Now can be a good time to purchase a home
"If you are a well-qualified credit buyer, there are a lot of good deals out there. Interest rates are good, too," said Carrie Clark, housing financial and rehabilitation specialist for the city of Janesville.
If you're in the market for your first home or are looking to buy again after not owning for three years, Congress is giving you an added incentive—the $8,000 first-time home buyer credit—to become a homeowner, according to Wiscon sin HOMEBUYER.org.
If you qualify and buy a home after Jan. 1, 2009, and before Dec. 1, 2009, you could receive up to the full $8,000 tax credit that you won't have to repay. Any home bought for $80,000 or more qualifies for the full $8,000 amount. If the house costs less than $80,000, the credit will be 10 percent of the cost.
There also are some restrictions, including payback provisions, income limits, effective dates for the tax credit, tax credit refund, and types of home that qualify for the tax credit. For more information visit www.wisconsinhomebuyer.org.
Clark also is in charge of the first-time homebuyers down payment assistance program—taking in applications, determining eligibility, coordinating inspections, working with lenders, handling property condition issues and coordinating the closing.
Clark offered these tips on how to buy a house during today's market:
-- Preparation—Educate yourself and realize that the process won't be perfect.
To get started, Clark suggested enrolling in a workshop for first-time homebuyers. The city contracts with Community Action to teach part of this eight-hour class.
"It is open to anybody, and classes are free," she said.
Upcoming workshops are scheduled for 9 a.m. to 1 p.m. Saturdays, July 25 and Aug. 1; 6:30 to 8:30 p.m. Tuesdays, Sept. 8, 15, 22, and 29, and from 9 a.m. to 1 p.m. Saturdays, Oct. 31 and Nov. 7. To enroll, call (608) 755-3065.
-- Get preapproved. Talk to at least one bank before you start looking at homes. Don't let the bank tell you how much you can afford to borrow.
"The bank doesn't take into consideration other expenses—gas, groceries, day care, medical or any other hobby you may have that you still want to be able to afford. Your mortgage payments should be where you can comfortably afford living expenses and then some," Clark said.
Ask about closing costs and be honest about your credit.
-- Find a realtor you can trust. Align yourself with an agent and stick with him or her.
"Once you establish a relationship, they get to know you and your housing preferences that can result in a less exhaustive search," Clark said.
-- Get a buyers agency agreement. Without such an agreement, real estate agents work for the seller. With a buyer's agency agreement, agents are better able to negotiate on behalf of the buyers.
-- Be willing to compromise. Your first home probably won't be your dream home.
"Buy deciding what you must have versus what you need or want," Clark said.
-- Hire a private home inspector. This will cost you between $200 and $300 but will be money well spent.
"They can give you a detailed report of property condition plus any other structural issues you may not see," Clark said.
Additional inspections for radon and termites also can be done.
"Without them, you may be buying a home and may not know what you're getting into and what you have to budget for," she said.
The bottom line, Clark said, is to expect the unexpected.
"Even if you've done your part, expect delays from the seller and lender. But don't let it get you down. It's a process that can be exhausting but well worth it in the end."