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I recently found a notice that The National Association of Realtors put out regarding using the $8000 first-time homebuyer tax credit for a down payment or closing costs on a FHA-insured mortgage.

According to the notice, 11 states — including Virginia — offer this program. For more information, visit www.realtor.org/government_affairs.

If anyone out there has used, or tried to use, this option, please comment or write us so we can share your experience.

I’m not an accountant, mortgage broker, attorney or any other type of financial advisor. I just saw this info and wanted to share it. If you want to take advantage of this option, you should get professional help–maybe start by asking your mortgage broker.

As I have written in the past, the lure of buying a junker bank-owned property and fixing it up yourself to save money can be both exhilarating and crushing–sometimes all at the same time!

Here is an example of how easy it is to entangle yourself in all the many elements of a renovation. These are all changes we’ve made to one of our current properties. No doubt the future buyer will be ecstatic about all of the lovely changes and updates we’ve made…but before you buy a fixer upper, ask yourself whether this is something you can handle on your own. If so, more power to ya! If not, why don’t you give us a call to see what already-renovated properties we might have available.

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Having a large room available in the house at 255 Colebrook Road, we decided to create a spacious second master suite, complete with a luxury bathroom and big double-headed shower.

After our personal experiences dealing with elderly family members, we decided to go the extra mile to make the whole suite handicapped accessible. We created a shower that has no step-over threshold. In the event a buyer or family member is in a wheelchair or requires a walker, they won’t have to worry about rolling or stepping over the threshold to get into the shower. For future needs, there is wood blocking installed in the framing of the walls for hand rails and a shower seat.

Having wheeled many a stretcher into homes during my long career in the fire department, we decided to install 36-inch wide doors to the master bedroom and bath in the event the suite will be used for an elderly or infirm resident. You’ve got to start thinking about these things as you get older, or reach the age when you find yourself caring for aging parents.

This foresight adds a bit more time and effort up front of course, but we know how much of a difference it can make to someone’s quality of life in the future, which makes it a no-brainer!

FYI:

The eligibility deadline for the $8000 first-time homebuyer tax credit is DECEMBER 1ST not DECEMBER 31ST!! I don’t know why they didn’t just make it the end of the year, but I have a feeling this is going to trip a lot of people up.

To take advantage of this great opportunity, you must be a first-time homebuyer and purchase a primary residence before December 1st!

For more information about this tax credit, visit http://www.federalhousingtaxcredit.com/2009/index.html.

We’ve also created a handy dandy countdown clock to keep tabs on the time running out (on the side bar to the right).

If you are looking to purchase a home for the first time, you only have about 3 more months to take advantage of this program. Don’t miss out!

The joy of riding a train from Connecticut to Washington, DC is that I have time to write. I only wish my fingers could go as fast as Amtrack on those those straightaways!

I have a little more to share about a challenge we faced during one of our current renovations. Whether you are looking to buy a home or you are renovating an older home yourself, you are likely to run into something like this.

The Oddities of Prior Renovations

Many houses are renovated little by little over the years–an addition here, closing in a porch there, knocking out walls to combine rooms or building walls to divide them, another addition years later…often resulting in an odd, higgeldy-piggeldy layout. We ran into just such a challenge with this renovation, and it nearly had me pulling out what is left of my hair! Hopefully you can benefit from our experience.

The home had an original carport that had been enclosed many years ago. Unfortunately, when they built the floor at that time, they dropped it lower than the rest of the house’s floor level.

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Hey everyone, it’s been a while since last writing. We’ve been working so hard, taking care of business, that I almost forgot to take care of the real business — YOU.

Recently we’ve invested in three properties that need various amounts of renovation. The one I want to speak  about now is our Fredericksburg single family home on one acre. This place was owned by a man who had many difficulties keeping the place up. After he passed away, his son inherited the property and realized that he had neither the time, the resources, nor the energy to tackle the renovation needed to either live in the property or to sell it conventionally. And this guy is even in the building trades, so you can imagine the amount of work we were up against when we got the call to consider purchasing the property!

A careful assessment was completed and a renovation budget was prepared. The potential of this property is awesome, but we knew we would have to roll up our sleeves to tackle this baby! Even with our many years of experience, this one posed a couple of challenges:

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It is interesting to me how agents make things sound so “easy” in their desire to make a commission. Recently, I had an experience with an agent who was working with a couple looking to buy a foreclosure property. This couple, being in their early 50s, already had the experience of buying and selling a few homes. These empty nesters were looking to get closer to work and simplify their lives by reducing their long daily commute.

While the couple and I were talking about the renovations that would be needed to bring the property up to the neighborhood standards and regain value, the agent chimed in that it “wasn’t a big deal.” She said that if the owners–who were planning to live in the property during most of the renovation–couldn’t do the work themselves, they could “just hire someone.”

Yes, that’s true. If you can’t do the work yourself, hire someone else. But it is not that simple or easy. Do not discount the fact that your life will be in turmoil if you are living in the home during major renovation work. You have got to pay for this work and keep a close eye on the finances. If you know this and are still willing to take on that situation, you should factor in some equity for your trouble.

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I met with a couple local bankers the other day and was very encouraged by what they had to say. I am passionate that we provide a good service (otherwise I never would have gotten into the business). But their support reinforced that we really are on the right track with our balanced approach to helping people find foreclosure/bank-owned homes: they don’t get stuck with fixing up the place, or a high price tag–just a clean, fully-renovated home completely move-in ready.

These guys — one working in Virginia, and the other in Maryland — both got excited about the “win-win” of our business model. They both highly recommended that people interested in getting a great deal on a foreclosure look into our service instead of going it alone.

It just works. For the banks, for you the homeowner, and for us. Here’s how:

We take on all of the risks of overhauling these troubled properties, and get them off the bank’s dead-weight foreclosure list. And you still get a great deal, though a realistic one. You still pay less than market value, but you don’t have to take on any of the risks or hassle of making the place liveable.

It’s a tough market out there, but there are still great deals to be had if you’ve got your priorities straight and can ignore the hype.

At the closing, we handled all of the legal and financial doings and Jan was the proud owner of a nice, affordable property. She paid a little more than what she would have from a bank-owned foreclosure. But, the property was ready for her to move into, allowing her to focus on her work and life instead of breakdowns, renovation, and repairs. When we got finished at the settlement table and shook hands, she actually gave me a big hug. I was taken aback by this and a little embarassed.

She then said the words that will stick with me for the rest of my life: “Thanks for selling me your property. I looked at a lot of houses before finding yours. Every one I saw had too much wrong with it for me to handle with my situation of available cash, approved mortgage amount, and housing need. You gave me the chance to put the housing part of my life back on track with no major worries.”

Wow.

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If you are looking to get into the “game” of buying a foreclosure to flip for profit right now, and you don’t have a lot of experience, take a chill pill and tune into ESPN or Oprah. In the world of distressed real estate, including foreclosures, you are playing with a tiger on steroids and very well may get mauled physically, emotionally, and financially. Even experienced real estate investors are having a difficult time with this market, and the numerous uncertainties that go along with our country’s current financial turmoil.

If you are looking for a home to live in, there are still deals to be had out there. But, that tiger on steroids is still lurking for unsuspecting buyers who get all pumped up emotionally about buying a foreclosure. Buying a house often turns into an emotional transaction. And many people who make money on these transactions bank on just that. DON’T, DON’T, DON’T make this an emotional transaction!

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