Vermont Home & Garden Show
April 15 – 17

Get ready for spring at the Champlain Valley Expo Center and Fairgrounds. We’ll be there, along with 400 other exhibitors from around the Champlain Valley. Meet Bob from the Home Team, chat with a Home Performance with ENERGY STAR contractor, and more.

This is a great home show, I just wish it were closer to the Bennington VT real estate market.  Would you like to see a Home Show in Bennington?  If you would, let me know, and maybe we can get enough interest.

The mortgage industry is divided over how much down payment a borrower should be required to have in order to be considered less risky. Regulators have until April to come up with a down payment requirement as part of the Dodd-Frank financial overhaul legislation.

Wells Fargo & Co., the nation’s largest mortgage lender, has asked U.S. regulators to set a new down-payment standard of 30 percent on mortgages. If approved, banks would have to retain 5 percent of the loan if it is securitized for any borrower who came with a down payment below 30 percent in order to meet a risk retention requirement. The new requirement is aimed at preventing lenders from facing big losses in case the loans goes into default.
While banks would still make loans to borrowers with down payments lower than 30 percent, those loans would be more costly to banks because of the risk retention requirement. Analysts say that lenders will likely pass that cost on to borrowers via higher interest rates.

Much of the housing industry opposes the Wells Fargo proposal, saying that a 30 percent down payment standard is too high.

The NATIONAL ASSOCIATION OF REALTORS®, along with the Mortgage Bankers Association and other groups, sent a letter to regulators warning that an “inordinately narrow” mortgage definition “would mean that millions of creditworthy borrowers would be deemed, by regulatory action, to be higher risk borrowers.”

If the 30 percent requirement does stand, some in the mortgage industry say it will drive more of the lending business from the private sector to the government. The Federal Housing Administration is exempt from the risk retention rules and offers loans with down payments as low as 3.5 percent.

Wells Fargo says it suggested the 30 percent requirement because about half of all mortgages already have that big of down payment.

Source: “Banking Law Hung Up on Down Payments,” The Wall Street Journal (Jan. 13, 2011)

Mortgage rates have been rising ever since November 2010, when lows of 4.42 percent were reported. Bankrate.com recently reported a rise to 5.02 percent in 30-year fixed rate loans, which is the second time in three weeks rates have crossed the 5 percent mark–many experts say signaling the end to the 4 percent mortgage rate era.

Forecasters predict mortgage rates to hover in the 5-6 percent range in 2011.

Yet, some industry experts say the rise in mortgage rates may stimulate a sluggish housing market.

The rising rates create an urgency for potential buyers. They’ll have more incentive to buy soon before mortgage rates go any higher.

After all, higher interest rates mean buyers will pay more for their mortgages. Greg McBride, chief economist at Bankrate.com, told CNNMoney.com that when rates rise 4.25 percent to 5 percent, it takes away 9 percent of the purchasing power of buyers.

Lawrence Yun, chief economist of the National Association of REALTORS®, doesn’t foresee a moderate hike in mortgage rates as a negative for the industry. Instead, he says the real mortgage challenge is getting lenders to approve creditworthy buyers for a loan.

“It’s less about rates than it is about underwriting standards … If lenders return to more normal, safe underwriting standards for creditworthy buyers, there would be a bigger boost to the housing market and spillover benefits for the broader economy,” Yun said.

Source: “Kiss 4% Mortgage Rates Goodbye,” CNNMoney.com (Dec. 30, 2010)

Here in the Bennington VT real estate market, we have already seen local banks with increased rates from what they were in late 2010.  It’s pretty safe to say that these rates will only continue to inch up over time.  With these historic lows, it’s a great time to buy a house.

Despite historic low interest rates and commercial real estate  prices, few small business owners are purchasing commercial real estate, citing liquidity  and loan qualification as key concerns. A recent study showed that many small business owners are unaware of the benefits provided through SBA loans, which offer small business owners more flexible repayment terms and easier loan qualification terms that can make purchasing a commercial property a more viable option. In the Bennington VT real estate market there are banks that can offer the SBA loan program.  Call Troy to find out who you should be talking to. See the following article from The Street for more on this.

Times are tough all over. You don’t have to remind small-business owners of that.

But with commercial real estate prices at historic lows, and low mortgage  rates right there beside them, entrepreneurs are missing a big chance to make a huge killing — and bolster their business in the process.

The CIT Small Business Commercial Real Estate Study, a report from CIT Group(CIT_), documents how small-business owners can capitalize on great commercial real estate deals, even though they apparently don’t want to.

According to CIT analysts, cheap commercial real estate is one of “the few upsides” for small-business owners trying to operate in a harsh economic climate.

But entrepreneurs aren’t taking advantage of the low prices. CIT says only 6% of small-business owners have bought one or more commercial properties, while a majority — 53% — say they “haven’t even thought about making a purchase.”

Overall, only a little over a quarter — 28% — of the 300 small-business owners interviewed for the survey say real estate is a “great” business opportunity.

The path to leveraging great commercial real estate opportunities goes through the U.S. Small Business Administration, the survey says.

“Today’s market conditions may offer a once-in-a-lifetime opportunity for entrepreneurs who want to take their businesses to the next level,” says Chris Reilly, president of CIT Small Business Lending. “To achieve this, Small Business Administration loans, with their low cost and flexible terms, offer an excellent choice for small-business owners looking to refinance their existing real estate or to acquire a new property.”

Small-business owners have their reasons for not jumping into the real estate market. CIT reports that 36% of respondents say they may not be able to qualify for a loan, given the tight lending market.

Another problem is liquidity, since 19% of business owners say they can’t afford a down payment. CIT notes, though, that SBA loans can come with lower down payments, lower monthly payments and longer “pay-off” periods than regular bank loans, which can surely address some small-business owners’ liquidity problems.

The study shows that only a tiny minority of survey respondents are aware of those benefits. The recently enacted Small Business Jobs and Credit Act “sweetens SBA loan terms for both lenders and borrowers, eliminating borrowers’ fees, raising the loan guarantee to 90% from 75%, and increases loan limits.”

Sure, CIT has a horse in this race — it wants to make loans to small-business owners. But there’s no question there has rarely been a better time for a small-business owner to buy commercial property.

Since small businesses employ 59 million people (about half of all private sector jobs, CIT says), any investment in property that solidifies a small-business owner’s financial position is good for his or her business, employees and the economy.

But entrepreneurs don’t see it that way, and they’re the ones who control the purse strings, no matter how many great real estate deals are out there.

This article has been republished from The Street.

Four years into the housing crisis, myths about foreclosure still litter the minds of even the smartest of real estate consumers. When it comes to matters as high stakes as your home, confusion can cost you thousands – or even your home. Whether you’re a buyer looking at foreclosures, a homeowner struggling to keep your home or a seller concerned making sure your home can compete with the foreclosed homes on your block, these foreclosure myths are prime for the busting, with no further ado.

Keep in mind that in the Bennington VT real estate market, not all of these comments may be applicable. It is important to consult with your bank or real estate professional to determine the best course of action for you. Remember, all real estate is local, and this commentary is more geared towards a national audience.
(more…)

Home buyers may get three more months — until Sept. 1 — to close on purchases they made prior to May 1 and still qualify for the federal tax credits.

Senate Majority Leader Harry Reid, a Nevada Democrat, introduced the proposal as an amendment to a bill that would extend jobless benefits through November. Reid represents the state with the highest foreclosure rate.

The National Association of REALTORS® has been lobbying for the extension because buyers whose purchases are delayed by slow-moving short sales and financial transactions will lose out.

“Time is of the essence,” said Lucien Salvant, NAR managing director. “It’s important for Congress to get this done, because there’s whole bunch of loans that aren’t going to close on time.”

Source: Associated Press, Alan Zibel (06/10/2010)

This may be great news for many buyers in the Bennington VT real estate market.

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.

While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.

The IRS clarification says: “In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Source: Washington Post (02/20/2010)

Bennington VT, First Time Buyers, Buying

Mortgage interest is deductible on your tax return. And you may be able to deduct the points you paid – check your 1098 statement from your lender for the amount. To be deductible, loan points must meet certain requirements, including but not limited to:

• The loan is for your main home
• The charge for points are within normal rates for your area.
• The amount is listed on the settlement statement as charged points.
• You report your income and deduct expenses in the year received or paid (cash accounting method).

For more information on deducting points from your tax return, go to www.irs.gov. For your Bennington, Vermont real estate needs, contact Troy Richardson at RE/MAX Maple Leaf Realty!

Home designers and builders speaking at the recent International Builders Show in Las Vegas say that buyers are seeking cost-effective features and rejecting things that don’t have lasting value.

“It’s all about family togetherness – casual living, entertaining and flexible spaces,” says Carol Lavender, president of the Lavender Design Group in San Antonio.

Paul Cardis, CEO of Avid Ratings, which conducts an annual survey of buyer preferences, identified these must-haves in new homes:

1. Large kitchens with islands
2. Energy efficiency, including energy-efficient appliances, super insulation, and high-efficiency windows.
3. Home offices
4. Main-floor master suite
5. Outdoor living space
6. Ceiling fans
7. Soaking tub in the master suite and/or an oversize shower with a seating area
8. Stone and brick exteriors rather than stucco or vinyl
9. Community walking paths and playgrounds
10. Two-car garages, but three-car garages are even more desirable

Source: MarketWatch, Steve Kerch (01/30/2010)

Equity is the difference between how much your Bennington, Vermont real estate is worth and how much you owe on that property. So if your property is currently appraised at $200,000, and you still owe $60,000, the property’s equity is $140,000.

A home equity loan is a line of credit based on that amount, using the equity as collateral (or tangible property to guarantee a loan).

Are you considering using a home equity loan to buy a second home? Contact Troy Richardson to help you find the right home and offer lists of local lenders or mortgage companies.