News regarding USDA Guaranteed Rural Housing Program

I just received this update from Tom Thuss at Bank of Granite in Lenoir, NC about the current state of the USDA Guaranteed Rural Housing Program:

As many of you are aware, the USDA Guaranteed Rural Housing Program had been operating under a Congressional Continuing Funding Resolution that was approved in 10/08 and was supposed to provide sufficient funds for this program through the end of March. Due to unprecedented demand for USDA financing, the funding for this program was used up by early January. We have been forced to suspend the closing of any USDA loans until Congress gets additional funding approved. I am very confident that USDA will be funded soon but I do not know when that will occur. In the mean time, we are still able to handle your conventional, FHA and VA financing needs as usual. If one of your clients already has an application in process with me, their loans should close as expected.

If you have a client who wants to proceed with a USDA application, we can process and approve it so that it can close immediately after funding is approved. Obviously, this is going to require flexibility from your sellers.

Joseph Griffin

Buy a Home Now and Get the $7,500 Tax Credit Now!

Today, I was re-reading the applicable parts of HR 3221, which is the Housing and Economic Recovery Act of 2008, and I saw a section that should really be emphasized, which is as follows:

‘‘(g) ELECTION TO TREAT PURCHASE IN PRIOR YEAR.—In the
case of a purchase of a principal residence after December 31,
2008, and before July 1, 2009, a taxpayer may elect to treat such
purchase as made on December 31, 2008, for purposes of this
section (other than subsection (c).”

This section is stating that if you make a qualifying purchase between January 1, 2009 and July 1, 2009, then the IRS will consider that you purchased the home on December 31, 2008. This means that if you purchase a home between the 2009 dates above, you can go back amend your 2008 tax return and receive the tax credit. You do not have to wait until time to file your 2009 tax return. I hope that this helps.

Joseph Griffin

My other related posts are:

Way’s to Use $7,500 Tax Credit as a Downpayment

How the Tax Credit Applies to New Construction

Quick Faxts about the $7,500 Homebuyer Tax Credit

IRS Form for Claiming the $7,500 Homebuyer Tax Credit

Starting Small with Incoming Producing Real Estate Investment Properties

Getting started with income producing properties is not very difficult. The three challenges that need to be overcome are as follows:

• The Knowledge Challenge
• The Mindset Challenge
• The Financial Challenge

IRS Form for Claiming the $7,500 Homebuyer Tax Credit

A few months ago, I did a post on the $7,500 homebuyer tax credit, which is part of the Housing & Economic Recovery Act of 2008 or H.R. 3221.  You can see those posts here:

 Way’s to Use $7,500 Tax Credit as a Downpayment

How the Tax Credit Applies to New Construction
 
Quick Faxts about the $7,500 Homebuyer Tax Credit

Now that it is tax time, I’ve received a few questions regarding how to file for the tax credit.  So attached to this post is the appropriate IRS Form and instructions for filing for the tax credit.  It is IRS Form 5405 Homebuyer Tax Credit.  The form includes instructions for how to complete it for those of you who file your taxes yourself. 

Even if you have already filed your taxes, you can go back and amend your tax return if you were eligible for the credit, but did not file for it.  I’ve had a couple of people e-mail me who asked about this and were able to amend their return without any problem. 

I’ve also received a question about someone who is eligible for the return, but their spouse has an IRS lien.  If the lien is against one spouse, then you may be able to file separately.  But if you are able to do this, you will only qualify for $3,750 of half of the tax credit.  This was done to make certain that spouses filing separately wouldn’t receive $15,000 by filing for the full $7,500 rebate.  If you have other specific questions, please look at my previous posts first.  If what you are looking for isn’t there, please post a comment, and I’ll be sure to answer it.

Joseph Griffin

2008 Real Estate Statistics

Over the next few weeks, I will be providing updates about how 2008 was for the local Real Estate market.  The first statistic I want to address is the how many homes were closed in 2008: 2,490.  This may seem like a high number, but, for the statistics that I have, it is the lowest number is the last five years.  Below is a chart which shows the number of single family dwellings closed in the preceding five years:

 

Year	Homes Closed
2004	2566
2005	2978
2006	3175
2007	3148
2008	2490

 

As you can see from the chart, 2008 is down almost 21 percent as compared with 2007.  Of those sold 2,172 were existing homes and 318 were new construction.  As you can see, the existing home market makes up almost 90 percent of the housing market for 2008.  This has placed strain on many builders, even forcing some to stop building.  This number is especially enlightening when one considers that for 2007, 449 newly constructed were closed, which means that 2008 experienced a nearly 30 percent drop in new construction sales. 

 

What this means for the consumer is that as demand has declined, so has construction, therefore you have fewer newly constructed homes to choose from, which could eventually lead to a shortage of new construction once the market begins to rebound.  We will be watching the market on a monthly basis over the next year to see how 2009 compares to 2008 and previous years.  Check back often as I continue to update these statistics. 

 

Remember, if I can help you with any of your Real Estate needs, please let me know.

 

Joseph Griffin, MBA, MPM, GRI, PMP®

 

Note: All statistics are gathered from the Catawba Valley MLS website.  Therefore, it will not include those properties whose sale was not recorded through the system. 

Evicting a Tenant in North Carolina

The eviction process in North Carolina is a relatively straight-forward process. This will be a high-level guide to the process, please let me know if you have specific questions.

Why evict? The most likely reason is because the tenant has failed to pay their rent, but there are many other reasons: you believe the tenant to be involved in illegal activity; the tenants are causing trouble with the neighbors; or any other number of issues that have led you to want them to move. Regardless of the reason, you need to make certain that you have the right to evict the tenant. There is a clause in North Carolina’s landlord/tenant law that does allow the landlord to evict with no cause. Therefore, the landlord doesn’t need a reason to evict the tenant; the landlord has the right to evict for no cause.

How to evict a tenant? The first thing to do is to give notice to the tenants that you are evicting them. Unless noted otherwise in your lease agreement, you need to give a ten day notice for monthly renters and a two day notice for weekly rentals. Once the notice period is up, then you file paperwork: a magistrate summons and a complaint in summary ejectment. You can get these files online or you can pick them up from your local Clerk of Court office. The paperwork is relatively straight-forward. If you are uncertain, they can help you at the Clerk of Court office. Once you take the appropriate number of forms to the court to file and pay the appropriate fee, then the Clerk of Court’s office will assign you a day and time to come to Small Claim’s court.

When you come to court, bring a copy of your lease agreement and your records book showing the payment history. If you are evicting someone for failing to pay their rent, you will need this supportive documentation. If they have breached the lease in some other manner, then you will need to bring the documentation which supports your claim. If, however, you are evicting someone for no cause, then you may want to bring only the lease and your record book, but you shouldn’t be required to prove any wrong doing on the part of the tenant because you are not evicting them for any breach of contract.

Once the magistrate rules in your favor, you have to wait ten days to execute the writ of execution. If the magistrate does not rule in your favor, then you can appeal. The tenant has ten days to appeal the magistrate’s ruling. If the appeal has grounds, then you must wait for the new court date. During the time that you are waiting for the new court date, the tenant must make payments to the clerk of court’s office. If the tenant does not appeal, then at the end of the ten day period, you go back to the clerk of court’s office and execute the writ of execution. The sheriff’s office or local police department will then get into contact with you to meet you at the property to put the person outside of the home. You need to meet them there and change the locks while at the property with the officer. If they have not removed all of their property from the home, you need to check with the local clerk of court about how to handle their property. Typically, there is a time that they have to get the property within. If they don’t, then you need to follow the guidelines provided by the clerk of court.

I realize that this has been something of a whirlwind tour of the process, and you may have many questions. Please feel free to ask them in a comment, and I will get back with you ASAP.

Joseph Griffin

Home Inspections in North Carolina

Having a set of home inspection is an important part of the Real Estate process. When considering which home inspections are important for your purchase, it is important to understand the purpose and the limits of the various types of home inspections. In this article, I’ll briefly discuss a few types of home inspections that may apply to your transactions. I’ll cover the following inspection types:

1. General Home Inspection
2. Radon Gas Inspection
3. Termite / Pest Inspection
4. Survey
5. Specialized Inspections: Electrical, Plumbing, HVAC, & Structural

The General Home Inspection:

By General Home Inspection, I am referring to a licensed home inspector who comes to inspect the property. All home inspectors have to be licensed by the state, and they must follow the guidelines appropriate to their licensing. The important thing for you to know is that you should have a home inspection done for any house that you purchase, unless, of course, you are the one in a thousand individuals who have the knowledge to do it themselves. The home inspector will cover just about everything, which will give you the information you need to proceed with the purchase. The inspection will also point you to whether or not you need additional inspections, such as one of the specialized listed above. It is important to note that home inspectors are not required to report on: wood-destroying insects, pools and spas, environmental contamination, or detached structures, which means there are limitations. You need to ask them what their inspection covers and does not cover. Be ready for your home inspector to find something. They are paid to find things; this doesn’t mean that they are making things up, but it does mean that they give really thorough inspections, and they look in the places that many buyers do not.

Radon Gas Inspection:

Radon is a cancer-causing natural radioactive gas that you can’t see, smell or taste. Its presence in your home can pose a danger to your family’s health. Radon is the leading cause of lung cancer among non-smokers. Radon is the second leading cause of lung cancer in America and claims about 20,000 lives annually (From EPA website). If you search the internet, you’ll find a number of different claims regarding radon gas. Some say it’s a myth, and I think you should be careful of sites that say such things. Here is a link to the EPAs website to provide you with more information. The important thing as part of this article is that radon can be mitigated through a system which can be installed and monitored by a licensed company.

Termite / Pest Inspection:

This inspection is fairly straight-forward. The cost to inspect is relatively small ($100-$300) in most cases, and the cost to repair varies depending on what needs to be done. If you have to replace wood, then it can obviously be more expensive than if you only have to treat. The cost of treating various by house size and the type of treatment to be done.

Survey:

Surveys are always a good idea, in my opinion, but aren’t always necessary. Sometimes a bank will require you to have a survey completed, but not always. If you have a general idea about where the line is, and you don’t want to pay for a survey, you need to make sure that you and your neighbor keep any type of permanent structure a good distance from where you think the lot line is. If you don’t, then you may encumber your neighbor’s property, or he may encumber yours, which is a bad situation. The best idea is to get a survey.

Specialized Inspections:

Depending on the property that you are purchasing and its condition, you may need additional inspections. For instance, my brother-in-law recently bought a home in northwest Indiana that was in foreclosure. The home needed a lot of work, and he was concerned about structural issues, so he hired a structural engineer to do an assessment of the property, which was a great idea. After you have the initial home inspection, question your inspector about the various components of the home to see if you need additional inspections by a licensed plumber, electrician, or HVAC contractor.

Questions and Answers about Real Estate Closings in North Carolina

Today, I want to provide some information about Real Estate closings in NC. My primary focus is going to be on residential properties, but some of the information may be applicable to commercial and other types of transactions, but my primary purpose is to discuss residential Real Estate closings.

The way that I think with will be most easily accomplished is in a Question & Answer format. If you have a question that I don’t answer, please leave me a comment, and I will try to answer it. I will provide brief answers to the following questions:

1) Who sets the closings date?
2) Who pays the closing costs?
3) How much should I expect to pay in closings costs?
4) What inspections do I need before closing?
5) What happens if we don’t close on the agreed upon closing date?
6) What is title insurance?