Springfield Missouri Real Estate Blog

“Vote YES to Stop Double Taxation”

Wednesday, October 21, 2009

by Elizabeth Mendenhall

A new Web site provides Missouri voters with information about a proposed state constitutional amendment barring politicians from imposing double taxation on sales of homes and other real estate.

Voters are encouraged to visit www.YesToSaveHomes.com to learn more about the proposal.

Petition signatures are now being gathered to place on the November 2010 ballot the proposal’s straightforward and simple language: “Shall the Missouri Constitution be amended to prevent the state, counties, and other political subdivisions from imposing any new tax, including a sales tax, on the sale or transfer of homes or any other real estate?”

Transfer taxes on home sales are double taxation because Missourians already pay annual property taxes on real estate, often over many decades of ownership. Missouri is among just 13 states that do not impose a transfer tax on real estate sales, including all of Missouri’s neighboring states. As state, county and city revenues decline, politicians are tempted to impose new transfer taxes - just as Missouri citizens are struggling to make it.

“This unfair double taxation can happen in Missouri under current law. We are asking voters to keep politicians from penalizing Missourians with bad public policy that denies fairness and defies Missouri common sense,” said Elizabeth Mendenhall, a REALTOR® from Columbia, Missouri, and spokesperson for the Vote Yes To Stop Double Taxation campaign committee.

“Many Missourians have lost jobs or had pay cuts. Some have been forced to sell their homes, many at a loss, because of drops in property values. This is particularly true for lower-income Missourians, who typically spend a larger percentage of income on their home,” added Mendenhall, who is also president-elect of the 22,000-member Missouri Association of Realtors. “Our fellow Missourians who are experiencing this severe financial strain shouldn’t be subjected to more taxes - especially the unfair double taxation of a real estate transfer tax.”

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Mortgage Loan Shopping? Look Locally

Sunday, October 18, 2009

by Jennifer Woods,CNBC

When it comes to getting the best possible interest rate for your home mortgage, apparently big is not better. So don't overlook the little guys.

Everyone knows that getting a lower interest rate on your mortgage can save you thousands of dollars over time, but what you may not know is that the best rates are not necessarily offered by the big volume players or the bank where you currently do your checking. Instead, they can often be found at smaller banks and credit unions.

“Neglecting to include smaller community banks and credit unions could prove to be a costly admission," says Greg McBride, senior financial analyst with Bankrate.com of the loan-hunting process.

“In this market, in particular with jumbo large or jumbo confirming loans, smaller community banks and credit unions are very competitive,” says McBride.

Compared to large banks, which are more depended on the secondary market, small banks have more flexibility to offer lower rate loans because “they are not dependent on an investor in the second market to eventually buy it,” he said.

Smaller banks also have an incentive to offer better rates.

According to Darren Beck, chief marketing officer at LendingTree, smaller banks often have a harder time attracting customers than large banks as they are not as convenient, with fewer branches and ATMs.

As a result, he said, they often use loans with lower rates to bring in customers in then make up for the lost profit potential in other ways, such as the new customer’s credit card and banking business.

“The holy grail is that the consumer is looking for a mortgage but also has financial assets [that they can transfer] and may be a small business owner,” he says.

The proof is in the numbers. Based on a recent search, here's two comparisons.

Take for instance, someone with a good credit score (at least 700), who is looking for a 30-year fixed rate jumbo mortgage in the New York metro area for a $1 million loan with 20% down. According to Bankrate.com, which scans interest rates, the best annual percentage rate (APR)—which is the interest rate including mortgage insurance and certain closing costs, with points paid at closing—is 5.365 percent, and is offered by Astoria Federal Savings and Loan. The next lowest APR is 5.827 percent, and is offered by Sovereign Bank. Meanwhile, Bank of America, which also turns up in this search offers three different options, with the lowest being 6.064 percent.

Looking at another region shows a similar pattern. If a borrower were to look for that mortgage option for a house in the Chicago suburbs, the best APR of 5.878 percent available is from First Savings Bank of Hegewisch. Meanwhile, the best APR offered by Bank of America is 6.203 percent.

Keep in mind, though, when you hear about low interest rates, it is essential to compare deals on an apples-to-apples basis, as the advertised interest rate is only one part of the puzzle. There are a number of fees included in mortgage loans that could have a significant impact on your total costs including closing costs, pay down points, document preparation fees, underwriting costs and more.

“Those fees not only vary widely but higher fees can offset a lower rate so it's important to make sure you are comparing apples to apples when evaluating different lenders,” says McBride.

Amy Bohutinsky agrees. “Smaller banks can be motivated to undercut bigger banks because they have more flexibility to do that,” however, that is not always the case.

She and other experts agree that the real key to getting the best possible rate is to shop around—which unfortunately many people are not doing to the extent that they should.

When people find a home that they want to buy “the mortgage comes as an after thought [and] that is a critical mistake. The difference in the terms of a loan can make an enormous difference in the amount you pay on that loan,” she says.

According to a survey, on average Americans who have purchased or refinanced a home loan in the past years typically spent less time researching a home loan (five hours) than they spent researching the purchase of a car (eight hours) or researching major home improvements such as kitchen remodels (ten hours).

“One of the things that always gets me is that people will spend weeks or months pondering the purchase of a digital camera,” says LendingTree’s Beck, but when they go to get a mortgage they often just go with whatever bank with which they do their checking.

“Most of the time, banks and lenders are going to have some wiggle room,” Beck said, adding “if not on the rate then in closing costs and points."

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Sneak Preview Night for Bears and Lady Bears is October 24

Saturday, October 17, 2009

by Team Thomas

The countdown to the 2009-10 basketball season is underway, and Missouri State fans will have their first opportunity to meet the Bears and Lady Bears on Saturday, October 24 at JQH Arena for the annual Basketball Sneak Preview, presented by Ashley Furniture Homestores.

Doors to JQH Arena will open at 5:30 p.m. for a night of basketball activities, games and entertainment.

At 7 p.m., both teams will be introduced, the players will participate in skills competitions, and Lady Bears' head coach Nyla Milleson will address the crowd before her team hits the floor for a five-minute warm-up and 10-minute scrimmage. Afterwards, Bears' head coach Cuonzo Martin will have his turn on the microphone before his team warms up and participates in a similar 10-minute scrimmage.

The evening will conclude with autograph stations, presented by AT&T Real Yellow Pages, in the JQH concourse along with free team photos, posters, and schedule cards.

Both teams will conduct their first official practice of the season on Friday, October 16 in separate closed sessions. The first exhibition games are November 1 for the Lady Bears against Missouri Western and November 2 for the Bears against Missouri-St. Louis.

Season ticket information, including the family plan package, is available now by calling (417) 836-7678. Current season ticket holders may pick up their 2009-10 tickets in the PRIME Overtime Club at JQH Arena on Sneak Preview Night.

Basketball Sneak Preview Order of Events

5:30 p.m. - JQH Arena Doors Open

7:00 p.m. - Lights Out & Spotlights On

Lady Bear Introductions
Bears Introductions
Ashley Furniture Best Seats in the House Promotion
1979 Field Hockey National Championship Team Promotion
Activity by Lady Bears
Activity by Bears
Courtside Seats Three-Point Shot
Courtside Seats Free Throw Shot
Loge Seat Giveaways
Coach Nyla Milleson Addresses Crowd
Lady Bears Warm Up
Lady Bears 10-Minute Scrimmage
Great Southern Bank Halftime Game
Coach Cuonzo Martin Addresses Crowd
Bears Warm Up
Bears 10-Minute Scrimmage
Event Concludes/Autographs Begin
Courtesy: MSU Athletics Communications

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Cash For Appliances Rebate Program

Saturday, October 17, 2009

by Team Thomas

By the end of 2009, consumers nationwide will be able to take advantage of a federal "cash for appliances" program offering rebates on purchases of a wide array of home appliances certified as energy-efficient by the EPA's Energy Star program.

Backed by an initial $300 million in funding from the American Recovery and Reinvestment Act, the state-run rebate program is intended to help make American homes more energy-efficient while further stimulating the economy.

"Appliances consume a huge amount of our electricity, so there's enormous potential to both save energy and save families money every month," said Department of Energy Secretary Steven Chu in a press release. "These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs."

States will Run the Rebate Program
Each state will administer its own cash for appliances program. The states will be free to select which residential Energy Star qualified appliances to include in their programs and the individual rebate amount offered for each appliance.

What Can You Buy?
The Department of Energy (DOE) has recommended that the states focus their cash for appliances rebate efforts on heating and cooling equipment, appliances, and water heaters as these products offer the greatest energy savings potential. Energy Star qualified appliance categories eligible for rebates include: central air conditioners, heat pumps (air source and geothermal), boilers, furnaces (oil and gas), room air conditioners, clothes washers, dishwashers, freezers, refrigerators, and water heaters.

How Big Will the Rebates Be?
While the states will be free to set actual rebate amounts based on their share of the $300 million, the Department of Energy expects the rebates to range from $50 to $200 per appliance. But wait, there's more. Any rebates offered by state and local utility districts for purchases of energy-efficient appliances will be added to the federal cash for appliances rebate.

How do You Qualify?
All consumers will need to do to get the rebate is simply buy any qualifying Energy Star appliance. Unlike the "cash for clunkers" fuel-efficient vehicle rebate program, you don't even need an old trade-in appliance. In addition, consumers will not be required to haul their bulky old appliances to the dealer in exchange for a new one.

When Does it Start?
The states will have until October 15, 2009 to submit their applications for funding and plans for recycling old appliances to the Department of Energy (DOE). The DOE plans to have distributed funding to the states by November 30. As a result, the cash for appliances rebates could be available in stores just in time for Christmas shopping.

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Home Warranty: Negotiating Tool for Sellers and Buyers in Springfield

Saturday, October 17, 2009

by Team Thomas

Home Warranties have proven to be a great negotiating tool for both buyers and sellers. We encourage all home sellers to include them with their homes that we list for sale in Springfield, Ozark, Nixa and the surrounding area.

Most home warranties can be initiated at the time of listing the home and therefore provides coverage to the seller during the time it is on the market. It is amazing how many things can go wrong when you decide to sell your home. Invariably, a toilet will leak, the dishwasher or microwave will break or the air conditioning or heat will stop working. For a modest co-payment, typically $50, the home warranty company will send out a technician to fix the problem. In those cases where things are broken beyond repair, they may even replace the item.

Now, we all know home warranty companies are insurance companies and they like to fight claims. As the listing agent that uses home warranties all the time, this gives you leverage to work on your sales agent to get the job done. It is amazing how well this works!

In addition to the above, home warranties really do work as great negotiating tools. For example, when items are brought up on a home inspection, and there is a transferable warranty in place, the seller can often times negotiate fewer repairs.

I have seen time and time again where home warranties really help. I put them on all of my listings and I pay for it. This is a great listing tool as well as a win win for buyers and sellers throughout the transaction.

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FHA Rehab Loans Available

Saturday, October 17, 2009

by Team Thomas

The Federal Housing Administration (FHA) has rehab loans through its Section 203(k) program. This program is specifically targeted at the rehabilitation and repair of single family properties.

When a buyer wants to purchase a home that needs repair, the loan process can be complex. It could require a loan to purchase the property, additional financing for the construction or repairs, and then a permanent mortgage once everything is complete.

The Section 203(K) program allows a buyer to get one mortgage to finance both the home purchase and the repair/rehabilitation of the property. There are different programs based on the extent of what needs to be done. There is a streamlined program for loans up to $35,000 and the ability to do more extensive work as well. The mortgage amount is based on the projected value of the completed project.

Single family and up to four family properties are eligible for this program. The program is not for luxury repairs. Rather, it can be used for:

Structural improvements
Modernizing the home's functionality
Eliminating health and safety hazards
Changing the appearance and eliminating obsolescence
Fixing or replacing plumbing, roofing, gutters, flooring
Landcaping improvements
Increasing access for the disabled
Increasing energy efficiency

A detailed explanation of this program can be found on the HUD Homes and Communities Site.

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"Extension of the Tax Credit or a New Version"...

Saturday, October 17, 2009

by Team Thomas

The much-talked-over first time home buyer tax credit continuance looks a lot more likely. Those watching carefully will recall that the House recently passed a bill which extends the $8,000 homebuyer’s credit for a select class: military personnel, diplomats, and intelligence staff serving overseas. The news comes not just as a refreshing relief for these civil workers, but as a premonition of good times for the rest of the nation.

The first-time homebuyer tax credit will expire next month, and go down in the history books as a benefit to over a million taxpayers who were able to finally move into a home they can call their own. But it may not be the end of the chapter.

We take the easy passage of the bill as a presage of passing more and similar bills. Several congressional leaders have already drafted plans of bills that would extend the first-time homebuyer tax credit, increase the first-time homebuyer tax credit, or other variations on the same theme.

In a closed-door meeting in the Oval Office last week, President Obama, Speaker Pelosi, and Majority Leader Reid, et. al., reviewed, among other things, the impact that an extended housing bill could have on the economy at large. Clearly, advantages would abound, and the meeting seemed to affirm this, though no promises or official announcements were made.

What stands in the way of a first-time homebuyer tax credit extension? Or any homebuyer tax-credit extension for that matter? Couldn’t the stymied housing market use some more governmental CPR? After these events, the answer is beginning to sound more like “yes.”

But there may be obstacles.

Billion dollar line items no longer evoke coughing paroxysms, even among the most ferociously fiscal conservatives, but the price tag of the proposed tax-credit extension is a big one: $30B at least. And $30B may just be a show stopper. We should have the answer to this question soon.

We will keep you posted!

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Should I Buy a Home Now?

Monday, October 12, 2009

by Team Thomas

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

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