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Connie Erickson's Blog

Connie Erickson

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Lenders Pulling 2nd Credit Report on Buyers

by Connie Erickson
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Under Fannie Mae's new Loan Quality Initiative (LQI) that went into effect on June 1, 2010, lenders are pulling a second credit report on the buyer right before closing to verify that the buyer's credit status has not changed and that all debts were disclosed. In other words, the buyer is not officially approved for the mortgage until the second credit report is approved. The lender may also re-verify job status and check other sources to make sure there are no undisclosed debts.

Other lenders also have been known to pull second credit reports right before the closing, but the Fannie Mae LQI will likely cause many more lenders to conduct last-minute verifications.

What this means for buyers is that they are well advised to not make any major purchases or apply for new credit until after closing. For instance, applying for a new credit card may lower a buyer's credit score. Under the LQI, the lender could delay the closing, increase the interest rate or the down payment, or even cancel the closing, depending upon the actual change.

"It seems everywhere is requiring credit checks nowadays. Credit inquiries, although not a serious hit, still can reduce a credit score. I was setting up my utilities before closing, and each one of them requested a social security number and credit check to get utilities set-up. I refused to have them check my credit, and instead paid the cash deposit for setting up a new account. I get the deposit back in 4-6 months, and it prevented any dings to my credit before closing." -Scott MacCallum (recent home buyer)

Incredibly Low Interest Rates

by Connie Erickson
google map to real pro systems 

Jodi Kaye, a lender in Door County says she has money available at 3.99% for a 15 year and 4.55% on a 30 year loan.



If that rate increases 1%, you will pay 10% more for the property you buy. The time to buy is NOW, call me or email me to discuss.

Real Estate Provisions in 2010 Tax Relief Bill

by Connie Erickson

The following information was recently published in an article by the National Association of REALTORS:

Congress has passed and President Obama has signed legislation (HR 4853) that extends the Bush-era tax rates and a host of other expired and expiring provisions. The legislation is not "paid for," so there are no revenue raisers taken from real estate or other industry groups. The package provides temporary extensions of its numerous provisions. Some are retroactive, as well, so that the rules that had been in place previously will operate as if they had never expired.

Only the provisions that affect real estate investment and operations are included in this summary. The bill itself is vast, even though there are few expansions or cutbacks of previous or current law.

Capital Gains: The tax rate will remain 15% for assets sold or disposed of during 2011 and 2012. Depreciation recapture tax rates remain 25%. No new limitations are created for Section 1031 like-kind exchanges. The 15% rate is retained for dividends received during those years. Small investors with incomes in either the 10% or 15% brackets will have a capital gains and dividend tax rate of 0%.

Estate Tax: During 2010, the estate tax was repealed, but heirs who received assets from an estate were required to use a so-called "carryover basis" in determining the value of the assets they receive. Carryover basis is the amount that the original owner of the asset paid for it. Prior to 2010, the heirs had always received the asset with a "stepped-up basis." Carryover basis requires heirs to know when the decedent acquired his/her assets and at what price. Stepped-up basis measures the value of the asset at its fair market value at the time of the death. Carryover basis is astonishingly burdensome. "Basis" is the value used to determine gain/loss when the heir sells an inherited asset.

In 2009, the estate tax was in place with an exclusion of $3.5 million and a maximum tax rate of 45%. In 2010, there was no estate tax. Without Congressional action, the estate tax would have been revived in 2011 with an exclusion of only $1 million and a maximum rate of 55%. This legislation revives the estate tax as of January 1, 2010, with an exclusion of $5 million ($10 million for a couple) and a maximum rate of 35%. The executors and heirs of those who died during 2010 may elect to pay no estate tax, but the assets will be subject to the more burdensome carryover basis rules. That election will not be available for those who die after 2010. The $5 million exclusion and 35% rate will be effective through December 31, 2012.

Leasehold Improvements: The legislation renews the 15-year cost recovery period for leasehold improvements made between January 1, 2010 and December 31, 2011.

Bonus Depreciation:Assets with a cost recovery period of 20 years or less are eligible for 100% depreciation (expensing) in the year the assets is placed in service. This rule applies to all assets placed in service on or after September 8, 2010 and before January 1, 2012. Eligible assets placed in service during 2010 will qualify for a 50% bonus depreciation allowance.

Energy-efficient Existing Homes: The tax credit for homeowners who make specified energy-related improvements to existing homes was scheduled to expire December 31, 2010. It has been extended through December 31, 2011. The qualified investments include replacement windows, doors, or skylights, some roofing materials and some heating and cooling equipment. The amounts of the credit vary depending on the asset and its energy rating as determined by the Energy Star program. The standards for qualified property are tougher than they were in 2010, so homeowners will need to exercise great care in their acquisitions. The credit is available only for improvements to a principal residence and only if the improvement is original to the property and only if the property will last for at least 5 years. The credit is not available if the improvement is financed using any form of subsidized energy program.

Energy-efficient Buildings: Owners of commercial buildings may qualify for tax credits for investments in designated insulation, windows and roofing improvements. Improvements to the heating/air conditioning systems, water heaters and air circulation fans may also be eligible for the credit. As with the home improvement credits, these credits require compliance with a variety of energy efficiency standards. Investors should exercise great care in determining what assets will satisfy the given criteria. The improvements must be in place on or before December 31, 2011.

See: REAL ESTATE PROVISIONS IN THE 2010 TAX RELIEF BILL for a complete summary posted by the National Association of REALTORS.

 

Extension of Tax Credit and Flood Insurance

by Connie Erickson

After a close brush with the deadline, Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed. The legislation is designed to create a seamless extension the new closing deadline for eligible transactions is now September 30, 2010. There is will be no gap between June 30 and the date the President signs the bill into law.

NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the Tax Credit Closing deadline will help provide additional stability to real estate markets across the nation.

For additional information on the extension visit
www.realtor.org/government_affairs

Additionally, the United States Senate has passed the National Flood
Insurance Program Extension Act of 2010 (H.R. 5569) an extension of the
National Flood Insurance Program until September 30, 2010. This will allow
transactions to move forward. The bill is retroactive and covers the lapse
period from June 1, 2010 to the date of enactment of the extension.

For more information on the flood insurance program visit
www.realtor.org/government_affairs

Provided to Connie from the Door County Board of REALTORS

White Gull Inn's French Toast Nominated Best in U.S.!

by Connie Erickson
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White Gull Inn's Cherry Stuff French Toast Nominated for Best in U.S.!

 

Tune in to Good Morning America

 

Saturday, May 15th

First Quarter 2010 Door County Real Estate Market Update

by Connie Erickson
 
.

In reviewing Door County's first quarter market statistics, I find it interesting that for the first time (as long as I can remember), the List Price to Sales Price (LP/SP) statistic has decreased below 90% in ALL property types except condominiums. Door County's LP/SP statistics have held in the 90% bracket until now.

The time it takes to get a property sold (TOM) is on average 1.5 years. Take note, vacant waterfront lots took, on average, 1,036 days to sell!

The market is the market. We cannot change it, but by understanding it, we can position ourselves to make the best of it. Knowledge is key!

Visit my web site often to stay on top of Door County's real estate market: www.ConnieErickson.com

I post updated Door County real estate market statistics quarterly and am available to discuss current market conditions anytime. I welcome your call or e-mail. I love talking real estate!

Markets Even Out Over the Long Term

by Connie Erickson
google map to real pro systems

In a recent article entitled, "Markets Even Out Over the Long Term", published by the National Association of REALTORS, Lawrence Yun, chief economist of the National Association of REALTORS stated:

"…With about 4 million births, 2 million deaths, and 1 million newly arriving immigrants in the United States each year, there will be a steady demand for homes over time. Historically, the net number of home-owning households rises by 1 million each year. The 2 million weddings and 1 million divorces each year also add to changes in living patterns. Furthermore, home owners look for a new place to live every seven to 10 years on average. As a result, over the next 10 years, we can expect anywhere from 50 million to 70 million home sales..."

You can stay on top of Door County’s real estate market conditions by visiting my web site.

2009 Profile of Buyers and Sellers

by Connie Erickson
google map to real pro systems

2009 Profile of Buyers and Sellers

1. New home construction and sales were down significantly during the recession, and home buyers purchased a high share of previously owned homes than at any point during the past decade.
2. Nationally home buyers moved a median 12 miles from their previous residence. There are slight regional differences. Buyers in the South moved a median of 13 miles from their previous residence, while buyers in the Northeast and Midwest typically moved 10 miles.
3. The typical home purchased was built in 1991.
4. Home buyers typically spend 12 weeks searching for a home and looked at 12 homes before deciding on their purchase. Before contacting and agent, home buyers spent about two weeks gathering their own information on the homes.
5. Internet users spent twice as much time searches for a home and visit three times as many homes. Connie with an upfront consultation appointment can cut that time in half because of her knowledge of the market. That way you have more time to enjoy the arts, crafts and environmental activities in Door County.
6. 9 out of 10 home buyers use the internet as one of the information sources in their home search process. A real estate agent is the second most frequently sided information source. The third most frequently used source is a yard sign.
7. In 2009, 13% of home buyers had a purchased agreement that was cancelled, terminated, or fell through. 90% of the buyers in their home search process used the internet, up 30% during the past 6 years.
8. 79% of home buyers using the internet bought their home through an agent.
9. First time buyers are less likely to use REALTOR.com than repeat buyers.

How do buyers find a real estate agent:

1. 44% used a referral.
2. 10% use of an agent previously.
3. First time buyers tend to rely more on referrals (53%).
4. Repeat buyers are more likely to revisit and agent they have used before.
5. When choosing a real estate agent buyers rate honesty and trustworthiness as the two most important factors in selecting and agent.
6. 66% of home buyers indicated they would defiantly use the real estate agent again or recommend the agent.
7. An additional 22% said they would probably use the same agent or recommend the agent.

Source: National Association of REALTORS

From the Lender's Point of View

by Connie Erickson

On February 11, 2010, my friend and local lender, Laura Seefelt of Johnson Bank spoke with me about 2010, home loan interest rates and what we're in for this year. It is a good time to invest in Door County real estate.

Door County's "Tug-Tanic" is Raised!

by Connie Erickson
google map to real pro systems 

DOOR COUNTY'S "TUG-TANIC" IS RAISED

Updated Photo & Information on the
Tugboat that sank New Year's Week End in Egg Harbor

This 52' tug was taken out of the Marina today and they still don't know why it sank - another tug boat towed it out of Egg Harbor this am.

Displaying blog entries 771-780 of 780

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Photo of Connie Erickson Real Estate
Connie Erickson
Door County Realty, Inc.
Po Box 340 - 4027 Main Street
Fish Creek WI 54212
Office: 920-868-2075
Toll Free: 888-678-3949
Fax: 920-868-2425

Integrity...Trust...Service...Excellence
These Are Connie Erickson's Core Values

RESULTS WITH INTEGRITY
and
The Best In Personal Service