Here’s Paramounts World-Class architect, on-site, live and off the cuff:
Here’s Paramounts World-Class architect, on-site, live and off the cuff:
New Home builders, big and small, would be among the winners if the $838 billion stimulus measure the U.S. Senate passes today.
The Senate bill seems to be more generous to home builders than the House was in the $819 billion measure it passed last month.
President Barack Obama, who spoke to the nation last night, has said he wants stimulus legislation signed by this weekend. President Obama is counting on the plan to help revive the economy. The economy has lost 3.6 million jobs since December 2007. This has caused the unemployment rate to soar to the highest level since 1992.
To quote a Bloomberg wire: “In a bill this big, there are countless private-sector winners and losers,” Rogan Kersh, associate dean of New York University’s Wagner School of Public Service was quoted as saying.
The Senate cleared the stimulus proposal yesterday by a vote of 61 to 36. There were three Republicans siding with Democrats.
It’s quite possible that U.S. home builders could see sales increase if consumers tap into the planned tax credit of $15,000, or 10 percent of the purchase price, whichever is less, under the Senate legislation.
Morningstar analyst, Eric Landry said “If someone’s going to give you $15,000 in free money it has to be stimulative”.
The proposed new tax credit does not have to be repaid. And it appears that all home buyers are eligible for the home purchase tax credit. This proposed home tax credit would replace the $7,500 tax credit for first-time home buyers that was passed sometime last year. In addition to the amount of the proposed home purchase tax credit, another difference is that the $7,500 home tax credit had to be repaid over 15 years.
Jerry Howard, president and chief executive officer of the National Association of Home Builders stated, “We’re pretty happy with the way the Senate bill is shaping up. We think it will entice a lot of those people sitting on the sidelines into the marketplace.”
As a home builder building new homes in the Washington D.C. area, I feel lucky because our area inside the Washington D.C. beltway is relatively strong. Values have held up and business is steady. So I can see real benefits to home builders, subcontractors and home building and remodeling vendors.
We also work with a large number of families and individuals that are just starting out and are looking for their first home to purchase. So it will be a huge benefit to individuals and families like that. But I’m not sure it is the best thing in the long run for our economy.
What do you think? Let me know your thoughts and comments.
This is some great news if it passes and is from a newsletter we subscribe to call
Builder Business Update:
Senate Adds $15,000 Home Buyer Tax Credit to Stimulus
Amendment to Senate version of stimulus bill provides the credit to all home buyers and doesn’t require repayment.
By Pat Curry
The U.S. Senate on Wednesday voted unanimously to approve a home buyer tax credit of $15,000 or up to 10 percent of the purchase price in its version of the stimulus bill. This proposed credit would be available to all home buyers and would not have to be repaid as long as a buyer lives in the house for at least two years. The amendment to the Senate’s economic stimulus package, co-sponsored by Sen. Johnny Isakson (R-Ga.) and Sen. Joe Lieberman (I-Conn.), offers the credit on purchases from one year of the date of enactment and could be applied to the home buyer’s 2008 taxes.
Isakson, who spent more than 30 years in the real estate business, proposed the tax credit because he’d seen it used effectively to jump-start housing in the 1970s.
“It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said in a prepared statement Wednesday evening. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history, and repeated a method that worked by adopting this amendment.”
Dwight Jaffee, a professor of finance and real estate at the Haas School of Business at the University of California, Berkeley, called the 1973-1975 recession the “classic example” of how a direct stimulus to housing demand impacted economic recovery. “Housing led us into this recession, and we really need a stimulus for it to lead us out,” Jaffee said in a statement released by the Fix Housing First coalition, a group of home builders, manufacturers, and others advocating for several housing-related measures, including the tax credit.
According to Jerry Howard, the NAHB’s CEO, the amendment’s provision to offer the tax credit for a year from the date of enactment “reflects Sen. Isakson’s in-depth understanding of housing. It gives the people who market housing a chance to ramp this up and put it in its proper perspective in the field.” Depending on the enactment date, it could make the tax credit available well into 2010. (In previous versions, the tax credit was only availble through Dec. 31, 2009.)
Howard also said Thursday that the NAHB’s staff is working closely with the Senate offices of Sen. Mitch McConnell (R-Ky.), John Ensign (R-Nev.) and Lamar Alexander (R-Tenn.) on additional amendments that the Fix Housing First Coalition considers crucial to solving the housing crisis. Those include low-interest mortgages for home buyers and additional measures to stem foreclosures.
The National Lumber and Building Material Dealers Association also issued a statement this morning applauding the adoption of the amendment and thanking the senators for their leadership. “We believe, if adopted in the final stimulus package, the tax credit could go a long way toward reviving the housing economy by encouraging more home purchases, creating new jobs, and restoring consumer confidence in the housing market,” said NLBMDA President and CEO Michael O’Brien.
The Fix Housing First coalition, which includes the NAHB and NLBMDA, continues to advocate for additional housing stimulus measures, including an amendment that would provide discounted 30-year fixed-rate mortgage financing for eligible home buyers.
In appearances on television news shows, several senators this week expressed support for such an amendment. “We have a 4% mortgage proposal where creditworthy home buyers could buy down their mortgages or save them on the average $5,600 a year,” Sen. McConnell said on Sunday on “Face the Nation.”
One disappointment for home builders in the bill is that this amendment does not include the ability to monetize the credit at closing, a feature in an earlier bill Isakson filed in mid-January. “Emails were flying back and forth this morning, asking ‘Can it be used for closing?’” says Michelle Smallwood, vice president of sales for Melbourne, Fla.-based Holiday Builders.
Pat Curry is senior editor, sales and marketing, at BUILDER magazine.Senate Adds $15,000 Home Buyer Tax Credit to Stimulus
Amendment to Senate version of stimulus bill provides the credit to all home buyers and doesn’t require repayment.
By:
Pat Curry
The U.S. Senate on Wednesday voted unanimously to approve a home buyer tax credit of $15,000 or up to 10 percent of the purchase price in its version of the stimulus bill. This proposed credit would be available to all home buyers and would not have to be repaid as long as a buyer lives in the house for at least two years. The amendment to the Senate’s economic stimulus package, co-sponsored by Sen. Johnny Isakson (R-Ga.) and Sen. Joe Lieberman (I-Conn.), offers the credit on purchases from one year of the date of enactment and could be applied to the home buyer’s 2008 taxes.
Isakson, who spent more than 30 years in the real estate business, proposed the tax credit because he’d seen it used effectively to jump-start housing in the 1970s.
“It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said in a prepared statement Wednesday evening. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history, and repeated a method that worked by adopting this amendment.”
Dwight Jaffee, a professor of finance and real estate at the Haas School of Business at the University of California, Berkeley, called the 1973-1975 recession the “classic example” of how a direct stimulus to housing demand impacted economic recovery. “Housing led us into this recession, and we really need a stimulus for it to lead us out,” Jaffee said in a statement released by the Fix Housing First coalition, a group of home builders, manufacturers, and others advocating for several housing-related measures, including the tax credit.
According to Jerry Howard, the NAHB’s CEO, the amendment’s provision to offer the tax credit for a year from the date of enactment “reflects Sen. Isakson’s in-depth understanding of housing. It gives the people who market housing a chance to ramp this up and put it in its proper perspective in the field.” Depending on the enactment date, it could make the tax credit available well into 2010. (In previous versions, the tax credit was only availble through Dec. 31, 2009.)
Howard also said Thursday that the NAHB’s staff is working closely with the Senate offices of Sen. Mitch McConnell (R-Ky.), John Ensign (R-Nev.) and Lamar Alexander (R-Tenn.) on additional amendments that the Fix Housing First Coalition considers crucial to solving the housing crisis. Those include low-interest mortgages for home buyers and additional measures to stem foreclosures.
The National Lumber and Building Material Dealers Association also issued a statement this morning applauding the adoption of the amendment and thanking the senators for their leadership. “We believe, if adopted in the final stimulus package, the tax credit could go a long way toward reviving the housing economy by encouraging more home purchases, creating new jobs, and restoring consumer confidence in the housing market,” said NLBMDA President and CEO Michael O’Brien.
The Fix Housing First coalition, which includes the NAHB and NLBMDA, continues to advocate for additional housing stimulus measures, including an amendment that would provide discounted 30-year fixed-rate mortgage financing for eligible home buyers.
In appearances on television news shows, several senators this week expressed support for such an amendment. “We have a 4% mortgage proposal where creditworthy home buyers could buy down their mortgages or save them on the average $5,600 a year,” Sen. McConnell said on Sunday on “Face the Nation.”
One disappointment for home builders in the bill is that this amendment does not include the ability to monetize the credit at closing, a feature in an earlier bill Isakson filed in mid-January. “Emails were flying back and forth this morning, asking ‘Can it be used for closing?’” says Michelle Smallwood, vice president of sales for Melbourne, Fla.-based Holiday Builders.
Pat Curry is senior editor, sales and marketing, at BUILDER magazine.
Question:
Do you think this is a good idea as a taxpayer?
If you are in the market to purchase a home, will this impact your decision to buy a home?
Here’s another of my “insider” strategy tips and secrets, that a head-shakingly few other “professionals” are even remotely aware of, for:
So here’s my “insider” strategy for today:
One of the secrets to having a successful- on time…on budget…great design You love…high quality
workmanship…smooth and hassle free process – and fun home building experience,is putting together the right team of professional “partners” to guide you through the process.
Not many people even know this (I’ve been doing this for 20+ years and only a few savvy real estate developer/investor “types” have a clue), but the right team can make it “real estate heaven”, a process so smooth that you’ll be looking for another transaction to do as soon as you finish this one…
And the wrong team can turn the whole project into a nightmarish mistake that could be excruciatingly painful and and an ordeal that you’ll want to wipe from your mind immediately.
And since the process really starts way before the first shovel ever pierces the earth, I view the partner checklist in terms of Phases.
Phase 1 partners are needed to determine project feasibility:
Many of the Phase 1 partners need to stay involved in Phase 2… through out the life of the project.
Like a lot of partnerships, many of these relationships are inter-dependent; decisions and input from one partner are needed for another partner to complete their portion of work.
Phase 2 Partners are brought in only after the go/no-go litmus test is passed. Why spend money if you don’t have to?
And here’s a bonus for you, this is the actual checklist that we use on our projects…
Phase 1 Partners:
Key Point: You do not have to retain the entire team at the
beginning of the process… And YOU DON’T WANT TO. Only bring
in the partners that are appropriate for that section of
the job.
Phase 2 Partners:
In my next “insider” strategy tip email I’ll explain the partner
roles in more detail.
I think you’ll be astonished at some simple-fix-steps, that if
assigned early on to some of the partners, could result in
huge economic windfalls or could give you a quick signal that
your project may not make sense in its initial form and you
need to re-purpose the plan.
Please keep the comments and critiques coming and let me know
what’s on your mind. And I’d appreciate if you could tell me:
If you want more “insider” secrets to make a yo9ur new home a profitable investment sign up here for our special series
With so many details to think about, where do you start the
custom home process? While it’s easy to get overwhelmed, we
like to simplify the custom home process by starting out
just looking at only two things.
What are these two things?
I can’t tell you because that would give away our
competitive advantage.
All right. You twisted my arm. Here they are:
Our process starts with two things: 1) you and 2) your lot.
That’s it. Pretty simple.
So I like to start things off playing Columbo. When we meet
I’ll ask you questions that fall into just a four
categories. Here’s a small sample of our routine:
A. $MONEY$ category
– How important is resale to you?
– Is return on investment your number one motivation
or is it a lower priority and you just want to
make sure you don’t do anything someone else would
think odd when you sell?
– How are you going to finance your new home?
– If you are going to use a lender, is a construction
loan, new first mortgage or new second mortgage best for
you? Can you use collateral of other assets to improve
your options?
– How much cash do you have to put into your new home?
– How much cash do you want to put in to the new home?
– Have you spoken with a lender (we prefer you use ours I’ll
explain some advantages in future post)?
– What tax bracket are you in? There could be some tax benefits
related to the project that may apply to your situation.
B. Lifestyle category:
– How long do you think you want to live in your new
home? This usually factors in to energy efficiency
and “green” options and calculating the pay-back period.
– Are you there for 5 years and then on to the vineyards
of Oregon or is this your last home and you want us
to design a master suite on the first floor or an
elevator to get to the 2nd floor?
– When do you want to see the home started by? This
can be a big factor when jurisdictions like Arlington,
D.C. and Montgomery County are constantly changing
zoning and building codes. Montgomery County just
passed a law that takes effect in four months
decreasing height and density in many neighborhoods
& sprinklers will be required in all dwellings in
two years (I’ll verify the exact date).
– When do you want to move in to the home? – “by Christmas”
is always a lofty goal and as long as you don’t
mind me asking “which one?” (I couldn’t resist)
we’ll always hit it.
– Where will you live during the construction
(we have sources for short term rentals, but ask
me early since they go fast)?
– Do you plan on in-laws or relatives coming back
for any period of time? What bathroom will they
use? What kitchen will they use? We just finished
a home in Silver Spring with three kitchens – one
for the kids with 5 kids of their own, one for the
parents and one for Aunt Lee, who visits during
the summers.
C. Your Future Home (and little bit about your
current home) category
– What are the features and amenities that you must
have, or the project just isn’t worth doing?
– What are the features and amenities that would
be nice to have?
– What style home do you love?
– What style home do you hate?
– What bothers you about your current home?
– What do you love about your current home?
– How important are energy efficient features?
– How important are green features?
– Do you like open plans with a ton of natural
light and views from front to back or would you
prefer something more intimate and cozy?
– What ceiling heights do you want? How do you feel
about two story spaces?
– Do you want a basement? If so do you want it
finished?
D. And Last but not least – Your Lot category – this
is always a biggie, so big I’m adding these extra
few sentences before I get to the.
It always surprises and shocks me, like a slurp
of Red Bull, when people don’t call us prior to
buying a lot (I bet you can tell, it especially
upsets me).
There could be so many restrictions on lots, for
instance: easements, setbacks, alleys, lot coverage,
height, etc., etc., etc., etc., etc., which you
would never know just by looking at a piece of dirt
with your eyes.
We just completed two subdivisions, on two separate
projects, that probably added six (unexpected)
months to each project. And added thousands of
dollars in engineering and permitting fees.
In each case the owners were not aware of the
restrictions until we performed our zoning analysis.
And in each case they had owned the lots for many years.
So checking the “buildability” of your lot is one
of the very first steps we take.
IF YOU’RE PURCHASING A LOT, please call me before
you pull that trigger!
Here are some things we look at (this is so
critical I’m tossing out the regular bullets):
Due to the complexity of some of these issues,
complete research and answers may be a few steps
into our process. And to paraphrase a soon to be
ex-senator, this stuff is way beyond my pay grade,
so, Kevin, our excellent and unflappable architect,
handles most of this.
Well that’s a brief primer on how we start the custom
home process. It all starts with you and your lot,
as it should be.
Next time I’ll give you an idea of what we do once
we get your answers. But it’s 12:08 a.m. and I need
to take out the garbage so I can earn my keep.
Please keep the comments and critiques coming
and let me know what’s on your mind. And I’d appreciate
if you could tell me:
No doubt about it, this is a tricky environment for funding a new custom home or major renovation project.
One way to get ahead of the curve is to get a preapproval from a lender. A Preapproval is your lender’s written commitment to finance your home purchase up to a specific amount. Getting preapproved is a smart move for serious homebuyers in this volatile credit environment and it shows sellers that you come to the negotiating table ready to complete the transaction.
Preapproval vs. prequalification
A preapproval indicates that a lender has taken a detailed look into your financial background and has committed to lend you a certain amount of money, pending specific property details. Because preapproval includes a credit check, it’s more powerful than a prequalification letter, which generally only estimates what you can borrow based on information you’ve provided.
What are the advantages of being preapproved?
Preapproval offers a number of advantages over waiting to apply for a mortgage until after you’ve found a home. It lets you:
* Shop for a home with the confidence of knowing exactly how much you can borrow.
* Take advantage of the preference many home sellers have for preapproved buyers.
* Find out about possible qualification problems early in the homebuying process.
* Avoid the hectic rush to find the right mortgage loan at the same time that you’ve found a house.
Who can benefit the most from preapproval?
Preapproval is a great advantage for anyone buying a home in todays environment. A year ago it was especially useful for buyers looking for their first home and those who are self-employed or work on commission. But today, even those buyers that on the surface may seem to be credit worthy – high incomes and great credit scores, may be surprised what lenders are requiring as credit is becoming scarcer.
* First-time homebuyers. Without a record of previous mortgage payments, sellers may see first-time homebuyers as less likely to obtain financing than a similar buyer who’s already demonstrated the ability to meet a monthly mortgage payment. A preapproval helps even the field by showing the seller that a lender has already run the numbers and is willing to proceed with the transaction.
* Self-employed buyers or commissioned employees. Because their incomes may fluctuate more dramatically, self-employed and commissioned buyers often lack the financial documentation of salaried employees, which can send up a red flag to some sellers. Showing that a lender has already considered these factors will help mitigate this risk.
How does the process work?
Before you begin shopping for a home, submit your financial information to us. We’ll review your loan application and then, if you meet the qualification requirements, we’ll provide you with a written preapproval for a certain mortgage amount, down payment, and interest rate, subject to the terms of the commitment letter. The loan commitment letter can be finalized after information about the property, including an appraisal, is submitted.
Thinking of Building or Buying A New Custom Home but not sure what to do in this volatile market? Are you on the sidelines waiting to buy a new home? Why not use this time to get ready. Here are things that you should be doing now to position yourself:
Financial preparation is the first–and perhaps the most important–step in the homebuying process. Get ready for your purchase by taking a careful look at your savings, credit, income, and debt.
Down-payment options
Buying a home doesn’t necessarily mean having to make a large down payment. We provide a variety of loan programs that can help you buy a home using little or no cash.
If you have a down payment goal in mind that you need to save for, you’ll reach it more quickly if you stick to these simple rules:
* Pay yourself first. When you pay your monthly bills, the first check you write should be to your savings or investment account.
* Avoid unnecessary purchases. The less you spend on things that you don’t really need, the sooner you’ll become a homeowner.
* Set realistic goals. Take an objective look at your monthly income and expenses, and decide how much you can really put aside. It defeats the purpose of saving for a home if you fall behind on your other obligations.
Your credit
Responsible credit use is an important part of the mortgage equation, and your lender will take your credit history into account when deciding whether to approve you for a mortgage. If you have a strong credit record, do your best to maintain it until you buy your home. If you’ve had credit problems in the past, the time to reverse that trend is now. Follow these steps to put yourself in the best possible credit standing:
* Check your credit report. Report incorrect or outdated entries on your credit report. Each year, you can get one free credit report from each of the three credit agencies through www.annualcreditreport.com.
* Contact creditors if you have a problem. Many creditors are willing to work with clients to help relieve difficult financial situations. It’s always better to seek help than to let a problem go unchecked.
Income and debt
To determine how much you may be eligible to borrow, we’ll generally compare your income to your outstanding debt. Guidelines vary, depending on your loan program, your credit history, and other compensating factors. It’s best to avoid taking on new debt in the months leading up to your purchase.
But even if your debt expenses are high, you may still be able to get a mortgage. Our financing programs help make homeownership affordable for people from a variety of financial backgrou