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Archive for the 'First Time Home Buyers' Category

Selling to Generation Y Courtesy of Pensacola Real Estate Professionals

Generation Y, otherwise known as the Millennials have had a bit of a bad rap up to now. The stereotype of 30-somethings living in their parents’ basement is finally giving way, as real estate agents and home builders see these Generation Y-ers flocking to the housing market.

Targeting these clients is different than working with older home buyers. According to the National Association of Home Builders, this young generation is prioritizing when it comes to looking for a new home.

They want efficiency for the long run over a low purchase price. The Gen Y clients are bringing their green sensibility to their home purchases. They want high-grade insulation and energy-efficient appliances that will save them on utility costs over the long run, and are often willing to pay more at the time of purchase to get tank less water heaters and super-efficient HVAC systems. That said, a game room wired for hi-tech toys is often on a young buyer’s wish list, beating out stainless steel fridges and marble countertops.

These young buyers also want to meld into their new locales. “Walk Scores” – the measure of a neighborhood’s friendliness and accessibility to pedestrians – are important to them. Proximity to public amenities, shops, and reliable public transportation are also big influences on where they’ll buy.

096Pensacola Real Estate Professionals recommends young buyers look at the following subdivisions: Plantation Woods, Covington Woods and Cottonwood. These subdivisions rank high on “Walk Scores”! Check them out, and see if you don’t agree.

These neighborhoods are all centrally-located, and they are close to shopping, restaurants, schools, churches and entertainment venues.

These subdivisions are family-friendly and nestled in secure areas. They are the perfect settings where a family can settle and grow.

covington woods sign

cottonwood subdivision sign 1

Buyers over the last 15 or so years wanted to get the maximum house for their money. Millennials seem to be content with just buying the size they need. However, they are interested in design and layouts that will allow them to change functionalities for different areas of the home, so they can adapt their living spaces to what they need right at the moment: dinner for 10, video game playoffs, or working from home. Again, these buyers are ranking efficiency incredible high on their list of home must-haves. Interestingly, they also seem to be trending toward single-level homes, a trend usually seen in much older buyers with lower mobility.

Timberland Contractors, LLC have a large assortment of floor plans! One of them is sure to suit the needs of any Generation Y buyer! Timberland Contractors LLC floor plans feature multi-purpose rooms and energy efficient appliances, doors and windows.

Contact me, Lisa Burns, Broker, Pensacola Real Estate Professionals, here or directly at 850-393-7106, and I will be happy to show you these plans, or help you revise any of them to suit your needs.

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Pensacola Real Estate Buyers Thrown a Bone by Banks Offering Mortgages with Only 5% Down

Pensacola Real Estate Buyers take heart! It has been announced that some banks are offering mortgages with down payments as low as 5%! For those who do not have a lot of ready-cash on hand, this is fantastic news!

After the Real Estate Market tumbled, home buyers needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration (FHA) for a low down payment loan.

But now, banks like TD Bank, Bank of America and Wells Fargo are loosening the “purse strings”, offering loans with as little as 5% down. bank of america 1

For example, TD Bank’s “Right Step” mortgage, allows borrowers to secure a loan with a 5% down payment. It also allows them to receive as much as 2% of the sale price as a gift from a third party or a relative, so they would really only need 3% down.

Market opportunity seems to be driving this change of heart.

FHA dominated the market for loans with a low down payment during the housing market down turn. Taking on all those risky loans, however, depleted the reserve’s of the agency and has forced it to increase costs.

And this year, the FHA started requiring borrowers to buy private mortgage insurance (PMI) for the life of the loan. This is an expensive proposition, that has sent many borrowers looking elsewhere to secure a loan.

Private lenders, who have been leery of taking on these risky loans, are now willing to entertain them with rising home prices. It is making it less of a gamble. Plus, the banks think they can offer a better deal than FHA.

wells fargo 1While the private lenders that are offering the 5% down loans are also requiring borrowers to buy PMI, they are only requiring them to do so until they build of 20% equity in the home.

The difference can end of being quite substantial! Paying an insurance premium over the life of a $200,000, 30-year fixed-rate loan from FHA that carries an effective mortgage rate of 4.4% (5.75% when you tack on the insurance premium), can add up to nearly $60,000 over the life of the loan.

Of course, home owners can refinance to end their FHA insurance, but rates are so low, that by the time an FHA borrower is able to refinance to a lower rate, it may not be worth it.

Please contact me here or directly at 850-393-7106, if I can help answer any questions or guide you through the home buying process.

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Home Buyer Tax Credit Extended For Active Duty Military

U.S. active duty military who are out of the country for 90 days (since 2008) may have an extra year to claim the home buyer tax credit. The tax credit is for up to $8,000 for first time home buyers and $6,500 for repeat home buyers.  This is very important news for the Pensacola real estate market, as we have so many active duty military who have served out of the country and are now living in or moving to the Pensacola area. Most are stationed at the Pensacola Naval Air Station.

For more information on the tax credit, see the article Pensacola Real Estate – Tax Credit Information.

The active-duty rule is part of the current tax credit law. The qualification must be for “official extended duty outside the United States for at least 90 days after 2008 and before May 1, 2010.”

If the above condition applies, the homebuyer has an extra year to buy a home. He or she has until April 30, 2011, to secure a binding contract, and until June 30, 2011 to close on the home. Other conditions such as a maximum $8,000 for first-time buyers and $6,500 for move-up buyers still apply.

For advice in any specific case, please consult a qualified tax advisor.

The applicable IRS publication is posted at:

If you live in Pensacola and are hoping to buy a Pensacola home before the tax credit deadline, follow the link to Pensacola Homes For Sale to begin your search.

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Pensacola Real Estate – Tax Credit Information

It takes time to find the right Pensacola home for sale that suits your needs. Finding and getting real estate under contract rarely happens quickly. There are currently over 4500 Pensacola homes and condos for sale. If you want to take advantage of the tax credit, you need to move quickly. There are only 54 days left (from March 6, 2010) to get a home under contract by April 30, 2010. Next, the home must be closed by June 30. This is not a lot of time.

If you decide to purchase a Short Sale property, the chances of getting it under contract before the deadline are very slim. (See article Short Sales – Are They Worth It). However, there are many affordable conventional sales available, and quite a few bank owned properties on the market.

Here are some links to help you understand more about the homebuyer tax
credit and take advantage of it:

IRS First-Time Homebuyer Credit Q & A

IRS Form 5405 (to take the tax credit)

Frequently asked questions about the $8,000 first-time home buyer tax

Frequently asked questions about the $6,500 tax credit for repeat home buyers

Some key points for prospective home buyers

Pensacola Military: Since we have such a high military presence in
Pensacola (thank goodness, what would we do without you great men and
women), the link below is very important to members of the military who
are looking for Pensacola Homes For Sale before the tax credit deadline.

Special rules that apply to members of the military, the foreign service and the intelligence community

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Impact From the HomeBuyer Tax Credit

How much impact has the extension of the home buyer tax credit had on Pensacola Real Estate sales?

The answer is elusive. There are many factors involved that make it hard to determine what impact the tax credit has had on local real estate sales.  One report released on March 1st, 2010 indicated that the extension of the tax credit has had very little impact on real estate sales on a national level.

Congress extended the first time homebuyer tax credit of $8000 through June 2010. In addition, they added a tax credit of $6500 for existing homeowners who decide to purchase another home (it must be their primary residence).

Homebuyer Tax Credit

The report  I read through the Florida Association of Realtors indicated that so far, people are staying put.  The results of the report are based on nationwide real estate sales and interviews with real estate agents around the country.

Why isn’t the homebuyer tax credit working as expected?

High Unemployment Rate

The unemployment rate is still near 10 percent and consumer confidence is falling. During periods of high unemployment and low consumer confidence, buyers tend to wait it out, not run out and buy a home.

Many Homeowners are Upside Down

While many homeowners would love to sell right now, their mortgage is higher than the value of their home. They are stuck where they are.

Harsh Winter Weather

Since we have had an unusually cold winter, many would-be buyers are not out house shopping. Even Pensacola has been unseasonably cold this winter.

Tax Credit Just Not Big Enough

It appears the tax credit is just not enough to entice buyers out into the real estate market. When people’s confidence is low, they are more likely to play it safe and stay put, even if they have the ability to move.  And the amount of the tax credits is not even enough to cover moving and closing costs if selling an existing home to purchase a new one is even an option.

I checked the Pensacola Real Estate Market sales for February 2010 (full report coming soon) and was pleasantly surprised to find that Pensacola Real Estate sales are on par to match or exceed last year’s February home sales. February already has 259 home sales, which is 50 more than January of this year (see January Pensacola Real Estate Market Report).

As of this writing, February is over and we’re into March. However, there are still real estate agents who have not entered their sold listings from February into the Pensacola MLS. To get the most accurate real estate market data, I usually have to wait a week to 10 days after the end of the month to check the local market statistics. (Personal pet peeve, which I won’t get on a soapbox about at this time).

Tax Credit Qualification

To qualify for the $6,500 credit, buyers must have owned and lived in the same home for five consecutive years out of the past eight. They must sign a contract by April 30 and close before June 30. The home’s purchase price can’t exceed $800,000, and it must be used as a main residence. The income limit for single taxpayers is $125,000; for a married couple, it’s $225,000.

The same rules above apply to first-time homebuyers, except that the tax credit is $8000 and the buyer must not have owned a home for the previous 3 years.

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