. Finally, Move expressly disclaims any intent or
obligation to update any forward-looking statements to reflect
subsequent events or circumstances. (1) NAR President Charles
McMillan, quoted in existing home sales news release, August 12 (2)
National Association of REALTORS 2008 Profile of Buyers and
Sellers, P. 45 (3) Realtor.com Homeownership Survey, July 2009 (4)
"Tax Credit Gives Nudge to First-time Homebuyers." Raleigh News
& Observer, August 9, 2009 (5) "2nd Quarter Existing-Home Sales
Rise in Most States, Helped by Affordable Metro Prices," NAR news
release, August 12 (6) Freddie Mac Mortgage tables (7) "2nd Quarter
Existing-Home Sales Rise in Most States, Helped by Affordable Metro
Prices," NAR news release, August 12 (8) "National Association of
REALTORS , Affordable Housing Real Estate Resource: Housing
Affordability Index, April 2009 (9) NAR 2008 Profile of Home
buyers' and Sellers, pg 67 (10) NAR 2008 Profile of Home Buyers and
Sellers, pg 42 (11) ComScore Media Metrics, July 2009 (Logo:
http://www.newscom.com/cgi-bin/prnh/20080213/MOVEINCLOGO)
http://www.newscom.com/cgi-bin/prnh/20080213/MOVEINCLOGO
http://photoarchive.ap.org/ DATASOURCE: Realtor.com CONTACT: Julie
Reynolds, +1-805-557-3080, ; or Pierre Kacsinta, +1-805-557-3128, ,
both of Move; or Victor White, AccessPR, +1-415-904-7070, Web Site:
http://www.realtor.com/
Copyright